<PAGE> 1
IMPERIAL ASSET MANAGEMENT, INC.
CODE OF ETHICS
(AS AMENDED APRIL 28, 2000)
INTRODUCTION
This Code of Ethics (the "Code") has been adopted by Imperial Asset
Management Incorporated ("IAMI"), a registered investment adviser. The
Investment Advisors Act of 1940, as amended (the "Investment Advisors Act"),
requires IAMI to adopt, maintain and enforce certain written policies and
procedures and to maintain certain records. This Code of Ethics is, among other
things, intended to comply with such requirements.
In addition, Rule 17j-1, under the Investment Company Act of 1940, as amended
(the "Investment Company Act") requires IAMI to adopt a Code of Ethics if IAMI
is an advisor to an investment company which is registered under the Investment
Company Act (a "registered investment company"). This Code of Ethics has been
adopted, and will apply, whenever IAMI is such an advisor.
1. POLICY STATEMENT
IAMI forbids any Access Person, Investment Personnel or Fund Officer from
engaging in any conduct which is contrary to this Code. In addition, due to
their positions, IAMI also forbids any Access Person or Investment Personnel
from engaging in any conduct which is contrary to IAMI's Insider Trading Policy
and Related Procedures. In addition, many persons subject to the Code are also
subject to the other restrictions or requirements which affect their ability to
open securities accounts, effect securities transactions, report securities
transactions, maintain information and documents in a confidential manner and
other matters relating to the proper discharge of their obligations to IAMI.
These include contractual arrangements with IAMI, policies adopted by IAMI
concerning confidential information and documents.
IAMI has always held itself and its employees to the highest ethical
standards. While this Code is only one manifestation of those standards,
compliance with its provisions is essential. Failure to comply with this Code
is a very serious matter and may result in disciplinary action being taken.
Such action can include among other things, monetary fines, disgorgement of
profits, suspension or even termination of employment.
2. WHO IS COVERED BY THIS CODE
(a) All Access Persons and Investment Personnel, in each case only
with respect to those Funds as listed on Appendix B.
(b) Fund Officers, but only with respect to those Funds for which
they serve as Fund Officers as listed in Appendix B.
<PAGE> 2
3. PROHIBITED TRANSACTIONS
(a) PROHIBITION AGAINST FRAUDULENT CONDUCT. It is unlawful for Access
Persons, Investment Personnel and Fund Officers to use any information
concerning a security held or to be acquired by a Fund, or their ability to
influence any investment decisions, for personal gain or in a manner
detrimental to the interests of a Fund. In addition, they shall not, directly
or indirectly:
(i) employ any device, scheme or artifice to defraud a Fund or engage
in any manipulative practice with respect to a Fund;
(ii) make to a Fund, any untrue statement of a material fact or omit to
state to a Fund a material fact necessary in order to make the
statements made, in light of the circumstances under which they are
made, not misleading; or
(iii) engage in any act, practice, or course of business which operates
or would operate as a fraud or deceit upon a Fund.
(b) BLACKOUT PERIOD. Access Persons and Investment Personnel shall not
purchase or sell a Covered Security in an account over which they have direct
or indirect influence or control on a day during which they know or should have
known a Fund has a pending "buy" or "sell" order in that same security until
that order is executed or withdrawn.
(c) ADDITIONAL INVESTMENT PERSONNEL BLACKOUT PERIOD. No Investment
Personnel shall purchase or sell a Covered Security within five calendar days
before or two calendar days after a Fund for which the Investment Personnel
makes or participates in making a recommendation trades in that security. Any
profits realized on trades within this proscribed period shall be disgorged.
This blackout period does not apply to money market mutual funds which are
advised by IAMI.
(d) FUND OFFICER PROHIBITION. No Fund Officer shall directly or
indirectly seek to obtain information (other than that necessary to accomplish
the functions of the office) from any Fund portfolio manager regarding (i) the
status of any pending securities transaction for a Fund or (ii) the merits of
any securities transaction contemplated by the Fund Officer.
(e) BLACKOUT PERIOD EXCLUSIONS AND DEFINITIONS. The following
transactions shall not be prohibited by this Code and are not subject to the
limitations of Sections 3(b) and (c):
(i) purchases or sales over which you have no direct or indirect
influence or control (for this purpose, you are deemed to have
direct or indirect influence or control over the accounts of a
spouse, minor children and relatives residing in your home);
(ii) purchases which are part of an automatic dividend reinvestment
plan;
(iii) purchases or sales which are non-volitional on your part; and
-2-
<PAGE> 3
(iv) purchases effected upon the exercise of rights issued by an issuer
pro rata to all holders of a class of its securities, to the extent
such rights were acquired from such issuer.
Your trading shall be exempt from the limitations of Sections 3(b) and
(c) provided that (i) the market capitalization of a particular security
exceeds $1 billion and (ii) pending orders of IAMI do not exceed two percent of
the daily average trading volume of the security for the prior 15 days.
For purposes of Sections 3(b) and (c), and subject to Section 3(g) below,
the (i) common stock and any fixed income security of an issuer shall not be
deemed to be the same security and (ii) non-convertible preferred stock of an
issuer shall be deemed to be the same security as the fixed income securities
of that issuer; and (iii) convertible preferred stock shall be deemed to be the
same security as both the common stock and fixed income securities of that
issuer.
(f) REQUIREMENT FOR PRECLEARANCE. Investment Personnel must obtain
prior written approval from the designated Review Officer before:
(i) directly or indirectly acquiring securities in an initial public
offering for which no public market in the same or similar
securities of the issue has previously existed; and
(ii) directly or indirectly acquiring securities in a private placement.
In determining whether to preclear the transaction, the Review
Officer designated under Section 5 shall consider, among other
factors, whether the investment opportunity should be reserved for
a Fund, and whether such opportunity is being offered to the
Investment Personnel by virtue of their position with the Fund.
Any Investment Personnel of a Fund who has taken a personal position
through a private placement will be under an affirmative obligation to disclose
that position in writing to the Review Officer if they play a material role in
the Fund's subsequent investment decision regarding the same issuer; this
separate disclosure must be made even though the Investment Personnel has
previously disclosed the ownership of the privately placed security in
compliance with the preclearance requirements of this section. Once disclosure
is given, an independent review of the Fund's investment decision will be made.
(g) OTHER PROHIBITED TRANSACTIONS. Access Persons, Investment
Personnel and Fund Officers shall not:
(i) induce or cause a Fund to take action or to fail to take action,
for personal benefit rather than for the benefit of the Fund;
(ii) accept anything other than of de minimis value or any other
preferential treatment from any broker-dealer or other entity with
which a Fund does business;
(iii) establish or maintain an account at a broker-dealer, bank or other
entity through which securities transactions may be effected
without written notice to the designated Review Officer prior to
establishing such an account;
-3-
<PAGE> 4
(iv) use knowledge of portfolio transactions of a Fund for your personal
benefit or the personal benefit of others;
(v) violate the anti-fraud provisions of the federal or state
securities laws;
(vi) serve on the boards of directors of publicly traded companies,
absent prior authorization based upon a determination by the Review
Officer that the board service would be consistent with the
interests of the Fund and its shareholders.
(h) UNDUE INFLUENCE. Access Persons, Investment Personnel and Fund
Officers shall not cause or attempt to cause any Fund to purchase, sell or hold
any security in a manner calculated to create any personal benefit to you. You
shall not recommend any securities transactions for a Fund without having
disclosed (through reports in accordance with Section 4, preclearance in
accordance with Section 3(f), or otherwise) your interest, if any, in such
securities or the issuer thereof, including, without limitation, (i) your
beneficial ownership of any securities of such issuer, (ii) any position with
such issuer or its affiliates and (iii) any present or proposed business
relationship between you (or any party in which you have a significant
interest) and such issuer or its affiliates.
(i) CORPORATE OPPORTUNITIES. Access Persons, Investment Personnel and
Fund Officers shall not take personal advantage of any opportunity properly
belonging to a Fund.
(j) CONFIDENTIALITY. Except as required in the normal course of
carrying out their business responsibilities, Access Persons, Investment
Personnel and Fund Officers shall not reveal information relating to the
investment intentions or activities of any Fund, or securities that are being
considered for purchase or sale on behalf of any Fund.
4. REPORTING REQUIREMENTS
(a) REPORTING. Access Persons, Investment Personnel and Fund Officers
must report the information described in this Section with respect to
transactions in any Covered Security in which they have, or by reason of such
transaction acquire, any direct or indirect beneficial ownership. They must
report to the designated Review Officer.
(b) EXCLUSIONS FROM REPORTING. Purchases or sales in Covered Securities
in an account in which you have no direct or indirect influence or control are
not subject to the reporting requirements of this Section.
(c) INITIAL HOLDING REPORTS. No later than ten (10) days after you
become subject to this Code as set forth in Section 2, you must report the
following information:
(i) the title, number of shares and principal amount of each Covered
Security (whether or not publicly traded) in which you have any
direct or indirect beneficial ownership as of the date you became
subject to this Code;
(ii) the name of any broker, dealer or bank with whom you maintained an
account in which any securities were held for your direct or
indirect benefit as of the date you became subject to this Code;
and
-4-
<PAGE> 5
(iii) the date that the report is submitted.
(d) QUARTERLY TRANSACTION REPORTS. No later than ten (10) days after
the end of a calendar quarter, you must report the following information:
(i) with respect to any transaction during the quarter in a Covered
Security (whether or not publicly traded) in which you have, or by
reason of such transaction acquired, any direct or indirect
beneficial ownership:
(1) the date of the transaction, the title, the interest rate and
maturity date (if applicable), the number of shares and the
principal amount of each Covered Security involved;
(2) the nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
(3) the price of the Covered Security at which the transaction was
effected;
(4) the name of the broker, dealer or bank with or through which
the transaction was effected; and
(5) the date that the report is submitted.
(i) with respect to any account established by you in which any
Covered Securities (whether or not publicly traded) were held
during the quarter for your direct or indirect benefit:
(1) the name of the broker, dealer or bank with whom you
established the account;
(2) the date the account was established; and
(3) the date that the report is submitted.
(e) ANNUAL HOLDINGS REPORTS. Annually, you must report the following
information (which information must be current as of a date no more than thirty
(30) days before the report is submitted):
(i) the title, number of shares and principal amount of each Covered
Security (whether or not publicly traded) in which you had any
direct or indirect beneficial ownership;
(ii) the name of any broker, dealer or bank with whom you maintain an
account in which any securities are held for your direct or
indirect benefit; and
(iii) the date that the report is submitted.
(f) CERTIFICATION OF COMPLIANCE. You are required to certify annually
(in the form of Attachment A) that you have read and understood the Code and
recognize that you are subject to the Code. Further, you are required to
certify annually that you have complied with all the requirements of the Code
and you have disclosed or reported all personal securities transactions
pursuant to the requirements of the Code.
-5-
<PAGE> 6
(g) ALTERNATIVE REPORTING. The submission to the Review Officer of
duplicate broker trade confirmations and statements on all securities
transactions shall satisfy the reporting requirements of Section 4. The annual
holdings report may be satisfied by confirming annually, in writing, the
accuracy of the records maintained by the Review Officer and recording the date
of the confirmation.
(h) REPORT QUALIFICATION. Any report may contain a statement that the
report shall not be construed as an admission by the person making the report
that he or she has any direct or indirect beneficial ownership in the Covered
Securities to which the report relates.
(i) ACCOUNT OPENING PROCEDURES. You shall provide written notice to
the Review Officer prior to opening any account with any entity through which a
Covered Securities transaction may be effected. In addition, you will
promptly:
(i) provide full access to a Fund, its agents and attorneys to any and
all records and documents which a Fund considers relevant to any
securities transactions or other matters subject to the Code;
(ii) cooperate with a Fund, or its agents and attorneys, in
investigating any securities transactions or other matter subject
to the Code;
(iii) provide a Fund, its agents and attorneys with an explanation (in
writing if requested) of the facts and circumstances surrounding
any securities transaction or other matter subject to the Code; and
(iv) promptly notify the Review Officer or such other individual as a
Fund may direct, in writing, from time to time, of any incident of
noncompliance with the Code by anyone subject to this Code.
5. REVIEW OFFICER
(a) DUTIES OF REVIEW OFFICER. The Compliance Officer of IAMI has been
appointed by the President of IAMI as the Review Officer to:
(i) review all securities transaction and holdings reports and shall
maintain the names of persons responsible for reviewing these
reports;
(ii) identify all persons subject to this Code who are required to make
these reports and promptly inform each person of the requirements
of this Code;
(iii) compare, on a quarterly basis, all Covered Securities transactions
with each Fund's completed portfolio transactions to determine
whether a Code violation may have occurred;
(iv) maintain a signed acknowledgment by each person who is then subject
to this Code, in the form of Attachment A; and
(v) identify persons who are Investment Personnel of the Fund and
inform those persons of their requirements to obtain prior written
approval from the Review Officer prior to directly or indirectly
acquiring ownership of a security in any private placement or
initial public offering.
-6-
<PAGE> 7
(vi) exempt any Fund Officer from provisions of this Code if the person
is subject to similar requirements of a Fund's Code of Ethics.
(b) POTENTIAL TRADE CONFLICT. When there appears to be a transaction
that conflicts with the Code, the Review Officer shall request a written
explanation of the person's transaction. If after post-trade review, it is
determined that there has been a violation of the Code, a report will be made
by the designated Review Officer with a recommendation of appropriate action to
the President of IAMI and a Fund's Board of Trustees or Board of Directors.
(c) REQUIRED RECORDS. The Review Officer shall maintain and cause to
be maintained:
(i) a copy of any code of ethics adopted by IAMI which has been in
effect during the previous five (5) years in an easily accessible
place;
(ii) a record of any violation of any code of ethics, and of any action
taken as a result of such violation, in an easily accessible place
for at least five (5) years after the end of the fiscal year in
which the violation occurs;
(iii) a copy of each report made by anyone subject to this Code as
required by Section 4 for at least five (5) years after the end of
the fiscal year in which the report is made, the first two (2)
years in an easily accessible place;
(iv) a list of all persons who are, or within the past five years have
been, required to make reports or who were responsible for
reviewing these reports pursuant to any code of ethics adopted by
Forum, in an easily accessible place;
(v) a copy of each written report and certification required pursuant
to Section 5(e) of this Code for at least five (5) years after the
end of the fiscal year in which it is made, the first two (2) years
in an easily accessible place; and
(vi) a record of any decision, and the reasons supporting the decision,
approving the acquisition by Investment Personnel of securities
under Section 3(f) of this Code, for at least five (5) years after
the end of the fiscal year in which the approval is granted.
(d) POST-TRADE REVIEW PROCESS. Following receipt of trade confirms
and statements, transactions will be screened for the following:
(di) same day trades: transactions by Access Persons and Investment
Personnel
occurring on the same day as the purchase or sale of the
same security by a Fund for which they are an Access Person or
Investment Personnel.
(ii) portfolio manager trades: transactions by Investment Personnel
within five calendar days before and two calendar days after a
Fund, for which the Investment Personnel makes or participates in
making a recommendation, trades in that security.
(iii) fraudulent conduct: transaction by Access Persons, Investment
Personnel and Fund Officers which, within the most recent 15 days,
is or has been held by a Fund or is being or has been considered by
a Fund or IAMI for purchase by a Fund.
-7-
<PAGE> 8
(iv) other activities: transactions which may give the appearance that
an Access Person, Investment Personnel or Fund Officer has executed
transactions not in accordance with this Code.
(e) SUBMISSION TO FUND BOARD. The Review Officer shall annually
prepare a written report to the Board of Trustees (or Directors) of a Fund
listed in Appendix B that
(i) describes any issues under this Code or its procedures since
the last report to the Trustees, including, but not limited to,
information about material violations of the code or procedures and
sanctions imposed in response to the material violations; and
(ii) certifies that the Fund has adopted procedures reasonably necessary
to prevent Access Persons, Investment Personnel and Fund Officers
from violating this code.
-8-
<PAGE> 9
IMPERIAL ASSET MANAGEMENT, INC. CODE OF ETHICS
APPENDIX A
DEFINITIONS
(a) Access Person:
(i)(1) of IAMI means each director or officer of IAMI, any employee or
agent of IAMI, or any company in a control relationship to IAMI
who, in connection with the person's regular functions or
duties, makes, participates in or obtains information regarding
the purchase or sale of Covered Securities by a Fund advised by
IAMI, or whose functions relate to the making of any
recommendations with respect to such purchases or sales; and
(i)(2) any natural person in a control relationship to IAMI who
obtains information concerning recommendations made to a Fund
by IAMI with regard to the purchase or sale of Covered
Securities by the Fund;
(b) Act means the Investment Company Act of 1940, as amended.
(c) Beneficial Owner shall have the meaning as that set forth in Rule
16a-1(a)(2) under the Securities Exchange Act of 1934, as amended, except that
the determination of direct or indirect beneficial ownership shall apply to all
Covered Securities which an Access Person owns or acquires. A beneficial owner
of a security is any person who, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has or shares a direct
or indirect pecuniary interest (the opportunity, directly or indirectly, to
profit or share in any profit derived from a transaction in the subject
securities) in a security.
Indirect pecuniary interest in a security includes securities held by a
person's immediate family sharing the same household. 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 (including adoptive relationships).
(d) Control means the power to exercise a controlling influence over the
management or policies of a company, unless this power is solely the result of
an official position with the company. Ownership of 25% or more of a company's
outstanding voting securities is presumed to give the holder thereof control
over the company. This presumption may be rebutted by the Review Officer based
upon the facts and circumstances of a given situation.
(e) Covered Security means any security except:
(i) direct obligations of the Government of the United States;
(ii) bankers' acceptances and bank certificates of deposits;
(iii) commercial paper and debt instruments with a maturity at
issuance of less than 366 days and that are rated in one of the
two highest rating categories by a nationally recognized
statistical rating organization;
-9-
<PAGE> 10
(iv) repurchase agreements covering any of the foregoing; and
(v) shares of registered open-end investment companies.
(f) Fund Officer means any employee of IAMI or of a company commonly
controlled with IAMI who is an officer or director/trustee of a Fund.
(h) Investment Personnel means
(i) any employee of IAMI 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 a
Fund managed by IAMI; and
(ii) any individual who controls IAMI or a Fund for which IAMI is an
investment adviser and who obtains information concerning
recommendations made to the Fund regarding the purchase or sale of
securities by the Fund.
(i) Purchase or sale includes, among other things, the writing of an option
to purchase or sell.
(j) Security held or to be acquired by the Fund means
(i) any Covered Security which, within the most recent 15 days (x) is
or has been held by the applicable Fund or (y) is being or has been
considered by the applicable Fund or its investment adviser for
purchase by the applicable Fund; and
(ii) and any option to purchase or sell, and any security convertible
into or exchangeable for, a Covered Security.
-10-
<PAGE> 11
IMPERIAL ASSET MANAGEMENT, INC.
CODE OF ETHICS
APPENDIX B
<TABLE>
<CAPTION>
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
IAMI AP IP AS OF DATE FUND END DATE
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
<S> <C> <C> <C> <C> <C>
Jack Singer X X May 1, 2000 ISII
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
Jon Maruya X X May 1, 2000 ISII
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
Sebastian Chang X X May 1, 2000 ISII
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
Eric Valdiviez X May 1, 2000 ISII
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
FUND OFFICERS AP IP AS OF DATE OFFICER OR DIRECTOR OF END DATE
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
Jack Singer May 1, 2000 ISII
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
------------------------------ --------- -------- ----------------------------- ------------------------ --------------------
</TABLE>
AP = Access Person; IP = Investment Personnel
ISII = Imperial Special Investments, Inc.
-11-
