-----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, LxxguuXs0i9qsgTP3aaeTpjfK0TuobhPQXp7Z/1VD9YOFx4V230xddruECX+eaou MMoTNXNwKuTKWZUZClsdGA== 0001012709-02-000073.txt : 20020414 0001012709-02-000073.hdr.sgml : 20020414 ACCESSION NUMBER: 0001012709-02-000073 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 15 FILED AS OF DATE: 20020129 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMPACT MANAGEMENT INVESTMENT TRUST CENTRAL INDEX KEY: 0001030805 IRS NUMBER: 232873254 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1933 Act SEC FILE NUMBER: 333-22095 FILM NUMBER: 02521149 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 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMPACT MANAGEMENT INVESTMENT TRUST CENTRAL INDEX KEY: 0001030805 IRS NUMBER: 232873254 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-08065 FILM NUMBER: 02521150 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 x485a-102.txt IMPACT MANAGEMENT INVESTMENT TRUST Filed with the Securities and Exchange Commission on January 29, 2002 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 1933 Act File No. 33-22095 1940 Act File No. 811-8065 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ] Pre-Effective Amendment No. __ [ ] Post-Effective Amendment No. 13 [X] and REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ] Amendment No. 13 [X] 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 Offices) (Zip Code) Registrant's Telephone Number, including Area Code: (859) 254-2240 Gerald L. Bowyer, Chairman Copy to: Impact Management Joseph V. Del Raso, Esq. Investment Trust Pepper Hamilton LLP 333 West Vine Street 3000 Two Logan Square Suite 206 Eighteenth and Arch Streets Lexington, KY 40507 Philadelphia, PA 19103 (Name and Address of Agent for Service) It is proposed that this filing will become effective: [ ] immediately upon filing pursuant to paragraph (b) [ ] on (date) pursuant to paragraph (b) [ ] 60 days after filing pursuant to paragraph (a)(1) [X] on February __, 2002 pursuant to paragraph (a)(1) [ ] 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. ================================================================================ THE IMPACT FUNDS IMPACT 25 FUND CLASS A SHARES CLASS F SHARES ================================================================================ PROSPECTUS _____________________, 2002 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 SUMMARY..............................................................3 Investment Objective and Principal Strategies...............................3 Principal Risks.............................................................3 Portfolio Expenses..........................................................4 INVESTMENT POLICIES AND RISKS..................................................6 Risk Factors................................................................7 MANAGEMENT OF THE PORTFOLIO....................................................8 Investment Adviser..........................................................8 Sub-Investment Adviser......................................................8 Portfolio Managers..........................................................8 Advisory Fees...............................................................9 PRICING PORTFOLIO SHARES.......................................................9 HOW TO PURCHASE SHARES........................................................10 Choosing a Share Class.....................................................10 Purchase of Class A Shares.................................................11 Purchase of Class F Shares.................................................11 Exchange...................................................................11 Purchasing By Mail.........................................................12 Purchasing By Wire.........................................................12 HOW TO REDEEM SHARES..........................................................13 Written Requests...........................................................13 Signatures.................................................................13 Telephone Redemptions......................................................14 Redemption In Kind.........................................................14 Receiving Payment..........................................................15 Accounts With Low Balances.................................................15 DISTRIBUTION ARRANGEMENTS.....................................................16 Sales Charges - Class A Shares.............................................16 Class A Purchases Not Subject to Sales Charges.............................16 Class A Contingent Deferred Sales Charges..................................16 Sales Charge Reductions and Waivers........................................16 Plans of Distribution......................................................17 -i- DIVIDENDS, DISTRIBUTIONS AND TAXES............................................18 Dividends and Distributions................................................18 Tax Consequences...........................................................18 Cusips.....................................................................19 -ii- PORTFOLIO SUMMARY ----------------- INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES The investment objective of the IMPACT 25 Fund (the "Portfolio"), a series of the Impact Management Investment Trust ("IMIT"), is to provide long-term capital growth. The Portfolio seeks to achieve its objective by investing primarily in equity securities selected for their potential for price appreciation and protection relative to the universe of securities of U.S. companies available in the market. The Portfolio will normally hold a core group of 12 to 25 common stocks of U.S. companies. The Portfolio analyzes historical and projected earnings, price/earnings relationships, industry potential, current and expected market share, competition and the quality of management to select these common stocks. There are no limitations on the size of the companies in which the Portfolio may invest. During periods when the stock market is rising, the Portfolio may invest primarily in small and mid-size U.S. companies, move back and forth between growth and value stocks or invest in both growth and value stocks. The portfolio managers 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 It exhibits a number of unattractive factors or attributes that are forecast to contribute to relative under-performance; o The portfolio managers identify a stronger holding (which could include cash); or o The portfolio managers discover something negative about the company that invalidates the original reason for the purchase or detracts from the growth estimates. 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 not likely to achieve growth of capital PRINCIPAL RISKS o The Portfolio's share price will fluctuate in response to political developments, regulatory issues, market conditions, economic conditions and financial conditions of issuers of the Portfolio's investments. o The Portfolio is non-diversified and may concentrate its investments in a limited number of issuers or a particular industry or industries. Consequently, the Portfolio may be more sensitive to changes in the market price of its portfolio securities than a diversified 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 Shifts between growth and value stocks, large and small cap stocks, as well as converting equity holdings of the Portfolio into cash or fixed income instruments can cause fluctuations in the Portfolio's price per share. o As with an investment in any mutual 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 shares of the Portfolio. SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT) (1) - -------------------------------------------------------------------------------- CLASS A CLASS F - -------------------------------------------------------------------------------- Maximum sales charge (load) imposed on Purchases (as a percentage of offering price) 5.75% (2) none Maximum deferred sales charge none (3) none Maximum sales charge imposed on reinvested dividends......... none none Redemption or exchange fee none none ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS) - -------------------------------------------------------------------------------- CLASS A CLASS F - -------------------------------------------------------------------------------- Management Fees(4) 0.80% 0.80% Distribution (12b-1) Fees (5) 0.25% 0.50% Other Expenses (6) 0.75% 0.75% Total Annual Fund Operating Expenses 1.80% 2.05% - -------------------------------------------------------------------------------- 1. Brokers which have not entered into a selling dealer 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 $25,000 or more, decreasing to zero for purchases over $ 1 million. See "Distribution Arrangements." -4- 3. A contingent deferred sales charge of 1% applies on certain redemptions made within 12 months following the purchase of $1 million or more made without a sales charge. 4. Based on the estimated amount for the current fiscal year after waivers and reimbursements. 5. 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. Class A and F 12b-1 fees may not exceed 0.25% and 0.50% respectively of the shares average net assets. 6. Based on the estimated amount 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) 5% annual return, (2) full redemption at the end of each time period, (3) reinvestment of all dividends and capital gain distributions, and (4) operating expenses remain the same. Actual expenses in the future may be greater or lesser than those shown. 1 Year 3 Years ------ ------- Class A: $185 $582 Class F: $210 $663 With respect to Class A shares, the example does not reflect sales charges (loads) imposed on reinvestment of dividends and other distributions. If these sales charges (loads) were included, your costs would be higher. This example should not be considered a representation of past or future expenses or performance. -5- INVESTMENT POLICIES AND RISKS ----------------------------- The Portfolio seeks to achieve its objective of long-term capital growth by investing primarily in equity securities selected for their potential for price appreciation and protection relative to the universe of securities of U.S. companies available in the market. The Portfolio will invest at least 65% of its assets in a core group of at least 12, and no more than 25, common stocks of U.S. issuers. In addition to common stocks, the Portfolio may invest in other types of equity securities, including preferred stocks, warrants or other convertible securities. 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 managers utilize outside research in their allocation and selection process which includes analyzing historical and projected earnings, price/earnings relationships, industry potential, current and expected market share, competition and the quality of management. The portfolio managers then monitor these factors to verify that each investment remains consistent with the fundamental understanding of the company. 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 and/or sub-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. 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 approximate 100%. TEMPORARY INVESTMENTS. For temporary defensive purposes, when the sub-adviser determines that market conditions so warrant, the Portfolio may invest up to 100% of its assets in cash, cash items, and money market and/or fixed income 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. These investment policies are non-fundamental and may be changed by the Board of Trustees without the approval of shareholders. -6- 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 less 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. 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. Investment in the securities of small and mid-sized companies have historically been 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. Growth stocks may under-perform during periods when the market favors value stocks (and vice versa), and so to the extent that the portfolio managers sell growth stocks or value stocks before they reach their market peak, the Portfolio may miss opportunities for higher performance. Similarly, small or mid-cap stocks may under-perform during periods when the market favors large-cap stocks (and vice versa) and so to the extent that the portfolio managers sell small or mid-cap stocks or large-cap stocks before they reach their market peak, the Portfolio may miss opportunities for higher performance. As with an investment in any mutual fund, there is risk of loss of all or part of your investment. If the portfolio managers invest in cash, money market, and/or fixed income instruments at inappropriate times or judge market conditions incorrectly, such investments may lower the Portfolio's performance. -7- 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 is responsible for the management of the Portfolio's business affairs. Under the terms of its investment advisory agreement, EAM arranges for the management of the investments and reinvestment of the assets contained in the Portfolio, and the review, supervision and administration of the Portfolio's investment program. EAM is a professional investment manager and a registered investment adviser formed in 2000 to succeed to the advisory business of its parent and predecessors. In addition to advising the portfolio, EAM provides investment advisory services to individuals, corporations, foundations, limited partnerships, and individual retirement, corporate, and group pension and profit sharing plans. EAM reviews the management of the Portfolio based upon the principles of competence, trust and value. EAM's principal is located at 2155 Resort Drive, Suite 108, Steamboat Springs, CO 80487. SUB-INVESTMENT ADVISER Denali Advisors LLC ("Denali"), 4350 La Jolla Village Drive, Suite 970, San Diego, California 92122 is the Portfolio's sub-investment adviser. Denali is a registered investment adviser founded in 2001. Denali provides discretionary investment management services primarily to institutional clients. Denali has no prior experience in providing investment management services to registered management investment companies. Robert Snigaroff, co-founder, President and Chief Investment Officer of Denali has over 11 years of investment management experience (see "Portfolio Managers" below). Mr. Snigaroff directs day-to-day investment activities for a number of clients approximating $280 million in assets as of August 31, 2001. Subject to the authority of the Board of Trustees of IMIT, Denali manages the Portfolio's Invested Assets in accordance with the Portfolio's investment objectives and policies described above. The sub-adviser provides the Portfolio with on-going research, analysis, advice and judgments regarding the Portfolio's investments. The sub-adviser also purchases and sells securities on behalf of the Portfolio. PORTFOLIO MANAGERS The portfolio managers of the Portfolio are: Robert Snigaroff, President and Chief Investment Officer at Denali since March 2001. Prior to co-founding Denali, Mr. Snigaroff worked the San Diego County Employee Retirement Account, a $4 billion pension fund from 1995 to 2001, serving as an investment officer from 1995 to 1997, and as Chief Investment Officer from 1997 to 2001. From 1991 to 1995, Mr. Snigaroff worked the $15 billion Alaska Permanent Fund oil savings pool as an Assistant Investment Officer. Mr. Snigaroff holds an MBA from the University of Southern California. Mike Munson, Vice President and Portfolio Manager at Denali since March 2001. Prior to co-founding Denali, Mr. Munson was a portfolio manager for the San Diego County -8- Employee Retirement Account from 1999 to 2001 and worked with Robert Snigaroff. From 1995 to 1997, he worked for Transamerica as a financial analyst. From 1997 to 1999, he was a full-time student in graduate school. Mr. Munson holds an MBA from UCLA and a B.S. in Mathematics from Harvey Mudd. John Chiu, Director of Research at Denali since June 2001. Prior to joining Denali, Mr. Chiu was an Associate Director at First Quadrant from 1999 to 2000 and worked as Quantitative Research Analyst from 1994 to 1999, also at First Quadrant. Mr. Chiu holds an M.S. in Physics (Ph.D. Candidate) from Caltech. 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, and which is adjusted monthly depending on the Portfolio's investment performance compared to the S&P 500 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. The sub-adviser's fee is 50% of the adviser fee and is paid by the adviser out of its fees. PRICING PORTFOLIO SHARES ------------------------ Class F shares are sold at net asset value per share, while Class A 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 are 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 -9- 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. HOW TO PURCHASE SHARES ---------------------- CHOOSING A SHARE CLASS Shares of the Portfolio are distributed through IMPACT Financial Network, Inc. ("IFNI"), the Portfolio's distributor. In this prospectus the Portfolio offers three classes of shares. Each share class represents an investment in the same portfolio of securities, but each share class has its own sales charge and expense structure, allowing you to choose the class that best meets your situation. When you purchase shares of the Portfolio, you must choose a share class. If none is chosen, your investment will be made in Class A shares. Shares of the fund may be purchased through various investment programs or accounts, including many types of retirement plans. The services or share classes available to you may vary depending upon how you purchase shares of the fund. Factors you should consider in choosing a class of shares include: o How long you expect to own the shares. o How much you intend to invest. o Total expenses associated with owning shares of each class. o Whether you qualify for any reduction or waiver of sales charges (for example, Class A shares may be a less expensive option over time if you qualify for a sales charge reduction or waiver). o That Class F shares are generally only available to fee-based programs of investment firms that have special agreements with the Portfolio distributor and certain registered investment advisers. o Each investor's financial considerations are different. You should speak with your financial adviser to help you decide which share class is best for you. -10- SUMMARY OF THE PRIMARY DIFFERENCES AMONG SHARE CLASSES - -------------------------------------------------------------------------------- CLASS A SHARES - -------------------------------------------------------------------------------- INITIAL SALES CHARGE UP TO 5.75%(REDUCED OR ELIMINATED FOR PURCHASES OF $25,000 OR MORE) CONTINGENT DEFERRED SALES CHARGE NONE (EXCEPT ON CERTAIN REDEMPTIONS OF PURCHASES OF $ 1 MILLION OR MORE BOUGHT WITHOUT AN INITIAL SALES CHARGE) 12B-1 FEES UP TO 0.25% ANNUALLY DIVIDENDS HIGHER THAN CLASS F DUE TO LOWER DISTRIBUTION FEES PURCHASE MAXIMUM NONE CONVERSIONS NONE - -------------------------------------------------------------------------------- CLASS F SHARES - -------------------------------------------------------------------------------- INITIAL SALES CHARGE NONE CONTINGENT DEFERRED SALES CHARGE NONE 12B-1 FEES UP TO 0.50% ANNUALLY DIVIDENDS LOWER THAN CLASS A SHARES DUE TO HIGHER DISTRIBUTION FEES PURCHASE MAXIMUM NONE CONVERSIONS NONE PURCHASE OF CLASS A SHARES Generally, you may open an account and purchase Class A shares by contacting any investment dealer (whom may impose transaction charges in addition to those described in this prospectus) authorized to sell the Portfolio's shares. You may purchase additional shares in various ways, including through your investment dealer and by mail, telephone and bank wire. PURCHASE OF CLASS F SHARES Generally, you may only open an account and purchase Class F shares through fee-based programs of investment firms that have special agreements with the Portfolio's distributor and certain registered investment advisers. These firms and advisers typically charge ongoing fees for services they provide. EXCHANGE Generally, you may exchange your shares into shares of the same class of other funds in The IMPACT Funds Group without a sales charge. Exchanges have the same tax consequences as ordinary sales and purchases. -11- The Portfolio and IFNI, the Portfolio's distributor, reserve the right to reject any purchase order for any reason, including purchases which are part of exchange activity that could involve actual or potential harm to the Portfolio. - -------------------------------------------------------------------------------- PURCHASE MINIMUMS FOR ALL CLASSES OF SHARES TO ESTABLISH AN ACCOUNT (INCLUDING RETIREMENT PLAN ACCOUNTS) $ 250 FOR A RETIREMENT PLAN ACCOUNT THROUGH PAYROLL DEDUCTIONS $ 25 TO ADD TO AN ACCOUNT $ 50 FOR A RETIREMENT PLAN ACCOUNT THROUGH PAYROLL DEDUCTION $ 25 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 made payable to IMPACT 25 FUND: [SPECIFY CLASS A OR F] to: IMPACT MANAGEMENT INVESTMENT TRUST 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. 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 IMPACT 25 FUND: [SPECIFY CLASS A OR F] c/o Fifth Third Bank, the Portfolio's Custodian Bank, at the following address: The Fifth Third Bank ABA # 042000314 IMPACT 25 Fund: Credit Account #728-62611 Account Name (your name) Account Number (your personal account number) -12- 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. 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 confirmation are sent to each shareholder to report dividends paid during that period. The Portfolio reserves the right to reject any purchase request. 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. The Portfolio does not accept signatures guaranteed by a notary public. -13- 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 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. 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. 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. -14- 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 $250 due to shareholder redemptions. This procedure would not apply, however, if the balance falls below $250 solely because of a decline in the Portfolio's net asset value. The Portfolio will provide the shareholder with at least 30 days' prior written notice before any such involuntary redemption occurs. -15- DISTRIBUTION ARRANGEMENTS SALES CHARGES - CLASS A SHARES The initial sales charge you pay when you buy Class A shares differs depending upon the amount you invest and may be reduced or eliminated for larger purchases as indicated below. Sales Charge as a Percentage of -------------------------------------- Dealer Net Commission Offering Amount as % of Price Invested Offering Price -------------------------------------- Less than $25,000 5.75% 6.10% 5.00% $25,000 but less than $50,000 5.00% 5.26% 4.25% $50,000 but less than $100,000 4.50% 4.71% 3.75% $100,000 but less than $250,000 3.50% 3.63% 2.75% $250,000 but less than $500,000 2.50% 2.56% 2.00% $500,000 but less than $750,000 2.00% 2.04% 1.60% $750,000 but less than $1 million 1.50% 1.52% 1.20% $1 million or more and certain other arrangements none None none CLASS A PURCHASES NOT SUBJECT TO SALES CHARGES Investments of $1 million or more may be subject to a 1% contingent deferred sales charge if shares are sold within one year of purchase. Employer-sponsored defined contribution-type plans investing $1 million or more, or with 100 or more eligible employees, and Individual Retirement Account rollovers involving retirement plan assets invested in the Portfolio, may invest with no sales charge and are not subject to a deferred contingent sales charge. The distributor may pay dealers up to 1% on investments made in Class A shares with no initial sales charge. The fund may reimburse the distributor for these payments through its Plan of Distribution see below. CLASS A CONTINGENT DEFERRED SALES CHARGES A contingent deferred sales charge of 1% applies on certain redemptions made within 12 months following the purchase of $1 million or more made without a sales charge. Shares acquired through reinvestment of dividends or capital gains distributions are not subject to a contingent deferred sales charge. The contingent deferred sales charge is based on the original offering price. For purposes of determining the contingent deferred sales charge, if you sell only some of your shares, shares that are not subject to any contingent deferred sales charge will be sold first and then shares that you have owned the longest. SALES CHARGE REDUCTIONS AND WAIVERS You must let your investment dealer or IMPACT Administrative Services, Inc. know if you qualify for a reduction in your Class A sales charge. -16- REDUCING YOUR CLASS A SALES CHARGE You and your " immediate family" (your spouse and your children under the age of 21) may combine investments to reduce your Class A sales charge. AGGREGATE ACCOUNTS To receive a reduced Class A sales charge, investments made by you and your immediate family (see above) may be aggregated if made for your own account(s) and /or, for instance: o Trust accounts established by the above individuals. However, if the person(s) who establish the trust is deceased, the trust account may be aggregated with accounts of the person who is the primary beneficiary of the trust; o Solely controlled business accounts; and o Single-participant retirement plans. CONCURRENT PURCHASES You may combine simultaneous purchases of any class of shares of two or more IMPACT funds to qualify for a reduced Class A sales charge. RIGHTS OF ACCUMULATION You may take into account the current value (or if greater, the amount invested less any withdrawals) of your existing holdings in any class of shares of the IMPACT Funds to determine your Class A sales charge. STATEMENT OF INTENTION You can reduce the sales charge you pay in your Class A share purchase by establishing a Statement of Intention. A Statement of Intention allows you to combine all fund purchases for all share classes to determine the applicable sales charge. At your request, purchases made during the previous 90 days may be included; however, capital appreciation and reinvested dividends and capital gains do no apply towards these combined purchases. A portion of your account may be held in escrow to cover additional Class A sales charges which may be due if your total investments over the 13-month period do not qualify for the applicable sales charge reduction. PLANS OF DISTRIBUTION The Portfolio has adopted separate plans of distribution ("Plans") pursuant to Rule 12b-1 for the Class A shares, and the Class F shares of the Portfolio under the Investment Company Act of 1940, as amended. Pursuant to each of the Plans, the Portfolio may reimburse IFNI or others for expenses actually incurred by IFNI or others in the promotion and distribution of the Class A and Class F shares of the Portfolio ("distribution expense") and servicing their shareholders by providing personal services and/or maintaining shareholder accounts ("service fees"). With respect to Class A and F shares, the Portfolio reimburses IFNI and others for -17- distribution expenses at an annual rate of up to 0.25% and up to 0.50%, respectively, payable on a monthly basis, of the Portfolio's aggregate average daily net assets attributable to Class A and F 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. 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 -18- 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. CUSIPS Class Cusip ----- ----- Class A Shares 45256A608 Class F Shares 45256A707 -19- IMPACT MANAGEMENT INVESTMENT TRUST IMPACT 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 -20- 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 1-202-942-8090. 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 ELECTRONIC REQUEST AT THE FOLLOWING E-MAIL ADDRESS: PUBLICINFO@SEC.GOV, OR BY WRITING THE PUBLIC REFERENCE SECTION OF THE SEC, WASHINGTON, D.C. 20549-6009. SEC File No. 811-8065 -21- ================================================================================ THE IMPACT FUNDS IMPACT 25 FUND INSTITUTIONAL CLASS ================================================================================ PROSPECTUS _________________, 2002 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 ----------------- PORTFOLIO SUMMARY..............................................................1 Investment Objective and Principal Strategies.............................1 Principal Risks...........................................................1 Fees and Expenses of the Portfolio........................................2 INVESTMENT POLICIES AND RISKS..................................................3 Risk Factors..............................................................3 MANAGEMENT OF THE PORTFOLIO....................................................5 Investment Adviser........................................................5 Sub-Investment Adviser....................................................5 Portfolio Managers........................................................5 Advisory Fees.............................................................6 PRICING PORTFOLIO SHARES.......................................................6 HOW TO PURCHASE SHARES.........................................................6 General...................................................................6 Purchasing By Mail........................................................7 Purchasing by Wire........................................................7 HOW TO REDEEM SHARES...........................................................7 Written Requests..........................................................8 Signatures................................................................8 Telephone Redemptions.....................................................8 Redemption In Kind........................................................9 Receiving Payment.........................................................9 Accounts with Low Balances................................................9 Transaction Fee on Certain Redemptions....................................9 DIVIDENDS, DISTRIBUTIONS AND TAXES............................................10 Dividends and Distributions..............................................10 Tax Consequences.........................................................10 Cusip....................................................................11 -i- PORTFOLIO SUMMARY ----------------- INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES The investment objective of the IMPACT 25 Fund(the "Portfolio"), a series of the Impact Management Investment Trust ("IMIT"), is to provide long-term capital growth. The Portfolio seeks to achieve its objective by investing primarily in equity securities selected for their potential for price appreciation and protection relative to the universe of securities of U.S. companies available in the market. The Portfolio will normally hold a core group of 12 to 25 common stocks of U.S. companies. The Portfolio analyzes historical and projected earnings, price/earnings relationships, industry potential, current and expected market share, competition and the quality of management to select these common stocks. There are no limitations on the size of the companies in which the Portfolio may invest. During periods when the stock market is rising, the Portfolio may invest primarily in small and mid-size U.S. companies, move back and forth between growth and value stocks or invest in both growth and value stocks. The portfolio managers 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 It exhibits a number of unattractive factors or attributes that are forecast to contribute to relative under-performance; o The portfolio managers identify a stronger holding (which could include cash); or o The portfolio managers discover something negative about the company that invalidates the original reason for the purchase or detracts from the growth estimates. 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 not likely to achieve growth of capital PRINCIPAL RISKS o The Portfolio's share price will fluctuate in response to political developments, regulatory issues, market conditions, economic conditions and financial conditions of issuers of the Portfolio's investments. o The Portfolio is non-diversified and may concentrate its investments in a limited number of issuers or a particular industry or industries. Consequently, the Portfolio may be more sensitive to changes in the market price of its portfolio securities than a diversified 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 Shifts between growth and value stocks, large and small cap stocks, as well as converting equity holdings of the Portfolio into cash or fixed income instruments can cause fluctuations in the Portfolio's price per share. o As with an investment in any mutual fund, there is risk of loss of all or part of your investment. FEES AND EXPENSES OF THE PORTFOLIO THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD INSTITUTIONAL CLASS SHARES. Institutional Class Shareholder Fees (paid directly from your investment)(1) Redemption Fee(2) 1.75% Institutional Class Annual Fund Operating Expenses (deducted from fund assets) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Management Fees (3) 0.75% - -------------------------------------------------------------------------------- Distribution (12b-1) Fees 0.00% Other Expenses (3) 0.25% Total Annual Fund Operating Expenses 1.00% - -------------------------------------------------------------------------------- 1) Brokers which have not entered into a selling dealer 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) Shares of the Portfolio not purchased through reinvested dividends or capital gains distributions and held less than one year are subject to the above redemption fee. This fee is intended to encourage long-term investment in the Portfolio, to avoid transaction and other expenses caused by early redemption, and to facilitate portfolio management. See "How to Redeem Shares" below for more information. 3) Based on the estimated amount for the current fiscal year after waivers or reimbursements. 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) 5% annual return, (2) full redemption at the end of each time period, (3) reinvestment of all dividends and capital gain distributions, and (4) operating expenses remain the same. Actual expenses in the future may be greater or lesser than those shown. 1 Year 3 Years ------ ------- Institutional Class: $103 $324 -2- INVESTMENT POLICIES AND RISKS ----------------------------- The Portfolio seeks to achieve its objective of long-term capital growth by investing primarily in equity securities selected for their potential for price appreciation and protection relative to the universe of securities of U.S. companies available in the market. The Portfolio will invest at least 65% of its assets in a core group of at least 12, and no more than 25, common stocks of U.S. issuers. In addition to common stocks, the Portfolio may invest in other types of equity securities, including preferred stocks, warrants or other convertible securities. 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 managers utilize outside research in their allocation and selection process which includes analyzing historical and projected earnings, price/earnings relationships, industry potential, current and expected market share, competition and the quality of management. The portfolio managers then monitor these factors to verify that each investment remains consistent with the fundamental understanding of the company. 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 and/or sub-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. 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 approximate 100%. TEMPORARY INVESTMENTS. For temporary defensive purposes, when the sub-adviser determines that market conditions so warrant, the Portfolio may invest up to 100% of its assets in cash, cash items, and money market and/or fixed income 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. These investment policies 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 less 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. 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. -3- Investment in the securities of small and mid-sized companies have historically been 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. Growth stocks may under-perform during periods when the market favors value stocks (and vice versa), and so to the extent that the portfolio managers sell growth stocks or value stocks before they reach their market peak, the Portfolio may miss opportunities for higher performance. Similarly, small or mid-cap stocks may under-perform during periods when the market favors large-cap stocks (and vice versa) and so to the extent that the portfolio managers sell small or mid-cap stocks or large-cap stocks before they reach their market peak, the Portfolio may miss opportunities for higher performance. As with an investment in any mutual fund, there is risk of loss of all or part of your investment. If the portfolio managers invest in cash, money market, and/or fixed income instruments at inappropriate times or judge market conditions incorrectly, such investments may lower the Portfolio's performance. -4- 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 is responsible for the management of the Portfolio's business affairs. Under the terms of its investment advisory agreement, EAM arranges for the management of the investments and reinvestment of the assets contained in the Portfolio, and the review, supervision and administration of the Portfolio's investment program. EAM is a professional investment manager and a registered investment adviser formed in 2000 to succeed to the advisory business of its parent and predecessors. In addition to advising the portfolio, EAM provides investment advisory services to individuals, corporations, foundations, limited partnerships, and individual retirement, corporate, and group pension and profit sharing plans. EAM reviews the management of the Portfolio based upon the principles of competence, trust and value. EAM's principal is located at 2155 Resort Drive, Suite 108, Steamboat Springs, CO 80487. SUB-INVESTMENT ADVISER Denali Advisors LLC ("Denali"), 4350 La Jolla Village Drive, Suite 970, San Diego, California 92122 is the Portfolio's sub-investment adviser. Denali is a registered investment adviser founded in 2001. Denali provides discretionary investment management services primarily to institutional clients. Denali has no prior experience in providing investment management services to registered management investment companies. Robert Snigaroff, co-founder, President and Chief Investment Officer of Denali has over 11 years of investment management experience (see "Portfolio Managers" below). Mr. Snigaroff directs day-to-day investment activities for a number of clients approximating $280 million in assets as of August 31, 2001. Subject to the authority of the Board of Trustees of IMIT, Denali manages the Portfolio's Invested Assets in accordance with the Portfolio's investment objectives and policies described above. The sub-adviser provides the Portfolio with on-going research, analysis, advice and judgments regarding the Portfolio's investments. The sub-adviser also purchases and sells securities on behalf of the Portfolio. PORTFOLIO MANAGERS The portfolio managers of the Portfolio are: Robert Snigaroff, President and Chief Investment Officer at Denali since March 2001. Prior to co-founding Denali, Mr. Snigaroff worked the San Diego County Employee Retirement Account, a $4 billion pension fund from 1995 to 2001, serving as an investment officer from 1995 to 1997, and as Chief Investment Officer from 1997 to 2001. From 1991 to 1995, Mr. Snigaroff worked the $15 billion Alaska Permanent Fund oil savings pool as an Assistant Investment Officer. Mr. Snigaroff holds an MBA from the University of Southern California. Mike Munson, Vice President and Portfolio Manager at Denali since March 2001. Prior to co-founding Denali, Mr. Munson was a portfolio manager for the San Diego County Employee Retirement Account from 1999 to 2001 and worked with Robert Snigaroff. From 1995 to 1997, he worked for Transamerica as a financial analyst. From 1997 to 1999, he was a full-time student in graduate school. Mr. Munson holds an MBA from UCLA and a B.S. in Mathematics from Harvey Mudd. John Chiu, Director of Research at Denali since June 2001. Prior to joining Denali, Mr. Chiu was an Associate Director at First Quadrant from 1999 to 2000 and worked as Quantitative Research Analyst from 1994 to 1999, also at First Quadrant. Mr. Chiu holds an M.S. in Physics (Ph.D. Candidate) from Caltech. -5- 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, and which is adjusted monthly depending on the Portfolio's investment performance compared to the S&P 500 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. The sub-adviser's fee is 50% of the adviser fee and is paid by the adviser out of its fees. PRICING PORTFOLIO SHARES Institutional Class shares are sold at net asset value per share. Net asset value fluctuates. The net asset value for shares of the Portfolio are 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 the Institutional Class of shares 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. 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. 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. -6- The minimum initial investment for Institutional Class shares is $100,000. 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 $25,000 for Institutional Class shares. 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 made payable to IMPACT 25 FUND: [SPECIFY INSTITUTIONAL CLASS] to: IMPACT MANAGEMENT INVESTMENT TRUST 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. 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 IMPACT 25 FUND: [SPECIFY INSTITUTIONAL CLASS] c/o Fifth Third Bank, the Portfolio's Custodian Bank, at the following address: The Fifth Third Bank ABA # 042000314 IMPACT 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. -7- 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. 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. -8- REDEMPTION IN KIND The Trust has elected to be governed by Rule 18f-1 of the Investment Company Act of 1940, under which the 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. 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. 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. 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 $100,000 due to shareholder redemptions. This procedure would not apply, however, if the balance falls below $100,000solely because of a decline in the Portfolio's net asset value. The Portfolio will provide the shareholder with at least 30 days' prior written notice before any such involuntary redemption occurs. TRANSACTION FEE ON CERTAIN REDEMPTIONS The Portfolio requires the payment of a transaction fee on redemption of Shares held for less than one year equal to 1.75% of the net asset value of such Shares redeemed at the time of redemption. This additional transaction fee is paid to the Portfolio, NOT to the adviser, distributor or transfer agent. It is NOT a sales charge or a contingent deferred sales charge. The fee does not apply to redeemed Shares that were purchased through reinvested dividends or capital gain distributions. The purpose of the additional transaction fee is to indirectly allocate transaction costs associated with redemptions to those investors making redemptions after holding their shares for a short period, thus protecting existing shareholders. These costs include: (1) brokerage costs: (2) market impact costs -i.e., the decrease in market prices which may result when the Portfolio sells certain securities in order to raise cash to meet the redemption request: (3) the realization of capital gains by the other shareholders in the Portfolio; and (4) the effect of the "bid-ask" spread in the over-the-counter market. The 1.75% amount represents the Portfolio's estimate of the brokerage and othre transaction costs which may be incurred by the Portfolio in disoposing of stocks in which the Portfolio may invest. Withour the additional transaction fee, the Portfolio would generally be selling its shares at a price less than the cost to the Portfolio of acquiring the portfolio securities necessary to maintain its investment characteristics, resulting in reduced investment performance for all shareholders in the Portfolio. With the additional transaction fee, the transaction costs of selling additional stocks are not borne by all existing shareholders, but the source of funds for these costs is the transaction fee paid by those investors making redemptions. For purposes of this redemtion feature, shares purchased first will be cosidered to be shares redeemed. -9- 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. 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. -10- CUSIP CLASS CUSIP ----- ----- Institutional Class Shares 45256A806 -11- IMPACT MANAGEMENT INVESTMENT TRUST ---------------------------------- IMPACT 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 -12- 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 1-202-942-8090. 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 ELECTRONIC REQUEST AT THE FOLLOWING E-MAIL ADDRESS: PUBLICINFO@SEC.GOV, OR BY WRITING THE PUBLIC REFERENCE SECTION OF THE SEC, WASHINGTON, D.C. 20549-6009. SEC File No. 811-8065 -13- IMPACT MANAGEMENT INVESTMENT TRUST IMPACT 25 FUND Class A Shares Class F Shares Institutional Class Shares STATEMENT OF ADDITIONAL INFORMATION _____________, 2002 This Statement of Additional Information is not a prospectus, but supplements and should be read in conjunction with the prospectus for the IMPACT 25 Fund dated ______________, 2002. 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....................................................1 INVESTMENT STRATEGIES, POLICIES AND RISKS......................................1 Restricted And Illiquid Securities..........................................1 Temporary Investments.......................................................1 Money Market Instruments....................................................1 U.S. Government Obligations.................................................1 Repurchase Agreements.......................................................2 Securities Of Other Investment Companies....................................3 Portfolio Turnover..........................................................3 INVESTMENT LIMITATIONS.........................................................3 Concentration Of Investments................................................3 Investing In Real Estate....................................................4 Buying On Margin............................................................4 Selling Short...............................................................4 Issuing Senior Securities And Borrowing Money...............................4 Lending Cash Or Securities..................................................4 Underwriting................................................................4 Commodities Or Commodity Contracts..........................................4 MANAGEMENT OF THE PORTFOLIO....................................................5 TRUST OWNERSHIP................................................................6 INVESTMENT ADVISORY SERVICES...................................................7 DISTRIBUTION OF SHARES.........................................................8 CODES OF ETHICS...............................................................10 ADMINISTRATIVE SERVICES, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT.........10 Custodian..................................................................11 Independent Auditors.......................................................11 BROKERAGE TRANSACTIONS........................................................11 SHARES OF BENEFICIAL INTEREST.................................................11 General Information........................................................11 Voting Rights..............................................................12 Massachusetts Partnership Law..............................................13 -i- Page ---- PURCHASING SHARES.............................................................13 REDEEMING SHARES..............................................................13 TRANSACTION FEE ON CERTAIN REDEMPTIONS........................................13 TAX STATUS....................................................................14 PERFORMANCE INFORMATION.......................................................15 Performance Comparisons....................................................15 -ii- INFORMATION ABOUT THE TRUST IMPACT 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, Schneider Large Cap Variable Fund, IMPACT 25 Fund and IMPACT 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.). 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. 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 -2- 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"). 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 held by it will be sold whenever the adviser and/or sub-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. 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 approximate 100%. 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. CONCENTRATION OF INVESTMENTS - ---------------------------- The 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. -3- 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. 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 -4- 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, birthdates, present positions with IMIT, and principal occupations. Name: Gerald L. Bowyer* Birthdate: August 31, 1962 Address: 820 Pine Hollow Road McKees Rocks, PA 15136 Position with Portfolio: Chairman of the Board of Trustees and Chief Economic Adviser Occupation: Host of "The Jerry Bowyer Program", a daily Pittsburgh radio program launched in 1999, focusing on business, leadership, politics and current events. President, Allegheny Institute (a non-partisan research and educational institute) from 1995 to 2001; host of "Focus on the Issues," a syndicated public affairs television program originating on WPCB, Cornerstone TeleVision. Name: A.J. Elko* Birthdate: September 4, 1963 Address: 333 West Vine Street, Suite 206 Lexington, KY 40507 Position with Portfolio: President Occupation: President and Chief Executive Officer of Jordan American Holdings, Inc. since 2001. Chief Operating Officer and Chief Financial Officer of Jordan American Holdings, Inc. from 1999 to 2001. Vice-President of IMPACT Financial Network, Inc. since 1999, President of IMPACT Administrative Services, Inc. since 2001 and President of IMPACT Tax and Business Services, Inc. since October, 2000. Chief Operating Manager and founder of A.J. Elko & Associates, LLC, (a tax planning and tax preparation services company) From 1995 to 2000. Name: Oleen Eagle Birthdate: September 28, 1930 Address: 3215 Chestnut Street Murrysville, PA 15668 Position with Portfolio: Trustee -5- Occupation: President of Cornerstone TeleVision since 1987, Vice 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: Mark Dreistadt Birthdate: July 27, 1954 Address: 133 Harvest Lane Harrison City, PA 15636 Position with Portfolio: Trustee Occupation: Vice President of Administration and Finance at Cornerstone TeleVision since January 2000. From January 1999 to December 2000, General Manager of WPXU, a Paxson Family television station, in Decatur, Illinois. From January 1989 to December 1998, General Manager at FHL Television, which was acquired by Paxson in 1999. Name: Emmett A. Pais, CPA* Birth date: November 14, 1963 Address: 185 Mary Ellen Drive North Versailles, PA 15137 Position with Portfolio: Secretary and Treasurer Occupation: CFO of Jordan American Holdings, Inc. since 2001. Accounting and Tax Manager of IMPACT Tax and Business Services, Inc. since 2000. Tax preparer and accountant for John W. Sinichak, CPA from 1998 to 2000. Staff auditor for audit department of USBANCORP, Inc. from 1997 to 1998. * 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, 2001, the non-interested trustees of IMIT received the following compensation: Independent Trustee Compensation from IMIT Total Compensation from IMIT ------------------- ---------------------- ---------------------------- Oleen Eagle $2,000 $2,000 TRUST OWNERSHIP As of January 28, 2002, officers and Trustees of IMIT owned individually and together less than 1% of IMIT's outstanding Shares. -6- INVESTMENT ADVISORY SERVICES The Portfolio's adviser is Equity Assets Management, Inc. ("EAM"), a wholly-owned subsidiary of Jordan American Holdings, Inc. ("JAHI"). JAHI is a holding company whose principal subsidiary is EAM. W. Neal Jordan and the Kirkland S. and Rena B. Lamb Foundation are presumed to be control persons of EAM because they each own more than 25% of the voting stock of JAHI. The Portfolio's principal distributor, IMPACT Financial Network, Inc., is an affiliate of EAM. Subject to the authority of the Board of Trustees of the Portfolio, EAM is responsible for the overall management of the Portfolio. Denali Advisors LLC, the Portfolio's sub-adviser, is a Delaware limited liability company. Robert G. Snigaroff is presumed to be a control person of Denali Advisors LLC because he has the right to vote more than 25% of a class of interests of Denali. Progress Putnam Lovell Ventures, LLC, is presumed to be a control person of Denali because it has the right to vote more than 25% of a class of interests of Denali. Progress-Putnam Lovell Advisors LLC is a joint venture between Progress Investment Management Company, one of the country's leading multi-manager investment management specialists and a member of the Liberty Financial Companies, Inc. (NYSE: L) family of companies, and Putnam Lovell Capital Partners Inc., the private capital affiliate of investment bank Putnam Lovell Securities Inc. Generally, the sub-adviser provides the Portfolio with on-going research, analysis, advice and judgments regarding the Portfolio's investments. Under the sub-advisory agreement with the Portfolio, Denali (i) makes investment decisions regarding the Invested Assets of the Portfolio; (ii) places purchase and sale orders on behalf of the Portfolio on a timely basis to implement such investment decisions; (iv) employs professional portfolio managers and securities analysts to provide research services to the Portfolio, including, analysis, advice, and judgments regarding individual investments, general economic conditions, trends and long-range investment policy; and (v) furnishes the Portfolio with whatever statistical information the Portfolio may reasonably request with respect to the securities that the Portfolio may hold or contemplate purchasing 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 Class A share of the Portfolio and the change in the S&P 500 Index ("Index"). The performance of one Class A 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 -7- 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. 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 Class A 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. The sub-adviser's fee is 50% of the adviser fee and is paid by the adviser out of its fees. 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 CLASS A SHARES - ------------------------------ Class A 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 Class A shares, is as follows: Amount of Purchase Amount Paid to Dealers ------------------ ---------------------- Under $25,000 5.00% $25,000 but less than $50,000 4.25% $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 $750,000 1.60% $750,000 but less than $1 million 1.20% $1 million or more and certain other investments described none A commission will be paid to authorized dealers who initiate and are responsible for purchases of $1 million or more of Class A shares during the first 12 months of operation of the Class A shares. -8- 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. DISTRIBUTION PLANS - ------------------ The Portfolio has adopted Rule 12b-1 Plans (the "Plans"), for Class A and F 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, and EAM, adviser to the portfolio and affiliate of IFNI, each have a financial interest in the operation of the Plans. Charles R. Clark, Sr. Portfolio Manager of EAM, and President of IFNI, has a direct financial interest in the operation of the Plans. A. J. Elko, President of IMIT, President and CEO of JAHI, and Vice President of IFNI, -9- has a direct financial interest in the operation of the Plans. Gerald Bowyer, Trustee and Chief Economic Adviser of IMIT and Director of JAHI has a direct financial interest in the operation of the Plans. Emmett Pais, Secretary and Treasurer of IMIT and CFO of JAHI has an indirect financial interest in the operation of the Plans. CODES OF ETHICS IMIT, the investment adviser, the sub-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 pre-clearance 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, Kentucky, 40507, is responsible for performing and overseeing administrative, transfer agent, dividend disbursing and fund accounting services on behalf of the Portfolio. IASI is an affiliate of EAM, the Portfolio's adviser. The fee paid to IASI for services is as follows: For the transfer agency and dividend disbursing services rendered by the Administrator pursuant to this Agreement, IMIT shall pay the Administrator at the beginning of each month, a fee, calculated as follows: Fee per shareholder account $8.25 Minimum annual fee per initial portfolio $15,000 Additional annual fee for each additional class $5,000 For the administration and accounting services rendered by the Administrator pursuant to this Agreement, IMIT shall pay the Administrator at the beginning of each month, a fee, calculated as follows: Fee for first $50 million in total fund assets 0.06%1 Fee for over $50 million up to $100 million in total fund assets 0.05%1 Fee for over $100 million in total fund assets 0.04%1 Minimum annual fee $48,000 Additional annual fee for each additional class $12,000 - -------- 1 Calculated annually of the average daily net assets of each portfolio for the previous month. -10- 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 the Portfolio. INDEPENDENT AUDITORS - -------------------- Spicer, Jeffries & Co., 4155 E. Jewell Avenue, Suite 307, Denver, Colorado 80222, serves as the independent auditor for the Portfolio. The auditor's fee is paid by the Portfolio. BROKERAGE TRANSACTIONS The adviser and/or sub-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 and/or sub-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 and/or sub-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 and/or sub-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 and/or sub-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 and/or sub-adviser. Although there is no specified formula for allocating such transactions, the various allocation methods used by the adviser and/or sub-adviser, and the results of such allocations, are subject to periodic review by the Portfolio's Board of Trustees. 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, comprised of (i) IMPACT Total Return Portfolio, (ii) IMPACT 25 Fund, (iii) IMPACT 25 Variable Fund and (iv) Schneider Large Cap Variable Fund. Each of the IMPACT Total Return Portfolio and IMPACT 25 Fund have four classes, designated as Class A shares, Class F shares, Class R shares (formerly designated the Traditional Class, Wholesale Class and Retail Class respectively) and Institutional Class 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 -11- 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 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. -12- 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. 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. TRANSACTION FEE ON CERTAIN REDEMPTIONS For the institutional class of shares only, the Portfolio requires the payment of a transaction fee on redemption of Shares held for less than one year equal to 1.75% of the net asset value of such Shares redeemed at the time of redemption. This additional transaction fee is paid to the Portfolio, NOT to the adviser, distributor or transfer agent. It is NOT a sales charge or -13- a contingent deferred sales charge. The fee does not apply to redeemed Shares that were purchased through reinvested dividends or capital gain distributions. The purpose of the additional transaction fee is to indirectly allocate transaction costs associated with redemptions to those investors making redemptions after holding their shares for a short period, thus protecting existing shareholders. These costs include: (1) brokerage costs: (2) market impact costs -i.e., the decrease in market prices which may result when the Portfolio sells certain securities in order to raise cash to meet the redemption request: (3) the realization of capital gains by the other shareholders in the Portfolio; and (4) the effect of the "bid-ask" spread in the over-the-counter market. The 1.75% amount represents the Portfolio's estimate of the brokerage and othre transaction costs which may be incurred by the Portfolio in disoposing of stocks in which the Portfolio may invest. Withour the additional transaction fee, the Portfolio would generally be selling its shares at a price less than the cost to the Portfolio of acquiring the portfolio securities necessary to maintain its investment characteristics, resulting in reduced investment performance for all shareholders in the Portfolio. With the additional transaction fee, the transaction costs of selling additional stocks are not borne by all existing shareholders, but the source of funds for these costs is the transaction fee paid by those investors making redemptions. For purposes of this redemtion feature, shares purchased first will be cosidered to be shares redeemed. 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. -14- 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 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; -15- 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. 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, including the Standard & Poor's 500 Composite Stock Price Index. -16- PART C OTHER INFORMATION ITEM 23. EXHIBITS (a) Amendment No. 2 to Declaration Trust (8) (b) By-Laws (1) (c) Article III of the Declaration of Trust (8) (d) (i) Investment Advisory Agreement with respect to IMPACT Total Return Portfolio - filed herewith (ii) Sub-Investment Advisory Agreement with respect to IMPACT Total Return Portfolio - filed herewith (iii) Investment Advisory Agreement with respect to the IMPACT 25 Fund (fka Jordan 25 Fund) -- filed herewith (iv) Investment Advisory Agreement with respect to the Schneider Large Cap Variable Fund - filed herewith (v) Investment Advisory Agreement with respect to the IMPACT 25 Variable Fund (fka Jordan 25 Variable Fund) - filed herewith (vi) Form of Sub-Investment Advisory Agreement with respect to the IMPACT 25 Fund - filed herewith (e) Amended and Restated Underwriting Agreement - filed herewith (f) Not applicable (g) (i) Form Amended Custody Agreement (2) (ii) Form of Amendment to Amended Custody Agreement - filed herewith (h) Amended and Restated Administrative Services Agreement - filed herewith (i) Opinion and Consent of Counsel (2) (j) Not applicable (k) Not applicable (l) Subscription Agreement (2) (m) Distribution Plans pursuant to Rule 12b-1 (i) Second Amended and Restated 12b-1 Plan for Class R shares of IMPACT Total Return Portfolio (8) (ii) Amended and Restated 12b-1 Plan for Class A shares of IMPACT Total Return Portfolio (8) (iii) Amended and Restated 12b-1 Plan for Class F shares of IMPACT Total Return Portfolio (8) (iv) Amended and Restated 12b-1 Plan for Class R shares of IMPACT 25 Fund (8) (v) Amended and Restated 12b-1 Plan for Class A shares of the IMPACT 25 Fund (8) (vi) Second Amended and Restated 12b-1 Plan for Class F shares of the IMPACT 25 Fund - filed herewith (vii) 12b-1 Plan for IMPACT 25 Variable Fund (fka Jordan 25 Variable Fund) - filed herewith (viii) 12b-1 Plan for Schneider Large Cap Variable Fund -- filed herewith (n) (i) Amended and Restated Rule 18f-3 Plan for IMPACT Total Return Portfolio (8) (ii) Amended and Restated Rule 18f-3 Plan for IMPACT 25 Fund - filed herewith (o) Not applicable (p) (i) Code of Ethics of Impact Management Investment Trust, Jordan American Holdings, Inc., Equity Assets Management Inc. and Impact Financial Network Inc. (6) (ii) Code of Ethics of Schneider Capital Management Corporation (8) (iii) Code of Ethics of Denali Advisors LLC - filed herewith (1) Incorporated by reference to IMIT's Registration Statement on Form N-1A, which was filed via EDGAR on February 18, 1997. (2) Incorporated by reference to Pre-Effective Amendment No. 2 which was filed via EDGAR on June 26, 1997. (3) Incorporated by reference to Post-Effective Amendment No. 3, which was filed via EDGAR on April 3, 1998. (4) Incorporated by reference to Post-Effective Amendment No. 4, which was filed via EDGAR on February 16, 1999. (5) Incorporated by reference to Post-Effective Amendment No. 5, which was filed via EDGAR on April 30, 1999. (6) Incorporated by reference to Post-Effective Amendment No. 8, which was filed via EDGAR on October 24, 2000. (7) Incorporated by reference to Post-Effective Amendment No. 11, which was filed via EDGAR on January 29, 2001. (8) Incorporated by reference to Post-Effective Amendment No. 12, which was filed via EDGAR on January 28, 2001. ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT Inapplicable. ITEM 25. INDEMNIFICATION Article XI, Section 2 of IMIT's Declaration of Trust and Article VIII, Section 8.1 of IMIT's Bylaws limit the liability of IMIT's trustees and officers and provide for indemnification of IMIT's trustees, officers, employees or agents for liabilities and expenses that they may incur in such capacities. In general, IMIT will indemnify its trustees and officers against any liability except for willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of trustee or officer. Pursuant to an agreement (the "Agreement") by which IMPACT Administrative Services, Inc. ("IASI") is appointed administrator, transfer agent and dividend disbursing agent, IMIT agrees to indemnify and hold IASI harmless from and against, any and all losses, damages, costs, reasonable attorneys' fees and expenses, payments expenses and liabilities, except for a loss or expense resulting from misfeasance, bad faith or negligence on IASI's part in the performance of its duties or from disregard by IASI of its obligations and duties under the Agreement, arising out of or attributable to: (1) The reliance on or use by IASI of its officers, employers or agents of information, records, or documents which are received by IASI or its officers, employers or agents and furnished to it or them by or on behalf of IMIT, and which have been prepared or maintained by IMIT or its officers, employees or agents; (2) IMIT's refusal or failure to comply with the terms of the Agreement or IMIT's lack of good faith, or its actions, or lack thereof, involving gross negligence or willful misfeasance; (3) The taping or other form of recording of telephone conversations or other forms of electronic communications with other agents of IMIT, its investors and shareholders, or reliance by IASI on telephone or other electronic instructions of any person acting on behalf of a shareholder or shareholder account for which telephone or other electronic services have been authorized; and (4) The offer or sale of shares by IMIT in violation of any requirement under the Federal securities laws or regulations or the securities laws or regulations of any state, or in violation of any stop order or other determination or ruling by any Federal agency or any state agency with respect to the offer or sale of such shares in such state resulting from activities, actions, or omissions by IMIT or its officers, employees, or agents prior to the effective date of this Agreement. Pursuant to Rule 484 under the Securities Act of 1933, IMIT furnishes the following undertaking: 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 and sub-advisers is hereby incorporated by reference to the section of the prospectuses captioned "Management of the Portfolio" and to the section of the statements of additional Information captioned "Investment Advisory Services." (1) A.J. Elko, an officer of IMIT, is an officer of the adviser. The adviser 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 adviser has engaged in any other business during the past two years. (2) Schneider Capital Management, a Pennsylvania corporation, serves as a sub-adviser to the IMPACT Total Return Portfolio and as the adviser to the Schneider Large Cap Variable Portfolio. Schneider Capital provides financial advisory services primarily to institutional clients. Mr. Schneider, the president and sole director of the sub-adviser has not engaged in any other business during the past two years. Steven J. Fellin, an officer of the sub-adviser, was a trustee of IMIT during the past two years. (3) Denali Advisors, LLC, a Delaware limited liability company, serves as a sub-adviser to the IMPACT 25 Fund. Denali provides financial advisory services primarily to institutional clients.. The principals of Denali have held the following positions of a substantial nature in the past two years: Other Business, Vocation, Profession or Name Employment of a Substantial Nature -------------------- --------------------------------------------------- Robert Snigaroff Chief Investment Officer for the San Diego County Employee Retirement Account Mike Munson Portfolio Manager for the San Diego County Employee Retirement Account John Chiu Associate Director at First Quadrant 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 Offices with Positions and Offices Name and Address Underwriter with Registrant - ------------------------ -------------------------- --------------------- Charles R. Clark President and Sole Directo None 333 West Vine Street, Suite 206 Lexington, KY 40507 A.J. Elko Vice-President President 333 West Vine Street, Suite 206 Lexington, KY 40507 (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 Not applicable ITEM 30. UNDERTAKINGS Not applicable 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. 13 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 29th day of January, 2002. Impact Management Investment Trust By: /s/ A.J. Elko ------------------------------ 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/ Gerald L. Bowyer Chairman of the January 29, 2001 - ------------------------------ Board of Trustees Gerald L. Bowyer /s/ A.J. Elko President January 29, 2001 - ------------------------------ A.J. Elko /s/ Oleen Eagle Trustee January 29, 2001 - ------------------------------ Oleen Eagle /s/ Mark Dreistadt Trustee January 29, 2001 - ------------------------------ Mark Dreistadt INDEX TO EXHIBITS Exhibit No. Page - ----------- ---- 23(d) (i) Investment Advisory Agreement with respect to IMPACT Total Return Portfolio A-1 (ii) Sub-Investment Advisory Agreement with respect to IMPACT Total Return Portfolio AA-1 (iii) Investment Advisory Agreement with respect to the IMPACT 25 Fund (fka Jordan 25 Fund) AB-1 (iv) Investment Advisory Agreement with respect to the Schneider Large Cap Variable Fund AC-1 (v) Investment Advisory Agreement with respect to the IMPACT 25 Variable Fund (fka Jordan 25 Variable Fund) AD-1 (vi) Form of Sub-Investment Advisory Agreement with respect to Impact 25 Fund AE-1 23(e) Amended and Restated Underwriting Agreement B-1 23(g) Form of Amendment to Amended and Restated Custody Agreement C-1 23(h) Amended and Restated Administrative Services Agreement D-1 23(m) (vi) Second Amended and Restated 12b-1 Plan for Class F shares of the IMPACT 25 Fund E-1 (vii) 12b-1 Plan for IMPACT 25 Variable Fund (fka Jordan 25 Variable Fund) EA-1 (viii) 12b-1 Plan for Schneider Large Cap Variable Fund EB-1 23(n) (ii) Amended and Restated Rule 18f-3 Plan for IMPACT 25 Fund F-1 23(p) (iii) Code of Ethics of Denali Advisers, LLC G-1 EX-99.23.D.I 3 ex23di-102a.txt INVESTMENT ADVISORY AGREEMENT 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 IMPACT TOTAL RETURN PORTFOLIO (the "Portfolio"), and EQUITY ASSETS MANAGEMENT, INC., a Delaware 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; A-1 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 1.25% 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. A-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. A-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 4th day of January, 2001. IMPACT MANAGEMENT INVESTMENT TRUST By: /s/ A.J. Elko ------------------------------ President EQUITY ASSETS MANAGEMENT, INC. By: /s/ Charles Clark ------------------------------ President A-4 EX-99.23.D.II 4 ex23dii-102a.txt SUB-INVESTMENT ADVISORY AGREEMENT IMPACT MANAGEMENT INVESTMENT TRUST SUB-INVESTMENT ADVISER AGREEMENT -------------------------------- AGREEMENT, made January 4, 2001, between Equity Assets Management, Inc. (the "Fund Manager"), Schneider Capital Management Corporation (the "Sub-Adviser"), a Pennsylvania Corporation, and Impact Management Investment Trust. WHEREAS, the Fund Manager has entered into an Investment Advisory Agreement with Impact Management Investment Trust (the "Company") pursuant to which the Fund Manager acts as the adviser to Impact Total Return Portfolio ("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 Sub-Adviser is registered as an investment adviser under the Investment Advisers Act of 1940, as amended ("Advisers Act"); WHEREAS, the Fund Manager wishes to retain the Sub-Adviser to render investment advisory services in connection with the management of the Fund, and the Sub-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 Fund Manager, the Sub-Adviser, and the Company on behalf of the Fund as follows: 1. Appointment ----------- The Fund Manager, with the consent and approval of the Company and its shareholders, hereby appoints the Sub-Adviser to act as Sub-Investment Adviser to the Fund for the period and on the terms set forth herein. The Sub-Adviser accepts the appointment and agrees to furnish the services set forth herein for the compensation provided herein. 2. Services as Sub-Investment Adviser ---------------------------------- Subject to the general supervision and direction of the Board of Trustees of the Company, the Sub-Adviser will (a) manage the Fund in accordance with the Fund's Prospectuses and Statement of Additional Information filed with the Securities and Exchange Commission, 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 Sub-Adviser will provide the Fund ongoing research, analysis, advice, and judgments regarding individual investments, general economic conditions and trends and long-range investment AA-1 policy. In addition, the Sub-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. The Sub-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 Sub-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 Sub-Adviser or any of its affiliates; (1) becomes aware that it is subject to a statutory disqualification that prevents the Sub-Adviser from serving as sub-investment adviser pursuant to this Agreement; or (2) becomes aware that it is the subject of an administrative proceeding or enforcement action by the Securities and Exchange Commission ("SEC") or other regulatory authority. The Sub-Adviser further agrees to notify the company immediately of any material fact known to the Sub-Adviser respecting or relating to the Sub-Adviser that is not contained in the Company's Registration Statement regarding the Fund, 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 Sub-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 Sub-Adviser and approving the form of this Agreement; AA-2 b. the Registration Statement as filed with the Securities and Exchange Commission and any amendments thereto; 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 Sub-Adviser's obligation to obtain best execution, the Sub-Adviser shall have full discretion to select brokers or dealers to effect the purchase and sale of securities. When the Sub-Adviser places orders for the purchase or sale of securities for the Fund, in selecting brokers or dealers to execute such orders, the Sub-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 Sub-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 Sub-Adviser, provided that the Sub-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 Sub-Adviser's overall responsibilities with respect to accounts as to which the Sub-Adviser exercises investment discretion. The Sub-Adviser may aggregate securities orders so long as the Sub-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 Sub-Adviser, or any affiliated person thereof, except to the extent permitted by SEC exemptive order or by applicable law. 5. Records ------- The Sub-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 Sub-Adviser with respect to the Fund by the 1940 Act. The Sub-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 Sub-Adviser shall exercise its best judgment in rendering the services under this Agreement. The Sub-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 Sub-Adviser against any liability to the Fund or to its shareholders to which the Sub-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 Sub-Advisers reckless disregard of its obligations and duties under this Agreement. As used in this Section 6, the term "Sub-Adviser" AA-3 shall include any officers, directors, employees, or other affiliates of the Sub-Adviser performing services with respect to the Fund. 7. Compensation ------------ In consideration of the services rendered pursuant to this Agreement, the Fund Manager will pay the Sub-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 Sub-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 Prospectuses or Statement of Additional Information. 8. Expenses -------- The Sub-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 Sub-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. In addition, the Fund will pay distribution fees pursuant to Distribution Plans adopted under Rule 12b-1 of the 1940 Act. 9. Services to Other Companies or Accounts --------------------------------------- The investment advisory services of the Sub-Adviser to the Fund under this Agreement are not to be deemed exclusive, and the Sub-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 Sub-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 Sub-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. AA-4 10. Duration and Termination ------------------------ This Agreement shall become effective on January 4, 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 Sub-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 Sub-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. 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. AA-5 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 Sub-Adviser by the Company or the Fund Manager shall be in writing and shall be duly given if mailed or delivered to the Sub-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 Sub-Adviser to the Company. Notices of any kind to be given to the Company or the Fund Manager by the Sub-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 or the Fund Manager to the Sub-Adviser. AA-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: /s/ Arnold C. Schneider, III ----------------------------- President Equity Assets Management, Inc. By: /s/ Charles Clark ----------------------------- President Impact Management Investment Trust By: /s/ A.J. Elko ----------------------------- President AA-7 EX-99.23.D.III 5 ex23diii-102a.txt INVESTMENT ADVISORY AGREEMENT 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 AB-1 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) AB-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. AB-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 AB-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 4th day of January, 2001. IMPACT MANAGEMENT INVESTMENT TRUST By: /s/ A.J. Elko ------------------------------ President EQUITY ASSETS MANAGEMENT, INC. By: /s/ Charles Clark ------------------------------ President AB-5 EX-99.23.D.IV 6 ex23div-102a.txt INVESTMENT ADVISORY AGREEMENT IMPACT MANAGEMENT INVESTMENT TRUST INVESTMENT ADVISER AGREEMENT ---------------------------- AGREEMENT, made as of January 4, 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. AC-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; AC-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. AC-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. AC-4 10. Duration and Termination ------------------------ This Agreement shall become effective as of January 4, 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. AC-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. AC-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: /s/ Arnold C. Schneider, III ---------------------------- President Impact Management Investment Trust By: /s/ A.J. Elko ---------------------------- President AC-7 EX-99.23.D.V 7 ex23dv-102a.txt INVESTMENT ADVISORY AGREEMENT 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; AD-1 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. AD-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. AD-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 4th day of January, 2001. IMPACT MANAGEMENT INVESTMENT TRUST By: /s/ A.J. Elko ----------------------------- President EQUITY ASSETS MANAGEMENT, INC. By: /s/ Charles Clark ----------------------------- President AD-4 EX-99.23.D.VI 8 ex23dvi-102a.txt FORM SUB-INVESTMENT ADVISORY AGREEMENT IMPACT MANAGEMENT INVESTMENT TRUST SUB-INVESTMENT ADVISER AGREEMENT -------------------------------- THIS AGREEMENT (this "Agreement") is made this ____ day of October, 2001, by and among Equity Assets Management, Inc. (the "Fund Manager"), a Delaware corporation, Denali Advisors LLC (the "Sub-Adviser"), a Delaware limited liability company, and Impact Management Investment Trust (the "Company"), a Massachusetts business trust on behalf of the IMPACT 25 Fund (the "Fund"). WHEREAS, the Fund Manager has entered into an Investment Advisory Agreement with the Company pursuant to which the Fund Manager acts as the adviser to the Fund; WHEREAS, the Company is authorized pursuant to its Declaration of Trust 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 Sub-Adviser is registered as an investment adviser under the Investment Advisers Act of 1940, as amended ("Advisers Act"); and WHEREAS, the Fund Manager wishes to retain the Sub-Adviser to render investment advisory services in connection with the management of the Fund, and the Sub-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 Fund Manager, the Sub-Adviser, and the Company on behalf of the Fund as follows: 1. Appointment ----------- The Fund Manager, with the consent and approval of the Company and its Board of Trustees, hereby appoints the Sub-Adviser to act as sub-investment adviser to the Fund for the period and on the terms set forth herein. The Sub-Adviser accepts the appointment and will furnish the services set forth herein for the compensation provided herein. 2. Services as Sub-Investment Adviser ---------------------------------- a. The Sub-Adviser acknowledges that the Fund Manager will determine the allocation of Fund assets between the invested (the "Invested Assets") and the cash positions thereof. Accordingly, subject to the general supervision and direction of the Board of Trustees of the Company, the Sub-Adviser shall (i) manage the Fund in accordance with the Fund's prospectus and statement of additional information filed with the Securities and Exchange Commission (the "SEC"), as they may be amended from time to time; (ii) make investment decisions regarding the Invested Assets of the Fund; (iii) place purchase and sale orders on behalf of the Fund on a timely basis to implement such investment decisions; (iv) employ professional portfolio managers and securities analysts to provide research services to the Fund, including, analysis, advice, and judgments regarding individual investments, general economic AE-1 conditions, trends and long-range investment policy; and (v) 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. b. In providing the services described in Section 2(a) above, the Sub-Adviser shall: (1) 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; (2) use reasonable efforts to manage the Invested Assets so that the Fund will qualify, and continue to qualify, as a regulated investment company under Subchapter M of the Code and regulations issued thereunder; (3) 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; (4) 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; and (5) immediately notify the Company in the event that the Sub-Adviser or any of its affiliates; (A) becomes aware that it is subject to a statutory disqualification that prevents the Sub-Adviser from serving as a sub-investment adviser pursuant to this Agreement; or (B) becomes aware that it is the subject of an administrative proceeding or enforcement action by the SEC or other regulatory authority. The Sub-Adviser shall also notify the Company immediately of any material fact known to the Sub-Adviser respecting or relating to the Sub-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 --------- a. The Fund has delivered properly certified or authenticated copies of each of the following documents to the Sub-Adviser, and shall deliver to the Sub-Adviser all future amendments and supplements thereto, if any: (1) A certified resolution of the Board of Trustees of the Company authorizing the appointment of the Sub-Adviser and approving the form of this Agreement. (2) The Registration Statement as filed with the SEC and any amendments thereto. AE-2 (3) All exhibits, powers of attorneys, certificates and any and all other documents relating to or filed in connection with the Registration Statement described above. b. The Sub-Adviser has delivered properly certified or authenticated copies of each of the following documents to the Fund, and shall deliver to the Fund all future amendments and supplements thereto, if any: (1) The Sub-Adviser's written code of ethics complying with the requirements of Rule 17j-1 under the 1940 Act and Section 204A the Investment Advisers Act of 1940 and evidence of its adoption by the Sub-Adviser. Within forty-five (45) days of the end of the last calendar quarter of each year while this Agreement is in effect, the president or a vice president or manager of the Sub-Adviser shall certify to the Fund that the Sub-Adviser has complied with the requirements of Rule 17j-1 and Section 204A during the previous year and that there has been no violation of the Sub-Adviser's code of ethics or, if such a violation has occurred, that appropriate action was taken in response to such violation. Upon the written request of the Fund, the Sub-Adviser shall permit the Fund, its employees or its agents to examine the reports required to be made to the Sub-Adviser by Rule 17j-1(d)(1). (2) The Sub-Adviser's Form ADV. 4. Brokerage --------- Subject to the Sub-Adviser's obligation to obtain best price and execution and subject to conformance with the policies and procedures disclosed in the Fund's prospectus and statement of additional information, the Sub-Adviser shall have discretion to select brokers or dealers to effect the purchase and sale of securities. When the Sub-Adviser places orders for the purchase or sale of securities for the Fund, in selecting brokers or dealers to execute such orders, the Sub-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 Sub-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 Sub-Adviser, subject to the review of the Company's Board of Trustees from time to time with respect to the extent and continuation of this practice, and provided that the Sub-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 Sub-Adviser's overall responsibilities with respect to accounts as to which the Sub-Adviser exercises investment discretion. The Sub-Adviser may aggregate securities orders so long as the Sub-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 shall the Fund's securities be purchased from or sold to the Fund's principal underwriter, the Fund Manager, the Sub-Adviser, or any affiliated person thereof, except to the extent permitted by SEC exemptive order or by applicable law. 5. Records ------- AE-3 The Sub-Adviser shall maintain and preserve for the periods prescribed under the 1940 Act any and all records as are required to be maintained by the Sub-Adviser with respect to the Fund by the 1940 Act. The Sub-Adviser acknowledges that all records which the Sub-Advisor maintains for the Fund are the property of the Fund and the Sub-Advisor will promptly surrender any of such records upon request. 6. Standard of Care ---------------- The Sub-Adviser shall exercise its best judgment in rendering services under this Agreement. The Sub-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, however, that nothing herein shall be deemed to protect or purport to protect the Sub-Adviser against any liability to the Fund or to its shareholders to which the Sub-Adviser would otherwise be subject by reason of misfeasance, bad faith or negligence on the Sub-Adviser's part in the performance of its duties or by reason of the Sub-Adviser's reckless disregard of its obligations and duties under this Agreement. As used in this Section 6, the term "Sub-Adviser" shall include any officers, directors, employees, or other affiliates of the Sub-Adviser performing services with respect to the Fund. 7. Compensation ------------ In consideration of the services rendered pursuant to this Agreement, the Fund Manager will pay the Sub-Adviser a fee of 50% of the annual advisory fee paid to the Fund Manager by the Fund. Under the Fund's investment advisory agreement with the Fund Manager, the Fund pays the Fund Manager a base fee which on an annual basis equals 1.20% of the Fund's average daily net assets, and which is adjusted monthly depending on the Fund's investment performance compared to S&P 500 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 Fund's average daily net assets. Pursuant to the investment advisory agreement with the Fund Manager, the Fund Manager may voluntarily waive some or all of the Fund Manager's fees. 8. Expenses -------- The Sub-Adviser shall 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 shall bear certain other expenses to be incurred in its operation, including: taxes, interest, brokerage fees and commissions, if any; fees of Trustees of the Company who are not officers, directors or employees of the Fund Manager or the Sub-Adviser; SEC 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 AE-4 extraordinary expenses. In addition, the Fund shall pay distribution fees pursuant to distribution plans adopted under Rule 12b-1 of the 1940 Act. 9. Services to Other Companies or Accounts --------------------------------------- The investment advisory services of the Sub-Adviser to the Fund under this Agreement are not to be deemed exclusive, and the Sub-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 the Sub-Adviser's services hereunder are not impaired thereby. Except to the extent limited by Rule 17j-1 under the 1940 Act, no provision of this Agreement shall limit or restrict the Sub-Adviser or any affiliated person thereof from buying, selling or trading any securities or other investments (including any securities or other investments which the Fund is eligible to buy) for the Sub-Adviser's or the affiliated person's own accounts or for the accounts of others for whom it or they may be acting; provided, however, that the Sub-Advisor shall not undertake any activities which, in its reasonable judgment, will adversely affect the performance of its obligations to the Fund under this Agreement. 10. Duration and Termination ------------------------ This Agreement shall become effective on October ___, 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 Sub-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 Denali Advisors LLC, or any derivation thereof or logo associated with that name is the valuable property of the Sub-Adviser and its affiliates, and that AE-5 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. 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 Delaware. 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 Sub-Adviser by the Company or the Fund Manager shall be in writing and shall be duly given if mailed or delivered to the Sub-Adviser at: Denali Advisors LLC, 4350 La Jolla Village Drive, Suite 970, San Diego, CA 92122 or at such other address or to such individual as shall be specified by the Sub-Adviser to the Company. Notices of any kind to be given to the Company or the Fund Manager by the Sub-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 or the Fund Manager to the Sub-Adviser. AE-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. DENALI ADVISORS LLC By: ------------------------------------ President EQUITY ASSETS MANAGEMENT, INC. By: ------------------------------------ President IMPACT MANAGEMENT INVESTMENT TRUST By: ------------------------------------ President AE-7 EX-99.23.E 9 ex23e-102a.txt AMENDED AND RESTATED UNDERWRITING AGREEMENT Amended and Restated Underwriting Agreement Between IMPACT MANAGEMENT INVESTMENT TRUST IMPACT FINANCIAL NETWORK, INC. THIS UNDERWRITING AGREEMENT is made this 28th day of January, 2002, between Impact Management Investment Trust (the "Trust"), a Massachusetts business trust and Impact Financial Network, Inc. ("Underwriter"), a corporation organized under the laws of the State of Florida. WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company; and WHEREAS, the Underwriter is engaged in the business of promoting the distribution of the securities of investment companies, and is a member of the National Association of Securities Dealers (the "NASD") and is registered as a broker-dealer under the Securities Exchange Act of 1934 (the "1934 Act"); and WHEREAS, the Trust is authorized to issue an unlimited number of shares of beneficial interest ("Shares") in one or more classes or series, and has registered or qualified such shares as the case may be for public offering and distribution under the Securities Act of 1933 (the "1933 Act") and any applicable state securities laws; and WHEREAS, the Trust is authorized to offer for public sale one or more distinct series of Shares of beneficial interest ("Series"), representing an undivided interest in the assets, subject to the liabilities, allocated to that Series and each Series having a separate investment objective and policies; and WHEREAS, the Trust has established as separate series the portfolios listed on appendix A to this Agreement (each a "Portfolio"); and WHEREAS, the Trust wishes to employ the services of the Underwriter to assist in the distribution of the Shares in accordance with applicable laws and such Plan(s) of Distribution as the Trust may adopt; and WHEREAS, the Underwriter wishes to provide distribution services to the Trust as set forth below; NOW, THEREFORE, in consideration of the mutual promises and undertakings herein contained, the parties agree as follows: 1. SALES OF SHARES. During the term of this Agreement the Trust grants to the Underwriter the right to sell on it behalf Shares of all Series of the Trust, now or hereafter created, subject to the registration requirements of the 1933 Act, and of the laws governing the B-1 sale of securities in various states (the "Blue Sky Laws") under the terms and conditions set forth herein. In connection therewith, the Underwriter (I) shall have the right to sell, as agent on behalf of the Trust, Shares authorized for issue and registered under the 1933 Act and applicable Blue Sky laws; and (ii) shall sell such Shares only in compliance with applicable law, the terms set forth in the Trust's currently effective registration statement, and in accordance with any Plans of Distribution of the Trust for any Series, as may be in effect from time to time, and further in compliance with any limitations which may be imposed by the Trustees of the Trust. The Underwriter is not obligated to sell any specific number of Shares. 2. SELLING DEALER AGREEMENTS. Subject to the supervisory authority of the Trustees of the Trust, and on such terms as are authorized by the Trust, the Underwriter may enter into selling dealer agreements with selected dealers and others ("Selling Dealers") for the provision of distribution services related to the sale of Trust Shares as well as other shareholder services as agreed by affected parties. The Underwriter will act only as principal in entering into such selling dealer agreements. 3. SALES OF SHARES BY THE TRUST. The rights granted to the Underwriter shall be nonexclusive in that the Trust reserves the right to sell its Shares to investors on applications received and accepted by the Trust. Further, the Trust reserves the right to issue Shares in connection with (a) the merger or consolidation of the assets of, or acquisition by the Trust through purchase or, otherwise, with any other investment company, trust or personal holding company; (b) the payment or reinvestment of dividends or distributions; or (c) any offer of exchange permitted by Section 11 of the 1940 Act. 4. SHARES COVERED BY THIS AGREEMENT. This Agreement shall apply to Shares of all Series of the Trust, Shares of all Series of the Trust held in its treasury in the event that in the discretion of the Trust treasury Shares shall be sold, and Shares of all series of the Trust repurchased for resale. 5. PUBLIC OFFERING PRICE. Except as otherwise noted in the Trust's current Prospectus (the "Prospectus") or Statement of Additional Information (the "SAI") with respect to each Series, all Shares sold to investors by the Underwriter or the Trust will be sold at the public offering price. The Public offering price for all accepted subscriptions will be the net asset value per share, determined in the manner described in the Trust's current Prospectus or SAI with respect to the applicable Series. The Trust shall in all cases receive the net asset value per share on all sales. 6. SUSPENSION OF SALES. If and whenever the determination of net asset value is suspended and until such suspension is terminated, no further orders for Shares shall be processed by the Underwriter except such unconditional orders placed with the Underwriter before it had knowledge of the suspension. In addition, the Trust reserves the right to suspend sales and the Underwriter's authority to process orders for Shares on behalf of the Trust if, in the judgment of the Trust it is in the best interests of the Trust to do so. Suspension will continue for such period as may be determined by the Trust. In addition, the Trust and the Underwriter reserve the right to reject any purchase order. 7. SOLICITATION OF SALES. In consideration of these rights granted to the Underwriter, the Underwriter agrees to use all reasonable efforts, consistent with their other business, to secure purchasers for Shares of the Trust. This shall not prevent the Underwriter from entering into like arrangements (including arrangements involving the payment of underwriting commissions) with other issuers. The Underwriter agrees to use all reasonable B-2 efforts to ensure that taxpayer, identification numbers provided for shareholders of the Trust are correct. 8. AUTHORIZED REPRESENTATIONS. The Underwriter is not authorized by the Trust to give any information or to make any representations other than those contained in the appropriate registration statements, Prospectuses or SAI's filed with the Securities and Exchange Commission (the "SEC") under the 1933 Act or with the states under applicable Blue Sky Laws (as those registration statements, Prospectus and SAI's may be amended from time to time), or Contained in shareholder reports or other materials that may be prepared by or on behalf of the Trust for the Underwriter's use. This shall not be construed to prevent the Underwriter from preparing and distribution, in compliance with applicable laws and regulations, sales literature or other material as it may deem appropriate. The Underwriter will furnish or cause to be furnished copies of such sales literature or other material to the President of the Trust or his or her designee and will provide that designee with reasonable opportunity to comment on it. The Underwriter agrees to take appropriate action to cease using such sales literature or other material to which the Trust reasonable objects as promptly as practicable after receipt of the objection. 9. REGISTRATION OF SHARES. The Trust agrees that it will take all action necessary to register and qualify under the 1933 Act and applicable state Blue Sky Laws all shares which are to be made subject to any public offering or sale (subject to the necessary approval, if any, of its shareholders) so that there will be available for sale the number of Shares the Underwriter may reasonably be expected to sell. The Trust shall furnish to the Underwriter copies of all information, financial statements and other papers which the Underwriter may reasonably request for use in connection with the distribution of Shares of each Series of the Trust. 10. REPURCHASE OF SHARES. The Underwriter as agent for the account of the Trust may repurchase Shares offered for resale to either of them, and redeem such Shares at their net asset value. 11. EXPENSES, COMPENSATION AND REIMBURSEMENTS. (a) The Trust shall pay all fees and expenses: (i) in connection with the preparation, setting in type and filing of any registration statement, Prospectus and SAI under the 1933 Act, and any amendments thereto, for the registration of its shares; (ii) in connection with the registration and qualification of Shares for sale in the various states in which the Board of Trustees (the "Trustees") of the Trust shall determine it advisable to qualify such Shares for sale (including registering the Trust or Series as a broker or dealer or any officer of the Trust as agent or salesperson in any state); (iii) of preparing, setting in type, printing and mailing any report or other communication to shareholders of the Trust in their capacity as such; and (iv) of preparing, setting in type, printing and mailing Prospectuses, SAI's, and any supplements thereto, sent to existing shareholders. (b) The Underwriter shall pay costs of: B-3 (i) printing and distributing Prospectuses, SAI's and reports prepared for its use in connection with the offering of Shares for sale of the public; (ii) any other literature used in connection with such offering; (iii) advertising in connection with such offering including, but not limited to public relations services, sales presentations, media charges, and preparation, printing and mailing of advertising and sales literature; data processing necessary to support a distribution effort; printing and mailing prospectuses to prospective investors; sales commissions; and distribution and shareholder servicing activities of broker-dealers and other financial institutions; and (iv) filing fees required by regulatory authorities for sales literature and advertising materials and any additional out-of-pocket expenses incurred in connection with these and any other costs of distribution. (c) In addition to the services describes above, the Underwriter will provide services including assistance in the production of marketing and advertising materials for the sale of Share of the Trust and the Underwriter will review them for compliance with applicable regulatory requirements, and submit them for required regulatory review. (d) In connection with the services to be provided by the Underwriter, and its costs assumed, under this Agreement, the Underwriter shall receive from the Trust such payments as shall be authorized to be paid by the Trust pursuant to any Plan of Distribution adopted by the Trust in accordance with the Rule 12b-1 under the 1940 Act, and reimbursement of such expenses of the Trust as may be paid by the Underwriter from time to time. (e) In connection with the services to be provided by the Underwriter under this Agreement, and payments to be made and expenses to be incurred by the parties under this Agreement, the Underwriter agrees to provide to the Board of Trustees of the Trust such information as may be required to be reviewed by the Trustees under Rule 12b-1 of the 1940 Act, including such financial information as may be required in connection with the adoption, supervision, or continuation of any Plan of Distribution of the Trust under such rule, or the adoption of any budget thereunder. 12. INDEMNIFICATION OF THE TRUST. The Underwriter agrees to indemnify each Portfolio of the Trust and the Trust against any and all litigation and other legal proceedings of any kind of nature and against any liability, judgment, cost, or penalty imposed as a result of such litigation or proceedings in any way arising out of or in connection with the sale or distribution of the shares of such Portfolio by the Underwriter. In the event of the threat or institution of any such litigation or legal proceedings against any Portfolio, the Underwriter shall defend such action on behalf of the Portfolio or the Trust at the Underwriter's own expense, and shall pay any such liability, judgment, cost, or penalty resulting therefrom, whether imposed by legal authority or agreed upon by way of compromise and settlement; provided, however, the Underwriter shall not be required to pay or reimburse a Portfolio for any liability, judgment, cost, or penalty incurred as result of information supplied by, or as the result of the omission to supply information by, the Trust to the Underwriter, or to the Underwriter by a director, officer, or employee of the Trust who is not an "interested person," as defined in the provisions of the 1940 Act, of the Underwriter, unless the information so supplied or omitted was available to the B-4 Underwriter or the Portfolio's investment adviser without recourse to the Portfolio or the Trust or any such person referred to above. 13. EFFECTIVENESS, TERMINATION. (a) This agreement shall become effective as of the date first written above, and unless terminated as provided, shall continue in force for two (2) years from the date of its execution and thereafter from year to year, provided continuance is approved at least annually by either (i) the vote of a majority of the Trustees of the Trust, or by the vote of a majority of the outstanding voting securities of the Trust, and (ii) the vote of a majority of those Trustees of the Trust who are not interested persons of the Trust and who are not parties to this Agreement or interested persons of any party, cast in person at a meeting called for the purpose of voting on the approval. (b) This Agreement shall automatically terminate in the event of its assignment. As used in this Section, the terms "vote of a majority of the outstanding voting securities," "assignment" and "interested person" shall have the respective meanings specified in the 1940 Act and the rules enacted thereunder as now in effect or as hereafter amended. (c) In addition to termination by failure to approve continuance or by assignment, this Agreement may at any time be terminated without the payment of any penalty: (i) by the Trust (by the vote of a majority of the Trustees of the Trust who are not interested persons of the Trust, or by vote of a majority of the outstanding voting securities of the Trust or an affected series of the Trust) upon not less than sixty (60) days written notice to the affected party; and (ii) by the Underwriter upon not less than sixty (60) days written notice of the Trust. 14. AMENDMENTS. The Underwriter and the Trust shall regularly consult with each other regarding the performance of their respective obligations and the Underwriter's compensation under the foregoing provisions. In connection therewith, the Trust shall submit to the Underwriter at a reasonable time in advance of filing with the SEC copies of any amended or supplemented registration statement of the Trust (including exhibits) under the 1933 Act, and the 1940 Act, and, a reasonable time in advance of their proposed use, copies of any amended or supplemented forms relating to any plan, program or service offered by the Trust. Any change in such materials that would require any change in the Underwriter's obligations under the foregoing provisions shall be subject to the burdened party's approval, which shall not be unreasonably withheld. In the event that a change in such documents or in the procedures contained therein increases the cost or potential liability to the Underwriter in performing their obligations hereunder by more than an insubstantial amount, the Underwriter shall be entitled to receive reasonable compensation therefore. This Agreement may be amended at any time by mutual consent of the parties, provided that such consent on the part of the Trust shall have been approved (i) by the Trustees of the Trust, or by a vote of majority of the outstanding voting securities of the Trust, and (ii) by vote of a majority of the Trustees of the Trust who are not interested persons of the Underwriter or of the Trust cast in person at a meeting called for the purpose of voting on such amendment. 15. NOTICE. Any notice under this Agreement shall be given in writing addressed to the party intended to receive such notice. Any notice may be hand delivered, or may be sent by registered or certified mail, postage prepaid, to the receiving party, at its principal place of business. B-5 16. SERVERABILITY. If any provision of the Agreement shall be held or made invalid by a court decision, statue, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 17. GOVERNING LAW. To the extent that state law has not been preempted by the provisions of any law of the United States heretofore or hereafter enacted, as the same may be amended from time to time, this Agreement shall be administered, construed and enforced according to the laws of the State of Colorado. 18. SHAREHOLDER LIABILITY. The Underwriter acknowledges that it has received notice of and accepts the limitations of liability set forth in the Trust's Agreement and Declaration of Trust. The Underwriter agrees that the Trust's obligations hereunder shall be limited to the assets of the Trust, and that the Underwriter shall have recourse solely against the assets of the Series with respect to which the Trust's obligations hereunder relate and shall have no recourse against the assets of any other Series or against any shareholder, Trustee, officer, employee, or agent of the Trust. 19. MISCELLANEOUS. Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction of effect. This Agreement may be executed in two counterparts, each of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. IMPACT MANAGEMENT INVESTMENT TRUST By: /s/ A.J. Elko ------------------------------------ IMPACT FINANCIAL NETWORK, INC. By: /s/ Charles Clark ------------------------------------ B-6 APPENDIX A ---------- Impact Total Return Portfolio IMPACT 25 Fund IMPACT 25 Variable Fund Schneider Large Cap Variable Fund B-7 EX-99.23.G 10 ex23g-102a.txt AMENDED AND RESTATED CUSTODY AGREEMENT SIGNATURE RESOLUTION RESOLVED, That all of the following officer of Impact Management Investment Trust and any of them, namely the Chairman, Vice President, Secretary and Treasurer, are hereby authorized as signers for the conduct of business for and on behalf of the Funds with the Fifth Third Bank: Charles R. Clark Chairman - --------------------------- ------------------------------ A.J. Elko President - --------------------------- ------------------------------ Vice President - --------------------------- ------------------------------ A.J. Elko Treasurer - --------------------------- ------------------------------ A.J. Elko Secretary - --------------------------- ------------------------------ In addition, the following Assistant Treasurer is authorized to sign on behalf of the Trust for the purpose of effecting securities transactions: Assistant Treasurer - --------------------------- ------------------------------ The undersigned officers of Impact Management Investment Trust certify that the foregoing is within the parameters of a Resolution adopted by Trustees of the Trust in a meeting held on October 16, 2001, directing and authorizing the preparation of documents and to do everything necessary to effect the Custody Agreement between Impact Management Investment Trust and The Fifth Third Bank. Impact Management Investment Trust By: ------------------------- Charles R. Clark, Chairman By: ------------------------- A.J. Elko, Secretary C-1 Dated: October 16, 2001 EXHIBIT A TO THE CUSTODY AGREEMENT BETWEEN IMPACT MANAGEMENT INVESTMENT TRUST AND THE FIFTH THIRD BANK October 16, 2001 Name of the Fund - ---------------- Impact Total Return Portfolio IMPACT 25 Fund IMPACT 25 Variable Fund Schneider Large Cap Variable Fund Impact Management Investment Trust By: ------------------------------------ A.J. Elko, President The Fifth Third Bank By: ------------------------------------ Christine Skiba, Relationship Manager C-2 Dated: October 16, 2001 EXHIBIT B TO THE CUSTODY AGREEMENT BETWEEN IMPACT MANAGEMENT INVESTMENT TRUST AND THE FIFTH THIRD BANK October 16, 2001 AUTHORIZED PERSONS Set forth below are the names and specimen signatures of the persons authorized by the trust to administer each Custody Account. Name Signature - ---- --------- Charles R. Clark - ----------------------------- ----------------------------------- A.J. Elko - ----------------------------- ----------------------------------- - ----------------------------- ----------------------------------- - ----------------------------- ----------------------------------- C-3 EX-99.23.H 11 ex23h-102a.txt AMENDED AND RESTATED ADMINISTRATIVE SVCS AGT AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT AGREEMENT made as of January 28, 2002 by and between IMPACT Management Investment Trust ("IMIT"), a Massachusetts business trust and IMPACT Administrative Services, Inc. (the "Administrator"), a Florida corporation. WITNESSETH: WHEREAS, IMIT is registered as a diversified, open-end, series management investment company under the Investment Company Act of 1940, as amended (the "1940 Act") and has established each of the separate portfolios listed on Attachment D (the "Portfolios"); and WHEREAS, IMIT wishes to retain the Administrator to provide certain transfer agent, fund accounting, dividend disbursing and administration services with respect to the Portfolios, and the Administrator is willing to furnish or provide for the furnishing of such services; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed between the parties hereto as follows: 1. APPOINTMENT. IMIT hereby appoints the Administrator to provide transfer agent, fund accounting, dividend disbursing and fund administration services to the Portfolios, subject to the supervision of the Board of Trustees of IMIT (the "Board"), for the period and on the terms set forth in this Agreement. The Administrator accepts such appointment and agrees to furnish the services herein set forth in return for the compensation as provided in Paragraph 3 of this Agreement. 2. SERVICES PROVIDED BY THE ADMINISTRATOR. The Administrator will provide the following services subject to the control, direction and supervision of the Board, and in compliance with the objectives, policies and limitations set forth in IMIT's Registration Statement, Declaration of Trust, Bylaws and applicable laws and regulations. (a) GENERAL ADMINISTRATION. The Administrator shall manage, administer and conduct the general business activities of the Portfolios. The Administrator shall provide the personnel and facilities necessary to perform such general business activities. A detailed description of these services is included in Attachment A to this Agreement. (b) FUND ACCOUNTING. The Administrator shall provide the following accounting services to the Portfolios: (i) maintenance of the books and records and accounting controls for the Portfolios' assets, including records of all securities transactions; (ii) calculation of the Portfolios' net asset values in accordance with the Prospectuses and, if requested by IMIT, transmission of the net asset values to the NASD for publication of prices; (iii) accounting for dividends, interest and other income received and distributions made by the Portfolios; (iv) preparation and filing of the Portfolios' state and federal tax returns and Semi-Annual Reports on Form N-SAR; (v) production of transaction data, financial reports and such other periodic and special reports as the Board may reasonably request; (vi) the preparation of financial statements for the semi-annual and annual reports and other shareholder communications; (vii) liaison with the Portfolios' independent auditors; and (viii) monitoring and administration of arrangements with the Portfolios' custodian and depository banks. A complete listing of reports that will be available to each of the Portfolios is included in Attachment B of this Agreement. D-1 (c) TRANSFER AGENT. With respect to each Portfolio, the Administrator shall: (i) Maintain records showing for each shareholder the following: (A) name, address and tax identification number; (B) number of shares held of the Portfolio; (C) historical information including dividends paid and the date and price of all transactions including individual purchases and redemptions; and (D) any dividend reinvestment order, application, dividend address and correspondence relating to the current maintenance of the account. (ii) Record the issuance of shares of beneficial interest of IMIT in book entry form. (iii) Process all orders for the purchase of shares of the Portfolio in accordance with IMIT's current Registration Statement. Upon receipt of any check or other payment for purchase of shares of the Portfolio from an investor, it will: (A) stamp the envelope with the date of receipt; (B) forthwith process the same for collection; and (C) determine the amounts thereof due the Portfolio, and notify the Portfolio of such determination and deposit, such notification to be given on a daily basis of the total amounts determined and deposited to the Portfolio's custodian bank account during such day. The Administrator shall then credit the share account of the investor with the number of shares to be purchased according to the price of the Portfolio's shares in effect for purchases made on the date such payment is received by the Administrator, determined as set forth in the Portfolio's current Prospectus, and shall promptly mail a confirmation of said purchase to the investor, all subject to any instructions which IMIT may give to the Administrator with respect to the timing or manner of acceptance of orders for Portfolio shares relating to payments so received by it. (iv) Receive and stamp with the date of receipt all written requests for redemptions or repurchase of shares and shall process redemptions and repurchase requests as follows: (A) if such redemption request complies with the applicable standards approved by IMIT, the Administrator shall on each business day notify the Portfolio of the total number of shares presented and covered by such requests received by the Administrator on such day; (B) on or prior to the seventh calendar day succeeding any such request for redemption, the Administrator shall notify the custodian, subject to the instructions from the Portfolio, to transfer monies to such account as designated by the Administrator for such payment to the redeeming shareholder of the applicable redemption or repurchase price; (C) if any such request for redemption or repurchase does not comply with applicable standards, the Administrator shall promptly notify the investor of such fact, together with the reason therefor, and shall effect such redemption at the Portfolio's price next determined after receipt of documents complying with said standards or at such other time as IMIT shall so direct. (v) Acknowledge all correspondence from shareholders relating to their share accounts and undertake such other shareholder correspondence as may from time to time be mutually agreed upon. D-2 (vi) Process redemptions of Portfolio shares upon telephone instructions from qualified shareholders in accordance with the procedures set forth in the Portfolio's current Prospectus. The Administrator shall be permitted to act upon the instruction of any person by telephone to redeem Portfolio shares from any account for which such services have been authorized. IMIT hereby agrees to indemnify and hold the Administrator harmless against all losses, costs or expenses, including attorneys' fees and expenses suffered or incurred by the Administrator directly or indirectly as a result of relying on the telephone instructions of any person acting on behalf of a shareholder account for which telephone services have been authorized. (vii) Transfer on the records of the Portfolio maintained by it, shares held in non-certificate form, upon the surrender to it of transfer documents in proper form for transfer and, upon cancellation thereof, to countersign and issue new documents of ownership for a like amount of stock and to deliver the same pursuant to the transfer instructions. (viii)In the event that any check or other order for the payment of money is returned unpaid for any reason, take such steps, including redepositing said check for collection or returning said check to the investor, as the Administrator may, at its discretion, deem appropriate and notify the Portfolio of such action, unless the Portfolio instructs otherwise. However, the Administrator shall not be liable to IMIT or the Portfolio for any returned checks or other order for the payment of money if it follows reasonable procedures with respect thereto. (ix) Prepare, file with the Internal Revenue Service, and mail to shareholders such returns for reporting payment of dividends and distributions as are required by applicable laws to be so filed and/or mailed, and the Administrator shall withhold such sums as are required to be withheld under applicable Federal income tax laws, rules and regulations. (x) Mail proxy statements, proxy cards and other materials and shall receive, examine and tabulate returned proxies. The Administrator shall make interim reports of the status of such tabulation to IMIT upon request, and shall certify the final results of the tabulation. (d) DIVIDEND DISBURSING. The Administrator shall act as Dividend Disbursing Agent for the Portfolios, and, as such, shall prepare and mail checks; or credit income and capital gain payments to shareholders. The Portfolios shall advise the Administrator of the declaration of any dividend or distribution and the record and payable date thereof at least five (5) days prior to the record date. The Administrator shall, on or before the payment date of any such dividend or distribution, notify the Portfolios' custodian of the estimated amount required to pay any portion of said dividend or distribution which is payable in cash, and on or before the payment date of such distribution, the Portfolios shall instruct its custodian to make available to the Administrator sufficient funds for the cash amount to be paid out. If a shareholder is entitled to receive additional shares by virtue of any such distribution or dividend, appropriate credits will be made to his account and/or certificates delivered where requested. A shareholder not electing issuance of certificates will receive a confirmation from the Administrator indicating the number of shares credited to his account. (e) MISCELLANEOUS. The Administrator will also: D-3 (i) Provide office facilities (which may be in the offices of the Administrator or a corporate affiliate of them, but shall be in such location as IMIT shall reasonably approve) and the services of a principal financial officer to be appointed by IMIT; (ii) Furnish statistical and research data, clerical services and stationery and office supplies; (iii) Assist in the monitoring of regulatory and legislative developments which may affect IMIT and the Portfolios and, in response to such developments, counsel and assist IMIT in routine regulatory examinations or investigations of IMIT and the Portfolios, and work with outside counsel to IMIT in connection with regulatory matters or litigation. (iv) In performing its duties: (A) will act in accordance with IMIT's Declaration of Trust, Bylaws, Prospectus and the instructions and directions of the Board and will conform to, and comply with, except as otherwise provided herein, the requirements of the 1940 Act and all other applicable federal or state laws and regulations; and (B) will consult with outside legal counsel to IMIT, as necessary or, appropriate. (v) Preserve for the periods prescribed by Rule 3la-2 under the 1940 Act the records required to be maintained by Rule 3la-1 under said Act in connection with the services required to be performed hereunder. The Administrator further agrees that all such records which it maintains for the Portfolios are the property of IMIT and further agrees to surrender promptly to IMIT any of such records upon IMIT's request. (vi) The Administrator may, at its expense and discretion, subcontract with any entity or person concerning the provisions of the services contemplated hereunder. The Administrator will provide prompt notice of such delegation and provide copies of such subcontracts to IMIT. 3. FEES, EXPENSES; EXPENSE REIMBURSEMENT. (a) For the services rendered for the Portfolios pursuant to this Agreement, the Administrator shall be entitled to fees as set forth in the fee schedule on Attachment C of this Agreement. Such fees are to be paid monthly on the first business day of the following month. Upon any termination of this Agreement before the end of any month, the fee for such part of the month shall be prorated according to the proportion which such period bears to the full monthly period and shall be payable upon the date of termination of this Agreement. (b) The Administrator will from time to time employ or associate with such person or persons as may be fit to assist them in the performance of this Agreement. Such person or persons may be officers and employees who are employed by both the Administrator and IMIT. The compensation of such person or persons for such employment shall be paid by the Administrator and no obligation will be incurred by or on behalf of IMIT in such respect. (c) The Administrator will bear all expenses in connection with the performance of its services under this Agreement except as otherwise expressly provided herein. Other expenses to be incurred in the operation of the Portfolios will be borne by the Portfolios or D-4 other parties, including interest, brokerage fees and commissions, if any, and advisory fees; provided, however, that, except as provided in any distribution plan adopted by IMIT, the Portfolios will not bear, directly or indirectly, the cost of any activity which is primarily intended to result in the distribution of shares of the Portfolios. In addition, the Administrator may utilize one or more independent pricing services, approved from time to time by the Board, to obtain securities prices in connection with determining the net asset values of the Portfolios, and a Portfolio will reimburse the Administrator for its share of the cost of such services based upon its actual use of the services for the benefit of such Portfolio. 4. DUTIES, RESPONSIBILITIES AND LIMITATION OF LIABILITY. (a) In the performance of its duties hereunder, the Administrator shall be obligated to exercise due care and diligence and to act in good faith in performing the services provided for under this Agreement. In performing its services hereunder, the Administrator shall be entitled to rely on any oral or written instructions, notices or other communications from IMIT or the Portfolios and their custodians, officers and directors, investors, agents, legal counsel and other service providers which communications the Administrator reasonably believes to be genuine, valid and authorized. (b) Subject to the foregoing, the Administrator shall not be liable for any error of judgment or mistake of law or for any loss or expense suffered by the Portfolios, in connection with the matters to which this Agreement relates, except for a loss or expense resulting from misfeasance, bad faith or negligence on the Administrator's part in the performance of its duties or from disregard by the Administrator of its obligations and duties under this Agreement. Any person, even though also an officer, director, partner, employee or agent of the Administrator, who may be or become an officer, director, partner, employee or agent of the Portfolios, shall be deemed when rendering services to the Portfolios or acting on any business of the Portfolios (other than services or business in connection with the Administrator's duties hereunder) to be rendering such services to or acting solely for the Portfolios and not as an officer, director, partner, employee or agent or person under the control or direction of the Administrator even though paid by the Administrator. (c) The Administrator shall not be responsible for, and IMIT shall indemnify and hold the Administrator harmless from and against, any and all losses, damages, costs, reasonable attorneys' fees and expenses, payments, expenses and liabilities, except for a loss or expense resulting from misfeasance, bad faith or negligence on the Administrator's part in the performance of its duties or from disregard by the Administrator of its obligations and duties under this Agreement, arising out of or attributable to: (i) The reliance on or use by the Administrator of its officers, employers or agents of information, records, or documents which are received by the Administrator or its officers, employers or agents and furnished to it or them by or on behalf of IMIT, and which have been prepared or maintained by IMIT or its officers, employees or agents; (ii) IMIT's refusal or failure to comply with the terms of this Agreement or IMIT's lack of good faith, or its actions, or lack thereof, involving gross negligence or willful misfeasance; D-5 (iii) The taping or other form of recording of telephone conversations or other forms of electronic communications with other agents of IMIT, its investors and shareholders, or reliance by the Administrator on telephone or other electronic instructions of any person acting on behalf of a shareholder or shareholder account for which telephone or other electronic services have been authorized; and (iv) The offer or sale of shares by IMIT in violation of any requirement under the Federal securities laws or regulations or the securities laws or regulations of any state, or in violation of any stop order or other determination or ruling by any Federal agency or any state agency with respect to the offer or sale of such shares in such state resulting from activities, actions, or omissions by IMIT or its officers, employees, or agents prior to the effective date of this Agreement. (d) The Administrator shall indemnify and hold IMIT harmless from and against any and all losses, damages, costs, charges, reasonable attorneys' fees and expenses, payments, expenses and liability arising out of or attributable to the Administrator's refusal or failure to comply with the terms of this Agreement; the Administrator's breach of any representation or warranty made by it herein; or the Administrator's lack of good faith, or acts involving negligence, misfeasance or disregard of its duties hereunder. 5. TERM. The Administrator will start the provision of the services contemplated by this Agreement on the date first hereinabove written or whenever the current service provider ceases to provide its services and the operative terms of the Agreement will be effective for a period of one (1) year from such date, unless sooner terminated as provided herein. Thereafter, unless sooner terminated as provided herein, this Agreement shall continue in effect from year to year provided such continuance is specifically approved at least annually by the Board. This Agreement is terminable, without penalty, by the Board or by the Administrator, on not less than ninety (90) days' written notice. Except as provided in Section 6 hereof, this Agreement shall automatically terminate upon its assignment by the Administrator without the prior written consent of IMIT. Upon termination of this Agreement, IMIT shall pay to the Administrator such compensation and any reimbursable expenses as may be due under the terms hereof as of the date of termination or the date that the provision of services ceases, whichever is later. 6. NON-ASSIGNABILITY. This Agreement shall not be assigned by any of the parties hereto without the prior consent in writing of the other party; provided, however, that the Administrator may in its own discretion and without limitation or prior consent of IMIT, whenever and on such terms and conditions as it deems necessary or appropriate, enter into subcontracts, agreements and understandings with non-affiliated third parties; provided, that such subcontract, agreement or understanding shall not discharge the Administrator from its obligations hereunder or delegation of duties to another third party. 7. NOTICE. Any notice required or permitted hereunder shall be in writing to the parties at the following address (or such other address as a party may specify by notice to the other): D-6 If to IMIT: Impact Management Investment Trust 333 West Vine Street Suite 206 Lexington, KY 40507 Attn: President With a copy to: Pepper Hamilton LLP 3000 Two Logan Square 18th and Arch Streets Philadelphia, PA 19103 Attn: Joseph V. Del Raso, Esq. If to Administrator: IMPACT Administrative Services, Inc. 333 West Vine Street Suite 206 Lexington, KY 40507 Attn: President Notice shall be effective upon receipt if by mail, on the date of personal delivery (by private messenger, courier service or otherwise) or upon confirmed receipt of telex or facsimile, whichever occurs first. 8. WAIVER. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver nor shall it deprive such party of the right thereafter to insist upon strict adherence to that term or any term of this Agreement. Any waiver must be in writing signed by the waiving party. 9. SEVERABILITY. If any provision of this Agreement is invalid or unenforceable, the balance of the Agreement shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. 10. SUCCESSOR AND ASSIGNS. The covenants and conditions herein contained shall, subject to the provisions as to assignment, apply to and bind the successors and assigns of the parties hereto. 11. GOVERNING LAW. This Agreement shall be governed by Massachusetts law, including its choice of law provisions. 12. AMENDMENTS. This Agreement may be modified or amended from time to time by mutual written agreement between the parties. No provision of this Agreement may be changed, discharged, or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, discharge or termination is sought. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below as of the date indicated above. D-7 IMPACT MANAGEMENT INVESTMENT TRUST By: /s A.J. Elko ------------------------------------ Name: A.J. Elko Title: President IMPACT ADMINISTRATIVE SERVICES, INC. By: /s/ Charles Clark ------------------------------------ Name: Charles Clark Title: President D-8 ATTACHMENT A ADMINISTRATION SERVICES PROVIDED TO EACH PORTFOLIO Compliance - ---------- Prepare and update compliance manuals and procedures. Assist in the training of portfolio managers, management and Portfolio accountants concerning compliance manuals and procedures. Monitor the Portfolio's compliance with investment restrictions (i.e. issuer or industry diversification, etc.) listed in the current Prospectuses and Statement of Additional Information. (Frequency - Daily) Monitor the Portfolio's compliance with the requirements of the Internal Revenue Code (the "Code") Section 851 for qualification as regulated investment companies. (Frequency - Monthly) Calculate and recommend dividend and capital gain distributions in accordance with distribution policies detailed in the Prospectus. (Frequency - Determined by Prospectus) Prepare year-end dividend and capital gain distributions to establish IMIT's status as a RIC under Section 4982 of the Code regarding minimum distribution requirements. File Federal Excise Tax Return (Form 8613). (Frequency - Annually) Mail quarterly requests for "Securities Transaction Reports" to IMIT's Trustees and Officers and "access persons" under the terms of IMIT's Code of Ethics and SEC regulations. Monitor investment adviser's compliance with Board directives such as "Approved Issuers Listings for Repurchase Agreements." (Frequency - Daily) Review investments involving interests in any broker, dealer, underwriter or investment adviser to ensure continued compliance with Section 12(d)(3) of the 1940 Act. (Frequency - Quarterly) Monitor the Portfolio's brokerage allocation and prepare quarterly brokerage allocation reports for Board meetings (consistent with reporting from the current service provider). Reporting - --------- Prepare agreed upon management reports and Board materials such as unaudited financial statements, distribution summaries and deviations of mark-to-market valuation and the amortized cost for money market funds. 1 Report Portfolio performance to outside services as directed by Portfolio management. Prepare and file IMIT's Semi-Annual Reports on Form N-SAR with the SEC. Prepare and file Portfolio Federal tax returns along with all state and local tax returns and State Expense Limitation returns, where applicable. Prepare and coordinate printing of Portfolio's Semi-Annual and Annual Reports to shareholders. File copies of every report to shareholders with the SEC under Rule 30b2-1. Notify shareholders as to what portion, if any, of the distributions made by the Portfolio during the prior fiscal year were exempt-interest dividends under Section 852(b)(5)(A) of the Code. Provide Form 1099-MISC to persons other than corporations (i.e., Trustees/Directors) to whom the Portfolio paid more than $600 during the year. Administration - -------------- Serve as officers of the Portfolio and attend IMIT Board meetings. Prepare Portfolio expense projections, establish accruals and review on a periodic basis. Expenses based on a percentage of Portfolio's average daily net assets (advisory and administrative fees). Expenses based on actual charges annualized and accrued daily (audit fees, registration fees, directors' fees, etc.). Provide financial information for proxies and Prospectus (Expense Table). Coordinate all communications and data collection with regard to any regulatory examinations and yearly audit by independent accountants. Legal Affairs - ------------- Prepare and update documents, such as Declaration of Trust, foreign corporation qualification filings, and Bylaws. Update and file post-effective amendments to IMIT's registration statement on Form N-1A and prepare supplements as needed. Prepare and file Rule 24f-2 Notice. Prepare proxy materials and administer shareholder meetings. 2 Review contracts between IMIT and its service providers (must be sensitive to conflict of interest situations). Apprise and train management and staff with respect to important legal issues. Prepare and maintain all state registrations and exemptions of IMIT's securities including annual renewals, preparing and filing sales reports, filing copies of the registration statement and final prospectus and statement of additional information, and increasing registered amounts of securities in individual states. Review and monitor fidelity bond and errors and omissions insurance coverage and make any related regulatory filings. Prepare agenda and Board materials, including materials relating to contract renewals, for all Board meetings. Maintain minutes of Board and shareholder meetings. Act as liaison with Portfolio's distributor and outside counsel. 3 ATTACHMENT B Portfolio Accounting Daily Reports - ---------------------------------- A. General Ledger Reports 1. Trial Balance Report 2. General Ledger Activity Report B. Portfolio Reports 1. Portfolio Report 2. Cost Lot Report 3. Purchase Journal 4. Sell/Maturity Journal 5. Amortization/Accretion Report 6. Maturity Projection Report C. Pricing Reports 1. Pricing Report 2. Pricing Report by Market Value 3. Pricing Variance by % Change 4. NAV Report 5. NAV Proof Report D. Accounts Receivable/Payable Reports 1. Accounts Receivable for Investments Report 2. Accounts Payable for Investments Report 3. Interest Accrual Report 4. Dividend Accrual Report E. Other 1. Dividend Computation Report 2. Cash Availability Report 3. Settlement Journal Monthly Portfolio Accounting Reports - ------------------------------------ 1. Cost Proof Report 2. Transaction History Report 3. Realized Gain/Loss Report 4. Interest Record Report 5. Dividend Record Report 6. Broker Commission Totals 7. Broker Principal Trades 8. Shareholder Activity Report 9. Performance Report 1 ATTACHMENT C FEE SCHEDULE (a) Transfer Agency and Dividend Disbursing Fees: -------------------------------------------- For the transfer agency and dividend disbursing services rendered by the Administrator pursuant to this Agreement, IMIT shall pay the Administrator at the beginning of each month, a fee, calculated as follows: Fee per shareholder account $ 8.25 Minimum annual fee per initial portfolio $15,000 Additional annual fee for each additional class $ 5,000 (b) For the administration and accounting services rendered by the Administrator pursuant to this Agreement, IMIT shall pay the Administrator at the beginning of each month, a fee, calculated as follows: Fee for first $50 million in total fund assets .................. 0.06%1 Fee for over $50 million up to $100 million in total fund assets 0.05%1 Fee for over $100 million in total fund assets .................. 0.04%1 Minimum annual fee .............................................. $ 48,000 Additional annual fee for each additional class ................. $ 12,000 (c) Expenses: IMIT shall reimburse the Administrator for any out-of-pocket expenses, exclusive of salaries, advanced by the Administrator in connection with but not limited to the printings or filings of documents for IMIT, travel, telephone, quotation services, facsimile transmissions, stationery and supplies, record storage, postage, telex, and courier charges, incurred in connection with the performance of the duties hereunder. The Administrator shall provide IMIT with a monthly invoice of such expenses and IMIT shall reimburse the Administrator within fifteen (15) days after receipt thereof. - --------------------------------- 1 Calculated annually of the average daily net assets of each portfolio for the previous month. 1 ATTACHMENT D IMPACT Total Return Portfolio IMPACT 25 Fund IMPACT 25 Variable Fund Schneider Large Cap Variable Fund 1 EX-99.23.M.VI 12 ex23mvi-102.txt SECOND AMENDED AND RESTATED 12B-1 PLAN SECOND AMENDED AND RESTATED DISTRIBUTION PLAN OF IMPACT MANAGEMENT INVESTMENT TRUST IMPACT 25 FUND CLASS F SHARES The following Distribution Plan (the "Plan") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by Impact Management Investment Trust (the "Trust") for the IMPACT 25 Fund series (the "Portfolio"), Class F shares. The Plan has been approved by a majority of the Trust's Board of Trustees, including a majority of the Trustees who are not interested persons of the Trust and who have no direct or indirect financial interest in the operation of the Plan (the "noninterested Trustees"), cast in person at a meeting called for the purpose of voting on such Plan. In reviewing the Plan, the Board of Trustees considered the proposed schedule and nature of payments and terms of the advisory agreement between the Trust and Equity Assets Management, Inc. (the "Adviser"), and the Distribution Agreement between the Trust and Impact Financial Network, Inc. (the "Distributor"). The Board of Trustees concluded that the proposed compensation of the Adviser under the advisory agreement, and of the Distributor under the underwriting agreement is fair and not excessive. Accordingly, the Board determined that the Plan should provide for such payments and that adoption of the Plan would be prudent and in the best interests of the Trust and its shareholders. Such approval included a determination that in the exercise of their reasonable business judgment and in light of their fiduciary duties, there is a reasonable likelihood that the Plan will benefit the Trust, the Portfolio and its shareholders. The Provisions of the Plan are: 1. The Trust shall reimburse the Distributor, or the Adviser or others through the Distributor, for all expenses incurred by such parties in the promotion and distribution of the Portfolio's Class F shares, 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 an agreement with the Trust or the Distributor, which form of agreement shall be approved by the Trustees, including the non-interested Trustees. 2. In addition to the payments which the Trust is authorized to make pursuant to this Plan, to the extent that the Trust, Adviser, Distributor, or other parties on behalf of the Trust, Adviser or Distributor make payments for the financing of any activity primarily intended to result in the sale of Class F shares issued by the Portfolio within the context of Rule 12b-1 under the Act, then such payments shall be deemed to have been made pursuant to this Plan. Such costs and activities include, but are not necessarily limited to, the incremental costs of the printing and mailing or other dissemination of all prospectuses (including Statements of Additional Information), annual reports and other periodic reports for distribution to persons who are not shareholders of the Portfolio; the costs of preparation and distributing any other supplemental sales literature; the costs of radio, television, newspaper and other advertising; telecommunications expenses, including the costs of telephones, telephone lines and other E-1 communications equipment used in the sale of Class F shares; all costs of the preparation and mailing of confirmations of shares sold or redeemed, and reports of share balances; all costs of responding to telephone or mail inquiries of investors or prospective investors; a prorated portion of the Distributor's overhead expenses attributable to the distribution of the Class F shares, including leases, communications, salaries, training, supplies, photocopying, and any other category of the Distributor's expenses attributable to the distribution of the Class F shares; and payments to dealers, financial institutions, advisers, or other firms (other than those otherwise authorized under this Plan), any one of whom may receive monies in respect to the Portfolio's shares owned by shareholder for whom such firm is the dealer of record or holder of record in any capacity, or with whom such firm has a servicing, agency, or distribution relationship. Servicing may include (i) answering client inquiries regarding the Portfolio; (ii) assisting clients in changing account designations and addresses; (iii) performing subaccounting; (iv) establishing and maintaining shareholder accounts and records; (v) processing purchase and redemption transactions; (vi) providing periodic statements showing a client's account balance and integrating such statements with those of other transactions and balances in the client's other accounts serviced by such firm; (vii) arranging for bank wire transfers; and (viii) such other services as the Class F shares may require, to the extent such firms are permitted by applicable statute, rule, or regulation to render such services. 3. The maximum aggregate amount which may be reimbursed by the Trust to such parties pursuant to Paragraphs 1 and 2 herein shall be 0.50% per annum of the average daily net assets of the Portfolio's Class F shares. Said reimbursement shall be made monthly by the Trust to such parties. 4. The Adviser and the Distributor shall collect and monitor the documentation of payments made under paragraphs 1 and 2 above, and shall furnish to the Board of Trustees of the Trust, for their review, on a quarterly basis, a written report of the monies reimbursed to them and others under the Plan as to the Trust, and shall furnish the Board of Trustees of the Trust with such other information as the Board may reasonably request in connection with the payments made under the Plan as to the Trust in order to enable the Board to make an informed determination of whether the Plan should be continued. 5. The Plan shall continue in effect for a period of more than one year only so long as such continuance is specifically approved at least annually by the Trust's Board of Trustees, including the non-interested Trustees, cast in person at a meeting called for the purpose of voting on the Plan. 6. The Plan, or any agreements entered into pursuant to the Plan, may be terminated at any time, without penalty, by vote of a majority of the outstanding voting securities of the Trust, or by vote of a majority of the non-interested Trustees, on not more than sixty (60) days' written notice, and shall terminate automatically in the event of any act that constitutes an assignment of the management agreement between the Trust and the Adviser. 7. The Plan and any agreements entered into pursuant to the Plan may not be amended to increase materially the amount to be spent by the Trust for distribution pursuant to Paragraph 2 hereof without approval by a majority of the Trust's outstanding voting securities. E-2 8. All material amendments to the Plan, or any agreements entered into pursuant to the Plan, shall be approved by the non-interested Trustees cast in person at a meeting called for the purpose of voting on any such amendment. 9. So long as the Plan is in effect, the selection and nomination of the Trust's non-interested Trustees shall be committed to the discretion of such non-interested Trustees. 10. This Plan shall take effect on the 28th day of January, 2002. This Plan and the terms and provisions thereof are hereby accepted and agreed to by the Trust, the Adviser and the Distributor as evidenced by their execution hereof. IMPACT MANAGEMENT INVESTMENT TRUST By: /s/ A.J. Elko ------------------------------- EQUITY ASSETS MANAGEMENT, INC. By: /s/ Charles Clark ------------------------------- IMPACT FINANCIAL NETWORK, INC. By: /s/ Charles Clark ------------------------------- E-3 EX-99.23.M.VII 13 ex23mvii-102.txt 12B-1 PLAN FOR IMPACT 25 VARIABLE FUND DISTRIBUTION PLAN OF IMPACT MANAGEMENT INVESTMENT TRUST JORDAN 25 VARIABLE FUND The following Distribution Plan (the "Plan") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by Impact Management Investment Trust (the "Trust") for the Jordan 25 Variable Fund series (the "Portfolio") of shares. The Plan has been approved by a majority of the Trust's Board of Trustees, including a majority of the Trustees who are not interested persons of the Trust and who have no direct or indirect financial interest in the operation of the Plan (the "noninterested Trustees"), cast in person at a meeting called for the purpose of voting on such Plan. In reviewing the Plan, the Board of Trustees considered the proposed schedule and nature of payments and terms of the advisory agreement between the Trust and Equity Assets Management, Inc. (the "Adviser"), and the Distribution Agreement between the Trust and Impact Financial Network, Inc. (the "Distributor"). The Board of Trustees concluded that the proposed compensation of the Adviser under the advisory agreement, and of the Distributor under the underwriting agreement is fair and not excessive. Accordingly, the Board determined that the Plan should provide for such payments and that adoption of the Plan would be prudent and in the best interests of the Trust and its shareholders. Such approval included a determination that in the exercise of their reasonable business judgment and in light of their fiduciary duties, there is a reasonable likelihood that the Plan will benefit the Trust, the Portfolio and its shareholders. The Provisions of the Plan are: 1. The Trust shall reimburse the Distributor, or the Adviser or others through the Distributor, for all expenses incurred by such parties in the promotion and distribution of the Portfolio's shares, 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 an agreement with the Trust or the Distributor, which form of agreement shall be approved by the Trustees, including the non-interested Trustees. 2. In addition to the payments which the Trust is authorized to make pursuant to this Plan, to the extent that the Trust, Adviser, Distributor, or other parties on behalf of the Trust, Adviser or Distributor make 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 under the Act, then such payments shall be deemed to have been made pursuant to this Plan. Such costs and activities include, but are not necessarily limited to, the incremental costs of the printing and mailing or other dissemination of all prospectuses (including Statements of Additional Information), annual reports and other periodic reports for distribution to persons who are not EA-1 shareholders of the Portfolio; the costs of preparation and distributing any other supplemental sales literature; the costs of radio, television, newspaper and other advertising; telecommunications expenses, including the costs of telephones, telephone lines and other communications equipment used in the sale of shares; all costs of the preparation and mailing of confirmations of shares sold or redeemed, and reports of share balances; all costs of responding to telephone or mail inquiries of investors or prospective investors; a prorated portion of the Distributor's overhead expenses attributable to the distribution of the shares, including leases, communications, salaries, training, supplies, photocopying, and any other category of the Distributor's expenses attributable to the distribution of the shares; and payments to dealers, financial institutions, advisers, or other firms (other than those otherwise authorized under this Plan), any one of whom may receive monies in respect to the Portfolio's shares owned by shareholder for whom such firm is the dealer of record or holder of record in any capacity, or with whom such firm has a servicing, agency, or distribution relationship. Servicing may include (i) answering client inquiries regarding the Portfolio; (ii) assisting clients in changing account designations and addresses; (iii) performing subaccounting; (iv) establishing and maintaining shareholder accounts and records; (v) processing purchase and redemption transactions; (vi) providing periodic statements showing a client's account balance and integrating such statements with those of other transactions and balances in the client's other accounts serviced by such firm; (vii) arranging for bank wire transfers; and (viii) such other services as the shares may require, to the extent such firms are permitted by applicable statute, rule, or regulation to render such services. 3. The maximum aggregate amount which may be reimbursed by the Trust to such parties pursuant to Paragraphs 1 and 2 herein shall be 0.15% per annum of the average daily net assets of the Portfolio's shares. Said reimbursement shall be made monthly by the Trust to such parties. 4. The Adviser and the Distributor shall collect and monitor the documentation of payments made under paragraphs 1 and 2 above, and shall furnish to the Board of Trustees of the Trust, for their review, on a quarterly basis, a written report of the monies reimbursed to them and others under the Plan as to the Trust, and shall furnish the Board of Trustees of the Trust with such other information as the Board may reasonably request in connection with the payments made under the Plan as to the Trust in order to enable the Board to make an informed determination of whether the Plan should be continued. 5. The Plan shall continue in effect for a period of more than one year only so long as such continuance is specifically approved at least annually by the Trust's Board of Trustees, including the non-interested Trustees, cast in person at a meeting called for the purpose of voting on the Plan. 6. The Plan, or any agreements entered into pursuant to the Plan, may be terminated at any time, without penalty, by vote of a majority of the outstanding voting securities of the Trust, or by vote of a majority of the non-interested Trustees, on not more than sixty (60) EA-2 days' written notice, and shall terminate automatically in the event of any act that constitutes an assignment of the management agreement between the Trust and the Adviser. 7. The Plan and any agreements entered into pursuant to the Plan may not be amended to increase materially the amount to be spent by the Trust for distribution pursuant to Paragraph 2 hereof without approval by a majority of the Trust's outstanding voting securities. 8. All material amendments to the Plan, or any agreements entered into pursuant to the Plan, shall be approved by the non-interested Trustees cast in person at a meeting called for the purpose of voting on any such amendment. 9. So long as the Plan is in effect, the selection and nomination of the Trust's non-interested Trustees shall be committed to the discretion of such non-interested Trustees. 10. This Plan shall take effect on the 4th day of January, 2001. This Plan and the terms and provisions thereof are hereby accepted and agreed to by the Trust, the Adviser and the Distributor as evidenced by their execution hereof. IMPACT MANAGEMENT INVESTMENT TRUST By: /s/ A.J. Elko ------------------------------- EQUITY ASSETS MANAGEMENT, INC. By: /s/ Charles Clark ------------------------------- IMPACT FINANCIAL NETWORK, INC. By: /s/ Charles Clark ------------------------------- EA-3 EX-99.23.M.VIII 14 ex23mviii-102.txt 12B-1 PLAN FOR SCHNEIDER LARGE CAP VARIABLE FUND DISTRIBUTION PLAN OF IMPACT MANAGEMENT INVESTMENT TRUST SCHNEIDER LARGE CAP VARIABLE FUND The following Distribution Plan (the "Plan") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by Impact Management Investment Trust (the "Trust") for the Schneider Large Cap Variable Fund (the "Portfolio"), series of shares. The Plan has been approved by a majority of the Trust's Board of Trustees, including a majority of the Trustees who are not interested persons of the Trust and who have no direct or indirect financial interest in the operation of the Plan (the "noninterested Trustees"), cast in person at a meeting called for the purpose of voting on such Plan. In reviewing the Plan, the Board of Trustees considered the proposed schedule and nature of payments and terms of the advisory agreement between the Trust and Schneider Capital Management (the "Adviser"), and the Distribution Agreement between the Trust and Impact Financial Network, Inc. (the "Distributor"). The Board of Trustees concluded that the proposed compensation of the Adviser under the advisory agreement, and of the Distributor under the underwriting agreement is fair and not excessive. Accordingly, the Board determined that the Plan should provide for such payments and that adoption of the Plan would be prudent and in the best interests of the Trust and its shareholders. Such approval included a determination that in the exercise of their reasonable business judgment and in light of their fiduciary duties, there is a reasonable likelihood that the Plan will benefit the Trust, the Portfolio and its shareholders. The Provisions of the Plan are: 1. The Trust shall reimburse the Distributor, or the Adviser or others through the Distributor, for all expenses incurred by such parties in the promotion and distribution of the Portfolio's shares, 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 an agreement with the Trust or the Distributor, which form of agreement shall be approved by the Trustees, including the non-interested Trustees. 2. In addition to the payments which the Trust is authorized to make pursuant to this Plan, to the extent that the Trust, Adviser, Distributor, or other parties on behalf of the Trust, Adviser or Distributor make 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 under the Act, then such payments shall be deemed to have been made pursuant to this Plan. Such costs and activities include, but are not necessarily limited to, the incremental costs of the printing and mailing or other dissemination of all prospectuses (including Statements of Additional EB-1 Information), annual reports and other periodic reports for distribution to persons who are not shareholders of the Portfolio; the costs of preparation and distributing any other supplemental sales literature; the costs of radio, television, newspaper and other advertising; telecommunications expenses, including the costs of telephones, telephone lines and other communications equipment used in the sale of shares; all costs of the preparation and mailing of confirmations of shares sold or redeemed, and reports of share balances; all costs of responding to telephone or mail inquiries of investors or prospective investors; a prorated portion of the Distributor's overhead expenses attributable to the distribution of the shares, including leases, communications, salaries, training, supplies, photocopying, and any other category of the Distributor's expenses attributable to the distribution of the shares; and payments to dealers, financial institutions, advisers, or other firms (other than those otherwise authorized under this Plan), any one of whom may receive monies in respect to the Portfolio's shares owned by shareholder for whom such firm is the dealer of record or holder of record in any capacity, or with whom such firm has a servicing, agency, or distribution relationship. Servicing may include (i) answering client inquiries regarding the Portfolio; (ii) assisting clients in changing account designations and addresses; (iii) performing subaccounting; (iv) establishing and maintaining shareholder accounts and records; (v) processing purchase and redemption transactions; (vi) providing periodic statements showing a client's account balance and integrating such statements with those of other transactions and balances in the client's other accounts serviced by such firm; (vii) arranging for bank wire transfers; and (viii) such other services as the shares may require, to the extent such firms are permitted by applicable statute, rule, or regulation to render such services. 3. The maximum aggregate amount which may be reimbursed by the Trust to such parties pursuant to Paragraphs 1 and 2 herein shall be 0.15% per annum of the average daily net assets of the Portfolio's shares. Said reimbursement shall be made monthly by the Trust to such parties. 4. The Adviser and the Distributor shall collect and monitor the documentation of payments made under paragraphs 1 and 2 above, and shall furnish to the Board of Trustees of the Trust, for their review, on a quarterly basis, a written report of the monies reimbursed to them and others under the Plan as to the Trust, and shall furnish the Board of Trustees of the Trust with such other information as the Board may reasonably request in connection with the payments made under the Plan as to the Trust in order to enable the Board to make an informed determination of whether the Plan should be continued. 5. The Plan shall continue in effect for a period of more than one year only so long as such continuance is specifically approved at least annually by the Trust's Board of Trustees, including the non-interested Trustees, cast in person at a meeting called for the purpose of voting on the Plan. 6. The Plan, or any agreements entered into pursuant to the Plan, may be terminated at any time, without penalty, by vote of a majority of the outstanding voting securities EB-2 of the Trust, or by vote of a majority of the non-interested Trustees, on not more than sixty (60) days' written notice, and shall terminate automatically in the event of any act that constitutes an assignment of the management agreement between the Trust and the Adviser. 7. The Plan and any agreements entered into pursuant to the Plan may not be amended to increase materially the amount to be spent by the Trust for distribution pursuant to Paragraph 2 hereof without approval by a majority of the Trust's outstanding voting securities. 8. All material amendments to the Plan, or any agreements entered into pursuant to the Plan, shall be approved by the non-interested Trustees cast in person at a meeting called for the purpose of voting on any such amendment. 9. So long as the Plan is in effect, the selection and nomination of the Trust's non-interested Trustees shall be committed to the discretion of such non-interested Trustees. 10. This Plan shall take effect on the 4th day of January, 2001. This Plan and the terms and provisions thereof are hereby accepted and agreed to by the Trust, the Adviser and the Distributor as evidenced by their execution hereof. IMPACT MANAGEMENT INVESTMENT TRUST By: /s/ A.J. Elko ------------------------------- EQUITY ASSETS MANAGEMENT, INC. By: /s/ Charles Clark ------------------------------- IMPACT FINANCIAL NETWORK, INC. By: /s/ Charles Clark ------------------------------- EB-6 EX-99.23.N.II 15 ex23nii-102.txt AMENDED AND RESTATED RUTE 18F-3 PLAN IMPACT MANAGEMENT INVESTMENT TRUST IMPACT 25 Fund Amended and Restated 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 IMPACT 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: Class R shares, Class A shares, Class F shares and Institutional Class shares. The Class R shares are subject to Rule 12b-1 charges. The Class R shares 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 Class R shares 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 Class R shares, 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 Class R shares. The maximum aggregate amount which may be reimbursed by the Class R shares of the Trust to such parties shall be 1.00% per annum of the average daily net assets of the Class R shares; provided however, that payment made under any servicing agreement entered into by the Class R shares shall not exceed 0.25% per annum of the average daily net assets of the Class R shares. The minimum initial investment for Class R shares is $250. 2. Class A shares are subject to Rule 12b-1 charges. The Class A shares 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 Class A shares 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 F-1 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 Class A shares, 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 Class A shares. Class A Shares are also offered subject to a contingent deferred sales charge (subject to certain reductions or eliminations of the sales charge as described in the applicable prospectus) The maximum aggregate amount which may be reimbursed by the Class A shares 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 Class A shares is $250. Class A shares are priced with a maximum front-end sales charge of 5.75%. 3. Class F shares are subject to Rule 12b-1 charges. The Class F shares 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 Class F shares 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 Class F shares, 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 Class F shares. The maximum aggregate amount which may be reimbursed by the Class F shares of the Trust to such parties shall be 0.50% per annum of the average daily net assets of the Class F shares. The minimum initial investment for Class F shares is $250. 4. Institutional Class shares are not subject to Rule 12b-1 charges or sales loads. The minimum initial investment for Institutional Class shares is $100,000. F-2 5. The Trust's Rule 12b-1 Plans relating to the Class R shares, Class A shares and Class F shares of the Fund shall operate in accordance with the Rule 2830 of the Conduct Rules of the National Association of Securities Dealers. 6. The only difference in expenses as between Class R shares, Class A shares, Class F shares 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. The Class R shares will be exchanged automatically for shares of Class A shares after 10 years. The conversion will be effected on the basis of the relative net asset values of the two classes without the imposition of any sales load, fee, or other charge. The conversion will also be effected only if the expenses, including payments authorized under a plan adopted pursuant to Rule 12b-1 for the target class are not higher than the expenses, including payment authorized under a rule 12b-1 plan, for the purchase class. If the shareholders of the target class approve any increase in expenses allocated to the target class under paragraphs (a)(1)(i) and (a)(1)(ii) of Rule 18f-3, and the purchase class shareholders do not approve the increase, IMIT will establish a new target class for the purchase class on the same terms as applied to the target class before that increase. There will no conversion features associated with any other 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. F-3 EX-99.23.P.III 16 ex23piii-102.txt CODE OF ETHICS DENALI INVESTMENT ADVISORS, LLC CODE OF ETHICS REGARDING PERSONAL SECURITIES TRANSACTIONS AND INSIDER TRADING POLICY I. General Statement The officers, managers, and employees of Denali Investment Advisors, LLC ("Denali" or "Advisor"), will in varying degrees participate in, or be aware of, decisions made to implement the investment policies of the Advisor's clients, including certain registered investment companies (each, a "Fund" and collectively, the "Funds") and others (each, a "Client" and collectively, the "Clients"). These relationships mandate adherence to the highest standards of conduct and integrity by each and every manager, officer, and employee. The establishment of high standards of behavior through this Code of Ethics Regarding Personal Securities Transactions and Insider Trading Policy of Denali Investment Advisors, LLC (the "Code") is intended to promote compliance with applicable laws and regulations, while not unnecessarily interfering with the privacy and freedom of the individuals subject to the Code. It is intended that Denali and its managers, officers, and employees will conduct their investment activities as to: o adhere to the requirements imposed by applicable law; o mitigate possible conflicts of interest between personal securities transactions and transactions for Clients, and when such possible conflicts of interest exist, place the interests of the Clients first; and o detect and prevent the use of material nonpublic information by Access Persons in making any investment decisions (for Clients, for personal securities accounts, or otherwise), whether that information is obtained by virtue of that person's position with the Advisor or otherwise. Further, while this Code refers to and is driven by the requirements of the 1940 Act, it is intended that it apply to all of the Advisor's investment activities, whether specifically for the Funds or for other Clients. II. Legal Requirements It is intended that, at a minimum, this Code be consistent with the personal investment activities requirements of Rule 17j-1 promulgated under the Investment Company Act of 1940, as amended (the "1940 Act"), the personal securities transactions requirements of Rule 204-2(a)(12) promulgated under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and the material nonpublic information restrictions of Section 204A of the Advisers Act. III. Access Persons The provisions of this Code shall apply to all "access persons" of the Advisor. "Access Person" means any manager, officer, or "advisory person" of the Advisor. "Advisory Person" of the Advisor means: G-1 (1) Any employee of the Advisor who, in connection with his or her regular functions or duties, makes, participates in, or obtains information regarding the purchase or sale of a Covered Security by any Fund or other Client, or whose functions relate to the making of any recommendation with respect to such purchases or sales; and (2) Any natural person in a control relationship to the Advisor who obtains information concerning recommendations made to any Fund or other Client of decisions with regard to the purchase or sale of a Covered Security by the Fund or other Client. IV. Covered Securities A "Covered Security" includes any Security in which an Access Person has, or by reason of a transaction acquires, any Beneficial Ownership, except transactions in securities that are: (1) Direct obligations of the Government of the United States; (2) Bankers' acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements; or (3) Shares issued by registered open-end investment companies. V. Definitions A. "Beneficial Ownership" of securities by any person subject to this Code means a direct or indirect pecuniary interest in the Security. A "direct pecuniary interest" is the opportunity, directly or indirectly, to profit, or to share the profit, from a transaction. An "indirect pecuniary interest" is generally any other financial interest, and specifically includes securities held by a partnership of which a person is a general partner; securities held by a trust to which a person is the settlor if the person can revoke the trust, or a beneficiary if the person has or shares investment control with the trustee; and equity securities that may be acquired upon exercise of any option or other right, or through conversion; and is presumed to include securities held by members of a person's Immediate Family sharing the same household. B. "Control" means the power to exercise a controlling influence over the management or policies of a company unless such power is solely the result of an official position with such company; and presumptively includes a person who owns beneficially, either directly or through one or more controlled companies, twenty-five percent (25%) of the voting securities of the company. C. "Immediate Family" means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and includes adoptive relationships. D. "Initial Public Offering" means an offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before the registration, was not subject to the reporting requirements of sections 13 or 15(d) of the Securities Exchange Act of 1934. E. "Investment Personnel" means: G-2 (1) Any employee of the Advisor who, in connection with his or her regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of securities by the Fund or other Client; and (2) Any natural person who controls the Advisor and who obtains information concerning recommendations made to the Fund or other Client regarding the purchase or sale. F. "Limited Offering" means an offering that is exempt from registration under the Securities Act of 1933 pursuant to section 4(2) or section 4(6) or pursuant to rule 504, rule 505, or rule 506 under the Securities Act of 1933. G. "Personal Account" of an Access Person means: (1) An Account as to which such person has beneficial ownership; and (2) An Account of any other individual or entity whose accounts are managed or controlled by or through such person (this term is deemed to include accounts of a spouse and members of the access person's immediate family living at home); and (3) An Account of any other individual or entity to whom such person gives advice with regard to the acquisition or disposition of securities, other than any of the Funds; provided, however, that the term "personal account" shall not be construed in a manner that would impose a limitation or restriction upon the normal conduct of business by managers, officers, employees and affiliates of the advisor. H. "Purchase or Sale of a Covered Security" shall include, among other things, the writing of an option to purchase or sell a Covered Security. I. "SEC" means the Securities and Exchange Commission. J. "Security" means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, or certificate of interest or participation in any profit-sharing agreement, any put, call, straddle or option, and, in general any interest or instrument commonly known as a "security." K. "Security Held Or To Be Acquired By Any Of The Funds" shall mean (a) any Covered Security which, within the most recent 15 days, is or has been held by any Fund or other Client or is being or has been considered by the Fund or the Advisor for purchase by the Fund and (b) any option to purchase or sell, and any security convertible into or exchangeable for, a Covered Security described in section (a), above. VI. Conflict of Interest Policy A. Access Persons must avoid making any personal securities transactions or engaging in any investment practices that could reasonably create a possible conflict of interest between that Access Person and any Client. B. In any matter involving a Covered Security in which an Access Person has or seeks to acquire a Beneficial Ownership that is also held or to be acquired by the Fund or other Client, the Access Person must resolve any known or reasonably-to-be-anticipated conflict of interest in favor of the Client. G-3 C. In connection with the direct or indirect purchase or sale of a Security Held Or To Be Acquired By Any Of The Funds or other Client for a Personal Account, no Access Person shall: (1) Employ any device, scheme, or artifice to defraud any Fund or other Client; (2) Make to any Fund or other Client any untrue statement of a material fact or omit to state to any Fund or other Client material facts necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading; (3) Engage in any act, practice, or course of business that operates or would operate as a fraud or deceit upon any Fund or other Client; or (4) Engage in any manipulative practice with respect to any Fund or other Client. VII. Insider Trading Policy A. Access Persons must avoid the use of material nonpublic information about an issuer of a Security in making any investment decisions (for customers, for personal securities accounts, or otherwise), whether that information is obtained by virtue of their position with the Advisor or otherwise. (1) Information is "material" if there is a substantial likelihood that a reasonable investor would consider that information important in deciding whether to buy, sell, or hold that Security. (2) Information is "nonpublic" if provided by the issuer of that Security or the issuer's agents and has not yet been disseminated generally to the public. (3) Knowledge of the identity of securities to be purchased or sold for any Fund or other Client prior to the transaction may also be considered "nonpublic" information. B. If you become aware of any information that could reasonably be viewed as material nonpublic information about any issuer of a Covered Security, please report the name of that issuer to the Compliance Officer immediately. VIII. Personal Securities Transactions - Reporting Procedures A. The rules under the 1940 Act and the Advisers Act governing personal securities transactions require the Advisor to collect and maintain quarterly transaction reports from all Access Persons. B. To assist the Compliance Officer in evaluating compliance with the Conflict of Interest Policy and the Insider Trading Policy, Access Persons must also provide initial holding reports, and other periodic holdings reports, as deemed necessary and appropriate by the Compliance Officer. C. The Compliance Officer or his designate shall keep a list of all Access Persons, and shall maintain such list, along with the holding reports and other related information, in an G-4 organized manner that allows easy access to and retrieval of any particular reports, confirmation, or statement. These materials will be made available for inspection to the SEC staff and other government officials, to the extent required by law. Other than the President, the Compliance Officer, and their designees (including, but not limited to, outside counsel and auditors), no manager, officer, employee, or agent of the Advisor will be permitted routine access to these records. The Advisor will make all reasonable attempts to keep this information confidential. D. Initial Holdings Reports: All new Access Persons shall disclose all holdings of Covered Securities to the Compliance Officer no later than ten (10) days after the person becomes an Access Person on a form substantially the same as that in EXHIBIT "A" to this Code. E. Quarterly Holdings Reports: (1) On a quarterly basis, no later than ten (10) days of the end of that calendar quarter, each Access Person shall report all transactions in Covered Securities, regardless of the amount of the transaction, to the Compliance Officer on a form substantially the same as that in EXHIBIT "B" to this Code. (2) In addition, each Access Person shall direct each of that Access Person's brokers to supply the Compliance Officer with duplicate copies of trade confirmations of all transactions in Covered Securities. F. Annual Reports: As of December 31 of each year, each Access Person shall disclose all holdings of Covered Securities to the Compliance Officer on a form substantially the same as that in EXHIBIT "C" to this Code. G. Exceptions From Reporting Requirements: (1) No Direct or Indirect Influence or Control Over Account: An Access Person need not make a report with respect to transactions effected for, and Covered Securities held in, any account over which that Access Person has no direct or indirect influence or control. (2) Independent Managers: A manager of the Advisor MAY be exempt from all or part of these reporting requirements if that manager would not be a "interested person" (as defined in the 1940 Act), but for the fact that he or she (a) is a manager of the Advisor and (b) knowingly has a direct or indirect Beneficial Interest in securities issued by the Advisor (or an affiliate of the Adviser). In addition, that manager must (I) own, control, or hold less than five percent (5%) of the voting securities of the Advisor (or any affiliate of the Advisor) and (II) have no control of the Advisor (or any affiliate of the Advisor), either individually or by virtue of any arrangement with any other person. A manager of the Advisor who satisfies this standard will automatically be exempt from the initial and the annual holding report requirements. A manager of the Advisor who satisfies this standard will also be exempt from the quarterly transaction report requirement, unless that manager knew, or in the ordinary course of fulfilling his or her official duties as a manager, should have known that during the fifteen (15) day period immediately before the or after the manager's transaction in a Covered Security, the Fund or other Client purchased or sold the Covered Security, or the G-5 Fund, the other Client, or the Advisor considered purchasing or selling the Covered Security. After review of the particular facts and circumstances, the Compliance Officer may, in his or her discretion, exempt such manager in writing. Any exemption granted will be supported by a file memorandum written by the Compliance Officer explaining the basis for the exemption. IX. Personal Securities Transactions - Pre-clearance Procedures A. To promote compliance with the Conflict of Interest Policy and the Insider Trading Policy, Access Persons must adhere to the following procedures when executing personal securities transactions in Covered Securities. B. These procedures have been tailored to reflect the particular investment approach that the Advisor uses on behalf of its Clients, including the fixed nature of the dates on which purchases and sales are made on behalf of the Clients and the quantitative nature of Advisor's analysis. (1) Depending on the facts and circumstances, the Advisor may adopt other temporary procedures and will promptly inform all Access Persons before those temporary procedures go into effect. C. All personal securities transactions in Covered Securities must be pre-cleared. D. All Access Persons, other than the Compliance Officer, shall pre-clear personal securities transactions in Covered Securities through the Compliance Officer. The Compliance Officer shall pre-clear personal securities transactions in Covered Securities through the President. (1) All pre-clearance requests must be on a form substantially the same as that in EXHIBIT "D" to this Code. (2) The Compliance Officer will maintain these forms (both approvals and denials) and will evaluate them for, among other things, the purpose of identifying any personal securities transactions trends that may raise an inference of being inconsistent with this Code. E. DURING THE PERIOD BEGINNING FOUR (4) BUSINESS DAYS PRIOR TO CLIENT TRADING AND ENDING ON THE DAY AFTER ALL CLIENT TRANSACTIONS HAVE BEEN EXECUTED: (1) As a matter of policy, no trades will be permitted in any Covered Security that, based on the parameters of the current model, could conceivably be purchased for or sold for any Fund or other Client. (2) Absent unusual circumstances, the Compliance Officer expects to be able to authorize all other pre-clearance requests. However, depending on the particular facts and circumstances, these other requests could also be denied. F. At All Other Times: ------------------ G-6 (1) The Compliance Officer will maintain a list of Covered Securities held for any Fund or other Client. (2) Requests to trade any Covered Security held for the Client will be subject to close scrutiny by the Compliance Officer. (3) Absent unusual circumstances, the Compliance Officer expects to be able to authorize all other pre-clearance requests. However, depending on the particular facts and circumstances, these other requests could also be prohibited. G. SPECIAL RULES FOR INVESTMENTS BY INVESTMENT PERSONNEL IN IPOS AND LIMITED OFFERINGS. Investment Personnel of the Advisor must obtain approval from the Advisor before directly or indirectly acquiring beneficial ownership in any securities in an Initial Public Offering or in a Limited Offering. X. Acceptance and Annual Certification Each Access Person shall receive a copy of the Code. Any amendment to this Code shall be similarly furnished to each Access Person. Acceptance of a copy of the Code implies an acknowledgement of the duty to abide by it. Each Access Person shall certify that they have read and understand this Code and recognize that they are subject to it. Further, such Access Person shall certify annually that they have complied with the requirement of this Code and that they have reported all personal securities transactions required to be reported pursuant to the requirements of this Code. The annual certification of compliance with this Code shall be made on a form substantially the same as that in Exhibit "E" to this Code. XI. Annual Review and Update The Compliance Officer will annually review this Code and update this Code as necessary or appropriate to conform to applicable changes in laws, regulations, or business practices of the Advisor. XII. Reporting of Violations to the Board of Managers The Compliance Officer shall be responsible for the review of the quarterly transaction reports, the initial holdings reports and annual holdings reports required under this Code of Ethics. In connection with the review of these reports, the Compliance Officer shall take appropriate measures to determine whether each Access Person of the Advisor has complied with the provisions of this Code of Ethics. The Compliance Officer of the Advisor shall prepare an annual report relating to this Code of Ethics to the Board of Managers of the Advisor and each Fund. Such annual report shall: (1) Describe any issues arising under the Code of Ethics or procedures during the past year. (2) Identify any material violations of this Code of Ethics or procedures, including sanctions imposed in response to such violations during the past year. G-7 (3) Identify any recommended changes in the existing restrictions or procedures based upon the Advisor's experience under the Code of Ethics, evolving industry practices or developments in applicable laws or regulations; and (4) Certify that the Advisor has adopted procedures reasonably necessary to prevent Access Persons from violating the Code of Ethics XIII. Sanctions Violation of this Code or any section shall be grounds for discipline, including immediate termination. All material violations of this Code and any sanctions imposed with respect thereto shall be reported periodically to the Managers of the Advisor. XIV. Interpretations and Exceptions Any questions regarding the applicability, meaning or administration of the Code shall be referred to the Compliance Officer by the person concerned in advance of any contemplated transaction. The Compliance Officer may grant exemptions if it reasonably appears to the Compliance Officer, in his sole discretion, that the contemplated transaction is in accordance with this Code. XV. Acceptance Each person to whom this Code is applicable shall receive a copy of the Code. Any amendment to this Code shall also be furnished to each person to whom it applies. Acceptance of a copy of the Code implies an acknowledgement of the duty to abide by it. XVI. Records A copy of this Code, a copy of each record of violations of the Code (if any), a copy of each report by each Access Person, a copy of each report under this Code to the Managers of the Advisor or the Board of Trustees of any Fund, and a list of all persons required to make such reports and the reviewers of those reports, will be preserved with the Advisor's records for the period required by Rule 17j-1 of the Act. Revised: 15 January 2002 G-8 EXHIBIT "A" DENALI INVESTMENT ADVISORS, LLC INITIAL HOLDINGS REPORT Please complete, sign, date, and return this form to the Compliance Officer. For the meaning of capitalized terms, please see the Code of Ethics Regarding Personal Securities Transactions and Insider Trading Policy of Denali Investment Advisors, LLC (the "Code"). 1. I became an Access Person on: _______________________. 2. As of the date I became an Access Person, either: (Please check one of these two boxes) [ ] Neither a member of my Immediate Family sharing the same household nor I has Beneficial Ownership in any Covered Security that is required to be reported pursuant to the Code. [ ] Below is a list of the Covered Securities over which either a member of my Immediate Family sharing the same household or I could be deemed to have Beneficial Ownership. This report is not an admission that I have or had any beneficial interest in the securities listed below. - -------------------------------------------------------------------------------- Name of Security Type of Security Number of Shares/ (Public, Private, Partnership, etc.) Principal Amount - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 3. As of the date I became an Access Person, either: (Please check one of these two boxes) [ ] There are no accounts that I maintain in which any securities are held for my direct or indirect benefit. [ ] Below is a list of the names of the brokers, dealers, and banks with whom I maintain an account in which any securities were held for my direct or indirect benefit: --------------------------------------------------------------------------- --------------------------------------------------------------------------- Signed: Date: ----------------------------- ----------------------------------- Name: Date Received: Initial: ------------------------------- ----------- ------ G-9 EXHIBIT "B" DENALI INVESTMENT ADVISORS, LLC QUARTERLY PERSONAL SECURITIES TRANSACTION REPORT (FOR BOTH 1940 ACT AND ADVISERS ACT) Please complete, sign, date, and return this form to the Compliance Officer. For the meaning of capitalized terms, please see the Code of Ethics Regarding Personal Securities Transactions and Insider Trading Policy of Denali Investment Advisors, LLC (the "Code"). 1. During the quarter ended ___________________: (Please check one of these two boxes) [ ] Neither a member of my Immediate Family sharing the same household nor I have acquired or disposed of Beneficial Ownership in any Covered Security that is required to be reported pursuant to the Code. [ ] Below is a list of the Covered Securities over which either me or a member of my Immediate Family sharing the same household could be deemed to have acquired or disposed of Beneficial Ownership. This report is not an admission that I have or had any beneficial interest in the securities listed below.
- ------------------------------------------------------------------------------------------------------- Name of Date of Number of Price per Total Dollar Transaction Name Security Transaction Shares or Share Amount (Purchase, Broker/Dealer Principal Sale, Other) or Bank - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------
2. During the quarter ended ___________________: (Please check one of these two boxes) [ ] I did not open an account that I maintain in which any securities are held for my direct or indirect benefit. [ ] Below is a list of the names of the brokers, dealers, and banks with whom I opened an account that I maintain in which any securities were held for my direct or indirect benefit: Name of Broker/Dealer/Bank: Date Account Opened: ----------------- ---------- Name of Broker/Dealer/Bank: Date Account Opened: ----------------- ---------- Signed: Date: ----------------------------- ----------------------------------- Name: Date Received: Initial: ------------------------------- ----------- ------ G-10 EXHIBIT "C" DENALI INVESTMENT ADVISORS, LLC ANNUAL HOLDINGS REPORT Please complete, sign, date, and return this form to the Compliance Officer. For the meaning of capitalized terms, please see the Code of Ethics Regarding Personal Securities Transactions and Insider Trading Policy of Denali Investment Advisors, LLC (the "Code"). YOU MUST SUBMIT THIS REPORT BY 30 JANUARY 200__. 1. This report is current as of: 31 December 200__. 2. As of this report date, either: (Please check one of these two boxes) [ ] Neither a member of my Immediate Family sharing the same household nor I has Beneficial Ownership in any Covered Security that is required to be reported pursuant to the Code. [ ] Below is a list of the Covered Securities over which either a member of my Immediate Family sharing the same household or I could be deemed to have Beneficial Ownership. This report is not an admission that I have or had any beneficial interest in the securities listed below. - -------------------------------------------------------------------------------- Name of Security Type of Security Number of Shares/ (Public, Private, Partnership, etc.) Principal Amount - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 3. As of this report date, either: (Please check one of these two boxes) [ ] There are no accounts that I maintain in which any securities are held for my direct or indirect benefit. [ ] Below is a list of the names of the brokers, dealers, and banks with whom I maintain an account in which any securities were held for my direct or indirect benefit: --------------------------------------------------------------------------- --------------------------------------------------------------------------- Signed: Date: ----------------------------- ----------------------------------- Name: Date Received: Initial: ------------------------------- ----------- ------ G-11 EXHIBIT "D" DENALI INVESTMENT ADVISORS, LLC PERSONAL SECURITIES TRANSACTION PRE-CLEARANCE REQUEST Please complete, sign, date, and return this form to the Compliance Officer. For the meaning of capitalized terms, please see the Code of Ethics Regarding Personal Securities Transactions and Insider Trading Policy of Denali Investment Advisors, LLC (the "Code"). Investment Personnel of the Advisor must obtain approval from the Compliance Officer before directly or indirectly acquiring beneficial ownership in any securities in an Initial Public Offering or in a Limited Offering. I request clearance, on my behalf or on behalf of an Immediate Family member sharing my household, to trade the following Security: I am not aware of any material nonpublic information about the issuer of this Security. I am not aware of any pending trades in this security for any Client. Issuer: --------------------------------- Security: --------------------------------- Type of Transaction: --------------------------------- Anticipated Trade Date: --------------------------------- Anticipated Number of Shares: --------------------------------- Signed: Date: ---------------------------- ----------------------------------- Name: ------------------------------ APPROVED by the Compliance Officer: - -------- Signed: Date: ---------------------------- ----------------------------------- Reasons: ------------------------------------------------------------------------ DENIED by the Compliance Officer: - ------ Signed: Date: ---------------------------- ----------------------------------- Reasons: ------------------------------------------------------------------------ G-12 EXHIBIT "E" INITIAL AND ANNUAL RESPONSE STATEMENT CODE OF ETHICS REGARDING PERSONAL SECURITIES TRANSACTIONS AND INSIDER TRADING POLICY I certify that I have received, understand, and will abide by the Code of Ethics Regarding Personal Securities Transactions and Insider Trading Policy of Denali Advisors, LLC as the same may be from time to time amended. I know that failure to so abide may constitute a violation of federal and/or state securities laws and regulations that may subject me to civil liabilities and/or criminal penalties. I acknowledge that failure to observe the provisions of the Code shall be a basis for any appropriate sanction, including dismissal. I certify that, to the best of my knowledge and belief, I am in compliance with the Code of Ethics Regarding Personal Securities Transactions and Insider Trading Policy. I certify that I have instructed every broker, dealer, or bank with whom I have an account, to forward a duplicate copy of my transaction confirmations to Denali Advisors, LLC. The following list contains all of my Immediate Family (as defined in the Code) sharing the same household: Name: Relationship: ------------------------------ ---------------------------------- ------------------------------ ---------------------------------- ------------------------------ ---------------------------------- ------------------------------ ---------------------------------- ------------------------------ ---------------------------------- I agree that I will promptly provide the Compliance Officer with any changes to this list. Signed: Date: ----------------------------- ----------------------------------- Name: Date Received: Initial: ------------------------------- ----------- ------ G-13 -----END PRIVACY-ENHANCED MESSAGE-----