SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
--
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 11 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT / /
OF 1940
Amendment No. 12 /X/
(Check appropriate box or boxes.)
AmeriPrime Funds - File Nos. 33-96826 and 811-9096
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092
- -------------------------------------------------------------------
(Address of Principal Executive Offices) Zip Code
Registrant's Telephone Number, including Area Code: (817) 431-2197
Kenneth Trumpfheller, 1793 Kingswood Drive, Suite 200, Southlake, Texas 76092
(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Release Date: June, 1997
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b) / / on _____________
pursuant to paragraph (b) /X/ 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) 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.
Title of Securities Being Registered
Omit from the facing sheet reference to the other Act if the
Registration Statement or amendment is filed under only one of the Acts. Include
the "Approximate Date of Proposed Public Offering" and "Title of Securities
Being Registered" only where securities are being registered under the
Securities Act of 1933.
ASA02D88-121197-1
<PAGE>
AmeriPrime Funds
CROSS REFERENCE SHEET
FORM N-1A
FOR CARL DOMINO EQUITY INCOME FUND
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
13.............................. General Information
15.............................. General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
<PAGE>
AmeriPrime Funds
CROSS REFERENCE SHEET
FORM N-1A
FOR FOUNTAINHEAD SPECIAL VALUE FUND
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
13.............................. General Information
15.............................. General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
<PAGE>
AmeriPrime Funds
CROSS REFERENCE SHEET
FORM N-1A
FOR AIT VISION U.S. EQUITY PORTFOLIO
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
13.............................. General Information
15.............................. General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
<PAGE>
AmeriPrime Funds
CROSS REFERENCE SHEET
FORM N-1A
FOR GLOBALT GROWTH FUND
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
13.............................. General Information
15.............................. General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
<PAGE>
CROSS REFERENCE SHEET
FORM N-1A
FOR NEWCAP CONTRARIAN FUND
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
13.............................. General Information
15.............................. General Information
16.............................. Distribution Plan
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
CROSS REFERENCE SHEET
FORM N-1A
FOR NEWCAP CONTRARIAN FUND
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
13.............................. General Information
15.............................. General Information
16.............................. Distribution Plan
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
CROSS REFERENCE SHEET
FORM N-1A
FOR IMS CAPITAL VALUE FUND
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
15.............................. General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
<PAGE>
CROSS REFERENCE SHEET
FORM N-1A
FOR CORBIN SMALL-CAP VALUE FUND
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
15.............................. General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
<PAGE>
AmeriPrime Funds
CROSS REFERENCE SHEET
FORM N-1A
FOR FLORIDA STREET BOND FUND AND FLORIDA STREET GROWTH FUND
ITEM SECTION IN COMBINED PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques, Risk Considerations,
Operation of the Funds, General
Information
5.............................. Operation of the Funds
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Funds, General Information
7.............................. Cover Page, How to Invest in the
Funds, Share Price Calculation,
Operation of the Funds,
8.............................. How to Redeem Shares
9.............................. None
13.............................. General Information
15.............................. General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. None
16.............................. The Investment Advisor, Custodian,
Transfer Agent, Accountants
17.............................. Fund Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
<PAGE>
AIT VISION U.S. EQUITY PORTFOLIO
PROSPECTUS February 13, 1998
311 Park Place Blvd., Suite 250
Clearwater, Florida 34619
For Information, Shareholder Services and Requests:
(800) 507-9922
AIT Vision U.S. Equity Portfolio (the "Fund") is a mutual fund whose
investment objective is to provide long term growth of capital. The Fund's
Adviser, Advanced Investment Technology, Inc., intends the Fund to be a core
equity investment vehicle. Characteristics of individual companies considered by
the Adviser in the securities selection process will include traditional growth
as well as fundamental value measures, among others. The process of evaluating
securities is quantitatively rigorous, using state of the art advanced
computational techniques developed by the Adviser.
The Fund is one of the mutual funds comprising AmeriPrime Funds, an
open-end management investment company, and is distributed by AmeriPrime
Financial Securities, Inc.
This Prospectus provides the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information has been filed with the Securities and
Exchange Commission (the "SEC") dated February 13, 1998, which is incorporated
herein by reference and can be obtained without charge by calling the Fund at
the phone number listed above. The SEC maintains a Web Site (http://www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding registrants that file electronically
with the SEC.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
ASA029F4-120897-2
<PAGE>
SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund. The expense information is based on operating expenses incurred during
the most recent fiscal year. The expenses are expressed as a percentage of
average net assets. The Example should not be considered a representation of
future Fund performance or expenses, both of which may vary.
Shareholders should be aware that the Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Fund. In addition, the Fund does not
have a 12b-1 Plan. Unlike most other mutual funds, the Fund does not pay
directly for transfer agency, pricing, custodial, auditing or legal services,
nor does it pay directly any general administrative or other significant
operating expenses. The Adviser pays all of the expenses of the Fund except
brokerage, taxes, interest, fees and expenses of non-interested person trustees
and extraordinary expenses.
<TABLE>
<CAPTION>
Shareholder Transaction Expenses
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)............................................NONE
Sales Load Imposed on Reinvested Dividends.............................................................................NONE
Deferred Sales Load....................................................................................................NONE
Redemption Fees........................................................................................................NONE
Exchange Fees..........................................................................................................NONE
Annual Fund Operating Expenses (as a percentage of average net assets)1
Management Fees...................................................................................................... 0.70%
12b-1 Charges..........................................................................................................NONE
Other Expenses2 (after reimbursement).................................................................................0.00%
Total Fund Operating Expenses2 (after reimbursement)..................................................................0.70%
<FN>
1 The Fund's total operating expenses are equal to the management fee paid to
the Adviser because the Adviser pays all of the Fund's general administrative
and significant operating expenses (except as described in footnote 2).
2 The Adviser has agreed to reimburse other expenses for the fiscal year ending
October 31, 1998 to the extent necessary to maintain total operating expenses as
indicated. For the fiscal year ended October 31, 1997, other expenses (fees and
expenses of the trustees who are not "interested persons" as defined in the
Investment Company Act) were 0.04% of average net assets and total fund
operating expenses were 0.74% of average net assets.
</FN>
</TABLE>
The tables above are provided to assist an investor in understanding the direct
and indirect expenses that an investor may incur as a shareholder in the Fund.
- 2 -
<PAGE>
Example
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$7 $22 $38 $86
FINANCIAL HIGHLIGHTS
The following condensed supplementary financial information for the
fiscal year ended October 31, 1997, is derived from the audited financial
statements of the Fund. The financial statements of the Fund have been audited
by McCurdy & Associates CPA's, Inc., independent public accountants, and are
included in the Fund's Annual Report. The Annual Report contains additional
performance information and is available upon request and without charge.
- 3 -
<PAGE>
THE FUND
AIT Vision U.S. Equity Portfolio (the "Fund") was organized as a series
of AmeriPrime Funds, an Ohio business trust (the "Trust") on August 8, 1995, and
commenced operations on November 6, 1995. This prospectus offers shares of the
Fund and each share represents an undivided, proportionate interest in the Fund.
The investment adviser to the Fund is Advanced Investment Technology, Inc.
(the "Adviser").
INVESTMENT OBJECTIVE AND STRATEGIES
The investment objective of the Fund is to provide long term growth of
capital. The Adviser will utilize computer technology and financial databases to
assist in the stock selection process. Characteristics of individual companies
considered in the securities selection process will include traditional growth
as well as fundamental value measures, among others. The process of evaluating
securities is quantitatively rigorous, using state of the art advanced
computational techniques developed by the Adviser. The Fund is designed by its
Adviser to be a core equity investment vehicle.
Under normal circumstances, at least 65% of the total assets of the
Fund will be invested in U.S. equity securities. The Adviser generally intends
to stay fully invested (subject to liquidity requirements and defensive
purposes) in common stock and seeks to limit investment risk and diversify the
Fund's portfolio by investing in companies in all capitalization ranges. Most
equity securities in the Fund's portfolio are listed on a major stock exchange
or traded over-the-counter. The Fund may also invest in fixed income securities
(including repurchase agreements); may write covered call options on common
stocks in the Fund's portfolio; may purchase call options; and may engage in
short sales (if the Fund owns or has the right to obtain an equal amount of the
security being sold). See "Investment Policies and Techniques and Risk
Considerations" for a more detailed discussion of the Fund's investment
practices.
For temporary defensive purposes under abnormal market or economic
conditions, the Fund may invest all or a portion of its assets in money market
instruments (including U.S. Treasury bills), securities of no-load registered
investment companies and repurchase agreements fully collateralized by U.S.
government obligations. The Fund may also invest in such instruments at any time
to maintain liquidity or pending selection of investments in accordance with its
policies. If the Fund acquires securities of another investment company, the
shareholders of the Fund will be subject to additional management fees.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, the Fund cannot give any assurance that its investment objective
will be achieved. Rates of total return quoted by the Fund may be higher or
lower than past quotations, and there can be no assurance that any rate of total
return will be maintained. See "Investment Policies and Techniques and Risk
Considerations" for a more detailed discussion of the Fund's investment
practices.
- 4 -
<PAGE>
HOW TO INVEST IN THE FUND
Shares of the Fund are sold on a continuous basis, and you may invest
any amount you choose, as often as you wish, subject to a minimum initial
investment of $5,000 ($2,000 for retirement accounts). Investors choosing to
purchase or redeem their shares through a broker/dealer or other institution may
be charged a fee by that institution. Investors choosing to purchase or redeem
shares directly from the Fund will not incur charges on purchases or
redemptions. To the extent investments of individual investors are aggregated
into an omnibus account established by an investment adviser, broker or other
intermediary, the account minimums apply to the omnibus account, not to the
account of the individual investor.
Initial Purchase
By Mail - You may purchase shares of the Fund by completing and signing
the investment application form which accompanies this Prospectus and mailing
it, in proper form, together with a check (subject to the above minimum amounts)
made payable to AIT Vision U.S. Equity Portfolio, and sent to the P.O. Box
listed below. If you prefer overnight delivery, use the overnight address listed
below.
U.S. Mail: Overnight:
AIT Vision U.S. Equity Portfolio AIT Vision U.S. Equity Portfolio
c/o American Data Services, Inc. c/o American Data Services, Inc.
P.O. Box 5536 Hauppauge Corporate Center
Hauppauge, New York 11788-0132 150 Motor Parkway
Hauppauge, New York 11760
Your purchase of shares of the Fund will be effected at the next share price
calculated after receipt of your investment.
By Wire - You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call the Transfer Agent at (800) 507-9922 to set up your account
and obtain an account number. You should be prepared at that time to provide the
information on the application. Then, you should provide your bank with the
following information for purposes of wiring your investment:
Star Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: AIT Vision U.S. Equity Portfolio
D.D.A. # 483889770
Account Name _________________ (write in shareholder
name) For the Account # ______________ (write in
account number)
You are required to mail a signed application to the Custodian at the
above address in order to complete your initial wire purchase. Wire orders will
be accepted only on a day on which the Fund and the Custodian and Transfer Agent
are open for business. A wire purchase will not be considered made until the
wired money is received and the purchase is accepted by the Fund. Any delays
which may occur in wiring money, including delays which may occur in processing
by the banks, are not the responsibility of the Fund or the Transfer Agent.
There is presently no fee for the receipt of wired funds, but the right to
charge shareholders for this service is reserved by the Fund.
- 5 -
<PAGE>
Additional Investments
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain your name, the name of your
account(s), your account number(s), and the name of the Fund. Checks should be
made payable to AIT Vision U.S. Equity Portfolio and should be sent to the
address listed above. A bank wire should be sent as outlined above.
Tax Sheltered Retirement Plans
Since the Fund is oriented to longer term investments, shares of the
Fund may be an appropriate investment medium for tax sheltered retirement plans,
including: individual retirement plans (IRAs); simplified employee pensions
(SEPs); 401(k) plans; qualified corporate pension and profit sharing plans (for
employees); tax deferred investment plans (for employees of public school
systems and certain types of charitable organizations); and other qualified
retirement plans. You should contact the Transfer Agent for the procedure to
open an IRA or SEP plan, as well as more specific information regarding these
retirement plan options. Consultation with an attorney or tax adviser regarding
these plans is advisable. Custodial fees for an IRA will be paid by the
shareholder by redemption of sufficient shares of the Fund from the IRA unless
the fees are paid directly to the IRA custodian. You can obtain information
about the IRA custodial fees from the Transfer Agent.
Other Purchase Information
Dividends begin to accrue after you become a shareholder. The Fund does
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases and to
refuse to sell to any person are reserved by the Fund. If your check or wire
does not clear, you will be responsible for any loss incurred by the Fund. If
you are already a shareholder, the Fund can redeem shares from any identically
registered account in the Fund as reimbursement for any loss incurred. You may
be prohibited or restricted from making future purchases in the Fund.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after
the redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. A broker may charge a transaction fee
for the redemption. Presently, there is no charge for wire redemptions; however,
the Fund reserves the right to charge for this service. Any charges for wire
redemptions will be deducted from the shareholder's Fund account by redemption
of shares. Investors choosing to purchase or redeem their shares through a
broker/dealer or other institution may be charged a fee by that institution.
By Mail - You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:
- 6 -
<PAGE>
AIT Vision U.S. Equity Portfolio
c/o American Data Services, Inc.
P.O. Box 5536
Hauppauge, New York 11788-0132
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the Fund
requires that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Fund or American Data Services, Inc., a
shareholder, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
By Telephone - You may redeem any part of your account in the Fund by
calling the Transfer Agent at (800) 507-9922. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at
any time by the Fund or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Fund, although neither the Fund nor the Transfer Agent has ever
experienced difficulties in receiving and in a timely fashion responding to
telephone requests for redemptions or exchanges. If you are unable to reach the
Fund by telephone, you may request a redemption or exchange by mail.
Additional Information - If you are not certain of the requirements for
a redemption please call the Transfer Agent at (800) 507-9922. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing or under any emergency circumstances, as determined
by the Securities and Exchange Commission, the Fund may suspend redemptions or
postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $5,000 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax adviser concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption
- 7 -
<PAGE>
at any time if the Board of Trustees determines in its sole discretion that
failure to so redeem may have materially adverse consequences to all or any of
the shareholders of the Fund.
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day on which there is sufficient trading in the
Fund's securities to materially affect the net asset value. The net asset value
per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Adviser's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Adviser determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Adviser believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Adviser, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within 60 days of maturity, are valued
by using the amortized cost method of valuation, which the Board has determined
will represent fair value.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on an annual basis, and intends to
distribute its net long term capital gains and its net short term capital gains
at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. An election to receive a cash payment of dividends and/or
capital gain distributions may be made in the application to purchase shares or
by separate written notice to the Transfer Agent. Shareholders will receive a
confirmation statement reflecting the payment and reinvestment of dividends and
summarizing all other transactions. If cash payment is requested, a check
normally will be mailed within five business days after the payable date. If you
withdraw your entire account, all dividends accrued to the time of withdrawal,
including the day of withdrawal, will be paid at that time. You may elect to
have distributions on shares held in
- 8 -
<PAGE>
IRAs and 403(b) plans paid in cash only if you are 59 1/2 years old or
permanently and totally disabled or if you otherwise qualify under the
applicable plan.
TAXES
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
the Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any realized
capital gains.
For federal income tax purposes, dividends paid by the Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 (the "Tax Reform Act"), all distributions of net
short-term capital gains to individuals are taxed at the same rate as ordinary
income. All distributions of net capital gains to corporations are taxed at
regular corporate rates. Any distributions designated as being made from net
realized long term capital gains are taxable to shareholders as long term
capital gains regardless of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisers regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
On the application or other appropriate form, the Fund will request the
shareholder's certified taxpayer identification number (social security number
for individuals) and a certification that the shareholder is not subject to
backup withholding. Unless the shareholder provides this information, the Fund
will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the Fund may
make a corresponding charge against the account.
OPERATION OF THE FUND
The Fund is a diversified series of AmeriPrime Funds, an open-end
management investment company organized as an Ohio business trust on August 8,
1995. The Board of Trustees supervises the business activities of the Fund. Like
other mutual funds, the Fund retains various organizations to perform
specialized services.
The Fund retains Advanced Investment Technology, Inc., 311 Park Place
Blvd., Clearwater, Florida 34619 (the "Adviser") to manage the Fund's
investments. The Adviser is controlled by its majority shareholder, State Street
Global Advisors, a division of State Street Bank and Trust Company. The Adviser
develops and uses advanced computational quantitative techniques for money
management. In addition to offering tactical overlay services to private
individuals and institutions, the Adviser manages private investor and
institutional funds in global asset allocation and individually managed accounts
(equity). Douglas W. Case, CFA, Chief Investment Officer, Susan L. Reigel,
- 9 -
<PAGE>
Portfolio Manager, and Dean S. Barr, Chairman and Chief Executive Officer, are
primarily responsible for the day-to-day management of the Fund's portfolio. Mr.
Case is the portfolio manager for the Adviser's managed U.S. equity accounts.
From 1994 to 1996, he was the Director of Equity Portfolio Management of LBS
Capital Management, Inc. ("LBS"). He previously worked with the Florida
Retirement System, where he oversaw all internal quantitatively driven
portfolios and assisted in the risk analysis of the aggregate domestic equity
fund. Ms. Reigel joined LBS as a portfolio manager in early 1996 and joined AIT
in late 1996. She assists in the management of all equity accounts. Ms. Reigel
previously worked with the Florida Retirement System where she managed
quantitatively driven portfolios. Mr. Barr founded the Adviser in 1996, is the
controlling shareholder, and oversees portfolio management of all of the
Adviser's programs. From 1989 to 1996, he was the Managing Director and Chief
Investment Officer of LBS. He is an authority and expert in the development of
artificial intelligence systems for market and security analysis. Additionally,
he is the author of several technical papers on Artificial Intelligence. The
Fund is authorized to pay the Adviser a fee equal to an annual average rate of
0.70% of its average daily net assets. The Adviser pays all of the operating
expenses of the Fund except brokerage, taxes, interest, fees and expenses on
non-interested person trustees and extraordinary expenses. It should be noted
that most investment companies pay their own operating expenses directly, while
the Fund's expenses, except those specified above, are paid by the Adviser.
The Fund retains AmeriPrime Financial Services, Inc. (the
"Administrator") to manage the Fund's business affairs and provide the Fund with
administrative services, including all regulatory reporting and necessary office
equipment, personnel and facilities. The Administrator receives a monthly fee
from the Adviser equal to an annual average rate of 0.10% of the Fund's average
daily net assets up to fifty million dollars, 0.075% of the Fund's average daily
net assets from fifty to one hundred million dollars and 0.050% of the Fund's
average daily net assets over one hundred million dollars (subject to a minimum
annual payment of $30,000). In addition, the Adviser will reimburse the
Administrator for organizational expenses advanced by the Administrator. The
Fund retains American Data Services, Inc., P.O. Box 5536, Hauppauge, New York
11788-0132 (the "Transfer Agent") to serve as transfer agent, dividend paying
agent and shareholder service agent. The Trust retains AmeriPrime Financial
Securities, Inc., 1793 Kingswood Drive, Suite 200, Southlake, Texas 76092 (the
"Distributor") to act as the principal distributor of the Fund's shares. Kenneth
D. Trumpfheller, officer and sole shareholder of the Administrator and the
Distributor, is an officer and trustee of the Trust. The services of the
Administrator, Transfer Agent and Distributor are operating expenses paid by the
Adviser.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Adviser may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute
portfolio transactions. Investment Technology Group, Inc., a registered
broker-dealer and an affiliate of the Adviser, may receive brokerage commissions
from the Fund. The Adviser (not the Fund) may pay certain financial institutions
(which may include banks, brokers, securities dealers and other industry
professionals) a "servicing fee" for performing certain administrative servicing
functions for Fund shareholders to the extent these institutions are allowed to
do so by applicable statute, rule or regulation.
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS
- 10 -
<PAGE>
This section contains general information about various types of
securities and investment techniques that the Fund may purchase or employ.
Equity Securities
The Fund may invest in common stock, preferred stock, common stock
equivalents (such as convertible preferred stock and convertible debentures) and
closed-end investment companies which invest primarily in common stocks.
Convertible preferred stock is preferred stock that can be converted into common
stock pursuant to its terms. Convertible debentures are debt instruments that
can be converted into common stock pursuant to their terms. The Adviser intends
to invest only in convertible debentures rated A or higher by Standard & Poor's
Corporation ("S&P") or by Moody's Investors Services, Inc. ("Moody's") and will
limit the Fund's investment in such debentures to 10% of net assets. The Fund
may hold warrants and rights issued in conjunction with common stock, but in
general will sell any such warrants or rights as soon as practicable after they
are received. Warrants are options to purchase equity securities at a specified
price valid for a specific time period. Rights are similar to warrants, but
normally have a short duration and are distributed by the issuer to its
shareholders.
The Fund may invest a significant portion of its portfolio in smaller
companies when the Adviser believes it to be consistent with the Fund's
objective. Some characteristics of smaller companies, such as limited product
diversity, a lack of managerial or financial resources, and thinly traded
securities may result in increased stock price volatility.
Equity securities include common stocks of domestic real estate
investment trusts and other companies which operate as real estate corporations
or which have a significant portion of their assets in real estate. The Fund
will not acquire any direct ownership of real estate.
The Fund may invest in foreign equity securities through the purchase
of American Depository Receipts. American Depository Receipts are
dollar-denominated receipts that are generally issued in registered form by
domestic banks, and represent the deposit with the bank of a security of a
foreign issuer. To the extent that the Fund does invest in foreign securities,
such investments may be subject to special risks, such as changes in
restrictions on foreign currency transactions and rates of exchange, and changes
in the administrations or economic and monetary policies of foreign governments.
In addition, the Fund may invest in S&P Depositary Receipts ("SPDRs")
and other similar instruments. SPDRs are shares of a publicly traded unit
investment trust which owns the stocks included in the S&P 500 Index, and
changes in the price of SPDRs track the movement of the Index relatively
closely.
Fixed Income Securities
The Fund may invest in U.S. Treasury bills and repurchase agreements,
both of which are fixed income securities. Fixed income securities are generally
considered to be interest rate sensitive, which means that their value will
generally decrease when interest rates rise and increase when interest rates
fall. Securities with shorter maturities, while offering lower yields, generally
provide greater price stability than longer term securities and are less
affected by changes in interest rates. U.S. Treasury bills are backed by the
full faith and credit of the U.S. Government as to payment of principal and
interest and are among the highest quality government securities.
- 11 -
<PAGE>
A repurchase agreement is a short-term investment in which the
purchaser (i.e., the Fund) acquires ownership of a U.S. Government obligation
(which may be of any maturity) and the seller agrees to repurchase the
obligation at a future time at a set price, thereby determining the yield during
the purchaser's holding period (usually not more than seven days from the date
of purchase). Any repurchase transaction in which the Fund engages will require
full collateralization of the seller's obligation during the entire term of the
repurchase agreement. In the event of a bankruptcy or other default of the
seller, the Fund could experience both delays in liquidating the underlying
security and losses in value. However, the Fund intends to enter into repurchase
agreements only with Star Bank, N.A. (the Fund's Custodian), other banks with
assets of $1 billion or more and registered securities dealers determined by the
Adviser (subject to review by the Board of Trustees) to be creditworthy. The
Adviser monitors the creditworthiness of the banks and securities dealers with
which the Fund engages in repurchase transactions.
Options Transactions
The Fund may write (sell) covered call options on common stocks in the
Fund's portfolio. A covered call option on a security is an agreement to sell a
particular portfolio security if the option is exercised at a specified price,
or before a set date. The Fund profits from the sale of the option, but gives up
the opportunity to profit from any increase in the price of the stock above the
option price, and may incur a loss if the stock price falls. Risks associated
with writing covered call options include the possible inability to effect
closing transactions at favorable prices and an appreciation limit on the
securities set aside for settlement. The Fund may also purchase call options.
The Fund will only engage in exchange-traded options transactions.
General
The Fund may engage in short sales if, at the time of the short sale,
the Fund owns or has the right to obtain an equal amount of the security being
sold, at no additional cost, and the Fund's investment does not exceed 5% of its
net assets. See "Additional Information About Fund Investments and Risk
Considerations" in the Statement of Additional Information.
GENERAL INFORMATION
Fundamental Policies. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. The investment objective of the Fund may be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. Any such
change may result in the Fund having an investment objective different from the
objective which the shareholders considered appropriate at the time of
investment in the Fund.
Portfolio Turnover. The Fund does not intend to purchase or sell
securities for short term trading purposes. The Fund will, however, sell any
portfolio security (without regard to the length of time it has been held) when
the Adviser believes that market conditions, creditworthiness factors or general
economic conditions warrant such action. It is anticipated that the Fund will
have a portfolio turnover rate of less than 200%. The brokerage commissions
incurred by the Fund will generally be higher than those incurred by a fund with
a lower portfolio turnover rate. The Fund does not anticipate any adverse tax
consequences as a result of its portfolio turnover rate, although
- 12 -
<PAGE>
substantial net capital gains could be realized, and any distributions derived
from such gains may be ordinary income for federal tax purposes.
Shareholder Rights. Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. When
matters are submitted to shareholders for a vote, each shareholder is entitled
to one vote for each whole share he owns and fractional votes for fractional
shares he owns. All shares of the Fund have equal voting rights and liquidation
rights. As of December 3, 1997, U.S. Trust Company of Florida, as Trustee of the
Killian Charitable Remainder Unitrust, owns a majority of the outstanding shares
of the Fund and may be deemed to control the Fund. Raymond Killian, as a
beneficiary of the Unitrust, may also be deemed to control the Fund.
PERFORMANCE INFORMATION
The Fund may periodically advertise "average annual total return." The
"average annual total return" of the Fund refers to the average annual
compounded rate of return over the stated period that would equate an initial
amount invested at the beginning of a stated period to the ending redeemable
value of the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions.
The Fund may also periodically advertise its total return over various
periods in addition to the value of a $10,000 investment (made on the date of
the initial public offering of the Fund's shares) as of the end of a specified
period. The "total return" for the Fund refers to the percentage change in the
value of an account between the beginning and end of the stated period, assuming
no activity in the account other than reinvestment of dividends and capital
gains distributions.
The Fund may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including the Standard &
Poor's (S&P) 500 Index, the Dow Jones Industrial Average or the Russell 3000
Index.
The advertised performance data of the Fund is based on historical
performance and is not intended to indicate future performance. Rates of total
return quoted by the Fund may be higher or lower than past quotations, and there
can be no assurance that any rate of total return will be maintained. The
principal value of an investment in the Fund will fluctuate so that a
shareholder's shares, when redeemed, may be worth more or less than the
shareholder's original investment.
Investment Adviser Administrator
Advanced Investment Technology, Inc. AmeriPrime Financial Services, Inc.
311 Park Place Blvd., Suite 250 1793 Kingswood Drive, Suite 200
Clearwater Florida 34619 Southlake, Texas 76092
Custodian Distributor
Star Bank, N.A. AmeriPrime Financial Securities, Inc.
- 13 -
<PAGE>
P.O. Box 641083 1793 Kingswood Drive, Suite 200
Cincinnati, Ohio 45264 Southlake, Texas 76092
Transfer Agent (all purchase and Auditors
redemption requests) McCurdy & Associates CPA's, Inc.
American Data Services, Inc. 27955 Clemens Road
P.O. Box 5536 Westlake, Ohio 44145
Hauppauge, New York 11788-0132
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell its
shares in any state to any person to whom it is unlawful to make such offer in
such state.
- 14 -
<PAGE>
TABLE OF CONTENTS PAGE
SUMMARY OF FUND EXPENSES..................................................... 2
Shareholder Transaction Expenses.................................... 2
Annual Fund Operating Expenses...................................... 2
FINANCIAL HIGHLIGHTS......................................................... 3
THE FUND .................................................................... 3
INVESTMENT OBJECTIVE AND STRATEGIES.......................................... 3
HOW TO INVEST IN THE FUND.................................................... 4
Initial Purchase.................................................... 4
By Mail .................................................. 4
By Wire .................................................. 4
Additional Investments............................................. 5
Tax Sheltered Retirement Plans....................................... 5
Other Purchase Information........................................... 5
HOW TO REDEEM SHARES.......................................................... 5
By Mail ........................................................... 6
By Telephone......................................................... 6
Additional Information............................................... 6
SHARE PRICE CALCULATION....................................................... 7
DIVIDENDS AND DISTRIBUTIONS.................................................. 7
TAXES ..................................................................... 8
OPERATION OF THE FUND......................................................... 8
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS....................10
Equity Securities....................................................10
Fixed Income Securities..............................................10
Options Transactions.................................................11
General ............................................................11
GENERAL INFORMATION...........................................................11
Fundamental Policies................................................ 11
Portfolio Turnover...................................................11
Shareholder Rights.................................................. 12
PERFORMANCE INFORMATION.......................................................12
<PAGE>
CARL DOMINO EQUITY INCOME FUND
PROSPECTUS February 13, 1998
580 Village Blvd., Suite 225
West Palm Beach, Florida 33409
For Information, Shareholder Services and Requests:
(800) 506-9922
Carl Domino Equity Income Fund (the "Fund") is a mutual fund whose
investment objective is to provide long term growth of capital together with
current income. The Fund's portfolio is comprised primarily of dividend-paying
common stocks of large, established companies believed by the Adviser, Carl
Domino Associates, L.P., to possess less downside risk and volatility than the
S&P 500 Index.
The Fund is "no-load," which means there are no sales charges or
commissions. In addition, there are no 12b-1 fees, distribution expenses or
deferred sales charges which are borne by the shareholders. The Fund is one of
the mutual funds comprising AmeriPrime Funds, an open-end management investment
company, and is distributed by AmeriPrime Financial Securities, Inc.
This Prospectus provides the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information has been filed with the Securities and
Exchange Commission (the "SEC") dated February 13, 1998, which is incorporated
herein by reference and can be obtained without charge by calling the Fund at
the phone number listed above. The SEC maintains a Web Site (http://www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding registrants that file electronically
with the SEC.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
ASA029D3-121197-1
<PAGE>
SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund. The expense information is based on operating expenses incurred during
the most recent fiscal year. The expenses are expressed as a percentage of
average net assets. The Example should not be considered a representation of
future Fund performance or expenses, both of which may vary.
Shareholders should be aware that the Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Fund. In addition, the Fund does not
have a 12b-1 Plan. Unlike most other mutual funds, the Fund does not pay
directly for transfer agency, pricing, custodial, auditing or legal services,
nor does it pay directly any general administrative or other significant
operating expenses. The Adviser pays all of the expenses of the Fund except
brokerage, taxes, interest, fees and expenses of non-interested person trustees
and extraordinary expenses.
Shareholder Transaction Expenses
Sales Load Imposed on Purchases............................................NONE
Sales Load Imposed on Reinvested Dividends.................................NONE
Deferred Sales Load........................................................NONE
Redemption Fees............................................................NONE
Exchange Fees..............................................................NONE
Annual Fund Operating Expenses (as a percentage of average net assets)1
Management Fees........................................................... 1.50%
12b-1 Charges...............................................................NONE
Other Expenses2 (after reimbursement)......................................0.00%
Total Fund Operating Expenses2 (after reimbursement).......................1.50%
1 The Fund's total operating expenses are equal to the management fee paid to
the Adviser because the Adviser pays all of the Fund's operating expenses
(except as described in footnote 2).
2 The Advisor has agreed to reimburse other expenses for the fiscal year ending
October 31, 1998 to the extent necessary to maintain total operating expenses as
indicated. For the fiscal year ended October 31, 1997, other expenses (fees and
expenses of the trustees who are not "interested persons" as defined in the
Investment Company Act) were ____% of average net assets and total fund
operating expenses were ____% of average net assets.
The tables above are provided to assist an investor in understanding the direct
and indirect expenses that an investor may incur as a shareholder in the Fund.
Example
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
- 2 -
<PAGE>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- -------
$15 $47 $82 $179
FINANCIAL HIGHLIGHTS
The following condensed supplementary financial information for the
fiscal year ended October 31, 1997, is derived from the audited financial
statements of the Fund. The financial statements of the Fund have been audited
by McCurdy & Associates CPA's, Inc., independent public accountants, and are
included in the Fund's Annual Report. The Annual Report contains additional
performance information and is available upon request and without charge.
[insert financial highlights]
THE FUND
Carl Domino Equity Income Fund (the "Fund") was organized as a series
of AmeriPrime Funds, an Ohio business trust (the "Trust"), on August 8, 1995,
and commenced operations on November 6, 1995. This prospectus offers shares of
the Fund and each share represents an undivided, proportionate interest in the
Fund. The investment adviser to the Fund is Carl Domino Associates, L.P. (the
"Adviser").
INVESTMENT OBJECTIVE AND STRATEGIES
The investment objective of the Fund is to provide long term growth of
capital together with current income. The Fund seeks to achieve its objective by
investing primarily in equity securities which the Adviser believes offer less
downside risk and volatility than the S&P 500 Index. In making investments for
the Fund, the Adviser uses a disciplined, conservative, value and yield
strategy, consistent with capital preservation. The Adviser will particularly
seek to purchase stocks of companies which, in its estimation, are undervalued
due to special circumstances which the Adviser believes are temporary. As the
Fund will primarily invest in dividend-paying common stocks, it is expected that
the Fund will generate a combination of current income and long term capital
appreciation.
The Adviser generally will select stocks with above average dividend
yield, which the Adviser believes will enhance the Fund's stability and reduce
market risk. The Adviser seeks to further limit investment risk by diversifying
the Fund's investments across a broad range of industries and companies, and by
investing primarily in larger, more established companies.
The Adviser has been managing equity income accounts for its
institutional clients since 1987. The performance of the accounts with
investment objectives, policies and strategies substantially similar to those of
the Fund appears below. The data is provided to illustrate past performance of
the Adviser in managing such accounts, as compared to the S&P 500 Index. The
persons responsible for the performance of the accounts are the same as those
responsible for the investment management of the Fund. As of December 31, 1996,
the assets in those accounts totaled approximately $597 million.
- 3 -
<PAGE>
Summary of Annual Investment Returns of
the Fund and Carl Domino Associates, L.P. Managed Accounts *
<TABLE>
<CAPTION>
Managed
Period Fund Accounts S&P 500
------ ---- -------- -------
<S> <C> <C> <C>
1987** -11.30% -17.43%
1988 21.68% 16.57%
1989 25.25% 31.65%
1990 - 6.91% - 3.14%
1991 25.47% 30.45%
1992 8.55% 7.62%
1993 13.16% 10.06%
1994 4.36% 1.30%
1995 3.00%*** 35.40% 37.54%
1996 24.35% 22.95% 22.99%
1997 _____% ______% ______%
<FN>
* The Carl Domino Associates, L.P. managed account performance is the
time-weighted, dollar-weighted average total return associated with a composite
of equity income accounts having objectives similar to the Fund, and is
unaudited. The composite does not include non-institutional accounts (those with
assets less than $5,000,000) and non-discretionary accounts because the nature
of those accounts make them inappropriate for purposes of comparison. Results
after June 30, 1988 include the reinvestment of income on an accrual basis,
while prior period results include the reinvestment of income on a cash basis.
Performance figures reflected are net of management fees and net of all
expenses, including transaction costs and commissions. Results include the
reinvestment of dividends and capital gains. The presentation of the performance
composite complies with the Performance Presentation Standards of the
Association for Investment Management and Research (AIMR).
The S&P 500 Index is a widely recognized, unmanaged index of market
activity based upon the aggregate performance of a selected portfolio of
publicly traded common stocks, including monthly adjustments to reflect the
reinvestment of dividends and other distributions. The S&P 500 Index reflects
the total return of securities comprising the Index, including changes in market
prices as well as accrued investment income, which is presumed to be reinvested.
Performance figures for the S&P 500 Index do not reflect deduction of
transaction costs or expenses, including management fees.
The performance of the accounts managed by the Adviser does not represent
the historical performance of the Fund and should not be considered indicative
of future performance of the Fund. Results may differ because of, among other
things, differences in brokerage commissions, account expenses, including
management fees, the size of positions taken in relation to account size and
diversification of securities, timing of purchases and sales, and availability
of cash for new investments. In addition, the managed accounts are not subject
to certain investment limitations, diversification requirements, and other
restrictions imposed by the Investment Company Act and the
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<PAGE>
Internal Revenue Code which, if applicable, may have adversely affected the
performance results of the managed accounts composite. The results for different
periods may vary.
*** From June 30, 1987 inception.
*** For the period December 4, 1995 (commencement of operations in
accordance with the Fund's investment objective) through December 31, 1995, not
annualized.
</FN>
</TABLE>
Under normal circumstances, at least 65% of the total assets of the
Fund will be invested in income producing equity securities. The Adviser
generally intends to stay fully invested (subject to liquidity requirements and
defensive purposes) in common stock and common stock equivalents (such as
rights, warrants and securities convertible into common stocks) regardless of
the movement of stock prices. However, the Fund may invest in preferred stocks,
bonds, corporate debt and U.S. government obligations to maintain liquidity or
pending investment in equity securities. Most equity securities in the Fund's
portfolio are listed on a major stock exchange or traded over-the-counter. While
the Fund ordinarily will invest in common stocks of U.S.
companies, it may invest in foreign companies.
For temporary defensive purposes under abnormal market or economic
conditions, the Fund may hold all or a portion of its assets in money market
instruments (including money market funds), cash equivalents or U.S. government
repurchase agreements. The Fund may also invest in such instruments at any time
to maintain liquidity or pending selection of investments in accordance with its
policies. If the Fund acquires securities of a money market fund, the
shareholders of the Fund will be subject to duplicative management fees.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, the Fund cannot give any assurance that its investment objective
will be achieved. Rates of total return quoted by the Fund may be higher or
lower than past quotations, and there can be no assurance that any rate of total
return will be maintained. See "Investment Policies and Techniques and Risk
Considerations" for a more detailed discussion of the Fund's investment
practices.
HOW TO INVEST IN THE FUND
Shares of the Fund are sold on a continuous basis, and you may invest
any amount you choose, as often as you wish, subject to a minimum initial
investment of $2,000 and minimum subsequent investments of $100 ($50 for IRAs).
Investors choosing to purchase or redeem their shares through a broker/dealer or
other institution may be charged a fee by that institution. Investors choosing
to purchase or redeem shares directly from the Fund will not incur charges on
purchases or redemptions. To the extent investments of individual investors are
aggregated into an omnibus account established by an investment adviser, broker
or other intermediary, the account minimums apply to the omnibus account, not to
the account of the individual investor.
Initial Purchase
By Mail - You may purchase shares of the Fund by completing and signing
the investment application form which accompanies this Prospectus and mailing
it, in proper form, together with a
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<PAGE>
check (subject to the above minimum amounts) made payable to Carl Domino Equity
Income Fund, and sent to the P.O. Box listed below. If you prefer overnight
delivery, use the overnight address listed below:
U.S. Mail: Overnight:
Carl Domino Equity Income Fund Carl Domino Equity Income Fund
c/o American Data Services, Inc. c/o American Data Services, Inc.
P.O. Box 5536 Hauppauge Corporate Center
Hauppauge, New York 11788-0132 150 Motor Parkway
Hauppauge, New York 11760
Your purchase of shares of the Fund will be effected at the next share price
calculated after receipt of your investment.
By Wire - You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call the Transfer Agent at 800-506-9922 to set up your account
and obtain an account number. You should be prepared at that time to provide the
information on the application. Then, you should provide your bank with the
following information for purposes of wiring your investment:
Star Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: Carl Domino Equity Income Fund
D.D.A. # 483889747
Account Name _________________ (write in shareholder
name) For the Account # ______________ (write in
account number)
You are required to mail a signed application to the Custodian at the
above address in order to complete your initial wire purchase. Wire orders will
be accepted only on a day on which the Fund and the Custodian and Transfer Agent
are open for business. A wire purchase will not be considered made until the
wired money is received and the purchase is accepted by the Fund. Any delays
which may occur in wiring money, including delays which may occur in processing
by the banks, are not the responsibility of the Fund or the Transfer Agent.
There is presently no fee for the receipt of wired funds, but the right to
charge shareholders for this service is reserved by the Fund.
Additional Investments
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain your name, the name of your
account(s), your account number(s), and the name of the Fund. Checks should be
made payable to Carl Domino Equity Income Fund and should be sent to the address
listed above. A bank wire should be sent as outlined above.
Tax Sheltered Retirement Plans
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<PAGE>
Since the Fund is oriented to longer term investments, shares of the
Fund may be an appropriate investment medium for tax sheltered retirement plans,
including: individual retirement plans (IRAs); simplified employee pensions
(SEPs); 401(k) plans; qualified corporate pension and profit sharing plans (for
employees); tax deferred investment plans (for employees of public school
systems and certain types of charitable organizations); and other qualified
retirement plans. You should contact the Transfer Agent for the procedure to
open an IRA or SEP plan, as well as more specific information regarding these
retirement plan options. Consultation with an attorney or tax adviser regarding
these plans is advisable. Custodial fees for an IRA will be paid by the
shareholder by redemption of sufficient shares of the Fund from the IRA unless
the fees are paid directly to the IRA custodian. You can obtain information
about the IRA custodial fees from the Transfer Agent.
Other Purchase Information
Dividends begin to accrue after you become a shareholder. The Fund does
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases and to
refuse to sell to any person are reserved by the Fund. If your check or wire
does not clear, you will be responsible for any loss incurred by the Fund. If
you are already a shareholder, the Fund can redeem shares from any identically
registered account in the Fund as reimbursement for any loss incurred. You may
be prohibited or restricted from making future purchases in the Fund.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after
the redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. There is no charge for wire
redemptions; however, the Fund reserves the right to charge for this service.
Any charges for wire redemptions will be deducted from the shareholder's Fund
account by redemption of shares. Investors choosing to purchase or redeem their
shares through a broker/dealer or other institution may be charged a fee by that
institution.
By Mail - You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:
Carl Domino Equity Income Fund
c/o American Data Services, Inc.
P.O. Box 5536
Hauppauge, New York 11788-0132
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all
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<PAGE>
redemptions, the Fund requires that signatures be guaranteed by a bank or member
firm of a national securities exchange. Signature guarantees are for the
protection of shareholders. At the discretion of the Fund or American Data
Services, Inc., a shareholder, prior to redemption, may be required to furnish
additional legal documents to insure proper authorization.
By Telephone - You may redeem any part of your account in the Fund by
calling the Transfer Agent at 800-506-9922. You must first complete the Optional
Telephone Redemption and Exchange section of the investment application to
institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at
any time by the Fund or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Fund, although neither the Fund nor the Transfer Agent has ever
experienced difficulties in receiving and in a timely fashion responding to
telephone requests for redemptions or exchanges. If you are unable to reach the
Fund by telephone, you may request a redemption or exchange by mail.
Additional Information - If you are not certain of the requirements for
a redemption please call the Transfer Agent at (800) 506-9922. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing or under any emergency circumstances, as determined
by the Securities and Exchange Commission, the Fund may suspend redemptions or
postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $2,000 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax adviser concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption at any time if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any
- 8 -
<PAGE>
liabilities (including estimated accrued expenses), by the number of shares
outstanding, rounded to the nearest cent. Net asset value per share is
determined as of the close of the New York Stock Exchange (4:00 p.m., Eastern
time) on each day that the exchange is open for business, and on any other day
on which there is sufficient trading in the Fund's securities to materially
affect the net asset value. The net asset value per share of the Fund will
fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Adviser's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Adviser determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Adviser believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Adviser, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within 60 days of maturity, are valued
by using the amortized cost method of valuation, which the Board has determined
will represent fair value.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on an annual basis, and intends to
distribute its net long term capital gains and its net short term capital gains
at least once a year.
In the absence of written instructions otherwise, income dividends and
capital gain distributions are automatically reinvested in additional shares at
the net asset value per share on the distribution date. An election to receive a
cash payment of dividends and/or capital gain distributions may be made in the
application to purchase shares or by separate written notice to the Transfer
Agent. Shareholders will receive a confirmation statement reflecting the payment
and reinvestment of dividends and summarizing all other transactions. If cash
payment is requested, a check normally will be mailed within five business days
after the payable date. If you withdraw your entire account, all dividends
accrued to the time of withdrawal, including the day of withdrawal, will be paid
at that time. You may elect to have distributions on shares held in IRAs and
403(b) plans paid in cash only if you are 59 1/2 years old or permanently and
totally disabled or if you otherwise qualify under the applicable plan.
TAXES
- 9 -
<PAGE>
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
the Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any realized
capital gains.
For federal income tax purposes, dividends paid by the Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 (the "Tax Reform Act"), all distributions of net
short-term capital gains to individuals are taxed at the same rate as ordinary
income. All distributions of net capital gains to corporations are taxed at
regular corporate rates. Any distributions designated as being made from net
realized long term capital gains are taxable to shareholders as long term
capital gains regardless of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisers regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
On the application or other appropriate form, the Fund will request the
shareholder's certified taxpayer identification number (social security number
for individuals) and a certification that the shareholder is not subject to
backup withholding. Unless the shareholder provides this information, the Fund
will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the Fund may
make a corresponding charge against the account.
OPERATION OF THE FUND
The Fund is a diversified series of AmeriPrime Funds, an open-end
management investment company organized as an Ohio business trust on August 8,
1995. The Board of Trustees supervises the business activities of the Fund. Like
other mutual funds, the Fund retains various organizations to perform
specialized services.
The Fund retains Carl Domino Associates, L.P., 580 Village Blvd., Suite
225, West Palm Beach, Florida 33409 (the "Adviser") to manage the Fund's
investments. The Adviser provides equity, balanced and fixed income portfolio
management services to a select group of corporations, institutions,
foundations, trusts and high net worth individuals. The Adviser is a limited
partnership organized in Delaware and its general partner is Carl Domino, Inc.
The controlling shareholder of Carl Domino, Inc. is Carl J. Domino. Mr. Domino
is primarily responsible for the day-to-day management of the Fund's portfolio.
A graduate of Florida State University in 1966 with a B.S. degree in accounting
(Cum Laude) he received an MBA from Harvard Business School in 1972 and joined a
national money management firm. During his 12 year association with Delaware
Investment Advisers he was Chairman of the Investment Strategy Committee for
seven years and personally managed over $1 billion. Carl Domino Associates, L.P.
has been
- 10 -
<PAGE>
providing portfolio management services since its founding in 1987. Mr. Domino,
a portfolio analyst for over 20 years, has been quoted in the press, is
regularly interviewed by the Wall Street Journal and appears frequently on the
Public Education Channel's Inside Money program.
The Fund is authorized to pay the Adviser a fee equal to an annual
average rate of 1.50% of its average daily net assets. The Adviser pays all of
the operating expenses of the Fund except brokerage, taxes, interest, fees and
expenses of non-interested person trustees and extraordinary expenses. In this
regard, it should be noted that most investment companies pay their own
operating expenses directly, while the Fund's expenses, except those specified
above, are paid by the Adviser.
The Fund retains AmeriPrime Financial Services, Inc. (the
"Administrator") to manage the Fund's business affairs and provide the Fund with
administrative services, including all regulatory reporting and necessary office
equipment, personnel and facilities. The Administrator receives a monthly fee
from the Adviser equal to an annual average rate of 0.10% of the Fund's average
daily net assets up to fifty million dollars, 0.075% of the Fund's average daily
net assets from fifty to one hundred million dollars and 0.050% of the Fund's
average daily net assets over one hundred million dollars (subject to a minimum
annual payment of $30,000). In addition, the Adviser will reimburse the
Administrator for organizational expenses advanced by the Administrator. The
Fund retains American Data Services, Inc., Hauppauge Corporate Center, 150 Motor
Parkway, Hauppauge, New York 11760 (the "Transfer Agent") to serve as transfer
agent, dividend paying agent and shareholder service agent. The Trust retains
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092 (the "Distributor") to act as the principal distributor
of the Fund's shares. Kenneth D. Trumpfheller, officer and sole shareholder of
the Administrator and the Distributor, is an officer and trustee of the Trust.
The services of the Administrator, Transfer Agent and Distributor are operating
expenses paid by the Adviser.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Adviser may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute
portfolio transactions. The Adviser (not the Fund) may pay certain financial
institutions (which may include banks, brokers, securities dealers and other
industry professionals) a "servicing fee" for performing certain administrative
servicing functions for Fund shareholders to the extent these institutions are
allowed to do so by applicable statute, rule or regulation.
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS
This section contains general information about various types of
securities and investment techniques that the Fund may purchase or employ.
Equity Securities
Equity securities consist of common stock, preferred stock and common
stock equivalents (such as convertible preferred stock, rights and warrants).
Equity securities also include common stocks and common stock equivalents of
domestic real estate investment trusts and other
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<PAGE>
companies which operate as real estate corporations or which have a significant
portion of their assets in real estate. The Fund will not acquire any direct
ownership of real estate.
The Fund may invest in foreign equity securities, including, but not
limited to, the purchase of American Depository Receipts. American Depository
Receipts are dollar-denominated receipts that are generally issued in registered
form by domestic banks, and represent the deposit with the bank of a security of
a foreign issuer. To the extent that the Fund does invest in foreign securities,
such investments may be subject to special risks, such as changes in
restrictions on foreign currency transactions and rates of exchange, and changes
in the administrations or economic and monetary policies of foreign governments.
The Fund will not invest more than 5% of its net assets at the time of purchase
in foreign securities which are not American Depository Receipts.
Fixed Income Securities
The Fund may invest in fixed income securities. Fixed income securities
include corporate debt securities, U.S. government securities, mortgage-related
securities and participation interests in such securities. Fixed income
securities are generally considered to be interest rate sensitive, which means
that their value will generally decrease when interest rates rise and increase
when interest rates fall. Securities with shorter maturities, while offering
lower yields, generally provide greater price stability than longer term
securities and are less affected by changes in interest rates.
Corporate Debt Securities - Corporate debt securities are long
and short term debt obligations issued by companies (such as publicly issued and
privately placed bonds, notes and commercial paper). The Fund will only invest
in corporate debt securities rated A or higher by Standard & Poor's Corporation
or Moody's Investors Services, Inc.
U.S. Government Obligations - U.S. government obligations may
be backed by the credit of the government as a whole or only by the issuing
agency. U.S. Treasury bonds, notes, and bills and some agency securities, such
as those issued by the Federal Housing Administration and the Government
National Mortgage Association (GNMA), are backed by the full faith and credit of
the U.S. government as to payment of principal and interest and are the highest
quality government securities. Other securities issued by U.S. government
agencies or instrumentalities, such as securities issued by the Federal Home
Loan Banks and the Federal Home Loan Mortgage Corporation, are supported only by
the credit of the agency that issued them, and not by the U.S. government.
Securities issued by the Federal Farm Credit System, the Federal Land Banks, and
the Federal National Mortgage Association (FNMA) are supported by the agency's
right to borrow money from the U.S. Treasury under certain circumstances, but
are not backed by the full faith and credit of the U.S. government.
Mortgage-Related Securities - Mortgage-related securities
include securities representing interests in a pool of mortgages. These
securities, including securities issued by FNMA and GNMA, provide investors with
payments consisting of both interest and principal as the mortgages in the
underlying mortgage pools are repaid. Pools of mortgage loans are assembled for
sale to investors (such as the Fund) by various governmental, government-related
and private organizations, such as dealers. Unscheduled or early payments on the
underlying mortgages may shorten the securities' effective maturities.
- 12 -
<PAGE>
Other types of securities representing interests in a pool of
mortgage loans are known as collateralized mortgage obligations (CMOs) and real
estate mortgage investment conduits (REMICs). CMOs and REMICs are debt
instruments collateralized by pools of mortgage loans or other mortgage-backed
securities. The average life of securities representing interests in pools of
mortgage loans is likely to be substantially less than the original maturity of
the mortgage pools as a result of prepayments or foreclosures of such mortgages.
Prepayments are passed through to the registered holder with the regular monthly
payments of principal and interest, and have the effect of reducing future
payments. To the extent the mortgages underlying a security representing an
interest in a pool of mortgages are prepaid, a Fund may experience a loss (if
the price at which the respective security was acquired by the Fund was at a
premium over par, which represents the price at which the security will be
redeemed upon prepayment). In addition, prepayments of such securities held by a
Fund will reduce the share price of the Fund to the extent the market value of
the securities at the time of prepayment exceeds their par value. Furthermore,
the prices of mortgage-related securities can be significantly affected by
changes in interest rates. Prepayments may occur with greater frequency in
periods of declining mortgage rates because, among other reasons, it may be
possible for mortgagors to refinance their outstanding mortgages at lower
interest rates. In such periods, it is likely that any prepayment proceeds would
be reinvested by a Fund at lower rates of return.
Investment Techniques
The Fund may invest up to 5% of its net assets in repurchase agreements
fully collateralized by U.S. Government obligations. The Fund may buy and sell
securities on a when- issued or delayed delivery basis, with payment and
delivery taking place at a future date, but investment in such securities may
not exceed 5% of the Fund's net assets. Also limited to 5% of the Fund's net
assets is the Fund's investment in STRIPs (Separate Trading of Registered
Interest and Principal of Securities). The Federal Reserve creates STRIPs by
separating the coupon payments and the principal payments from the outstanding
Treasury security and selling them as individual securities.
Loans of Portfolio Securities - The Fund may make short and
long term loans of its portfolio securities. Under the lending policy authorized
by the Board of Trustees and implemented by the Adviser in response to requests
of broker-dealers or institutional investors which the Adviser deems qualified,
the borrower must agree to maintain collateral, in the form of cash or U.S.
government obligations, with the Fund on a daily mark-to-market basis in an
amount at least equal to 100% of the value of the loaned securities. The Fund
will continue to receive dividends or interest on the loaned securities and may
terminate such loans at any time or reacquire such securities in time to vote on
any matter which the Board of Trustees determines to be serious. With respect to
loans of securities, there is the risk that the borrower may fail to return the
loaned securities or that the borrower may not be able to provide additional
collateral.
General
The Fund may invest in other investment companies, time deposits,
certificates of deposit or banker's acceptances, and may buy and write put and
call options, provided the Fund's investment in each does not exceed 5% of its
net assets. The Fund will not invest more than 5%
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<PAGE>
of its net assets in illiquid securities, including repurchase agreements
maturing in more than seven days.
GENERAL INFORMATION
Fundamental Policies. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. The investment objective of the Fund may be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. Any such
change may result in the Fund having an investment objective different from the
objective which the shareholders considered appropriate at the time of
investment in the Fund.
Portfolio Turnover. The Fund does not intend to purchase or sell
securities for short term trading purposes. The Fund will, however, sell any
portfolio security (without regard to the length of time it has been held) when
the Adviser believes that market conditions, creditworthiness factors or general
economic conditions warrant such action. It is anticipated that the Fund will
have a portfolio turnover rate of less than 100%.
Shareholder Rights. Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. When
matters are submitted to shareholders for a vote, each shareholder is entitled
to one vote for each whole share he owns and fractional votes for fractional
shares he owns. All shares of the Fund have equal voting rights and liquidation
rights. As of December 3, 1997, Carl Domino Associates Profit Sharing Trust may
be deemed to control the Fund.
PERFORMANCE INFORMATION
The Fund may periodically advertise "average annual total return." The
"average annual total return" of the Fund refers to the average annual
compounded rate of return over the stated period that would equate an initial
amount invested at the beginning of a stated period to the ending redeemable
value of the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions.
The Fund may also periodically advertise its total return over various
periods in addition to the value of a $10,000 investment (made on the date of
the initial public offering of the Fund's shares) as of the end of a specified
period. The "total return" for the Fund refers to the percentage change in the
value of an account between the beginning and end of the stated period, assuming
no activity in the account other than reinvestment of dividends and capital
gains distributions.
The Fund may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices
- 14 -
<PAGE>
of market performance including the Standard & Poor's (S&P) 500 Index or the Dow
Jones Industrial Average.
The advertised performance data of the Fund is based on historical
performance and is not intended to indicate future performance. Rates of total
return quoted by the Fund may be higher or lower than past quotations, and there
can be no assurance that any rate of total return will be maintained. The
principal value of an investment in the Fund will fluctuate so that a
shareholder's shares, when redeemed, may be worth more or less than the
shareholder's original investment.
Investment Adviser Administrator
Carl Domino Associates, L.P. AmeriPrime Financial Services, Inc.
580 Village Blvd., Suite 225 1793 Kingswood Drive, Suite 200
West Palm Beach, Florida 33409 Southlake, Texas 76092
Custodian Distributor
Star Bank, N.A. AmeriPrime Financial Securities, Inc.
P.O. Box 641081 1793 Kingswood Drive, Suite 200
Cincinnati, Ohio 45264 Southlake, Texas 76092
Transfer Agent (all purchase Auditors
and redemption requests) McCurdy & Associates CPA's, Inc.
American Data Services, Inc. 27955 Clemens Road
Hauppauge Corporate Center Westlake, Ohio 44145
150 Motor Parkway
Hauppauge, New York 11760
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell its
shares in any state to any person to whom it is unlawful to make such offer in
such state.
- 15 -
<PAGE>
TABLE OF CONTENTS PAGE
SUMMARY OF FUND EXPENSES............................................ 2
Shareholder Transaction Expenses........................... 2
Annual Fund Operating Expenses.............................. 2
FINANCIAL HIGHLIGHTS......................................................... 2
THE FUND............................................................. 3
INVESTMENT OBJECTIVE AND STRATEGIES................................. 3
HOW TO INVEST IN THE FUND........................................... 5
Initial Purchase........................................... 5
By Mail........................................... 5
By Wire........................................... 6
Additional Investments..................................... 6
Tax Sheltered Retirement Plans............................. 6
Other Purchase Information................................................... 7
HOW TO REDEEM SHARES................................................ 7
By Mail.................................................... 7
By Telephone................................................ 7
Additional Information..................................... 8
SHARE PRICE CALCULATION............................................. 8
DIVIDENDS AND DISTRIBUTIONS......................................... 9
TAXES............................................................... 9
OPERATION OF THE FUND............................................... 10
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS.......... 11
Equity Securities.......................................... 11
Fixed Income Securities.................................... 11
Corporate Debt Securities..........................12
U.S. Government Obligations....................... 12
Mortgage-Related Securities....................... 12
Investment Techniques.......................................13
Loans of Portfolio Securities.............................. 13
General.....................................................13
<PAGE>
GENERAL INFORMATION................................................. 13
Fundamental Policies....................................... 13
Portfolio Turnover..........................................13
Shareholder Rights......................................... 14
PERFORMANCE INFORMATION............................................. 14
<PAGE>
GLOBALT GROWTH FUND
PROSPECTUS February 13, 1998
3060 Peachtree Road, N.W.
One Buckhead Plaza, Suite 225
Atlanta, Georgia 30305
For Information, Shareholder Services and Requests:
(800) 831 - 9922
GLOBALT Growth Fund (the "Fund") is a mutual fund whose investment
objective is to provide long term growth of capital. The Fund seeks to achieve
its objective by investing in a broad range of equity securities of U.S.
companies believed by its Adviser, GLOBALT, Inc., to offer superior growth
potential. As the Adviser believes exposure to rapidly growing foreign markets
enhances growth potential, all stocks in the Fund's portfolio will be of
companies which compete in both U.S. and foreign economies and thus, in the
Adviser's opinion, are globally positioned for success.
The Fund is "no-load," which means there are no sales charges or
commissions. In addition, there are no 12b-1 fees, distribution expenses or
deferred sales charges which are borne by the shareholders. The Fund is one of
the mutual funds comprising AmeriPrime Funds, an open-end management investment
company, and is distributed by AmeriPrime Financial Securities, Inc.
This Prospectus provides the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information has been filed with the Securities and
Exchange Commission (the "SEC") dated February 13, 1998, which is incorporated
herein by reference and can be obtained without charge by calling the Fund at
the phone number listed above. The SEC maintains a Web Site (http://www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding registrants that file electronically
with the SEC.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
ASA029CF-121197-1
<PAGE>
SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund. The expense information is based on operating expenses incurred during
the most recent fiscal year. The expenses are expressed as a percentage of
average net assets. The Example should not be considered a representation of
future Fund performance or expenses, both of which may vary.
Shareholders should be aware that the Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Fund. In addition, the Fund does not
have a 12b-1 Plan. Unlike most other mutual funds, the Fund does not pay
directly for transfer agency, pricing, custodial, auditing or legal services,
nor does it pay directly any general administrative or other significant
operating expenses. The Adviser pays all of the expenses of the Fund except
brokerage, taxes, interest, fees and expenses of non-interested person trustees
and extraordinary expenses.
Shareholder Transaction Expenses
Sales Load Imposed on Purchases.............................................NONE
Sales Load Imposed on Reinvested Dividends..................................NONE
Deferred Sales Load.........................................................NONE
Redemption Fees.............................................................NONE
Exchange Fees...............................................................NONE
Annual Fund Operating Expenses (as a percentage of average net assets)1
Management Fees............................................................1.17%
12b-1 Charges...............................................................NONE
Other Expenses2 (after reimbursement)......................................0.00%
Total Fund Operating Expenses2 (after reimbursement).......................1.17%
1 The Fund's total operating expenses are equal to the management fee paid to
the Adviser because the Adviser pays all of the Fund's operating expenses
(except as described in footnote 2).
2 The Adviser has agreed to reimburse other expenses for the fiscal year ending
October 31, 1998 to the extent necessary to maintain total operating expenses as
indicated. For the fiscal year ended October 31, 1997, other expenses (fees and
expenses of the trustees who are not "interested persons" as defined in the
Investment Company Act) were ____% of average net assets and total fund
operating expenses were ____% of average net assets.
The tables above are provided to assist an investor in understanding the direct
and indirect expenses that an investor may incur as a shareholder in the Fund.
- 2 -
<PAGE>
Example
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- -------
$12 $37 $64 $142
FINANCIAL HIGHLIGHTS
The following condensed supplementary financial information for the
fiscal year ended October 31, 1997, is derived from the audited financial
statements of the Fund. The financial statements of the Fund have been audited
by McCurdy & Associates CPA's, Inc., independent public accountants, and are
included in the Fund's Annual Report. The Annual Report contains additional
performance information and is available upon request and without charge.
[insert highlights]
THE FUND
GLOBALT Growth Fund (the "Fund") was organized as a series of
AmeriPrime Funds, an Ohio business trust (the "Trust"), on October 20, 1995 and
commenced operations on December 1, 1995. This prospectus offers shares of the
Fund and each share represents an undivided, proportionate interest in the Fund.
The investment adviser to the Fund is GLOBALT, Inc. (the "Adviser").
INVESTMENT OBJECTIVE AND STRATEGIES
The investment objective of the Fund is to provide long term growth of
capital. The Fund seeks to achieve its objective by investing primarily in a
broad range of equity securities of U.S. companies which the Adviser believes
offer superior growth potential, based on certain fundamental and technical
standards of selection. As the Adviser believes exposure to rapidly growing
foreign markets enhances growth potential, all stocks in the Fund's portfolio
will be of companies which compete in both U.S. and foreign economies and thus,
in the Adviser's opinion, are globally positioned for success. The Adviser will
only purchase stocks of companies that are expected to derive at least 20% of
their revenues outside of the U.S. It is anticipated that, in the aggregate, the
stocks in the Fund's portfolio will derive at least 50% of their revenues
outside of the U.S. and as a result will provide higher relative growth than the
S&P 500 Index.
The Fund is designed for investors with a long term wealthbuilding
horizon and is particularly suitable for retirement and educational funds. The
Adviser seeks to limit investment risk by diversifying the Fund's investments
across a broad range of industries and companies. After screening for securities
with exposure to foreign markets, the Adviser uses a disciplined selection
process to assemble a portfolio which it anticipates will have at least a 50%
exposure to foreign markets and will be highly diversified across economic
sectors. As the Fund will primarily invest in growth-oriented stocks, it is
expected that the Fund will generate a total return that is predominantly
derived from long term capital appreciation, although current income is also
expected.
- 3 -
<PAGE>
The Adviser has been managing income accounts for its clients since
1991. The performance of all accounts with investment objectives, policies and
strategies substantially similar to those of the Fund appears below. The data is
provided to illustrate past performance of the Adviser in managing such
accounts, as compared to the S&P 500 Index. The persons responsible for the
performance of the accounts are the same as those responsible for the investment
management of the Fund. As of December 31, 1997, the assets in those accounts
totaled approximately $___ million. The Adviser's total assets under management
were approximately $___ million as of _____________.
Summary of Annual Investment Returns of the Fund and GLOBALT, Inc. Managed
Accounts *
<TABLE>
<CAPTION>
Period Fund Managed Accounts S&P 500
------ ---- ---------------- -------
<S> <C> <C> <C>
1991 35.4% 30.5%
1992 7.8% 7.6%
1993 18.9% 10.1%
1994 - 0.7% 1.3%
1995 6.4%** 36.5% 37.6%
1996 20.0% 21.8% 22.9%
1997 ____% _____% ____%
Average Annual Total Return
Since Fund Inception
(12/1/95) ____% ____% ____%
Average Annual Total Return
Since Managed Accounts
Inception (1/1/91) N/A ____% ____%
<FN>
* The GLOBALT, Inc. managed account performance is the time-weighted,
dollar-weighted average total return associated with a composite of equity
accounts having objectives similar to the Fund, and is unaudited. The composite
does not include non-discretionary or otherwise restricted accounts because the
nature of those accounts make them inappropriate for purposes of comparison.
Performance figures reflected are net of management fees and net of all
expenses, including transaction costs and commissions. Results include the
reinvestment of dividends and capital gains. The presentation of the performance
composite complies with the Performance Presentation Standards of the
Association for Investment Management and Research (AIMR).
The S&P 500 Index is a widely recognized, unmanaged index of market
activity based upon the aggregate performance of a selected portfolio
of publicly traded common stocks, including monthly adjustments to
reflect the reinvestment of dividends and other distributions. The S&P
500 Index reflects the total return of securities comprising the Index,
including changes in market prices as well as accrued investment
income, which is presumed to be reinvested. Performance figures for the
S&P 500 Index do not reflect deduction of transaction costs or
expenses, including management fees.
- 4 -
<PAGE>
THE PERFORMANCE OF THE ACCOUNTS MANAGED BY THE ADVISER DOES NOT
REPRESENT THE HISTORICAL PERFORMANCE OF THE FUND, AND SHOULD NOT BE
CONSIDERED INDICATIVE OF FUTURE PERFORMANCE OF THE FUND. Results may
differ because of, among other things, differences in brokerage
commissions, account expenses, including management fees, the size of
positions taken in relation to account size and diversification of
securities, timing of purchases and sales, and availability of cash for
new investments. In addition, the managed accounts are not subject to
certain investment limitation, diversification requirements, and other
restrictions imposed by the Investment Company Act and the Internal
Revenue Code which, if applicable, may have adversely affected the
performance results of the managed accounts composite. The results for
different periods may vary.
** For the period December 1, 1995 (commencement of operations) through
December 31, 1995, not annualized.
</FN>
</TABLE>
The Adviser generally intends to stay fully invested (subject to
liquidity requirements and defensive purposes) in common stock and common stock
equivalents (such as rights, warrants and securities convertible into common
stocks) of U.S. companies, regardless of the movement of stock prices. However,
the Fund may invest in preferred stocks, bonds, corporate debt and U.S.
government obligations to maintain liquidity or pending investment in equity
securities. Substantially all equity securities in the Fund's portfolio are
listed on a major stock exchange or traded over-the-counter. The Fund will not
invest in foreign securities.
For temporary defensive purposes under abnormal market or economic
conditions, the Fund may hold all or a portion of its assets in money market
instruments, securities of other no-load registered investment companies or U.S.
government repurchase agreements. The Fund may also invest in such instruments
at any time to maintain liquidity or pending selection of investments in
accordance with its policies. If the Fund acquires securities of another
investment company, the shareholders of the Fund will be subject to additional
management fees.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, the Fund cannot give any assurance that its investment objective
will be achieved. Rates of total return quoted by the Fund may be higher or
lower than past quotations, and there can be no assurance that any rate of total
return will be maintained. See "Investment Policies and Techniques and Risk
Considerations" for a more detailed discussion of the Fund's investment
practices.
HOW TO INVEST IN THE FUND
Shares of the Fund are sold on a continuous basis, and you may invest
any amount you choose as often as you wish, subject to a minimum initial
investment of $25,000 and minimum subsequent investments of $5,000. Investors
choosing to purchase or redeem their shares through a broker/dealer or other
institution may be charged a fee by that institution. Investors choosing to
purchase or redeem shares directly from the Fund will not incur charges on
purchases or redemptions. To the extent investments of individual investors are
aggregated into an omnibus account established by an investment adviser, broker
or other intermediary, the account minimums apply to the omnibus account, not to
the account of the individual investor.
- 5 -
<PAGE>
Initial Purchase
By Mail - You may purchase shares of the Fund by completing and signing
the investment application form which accompanies this Prospectus and mailing it
in proper form, together with a check (subject to the above minimum amounts)
made payable to GLOBALT Growth Fund, and sent to the P.O. Box listed below. If
you prefer overnight delivery, use the overnight address listed below.
U.S. Mail: GLOBALT Growth Fund Overnight: GLOBALT Growth Fund
c/o American Data Services, Inc. c/o American Data Services, Inc.
P.O. Box 5536 Hauppauge Corporate Center
Hauppauge, New York 11788-0132 150 Motor Parkway
Hauppauge, New York 11760
Your purchase of shares of the Fund will be effected at the next share price
calculated after receipt of your investment.
BY WIRE - You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. If the money is
to be wired, you must call the Transfer Agent at (800) 831-9922 to set up your
account and obtain an account number. You should be prepared to provide the
information on the application to the Transfer Agent. Then, you should provide
your bank with the following information for purposes of wiring your investment:
Star Bank, N.A. Cinti/Trust
ABA # 0420-0001-3
Attn: GLOBALT Growth Fund
D.D.A. # 483889739
Account Name ________________ (write in shareholder name) For
the Account # ________________ (write in account number)
You are required to mail a signed application to the Custodian at the
above address in order to complete your initial wire purchase. Wire orders will
be accepted only on a day on which the Fund and the Custodian and Transfer Agent
are open for business. A wire purchase will not be considered made until the
wired money is received and the purchase is accepted by the Fund. Any delays
which may occur in wiring money, including delays which may occur in processing
by the banks, are not the responsibility of the Fund or the Transfer Agent.
There is presently no fee for the receipt of wired funds, but the right to
charge shareholders for this service is reserved by the Fund.
ADDITIONAL INVESTMENTS
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain your name, the name of your
account(s), your account number(s), and the name of the Fund. Checks should be
made payable to GLOBALT Growth Fund and should be sent to the address listed
above. A bank wire should be sent as outlined above.
- 6 -
<PAGE>
TAX SHELTERED RETIREMENT PLANS
Since the Fund is oriented to longer term investments, shares of the
Fund may be an appropriate investment medium for tax sheltered retirement plans,
including: individual retirement plans (IRAs); simplified employee pensions
(SEPs); 401(k) plans; qualified corporate pension and profit sharing plans (for
employees); tax deferred investment plans (for employees of public school
systems and certain types of charitable organizations); and other qualified
retirement plans. You should contact the Transfer Agent for the procedure to
open an IRA or SEP plan, as well as more specific information regarding these
retirement plan options. Consultation with an attorney or tax adviser regarding
these plans is advisable. Custodial fees for an IRA will be paid by the
shareholder by redemption of sufficient shares of the Fund from the IRA unless
the fees are paid directly to the IRA custodian. You can obtain information
about the IRA custodial fees from the Transfer Agent.
OTHER PURCHASE INFORMATION
Dividends begin to accrue after you become a shareholder. The Fund does
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases and to
refuse to sell to any person are reserved by the Fund. If your check or wire
does not clear, you will be responsible for any loss incurred by the Fund. If
you are already a shareholder, the Fund can redeem shares from any identically
registered account in the Fund as reimbursement for any loss incurred. You may
be prohibited or restricted from making future purchases in the Fund.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after
the redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. A broker may charge a transaction fee
for the redemption. There is no charge for wire redemptions; however, the Fund
reserves the right to charge for this service. Any charges for wire redemptions
will be deducted from the shareholder's Fund account by redemption of shares.
Investors choosing to purchase or redeem their shares through a broker/dealer or
other institution may be charged a fee by that institution.
By Mail - You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:
GLOBALT Growth Fund
c/o American Data Services, Inc.
P.O. Box 5536
Hauppauge, New York 11788-0132
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the Fund
- 7 -
<PAGE>
requires that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Fund or American Data Services, Inc., a
shareholder, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
By Telephone - You may redeem any part of your account in the Fund by
calling the Transfer Agent at (800) 831-9922. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at
any time by the Fund or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Fund, although neither the Fund nor the Transfer Agent has ever
experienced difficulties in receiving and in a timely fashion responding to
telephone requests for redemptions or exchanges. If you are unable to reach the
Fund by telephone, you may request a redemption or exchange by mail.
Additional Information - If you are not certain of the requirements for
a redemption please call the Transfer Agent at (800) 831 - 9922. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing or under any emergency circumstances, as determined
by the Securities and Exchange Commission, the Fund may suspend redemptions or
postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $25,000 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax adviser concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption at any time if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day on which
- 8 -
<PAGE>
there is sufficient trading in the Fund's securities to materially affect the
net asset value. The net asset value per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Adviser's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Adviser determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Adviser believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Adviser, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within 60 days of maturity, are valued
by using the amortized cost method of valuation, which the Board has determined
will represent fair value.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on an annual basis, and intends to
distribute its net long term capital gains and its net short term capital gains
at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. An election to receive a cash payment of dividends and/or
capital gain distributions may be made in the application to purchase shares or
by separate written notice to the Transfer Agent. Shareholders will receive a
confirmation statement reflecting the payment and reinvestment of dividends and
summarizing all other transactions. If cash payment is requested, a check
normally will be mailed within five business days after the payable date. If you
withdraw your entire account, all dividends accrued to the time of withdrawal,
including the day of withdrawal, will be paid at that time. You may elect to
have distributions on shares held in IRAs and 403(b) plans paid in cash only if
you are 59 1/2 years old or permanently and totally disabled or if you otherwise
qualify under the applicable plan.
TAXES
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
the Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any realized
capital gains.
- 9 -
<PAGE>
For federal income tax purposes, dividends paid by the Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 (the "Tax Reform Act"), all distributions of net
short-term capital gains to individuals are taxed at the same rate as ordinary
income. All distributions designated as being made from net realized long term
capital gains are taxable to shareholders as long term capital gains regardless
of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisers regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
On the application or other appropriate form, the Fund will request the
shareholder's certified taxpayer identification number (social security number
for individuals) and a certification that the shareholder is not subject to
backup withholding. Unless the shareholder provides this information, the Fund
will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the Fund may
make a corresponding charge against the account.
OPERATION OF THE FUND
The Fund is a diversified series of AmeriPrime Funds, an open-end
management investment company organized as an Ohio business trust on August 8,
1995. The Board of Trustees supervises the business activities of the Fund. Like
other mutual funds, the Fund retains various organizations to perform
specialized services.
The Fund retains GLOBALT, Inc., 3060 Peachtree Road, N.W., One Buckhead
Plaza, Suite 225, Atlanta, Georgia 30305 (the "Adviser") to manage the Fund's
investments. The Adviser was organized as a Georgia corporation in 1990. The
Adviser manages larger capitalization equity, medium capitalization equity,
balanced and fixed income portfolios for a variety of tax-exempt and taxable
clients. Angela Allen, President of the Adviser, and Samuel Allen, Chairman of
the Adviser, are the controlling shareholders of GLOBALT, Inc. The investment
decisions for the Fund are made by a committee of the Adviser, which is
primarily responsible for the day-to-day management of the Fund's portfolio.
The Fund is authorized to pay the Adviser a fee equal to an annual
average rate of 1.17% of its average daily net assets. The Adviser pays all of
the operating expenses of the Fund except brokerage, taxes, interest, fees and
expenses of non-interested person trustees and extraordinary expenses. It should
be noted that most investment companies pay their own operating expenses
directly, while the Fund's expenses, except those specified above, are paid by
the Adviser.
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator")
to manage the Fund's business affairs and provide the Fund with administrative
services, including all regulatory
- 10 -
<PAGE>
reporting and necessary office equipment, personnel and facilities. The
Administrator receives a monthly fee from the Adviser equal to an annual average
rate of 0.10% of the Fund's average daily net assets up to fifty million
dollars, 0.075% of the Fund's average daily net assets from fifty to one hundred
million dollars and 0.050% of the Fund's average daily net assets over one
hundred million dollars (subject to a minimum annual payment of $30,000). In
addition, the Adviser will reimburse the Administrator for organizational
expenses advanced by the Administrator. The Fund retains American Data Services,
Inc., Hauppauge Corporate Center, 150 Motor Parkway, Hauppauge, New York 11760
(the "Transfer Agent") to serve as transfer agent, dividend paying agent and
shareholder service agent. The Trust retains AmeriPrime Financial Securities,
Inc., 1793 Kingswood Drive, Suite 200, Southlake, Texas 76092 (the
"Distributor") to act as the principal distributor of the Fund's shares. Kenneth
D. Trumpfheller, officer and sole shareholder of the Administrator and the
Distributor, is an officer and trustee of the Trust. The services of the
Administrator, Transfer Agent and Distributor are operating expenses paid by the
Adviser.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Adviser may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute
portfolio transactions. The Adviser (not the Fund) may pay certain financial
institutions (which may include banks, brokers, securities dealers and other
industry professionals) a "servicing fee" for performing certain administrative
servicing functions for Fund shareholders to the extent these institutions are
allowed to do so by applicable statute, rule or regulation.
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS
This section contains general information about various types of
securities and investment techniques that the Fund may purchase or employ.
EQUITY SECURITIES
Equity securities consist of common stock, preferred stock and common
stock equivalents (such as convertible preferred stock, convertible debentures,
rights and warrants) and investment companies which invest primarily in the
above. Equity securities also include common stocks and common stock equivalents
of domestic real estate investment trusts and other companies which operate as
real estate corporations or which have a significant portion of their assets in
real estate.
FIXED INCOME SECURITIES
The Fund may temporarily invest in short term fixed income securities.
The Fund will limit its investment in fixed income securities to corporate debt
securities and U.S. government securities. Fixed income securities are generally
considered to be interest rate sensitive, which means that their value will
generally decrease when interest rates rise and increase when interest rates
fall. Securities with shorter maturities, while offering lower yields, generally
provide greater price stability than longer term securities and are less
affected by changes in interest rates.
CORPORATE DEBT SECURITIES - Corporate debt securities are long and short
term debt obligations issued by companies (such as publicly issued and privately
placed bonds, notes and
- 11 -
<PAGE>
commercial paper). The Fund will only invest in corporate debt securities rated
A or higher by Standard & Poor's Corporation or Moody's Investors Services, Inc.
U.S. GOVERNMENT OBLIGATIONS - U.S. government obligations may
be backed by the credit of the government as a whole or only by the issuing
agency. U.S. Treasury bonds, notes, and bills and some agency securities, such
as those issued by the Federal Housing Administration and the Government
National Mortgage Association (GNMA), are backed by the full faith and credit of
the U.S. government as to payment of principal and interest and are the highest
quality government securities. Other securities issued by U.S. government
agencies or instrumentalities, such as securities issued by the Federal Home
Loan Banks and the Federal Home Loan Mortgage Corporation, are supported only by
the credit of the agency that issued them, and not by the U.S. government.
Securities issued by the Federal Farm Credit System, the Federal Land Banks, and
the Federal National Mortgage Association (FNMA) are supported by the agency's
right to borrow money from the U.S. Treasury under certain circumstances, but
are not backed by the full faith and credit of the U.S. government.
LOANS OF PORTFOLIO SECURITIES
The Fund may make short and long term loans of its portfolio
securities. Under the lending policy authorized by the Board of Trustees and
implemented by the Adviser in response to requests of broker-dealers or
institutional investors which the Adviser deems qualified, the borrower must
agree to maintain collateral, in the form of cash or U.S. government
obligations, with the Fund on a daily mark-to-market basis in an amount at least
equal to 100% of the value of the loaned securities. The Fund will continue to
receive dividends or interest on the loaned securities and may terminate such
loans at any time or reacquire securities in time to vote on any matter which
the Board of Trustees determines to be serious. With respect to loans of
securities, there is the risk that the borrower may fail to return the loaned
securities or that the borrower may not be able to provide additional
collateral.
GENERAL
The Fund may invest up to 5% of its net assets in repurchase agreements
fully collateralized by U.S. Government obligations. The Fund may invest in time
deposits, certificates of deposit or banker's acceptances, and may buy and write
put and call options, provided the Fund's investment in each does not exceed 5%
of its net assets.
GENERAL INFORMATION
FUNDAMENTAL POLICIES. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. The investment objective of the Fund may be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. Any such
change may result in the Fund having an investment objective different from the
objective which the shareholders considered appropriate at the time of
investment in the Fund.
PORTFOLIO TURNOVER. The Fund does not intend to purchase or sell
securities for short term trading purposes. The Fund will, however, sell any
portfolio security (without regard to the length of time it has been held) when
the Adviser believes that market conditions, creditworthiness factors or
- 12 -
<PAGE>
general economic conditions warrant such action. It is anticipated that the Fund
will have a portfolio turnover rate of less than 100%.
SHAREHOLDER RIGHTS. Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. When
matters are submitted to shareholders for a vote, each shareholder is entitled
to one vote for each whole share he owns and fractional votes for fractional
shares he owns. All shares of the Fund have equal voting rights and liquidation
rights.
PERFORMANCE INFORMATION
The Fund may periodically advertise "average annual total return." The
"average annual total return" of the Fund refers to the average annual
compounded rate of return over the stated period that would equate an initial
amount invested at the beginning of a stated period to the ending redeemable
value of the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions.
The Fund may also periodically advertise its total return over various
periods in addition to the value of a $10,000 investment (made on the date of
the initial public offering of the Fund's shares) as of the end of a specified
period. The "total return" for the Fund refers to the percentage change in the
value of an account between the beginning and end of the stated period, assuming
no activity in the account other than reinvestment of dividends and capital
gains distributions.
The Fund may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including the Standard &
Poor's (S&P) 500 Index or the Dow Jones Industrial Average.
The advertised performance data of the Fund is based on
historical performance and is not intended to indicate future performance. Rates
of total return quoted by the Fund may be higher or lower than past quotations,
and there can be no assurance that any rate of total return will be maintained.
The principal value of an investment in the Fund will fluctuate so that a
shareholder's shares, when redeemed, may be worth more or less than the
shareholder's original investment.
INVESTMENT ADVISER ADMINISTRATOR
GLOBALT, Inc. AmeriPrime Financial Services, Inc.
3060 Peachtree Road, N.W. 1793 Kingswood Drive, Suite 200
One Buckhead Plaza, Suite 225 Southlake, Texas 76092
Atlanta, Georgia 30305
CUSTODIAN DISTRIBUTOR
Star Bank, N.A. AmeriPrime Financial Securities, Inc.
P.O. Box 641084 1793 Kingswood Drive, Suite 200
Cincinnati, Ohio 45264 Southlake, Texas 76092
- 13 -
<PAGE>
TRANSFER AGENT (ALL PURCHASE AND AUDITORS
REDEMPTION REQUESTS) McCurdy & Associates CPA's, Inc.
American Data Services, Inc. 27955 Clemens Road
Hauppauge Corporate Center Westlake, Ohio 44145
150 Motor Parkway
Hauppauge, New York 11760
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell its
shares in any state to any person to whom it is unlawful to make such offer in
such state.
- 14 -
14
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY OF FUND EXPENSES............................................ 2
Shareholder Transaction Expenses........................... 2
Annual Fund Operating Expenses............................. 2
FINANCIAL HIGHLIGHTS................................................ 3
THE FUND............................................................ 3
INVESTMENT OBJECTIVE AND STRATEGIES................................. 3
HOW TO INVEST IN THE FUND............................................ 5
Initial Purchase............................................ 6
By Mail........................................... 6
By Wire............................................ 6
Additional Investments..................................... 6
Tax Sheltered Retirement Plans............................. 7
Other Purchase Information................................. 7
HOW TO REDEEM SHARES................................................. 7
By Mail............................................ 7
By Telephone...................................... 8
Additional Information............................. 8
SHARE PRICE CALCULATION............................................. 8
DIVIDENDS AND DISTRIBUTIONS.......................................... 9
TAXES............................................................... 9
OPERATION OF THE FUND............................................... 10
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS.......... 11
Equity Securities.......................................... 11
Fixed Income Securities.....................................11
Corporate Debt Securities......................... 11
U.S. Government Obligations....................... 12
Loans of Portfolio Securities ............................. 12
General.....................................................12
GENERAL INFORMATION................................................. 12
Fundamental Policies.............................. 12
Portfolio Turnover................................ 12
Shareholder Rights................................ 13
PERFORMANCE INFORMATION............................................. 13
- 15 -
<PAGE>
FLORIDA STREET FUNDS
PROSPECTUS February 13, 1998
247 Florida Street
Baton Rouge, LA 70801
For Information, Shareholder Services and Requests:
(800) 890-5344
Florida Street Bond Fund. The investment objective of the Florida
Street Bond Fund is to provide total return to its shareholders over the long
term. The Fund's investment advisor, CommonWealth Advisors, Inc. (the
"Advisor"), seeks to achieve this objective by investing primarily in a
portfolio of high yield, non-investment grade securities issued in many of the
world's securities markets. Under normal circumstances, the Fund will invest at
least 65% of its total assets in bonds and other debt securities, and thus it is
expected that the Fund will generate a high level of current income. However,
the Advisor will also consider the potential for capital appreciation in making
investments for the Fund's portfolio, and may invest in preferred stock,
convertible bonds and other securities (including equity securities) without
regard to yield characteristics.
Florida Street Growth Fund. The investment objective of the Florida
Street Growth Fund is to provide total return to its shareholders over the long
term. The Advisor seeks to achieve this objective by investment primarily in a
portfolio of equity securities that the Advisor believes are undervalued by the
market place. However, the Fund may also invest in bonds and other fixed income
securities that the Advisor believes are consistent with the Fund's objective.
The Funds are "no-load," which means that investors incur no sales
charges, commissions or deferred sales charges on the purchase or redemption of
their shares. Each Fund is one of the mutual funds comprising AmeriPrime Funds,
an open-end management investment company, distributed by AmeriPrime Financial
Securities, Inc.
This Prospectus provides the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information has been filed with the Securities and
Exchange Commission dated February 13, 1998, which is incorporated herein by
reference and can be obtained without charge by calling the Funds at the phone
number listed above.
The Florida Street Bond Fund may invest up to 100% of its assets in
non-investment grade securities, commonly known as "junk bonds," that entail
greater risks, including default risks, than those found in investment grade
securities. The Florida Street Growth Fund may also invest in junk bonds.
Investors should carefully consider these risks before investing. See
"Investment Objective and Strategies," page ____; "Risk Considerations, page
______; and "Investment Policies and Techniques," page _______.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
ASA02B5C-121297-1
<PAGE>
SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
each Fund. The expense information is based on estimated amounts for the current
fiscal year. The expenses are expressed as a percentage of average net assets.
The Example should not be considered a representation of future Fund performance
or expenses, both of which may vary.
Shareholders should be aware that each Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Funds. In addition, the Funds do not
have a 12b-1 Plan. Unlike most other mutual funds, neither Fund pays directly
for transfer agency, pricing, custodial, auditing or legal services, nor does
either Fund pay directly any general administrative or other significant
operating expenses. The Advisor pays all of the expenses of each Fund except
brokerage, taxes, interest, fees and expenses of non-interested person trustees
and extraordinary expenses.
<TABLE>
<CAPTION>
Shareholder Transaction Expenses
Florida Street
<S> <C> <C>
Bond Fund
Florida Street Growth Fund
Sales Load Imposed on Purchases
NONE
NONE
Sales Load Imposed on Reinvested Dividends
NONE
NONE
Deferred Sales Load
NONE
NONE
Redemption Fees
NONE
NONE
Exchange Fees
NONE
NONE
</TABLE>
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
(as a percentage of average net assets)
<S> <C> <C>
Management Fees (after fee waiver) 0.75% 0.90%
12b-1 Charges NONE NONE
Other Expenses2 0.00% 0.90%
Total Fund Operating Expenses (after fee waiver)1
<FN>
1 Each Fund's total operating expenses are equal to the management fee paid
to the Advisor because the Advisor pays all of the Fund's operating
expenses (except as described in footnote 2). Expense information has been
restated to reflect current fee
2 Each Fund estimates that other expenses (fees and expenses of the
trustees who are not "interested persons" as defined in the Investment
Company Act) will be less than of .001% of average net assets for the first
fiscal year.
</FN>
</TABLE>
The tables above are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
each Fund.
Example
You would pay the following expenses on a $1,000 investment, assuming (1)
5% annual return and (2) redemption at the end of each time period:
<TABLE>
1 Year 3 Years
------ -------
<S> <C> <C>
Florida Street Bond Fund $08 $24
Florida Street Growth Fund $09 $29
</TABLE>
FINANCIAL HIGHLIGHTS
The following condensed supplementary financial information for the
period August 4, 1997 (commencement of operations) through October 31, 1997, is
derived from the audited financial statements of the Fund. The financial
statements of the Fund have been audited by McCurdy & Associates CPA's, Inc.,
independent public accountants, and are included in the Fund's Annual Report.
The Annual Report contains additional performance information and is available
upon request and without charge.
[INSERT FINANCIAL HIGHLIGHTS]
THE FUNDS
Florida Street Bond Fund and Florida Street Growth Fund (each a "Fund"
or collectively the "Funds") were organized as non-diversified series of
AmeriPrime Funds, an Ohio business trust (the "Trust"), on June 10, 1997. This
prospectus offers shares of each Fund and each share represents an undivided,
proportionate interest in a Fund. The investment advisor to each Fund is
CommonWealth Advisors, Inc. (the "Advisor"). The Funds are referred to, and may
conduct business as, the "Florida Street Funds."
INVESTMENT OBJECTIVE AND STRATEGIES
Florida Street Bond Fund
The investment objective of the Florida Street Bond Fund is to provide
total return to its shareholders over the long term. The Advisor seeks to
achieve this objective by investing primarily in a portfolio of high yield,
non-investment grade securities issued in many of the world's securities
markets. Under normal circumstances, the Fund will invest at least 65% of its
total assets in bonds and other debt securities, and thus it is expected that
the Fund will generate a high level of current income. However, the Advisor will
also consider the potential for capital appreciation in making investments for
the Fund's portfolio, and may invest in preferred stock, convertible bonds and
other securities (including equity securities) without regard to yield
characteristics.
The Fund intends to invest in Brady bonds and other sovereign debt and
in high risk, lower quality debt securities commonly referred to as "junk
bonds", as well as in the debt securities of issuers located in emerging
markets. Junk bonds are regarded as predominantly speculative with respect to
the issuer's capacity to pay interest and repay principal in accordance with the
terms of the obligation. It is anticipated that the Fund's assets will primarily
be invested in high yield, non-investment grade debt securities of both
governmental and corporate issuers in both the major industrialized markets and
the so-called "emerging markets." The use of junk bonds, foreign securities
(particularly from emerging markets) and certain other investments and
investment techniques will subject the Fund to greater risk than is typical for
most bond funds. There also is additional risk because the Fund is
non-diversified.
See "Investment Policies and Techniques" and "Risk Considerations".
The Fund generally invests in securities which are rated BB or lower by
S&P or Baa or lower by Moody's or, if unrated, of comparable quality in the
opinion of the Advisor. Securities which are rated BB by S&P or Baa by Moody's
possess some speculative characteristics. A description of the rating categories
is contained in the Appendix herein. There is no lower limit with respect to the
rating categories for securities in which the Fund may invest. See "Risk
Factors: Risks of Investing In High Yield Securities ("Junk Bonds")" herein.
The Fund is not required to dispose of debt securities whose credit
quality declines at some point after the security is purchased; however, no more
than 25% of the Fund's assets will be invested at any time in securities rated
less than CCC by S&P or Caa by Moody's or, if unrated, of comparable quality in
the opinion of the Advisor. S&P's lowest rating for bonds is CI, which is
reserved for income bonds on which no interest is being paid, and D, which is
reserved for debt in default and in respect of which payment of interest or
repayment of principal is in arrears. Moody's lowest rating is C, which is
applied to bonds which have extremely poor prospects for ever attaining any real
investment standing. The Fund may, from time to time, purchase defaulted debt
securities if, in the opinion of the Advisor, the issuer may resume interest
payments in the near future. The Fund will not invest more than 15% of its total
assets (at the time of purchase) in defaulted debt securities, which may be
illiquid. Other than as set forth above, there is no restriction on the
percentage of the Fund's assets which may be invested in bonds of a particular
rating.
The Fund invests in debt obligations allocated among diverse markets
and denominated in various currencies, including multi-currency units such as
European Currency Units. The Fund may purchase securities that are issued by the
government or a company or financial institution of one country but denominated
in the currency (or multi- currency unit) of another country.
Florida Street Growth Fund
The investment objective of the Florida Street Growth Fund is to
provide total return to its shareholders over the long term. The Advisor seeks
to achieve this objective by investment primarily in a portfolio of equity
securities that the Advisor believes are undervalued by the market place.
However, the Fund may also invest in bonds and other debt securities that the
Advisor believes are consistent with the Fund's objective. Certain investments
eligible for purchase by the Fund entail risks. There also is additional risk
because the Fund is non-diversified. See "Investment Policies and Techniques"
and "Risk Considerations".
In searching for investments for the Fund, the Advisor employs a "value
style" that focuses on a low current price relative to the Advisor's view
regarding long-term future value. The Advisor gauges the ability of a company to
build long-term value while minimizing long-term investment risk, assesses the
quality and quantity of a company's resources, and estimates how those resources
might be converted into earnings over time.
General
For temporary defensive purposes under abnormal market or economic
conditions, either Fund may hold all or a portion of its assets in money market
instruments, securities of other no-load registered investment companies or U.S.
government repurchase agreements. Either Fund may also invest in such
instruments at any time to maintain liquidity or pending selection of
investments in accordance with its policies. If a Fund acquires securities of
another investment company, the shareholders of the Fund will be subject to
additional management fees.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, neither Fund can give any assurance that its investment objective
will be achieved. In addition, it should be noted that the Advisor has not
previously managed assets organized as a mutual fund, and the Funds have no
operating history. Rates of total return quoted by a Fund may be higher or lower
than past quotations, and there can be no assurance that any rate of total
return will be maintained. See "Investment Policies and Techniques" and "Risk
Considerations" for a more detailed discussion of each Fund s investment
practices and the risks involved in such practices.
HOW TO INVEST IN THE FUNDS
Each Fund is "no-load" and shares of each Fund are sold directly to
investors on a continuous basis, subject to the following minimums: minimum
initial investment of $1,000 and minimum subsequent investments of $100. These
minimums may be waived by the Advisor for accounts participating in an automatic
investment program. Investors choosing to purchase or redeem their shares
through a broker/dealer or other institution may be charged a fee by that
institution. Investors choosing to purchase or redeem shares directly from the
Funds will not incur charges on purchases or redemptions. To the extent
investments of individual investors are aggregated into an omnibus account
established by an investment adviser, broker or other intermediary, the account
minimums apply to the omnibus account, not to the account of the individual
investor.
Initial Purchase
By Mail - You may purchase shares of each Fund by completing and
signing the investment application form which accompanies this Prospectus and
mailing it, in proper form, together with a check (subject to the above minimum
amounts) made payable to Florida Street Funds, and sent to the to the P.O. Box
listed below. If you prefer overnight delivery, use the overnight address listed
below.
U.S Mail Overnight:
Florida Street Funds Florida Street Funds
c/o American Data Services, Inc. c/o American Data Services, Inc.
P.O. Box 5536 Hauppauge Corporate Center
Hauppauge, New York 11788-0132 150 Motor Parkway
Hauppauge, NY 11760
Please identify the Fund(s) in which you wish to invest. Your purchase of shares
of a Fund will be effected at the next share price calculated after receipt of
your investment.
By Wire - You may also purchase shares of a Fund by wiring federal funds from
your bank, which may charge you a fee for doing so. If money is to be wired, you
must call the Transfer Agent at 800-890-5344 to set up your account and obtain
an account number. You should be prepared at that time to provide the
information on the application. Then, you should provide your bank with the
following information for purposes of wiring your investment:
Star Bank, N.A. Cinti/Trust
ABA #0420-0001-3
for Florida Street Bond Fund D.D.A. # __________________
for Florida Street Growth Fund D.D.A. # __________________
Account Name _________________ (write in shareholder name)
For the Account # ______________ (write in account number)
You are required to mail a signed application to the Custodian at the
above address in order to complete your initial wire purchase. Wire orders will
be accepted only on a day on which the Funds, Custodian and Transfer Agent are
open for business. A wire purchase will not be considered made until the wired
money is received and the purchase is accepted by the Funds. Any delays which
may occur in wiring money, including delays which may occur in processing by the
banks, are not the responsibility of the Funds or the Transfer Agent. There is
presently no fee for the receipt of wired funds, but the right to charge
shareholders for this service is reserved by the Funds.
Additional Investments
You may purchase additional shares of either Fund at any time (subject
to minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain your name, the name of your
account(s), your account number(s), and the name of the Fund. Checks should be
made payable to Florida Street Funds and should be sent to the above listed
address. A bank wire should be sent as outlined above.
Automatic Investment Plan
You may make regular investments in a Fund with an Automatic Investment
Plan by completing the appropriate section of the account application and
attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting $100 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time.
Tax Sheltered Retirement Plans
Since the Funds are oriented to longer term investments, shares of the
Funds may be an appropriate investment medium for tax sheltered retirement
plans, including: individual retirement plans (IRAs); simplified employee
pensions (SEPs); 401(k) plans; qualified corporate pension and profit sharing
plans (for employees); tax deferred investment plans (for employees of public
school systems and certain types of charitable organizations); and other
qualified retirement plans. You should contact the Transfer Agent for the
procedure to open an IRA or SEP plan, as well as more specific information
regarding these retirement plan options. Consultation with an attorney or tax
advisor regarding these plans is advisable. Custodial fees for an IRA will be
paid by the shareholder by redemption of sufficient shares of the Funds from the
IRA unless the fees are paid directly to the IRA custodian. You can obtain
information about the IRA custodial fees from the Transfer Agent.
Other Purchase Information
Dividends begin to accrue after you become a shareholder. The Funds do
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Funds and the Funds Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases and to
refuse to sell to any person are reserved by the Funds. If your check or wire
does not clear, you will be responsible for any loss incurred by the Funds. If
you are already a shareholder, the Funds can redeem shares from any identically
registered account in the Funds as reimbursement for any loss incurred. You may
be prohibited or restricted from making future purchases in the Funds.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value next determined
after the redemption request has been received by the Transfer Agent in proper
order. Shareholders may receive redemption payments in the form of a check or
federal wire transfer. The proceeds of the redemption may be more or less than
the purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. Presently there is no charge for wire
redemptions; however, the Funds reserve the right to charge for this service.
Any charges for wire redemptions will be deducted from the shareholder's Fund
account by redemption of shares. Investors choosing to purchase or redeem their
shares through a broker/dealer or other institution may be charged a fee by that
institution.
By Mail - You may redeem any part of your account in a Fund at no charge by
mail. Your request should be addressed to:
Florida Street Funds
c/o American Data Services, Inc.
P.O. Box 5536
Hauppauge, NY 11788-0132
"Proper order" means your request for a redemption must include your letter of
instruction, including the Fund name, account number, account name(s), the
address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the
Funds require that signatures be guaranteed by a bank or member firm of a
national securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of a Fund or American Data Services, Inc., a
shareholder, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
By Telephone - You may redeem any part of your account in a Fund by
calling the Transfer Agent at (800) 890-5344. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Funds, the Transfer Agent and the Custodian are
not liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at
any time by the Funds or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Funds, although neither the Funds nor the Transfer Agent has
ever experienced difficulties in receiving and in a timely fashion responding to
telephone requests for redemptions or exchanges. If you are unable to reach the
Funds by telephone, you may request a redemption or exchange by mail.
By Systematic Withdrawal Plan - As another convenience, the Funds offer
a Systematic Withdrawal Program whereby shareholders may request that a check
drawn in a predetermined amount be sent to them each month or calendar quarter.
A shareholders account must have Fund shares with a value of at least $10,000 in
order to start a systematic Withdrawal Program, and the minimum amount that may
be withdrawn each month or quarter under the Systematic Withdrawal program is
$100. This Program may be terminated by a shareholder or the Funds at any time
without charge or penalty and will become effective five business days following
receipt of your instructions. Shares will be sold within three business days
before month-end. A withdrawal under the Systematic Withdrawal Program involves
a redemption of shares, and may result in a gain or loss for federal income tax
purposes. In addition, if the amount withdrawn exceeds the dividends credited to
the shareholder s account, the account ultimately may be depleted.
Additional Information - If you are not certain of the requirements for
a redemption please call the Transfer Agent at (800) 890-5344. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing or under any emergency circumstances, as determined
by the Securities and Exchange Commission, the Funds may suspend redemptions or
postpone payment dates.
Because the Funds incur certain fixed costs in maintaining shareholder
accounts, each Fund reserves the right to require any shareholder to redeem all
of his or her shares in a Fund on 30 days' written notice if the value of his or
her shares in the Fund is less than $1,000 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax advisor concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in each Fund to the minimum amount within the 30 day
period. Each share of each Fund is subject to redemption at any time if the
Board of Trustees determines in its sole discretion that failure to so redeem
may have materially adverse consequences to all or any of the shareholders of
the Funds.
SHARE PRICE CALCULATION
The value of an individual share in a Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day on which there is sufficient trading in the
Fund's securities to materially affect the net asset value. The net asset value
per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Advisor's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Advisor determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Advisor, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Advisor believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Advisor, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within 60 days of maturity, are valued
by using the amortized cost method of valuation, which the Board has determined
will represent fair value.
DIVIDENDS AND DISTRIBUTIONS
The Florida Street Growth Fund intends to distribute substantially all
of its net investment income as dividends to its shareholders on an annual
basis. The Florida Street Bond Fund intends to declare substantially all of its
net investment income as dividends to its shareholders on a daily basis and to
pay such dividends monthly. Each Fund intends to distribute its net long term
capital gains and its net short term capital gains at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. An election to receive a cash payment of dividends and/or
capital gain distributions may be made in the application to purchase shares or
by separate written notice to the Transfer Agent. Shareholders will receive a
confirmation statement reflecting the payment and reinvestment of dividends and
summarizing all other transactions. If cash payment is requested, a check
normally will be mailed within five business days after the payable date. If you
withdraw your entire account, all dividends accrued to the time of withdrawal,
including the day of withdrawal, will be paid at that time. You may elect to
have distributions on shares held in IRAs and 403(b) plans paid in cash only if
you are 59 1/2 years old or permanently and totally disabled or if you otherwise
qualify under the applicable plan.
TAXES
Each Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended (the "Code"). By so
qualifying, a Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net investment income and any
realized capital gains.
For federal income tax purposes, dividends paid by each Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 (the "Tax Reform Act"), all distributions of net
short term capital gains to individuals are taxed at the same rate as ordinary
income. All distributions of net capital gains to corporations are taxed at
regular corporate rates. Any distributions designated as being made from net
realized long term capital gains are taxable to shareholders as long term
capital gains regardless of the holding period of the shareholder.
Each Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisors regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from a Fund.
On the application or other appropriate form, the Funds will request
the shareholder's certified taxpayer identification number (social security
number for individuals) and a certification that the shareholder is not subject
to backup withholding. Unless the shareholder provides this information, each
Fund will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, a Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the applicable
Fund may make a corresponding charge against the account.
OPERATION OF THE FUNDS
Each Fund is a non-diversified series of AmeriPrime Funds, an open-end
management investment company organized as an Ohio business trust on August 8,
1995. The Board of Trustees supervises the business activities of the Funds.
Like other mutual funds, the Funds retain various organizations to perform
specialized services. The Funds retain CommonWealth Advisors, Inc., 247 Florida
Street, Baton Rouge, LA 70801 (the "Advisor") to manage the assets of each Fund.
The Florida Street Bond Fund is authorized to pay the Advisor a fee equal to an
annual average rate of 1.10% of the Fund's average daily net assets, and the
Florida Street Growth Fund is authorized to pay the Advisor a fee equal to an
annual average rate of 1.35% of the Fund's average daily net assets. Effective
November 1, 1997, and until further notice, the Advisor intends to waive a
portion of its management fee in order to reduce total operating expenses of the
Florida Street Bond Fund from 1.10% to .75%, and of the Florida Street Growth
Fund from 1.35% to 0.90%. The Advisor pays all of the operating expenses of the
Funds except brokerage, taxes, interest, fees and expenses of non-interested
person trustees and extraordinary expenses. In this regard, it should be noted
that most investment companies pay their own operating expenses directly, while
the Funds expenses, except those specified above, are paid by the Advisor.
The Advisor, a Louisiana corporation, is an independent investment advisory
firm that has provided investment supervisory services and financial planning to
individuals, financial institutions, corporations, trusts, estates, charitable
organizations, and retirement plans since 1991. Walter A. Morales is responsible
for the day-to-day management of the Florida Street Bond Fund. Mr. Morales began
privately managing individual common stocks in 1984, and has served as the
Advisor's president and chief investment manager since its founding in 1991. Mr.
Morales has a Masters in Business Administration and a B.S. degree in Chemistry
from Louisiana State University and previously worked as a Vice President and
Senior Trust Investment Officer for Baton Rouge Bank and Trust, and as an
Investment Broker for A.G. Edwards and Sons, Inc. Richard L. Chauvin, Jr. is
responsible for the day-to-day management of the Florida Street Growth Fund. Mr.
Chauvin is Senior Vice President and Fund Manager of the Advisor. Prior to
joining the Advisor in 1996, Mr. Chauvin served as Regional Director of
Portfolio Management at Bank One Investment Advisors ("BOIA") where he managed a
$100 million equity mutual fund and numerous accounts for individuals and
foundations. Mr. Chauvin joined the Trust Division of the former Louisiana
National Bank ("LNB") in 1978. LNB became Premier Investment Advisors which
became BOIA.
The services of the Administrator, Transfer Agent and Distributor are
operating expenses paid by the Advisor (not the Fund). The Funds retain
AmeriPrime Financial Services, Inc. (the "Administrator") to manage the Funds
business affairs and provide each Fund with administrative services, including
all regulatory reporting and necessary office equipment, personnel and
facilities. For the Florida Street Bond Fund, the Administrator receives a
monthly fee from the Fund equal to an annual average rate of 0.050% of the
Fund's average daily net assets (subject to a minimum annual payment of
$25,000). For the Florida Street Growth Fund, the Administrator receives a
monthly fee from the Fund equal to an annual average rate of 0.10% of the Fund's
average daily net assets up to fifty million dollars, 0.075% of the Fund's
average daily net assets from fifty to one hundred million dollars and 0.050% of
the Fund's average daily net assets over one hundred million dollars (subject to
a minimum annual payment of $25,000). The Funds retain American Data Services,
Inc., Hauppauge Corporate Center, 150 Motor Parkway, Hauppauge, NY 11760 (the
"Transfer Agent") to serve as transfer agent, dividend paying agent and
shareholder service agent. The Trust retains AmeriPrime Financial Securities,
Inc., 1793 Kingswood Drive, Suite 200, Southlake, Texas 76092 (the
"Distributor") to act as the principal distributor of each Fund's shares.
Kenneth D. Trumpfheller, officer and sole shareholder of the Administrator and
the Distributor, is an officer and trustee of the Trust.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Advisor may give consideration to sales of shares of
a Fund as a factor in the selection of brokers and dealers to execute Fund
transactions.
RISK CONSIDERATIONS
RISKS OF INVESTING IN HIGH YIELD SECURITIES ("JUNK BONDS"). Lower-rated
long-term securities, including securities rated from BB to D by S&P or Ba to C
by Moody's or, if unrated, of comparable quality in the opinion of the Advisor,
will usually offer higher yields than higher-rated securities. However, there is
more risk associated with these investments. This is because of the reduced
creditworthiness and increased risk of default that these securities carry.
Lower-rated long-term securities generally tend to reflect short-term corporate
and market developments to a greater extent than higher-rated securities which
react primarily to fluctuations in the general level of interest rates. Lower
rated long-term securities also involve greater sensitivity to significant
increases in interest rates. Short-term corporate and market developments
affecting the prices and liquidity of lower-rated long-term securities could
include adverse news impacting major issues or underwriters or dealers in
lower-rated long-term or unrated securities. In addition, since there are fewer
investors in lower-rated long-term securities, it may be harder to sell
securities at an optimum time.
An economic downturn may adversely affect the value of some lower-rated
long-term bonds. Such a downturn may especially affect highly leveraged
companies or companies in cyclically sensitive industries, where deterioration
in a company's cash flow may impair its ability to meet its obligation to pay
principal and interest to bondholders in a timely fashion. From time to time, as
a result of changing conditions, issuers of lower-rated long-term bonds may seek
or may be required to restructure the terms and conditions of the securities
they have issued. As a result of these restructurings, holders of lower-rated
long-term securities may receive less principal and interest than originally
expected at the time such bonds were purchased. In the event of a restructuring,
the Funds may bear additional legal or administrative expenses in order to
maximize recovery from an issuer. The secondary trading market for lower-rated
long-term bonds is generally less liquid than the secondary trading market for
higher-rated bonds.
The risk of loss due to default by the issuer is significantly greater
for the holders of high yield securities because such securities are generally
unsecured and are often subordinated to other obligations of the issuer. During
an economic downturn or a sustained period of rising interest rates, highly
leveraged issuers of high yield securities may experience financial stress and
may not have sufficient revenues to meet their interest payment obligations. An
issuer's ability to service its debt obligations may also be adversely affected
by specific corporate developments, its inability to meet specific projected
business forecasts, or the unavailability of additional financing.
Factors adversely affecting the market value of high yield and other
Fund securities will adversely affect the corresponding Fund's net asset value.
In addition, a Fund may incur additional expenses to the extent it is required
to seek recovery upon a default in the payment of principal or interest on its
Fund holdings.
RISKS OF INVESTING IN FOREIGN SECURITIES. Investors should realize that
investing in securities of foreign issuers involves considerations not typically
associated with investing in securities of companies organized and operated in
the United States. Investments may be adversely affected by changes in political
or social conditions, diplomatic relations, confiscatory taxation,
expropriation, nationalization, limitation on the removal of funds or assets, or
imposition of (or change in) exchange control or tax regulations in foreign
countries. In addition, changes in government administrations or economic or
monetary policies in the United States or abroad could result in appreciation or
depreciation of Fund securities and could favorably or unfavorably affect a
Fund's operations. Furthermore, the economies of individual foreign nations may
differ from the U.S. economy, whether favorably or unfavorably, in areas such as
growth of gross national product, rate of inflation, capital reinvestment,
resource self-sufficiency and balance of payments position. It may also be more
difficult to obtain and enforce a judgment against a foreign issuer. In general,
less information is publicly available with respect to foreign issuers than is
available with respect to U.S. companies. Most foreign companies are also not
subject to the uniform accounting and financial reporting requirements
applicable to issuers in the United States. Any foreign investments made by a
Fund must be made in compliance with U.S. and foreign currency restrictions and
tax laws restricting the amounts and types of foreign investments.
Because foreign securities generally are denominated and pay dividends
or interest in foreign currencies, the value of the net assets of a Fund as
measured in U.S. dollars will be affected favorably or unfavorably by changes in
exchange rates. In order to protect against uncertainty in the level of future
foreign currency exchange rates, each Fund is also authorized to enter into
certain foreign currency exchange transactions. Furthermore, a Fund's foreign
investments may be less liquid and their prices may be more volatile than
comparable investments in securities of U.S. companies. The settlement periods
for foreign securities, which are often longer than those for securities of U.S.
issuers, may affect Fund liquidity. Finally, there may be less government
supervision and regulation of securities exchanges, brokers and issuers in
foreign countries than in the United States.
RISKS OF INVESTING IN EMERGING MARKETS. The world's industrialized
markets generally include but are not limited to the following: Australia,
Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland,
Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Singapore,
Spain, Sweden, Switzerland, the United Kingdom, and the United States. The
world's emerging markets generally include but are not limited to the following:
Argentina, Bolivia, Brazil, Bulgaria, Chile, China, Colombia, Costa Rica, the
Czech Republic, Ecuador, Egypt, Greece, Hungary, India, Indonesia, Israel, the
Ivory Coast, Jordan, Malaysia, Mexico, Morocco, Nicaragua, Nigeria, Pakistan,
Peru, the Philippines, Poland, Portugal, Romania, Russia, Slovakia, Slovenia,
South Africa, South Korea, Sri Lanka, Taiwan, Thailand, Turkey, Uruguay,
Venezuela, Vietnam and Zimbabwe.
Investment in securities of issuers based in underdeveloped emerging
markets entails all of the risks of investing in securities of foreign issuers
outlined in this section to a heightened degree. These heightened risks include:
(i) greater risks of expropriation, confiscatory taxation, nationalization, and
less social, political and economic stability; (ii) the smaller size of the
market for such securities and a low or nonexistent volume of trading, resulting
in lack of liquidity and in price volatility; (iii) certain national policies
which may restrict a Fund's investment opportunities including restrictions on
investing in issuers or industries deemed sensitive to relevant national
interests; and (iv) in the case of Eastern Europe and in China and other Asian
countries, the absence of developed capital markets and legal structures
governing private or foreign investment and private property and the possibility
that recent favorable economic and political developments could be slowed or
reversed by unanticipated events. So long as the Communist Party continues to
exercise a significant or, in some countries, dominant role in Eastern European
countries or in China and other Asian countries, investments in such countries
will involve risks of nationalization, expropriation and confiscatory taxation.
The Communist governments of a number of Eastern European countries expropriated
large amounts of private property in the past, in many cases without adequate
compensation. There may be no assurance that such expropriation will not occur
in the future in either the Eastern European countries or other countries. In
the event of such expropriation, a Fund could lose a substantial portion of any
investments it has made in the affected countries. Further, no accounting
standards exist in Eastern European countries. Finally, even though certain
Eastern European currencies may be convertible into U.S. dollars, the conversion
rates may be artificial to the actual market values and may be adverse to Fund
shareholders.
In addition to brokerage commissions, custodial services and other
costs relating to investment in emerging markets are generally more expensive
than in the United States. Such markets have been unable to keep pace with the
volume of securities transactions, making it difficult to conduct such
transactions. The inability of a Fund to make intended security purchases due to
settlement problems could cause the Fund to miss attractive investment
opportunities. Inability to dispose of a security due to settlement problems
could result either in losses to the Fund due to subsequent declines in the
value of the security or, if the Fund has entered into a contract to sell the
security, could result in possible liability to the purchaser.
RISKS OF INVESTINGS IN OPTIONS AND FUTURES CONTRACTS. Options and
futures contracts ("Futures") can be volatile investments, and involve certain
risks. Options and Futures may fail as hedging techniques in cases where the
price movements of the securities underlying the options and Futures do not
follow the price movements of the portfolio securities subject to the hedge.
Successful use by a Fund of options and Futures will be subject to the Advisor s
ability to correctly predict movement in the direction of interest rates, the
security market generally or of a particular industry, and other economic
factors. This requires different skills and techniques than predicting changes
in the price of individual securities. A Fund could experience losses if it can
not close out its positions because of an illiquid secondary market. In
addition, losses from certain Futures transactions are potentially unlimited.
See the sections describing options and futures under "Investment Policies and
Techniques" (page ____) for additional risk information.
NON-DIVERSIFIED INVESTMENT COMPANY. Each Fund is classified as a
"non-diversified" investment company and, as such, each may invest a greater
proportion of its assets in the securities of a smaller number of issuers and
therefore may be subject to greater market and credit risk than a more broadly
diversified fund. As each Fund intends to comply with Subchapter M of the Code,
each Fund may invest up to 50% of its assets at the end of each quarter of its
fiscal year in as few as two issuers, provided that no more than 25% of the
assets are invested in one issuer. With respect to the remaining 50% of its
assets at the end of each quarter, it may invest no more than 5% in one issuer.
ADDITIONAL INVESTMENT INFORMATION. Neither Fund will have more than 25%
of the current value of its total assets invested in any single industry. This
restriction does not apply to debt securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities.
The Advisor (not the Funds) may pay certain financial institutions
(which may include banks, brokers, securities dealers and other industry
professionals) a "servicing fee" for performing certain administrative functions
for Fund shareholders to the extent these institutions are allowed to do so by
applicable statute, rule or regulation.
INVESTMENT POLICIES AND TECHNIQUES
This section contains general information about various types of
securities and investment techniques that each Fund may purchase or employ.
EQUITY SECURITIES. As used herein, "equity securities" are defined as
common stock, preferred stock, trust or limited partnership interests, rights
and warrants to subscribe to or purchase such securities, sponsored or
unsponsored American Depository Receipts ("ADRs"), European Depository Receipts
("EDR"), Global Depository Receipts ("GDRs"), and convertible securities
consisting of debt securities or preferred stock that may be converted into
common stock or that carry the right to purchase common stock. Common stocks,
the most familiar type, represent an equity (ownership) interest in a
corporation. Although equity securities have a history of long-term growth in
value, their prices fluctuate based on changes in a company's financial
condition and on overall market and economic conditions.
Smaller companies are especially sensitive to these factors.
Each Fund stresses four criteria in selecting equity investments:
(1) A strong financial position, as measured not only by balance sheet data
but also measured by off-balance sheet liabilities and contingencies (as
disclosed in footnotes to financial statements and as determined through
research of public information)
(2) Responsible management and control groups, as gauged by managerial
competence as operators and investors as well as by an apparent absence of
intent to profit at the expense of stockholders.
(3) Availability of comprehensive and meaningful financial and related
information. The availability of financial statements and information which
provide the Advisor with reliable benchmarks to aid in understanding the
business, its values and its dynamics.
(4) Availability of the security at a market price which the Advisor
believes is at a substantial discount to the Advisor's estimate of what the
issuer is worth as a private company or as a takeover or merger and acquisition
candidate, or based on other measures the Advisor believes reflect the security
s value such as price to earnings, price to sales, price to cash flow, price to
book value.
DEBT SECURITIES . Each Fund may buy debt securities of all types and
qualities issued by both domestic and foreign issuers. Bonds and other debt
instruments are used by issuers to borrow money from investors. The issuer pays
the investor a fixed or variable rate of interest, and must repay the amount
borrowed at maturity. Some debt securities, such as zero coupon bonds, do not
pay current interest, but are purchased at a discount from their face values.
Debt securities, loans, and other direct debt have varying degrees of quality
and varying levels of sensitivity to changes in interest rates. Longer-term
bonds are generally more sensitive to interest rate changes than short-term
bonds.
Lower-quality foreign government securities are often considered to be
speculative and involve greater risk of default or price changes, or they may
already be in default. These risks are in addition to the general risks
associated with foreign securities.
Each Fund intends to invest for the most part in debt securities which
the Advisor believes will provide above-average current yields or yields to
maturity. When selecting debt instruments, the Advisor stresses:
(1) Strong investor protection in the form of covenants contained in loan
agreements and other contracts that establish the terms of the debt instrument;
and
(2) Appraisals of the business' financial position and operating outlook,
as well as the Advisor's appraisal of values that might be realized in a
reorganization or upon the sale of assets or the liquidation of the issuer.
The Advisor will also use its best judgment as to the most favorable
range of maturities. In general, a Fund will acquire debt issues which have a
senior position in an issuer's capitalization.
PREFERRED STOCK. Preferred stock has a preference in liquidation (and,
generally dividends) over common stock but is subordinated in liquidation to
debt. As a general rule the market value of preferred stocks with fixed dividend
rates and no conversion rights varies inversely with interest rates and
perceived credit risk, with the price determined by the dividend rate. Some
preferred stocks are convertible into other securities, (for example, common
stock) at a fixed price and ratio or upon the occurrence of certain events. The
market price of convertible preferred stocks generally reflects an element of
conversion value. Because many preferred stocks lack a fixed maturity date,
these securities generally fluctuate substantially in value when interest rates
change; such fluctuations often exceed those of long-term bonds of the same
issuer. Some preferred stocks pay an adjustable dividend that may be based on an
index, formula, auction procedure or other dividend rate reset mechanism. In the
absence of credit deterioration, adjustable rate preferred stocks tend to have
more stable market values than fixed rate preferred stocks. All preferred stocks
are also subject to the same types of credit risks of the issuer as corporate
bonds. In addition, because preferred stock is junior to debt securities and
other obligations of an issuer, deterioration in the credit rating of the issuer
will cause greater changes in the value of a preferred stock than in a more
senior debt security with similar yield characteristics. Preferred stocks may be
rated by S&P and Moody's although there is no minimum rating which a preferred
stock must have (and a preferred stock may not be rated) to be an eligible
investment for a Fund. The Advisor expects, however, that generally the
preferred stocks in which a Fund invests will be rated at least CCC by S&P or
Caa by Moody's or, if unrated, of comparable quality in the opinion of the
Advisor. Preferred stocks rated CCC by S&P are regarded as predominantly
speculative with respect to the issuer's capacity to pay preferred stock
obligations and represent the highest degree of speculation among securities
rated between BB and CCC; preferred stocks rated Caa by Moody's are likely to be
in arrears on dividend payments. Moody's rating with respect to preferred stocks
does not purport to indicate the future status of payments of dividends.
CONVERTIBLE SECURITIES. A convertible security is a bond or preferred
stock which may be converted at a stated price within a specific period of time
into a specified number of shares of common stock of the same or different
issuer. Convertible securities are senior to common stock in a corporation's
capital structure, but usually are subordinated to non-convertible debt
securities. While providing a fixed income stream generally higher in yield than
in the income derived from a common stock but lower than that afforded by a
non-convertible debt security, convertible security also affords an investor the
opportunity, through its conversion feature, to participate in the capital
appreciation of common stock into which it is convertible.
In general, the market value of a convertible security is the higher of
its investment value (its value as a fixed income security) or its conversion
value (the value of the underlying shares of common stock if the security is
converted). As a fixed income security, the market value of a convertible
security generally increases when interest rates decline and generally decreases
when interest rates rise; however, the price of a convertible security generally
increases as the market value of the underlying stock increases, and generally
decreases as the market value of the underlying stock declines. Investments in
convertible securities generally entail less risk than investments in the common
stock of the same issuer.
WARRANTS. Warrants are instruments which entitle the holder to buy
underlying equity securities at a specific price for a specific period of time.
A warrant tends to be more volatile than its underlying securities and ceases to
have value if it is not exercised prior to its expiration date. In addition,
changes in the value of a warrant do not necessarily correspond to changes in
the value of its underlying securities.
MORTGAGE-BACKED SECURITIES. Each Fund may invest in mortgage-backed
securities and derivative mortgage-backed securities, including "principal only"
and "interest only" components. Mortgage-backed securities are securities
that directly or indirectly represent a participation in, or are secured by and
payable from, mortgage loans on real property. These securities have special
risk characteristics. The Advisor intends to invest in these securities only
when it believes, after analysis, that there is unlikely to ever be a default by
either the issuer or the guarantor of these securities. These securities do,
nonetheless, entail considerable market risk (i.e., fluctuations in quoted
prices for the instruments), interest rate risk, prepayment risk and inflation
risk.
The Funds may invest in residential mortgage-backed securities
representing participation interests in pools of one-to-four family residential
mortgage loans originated by private mortgage originators including stripped
mortgage-backed securities ("SMBS") of the U.S. Government and certain of its
agencies and instrumentalities. An SMBS is described as "stripped" because some
of the equity or interest components of the security is removed from the
package. The Fund will not invest in non-investment grade subordinated classes
of residential mortgage-backed securities and may invest in
commercial mortgage-backed securities.
SMBS are structured with two or more classes of securities that receive
different proportions of the interest and principal distributions on a pool of
mortgage assets. A common type of SMBS will have at least one class receiving
none or only a small portion of the interest and all or a larger portion of the
principal from the mortgage assets, while the other classes will receive
primarily or entirely interest and none or only a small portion of the
principal.
Prepayments of principal generally may be made at any time without
penalty on residential mortgage-backed securities. Prepayment rates are
influenced by changes in current interest rates and a variety of economic,
geographic, social and other factors. Changes in prepayment rates may change the
yield to maturity of the security and amounts available for reinvestment from
such securities by the Fund are likely to be greater during periods of
relatively low or declining interest rates and therefore are likely to be
reinvested at lower rates than during a period of relatively high interest
rates. As a result, the high credit quality of many of these securities may
provide little or no protection against loss in market value. Due to the
unprecedented volatility of prepayment and interest rates during the past two
years, many mortgage-backed securities have experienced substantial losses in
market value. The Fund's Advisor believes that many of these securities are
currently trading at prices below their inherent value on a risk-adjusted basis
and believes that selective purchases by the Fund could provide high yield and
total return in comparison to risk levels.
Current federal income tax law requires that companies such as the
Funds which seek to qualify for pass-through federal income tax treatment as
regulated investment companies distribute substantially all of their net
investment income each year, including non-cash income such as income from
principal only mortgage-backed securities. Accordingly, the Fund may be required
to distribute to its shareholders each year the interest it is deemed to earn on
principal only mortgage-backed securities even though it receives no cash
interest payments.
U.S. Government Securities are high-quality debt securities issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the U.S.
government. Not all U.S. government securities are backed by the full faith and
credit of the United States. For example, securities issued by the Farm Credit
Banks or by the Federal National Mortgage Association are supported by the
instrumentality's right to borrow money from the U.S. Treasury under certain
circumstances. However, securities issued by other agencies or instrumentalities
are supported only by the credit of the entity that issued them.
ADRs, GDRs and EDRs are certificates evidencing ownership of shares of
a foreign-based issuer held in trust by a bank or similar financial institution.
Designed for use in U.S. and European securities markets, respectively, ADRs,
GDRs and EDRs are alternatives to the purchase of the underlying securities in
their national markets and currencies. ADRs, GDRs and EDRs are subject to the
same risks as the foreign securities to which they relate. See "Risks of
Investing in Foreign Securities" herein.
PUTS. Each Fund may purchase bonds or notes together with the right to
resell them at an agreed price or yield within a specified period prior to
maturity. This right to resell is known as a put. The aggregate price paid for
securities with puts may be higher than the price which otherwise would be paid.
Consistent with the investment objectives of the Fund and subject to the
supervision of the Trustees of the Fund, the purpose of this practice is to
permit a Fund to be fully invested in securities while maintaining the necessary
liquidity to purchase securities on a when-issued basis, to meet unusually large
redemptions, to purchase at a later date securities other than those subject to
the put and to facilitate the Advisor s ability to manage the Fund actively. The
principal risk of puts is that the put writer may default on its obligation to
repurchase. The Advisor will monitor each writer's ability to meet its
obligations under puts. The amortized cost method is used by the Funds to value
securities with maturities of less than 60 days; when these securities are
subject to puts separate from the underlying securities, no value is assigned to
the puts. The cost of any such put is carried as an unrealized loss from the
time of purchase until it is exercised or expires.
ZERO COUPON SECURITIES. Each Fund may invest in zero coupon securities
which are debt securities issued or sold at a discount from their face value
which do not entitle the holder to any periodic payment of interest prior to
maturity or a specified redemption date (or cash payment date). These involve
risks that are similar to those of other debt securities, although they may be
more volatile, and certain zero coupon securities move in the same direction as
interest rates. The amount of the discount varies depending on the time
remaining until maturity or cash payment date, prevailing interest rates,
liquidity of the security and perceived credit quality of the issuer. Zero
coupon securities also may take the form of debt securities that have been
stripped of their unmatured interest coupons, the coupons themselves and
receipts or certificates representing interests in such stripped debt
obligations and coupons. The market prices of zero coupon securities generally
are more volatile than the market prices of interest-bearing securities and are
likely to respond to a greater degree to changes in interest rates than
interest-bearing securities having similar maturities and credit qualities.
STRIPS. The Federal Reserve creates STRIPS (Separate Trading of
Registered Interest and Principal of Securities) by separating the coupon
payments and the principal payment from an outstanding Treasury security and
selling them as individual securities. To the extent a Fund purchases the
principal portion of the STRIP, the Fund will not receive regular interest
payments. Instead they are sold at a deep discount from their face value. A Fund
will accrue income on such STRIPS for tax and accounting purposes, in accordance
with applicable law, which income is distributable to shareholders. Because no
cash is received at the time such income is accrued, a Fund may be required to
liquidate other Fund securities to satisfy its distribution obligations. Because
the principal portion of the STRIP does not pay current income, its price can be
very volatile when interest rates change. In calculating its dividend, a Fund
takes into account as income a portion of the difference between the principal
portion of the STRIP's purchase price and its face value.
Floating Rate Bonds may have interest rates that move in tandem with a
benchmark, helping to stabilize their prices.
SOVEREIGN AND SUPRANATIONAL DEBT OBLIGATIONS. Debt instruments issued
or guaranteed by foreign governments, agencies, and supranational organizations
("sovereign debt obligations"), especially sovereign debt obligations of
developing countries, may involve a high degree of risk, and may be in default
or present the risk of default. The issuer of the obligation or the governmental
authorities that control the repayment of the debt may be unable or unwilling to
repay principal and interest when due, and may require renegotiation or
rescheduling of debt payments. In addition, prospects for repayment of principal
and interest may depend on political as well as economic factors.
BRADY BONDS. "Brady bonds" are bonds issued as a result of a
restructuring of a country's debt obligations to commercial banks under the
"Brady plan." Brady bonds have been issued by the governments of Argentina,
Costa Rica, Mexico, Nigeria, Uruguay, Venezuela, Brazil and the Philippines, as
well as other emerging market countries. Most Brady bonds are currently rated
below BBB by S&P or Baa by Moody's. While the Advisor is not aware of the
occurrence of any payment defaults on Brady bonds, investors should recognize
that these debt securities have been issued only recently and, accordingly, do
not have a long payment history. Brady bonds may be collateralized or
uncollateralized, are issued in various currencies (primarily the U.S. dollar)
and are actively traded in the secondary market for Latin American debt.
RULE 144A SECURITIES are securities in the United States that are not
registered for sale under Federal securities laws but which can be resold to
institutions under SEC Rule 144A. Provided that a dealer or institutional
trading market in such securities exists, these restricted securities are
treated as exempt from the 15% limit on illiquid securities. Under the
supervision of the Board of Trustees of each Fund, the Advisor determines the
liquidity of restricted securities and, through reports from the Advisor, the
Board will monitor trading activity in restricted securities. If institutional
trading in restricted securities were to decline, the liquidity of a Fund could
be adversely affected.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. Each Fund may purchase
securities on a when-issued or delayed delivery basis. Delivery of and payment
for these securities may take place as long as a month or more after the date of
the purchase commitment. The value of these securities is subject to market
fluctuation during this period and no income accrues to the Fund until
settlement takes place. The Fund maintains with the Custodian a segregated
account containing high grade liquid securities in an amount at least equal to
these commitments.
REPURCHASE AGREEMENTS. In a repurchase agreement, a Fund buys a
security at one price and simultaneously agrees to sell it back at a higher
price at a future date. Delays or losses could result if the other party to the
agreement defaults or becomes insolvent.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
Fund temporarily transfers possession of a Fund instrument to another party in
return for cash. This could increase the risk of fluctuation in the Fund's yield
or in the market value of its assets. A reverse repurchase agreement is a form
of borrowing and will be counted towards each Fund's borrowing restrictions. See
"Leverage" below.
INVESTMENT COMPANIES. The Funds may invest without limitation in other
registered investment companies. With respect to certain countries in which
capital markets are either less developed or not easily accessed, investments by
each Fund may be made through investment in other registered investment
companies that in turn are authorized to invest in the securities of such
countries. Investment in other investment companies is limited in amount by the
Investment Company Act of 1940, as amended (the "1940 Act"), will involve the
indirect payment of a portion of the expenses, including advisory fees, of such
other investment companies and may result in a duplication of fees and expenses.
SECURITIES LENDING. Each Fund may lend securities to parties such as
broker-dealers, banks, or institutional investors. Securities lending allows the
Fund to retain ownership of the securities loaned and, at the same time, to earn
additional income. Since there may be delays in the recovery of loaned
securities, or even a loss of rights in collateral supplied, should the borrower
fail financially, loans will be made only to parties whose creditworthiness has
been reviewed and deemed satisfactory by the Advisor. Furthermore, they will
only be made if, in the judgment of the Advisor, the consideration to be earned
from such loans would justify the risk.
The Advisor understands that it is the current view of the staff of the
Securities and Exchange Commission ("SEC") that a Fund may engage in loan
transactions only under the following conditions: (1) a Fund must receive 100%
collateral in the form of cash, cash equivalents (e.g., U.S. Treasury bills or
notes) or other high grade liquid debt instruments from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of the
collateral; (3) after giving notice, the Fund must be able to terminate the loan
at any time; (4) the Fund must receive reasonable interest on the loan or a flat
fee from the borrower, as well as amounts equivalent to any dividends, interest,
or other distributions on the securities loaned and to any increase in market
value; (5) the Fund may pay only reasonable custodian fees in connection with
the loan; and (6) the Board of Trustees must be able to vote proxies on the
securities loaned, either by terminating the loan or by entering into an
alternative arrangement with the borrower.
Cash received through loan transactions may be invested in any security
in which the Fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
LEVERAGE. Each Fund may borrow up to one-third of the value of its
total assets, from banks or through the use of reverse repurchase agreements, to
increase its holdings of Fund securities. Under the 1940 Act, each Fund is
required to maintain continuous asset coverage of 300% with respect to such
borrowings and to sell (within three days) sufficient Fund holdings to restore
such coverage if it should decline to less than 300% due to market fluctuations
or otherwise, even if such liquidations of a Fund's holdings may be
disadvantageous from an investment standpoint.
Leveraging by means of borrowing may exaggerate the effect of any
increase or decrease in the value of each Fund's securities and the
corresponding Fund's net asset value and money borrowed by a Fund will be
subject to interest and other costs (which may include commitment fees and/or
the cost of maintaining minimum average balances) which may or may not exceed
the income received from the securities purchased with borrowed funds.
FLOATING RATE, INVERSE FLOATING RATE AND INDEX OBLIGATIONS. Each Fund
may invest without limitation in debt securities with interest payments or
maturity values that are not fixed, but float in conjunction with (or inversely
to) an underlying index or price. These floating rate, inverse floating rate and
index obligations are considered to be instruments which are commonly known as
derivatives. They may be backed by U.S. Government or corporate issuers, or by
collateral such as mortgages. In certain cases, a change in the underlying index
or price may have a leveraging effect on the periodic coupon payments, creating
larger possible swings in the prices of such securities than would be expected
when taking into account their maturities alone. The indices and prices upon
which such securities can be based include interest rates, currency rates and
commodities prices. The Fund may invest in instruments whose value is computed
based on a multiple of the change in price or value of an asset (or of an index
of or relating to assets), provided the relevant asset or assets are eligible
for investment by the Fund. To the extent a Fund invests in instruments whose
value is computed based on such a multiple, a leverage factor is involved, which
can result in high volatility and significant losses. See "Derivatives" on pages
of the Prospectus.
Floating rate securities pay interest according to a coupon which is
reset periodically. The reset mechanism may be formula based, or reflect the
passing through of floating interest payments on an underlying collateral pool.
The coupon is usually reset daily, weekly, monthly, quarterly or semi-annually,
but other schedules are possible. Floating rate obligations generally exhibit a
low price volatility for a given stated maturity or average life because their
coupons adjust with changes in interest rates. If their underlying index is not
an interest rate, or the reset mechanism lags the movement of rates in the
current market, greater price volatility may be experienced.
Inverse floating rate securities are similar to floating rate
securities except that their coupon payments vary inversely with an underlying
index by use of a formula. Inverse floating rate securities tend to exhibit
greater price volatility than other floating rate securities. Because the
changes in the coupon are usually negatively correlated with changes in overall
interest rates, interest rate risk and price volatility on inverse floating rate
obligations can be high, especially if leverage is used in the formula. Index
securities pay a fixed rate of interest, but have a maturity value that varies
by formula, so that when the obligation matures, a gain or loss is realized. The
risk of index obligations depends on the volatility of the underlying index, the
coupon payment and the maturity of the obligation.
TRADE CLAIMS. Each Fund may invest in trade claims. Trade claims are
interests in amounts owed to suppliers of goods or services and are purchased
from creditors of companies in financial difficulty. For purchasers such as the
Fund, trade claims offer the potential for profits since they are often
purchased at a significant discount from face value and, consequently, may
generate capital appreciation in the event that the market value of the claim
increases as the debtor's financial position improves or the claim is paid.
An investment in trade claims is speculative and carries a high degree
of risk. Trade claims are illiquid securities which generally do not pay
interest and there can be no guarantee that the debtor will ever be able to
satisfy the obligation on the trade claim. The markets in trade claims are not
regulated by federal securities laws or the SEC. Because trade claims are
unsecured, holders of trade claims may have a lower priority in terms of payment
than certain other creditors in a bankruptcy proceeding.
INVESTMENT IN RELATIVELY NEW ISSUES. Each Fund may invest in the common
stock and debt securities of selected new issuers (i.e., those having continuous
operating histories of less than three years). If a Fund invests in debt
securities of new issuers, it will only be in those issues where the Advisor
believes there are strong contractual protections for the holder. If issuers
meet the investment criteria discussed above, the Funds may invest in securities
without respect to the age of the issuer. Investments in new issuers may carry
special risks and may be more speculative because such companies are relatively
unseasoned. Such companies may also lack sufficient resources, may be unable to
generate internally the funds necessary for growth and may find external
financing to be unavailable on favorable terms or even totally unavailable.
Those companies will often be involved in the development or marketing of a new
product with no established market, which could lead to significant losses.
Loan Participations and Assignments. Each Fund may invest in fixed and
floating rate loans arranged through private negotiations between a borrower and
one or more lending institutions. The majority of the Funds' investments in
loans in emerging markets is expected to be in the form of participations in
loans ("Participations") and assignments of portions of loans from third parties
("Assignments"). The Funds may also invest in loans, Participations or
Assignments of loans to borrowers located in the industrialized world.
Participations typically will result in a Fund having a contractual relationship
only with the lender, not the borrower. The Fund will have the right to receive
payments of principal, interest and any fees to which it is entitled only from
the lender selling the Participation and only upon receipt by the lender of the
payments from the borrower. In connection with purchasing Participations, the
Fund generally will have no right to enforce compliance by the borrower with the
terms of the loan agreement relating to the loan, nor any rights of set-off
against the borrower, and the Fund may not directly benefit from any collateral
supporting the loan in which it has purchased the Participation. As a result,
the Fund will assume the credit risk of both the borrower and the lender that is
selling the Participation. In the event of the insolvency of the lender selling
the Participation, the Fund may be treated as a general creditor of the lender
and may not benefit from any set-off between the lender and the borrower. The
Funds will acquire Participations only if the lender interpositioned between the
Fund and the borrower is determined by the Advisor to be creditworthy. When a
Fund purchases Assignments from lenders, the Fund will acquire direct rights
against the borrower on the loan; however, since Assignments are arranged
through private negotiations between the potential assignees and assignors, the
rights and obligations acquired by the Fund as the purchaser of an Assignment
may differ from, and be more limited than, those held by the assigning lender.
A Fund may have difficulty disposing of Assignments and Participations.
The liquidity of such securities is limited and the Funds anticipate that such
securities could only be sold to a limited number of institutional investors.
The lack of a liquid secondary market could have an adverse impact on the value
of such securities and on the Funds' ability to dispose of particular
Assignments or Participations when necessary to meet liquidity needs or in
response to a specific economic event, such as a deterioration in the
creditworthiness of the borrower. The lack of a liquid secondary market for
Assignments and Participations also may make it more difficult in valuing the
Funds and, therefore, calculating the net asset value per share of the Funds.
All Assignments and Participations shall be considered to be illiquid securities
by the Funds. The investment by a Fund in illiquid securities, including
Assignments and Participations, is limited to a total of 15% of its net assets.
DERIVATIVES. Each Fund may invest in various instruments that are
commonly known as derivatives. Generally, a derivative is a financial
arrangement, the value of which is based on, or "derived" from, a traditional
security, asset, or market index. Some "derivatives" such as mortgage-related
and other asset-backed securities are in many respects like any other
investment, although they may be more volatile or less liquid than more
traditional debt securities. There are, in fact, many different types of
derivatives and many different ways to use them. There are a range of risks
associated with those uses. Futures and options are commonly used for
traditional hedging purposes to attempt to protect a fund from exposure to
changing interest rates, securities prices, or currency exchange rates and as a
low cost method of gaining exposure to a particular securities market without
investing directly in those securities. However, some derivatives are used for
leverage, which tends to magnify the effects of an instrument's price changes as
market conditions change. Leverage involves the use of a small amount of money
to control a large amount of financial assets, and can in some circumstances,
lead to significant losses. The Advisor will use derivatives only in
circumstances where they offer the most efficient means of improving the
risk/reward profile of a Fund and when consistent with a Fund's investment
objective and policies. The use of derivatives for non-hedging purposes may be
considered speculative.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS. Each Fund may enter into
foreign currency exchange transactions to convert to and from different foreign
currencies and to convert foreign currencies to and from the U.S. dollar. A Fund
either enters into these transactions on a spot (i.e., cash) basis at the spot
rate prevailing in the foreign currency exchange market or uses forward
contracts to purchase or sell foreign currencies. A forward foreign currency
exchange contract is an obligation by a Fund to purchase or to sell a specific
currency at a future date, which may be any fixed number of days from the date
of the contract. Forward foreign currency exchange contracts establish an
exchange rate at a future date. These contracts are transferable in the
interbank market conducted directly between currency traders (usually large
commercial banks) and their customers. A forward foreign currency exchange
contract generally has no deposit requirement and is traded at a net price
without commission. Neither spot transactions nor forward foreign currency
exchange contracts eliminate fluctuations in the prices of a Fund's securities
or in foreign exchange rates, or prevent loss if the prices of these securities
should decline.
A Fund may enter into foreign currency hedging transactions in an
attempt to protect against changes in foreign currency exchange rates between
the trade and settlement dates of specific securities transactions or changes in
foreign currency exchange rates that would adversely affect a Fund position or
an anticipated investment position. Although these transactions tend to minimize
the risk of loss due to a decline in the value of the hedged currency, at the
same time they tend to limit any potential gain that might be realized should
the value of the hedged currency increase. The precise matching of the forward
contract amounts and the value of the securities involved will not generally be
possible because the future value of such securities in foreign currencies will
change as a consequence of market movements in the value of such securities
between the date the forward contract is entered into and the date it matures.
The projection of currency market movements is extremely difficult, and the
successful execution of a hedging strategy is highly uncertain.
OPTIONS ON FOREIGN CURRENCIES. Each Fund may write covered put and call
options and purchase put and call options on foreign currencies for the purpose
of protecting against declines in the U.S. dollar value of Fund securities and
against increases in the U.S. dollar cost of securities to be acquired. A Fund
may use options on foreign currency to cross-hedge, which involves writing or
purchasing options on one currency to hedge against changes in exchange rates
for a different, but related currency. As with other types of options, however,
the writing of an option on a foreign currency will constitute only a partial
hedge up to the amount of the premium received, and a Fund could be required to
purchase or sell a foreign currency at disadvantageous exchange rates, thereby
incurring losses. The purchase of an option on foreign currency may be used to
hedge against fluctuations in exchange rates although, in the event of exchange
rate movements adverse to a Fund's position, it may forfeit the entire amount of
the premium plus related transaction costs. In addition, a Fund may purchase
call options on a foreign currency when the investment Advisor anticipates that
the currency will appreciate in value.
There is no assurance that a liquid secondary market will exist for any
particular option, or at any particular time. If a Fund is unable to effect a
closing purchase transaction with respect to covered options it has written, the
Fund will not be able to sell the underlying currency or dispose of assets held
in a segregated account until it closes out the options or the options expire or
are exercised. Similarly, if the Fund is unable to close out options it has
purchased, it would have to exercise the options in order to realize any profit
and will incur transaction costs. The Funds pay brokerage commissions or spreads
in connection with options transactions.
As in the case of forward contracts, certain options on foreign
currencies are traded over-the-counter and involve liquidity and credit risks
which may not be present in the case of exchange-traded currency options. The
Funds' ability to terminate over-the-counter options ("OTC Options") will be
more limited than with exchange-traded options. It is also possible that
broker-dealers participating in OTC Options transactions will not fulfill their
obligations. Until such time as the staff of the SEC changes its position, the
Funds will treat purchased OTC Options and assets used to cover written OTC
Options as illiquid securities. With respect to options written with primary
dealers in U.S. government securities pursuant to an agreement requiring a
closing purchase transaction at a formula price, the amount of illiquid
securities may be calculated with reference to the repurchase formula.
OPTIONS ON STOCKS, BONDS AND STOCK AND BOND INDICES. Each Fund may
write and purchase covered and uncovered options on stocks or bonds. A call
option gives the purchaser of the option the right to buy, and obligates the
writer to sell, the underlying security at the exercise price at any time during
the option period. Similarly, a put option gives the purchaser of the option the
right to sell, and obligates the writer to buy the underlying security at the
exercise price at any time during the option period. A covered call option with
respect to which a Fund owns the underlying security sold by the Fund exposes
the Fund during the term of the option to possible loss of opportunity to
realize appreciation in the market price of the underlying security or to
possible continued holding of a security which might otherwise have been sold to
protect against depreciation in the market price of the security. A covered put
option sold by a Fund exposes the Fund during the term of the option to a
decline in price of the underlying security.
Each Fund may purchase and write put and call options on stock or bond
indices listed on domestic and foreign stock exchanges, in lieu of direct
investment in the underlying securities or for hedging purposes. A stock or bond
index fluctuates with changes in the market values of the securities included in
the index. Options on securities indices are generally similar to options on
stocks except that the delivery requirements are different. Instead of giving
the right to take or make delivery of securities at a specified price, an option
on a stock or bond index gives the holders the right to receive a cash "exercise
settlement amount" equal to (a) the amount, if any, by which the fixed exercise
price of the option exceeds (in the case of a put) or is less than (in the case
of a call) the closing value of the underlying index on the date of the
exercise, multiplied by (b) a fixed "index multiplier."
FUTURES CONTRACTS ON STOCK AND BOND INDICES. Each Fund may enter into
contracts providing for the making and acceptance of a cash settlement based
upon changes in the value of an index of domestic or foreign securities
("Futures Contracts"). This investment technique may be used as a low cost
method of gaining exposure to a particular securities market without investing
directly in those securities or to hedge against anticipated future changes in
general market prices which otherwise might either adversely affect the value of
securities held by the Fund or adversely affect the prices of securities which
are intended to be purchased at a later date for the Fund. A Futures Contract
may also be entered into to close out or offset an existing futures position.
When used for hedging purposes, each transaction in Futures Contracts
involves the establishment of a position which will move in a direction opposite
to that of the investment being hedged. If these hedging transactions are
successful, the futures position taken for the Fund will rise in value by an
amount which approximately offsets the decline in value of the portion of the
Fund's investments that is being hedged. Should general market prices move in an
unexpected manner, the full anticipated benefits of Futures Contracts may not be
achieved or a loss may be realized. The risks of Futures Contracts also include
a potential lack of liquidity in the secondary market and incorrect assessments
of market. The loss from investing in Futures Contracts is potentially
unlimited. Brokerage costs will be incurred and "margin" will be required to be
posted and maintained as a good faith deposit against performance of obligations
under Futures Contracts written for a Fund. A Fund may not purchase or sell a
Futures Contract, or purchase an option on a Futures Contract, if immediately
thereafter its aggregate outstanding margin deposits and premiums on such
contracts and options would exceed 5% of the market value of the Fund's total
assets.
OPTIONS ON FUTURES CONTRACTS. Each Fund may invest in options on
futures contracts for hedging purposes. There can be no assurance that the use
of these Fund strategies will be successful. The risks associated with options
on futures contracts are similar to those risks associated with futures
contracts and options on stocks, bonds and indices.
ASSET COVERAGE. To assure that a Fund's use of futures and related
options, as well as when-issued and delayed-delivery securities and foreign
currency exchange transactions, are not used to achieve investment leverage, a
Fund will cover such transactions, as required by the SEC, either by owning the
underlying securities, entering into an offsetting transaction, or by
segregating with the Fund's custodian liquid securities in an amount at all
times equal to or exceeding the Fund's commitment with respect to these
instruments or contracts.
SHORT SALES. Each Fund may sell a security short in anticipation of a
decline in the market value of the security. When a Fund engages in a short
sale, it sells a security which it does not own. To complete the transaction,
the Fund must borrow the security in order to deliver it to the buyer. The Fund
must replace the borrowed security by purchasing it at the market price at the
time of replacement, which may be more or less than the price at which the Fund
sold the security. The Fund will incur a loss as a result of the short sale if
the price of the security increases between the date of the short sale and the
date on which the Fund replaces the borrowed security. The Fund will realize a
profit if the security declines in price between those dates.
In connection with its short sales, a Fund will be required to maintain
a segregated account with its Custodian of cash or high grade liquid debt assets
equal to the market value of the securities sold less any collateral deposited
with its broker. However, the segregated account and deposits will not
necessarily limit the Fund's potential loss on a short sale, which is unlimited.
ILLIQUID SECURITIES. Each Fund may contain illiquid securities.
Illiquid securities generally include securities which cannot be disposed of
promptly and in the ordinary course of business without taking a reduced price.
Securities may be illiquid due to contractual or legal restrictions on resale or
lack of a ready market. The following securities are considered to be illiquid:
repurchase agreements maturing in more than seven days, nonpublicly offered
securities and restricted securities. Neither Fund will invest more than 15% of
its net assets in illiquid securities.
General. Each Fund may invest up to 5% of its net assets in each of the
following: municipal bonds, certificates of deposit, time deposits and banker's
acceptances.
GENERAL INFORMATION
FUNDAMENTAL POLICIES . The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
applicable Fund. The investment objective of each Fund may be changed without
the affirmative vote of a majority of the outstanding shares of the Fund. Any
such change may result in the Fund having an investment objective different from
the objective which the shareholders considered appropriate at the time of
investment in the Fund.
FUND TURNOVER . Neither Fund intends to purchase or sell securities for
short term trading purposes. However, if the objectives of a Fund would be
better served, short-term profits or losses may be realized from time to time.
It is anticipated that portfolio turnover will average less than 200% for the
Florida Street Bond Fund and less than 100% for the Florida Street Growth Fund.
The brokerage commissions incurred by the Florida Street Bond Fund will
generally be higher than those incurred by a fund with a lower portfolio
turnover rate. The Florida Street Bond Fund's higher turnover rate may result in
the realization for federal tax purposes of more net capital gains, and any
distributions derived from such gains may be ordinary income.
Shareholder Rights . Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. When
matters are submitted to shareholders for a vote, each shareholder is entitled
to one vote for each whole share he owns and fractional votes for fractional
shares he owns. All shares of a Fund have equal voting rights and liquidation
rights.
<PAGE>
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PERFORMANCE INFORMATION
Each Fund may periodically advertise "average annual total return." The
"average annual total return" of a Fund refers to the average annual compounded
rate of return over the stated period that would equate an initial amount
invested at the beginning of a stated period to the ending redeemable value of
the investment. The calculation of "average annual total return" assumes the
reinvestment of all dividends and distributions.
Each Fund may also periodically advertise its total return over various
periods in addition to the value of a $10,000 investment (made on the date of
the initial public offering of the Fund's shares) as of the end of a specified
period. The "total return" for each Fund refers to the percentage change in the
value of an account between the beginning and end of the stated period, assuming
no activity in the account other than reinvestment of dividends and capital
gains distributions.
Each Fund may also include in advertisements data comparing
performance with other mutual funds as reported in non-related investment media,
published editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including the Standard &
Poor's (S&P) 500 Index, the S&P 1500 Index, the Dow Jones Industrial Average,
the Merrill Lynch High Yield Index and the Russell 2000 Index.
The advertised performance data of each Fund is based on historical performance
and is not intended to indicate future performance. Rates of total return quoted
by a Fund may be higher or lower than past quotations, and there can be no
assurance that any rate of total return will be maintained. The principal value
of an investment in each Fund will fluctuate so that a shareholder's shares,
when redeemed, may be worth more or less than the shareholder's original
investment.
Each Fund acknowledges that it is solely responsible for the
informaiton or any lack of information about it in this joint Prospectus and in
the joint Statement of Additional Information, and no other Fund is responsible
therefore. There is a possibility that one Fund might be deemed liable for
misstatements or omissions regarding another Fund in this Prospectus or in the
joint Statement of Additional Information; however, the Funds deem this
possibility slight.
<PAGE>
APPENDIX A
DESCRIPTION OF CORPORATE BOND RATINGS
STANDARD & POOR'S RATINGS SERVICES
The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable. Standard
& Poor's does not perform any audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended or withdrawn as a result of changes in, or unavailability of, such
information or for other circumstances.
The ratings are based, in varying degrees, on the following
considerations:
I. Likelihood of default-capacity and willingness of the obliger as to the
timely payment of interest and repayment of principal in accordance with the
terms of the obligation.
II. Nature and provisions of the obligation.
III. Protection afforded by, and relative position of the obligation in the
event of bankruptcy, reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.
AAA - Debt rated "AAA" has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.
AA - Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A - Debt rated "A" has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
BBB - Debt rated "BBB" is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
BB, B, CCC, CC, C - Debt rated "BB", "B", "CCC", "CC", and "C" is regarded,
on balance, as predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the obligation.
"BB" indicates the lowest degree of speculation and "C" the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
BB - Debt rate "BB" has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The "BB"
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied "BBB" rating.
B - Debt rated "B" has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The "B" rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
"BB" or "BB-" rating.
CCC - Debt rated "CCC" has a currently identifiable vulnerability to
default, and is dependent upon favorable business, financial and economic
conditions to meet timely payment of interest and repayment of principal. In the
event of adverse business, financial or economic conditions, it is not likely to
have the capacity to pay interest and repay principal. The "CCC" rating category
is also used for debt subordinated to senior debt that is assigned an actual or
implied "B" or "B-" rating.
CC - The rating "CC" is typically applied to debt subordinated to senior
debt that is assigned an actual or implied "CCC" rating.
C - The rating "C" is typically applied to debt subordinated to senior debt
which is assigned an actual or implied "CCC-" debt rating. The "C" rating may be
used to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued.
C1 - The rating "C1" is reserved for income bonds on which no interest is
being paid.
D - Debt rated "D" is in payment default. The "D" rating category is used
when interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The "D"
rating also will be used upon the filing of a bankruptcy petition if debt
service payments are jeopardized.
Plus (+) or Minus (-): The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
categories.
MOODY'S INVESTORS SERVICE, INC.
Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, fluctuation of protective
elements may be of greater amplitude, or there may be other elements present
which make the long-term risk appear somewhat greater than the Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment some time in the future.
Baa - Bonds which are rated Baa are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba - Bonds which are rated Ba are judged to have speculative elements:
their future cannot be considered as well-assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca - Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C - Bonds which are rated C are the lowest rated class of bonds, and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
<PAGE>
- 1 -
Moody's applies numerical modifiers: 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category, the modifier 2 indicates a mid-range ranking, and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
<PAGE>
- 1 -
Investment Advisor Administrator
CommonWealth Advisors, Inc. AmeriPrime Financial Services, Inc.
247 Florida Street 1793 Kingswood Drive, Suite 200
Baton Rouge, LA 70801 Southlake, Texas 76092
Custodian Distributor
Star Bank, N.A. AmeriPrime Financial Securities, Inc.
P.O. Box 1118 1793 Kingswood Drive, Suite 200
Cincinnati, Ohio 45264 Southlake, Texas 76092
Transfer Agent (all purchases and Independent Auditors
all redemption requests) McCurdy & Associates CPA's, Inc.
American Data Services, Inc. 27955 Clemens Road
Hauppauge Corporate Center Westlake, Ohio 44145
150 Motor Parkway
Hauppauge, NY 11760
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
each Fund. This Prospectus does not constitute an offer by the Funds to sell its
shares in any state to any person to whom it is unlawful to make such offer in
such state.
<PAGE>
TABLE OF CONTENTS
SUMMARY OF FUND EXPENSES 2
Shareholder Transaction Expenses 2
Annual Fund Operating Expenses 2
FINANCIAL HIGHLIGHTS 3
THE FUNDS 3
INVESTMENT OBJECTIVE AND STRATEGIES 3
General 4
HOW TO INVEST IN THE FUND
Initial Purchase 4
Additional
Investments 5
Automatic Investment Plan 5
Tax Sheltered Retirement Plans 5
Other Purchase Information 5
HOW TO REDEEM SHARES 6
By Mail 6
By Telephone 6
By Systematic Withdrawal Plan 6
Additional Information 6
SHARE PRICE CALCULATION 7
DIVIDENDS AND DISTRIBUTIONS 7
TAXES 7
OPERATION OF THE FUNDS 8
RISK CONSIDERATIONS 9
INVESTMENT POLICIES AND TECHNIQUES 11
GENERAL INFORMATION 19
Fundamental Policies 19
Fund Turnover 19
Shareholder Rights 19
PERFORMANCE INFORMATION 19
<PAGE>
PROSPECTUS February 13, 1998
IMS CAPITAL VALUE FUND
10159 S.E. Sunnyside Road
Suite 330
Portland, Oregon 97015
For Information, Shareholder Services and Requests:
(800) 934-5550
The investment objective of the IMS Capital Value Fund (the "Fund") is to
provide long term growth for its shareholders. IMS Capital Management, Inc. (the
"Advisor") applies a value-oriented, contrarian investment philosophy to reduce
risk while enhancing potential returns. The Advisor seeks to reduce risk through
diversification and by focusing on large, high quality, dividend-paying U.S.
companies. The Advisor strives to maximize potential returns by purchasing
companies at historically low prices, when they are temporarily out of favor and
contrary to conventional wisdom.
The Fund is "no-load," which means that investors incur no sales charges,
commissions or deferred sales charges on the purchase or redemption of their
shares. The Fund is one of the mutual funds comprising AmeriPrime Funds, an
open-end management investment company, distributed by AmeriPrime Financial
Securities, Inc.
This Prospectus provides the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information has been filed with the Securities and
Exchange Commission dated February 13, 1998, which is incorporated herein by
reference and can be obtained without charge by calling the Fund at the phone
number listed above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
ASA02D87-121197-1
<PAGE>
SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund. The expense information is based on operating expenses incurred during
the most recent fiscal year. The expenses are expressed as a percentage of
average net assets. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
FUTURE FUND PERFORMANCE OR EXPENSES, BOTH OF WHICH MAY VARY.
Shareholders should be aware that the Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Fund.
Shareholder Transaction Expenses
Sales Load Imposed on Purchases.............................................NONE
Sales Load Imposed on Reinvested Dividends..................................NONE
Deferred Sales Load.........................................................NONE
Redemption Fees.............................................................NONE
Exchange Fees...............................................................NONE
Annual Fund Operating Expenses (as a percentage of average net assets)
Management Fees............................................................1.59%
12b-1 Charges...............................................................NONE
Other Expenses 1 (after reimbursement).....................................0.33%
Total Fund Operating Expenses1 (after reimbursement).......................1.92%
1 The Advisor has agreed to reimburse other expenses for the fiscal year ending
October 31, 1998 to the extent necessary to maintain total operating expenses as
indicated. For the fiscal year ended October 31, 1997, other expenses (fees and
expenses of the trustees who are not "interested persons" as defined in the
Investment Company Act) were ____% of average net assets and total fund
operating expenses were ____% of average net assets.
The tables above are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund.
Example
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$19 $60 $103 $224
- 2 -
<PAGE>
FINANCIAL HIGHLIGHTS
The following condensed supplementary financial information for the
fiscal year ended October 31, 1997, is derived from the audited financial
statements of the Fund. The financial statements of the Fund have been audited
by McCurdy & Associates CPA's, Inc., independent public accountants, and are
included in the Fund's Annual Report. The Annual Report contains additional
performance information and is available upon request and without charge.
[INSERT FINANCIAL HIGHLIGHTS]
THE FUND
IMS Capital Value Fund (the "Fund") was organized as a series of
AmeriPrime Funds, an Ohio business trust (the "Trust"), on July 30, 1996, and
commenced operations on August 1, 1996. This prospectus offers shares of the
Fund and each share represents an undivided, proportionate interest in the Fund.
The investment advisor to the Fund is IMS Capital Management, Inc. (the
"Advisor").
INVESTMENT OBJECTIVE AND STRATEGIES
The investment objective of the IMS Capital Value Fund is to provide
long term growth for its shareholders. IMS Capital Management, Inc. (the
"Advisor") applies a value-oriented, contrarian investment philosophy to reduce
risk while enhancing potential returns. The Advisor seeks to reduce risk through
diversification and by focusing on large, high quality, dividend-paying U.S.
companies. The Advisor strives to maximize potential returns by purchasing
companies at historically low prices, when they are temporarily out of favor and
contrary to conventional wisdom.
The Advisor will purchase stocks of companies which, in its estimation,
are unfairly valued due to special and temporary circumstances. The Advisor
selects stocks which it believes possess limited downside risk, yet have the
potential to produce significant gains. The Advisor will select either growth or
value stocks that are trading significantly below their previous highs, if such
securities are also determined by the Advisor to be trading at substantial
discounts from their intrinsic values. The companies selected generally will be
highly visible, household names that trade on the New York Stock Exchange and
that historically have had market capitalizations of at least one billion
dollars. These well-capitalized, globally-diversified companies generally have
the resources to weather negative business conditions successfully and provide
both growth and stability. The Advisor seeks to further limit investment risk by
diversifying across a broad range of industries and companies. Because of its
diversified, large company focus, the Fund is designed to be a "core holding"
within a typical investor's asset mix.
The Advisor believes that investors tend to overreact to short-term
negative events, which can in turn create undervalued security prices. For this
reason, the Advisor applies a patient approach to stock selection. Through a
careful process of company research and analysis, the Advisor selects companies
for potential purchase based on various criteria outlined below. A target buy
price is established for each company - generally well below the current price.
Companies are then tracked and monitored until the right combination of events
or market conditions creates a buying opportunity at or below the target price.
The Advisor seeks to identify situations where the reasons for a stock's decline
are misunderstood, temporary and solvable. A company is purchased only after the
Advisor has determined that investing in the security is timely given the nature
and reasons for its decline. When analyzing companies, particular emphasis is
given to securities with a high potential for gain upon return to historical
levels, securities trading at a discount to the Advisor's estimation of the
company's fair market value (based on projected future cash flow, balance sheet
characteristics, and future earnings), and securities trading at the low end of
their historical fundamental valuation ranges based on current financial ratios
such as price-to-cash flow, price-to-book value and price-to-earnings.
- 3 -
<PAGE>
By owning a diversified collection of large U.S. companies that, as a
group, have already experienced a "correction" (i.e., as a group are generally
trading at 30% or more below historical levels), the Advisor believes that the
Fund, by design, may weather "bear" (down) markets more favorably than other
funds with similar investment objectives. The Advisor can, however, provide no
assurances to that effect. The Advisor typically holds companies for three to
five years at a time, and therefore believes that the Fund may not be
appropriate for those with shorter time horizons.
The Advisor has been managing equity accounts for its clients since
1988. The performance of the accounts with investment objectives, policies and
strategies substantially similar to those of the Fund appears below. The data is
provided to illustrate past performance of the Advisor in managing such
accounts, as compared to the S&P 500 Index. The persons responsible for the
performance below are the same as those responsible for the investment
management of the Fund.
IMS CAPITAL MANAGEMENT PERFORMANCE
SUMMARY [A Graph with the following data is
included in the Prospectus]
<TABLE>
<CAPTION>
FUND IMS CAPITAL MANAGEMENT S&P 500 INDEX
<S> <C> <C> <C>
1991 $14,103 $13,040
1992 $18,620 $14,038
1993 $23,236 $15,441
1994 $23,124 $15,461
1995 $26,366 $21,490
1996 $_______** $______ $______
1997 $_______*** $_______ $______
Growth of $10,000 invested January 1, 1991 to December 31, 1996.
<FN>
* THE ADVISOR'S TOTAL RETURNS BY YEAR WERE AS FOLLOWS: 1991 41.03%, 1992 32.03%, 1993
24.79%, 1994 0.48%, 1995 14.02%, 1996 _____%, 1997 ____%. THE ADVISOR'S PERFORMANCE
FIGURES REFLECT THE USE OF TIME-WEIGHTED, DOLLAR-WEIGHTED AVERAGE ANNUALIZED TOTAL RETURNS FOR
THE ADVISOR'S EQUITY ACCOUNTS HAVING OBJECTIVES SIMILAR TO THE FUND. THE RESULTS ARE AUDITED
BY AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM. THE COMPOSITE INCLUDES ALL FEE-PAYING,
DISCRETIONARY, INDIVIDUAL STOCK PORTFOLIOS ABOVE $10,000. OTHER ACCOUNTS OF THE ADVISOR ARE
EXCLUDED FROM THE COMPOSITE BECAUSE THE NATURE OF THOSE ACCOUNTS MAKE THEM INAPPROPRIATE
FOR PURPOSES OF COMPARISON. IN ADDITION, PERFORMANCE OF ACCOUNTS PRIOR TO 1991 IS EXCLUDED
FOR THE SAME REASON. IN 1988, NO ACCOUNT SATISFIED THE ADVISOR'S CRITERIA FOR INCLUSION IN THE
COMPOSITE. IN 1989 AND 1990, THE AGGREGATE ASSETS IN THE QUALIFYING ACCOUNTS WERE TOO SMALL
TO PROVIDE DIVERSIFICATION COMPARABLE TO THAT OF A DIVERSIFIED MUTUAL FUND, AND THEREFORE THE
ADVISOR BELIEVES INCLUSION OF PERFORMANCE FOR THOSE YEARS WOULD BE MISLEADING. PERFORMANCE
FIGURES REFLECTED ARE NET OF ALL EXPENSES, INCLUDING TRANSACTION COSTS, COMMISSIONS AND
MANAGEMENT FEES. RESULTS INCLUDE THE REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. THE
PRESENTATION OF THE PERFORMANCE COMPOSITE COMPLIES WITH THE PERFORMANCE PRESENTATION
STANDARDS OF THE ASSOCIATION FOR INVESTMENT MANAGEMENT AND RESEARCH (AIMR). COMPLETE
PERFORMANCE PRESENTATION NOTES ARE AVAILABLE ON REQUEST.
- 4 -
<PAGE>
THE S&P 500 INDEX TOTAL RETURNS BY YEAR WERE AS FOLLOWS: 1991 30.40%,
1992 7.65%, 1993 10.04%, 1994 1.29%, 1995 37.41%, 1996 _____%, 1997
_____%. THE S&P 500 INDEX IS A WIDELY RECOGNIZED, UNMANAGED INDEX OF
MARKET ACTIVITY BASED UPON THE AGGREGATE PERFORMANCE OF A SELECTED
PORTFOLIO OF PUBLICLY TRADED COMMON STOCKS, INCLUDING MONTHLY
ADJUSTMENTS TO REFLECT THE REINVESTMENT OF DIVIDENDS AND OTHER
DISTRIBUTIONS. THE S&P 500 INDEX REFLECTS THE TOTAL RETURN OF
SECURITIES COMPRISING THE INDEX, INCLUDING CHANGES IN MARKET PRICES AS
WELL AS ACCRUED INVESTMENT INCOME, WHICH IS PRESUMED TO BE REINVESTED.
PERFORMANCE FIGURES FOR THE S&P 500 INDEX DO NOT REFLECT DEDUCTION OF
TRANSACTION COSTS OR EXPENSES, INCLUDING MANAGEMENT FEES.
THE FUND TOTAL RETURNS BY YEAR WERE ___% FOR THE PERIOD AUGUST 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH OCTOBER 31, 1996, AND ___% FOR THE
FISCAL YEAR ENDED OCTOBER 31, 1997.
THE PERFORMANCE OF THE ACCOUNTS MANAGED BY THE ADVISOR DOES
NOT REPRESENT THE HISTORICAL PERFORMANCE OF THE FUND AND
SHOULD NOT BE CONSIDERED INDICATIVE OF FUTURE PERFORMANCE OF
THE FUND. RESULTS MAY DIFFER BECAUSE OF, AMONG OTHER THINGS,
DIFFERENCES IN BROKERAGE COMMISSIONS, ACCOUNT EXPENSES,
INCLUDING MANAGEMENT FEES, THE SIZE OF POSITIONS TAKEN IN
RELATION TO ACCOUNT SIZE AND DIVERSIFICATION OF SECURITIES,
TIMING OF PURCHASES AND SALES, AVAILABILITY OF CASH FOR NEW
INVESTMENTS AND THE PRIVATE CHARACTER OF ACCOUNTS COMPARED
WITH THE PUBLIC CHARACTER OF THE FUND. IN ADDITION, THE
MANAGED ACCOUNTS ARE NOT SUBJECT TO CERTAIN INVESTMENT
LIMITATIONS, DIVERISIFICATION REQUIREMENTS, AND OTHER
RESTRICTIONS IMPOSED BY THE INVESTMENT COMPANY ACT AND THE
INTERNAL REVENUE CODE WHICH, IF APPLICABLE, MAY HAVE ADVERSELY
AFFECTED THE PERFORMANCE RESULTS OF THE MANAGED ACCOUNTS. THE
RESULTS FOR DIFFERENT PERIODS MAY VARY.
** FOR THE PERIOD AUGUST 1, 1996 (INCEPTION) THROUGH OCTOBER 31, 1996.
</FN>
</TABLE>
*** FROM AUGUST 1, 1996 (INCEPTION).
The Advisor generally intends to stay fully invested (subject to
liquidity requirements) in common stock, preferred stock and common stock
equivalents (such as securities convertible into common stocks) regardless of
the movement of stock prices. However, the Fund may invest in fixed income
securities, such as corporate debt securities and U.S. government obligations,
when the Advisor believes that these securities offer opportunities to further
the Fund's investment objective. While the Fund ordinarily will invest in common
stocks of U.S. companies, it may invest in foreign companies through the
purchase of American Depository Receipts.
For temporary defensive purposes under adverse market conditions, the
Fund may hold a substantial portion of its assets in cash equivalents, money
market funds or U.S. government repurchase agreements. The Fund may also invest
in such instruments at any time to maintain liquidity or pending selection of
investments in accordance with its policies. To the extent the Fund acquires the
securities of a money market fund, the shareholders of the Fund will be subject
to duplicative management fees.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, the Fund cannot give any assurance that its investment objective
will be achieved. In addition, it should be noted that the Advisor has not
previously managed assets organized as a mutual fund and the Fund has no
operating history.
- 5 -
<PAGE>
Rates of total return quoted by the Fund may be higher or lower than past
quotations, and there can be no assurance that any rate of total return will be
maintained. See "Investment Policies and Techniques and Risk Considerations" for
a more detailed discussion of the Fund's investment practices.
HOW TO INVEST IN THE FUND
The Fund is "no-load" and shares of the Fund are sold directly to
investors on a continuous basis, subject to the following minimums: minimum
initial investment of $5,000 ($2,000 for IRAs and other retirement plans) and
minimum subsequent investments of $100. These minimums may be waived by the
Advisor for accounts participating in an automatic investment program. Investors
choosing to purchase or redeem their shares through a broker/dealer or other
institution may be charged a fee by that institution. Investors choosing to
purchase or redeem shares directly from the Fund will not incur charges on
purchases or redemptions. To the extent investments of individual investors are
aggregated into an omnibus account established by an investment adviser, broker
or other intermediary, the account minimums apply to the omnibus account, not to
the account of the individual investor.
Initial Purchase
By Mail - You may purchase shares of the Fund by completing and signing
the investment application form which accompanies this Prospectus and mailing
it, in proper form, together with a check (subject to the above minimum amounts)
made payable to IMS Capital Value Fund, and sent to the P.O. Box listed below.
If you prefer overnight delivery, use the overnight address listed below.
U.S. Mail: Overnight:
IMS Capital Value Fund IMS Capital Value Fund
c/o American Data Services, Inc. c/o American Data Services, Inc.
P.O. Box 5536 Hauppauge Corporate Center
Hauppauge, New York 11788-0132 150 Motor Parkway
Hauppauge, New York 11760
Your purchase of shares of the Fund will be effected at the next share price
calculated after receipt of your investment.
By Wire - You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call the Transfer Agent at 800-934-5550 to set up your account
and obtain an account number. You should be prepared at that time to provide the
information on the application. Then, you should provide your bank with the
following information for purposes of wiring your investment:
Star Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: IMS Capital Value Fund
D.D.A. # 485777197
Account Name _________________ (write in shareholder
name) For the Account # ______________ (write in
account number)
- 6 -
<PAGE>
You are required to mail a signed application to the Custodian at the
above address in order to complete your initial wire purchase. Wire orders will
be accepted only on a day on which the Fund, Custodian and Transfer Agent are
open for business. A wire purchase will not be considered made until the wired
money is received and the purchase is accepted by the Fund. Any delays which may
occur in wiring money, including delays which may occur in processing by the
banks, are not the responsibility of the Fund or the Transfer Agent. There is
presently no fee for the receipt of wired funds, but the right to charge
shareholders for this service is reserved by the Fund.
Additional Investments
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain your name, the name of your
account(s), your account number(s), and the name of the Fund. Checks should be
made payable to IMS Capital Value Fund and should be sent to the address listed
above. A bank wire should be sent as outlined above.
Automatic Investment Plan
You may make regular investments in the Fund with an Automatic
Investment Plan by completing the appropriate section of the account application
and attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting $100 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time. Tax Sheltered Retirement Plans
Since the Fund is oriented to longer term investments, shares of the
Fund may be an appropriate investment medium for tax sheltered retirement plans,
including: individual retirement plans (IRAs); simplified employee pensions
(SEPs); 401(k) plans; qualified corporate pension and profit sharing plans (for
employees); tax deferred investment plans (for employees of public school
systems and certain types of charitable organizations); and other qualified
retirement plans. You should contact the Transfer Agent for the procedure to
open an IRA or SEP plan, as well as more specific information regarding these
retirement plan options. Consultation with an attorney or tax advisor regarding
these plans is advisable. Custodial fees for an IRA will be paid by the
shareholder by redemption of sufficient shares of the Fund from the IRA unless
the fees are paid directly to the IRA custodian. You can obtain information
about the IRA custodial fees from the Transfer Agent.
Other Purchase Information
Dividends begin to accrue after you become a shareholder. The Fund does
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases and to
refuse to sell to any person are reserved by the Fund. If your check or wire
does not clear, you will be responsible for any loss incurred by the Fund. If
you are already a shareholder, the Fund can redeem shares from any identically
registered account in the Fund as reimbursement for any loss incurred. You may
be prohibited or restricted from making future purchases in the Fund.
- 7 -
<PAGE>
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after
the redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. Presently there is no charge for wire
redemptions; however, the Fund reserves the right to charge for this service.
Any charges for wire redemptions will be deducted from the shareholder's Fund
account by redemption of shares. Investors choosing to purchase or redeem their
shares through a broker/dealer or other institution may be charged a fee by that
institution.
By Mail - You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:
IMS Capital Value Fund
c/o American Data Services, Inc.
P.O. Box 5536
Hauppauge, New York 11788-0132
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the Fund
requires that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Fund or American Data Services, Inc., a
shareholder, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
By Telephone - You may redeem any part of your account in the Fund by
calling the Transfer Agent at (800) 934-5550. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at
any time by the Fund or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Fund, although neither the Fund nor the Transfer Agent has ever
experienced difficulties in receiving and in a timely fashion responding to
telephone requests for redemptions or exchanges. If you are unable to reach the
Fund by telephone, you may request a redemption or exchange by mail.
Additional Information - If you are not certain of the requirements for
a redemption please call the Transfer Agent at (800) 934-5550. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth
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<PAGE>
business day following the redemption. However, payment for redemption made
against shares purchased by check will be made only after the check has been
collected, which normally may take up to fifteen days. Also, when the New York
Stock Exchange is closed (or when trading is restricted) for any reason other
than its customary weekend or holiday closing or under any emergency
circumstances, as determined by the Securities and Exchange Commission, the Fund
may suspend redemptions or postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $5,000 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax advisor concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption at any time if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day on which there is sufficient trading in the
Fund's securities to materially affect the net asset value. The net asset value
per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Advisor's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Advisor determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Advisor, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Advisor believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Advisor, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within 60 days of maturity, are valued
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by using the amortized cost method of valuation, which the Board has determined
will represent fair value.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on an annual basis, and intends to
distribute its net long term capital gains and its net short term capital gains
at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. An election to receive a cash payment of dividends and/or
capital gain distributions may be made in the application to purchase shares or
by separate written notice to the Transfer Agent. Shareholders will receive a
confirmation statement reflecting the payment and reinvestment of dividends and
summarizing all other transactions. If cash payment is requested, a check
normally will be mailed within five business days after the payable date. If you
withdraw your entire account, all dividends accrued to the time of withdrawal,
including the day of withdrawal, will be paid at that time. You may elect to
have distributions on shares held in IRAs and 403(b) plans paid in cash only if
you are 59 1/2 years old or permanently and totally disabled or if you otherwise
qualify under the applicable plan.
TAXES
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
the Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any realized
capital gains.
For federal income tax purposes, dividends paid by the Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 (the "Tax Reform Act"), all distributions of net
short term capital gains to individuals are taxed at the same rate as ordinary
income. All distributions of net capital gains to corporations are taxed at
regular corporate rates. Any distributions designated as being made from net
realized long term capital gains are taxable to shareholders as long term
capital gains regardless of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisors regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
On the application or other appropriate form, the Fund will request the
shareholder's certified taxpayer identification number (social security number
for individuals) and a certification that the shareholder is not subject to
backup withholding. Unless the shareholder provides this information, the Fund
will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that
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such a fine is imposed with respect to a specific account in any year, the Fund
may make a corresponding charge against the account.
OPERATION OF THE FUND
The Fund is a diversified series of AmeriPrime Funds, an open-end
management investment company organized as an Ohio business trust on August 8,
1995. The Board of Trustees supervises the business activities of the Fund. Like
other mutual funds, the Fund retains various organizations to perform
specialized services. The Fund retains IMS Capital Management, Inc., 10159 S.E.
Sunnyside Road, Suite 330, Portland, Oregon 97015 (the "Advisor") to manage the
assets of the Fund and is authorized to pay the Advisor a fee equal to an annual
average rate of 1.59% of the Fund's average daily net assets. The Advisor, an
Oregon corporation, is an independent investment advisory firm that has
practiced a large company, value-oriented, contrarian style of management for a
select group of clients since 1988. The Advisor currently manages accounts for
institutional clients which include the State of Oregon, Pacific University, and
several 401K plans. Individual clients include families, trusts and small
businesses, both taxable and non-taxable. Carl W. Marker is primarily
responsible for the day-to-day management of the Fund's portfolio. Mr. Marker
has served as the Advisor's chairman, president and primary portfolio manager
since its founding in 1988, and began privately managing individual common
stocks in 1981. Mr. Marker has a B.S. degree from the University of Oregon and
previously worked for divisions of both General Motors and Mercedes- Benz as a
financial systems analyst before founding IMS Capital Management, Inc. Mr.
Marker is regularly quoted by the press and has been published in the Dick Davis
Digest, the Wall Street Transcript, several newspapers and magazines, and has
appeared on the PBS television program, Serious Money.
The Fund is responsible for the payment of all organizational and
operating expenses of the Fund, including brokerage fees and commissions; taxes
or governmental fees; interest; fees and expenses of the non-interested person
trustees; clerical and shareholder service staff salaries; office space and
other office expenses; fees and expenses incurred by the Fund in connection with
membership in investment company organizations; legal, auditing and accounting
expenses; expenses of registering shares under federal and state securities
laws; insurance expenses; fees and expenses of the custodian, transfer agent,
dividend disbursing agent, shareholder service agent, administrator, accounting
and pricing services agent and underwriter of the Fund; expenses, including
clerical expenses, of issue, sale, redemption or repurchase of shares of the
Fund; the cost of preparing and distributing reports and notices to
shareholders, the cost of printing or preparing prospectuses and statements of
additional information for delivery to the Fund's shareholders; the cost of
printing or preparing statements, reports or other documents to shareholders;
expenses of shareholders' meetings and proxy solicitations; and such
extraordinary or non-recurring expenses as may arise, including litigation to
which the Fund may be a party and indemnification of the Trust's trustees and
officers with respect thereto. The Fund will only be liable for organizational
expenses when the Fund reaches $10,000,000 in assets or when the Fund has been
in existence for at least one year.
The Fund retains AmeriPrime Financial Services, Inc. (the
"Administrator") to manage the Fund's business affairs and provide the Fund with
administrative services, including all regulatory reporting and necessary office
equipment, personnel and facilities. The Administrator receives a monthly fee
from the Fund equal to an annual average rate of 0.10% of the Fund's average
daily net assets up to fifty million dollars, 0.075% of the Fund's average daily
net assets from fifty to one hundred million dollars and 0.050% of the Fund's
average daily net assets over one hundred million
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dollars (subject to a minimum annual payment of $30,000). In addition, the
Advisor will reimburse the Administrator for organizational expenses advanced by
the Administrator. The Fund retains American Data Services, Inc., P.O. Box 5536,
Hauppauge, New York 11788-0132 (the "Transfer Agent") to serve as transfer
agent, dividend paying agent and shareholder service agent. The Trust retains
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092 (the "Distributor") to act as the principal distributor
of the Fund's shares. Kenneth D. Trumpfheller, officer and sole shareholder of
the Administrator and the Distributor, is an officer and trustee of the Trust.
The services of the Administrator, Transfer Agent and Distributor are operating
expenses paid by the Fund.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Advisor may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute
portfolio transactions. The Advisor (not the Fund) may pay certain financial
institutions (which may include banks, brokers, securities dealers and other
industry professionals) a "servicing fee" for performing certain administrative
functions for the Fund shareholders to the extent these institutions are allowed
to do so by applicable statute, rule or regulation.
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS
This section contains general information about various types of
securities and investment techniques that the Fund may purchase or employ.
EQUITY SECURITIES
The fund will invest primarily in U.S. equity securities consisting of
common stock, preferred stock and common stock equivalents such as convertible
preferred stock and convertible debentures, rights and warrants. Convertible
preferred stock is preferred stock that can be converted into common stock
pursuant to its terms. Convertible debentures are debt instruments that can be
converted into common stock pursuant to their terms. The Fund will not invest
more that 5% of its net assets in convertible preferred stock, convertible
debentures, rights or warrants. The Fund reserves the right to invest in foreign
stocks, through the purchase of American Depository Receipts (ADRs), provided
the companies have substantial operations in the U.S. and do not exceed 5% of
the Fund's net assets. ADRs are dollar-denominated receipts that are generally
issued in registered form by domestic banks, and represent the deposit with the
bank of a security of a foreign issuer.
FIXED INCOME SECURITIES
Although the Fund intends to invest primarily in U.S. common stocks, the Advisor
reserves the right, during periods of unusually high interest rates or unusual
market conditions, to invest in fixed income securities for preservation of
capital, total return and capital gain purposes, if the Advisor believes that
such a position would best serve the Fund's investment objective. Fixed income
securities include corporate debt securities, U.S. government securities and
participation interests in such securities. Fixed income securities are
generally considered to be interest rate sensitive, which means that their value
will generally decrease when interest rates rise and increase when interest
rates fall. Securities
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<PAGE>
with shorter maturities, while offering lower yields, generally provide greater
price stability than longer term securities and are less affected by changes in
interest rates.
CORPORATE DEBT SECURITIES - Corporate debt securities are long
and short term debt obligations issued by companies (such as publicly issued and
privately placed bonds, notes and commercial paper). The Advisor considers
corporate debt securities to be of investment grade quality if they are rated A
or higher by Standard & Poor's Corporation, or Moody's Investors Services, Inc.,
or if unrated, determined by the Advisor to be of comparable quality. Investment
grade debt securities generally have adequate to strong protection of principal
and interest payments. In the lower end of this category, credit quality may be
more susceptible to potential future changes in circumstances and the securities
have speculative elements. The Fund will not invest more than 5% of the value of
its net assets in securities that are below investment grade.
U.S. GOVERNMENT OBLIGATIONS - U.S. government obligations may
be backed by the credit of the government as a whole or only by the issuing
agency. U.S. Treasury bonds, notes, and bills and some agency securities, such
as those issued by the Federal Housing Administration and the Government
National Mortgage Association (GNMA), are backed by the full faith and credit of
the U.S. government as to payment of principal and interest and are the highest
quality government securities. Other securities issued by U.S. government
agencies or instrumentalities, such as securities issued by the Federal Home
Loan Banks and the Federal Home Loan Mortgage Corporation, are supported only by
the credit of the agency that issued them, and not by the U.S. government.
Securities issued by the Federal Farm Credit System, the Federal Land Banks, and
the Federal National Mortgage Association (FNMA) are supported by the agency's
right to borrow money from the U.S. Treasury under certain circumstances, but
are not backed by the full faith and credit of the U.S. government.
INVESTMENT TECHNIQUES
GENERAL
The Fund, on occasion, may write covered call options on securities
held within the portfolio, for income purposes, provided that such investments
do not exceed 5% of the Fund's net assets. The Fund may not engage in short
sales of any kind. For income purposes, the Fund may lend its portfolio
securities from time to time, provided that such transactions do not exceed 5%
of the Fund's net assets.
REPURCHASE AGREEMENTS - The Fund may invest in repurchase
agreements fully collateralized by U.S. Government obligations. A repurchase
agreement is a short-term investment in which the purchaser (i.e., the Fund)
acquires ownership of a U.S. Government obligation (which may be of any
maturity) and the seller agrees to repurchase the obligation at a future time at
a set price, thereby determining the yield during the purchaser's holding period
(usually not more than seven days from the date of purchase). Any repurchase
transaction in which the Fund engages will require full collateralization of the
seller's obligation during the entire term of the repurchase agreement. In the
event of a bankruptcy or other default of the seller, the Fund could experience
both delays in liquidating the underlying security and losses in value. However,
the Fund intends to enter into repurchase agreements only with Star Bank, N.A.
(the Fund's Custodian), other banks with assets of $1 billion or more and
registered securities dealers determined by the Advisor (subject to review by
the Board of Trustees) to be creditworthy. The Advisor monitors the
creditworthiness of the banks and securities dealers with which the Fund engages
in repurchase transactions.
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<PAGE>
GENERAL INFORMATION
FUNDAMENTAL POLICIES. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. The investment objective of the Fund may be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. Any such
change may result in the Fund having an investment objective different from the
objective which the shareholders considered appropriate at the time of
investment in the Fund.
PORTFOLIO TURNOVER. The Fund does not intend to purchase or sell
securities for short term trading purposes. However, if the objectives of the
Fund would be better served, short-term profits or losses may be realized from
time to time. It is anticipated that the Fund will hold most securities from 1
to 5 years at a time and that portfolio turnover will average less than 45%.
SHAREHOLDER RIGHTS. Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. When
matters are submitted to shareholders for a vote, each shareholder is entitled
to one vote for each whole share he owns and fractional votes for fractional
shares he owns. All shares of the Fund have equal voting rights and liquidation
rights.
PERFORMANCE INFORMATION
The Fund may periodically advertise "average annual total return." The
"average annual total return" of the Fund refers to the average annual
compounded rate of return over the stated period that would equate an initial
amount invested at the beginning of a stated period to the ending redeemable
value of the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions.
The Fund may also periodically advertise its total return over various
periods in addition to the value of a $10,000 investment (made on the date of
the initial public offering of the Fund's shares) as of the end of a specified
period. The "total return" for the Fund refers to the percentage change in the
value of an account between the beginning and end of the stated period, assuming
no activity in the account other than reinvestment of dividends and capital
gains distributions.
The Fund may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including the Standard &
Poor's (S&P) 500 Index or the Dow Jones Industrial Average.
The advertised performance data of the Fund is based on historical
performance and is not intended to indicate future performance. Rates of total
return quoted by the Fund may be higher or lower than past quotations, and there
can be no assurance that any rate of total return will be maintained. The
principal value of an investment in the Fund will fluctuate so that a
shareholder's shares, when redeemed, may be worth more or less than the
shareholder's original investment.
Investment Advisor Administrator
IMS Capital Management, Inc. AmeriPrime Financial Services, Inc.
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<PAGE>
10159 S.E. Sunnyside Road, Suite 330 1793 Kingswood Drive, Suite 200
Portland, Oregon 97015 Southlake, Texas 76092
Custodian Distributor
Star Bank, N.A. AmeriPrime Financial Securities, Inc.
P.O. Box 641082 1793 Kingswood Drive, Suite 200
Cincinnati, Ohio 45264 Southlake, Texas 76092
Transfer Agent (all purchase and Independent Auditors
redemption requests) McCurdy & Associates CPA's, Inc.
American Data Services, Inc. 27955 Clemens Road
P.O. Box 5536 Westlake, Ohio 44145
Hauppauge, New York 11788-0132
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell its
shares in any state to any person to whom it is unlawful to make such offer in
such state.
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TABLE OF CONTENTS PAGE
SUMMARY OF FUND EXPENSES...................................................... 2
Shareholder Transaction Expenses.................................... 2
Annual Fund Operating Expenses...................................... 2
FINANCIAL HIGHLIGHTS...........................................................2
THE FUND ..................................................................... 3
INVESTMENT OBJECTIVE AND STRATEGIES.......................................... 3
HOW TO INVEST IN THE FUND..................................................... 5
Initial Purchase..................................................... 5
By Mail .................................................. 5
By Wire ................................................... 6
Additional Investments.............................................. 6
Automatic Investment Plan........................................... 6
Tax Sheltered Retirement Plans....................................... 7
Other Purchase Information........................................... 7
HOW TO REDEEM SHARES.......................................................... 7
By Mail ............................................................ 7
By Telephone......................................................... 8
Additional Information................................................8
SHARE PRICE CALCULATION....................................................... 8
DIVIDENDS AND DISTRIBUTIONS................................................... 9
TAXES ......................................................................9
OPERATION OF THE FUND.........................................................10
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS....................11
Equity Securities................................................... 11
Fixed Income Securities............................................. 12
Corporate Debt Securities...................................12
U.S. Government Obligations.................................12
Investment Techniques................................................12
General.....................................................12
GENERAL INFORMATION...........................................................13
Fundamental Policies.................................................13
Portfolio Turnover.................................................. 13
Shareholder Rights...................................................13
PERFORMANCE INFORMATION.......................................................13
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FOUNTAINHEAD SPECIAL VALUE FUND
PROSPECTUS February 13, 1998
c/o Jenswold, King & Associates, Inc.
Two Post Oak Central
1980 Post Oak Blvd., Suite 2400
Houston, Texas 77056-3898
For Information, Shareholder Services and Requests:
(800) 868-9535
Fountainhead Special Value Fund ("Fund") is a mutual fund whose
investment objective is to provide long term capital growth. The Fund's Advisor,
Jenswold, King & Associates, Inc., seeks to achieve the objective by investing
primarily in a broad range of equity securities believed by the Advisor to be
selling at attractive prices relative to their intrinsic value.
The Fund is "no-load," which means there are no sales charges or
commissions. In addition, there are no 12b-1 fees, distribution expenses or
deferred sales charges which are borne by the shareholders. The Fund is one of
the mutual funds comprising AmeriPrime Funds, an open-end management investment
company, and is distributed by AmeriPrime Financial Securities, Inc.
This Prospectus provides the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information has been filed with the Securities and
Exchange Commission ("SEC") dated February 13, 1998, which is incorporated
herein by reference and can be obtained without charge by calling the Fund at
the phone number listed above. The SEC maintains a Web Site (http://www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding registrants that file electronically
with the SEC.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
ASA029D1-121197-1
<PAGE>
SUMMARY OF FUND EXPENSES
The expense information provided below is based on operating expenses
incurred during the most recent fiscal year. The expenses are expressed as a
percentage of average net assets. The Example should not be considered a
representation of future Fund performance or expenses, both of which may vary.
Shareholders should be aware that the Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Fund. In addition, the Fund does not
have a 12b-1 Plan.
Shareholder Transaction Expenses
Sales Load Imposed on Purchases.............................................NONE
Sales Load Imposed on Reinvested Dividends..................................NONE
Deferred Sales Load.........................................................NONE
Redemption Fees.............................................................NONE
Exchange Fees...............................................................NONE
Annual Fund Operating Expenses (as a percentage of average net assets)*
Management Fees (after fee waiver)........................................0.___%
12b-1 Charges...............................................................NONE
Other Expenses (after reimbursement)......................................0.___%
Total Fund Operating Expenses (after reimbursement)........................1.25%
* Expense information has been restated to reflect current fees.
The tables above are provided to assist an investor in understanding the direct
and indirect expenses that an investor may incur as a shareholder in the Fund.
Example
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- ------
$13 $40 $69 $151
FINANCIAL HIGHLIGHTS
The following condensed supplementary financial information for the
period December 23, 1996 (commencement of operations) through October 31, 1997,
is derived from the audited financial statements of the Fund. The financial
statements of the Fund have been audited by McCurdy & Associates CPA's, Inc.,
independent public accountants and are included in the Fund's Annual Report. The
Annual Report contains additional performance information and is available upon
request and without charge.
[INSERT FINANCIAL HIGHLIGHTS]
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THE FUND
Fountainhead Special Value Fund ("Fund") was organized as a series of
AmeriPrime Funds, an Ohio business trust ("Trust"), on October 20, 1995, and
commenced operations on December 23, 1996. This prospectus offers shares of the
Fund and each share represents an undivided, proportionate interest in the Fund.
The investment advisor to the Fund is Jenswold, King & Associates, Inc.
("Advisor").
INVESTMENT OBJECTIVE AND STRATEGIES
The investment objective of the Fund is to provide long term capital
growth. The Fund seeks to achieve the objective by investing primarily in a
broad range of equity securities which the Advisor believes to be selling at
attractive prices relative to their intrinsic value. It is anticipated that an
emphasis will be placed on domestic small-cap and mid-cap equity securities
(those with a market capitalization between $50 million and $5 billion).
The Advisor is a bottom-up value manager selecting securities based on
a method the Adviser calls the "Business Valuation Approach". This
highly-disciplined "Approach" seeks to identify attractive investment
opportunities using a broad definition of value, uncovering securities often
overlooked by other investors. The Advisor believes value can be found in
different types of securities at different points in the economic cycle. The
Advisor's buy criteria consist of three elements. The Advisor will buy a stock
trading at a discount to: 1) its five-year projected earnings growth rate
(unlike many typical value managers who buy only low P/E or price/book stocks),
2) its seven-year historical valuation based on its price-to-earnings,
price/book, price/cash flow, or price/sales ratios, or 3) its private-market
value (based on its projected level of cash flows, balance sheet
characteristics, future earnings, and payments made for similar companies in
mergers and acquisitions). These criteria allow the Advisor to purchase growth
stocks, but at a reasonable price. While it is anticipated that the Fund will
diversify its investments across a range of industries/sectors, certain
industries are likely to be overweighed compared to others because the Advisor
seeks the best investment values regardless of industry. The Advisor retains the
flexibility to invest in securities of various market capitalizations.
The Advisor generally intends to stay fully invested (subject to
liquidity requirements and defensive purposes) in common stock and common stock
equivalents (such as securities convertible into common stocks) regardless of
the movement of stock prices. However, the Fund may invest in preferred stocks,
bonds, corporate debt and U.S. government obligations when the Advisor believes
that these securities offer opportunities to further the Fund's investment
objective. While the Fund ordinarily will invest in common stocks of U.S.
companies, it may invest in foreign companies through the purchase of American
Depository Receipts.
For temporary defensive purposes under abnormal market or economic
conditions, the Fund may hold all or a portion of its assets in money market
instruments (including money market funds) or U.S. government repurchase
agreements. The Fund may also invest in such instruments at any time to maintain
liquidity or pending selection of investments in accordance with its policies.
If the Fund acquires securities of a money market fund, the shareholders of the
Fund will be subject to duplicative management fees.
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<PAGE>
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, the Fund cannot give any assurance that its investment objective
will be achieved. In addition, you should be aware that the Advisor has no prior
experience in managing investment companies and that the Fund has no operating
history. Rates of total return quoted by the Fund may be higher or lower than
past quotations, and there can be no assurance that any rate of total return
will be maintained. See "Investment Policies and Techniques and Risk
Considerations" for a more detailed discussion of the Fund's investment
practices.
HOW TO INVEST IN THE FUND
Shares of the Fund are sold on a continuous basis, and you may invest
any amount you choose, as often as you wish, subject to a minimum initial
investment of $5,000 ($2,000 for IRAs) and minimum subsequent investments of
$1,000. For corporate retirement plans, however, there is no minimum for
separate employee accounts. Investors choosing to purchase or redeem their
shares through a broker/dealer or other institution may be charged a fee by that
institution. Investors choosing to purchase or redeem shares directly from the
Fund will not incur charges on purchases or redemptions. To the extent
investments of individual investors are aggregated into an omnibus account
established by an investment adviser, broker or other intermediary, the account
minimums apply to the omnibus account, not to the account of the individual
investor.
Initial Purchase
By Mail - You may purchase shares of the Fund by completing and signing
the investment application form which accompanies this Prospectus and mailing
it, in proper form, together with a check (subject to the above minimum amounts)
made payable to Fountainhead Special Value Fund, and sent the P.O. Box listed
below. If you prefer overnight delivery, use the overnight address listed below.
U.S. Mail:
THE NEWCAP CONTRARIAN FUND
PROSPECTUS February 13, 1998
23775 Commerce Park Road
Cleveland, Ohio 44122
For Information, Shareholder Services and Requests:
Call toll free: 800-466-7678
Local: 216-514-5151
The NewCap Contrarian Fund (the "Fund") is a no-load mutual fund whose
investment objective is to provide maximum long term growth. The Fund seeks to
achieve its objective by aggressively investing world-wide in securities of
growing companies which its Advisor, Newport Investment Advisors, Inc. believes
are attractively priced and offer investment value. The Fund's aggressive
investment approach may be appropriate for investors who seek potentially high
long term returns and are willing to accept the risks inherent in that approach,
including potentially significant fluctuations in the Fund's share price. The
Fund is a non-diversified fund, and this Prospectus provides additional
information relating to the additional risks associated with
non-diversification.
The Fund is "no-load," which means there are no sales charges or
commissions. The Fund is one of the mutual funds comprising AmeriPrime Funds, an
open-end management investment company, and is distributed by AmeriPrime
Financial Securities, Inc.
This Prospectus provides the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information dated February 13, 1998, which has been
filed with the Securities and Exchange Commission (the "SEC"), is incorporated
herein by reference and can be obtained without charge by calling the Fund at
the phone number listed above. The SEC maintains a Web Site (http://www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding registrants that file electronically
with the SEC.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
ASA029CE-121197-1
<PAGE>
SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund. The expense information is based on the most recent fiscal year. The
expenses are expressed as a percentage of average net assets. The Example should
not be considered a representation of future Fund performance or expenses, both
of which may vary.
Shareholders should be aware that the Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Fund. Unlike most other mutual funds,
the Fund does not pay directly for transfer agency, pricing, custodial, auditing
or legal services, nor does it pay directly any general administrative or other
significant operating expenses (except for 12b-1 fees). The Advisor pays all of
the operating expenses of the Fund except 12b-1 fees, brokerage, taxes,
interest, fees and expenses of non-interested person trustees and extraordinary
expenses.
Shareholder Transaction Expenses
Sales Load Imposed on Purchases.............................................NONE
Sales Load Imposed on Reinvested Dividends..................................NONE
Deferred Sales Load.........................................................NONE
Redemption Fees.............................................................NONE
Exchange Fees...............................................................NONE
Annual Fund Operating Expenses (as a percentage of average net assets)
Management Fees........................................................... 2.50%
12b-1 Fees1................................................................0.25%
Other Expenses.............................................................0.08%
Total Fund Operating Expenses..............................................2.83%
1 The Fund incurs 12b-1 fees of .25% of average net assets. Long-term
shareholders may pay more than the economic equivalent of the maximum front-end
sales loads permitted by the National Association of Securities Dealers.
The tables above are provided to assist an investor in understanding the direct
and indirect expenses that an investor may incur as a shareholder in the Fund.
- 2 -
<PAGE>
Example
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$29 $88 $150 $317
THE FUND
The NewCap Contrarian Fund, formerly known as the MAXIM Contrarian Fund
(the "Fund"), was organized as a non-diversified series of AmeriPrime Funds, an
Ohio business trust (the "Trust"), on December 26, 1995, and commenced
operations on May 2, 1996. This prospectus offers shares of the Fund and each
share represents an undivided, proportionate interest in the Fund. The
investment advisor to the Fund is Newport Investment Advisors, Inc. (the
"Advisor").
FINANCIAL HIGHLIGHTS
The following condensed supplementary financial information for the
fiscal year ended October 31, 1997, is derived from the audited financial
statements of the Fund. The financial statements of the Fund have been audited
by McCurdy & Associates CPA's, Inc., independent public accountants, and are
included in the Statement of Additional Information. The Fund's Annual Report
contains additional performance information and will be made available upon
request and without charge.
[INSERT HIGHLIGHTS]
INVESTMENT OBJECTIVE AND STRATEGIES
The investment objective of the Fund is to provide maximum long term
growth. The Fund seeks to achieve its objective by aggressively investing
world-wide in securities of growing companies which the Advisor believes are
attractively priced and offer investment value. Unlike many mutual funds with
this investment objective, the Fund will attempt to achieve its investment
objective in declining equity markets as well as in rising equity markets. The
Fund's aggressive investment approach may be appropriate for investors who seek
potentially high long term returns and are willing to accept the risks inherent
in that approach, including potentially significant fluctuations in the Fund's
share price.
The Fund focuses its investments primarily on equity securities of
domestic, multinational and foreign companies whose potential values generally
are not recognized by the investing public. Such companies include viable
businesses that have been overlooked by other investors, or that are unpopular
as a result of actual or anticipated unfavorable developments or other factors
affecting the companies, their industries or markets in general. The Advisor may
choose smaller companies that it believes offer significant investment value,
even if they involve more risk. Dividend and interest income received from
portfolio securities is not a significant consideration.
- 3 -
<PAGE>
The Advisor generally intends to stay fully invested (subject to
liquidity requirements and defensive purposes) in equity and debt securities of
U.S. and foreign companies. THE FUND MAY INVEST IN DEBT SECURITIES OF ALL TYPES
AND QUALITIES, INCLUDING LOWER QUALITY SECURITIES WITH MORE RISK. THE FUND MAY
ALSO PURSUE INVESTMENT OPPORTUNITIES BY INVESTING IN INDEXED SECURITIES,
OPTIONS, FUTURES CONTRACTS AND PRECIOUS METALS, AND BY USING OTHER AGGRESSIVE
INVESTMENT TECHNIQUES INVOLVING LEVERAGE AND OTHER RISKS. In selecting
securities for inclusion in the Fund's portfolio, the Advisor may analyze
issuers of all sizes, industries, and geographical markets, including restricted
securities of companies issued in private placements. To retain investment
flexibility, the Fund may be non-diversified to some extent. To the extent that
the Fund invests a significant portion of its assets in a few issuers'
securities, the performance of the Fund could be significantly affected by the
performance of those issuers.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, the Fund cannot give any assurance that its investment objective
will be achieved. In addition, the aggressive investment techniques of the Fund
may entail risks not encountered by the average mutual fund. SEE "INVESTMENT
POLICIES, TECHNIQUES AND RISK CONSIDERATIONS" FOR A MORE DETAILED DISCUSSION OF
THE FUND'S INVESTMENT PRACTICES. Investors should also be aware that the Advisor
has no prior experience in acting as an investment adviser to a mutual fund and
that the Fund has no operating history.
HOW TO INVEST IN THE FUND
Shares of the Fund are sold on a continuous basis, and you may invest
any amount you choose, as often as you wish, subject to a minimum initial
investment of $2,500 ($1,000 for IRA retirement accounts) and minimum subsequent
investments of $500 ($100 for IRA retirement accounts). Investors choosing to
purchase or redeem their shares through a broker/dealer or other institution may
be charged a fee by that institution. Investors choosing to purchase or redeem
shares directly from the Fund will not incur charges on purchases or
redemptions.
Initial Purchase
By Mail - You may purchase shares of the Fund by completing and signing
the investment application form which accompanies this Prospectus and mailing
it, in proper form, together with a check (subject to the above minimum amounts)
made payable to The NewCap Contrarian Fund, and sent to the P.O. Box listed
below. If you prefer overnight delivery, use the overnight address listed below.
U.S. Mail: The NewCap Contrarian Fund Overnight:The NewCap Contrarian Fund
c/o American Data Services, Inc. c/o American Data Services, Inc.
P.O. Box 5536 Hauppauge Corporate Center
Hauppauge, New York 11788-0132 150 Motor Parkway
Hauppauge, New York 11760
Your purchase of shares of the Fund will be effected at the next share price
calculated after receipt of your investment.
- 4 -
<PAGE>
By Wire - You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call the Transfer Agent at 516-385-9580 to set up your account
and obtain an account number. You should be prepared at that time to provide the
information on the application. Then, you should provide your bank with the
following information for purposes of wiring your investment:
Star Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: The NewCap Contrarian Fund Master Account
D.D.A. # 485772974
Account Name _________________ (write in shareholder name)
For the Account # ______________ (write in account number)
You are required to mail a signed application to the Custodian at the
above address in order to complete your initial wire purchase. Wire orders will
be accepted only on a day on which the Fund, Custodian and Transfer Agent are
open for business. A wire purchase will not be considered made until the wired
money is received and the purchase is accepted by the Fund. Any delays which may
occur in wiring money, including delays which may occur in processing by the
banks, are not the responsibility of the Fund or the Transfer Agent. There is
presently no fee for the receipt of wired funds, but the right to charge
shareholders for this service is reserved by the Fund.
Additional Investments
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain your name, the name of your
account(s), your account number(s), and the name of the Fund. Checks should be
made payable to The NewCap Contrarian Fund and should be sent to the address
listed above. A bank wire should be sent as outlined above.
Tax Sheltered Retirement Plans
Since the Fund is oriented to longer term investments, shares of the
Fund may be an appropriate investment medium for tax sheltered retirement plans,
including: individual retirement accounts (IRAs); simplified employee pensions
(SEPs); 401(k) plans; qualified corporate pension and profit sharing plans (for
employees); 403(b)(7) tax deferred retirement plans (for employees of public
school systems and certain types of charitable organizations); and other
qualified retirement plans. You should contact the Transfer Agent for the
procedure to open an IRA or SEP plan, as well as more specific information
regarding these retirement plan options. Consultation with an attorney or tax
adviser regarding these plans is advisable. Custodial fees for an IRA will be
paid by the shareholder by redemption of sufficient shares of the Fund from the
IRA unless the fees are paid directly to the IRA custodian. You can obtain
information about the IRA custodial fees from the Transfer Agent.
Other Purchase Information
Dividends begin to accrue after you become a shareholder. The Fund does
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases
- 5 -
<PAGE>
and to refuse to sell to any person are reserved by the Fund. If your check or
wire does not clear, you will be responsible for any loss incurred by the Fund.
If you are already a shareholder, the Fund can redeem shares from any
identically registered account in the Fund as reimbursement for any loss
incurred. You may be prohibited or restricted from making future purchases in
the Fund.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after
the redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. Presently there is no charge for wire
redemptions; however, the Fund reserves the right to charge for this service.
Any charges for wire redemptions will be deducted from the shareholder's Fund
account by redemption of shares. Investors choosing to purchase or redeem their
shares through a broker/dealer or other institution may be charge a fee by that
institution. Investors choosing to purchase or redeem shares directly from the
Fund will not incur charges on purchases or redemptions.
By Mail - You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:
The NewCap Contrarian Fund
c/o American Data Services, Inc.
P.O. Box 5536
Hauppauge, New York 11788-0132
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the Fund
requires that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Fund or American Data Services, Inc., a
shareholder, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
By Telephone - You may redeem any part of your account in the Fund by
calling the Transfer Agent at (516) 385-9580. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at
any time by the Fund or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Fund, although neither the Fund nor the Transfer Agent
- 6 -
<PAGE>
has ever experienced difficulties in receiving and in a timely fashion
responding to telephone requests for redemptions or exchanges. If you are unable
to reach the Fund by telephone, you may request a redemption or exchange by
mail.
Additional Information - If you are not certain of the requirements for
a redemption please call the Transfer Agent at (516) 385-9580. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing or under any emergency circumstances, as determined
by the Securities and Exchange Commission, the Fund may suspend redemptions or
postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $1,000 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax adviser concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption at any time if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
After the initial three months of the Fund's operations, any account opened
during the initial three month period will be subject to the redemption
provisions described above.
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day the Fund is open for business on which there
is sufficient trading in the Fund's securities to materially affect the net
asset value. The net asset value per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Advisor's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Advisor determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Advisor, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Advisor believes such prices accurately
- 7 -
<PAGE>
reflect the fair market value of such securities. A pricing service utilizes
electronic data processing techniques based on yield spreads relating to
securities with similar characteristics to determine prices for normal
institutional-size trading units of debt securities without regard to sale or
bid prices. When prices are not readily available from a pricing service, or
when restricted or illiquid securities are being valued, securities are valued
at fair value as determined in good faith by the Advisor, subject to review of
the Board of Trustees. Short term investments in fixed income securities with
maturities of less than 60 days when acquired, or which subsequently are within
60 days of maturity, are valued by using the amortized cost method of valuation,
which the Board has determined will represent fair value.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on an annual basis, and intends to
distribute its net long term capital gains and its net short term capital gains
at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. An election to receive a cash payment of dividends and/or
capital gain distributions may be made in the application to purchase shares or
by separate written notice to the Transfer Agent. Shareholders will receive a
confirmation statement reflecting the payment and reinvestment of dividends and
summarizing all other transactions. If cash payment is requested, a check
normally will be mailed within five business days after the payable date. If you
withdraw your entire account, all dividends accrued to the time of withdrawal,
including the day of withdrawal, will be paid at that time. You may elect to
have distributions on shares held in IRAs and 403(b) plans paid in cash only if
you are 59 1/2 years old or permanently and totally disabled or if you otherwise
qualify under the applicable plan.
TAXES
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
the Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any realized
capital gains.
For federal income tax purposes, dividends paid by the Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 (the "Tax Reform Act"), all distributions of net
short term capital gains to individuals are taxed at the same rate as ordinary
income. All distributions of net capital gains to corporations are taxed at
regular corporate rates. Any distributions designated as being made from net
realized long term capital gains are taxable to shareholders as long term
capital gains regardless of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisers regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
- 8 -
<PAGE>
On the application or other appropriate form, the Fund will request the
shareholder's certified taxpayer identification number (social security number
for individuals) and a certification that the shareholder is not subject to
backup withholding. Unless the shareholder provides this information, the Fund
will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the Fund may
make a corresponding charge against the account.
OPERATION OF THE FUND
The Fund is a non-diversified series of AmeriPrime Funds, an open-end
management investment company organized as an Ohio business trust on August 8,
1995. The Board of Trustees supervises the business activities of the Fund. Like
other mutual funds, the Fund retains various organizations to perform
specialized services.
The Fund retains Newport Investment Advisors, Inc., 23775 Commerce Park
Road, Cleveland, Ohio 44122 (the "Advisor") to manage the Fund's investments.
The Advisor, an Ohio corporation, provides investment management services to
taxable and tax-exempt clients, and currently manages approximately $250 million
in assets. Kenneth M. Holeski, controlling shareholder of the Advisor, has
served as the President of the Advisor since its founding in 1989. He is
primarily responsible for the day-to-day management of the portfolio of the
Fund. Prior to 1996, Mr. Holeski was also the Vice President of Newport
Evaluation Services, Inc., a consulting firm that primarily monitors the
performance of money managers on behalf of retirement funds.
The Fund is authorized to pay the Advisor a fee equal to an annual
average rate of 2.50% of its average daily net assets. The Advisor pays all of
the operating expenses of the Fund except 12b-1 fees, brokerage, taxes,
interest, fees and expenses of non-interested person trustees and extraordinary
expenses. It should be noted that most mutual funds pay their own operating
expenses directly, while the Fund's expenses, except those specified above, are
paid by the Advisor. The 12b-1 fees paid by the Fund are described below under
"Distribution Plan."
The Fund retains AmeriPrime Financial Services, Inc. (the
"Administrator") to manage the Fund's business affairs and provide the Fund with
administrative services, including all regulatory reporting and necessary office
equipment, personnel and facilities. The Administrator receives a monthly fee
from the Advisor equal to an annual average rate of 0.10% of the Fund's average
daily net assets up to fifty million dollars, 0.075% of the Fund's average daily
net assets from fifty to one hundred million dollars and 0.050% of the Fund's
average daily net assets over one hundred million dollars (subject to a minimum
annual payment of $30,000). The Fund retains American Data Services, Inc., P.O.
Box 5536, Hauppauge, New York 11788-0132 (the "Transfer Agent") to serve as
transfer agent, dividend paying agent and shareholder service agent. The Trust
retains AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092 (the "Distributor") to act as the principal distributor
of the Fund's shares. Kenneth D. Trumpfheller, officer and sole shareholder of
the Administrator and the Distributor, is an officer and trustee of the Trust.
The services of the Administrator, Transfer Agent and Distributor are operating
expenses paid by the Advisor.
- 9 -
<PAGE>
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Advisor may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute
portfolio transactions. WRP Investments, Inc., a registered broker dealer of
which Mr. Holeski is a registered representative and branch manager, may receive
brokerage commissions from the Fund on a basis comparable to trades placed with
unaffiliated broker dealers. Mr. Holeski does not receive compensation on these
trades.
DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (the "Plan") under which the Fund pays the
Advisor an amount which is accrued daily and paid monthly, at an annual rate of
0.25% of the average daily net assets of the Fund. Amounts are paid at that rate
regardless of actual distribution expenses incurred. Amounts paid under the Plan
by the Fund are in addition to the advisory fee described above and are paid to
the Advisor for services it provides and the expenses it bears in the
distribution of the Fund's shares, including overhead and telephone expenses;
printing and distribution of prospectuses and reports used in connection with
the offering of the Fund's shares to prospective investors; and preparation,
printing and distribution of sales literature and advertising materials. In
addition, payments to the Advisor under the Plan may reimburse the Advisor for
payments it makes to selected dealers and administrators which have entered into
Service Agreements with the Advisor for services provided to shareholders of the
Fund. The services provided by selected dealers pursuant to the Plan are
primarily designed to promote the sale of shares of the Fund and include the
furnishing of office space and equipment, telephone facilities, personnel and
assistance to the Fund in servicing such shareholders. The service provided by
administrators pursuant to the Plan are designed to provide support services to
the Fund and include establishing and maintaining shareholders' accounts and
records, processing purchase and redemption transactions, answering routine
client inquiries regarding the Fund, and providing such other services to the
Fund as the Fund may reasonably request. The Advisor may also compensate such
dealers and administrators out of its own assets.
INVESTMENT POLICIES, TECHNIQUES AND RISK CONSIDERATIONS
The Fund may invest in the following portfolio securities, may engage
in the following practices and will be subject to the following risks and
limitations:
EQUITY SECURITIES. The Fund emphasizes investments in common stocks,
which represent an equity (ownership) interest in a corporation. The Fund also
may buy securities such as convertible debt, preferred stock, warrants, or other
securities exchangeable for shares of common stock, and publicly-traded
partnership interests. In selecting equity investments for the Fund, the Advisor
considers the fundamental value of the issuing company as well as market and
economic factors that affect securities prices.
DEBT SECURITIES. The Fund may invest up to 35% of its assets in debt
securities, including lower quality, high yielding debt securities if it
believes that doing so will result in capital appreciation or will earn income
on idle cash. The Fund may buy debt securities of all types and qualities issued
by both domestic and foreign issuers, including government securities, corporate
bonds and debentures, commercial paper, and certificates of deposit.
- 10 -
<PAGE>
Lower quality debt securities (commonly called "junk bonds") often are
considered to be speculative and involve greater risk of default or price change
due to changes in the issuer's creditworthiness or changes in economic
conditions. The market prices of these securities will fluctuate over time, may
fluctuate more than higher quality securities and may decline significantly in
periods of general economic difficulty, which may follow periods of rising
interest rates. The market for lower quality securities may be less liquid than
the market for securities of higher quality. Furthermore, the liquidity of lower
quality securities may be affected by the market's perception of their credit
quality. Therefore, judgment may at times play a greater role in valuing these
securities than in the case of higher quality securities, and it also may be
more difficult during certain adverse market conditions to sell lower quality
securities at their fair value to meet redemption requests or to respond to
changes in the market.
FOREIGN SECURITIES. Foreign debt and equity securities, and securities
denominated in or indexed to foreign currencies may be affected by the strength
of those currencies relative to the U.S. dollar, or by political or economic
developments in foreign countries. These developments could include restrictions
on foreign currency transactions and rules of exchange, or changes in
administrations or monetary policies of foreign governments. Foreign securities
purchased using foreign currencies may incur currency conversion costs. Foreign
issuers and brokers may not be subject to accounting standards or governmental
supervision comparable to U.S. issuers and brokers, and there may be less public
information about their operations. In addition, foreign markets may be less
liquid or more volatile than U.S. markets, and may offer less protection to
investors.
The Fund may enter into forward contracts (agreements to exchange one
currency for another at a future date) to manage currency risks and to
facilitate transactions in foreign securities. Although currency forward
contracts can be used to protect the Fund from adverse exchange rate changes,
the Fund may incur a loss if the Advisor incorrectly predicts foreign currency
values.
There is no limitation on the amount of the Fund's assets that may be
invested in foreign securities or in any one country or currency, except that no
more than 35% of the Fund's assets may be invested in companies operating
exclusively in one foreign country.
INDEXED SECURITIES. The Fund may invest in indexed securities whose
value is linked to currencies, interest rates, commodities, indices, or other
financial indicators (the "reference index"). Most indexed securities are short
to intermediate term fixed-income securities whose values at maturity or
interest rates rise or fall according to the change in one or more specified
underlying instruments. Indexed securities may be positively or negatively
indexed (i.e., their value may increase or decrease if the underlying instrument
appreciates), and may have return characteristics similar to direct investments
in the underlying instrument or to one or more options on the underlying
instrument. Indexed securities may be more volatile than the underlying
instrument itself. Because their performance is tied to a reference index, a
fund investing in indexed securities bears the risk of changes in the reference
index in addition to being exposed to the credit risk of the issuer of the
security.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Fund buys a
security at one price and simultaneously agrees to sell it back later at a
higher price. The repurchase date is usually within seven days of the original
purchase. If the other party to a repurchase agreement becomes bankrupt or
otherwise defaults on its obligation to repurchase the security, the Fund may
experience delays in
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recovering its cash. To the extent that the value of the security purchased has
decreased in the meantime, the Fund could experience a loss. The Fund's
repurchase agreements are fully collateralized.
WHEN ISSUED SECURITIES AND FORWARD COMMITMENTS. The Fund may buy and
sell securities on a when-issued or delayed delivery basis, with payment and
delivery taking place at a future date. The price and interest rate that will be
received on the securities are each fixed at the time the buyer enters into the
commitment. The Fund may enter into such forward commitments if it holds, and
maintains until the settlement date in a separate account at the Fund's
Custodian, cash or U.S. government securities in an amount sufficient to meet
the purchase price. Forward commitments involve a risk of loss if the value of
the security to be purchased declines prior to the settlement date. Any change
in value could increase fluctuations in the Fund's share price and yield.
Although the Fund will generally enter into forward commitments with the
intention of acquiring securities for its portfolio, the Fund may dispose of a
commitment prior to the settlement if the Advisor deems it appropriate to do so.
BORROWING AND LEVERAGE; REVERSE REPURCHASE AGREEMENTS. The Fund may
borrow from banks up to one third of its total assets, and the Fund may pledge
assets in connection with such borrowings. The Fund also may engage in reverse
repurchase agreements in which the Fund sells a security to another party, such
as a bank, broker-dealer or other financial institution, and simultaneously
agrees to buy it back later at a higher price. While a reverse repurchase
agreement is outstanding, the Fund generally will direct its custodian to
segregate cash and appropriate liquid assets to cover its obligations under the
agreement. The Fund will enter into reverse repurchase agreements only with
parties whose creditworthiness has been reviewed and deemed satisfactory by the
Advisor. Except for reverse repurchase agreements that it fully collateralizes,
the Fund aggregates reverse repurchase agreements with its bank borrowings for
purposes of limiting borrowings to one third of its total assets.
If the Fund makes additional investments while borrowings are
outstanding, this may be construed as a form of leverage. The Fund's objective
would be to pursue investment opportunities with yields that exceed the cost of
the borrowings. This leverage may exaggerate changes in the Fund's share value
and the gains and losses on the Fund's investment. Leverage also creates
interest expenses that may exceed the return on investments made with the
borrowings.
LENDING. The Fund may lend securities to broker-dealers and other
institutions as a means of earning additional income. Under the lending policy
authorized by the Board of Trustees and implemented by the Advisor in response
to requests of broker-dealers or institutional investors which the Advisor deems
qualified, the borrower must agree to maintain collateral, in the form of cash
or U.S. government obligations, with the Fund at least equal to 100% of the
current market value of the loaned securities. The Fund will continue to receive
dividends or interest on the loaned securities and may terminate such loans at
any time or reacquire such securities in time to vote on any matter when the
Board of Trustees determines voting to be in the Fund's interest. If the
borrower becomes bankrupt or otherwise defaults on its obligations, the Fund
could experience delays in recovering its securities. To the extent that, in the
meantime, the value of securities loaned had increased, the Fund could
experience a loss if the borrower had not maintained sufficient collateral.
Loans, in the aggregate, may not exceed one third of the Fund's total assets.
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<PAGE>
SHORT SALES. If the Fund anticipates that the price of a security will
decline, it may sell the security short. When the Fund engages in a short sale,
it sells a security it does not own and, to complete the sale, borrows the same
security from a broker or other institution. The Fund must replace the borrowed
security by purchasing it at the market price at the time the Fund chooses to
close the short sale, or at the time it is required to do so by the lender,
whichever is earlier. The Fund may make a profit or loss depending upon whether
the market price of the security decreases or increases between the date of the
short sale and the date on which the Fund must replace the borrowed security.
In connection with its short sales, the Fund will be required to
maintain a segregated account with its custodian of cash or U.S. Government
Securities or other high grade liquid debt securities equal to the market value
of the securities sold less any collateral deposited with its broker. The Fund
will limit its short sales so that no more than 25% of its net assets (less all
its liabilities other than obligations under the short sales) will be deposited
as collateral and allocated to the segregated account. However, the segregated
account and deposits will not necessarily limit the Fund's potential loss on a
short sale, which is unlimited. The Fund limits short sales of any one issuer's
securities to 2% of the Fund's total assets and to 2% of any one class of the
issuer's securities.
OPTIONS AND FUTURES CONTRACTS. The Fund may buy and sell options and
futures contracts to manage its exposure to changing interest rates, security
prices, currency exchange rates and precious metal prices. Some options and
futures strategies, including selling futures, buying puts, and writing calls,
hedge the Fund's investment against price fluctuations. Other strategies,
including buying futures, writing puts, and buying calls, tend to increase
market exposure. Options and futures may be combined with each other or with
forward contracts in order to adjust the risk and return characteristics of the
overall strategy. The Fund may invest in options and futures based on any type
of security, index, or currency related to its investments, including options
and futures traded on foreign exchanges and options not traded on exchanges. The
Fund also may invest in precious metal options and futures.
Options and futures can be volatile investments, and involve certain
risks. If the Advisor applies a hedge at an inappropriate time or judges market
conditions incorrectly, options and futures strategies may lower the Fund's
return. Options and futures traded on foreign exchanges generally are not
regulated by U.S. authorities, and may offer less liquidity and less protection
to the Fund if the other party to the contract defaults. The Fund also could
experience losses if the prices of its options and futures positions were poorly
correlated with its other investments, or if it could not close out its
positions because of an illiquid secondary market. In addition, losses from
certain futures transactions are potentially unlimited.
The Fund will not hedge more than 25% of its total assets by selling
futures or writing calls under normal conditions. In general, the Fund also will
not write put options if its settlement obligations would exceed 25% of its
total assets. In addition, the Fund will not buy futures, put options or call
options for other than hedging purposes with an aggregate value exceeding 5% of
its total assets.
PRECIOUS METALS. The Fund may invest up to 5% of its total assets in gold,
silver, platinum or other precious metals. Gold and other precious metals have
been subject to substantial price fluctuations over short periods of time and
may be affected by unpredictable international monetary
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<PAGE>
and other governmental policies, and economic and social conditions. In
addition, the Fund may invest without limitation in securities of companies
principally engaged in exploration, mining or processing of gold or other
precious metals and minerals. These securities involve additional risk because
the price volatility of precious metals has an increased impact on their market
value.
ZERO COUPON DEBT SECURITIES AND PAY-IN-KIND SECURITIES. The Fund may
invest in zero coupon securities and pay-in-kind securities. Zero coupon debt
securities do not make interest payments; instead, they are sold at a discount
from face value and are redeemed at face value when they mature. Pay-in-kind
securities pay all or a portion of their interest or dividends in the form of
additional securities. Both these types of bonds allow an issuer to avoid the
need to generate cash to meet current interest payments and, accordingly, may
involve greater credit risks than debt securities that make regular interest
payments. Because these securities do not pay current income, their prices can
be very volatile when interest rates change. In calculating its daily dividend,
the Fund takes into account as income a portion of the difference between the
bond's purchase price and its face value. Although zero coupon bonds and
pay-in-kind bonds pay no interest to holders prior to maturity, interest on
these securities is reported as income to the Fund and included with dividends
paid to the Fund's shareholders, if any. These dividends must be made from the
Fund's cash assets or, if necessary, from the proceeds of sales of portfolio
securities. The Fund will not be able to purchase additional income-producing
securities with cash used to pay such dividends, and its current income
ultimately may be reduced as a result.
ILLIQUID INVESTMENTS. Under the supervision of and pursuant to the
guidelines adopted by the Board of Trustees, the Advisor determines which of the
Fund's investments are classified as illiquid. Illiquid securities generally
include securities which cannot be disposed of promptly and in the ordinary
course of business without taking a reduced price. Securities may be illiquid
due to contractual or legal restrictions on resale or lack of a ready market.
The absence of a trading market can make it difficult to ascertain a market
value for illiquid investments. Disposing of illiquid investments may involve
time-consuming negotiation and legal expenses, and it may be difficult or
impossible for the Fund to sell them promptly at an acceptable price. The Fund
may not invest more than 15% of its net assets in illiquid investments.
OTHER INVESTMENTS. For temporary defensive purposes under adverse
market conditions, the Fund may invest up to 100% of its assets in cash
equivalents, money market funds and investment grade debt securities. The Fund
may also invest in such instruments at any time to maintain liquidity or pending
selection of investments in accordance with its policies. To the extent the Fund
acquires the securities of a money market fund, the shareholders of the Fund
will be subject to duplicative management fees.
Investment Risks.
The aggressive investment techniques of the Fund may entail risks not
encountered by the average mutual fund. Some techniques, such as short sales,
use of put and call options and futures, investments in foreign securities,
leverage and short term trading, may be considered speculative and could result
in higher operating expenses.
GENERAL INFORMATION
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<PAGE>
FUNDAMENTAL POLICIES. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. The investment objective of the Fund may be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. Any such
change may result in the Fund having an investment objective different from the
objective which the shareholders considered appropriate at the time of
investment in the Fund.
PORTFOLIO TURNOVER. The Fund does not intend to purchase or sell
securities for short term trading purposes. The Fund will, however, sell any
portfolio security (without regard to the length of time it has been held) when
the Advisor believes that market conditions, creditworthiness factors or general
economic conditions warrant such action. The Fund's portfolio turnover rate may
exceed 100%. To the extent it does, the brokerage commissions incurred by the
Fund will generally be higher than those incurred by a fund with a lower
portfolio turnover rate. The Fund's higher turnover rate may result in the
realization, for federal tax purposes, of more net capital gains, and any
distributions derived from such gains may be ordinary income.
SHAREHOLDER RIGHTS. Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. However,
the Declaration of Trust contains provisions which authorize the shareholders to
call a meeting under certain circumstances. When matters are submitted to
shareholders for a vote, each shareholder is entitled to one vote for each whole
share he owns and fractional votes for fractional shares he owns. All shares of
the Fund have equal voting rights and liquidation rights. As of December 3,
1997, Cheryl and Kenneth Holeski may be deemed to control the Fund as a result
of their beneficial ownership of the shares of the Fund.
PERFORMANCE INFORMATION
The Fund may periodically advertise "average annual total return." The
"average annual total return" of the Fund refers to the average annual
compounded rate of return over the stated period that would equate an initial
amount invested at the beginning of a stated period to the ending redeemable
value of the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions.
The Fund may also periodically advertise its total return over various
periods in addition to the value of a $10,000 investment (made on the date of
the initial public offering of the Fund's shares) as of the end of a specified
period. The "total return" for the Fund refers to the percentage change in the
value of an account between the beginning and end of the stated period, assuming
no activity in the account other than reinvestment of dividends and capital
gains distributions.
The Fund may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including the Standard &
Poor's (S&P) 500 Index or the Dow Jones Industrial Average.
The advertised performance data of the Fund is based on historical
performance and is not intended to indicate future performance. Rates of total
return quoted by the Fund may be higher or lower than past quotations, and there
can be no assurance that any rate of total return will be
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<PAGE>
maintained. The principal value of an investment in the Fund will fluctuate so
that a shareholder's shares, when redeemed, may be worth more or less than the
shareholder's original investment.
INVESTMENT ADVISOR ADMINISTRATOR
Newport Investment Advisors, Inc. AmeriPrime Financial Services, Inc.
23775 Commerce Park Road 1793 Kingswood Drive, Suite 200
Cleveland, Ohio 44122 Southlake, Texas 76092
CUSTODIAN DISTRIBUTOR
Star Bank, N.A. AmeriPrime Financial Securities, Inc.
P.O. Box 640749 1793 Kingswood Drive, Suite 200
Cincinnati, Ohio 45264 Southlake, Texas 76092
TRANSFER AGENT (ALL PURCHASE AND AUDITORS
redemption requests) McCurdy & Associates CPA's, Inc.
American Data Services, Inc. 27955 Clemens Road
P.O. Box 5536 Westlake, Ohio 44145
Hauppauge, New York 11788-0132
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell its
shares in any state to any person to whom it is unlawful to make such offer in
such state.
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<PAGE>
TABLE OF CONTENTS
PAGE#
SUMMARY OF FUND EXPENSES..................................................... 2
Shareholder Transaction Expenses.................................... 2
Annual Fund Operating Expenses...................................... 2
THE FUND .................................................................... 3
FINANCIAL HIGHLIGHTS......................................................... 3
INVESTMENT OBJECTIVE AND STRATEGIES.......................................... 3
HOW TO INVEST IN THE FUND.................................................... 4
Initial Purchase.................................................... 4
By Mail ................................................... 4
By Wire .................................................. 4
Additional Investments.............................................. 5
Tax Sheltered Retirement Plans...................................... 5
Other Purchase Information.......................................... 5
HOW TO REDEEM SHARES......................................................... 6
By Mail ........................................................... 6
By Telephone........................................................ 6
Additional Information.............................................. 7
SHARE PRICE CALCULATION...................................................... 7
DIVIDENDS AND DISTRIBUTIONS.................................................. 8
TAXES .................................................................... 8
OPERATION OF THE FUND......................................................... 9
DISTRIBUTION PLAN............................................................ 10
INVESTMENT POLICIES, TECHNIQUES AND RISK CONSIDERATIONS...................... 10
Equity Securities...........................................10
Debt Securities............................................ 10
Foreign Securities......................................... 11
Indexed Securities......................................... 11
Repurchase Agreements...................................... 11
When Issued Securities and Forward Commitments............. 12
Borrowing and Leverage; Reverse Repurchase Agreements.......12
Lending .................................................. 12
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<PAGE>
Short Sales................................................ 13
Options and Futures Contracts...............................13
Zero Coupon Debt Securities and Pay-in-Kind Securities..... 14
Illiquid Investments....................................... 14
Non-Diversification and Concentration...................... 14
Defensive Investments...................................... 14
Investment Risks.................................................... 15
GENERAL INFORMATION.......................................................... 15
Fundamental Policies.................................................15
Portfolio Turnover.................................................. 15
Shareholder Rights.................................................. 15
PERFORMANCE INFORMATION...................................................... 15
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<PAGE>
Fountainhead Special Value Fund Fountainhead Special Value Fund
c/o American Data Services, Inc. c/o American Data Services, Inc.
P.O. Box 5536 Hauppauge Corporate Center
Hauppauge, New York 11788-0132 150 Motor Parkway
Hauppauge, New York 11760
Your purchase of shares of the Fund will be effected at the next share price
calculated after receipt of your investment.
By Wire - You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call the Transfer Agent at 800-868-9535 to set up your account
and obtain an account number. You should be prepared at that time to provide the
information on the application. Then, you should provide your bank with the
following information for purposes of wiring your investment:
Star Bank, N.A. Cinti/Trust
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<PAGE>
ABA #0420-0001-3
Attn: Fountainhead Special Value Fund
D.D.A. #483885570
Account Name _________________ (write in shareholder
name) For the Account # ______________ (write in
account number)
You are required to mail a signed application to the Custodian at the
above address in order to complete your initial wire purchase. Wire orders will
be accepted only on a day on which the Fund, Custodian and Transfer Agent are
open for business. A wire purchase will not be considered made until the wired
money is received and the purchase is accepted by the Fund. Any delays which may
occur in wiring money, including delays which may occur in processing by the
banks, are not the responsibility of the Fund or the Transfer Agent. There is
presently no fee for the receipt of wired funds, but the right to charge
shareholders for this service is reserved by the Fund.
Additional Investments
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain your name, the name of your
account(s), your account number(s), and the name of the Fund. Checks should be
made payable to Fountainhead Special Value Fund and should be sent to the
address listed above. A bank wire should be sent as outlined above.
Tax Sheltered Retirement Plans
Since the Fund is oriented to longer term investments, shares of the
Fund may be an appropriate investment medium for tax sheltered retirement plans,
including: individual retirement plans (IRAs); simplified employee pensions
(SEPs); 401(k) plans; qualified corporate pension and profit sharing plans (for
employees); tax deferred investment plans (for employees of public school
systems and certain types of charitable organizations); and other qualified
retirement plans. You should contact the Transfer Agent for the procedure to
open an IRA or SEP plan, as well as more specific information regarding these
retirement plan options. Consultation with an attorney or tax adviser regarding
these plans is advisable. Custodial fees for an IRA will be paid by the
shareholder by redemption of sufficient shares of the Fund from the IRA unless
the fees are paid directly to the IRA custodian. You can obtain information
about the IRA custodial fees from the Transfer Agent.
Other Purchase Information
Dividends begin to accrue after you become a shareholder. The Fund does
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases and to
refuse to sell to any person are reserved by the Fund. If your check or wire
does not clear, you will be responsible for any loss incurred by the Fund. If
you are already a shareholder, the Fund can redeem shares from any identically
registered account in the Fund as reimbursement for any loss incurred. You may
be prohibited or restricted from making future purchases in the Fund.
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<PAGE>
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after
the redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. Presently there is no charge for wire
redemptions; however, the Fund reserves the right to charge for this service.
Any charges for wire redemptions will be deducted from the shareholder's Fund
account by redemption of shares. Investors choosing to purchase or redeem their
shares through a broker/dealer or other institution may be charged a fee by that
institution.
By Mail - You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:
Fountainhead Special Value Fund
c/o American Data Services, Inc.
P.O. Box 5536
Hauppauge, New York 11788-0132
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the Fund
requires that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Fund or American Data Services, Inc., a
shareholder, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
By Telephone - You may redeem any part of your account in the Fund by
calling the Transfer Agent at (800) 868-9535. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at
any time by the Fund or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Fund, although neither the Fund nor the Transfer Agent has ever
experienced difficulties in receiving and in a timely fashion responding to
telephone requests for redemptions or exchanges. If you are unable to reach the
Fund by telephone, you may request a redemption or exchange by mail.
Additional Information - If you are not certain of the requirements for
a redemption please call the Transfer Agent at (800) 868-9535. Redemptions
specifying a certain date or share price
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<PAGE>
cannot be accepted and will be returned. You will be mailed the proceeds on or
before the fifth business day following the redemption. However, payment for
redemption made against shares purchased by check will be made only after the
check has been collected, which normally may take up to fifteen days. Also, when
the New York Stock Exchange is closed (or when trading is restricted) for any
reason other than its customary weekend or holiday closing or under any
emergency circumstances, as determined by the Securities and Exchange
Commission, the Fund may suspend redemptions or postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $2,000 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax adviser concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption at any time if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day on which there is sufficient trading in the
Fund's securities to materially affect the net asset value. The net asset value
per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Advisor's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Advisor determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Advisor, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Advisor believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Advisor, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within 60 days of maturity, are valued
- 7 -
<PAGE>
by using the amortized cost method of valuation, which the Board has determined
will represent fair value.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on an annual basis, and intends to
distribute its net long term capital gains and its net short term capital gains
at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. An election to receive a cash payment of dividends and/or
capital gain distributions may be made in the application to purchase shares or
by separate written notice to the Transfer Agent. Shareholders will receive a
confirmation statement reflecting the payment and reinvestment of dividends and
summarizing all other transactions. If cash payment is requested, a check
normally will be mailed within five business days after the payable date. If you
withdraw your entire account, all dividends accrued to the time of withdrawal,
including the day of withdrawal, will be paid at that time. You may elect to
have distributions on shares held in IRAs and 403(b) plans paid in cash only if
you are 59 1/2 years old or permanently and totally disabled or if you otherwise
qualify under the applicable plan.
TAXES
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
the Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any realized
capital gains.
For federal income tax purposes, dividends paid by the Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 ("Tax Reform Act"), all distributions of net
short-term capital gains to individuals are taxed at the same rate as ordinary
income. All distributions of net capital gains to corporations are taxed at
regular corporate rates. Any distributions designated as being made from net
realized long term capital gains are taxable to shareholders as long term
capital gains regardless of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisers regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
On the application or other appropriate form, the Fund will request the
shareholder's certified taxpayer identification number (social security number
for individuals) and a certification that the shareholder is not subject to
backup withholding. Unless the shareholder provides this information, the Fund
will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually
- 8 -
<PAGE>
for each account for which a certified taxpayer identification number is not
provided. In the event that such a fine is imposed with respect to a specific
account in any year, the Fund may make a corresponding charge against the
account.
OPERATION OF THE FUND
The Fund is a diversified series of AmeriPrime Funds, an open-end
management investment company organized as an Ohio business trust on August 8,
1995. The Board of Trustees supervises the business activities of the Fund. Like
other mutual funds, the Fund retains various organizations to perform
specialized services.
The Fund retains Jenswold, King & Associates, Inc., Two Post Oak
Central, 1980 Post Oak Blvd., Suite 2400, Houston, Texas 77056-3898 ("Advisor")
to manage the Fund's investments. The Advisor is a Houston-based independent
investment advisor that provides value-oriented equity and balanced management
for both taxable and tax-exempt clients and currently manages approximately $775
million in assets. The Advisor is a Texas corporation controlled by Roger E.
King, the Chairman, President and majority shareholder of the Advisor. Mr. King
is primarily responsible for the day-to-day management of the Fund's portfolio.
Mr. King co-founded the firm in 1981 and has served as its president since 1986
and as its chairman since 1993. The Fund is authorized to pay the Advisor a fee
equal to an annual average rate of 1.43% of its average daily net assets. The
Advisor has agreed to waive management fees and reimburse expenses to limit
total net operating expenses for the Fund to not more than 1.25% of its average
daily net assets for at least the next year (through 1998).
The Fund retains AmeriPrime Financial Services, Inc. ("Administrator")
to manage the Fund's business affairs and provide the Fund with administrative
services, including all regulatory reporting and necessary office equipment,
personnel and facilities. The Administrator receives a monthly fee from the
Advisor equal to an annual average rate of 0.10% of the Fund's average daily net
assets up to fifty million dollars, 0.075% of the Fund's average daily net
assets from fifty to one hundred million dollars and 0.050% of the Fund's
average daily net assets over one hundred million dollars (subject to a minimum
annual payment of $30,000). In addition, the Advisor will reimburse the
Administrator for organizational expenses advanced by the Administrator. The
Fund retains American Data Services, Inc., Hauppauge Corporate Center, 150 Motor
Parkway, Hauppauge, New York 11760 ("Transfer Agent") to serve as transfer
agent, dividend paying agent and shareholder service agent. The Trust retains
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092 ("Distributor") to act as the principal distributor of
the Fund's shares. Kenneth D. Trumpfheller, officer and sole shareholder of the
Administrator and the Distributor, is an officer and trustee of the Trust. The
services of the Administrator, Transfer Agent and Distributor are operating
expenses paid by the Advisor.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Advisor may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute
portfolio transactions. The Adviser (not the Fund) may pay certain financial
institutions (which may include banks, brokers, securities dealers and other
industry professionals) a "servicing fee" for performing certain administrative
servicing functions for Fund shareholders to the extent these institutions are
allowed to do so by applicable statute, rule or regulation.
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<PAGE>
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS
This section contains general information about various types of
securities and investment techniques that the Fund may purchase or employ.
Equity Securities
Equity securities consist of common stock, preferred stock and common
stock equivalents (such as convertible preferred stock and convertible
debentures, rights and warrants) and investment companies which invest primarily
in the above. Convertible preferred stock is preferred stock that can be
converted into common stock pursuant to its terms. Convertible debentures are
debt instruments that can be converted into common stock pursuant to their
terms. The Fund will not invest more that 5% of its net assets at the time of
purchase in either rights or warrants. Equity securities also include common
stocks and common stock equivalents of domestic real estate investment trusts
and other companies which operate as real estate corporations or which have a
significant portion of their assets in real estate. The Fund will not acquire
any direct ownership of real estate.
The Fund may invest in foreign equity securities through the purchase
of American Depository Receipts (ADRs). ADRs are dollar-denominated receipts
that are generally issued in registered form by domestic banks, and represent
the deposit with the bank of a security of a foreign issuer. To the extent that
the Fund does invest in foreign securities, such investments may be subject to
special risks, such as changes in restrictions on foreign currency transactions
and rates of exchange, and changes in the administrations or economic and
monetary policies of foreign governments.
Fixed Income Securities
The Fund may invest in fixed income securities. Fixed income securities
include corporate debt securities, U.S. government securities and participation
interests in such securities. Fixed income securities are generally considered
to be interest rate sensitive, which means that their value will generally
decrease when interest rates rise and increase when interest rates fall.
Securities with shorter maturities, while offering lower yields, generally
provide greater price stability than longer term securities and are less
affected by changes in interest rates.
Corporate Debt Securities - Corporate debt securities are long
and short term debt obligations issued by companies (such as publicly issued and
privately placed bonds, notes and commercial paper). The Advisor considers
corporate debt securities to be of investment grade quality if they are rated
BBB or higher by Standard & Poor's Corporation, or Baa or higher by Moody's
Investors Services, Inc., or if unrated, determined by the Advisor to be of
comparable quality. Investment grade debt securities generally have adequate to
strong protection of principal and interest payments. In the lower end of this
category, credit quality may be more susceptible to potential future changes in
circumstances and the securities have speculative elements. The Fund will not
invest more than 5% of the value of its net assets in securities that are below
investment grade.
U.S. Government Obligations - U.S. government obligations may be backed by
the credit of the government as a whole or only by the issuing agency. U.S.
Treasury bonds, notes, and bills and some agency securities, such as those
issued by the Federal Housing Administration and the Government National
Mortgage Association (GNMA), are backed by the full faith and credit of the
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<PAGE>
U.S. government as to payment of principal and interest and are the highest
quality government securities. Other securities issued by U.S. government
agencies or instrumentalities, such as securities issued by the Federal Home
Loan Banks and the Federal Home Loan Mortgage Corporation, are supported only by
the credit of the agency that issued them, and not by the U.S. government.
Securities issued by the Federal Farm Credit System, the Federal Land Banks, and
the Federal National Mortgage Association (FNMA) are supported by the agency's
right to borrow money from the U.S. Treasury under certain circumstances, but
are not backed by the full faith and credit of the U.S. government.
Investment Techniques
The Fund may invest up to 5% of its net assets in repurchase agreements
fully collateralized by U.S. Government obligations, as well as reverse
repurchase agreements. The Fund may engage in short sales, but the percentage of
the Fund's net assets that may be used as collateral or segregated for short
sales is limited to 5%.
When Issued Securities and Forward Commitments - The Fund may
buy and sell securities on a when-issued or delayed delivery basis, with payment
and delivery taking place at a future date. The price and interest rate that
will be received on the securities are each fixed at the time the buyer enters
into the commitment. The Fund may enter into such forward commitments if they
hold, and maintain until the settlement date in a separate account at the Fund's
Custodian, cash or U.S. government securities in an amount sufficient to meet
the purchase price. The Fund will not invest more than 25% of its total assets
in forward commitments. Forward commitments involve a risk of loss if the value
of the security to be purchased declines prior to the settlement date. Any
change in value could increase fluctuations in the Fund's share price and yield.
Although the Fund will generally enter into forward commitments with the
intention of acquiring securities for its portfolio, the Fund may dispose of a
commitment prior to the settlement if the Advisor deems it appropriate to do so.
Loans of Portfolio Securities - The Fund may make short and
long term loans of its portfolio securities. Under the lending policy authorized
by the Board of Trustees and implemented by the Advisor in response to requests
of broker-dealers or institutional investors which the Advisor deems qualified,
the borrower must agree to maintain collateral, in the form of cash or U.S.
government obligations, with the Fund on a daily mark-to-market basis in an
amount at least equal to 102% of the value of the loaned securities. The Fund
will continue to receive dividends or interest on the loaned securities and may
terminate such loans at any time or reacquire such securities in time to vote on
any matter which the Board of Trustees determines to be serious. With respect to
loans of securities, there is the risk that the borrower may fail to return the
loaned securities or that the borrower may not be able to provide additional
collateral.
General
The Fund may invest in mortgage related securities, invest in foreign
securities other than ADR's, and may buy and write put and call options and
futures on stock indices, provided the Fund's investment in each does not exceed
5% of its net assets.
GENERAL INFORMATION
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<PAGE>
Fundamental Policies. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. The investment objective of the Fund may be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. Any such
change may result in the Fund having an investment objective different from the
objective which the shareholders considered appropriate at the time of
investment in the Fund.
Portfolio Turnover. The Fund does not intend to purchase or sell
securities for short term trading purposes. The Fund will, however, sell any
portfolio security (without regard to the length of time it has been held) when
the Advisor believes that changes in its price or underlying value, or general
economic or market conditions, warrant such action. The Fund's portfolio
turnover rate may exceed 100%. To the extent it does, the brokerage commissions
incurred by the Fund will generally be higher than those incurred by a fund with
a lower portfolio turnover rate. The Fund's higher turnover rate may result in
the realization, for federal tax purposes, of more net capital gains, and any
distributions derived from such gains may be ordinary income.
Shareholder Rights. Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. When
matters are submitted to shareholders for a vote, each shareholder is entitled
to one vote for each whole share he owns and fractional votes for fractional
shares he owns. All shares of the Fund have equal voting rights and liquidation
rights.
PERFORMANCE INFORMATION
The Fund may periodically advertise "average annual total return." The
"average annual total return" of the Fund refers to the average annual
compounded rate of return over the stated period that would equate an initial
amount invested at the beginning of a stated period to the ending redeemable
value of the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions.
The Fund may also periodically advertise its total return over various
periods in addition to the value of a $10,000 investment (made on the date of
the initial public offering of the Fund's shares) as of the end of a specified
period. The "total return" for the Fund refers to the percentage change in the
value of an account between the beginning and end of the stated period, assuming
no activity in the account other than reinvestment of dividends and capital
gains distributions.
The Fund may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including the Standard &
Poor's (S&P) Mid Cap Index, the Russell Mid Cap Index, or the S&P 500 Index.
The advertised performance data of the Fund is based on historical
performance and is not intended to indicate future performance. Rates of total
return quoted by the Fund may be higher or
- 12 -
<PAGE>
lower than past quotations, and there can be no assurance that any rate of total
return will be maintained. The principal value of an investment in the Fund will
fluctuate so that a shareholder's shares, when redeemed, may be worth more or
less than the shareholder's original investment.
The Advisor has been managing equity accounts since 1982. The
performance of the accounts with investment objectives, policies and strategies
similar to those of the Fund appears below. The data is provided to illustrate
past performance of the Advisor in managing such accounts, as compared to the
Russell Mid Cap Index. Roger E. King is responsible for the performance of the
accounts and is also responsible for the investment management of the Fund. As
of December 31, 1997, the assets in those accounts totaled approximately $____
million.
[chart showing growth of $10,000 investment from January 1, 1982 through
December 31, 1997, compared to the Russell Mid Cap Index and the Fund]
* The Advisor's total returns by year were as follows: 1982 40.67%, 1983 22.95%,
1984 12.43%, 1985 28.60%, 1986 15.56%, 1987 -5.35%, 1988 27.96%, 1989 25.20%,
1990 -1.04%, 1991 36.86%, 1992 11.40%, 1993 6.50%, 1994 -8.35%, 1995 55.00%,
1996 12.42%, 1997 _____%. The Jenswold, King & Associates, Inc. performance is
the time-weighted, dollar-weighted average total return associated with a
composite of equity income accounts managed by Roger E. King, having objectives
similar to the Fund, and is unaudited. The composite does not include accounts
with less than $1,000,000 in assets or accounts under the Advisor's management
for less than one quarter, because the nature of those accounts make them
inappropriate for purposes of comparison. Performance figures reflected are net
of management fees and net of all expenses, including transaction costs and
commissions. Results include the reinvestment of dividends and capital gains.
The Russell Mid Cap Index is a widely recognized, unmanaged index of
market activity based upon the aggregate performance of a selected portfolio of
publicly traded common stocks, including monthly adjustments to reflect the
reinvestment of dividends and other distributions. The Russell Mid Cap Index
reflects the total return of securities comprising the Index with market
capitalizations ranging from $1 billion to $6 billion, including changes in
market prices as well as accrued investment income, which is presumed to be
reinvested. Performance figures for the Russell Mid Cap Index do not reflect
deduction of transaction costs or expenses, including management fees.
The performance of the accounts managed by the Advisor should not be
considered indicative of future performance of the Fund. Results may
differ because of, among other things, differences in brokerage
commissions, account expenses, including management fees, the size of
positions taken in relation to account size and diversification of
securities, timing of purchases and sales, and availability of cash for
new investments. In addition, the managed accounts are not subject to
certain investment limitations, diversification requirements, and other
restrictions imposed by the Investment Company Act and the Internal
Revenue Code.
The results for different periods may vary.
Investment Advisor Administrator
Jenswold, King and Associates, Inc. AmeriPrime Financial Services, Inc.
Two Post Oak Central 1793 Kingswood Drive, Suite 200
1980 Post Oak Blvd., Suite 2400 Southlake, Texas 76092
Houston, Texas 77056-3898
- 13 -
<PAGE>
Custodian Distributor
Star Bank, N.A. AmeriPrime Financial Securities, Inc.
P.O. Box 641082 1793 Kingswood Drive, Suite 200
Cincinnati, Ohio 45264 Southlake, Texas 76092
Transfer Agent (all purchase and Auditors
redemption requests) McCurdy & Associates CPA's, Inc.
American Data Services, Inc. 27955 Clemens Road
P.O. Box 5536 Westlake, Ohio 44145
Hauppauge, New York 11788-0132
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell its
shares in any state to any person to whom it is unlawful to make such offer in
such state.
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<PAGE>
TABLE OF CONTENTS PAGE
SUMMARY OF FUND EXPENSES............................................ 2
Shareholder Transaction Expenses........................... 2
Annual Fund Operating Expenses............................. 2
FINANCIAL HIGHLIGHTS................................................ 2
THE FUND............................................................ 3
INVESTMENT OBJECTIVE AND STRATEGIES................................. 3
HOW TO INVEST IN THE FUND........................................... 4
Initial Purchase........................................... 4
By Mail............................................ 4
By Wire............................................ 4
Additional Investments..................................... 5
Tax Sheltered Retirement Plans............................. 5
Other Purchase Information.................................. 5
HOW TO REDEEM SHARES................................................ 5
By Mail.................................................... 6
By Telephone............................................... 6
Additional Information..................................... 6
SHARE PRICE CALCULATION............................................. 7
DIVIDENDS AND DISTRIBUTIONS......................................... 7
TAXES............................................................... 8
OPERATION OF THE FUND............................................... 8
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS........... 9
Equity Securities............................................................ 10
Fixed Income Securities.................................... 10
Investment Techniques...................................... 11
General.................................................... 11
GENERAL INFORMATION................................................. 11
Fundamental Policies....................................... 11
Portfolio Turnover......................................... 12
Shareholder Rights......................................... 12
PERFORMANCE INFORMATION............................................. 12
+
<PAGE>
THE NEWCAP CONTRARIAN FUND
PROSPECTUS February 13, 1998
23775 Commerce Park Road
Cleveland, Ohio 44122
For Information, Shareholder Services and Requests:
Call toll free: 800-466-7678
Local: 216-514-5151
The NewCap Contrarian Fund (the "Fund") is a no-load mutual fund whose
investment objective is to provide maximum long term growth. The Fund seeks to
achieve its objective by aggressively investing world-wide in securities of
growing companies which its Advisor, Newport Investment Advisors, Inc. believes
are attractively priced and offer investment value. The Fund's aggressive
investment approach may be appropriate for investors who seek potentially high
long term returns and are willing to accept the risks inherent in that approach,
including potentially significant fluctuations in the Fund's share price. The
Fund is a non-diversified fund, and this Prospectus provides additional
information relating to the additional risks associated with
non-diversification.
The Fund is "no-load," which means there are no sales charges or
commissions. The Fund is one of the mutual funds comprising AmeriPrime Funds, an
open-end management investment company, and is distributed by AmeriPrime
Financial Securities, Inc.
This Prospectus provides the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information dated February 13, 1998, which has been
filed with the Securities and Exchange Commission (the "SEC"), is incorporated
herein by reference and can be obtained without charge by calling the Fund at
the phone number listed above. The SEC maintains a Web Site (http://www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding registrants that file electronically
with the SEC.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
ASA029CE-121197-1
<PAGE>
SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund. The expense information is based on the most recent fiscal year. The
expenses are expressed as a percentage of average net assets. The Example should
not be considered a representation of future Fund performance or expenses, both
of which may vary.
Shareholders should be aware that the Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Fund. Unlike most other mutual funds,
the Fund does not pay directly for transfer agency, pricing, custodial, auditing
or legal services, nor does it pay directly any general administrative or other
significant operating expenses (except for 12b-1 fees). The Advisor pays all of
the operating expenses of the Fund except 12b-1 fees, brokerage, taxes,
interest, fees and expenses of non-interested person trustees and extraordinary
expenses.
Shareholder Transaction Expenses
Sales Load Imposed on Purchases.............................................NONE
Sales Load Imposed on Reinvested Dividends..................................NONE
Deferred Sales Load.........................................................NONE
Redemption Fees.............................................................NONE
Exchange Fees...............................................................NONE
Annual Fund Operating Expenses (as a percentage of average net assets)
Management Fees........................................................... 2.50%
12b-1 Fees1................................................................0.25%
Other Expenses.............................................................0.08%
Total Fund Operating Expenses..............................................2.83%
1 The Fund incurs 12b-1 fees of .25% of average net assets. Long-term
shareholders may pay more than the economic equivalent of the maximum front-end
sales loads permitted by the National Association of Securities Dealers.
The tables above are provided to assist an investor in understanding the direct
and indirect expenses that an investor may incur as a shareholder in the Fund.
- 2 -
<PAGE>
Example
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$29 $88 $150 $317
THE FUND
The NewCap Contrarian Fund, formerly known as the MAXIM Contrarian Fund
(the "Fund"), was organized as a non-diversified series of AmeriPrime Funds, an
Ohio business trust (the "Trust"), on December 26, 1995, and commenced
operations on May 2, 1996. This prospectus offers shares of the Fund and each
share represents an undivided, proportionate interest in the Fund. The
investment advisor to the Fund is Newport Investment Advisors, Inc. (the
"Advisor").
FINANCIAL HIGHLIGHTS
The following condensed supplementary financial information for the
fiscal year ended October 31, 1997, is derived from the audited financial
statements of the Fund. The financial statements of the Fund have been audited
by McCurdy & Associates CPA's, Inc., independent public accountants, and are
included in the Statement of Additional Information. The Fund's Annual Report
contains additional performance information and will be made available upon
request and without charge.
[INSERT HIGHLIGHTS]
INVESTMENT OBJECTIVE AND STRATEGIES
The investment objective of the Fund is to provide maximum long term
growth. The Fund seeks to achieve its objective by aggressively investing
world-wide in securities of growing companies which the Advisor believes are
attractively priced and offer investment value. Unlike many mutual funds with
this investment objective, the Fund will attempt to achieve its investment
objective in declining equity markets as well as in rising equity markets. The
Fund's aggressive investment approach may be appropriate for investors who seek
potentially high long term returns and are willing to accept the risks inherent
in that approach, including potentially significant fluctuations in the Fund's
share price.
The Fund focuses its investments primarily on equity securities of
domestic, multinational and foreign companies whose potential values generally
are not recognized by the investing public. Such companies include viable
businesses that have been overlooked by other investors, or that are unpopular
as a result of actual or anticipated unfavorable developments or other factors
affecting the companies, their industries or markets in general. The Advisor may
choose smaller companies that it believes offer significant investment value,
even if they involve more risk. Dividend and interest income received from
portfolio securities is not a significant consideration.
- 3 -
<PAGE>
The Advisor generally intends to stay fully invested (subject to
liquidity requirements and defensive purposes) in equity and debt securities of
U.S. and foreign companies. THE FUND MAY INVEST IN DEBT SECURITIES OF ALL TYPES
AND QUALITIES, INCLUDING LOWER QUALITY SECURITIES WITH MORE RISK. THE FUND MAY
ALSO PURSUE INVESTMENT OPPORTUNITIES BY INVESTING IN INDEXED SECURITIES,
OPTIONS, FUTURES CONTRACTS AND PRECIOUS METALS, AND BY USING OTHER AGGRESSIVE
INVESTMENT TECHNIQUES INVOLVING LEVERAGE AND OTHER RISKS. In selecting
securities for inclusion in the Fund's portfolio, the Advisor may analyze
issuers of all sizes, industries, and geographical markets, including restricted
securities of companies issued in private placements. To retain investment
flexibility, the Fund may be non-diversified to some extent. To the extent that
the Fund invests a significant portion of its assets in a few issuers'
securities, the performance of the Fund could be significantly affected by the
performance of those issuers.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, the Fund cannot give any assurance that its investment objective
will be achieved. In addition, the aggressive investment techniques of the Fund
may entail risks not encountered by the average mutual fund. SEE "INVESTMENT
POLICIES, TECHNIQUES AND RISK CONSIDERATIONS" FOR A MORE DETAILED DISCUSSION OF
THE FUND'S INVESTMENT PRACTICES. Investors should also be aware that the Advisor
has no prior experience in acting as an investment adviser to a mutual fund and
that the Fund has no operating history.
HOW TO INVEST IN THE FUND
Shares of the Fund are sold on a continuous basis, and you may invest
any amount you choose, as often as you wish, subject to a minimum initial
investment of $2,500 ($1,000 for IRA retirement accounts) and minimum subsequent
investments of $500 ($100 for IRA retirement accounts). Investors choosing to
purchase or redeem their shares through a broker/dealer or other institution may
be charged a fee by that institution. Investors choosing to purchase or redeem
shares directly from the Fund will not incur charges on purchases or
redemptions.
Initial Purchase
By Mail - You may purchase shares of the Fund by completing and signing
the investment application form which accompanies this Prospectus and mailing
it, in proper form, together with a check (subject to the above minimum amounts)
made payable to The NewCap Contrarian Fund, and sent to the P.O. Box listed
below. If you prefer overnight delivery, use the overnight address listed below.
U.S. Mail: The NewCap Contrarian Fund Overnight:The NewCap Contrarian Fund
c/o American Data Services, Inc. c/o American Data Services, Inc.
P.O. Box 5536 Hauppauge Corporate Center
Hauppauge, New York 11788-0132 150 Motor Parkway
Hauppauge, New York 11760
Your purchase of shares of the Fund will be effected at the next share price
calculated after receipt of your investment.
- 4 -
<PAGE>
By Wire - You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call the Transfer Agent at 516-385-9580 to set up your account
and obtain an account number. You should be prepared at that time to provide the
information on the application. Then, you should provide your bank with the
following information for purposes of wiring your investment:
Star Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: The NewCap Contrarian Fund Master Account
D.D.A. # 485772974
Account Name _________________ (write in shareholder name)
For the Account # ______________ (write in account number)
You are required to mail a signed application to the Custodian at the
above address in order to complete your initial wire purchase. Wire orders will
be accepted only on a day on which the Fund, Custodian and Transfer Agent are
open for business. A wire purchase will not be considered made until the wired
money is received and the purchase is accepted by the Fund. Any delays which may
occur in wiring money, including delays which may occur in processing by the
banks, are not the responsibility of the Fund or the Transfer Agent. There is
presently no fee for the receipt of wired funds, but the right to charge
shareholders for this service is reserved by the Fund.
Additional Investments
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain your name, the name of your
account(s), your account number(s), and the name of the Fund. Checks should be
made payable to The NewCap Contrarian Fund and should be sent to the address
listed above. A bank wire should be sent as outlined above.
Tax Sheltered Retirement Plans
Since the Fund is oriented to longer term investments, shares of the
Fund may be an appropriate investment medium for tax sheltered retirement plans,
including: individual retirement accounts (IRAs); simplified employee pensions
(SEPs); 401(k) plans; qualified corporate pension and profit sharing plans (for
employees); 403(b)(7) tax deferred retirement plans (for employees of public
school systems and certain types of charitable organizations); and other
qualified retirement plans. You should contact the Transfer Agent for the
procedure to open an IRA or SEP plan, as well as more specific information
regarding these retirement plan options. Consultation with an attorney or tax
adviser regarding these plans is advisable. Custodial fees for an IRA will be
paid by the shareholder by redemption of sufficient shares of the Fund from the
IRA unless the fees are paid directly to the IRA custodian. You can obtain
information about the IRA custodial fees from the Transfer Agent.
Other Purchase Information
Dividends begin to accrue after you become a shareholder. The Fund does
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases
- 5 -
<PAGE>
and to refuse to sell to any person are reserved by the Fund. If your check or
wire does not clear, you will be responsible for any loss incurred by the Fund.
If you are already a shareholder, the Fund can redeem shares from any
identically registered account in the Fund as reimbursement for any loss
incurred. You may be prohibited or restricted from making future purchases in
the Fund.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after
the redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. Presently there is no charge for wire
redemptions; however, the Fund reserves the right to charge for this service.
Any charges for wire redemptions will be deducted from the shareholder's Fund
account by redemption of shares. Investors choosing to purchase or redeem their
shares through a broker/dealer or other institution may be charge a fee by that
institution. Investors choosing to purchase or redeem shares directly from the
Fund will not incur charges on purchases or redemptions.
By Mail - You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:
The NewCap Contrarian Fund
c/o American Data Services, Inc.
P.O. Box 5536
Hauppauge, New York 11788-0132
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the Fund
requires that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Fund or American Data Services, Inc., a
shareholder, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
By Telephone - You may redeem any part of your account in the Fund by
calling the Transfer Agent at (516) 385-9580. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at
any time by the Fund or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Fund, although neither the Fund nor the Transfer Agent
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has ever experienced difficulties in receiving and in a timely fashion
responding to telephone requests for redemptions or exchanges. If you are unable
to reach the Fund by telephone, you may request a redemption or exchange by
mail.
Additional Information - If you are not certain of the requirements for
a redemption please call the Transfer Agent at (516) 385-9580. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing or under any emergency circumstances, as determined
by the Securities and Exchange Commission, the Fund may suspend redemptions or
postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $1,000 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax adviser concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption at any time if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
After the initial three months of the Fund's operations, any account opened
during the initial three month period will be subject to the redemption
provisions described above.
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day the Fund is open for business on which there
is sufficient trading in the Fund's securities to materially affect the net
asset value. The net asset value per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Advisor's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Advisor determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Advisor, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Advisor believes such prices accurately
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reflect the fair market value of such securities. A pricing service utilizes
electronic data processing techniques based on yield spreads relating to
securities with similar characteristics to determine prices for normal
institutional-size trading units of debt securities without regard to sale or
bid prices. When prices are not readily available from a pricing service, or
when restricted or illiquid securities are being valued, securities are valued
at fair value as determined in good faith by the Advisor, subject to review of
the Board of Trustees. Short term investments in fixed income securities with
maturities of less than 60 days when acquired, or which subsequently are within
60 days of maturity, are valued by using the amortized cost method of valuation,
which the Board has determined will represent fair value.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on an annual basis, and intends to
distribute its net long term capital gains and its net short term capital gains
at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. An election to receive a cash payment of dividends and/or
capital gain distributions may be made in the application to purchase shares or
by separate written notice to the Transfer Agent. Shareholders will receive a
confirmation statement reflecting the payment and reinvestment of dividends and
summarizing all other transactions. If cash payment is requested, a check
normally will be mailed within five business days after the payable date. If you
withdraw your entire account, all dividends accrued to the time of withdrawal,
including the day of withdrawal, will be paid at that time. You may elect to
have distributions on shares held in IRAs and 403(b) plans paid in cash only if
you are 59 1/2 years old or permanently and totally disabled or if you otherwise
qualify under the applicable plan.
TAXES
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
the Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any realized
capital gains.
For federal income tax purposes, dividends paid by the Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 (the "Tax Reform Act"), all distributions of net
short term capital gains to individuals are taxed at the same rate as ordinary
income. All distributions of net capital gains to corporations are taxed at
regular corporate rates. Any distributions designated as being made from net
realized long term capital gains are taxable to shareholders as long term
capital gains regardless of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisers regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
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On the application or other appropriate form, the Fund will request the
shareholder's certified taxpayer identification number (social security number
for individuals) and a certification that the shareholder is not subject to
backup withholding. Unless the shareholder provides this information, the Fund
will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the Fund may
make a corresponding charge against the account.
OPERATION OF THE FUND
The Fund is a non-diversified series of AmeriPrime Funds, an open-end
management investment company organized as an Ohio business trust on August 8,
1995. The Board of Trustees supervises the business activities of the Fund. Like
other mutual funds, the Fund retains various organizations to perform
specialized services.
The Fund retains Newport Investment Advisors, Inc., 23775 Commerce Park
Road, Cleveland, Ohio 44122 (the "Advisor") to manage the Fund's investments.
The Advisor, an Ohio corporation, provides investment management services to
taxable and tax-exempt clients, and currently manages approximately $250 million
in assets. Kenneth M. Holeski, controlling shareholder of the Advisor, has
served as the President of the Advisor since its founding in 1989. He is
primarily responsible for the day-to-day management of the portfolio of the
Fund. Prior to 1996, Mr. Holeski was also the Vice President of Newport
Evaluation Services, Inc., a consulting firm that primarily monitors the
performance of money managers on behalf of retirement funds.
The Fund is authorized to pay the Advisor a fee equal to an annual
average rate of 2.50% of its average daily net assets. The Advisor pays all of
the operating expenses of the Fund except 12b-1 fees, brokerage, taxes,
interest, fees and expenses of non-interested person trustees and extraordinary
expenses. It should be noted that most mutual funds pay their own operating
expenses directly, while the Fund's expenses, except those specified above, are
paid by the Advisor. The 12b-1 fees paid by the Fund are described below under
"Distribution Plan."
The Fund retains AmeriPrime Financial Services, Inc. (the
"Administrator") to manage the Fund's business affairs and provide the Fund with
administrative services, including all regulatory reporting and necessary office
equipment, personnel and facilities. The Administrator receives a monthly fee
from the Advisor equal to an annual average rate of 0.10% of the Fund's average
daily net assets up to fifty million dollars, 0.075% of the Fund's average daily
net assets from fifty to one hundred million dollars and 0.050% of the Fund's
average daily net assets over one hundred million dollars (subject to a minimum
annual payment of $30,000). The Fund retains American Data Services, Inc., P.O.
Box 5536, Hauppauge, New York 11788-0132 (the "Transfer Agent") to serve as
transfer agent, dividend paying agent and shareholder service agent. The Trust
retains AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092 (the "Distributor") to act as the principal distributor
of the Fund's shares. Kenneth D. Trumpfheller, officer and sole shareholder of
the Administrator and the Distributor, is an officer and trustee of the Trust.
The services of the Administrator, Transfer Agent and Distributor are operating
expenses paid by the Advisor.
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Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Advisor may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute
portfolio transactions. WRP Investments, Inc., a registered broker dealer of
which Mr. Holeski is a registered representative and branch manager, may receive
brokerage commissions from the Fund on a basis comparable to trades placed with
unaffiliated broker dealers. Mr. Holeski does not receive compensation on these
trades.
DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (the "Plan") under which the Fund pays the
Advisor an amount which is accrued daily and paid monthly, at an annual rate of
0.25% of the average daily net assets of the Fund. Amounts are paid at that rate
regardless of actual distribution expenses incurred. Amounts paid under the Plan
by the Fund are in addition to the advisory fee described above and are paid to
the Advisor for services it provides and the expenses it bears in the
distribution of the Fund's shares, including overhead and telephone expenses;
printing and distribution of prospectuses and reports used in connection with
the offering of the Fund's shares to prospective investors; and preparation,
printing and distribution of sales literature and advertising materials. In
addition, payments to the Advisor under the Plan may reimburse the Advisor for
payments it makes to selected dealers and administrators which have entered into
Service Agreements with the Advisor for services provided to shareholders of the
Fund. The services provided by selected dealers pursuant to the Plan are
primarily designed to promote the sale of shares of the Fund and include the
furnishing of office space and equipment, telephone facilities, personnel and
assistance to the Fund in servicing such shareholders. The service provided by
administrators pursuant to the Plan are designed to provide support services to
the Fund and include establishing and maintaining shareholders' accounts and
records, processing purchase and redemption transactions, answering routine
client inquiries regarding the Fund, and providing such other services to the
Fund as the Fund may reasonably request. The Advisor may also compensate such
dealers and administrators out of its own assets.
INVESTMENT POLICIES, TECHNIQUES AND RISK CONSIDERATIONS
The Fund may invest in the following portfolio securities, may engage
in the following practices and will be subject to the following risks and
limitations:
EQUITY SECURITIES. The Fund emphasizes investments in common stocks,
which represent an equity (ownership) interest in a corporation. The Fund also
may buy securities such as convertible debt, preferred stock, warrants, or other
securities exchangeable for shares of common stock, and publicly-traded
partnership interests. In selecting equity investments for the Fund, the Advisor
considers the fundamental value of the issuing company as well as market and
economic factors that affect securities prices.
DEBT SECURITIES. The Fund may invest up to 35% of its assets in debt
securities, including lower quality, high yielding debt securities if it
believes that doing so will result in capital appreciation or will earn income
on idle cash. The Fund may buy debt securities of all types and qualities issued
by both domestic and foreign issuers, including government securities, corporate
bonds and debentures, commercial paper, and certificates of deposit.
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Lower quality debt securities (commonly called "junk bonds") often are
considered to be speculative and involve greater risk of default or price change
due to changes in the issuer's creditworthiness or changes in economic
conditions. The market prices of these securities will fluctuate over time, may
fluctuate more than higher quality securities and may decline significantly in
periods of general economic difficulty, which may follow periods of rising
interest rates. The market for lower quality securities may be less liquid than
the market for securities of higher quality. Furthermore, the liquidity of lower
quality securities may be affected by the market's perception of their credit
quality. Therefore, judgment may at times play a greater role in valuing these
securities than in the case of higher quality securities, and it also may be
more difficult during certain adverse market conditions to sell lower quality
securities at their fair value to meet redemption requests or to respond to
changes in the market.
FOREIGN SECURITIES. Foreign debt and equity securities, and securities
denominated in or indexed to foreign currencies may be affected by the strength
of those currencies relative to the U.S. dollar, or by political or economic
developments in foreign countries. These developments could include restrictions
on foreign currency transactions and rules of exchange, or changes in
administrations or monetary policies of foreign governments. Foreign securities
purchased using foreign currencies may incur currency conversion costs. Foreign
issuers and brokers may not be subject to accounting standards or governmental
supervision comparable to U.S. issuers and brokers, and there may be less public
information about their operations. In addition, foreign markets may be less
liquid or more volatile than U.S. markets, and may offer less protection to
investors.
The Fund may enter into forward contracts (agreements to exchange one
currency for another at a future date) to manage currency risks and to
facilitate transactions in foreign securities. Although currency forward
contracts can be used to protect the Fund from adverse exchange rate changes,
the Fund may incur a loss if the Advisor incorrectly predicts foreign currency
values.
There is no limitation on the amount of the Fund's assets that may be
invested in foreign securities or in any one country or currency, except that no
more than 35% of the Fund's assets may be invested in companies operating
exclusively in one foreign country.
INDEXED SECURITIES. The Fund may invest in indexed securities whose
value is linked to currencies, interest rates, commodities, indices, or other
financial indicators (the "reference index"). Most indexed securities are short
to intermediate term fixed-income securities whose values at maturity or
interest rates rise or fall according to the change in one or more specified
underlying instruments. Indexed securities may be positively or negatively
indexed (i.e., their value may increase or decrease if the underlying instrument
appreciates), and may have return characteristics similar to direct investments
in the underlying instrument or to one or more options on the underlying
instrument. Indexed securities may be more volatile than the underlying
instrument itself. Because their performance is tied to a reference index, a
fund investing in indexed securities bears the risk of changes in the reference
index in addition to being exposed to the credit risk of the issuer of the
security.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Fund buys a
security at one price and simultaneously agrees to sell it back later at a
higher price. The repurchase date is usually within seven days of the original
purchase. If the other party to a repurchase agreement becomes bankrupt or
otherwise defaults on its obligation to repurchase the security, the Fund may
experience delays in
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recovering its cash. To the extent that the value of the security purchased has
decreased in the meantime, the Fund could experience a loss. The Fund's
repurchase agreements are fully collateralized.
WHEN ISSUED SECURITIES AND FORWARD COMMITMENTS. The Fund may buy and
sell securities on a when-issued or delayed delivery basis, with payment and
delivery taking place at a future date. The price and interest rate that will be
received on the securities are each fixed at the time the buyer enters into the
commitment. The Fund may enter into such forward commitments if it holds, and
maintains until the settlement date in a separate account at the Fund's
Custodian, cash or U.S. government securities in an amount sufficient to meet
the purchase price. Forward commitments involve a risk of loss if the value of
the security to be purchased declines prior to the settlement date. Any change
in value could increase fluctuations in the Fund's share price and yield.
Although the Fund will generally enter into forward commitments with the
intention of acquiring securities for its portfolio, the Fund may dispose of a
commitment prior to the settlement if the Advisor deems it appropriate to do so.
BORROWING AND LEVERAGE; REVERSE REPURCHASE AGREEMENTS. The Fund may
borrow from banks up to one third of its total assets, and the Fund may pledge
assets in connection with such borrowings. The Fund also may engage in reverse
repurchase agreements in which the Fund sells a security to another party, such
as a bank, broker-dealer or other financial institution, and simultaneously
agrees to buy it back later at a higher price. While a reverse repurchase
agreement is outstanding, the Fund generally will direct its custodian to
segregate cash and appropriate liquid assets to cover its obligations under the
agreement. The Fund will enter into reverse repurchase agreements only with
parties whose creditworthiness has been reviewed and deemed satisfactory by the
Advisor. Except for reverse repurchase agreements that it fully collateralizes,
the Fund aggregates reverse repurchase agreements with its bank borrowings for
purposes of limiting borrowings to one third of its total assets.
If the Fund makes additional investments while borrowings are
outstanding, this may be construed as a form of leverage. The Fund's objective
would be to pursue investment opportunities with yields that exceed the cost of
the borrowings. This leverage may exaggerate changes in the Fund's share value
and the gains and losses on the Fund's investment. Leverage also creates
interest expenses that may exceed the return on investments made with the
borrowings.
LENDING. The Fund may lend securities to broker-dealers and other
institutions as a means of earning additional income. Under the lending policy
authorized by the Board of Trustees and implemented by the Advisor in response
to requests of broker-dealers or institutional investors which the Advisor deems
qualified, the borrower must agree to maintain collateral, in the form of cash
or U.S. government obligations, with the Fund at least equal to 100% of the
current market value of the loaned securities. The Fund will continue to receive
dividends or interest on the loaned securities and may terminate such loans at
any time or reacquire such securities in time to vote on any matter when the
Board of Trustees determines voting to be in the Fund's interest. If the
borrower becomes bankrupt or otherwise defaults on its obligations, the Fund
could experience delays in recovering its securities. To the extent that, in the
meantime, the value of securities loaned had increased, the Fund could
experience a loss if the borrower had not maintained sufficient collateral.
Loans, in the aggregate, may not exceed one third of the Fund's total assets.
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SHORT SALES. If the Fund anticipates that the price of a security will
decline, it may sell the security short. When the Fund engages in a short sale,
it sells a security it does not own and, to complete the sale, borrows the same
security from a broker or other institution. The Fund must replace the borrowed
security by purchasing it at the market price at the time the Fund chooses to
close the short sale, or at the time it is required to do so by the lender,
whichever is earlier. The Fund may make a profit or loss depending upon whether
the market price of the security decreases or increases between the date of the
short sale and the date on which the Fund must replace the borrowed security.
In connection with its short sales, the Fund will be required to
maintain a segregated account with its custodian of cash or U.S. Government
Securities or other high grade liquid debt securities equal to the market value
of the securities sold less any collateral deposited with its broker. The Fund
will limit its short sales so that no more than 25% of its net assets (less all
its liabilities other than obligations under the short sales) will be deposited
as collateral and allocated to the segregated account. However, the segregated
account and deposits will not necessarily limit the Fund's potential loss on a
short sale, which is unlimited. The Fund limits short sales of any one issuer's
securities to 2% of the Fund's total assets and to 2% of any one class of the
issuer's securities.
OPTIONS AND FUTURES CONTRACTS. The Fund may buy and sell options and
futures contracts to manage its exposure to changing interest rates, security
prices, currency exchange rates and precious metal prices. Some options and
futures strategies, including selling futures, buying puts, and writing calls,
hedge the Fund's investment against price fluctuations. Other strategies,
including buying futures, writing puts, and buying calls, tend to increase
market exposure. Options and futures may be combined with each other or with
forward contracts in order to adjust the risk and return characteristics of the
overall strategy. The Fund may invest in options and futures based on any type
of security, index, or currency related to its investments, including options
and futures traded on foreign exchanges and options not traded on exchanges. The
Fund also may invest in precious metal options and futures.
Options and futures can be volatile investments, and involve certain
risks. If the Advisor applies a hedge at an inappropriate time or judges market
conditions incorrectly, options and futures strategies may lower the Fund's
return. Options and futures traded on foreign exchanges generally are not
regulated by U.S. authorities, and may offer less liquidity and less protection
to the Fund if the other party to the contract defaults. The Fund also could
experience losses if the prices of its options and futures positions were poorly
correlated with its other investments, or if it could not close out its
positions because of an illiquid secondary market. In addition, losses from
certain futures transactions are potentially unlimited.
The Fund will not hedge more than 25% of its total assets by selling
futures or writing calls under normal conditions. In general, the Fund also will
not write put options if its settlement obligations would exceed 25% of its
total assets. In addition, the Fund will not buy futures, put options or call
options for other than hedging purposes with an aggregate value exceeding 5% of
its total assets.
PRECIOUS METALS. The Fund may invest up to 5% of its total assets in gold,
silver, platinum or other precious metals. Gold and other precious metals have
been subject to substantial price fluctuations over short periods of time and
may be affected by unpredictable international monetary
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and other governmental policies, and economic and social conditions. In
addition, the Fund may invest without limitation in securities of companies
principally engaged in exploration, mining or processing of gold or other
precious metals and minerals. These securities involve additional risk because
the price volatility of precious metals has an increased impact on their market
value.
ZERO COUPON DEBT SECURITIES AND PAY-IN-KIND SECURITIES. The Fund may
invest in zero coupon securities and pay-in-kind securities. Zero coupon debt
securities do not make interest payments; instead, they are sold at a discount
from face value and are redeemed at face value when they mature. Pay-in-kind
securities pay all or a portion of their interest or dividends in the form of
additional securities. Both these types of bonds allow an issuer to avoid the
need to generate cash to meet current interest payments and, accordingly, may
involve greater credit risks than debt securities that make regular interest
payments. Because these securities do not pay current income, their prices can
be very volatile when interest rates change. In calculating its daily dividend,
the Fund takes into account as income a portion of the difference between the
bond's purchase price and its face value. Although zero coupon bonds and
pay-in-kind bonds pay no interest to holders prior to maturity, interest on
these securities is reported as income to the Fund and included with dividends
paid to the Fund's shareholders, if any. These dividends must be made from the
Fund's cash assets or, if necessary, from the proceeds of sales of portfolio
securities. The Fund will not be able to purchase additional income-producing
securities with cash used to pay such dividends, and its current income
ultimately may be reduced as a result.
ILLIQUID INVESTMENTS. Under the supervision of and pursuant to the
guidelines adopted by the Board of Trustees, the Advisor determines which of the
Fund's investments are classified as illiquid. Illiquid securities generally
include securities which cannot be disposed of promptly and in the ordinary
course of business without taking a reduced price. Securities may be illiquid
due to contractual or legal restrictions on resale or lack of a ready market.
The absence of a trading market can make it difficult to ascertain a market
value for illiquid investments. Disposing of illiquid investments may involve
time-consuming negotiation and legal expenses, and it may be difficult or
impossible for the Fund to sell them promptly at an acceptable price. The Fund
may not invest more than 15% of its net assets in illiquid investments.
OTHER INVESTMENTS. For temporary defensive purposes under adverse
market conditions, the Fund may invest up to 100% of its assets in cash
equivalents, money market funds and investment grade debt securities. The Fund
may also invest in such instruments at any time to maintain liquidity or pending
selection of investments in accordance with its policies. To the extent the Fund
acquires the securities of a money market fund, the shareholders of the Fund
will be subject to duplicative management fees.
Investment Risks.
The aggressive investment techniques of the Fund may entail risks not
encountered by the average mutual fund. Some techniques, such as short sales,
use of put and call options and futures, investments in foreign securities,
leverage and short term trading, may be considered speculative and could result
in higher operating expenses.
GENERAL INFORMATION
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FUNDAMENTAL POLICIES. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. The investment objective of the Fund may be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. Any such
change may result in the Fund having an investment objective different from the
objective which the shareholders considered appropriate at the time of
investment in the Fund.
PORTFOLIO TURNOVER. The Fund does not intend to purchase or sell
securities for short term trading purposes. The Fund will, however, sell any
portfolio security (without regard to the length of time it has been held) when
the Advisor believes that market conditions, creditworthiness factors or general
economic conditions warrant such action. The Fund's portfolio turnover rate may
exceed 100%. To the extent it does, the brokerage commissions incurred by the
Fund will generally be higher than those incurred by a fund with a lower
portfolio turnover rate. The Fund's higher turnover rate may result in the
realization, for federal tax purposes, of more net capital gains, and any
distributions derived from such gains may be ordinary income.
SHAREHOLDER RIGHTS. Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. However,
the Declaration of Trust contains provisions which authorize the shareholders to
call a meeting under certain circumstances. When matters are submitted to
shareholders for a vote, each shareholder is entitled to one vote for each whole
share he owns and fractional votes for fractional shares he owns. All shares of
the Fund have equal voting rights and liquidation rights. As of December 3,
1997, Cheryl and Kenneth Holeski may be deemed to control the Fund as a result
of their beneficial ownership of the shares of the Fund.
PERFORMANCE INFORMATION
The Fund may periodically advertise "average annual total return." The
"average annual total return" of the Fund refers to the average annual
compounded rate of return over the stated period that would equate an initial
amount invested at the beginning of a stated period to the ending redeemable
value of the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions.
The Fund may also periodically advertise its total return over various
periods in addition to the value of a $10,000 investment (made on the date of
the initial public offering of the Fund's shares) as of the end of a specified
period. The "total return" for the Fund refers to the percentage change in the
value of an account between the beginning and end of the stated period, assuming
no activity in the account other than reinvestment of dividends and capital
gains distributions.
The Fund may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including the Standard &
Poor's (S&P) 500 Index or the Dow Jones Industrial Average.
The advertised performance data of the Fund is based on historical
performance and is not intended to indicate future performance. Rates of total
return quoted by the Fund may be higher or lower than past quotations, and there
can be no assurance that any rate of total return will be
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maintained. The principal value of an investment in the Fund will fluctuate so
that a shareholder's shares, when redeemed, may be worth more or less than the
shareholder's original investment.
INVESTMENT ADVISOR ADMINISTRATOR
Newport Investment Advisors, Inc. AmeriPrime Financial Services, Inc.
23775 Commerce Park Road 1793 Kingswood Drive, Suite 200
Cleveland, Ohio 44122 Southlake, Texas 76092
CUSTODIAN DISTRIBUTOR
Star Bank, N.A. AmeriPrime Financial Securities, Inc.
P.O. Box 640749 1793 Kingswood Drive, Suite 200
Cincinnati, Ohio 45264 Southlake, Texas 76092
TRANSFER AGENT (ALL PURCHASE AND AUDITORS
redemption requests) McCurdy & Associates CPA's, Inc.
American Data Services, Inc. 27955 Clemens Road
P.O. Box 5536 Westlake, Ohio 44145
Hauppauge, New York 11788-0132
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell its
shares in any state to any person to whom it is unlawful to make such offer in
such state.
- 16 -
<PAGE>
TABLE OF CONTENTS
PAGE#
SUMMARY OF FUND EXPENSES..................................................... 2
Shareholder Transaction Expenses.................................... 2
Annual Fund Operating Expenses...................................... 2
THE FUND .................................................................... 3
FINANCIAL HIGHLIGHTS......................................................... 3
INVESTMENT OBJECTIVE AND STRATEGIES.......................................... 3
HOW TO INVEST IN THE FUND.................................................... 4
Initial Purchase.................................................... 4
By Mail ................................................... 4
By Wire .................................................. 4
Additional Investments.............................................. 5
Tax Sheltered Retirement Plans...................................... 5
Other Purchase Information.......................................... 5
HOW TO REDEEM SHARES......................................................... 6
By Mail ........................................................... 6
By Telephone........................................................ 6
Additional Information.............................................. 7
SHARE PRICE CALCULATION...................................................... 7
DIVIDENDS AND DISTRIBUTIONS.................................................. 8
TAXES .................................................................... 8
OPERATION OF THE FUND......................................................... 9
DISTRIBUTION PLAN............................................................ 10
INVESTMENT POLICIES, TECHNIQUES AND RISK CONSIDERATIONS...................... 10
Equity Securities...........................................10
Debt Securities............................................ 10
Foreign Securities......................................... 11
Indexed Securities......................................... 11
Repurchase Agreements...................................... 11
When Issued Securities and Forward Commitments............. 12
Borrowing and Leverage; Reverse Repurchase Agreements.......12
Lending .................................................. 12
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<PAGE>
Short Sales................................................ 13
Options and Futures Contracts...............................13
Zero Coupon Debt Securities and Pay-in-Kind Securities..... 14
Illiquid Investments....................................... 14
Non-Diversification and Concentration...................... 14
Defensive Investments...................................... 14
Investment Risks.................................................... 15
GENERAL INFORMATION.......................................................... 15
Fundamental Policies.................................................15
Portfolio Turnover.................................................. 15
Shareholder Rights.................................................. 15
PERFORMANCE INFORMATION...................................................... 15
- 18 -
<PAGE>
PROSPECTUS February 13, 1998
CORBIN SMALL-CAP VALUE FUND
6300 Ridglea Place
Suite 1111
Fort Worth, Texas 76116
For Information, Shareholder Services and Requests:
(800) 924-6848
The investment objective of the Corbin Small-Cap Value Fund (the
"Fund") is to provide long term capital appreciation to its shareholders. The
Fund's advisor, Corbin & Company (the "Advisor"), seeks to achieve this
objective by investing primarily in small capitalization stocks (those with
market capitalizations of $2 billion or less) selling at attractive valuations
versus the market. The Advisor believes its value-oriented approach will
mitigate risk while enhancing potential returns.
The Fund is "no-load," which means that investors incur no sales
charges, commissions or deferred sales charges on the purchase or redemption of
their shares. The Fund is one of the mutual funds comprising AmeriPrime Funds,
an open-end management investment company, distributed by AmeriPrime Financial
Securities, Inc.
This Prospectus provides the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information dated February 13, 1998 has been filed with
the Securities and Exchange Commission (the "SEC"), is incorporated herein by
reference, and can be obtained without charge by calling the Fund at the phone
number listed above. The SEC maintains a Web Site (http://www.sec.gov) that
contains the Statement of Additional Information, material incorporated by
reference, and other information regarding registrants that file electronically
with the SEC.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
ASA02B57-121197-1
<PAGE>
SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund. The expense information is based on estimated amounts for the current
fiscal year. The expenses are expressed as a percentage of average net assets.
The Example should not be considered a representation of future Fund performance
or expenses, both of which may vary.
Shareholders should be aware that the Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Fund. In addition, the Fund does not
charge a 12b-1 fee. Unlike most other mutual funds, the Fund does not pay
directly for transfer agency, pricing, custodial, auditing or legal services,
nor does it pay directly any general administrative or other significant
operating expenses. The Advisor pays all of the expenses of the Fund except
brokerage, taxes, interest, fees and expenses of non-interested person trustees
and extraordinary expenses.
Shareholder Transaction Expenses
Sales Load Imposed on Purchases........................................NONE
Sales Load Imposed on Reinvested Dividends.............................NONE
Deferred Sales Load....................................................NONE
Redemption Fees........................................................NONE
Exchange Fees..........................................................NONE
Annual Fund Operating Expenses (as a percentage of average net assets)1
Management Fees...................................................... 1.25%
12b-1 Charges..........................................................NONE
Other Expenses2.......................................................0.00%
Total Fund Operating Expenses.........................................1.25%
1 The Fund's total operating expenses are equal to the management fee paid
to the Advisor because the Advisor pays all of the Fund's operating
expenses (except as described in footnote 2).
2 The Fund estimates that other expenses (fees and expenses of the trustees
who are not "interested persons" as defined in the Investment Company Act)
will be less than .001% of average net assets for the first fiscal year.
The tables above are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund.
Example
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
1 Year 3 Years 5 Year 10 Years
------ ------- ------ --------
$13 $40 $69 $151
FINANCIAL HIGHLIGHTS
The following condensed supplementary financial information for the
period June 30, 1997 (commencement of operations) through October 31, 1997, is
derived from the audited financial statements of the Fund. The financial
statements of the Fund have been audited by McCurdy & Associates CPA's, Inc.,
independent public accountants, and are included in the Fund's Annual Report.
The Annual Report contains additional performance information and is available
upon request and without charge.
[INSERT FINANCIAL HIGHLIGHTS]
1
<PAGE>
THE FUND
Corbin Small-Cap Value Fund (the "Fund") was organized as a series of
AmeriPrime Funds, an Ohio business trust (the "Trust"), on June 10, 1997, and
commenced operations on June 30, 1997. This prospectus offers shares of the Fund
and each share represents an undivided, proportionate interest in the Fund. The
investment advisor to the Fund is Corbin & Company (the "Advisor").
INVESTMENT OBJECTIVE AND STRATEGIES AND RISK CONSIDERATIONS
The investment objective of the Corbin Small-Cap Value Fund (the
"Fund") is to provide long term capital appreciation to its shareholders. The
Advisor seeks to achieve this objective by investing primarily in small
capitalization stocks (those with market capitalizations of $2 billion or less)
selling at attractive valuations versus the market. The Advisor believes its
value-oriented approach will mitigate risk while enhancing potential returns.
The Advisor selects securities using a model known as the value score.
A security's value score is determined by a formula that consists of three
variables: the security's five-year estimated earnings growth rate, its dividend
yield, and its price/earnings ratio based on the current year's estimated
earnings. Securities with value scores 50% greater than the market are
considered candidates for purchase. They are then analyzed based on five
additional factors: management, financial position, long-term industry
fundamentals, contrarianism, and complexity of business. The Advisor selects
securities with the intention of holding them for 3 to 5 years, during which
time the Advisor believes they will reach their full value.
Under normal circumstances, the Fund will invest at least 65% of its
total assets in small capitalization stocks. The Advisor generally plans to stay
fully invested (subject to liquidity requirements) in common stocks, preferred
stocks, and common stock equivalents (such as securities convertible into common
stocks), regardless of price movements. The Fund may also invest up to 5% of its
assets in foreign companies meeting its investment criteria. For temporary
defensive purposes under abnormal market or economic conditions, the Fund may
hold all or a portion of its assets in money market instruments, securities of
other no-load registered investment companies or U.S. government repurchase
agreements. The Fund may also invest in such instruments at any time to maintain
liquidity or pending selection of investments in accordance with its policies.
If the Fund acquires securities of another investment company, the shareholders
of the Fund will be subject to additional management fees.
By investing primarily in small capitalization companies, the Fund will
be subject to the risks associated with such companies. Smaller capitalization
companies may experience higher growth rates and higher failure rates than do
larger capitalization companies. Companies in which the Fund is likely to invest
may have limited product lines, markets or financial resources and may lack
management depth. The trading volume of securities of smaller capitalization
companies is normally less than that of larger capitalization companies, and,
therefore, may disproportionately affect their market price, tending to make
them rise more in response to buying demand and fall more in response to selling
pressure than is the case with larger capitalization companies. The Advisor
seeks to reduce risk by having at least twenty different securities in the
portfolio; however, substantial concentrations in economic sectors might occur,
and some issues may have liquidity concerns.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, the Fund cannot give any assurance that its investment objective
will be achieved. In addition, it should be noted that the Advisor has not
previously managed assets organized as a mutual fund and the Fund has no
operating history. Rates of total return quoted by the Fund may be higher or
lower than past quotations, and there can be no assurance that any rate of total
return will be maintained. See "Investment Policies and Techniques" for a more
detailed discussion of the Fund's investment practices.
HOW TO INVEST IN THE FUND
The Fund is "no-load" and shares of the Fund are sold directly to
investors on a continuous basis, subject to a minimum initial investment of
$2,000 and minimum subsequent investments of $50. These minimums may be waived
by the Advisor for accounts participating in an automatic investment program.
Investors choosing to purchase or redeem their shares through a broker/dealer or
other institution may be charged a fee by that institution. Investors choosing
to purchase or redeem shares directly from the Fund will not incur charges on
purchases or redemptions. To the extent
2
<PAGE>
investments of individual investors are aggregated into an omnibus account
established by an investment adviser, broker or other intermediary, the account
minimums apply to the omnibus account, not to the account of the individual
investor.
Initial Purchase
By Mail - You may purchase shares of the Fund by completing and signing
the investment application form which accompanies this Prospectus and mailing
it, in proper form, together with a check (subject to the above minimum amounts)
made payable to Corbin Small-Cap Value Fund, and sent to the P.O. Box listed
below. If you prefer overnight delivery, use the overnight address listed below.
U.S. Mail: Overnight:
Corbin Small-Cap Value Fund Corbin Small-Cap Value Fund
c/o American Data Services, Inc. c/o American Data Services, Inc.
P.O. Box 5536 Hauppauge Corporate Center
Hauppauge, New York 11788-0132 150 Motor Parkway
Hauppauge, New York 11760
Your purchase of shares of the Fund will be effected at the next share
price calculated after receipt of your investment.
By Wire - You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call the Transfer Agent at 800-924-6848 to set up your account
and obtain an account number. You should be prepared at that time to provide the
information on the application. Then, you should provide your bank with the
following information for purposes of wiring your investment:
Star Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: Corbin Small-Cap Value Fund
D.D.A. # 486479645
Account Name _________________ (write in shareholder name) For
the Account # ______________ (write in account number)
You are required to mail a signed application to the Custodian at the
above address in order to complete your initial wire purchase. Wire orders will
be accepted only on a day on which the Fund, Custodian and Transfer Agent are
open for business. A wire purchase will not be considered made until the wired
money is received and the purchase is accepted by the Fund. Any delays which may
occur in wiring money, including delays which may occur in processing by the
banks, are not the responsibility of the Fund or the Transfer Agent. There is
presently no fee for the receipt of wired funds, but the right to charge
shareholders for this service is reserved by the Fund.
Additional Investments
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain your name, the name of your
account(s), your account number(s), and the name of the Fund. Checks should be
made payable to Corbin Small-Cap Value Fund and should be sent to the address
listed above. A bank wire should be sent as outlined above.
Automatic Investment Plan
You may make regular investments in the Fund with an Automatic
Investment Plan by completing the appropriate section of the account application
and attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting $50 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time.
Tax Sheltered Retirement Plans
Since the Fund is oriented to longer term investments, shares of the
Fund may be an appropriate investment medium for tax sheltered retirement plans,
including: individual retirement plans (IRAs); simplified employee pensions
3
<PAGE>
(SEPs); SIMPLE plans; 401(k) plans; qualified corporate pension and profit
sharing plans (for employees); tax deferred investment plans (for employees of
public school systems and certain types of charitable organizations); and other
qualified retirement plans. You should contact the Transfer Agent for the
procedure to open an IRA or SEP plan, as well as more specific information
regarding these retirement plan options. Consultation with an attorney or tax
advisor regarding these plans is advisable. Custodial fees for an IRA will be
paid by the shareholder by redemption of sufficient shares of the Fund from the
IRA unless the fees are paid directly to the IRA custodian. You can obtain
information about the IRA custodial fees from the Transfer Agent.
Other Purchase Information
Dividends begin to accrue after you become a shareholder. The Fund does
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases and to
refuse to sell to any person are reserved by the Fund. If your check or wire
does not clear, you will be responsible for any loss incurred by the Fund. If
you are already a shareholder, the Fund can redeem shares from any identically
registered account in the Fund as reimbursement for any loss incurred. You may
be prohibited or restricted from making future purchases in the Fund.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after
the redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. Presently there is no charge for wire
redemptions; however, the Fund reserves the right to charge for this service.
Any charges for wire redemptions will be deducted from the shareholder's Fund
account by redemption of shares. Investors choosing to purchase or redeem their
shares through a broker/dealer or other institution may be charged a fee by that
institution.
By Mail - You may redeem any part of your account in the Fund at no charge
by mail. Your request should be addressed to:
Corbin Small-Cap Value Fund
c/o American Data Services, Inc.
P.O. Box 5536
Hauppauge, NY 11788-0132
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the Fund
requires that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Fund or American Data Services, Inc., a
shareholder, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
By Telephone - You may redeem any part of your account in the Fund by
calling the Transfer Agent at (800) 924-6848. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at
any time by the Fund or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Fund, although neither the Fund nor the Transfer Agent has ever
experienced difficulties in receiving and in a timely fashion responding to
telephone requests for redemptions or exchanges. If you are unable to reach the
Fund by telephone, you may request a redemption or exchange by mail.
4
<PAGE>
Additional Information - If you are not certain of the requirements for
a redemption please call the Transfer Agent at (800) 924-6848. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing or under any emergency circumstances, as determined
by the Securities and Exchange Commission, the Fund may suspend redemptions or
postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $2,000 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax advisor concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption at any time if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day on which there is sufficient trading in the
Fund's securities to materially affect the net asset value. The net asset value
per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Advisor's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Advisor determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Advisor, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Advisor believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Advisor, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within 60 days of maturity, are valued
by using the amortized cost method of valuation, which the Board has determined
will represent fair value.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on an annual basis, and intends to
distribute its net long term capital gains and its net short term capital gains
at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. An election to receive a cash payment of dividends and/or
capital gain distributions may be made in the application to purchase shares or
by separate written notice to the Transfer Agent. Shareholders will receive a
confirmation statement reflecting the payment and reinvestment of dividends and
summarizing all other transactions. If cash payment is requested, a check
normally will be mailed within five business days after the payable date. If you
withdraw your entire account, all dividends accrued to the time of withdrawal,
including the day of
5
<PAGE>
withdrawal, will be paid at that time. You may elect to have distributions on
shares held in IRAs and 403(b) plans paid in cash only if you are 59 1/2 years
old or permanently and totally disabled or if you otherwise qualify under the
applicable plan.
TAXES
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
the Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any realized
capital gains.
For federal income tax purposes, dividends paid by the Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 (the "Tax Reform Act"), all distributions of net
short term capital gains to individuals are taxed at the same rate as ordinary
income. All distributions of net capital gains to corporations are taxed at
regular corporate rates. Any distributions designated as being made from net
realized long term capital gains are taxable to shareholders as long term
capital gains regardless of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisors regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
On the application or other appropriate form, the Fund will request the
shareholder's certified taxpayer identification number (social security number
for individuals) and a certification that the shareholder is not subject to
backup withholding. Unless the shareholder provides this information, the Fund
will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the Fund may
make a corresponding charge against the account.
OPERATION OF THE FUND
The Fund is a diversified series of AmeriPrime Funds, an open-end
management investment company organized as an Ohio business trust on August 8,
1995. The Board of Trustees supervises the business activities of the Fund. Like
other mutual funds, the Fund retains various organizations to perform
specialized services. The Fund retains Corbin & Company, 6300 Ridglea Place,
Suite 1111, Fort Worth, Texas 76116 (the "Advisor") to manage the assets of the
Fund. The Advisor, a Texas corporation, is a Fort Worth based independent
investment advisor founded in 1992 and controlled by David A. Corbin, CFA. The
Advisor currently manages over $150 million in assets and specializes in the
management of assets for clients seeking a value-oriented, contrarian investment
style, including individual investors, personal trusts, all types of tax-exempt
organizations and ERISA plans, such as foundations, endowments, defined benefit
plans, defined contribution plans and union plans. David A. Corbin is President
and Chief Investment Officer of the Advisor, and is primarily responsible for
the day-to-day management of the Fund's portfolio. Prior to founding Corbin &
Company, Mr. Corbin was a trust investment portfolio manager with
Ameritrust/MTrust, where his responsibilities included investment analysis and
investment oversight for personal trust accounts, employee benefit plans, and
endowments. He was also the Portfolio Manager of the William C. Conner
Foundation at Texas Christian University, where he received his Bachelor of
Science degree in Economics. Mr. Corbin has been published and quoted on a
variety of investment management topics in such publications as The Wall Street
Journal and The Wall Street Transcript, and is a Chartered Financial Analyst
(CFA).
The Fund is authorized to pay the Advisor a fee equal to an annual
average rate of 1.25% of its average daily net assets. The Advisor pays all of
the operating expenses of the Fund except brokerage, taxes, interest, fees and
expenses of non-interested person trustees and extraordinary expenses. In this
regard, it should be noted that most investment companies pay their own
operating expenses directly, while the Fund's expenses, except those specified
above, are paid by the Advisor.
6
<PAGE>
The Fund retains AmeriPrime Financial Services, Inc. (the
"Administrator") to manage the Fund's business affairs and provide the Fund with
administrative services, including all regulatory reporting and necessary office
equipment, personnel and facilities. The Administrator receives a monthly fee
from the Fund equal to an annual average rate of 0.10% of the Fund's average
daily net assets up to fifty million dollars, 0.075% of the Fund's average daily
net assets from fifty to one hundred million dollars and 0.050% of the Fund's
average daily net assets over one hundred million dollars (subject to a minimum
annual payment of $30,000). In addition, the Advisor will reimburse the
Administrator for organizational expenses advanced by the Administrator. The
Fund retains American Data Services, Inc., Hauppauge Corporate Center, 150 Motor
Parkway, Hauppauge, NY 11760 (the "Transfer Agent") to serve as transfer agent,
dividend paying agent and shareholder service agent. The Trust retains
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092 (the "Distributor") to act as the principal distributor
of the Fund's shares. Kenneth D. Trumpfheller, officer and sole shareholder of
the Administrator and the Distributor, is an officer and trustee of the Trust.
The services of the Administrator, Transfer Agent and Distributor are operating
expenses paid by the Advisor.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Advisor may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute
portfolio transactions. The Advisor (not the Fund) may pay certain financial
institutions (which may include banks, brokers, securities dealers and other
industry professionals) a "servicing fee" for performing certain administrative
functions for Fund shareholders to the extent these institutions are allowed to
do so by applicable statute, rule or regulation.
INVESTMENT POLICIES AND TECHNIQUES
This section contains general information about various types of
securities and investment techniques that the Fund may purchase or employ.
Equity Securities. Equity securities consist of common stock, preferred
stock and common stock equivalents (such as convertible preferred stock, rights
and warrants). Common stocks, the most familiar type, represent an equity
(ownership) interest in a corporation. Warrants are options to purchase equity
securities at a specified price for a specific time period. Rights are similar
to warrants, but normally have a short duration and are distributed by the
issuer to its shareholders. Although equity securities have a history of
long-term growth in value, their prices fluctuate based on changes in a
company's financial condition and on overall market and economic conditions.
Equity securities also include common stocks and common stock equivalents of
domestic real estate investment trusts and other companies which operate as real
estate corporations or which have a significant portion of their assets in real
estate. The Fund will not acquire any direct ownership of real estate.
The Fund may invest in foreign equity securities, including, but not
limited to, the purchase of American Depository Receipts. American Depository
Receipts are dollar-denominated receipts that are generally issued in registered
form by domestic banks, and represent the deposit with the bank of a security of
a foreign issuer. To the extent that the Fund does invest in foreign securities,
such investments may be subject to special risks, such as changes in
restrictions on foreign currency transactions and rates of exchange, and changes
in the administrations or economic and monetary policies of foreign governments.
The Fund will not invest more than 5% of its net assets at the time of purchase
in foreign securities.
Convertible Securities. A convertible security is a bond or preferred
stock which may be converted at a stated price within a specific period of time
into a specified number of shares of common stock of the same or different
issuer. Convertible securities are senior to common stock in a corporation's
capital structure, but usually are subordinated to non-convertible debt
securities. While providing a fixed income stream generally higher in yield than
in the income derived from a common stock but lower than that afforded by a
non-convertible debt security, a convertible security also affords an investor
the opportunity, through its conversion feature, to participate in the capital
appreciation of common stock into which it is convertible.
In general, the market value of a convertible security is the higher of
its investment value (its value as a fixed income security) or its conversion
value (the value of the underlying shares of common stock if the security is
converted). As a fixed income security, the market value of a convertible
security generally increases when interest rates decline and generally decreases
when interest rates rise; however, the price of a convertible security generally
increases as the market value of the underlying stock increases, and generally
decreases as the market value of the underlying stock declines. Investments in
convertible securities generally entail less risk than investments in the common
stock of the same issuer.
7
<PAGE>
Preferred Stock. Preferred stock has a preference in liquidation (and,
generally dividends) over common stock but is subordinated in liquidation to
debt. As a general rule the market value of preferred stocks with fixed dividend
rates and no conversion rights varies inversely with interest rates and
perceived credit risk, with the price determined by the dividend rate. Some
preferred stocks are convertible into other securities, for example common
stock, at a fixed price and ratio or upon the occurrence of certain events. The
market price of convertible preferred stocks generally reflects an element of
conversion value. Because many preferred stocks lack a fixed maturity date,
these securities generally fluctuate substantially in value when interest rates
change; such fluctuations often exceed those of long-term bonds of the same
issuer. Some preferred stocks pay an adjustable dividend that may be based on an
index, formula, auction procedure or other dividend rate reset mechanism. In the
absence of credit deterioration, adjustable rate preferred stocks tend to have
more stable market values than fixed rate preferred stocks. All preferred stocks
are also subject to the same types of credit risks of the issuer as corporate
bonds. In addition, because preferred stock is junior to debt securities and
other obligations of an issuer, deterioration in the credit rating of the issuer
will cause greater changes in the value of a preferred stock than in a more
senior debt security with similar yield characteristics. Preferred stocks may be
rated by S&P and Moody's although there is no minimum rating which a preferred
stock must have (and a preferred stock may not be rated) to be an eligible
investment for a Fund. The Advisor expects, however, that generally the
preferred stocks in which a Fund invests will be rated at least CCC by S&P or
Caa by Moody's or, if unrated, of comparable quality in the opinion of the
Advisor. Preferred stocks rated CCC by S&P are regarded as predominantly
speculative with respect to the issuer's capacity to pay preferred stock
obligations and represent the highest degree of speculation among securities
rated between BB and CCC; preferred stocks rated Caa by Moody's are likely to be
in arrears on dividend payments. Moody's rating with respect to preferred stocks
does not purport to indicate the future status of payments of dividends.
Repurchase Agreements. The Fund may invest in repurchase agreements
fully collateralized by U.S. Government obligations. A repurchase agreement is a
short-term investment in which the purchaser (i.e., the Fund) acquires ownership
of a U.S. Government obligation (which may be of any maturity) and the seller
agrees to repurchase the obligation at a future time at a set price, thereby
determining the yield during the purchaser's holding period (usually not more
than seven days from the date of purchase). Any repurchase transaction in which
the Fund engages will require full collateralization of the seller's obligation
during the entire term of the repurchase agreement. In the event of a bankruptcy
or other default of the seller, the Fund could experience both delays in
liquidating the underlying security and losses in value. However, the Fund
intends to enter into repurchase agreements only with Star Bank, N.A. (the
Fund's Custodian), other banks with assets of $1 billion or more and registered
securities dealers determined by the Advisor (subject to review by the Board of
Trustees) to be creditworthy. The Advisor monitors the creditworthiness of the
banks and securities dealers with which the Fund engages in repurchase
transactions.
General. The Fund may invest up to 5% of its net assets at the time of
purchase in each of the following financial services industry obligations:
certificates of deposit, time deposits and banker's acceptances. The Statement
of Additional Information provides information about these securities. The Fund
may also invest up to 5% of its net assets in illiquid securities, including
repurchase agreements maturing in more than seven days.
GENERAL INFORMATION
Fundamental Policies. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. The investment objective of the Fund may be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. Any such
change may result in the Fund having an investment objective different from the
objective which the shareholders considered appropriate at the time of
investment in the Fund.
Portfolio Turnover. The Fund does not intend to purchase or sell
securities for short term trading purposes. However, if the objectives of the
Fund would be better served, short-term profits or losses may be realized from
time to time. It is anticipated that the Fund will hold most securities from 1
to 5 years at a time and that portfolio turnover will average less than 100%.
Shareholder Rights. Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. When
matters are submitted to shareholders for a vote, each shareholder is entitled
to one vote for each whole share he owns and fractional votes for fractional
shares he owns. All shares of the Fund have equal voting rights and liquidation
rights.
8
<PAGE>
PERFORMANCE INFORMATION
The Fund may periodically advertise "average annual total return." The
"average annual total return" of the Fund refers to the average annual
compounded rate of return over the stated period that would equate an initial
amount invested at the beginning of a stated period to the ending redeemable
value of the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions.
The Fund may also periodically advertise its total return over various
periods in addition to the value of a $10,000 investment (made on the date of
the initial public offering of the Fund's shares) as of the end of a specified
period. The "total return" for the Fund refers to the percentage change in the
value of an account between the beginning and end of the stated period, assuming
no activity in the account other than reinvestment of dividends and capital
gains distributions.
The Fund may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including the Rusell 2000
Index and the Standard & Poor's (S&P) 600 Small-Cap Index.
The advertised performance data of the Fund is based on historical
performance and is not intended to indicate future performance. Rates of total
return quoted by the Fund may be higher or lower than past quotations, and there
can be no assurance that any rate of total return will be maintained. The
principal value of an investment in the Fund will fluctuate so that a
shareholder's shares, when redeemed, may be worth more or less than the
shareholder's original investment.
Investment Advisor Administrator
Corbin & Company AmeriPrime Financial Services, Inc.
6300 Ridglea Place, Suite 1111 1793 Kingswood Drive, Suite 200
Fort Worth, Texas 76116 Southlake, Texas 76092
Custodian Distributor
Star Bank, N.A. AmeriPrime Financial Securities, Inc.
P.O. Box 1118 1793 Kingswood Drive, Suite 200
Cincinnati, Ohio 45201 Southlake, Texas 76092
Transfer Agent (all purchases and Independent Auditors
all redemption requests) McCurdy & Associates CPA's, Inc.
American Data Services, Inc. 27955 Clemens Road
Hauppauge Corporate Center Westlake, Ohio 44145
150 Motor Parkway
Hauppauge, NY 11760
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell its
shares in any state to any person to whom it is unlawful to make such offer in
such state.
9
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY OF FUND EXPENSES...................................................... 1
Shareholder Transaction Expenses..................................... 1
Annual Fund Operating Expenses....................................... 1
FINANCIAL HIGHLIGHTS......................................................... 1
THE FUND ..................................................................... 2
INVESTMENT OBJECTIVE AND STRATEGIES AND RISK CONSIDERATIONS................... 2
HOW TO INVEST IN THE FUND.................................................... 2
Initial Purchase..................................................... 3
Additional Investments............................................... 3
Automatic Investment Plan........................................... 3
Tax Sheltered Retirement Plans....................................... 3
Other Purchase Information.......................................... 4
HOW TO REDEEM SHARES......................................................... 4
By Mail ............................................................ 4
By Telephone......................................................... 4
Additional Information.............................................. 5
SHARE PRICE CALCULATION....................................................... 5
DIVIDENDS AND DISTRIBUTIONS.................................................. 5
TAXES .................................................................... 6
OPERATION OF THE FUND......................................................... 6
INVESTMENT POLICIES AND TECHNIQUES .......................................... 7
Equity Securities.................................................... 7
Convertible Securities.............................................. 7
Preferred Stock...................................................... 8
Repurchase Agreements............................................... 8
General ............................................................ 8
GENERAL INFORMATION.......................................................... 8
Fundamental Policies................................................ 8
Portfolio Turnover.................................................. 8
Shareholder Rights.................................................. 9
PERFORMANCE INFORMATION...................................................... 9
10
<PAGE>
AIT VISION U.S. EQUITY PORTFOLIO
STATEMENT OF ADDITIONAL INFORMATION
February 13, 1998
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of AIT Vision U.S. Equity Portfolio
dated February 13, 1998. A copy of the Prospectus can be obtained by writing the
Transfer Agent at Hauppauge Corporate Center, 150 Motor Parkway, Hauppauge, New
York 11760, or by calling 1-800-507-9922.
ASA029D5-120897-1
<PAGE>
- 1 -
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
PAGE
DESCRIPTION OF THE TRUST 1
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS 1
INVESTMENT LIMITATIONS 2
THE INVESTMENT ADVISER 5
TRUSTEES AND OFFICERS 6
PORTFOLIO TRANSACTIONS AND BROKERAGE 7
DETERMINATION OF SHARE PRICE 8
INVESTMENT PERFORMANCE 8
CUSTODIAN 9
TRANSFER AGENT 9
ACCOUNTANTS 9
DISTRIBUTOR 9
FINANCIAL STATEMENTS 9
<PAGE>
- 1 -
<PAGE>
AIT Vision U.S. Equity Portfolio (the "Fund") was organized as a series of
AmeriPrime Funds (the "Trust"). The Trust is an open-end investment company
established under the laws of Ohio by an Agreement and Declaration of Trust
dated August 8, 1995 (the "Trust Agreement"). The Trust Agreement permits the
Trustees to issue an unlimited number of shares of beneficial interest of
separate series without par value. The Fund is one of a series of funds
currently authorized by the Trustees.
Each share of a series represents an equal proportionate interest in the
assets and liabilities belonging to that series with each other share of that
series and is entitled to such dividends and distributions out of income
belonging to the series as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will be entitled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his or her express consent.
As of December 3, 1997, the following persons may be deemed to beneficially
own five percent (5%) or more of the Fund: LBS Capital Management Resources
Trust Co., P.O. Box 5900, Denver, Colorado - 9.27%; Killian Charitable Remainder
Unitrust, U.S. Trust Company of Florida, Trustee, 765 Seagate Drive, Naples,
Florida - 68.42%; Wooten Charitable Remainder Unitrust, Rike D. Wooten, Trustee,
1865 E. Cedar Avenue, Denver, Colorado - 7.54%.
As of December 3, 1997, U.S. Trust Company of Florida, Trustee of the
Killian Charitable Remainder Unitrust, owns a majority of the outstanding
shares of the Fund and may be deemed to control the Fund. Raymond Killian, as
beneficiary
of the Unitrust, may also be deemed to control the Fund.
As of December 1, 1997, the officers and trustees as a
group may be deemed to beneficially own less than one
percent (1%) of the Fund.
For information concerning the purchase and redemption of shares of the
Fund, see "How to Invest in the Fund" and "How to Redeem Shares" in the Fund's
Prospectus. For a description of the methods used to determine the share price
and value of the Fund's assets, see "Share Price Calculation" in the Fund's
Prospectus.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a more detailed discussion of some of the
investments the Fund may make and some of the techniques it may use, as
described in the Prospectus (see "Investment Objectives and Strategies" and
"Investment Policies and Techniques and Risk Considerations").
American Depository Receipts. American Depository Receipts are
dollar-denominated receipts that are generally issued in registered form by
domestic banks, and represent the deposit with the bank of a security of a
foreign issuer. To the extent that the Fund invests in foreign securities, such
investments may be subject to special risks. For example, there may be less
information publicly available about a foreign company than about a U.S.
company, and foreign companies are not generally subject to accounting, auditing
and financial reporting standards and practices comparable to those in the U.S.
Other risks associated with investments in foreign securities include changes in
restrictions on foreign currency transactions and rates of exchanges, changes in
the administrations or economic and monetary policies of foreign governments,
the imposition of exchange control regulations, the possibility of expropriation
decrees and other adverse foreign governmental action, the imposition of foreign
taxes, less liquid markets, less government supervision of exchanges, brokers
and issuers, difficulty in enforcing contractual obligations, delays in
settlement of securities transactions and greater price volatility. In addition,
investing in foreign securities will generally result in higher commissions than
investing in similar domestic securities.
Convertible Debentures. The Adviser considers convertible debentures
rated A or higher by Standard & Poor's Corporation ("S&P") or by Moody's
Investors Services, Inc. ("Moody's") to be of investment grade quality.
Investment grade securities generally have adequate to strong protection of
principal and interest payments. Convertible debentures rated A possess many
favorable investment attributes and are considered to be upper-medium grade
obligations. Securities rated A may be more susceptible to the adverse effects
of changes in circumstances and economic conditions (changes that increase long
term risk) than higher rated securities.
Short Sales. The Fund may sell a security short in anticipation of a
decline in the market value of the security. When the Fund engages in a short
sale, it sells a security which it does not own. To complete the transaction,
the Fund must borrow the security in order to deliver it to the buyer. The Fund
must replace the borrowed security by purchasing it at the market price at the
time of replacement, which may be more or less than the price at which the Fund
sold the security. The Fund will incur a loss as a result of the short sale if
the price of the security increases between the date of the short sale and the
date on which the Fund replaces the borrowed security. The Fund will realize a
profit if the security declines in price between those dates.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
the Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").
1. Borrowing Money. The Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. Senior Securities. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is (a) consistent with or permitted by the
Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder or interpretations of the Securities and Exchange
Commission or its staff and (b) as described in the Prospectus and the Statement
of Additional Information.
3. Underwriting. The Fund will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. Real Estate. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. Commodities. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. Loans. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. The Fund will not invest 25% or more of its total
assets in a particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
Non-Fundamental. The following limitations have been adopted by the Trust
with respect to the Fund and are Non-Fundamental (see "Investment Restrictions"
above).
i. Pledging. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
ii. Borrowing. The Fund will not purchase any security while borrowings
(including reverse repurchase agreements) representing more than 5% of its total
assets are outstanding. The Fund will not enter into reverse repurchase
agreements.
iii. Margin Purchases. The Fund will not purchase securities or
evidences of interest thereon on "margin." This limitation is not applicable to
short term credit obtained by the Fund for the clearance of purchases and sales
or redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
iv. Short Sales. The Fund will not effect short sales of securities
unless it owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short.
v. Options. The Fund will not purchase or sell puts, calls, options or
straddles, except as described in the Prospectus and the Statement of Additional
Information.
vi. Illiquid Investments. The Fund will not invest in securities for
which there are legal or contractual restrictions on resale or other illiquid
securities.
THE INVESTMENT ADVISER
The Fund's investment adviser is Advanced Investment Technology, Inc.,
311 Park Place Blvd., Clearwater, Florida 34619. State Street Global Advisors, a
division of State Street Bank and Trust Company, may be deemed to control the
Adviser due to its majority ownership of shares of the Adviser.
Under the terms of the management agreement (the "Agreement"), the
Adviser manages the Fund's investments subject to approval of the Board of
Trustees and pays all of the expenses of the Fund except brokerage, taxes,
interest, fees and expenses of the non-interested person trustees and
extraordinary expenses. As compensation for its management services and
agreement to pay the Fund's expenses, the Fund is obligated to pay the Adviser a
fee computed and accrued daily and paid monthly at an annual rate of 0.70% of
the average daily net assets of the Fund. The Adviser may waive all or part of
its fee, at any time, and at its sole discretion, but such action shall not
obligate the Adviser to waive any fees in the future. For the period November 6,
1995 (commencement of operations) through October 31, 1996 and for the fiscal
year ended October 31, 1997, the Fund paid advisory fees of $5,994 and $21,591,
respectively.
The Adviser retains the right to use the names "AIT" and "AIT Vision"
in connection with another investment company or business enterprise with which
the Adviser is or may become associated. The Trust's right to use the name "AIT"
and "AIT Vision" automatically ceases ninety days after termination of the
Agreement and may be withdrawn by the Adviser on ninety days written notice.
The Adviser may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Fund believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Fund believes that there would be no material impact on the Fund or its
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
TRUSTEES AND OFFICERS
The names of the Trustees and executive officers of the Trust are shown
below. Each Trustee who is an "interested person" of the Trust, as defined in
the Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<CAPTION>
===================================== -------------------------- ===========================================================
Name, Age and Address Position Principal Occupations During Past 5 Years
===================================== -------------------------- ===========================================================
<S> <C> <C>
* Kenneth D. Trumpfheller President and Trustee President, Treasurer and Secretary of AmeriPrime
Age: 39 Financial Services, Inc., the Fund's administrator, and
1793 Kingswood Drive AmeriPrime Financial Securities, Inc., the Fund's
Suite 200 distributor. Prior to December, 1994, a senior client
Southlake, Texas 76092 executive with SEI Financial Services.
===================================== -------------------------- ===========================================================
Julie A. Feleo Secretary, Treasurer Secretary, Treasurer and Chief Financial Officer of
Age: 31 AmeriPrime Financial Services, Inc. and AmeriPrime
1793 Kingswood Drive Financial Securities, Inc.; Fund Reporting Analyst at
Suite 200 Fidelity Investments from 1993 to 1997; Fund Accounting
Southlake, Texas 76092 Analyst at Fidelity Investments in 1993. Prior to 1993,
Accounting Manager at Windows Presentation Manager
Association.
===================================== -------------------------- ===========================================================
Steve L. Cobb Trustee President of Chandler Engineering Company, L.L.C., oil
Age: 40 and gas services company; various positions with Carbo
2001 Indianwood Avenue Ceramics, Inc., oil field manufacturing/supply Company,
Broken Arrow, Oklahoma 74012 from 1984 to 1997, most recently Vice President of
Marketing.
===================================== ========================== ===========================================================
Gary E. Hippenstiel Trustee Director, Vice President and Chief Investment Officer of
Age: 50 Legacy Trust Company since 1992; President and Director
32 Sunlit Forest Drive of Heritage Trust Company from 1994 to 1996; Vice
The Woodlands, Texas 77381 President and Manager of Investments of Kanaly Trust
Company from
1988 to 1992.
===================================== ========================== ===========================================================
</TABLE>
The compensation paid to the Trustees of the Trust for the period ended
October 31, 1997 is set forth in the following table. Trustee fees are Trust
expenses and each series of the Trust pays a portion of the Trustee fees.
<TABLE>
<CAPTION>
============================ ----------------- ==============================
Total Compensation
Aggregate from Trust (the Trust is
Name Compensation not in a Fund Complex)
from Trust
============================ ----------------- ==============================
<S> <C> <C>
Kenneth D. Trumpfheller 0 0
============================ ----------------- ==============================
Steve L. Cobb $4,000 $4,000
============================ ================= ==============================
Gary E. Hippenstiel $4,000 $4,000
============================ ================= ==============================
</TABLE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Adviser is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In placing portfolio transactions, the
Adviser seeks the best qualitative execution for the Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Adviser generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received.
The Adviser is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Fund and/or the other
accounts over which the Adviser exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Adviser determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Adviser's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Fund effects securities
transactions may also be used by the Adviser in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Adviser in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Adviser, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Adviser that the review and study of the research and other information will not
reduce the overall cost to the Adviser of performing its duties to the Fund
under the Agreement. Due to research services provided by brokers, the Fund
directed to brokers $_______ (on which commissions were $______) during the
fiscal year ended October 31, 1997.
While the Fund does not deem it practicable and in its best interests
to solicit competitive bids for commission rates on each transaction,
consideration is regularly given to posted commission rates as well as other
information concerning the level of commissions charged on comparable
transactions by qualified brokers.
The Fund has no obligation to deal with any broker or dealer in the
execution of its transactions. However, it is contemplated that Investment
Technology Group, Inc. ("ITG"), in its capacity as a registered broker-dealer,
will effect securities transactions which are executed on a national securities
exchange and over-the-counter transactions conducted on an agency basis. Such
transactions will be executed at competitive commission rates through Jefferies
Group, Inc.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
Under the Investment Company Act of 1940, persons affiliated with an
affiliate of the Adviser (such as ITG) may be prohibited from dealing with the
Fund as a principal in the purchase and sale of securities. Therefore, ITG will
not serve as the Fund's dealer in connection with over-the-counter transactions.
However, ITG may serve as the Fund's broker in over-the-counter transactions
conducted on an agency basis and will receive brokerage commissions in
connection with such transactions. Such agency transactions will be executed
through Jefferies Group, Inc.
The Fund will not effect any brokerage transactions in its portfolio
securities with ITG if such transactions would be unfair or unreasonable to Fund
shareholders, and the commissions will be paid solely for the execution of
trades and not for any other services. The Agreement provides that affiliates of
affiliates of the Adviser may receive brokerage commissions in connection with
effecting such transactions for the Fund. In determining the commissions to be
paid to ITG, it is the policy of the Fund that such commissions will, in the
judgement of the Trust's Board of Trustees, be (a) at least as favorable to the
Fund as those which would be charged by other qualified brokers having
comparable execution capability and (b) at least as favorable to the Fund as
commissions contemporaneously charged by ITG on comparable transactions for its
most favored unaffiliated customers, except for customers of ITG considered by a
majority of the Trust's disinterested Trustees not to be comparable to the Fund.
The disinterested Trustees from time to time review, among other things,
information relating to the commissions charged by ITG to the Fund and its other
customers, and rates and other information concerning the commissions charged by
other qualified brokers.
While the Fund contemplates no ongoing arrangements with any other
brokerage firms, brokerage business may be given from time to time to other
firms. ITG will not receive reciprocal brokerage business as a result of the
brokerage business placed by the Fund with others.
To the extent that the Trust and another of the Adviser's clients seek
to acquire the same security at about the same time, the Trust may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Trust may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Trust. In the event that more than one client wants to purchase or sell the same
security on a given date, the purchases and sales will normally be made by
random client selection.
For the period November 6, 1995 (commencement of operations) through
October 31, 1996 and for the fiscal year ended October 31, 1997, the Fund paid
brokerage commissions of $3,203 and $_______, respectively. For the fiscal year
ended October 31, 1997, the Fund paid $_______ (____% of the total brokerage
commissions paid) to ITG, an affiliate of the Advisor, for effecting ____% of
all brokerage transactions.
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of the Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day, Martin
Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas. For a description of the methods
used to determine the net asset value (share price), see "Share Price
Calculation" in the Prospectus.
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return for the period indicated that would equate the initial amount invested
to the ending redeemable value, according to the following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue. For the fiscal year
ended October 31, 1997, the Fund's average annual total return was 21.95%.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the Standard & Poor's 500 Stock Index or the Dow Jones Industrial Average.
In addition, the performance of the Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of the Fund. Performance rankings and ratings
reported periodically in national financial publications such as Barron's and
Fortune also may be used.
CUSTODIAN
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is
Custodian of the Fund's investments. The Custodian acts as the Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
TRANSFER AGENT
American Data Services, Inc. ("ADS"), Hauppauge Corporate Center, 150
Motor Parkway, Hauppauge, New York 11760, acts as the Fund's transfer agent and,
in such capacity, maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution disbursing
agent and performs other accounting and shareholder service functions. In
addition, ADS provides the Fund with certain monthly reports, record-keeping and
other management-related services. For the period November 6, 1995 (commencement
of operations) through October 31, 1996 and for the fiscal year ended October
31, 1997, ADS received $17,600 and $_______, respectively, from the Adviser (not
the Fund) for these services.
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent public accountants for the Trust
for the fiscal year ending October 31, 1998. McCurdy & Associates performs an
annual audit of the Fund's financial statements and provides financial, tax and
accounting consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the exclusive agent for distribution of shares of the
Fund. The Distributor is obligated to sell the shares of the Fund on a best
efforts basis only against purchase orders for the shares. Shares of the Fund
are offered to the public on a continuous basis.
FINANCIAL STATEMENTS
The financial statements and independent auditor's report required to
be included in the Statement of Additional Information are incorporated herein
by reference to the Trust's Annual Report to Shareholders for the fiscal year
ended October 31, 1997. The Trust will provide the Annual Report without the
charge by calling the Fund at 1-800-507-9922.
<PAGE>
CARL DOMINO EQUITY INCOME FUND
STATEMENT OF ADDITIONAL INFORMATION
February 13, 1998
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of Carl Domino Equity Income Fund
dated February 13, 1998. A copy of the Prospectus can be obtained by writing the
Transfer Agent at Hauppauge Corporate Center, 150 Motor Parkway, Hauppauge, New
York 11760, or by calling 1-800-506-9922.
ASA029D2-120897-1
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
PAGE
DESCRIPTION OF THE TRUST........................................... 1
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS............................................................. 1
INVESTMENT LIMITATIONS............................................. 5
THE INVESTMENT ADVISER............................................. 8
TRUSTEES AND OFFICERS............................................... 8
PORTFOLIO TRANSACTIONS AND BROKERAGE................................ 9
DETERMINATION OF SHARE PRICE........................................10
INVESTMENT PERFORMANCE............................................. 11
CUSTODIAN.......................................................... 11
TRANSFER AGENT......................................................12
ACCOUNTANTS........................................................ 12
DISTRIBUTOR.........................................................12
FINANCIAL STATEMENTS.........................................................12
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DESCRIPTION OF THE TRUST
Carl Domino Equity Income Fund (the "Fund") was organized as a series
of AmeriPrime Funds (the "Trust"). The Trust is an open-end investment company
established under the laws of Ohio by an Agreement and Declaration of Trust
dated August 8, 1995 (the "Trust Agreement"). The Trust Agreement permits the
Trustees to issue an unlimited number of shares of beneficial interest of
separate series without par value. The Fund is one of a series of funds
currently authorized by the Trustees.
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series with each other share of
that series and is entitled to such dividends and distributions out of income
belonging to the series as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will be entitled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his or her express consent.
As of December 3, 1997, the following persons may be deemed to
beneficially own five percent (5%) or more of the Fund: Carl Domino Associates
Profit Sharing Trust, 580 Village Boulevard, Suite 225, West Palm Beach, Florida
- - 30.55%; National Financial, 200 Liberty Street, 5th Floor, New York, New York
- - 8.17%; Mercury Retirement Trust, 80 Leuning Street, South Hackensack, New
Jersey - 8.14%; Deborah Aurilio, 5329 Ridan Way, Palm Beach Gardens, Florida -
5.20%.
As of December 3, 1997, Carl Domino Associates Profit Sharing Trust may
be deemed to control the Fund as a result of its beneficial ownership of shares
of the Fund. As of December 1, 1997, the officers and trustees as a group may be
deemed to beneficially own 1.05% of the Fund.
For information concerning the purchase and redemption of shares of the
Fund, see "How to Invest in the Fund" and "How to Redeem Shares" in the Fund's
Prospectus. For a description of the methods used to determine the share price
and value of the Fund's assets, see "Share Price Calculation" in the Fund's
Prospectus.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a more detailed discussion of some of the
investments the Fund may make and some of the techniques it may use, as
described in the Prospectus (see "Investment Objectives and Strategies" and
"Investment Policies and Techniques and Risk Considerations").
A. Equity Securities. Equity securities include common stock, preferred
stock and common stock equivalents (such as convertible preferred stock, rights
and warrants). Convertible preferred stock is preferred stock that can be
converted into common stock pursuant to its terms. Warrants are options to
purchase equity securities at a specified price valid for a specific time
period. Rights are similar to
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<PAGE>
warrants, but normally have a short duration and are distributed by the
issuer to its shareholders. The Fund may invest up to 5% of its net assets at
the time of purchase in each of the following: rights, warrants, or convertible
preferred stocks.
B. Repurchase Agreements. A repurchase agreement is a short-term
investment in which the purchaser (i.e., the Fund) acquires ownership of a U.S.
Government obligation (which may be of any maturity) and the seller agrees to
repurchase the obligation at a future time at a set price, thereby determining
the yield during the purchaser's holding period (usually not more than seven
days from the date of purchase). Any repurchase transaction in which the Fund
engages will require full collateralization of the seller's obligation during
the entire term of the repurchase agreement. In the event of a bankruptcy or
other default of the seller, the Fund could experience both delays in
liquidating the underlying security and losses in value. However, the Fund
intends to enter into repurchase agreements only with the Custodian, other banks
with assets of $1 billion or more and registered securities dealers determined
by the Adviser (subject to review by the Board of Trustees) to be creditworthy.
The Adviser monitors the creditworthiness of the banks and securities dealers
with which the Fund engages in repurchase transactions, and the Fund will not
invest more than 5% of its net assets in repurchase agreements.
C. Illiquid Securities. The portfolio of the Fund may contain illiquid
securities. Illiquid securities generally include securities which cannot be
disposed of promptly and in the ordinary course of business without taking a
reduced price. Securities may be illiquid due to contractual or legal
restrictions on resale or lack of a ready market. The following securities are
considered to be illiquid: repurchase agreements maturing in more than seven
days, nonpublicly offered securities and restricted securities. The Fund will
not invest more than 5% of its net assets in illiquid securities.
D. Other Investment Companies. The Fund is permitted to invest up to 5%
of its net assets in other investment companies at any time. The Fund will not
purchase more than 3% of the outstanding voting stock of any investment company.
If the Fund acquires securities of another investment company, the shareholders
of the Fund will be subject to duplicative management fees.
E. Foreign Securities. The Fund may invest in foreign equity securities
including common stock, preferred stock and common stock equivalents issued by
foreign companies, and foreign fixed income securities. Foreign fixed income
securities include corporate debt obligations issued by foreign companies and
debt obligations of foreign governments or international organizations. This
category may include floating rate obligations, variable rate obligations,
Yankee dollar obligations (U.S. dollar denominated obligations issued by foreign
companies and traded on U.S. markets) and Eurodollar obligations (U.S. dollar
denominated obligations issued by foreign companies and traded on foreign
markets).
Foreign government obligations generally consist of debt
securities supported by national, state or provincial governments or similar
political units or governmental agencies. Such obligations may or may not be
backed by the national government's full faith and credit and general taxing
powers. Investments in foreign securities also include obligations issued by
international organizations. International organizations include entities
designated or supported by governmental entities to promote economic
reconstruction or development as well as international banking institutions and
related government agencies. Examples are the International Bank for
Reconstruction and Development (the World Bank), the European Coal and Steel
Community, the Asian Development Bank and the
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<PAGE>
InterAmerican Development Bank. In addition, investments in foreign securities
may include debt securities denominated in multinational currency units of an
issuer (including international issuers). An example of a multinational currency
unit is the European Currency Unit. A European Currency Unit represents
specified amounts of the currencies of certain member states of the European
Economic Community, more commonly known as the Common Market.
Purchases of foreign securities are usually made in foreign
currencies and, as a result, the Fund may incur currency conversion costs and
may be affected favorably or unfavorably by changes in the value of foreign
currencies against the U.S. dollar. In addition, there may be less information
publicly available about a foreign company then about a U.S. company, and
foreign companies are not generally subject to accounting, auditing and
financial reporting standards and practices comparable to those in the U.S.
Other risks associated with investments in foreign securities include changes in
restrictions on foreign currency transactions and rates of exchanges, changes in
the administrations or economic and monetary policies of foreign governments,
the imposition of exchange control regulations, the possibility of expropriation
decrees and other adverse foreign governmental action, the imposition of foreign
taxes, less liquid markets, less government supervision of exchanges, brokers
and issuers, difficulty in enforcing contractual obligations, delays in
settlement of securities transactions and greater price volatility. In addition,
investing in foreign securities will generally result in higher commissions than
investing in similar domestic securities.
F. When Issued Securities and Forward Commitments. The Fund may buy and
sell securities on a when-issued or delayed delivery basis, with payment and
delivery taking place at a future date. The price and interest rate that will be
received on the securities are each fixed at the time the buyer enters into the
commitment. The Fund may enter into such forward commitments if they hold, and
maintain until the settlement date in a separate account at the Fund's
Custodian, cash or U.S. government securities in an amount sufficient to meet
the purchase price. Forward commitments involve a risk of loss if the value of
the security to be purchased declines prior to the settlement date. Any change
in value could increase fluctuations in the Fund's share price and yield.
Although the Fund will generally enter into forward commitments with the
intention of acquiring securities for its portfolio, the Fund may dispose of a
commitment prior to the settlement if the Adviser deems it appropriate to do so.
G. Collateralized Mortgage Obligations (CMOs). CMOs are securities
collateralized by mortgages or mortgage-backed securities and are issued with a
variety of classes or series which have different maturities and are often
retired in sequence. CMOs may be issued by governmental or non-governmental
entities such as banks and other mortgage lenders. Non-government securities may
offer a higher yield but also may be subject to greater price fluctuation than
government securities. Investments in CMOs are subject to the same risks as
direct investments in the underlying mortgage and mortgage-backed securities. In
addition, in the event of a bankruptcy or other default of an entity who issued
the CMO held by a Fund, the Fund could experience both delays in liquidating its
position and losses.
H. Financial Services Industry Obligations. The Fund may invest up to
5% of its net assets in each of the following obligations of the financial
services industry:
(1) Certificate of Deposit. Certificates of deposit are
negotiable certificates evidencing the indebtedness of a commercial
bank or a savings and loan association to repay funds deposited
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<PAGE>
with it for a definite period of time (usually from fourteen days to
one year) at a stated or variable interest rate.
(2) Time Deposits. Time deposits are non-negotiable deposits
maintained in a banking institution or a savings and loan association
for a specified period of time at a stated interest rate.
(3) Bankers' Acceptances. Bankers' acceptances are credit
instruments evidencing the obligation of a bank to pay a draft which
has been drawn on it by a customer, which instruments reflect the
obligation both of the bank and of the drawer to pay the face amount of
the instrument upon maturity.
I. Option Transactions. The Fund may engage in option transactions
involving individual securities and market indices. An option involves either
(a) the right or the obligation to buy or sell a specific instrument at a
specific price until the expiration date of the option, or (b) the right to
receive payments or the obligation to make payments representing the difference
between the closing price of a market index and the exercise price of the option
expressed in dollars times a specified multiple until the expiration date of the
option. Options are sold (written) on securities and market indices. The
purchaser of an option on a security pays the seller (the writer) a premium for
the right granted but is not obligated to buy or sell the underlying security.
The purchaser of an option on a market index pays the seller a premium for the
right granted, and in return the seller of such an option is obligated to make
the payment. A writer of an option may terminate the obligation prior to
expiration of the option by making an offsetting purchase of an identical
option. Options are traded on organized exchanges and in the over-the-counter
market. Options on securities which the Fund sells (writes) will be covered or
secured, which means that it will own the underlying security (for a call
option); will segregate with the Custodian high quality liquid debt obligations
equal to the option exercise price (for a put option); or (for an option on a
stock index) will hold a portfolio of securities substantially replicating the
movement of the index (or, to the extent it does not hold such a portfolio, will
maintain a segregated account with the Custodian of high quality liquid debt
obligations equal to the market value of the option, marked to market daily).
When the Fund writes options, it may be required to maintain a margin account,
to pledge the underlying securities or U.S. government obligations or to deposit
liquid high quality debt obligations in a separate account with the Custodian.
The purchase and writing of options involves certain risks; for
example, the possible inability to effect closing transactions at favorable
prices and an appreciation limit on the securities set aside for settlement, as
well as (in the case of options on a stock index) exposure to an indeterminate
liability. The purchase of options limits the Fund's potential loss to the
amount of the premium paid and can afford the Fund the opportunity to profit
from favorable movements in the price of an underlying security to a greater
extent than if transactions were effected in the security directly. However, the
purchase of an option could result in the Fund losing a greater percentage of
its investment than if the transaction were effected directly. When the Fund
writes a covered call option, it will receive a premium, but it will give up the
opportunity to profit from a price increase in the underlying security above the
exercise price as long as its obligation as a writer continues, and it will
retain the risk of loss should the price of the security decline. When the Fund
writes a covered put option, it will receive a premium, but it will assume the
risk of loss should the price of the underlying security fall below the exercise
price. When the Fund writes a covered put option on a stock index, it will
assume the risk that the price of the index will fall below the exercise price,
in which case the Fund may be required
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<PAGE>
to enter into a closing transaction at a loss. An analogous risk would apply if
the Fund writes a call option on a stock index and the price of the index rises
above the exercise price.
J. STRIPS. The Federal Reserve creates STRIPS (Separate Trading of
Registered Interest and Principal of Securities) by separating the coupon
payments and the principal payment from an outstanding Treasury security and
selling them as individual securities. To the extent the Fund purchases the
principal portion of the STRIP, the Fund will not receive regular interest
payments. Instead they are sold at a deep discount from their face value. The
Fund will accrue income on such STRIPS for tax and accounting purposes, in
accordance with applicable law, which income is distributable to shareholders.
Because no cash is received at the time such income is accrued, the Fund may be
required to liquidate other portfolio securities to satisfy its distribution
obligations. Because the principal portion of the STRIP does not pay current
income, its price can be very volatile when interest rates change. In
calculating its dividend, the Fund takes into account as income a portion of the
difference between the principal portion of the STRIP's purchase price and its
face value.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
the Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").
1. Borrowing Money. The Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. Senior Securities. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is (a) consistent with or permitted by the
Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder or interpretations of the Securities and Exchange
Commission or its staff and (b) as described in the Prospectus and the Statement
of Additional Information.
3. Underwriting. The Fund will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
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<PAGE>
4. Real Estate. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. Commodities. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. Loans. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. The Fund will not invest 25% or more of its total
assets in a particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
Non-Fundamental. The following limitations have been adopted by the Trust
with respect to the Fund and are Non-Fundamental (see "Investment Restrictions"
above).
i. Pledging. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
ii. Borrowing. The Fund will not purchase any security while borrowings
(including reverse repurchase agreements) representing more than 5% of its total
assets are outstanding. The Fund will not enter into reverse repurchase
agreements.
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<PAGE>
iii. Margin Purchases. The Fund will not purchase securities or
evidences of interest thereon on "margin." This limitation is not applicable to
short term credit obtained by the Fund for the clearance of purchases and sales
or redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
iv. Short Sales. The Fund will not effect short sales of securities.
v. Options. The Fund will not purchase or sell puts, calls, options or
straddles, except as described in the Prospectus and the Statement of Additional
Information.
vi. Repurchase Agreements. The Fund will not invest more than 5% of its
net assets in repurchase agreements.
vii. Illiquid Investments. The Fund will not invest more than 5% of its
net assets in securities for which there are legal or contractual restrictions
on resale and other illiquid securities.
THE INVESTMENT ADVISER
The Fund's investment adviser is Carl Domino Associates, L.P., 580 Village
Blvd., Suite 225, West Palm Beach, Florida 33409. Carl Domino, Inc. and CW
Partners may both be deemed to control the Adviser due to their respective share
of ownership of the Adviser.
Under the terms of the management agreement (the "Agreement"), the
Adviser manages the Fund's investments subject to approval of the Board of
Trustees and pays all of the expenses of the Fund except brokerage, taxes,
interest, fees and expenses of the non-interested person trustees and
extraordinary expenses. As compensation for its management services and
agreement to pay the Fund's expenses, the Fund is obligated to pay the Adviser a
fee computed and accrued daily and paid monthly at an annual rate of 1.50% of
the average daily net assets of the Fund. The Adviser may waive all or part of
its fee, at any time, and at its sole discretion, but such action shall not
obligate the Adviser to waive any fees in the future. For the period November 6,
1995 (commencement of operations) through October 31, 1996 and the fiscal year
ended October 31, 1997, the Fund paid advisory fees of $11,548 and $______,
respectively.
The Adviser retains the right to use the name "Domino" in connection
with another investment company or business enterprise with which the Adviser is
or may become associated. The Trust's right to use the name "Domino"
automatically ceases ninety days after termination of the Agreement and may be
withdrawn by the Adviser on ninety days written notice.
The Adviser may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Fund believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Fund believes that there would be no material impact on the Fund or its
- 7 -
<PAGE>
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
TRUSTEES AND OFFICERS
The names of the Trustees and executive officers of the Trust are shown
below. Each Trustee who is an "interested person" of the Trust, as defined in
the Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<CAPTION>
===================================================================================================================================
Name, Age and Address Position Principal Occupations During Past 5 Years
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
* Kenneth D. Trumpfheller President and Trustee President, Treasurer and Secretary of AmeriPrime
Age: 39 Financial Services, Inc., the Fund's administrator, and
1793 Kingswood Drive AmeriPrime Financial Securities, Inc., the Fund's
Suite 200 distributor. Prior to December, 1994, a senior client
Southlake, Texas 76092 executive with SEI Financial Services.
- -----------------------------------------------------------------------------------------------------------------------------------
Julie A. Feleo Secretary, Treasurer Secretary, Treasurer and Chief Financial Officer of
Age: 31 AmeriPrime Financial Services, Inc. and AmeriPrime
1793 Kingswood Drive Financial Securities, Inc.; Fund Reporting Analyst at
Suite 200 Fidelity Investments from 1993 to 1997; Fund
Southlake, Texas 76092 Accounting Analyst at Fidelity Investments in 1993.
Prior to 1993, Accounting Manager at Windows
Presentation Manager Association.
- -----------------------------------------------------------------------------------------------------------------------------------
Steve L. Cobb Trustee President of Chandler Engineering Company, L.L.C., oil
Age: 40 and gas services company; various positions with Carbo
2001 Indianwood Ave. Ceramics, Inc., oil field manufacturing/supply company
Broken Arrow, Oklahoma from 1984 to 1997, most recently Vice President of
47012 Marketing.
- -----------------------------------------------------------------------------------------------------------------------------------
Gary E. Hippenstiel Trustee Director, Vice President and Chief Investment Officer of
Age: 50 Legacy Trust Company since 1992; President and
32 Sunlit Forest Drive Director of Heritage Trust Company from 1994 to 1996;
The Woodlands, Texas 77381 Vice President and Manager of Investments of Kanaly
Trust
Company from 1988 to 1992.
===================================================================================================================================
</TABLE>
The compensation paid to the Trustees of the Trust for the period ended
October 31, 1997 is set forth in the following table. Trustee fees are Trust
expenses and each series of the Trust is responsible for a portion of the
Trustee fees. The Adviser voluntarily reimbursed the Fund for the Fund's share
of the Trustee fees paid for the period ended October 31, 1997.
<TABLE>
<CAPTION>
======================================================================================
Name Aggregate Total Compensation
Compensation from Trust (the Trust is
from Trust not in a Fund Complex)
- --------------------------------------------------------------------------------------
<S> <C> <C>
Kenneth D. Trumpfheller 0 0
- --------------------------------------------------------------------------------------
Steve L. Cobb $4,000 $4,000
- --------------------------------------------------------------------------------------
Gary E. Hippenstiel $4,000 $4,000
======================================================================================
</TABLE>
- 8 -
<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Adviser is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In placing portfolio transactions, the
Adviser seeks the best qualitative execution for the Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Adviser generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received.
The Adviser is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Fund and/or the other
accounts over which the Adviser exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Adviser determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Adviser's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Fund effects securities
transactions may also be used by the Adviser in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Adviser in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Adviser, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Adviser that the review and study of the research and other information will not
reduce the overall cost to the Adviser of performing its duties to the Fund
under the Agreement. Due to research services provided by brokers, the Fund
directed to brokers $_______ of brokerage transactions (on which commissions
were $_____) during the fiscal year ended October 31, 1997.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
To the extent that the Trust and another of the Adviser's clients seek
to acquire the same security at about the same time, the Trust may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Trust may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Trust. In the event that more than one client wants to purchase or sell the same
security on a given date, the purchases and sales will normally be made by
random client selection.
- 9 -
<PAGE>
For the period November 6, 1995 (commencement of operations) through
October 31, 1996 and for the fiscal year ended October 31, 1997, the Fund paid
brokerage commissions of $2,617 and $_______, respectively.
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of the Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day, Martin
Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas. For a description of the methods
used to determine the net asset value (share price), see "Share Price
Calculation" in the Prospectus.
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return for the period indicated that would equate the initial amount invested
to the ending redeemable value, according to the following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue. For the fiscal year
ended October 31, 1997, the Fund's average annual total return was 36.58%.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the Standard & Poor's 500 Stock Index or the Dow Jones Industrial Average.
- 10 -
<PAGE>
In addition, the performance of the Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of the Fund. Performance rankings and ratings
reported periodically in national financial publications such as Barron's and
Fortune also may be used.
CUSTODIAN
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is
Custodian of the Fund's investments. The Custodian acts as the Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
TRANSFER AGENT
American Data Services, Inc. ("ADS"), Hauppauge Corporate Center, 150
Motor Parkway, Hauppauge, New York 11760, acts as the Fund's transfer agent and,
in such capacity, maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution disbursing
agent and performs other accounting and shareholder service functions. In
addition, ADS provides the Fund with certain monthly reports, record-keeping and
other management-related services. For the period November 6, 1995 (commencement
of operations) through October 31, 1996 and for the fiscal year ended October
31, 1997, ADS received $17,600 and $_________, respectively, from the Adviser
(not the Fund) for these services.
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent public accountants for the Trust
for the fiscal year ending October 31, 1998. McCurdy & Associates performs an
annual audit of the Fund's financial statements and provides financial, tax and
accounting consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the exclusive agent for distribution of shares of the
Fund. The Distributor is obligated to sell the shares of the Fund on a best
efforts basis only against purchase orders for the shares. Shares of the Fund
are offered to the public on a continuous basis.
FINANCIAL STATEMENTS
The financial statements and independent auditor's report required to
be included in the Statement of Additional Information are incorporated herein
by reference to the Trust's Annual Report to Shareholders for the fiscal year
ended October 31, 1997. The Trust will provide the Annual Report without charge
by calling the Fund at 1-800-506-9922.
- 11 -
<PAGE>
CARL DOMINO EQUITY INCOME FUND
STATEMENT OF ADDITIONAL INFORMATION
February 13, 1998
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of Carl Domino Equity Income Fund
dated February 13, 1998. A copy of the Prospectus can be obtained by writing the
Transfer Agent at Hauppauge Corporate Center, 150 Motor Parkway, Hauppauge, New
York 11760, or by calling 1-800-506-9922.
ASA029D2-120897-1
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
PAGE
DESCRIPTION OF THE TRUST........................................... 1
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS............................................................. 1
INVESTMENT LIMITATIONS............................................. 5
THE INVESTMENT ADVISER............................................. 8
TRUSTEES AND OFFICERS............................................... 8
PORTFOLIO TRANSACTIONS AND BROKERAGE................................ 9
DETERMINATION OF SHARE PRICE........................................10
INVESTMENT PERFORMANCE............................................. 11
CUSTODIAN.......................................................... 11
TRANSFER AGENT......................................................12
ACCOUNTANTS........................................................ 12
DISTRIBUTOR.........................................................12
FINANCIAL STATEMENTS.........................................................12
- i -
<PAGE>
DESCRIPTION OF THE TRUST
Carl Domino Equity Income Fund (the "Fund") was organized as a series
of AmeriPrime Funds (the "Trust"). The Trust is an open-end investment company
established under the laws of Ohio by an Agreement and Declaration of Trust
dated August 8, 1995 (the "Trust Agreement"). The Trust Agreement permits the
Trustees to issue an unlimited number of shares of beneficial interest of
separate series without par value. The Fund is one of a series of funds
currently authorized by the Trustees.
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series with each other share of
that series and is entitled to such dividends and distributions out of income
belonging to the series as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will be entitled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his or her express consent.
As of December 3, 1997, the following persons may be deemed to
beneficially own five percent (5%) or more of the Fund: Carl Domino Associates
Profit Sharing Trust, 580 Village Boulevard, Suite 225, West Palm Beach, Florida
- - 30.55%; National Financial, 200 Liberty Street, 5th Floor, New York, New York
- - 8.17%; Mercury Retirement Trust, 80 Leuning Street, South Hackensack, New
Jersey - 8.14%; Deborah Aurilio, 5329 Ridan Way, Palm Beach Gardens, Florida -
5.20%.
As of December 3, 1997, Carl Domino Associates Profit Sharing Trust may
be deemed to control the Fund as a result of its beneficial ownership of shares
of the Fund. As of December 1, 1997, the officers and trustees as a group may be
deemed to beneficially own 1.05% of the Fund.
For information concerning the purchase and redemption of shares of the
Fund, see "How to Invest in the Fund" and "How to Redeem Shares" in the Fund's
Prospectus. For a description of the methods used to determine the share price
and value of the Fund's assets, see "Share Price Calculation" in the Fund's
Prospectus.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a more detailed discussion of some of the
investments the Fund may make and some of the techniques it may use, as
described in the Prospectus (see "Investment Objectives and Strategies" and
"Investment Policies and Techniques and Risk Considerations").
A. Equity Securities. Equity securities include common stock, preferred
stock and common stock equivalents (such as convertible preferred stock, rights
and warrants). Convertible preferred stock is preferred stock that can be
converted into common stock pursuant to its terms. Warrants are options to
purchase equity securities at a specified price valid for a specific time
period. Rights are similar to
- 1 -
<PAGE>
warrants, but normally have a short duration and are distributed by the
issuer to its shareholders. The Fund may invest up to 5% of its net assets at
the time of purchase in each of the following: rights, warrants, or convertible
preferred stocks.
B. Repurchase Agreements. A repurchase agreement is a short-term
investment in which the purchaser (i.e., the Fund) acquires ownership of a U.S.
Government obligation (which may be of any maturity) and the seller agrees to
repurchase the obligation at a future time at a set price, thereby determining
the yield during the purchaser's holding period (usually not more than seven
days from the date of purchase). Any repurchase transaction in which the Fund
engages will require full collateralization of the seller's obligation during
the entire term of the repurchase agreement. In the event of a bankruptcy or
other default of the seller, the Fund could experience both delays in
liquidating the underlying security and losses in value. However, the Fund
intends to enter into repurchase agreements only with the Custodian, other banks
with assets of $1 billion or more and registered securities dealers determined
by the Adviser (subject to review by the Board of Trustees) to be creditworthy.
The Adviser monitors the creditworthiness of the banks and securities dealers
with which the Fund engages in repurchase transactions, and the Fund will not
invest more than 5% of its net assets in repurchase agreements.
C. Illiquid Securities. The portfolio of the Fund may contain illiquid
securities. Illiquid securities generally include securities which cannot be
disposed of promptly and in the ordinary course of business without taking a
reduced price. Securities may be illiquid due to contractual or legal
restrictions on resale or lack of a ready market. The following securities are
considered to be illiquid: repurchase agreements maturing in more than seven
days, nonpublicly offered securities and restricted securities. The Fund will
not invest more than 5% of its net assets in illiquid securities.
D. Other Investment Companies. The Fund is permitted to invest up to 5%
of its net assets in other investment companies at any time. The Fund will not
purchase more than 3% of the outstanding voting stock of any investment company.
If the Fund acquires securities of another investment company, the shareholders
of the Fund will be subject to duplicative management fees.
E. Foreign Securities. The Fund may invest in foreign equity securities
including common stock, preferred stock and common stock equivalents issued by
foreign companies, and foreign fixed income securities. Foreign fixed income
securities include corporate debt obligations issued by foreign companies and
debt obligations of foreign governments or international organizations. This
category may include floating rate obligations, variable rate obligations,
Yankee dollar obligations (U.S. dollar denominated obligations issued by foreign
companies and traded on U.S. markets) and Eurodollar obligations (U.S. dollar
denominated obligations issued by foreign companies and traded on foreign
markets).
Foreign government obligations generally consist of debt
securities supported by national, state or provincial governments or similar
political units or governmental agencies. Such obligations may or may not be
backed by the national government's full faith and credit and general taxing
powers. Investments in foreign securities also include obligations issued by
international organizations. International organizations include entities
designated or supported by governmental entities to promote economic
reconstruction or development as well as international banking institutions and
related government agencies. Examples are the International Bank for
Reconstruction and Development (the World Bank), the European Coal and Steel
Community, the Asian Development Bank and the
- 2 -
<PAGE>
InterAmerican Development Bank. In addition, investments in foreign securities
may include debt securities denominated in multinational currency units of an
issuer (including international issuers). An example of a multinational currency
unit is the European Currency Unit. A European Currency Unit represents
specified amounts of the currencies of certain member states of the European
Economic Community, more commonly known as the Common Market.
Purchases of foreign securities are usually made in foreign
currencies and, as a result, the Fund may incur currency conversion costs and
may be affected favorably or unfavorably by changes in the value of foreign
currencies against the U.S. dollar. In addition, there may be less information
publicly available about a foreign company then about a U.S. company, and
foreign companies are not generally subject to accounting, auditing and
financial reporting standards and practices comparable to those in the U.S.
Other risks associated with investments in foreign securities include changes in
restrictions on foreign currency transactions and rates of exchanges, changes in
the administrations or economic and monetary policies of foreign governments,
the imposition of exchange control regulations, the possibility of expropriation
decrees and other adverse foreign governmental action, the imposition of foreign
taxes, less liquid markets, less government supervision of exchanges, brokers
and issuers, difficulty in enforcing contractual obligations, delays in
settlement of securities transactions and greater price volatility. In addition,
investing in foreign securities will generally result in higher commissions than
investing in similar domestic securities.
F. When Issued Securities and Forward Commitments. The Fund may buy and
sell securities on a when-issued or delayed delivery basis, with payment and
delivery taking place at a future date. The price and interest rate that will be
received on the securities are each fixed at the time the buyer enters into the
commitment. The Fund may enter into such forward commitments if they hold, and
maintain until the settlement date in a separate account at the Fund's
Custodian, cash or U.S. government securities in an amount sufficient to meet
the purchase price. Forward commitments involve a risk of loss if the value of
the security to be purchased declines prior to the settlement date. Any change
in value could increase fluctuations in the Fund's share price and yield.
Although the Fund will generally enter into forward commitments with the
intention of acquiring securities for its portfolio, the Fund may dispose of a
commitment prior to the settlement if the Adviser deems it appropriate to do so.
G. Collateralized Mortgage Obligations (CMOs). CMOs are securities
collateralized by mortgages or mortgage-backed securities and are issued with a
variety of classes or series which have different maturities and are often
retired in sequence. CMOs may be issued by governmental or non-governmental
entities such as banks and other mortgage lenders. Non-government securities may
offer a higher yield but also may be subject to greater price fluctuation than
government securities. Investments in CMOs are subject to the same risks as
direct investments in the underlying mortgage and mortgage-backed securities. In
addition, in the event of a bankruptcy or other default of an entity who issued
the CMO held by a Fund, the Fund could experience both delays in liquidating its
position and losses.
H. Financial Services Industry Obligations. The Fund may invest up to
5% of its net assets in each of the following obligations of the financial
services industry:
(1) Certificate of Deposit. Certificates of deposit are
negotiable certificates evidencing the indebtedness of a commercial
bank or a savings and loan association to repay funds deposited
- 3 -
<PAGE>
with it for a definite period of time (usually from fourteen days to
one year) at a stated or variable interest rate.
(2) Time Deposits. Time deposits are non-negotiable deposits
maintained in a banking institution or a savings and loan association
for a specified period of time at a stated interest rate.
(3) Bankers' Acceptances. Bankers' acceptances are credit
instruments evidencing the obligation of a bank to pay a draft which
has been drawn on it by a customer, which instruments reflect the
obligation both of the bank and of the drawer to pay the face amount of
the instrument upon maturity.
I. Option Transactions. The Fund may engage in option transactions
involving individual securities and market indices. An option involves either
(a) the right or the obligation to buy or sell a specific instrument at a
specific price until the expiration date of the option, or (b) the right to
receive payments or the obligation to make payments representing the difference
between the closing price of a market index and the exercise price of the option
expressed in dollars times a specified multiple until the expiration date of the
option. Options are sold (written) on securities and market indices. The
purchaser of an option on a security pays the seller (the writer) a premium for
the right granted but is not obligated to buy or sell the underlying security.
The purchaser of an option on a market index pays the seller a premium for the
right granted, and in return the seller of such an option is obligated to make
the payment. A writer of an option may terminate the obligation prior to
expiration of the option by making an offsetting purchase of an identical
option. Options are traded on organized exchanges and in the over-the-counter
market. Options on securities which the Fund sells (writes) will be covered or
secured, which means that it will own the underlying security (for a call
option); will segregate with the Custodian high quality liquid debt obligations
equal to the option exercise price (for a put option); or (for an option on a
stock index) will hold a portfolio of securities substantially replicating the
movement of the index (or, to the extent it does not hold such a portfolio, will
maintain a segregated account with the Custodian of high quality liquid debt
obligations equal to the market value of the option, marked to market daily).
When the Fund writes options, it may be required to maintain a margin account,
to pledge the underlying securities or U.S. government obligations or to deposit
liquid high quality debt obligations in a separate account with the Custodian.
The purchase and writing of options involves certain risks; for
example, the possible inability to effect closing transactions at favorable
prices and an appreciation limit on the securities set aside for settlement, as
well as (in the case of options on a stock index) exposure to an indeterminate
liability. The purchase of options limits the Fund's potential loss to the
amount of the premium paid and can afford the Fund the opportunity to profit
from favorable movements in the price of an underlying security to a greater
extent than if transactions were effected in the security directly. However, the
purchase of an option could result in the Fund losing a greater percentage of
its investment than if the transaction were effected directly. When the Fund
writes a covered call option, it will receive a premium, but it will give up the
opportunity to profit from a price increase in the underlying security above the
exercise price as long as its obligation as a writer continues, and it will
retain the risk of loss should the price of the security decline. When the Fund
writes a covered put option, it will receive a premium, but it will assume the
risk of loss should the price of the underlying security fall below the exercise
price. When the Fund writes a covered put option on a stock index, it will
assume the risk that the price of the index will fall below the exercise price,
in which case the Fund may be required
- 4 -
<PAGE>
to enter into a closing transaction at a loss. An analogous risk would apply if
the Fund writes a call option on a stock index and the price of the index rises
above the exercise price.
J. STRIPS. The Federal Reserve creates STRIPS (Separate Trading of
Registered Interest and Principal of Securities) by separating the coupon
payments and the principal payment from an outstanding Treasury security and
selling them as individual securities. To the extent the Fund purchases the
principal portion of the STRIP, the Fund will not receive regular interest
payments. Instead they are sold at a deep discount from their face value. The
Fund will accrue income on such STRIPS for tax and accounting purposes, in
accordance with applicable law, which income is distributable to shareholders.
Because no cash is received at the time such income is accrued, the Fund may be
required to liquidate other portfolio securities to satisfy its distribution
obligations. Because the principal portion of the STRIP does not pay current
income, its price can be very volatile when interest rates change. In
calculating its dividend, the Fund takes into account as income a portion of the
difference between the principal portion of the STRIP's purchase price and its
face value.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
the Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").
1. Borrowing Money. The Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. Senior Securities. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is (a) consistent with or permitted by the
Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder or interpretations of the Securities and Exchange
Commission or its staff and (b) as described in the Prospectus and the Statement
of Additional Information.
3. Underwriting. The Fund will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
- 5 -
<PAGE>
4. Real Estate. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. Commodities. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. Loans. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. The Fund will not invest 25% or more of its total
assets in a particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
Non-Fundamental. The following limitations have been adopted by the Trust
with respect to the Fund and are Non-Fundamental (see "Investment Restrictions"
above).
i. Pledging. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
ii. Borrowing. The Fund will not purchase any security while borrowings
(including reverse repurchase agreements) representing more than 5% of its total
assets are outstanding. The Fund will not enter into reverse repurchase
agreements.
- 6 -
<PAGE>
iii. Margin Purchases. The Fund will not purchase securities or
evidences of interest thereon on "margin." This limitation is not applicable to
short term credit obtained by the Fund for the clearance of purchases and sales
or redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
iv. Short Sales. The Fund will not effect short sales of securities.
v. Options. The Fund will not purchase or sell puts, calls, options or
straddles, except as described in the Prospectus and the Statement of Additional
Information.
vi. Repurchase Agreements. The Fund will not invest more than 5% of its
net assets in repurchase agreements.
vii. Illiquid Investments. The Fund will not invest more than 5% of its
net assets in securities for which there are legal or contractual restrictions
on resale and other illiquid securities.
THE INVESTMENT ADVISER
The Fund's investment adviser is Carl Domino Associates, L.P., 580 Village
Blvd., Suite 225, West Palm Beach, Florida 33409. Carl Domino, Inc. and CW
Partners may both be deemed to control the Adviser due to their respective share
of ownership of the Adviser.
Under the terms of the management agreement (the "Agreement"), the
Adviser manages the Fund's investments subject to approval of the Board of
Trustees and pays all of the expenses of the Fund except brokerage, taxes,
interest, fees and expenses of the non-interested person trustees and
extraordinary expenses. As compensation for its management services and
agreement to pay the Fund's expenses, the Fund is obligated to pay the Adviser a
fee computed and accrued daily and paid monthly at an annual rate of 1.50% of
the average daily net assets of the Fund. The Adviser may waive all or part of
its fee, at any time, and at its sole discretion, but such action shall not
obligate the Adviser to waive any fees in the future. For the period November 6,
1995 (commencement of operations) through October 31, 1996 and the fiscal year
ended October 31, 1997, the Fund paid advisory fees of $11,548 and $______,
respectively.
The Adviser retains the right to use the name "Domino" in connection
with another investment company or business enterprise with which the Adviser is
or may become associated. The Trust's right to use the name "Domino"
automatically ceases ninety days after termination of the Agreement and may be
withdrawn by the Adviser on ninety days written notice.
The Adviser may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Fund believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Fund believes that there would be no material impact on the Fund or its
- 7 -
<PAGE>
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
TRUSTEES AND OFFICERS
The names of the Trustees and executive officers of the Trust are shown
below. Each Trustee who is an "interested person" of the Trust, as defined in
the Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<CAPTION>
===================================================================================================================================
Name, Age and Address Position Principal Occupations During Past 5 Years
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
* Kenneth D. Trumpfheller President and Trustee President, Treasurer and Secretary of AmeriPrime
Age: 39 Financial Services, Inc., the Fund's administrator, and
1793 Kingswood Drive AmeriPrime Financial Securities, Inc., the Fund's
Suite 200 distributor. Prior to December, 1994, a senior client
Southlake, Texas 76092 executive with SEI Financial Services.
- -----------------------------------------------------------------------------------------------------------------------------------
Julie A. Feleo Secretary, Treasurer Secretary, Treasurer and Chief Financial Officer of
Age: 31 AmeriPrime Financial Services, Inc. and AmeriPrime
1793 Kingswood Drive Financial Securities, Inc.; Fund Reporting Analyst at
Suite 200 Fidelity Investments from 1993 to 1997; Fund
Southlake, Texas 76092 Accounting Analyst at Fidelity Investments in 1993.
Prior to 1993, Accounting Manager at Windows
Presentation Manager Association.
- -----------------------------------------------------------------------------------------------------------------------------------
Steve L. Cobb Trustee President of Chandler Engineering Company, L.L.C., oil
Age: 40 and gas services company; various positions with Carbo
2001 Indianwood Ave. Ceramics, Inc., oil field manufacturing/supply company
Broken Arrow, Oklahoma from 1984 to 1997, most recently Vice President of
47012 Marketing.
- -----------------------------------------------------------------------------------------------------------------------------------
Gary E. Hippenstiel Trustee Director, Vice President and Chief Investment Officer of
Age: 50 Legacy Trust Company since 1992; President and
32 Sunlit Forest Drive Director of Heritage Trust Company from 1994 to 1996;
The Woodlands, Texas 77381 Vice President and Manager of Investments of Kanaly
Trust
Company from 1988 to 1992.
===================================================================================================================================
</TABLE>
The compensation paid to the Trustees of the Trust for the period ended
October 31, 1997 is set forth in the following table. Trustee fees are Trust
expenses and each series of the Trust is responsible for a portion of the
Trustee fees. The Adviser voluntarily reimbursed the Fund for the Fund's share
of the Trustee fees paid for the period ended October 31, 1997.
<TABLE>
<CAPTION>
======================================================================================
Name Aggregate Total Compensation
Compensation from Trust (the Trust is
from Trust not in a Fund Complex)
- --------------------------------------------------------------------------------------
<S> <C> <C>
Kenneth D. Trumpfheller 0 0
- --------------------------------------------------------------------------------------
Steve L. Cobb $4,000 $4,000
- --------------------------------------------------------------------------------------
Gary E. Hippenstiel $4,000 $4,000
======================================================================================
</TABLE>
- 8 -
<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Adviser is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In placing portfolio transactions, the
Adviser seeks the best qualitative execution for the Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Adviser generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received.
The Adviser is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Fund and/or the other
accounts over which the Adviser exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Adviser determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Adviser's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Fund effects securities
transactions may also be used by the Adviser in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Adviser in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Adviser, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Adviser that the review and study of the research and other information will not
reduce the overall cost to the Adviser of performing its duties to the Fund
under the Agreement. Due to research services provided by brokers, the Fund
directed to brokers $_______ of brokerage transactions (on which commissions
were $_____) during the fiscal year ended October 31, 1997.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
To the extent that the Trust and another of the Adviser's clients seek
to acquire the same security at about the same time, the Trust may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Trust may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Trust. In the event that more than one client wants to purchase or sell the same
security on a given date, the purchases and sales will normally be made by
random client selection.
- 9 -
<PAGE>
For the period November 6, 1995 (commencement of operations) through
October 31, 1996 and for the fiscal year ended October 31, 1997, the Fund paid
brokerage commissions of $2,617 and $_______, respectively.
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of the Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day, Martin
Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas. For a description of the methods
used to determine the net asset value (share price), see "Share Price
Calculation" in the Prospectus.
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return for the period indicated that would equate the initial amount invested
to the ending redeemable value, according to the following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue. For the fiscal year
ended October 31, 1997, the Fund's average annual total return was 36.58%.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the Standard & Poor's 500 Stock Index or the Dow Jones Industrial Average.
- 10 -
<PAGE>
In addition, the performance of the Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of the Fund. Performance rankings and ratings
reported periodically in national financial publications such as Barron's and
Fortune also may be used.
CUSTODIAN
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is
Custodian of the Fund's investments. The Custodian acts as the Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
TRANSFER AGENT
American Data Services, Inc. ("ADS"), Hauppauge Corporate Center, 150
Motor Parkway, Hauppauge, New York 11760, acts as the Fund's transfer agent and,
in such capacity, maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution disbursing
agent and performs other accounting and shareholder service functions. In
addition, ADS provides the Fund with certain monthly reports, record-keeping and
other management-related services. For the period November 6, 1995 (commencement
of operations) through October 31, 1996 and for the fiscal year ended October
31, 1997, ADS received $17,600 and $_________, respectively, from the Adviser
(not the Fund) for these services.
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent public accountants for the Trust
for the fiscal year ending October 31, 1998. McCurdy & Associates performs an
annual audit of the Fund's financial statements and provides financial, tax and
accounting consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the exclusive agent for distribution of shares of the
Fund. The Distributor is obligated to sell the shares of the Fund on a best
efforts basis only against purchase orders for the shares. Shares of the Fund
are offered to the public on a continuous basis.
FINANCIAL STATEMENTS
The financial statements and independent auditor's report required to
be included in the Statement of Additional Information are incorporated herein
by reference to the Trust's Annual Report to Shareholders for the fiscal year
ended October 31, 1997. The Trust will provide the Annual Report without charge
by calling the Fund at 1-800-506-9922.
- 11 -
<PAGE>
GLOBALT GROWTH FUND
PROSPECTUS February 13, 1998
3060 Peachtree Road, N.W.
One Buckhead Plaza, Suite 225
Atlanta, Georgia 30305
For Information, Shareholder Services and Requests:
(800) 831 - 9922
GLOBALT Growth Fund (the "Fund") is a mutual fund whose investment
objective is to provide long term growth of capital. The Fund seeks to achieve
its objective by investing in a broad range of equity securities of U.S.
companies believed by its Adviser, GLOBALT, Inc., to offer superior growth
potential. As the Adviser believes exposure to rapidly growing foreign markets
enhances growth potential, all stocks in the Fund's portfolio will be of
companies which compete in both U.S. and foreign economies and thus, in the
Adviser's opinion, are globally positioned for success.
The Fund is "no-load," which means there are no sales charges or
commissions. In addition, there are no 12b-1 fees, distribution expenses or
deferred sales charges which are borne by the shareholders. The Fund is one of
the mutual funds comprising AmeriPrime Funds, an open-end management investment
company, and is distributed by AmeriPrime Financial Securities, Inc.
This Prospectus provides the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information has been filed with the Securities and
Exchange Commission (the "SEC") dated February 13, 1998, which is incorporated
herein by reference and can be obtained without charge by calling the Fund at
the phone number listed above. The SEC maintains a Web Site (http://www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding registrants that file electronically
with the SEC.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
ASA029CF-121197-1
<PAGE>
SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund. The expense information is based on operating expenses incurred during
the most recent fiscal year. The expenses are expressed as a percentage of
average net assets. The Example should not be considered a representation of
future Fund performance or expenses, both of which may vary.
Shareholders should be aware that the Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Fund. In addition, the Fund does not
have a 12b-1 Plan. Unlike most other mutual funds, the Fund does not pay
directly for transfer agency, pricing, custodial, auditing or legal services,
nor does it pay directly any general administrative or other significant
operating expenses. The Adviser pays all of the expenses of the Fund except
brokerage, taxes, interest, fees and expenses of non-interested person trustees
and extraordinary expenses.
Shareholder Transaction Expenses
Sales Load Imposed on Purchases.............................................NONE
Sales Load Imposed on Reinvested Dividends..................................NONE
Deferred Sales Load.........................................................NONE
Redemption Fees.............................................................NONE
Exchange Fees...............................................................NONE
Annual Fund Operating Expenses (as a percentage of average net assets)1
Management Fees............................................................1.17%
12b-1 Charges...............................................................NONE
Other Expenses2 (after reimbursement)......................................0.00%
Total Fund Operating Expenses2 (after reimbursement).......................1.17%
1 The Fund's total operating expenses are equal to the management fee paid to
the Adviser because the Adviser pays all of the Fund's operating expenses
(except as described in footnote 2).
2 The Adviser has agreed to reimburse other expenses for the fiscal year ending
October 31, 1998 to the extent necessary to maintain total operating expenses as
indicated. For the fiscal year ended October 31, 1997, other expenses (fees and
expenses of the trustees who are not "interested persons" as defined in the
Investment Company Act) were ____% of average net assets and total fund
operating expenses were ____% of average net assets.
The tables above are provided to assist an investor in understanding the direct
and indirect expenses that an investor may incur as a shareholder in the Fund.
- 2 -
<PAGE>
Example
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- -------
$12 $37 $64 $142
FINANCIAL HIGHLIGHTS
The following condensed supplementary financial information for the
fiscal year ended October 31, 1997, is derived from the audited financial
statements of the Fund. The financial statements of the Fund have been audited
by McCurdy & Associates CPA's, Inc., independent public accountants, and are
included in the Fund's Annual Report. The Annual Report contains additional
performance information and is available upon request and without charge.
[insert highlights]
THE FUND
GLOBALT Growth Fund (the "Fund") was organized as a series of
AmeriPrime Funds, an Ohio business trust (the "Trust"), on October 20, 1995 and
commenced operations on December 1, 1995. This prospectus offers shares of the
Fund and each share represents an undivided, proportionate interest in the Fund.
The investment adviser to the Fund is GLOBALT, Inc. (the "Adviser").
INVESTMENT OBJECTIVE AND STRATEGIES
The investment objective of the Fund is to provide long term growth of
capital. The Fund seeks to achieve its objective by investing primarily in a
broad range of equity securities of U.S. companies which the Adviser believes
offer superior growth potential, based on certain fundamental and technical
standards of selection. As the Adviser believes exposure to rapidly growing
foreign markets enhances growth potential, all stocks in the Fund's portfolio
will be of companies which compete in both U.S. and foreign economies and thus,
in the Adviser's opinion, are globally positioned for success. The Adviser will
only purchase stocks of companies that are expected to derive at least 20% of
their revenues outside of the U.S. It is anticipated that, in the aggregate, the
stocks in the Fund's portfolio will derive at least 50% of their revenues
outside of the U.S. and as a result will provide higher relative growth than the
S&P 500 Index.
The Fund is designed for investors with a long term wealthbuilding
horizon and is particularly suitable for retirement and educational funds. The
Adviser seeks to limit investment risk by diversifying the Fund's investments
across a broad range of industries and companies. After screening for securities
with exposure to foreign markets, the Adviser uses a disciplined selection
process to assemble a portfolio which it anticipates will have at least a 50%
exposure to foreign markets and will be highly diversified across economic
sectors. As the Fund will primarily invest in growth-oriented stocks, it is
expected that the Fund will generate a total return that is predominantly
derived from long term capital appreciation, although current income is also
expected.
- 3 -
<PAGE>
The Adviser has been managing income accounts for its clients since
1991. The performance of all accounts with investment objectives, policies and
strategies substantially similar to those of the Fund appears below. The data is
provided to illustrate past performance of the Adviser in managing such
accounts, as compared to the S&P 500 Index. The persons responsible for the
performance of the accounts are the same as those responsible for the investment
management of the Fund. As of December 31, 1997, the assets in those accounts
totaled approximately $___ million. The Adviser's total assets under management
were approximately $___ million as of _____________.
Summary of Annual Investment Returns of the Fund and GLOBALT, Inc. Managed
Accounts *
<TABLE>
<CAPTION>
Period Fund Managed Accounts S&P 500
------ ---- ---------------- -------
<S> <C> <C> <C>
1991 35.4% 30.5%
1992 7.8% 7.6%
1993 18.9% 10.1%
1994 - 0.7% 1.3%
1995 6.4%** 36.5% 37.6%
1996 20.0% 21.8% 22.9%
1997 ____% _____% ____%
Average Annual Total Return
Since Fund Inception
(12/1/95) ____% ____% ____%
Average Annual Total Return
Since Managed Accounts
Inception (1/1/91) N/A ____% ____%
<FN>
* The GLOBALT, Inc. managed account performance is the time-weighted,
dollar-weighted average total return associated with a composite of equity
accounts having objectives similar to the Fund, and is unaudited. The composite
does not include non-discretionary or otherwise restricted accounts because the
nature of those accounts make them inappropriate for purposes of comparison.
Performance figures reflected are net of management fees and net of all
expenses, including transaction costs and commissions. Results include the
reinvestment of dividends and capital gains. The presentation of the performance
composite complies with the Performance Presentation Standards of the
Association for Investment Management and Research (AIMR).
The S&P 500 Index is a widely recognized, unmanaged index of market
activity based upon the aggregate performance of a selected portfolio
of publicly traded common stocks, including monthly adjustments to
reflect the reinvestment of dividends and other distributions. The S&P
500 Index reflects the total return of securities comprising the Index,
including changes in market prices as well as accrued investment
income, which is presumed to be reinvested. Performance figures for the
S&P 500 Index do not reflect deduction of transaction costs or
expenses, including management fees.
- 4 -
<PAGE>
THE PERFORMANCE OF THE ACCOUNTS MANAGED BY THE ADVISER DOES NOT
REPRESENT THE HISTORICAL PERFORMANCE OF THE FUND, AND SHOULD NOT BE
CONSIDERED INDICATIVE OF FUTURE PERFORMANCE OF THE FUND. Results may
differ because of, among other things, differences in brokerage
commissions, account expenses, including management fees, the size of
positions taken in relation to account size and diversification of
securities, timing of purchases and sales, and availability of cash for
new investments. In addition, the managed accounts are not subject to
certain investment limitation, diversification requirements, and other
restrictions imposed by the Investment Company Act and the Internal
Revenue Code which, if applicable, may have adversely affected the
performance results of the managed accounts composite. The results for
different periods may vary.
** For the period December 1, 1995 (commencement of operations) through
December 31, 1995, not annualized.
</FN>
</TABLE>
The Adviser generally intends to stay fully invested (subject to
liquidity requirements and defensive purposes) in common stock and common stock
equivalents (such as rights, warrants and securities convertible into common
stocks) of U.S. companies, regardless of the movement of stock prices. However,
the Fund may invest in preferred stocks, bonds, corporate debt and U.S.
government obligations to maintain liquidity or pending investment in equity
securities. Substantially all equity securities in the Fund's portfolio are
listed on a major stock exchange or traded over-the-counter. The Fund will not
invest in foreign securities.
For temporary defensive purposes under abnormal market or economic
conditions, the Fund may hold all or a portion of its assets in money market
instruments, securities of other no-load registered investment companies or U.S.
government repurchase agreements. The Fund may also invest in such instruments
at any time to maintain liquidity or pending selection of investments in
accordance with its policies. If the Fund acquires securities of another
investment company, the shareholders of the Fund will be subject to additional
management fees.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, the Fund cannot give any assurance that its investment objective
will be achieved. Rates of total return quoted by the Fund may be higher or
lower than past quotations, and there can be no assurance that any rate of total
return will be maintained. See "Investment Policies and Techniques and Risk
Considerations" for a more detailed discussion of the Fund's investment
practices.
HOW TO INVEST IN THE FUND
Shares of the Fund are sold on a continuous basis, and you may invest
any amount you choose as often as you wish, subject to a minimum initial
investment of $25,000 and minimum subsequent investments of $5,000. Investors
choosing to purchase or redeem their shares through a broker/dealer or other
institution may be charged a fee by that institution. Investors choosing to
purchase or redeem shares directly from the Fund will not incur charges on
purchases or redemptions. To the extent investments of individual investors are
aggregated into an omnibus account established by an investment adviser, broker
or other intermediary, the account minimums apply to the omnibus account, not to
the account of the individual investor.
- 5 -
<PAGE>
Initial Purchase
By Mail - You may purchase shares of the Fund by completing and signing
the investment application form which accompanies this Prospectus and mailing it
in proper form, together with a check (subject to the above minimum amounts)
made payable to GLOBALT Growth Fund, and sent to the P.O. Box listed below. If
you prefer overnight delivery, use the overnight address listed below.
U.S. Mail: GLOBALT Growth Fund Overnight: GLOBALT Growth Fund
c/o American Data Services, Inc. c/o American Data Services, Inc.
P.O. Box 5536 Hauppauge Corporate Center
Hauppauge, New York 11788-0132 150 Motor Parkway
Hauppauge, New York 11760
Your purchase of shares of the Fund will be effected at the next share price
calculated after receipt of your investment.
BY WIRE - You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. If the money is
to be wired, you must call the Transfer Agent at (800) 831-9922 to set up your
account and obtain an account number. You should be prepared to provide the
information on the application to the Transfer Agent. Then, you should provide
your bank with the following information for purposes of wiring your investment:
Star Bank, N.A. Cinti/Trust
ABA # 0420-0001-3
Attn: GLOBALT Growth Fund
D.D.A. # 483889739
Account Name ________________ (write in shareholder name) For
the Account # ________________ (write in account number)
You are required to mail a signed application to the Custodian at the
above address in order to complete your initial wire purchase. Wire orders will
be accepted only on a day on which the Fund and the Custodian and Transfer Agent
are open for business. A wire purchase will not be considered made until the
wired money is received and the purchase is accepted by the Fund. Any delays
which may occur in wiring money, including delays which may occur in processing
by the banks, are not the responsibility of the Fund or the Transfer Agent.
There is presently no fee for the receipt of wired funds, but the right to
charge shareholders for this service is reserved by the Fund.
ADDITIONAL INVESTMENTS
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain your name, the name of your
account(s), your account number(s), and the name of the Fund. Checks should be
made payable to GLOBALT Growth Fund and should be sent to the address listed
above. A bank wire should be sent as outlined above.
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<PAGE>
TAX SHELTERED RETIREMENT PLANS
Since the Fund is oriented to longer term investments, shares of the
Fund may be an appropriate investment medium for tax sheltered retirement plans,
including: individual retirement plans (IRAs); simplified employee pensions
(SEPs); 401(k) plans; qualified corporate pension and profit sharing plans (for
employees); tax deferred investment plans (for employees of public school
systems and certain types of charitable organizations); and other qualified
retirement plans. You should contact the Transfer Agent for the procedure to
open an IRA or SEP plan, as well as more specific information regarding these
retirement plan options. Consultation with an attorney or tax adviser regarding
these plans is advisable. Custodial fees for an IRA will be paid by the
shareholder by redemption of sufficient shares of the Fund from the IRA unless
the fees are paid directly to the IRA custodian. You can obtain information
about the IRA custodial fees from the Transfer Agent.
OTHER PURCHASE INFORMATION
Dividends begin to accrue after you become a shareholder. The Fund does
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases and to
refuse to sell to any person are reserved by the Fund. If your check or wire
does not clear, you will be responsible for any loss incurred by the Fund. If
you are already a shareholder, the Fund can redeem shares from any identically
registered account in the Fund as reimbursement for any loss incurred. You may
be prohibited or restricted from making future purchases in the Fund.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after
the redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. A broker may charge a transaction fee
for the redemption. There is no charge for wire redemptions; however, the Fund
reserves the right to charge for this service. Any charges for wire redemptions
will be deducted from the shareholder's Fund account by redemption of shares.
Investors choosing to purchase or redeem their shares through a broker/dealer or
other institution may be charged a fee by that institution.
By Mail - You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:
GLOBALT Growth Fund
c/o American Data Services, Inc.
P.O. Box 5536
Hauppauge, New York 11788-0132
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the Fund
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<PAGE>
requires that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Fund or American Data Services, Inc., a
shareholder, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
By Telephone - You may redeem any part of your account in the Fund by
calling the Transfer Agent at (800) 831-9922. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at
any time by the Fund or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Fund, although neither the Fund nor the Transfer Agent has ever
experienced difficulties in receiving and in a timely fashion responding to
telephone requests for redemptions or exchanges. If you are unable to reach the
Fund by telephone, you may request a redemption or exchange by mail.
Additional Information - If you are not certain of the requirements for
a redemption please call the Transfer Agent at (800) 831 - 9922. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing or under any emergency circumstances, as determined
by the Securities and Exchange Commission, the Fund may suspend redemptions or
postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $25,000 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax adviser concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption at any time if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day on which
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<PAGE>
there is sufficient trading in the Fund's securities to materially affect the
net asset value. The net asset value per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Adviser's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Adviser determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Adviser believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Adviser, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within 60 days of maturity, are valued
by using the amortized cost method of valuation, which the Board has determined
will represent fair value.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on an annual basis, and intends to
distribute its net long term capital gains and its net short term capital gains
at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. An election to receive a cash payment of dividends and/or
capital gain distributions may be made in the application to purchase shares or
by separate written notice to the Transfer Agent. Shareholders will receive a
confirmation statement reflecting the payment and reinvestment of dividends and
summarizing all other transactions. If cash payment is requested, a check
normally will be mailed within five business days after the payable date. If you
withdraw your entire account, all dividends accrued to the time of withdrawal,
including the day of withdrawal, will be paid at that time. You may elect to
have distributions on shares held in IRAs and 403(b) plans paid in cash only if
you are 59 1/2 years old or permanently and totally disabled or if you otherwise
qualify under the applicable plan.
TAXES
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
the Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any realized
capital gains.
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<PAGE>
For federal income tax purposes, dividends paid by the Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 (the "Tax Reform Act"), all distributions of net
short-term capital gains to individuals are taxed at the same rate as ordinary
income. All distributions designated as being made from net realized long term
capital gains are taxable to shareholders as long term capital gains regardless
of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisers regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
On the application or other appropriate form, the Fund will request the
shareholder's certified taxpayer identification number (social security number
for individuals) and a certification that the shareholder is not subject to
backup withholding. Unless the shareholder provides this information, the Fund
will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the Fund may
make a corresponding charge against the account.
OPERATION OF THE FUND
The Fund is a diversified series of AmeriPrime Funds, an open-end
management investment company organized as an Ohio business trust on August 8,
1995. The Board of Trustees supervises the business activities of the Fund. Like
other mutual funds, the Fund retains various organizations to perform
specialized services.
The Fund retains GLOBALT, Inc., 3060 Peachtree Road, N.W., One Buckhead
Plaza, Suite 225, Atlanta, Georgia 30305 (the "Adviser") to manage the Fund's
investments. The Adviser was organized as a Georgia corporation in 1990. The
Adviser manages larger capitalization equity, medium capitalization equity,
balanced and fixed income portfolios for a variety of tax-exempt and taxable
clients. Angela Allen, President of the Adviser, and Samuel Allen, Chairman of
the Adviser, are the controlling shareholders of GLOBALT, Inc. The investment
decisions for the Fund are made by a committee of the Adviser, which is
primarily responsible for the day-to-day management of the Fund's portfolio.
The Fund is authorized to pay the Adviser a fee equal to an annual
average rate of 1.17% of its average daily net assets. The Adviser pays all of
the operating expenses of the Fund except brokerage, taxes, interest, fees and
expenses of non-interested person trustees and extraordinary expenses. It should
be noted that most investment companies pay their own operating expenses
directly, while the Fund's expenses, except those specified above, are paid by
the Adviser.
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator")
to manage the Fund's business affairs and provide the Fund with administrative
services, including all regulatory
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<PAGE>
reporting and necessary office equipment, personnel and facilities. The
Administrator receives a monthly fee from the Adviser equal to an annual average
rate of 0.10% of the Fund's average daily net assets up to fifty million
dollars, 0.075% of the Fund's average daily net assets from fifty to one hundred
million dollars and 0.050% of the Fund's average daily net assets over one
hundred million dollars (subject to a minimum annual payment of $30,000). In
addition, the Adviser will reimburse the Administrator for organizational
expenses advanced by the Administrator. The Fund retains American Data Services,
Inc., Hauppauge Corporate Center, 150 Motor Parkway, Hauppauge, New York 11760
(the "Transfer Agent") to serve as transfer agent, dividend paying agent and
shareholder service agent. The Trust retains AmeriPrime Financial Securities,
Inc., 1793 Kingswood Drive, Suite 200, Southlake, Texas 76092 (the
"Distributor") to act as the principal distributor of the Fund's shares. Kenneth
D. Trumpfheller, officer and sole shareholder of the Administrator and the
Distributor, is an officer and trustee of the Trust. The services of the
Administrator, Transfer Agent and Distributor are operating expenses paid by the
Adviser.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Adviser may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute
portfolio transactions. The Adviser (not the Fund) may pay certain financial
institutions (which may include banks, brokers, securities dealers and other
industry professionals) a "servicing fee" for performing certain administrative
servicing functions for Fund shareholders to the extent these institutions are
allowed to do so by applicable statute, rule or regulation.
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS
This section contains general information about various types of
securities and investment techniques that the Fund may purchase or employ.
EQUITY SECURITIES
Equity securities consist of common stock, preferred stock and common
stock equivalents (such as convertible preferred stock, convertible debentures,
rights and warrants) and investment companies which invest primarily in the
above. Equity securities also include common stocks and common stock equivalents
of domestic real estate investment trusts and other companies which operate as
real estate corporations or which have a significant portion of their assets in
real estate.
FIXED INCOME SECURITIES
The Fund may temporarily invest in short term fixed income securities.
The Fund will limit its investment in fixed income securities to corporate debt
securities and U.S. government securities. Fixed income securities are generally
considered to be interest rate sensitive, which means that their value will
generally decrease when interest rates rise and increase when interest rates
fall. Securities with shorter maturities, while offering lower yields, generally
provide greater price stability than longer term securities and are less
affected by changes in interest rates.
CORPORATE DEBT SECURITIES - Corporate debt securities are long and short
term debt obligations issued by companies (such as publicly issued and privately
placed bonds, notes and
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<PAGE>
commercial paper). The Fund will only invest in corporate debt securities rated
A or higher by Standard & Poor's Corporation or Moody's Investors Services, Inc.
U.S. GOVERNMENT OBLIGATIONS - U.S. government obligations may
be backed by the credit of the government as a whole or only by the issuing
agency. U.S. Treasury bonds, notes, and bills and some agency securities, such
as those issued by the Federal Housing Administration and the Government
National Mortgage Association (GNMA), are backed by the full faith and credit of
the U.S. government as to payment of principal and interest and are the highest
quality government securities. Other securities issued by U.S. government
agencies or instrumentalities, such as securities issued by the Federal Home
Loan Banks and the Federal Home Loan Mortgage Corporation, are supported only by
the credit of the agency that issued them, and not by the U.S. government.
Securities issued by the Federal Farm Credit System, the Federal Land Banks, and
the Federal National Mortgage Association (FNMA) are supported by the agency's
right to borrow money from the U.S. Treasury under certain circumstances, but
are not backed by the full faith and credit of the U.S. government.
LOANS OF PORTFOLIO SECURITIES
The Fund may make short and long term loans of its portfolio
securities. Under the lending policy authorized by the Board of Trustees and
implemented by the Adviser in response to requests of broker-dealers or
institutional investors which the Adviser deems qualified, the borrower must
agree to maintain collateral, in the form of cash or U.S. government
obligations, with the Fund on a daily mark-to-market basis in an amount at least
equal to 100% of the value of the loaned securities. The Fund will continue to
receive dividends or interest on the loaned securities and may terminate such
loans at any time or reacquire securities in time to vote on any matter which
the Board of Trustees determines to be serious. With respect to loans of
securities, there is the risk that the borrower may fail to return the loaned
securities or that the borrower may not be able to provide additional
collateral.
GENERAL
The Fund may invest up to 5% of its net assets in repurchase agreements
fully collateralized by U.S. Government obligations. The Fund may invest in time
deposits, certificates of deposit or banker's acceptances, and may buy and write
put and call options, provided the Fund's investment in each does not exceed 5%
of its net assets.
GENERAL INFORMATION
FUNDAMENTAL POLICIES. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. The investment objective of the Fund may be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. Any such
change may result in the Fund having an investment objective different from the
objective which the shareholders considered appropriate at the time of
investment in the Fund.
PORTFOLIO TURNOVER. The Fund does not intend to purchase or sell
securities for short term trading purposes. The Fund will, however, sell any
portfolio security (without regard to the length of time it has been held) when
the Adviser believes that market conditions, creditworthiness factors or
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<PAGE>
general economic conditions warrant such action. It is anticipated that the Fund
will have a portfolio turnover rate of less than 100%.
SHAREHOLDER RIGHTS. Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. When
matters are submitted to shareholders for a vote, each shareholder is entitled
to one vote for each whole share he owns and fractional votes for fractional
shares he owns. All shares of the Fund have equal voting rights and liquidation
rights.
PERFORMANCE INFORMATION
The Fund may periodically advertise "average annual total return." The
"average annual total return" of the Fund refers to the average annual
compounded rate of return over the stated period that would equate an initial
amount invested at the beginning of a stated period to the ending redeemable
value of the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions.
The Fund may also periodically advertise its total return over various
periods in addition to the value of a $10,000 investment (made on the date of
the initial public offering of the Fund's shares) as of the end of a specified
period. The "total return" for the Fund refers to the percentage change in the
value of an account between the beginning and end of the stated period, assuming
no activity in the account other than reinvestment of dividends and capital
gains distributions.
The Fund may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including the Standard &
Poor's (S&P) 500 Index or the Dow Jones Industrial Average.
The advertised performance data of the Fund is based on
historical performance and is not intended to indicate future performance. Rates
of total return quoted by the Fund may be higher or lower than past quotations,
and there can be no assurance that any rate of total return will be maintained.
The principal value of an investment in the Fund will fluctuate so that a
shareholder's shares, when redeemed, may be worth more or less than the
shareholder's original investment.
INVESTMENT ADVISER ADMINISTRATOR
GLOBALT, Inc. AmeriPrime Financial Services, Inc.
3060 Peachtree Road, N.W. 1793 Kingswood Drive, Suite 200
One Buckhead Plaza, Suite 225 Southlake, Texas 76092
Atlanta, Georgia 30305
CUSTODIAN DISTRIBUTOR
Star Bank, N.A. AmeriPrime Financial Securities, Inc.
P.O. Box 641084 1793 Kingswood Drive, Suite 200
Cincinnati, Ohio 45264 Southlake, Texas 76092
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<PAGE>
TRANSFER AGENT (ALL PURCHASE AND AUDITORS
REDEMPTION REQUESTS) McCurdy & Associates CPA's, Inc.
American Data Services, Inc. 27955 Clemens Road
Hauppauge Corporate Center Westlake, Ohio 44145
150 Motor Parkway
Hauppauge, New York 11760
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell its
shares in any state to any person to whom it is unlawful to make such offer in
such state.
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14
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY OF FUND EXPENSES............................................ 2
Shareholder Transaction Expenses........................... 2
Annual Fund Operating Expenses............................. 2
FINANCIAL HIGHLIGHTS................................................ 3
THE FUND............................................................ 3
INVESTMENT OBJECTIVE AND STRATEGIES................................. 3
HOW TO INVEST IN THE FUND............................................ 5
Initial Purchase............................................ 6
By Mail........................................... 6
By Wire............................................ 6
Additional Investments..................................... 6
Tax Sheltered Retirement Plans............................. 7
Other Purchase Information................................. 7
HOW TO REDEEM SHARES................................................. 7
By Mail............................................ 7
By Telephone...................................... 8
Additional Information............................. 8
SHARE PRICE CALCULATION............................................. 8
DIVIDENDS AND DISTRIBUTIONS.......................................... 9
TAXES............................................................... 9
OPERATION OF THE FUND............................................... 10
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS.......... 11
Equity Securities.......................................... 11
Fixed Income Securities.....................................11
Corporate Debt Securities......................... 11
U.S. Government Obligations....................... 12
Loans of Portfolio Securities ............................. 12
General.....................................................12
GENERAL INFORMATION................................................. 12
Fundamental Policies.............................. 12
Portfolio Turnover................................ 12
Shareholder Rights................................ 13
PERFORMANCE INFORMATION............................................. 13
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<PAGE>
IMS CAPITAL VALUE FUND
STATEMENT OF ADDITIONAL INFORMATION
February 13, 1998
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of IMS Capital Value Fund dated
February 13, 1998. A copy of the Prospectus can be obtained by writing the
Transfer Agent at Hauppauge Corporate Center, 150 Motor Parkway, Hauppauge, New
York 11760, or by calling 1-800-934-5550.
ASA029D0-121197-3
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
PAGE
DESCRIPTION OF THE TRUST..............................................1
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS........................................................1
INVESTMENT LIMITATIONS................................................2
THE INVESTMENT ADVISOR................................................4
TRUSTEES AND OFFICERS.................................................5
PORTFOLIO TRANSACTIONS AND BROKERAGE..................................6
DETERMINATION OF SHARE PRICE..........................................7
INVESTMENT PERFORMANCE................................................8
CUSTODIAN.............................................................8
TRANSFER AGENT........................................................9
ACCOUNTANTS...........................................................9
DISTRIBUTOR...........................................................9
FINANCIAL STATEMENTS..................................................9
<PAGE>
DESCRIPTION OF THE TRUST
IMS Capital Value Fund (the "Fund") was organized as a series of
AmeriPrime Funds (the "Trust"). The Trust is an open-end investment company
established under the laws of Ohio by an Agreement and Declaration of Trust
dated August 8, 1995 (the "Trust Agreement"). The Trust Agreement permits the
Trustees to issue an unlimited number of shares of beneficial interest of
separate series without par value. The Fund is one of a series of funds
currently authorized by the Trustees.
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series with each other share of
that series and is entitled to such dividends and distributions out of income
belonging to the series as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will be entitled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his or her express consent.
Upon sixty days prior written notice to shareholders, the Fund may make
redemption payments in whole or in part in securities or other property if the
Trustees determine that existing conditions make cash payments undesirable. For
other information concerning the purchase and redemption of shares of the Fund,
see "How to Invest in the Fund" and "How to Redeem Shares" in the Fund's
Prospectus. For a description of the methods used to determine the share price
and value of the Fund's assets, see "Share Price Calculation" in the Fund's
Prospectus.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS
This section contains a more detailed discussion of some of the
investments the Fund may make and some of the techniques it may use, as
described in the Prospectus (see "Investment Objectives and Strategies" and
"Investment Policies and Techniques and Risk Considerations").
A. Equity Securities. Equity securities include common stock, preferred
stock and common stock equivalents (such as convertible preferred stock, rights
and warrants). Convertible preferred stock is preferred stock that can be
converted into common stock pursuant to its terms. Warrants are options to
purchase equity securities at a specified price valid for a specific time
period. Rights are similar to warrants, but normally have a short duration and
are distributed by the issuer to its shareholders. The Fund may invest up to 5%
of its net assets at the time of purchase in convertible preferred stock,
convertible debentures, rights or warrants.
B. American Depository Receipts. American Depository Receipts are
dollar-denominated receipts that are generally issued in registered form by
domestic banks, and represent the deposit with the bank of a security of a
foreign issuer. To the extent that the Fund invests in
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<PAGE>
foreign securities, such investments may be subject to special risks. For
example, there may be less information publicly available about a foreign
company than about a U.S. company, and foreign companies are not generally
subject to accounting, auditing and financial reporting standards and practices
comparable to those in the U.S. Other risks associated with investments in
foreign securities include changes in restrictions on foreign currency
transactions and rates of exchanges, changes in the administrations or economic
and monetary policies of foreign governments, the imposition of exchange control
regulations, the possibility of expropriation decrees and other adverse foreign
governmental action, the imposition of foreign taxes, less liquid markets, less
government supervision of exchanges, brokers and issuers, difficulty in
enforcing contractual obligations, delays in settlement of securities
transactions and greater price volatility. In addition, investing in foreign
securities will generally result in higher commissions than investing in similar
domestic securities.
C. Options Transactions. The Fund may write (sell) covered call options
on common stocks in the Fund's portfolio. A covered call option on a security is
an agreement to sell a particular portfolio security if the option is exercised
at a specified price, or before a set date. The Fund profits from the sale of
the option, but gives up the opportunity to profit from any increase in the
price of the stock above the option price, and may incur a loss if the stock
price falls. Risks associated with writing covered call options include the
possible inability to effect closing transactions at favorable prices and an
appreciation limit on the securities set aside for settlement.
The Fund will only engage in exchange-traded options transactions.
D. Loans of Portfolio Securities. The Fund may made short and long term
loans of its portfolio securities. Under the lending policy authorized by the
Board of Trustees and implemented by the Adviser in response to requests of
broker-dealers or institutional investors which the Adviser deems qualified, the
borrower must agree to maintain collateral, in the form of cash or U.S.
government obligations, with the Fund on a daily mark-to-market basis in an
amount at least equal to 100% of the value of the loaned securities. The Fund
will continue to receive dividends or interest on the loaned securities and may
terminate such loans at any time or reacquire such securities in time to vote on
any matter which the Board of Trustees determines to be serious. With respect to
loans of securities, there is the risk that the borrower may fail to return the
loaned securities or that the borrower may not be able to provide additional
collateral.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
the Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").
1. Borrowing Money. The Fund will not borrow money, except (a) from a bank,
provided that immediately after such borrowing there is an asset coverage of
300% for all
-2-
<PAGE>
borrowings of the Fund; or (b) from a bank or other persons for temporary
purposes only, provided that such temporary borrowings are in an amount not
exceeding 5% of the Fund's total assets at the time when the borrowing is made.
This limitation does not preclude the Fund from entering into reverse repurchase
transactions, which will not be considered as borrowings provided they are fully
collateralized.
2. Senior Securities. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is (a) consistent with or permitted by the
Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder or interpretations of the Securities and Exchange
Commission or its staff and (b) as described in the Prospectus and the Statement
of Additional Information.
3. Underwriting. The Fund will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. Real Estate. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which have
a significant portion of their assets in real estate.
5. Commodities. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. Loans. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing non-publicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. The Fund will not invest 25% or more of its total
assets in a particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
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<PAGE>
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
Non-Fundamental. The following limitations have been adopted by the Trust
with respect to the Fund and are Non-Fundamental (see "Investment Restrictions"
above).
i. Pledging. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
ii. Borrowing. The Fund will not purchase any security while borrowings
representing more than 5% of its total assets are outstanding. The Fund will not
invest in reverse repurchase agreements.
iii. Margin Purchases. The Fund will not purchase securities or
evidences of interest thereon on "margin." This limitation is not applicable to
short term credit obtained by the Fund for the clearance of purchases and sales
or redemption of securities, or to arrangements with respect to transactions
involving options and other permitted investments and techniques.
iv. Short Sales. The Fund will not effect short sales.
v. Options. The Fund will not purchase or sell puts, calls, options or
straddles, except as described in the Prospectus and the Statement of Additional
Information.
vi. Repurchase Agreements. The Fund may invest some or all of the funds
assets in U.S. Government repurchase agreements temporarily under certain
conditions described in the prospectus.
vii. Illiquid Investments. The Fund will not invest in securities for
which there are legal or contractual restrictions on resale and other illiquid
securities.
viii. Mortgage-related Securities. The Fund will not invest in
mortgage-related securities.
THE INVESTMENT ADVISOR
The Fund's investment advisor is IMS Capital Management, 10159 S.E.
Sunnyside Road, Suite 330, Portland, Oregon 97015. Carl W. Marker may be deemed
to be a controlling person of the Advisor due to his ownership of the shares of
the corporation.
Under the terms of the management agreement (the "Agreement"), the Advisor
manages the Fund's investments subject to approval of the Board of Trustees. As
compensation for its management services, the Fund is obligated to pay the
Advisor a fee computed and accrued daily and paid monthly at an annual rate of
1.59% of the average daily net assets of the Fund. The
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<PAGE>
Advisor may waive all or part of its fee, at any time, and at its sole
discretion, but such action shall not obligate the Advisor to waive any fees in
the future. For the period August 1, 1996 (commencement of operations) through
October 31, 1996 and for the fiscal year ended October 31, 1997, the Fund paid
advisory fees of $9,952 and $________, respectively.
The Advisor retains the right to use the name "IMS" in connection with
another investment company or business enterprise with which the Advisor is or
may become associated. The Trust's right to use the name "IMS" automatically
ceases ninety days after termination of the Agreement and may be withdrawn by
the Advisor on ninety days written notice.
The Advisor may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Fund believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Fund believes that there would be no material impact on the Fund or its
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
TRUSTEES AND OFFICERS
The names of the Trustees and executive officers of the Trust are shown
below. Each Trustee who is an "interested person" of the Trust, as defined in
the Investment Company Act of 1940, is indicated by an asterisk. As of December
1, 1997, the officers and trustees as a group beneficially owned less than one
percent (1%) of the Fund.
-5-
<PAGE>
<TABLE>
<CAPTION>
Name, Age and Address Position Principal Occupations During Past 5 Years
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
* Kenneth D. Trumpfheller President and Trustee President, Treasurer and Secretary of AmeriPrime
Age: 39 Financial Services, Inc., the Fund's administrator, and
1793 Kingswood Drive AmeriPrime Financial Securities, Inc., the Fund's
Suite 200 distributor. Prior to December, 1994, a senior client
Southlake, Texas 76092 executive with SEI Financial Services.
- ------------------------------------------------------------------------------------------------------------------------------------
Age: 31 AmeriPrime Financial Services, Inc. and AmeriPrime
1793 Kingswood Drive Financial Securities, Inc.; Fund Reporting Analyst at
Suite 200 Fidelity Investments from 1993 to 1997; Fund
Southlake, Texas 76092 Accounting Analyst at Fidelity Investments in 1993.
Prior to 1993, Accounting Manager at Windows
Presentation Manager Association.
- ------------------------------------------------------------------------------------------------------------------------------------
Steve L. Cobb Trustee President of Chandler Engineering Company, L.L.C.,
Age: 40 oil and gas services company; various positions with
2001 Indianwood Ave. Carbo Ceramics, Inc., oil field manufacturing/supply
Broken Arrow, Oklahoma company, from 1984 to 1997, most recently Vice
74102 President of Marketing.
- ------------------------------------------------------------------------------------------------------------------------------------
Gary E. Hippenstiel Trustee Director, Vice President and Chief Investment Officer of
Age: 50 Legacy Trust Company since 1992; President and
32 Sunlit Forest Drive Director of Heritage Trust Company from 1994 to 1996;
The Woodlands, Texas 77381 Vice President and Manager of Investments of Kanaly
Trust
Company from 1988 to 1992.
====================================================================================================================================
</TABLE>
/R>
The compensation paid to the Trustees of the Trust for the fiscal year
ended October 31, 1997 is set forth in the following table. Trustee fees are
Trust expenses and each series of the Trust pays a portion of the Trustee fees.
<TABLE>
<CAPTION>
===================================================================================================================================
Name Aggregate Total Compensation
Compensation from Trust (the Trust is
from Trust not in a Fund Complex)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Kenneth D. Trumpfheller 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Steve L. Cobb $4,000 $4,000
- -----------------------------------------------------------------------------------------------------------------------------------
Gary E. Hippenstiel $4,000 $4,000
===================================================================================================================================
</TABLE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Advisor is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In placing portfolio transactions, the
Advisor seeks the best qualitative execution for the Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Advisor generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received.
-6-
<PAGE>
The Advisor is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Fund and/or the other
accounts over which the Advisor exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Advisor determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Advisor's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Fund effects securities
transactions may also be used by the Advisor in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Advisor in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Advisor, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Advisor that the review and study of the research and other information will not
reduce the overall cost to the Advisor of performing its duties to the Fund
under the Agreement. Due to research services provided by brokers, the Fund
directed to brokers $________ of brokerage transactions (on which commissions
were $________) during the fiscal year ended October 31, 1997.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
To the extent that the Trust and another of the Advisor's clients seek
to acquire the same security at about the same time, the Trust may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Trust may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Trust. In the event that more than one client wants to purchase or sell the same
security on a given date, the purchases and sales will normally be made by
random client selection.
For the period August 1, 1996 (commencement of operations) through
October 31, 1996 and for the fiscal year ended October 31, 1997, the Fund paid
brokerage commissions of $3,318 and $________, respectively.
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of the Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day,
-7-
<PAGE>
Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas. For a description of
the methods used to determine the net asset value (share price), see "Share
Price Calculation" in the Prospectus.
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return for the period indicated that would equate the initial amount invested
to the ending redeemable value, according to the following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue. For the fiscal year
ended October 31, 1997, the Fund's average annual total return was 12.08%.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the Standard & Poor's 500 Stock Index or the Dow Jones Industrial Average.
In addition, the performance of the Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of the Fund. Performance rankings and ratings
reported periodically in national financial publications such as Barron's and
Fortune also may be used.
CUSTODIAN
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is Custodian of
the Fund's
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<PAGE>
investments. The Custodian acts as the Fund's depository, safekeeping its
portfolio securities, collects all income and other payments with respect
thereto, disburses funds at the Fund's request and maintains records in
connection with its duties.
TRANSFER AGENT
American Data Services, Inc. ("ADS"), Hauppauge Corporate Center, 150
Motor Parkway, Hauppauge, New York 11760, acts as the Fund's transfer agent and,
in such capacity, maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution disbursing
agent and performs other accounting and shareholder service functions. In
addition, ADS provides the Fund with certain monthly reports, record-keeping and
other management-related services. For the period August 1, 1996 (commencement
of operations) through October 31, 1996 and for the fiscal year ended October
31, 1997, ADS received $4,800 and $_____, respectively, from the Fund for these
services.
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent public accountants for the Trust
for the fiscal year ending October 31, 1998. McCurdy & Associates performs an
annual audit of the Fund's financial statements and provides financial, tax and
accounting consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the exclusive agent for distribution of shares of the
Fund. The Distributor is obligated to sell the shares of the Fund on a best
efforts basis only against purchase orders for the shares.
Shares of the Fund are offered to the public on a continuous basis.
FINANCIAL STATEMENTS
The financial statements and independent auditors' report required to
be included in the Statement of Additional Information are incorporated herein
by reference to the Trust's Annual Report to Shareholders for the fiscal year
ended October 31, 1997. The Trust will provide the Annual Report without charge
by calling the Fund at 1-800-934-5550.
-9-
<PAGE>
FOUNTAINHEAD SPECIAL VALUE FUND
STATEMENT OF ADDITIONAL INFORMATION
February 13, 1998
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of Fountainhead Special Value Fund
dated February 13, 1998. A copy of the Prospectus can be obtained by writing the
Transfer Agent at Hauppauge Corporate Center, 150 Motor Parkway, New York 11760,
or by calling 1-800-868-9535.
ASA02D28-121197-3
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
PAGE
DESCRIPTION OF THE TRUST............................................. 1
ADDITIONAL INFORMATION ABOUT FUND
INVESTMENTS AND RISK CONSIDERATIONS.......................................... 1
INVESTMENT LIMITATIONS.............................................. 6
THE INVESTMENT ADVISOR.............................................. 8
TRUSTEES AND OFFICERS............................................... 9
PORTFOLIO TRANSACTIONS AND BROKERAGE................................ 10
DETERMINATION OF SHARE PRICE.........................................11
INVESTMENT PERFORMANCE.............................................. 11
CUSTODIAN........................................................... 12
TRANSFER AGENT...................................................... 12
ACCOUNTANTS......................................................... 12
DISTRIBUTOR......................................................... 12
FINANCIAL STATEMENTS................................................ 12
- i -
<PAGE>
DESCRIPTION OF THE TRUST
Fountainhead Special Value Fund (the "Fund") was organized as a series
of AmeriPrime Funds (the "Trust"). The Trust is an open-end investment company
established under the laws of Ohio by an Agreement and Declaration of Trust
dated August 8, 1995 (the "Trust Agreement"). The Trust Agreement permits the
Trustees to issue an unlimited number of shares of beneficial interest of
separate series without par value. The Fund is one of four series currently
authorized by the Trustees.
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series with each other share of
that series and is entitled to such dividends and distributions out of income
belonging to the series as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will be entitled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his or her express consent.
As of December 3, 1997, the following persons may be deemed to
beneficially own five percent (5%) or more of the Fund: Servis Beulah IRA, 602
Hallie, Houston, Texas 77024 - 9.40%; Jenswold, King & Associates, Inc. Profit
Sharing Plan, Roger E. King, Trustee, 1980 Post Oak Boulevard, #2400, Houston,
Texas - 16.84%; Betty F. Wolfenson, 5555 Del Monte, Suite 106, Houston, Texas -
13.16%; Robert E. Holloway IRA, 12518 Overcup Drive, Houston, Texas - 7.79%;
Keogh Money Purchase Plan, Terry Donovan, Trustee, 8723 Winningham Lane,
Houston, Texas - 5.02%; and Keogh Money Purchase Plan, John Douglas, Trustee,
8723 Winningham Lane, Houston, Texas - 7.37%. As of December 1, 1997, the
officers and trustees as a group may be deemed to beneficially own less than one
percent (1%) of the Fund.
For information concerning the purchase and redemption of shares of the
Fund, see "How to Invest in the Fund" and "How to Redeem Shares" in the Fund's
Prospectus. For a description of the methods used to determine the share price
and value of the Fund's assets, see "Share Price Calculation" in the Fund's
Prospectus.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a more detailed discussion of some of the
investments the Fund may make and some of the techniques it may use, as
described in the Prospectus (see "Investment Objectives and Strategies" and
"Investment Policies and Techniques and Risk Considerations").
A. Equity Securities. Equity securities include common stock, preferred
stock and common stock equivalents (such as convertible preferred stock, rights
and warrants). Convertible preferred stock is preferred stock that can be
converted into common stock pursuant to its terms. Warrants are options to
purchase equity securities at a specified price valid for a specific time
period. Rights are similar to
- 1 -
<PAGE>
warrants, but normally have a short duration and are distributed by the issuer
to its shareholders. The Fund may invest up to 5% of its net assets at the time
of purchase in rights or warrants.
B. Repurchase Agreements. A repurchase agreement is a short-term
investment in which the purchaser (i.e., the Fund) acquires ownership of a U.S.
Government obligation (which may be of any maturity) and the seller agrees to
repurchase the obligation at a future time at a set price, thereby determining
the yield during the purchaser's holding period (usually not more than seven
days from the date of purchase). Any repurchase transaction in which the Fund
engages will require full collateralization of the seller's obligation during
the entire term of the repurchase agreement. In the event of a bankruptcy or
other default of the seller, the Fund could experience both delays in
liquidating the underlying security and losses in value. However, the Fund
intends to enter into repurchase agreements only with the Custodian, other banks
with assets of $1 billion or more and registered securities dealers determined
by the Advisor (subject to review by the Board of Trustees) to be creditworthy.
The Advisor monitors the creditworthiness of the banks and securities dealers
with which the Fund engages in repurchase transactions, and the Fund will not
invest more than 5% of its net assets in repurchase agreements.
C. Reverse Repurchase Agreements. Reverse repurchase agreements involve
sales of portfolio securities by the Fund to member banks of the Federal Reserve
System or recognized securities dealers, concurrently with an agreement by the
Fund to repurchase the same securities at a later date at a fixed price, which
is generally equal to the original sales price plus interest. The Fund retains
record ownership and the right to receive interest and principal payments on the
portfolio security involved. The Fund's objective in such a transaction would be
to obtain funds to pursue additional investment opportunities whose yield would
exceed the cost of the reverse repurchase transaction. Generally, the use of
reverse repurchase agreements should reduce portfolio turnover and increase
yield.
In connection with each reverse repurchase agreement, the Fund
will direct its Custodian to place cash or U.S. government obligations in a
separate account in an amount equal to the repurchase price. In the event of
bankruptcy or other default by the purchaser, the Fund could experience both
delays in repurchasing the portfolio securities and losses.
D. Illiquid Securities. The portfolio of the Fund may contain illiquid
securities. Illiquid securities generally include securities which cannot be
disposed of promptly and in the ordinary course of business without taking a
reduced price. Securities may be illiquid due to contractual or legal
restrictions on resale or lack of a ready market. The following securities are
considered to be illiquid: repurchase agreements and reverse repurchase
agreements maturing in more than seven days, nonpublicly offered securities and
restricted securities. The Fund will not invest more than 5% of its net assets
in illiquid securities.
E. Mortgage-Related Securities. Mortgage-related securities include
securities representing interests in a pool of mortgages. These securities,
including securities issued by FNMA, GNMA and the Federal Home Loan Mortgage
Corporation, provide investors with payments consisting of both interest and
principal as the mortgages in the underlying mortgage pools are repaid. The Fund
will only invest in pools of mortgage loans assembled for sale to investors by
agencies or instrumentalities of the U.S. government and will limit its
investment to 5% of its net assets. Unscheduled or early payments on the
underlying mortgages may shorten the securities' effective maturities.
- 2 -
<PAGE>
Other types of securities representing interests in a pool of
mortgage loans are known as collateralized mortgage obligations (CMOs) and real
estate mortgage investment conduits (REMICs) and multi-class pass-throughs. CMOs
and REMICs are debt instruments collateralized by pools of mortgage loans or
other mortgage-backed securities. Multi-class pass-through securities are equity
interests in a trust composed of mortgage loans or other mortgage-backed
securities. Payments of principal and interest on underlying collateral provides
the funds to pay debt service on the CMO or REMIC or make scheduled
distributions on the multi-class pass-through securities. The Fund will only
invest in CMOs, REMICs and multi-class pass-through securities (collectively
"CMOs" unless the context indicates otherwise) issued by agencies or
instrumentalities of the U.S. government (such as the Federal Home Loan Mortgage
Corporation). Neither Fund will invest in "stripped" CMOs, which represent only
the income portion or the principal portion of the CMO.
CMOs are issued with a variety of classes or "tranches," which
have different maturities and are often retired in sequence. One or more
tranches of a CMO may have coupon rates which reset periodically at a specified
increment over an index such as the London Interbank Offered Rate ("LIBOR").
These "floating rate CMOs," typically are issued with lifetime "caps" on their
coupon rate, which means that there is a ceiling beyond which the coupon rate
may not be increased. The yield of some floating rate CMOs varies in excess of
the change in the index, which would cause the value of such CMOs to fluctuate
significantly once rates reach the cap.
REMICs, which have elected to be treated as such under the
Internal Revenue Code, are private entities formed for the purpose of holding a
fixed pool of mortgages secured by an interest in real property. REMICs are
similar to CMOs in that they issue multiple classes of securities. As with other
CMOs, the mortgages which collateralize the REMICs in which a Fund may invest
include mortgages backed by GNMA certificates or other mortgage pass-throughs
issued or guaranteed by the U.S. government, its agencies or instrumentalities.
The average life of securities representing interests in pools
of mortgage loans is likely to be substantially less than the original maturity
of the mortgage pools as a result of prepayments or foreclosures of such
mortgages. Prepayments are passed through to the registered holder with the
regular monthly payments of principal and interest, and have the effect of
reducing future payments. To the extent the mortgages underlying a security
representing an interest in a pool of mortgages are prepaid, the Fund may
experience a loss (if the price at which the respective security was acquired by
the Fund was at a premium over par, which represents the price at which the
security will be redeemed upon prepayment). In addition, prepayments of such
securities held by the Fund will reduce the share price of the Fund to the
extent the market value of the securities at the time of prepayment exceeds
their par value. Furthermore, the prices of mortgage-related securities can be
significantly affected by changes in interest rates. Prepayments may occur with
greater frequency in periods of declining mortgage rates because, among other
reasons, it may be possible for mortgagors to refinance their outstanding
mortgages at lower interest rates. In such periods, it is likely that any
prepayment proceeds would be reinvested by the Fund at lower rates of return.
F. Foreign Securities. The Fund may invest up to 5% of its net assets
at the time of purchase in foreign equity securities including common stock,
preferred stock and common stock equivalents issued by foreign companies, and
foreign fixed income securities. Foreign fixed income securities include
corporate debt obligations issued by foreign companies and debt obligations of
foreign governments or international organizations. This category may include
floating rate obligations, variable rate obligations, Yankee dollar obligations
(U.S. dollar denominated obligations issued by
- 3 -
<PAGE>
foreign companies and traded on U.S. markets) and Eurodollar obligations
(U.S. dollar denominated obligations issued by foreign companies and traded on
foreign markets).
Foreign government obligations generally consist of debt
securities supported by national, state or provincial governments or similar
political units or governmental agencies. Such obligations may or may not be
backed by the national government's full faith and credit and general taxing
powers. Investments in foreign securities also include obligations issued by
international organizations. International organizations include entities
designated or supported by governmental entities to promote economic
reconstruction or development as well as international banking institutions and
related government agencies. Examples are the International Bank for
Reconstruction and Development (the World Bank), the European Coal and Steel
Community, the Asian Development Bank and the InterAmerican Development Bank. In
addition, investments in foreign securities may include debt securities
denominated in multinational currency units of an issuer (including
international issuers). An example of a multinational currency unit is the
European Currency Unit. A European Currency Unit represents specified amounts of
the currencies of certain member states of the European Economic Community, more
commonly known as the Common Market.
Purchases of foreign securities are usually made in foreign
currencies and, as a result, the Fund may incur currency conversion costs and
may be affected favorably or unfavorably by changes in the value of foreign
currencies against the U.S. dollar. In addition, there may be less information
publicly available about a foreign company then about a U.S. company, and
foreign companies are not generally subject to accounting, auditing and
financial reporting standards and practices comparable to those in the U.S.
Other risks associated with investments in foreign securities include changes in
restrictions on foreign currency transactions and rates of exchanges, changes in
the administrations or economic and monetary policies of foreign governments,
the imposition of exchange control regulations, the possibility of expropriation
decrees and other adverse foreign governmental action, the imposition of foreign
taxes, less liquid markets, less government supervision of exchanges, brokers
and issuers, difficulty in enforcing contractual obligations, delays in
settlement of securities transactions and greater price volatility. In addition,
investing in foreign securities will generally result in higher commissions than
investing in similar domestic securities.
G. Option Transactions. Up to 5% of the Fund's net assets may be
invested in option transactions involving individual securities and market
indices. An option involves either (a) the right or the obligation to buy or
sell a specific instrument at a specific price until the expiration date of the
option, or (b) the right to receive payments or the obligation to make payments
representing the difference between the closing price of a market index and the
exercise price of the option expressed in dollars times a specified multiple
until the expiration date of the option. Options are sold (written) on
securities and market indices. The purchaser of an option on a security pays the
seller (the writer) a premium for the right granted but is not obligated to buy
or sell the underlying security. The purchaser of an option on a market index
pays the seller a premium for the right granted, and in return the seller of
such an option is obligated to make the payment. A writer of an option may
terminate the obligation prior to expiration of the option by making an
offsetting purchase of an identical option. Options are traded on organized
exchanges and in the over-the-counter market. Options on securities which the
Fund sells (writes) will be covered or secured, which means that it will own the
underlying security (for a call option); will segregate with the Custodian high
quality liquid debt obligations equal to the option exercise price (for a put
option); or (for an option on a stock index) will hold a portfolio of securities
substantially replicating the movement of the index (or, to the extent it does
not hold such a portfolio, will maintain a segregated account with the Custodian
of high quality liquid debt obligations
- 4 -
<PAGE>
equal to the market value of the option, marked to market daily). When the Fund
writes options, it may be required to maintain a margin account, to pledge the
underlying securities or U.S. government obligations or to deposit liquid high
quality debt obligations in a separate account with the Custodian.
The purchase and writing of options involves certain risks; for
example, the possible inability to effect closing transactions at favorable
prices and an appreciation limit on the securities set aside for settlement, as
well as (in the case of options on a stock index) exposure to an indeterminate
liability. The purchase of options limits the Fund's potential loss to the
amount of the premium paid and can afford the Fund the opportunity to profit
from favorable movements in the price of an underlying security to a greater
extent than if transactions were effected in the security directly. However, the
purchase of an option could result in the Fund losing a greater percentage of
its investment than if the transaction were effected directly. When the Fund
writes a covered call option, it will receive a premium, but it will give up the
opportunity to profit from a price increase in the underlying security above the
exercise price as long as its obligation as a writer continues, and it will
retain the risk of loss should the price of the security decline. When the Fund
writes a covered put option, it will receive a premium, but it will assume the
risk of loss should the price of the underlying security fall below the exercise
price. When the Fund writes a covered put option on a stock index, it will
assume the risk that the price of the index will fall below the exercise price,
in which case the Fund may be required to enter into a closing transaction at a
loss. An analogous risk would apply if the Fund writes a call option on a stock
index and the price of the index rises above the exercise price.
H. Hedging Transactions. The Fund may hedge all or a portion of its
portfolio investments through the use of options and futures contracts. The
objective of the hedging program is to protect a profit or offset a loss in a
portfolio security from future price erosion or to assure a definite price for a
security by acquiring the right or option to purchase or to sell a fixed amount
of the security at a future date. For example, in order to hedge against the
risk that the value of the Fund's portfolio securities may decline, the fund
might sell futures contracts on stock indices. When hedging of this character is
successful, any depreciation in the value of the hedged portfolio securities
will be substantially offset by an increase in the Fund's equity in the stock
index futures position.
There is no assurance that the objective of the hedging
program will be achieved, since the success of the program will depend on the
Advisor's ability to predict the future direction of the relevant security or
stock index, and incorrect predictions by the Advisor may have an adverse effect
on the Fund. In this regard, skills and techniques necessary to arrive at such
predictions are different from those needed to predict price changes in
individual stocks.
A stock index futures contract is a binding contractual
commitment which involves the payment or receipt of payments representing,
respectively, the loss or gain of a specified market index. Ordinarily, the Fund
would enter into stock index futures contracts to hedge its investments in
common stocks. Futures contracts are traded on exchanges licensed and regulated
by the Commodity Futures Trading Commission. The Fund will be subject to any
limitations imposed by the exchanges with respect to futures contracts trading
and positions. A clearing corporation associated with the particular exchange
assumes responsibility for all purchases and sales and guarantees delivery and
payment on the contracts. Although most futures contracts call for actual
delivery or acceptance of the underlying securities or currency, in most cases
the contracts are closed out before settlement date without the making or taking
of delivery. Closing out is accomplished by entering into an offsetting
transaction, which may result in a profit or a loss. There is no assurance that
the Fund will be able to close out a particular futures contract.
- 5 -
<PAGE>
A hedging strategy involving options and futures contracts
entails some risks. For example, the total premium paid for an option may be
lost if the Fund does not exercise the option or futures contract, or the writer
does not perform his obligations. It is also possible that the futures contracts
selected by the Fund will not follow the price movement of the underlying stock
index. If this occurs, the hedging strategy may not be successful. Further, if
the Fund sells a stock index futures contract and is required to pay an amount
measured by any increase in the market index, it will be exposed to an
indeterminate liability. In addition, a liquid secondary market may not exist
for any particular option or futures contract at any specific time.
The Fund will incur transactional costs in connection with the
hedging program. When the Fund purchases or sells a futures contract, an amount
of cash and liquid assets will be deposited in a segregated account with the
Trust's Custodian to guarantee performance of the futures contract. The amount
of such deposits will depend upon the requirements of each exchange and broker
and will vary with each futures contract. Because open futures contract
positions are marked to market and gains and losses are settled on a daily
basis, the Fund may be required to deposit additional funds in such a segregated
account if it has incurred a net loss on its open futures contract positions on
any day.
The Trust has filed a supplemental notice of eligibility with
the Commodity Futures Trading Commission ("CFTC") to claim relief from
regulation as a commodity "pool" within the meaning of the CFTC's regulations.
In its filing, the Trust has represented that the Fund's transactions in futures
contracts will constitute bona fide hedging transactions within the meaning of
such regulations and that the Fund will enter into commitments which require as
deposits for initial margin for futures contracts no more than 5% of the fair
market value of its assets.
I. Short Sales. The Fund may sell a security short in anticipation of a
decline in the market value of the security. When the Fund engages in a short
sale, it sells a security which it does not own. To complete the transaction,
the Fund must borrow the security in order to deliver it to the buyer. The Fund
must replace the borrowed security by purchasing it at the market price at the
time of replacement, which may be more or less than the price at which the Fund
sold the security. The Fund will incur a loss as a result of the short sale if
the price of the security increases between the date of the short sale and the
date on which the Fund replaces the borrowed security. The Fund will realize a
profit if the security declines in price between those dates.
In connection with its short sales, the Fund will be required
to maintain a segregated account with its Custodian of cash or high grade liquid
assets equal to the market value of the securities sold less any collateral
deposited with its broker. The Fund will limit its short sales so that no more
than 5% of its net assets (less all its liabilities other than obligations under
the short sales) will be deposited as collateral and allocated to the segregated
account. However, the segregated account and deposits will not necessarily limit
the Fund's potential loss on a short sale, which is unlimited. The Fund's policy
with respect to short sales is fundamental, although the particular practices
followed with respect to short sales, such as the percentage of the Fund's
assets which may be deposited as collateral or allocated to the segregated
account, are not deemed fundamental and may be changed by the Board of Trustees
without the vote of the Fund's shareholders.
J. Corporate Debt Securities. Corporate debt securities are bonds or
notes issued by corporations and other business organizations, including
business trusts, in order to finance their credit needs. Corporate debt
securities include commercial paper which consist of short term (usually from
- 6 -
<PAGE>
one to two hundred seventy days) unsecured promissory notes issued by
corporations in order to finance their current operations.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
the Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").
1. Borrowing Money. The Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. Senior Securities. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is (a) consistent with or permitted by the
Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder or interpretations of the Securities and Exchange
Commission or its staff and (b) as described in the Prospectus and the Statement
of Additional Information.
3. Underwriting. The Fund will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. Real Estate. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or have a significant portion of
their assets in real estate (including real estate investment trusts).
5. Commodities. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
- 7 -
<PAGE>
6. Loans. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. The Fund will not invest 25% or more of its total
assets in a particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
Non-Fundamental. The following limitations have been adopted by the Trust
with respect to the Fund and are Non-Fundamental (see "Investment Restrictions"
above).
i. Pledging. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
ii. Borrowing. The Fund will not purchase any security while borrowings
(including reverse repurchase agreements) representing more than 5% of its total
assets are outstanding. The Fund will not invest more than 5% of its net assets
in reverse repurchase agreements.
iii. Margin Purchases. The Fund will not purchase securities or
evidences of interest thereon on "margin." This limitation is not applicable to
short term credit obtained by the Fund for the clearance of purchases and sales
or redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
iv. Short Sales. The Fund will not effect short sales of securities
unless it owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short.
v. Options. The Fund will not purchase or sell puts, calls, options or
straddles, except as described in the Prospectus and the Statement of Additional
Information.
- 8 -
<PAGE>
vi. Repurchase Agreements. The Fund will not invest more than 5% of its
net assets in repurchase agreements.
vii. Illiquid Investments. The Fund will not invest more than 5% of its
net assets in securities for which there are legal or contractual restrictions
on resale and other illiquid securities.
THE INVESTMENT ADVISOR
The Fund's investment advisor is Jenswold, King & Associates, Inc., Two
Post Oak Central, 1980 Post Oak Boulevard, Suite 2400, Houston, Texas
77056-3898. Roger E. King may be deemed to be a controlling person of the
Advisor due to his ownership of a majority of its shares.
Under the terms of the management agreement (the "Agreement"), the
Advisor manages the Fund's investments subject to approval of the Board of
Trustees and pays all of the expenses of the Fund except brokerage, taxes,
interest, fees and expenses of the non-interested person trustees and
extraordinary expenses. As compensation for its management services and
agreement to pay the Fund's expenses, the Fund is obligated to pay the Advisor a
fee computed and accrued daily and paid monthly at an annual rate of 1.75% of
the average daily net assets of the Fund. The Advisor may waive all or part of
its fee, at any time, and at its sole discretion, but such action shall not
obligate the Advisor to waive any fees in the future. For the period December
31, 1996 (commencement of operations) through October 31, 1997, the Fund paid
advisory fees of $6,173.
The Advisor retains the right to use the name "Fountainhead" in
connection with another investment company or business enterprise with which the
Advisor is or may become associated. The Trust's right to use the name
"Fountainhead" automatically ceases ninety days after termination of the
Agreement and may be withdrawn by the Advisor on ninety days written notice.
The Advisor may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Fund believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Fund believes that there would be no material impact on the Fund or its
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
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<PAGE>
TRUSTEES AND OFFICERS
The names of the Trustees and executive officers of the Trust are shown
below. Each Trustee who is an "interested person" of the Trust, as defined in
the Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<CAPTION>
===================================================================================================================================
Name, Age and Address Position Principal Occupations During Past 5 Years
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
* Kenneth D. Trumpfheller President and Trustee President, Treasurer and Secretary of AmeriPrime
Age: 39 Financial Services, Inc., the Fund's administrator, and
1793 Kingswood Drive AmeriPrime Financial Securities, Inc., the Fund's
Suite 200 distributor. Prior to December, 1994, a senior client
Southlake, Texas 76092 executive with SEI Financial Services.
- -----------------------------------------------------------------------------------------------------------------------------------
Julie A. Feleo Secretary, Treasurer Secretary, Treasurer and Chief Financial Officer of
Age: 31 AmeriPrime Financial Services, Inc. and AmeriPrime
1793 Kingswood Drive Financial Securities, Inc.; Fund Reporting Analyst at
Suite 200 Fidelity Investments from 1993 to 1997; Fund
Southlake, Texas 76092 Accounting Analyst at Fidelity Investments in 1993.
Prior to 1993, Accounting Manager at Windows
Presentation Manager Association.
- -----------------------------------------------------------------------------------------------------------------------------------
Steve L. Cobb Trustee President of Chandler Engineering Company, L.L.C., oil
Age: 40 and gas services company; various positions with Carbo
2001 Indianwood Avenue Ceramics, Inc., oil field manufacturing/supply company,
Broken Arrow, OK 74012 from 1984 to 1997, most recently Vice President of
Marketing.
- -----------------------------------------------------------------------------------------------------------------------------------
Gary E. Hippenstiel Trustee Director, Vice President and Chief Investment Officer of
Age: 50 Legacy Trust Company since 1992; President and
32 Sunlit Forest Drive Director of Heritage Trust Company from 1994-1996;
The Woodlands, Texas 77381 Vice President and Manager of Investments of Kanaly
Trust
Company from 1988 to 1992.
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
The compensation paid to the Trustees of the Trust for the fiscal year
ended October 31, 1997 is set forth in the following table. Trustee fees are
Trust expenses and each series of the Trust pays a portion of the Trustee fees.
======================================================================================
Aggregate Total Compensation
Compensation from Trust (the Trust is
Name from Trust not in a Fund Complex)
- --------------------------------------------------------------------------------------
<S> <C> <C>
Kenneth D. Trumpfheller 0 0
- --------------------------------------------------------------------------------------
Steve L. Cobb $4,000 $4,000
- --------------------------------------------------------------------------------------
Gary E. Hippenstiel $4,000 $4,000
======================================================================================
</TABLE>
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<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Advisor is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In placing portfolio transactions, the
Advisor seeks the best qualitative execution for the Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Advisor generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received.
The Advisor is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Fund and/or the other
accounts over which the Advisor exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Advisor determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Advisor's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Fund effects securities
transactions may also be used by the Advisor in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Advisor in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Advisor, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Advisor that the review and study of the research and other information will not
reduce the overall cost to the Advisor of performing its duties to the Fund
under the Agreement.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
To the extent that the Trust and another of the Advisor's clients seek
to acquire the same security at about the same time, the Trust may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Trust may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Trust. In the event that more than one client wants to purchase or sell the same
security on a given date, the purchases and sales will normally be made by
random client selection. For the period December 31, 1996 (commencement of
operations) through October 31, 1997, the Fund paid brokerage commissions of
$________.
- 11 -
<PAGE>
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of the Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day, Martin
Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas. For a description of the methods
used to determine the net asset value (share price), see "Share Price
Calculation" in the Prospectus.
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return for the period indicated that would equate the initial amount invested
to the ending redeemable value, according to the following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue. For the period December
31, 1996 (commencement of operations) through October 31, 1997, the Fund's
average annual total return was ____%, annualized.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the Standard & Poor's 500 Stock Index or the Dow Jones Industrial Average.
In addition, the performance of the Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the
- 12 -
<PAGE>
same as those of the Fund. Performance rankings and ratings reported
periodically in national financial publications such as Barron's and Fortune
also may be used.
CUSTODIAN
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is
Custodian of the Fund's investments. The Custodian acts as the Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
TRANSFER AGENT
American Data Services, Inc., Hauppauge Corporate Center, 150 Motor
Parkway, New York 11760, acts as the Fund's transfer agent and, in such
capacity, maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution disbursing
agent and performs other accounting and shareholder service functions. In
addition, American Data Services, Inc. provides the Fund with certain monthly
reports, record-keeping and other management-related services. For the period
December 31, 1996 (commencement of operations) through October 31, 1997, ADS
received $________ from the Fund for these services.
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent public accountants for the Trust
for the fiscal year ending October 31, 1998. McCurdy & Associates performs an
annual audit of the Fund's financial statements and provides financial, tax and
accounting consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the exclusive agent for distribution of shares of the
Fund. The Distributor is obligated to sell the shares of the Fund on a best
efforts basis only against purchase orders for the shares. Shares of the Fund
are offered to the public on a continuous basis.
FINANCIAL STATEMENTS
The financial statements and independent auditors' report required to
be included in the Statement of Additional Information are incorporated herein
by reference to the Fund's Annual Report to Shareholders for the period ended
October 31, 1997. The Fund will provide the Annual Report without charge at
written request or request by telephone.
- 13 -
<PAGE>
BROWN, CUMMINS & BROWN CO., L.P.A.
ATTORNEYS AND COUNSELORS AT LAW
3500 CAREW TOWER
J. W. BROWN (1911-1995) 441 VINE STREET
JAMES R. CUMMINS CINCINNATI, OHIO 45202
ROBERT S BROWN TELEPHONE (513) 381-2121 OF COUNSEL
DONALD S. MENDELSOHN TELECOPIER (513) 381-2125 GILBERT BETTMAN
LYNNE SKILKEN
AMY G. APPLEGATE
KATHRYN KNUE PRZYWARA
MELANIE S. CORWIN
JOANN M. STRASSER
December 15, 1997
VIA ELECTRONIC TRANSMISSION
Securities and Exchange Commission
Division of Corporate Finance
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
RE: AmeriPrime Funds, File Nos. 33-96826 and 811-9096
Ladies and Gentlemen:
On behalf of AmeriPrime Funds, a registered investment company (the
"Trust"), we hereby file by EDGAR, Post-Effective Amendment No. 11 to the
Trust's Registration Statement. The Amendment is being filed pursuant to Rule
485(a) promulgated under the Securities Act of 1933 for the purpose of providing
audited financial information and other updating information for the AmeriPrime
Funds. The Amendment also satisfies the Registrant's undertaking to file an
amendment, with financial statements, within four to six months of the effective
date of the Florida Street Growth Fund, the Florida Street Bond Fund and the
Corbin Small-Cap Value Fund. The Trust's series (the "Funds") have made changes
in addition to providing and updating financial information, including the
following
Several of the Fund's have revised the table of expenses to reflect current
fees or reimbursement/fee waivers. Changes have been made to the funds' "How to
Invest" and "How to Redeem" sections of the Prospectuses to consistently
disclose fees and account minimums charged by brokers. The Florida Street Funds
moved the "Floating Rate, Inverse Floating Rate and Index Obligations" section
from the Statement of Additional Information to the Prospectus, eliminating the
5% limit on those securities, and the prospectus now permits "interest only" and
commercial mortgage backed securities. The NewCap Contrarian Fund has added
additional risk disclosure on the cover page of the Prospectus and relocated the
non-diversified risk disclosure to an earlier section of the Prospectus. Both
the NewCap Contrarian Fund and the IMS Capital Value Fund have added money
markets to thier permitted investments for temporary/liquidity purposes. The
Fountainhead Special Value Fund and the NewCap Contrarian Fund added disclosure
regarding high turnover rates and the Fountainhead Special Value Fund revised
its description of the adviser's stock selection process. The AIT Vision U.S.
Equity Portfolio is now permitted to invest in SPDRS and similar instruments.
If you have any questions concerning this filing, please contact Donald
S. Mendelsohn at (513) 381-2121.
Very truly yours,
BROWN, CUMMINS & BROWN CO., L.P.A.
BCB/emj
cc: Mr. Kenneth Trumpfheller
ASA02D88-121197-1
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
--
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 11 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT / /
OF 1940
Amendment No. 12 /X/
(Check appropriate box or boxes.)
AmeriPrime Funds - File Nos. 33-96826 and 811-9096
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092
- -------------------------------------------------------------------
(Address of Principal Executive Offices) Zip Code
Registrant's Telephone Number, including Area Code: (817) 431-2197
Kenneth Trumpfheller, 1793 Kingswood Drive, Suite 200, Southlake, Texas 76092
(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Release Date: June, 1997
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b) / / on _____________
pursuant to paragraph (b) /X/ 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) 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.
Title of Securities Being Registered
Omit from the facing sheet reference to the other Act if the
Registration Statement or amendment is filed under only one of the Acts. Include
the "Approximate Date of Proposed Public Offering" and "Title of Securities
Being Registered" only where securities are being registered under the
Securities Act of 1933.
ASA02D88-121197-1
<PAGE>
AmeriPrime Funds
CROSS REFERENCE SHEET
FORM N-1A
FOR CARL DOMINO EQUITY INCOME FUND
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
13.............................. General Information
15.............................. General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
<PAGE>
AmeriPrime Funds
CROSS REFERENCE SHEET
FORM N-1A
FOR FOUNTAINHEAD SPECIAL VALUE FUND
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
13.............................. General Information
15.............................. General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
<PAGE>
AmeriPrime Funds
CROSS REFERENCE SHEET
FORM N-1A
FOR AIT VISION U.S. EQUITY PORTFOLIO
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
13.............................. General Information
15.............................. General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
<PAGE>
AmeriPrime Funds
CROSS REFERENCE SHEET
FORM N-1A
FOR GLOBALT GROWTH FUND
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
13.............................. General Information
15.............................. General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
<PAGE>
CROSS REFERENCE SHEET
FORM N-1A
FOR NEWCAP CONTRARIAN FUND
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
13.............................. General Information
15.............................. General Information
16.............................. Distribution Plan
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
CROSS REFERENCE SHEET
FORM N-1A
FOR NEWCAP CONTRARIAN FUND
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
13.............................. General Information
15.............................. General Information
16.............................. Distribution Plan
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
CROSS REFERENCE SHEET
FORM N-1A
FOR IMS CAPITAL VALUE FUND
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
15.............................. General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
<PAGE>
CROSS REFERENCE SHEET
FORM N-1A
FOR CORBIN SMALL-CAP VALUE FUND
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
15.............................. General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
<PAGE>
AmeriPrime Funds
CROSS REFERENCE SHEET
FORM N-1A
FOR FLORIDA STREET BOND FUND AND FLORIDA STREET GROWTH FUND
ITEM SECTION IN COMBINED PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Financial Highlights
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques, Risk Considerations,
Operation of the Funds, General
Information
5.............................. Operation of the Funds
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Funds, General Information
7.............................. Cover Page, How to Invest in the
Funds, Share Price Calculation,
Operation of the Funds,
8.............................. How to Redeem Shares
9.............................. None
13.............................. General Information
15.............................. General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. None
16.............................. The Investment Advisor, Custodian,
Transfer Agent, Accountants
17.............................. Fund Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
<PAGE>
AmeriPrime Funds
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements.
Included in Part A:
Financial Highlights of Carl Domino Equity Income
Fund, AIT Vision U.S. Equity Portfolio, GLOBALT
Growth Fund, The NewCap Contrarian Fund, IMS Capital
Value Fund, Corbin Small-Cap Value Fund, Florida
Street Bond Fund, Florida Street Growth Fund, and
Fountainhead Special Value Fund for the period ended
October 31, 1997 are included in their respective
Prospectus.
Included in Part B:
Financial Statements, comprised of the following
items, of Carl Domino Equity Income Fund, AIT Vision
U.S. Equity Portfolio, GLOBALT Growth Fund, The
NewCap Contrarian Fund, IMS Capital Value Fund,
Corbin Small-Cap Value Fund, Florida Street Bond
Fund, Florida Street Growth Fund, and Fountainhead
Special Value Fund are incorporated in their
respective Statement of Additional Information by
reference to their respective Annual Report to
Shareholders:
Report of Independent Acountants.
Schedule of Investments, October 31, 1997.
Statement of Assets and Liabilities, October 31, 1997.
Statement of Operations for the period ended October 31,
1997.
Statement of changes in Net Assets for the period ended
October 31, 1997.
Financial Highlights for the period ended October 31,
1997.
Notes to Financial Statements.
(b) Exhibits
(1) (i) Copy of Registrant's Declaration of Trust is filed herewith.
(ii) Copy of Amendment No. 1 to Registrant's Declaration of Trust is filed
herewith.
(iii) Copy of Amendment No. 2 to Registrant's Declaration of Trust, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 1, is
hereby incorporated by reference.
(iv) Copy of Amendment No. 3 to Registrant's Declaration of Trust, which
was filed as an Exhibit to Registrant's Post-Effective
<PAGE>
Amendment No. 4, is hereby incorporated by reference.
(v) Copy of Amendment No. 4 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 4, is hereby
incorporated by reference.
(vi) Copy of Amendment No. 5 and Amendment No. 6 to Registrant's
Declaration of Trust, which were filed as an Exhibit to Registrant's
PostEffective Amendment No. 8, are hereby incorporated by reference.
(viii) Copy of Amendment No. 7 to Registrant's Declaration of Trust is
filed herewith.
(2) Copy of Registrant's By-Laws is filed herewith.
(3) Voting Trust Agreements - None.
(4) Specimen of Share Certificates - None.
(5) (i) Copy of Registrant's Management Agreement with Carl Domino
Associates, L.P., Adviser to Carl Domino Equity Income Fund, is filed herewith.
(ii) Copy of Registrant's Management Agreement with Jenswold, King &
Associates, Adviser to Fountainhead Special Value Fund, which was filed as an
Exhibit to Registrant's PostEffective Amendment No. 8, is hereby incorporated by
reference.
(iii) Copy of Registrant's Management Agreement with Advanced Investment
Technology, Inc., Adviser to AIT Vision U.S. Equity Portfolio, is filed
herewith.
(iv) Copy of Registrant's Management Agreement with GLOBALT, Inc., Adviser
to GLOBALT Growth Fund, is filed herewith.
(v) Copy of Registrant's Management Agreement with Newport Investment
Advisors, Inc., Adviser to the MAXIM Contrarian Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 2, is hereby incorporated
by reference.
(vi) Copy of Registrant's Management Agreement with IMS Capital Management,
Inc., Adviser to the IMS Capital Value Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 2, is hereby incorporated by
reference.
<PAGE>
(vii) Copy of Registrant's Management
Agreement with Commonwealth
Advisors, Inc., Adviser to Florida
Street Bond Fund and Florida Street
Growth Fund, which was filed as an
Exhibit to Registrant's
Post-Effective Amendment No. 8, is
hereby incorporated by reference.
(viii) Copy of Registrant's Management
Agreement with Corbin & Company,
Adviser to Corbin Small-Cap Fund,
which was filed as an Exhibit to
Registrant's Post-Effective
Amendment No. 8, is hereby
incorporated by reference.
(ix) Copy of Registrant's proposed
Management Agreement with Vuong
Asset Management Company, LLC,
Adviser to MAI Enhanced Index Fund,
MAI Growth & Income Fund, MAI
Aggressive Growth Fund, MAI
High-Yield Income Fund, MAI Capital
Appreciation Fund and MAI Global
Equity Fund (the "MAI Family of
Funds"), is filed herewith.
(x) Copy of Registrant's proposed
Management Agreement with CWH
Associates, Inc., Advisor to
Worthington Theme Fund, which was
filed as an Exhibit to Registrant's
Post-Effective Amendment No. 10, is
hereby incorporated by
reference.
(6) Copy of Registrant's Amended and Restated
Underwriting Agreement with AmeriPrime
Financial Securities, Inc., which was filed
as an Exhibit to Registrant's Post-Effective
Amendment No. 8, is hereby incorporated by
reference.
(7) Bonus, Profit Sharing, Pension or Similar
Contracts for the benefit of Directors or
Officers - None.
(8) (i) Copy of Registrant's Agreement
with the Custodian, Star Bank, N.A.
is filed herewith.
(ii) Copy of Registrant's Appendix B to
the Agreement with the Custodian,
Star Bank, N.A., which was filed as
an Exhibit to Registrant's
Post-Effective Amendment No. 8, is
hereby incorporated by reference.
(9) Copy of Registrant's Agreement with the
Administrator, AmeriPrime Financial Services, Inc.
is filed herewith.
(10) Opinion and Consent of Brown, Cummins &
Brown Co., L.P.A., which was filed as an
Exhibit to Registrant's Post-Effective
Amendment No. 9, is hereby incorporated by
reference.
(11) Consent of independent public accountants is
filed herewith.
(12)Financial Statements Omitted from Item 23 - None.
<PAGE>
(13) Copy of Letter of Initial Stockholders is
filed herewith.
(14) Model Plan used in Establishment of any
Retirement Plan - None.
(15) (i) Copy of Registrant's Rule 12b-1
Distribution Plan for The MAXIM
Contrarian Fund, which was filed as
an Exhibit to Registrant's
PostEffective Amendment No. 1, is
hereby incorporated by reference.
(ii) Copy of Registrant's Rule 12b-1
Service Agreement for The MAXIM
Contrarian Fund, which was filed as
an Exhibit to Registrant's
PostEffective Amendment No. 1, is
hereby incorporated by reference.
(16) Schedule for Computation of Each Performance
Quotation - None.
(17) Financial Data Schedule - None.
(18) Rule 18f-3 Plan - None.
(19) (i) Power of Attorney for Registrant
and Certificate with respect
thereto, which were filed as an
Exhibit to Registrant's
PostEffective Amendment No. 5, are
hereby incorporated by reference.
(ii) Powers of Attorney for Trustees and
Officers which were filed as an
Exhibit to Registrant's
Post-Effective Amendment No. 5, are
hereby incorporated by reference.
(iii) Power of Attorney for the Treasurer
of the Trust, which was filed as an
Exhibit to Registrant's
Post-Effective Amendment No. 8, is
hereby incorporated by reference.
Item 25. Persons Controlled by or Under Common Control with the
Registrant (As of December 3, 1997)
The Carl Domino Associates, L.P., Profit Sharing Trust may be
deemed to control the Carl Domino Equity Income Fund and Cheryl and
Kenneth Holeski may be deemed to control The NewCap Contrarian Fund, as
a result of their respective beneficial ownership of those Funds.
Item 26. Number of Holders of Securities (as of December 3, 1997)
- -------- --------------------------------------------------------
Title of Class Number of Record Holders
Carl Domino Equity Income Fund 83
Fountainhead Special Value Fund 61
AIT Vision U.S. Equity Portfolio 31
GLOBALT Growth Fund 65
NewCap Contrarian Fund 43
<PAGE>
IMS Capital Value Fund 445
Florida Street Bond Fund 2
Florida Street Growth Fund 1
Corbin Small-Cap Value Fund 69
MAI Enhanced Equity Benchmark Fund 0
MAI Enhanced Growth and Income Fund 0
MAI Enhanced Aggressive Growth Fund 0
MAI Enhanced Income Fund 0
MAI Enhanced Capital Appreciation Fund 0
MAI Enhanced Global Fund 0
Worthington Theme Fund 0
Item 27. Indemnification
(a) Article VI of the Registrant's Declaration of Trust
provides for indemnification of officers and Trustees
as follows:
Section 6.4 Indemnification of
Trustees, Officers, etc. Subject to and
except as otherwise provided in the
Securities Act of 1933, as amended, and the
1940 Act, the Trust shall indemnify each of
its Trustees and officers (including persons
who serve at the Trust's request as
directors, officers or trustees of another
organization in which the Trust has any
interest as a shareholder, creditor or
otherwise (hereinafter referred to as a
"Covered Person") against all liabilities,
including but not limited to amounts paid in
satisfaction of judgments, in compromise or
as fines and penalties, and expenses,
including reasonable accountants' and
counsel fees, incurred by any Covered Person
in connection with the defense or
disposition of any action, suit or other
proceeding, whether civil or criminal,
before any court or administrative or
legislative body, in which such Covered
Person may be or may have been involved as a
party or otherwise or with which such person
may be or may have been threatened, while in
office or thereafter, by reason of being or
having been such a Trustee or officer,
director or trustee, and except that no
Covered Person shall be indemnified against
any liability to the Trust or its
Shareholders to which such Covered Person
would otherwise be subject by reason of
willful misfeasance, bad faith, gross
negligence or reckless disregard of the
duties involved in the conduct of such
Covered Person's office.
Section 6.5 Advances of Expenses.
The Trust shall advance attorneys' fees or
other expenses incurred by a Covered Person
in defending a proceeding to the full extent
permitted by the Securities Act of 1933, as
amended, the 1940 Act, and Ohio Revised Code
Chapter 1707, as amended. In the event any
of these laws conflict with Ohio
<PAGE>
Revised Code Section 1701.13(E), as amended,
these laws, and not Ohio Revised Code
Section 1701.13(E), shall govern.
Section 6.6 Indemnification Not
Exclusive, etc. The right of indemnification
provided by this Article VI shall not be
exclusive of or affect any other rights to
which any such Covered Person may be
entitled. As used in this Article VI,
"Covered Person" shall include such person's
heirs, executors and administrators. Nothing
contained in this article shall affect any
rights to indemnification to which personnel
of the Trust, other than Trustees and
officers, and other persons may be entitled
by contract or otherwise under law, nor the
power of the Trust to purchase and maintain
liability insurance on behalf of any such
person.
The Registrant may not pay for insurance which
protects the Trustees and officers against
liabilities rising from action involving willful
misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of
their offices.
(b) The Registrant may maintain a standard mutual fund and investment
advisory professional and directors and officers liability policy. The policy,
if maintained, would provide coverage to the Registrant, its Trustees and
officers, and could cover its Advisers, among others. Coverage under the policy
would include losses by reason of any act, error, omission, misstatement,
misleading statement, neglect or breach of duty.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
the Registrant pursuant to the provisions of Ohio law and the Agreement and
Declaration of the Registrant or the By-Laws of the Registrant, 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 trustee, officer or controlling
person of the Trust in the successful defense of any action, suit or proceeding)
is asserted by such trustee, 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 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.
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
A. Carl Domino Associates, L.P., 580 Village Boulevard,
Suite 225, West Palm Beach, Florida 33409, ("CDA"),
adviser to the Carl Domino Equity Income Fund, is a
registered investment adviser.
(1) CDA has engaged in no other business during
the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the
partners and officers of CDA during the past
two years.
(a) Penn Independent Corp., a partner in
CDA, is an insurance holding company
that operates a premium finance
company, a surplus lines insurance
company and a wholesale insurance
agency.
(b) James E. Heerin, Jr., an officer of
CDA, is vice president and general
counsel of Penn Independent Corp.
and an officer and director of
Shrimp Culture II, Inc., both at 420
South York Road, Hatboro, PA 19040.
Shrimp Culture II, Inc. raises and
sells shrimp.
(c) Lawrence Katz, a partner in CDA, is
an orthopedic surgeon in private
practice.
(d) Saltzman Partners, a partner in CDA,
is a limited partnership that
invests in companies and businesses.
(e) Cango Inversiones, SA, a partner in
CDA, is a foreign business entity
that invests in U.S. companies and
businesses.
B. Jenswold, King & Associates, Inc., 1980 Post Oak
Boulevard, Suite 2400, Houston, Texas 77056-3898
("JKA"), adviser to the Fountainhead Special Value
Fund, is a registered investment adviser.
(1) JKA has engaged in no other business during
the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the
directors and officers of JKA during the
past two years.
(a)John Servis, a director of JKA, is a licensed
real estate broker.
C. Advanced Investment Technology, Inc., 311 Park Place
Boulevard, Suite 250, Clearwater, Florida 34619
("AIT"), adviser to AIT Vision U.S. Equity Portfolio,
is a registered investment adviser.
<PAGE>
(1) AIT has engaged in no other business during
the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the
directors and officers of AIT during the
past two fiscal years.
(a) Dean S. Barr, director and the CEO
of AIT, was the managing director of
LBS Capital Management, Inc., 311
Park Place Blvd., Clearwater,
Florida from 1989-1996.
(b) Mani Ganesh, a director and the vice
president of AIT, was the vice
president of LBS Capital Management,
Inc. from 1989-1996.
(c) Scott P. Mason, a director of AIT is
also a professor at Harvard
University.
(d) Raymond L. Killian, a director of
AIT and the chief executive officer
of Investment Technology Group,
Inc., 900 3rd Avenue, New
York, New York.
(e) David C. Cushing, a director of AIT
and a registered representative of
Investment Technology Group, Inc.
(f) Lisa A. Sloan, chief operating
officer of AIT was director of
operations of LBS Capital
Management, Inc., 311 Park Place
Blvd., Suite 330, Clearwater,
Florida. From 1995-1996 she was a
technical controller with Salomon
Brothers, Inc., 8800 Hidden River
Parkway, Tampa, Florida.
D. GLOBALT, Inc., 3060 Peachtree Road, N.W., One
Buckhead Plaza, Suite 225, Atlanta, Georgia 30305
("GLOBALT"), adviser to GLOBALT Growth Fund, is a
registered investment adviser.
(1) GLOBALT has engaged in no other business
during the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the
officers and directors of GLOBALT during the
past two years.
(a) Gregory S. Paulette, an officer of
GLOBALT, is the president of GLOBALT
Capital Management, a division of
GLOBALT.
E. Newport Investment Advisors, Inc., 20600 Chagrin
Boulevard, Suite 1020, Shaker Heights, Ohio 44122
("Newport"), adviser to The MAXIM Contrarian Fund, is
a registered investment adviser.
<PAGE>
(1) Newport has engaged in no other business
during the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the
officers and directors of Newport during the
past two years.
(a) Kenneth Holeski, president of Newport, is the vice president of Newport
Evaluation Services, Inc., a fiduciary consulting business at 20600 Chagrin
Boulevard, Shaker Heights, Ohio 44122, and a registered representative of WRP
Investments, Inc., 4407 Belmont Avenue, Youngstown, Ohio 44505, a registered
broker/dealer.
(b) Donn M. Goodman, vice president of Newport, is the president of Newport
Evaluation Services, Inc.
F. IMS Capital Management, Inc., 10159 S.E. Sunnyside
Road, Suite 330, Portland, Oregon 97015, ("IMS"),
Adviser to the IMS Capital Value Fund, is a
registered investment adviser.
(1) IMS has engaged in no other business during
the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the
directors and officers of IMS during the
past two years - None.
G. CommonWealth Advisors, Inc., 929 Government Street,
Baton Rouge, Louisiana 70802, ("CommonWealth"),
Adviser to the Florida Street Bond Fund and the
Florida Street Growth Fund, is a registered
investment adviser.
(1) CommonWealth has engaged in no other
business during the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the
directors and officers of CommonWealth
during the past two years.
(a) Walter A. Morales, President/Chief Investment Officer of CommonWealth
was the Director of an insurance/broadcasting corporation, Guaranty Corporation,
929 Government Street, Baton Rouge, Louisiana 70802 from August 1994 to February
1996. From September 1994 through the present, a registered representative of a
Broker/Dealer company, Securities Service Network, 2225 Peters Road, Knoxville,
Tennessee 37923. Beginning August 1995 through the present, an instructor at the
University of Southwestern Louisiana in Lafayette, Louisiana.
<PAGE>
H. Corbin & Company, 1320 S. University Drive, Suite
406, Fort Worth, Texas 76107, ("Corbin"), Adviser to
the Corbin Small-Cap Value Fund, is a registered
investment adviser.
(1) Corbin has engaged in no other business
during the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the
directors and officers of Corbin during the
past two years - None.
I. Vuong Asset Management Company, LLC, 6575 West Loop
South, Suite 110, Houston, Texas 77401, ("VAMCO"),
Adviser to the MAI Family of Funds, is a registered
investment adviser.
(1) VAMCO has engaged in no other business during the past two
fiscal years.
(2) The following list sets forth substantial business activities
of the directors and officers of VAMCO during the past two
years.
(a) Qui Tu Vuong, the Chief Investment Officer and head of Equity Asset
Management of VAMCO, is the Chief Executive Officer of Vuong & Co., LLC, a
holding company at 6575 West Loop South #110, Bellaire, Texas 77401; and Sales
Manager/Equities Regulation Representative of Omni Financial Group, LLC, a
securities brokerage company at 6575 West Loop South #110, Bellaire, Texas
77401; and President of Oishiicorp, Inc., an investment advising corporation at
6575 West Loop South #110, Bellaire, Texas 77401; and Managing General Partner
of Sigma Delta Capital Appreciation Funds, LP, an investment company at 6575
West Loop South #110, Bellaire, Texas 77401; and President of Premier Capital
Management and Consulting Group, Inc., a financial consulting corporation at
6575 West Loop South #170, Bellaire, Texas 77401; and from August, 1992 through
February, 1996, he was a registered representative of Securities America, Inc.,
a securities brokerage corporation at 6575 West Loop South #170, Bellaire, Texas
77401.
(b) Quyen Ngoc Vuong, President, Chairman and Chief
Financial Officer of VAMCO, is the Manager of Vuong &
Company, LLC, and Manager of Omni Financial Group,
LLC.
(c) Canh Viet Le, Manager of VAMCO, is the Manager of
Vuong and Company, LLC, and was Co-Founder and Chief
Financial Officer of Tribe Computer Works, a
manufacturing network in Alameda, California from
April, 1990 through January, 1996.
<PAGE>
J. CWH Associates, Inc., 200 Park Avenue, Suite 3900, New York,
New York 10166, ("CWH"), Advisor to the Worthington Theme
Fund, is a registered investment Advisor.
(1) CWH has engaged in no other business during the past
two fiscal years.
(2) The following list sets forth other substantial
business activities of the directors and officers of
CWH during the past two years.
Andrew M. Abrams, the Chief Operating Officer of CWH,
is a General Partner of Abrams Investment Partners,
L.P., an investment limited partnership at 200 Park
Avenue, Suite 3900, New York, New York 10166.
Item 29. Principal Underwriters
A. AmeriPrime Financial Securities, Inc., is the
Registrant's principal underwriter. Kenneth D.
Trumpfheller, 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the President, Secretary
and Treasurer of the underwriter and the President
and a Trustee of the Registrant.
B. Omni Financial Group, LLC ("OMNI") acts as co- distributor, along with
AmeriPrime Financial Securities, Inc., of the MAI Family of Funds. Qui T. Vuong,
Quyen N. Vuong and Diep N. Vuong, each of whose principal business address is
6575 West Loop South, Suite 125, Bellaire, Texas 77401, are the managers of
OMNI, and they hold no offices or position with the Registrant.
Item 30. Location of Accounts and Records
Accounts, books and other documents required to be maintained
by Section 31(a) of the Investment Company Act of 1940 and the
Rules promulgated thereunder will be maintained by the
Registrant at 1793 Kingswood Drive, Suite 200, Southlake,
Texas 76092 and/or by the Registrant's Custodian, Star Bank,
N.A., 425 Walnut Street, Cincinnati, Ohio 45202, and/or
transfer and shareholder service agent, American Data
Services, Inc., Hauppauge Corporate Center, 150 Motor Parkway,
Hauppauge, New York 11760.
Item 31. Management Services Not Discussed in Parts A or B
None.
Item 32. Undertakings
(a) Not Applicable.
(b) The Registrant hereby undertakes to furnish each
person to whom a prospectus is delivered with a copy
of the
<PAGE>
Registrant's latest applicable annual report to
shareholders, upon request and without charge.
(c) The Registrant hereby undertakes to file a Post-
Effective Amendment, using financial statements which
need not be certified, within four to six months from
the effective date of the MAI Family of Funds
registration.
(d) The Registrant hereby undertakes to file a
PostEffective Amendment, using financial statements
which need not be certified, within four to six
months from the effective date of the Worthington
Theme Fund registration.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on the ____ day of
December, 1997.
AmeriPrime Funds
By:
Donald S. Mendelsohn,
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Kenneth D. Trumpfheller,
President and Trustee By:_________________________
Donald S. Mendelsohn,
Julie A. Feleo, Treasurer Attorney-in-Fact
Steve L. Cobb, Trustee December ____, 1997
Gary E. Hippenstiel, Trustee
<PAGE>
EXHIBIT INDEX
EXHIBIT
1. Declaration of Trust.........................................EX-99.B1.1
2. Amendment No. 1 to Declaration of Trust......................EX-99.B1.2
3. Amendment No. 7 to Declaration of Trust......................EX-99.B1.3
4. By-Laws........................................................EX-99.B2
5. Management Agreement with Carl Domino Associates, L.P........EX-99.B5.1
6. Management Agreement with Advanced Investment
Technology, Inc..............................................EX-99.B5.2
7. Management Agreement with GLOBALT, Inc.......................EX-99.B5.3
8. Proposed Management Agreement with Vuong Asset
Management...................................................EX-99.B5.4
9. Custodian Agreement............................................EX-99.B8
10. Administrator Agreement........................................EX-99.B9
11. Consent of Accountants........................................EX-99.B11
12. Initial Stockholder Letter....................................EX-99.B13
ASA02D88-121197-1
<PAGE>
<PAGE>
AmeriPrime Funds
Agreement and Declaration of Trust
August ____, 1995
<PAGE>
AmeriPrime Funds
Agreement and Declaration of Trust
TABLE OF CONTENTS
ARTICLE I - NAME AND DEFINITIONS............................................. 1
Section 1.1 Name......................................... 1
Section 1.2 Definitions.................................. 1
(a) The "Trust"...................................... 1
(b) "Trustees"....................................... 1
(c) "Shares"......................................... 1
(d) "Series".......................................... 1
(e) "Class".......................................... 1
(f) "Shareholder".................................... 2
(g) The "1940 Act"................................... 2
(h) "Commission"..................................... 2
(i) "Declaration of Trust"........................... 2
(j) "By-Laws"........................................ 2
ARTICLE II - PURPOSE OF TRUST............................................... 2
ARTICLE III - THE TRUSTEES.................................................. 2
Section 3.1 Number, Designation, Election, Term, etc...... 2
(a) Initial Trustees.................................. 2
(b) Number........................................... 2
(c) Term............................................. 2
(d) Resignation and Retirement....................... 3
(e) Removal.......................................... 3
(f) Vacancies........................................ 3
(g) Effect of Death, Resignation, etc................ 3
(h) No Accounting.................................... 3
Section 3.2 Powers of Trustees............................ 3
(a) Investments....................................... 4
(b) Disposition of Assets............................. 4
(c) Ownership Powers.................................. 4
(d) Subscription..................................... 4
(e) Form of Holding................................... 5
(f) Reorganization, etc............................... 5
(g) Voting Trusts, etc................................ 5
(h) Compromise....................................... 5
(i) Partnerships, etc................................. 5
(j) Borrowing and Security........................... 5
(k) Guarantees, etc.................................. 5
(l) Insurance........................................ 5
(m) Pensions, etc.................................... 6
Section 3.3 Certain Contracts............................ 6
(a) Advisory......................................... 6
(b) Administration.................................... 6
(c) Distribution..................................... 7
(d) Custodian and Depository......................... 7
(e) Transfer and Dividend Disbursing Agency........... 7
(f) Shareholder Servicing............................ 7
(g) Accounting...................................... 7
Section 3.4 Payment of Trust Expenses and Compensation of
Trustees................................... 8
Section 3.5 Ownership of Assets of the Trust............. 8
ARTICLE IV - SHARES......................................................... 8
Section 4.1 Description of Shares........................ 8
Section 4.2 Establishment and Designation of Series...... 10
(a) Assets Belonging to Series....................... 10
(b) Liabilities Belonging to Series.................. 10
(c) Dividends.........................................11
(d) Liquidation...................................... 11
(e) Voting........................................... 12
(f) Redemption by Shareholder........................ 12
(g) Redemption by Trust.............................. 12
(h) Net Asset Value.................................. 13
(i) Transfer......................................... 13
(j) Equality......................................... 13
(k) Fractions.........................................13
(l) Conversion Rights................................ 14
Section 4.3 Ownership of Shares.......................... 14
Section 4.4 Investments in the Trust..................... 14
Section 4.5 No Preemptive Rights..........................14
Section 4.6 Status of Shares and Limitation of
Personal Liability......................... 14
ARTICLE V - SHAREHOLDERS' VOTING POWERS AND MEETINGS........................ 14
Section 5.1 Voting Powers...................................... 14
Section 5.2 Meetings..................................... 15
Section 5.3 Record Dates................................. 15
Section 5.4 Quorum and Required Vote..................... 16
Section 5.5 Action by Written Consent.....................16
Section 5.6 Inspection of Records........................ 16
Section 5.7 Additional Provisions........................ 16
ARTICLE VI - LIMITATION OF LIABILITY; INDEMNIFICATION....................... 16
Section 6.1 Trustees, Shareholders, etc.
Not Personally Liable; Notice.............. 16
Section 6.2 Trustee's Good Faith Action;
Expert Advice; No Bond or Surety........... 17
Section 6.3 Indemnification of Shareholders.............. 17
Section 6.4 Indemnification of Trustees, Officers, etc... 18
Section 6.5 Advances of Expenses......................... 18
Section 6.6 Indemnification Not Exclusive, etc........... 18
Section 6.7 Liability of Third Persons
Dealing with Trustees.......................18
ARTICLE VII - MISCELLANEOUS................................................. 18
Section 7.1 Duration and Termination of Trust............ 18
Section 7.2 Reorganization................................19
Section 7.3 Amendments................................... 19
Section 7.4 Filing of Copies; References; Headings........20
Section 7.5 Applicable Law............................... 20
ARTICLE I - NAME AND DEFINITIONS............................................. 1
Section 1.1 Name......................................... 1
Section 1.2 Definitions................................... 1
(a) The "Trust"...................................... 1
(b) "Trustees"....................................... 1
(c) "Shares"......................................... 1
(d) "Series"......................................... 1
(e) "Shareholder".................................... 2
(f) The "1940 Act"................................... 2
(g) "Commission"..................................... 2
(h) "Declaration of Trust"........................... 2
(i) "By-Laws"........................................ 2
ARTICLE II - PURPOSE OF TRUST............................................... 2
ARTICLE III - THE TRUSTEES................................................... 2
Section 3.1 Number, Designation, Election, Term, etc...... 2
(a) Initial Trustees................................. 2
(b) Number............................................ 2
(c) Term............................................. 2
(d) Resignation and Retirement........................ 3
(e) Removal............................................3
(f) Vacancies......................................... 3
(g) Effect of Death, Resignation, etc................ 3
(h) No Accounting.................................... 3
Section 3.2 Powers of Trustees............................ 4
(a) Investments....................................... 4
(b) Disposition of Assets............................. 4
(c) Ownership Powers................................. 4
(d) Subscription..................................... 5
(e) Form of Holding.................................. 5
(f) Reorganization, etc............................... 5
(g) Voting Trusts, etc............................... 5
(h) Compromise....................................... 5
(i) Partnerships, etc................................ 5
(j) Borrowing and Security........................... 5
(k) Guarantees, etc................................... 5
(l) Insurance......................................... 5
(m) Pensions, etc..................................... 6
Section 3.3 Certain Contracts............................. 6
(a) Advisory......................................... 6
(b) Administration................................... 7
(c) Distribution..................................... 7
(d) Custodian and Depository......................... 7
(e) Transfer and Dividend Disbursing Agency.......... 7
(f) Shareholder Servicing............................. 7
(g) Accounting........................................ 7
Section 3.4 Payment of Trust Expenses
and Compensation of Trustees................ 8
Section 3.5 Ownership of Assets of the Trust.............. 8
ARTICLE IV - SHARES
Section 4.1 Description of Shares.......................... 8
Section 4.2 Establishment and Designation of Series........10
(a) Assets Belonging to Series........................ 10
(b) Liabilities Belonging to Series................... 11
(c) Dividends......................................... 11
(d) Liquidation....................................... 12
(e) Voting............................................ 12
(f) Redemption by Shareholder......................... 12
(g) Redemption by Trust................................13
(h) Net Asset Value................................... 13
(i) Transfer.......................................... 13
(j) Equality...........................................13
(k) Fractions..........................................14
(l) Conversion Rights..................................14
Section 4.3 Ownership of Shares........................... 14
Section 4.4 Investments in the Trust...................... 14
Section 4.5 No Preemptive Rights.......................... 14
Section 4.6 Status of Shares and Limitation of
Personal Liability......................... 14
ARTICLE V - SHAREHOLDERS' VOTING POWERS AND MEETINGS......................... 15
Section 5.1. Voting Powers..................................15
Section 5.2 Meetings...................................... 15
Section 5.3 Record Dates.................................. 16
Section 5.4 Quorum and Required Vote.......................16
Section 5.5 Action by Written Consent..................... 16
Section 5.6 Inspection of Records......................... 16
Section 5.7 Additional Provisions......................... 16
ARTICLE VI - LIMITATION OF LIABILITY; INDEMNIFICATION.........................17
Section 6.1 Trustees, Shareholders, etc.
Not Personally Liable; Notice................ 17
Section 6.2 Trustee's Good Faith Action;
Expert Advice; No Bond or Surety............. 17
Section 6.3 Indemnification of Shareholders............... 18
Section 6.4 Indemnification of Trustees, Officers, etc.... 18
Section 6.5 Advances of Expenses.......................... 18
Section 6.6 Indemnification Not Exclusive, etc............ 18
Section 6.7 Liability of Third Persons Dealing
with Trustees................................18
ARTICLE VII - MISCELLANEOUS...................................................19
Section 7.1 Duration and Termination of Trust..............19
Section 7.2 Reorganization.................................19
Section 7.3 Amendments.................................... 19
Section 7.4 Filing of Copies; References; Headings........ 20
Section 7.5 Applicable Law................................ 20
<PAGE>
AmeriPrime Funds
Agreement and Declaration of Trust
AGREEMENT AND DECLARATION OF TRUST made at Southlake, Texas, this 26th
day of July, 1995, by the Trustees hereunder, and by the holders of Shares of
beneficial interest to be issued hereunder as hereinafter provided.
WITNESSETH:
WHEREAS, this Trust is being formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into
their hands as trustees of an Ohio business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets which they may from time to time acquire in
any manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the benefit of the holders from time to
time of shares of beneficial interest in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
. This Trust shall be known as "AmeriPrime Funds" and the Trustees shall conduct
the business of the Trust under that name or any other name as they may from
time to time determine.
. Whenever used herein, unless otherwise required by the context or
specifically provided: refers to the Ohio business trust established by this
Agreement and Declaration of Trust, as amended from time to time; refers to the
Trustees of the Trust named herein or elected in accordance with Article III;
refers to the transferable units of interest into which the
beneficial interest in the Trust, shall be divided from time
to time, including the shares of any and all Series or Classes
which may be established by the Trustees, and includes
fractions of Shares as well as whole Shares;
refers to Series of Shares established and designated under or in accordance
with the provisions of Article IV; refers to a class or sub-series of any
Series of Shares established and designated under and in accordance with the
provisions of Article IV;
means a record owner of Shares;
refers to the Investment Company Act of 1940 and the Rules and Regulations
thereunder, all as amended from time to time; shall have the meaning given it in
the 1940 Act;
shall mean this Agreement and Declaration of Trust as amended or restated
from time to time; and shall mean the By-Laws of the Trust as amended from time
to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of the Trust is to operate as an investment company, to
offer Shareholders one or more investment programs primarily in securities and
debt instruments and to engage in any and all lawful acts or activities for
which business trusts may be formed under Chapter 1746 of the Ohio Revised Code.
ARTICLE III
THE TRUSTEES
Section 3.1 Number, Designation, Election, Term, etc.
. Upon his execution of this Declaration of Trust or a
counterpart hereof or some other writing in which he accepts
such Trusteeship and agrees to the provisions hereof, Kenneth
D. Trumpfheller shall become Trustee hereof.
. The Trustees serving as such, whether named above or hereafter
becoming a Trustee, may increase or decrease the number of
Trustees to a number other than the number theretofore
determined. No decrease in the number of Trustees shall have
the effect of removing any Trustee from office prior to the
expiration of his term, but the number of Trustees may be
decreased in conjunction with the removal of a Trustee
pursuant to subsection (e) of this Section 3.1.
. Each Trustee shall serve as a Trustee during the lifetime of the Trust
and until its termination as hereinafter provided or until such Trustee sooner
dies, resigns, retires or is removed. The Trustees may elect their own
successors and may, pursuant to Section 3.1(f) hereof, appoint Trustees to fill
vacancies; provided that, immediately after filling a vacancy, at least
two-thirds of the Trustees then holding office shall have been elected to such
office by the Shareholders at an annual or special meeting. If at any time less
than a majority of the Trustees then holding office were so elected, the
Trustees shall forthwith cause to be held as promptly as possible, and in any
event within 60 days, a meeting of Shareholders for the purpose of electing
Trustees to fill any existing vacancies.
. Any Trustee may resign his trust or retire as a Trustee, by
written instrument signed by him and delivered to the other
Trustees or to any officer of the Trust, and such resignation
or retirement shall take effect upon such delivery or upon
such later date as is specified in such instrument.
. Any Trustee may be removed with or without cause at any time:
(i) by written instrument, signed by at least two-thirds of
the number of Trustees prior to such removal, specifying the
date upon which such removal shall become effective, (ii) by
vote of the Shareholders holding not less than two-thirds of
the Shares then outstanding, cast in person or by proxy at any
meeting called for the purpose, or (iii) by a declaration in
writing signed by Shareholders holding not less than
two-thirds of the Shares then outstanding and filed with the
Trust's Custodian.
. Any vacancy or anticipated vacancy resulting from any reason, including
without limitation the death, resignation, retirement, removal or incapacity of
any of the Trustees, or resulting from an increase in the number of Trustees by
the Trustees may (but so long as there are at least three remaining Trustees,
need not unless required by the 1940 Act) be filled either by a majority of the
remaining Trustees through the appointment in writing of such other person as
such remaining Trustees in their discretion shall determine (unless a
shareholder election is required by the 1940 Act) or by the election by the
Shareholders, at a meeting called for the purpose, of a person to fill such
vacancy, and such appointment or election shall be effective upon the written
acceptance of the person named therein to serve as a Trustee and agreement by
such person to be bound by the provisions of this Declaration of Trust, except
that any such appointment or election in anticipation of a vacancy to occur by
reason of retirement, resignation, or increase in number of Trustees to be
effective at a later date shall become effective only at or after the effective
date of said retirement, resignation, or increase in number of Trustees. As soon
as any Trustee so appointed or elected shall have accepted such appointment or
election and shall have agreed in writing to be bound by this Declaration of
Trust and the appointment or election is effective, the Trust estate shall vest
in the new Trustee, together with the continuing Trustees, without any further
act or conveyance.
The death, resignation, retirement, removal, or incapacity of the
Trustees, or any one of them, shall not operate to annul or
terminate the Trust or to revoke or terminate any existing
agency or contract created or entered into pursuant to the
terms of this Declaration of Trust.
. Except to the extent required by the 1940 Act or under
circumstances which would justify his removal for cause, no
person ceasing to be a Trustee as a result of his death,
resignation, retirement, removal or incapacity (nor the estate
of any such person) shall be required to make an accounting to
the Shareholders or remaining Trustees upon such cessation.
. Subject to the provisions of this Declaration of Trust, the business of the
Trust shall be managed by the Trustees, and they shall have all powers necessary
or convenient to carry out that responsibility and the purpose of the Trust.
Without limiting the foregoing, the Trustees may adopt By-Laws not inconsistent
with this Declaration of Trust providing for the conduct of the business and
affairs of the Trust and may amend and repeal them to the extent that such
By-Laws do not reserve that right to the Shareholders; they may as they consider
appropriate elect and remove officers and appoint and terminate agents and
consultants and hire and terminate employees, any one or more of the foregoing
of whom may be a Trustee, and may provide for the compensation of all of the
foregoing; they may appoint from their own number, and terminate, any one or
more committees consisting of two or more Trustees, including without implied
limitation an executive committee, which may, when the Trustees are not in
session and subject to the 1940 Act, exercise some or all of the power and
authority of the Trustees as the Trustees may determine; in accordance with
Section 3.3 they may employ one or more Advisers, Administrators, Depositories
and Custodians and may authorize any Depository or Custodian to employ
subcustodians or agents and to deposit all or any part of such assets in a
system or systems for the central handling of securities and debt instruments,
retain transfer, dividend, accounting or Shareholder servicing agents or any of
the foregoing, provide for the distribution of Shares by the Trust through one
or more distributors, principal underwriters or otherwise, set record dates or
times for the determination of Shareholders or number of them with respect to
various matters; they may compensate or provide for the compensation of the
Trustees, officers, advisers, administrators, custodians, other agents,
consultants and employees of the Trust or the Trustees on such terms as they
deem appropriate; and in general they may delegate to any officer of the Trust,
to any committee of the Trustees and to any employee, adviser, administrator,
distributor, principal underwriter, depository, custodian, transfer and dividend
disbursing agent, or any other agent or consultant of the Trust such authority,
powers, functions and duties as they consider desirable or appropriate for the
conduct of the business and affairs of the Trust, including without implied
limitation the power and authority to act in the name of the Trust and of the
Trustees, to sign documents and to act as attorney-in-fact for the Trustees.
Without limiting the foregoing and to the extent not inconsistent with
the 1940 Act or other applicable law, the Trustees shall have power and
authority:
. To invest and reinvest cash and other property, and to hold
cash or other property uninvested without in any event being
bound or limited by any present or future law or custom in
regard to investments by trustees;
. To sell, exchange, lend, pledge, mortgage, hypothecate, write options on
and lease any or all of the assets of the Trust;
. To vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities, debt instruments or
property; and to execute and deliver proxies or powers of
attorney to such person or persons as the Trustees shall deem
proper, granting to such person or persons such power and
discretion with relation to securities, debt instruments or
property as the Trustees shall deem proper;
. To exercise powers and rights of subscription or otherwise which in any
manner arise out of ownership of securities or debt instruments;
. To hold any security, debt instrument or property in a form
not indicating any trust, whether in bearer, unregistered or
other negotiable form, or in the name of the Trustees or of
the Trust or in the name of a custodian, subcustodian or other
depository or a nominee or nominees or otherwise;
To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any
security or debt instrument of which is or was held in the
Trust; to consent to any contract, lease, mortgage, purchase
or sale of property by such corporation or issuer, and to pay
calls or subscriptions with respect to any security or debt
instrument held in the Trust;
To join with other holders of any securities or debt instruments
in acting through a committee, depository, voting trustee or
otherwise, and in that connection to deposit any security or
debt instrument with, or transfer any security or debt
instrument to, any such committee, depository or trustee, and
to delegate to them such power and authority with relation to
any security or debt instrument (whether or not so deposited
or transferred) as the Trustees shall deem proper, and to
agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depository or trustee as the
Trustees shall deem proper;
. To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not limited to
claims for taxes;
To enter into joint ventures, general or limited partnerships and any other
combinations or associations;
. To borrow funds and to mortgage and pledge the assets of the Trust or any
part thereof to secure obligations arising in connection with such borrowing;
To endorse or guarantee the payment of any notes or other
obligations of any person; to make contracts of guaranty or
suretyship, or otherwise assume liability for payment thereof;
and to mortgage and pledge the Trust property or any part
thereof to secure any of or all such obligations;
. To purchase and pay for entirely out of Trust property such insurance as
they may deem necessary or appropriate for the conduct of the business,
including, without limitation, insurance policies insuring the assets of the
Trust and payment of distributions and principal on its portfolio investments,
and insurance policies insuring the Shareholders, Trustees, officers, employees,
agents, consultants, investment advisers, managers, administrators,
distributors, principal underwriters, or independent contractors, or any thereof
(or any person connected therewith), of the Trust individually against all
claims and liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action alleged to
have been taken or omitted by any such person in any such capacity, including
any action taken or omitted that may be determined to constitute negligence;
provided, however, that insurance which protects the Trustees and officers
against liabilities rising from action involving willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
their offices may not be purchased; and
To pay pensions for faithful service, as deemed appropriate by
the Trustees, and to adopt, establish and carry out pension,
profit-sharing, share bonus, share purchase, savings, thrift
and other retirement, incentive and benefit plans, trusts and
provisions, including the purchasing of life insurance and
annuity contracts as a means of providing such retirement and
other benefits, for any or all of the Trustees, officers,
employees and agents of the Trust.
Except as otherwise provided by the 1940 Act or other applicable law,
this Declaration of Trust or the By-Laws, any action to be taken by the Trustees
may be taken by a majority of the Trustees present at a meeting of Trustees (a
quorum, consisting of at least a majority of the Trustees then in office, being
present), within or without Ohio, including any meeting held by means of a
conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting, or
by written consents of a majority of the Trustees then in office (or such larger
or different number as may be required by the 1940 Act or other applicable law).
. Subject to compliance with the provisions of the 1940 Act, but notwithstanding
any limitations of present and future law or custom in regard to delegation of
powers by trustees generally, the Trustees may, at any time and from time to
time and without limiting the generality of their powers and authority otherwise
set forth herein, enter into one or more contracts with any one or more
corporations, trusts, associations, partnerships, limited partnerships, other
type of organizations, or individuals ("Contracting Party") to provide for the
performance and assumption of some or all of the following services, duties and
responsibilities to, for or of the Trust and/or the Trustees, and to provide for
the performance and assumption of such other services, duties and
responsibilities in addition to those set forth below as the Trustees may
determine appropriate:
. Subject to the general supervision of the Trustees and in
conformity with the stated policy of the Trustees with respect
to the investments of the Trust or of the assets belonging to
any Series of Shares of the Trust (as that phrase is defined
in subsection (a) of Section 4.2), to manage such investments
and assets, make investment decisions with respect thereto,
and to place purchase and sale orders for portfolio
transactions relating to such investments and assets;
. Subject to the general supervision of the Trustees and in
conformity with any policies of the Trustees with respect to
the operations of the Trust, to supervise all or any part of
the operations of the Trust, and to provide all or any part of
the administrative and clerical personnel, office space and
office equipment and services appropriate for the efficient
administration and operations of the Trust;
. To distribute the Shares of the Trust, to be principal underwriter of
such Shares, and/or to act as agent of the Trust in the sale of Shares and the
acceptance or rejection of orders for the purchase of Shares;
. To act as depository for and to maintain custody of the property of the
Trust and accounting records in connection therewith;
. To maintain records of the ownership of outstanding Shares,
the issuance and redemption and the transfer thereof, and to
disburse any dividends declared by the Trustees and in
accordance with the policies of the Trustees and/or the
instructions of any particular Shareholder to reinvest any
such dividends;
. To provide service with respect to the relationship of the Trust and its
Shareholders, records with respect to Shareholders and their Shares, and similar
matters; and
. To handle all or any part of the accounting responsibilities, whether
with respect to the Trust's properties, Shareholders or otherwise.
The same person may be the Contracting Party for some or all of the services,
duties and responsibilities to, for and of the Trust and/or the Trustees, and
the contracts with respect thereto may contain such terms interpretive of or in
addition to the delineation of the services, duties and responsibilities
provided for, including provisions that are not inconsistent with the 1940 Act
relating to the standard of duty of and the rights to indemnification of the
Contracting Party and others, as the Trustees may determine. Nothing herein
shall preclude, prevent or limit the Trust or a Contracting Party from entering
into subcontractual arrangements relative to any of the matters referred to in
Sections 3.3(a) through (g) hereof.
Subject to the provisions of the 1940 Act, the fact that:
(i) any of the Shareholders, Trustees or officers of the Trust
is a shareholder, director, officer, partner, trustee, employee,
manager, adviser, principal underwriter or distributor or agent of or
for any Contracting Party, or of or for any parent or affiliate of any
Contracting Party or that the Contracting Party or any parent or
affiliate thereof is a Shareholder or has an interest in the Trust, or
that
(ii) any Contracting Party may have a contract providing for
the rendering of any similar services to one or more other
corporations, trusts, associations, partnerships, limited partnerships
or other organizations, or has other business or interests,
shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust and/or the
Trustees or disqualify any Shareholder, Trustee or officer of the Trust from
voting upon or executing the same or create any liability or accountability to
the Trust or its Shareholders, provided that in the case of any relationship or
interest referred to in the preceding clause (i) on the part of any Trustee or
officer of the Trust either (l) the material facts as to such relationship or
interest have been disclosed to or are known by the Trustees not having any such
relationship or interest and the contract involved is approved in good faith
reasonably justified by such facts by a majority of such Trustees not having any
such relationship or interest (even though such unrelated or disinterested
Trustees are less than a quorum of all of the Trustees), (2) the material facts
as to such relationship or interest and as to the contract have been disclosed
to or are known by the Shareholders not having such relationship or interest and
who are entitled to vote thereon and the contract involved is specifically
approved in good faith by majority vote of such Shareholders, or (3) the
specific contract involved is fair to the Trust as of the time it is authorized,
approved or ratified by the Trustees or by the Shareholders.
. The Trustees are authorized to pay or to cause to be paid out of the principal
or income of the Trust, or partly out of principal and partly out of income, and
to charge or allocate the same to, between or among such one or more of the
Series and Class that may be established and designated pursuant to Article IV,
as the Trustees deem fair, all expenses, fees, charges, taxes and liabilities
incurred or arising in connection with the Trust, or in connection with the
management thereof, including, but not limited to, the Trustees' compensation
and such expenses and charges for the services of the Trust's officers,
employees, investment adviser, administrator, distributor, principal
underwriter, auditor, counsel, depository, custodian, transfer agent, dividend
disbursing agent, accounting agent, Shareholder servicing agent, and such other
agents, consultants, and independent contractors and such other expenses and
charges as the Trustees may deem necessary or proper to incur. Without limiting
the generality of any other provision hereof, the Trustees shall be entitled to
reasonable compensation from the Trust for their services as Trustees and may
fix the amount of such compensation.
. Title to all of the assets of the Trust shall at all times be considered
as vested in the Trustees.
ARTICLE IV
SHARES
. The beneficial interest in the Trust shall be divided into Shares, all without
par value. The Trustees shall have the authority from time to time to issue or
reissue Shares in one or more Series of Shares (including without limitation the
Series specifically established and designated in Section 4.2), as they deem
necessary or desirable, to establish and designate such Series, and to fix and
determine the relative rights and preferences as between the different Series of
Shares as to right of redemption and the price, terms and manner of redemption,
special and relative rights as to dividends and other distributions and on
liquidation, sinking or purchase fund provisions, conversion rights, and
conditions under which the several Series shall have separate voting rights or
no voting rights.
The Shares of each Series may be issued or reissued from time to time
in one or more Classes, as determined by the Board of Trustees pursuant to
resolution. Each Class shall be appropriately designated, prior to the issuance
of any shares thereof, by some distinguishing letter, number or title. All
Shares within a Class shall be alike in every particular. All Shares of each
Series shall be of equal rank and have the same powers, preferences and rights,
and shall be subject to the same qualifications, limitations and restrictions
without distinction between the shares of different Classes thereof, except with
respect to such differences among such Classes, as the Board of Trustees shall
from time to time determine to be necessary or desirable, including differences
in the rate or rates of dividends or distributions. The Board of Trustees may
from time to time increase the number of Shares allocated to any Class already
created by providing that any unissued Shares of the applicable Series shall
constitute part of such Class, or may decrease the number of Shares allocated to
any Class already created by providing that any unissued Shares previously
assigned to such Class shall no longer constitute part thereof. The Board of
Trustees is hereby empowered to classify or reclassify from time to time any
unissued Shares of each Series by fixing or altering the terms thereof and by
assigning such unissued shares to an existing or newly created Class.
Notwithstanding anything to the contrary in this paragraph the Board of Trustees
is hereby empowered (i) to redesignate any issued Shares of any Series by
assigning a distinguishing letter, number or title to such shares and (ii) to
reclassify all or any part of the issued Shares of any Series to make them part
of an existing or newly created Class.
The number of authorized Shares and the number of Shares of each Series
and Class that may be issued is unlimited, and the Trustees may issue Shares of
any Series or Class for such consideration and on such terms as they may
determine (or for no consideration if pursuant to a Share dividend or split-up),
all without action or approval of the Shareholders. All Shares when so issued on
the terms determined by the Trustees shall be fully paid and non-assessable (but
may be subject to mandatory contribution back to the Trust as provided in
subsection (h) of Section 4.2). The Trustees may classify or reclassify any
unissued Shares or any Shares previously issued and reacquired of any Series or
Class into one or more Series or Classes that may be established and designated
from time to time. The Trustees may hold as treasury Shares (of the same or some
other Series), reissue for such consideration and on such terms as they may
determine, or cancel, at their discretion from time to time, any Shares of any
Series or Class reacquired by the Trust.
The Trustees may from time to time close the transfer books or
establish record dates and times for the purposes of determining the holders of
Shares entitled to be treated as such, to the extent provided or referred to in
Section 5.3.
The establishment and designation of any Series of Shares in addition
to those established and designated in Section 4.2, or of any Class of Shares,
shall be effective upon the execution by a majority of the then Trustees of an
instrument setting forth such establishment and designation and the relative
rights and preferences of such Series or Class, or as otherwise provided in such
instrument. At any time that there are no Shares outstanding of any particular
Series or Class previously established and designated the Trustees may by an
instrument executed by a majority of their number abolish that Series or Class
and the establishment and designation thereof. Each instrument referred to in
this paragraph shall have the status of an amendment to this Declaration of
Trust.
Any Trustee, officer or other agent of the Trust, and any organization
in which any such person is interested may acquire, own, hold and dispose of
Shares to the same extent as if such person were not a Trustee, officer or other
agent of the Trust; and the Trust may issue and sell or cause to be issued and
sold and may purchase Shares from any such person or any such organization
subject only to the general limitations, restrictions or other provisions
applicable to the sale or purchase of Shares generally.
. Without limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Series, the Trustees hereby establish and
designate two Series of Shares: the "AIT Vision U.S. Equity Portfolios" and the
"Domino Equity Income Fund". The Shares of these Series and any Shares of any
further Series or Class that may from time to time be established and designated
by the Trustees shall (unless the Trustees otherwise determine with respect to
some further Series or Class at the time of establishing and designating the
same) have the following relative rights and preferences:
. All consideration received by the Trust for the issuance or sale of
Shares of a particular Series or Class, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series or Class for all purposes, subject only to the
rights of creditors, and shall be so recorded upon the books of account of the
Trust. Such consideration, assets, income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, together with any General Items
allocated to that Series or Class as provided in the following sentence, are
herein referred to as "assets belonging to" that Series or Class. In the event
that there are any assets, income, earnings, profits, and proceeds thereof,
funds, or payments which are not readily identifiable as belonging to any
particular Series or Class (collectively "General Items"), the Trustees shall
allocate such General Items to and among any one or more of the Series or
Classes established and designated from time to time in such manner and on such
basis as they, in their sole discretion, deem fair and equitable; and any
General Items so allocated to a particular Series or Class shall belong to that
Series or Class. Each such allocation by the Trustees shall be conclusive and
binding upon the Shareholders of all Series and Classes for all purposes.
The Trustees shall have full discretion, to the extent not
inconsistent with the 1940 Act, to determine which items shall
be treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding
upon the Shareholders.
. The assets belonging to each particular Series and Class thereof shall be
charged with the liabilities of the Trust in respect of that Series or Class and
all expenses, costs, charges and reserves attributable to that Series or Class,
and any general liabilities, expenses, costs, charges or reserves of the Trust
which are not readily identifiable as belonging to any particular Series shall
be allocated and charged by the Trustees to and among any one or more of the
Series and Classes established and designated from time to time in such manner
and on such basis as the Trustees in their sole discretion deem fair and
equitable. The liabilities, expenses, costs, charges and reserves allocated and
so charged to a Series or Class are herein referred to as "liabilities belonging
to" that Series or Class. Each allocation of liabilities, expenses, costs,
charges and reserves by the Trustees shall be conclusive and binding upon the
Shareholders of all Series for all purposes.
. Dividends and distributions on Shares of a particular Series may be paid
with such frequency as the Trustees may determine, which may be daily or
otherwise pursuant to a standing resolution or resolutions adopted only once or
with such frequency as the Trustees may determine, to the holders of Shares of
that Series, from such of the estimated income and capital gains, accrued or
realized, from the assets belonging to that Series, as the Trustees may
determine, after providing for actual and accrued liabilities belonging to that
Series. All dividends and distributions on Shares of a particular Series shall
be distributed pro rata to the holders of that Series in proportion to the
number of Shares of that Series held by such holders at the date and time of
record established for the payment of such dividends or distributions, except
that in connection with any dividend or distribution program or procedure the
Trustees may determine that no dividend or distribution shall be payable on
Shares as to which the Shareholder's purchase order and/or payment have not been
received by the time or times established by the Trustees under such program or
procedure, and except that if Classes have been established for any Series, the
rate of dividends or distributions may vary among such Class pursuant to
resolution, which may be a standing resolution, of the Board of Trustees. Such
dividends and distributions may be made in cash or Shares or a combination
thereof as determined by the Trustees or pursuant to any program that the
Trustees may have in effect at the time for the election by each Shareholder of
the mode of the making of such dividend or distribution to that Shareholder. Any
such dividend or distribution paid in Shares will be paid at the net asset value
thereof as determined in accordance with subsection (h) of Section 4.2.
The Trust intends to qualify each Series as a "regulated
investment company" under the Internal Revenue Code of 1954,
as amended, or any successor or comparable statute thereto,
and regulations promulgated thereunder. Inasmuch as the
computation of net income and gains for federal income tax
purposes may vary from the computation thereof on the books of
the Trust, the Board of Trustees shall have the power, in its
sole discretion, to distribute in any fiscal year as
dividends, including dividends designated in whole or in part
as capital gains distributions, amounts sufficient, in the
opinion of the Board of Trustees, to enable each Series to
qualify as a regulated investment company and to avoid
liability of the Series for federal income tax in respect of
that year. However, nothing in the foregoing shall limit the
authority of the Board of Trustees to make distributions
greater than or less than the amount necessary to qualify as a
regulated investment company and to avoid liability of each
Series for such tax.
. In event of the liquidation or dissolution of the Trust, the Shareholders
of each Series or Class that has been established and designated shall be
entitled to receive, as a Series or Class, when and as declared by the Trustees,
the excess of the assets belonging to that Series or Class over the liabilities
belonging to that Series or Class. The assets so distributable to the
Shareholders of any particular Series or Class shall be distributed among such
Shareholders in proportion to the number of Shares of that Series or Class held
by them and recorded on the books of the Trust. The liquidation of any
particular Series or Class may be authorized by vote of a majority of the
Trustees then in office subject to the approval of a majority of the outstanding
voting Shares of that Series or Class, as defined in the 1940 Act.
. All Shares shall have "equal voting rights" as such term is defined in
the Investment Company Act of 1940 and except as otherwise provided by that Act
or rules, regulations or orders promulgated thereunder. On each matter submitted
to a vote of the Shareholders, each Series shall vote as a separate series
except (i) as to any matter with respect to which a vote of all Series voting as
a single series is required by the 1940 Act or rules and regulations promulgated
thereunder, or would be required under the Ohio General Corporation Law if the
Trust were an Ohio corporation; and (ii) to any matter which the Trustees have
determined affects only the interests of one or more Series or Class, only the
holders of Shares of the one or more affected Series or Classes shall be
entitled to vote thereon.
. Each holder of Shares of a particular Series or Class shall have the
right at such times as may be permitted by the Trust, but no less frequently
than once each week, to require the Trust to redeem all or any part of his
Shares of that Series or Class at a redemption price equal to the net asset
value per Share of that Series or Class next determined in accordance with
subsection (h) of this Section 4.2 after the Shares are properly tendered for
redemption. Payment of the redemption price shall be in cash; provided, however,
that if the Trustees determine, which determination shall be conclusive, that
conditions exist which make payment wholly in cash unwise or undesirable, the
Trust may make payment wholly or partly in securities or other assets belonging
to the Series or Class of which the Shares being redeemed are part at the value
of such securities or assets used in such determination of net asset value.
Notwithstanding the foregoing, the Trust may postpone payment of the
redemption price and may suspend the right of the holders of Shares of any
Series to require the Trust to redeem Shares of that Series during any period or
at any time when and to the extent permissible under the 1940 Act, and such
redemption is conditioned upon the Trust having funds or property legally
available therefor.
. Each Share of each Series or Class that has been established and
designated is subject to redemption by the Trust at the redemption price which
would be applicable if such Share was then being redeemed by the Shareholder
pursuant to subsection (f) of this Section 4.2:(a) at any time, if the Trustees
determine in their sole discretion that failure to so redeem may have materially
adverse consequences to all or any of the holders of the Shares, or any Series
or Class thereof, of the Trust, or (b) upon such other conditions as may from
time to time be determined by the Trustees and set forth in the then current
Prospectus of the Trust with respect to maintenance of Shareholder accounts of a
minimum amount. Upon such redemption the holders of the Shares so redeemed shall
have no further right with respect thereto other than to receive payment of such
redemption price.
. The net asset value per Share of any Series or Class shall be
the quotient obtained by dividing the value of the net assets
of that Series or Class (being the value of the assets
belonging to that Series or Class less the liabilities
belonging to that Series or Class) by the total number of
Shares of that Series or Class outstanding, all determined in
accordance with the methods and procedures, including without
limitation those with respect to rounding, established by the
Trustees from time to time, and net asset value shall be
determined separately for each Class of a Series.
The Trustees may determine to maintain the net asset value per
Share of any Series or Class at a designated constant dollar
amount and in connection therewith may adopt procedures not
inconsistent with the 1940 Act for the continuing declarations
of income attributable to that Series or Class as dividends
payable in additional Shares of that Series or Class at the
designated constant dollar amount and for the handling of any
losses attributable to that Series or Class . Such procedures
may provide that in the event of any loss each Shareholder
shall be deemed to have contributed to the capital of the
Trust attributable to that Series or Class his pro rata
portion of the total number of Shares required to be canceled
in order to permit the net asset value per Share of that
Series or Class to be maintained, after reflecting such loss,
at the designated constant dollar amount. Each Shareholder of
the Trust shall be deemed to have agreed, by his investment in
any Series with respect to which the Trustees shall have
adopted any such procedure, to make the contribution referred
to in the preceding sentence in the event of any such loss.
. All Shares of each particular Series or Class shall be
transferable, but transfers of Shares of a particular Series
or Class will be recorded on the Share transfer records of the
Trust applicable to that Series or Class only at such times as
Shareholders shall have the right to require the Trust to
redeem Shares of that Series or Class and at such other times
as may be permitted by the Trustees.
. All Shares of each particular Series shall represent an equal
proportionate interest in the assets belonging to that Series (subject to the
liabilities belonging to that Series), and each Share of any particular Series
shall be equal to each other Share of that Series; but the provisions of this
sentence shall not restrict any distinctions permissible under this Section 4.2
that may exist with respect to a Class of the same Series. The Trustees may from
time to time divide or combine the Shares of any particular Series or Class into
a greater or lesser number of Shares of that Series or Class without thereby
changing the proportionate beneficial interest in the assets belonging to that
Series or Class or in any way affecting the rights of Shares of any other Series
or Class.
. Any fractional Share of any Series or Class, if any such
fractional Share is outstanding, shall carry proportionately
all the rights and obligations of a whole Share of that Series
or Class, including with respect to voting, receipt of
dividends and distributions, redemption of Shares, and
liquidation of the Trust.
. Subject to compliance with the requirements of the 1940 Act,
the Trustees shall have the authority to provide that holders
of Shares of any Series or Class shall have the right to
convert said Shares into Shares of one or more other Series or
Classes in accordance with such requirements and procedures as
may be established by the Trustees.
. The ownership of Shares shall be recorded on the books of the Trust or of a
transfer or similar agent for the Trust, which books shall be maintained
separately for the Shares of each Series and Class that has been established and
designated. No certificates certifying the ownership of Shares need be issued
except as the Trustees may otherwise determine from time to time. The Trustees
may make such rules as they consider appropriate for the issuance of Share
certificates, the use of facsimile signatures, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent, as the case may be, shall be conclusive as to who are
the Shareholders and as to the number of Shares of each Series and Class held
from time to time by each such Shareholder.
. The Trustees may accept investments in the Trust from such persons and on such
terms and for such consideration, not inconsistent with the provisions of the
1940 Act, as they from time to time authorize. The Trustees may authorize any
distributor, principal underwriter, custodian, transfer agent or other person to
accept orders for the purchase of Shares that conform to such authorized terms
and to reject any purchase orders for Shares whether or not conforming to such
authorized terms.
. Shareholders shall have no preemptive or other right to subscribe to any
additional Shares or other securities issued by the Trust.
. Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death of a Shareholder during the continuance of
the Trust shall not operate to terminate the Trust nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to the
rights of said decedent under this Trust. Ownership of Shares shall not entitle
the Shareholder to any title in or to the whole or any part of the Trust
property or right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or agent
of the Trust shall have any power to bind personally any Shareholder, nor except
as specifically provided herein to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the Shareholder may
at any time personally agree to pay.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
. The Shareholders shall have power to vote only (i) for the election or removal
of Trustees as provided in Section 3.1, (ii) with respect to any contract with a
Contracting Party as provided in Section 3.3 as to which Shareholder approval is
required by the 1940 Act, (iii) with respect to any termination or
reorganization of the Trust or any Series to the extent and as provided in
Sections 7.1 and 7.2, (iv) with respect to any amendment of this Declaration of
Trust to the extent and as provided in Section 7.3, (v) to the same extent as
the stockholders of an Ohio business corporation as to whether or not a court
action, proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or the Shareholders,
and (vi) with respect to such additional matters relating to the Trust as may be
required by the 1940 Act, this Declaration of Trust, the By-Laws or any
registration of the Trust with the Commission (or any successor agency) or any
state, or as the Trustees may consider necessary or desirable. There shall be no
cumulative voting in the election of any Trustee or Trustees. Shares may be
voted in person or by proxy. A proxy with respect to Shares held in the name of
two or more persons shall be valid if executed by any one of them unless at or
prior to exercise of the proxy the Trust receives a specific written notice to
the contrary from any one of them. A proxy purporting to be executed by or on
behalf of a Shareholder shall be deemed valid unless challenged at or prior to
its exercise and the burden of proving invalidity shall rest on the challenger.
Until Shares are issued, the Trustees may exercise all rights of Shareholders
and may take any action required by law, this Declaration of Trust or the
By-Laws to be taken by Shareholders.
. Meetings (including meetings involving only the holders of Shares of one or
more but less than all Series or Classes) of Shareholders may be called by the
Trustees from time to time for the purpose of taking action upon any matter
requiring the vote or authority of the Shareholders as herein provided or upon
any other matter deemed by the Trustees to be necessary or desirable. Written
notice of any meeting of Shareholders shall be given or caused to be given by
the Trustees by mailing such notice at least seven days before such meeting,
postage prepaid, stating the time, place and purpose of the meeting, to each
Shareholder at the Shareholder's address as it appears on the records of the
Trust. If the Trustees shall fail to call or give notice of any meeting of
Shareholders (including a meeting involving only the holders of Shares of one or
more but less than all Series or Classes) for a period of 30 days after written
application by Shareholders holding at least 25% of the Shares then outstanding
requesting a meeting be called for any other purpose requiring action by the
Shareholders as provided herein or in the By-Laws, then Shareholders holding at
least 25% of the Shares then outstanding may call and give notice of such
meeting, and thereupon the meeting shall be held in the manner provided for
herein in case of call thereof by the Trustees.
. For the purpose of determining the Shareholders who are entitled to vote or
act at any meeting or any adjournment thereof, or who are entitled to
participate in any dividend or distribution, or for the purpose of any other
action, the Trustees may from time to time close the transfer books for such
period, not exceeding 30 days (except at or in connection with the termination
of the Trust), as the Trustees may determine; or without closing the transfer
books the Trustees may fix a date and time not more than 60 days prior to the
date of any meeting of Shareholders or other action as the date and time of
record for the determination of Shareholders entitled to vote at such meeting or
any adjournment thereof or to be treated as Shareholders of record for purposes
of such other action, and any Shareholder who was a Shareholder at the date and
time so fixed shall be entitled to vote at such meeting or any adjournment
thereof or (subject to any provisions permissible under subsection (c) of
Section 4.2 with respect to dividends or distributions on Shares that have not
been ordered and/or paid for by the time or times established by the Trustees
under the applicable dividend or distribution program or procedure then in
effect) to be treated as a Shareholder of record for purposes of such other
action, even though he has since that date and time disposed of his Shares, and
no Shareholder becoming such after that date and time shall be so entitled to
vote at such meeting or any adjournment thereof or to be treated as a
Shareholder of record for purposes of such other action.
. A majority of the Shares of each Series, or of all Series if voting as a
single series is required, which are entitled to vote shall be a quorum for the
transaction of business at a Shareholders' meeting, but any lesser number shall
be sufficient for adjournments. Any adjourned session or sessions may be held,
within a reasonable time after the date set for the original meeting without the
necessity of further notice. A majority of the Shares voted, at a meeting of
which a quorum is present, shall decide any questions and a plurality shall
elect a Trustee, except when a different vote is required or permitted by any
provision of the 1940 Act or other applicable law or by this Declaration of
Trust or the By-Laws.
. Subject to the provisions of the 1940 Act and other applicable law, any action
taken by Shareholders may be taken without a meeting if a majority of
Shareholders entitled to vote on the matter (or such other proportion thereof as
shall be required by the 1940 Act or by any express provision of this
Declaration of Trust or the By-Laws) consent to the action in writing and such
written consents are filed with the records of the meetings of Shareholders.
Such consent shall be treated for all purposes as a vote taken at a meeting of
Shareholders.
. The records of the Trust shall be open to inspection by Shareholders to the
same extent as is permitted stockholders of an Ohio corporation under the Ohio
General Corporation Law.
. The By-Laws may include further provisions for Shareholders' votes and
meetings and related matters not inconsistent with the provisions hereof.
ARTICLE VI
LIMITATION OF LIABILITY; INDEMNIFICATION
. All persons extending credit to, contracting with or having any claim against
any Series of the Trust (or the Trust on behalf of any Series) shall look only
to the assets of that Series for payment under such credit, contract or claim;
and neither the Shareholders nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be personally liable
therefor. Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only by or for the Trust or
the Trustees and not personally. Nothing in this Declaration of Trust shall
protect any Trustee or officer against any liability to the Trust or the
Shareholders to which such Trustee or officer would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of Trustee or of such
officer.
Every note, bond, contract, instrument, certificate or undertaking made
or issued by the Trustees or by any officers or officer shall give notice that
this Declaration of Trust is on file with the Secretary of the State of Ohio and
shall recite to the effect that the same was executed or made by or on behalf of
the Trust or by them as Trustees or Trustee or as officers or officer and not
individually and that the obligations of such instrument are not binding upon
any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, but the omission thereof shall not operate to
bind any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually.
. The exercise by the Trustees of their powers and discretions hereunder shall
be binding upon everyone interested. A Trustee shall be liable for his own
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee, and for nothing else,
and shall not be liable for errors of judgment or mistakes of fact or law.
Subject to the foregoing, (a) the Trustees shall not be responsible or liable in
any event for any neglect or wrongdoing of any officer, agent, employee,
consultant, adviser, administrator, distributor or principal underwriter,
custodian or transfer, dividend disbursing, Shareholder servicing or accounting
agent of the Trust, nor shall any Trustee be responsible for the act or omission
of any other Trustee; (b) the Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust
and their duties as Trustees, and shall be under no liability for any act or
omission in accordance with such advice or for failing to follow such advice;
and (c) in discharging their duties, the Trustees, when acting in good faith,
shall be entitled to rely upon the books of account of the Trust and upon
written reports made to the Trustees by any officer appointed by them, any
independent public accountant, and (with respect to the subject matter of the
contract involved) any officer, partner or responsible employee of a Contracting
Party appointed by the Trustees pursuant to Section 3.3. The Trustees as such
shall not be required to give any bond or surety or any other security for the
performance of their duties. Nothing stated herein is intended to detract from
the protection accorded to Trustees by Ohio Revised Code Sections 1746.08 and
1701.59, as amended from time to time.
. In case any Shareholder or former Shareholder shall be charged or held to be
personally liable for any obligation or liability of the Trust solely by reason
of being or having been a Shareholder and not because of such Shareholder's acts
or omissions or for some other reason, the Trust (upon proper and timely request
by the Shareholder) shall assume the defense against such charge and satisfy any
judgment thereon, and the Shareholder or former Shareholder (or his heirs,
executors, administrators or other legal representatives or in the case of a
corporation or other entity, its corporate or other general successor) shall be
entitled out of the assets of the Trust estate to be held harmless from and
indemnified against all loss and expense arising from such liability; provided
that, in the event the Trust shall consist of more than one Series, Shareholders
of a particular Series who are faced with claims or liabilities solely by reason
of their status as Shareholders of that Series shall be limited to the assets of
that Series for recovery of such loss and related expenses. The rights accruing
to a Shareholder under this Section 6.3 shall not exclude any other right to
which such Shareholder may be lawfully entitled, nor shall anything herein
contained restrict the right of the Trust to indemnify or reimburse a
Shareholder in any appropriate situation even though not specifically provided
herein.
Subject to and except as otherwise provided in the Securities Act of 1933, as
amended, and the 1940 Act, the Trust shall indemnify each of its Trustees and
officers (including persons who serve at the Trust's request as directors,
officers or trustees of another organization in which the Trust has any interest
as a shareholder, creditor or otherwise (hereinafter referred to as a "Covered
Person") against all liabilities, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise or with which such person may be or
may have been threatened, while in office or thereafter, by reason of being or
having been such a Trustee or officer, director or trustee, and except that no
Covered Person shall be indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
. The Trust shall advance attorneys' fees or other expenses incurred by a
Covered Person in defending a proceeding to the full extent permitted by the
Securities Act of 1933, as amended, the 1940 Act, and Ohio Revised Code Chapter
1707, as amended. In the event any of these laws conflict with Ohio Revised Code
Section 1701.13(E), as amended, these laws, and not Ohio Revised Code Section
1701.13(E), shall govern.
The right of indemnification provided by this Article VI shall not be
exclusive of or affect any other rights to which any such Covered Person may be
entitled. As used in this Article VI, "Covered Person" shall include such
person's heirs, executors and administrators. Nothing contained in this article
shall affect any rights to indemnification to which personnel of the Trust,
other than Trustees and officers, and other persons may be entitled by contract
or otherwise under law, nor the power of the Trust to purchase and maintain
liability insurance on behalf of any such person.
. No person dealing with the Trustees shall be bound to make any inquiry
concerning the validity of any transaction made or to be made by the Trustees or
to see to the application of any payments made or property transferred to the
Trust or upon its order.
ARTICLE VII
MISCELLANEOUS
. Unless terminated as provided herein, the Trust shall continue without
limitation of time. The Trust may be terminated at any time by a majority of the
Trustees then in office subject to a favorable vote of a majority of the
outstanding voting Shares, as defined in the 1940 Act, of each Series voting
separately by Series.
Upon termination, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or anticipated as may be
determined by the Trustees, the Trust shall in accordance with such procedures
as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash, securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with the
provisions of subsection (d) of Section 4.2.
. The Trustees may sell, convey and transfer the assets of the Trust, or the
assets belonging to any one or more Series, to another trust, partnership,
association or corporation organized under the laws of any state of the United
States, or to the Trust to be held as assets belonging to another Series of the
Trust, in exchange for cash, shares or other securities (including, in the case
of a transfer to another Series of the Trust, Shares of such other Series) with
such transfer being made subject to, or with the assumption by the transferee
of, the liabilities belonging to each Series the assets of which are so
transferred; provided, however, that if shareholder approval is required by the
1940 Act, no assets belonging to any particular Series shall be so transferred
unless the terms of such transfer shall have first been approved at a meeting
called for the purpose by the affirmative vote of the holders of a majority of
the outstanding voting Shares, as defined in the 1940 Act, of that Series.
Following such transfer, the Trustees shall distribute such cash, shares or
other securities (giving due effect to the assets and liabilities belonging to
and any other differences among the various Series the assets belonging to which
have so been transferred) among the Shareholders of the Series the assets
belonging to which have been so transferred; and if all of the assets of the
Trust have been so transferred, the Trust shall be terminated.
. All rights granted to the Shareholders under this Declaration of Trust are
granted subject to the reservation of the right to amend this Declaration of
Trust as herein provided, except that no amendment shall repeal the limitations
on personal liability of any Shareholder or Trustee or repeal the prohibition of
assessment upon the Shareholders without the express consent of each Shareholder
or Trustee involved. Subject to the foregoing, the provisions of this
Declaration of Trust (whether or not related to the rights of Shareholders) may
be amended at any time by an instrument in writing signed by a majority of the
then Trustees (or by an officer of the Trust pursuant to the vote of a majority
of such Trustees), when authorized so to do by the vote in accordance with
subsection (e) of Section 4.2 of Shareholders holding a majority of the Shares
entitled to vote, except that amendments either (a) establishing and designating
any new Series of Shares not established and designated in Section 4.2, or any
Class or (b) having the purpose of changing the name of the Trust or the name of
any Shares theretofore established and designated or of supplying any omission,
curing any ambiguity or curing, correcting or supplementing any provision hereof
which is internally inconsistent with any other provision hereof or which is
defective or inconsistent with the 1940 Act or with the requirements of the
Internal Revenue Code and applicable regulations for the Trust's obtaining the
most favorable treatment thereunder available to regulated investment companies,
shall not require authorization by Shareholder vote. If Shares have been issued
in Series or Classes and such amendment would not affect Shares of all Series or
Classes equally, no such amendment may be made except with the vote or consent
of the holders of a majority of the Shares of each Series or Class affected by
such amendment. Subject to the foregoing, any such amendment shall be effective
as provided in the instrument containing the terms of such amendment or, if
there is no provision therein with respect to effectiveness, upon the execution
of such instrument and of a certificate (which may be a part of such instrument)
executed by a Trustee or officer of the Trust to the effect that such amendment
has been duly adopted.
<PAGE>
20
. The original or a copy of this instrument and of each amendment hereto shall
be kept at the office of the Trust where it may be inspected by any Shareholder.
A copy of this instrument and of each amendment hereto shall be filed by the
Trust with the Secretary of the State of Ohio, as well as any other governmental
office where such filing may from time to time be required, but the failure to
make any such filing shall not impair the effectiveness of this instrument or
any such amendment. Anyone dealing with the Trust may rely on a certificate by
an officer of the Trust as to whether or not any such amendments have been made,
as to the identities of the Trustees and officers, and as to any matters in
connection with the Trust hereunder; and, with the same effect as if it were the
original, may rely on a copy certified by an officer of the Trust to be a copy
of this instrument or of any such amendments. In this instrument and in any such
amendment, references to this instrument, and all expressions like "herein",
"hereof" and "hereunder" shall be deemed to refer to this instrument as a whole
as the same may be amended or affected by any such amendments. The masculine
gender shall include the feminine and neuter genders. Headings are placed herein
for convenience of reference only and shall not be taken as a part hereof or
control or affect the meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts each of which shall be
deemed an original.
. This Declaration of Trust is made in the State of Ohio, and it is created
under and is to be governed by and construed and administered according to the
laws of said State, including the Ohio General Corporation Law as the same may
be amended from time to time, but the reference to said Corporation Law is not
intended to give the Trust, the Trustees, the Shareholders or any other person
any right, power, authority or responsibility available only to or in connection
with an entity organized in corporate form. The Trust shall be of the type
referred to in Section 1746.01 of the Ohio Revised Code, and without limiting
the provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand in
Southlake, Texas for himself and his assigns, as of the day and year first above
written.
/s/
Kenneth D. Trumpfheller
STATE OF TEXAS )
) ss:
COUNTY OF TARRANT )
Before me, a Notary Public in and for said county and state, personally
appeared the above named Kenneth D. Trumpfheller, who acknowledged that he did
sign the foregoing instrument and that the same is his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal on this 8th day of August, 1995.
/s/
Cynthia K. Mays
Notary Public
My Commission Expires: 11-12-97
<PAGE>
AmeriPrime Funds
Amendment No. 1 to Declaration of Trust
Pursuant to Sections 4.2 and 7.3 of the Declaration of Trust of
AmeriPrime Funds (the "Trust") and effective upon execution of this document,
the undersigned, being the sole Trustee of the Trust, hereby adds two new series
of shares: "GLOBALT Growth Fund" and "Fountainhead Value Fund".
Date: October 20, 1995 /s/
Kenneth D. Trumpfheller
AmeriPrime Funds Amendment No. 8
Agreement and Declaration of Trust
1. Pursuant to Section 4.1 of the Agreement and Declaration of Trust of
AmeriPrime Funds and effective upon the execution of this document, the
undersigned, being a majority of the trustees of AmeriPrime Funds, hereby
establish two new series of shares of the Trust and designate such series the
"Marathon Value Fund" and the "Worthington Theme Fund." The relative rights and
preferences of the series shall be those rights and preferences set forth in
Section 4.2 of the Agreement and Declaration of Trust of AmeriPrime Funds.
2. This document shall have the status of an Amendment to said
Agreement and Declaration of Trust, and may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-----------------------------------
Steve L. Cobb
-----------------------------------
Gary E. Hippenstiel
-----------------------------------
Kenneth D. Trumpfheller
December 15, 1997
ASA02D91-120897-2
<PAGE>
AmeriPrime Funds
<PAGE>
By-Laws
of
AmeriPrime Funds
ARTICLE 1
Agreement and Declaration of Trust and Offices
1.1 Agreement and Declaration of Trust. These By-Laws shall be subject
to the Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of The AmeriPrime Funds, the Ohio business trust
established by the Declaration of Trust (the "Trust").
1.2 Offices. The Trust may maintain one or more other offices,
including its principal office, in or outside of Ohio, in such cities as the
Trustees may determine from time to time. Unless the Trustees otherwise
determine, the principal office of the Trust shall be located in Southlake,
Texas.
ARTICLE 2
Meetings of Trustees
2.1 Regular Meetings. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees. A regular
meeting of the Trustees may be held without call or notice immediately after and
at the same place as any meeting of the shareholders.
2.2 Special Meetings. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meeting when called by
the President or the Treasurer or by two or more Trustees, sufficient notice
thereof being given to each Trustee by the Secretary or an Assistant Secretary
or by the officer or the Trustees calling the meeting.
2.3 Notice. It shall be sufficient notice to a Trustee of a special
meeting to send notice by mail at least forty-eight hours or by telegram at
least twenty-four hours before the meeting addressed to the Trustee at his or
her usual or last known business or residence address or to give notice to him
or her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice to him or
her. Neither notice of a meeting nor a waiver of a notice need specify the
purposes of the meeting.
2.4 Quorum. At any meeting of the Trustees a majority of the Trustees
then in office shall constitute a quorum. Any meeting may be adjourned from time
to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
2.5 Participation by Telephone. One or more of the Trustees or of any
committee of the Trustees may participate in a meeting thereof by means of a
conference telephone or similar
communications equipment allowing all persons participating in the meeting to
hear each other at the same time. Participation by such means shall constitute
presence in person at a meeting except as otherwise provided by the Investment
Company Act of 1940.
2.6 Action by Consent. Any action required or permitted to be taken at
any meeting of the Trustees or any committee thereof may be taken without a
meeting, if a written consent of such action is signed by a majority of the
Trustees then in office or a majority of the members of such committee, as the
case may be, and such written consent is filed with the minutes of the
proceedings of the Trustees or such committee.
ARTICLE 3
Officers
3.1 Enumeration and Qualification. The officers of the Trust shall be a
President, a Treasurer, a Secretary and such other officers, including Vice
Presidents, if any, as the Trustees from time to time may in their discretion
elect. The Trust may also have such agents as the Trustees from time to time may
in their discretion appoint. Any officer may be but none need be a Trustee or
shareholder. Any two or more offices may be held by the same person.
3.2 Election. The President, the Treasurer and the Secretary shall be
elected annually by the Trustees. Other officers, if any, may be elected or
appointed by the Trustees at any time. Vacancies in any office may be filled at
any time.
3.3 Tenure. The President, the Treasurer and the Secretary shall hold
office for one year and until their respective successors are chosen and
qualified, or in each case until he or she sooner dies, resigns, is removed or
becomes disqualified. Each other officer shall hold office and each agent shall
retain authority at the pleasure of the Trustees.
3.4 Powers. Subject to the other provisions of these By-Laws, each
officer shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly incident
to the office occupied by him or her as if the Trust were organized as an Ohio
business corporation and such other duties and powers as the Trustees may from
time to time designate.
3.5 President. Unless the Trustees otherwise provide, the President, or in
the absence of the President, any Trustee chosen by the Trustees, shall preside
at all meetings of the shareholders and of the Trustees. The President shall be
the chief executive officer.
3.6 Treasurer. The Treasurer shall be the chief financial and
accounting officer of the Trust, and shall, subject to the provisions of the
Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager, or transfer, shareholder servicing or
similar agent, be in charge of the valuable papers, books of account and
accounting records of the Trust, and shall have such other duties and powers as
may be designated from time to time by the Trustees or by the President.
3.7 Secretary. The Secretary shall record all proceedings of the
shareholders and the Trustees in books to be kept therefor, which books or a
copy thereof shall be kept at the principal office of the Trust. In the absence
of the Secretary from any meeting of the shareholders or Trustees, an assistant
secretary, or if there be none or if he or she is absent, a temporary secretary
chosen at such meeting shall record the proceedings thereof in the aforesaid
books.
3.8 Resignations and Removals. Any Trustee or officer may resign at any
time by written instrument signed by him or her and delivered to the President
or the Secretary or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other time. The
Trustees may remove any officer elected by them with or without cause. Except to
the extent expressly provided in a written agreement with the Trust, no Trustee
or officer resigning and no officer removed shall have any right to any
compensation for any period following his or her resignation or removal, or any
right to damages on account of such removal.
ARTICLE 4
Committees
4.1 General. The Trustees, by vote of a majority of the Trustees then
in office, may elect from their number an Executive Committee or other
committees and may delegate thereto some or all of their powers except those
which by law, by the Declaration of Trust, or by these By-Laws may not be
delegated. Except as the Trustees may otherwise determine, any such committee
may make rules for the conduct of its business, but unless otherwise provided by
the Trustees or in such rules, its business shall be conducted so far as
possible in the same manner as is provided by these By-Laws for the Trustees
themselves. All members of such committees shall hold such offices at the
pleasure of the Trustees. The Trustees may abolish any such committee at any
time. Any committee to which the Trustees delegate any of their powers or duties
shall keep records of its meetings and shall report its action to the Trustees.
The Trustees shall have power to rescind any action of any committee, but no
such rescission shall have retroactive effect.
ARTICLE 5
Reports
5.1 General. The Trustees and officers shall render reports at the time
and in the manner required by the Declaration of Trust or any applicable law.
Officers and Committees shall render such additional reports as they may deem
desirable or as may from time to time be required by the Trustees.
ARTICLE 6
Fiscal Year
6.1 General. The fiscal year of the Trust shall be fixed by, and shall
be subject to change by, the Trustees.
ARTICLE 7
Seal
7.1 General. If required by applicable law, the seal of the Trust shall
consist of a flat-faced die with the word "Ohio", together with the name of the
Trust and the year of its organization cut or engraved thereon, but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.
ARTICLE 8
Execution of Papers
8.1 General. Except as the Trustees may generally or in particular
cases authorize the execution thereof in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees shall be signed by
the President, any Vice President, or by the Treasurer and need not bear the
seal of the Trust, but shall state the substance of or make reference to the
provisions of Section 7.1 of the Declaration of Trust.
ARTICLE 9
Issuance of Share Certificates
9.1 Share Certificates. In lieu of issuing certificates for shares, the
Trustees or the transfer agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
The Trustees may at any time authorize the issuance of share
certificates. In that event, each shareholder shall be entitled to a certificate
stating the number of shares owned by him, in such form as shall be prescribed
from time to time by the Trustees. Such certificate shall be signed by the
President or a Vice-President and by the Treasurer or Assistant Treasurer. Such
signatures may be facsimiles if the certificate is signed by a transfer agent,
or by a registrar, other than a Trustee, officer or employee of the Trust. In
case any officer who has signed or whose facsimile signature has been placed on
such certificate shall cease to be such officer before such certificate is
issued, it may be issued by the Trust with the same effect as if he were such
officer at the time of its issue.
9.2 Loss of Certificates. In case of the alleged loss or destruction or
the mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees shall prescribe.
9.3 Issuance of New Certificate to Pledgee. In the event certificates
have been issued, a pledgee of shares transferred as collateral security shall
be entitled to a new certificate if the instrument of transfer substantially
describes the debt or duty that is intended to be secured thereby. Such new
certificate shall express on its face that it is held as collateral security,
and the name of the pledgor shall be stated thereon, who alone shall be liable
as a shareholder, and entitled to vote thereon.
9.4 Discontinuance of Issuance of Certificates. The Trustees may at any
time discontinue the issuance of share certificates and may, by written notice
to each shareholder, require the surrender of share certificates to the Trust
for cancellation. Such surrender and cancellation shall not affect the ownership
of shares in the Trust.
ARTICLE 10
Custodian
10.1 General. The Trust shall at all times employ a bank or trust
company having a capital, surplus and undivided profits of at least Five Hundred
Thousand ($500,000) Dollars as Custodian of the capital assets of the Trust. The
Custodian shall be compensated for its services by the Trust and upon such basis
as shall be agreed upon from time to time between the Trust and the Custodian.
ARTICLE 11
Dealings with Trustees and Officers
11.1 General. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of shares of the Trust to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may accept subscriptions to
shares or repurchase shares from any firm or company in which he is interested.
ARTICLE 12
Shareholders
12.1 Meetings. A meeting of the shareholders of the Trust shall be held
whenever called by the Trustees, whenever election of a Trustee or Trustees by
shareholders is required by the provisions of Section 16(a) of the Investment
Company Act of 1940 for that purpose or whenever otherwise required pursuant to
the Declaration of Trust. Any meeting shall be held on such day and at such time
as the President or the Trustees may fix in the notice of the meeting.
12.2 Record Dates. For the purpose of determining the shareholders who
are entitled to vote or act at any meeting or any adjournment thereof, or who
are entitled to receive payment of any dividend or of any other distribution,
the Trustees may from time to time fix a time, which shall be not more than 60
days before the date of any meeting of shareholders or the date for the payment
of any dividend or of any other distribution, as the record date for determining
the shareholders having the right to notice of and to vote at such meeting and
any adjournment thereof or the right to receive such dividend or distribution,
and in such case only shareholders of record on such record date shall have such
right, notwithstanding any transfer of shares on the books of the Trust after
the record date; or without fixing such record date the Trustees may for any
such purposes close the register or transfer books for all or any part of such
period.
ARTICLE 13
Amendments to the By-Laws
13.1 General. These By-Laws may be amended or repealed, in whole or in
part, by a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.
MANAGEMENT AGREEMENT
TO: Carl Domino Associates, L.P.
580 Village Blvd., Suite 225
West Palm Beach, Florida 33409
Dear Sirs:
AmeriPrime Funds (the "Trust") herewith confirms our agreement with
you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers several series of shares to investors, one
of which is the Domino Equity Income Fund (the "Fund").
You have been selected to act as the sole investment adviser of the
Fund and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows upon the date of the execution of this Agreement.
1. ADVISORY SERVICES
You will regularly provide the Fund with such investment
advice as you in your discretion deem advisable and will furnish a continuous
investment program for the Fund consistent with the Fund's investment objectives
and policies. You will determine the securities to be purchased for the Fund,
the portfolio securities to be held or sold by the Fund and the portion of the
Fund's assets to be held uninvested, subject always to the Fund's investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect, and subject further to such policies and instructions as the
Board may from time to time establish. You will advise and assist the officers
of the Trust in taking such steps as are necessary or appropriate to carry out
the decisions of the Board and the appropriate committees of the Board regarding
the conduct of the business of the Fund.
2. ALLOCATION OF CHARGES AND EXPENSES
You will pay all organizational and operating expenses of the
Fund, including the compensation and expenses of any employees of the Fund and
of any other persons rendering any services to the Fund; clerical and
shareholder service staff salaries; office space and other office expenses; fees
and expenses incurred by the Fund in connection with membership in investment
company organizations; legal, auditing and accounting expenses; expenses of
registering shares under federal and state securities laws, including expenses
incurred by the Fund in connection with the organization and initial
registration of shares of the Fund; insurance expenses; fees and expenses of the
custodian, transfer agent, dividend disbursing agent, shareholder service agent,
plan agent, administrator, accounting and pricing services agent and underwriter
of the Fund; expenses, including clerical expenses, of issue, sale, redemption
or repurchase of shares of the Fund; the cost of preparing and distributing
reports and notices to shareholders, the cost of printing or preparing
prospectuses and statements of additional information for delivery to the Fund's
current and prospective shareholders; the cost of printing or preparing stock
certificates or any other documents, statements or reports to shareholders;
expenses of shareholders' meetings and proxy solicitations; advertising,
promotion and other expenses incurred directly or indirectly in connection with
the sale or distribution of the Fund's shares; and all other organizational and
operating expenses not specifically assumed by the Fund.
The Fund will pay all brokerage fees and commissions, taxes,
interest, fees and expenses of the non-interested person trustees and such
extraordinary or non-recurring expenses as may arise, including litigation to
which the Fund may be a party and indemnification of the Trust's trustees and
officers with respect thereto. You may obtain reimbursement from the Fund, at
such time or times as you may determine in your sole discretion, for any of the
expenses advanced by you, which the Fund is obligated to pay, and such
reimbursement shall not be considered to be part of your compensation pursuant
to this Agreement.
3. COMPENSATION OF THE ADVISER
For all of the services to be rendered and payments to be made
as provided in this Agreement, as of the last business day of each month, the
Fund will pay you a fee at the annual rate of 1.50% of the average value of its
daily net assets.
The average value of the daily net assets of the Fund shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of the Fund is suspended for
any particular business day, then for the purposes of this paragraph, the value
of the net assets of the Fund as last determined shall be deemed to be the value
of the net assets as of the close of the business day, or as of such other time
as the value of the Fund's net assets may lawfully be determined, on that day.
If the determination of the net asset value of the Fund has been suspended for a
period including such month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the Fund as
last determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
In connection with purchases or sales of portfolio securities
for the account of the Fund, it is understood that you will arrange for the
placing of all orders for the purchase and sale of portfolio securities for the
account with brokers or dealers selected by you, subject to review of this
selection by the Board from time to time. You will be responsible for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed at all times to seek for the Fund the best qualitative execution,
taking into account such factors as price (including the applicable brokerage
commission or dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and research
services provided by the broker or dealer.
You should generally seek favorable prices and commission
rates that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Fund and/or the other
accounts over which you exercise investment discretion. You are authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a Fund portfolio transaction which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if you determine in good faith that the amount of the
commission is reasonable in relation to the value of the brokerage and research
services provided by the executing broker or dealer. The determination may be
viewed in terms of either a particular transaction or your overall
responsibilities with respect to the Fund and to accounts over which you
exercise investment discretion. The Fund and you understand and acknowledge
that, although the information may be useful to the Fund and you, it is not
possible to place a dollar value on such information. The Board shall
periodically review the commissions paid by the Fund to determine if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Fund.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute Fund
portfolio transactions.
Subject to the provisions of the Investment Company Act of
1940, as amended, and other applicable law, you, any of your affiliates or any
affiliates of your affiliates may retain compensation in connection with
effecting the Fund's portfolio transactions, including transactions effected
through others. If any occasion should arise in which you give any advice to
clients of yours concerning the shares of the Fund, you will act solely as
investment counsel for such client and not in any way on behalf of the Fund.
Your services to the Fund pursuant to this Agreement are not to be deemed to be
exclusive and it is understood that you may render investment advice, management
and other services to others, including other registered investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the Investment
Company Act of 1940 or the rules thereunder, neither you nor your officers,
partners, employees, agents, control persons or affiliates of any thereof shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Trust in connection with, any error of judgment, mistake of law, any act or
omission connected with or arising out of any services rendered under, or
payments made pursuant to, this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or gross
negligence on the part of any such persons in the performance of your duties
under this Agreement, or by reason of reckless disregard by any of such persons
of your obligations and duties under this Agreement.
Any person, even though also a partner, officer, employee or
agent of you, who may be or become an officer, director, trustee, employee or
agent of the Trust, shall be deemed, when rendering services to the Trust or
acting on any business of the Trust (other than services or business in
connection with your duties hereunder), to be rendering such services to or
acting solely for the Trust and not as a partner, officer, employee or agent of
you, or one under your control or direction, even though paid by you.
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its execution
by you, and shall remain in force for a period of two (2) years from the date of
its execution, and from year to year thereafter, subject to annual approval by
(i) the Board or (ii) a vote of a majority (as defined in the Investment Company
Act of 1940) of the outstanding voting securities of the Fund, provided that in
either event continuance is also approved by a majority of the trustees who are
not "interested persons," as defined in the Investment Company Act of 1940, of
you or the Trust, by a vote cast in person at a meeting called for the purpose
of voting such approval.
If the shareholders of the Fund fail to approve the Agreement
in the manner set forth above, upon request of the Board, you will continue to
serve or act in such capacity for the Fund for the period of time pending
required approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to you for your services to and payments on behalf of the Fund will be
equal to the lesser of your actual costs incurred in furnishing such services
and payments or the amount you would have received under this Agreement for
furnishing such services and payments.
This Agreement may, on sixty days written notice, be
terminated with respect to the Fund, at any time without the payment of any
penalty, by the Board, by a vote of a majority of the outstanding voting
securities of the Fund, or by you. This Agreement shall automatically terminate
in the event of its assignment.
7. USE OF NAME
The Trust and you acknowledge that all rights to the name
"Domino" belongs to you, and that the Trust is being granted a limited license
to use such words in its Fund name or in any class name. In the event you cease
to be the adviser to the Fund, the Trust's right to the use of the name "Domino"
shall automatically cease on the ninetieth day following the termination of this
Agreement. The right to the name may also be withdrawn by you during the term of
this Agreement upon ninety (90) days written notice by you to the Trust. Nothing
contained herein shall impair or diminish in any respect, your right to use the
name "Domino" in the name of, or in connection with, any other business
enterprises with which you are or may become associated. There is no charge to
the Trust for the right to use these names.
8. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived,
discharged or terminated orally, and no amendment of this Agreement shall be
effective until approved by the Board, including a majority of the trustees who
are not interested persons of you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
current interpretations of the Act by the Securities and Exchange Commission) by
vote of the holders of a majority of the outstanding voting securities of the
series to which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "AmeriPrime Funds" means and refers to the Trustees
from time to time serving under the Trust's Declaration of Trust as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Trust and signed by officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the State of Ohio.
10. SEVERABILITY
In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(b) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the Investment Company Act of 1940, as amended (the "Act") shall be
resolved by reference to such term or provision of the Act and to interpretation
thereof, if any, by the United States courts or in the absence of any
controlling decision of any such court, by rules, regulations or orders of the
Securities and Exchange Commission issued pursuant to said Act. In addition,
where the effect of a requirement of the Act, reflected in any provision of this
Agreement is revised by rule, regulation or order of the Securities and Exchange
Commission, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
12. NOTICES
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust is
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092, and your address for
this purpose shall be 580 Village Blvd., Suite 225, West Palm Beach, Florida
33409.
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
14. BINDING EFFECT
Each of the undersigned expressly warrants and represents that
he has the full power and authority to sign this Agreement on behalf of the
party indicated, and that his signature will operate to bind the party indicated
to the foregoing terms.
15. CAPTIONS
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 or effect.
If you are in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterpart of this letter and return
such counterpart to the Trust, whereupon this letter shall become a binding
contract upon the date thereof.
Yours very truly,
ATTEST: AmeriPrime Funds
/s/ By/s/
Name/Title: Kelli Shomaker, Secretary Kenneth D. Trumpfheller, President
Dated: October 20 , 1995
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST: Carl Domino Associates, L.P.
/s/ By/s/
Name/Title: Janet M. Perry Name/Title: Carl J. Domino
Director of Operations General Partner, Carl Domino, Inc.,
Carl J. Domino, President
Dated: October 31 , 1995
MANAGEMENT AGREEMENT
TO: Advanced Investment Technology, Inc.
311 Park Place Blvd.
Clearwater, Florida 34619
Dear Sirs:
AmeriPrime Funds (the "Trust") herewith confirms our agreement with
you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers several series of shares to investors, one
of which is the AIT Vision U.S. Equity Portfolio (the "Fund").
You have been selected to act as the sole investment adviser of the
Fund and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows.
1. ADVISORY SERVICES
You will regularly provide the Fund with such investment
advice as you in your discretion deem advisable and will furnish a continuous
investment program for the Fund consistent with the Fund's investment objectives
and policies. You will determine the securities to be purchased for the Fund,
the portfolio securities to be held or sold by the Fund and the portion of the
Fund's assets to be held uninvested, subject always to the Fund's investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect, and subject further to such policies and instructions as the
Board may from time to time establish. You will advise and assist the officers
of the Trust in taking such steps as are necessary or appropriate to carry out
the decisions of the Board and the appropriate committees of the Board regarding
the conduct of the business of the Fund.
2. ALLOCATION OF CHARGES AND EXPENSES
You will pay all organizational and operating expenses of the
Fund, including the compensation and expenses of any employees of the Fund and
of any other persons rendering any services to the Fund; clerical and
shareholder service staff salaries; office space and other office expenses; fees
and expenses incurred by the Fund in connection with membership in investment
company organizations; legal, auditing and accounting expenses; expenses of
registering shares under federal and state securities laws, including expenses
incurred by the Fund in connection with the organization and initial
registration of shares of the Fund; insurance expenses; fees and expenses of the
custodian, transfer agent, dividend disbursing agent, shareholder service agent,
plan agent, administrator, accounting and pricing services agent and underwriter
of the Fund; expenses, including clerical expenses, of issue, sale, redemption
or repurchase of shares of the Fund; the cost of preparing and distributing
reports and notices to shareholders, the cost of printing or preparing
prospectuses and statements of additional information for delivery to the Fund's
current and prospective shareholders; the cost of printing or preparing stock
certificates or any other documents, statements or reports to shareholders;
expenses of shareholders' meetings and proxy solicitations; advertising,
promotion and other expenses incurred directly or indirectly in connection with
the sale or distribution of the Fund's shares; and all other organizational and
operating expenses not specifically assumed by the Fund.
The Fund will pay all brokerage fees and commissions, taxes,
interest, fees and expenses of the non- interested person trustees and such
extraordinary or non-recurring expenses as may arise, including litigation to
which the Fund may be a party and indemnification of the Trust's trustees and
officers with respect thereto. You may obtain reimbursement from the Fund, at
such time or times as you may determine in your sole discretion, for any of the
expenses advanced by you, which the Fund is obligated to pay, and such
reimbursement shall not be considered to be part of your compensation pursuant
to this Agreement.
3. COMPENSATION OF THE ADVISER
For all of the services to be rendered and payments to be made
as provided in this Agreement, as of the last business day of each month, the
Fund will pay you a fee at the annual rate of 0.70% of the average value of its
daily net assets.
The average value of the daily net assets of the Fund shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If, pursuant to such
<PAGE>
provisions, the determination of net asset value of the Fund is suspended for
any particular business day, then for the purposes of this paragraph, the value
of the net assets of the Fund as last determined shall be deemed to be the value
of the net assets as of the close of the business day, or as of such other time
as the value of the Fund's net assets may lawfully be determined, on that day.
If the determination of the net asset value of the Fund has been suspended for a
period including such month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the Fund as
last determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
In connection with purchases or sales of portfolio securities
for the account of the Fund, it is understood that you will arrange for the
placing of all orders for the purchase and sale of portfolio securities for the
account with brokers or dealers selected by you, subject to review of this
selection by the Board from time to time. You will be responsible for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed at all times to seek for the Fund the best qualitative execution,
taking into account such factors as price (including the applicable brokerage
commission or dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and research
services provided by the broker or dealer.
You should generally seek favorable prices and commission
rates that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Fund and/or the other
accounts over which you exercise investment discretion. You are authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a Fund portfolio transaction which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if you determine in good faith that the amount of the
commission is reasonable in relation to the value of the brokerage and research
services provided by the executing broker or dealer. The determination may be
viewed in terms of either a particular transaction or your overall
responsibilities with respect to the Fund and to accounts over which you
exercise investment discretion. The Fund and you understand and acknowledge
that, although the information may be useful to the Fund and you, it is not
possible to place a dollar value on such information. The Board shall
periodically review the commissions paid by the Fund to determine if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Fund.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute Fund
portfolio transactions.
Subject to the provisions of the Investment Company Act of
1940, as amended, and other applicable law, you, any of your affiliates or any
affiliates of your affiliates may retain compensation in connection with
effecting the Fund's portfolio transactions, including transactions effected
through others. If any occasion should arise in which you give any advice to
clients of yours concerning the shares of the Fund, you will act solely as
investment counsel for such client and not in any way on behalf of the Fund.
Your services to the Fund pursuant to this Agreement are not to be deemed to be
exclusive and it is understood that you may render investment advice, management
and other services to others, including other registered investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the Investment
Company Act of 1940 or the rules thereunder, neither you nor your shareholders,
officers, directors, employees, agents, control persons or affiliates of any
thereof shall be subject to any liability for, or any damages, expenses or
losses incurred by the Trust in connection with, any error of judgment, mistake
of law, any act or omission connected with or arising out of any services
rendered under, or payments made pursuant to, this Agreement or any other matter
to which this Agreement relates, except by reason of willful misfeasance, bad
faith or gross negligence on the part of any such persons in the performance of
your duties under this Agreement, or by reason of reckless disregard by any of
such persons of your obligations and duties under this Agreement.
- 2 -
<PAGE>
Any person, even though also a director, officer, employee,
shareholder or agent of you, who may be or become an officer, director, trustee,
employee or agent of the Trust, shall be deemed, when rendering services to the
Trust or acting on any business of the Trust (other than services or business in
connection with your duties hereunder), to be rendering such services to or
acting solely for the Trust and not as a director, officer, employee,
shareholder or agent of you, or one under your control or direction, even though
paid by you.
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on ________________________,
and shall remain in force for a period of two (2) years from the date of its
execution, and from year to year thereafter, subject to annual approval by (i)
the Board or (ii) a vote of a majority (as defined in the Investment Company Act
of 1940) of the outstanding voting securities of the Fund, provided that in
either event continuance is also approved by a majority of the trustees who are
not "interested persons," as defined in the Investment Company Act of 1940, of
you or the Trust, by a vote cast in person at a meeting called for the purpose
of voting such approval.
If the shareholders of the Fund fail to approve the Agreement
in the manner set forth above, upon request of the Board, you will continue to
serve or act in such capacity for the Fund for the period of time pending
required approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to you for your services to and payments on behalf of the Fund will be
equal to the lesser of your actual costs incurred in furnishing such services
and payments or the amount you would have received under this Agreement for
furnishing such services and payments.
This Agreement may, on sixty days written notice, be
terminated with respect to the Fund, at any time without the payment of any
penalty, by the Board, by a vote of a majority of the outstanding voting
securities of the Fund, or by you. This Agreement shall automatically terminate
in the event of its assignment.
7. USE OF NAME
The Trust and you acknowledge that all rights to the name "AIT
Vision" belongs to you, and that the Trust is being granted a limited license to
use such words in its Fund name or in any class name. In the event you cease to
be the adviser to the Fund, the Trust's right to the use of the name "AIT
Vision" shall automatically cease on the ninetieth day following the termination
of this Agreement. The right to the name may also be withdrawn by you during the
term of this Agreement upon ninety (90) days' written notice by you to the
Trust. Nothing contained herein shall impair or diminish in any respect, your
right to use the name "AIT Vision" in the name of, or in connection with, any
other business enterprises with which you are or may become associated. There is
no charge to the Trust for the right to use these names.
8. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived,
discharged or terminated orally, and no amendment of this Agreement shall be
effective until approved by the Board, including a majority of the trustees who
are not interested persons of you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
current interpretations of the Act by the Securities and Exchange Commission) by
vote of the holders of a majority of the outstanding voting securities of the
series to which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "AmeriPrime Funds" means and refers to the Trustees
from time to time serving under the Trust's Declaration of Trust as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Trust and signed by officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind
- 3 -
<PAGE>
only the trust property of the Trust as provided in its Declaration of Trust. A
copy of the Agreement and Declaration of Trust of the Trust is on file with the
Secretary of the State of Ohio.
10. SEVERABILITY
In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(b) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the Investment Company Act of 1940, as amended (the "Act") shall be
resolved by reference to such term or provision of the Act and to interpretation
thereof, if any, by the United States courts or in the absence of any
controlling decision of any such court, by rules, regulations or orders of the
Securities and Exchange Commission issued pursuant to said Act. In addition,
where the effect of a requirement of the Act, reflected in any provision of this
Agreement is revised by rule, regulation or order of the Securities and Exchange
Commission, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
12. NOTICES
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust is
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092, and your address for
this purpose shall be 311 Park Place Boulevard, Clearwater, Florida 34619.
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
14. BINDING EFFECT
Each of the undersigned expressly warrants and represents that
he has the full power and authority to sign this Agreement on behalf of the
party indicated, and that his signature will operate to bind the party indicated
to the foregoing terms.
- 4 -
<PAGE>
15. CAPTIONS
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 or effect.
If you are in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterpart of this letter and return
such counterpart to the Trust, whereupon this letter shall become a binding
contract upon the date thereof.
Yours very truly,
ATTEST: AmeriPrime Funds
By
Name/Title: ______________________ Kenneth D. Trumpfheller, President
Dated: _________________, 1997
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST: Advanced Investment Technology, Inc.
By
Name/Title: ______________________ Name/Title: ____________________________
Dated: _______________, 1997
<PAGE>
MANAGEMENT AGREEMENT
TO: GLOBALT, Inc.
3060 Peachtree Road, N.W.
One Buckhead Plaza, Suite 225
Atlanta, Georgia 30305
Dear Sirs:
AmeriPrime Funds (the "Trust") herewith confirms our agreement with
you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers several series of shares to investors, one
of which is the GLOBALT Growth Fund (the "Fund").
You have been selected to act as the sole investment adviser of the
Fund and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows upon the date of the execution of this Agreement.
1. ADVISORY SERVICES
You will regularly provide the Fund with such investment
advice as you in your discretion deem advisable and will furnish a continuous
investment program for the Fund consistent with the Fund's investment objectives
and policies. You will determine the securities to be purchased for the Fund,
the portfolio securities to be held or sold by the Fund and the portion of the
Fund's assets to be held uninvested, subject always to the Fund's investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect, and subject further to such policies and instructions as the
Board may from time to time establish. You will advise and assist the officers
of the Trust in taking such steps as are necessary or appropriate to carry out
the decisions of the Board and the appropriate committees of the Board regarding
the conduct of the business of the Fund.
2. ALLOCATION OF CHARGES AND EXPENSES
You will pay all organizational and operating expenses of the
Fund, including the compensation and expenses of any employees of the Fund and
of any other persons rendering any services to the Fund; clerical and
shareholder service staff salaries; office space and other office expenses; fees
and expenses incurred by the Fund in connection with membership in investment
company organizations; legal, auditing and accounting expenses; expenses of
registering shares under federal and state securities laws, including expenses
incurred by the Fund in connection with the organization and initial
registration of shares of the Fund; insurance expenses; fees and expenses of the
custodian, transfer agent, dividend disbursing agent, shareholder service agent,
plan agent, administrator, accounting and pricing services agent and underwriter
of the Fund; expenses, including clerical expenses, of issue, sale, redemption
or repurchase of shares of the Fund; the cost of preparing and distributing
reports and notices to shareholders, the cost of printing or preparing
prospectuses and statements of additional information for delivery to the Fund's
current and prospective shareholders; the cost of printing or preparing stock
certificates or any other documents, statements or reports to shareholders;
expenses of shareholders' meetings and proxy solicitations; advertising,
promotion and other expenses incurred directly or indirectly in connection with
the sale or distribution of the Fund's shares; and all other organizational and
operating expenses not specifically assumed by the Fund.
<PAGE>
<PAGE>
The Fund will pay all brokerage fees and commissions, taxes,
interest, fees and expenses of the non-interested person trustees and such
extraordinary or non-recurring expenses as may arise, including litigation to
which the Fund may be a party and indemnification of the Trust's trustees and
officers with respect thereto. You may obtain reimbursement from the Fund, at
such time or times as you may determine in your sole discretion, for any of the
expenses advanced by you, which the Fund is obligated to pay, and such
reimbursement shall not be considered to be part of your compensation pursuant
to this Agreement.
3. COMPENSATION OF THE ADVISER
For all of the services to be rendered and payments to be made
as provided in this Agreement, as of the last business day of each month, the
Fund will pay you a fee at the annual rate of 1.17% of the average value of its
daily net assets.
The average value of the daily net assets of the Fund shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of the Fund is suspended for
any particular business day, then for the purposes of this paragraph, the value
of the net assets of the Fund as last determined shall be deemed to be the value
of the net assets as of the close of the business day, or as of such other time
as the value of the Fund's net assets may lawfully be determined, on that day.
If the determination of the net asset value of the Fund has been suspended for a
period including such month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the Fund as
last determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
In connection with purchases or sales of portfolio securities
for the account of the Fund, it is understood that you will arrange for the
placing of all orders for the purchase and sale of portfolio securities for the
account with brokers or dealers selected by you, subject to review of this
selection by the Board from time to time. You will be responsible for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed at all times to seek for the Fund the best qualitative execution,
taking into account such factors as price (including the applicable brokerage
commission or dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and research
services provided by the broker or dealer.
You should generally seek favorable prices and commission
rates that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Fund and/or the other
accounts over which you exercise investment discretion. You are authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a Fund portfolio transaction which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if you determine in good faith that the amount of the
commission is reasonable in relation to the value of the brokerage and research
services provided by the executing broker or dealer. The determination may be
viewed in terms of either a particular transaction or your overall
responsibilities with respect to the Fund and to accounts over which you
exercise investment discretion. The Fund and you understand and acknowledge
that, although the information may be useful to the Fund and you, it is not
possible to place a dollar value on such information. The Board shall
periodically review the commissions paid by the Fund to determine if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Fund.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute Fund
portfolio transactions.
Subject to the provisions of the Investment Company Act of
1940, as amended, and other applicable law, you, any of your affiliates or any
affiliates of your affiliates may retain compensation in connection with
effecting the Fund's portfolio transactions, including transactions effected
through others. If any occasion should arise in which you give any advice to
clients of yours concerning the shares of the Fund, you will act solely as
investment counsel for such client and not in any way on behalf of the Fund.
Your services to the Fund pursuant to this Agreement are not to be deemed to be
exclusive and it is understood that you may render investment advice, management
and other services to others, including other registered investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the Investment
Company Act of 1940 or the rules thereunder, neither you nor your shareholders,
officers, directors, employees, agents, control persons or affiliates of any
thereof shall be subject to any liability for, or any damages, expenses or
losses incurred by the Trust in connection with, any error of judgment, mistake
of law, any act or omission connected with or arising out of any services
rendered under, or payments made pursuant to, this Agreement or any other matter
to which this Agreement relates, except by reason of willful misfeasance, bad
faith or gross negligence on the part of any such persons in the performance of
your duties under this Agreement, or by reason of reckless disregard by any of
such persons of your obligations and duties under this Agreement.
Any person, even though also a director, officer, employee,
shareholder or agent of you, who may be or become an officer, director, trustee,
employee or agent of the Trust, shall be deemed, when rendering services to the
Trust or acting on any business of the Trust (other than services or business in
connection with your duties hereunder), to be rendering such services to or
acting solely for the Trust and not as a director, officer, employee,
shareholder or agent of you, or one under your control or direction, even though
paid by you.
<PAGE>
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its execution
by you, and shall remain in force for a period of two (2) years from the date of
its execution, and from year to year thereafter, subject to annual approval by
(i) the Board or (ii) a vote of a majority (as defined in the Investment Company
Act of 1940) of the outstanding voting securities of the Fund, provided that in
either event continuance is also approved by a majority of the trustees who are
not "interested persons," as defined in the Investment Company Act of 1940, of
you or the Trust, by a vote cast in person at a meeting called for the purpose
of voting such approval.
If the shareholders of the Fund fail to approve the Agreement
in the manner set forth above, upon request of the Board, you will continue to
serve or act in such capacity for the Fund for the period of time pending
required approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to you for your services to and payments on behalf of the Fund will be
equal to the lesser of your actual costs incurred in furnishing such services
and payments or the amount you would have received under this Agreement for
furnishing such services and payments.
This Agreement may, on sixty days written notice, be
terminated with respect to the Fund, at any time without the payment of any
penalty, by the Board, by a vote of a majority of the outstanding voting
securities of the Fund, or by you. This Agreement shall automatically terminate
in the event of its assignment.
7. USE OF NAME
The Trust and you acknowledge that all rights to the name
"GLOBALT" belongs to you, and that the Trust is being granted a limited license
to use such words in its Fund name or in any class name. In the event you cease
to be the adviser to the Fund, the Trust's right to the use of the name
"GLOBALT" shall automatically cease on the ninetieth day following the
termination of this Agreement. The right to the name may also be withdrawn by
you during the term of this Agreement upon ninety (90) days' written notice by
you to the Trust. Nothing contained herein shall impair or diminish in any
respect, your right to use the name "GLOBALT" in the name of, or in connection
with, any other business enterprises with which you are or may become
associated. There is no charge to the Trust for the right to use these names.
8. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived,
discharged or terminated orally, and no amendment of this Agreement shall be
effective until approved by the Board, including a majority of the trustees who
are not interested persons of you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
current interpretations of the Act by the Securities and Exchange Commission) by
vote of the holders of a majority of the outstanding voting securities of the
series to which the amendment relates.
<PAGE>
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "AmeriPrime Funds" means and refers to the Trustees
from time to time serving under the Trust's Declaration of Trust as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Trust and signed by officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the State of Ohio.
10. SEVERABILITY
In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(b) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the Investment Company Act of 1940, as amended (the "Act") shall be
resolved by reference to such term or provision of the Act and to interpretation
thereof, if any, by the United States courts or in the absence of any
controlling decision of any such court, by rules, regulations or orders of the
Securities and Exchange Commission issued pursuant to said Act. In addition,
where the effect of a requirement of the Act, reflected in any provision of this
Agreement is revised by rule, regulation or order of the Securities and Exchange
Commission, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
12. NOTICES
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust is
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092, and your address for
this purpose shall be 3060 Peachtree Road, N.W., One Buckhead Plaza, Suite 225,
Atlanta, Georgia 30305.
<PAGE>
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
14. BINDING EFFECT
Each of the undersigned expressly warrants and represents that
he has the full power and authority to sign this Agreement on behalf of the
party indicated, and that his signature will operate to bind the party indicated
to the foregoing terms.
15. CAPTIONS
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 or effect.
If you are in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterpart of this letter and return
such counterpart to the Trust, whereupon this letter shall become a binding
contract upon the date thereof.
Yours very truly,
ATTEST: AmeriPrime Funds
/s/ By/s/
Name/Title: Kelli D. Shomaker, Secretary Kenneth D. Trumpfheller, President
Dated: October 20, 1995
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST: GLOBALT, Inc.
/s/ By/s/
Name/Title: Fredric A. Mann Name/Title: Angela Z. Allen, President
Dated: November 1 , 1995
<PAGE>
MANAGEMENT AGREEMENT
TO: Vuong Asset Management Company, LLC
6575 West Loop South, Suite 110
Houston, Texas 77401
Dear Sirs:
AmeriPrime Funds (the "Trust") herewith confirms our agreement with
you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers several series of shares to investors,
including MAI Enhanced Equity Benchmark Fund, MAI Enhanced Growth & Income Fund,
MAI Enhanced Aggressive Growth Fund, MAI Enhanced Income Fund; MAI Enhanced
Capital Appreciation Fund and MAI Enhanced Global Fund (each a Fund and
collectively the "Funds").
You have been selected to act as the sole investment adviser of the
Funds and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows upon the date of the execution of this Agreement.
1. ADVISORY SERVICES
You will regularly provide the Funds with such investment
advice as you in your discretion deem advisable and will furnish a continuous
investment program for the Funds consistent with the respective Funds'
investment objectives and policies. You will determine the securities to be
purchased for each Fund, the portfolio securities to be held or sold by each
Fund and the portion of each Fund's assets to be held uninvested, subject always
to the Fund's investment objectives, policies and restrictions, as each of the
same shall be from time to time in effect, and subject further to such policies
and instructions as the Board may from time to time establish. You will advise
and assist the officers of the Trust in taking such steps as are necessary or
appropriate to carry out the decisions of the Board and the appropriate
committees of the Board regarding the conduct of the business of the Funds.
2. ALLOCATION OF CHARGES AND EXPENSES
You will pay all operating expenses of the Funds, including
the compensation and expenses of any employees of the Funds and of any other
persons rendering any services to the Funds; clerical and shareholder service
staff salaries; office space and other office expenses; fees and expenses
incurred by the Funds in connection with membership in investment company
organizations; legal, auditing and accounting expenses; expenses of registering
shares under federal and state securities laws, excluding expenses incurred by
the Funds in connection with the organization and initial registration of shares
of the Funds; insurance expenses; fees and expenses of the custodian, transfer
agent, dividend disbursing agent, shareholder service agent, plan agent,
administrator, accounting and pricing services agent and underwriter of the
Funds; expenses, including clerical expenses, of issue, sale, redemption or
repurchase of shares of the Funds; the cost of preparing and distributing
reports and notices to shareholders, the cost of printing or preparing
prospectuses and statements of additional information for delivery to each
Fund's current and prospective shareholders; the cost of printing or preparing
stock certificates or any other documents, statements or reports to
shareholders; expenses of shareholders' meetings and proxy solicitations;
advertising, promotion and other expenses incurred directly or indirectly in
connection with the sale
<PAGE>
or distribution of the Funds' shares; and all other operating expenses not
specifically assumed by the Funds.
Each Fund will pay all of its respective brokerage fees and
commissions, taxes, interest, fees and expenses of the non-interested person
trustees and such extraordinary or non-recurring expenses as may arise,
including organizational expenses, and litigation to which the Fund may be a
party and indemnification of the Trust's trustees and officers with respect
thereto. You may obtain reimbursement from a Fund, at such time or times as you
may determine in your sole discretion, for any of the expenses advanced by you,
which the Fund is obligated to pay, and such reimbursement shall not be
considered to be part of your compensation pursuant to this Agreement.
Notwithstanding anything herein to the contrary, the Funds
will only be liable for organizational expenses when the Funds'combined assets
reach $10,000,000 or if a Fund is in existence through October 31, 1998, and
until such time, you are liable for such expenses. You will cause such expenses
to be advanced on behalf of each Fund and may obtain reimbursement from the Fund
after the Funds becomes liable.
3. COMPENSATION OF THE ADVISER
For all of the services to be rendered and payments to be made as provided
in this Agreement, as of the last business day of each month, each Fund will pay
you a fee at the annual rate, based on the average value of its daily net
assets, as follows: MAI Enhanced Equity Benchmark: 1.20%; MAI Enhanced Capital
Appreciation: 1.20%; MAI Enhanced Aggressive Growth: 1.20%; MAI Enhanced Growth
& Income: 1.00%; MAI Enhanced Income: 0.60%; MAI Enhanced Global: 1.40%.
The average value of the daily net assets of a Fund shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of a Fund is suspended for any
particular business day, then for the purposes of this paragraph, the value of
the net assets of the Fund as last determined shall be deemed to be the value of
the net assets as of the close of the business day, or as of such other time as
the value of the Fund's net assets may lawfully be determined, on that day. If
the determination of the net asset value of a Fund has been suspended for a
period including such month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the Fund as
last determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
In connection with purchases or sales of portfolio securities
for the account of each Fund, it is understood that you will arrange for the
placing of all orders for the purchase and sale of portfolio securities for the
account with brokers or dealers selected by you, subject to review of this
selection by the Board from time to time. You will be responsible for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed at all times to seek for the Funds the best qualitative execution,
taking into account such factors as price (including the applicable brokerage
- 2 -
<PAGE>
commission or dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and research
services provided by the broker or dealer.
You should generally seek favorable prices and commission
rates that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Funds and/or the other
accounts over which you exercise investment discretion. You are authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a Fund portfolio transaction which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if you determine in good faith that the amount of the
commission is reasonable in relation to the value of the brokerage and research
services provided by the executing broker or dealer. The determination may be
viewed in terms of either a particular transaction or your overall
responsibilities with respect to the Funds and to accounts over which you
exercise investment discretion. The Funds and you understand and acknowledge
that, although the information may be useful to the Funds and you, it is not
possible to place a dollar value on such information. The Board shall
periodically review the commissions paid by each Fund to determine if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Fund.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Funds as a factor in the selection of brokers and dealers to execute Fund
portfolio transactions.
Subject to the provisions of the Investment Company Act of
1940, as amended, and other applicable law, you, any of your affiliates or any
affiliates of your affiliates may retain compensation in connection with
effecting the Funds' portfolio transactions, including transactions effected
through others. If any occasion should arise in which you give any advice to
clients of yours concerning the shares of a Fund, you will act solely as
investment counsel for such client and not in any way on behalf of the Fund.
Your services to the Funds pursuant to this Agreement are not to be deemed to be
exclusive and it is understood that you may render investment advice, management
and other services to others, including other registered investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the Investment
Company Act of 1940 or the rules thereunder, neither you nor your shareholders,
officers, directors, employees, agents, control persons or affiliates of any
thereof shall be subject to any liability for, or any damages, expenses or
losses incurred by the Trust in connection with, any error of judgment, mistake
of law, any act or omission connected with or arising out of any services
rendered under, or payments made pursuant to, this Agreement or any other matter
to which this Agreement relates, except by reason of willful misfeasance, bad
faith or gross negligence on the part of any such persons in the performance of
your duties under this Agreement, or by reason of reckless disregard by any of
such persons of your obligations and duties under this Agreement.
- 3 -
<PAGE>
Any person, even though also a director, officer, employee,
shareholder or agent of you, who may be or become an officer, director, trustee,
employee or agent of the Trust, shall be deemed, when rendering services to the
Trust or acting on any business of the Trust (other than services or business in
connection with your duties hereunder), to be rendering such services to or
acting solely for the Trust and not as a director, officer, employee,
shareholder or agent of you, or one under your control or direction, even though
paid by you.
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its execution
by you, and shall remain in force for a period of two (2) years from the date of
its execution, and from year to year thereafter, subject to annual approval by
(i) the Board or (ii) a vote of a majority (as defined in the Investment Company
Act of 1940) of the outstanding voting securities of such Fund, provided that in
either event continuance is also approved by a majority of the trustees who are
not "interested persons," as defined in the Investment Company Act of 1940, of
you or the Trust, by a vote cast in person at a meeting called for the purpose
of voting such approval.
If the shareholders of a Fund fail to approve the Agreement in
the manner set forth above, upon request of the Board, you will continue to
serve or act in such capacity for the Fund for the period of time pending
required approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to you for your services to and payments on behalf of the Fund will be
equal to the lesser of your actual costs incurred in furnishing such services
and payments or the amount you would have received under this Agreement for
furnishing such services and payments.
This Agreement may, on sixty days written notice, be
terminated with respect to a Fund, at any time without the payment of any
penalty, by the Board, by a vote of a majority of the outstanding voting
securities of the Fund, or by you. This Agreement shall automatically terminate
in the event of its assignment.
7. USE OF NAME
The Trust and you acknowledge that all rights to the name
"MAI" belongs to you, and that the Trust is being granted a limited license to
use such words in the Fund names or in any name of any class of Fund. In the
event you cease to be the adviser to a Fund, the Trust's right to the use of the
name "MAI" shall automatically cease on the ninetieth day following the
termination of this Agreement. The right to the name may also be withdrawn by
you during the term of this Agreement upon ninety (90) days' written notice by
you to the Trust. Nothing contained herein shall impair or diminish in any
respect, your right to use the name "MAI" in the name of, or in connection with,
any other business enterprises with which you are or may become associated.
There is no charge to the Trust for the right to use these names.
- 4 -
<PAGE>
8. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived,
discharged or terminated orally, and no amendment of this Agreement shall be
effective until approved by the Board, including a majority of the trustees who
are not interested persons of you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
current interpretations of the Act by the Securities and Exchange Commission) by
vote of the holders of a majority of the outstanding voting securities of the
series to which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "AmeriPrime Funds" means and refers to the Trustees
from time to time serving under the Trust's Declaration of Trust as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Trust and signed by officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the State of Ohio.
10. SEVERABILITY
In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(b) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the Investment Company Act of 1940, as amended (the "Act") shall be
resolved by reference to such term or provision of the Act and to interpretation
thereof, if any, by the United States courts or in the absence of any
controlling decision of any such court, by rules, regulations or orders of the
Securities and Exchange Commission issued pursuant to said Act. In addition,
where the effect of a requirement of the Act, reflected in any provision of this
Agreement is revised by rule, regulation or order of the Securities and Exchange
Commission, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
12. NOTICES
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<PAGE>
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust is
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092, and your address for
this purpose shall be 6575 West Loop South, Suite 110, Houston, Texas 77401.
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
14. BINDING EFFECT
Each of the undersigned expressly warrants and represents that
he has the full power and authority to sign this Agreement on behalf of the
party indicated, and that his signature will operate to bind the party indicated
to the foregoing terms.
15. CAPTIONS
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 or effect.
If you are in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterpart of this letter and return
such counterpart to the Trust, whereupon this letter shall become a binding
contract upon the date thereof.
Yours very truly,
ATTEST: AmeriPrime Funds
By
Name/Title: ______________________ Kenneth D. Trumpfheller, President
Dated: _________________, 1997
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST: Vuong Asset Management Company, LLC
By
Name/Title: ____________________ Qui T. Vuong, Managing Member
Dated: _______________, 1997
ASA02B19-121097-1
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<PAGE>
CUSTODY AGREEMENT
BETWEEN
STAR BANK, N.A.
AND
AmeriPrime Funds
<PAGE>
CUSTODY AGREEMENT
BETWEEN
STAR BANK, N.A.
AND
AmeriPrime Funds
TABLE OF CONTENTS
Definitions
1
ARTICLE II - Appointment; Acceptence; and Furnishing of Documents
II. A. Appointment of Custodian.
5
II. B. Acceptance of Custodian.
5
II. C. Documents to be Furnished.
5
II. D. Notice of Appointment of Dividend and Transfer Agent.
5
ARTICLE III - Receipt of Trust Assets
III. A. Delivery of Moneys.
6
III. B. Delivery of Securities.
6
III. C. Payments for Shares.
6
III. D. Duties Upon Receipt.
6
ARTICLE IV - Disbursement of Trust Assets
IV. A. Declaration of Dividends by Trust.
7
IV. B. Segregation of Redemption Proceeds.
7
IV. C. Disbursements of Custodian.
8
IV. D. Payment of Custodian Fees.
8
ARTICLE V - Custody of Trust Assets
V. A. Separate Accounts for Each Fund.
8
V. B. Segregation of Non-Cash Assets.
9
V. C. Securities in Bearer and Registered Form.
9
V. D. Duties of Custodian as to Securities.
9
V. E. Certain Actions Upon Written Instructions.
10
V. F. Custodian to Deliver Proxy Materials.
11
V. G. Custodian to Deliver Tender Offer Information.
11
V. H. Custodian to Deliver Security and Transaction Information.
11
ARTICLE VI - Purchase and Sale of Securities
VI. A. Purchase of Securities.
12
VI. B. Sale of Securities.
13
VI. C. Delivery Versus Payment for Purchases and Sales.
14
VI. D. Payment on Settlement Date.
14
VI. E. Segregated Accounts.
15
VI. F. Advances for Settlement.
16
ARTICLE VII - Trust Indebtedness
VII. A. Borrowings.
17
VII. B. Advances.
18
ARTICLE VIII - Concerning the Custodian
VIII. A. Limitations on Liability of Custodian.
18
VIII. B. Actions not Required by Custodian.
20
VIII. C. No Duty to Collect Amounts Due From Dividend and Transfer Agent.
21
VIII. D. No Enforcement Actions.
21
VIII. E. Authority to Use Agents and Sub-Custodians.
21
VIII. F. No Duty to Supervise Investments.
22
VIII. G. All Records Confidential.
22
VIII. H. Compensation of Custodian.
22
VIII. I. Reliance Upon Instructions.
23
VIII. J. Books and Records.
23
VIII. K. Internal Accounting Control Systems.
24
VIII. L. No Management of Assets by Custodian.
24
VIII. M. Assistance to Trust.
24
ARTICLE IX - Termination
IX. A. Termination.
26
IX. B. Failure to Designate Successor Trustee.
27
ARTICLE X - Force Majeure
ARTICLE XI - Miscellaneous
XI. A. Designation of Authorized Persons.
28
XI. B. Limitation of Personal Liability.
28
XI. C. Authorization By Board.
28
XI. D. Custodian's Consent to Use of Its Name.
29
XI. E. Notices to Custodian.
29
XI. F. Notices to Trust.
29
XI. G. Amendments In Writing.
29
XI. H. Successors and Assigns.
30
XI. I. Governing Law.
30
XI. J. Jurisdiction.
30
XI. K. Counterparts.
30
XI. L. Headings.
30
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
CUSTODY AGREEMENT
This agreement (the "Agreement") is entered into as of the _____ day of
__________, 1995, by and between AmeriPrime Funds, an Ohio business trust (the
"Trust") and Star Bank, National Association, (the "Custodian"), a national
banking association having its principal office at 425 Walnut Street,
Cincinnati, Ohio, 45202.
WHEREAS, the Trust and the Custodian desire to enter into this
Agreement to provide for the custody and safekeeping of the assets of the Trust
as required by the Act (as hereafter defined).
THEREFORE, in consideration of the mutual promises hereinafter set forth,
the Trust and the Custodian agree as follows:
Definitions
The following words and phrases, when used in this Agreement, unless
the context otherwise requires, shall have the following meanings:
Act - the Investment Company Act of 1940, as amended. 1934 Act - the
Securities and Exchange Act of 1934, as amended.
Authorized Person - any person, whether or not any such person is an
officer or employee of the Trust, who is duly authorized by the Board of
Trustees of the Trust to give Oral Instructions and Written Instructions on
behalf of the Trust or any Fund, and named in Appendix A attached hereto and as
amended from time to time by resolution of the Board of Trustees, certified by
an Officer, and received by the Custodian.
Board of Trustees - the Trustees from time to time serving under the
Trust's Agreement and Declaration of Trust, as from time to time amended.
Book-Entry System - a federal book-entry system as provided in Subpart
O of Treasury Circular No. 300, 31 CFR 306, in Subpart B of 31 CFT Part 350, or
in such book-entry regulations of federal agencies as are substantially in the
form of Subpart O.
Business Day - any day recognized as a settlement day by The New York
Stock Exchange, Inc. and any other day for which the Trust computes the net
asset value of Shares of any fund.
Depository - The Depository Trust Company ("DTC"), a limited purpose
trust company, its successor(s) and its nominee(s). Depository shall include any
other clearing agency registered with the SEC under Section 17A of the 1934 Act
which acts as a system for the central handling of Securities where all
Securities of any particular class or series of an issuer deposited within the
system are treated as fungible and may be transferred or pledged by bookkeeping
entry without physical delivery of the Securities provided that the Custodian
shall have received a copy of a resolution of the Board of Trustees, certified
by an Officer, specifically approving the use of such clearing agency as a
depository for the Funds.
Dividend and Transfer Agent - the dividend and transfer agent
appointed, from time to time, pursuant to a written agreement between the
dividend and transfer agent and the Trust.
Foreign Securities - a) securities issued and sold primarily outside of
the United States by a foreign government, a national of any foreign country, or
a trust or other organization incorporated or organized under the laws of any
foreign country or; b) securities issued or guaranteed by the government of the
United States, by any state, by any political subdivision or agency thereof, or
by any entity organized under the laws of the United States or of any state
thereof, which have been issued and sold primarily outside of the United States.
Fund - each series of the Trust listed in Appendix B and any additional
series added pursuant to Proper Instructions. A series is individually referred
to as a "Fund" and collectively referred to as the "Funds."
Money Market Security - debt obligations issued or guaranteed as to
principal and/or interest by the government of the United States or agencies or
instrumentalities thereof, commercial paper, obligations (including certificates
of deposit, bankers' acceptances, repurchase agreements and reverse repurchase
agreements with respect to the same), and time deposits of domestic banks and
thrift institutions whose deposits are insured by the Federal Deposit Insurance
Corporation, and short-term corporate obligations where the purchase and sale of
such securities normally require settlement in federal funds or their equivalent
on the same day as such purchase and sale, all of which mature in not more than
thirteen (13) months.
NASD - the National Association of Securities Dealers, Inc.
Officer - the Chairman, President, Secretary, Treasurer, any Vice
President, Assistant Secretary or Assistant Treasurer of the Trust.
Oral Instructions - instructions orally transmitted to and received by
the Custodian from an Authorized Person (or from a person that the Custodian
reasonably believes in good faith to be an Authorized Person) and confirmed by
Written Instructions in such a manner that such Written Instructions are
received by the Custodian on the Business Day immediately following receipt of
such Oral Instructions.
Proper Instructions - Oral Instructions or Written Instructions. Proper
Instructions may be continuing Written Instructions when deemed appropriate by
both parties.
Prospectus - the Trust's then currently effective prospectus and
Statement of Additional Information, as filed with and declared effective from
time to time by the Securities and Exchange Commission.
Security or Securities - Money Market Securities, common stock,
preferred stock, options, financial futures, bonds, notes, debentures, corporate
debt securities, mortgages, bank certificates of deposit, bankers' acceptances,
mortgage-backed securities or other obligations and any certificates, receipts,
warrants, or other instruments or documents representing rights to receive,
purchase, or subscribe for the same or evidencing or representing any other
rights or interest therein, or any similar property or assets, including
securities of any registered investment company, that the Custodian has the
facilities to clear and to service.
SEC - the Securities and Exchange Commission of the United States of
America.
Shares - with respect to a Fund, the units of beneficial interest
issued by the Trust on account of such Fund. Trust - the business trust
organized under the laws of Ohio which is an open-end diversified
management
investment company registered under the Act.
Written Instructions - communications in writing actually received by
the Custodian from an Authorized Person. A communication in writing includes a
communication by facsimile, telex or between electro-mechanical or electronic
devices (where the use of such devices have been approved by resolution of the
Board of Trustees and the resolution is certified by an Officer and delivered to
the Custodian). All written communications shall be directed to the Custodian,
attention: Mutual Fund Custody Department.
ARTICLE II
Appointment; Acceptance; and Furnishing of Documents
II. A. Appointment of Custodian. The Trust hereby constitutes and appoints
the Custodian as custodian of all Securities and cash owned by the Trust at any
time during the term of this Agreement.
II. B. Acceptance of Custodian. The Custodian hereby accepts appointment as
such custodian and agrees to perform the duties thereof as hereinafter set
forth.
II. C. Documents to be Furnished. The following documents, including any
amendments thereto, will be provided contemporaneously with the execution of the
Agreement, to the Custodian by the Trust: 1. A copy of the Declaration of Trust
of the Trust certified by the Secretary.
2. A copy of the By-Laws of the Trust certified by the
Secretary.
3. A copy of the resolution of the Board of Trustees of the
Trust appointing the Custodian, certified by the Secretary.
4. A copy of the then current Prospectus.
5. A Certificate of the President and Secretary of the Trust
setting forth the names and signatures of all Authorized Persons.
II. D. Notice of Appointment of Dividend and Transfer Agent. The Trust
agrees to notify the Custodian in writing of the appointment, termination or
change in appointment of any Dividend and Transfer Agent.
ARTICLE III
Receipt of Trust Assets
III. A. Delivery of Moneys. During the term of this Agreement, the
Trust will deliver or cause to be delivered to the Custodian all moneys to be
held by the Custodian for the account of any Fund. The Custodian shall be
entitled to reverse any deposits made on any Fund's behalf where such deposits
have been entered and moneys are not finally collected within 30 days of the
making of such entry.
III. B. Delivery of Securities. During the term of this Agreement, the
Trust will deliver or cause to be delivered to the Custodian all Securities to
be held by the Custodian for the account of any Fund. The Custodian will not
have any duties or responsibilities with respect to such Securities until
actually received by the Custodian. The Custodian is hereby authorized by the
Trust, acting on behalf of the Fund, to actually deposit any assets of the Fund
in the Book-Entry System or in a Depository, provided, however, that the
Custodian shall always be accountable to the Trust for the assets of the Fund so
deposited. Assets deposited in the Book-Entry System or the Depository will be
represented in accounts which include only assets held by the Custodian for
customers, including but not limited to accounts in which the Custodian acts in
a fiduciary or representative capacity.
III. C. Payments for Shares. As and when received, the Custodian shall
deposit to the account(s) of a Fund any and all payments for Shares of that Fund
issued or sold from time to time as they are received from the Trust's
distributor or Dividend and Transfer Agent or from the Trust itself.
III. D. Duties Upon Receipt. The Custodian shall not be responsible
for any Securities, moneys or other assets of any Fund until actually received.
ARTICLE IV
Disbursement of Trust Assets
IV. A. Declaration of Dividends by Trust. The Trust shall furnish to
the Custodian a copy of the resolution of the Board of Trustees of the Trust,
certified by the Trust's Secretary, either (i) setting forth the date of the
declaration of any dividend or distribution in respect of Shares of any Fund of
the Trust, the date of payment thereof, the record date as of which the Fund
shareholders entitled to payment shall be determined, the amount payable per
share to Fund shareholders of record as of that date, and the total amount to be
paid by the Dividend and Transfer Agent on the payment date, or (ii) authorizing
the declaration of dividends and distributions in respect of Shares of a Fund on
a daily basis and authorizing the Custodian to rely on Written Instructions
setting forth the date of the declaration of any such dividend or distribution,
the date of payment thereof, the record date as of which the Fund shareholders
entitled to payment shall be determined, the amount payable per share to Fund
shareholders of record as of that date, and the total amount to be paid by the
Dividend and Transfer Agent on the payment date.
On the payment date specified in the resolution or Written Instructions
described above, the Custodian shall segregate such amounts from moneys held for
the account of the Fund so that they are available for such payment.
IV. B. Segregation of Redemption Proceeds. Upon receipt of Proper
Instructions so directing it, the Custodian shall segregate amounts necessary
for the payment of redemption proceeds to be made by the Dividend and Transfer
Agent from moneys held for the account of the Fund so that they are available
for such payment.
IV. C. Disbursements of Custodian. Upon receipt of a Certificate
directing payment and setting forth the name and address of the person to whom
such payment is to be made, the amount of such payment, the name of the Fund
from which payment is to be made, and the purpose for which payment is to be
made, the Custodian shall disburse amounts as and when directed from the assets
of that Fund. The Custodian is authorized to rely on such directions and shall
be under no obligation to inquire as to the propriety of such directions.
IV. D. Payment of Custodian Fees. Upon receipt of Written Instructions
directing payment, the Custodian shall disburse moneys from the assets of the
Trust in payment of the Custodian's fees and expenses as provided in Article
VIII hereof.
ARTICLE V
Custody of Trust Assets
V. A. Separate Accounts for Each Fund. As to each Fund, the Custodian
shall open and maintain a separate bank account or accounts in the United States
in the name of the Trust coupled with the name of such Fund, subject only to
draft or order by the Custodian acting pursuant to the terms of this Agreement,
and shall hold all cash received by it from or for the account of the Fund,
other than cash maintained by the Fund in a bank account established and used by
the Fund in accordance with Rule 17f-3 under the Act. Moneys held by the
Custodian on behalf of a Fund may be deposited by the Custodian to its credit as
Custodian in the banking department of the Custodian. Such moneys shall be
deposited by the Custodian in its capacity as such, and shall be withdrawable by
the Custodian only in such capacity.
V. B. Segregation of Non-Cash Assets. All Securities and non-cash
property held by the Custodian for the account of a Fund (other than Securities
maintained in a Depository or Book-entry System) shall be physically segregated
from other Securities and non-cash property in the possession of the Custodian
(including the Securities and non-cash property of the other Funds) and shall be
identified as subject to this Agreement.
V. C. Securities in Bearer and Registered Form. All Securities held
which are issued or issuable only in bearer form, shall be held by the Custodian
in that form; all other Securities held for the Fund may be registered in the
name of the Custodian, any sub-custodian appointed in accordance with this
Agreement, or the nominee of any of them. The Trust agrees to furnish to the
Custodian appropriate instruments to enable the Custodian to hold, or deliver in
proper form for transfer, any Securities that it may hold for the account of any
Fund and which may, from time to time, be registered in the name of a Fund.
V. D. Duties of Custodian as to Securities. Unless otherwise instructed
by the Trust, with respect to all Securities held for the Trust, the Custodian
shall on a timely basis (concerning items 1 and 2 below, as defined in the
Custodian's Standards of Service Guide, as amended from time to time, annexed
hereto as Appendix D):
1.) Collect all income due and payable with respect to
such Securities;
2.) Present for payment and collect amounts payable upon all
Securities which may mature or be called, redeemed, or retired, or otherwise
become payable;
3.) Surrender interim receipts or Securities in
temporary form for Securities in definitive form;and
4.) Execute, as Custodian, any necessary declarations or
certificates of ownership under the Federal income tax laws or the laws or
regulations of any other taxing authority, including any foreign taxing
authority, now or hereafter in effect.
V. E. Certain Actions Upon Written Instructions. Upon receipt of
a Written Instructions and not otherwise,
the Custodian shall:
1.) Execute and deliver to such persons as may be designated
in such Written Instructions proxies, consents, authorizations, and any other
instruments whereby the authority of the Trust as beneficial owner of any
Securities may be exercised;
2.) Deliver any Securities in exchange for other Securities or
cash issued or paid in connection with the liquidation, reorganization,
refinancing, merger, consolidation, or recapitalization of any corporation, or
the exercise of any conversion privilege;
3.) Deliver any Securities to any protective committee,
reorganization committee, or other person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization, or sale of assets of any
corporation, and receive and hold under the terms of this Agreement such
certificates of deposit, interim receipts or other instruments or documents as
may be issued to it to evidence such delivery;
4.) Make such transfers or exchanges of the assets of any Fund
and take such other steps as shall be stated in the Written Instructions to be
for the purpose of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the Trust; and
5.) Deliver any Securities held for any Fund to the
depository agent for tender or other similar offers.
V. F. Custodian to Deliver Proxy Materials. The Custodian shall
promptly deliver to the Trust all notices, proxy material and executed but
unvoted proxies pertaining to shareholder meetings of Securities held by any
Fund. The Custodian shall not vote or authorize the voting of any Securities or
give any consent, waiver or approval with respect thereto unless so directed by
Written Instructions.
V. G. Custodian to Deliver Tender Offer Information. The Custodian
shall promptly deliver to the Trust all information received by the Custodian
and pertaining to Securities held by any Fund with respect to tender or exchange
offers, calls for redemption or purchase, or expiration of rights as described
in the Standards of Service Guide attached as Appendix D. If the Trust desires
to take action with respect to any tender offer, exchange offer or other similar
transaction, the Trust shall notify the Custodian at least five Business Days
prior to the date on which the Custodian is to take such action. The Trust will
provide or cause to be provided to the Custodian all relevant information for
any Security which has unique put/option provisions at least five Business Days
prior to the beginning date of the tender period.
V. H. Custodian to Deliver Security and Transaction Information. On
each Business Day that the Federal Reserve Bank is open, the Custodian shall
furnish the Trust with a detailed statement of monies held for the Fund under
this Agreement and with confirmations and a summary of all transfers to or from
the account of the Fund. At least monthly and from time to time, the Custodian
shall furnish the Trust with a detailed statement of the Securities held for the
Fund under this Agreement. Where Securities are transferred to the account of
the Fund without physical delivery, the Custodian shall also identify as
belonging to the Fund a quantity of Securities in a fungible bulk of Securities
registered in the name of the Custodian (or its nominee) or shown on the
Custodian's account on the books of the Book-Entry System or the Depository.
With respect to information provided by this section, it shall not be necessary
for the Custodian to provide notice as described by Article XI Section F.
Notices to Trust; it shall be sufficient to communicate by such means as shall
be mutually agreeable to the Trust and the Custodian.
ARTICLE VI
Purchase and Sale of Securities
VI. A. Purchase of Securities. Promptly after each purchase of
Securities by the Trust, the Trust shall deliver to the Custodian (i) with
respect to each purchase of Securities which are not Money Market Securities,
Written Instructions, and (ii) with respect to each purchase of Money Market
Securities, Proper Instructions, specifying with respect to each such purchase
the;
1.) name of the issuer and the title of the Securities,
2.) the number of shares, principal amount purchased (and
accrued interest, if any) or other units purchased,
3.) date of purchase and settlement,
4.) purchase price per unit,
5.) total amount payable,
6.) name of the person from whom, or the broker through
which, the purchase was made,
7.) the name of the person to whom such amount ispayable,
and
8.) the Fund for which the purchase was made.
The Custodian shall, against receipt of Securities purchased by or for the
Trust, pay out of the moneys held for the account of such Fund the total amount
specified in the Written Instructions, or Oral Instructions, if applicable, to
the person named therein. The Custodian shall not be under any obligation to pay
out moneys to cover the cost of a purchase of Securities for a Fund, if in the
relevant Fund custody account there is insufficient cash available to the Fund
for which such purchase was made. With respect to any repurchase agreement
transaction for the Funds, the Custodian shall assure that the collateral
reflected on the transaction advice is received by the Custodian.
VI. B. Sale of Securities. Promptly after each sale of Securities by a
Fund, the Trust shall deliver to the Custodian (i) with respect to each sale of
Securities which are not Money Market Securities, Written Instructions, and (ii)
with respect to each sale of Money Market Securities, Proper Instructions,
specifying with respect to each such sale the:
1.) name of the issuer and the title of the Securities,
2.) number of shares, principal amount sold (and accrued
interest, if any) or other units sold,
3.) date of sale and settlement,
4.) sale price per unit,
5.) total amount receivable,
6.) name of the person to whom, or the broker through
which, the sale was made,
7.) name of the person to whom such Securities are to be
delivered, and
8.) Fund for which the sale was made.
The Custodian shall deliver the Securities against receipt of the total amount
specified in the Written Instructions, or Oral Instructions, if applicable.
VI. C. Delivery Versus Payment for Purchases and Sales. Purchases and
sales of Securities effected by the Custodian will be made on a delivery versus
payment basis. The Custodian may, in its sole discretion, upon receipt of
Written Instructions, elect to settle a purchase or sale transaction in some
other manner, but only upon receipt of acceptable indemnification from the Fund.
VI. D. Payment on Settlement Date. On contractual settlement date, the
account of the Fund will be charged for all purchased Securities settling on
that day, regardless of whether or not delivery is made. Likewise, on
contractual settlement date, proceeds from the sale of Securities settling that
day will be credited to the account of the Fund, irrespective of delivery. VI.
E. Segregated Accounts. The Custodian shall, upon receipt of Proper Instructions
so directing it, establish and maintain a segregated account or accounts for and
on behalf of a Fund. Cash and/or Securities may be transferred into such account
or accounts for specific purposes, to-wit:
1.) in accordance with the provision of any agreement among
the Trust, the Custodian, and a broker-dealer registered under the 1934 Act, and
also a member of the NASD (or any futures commission merchant registered under
the Commodity Exchange Act), relating to compliance with the rules of the
Options Clearing Corporation and of any registered national securities exchange,
the Commodity Futures Trading Commission, any registered contract market, or any
similar organization or organizations requiring escrow or other similar
arrangements in connection with transactions by the Fund;
2.) for purposes of segregating cash or Securities in
connection with options purchased, sold, or written by the Fund or commodity
futures contracts or options thereon purchased or sold by the Fund;
3.) for the purpose of compliance by the Fund with the
procedures required for reverse repurchase agreements, firm commitment
agreements, standby commitment agreements, short sales, or any other securities
by Act Release No. 10666, or any subsequent release or releases or rule of the
SEC relating to the maintenance of segregated accounts by registered investment
companies;
4.) for the purpose of segregating collateral for loans of
Securities made by the Fund; and 5.) for other proper
corporate purposes, but only upon receipt of, in addition to
Proper
Instructions, a copy of a resolution of the Board of Trustees, certified by an
Officer, setting forth the purposes of such segregated account.
Each segregated account established hereunder shall be established and
maintained for a single Fund only. All Proper Instructions relating to a
segregated account shall specify the Fund involved.
VI. F. Advances for Settlement. Except as otherwise may be agreed upon
by the parties hereto, the Custodian shall not be required to comply with any
Written Instructions to settle the purchase of any Securities on behalf of a
Fund unless there is sufficient cash in the account(s) pertaining to such Fund
at the time or to settle the sale of any Securities from such an account(s)
unless such Securities are in deliverable form. Notwithstanding the foregoing,
if the purchase price of such Securities exceeds the amount of cash in the
account(s) at the time of such purchase, the Custodian may, in its sole
discretion, advance the amount of the difference in order to settle the purchase
of such Securities. The amount of any such advance shall be deemed a loan from
the Custodian to the Trust payable on demand and bearing interest accruing from
the date such loan is made up to but not including the date such loan is repaid
at the rate per annum customarily charged by the Custodian on similar loans.
ARTICLE VII
Trust Indebtedness
VII. A. Borrowings. In connection with any borrowings by the Trust, the
Trust will cause to be delivered to the Custodian by a bank or broker requiring
Securities as collateral for such borrowings (including the Custodian if the
borrowing is from the Custodian), a notice or undertaking in the form currently
employed by such bank or broker setting forth the amount of collateral. The
Trust shall promptly deliver to the Custodian Written Instructions specifying
with respect to each such borrowing: (a) the name of the bank or broker, (b) the
amount and terms of the borrowing, which may be set forth by incorporating by
reference an attached promissory note duly endorsed by the Trust, or a loan
agreement, (c) the date, and time if known, on which the loan is to be entered
into, (d) the date on which the loan becomes due and payable, (e) the total
amount payable to the Trust on the borrowing date, and (f) the description of
the Securities securing the loan, including the name of the issuer, the title
and the number of shares or other units or the principal amount. The Custodian
shall deliver on the borrowing date specified in the Written Instructions the
required collateral against the lender's delivery of the total loan amount then
payable, provided that the same conforms to that which is described in the
Written Instructions. The Custodian shall deliver, in the manner directed by the
Trust, such Securities as additional collateral, as may be specified in Written
Instructions, to secure further any transaction described in this Article VII.
The Trust shall cause all Securities released from collateral status to be
returned directly to the Custodian and the Custodian shall receive from time to
time such return of collateral as may be tendered to it.
The Custodian may, at the option of the lender, keep such collateral in
its possession, subject to all rights therein given to the lender because of the
loan. The Custodian may require such reasonable conditions regarding such
collateral and its dealings with third-party lenders as it may deem appropriate.
VII. B. Advances. With respect to any advances of cash made by the
Custodian to or for the benefit of a Fund for any purpose which results in the
Fund incurring an overdraft at the end of any Business Day, such advance shall
be repayable immediately upon demand made by the Custodian at any time.
ARTICLE VIII
Concerning the Custodian
VIII. A. Limitations on Liability of Custodian. Except as otherwise
provided herein, the Custodian shall not be liable for any loss or damage,
including counsel fees, resulting from its action or omission to act or
otherwise, except for any such loss or damage arising out of its negligence or
willful misconduct. The Trust, on behalf of the Fund and only from assets of the
Fund (or insurance purchased by the Trust with respect to its liabilities on
behalf of the Fund hereunder), shall defend, indemnify and hold harmless the
Custodian and its directors, officers, employees and agents with respect to any
loss, claim, liability or cost (including reasonable attorneys' fees) arising or
alleged to arise from or relating to the Trust's duties hereunder or any other
action or inaction of the Trust or its Trustees, officers, employees or agents,
except such as may arise from the negligent action, omission, willful misconduct
or breach of this Agreement by the Custodian, its directors, officers, employees
or agents.. The Custodian shall defend, indemnify and hold harmless the Trust
and its trustees, officers, employees or agents with respect to any loss, claim,
liability or cost (including reasonable attorneys' fees) arising or alleged to
arise from or relating to the Custodian's duties as specifically set forth in
this agreement with respect to the Fund hereunder or any other action or
inaction of the Custodian or its directors, officers, employees, agents,
nominees, or Sub-Custodians as to the Fund, except such as may arise from the
negligent action, omission or willful misconduct of the Trust, its trustees,
officers, employees, or agents. The Custodian may, with respect to questions of
law apply for and obtain the advice and opinion of counsel to the Trust at the
expense of the Fund, or of its own counsel at its own expense, and shall be
fully protected with respect to anything done or omitted by it in good faith in
conformity with the advice or opinion of counsel to the Trust, and shall be
similarly protected with respect to anything done or omitted by it in good faith
in conformity with advice or opinion of its counsel, unless counsel to the Fund
shall, within a reasonable time after being notified of legal advice received by
the Custodian, have a differing interpretation of such question of law. The
Custodian shall be liable to the Trust for any proximate loss or damage
resulting from the use of the Book-Entry System or any Depository arising by
reason of any negligence, misfeasance or misconduct on the part of the Custodian
or any of its employees, agents, nominees or Sub-Custodians, but not for any
special, incidental, consequential, or punitive damages; provided, however, that
nothing contained herein shall preclude recovery by the Trust, on behalf of the
Fund, of principal and of interest to the date of recovery on Securities
incorrectly omitted from the Fund's account or penalties imposed on the Trust,
in connection with the Fund, for any failures to deliver Securities.
In any case in which one party hereto may be asked to indemnify the other or
hold the other harmless, the party from whom indemnification is sought (the
"Indemnifying Party") shall be advised of all pertinent facts concerning the
situation in question, and the party claiming a right to indemnification (the
"Indemnified Party") will use reasonable care to identify and notify the
Indemnifying Party promptly concerning any situation which presents or appears
to present a claim for indemnification against the Indemnifying Party. The
Indemnifying Party shall have the option to defend the Indemnified Party against
any claim which may be the subject of the indemnification, and in the event the
Indemnifying Party so elects, such defense shall be conducted by counsel chosen
by the Indemnifying Party and satisfactory to the Indemnified Party and the
Indemnifying Party will so notify the Indemnified Party and thereupon such
Indemnifying Party shall take over the complete defense of the claim and the
Indemnifying Party shall sustain no further legal or other expenses in such
situation for which indemnification has been sought under this paragraph, except
the expenses of any additional counsel retained by the Indemnified Party. In no
case shall any party claiming the right to indemnification confess any claim or
make any compromise in any case in which the other party has been asked to
indemnify such party (unless such confession or compromise is made with such
other party's prior written consent. The provisions of this section VIII. A.
shall survive the termination of this Agreement.
VIII. B. Actions not Required by Custodian. Without limiting the generality
of the foregoing, the Custodian, acting in the capacity of Custodian hereunder,
shall be under no obligation to inquire into, and shall not be liable for:
1.) The validity of the issue of any Securities purchased by or for the
account of any Fund, the legality of the purchase thereof, or the propriety of
the amount paid therefor;
2.) The legality of the sale of any Securities by or for the
account of any Fund, or the propriety of the amount for which the same are sold;
3.) The legality of the issue or sale of any Shares of any
Fund, or the sufficiency of the amount to be received therefor;
4.) The legality of the redemption of any Shares of any
Fund, or the propriety of the amount to be paid there
for;
5.) The legality of the declaration or payment of any dividend
by the Trust in respect of Shares of any Fund;
6.) The legality of any borrowing by the Trust on behalf of
the Trust or any Fund, using Securities as collateral;
7.) Whether the Trust or a Fund is in compliance with the 1940
Act, the regulations thereunder, the provisions of the Trust's charter documents
or by-laws, or its investment objectives and policies as then in effect.
VIII. C. No Duty to Collect Amounts Due From Dividend and Transfer
Agent. The Custodian shall not be under any duty or obligation to take action to
effect collection of any amount due to the Trust from any Dividend and Transfer
Agent of the Trust nor to take any action to effect payment or distribution by
any Dividend and Transfer Agent of the Trust of any amount paid by the Custodian
to any Dividend and Transfer Agent of the Trust in accordance with this
Agreement.
VIII. D. No Enforcement Actions. Notwithstanding Section D of Article
V, the Custodian shall not be under any duty or obligation to take action, by
legal means or otherwise, to effect collection of any amount, if the Securities
upon which such amount is payable are in default, or if payment is refused after
due demand or presentation, unless and until (i) it shall be directed to take
such action by Written Instructions and (ii) it shall be assured to its
satisfaction (including prepayment thereof) of reimbursement of its costs and
expenses in connection with any such action.
VIII. E. Authority to Use Agents and Sub-Custodians. The Trust
acknowledges and hereby authorizes the Custodian to hold Securities through its
various agents described in Appendix C annexed hereto. In addition, the Trust
acknowledges that the Custodian may appoint one or more financial institutions,
as agent or agents or as sub-custodian or sub-custodians, including, but not
limited to, banking institutions located in foreign countries, for the purpose
of holding Securities and moneys at any time owned by the Fund. The Custodian
shall not be relieved of any obligation or liability under this Agreement in
connection with the appointment or activities of such agents or sub-custodians.
Any such agent or sub-custodian shall be qualified to serve as such for assets
of investment companies registered under the Act. The Funds shall reimburse the
Custodian for all costs incurred by the Custodian in connection with opening
accounts with any such agents or sub-custodians. Upon request, the Custodian
shall promptly forward to the Trust any documents it receives from any agent or
sub-custodian appointed hereunder which may assist trustees of registered
investment companies to fulfill their responsibilities under Rule 17f-5 of the
Act.
VIII. F. No Duty to Supervise Investments. The Custodian shall not be
under any duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the account of the Trust are such as properly may
be held by the Trust under the provisions of the Declaration of Trust and the
Trust's By-Laws.
VIII. G. All Records Confidential. The Custodian shall treat all
records and other information relating to the Trust and the assets of all Funds
as confidential and shall not disclose any such records or information to any
other person unless (i) the Trust shall have consented thereto in writing or
(ii) such disclosure is compelled by law.
VIII. H. Compensation of Custodian. The Custodian shall be entitled to
receive and the Trust agrees to pay to the Custodian, for the Fund's account
from the Fund's assets only, such compensation as shall be determined pursuant
to Appendix E attached hereto, or as shall be determined pursuant to amendments
to Appendix E as approved by the Custodian and the Trust. The Custodian shall be
entitled to charge against any money held by it for the accounts of the Fund the
amount of any loss, damage, liability or expense, including counsel fees, for
which it shall be entitled to reimbursement under the provisions of this
Agreement as determined by agreement of the Custodian and the Trust or by the
final order of any court or arbitrator having jurisdiction and as to which all
rights of appeal shall have expired. The expenses which the Custodian may charge
against the account of a Fund include, but are not limited to, the expenses of
agents or Sub-Custodians incurred in settling transactions involving the
purchase and sale of Securities of the Fund.
VIII. I. Reliance Upon Instructions. The Custodian shall be entitled to
rely upon any Proper Instructions if such reliance is made in good faith. The
Trust agrees to forward to the Custodian Written Instructions confirming Oral
Instructions in such a manner so that such Written Instructions are received by
the Custodian, whether by hand delivery, telex, facsimile or otherwise, on the
same Business Day on which such Oral Instructions were given. The Trust agrees
that the failure of the Custodian to receive such confirming instructions shall
in no way affect the validity of the transactions or enforceability of the
transactions hereby authorized by the Trust. The Trust agrees that the Custodian
shall incur no liability to the Trust for acting upon Oral Instructions given to
the Custodian hereunder concerning such transactions.
VIII. J. Books and Records. The Custodian will (i) set up and maintain
proper books of account and complete records of all transactions in the accounts
maintained by the Custodian hereunder in such manner as will meet the
obligations of the Fund under the Act, with particular attention to Section 31
thereof and Rules 3la-1 and 3la-2 thereunder and those records are the property
of the Trust, and (ii) preserve for the periods prescribed by applicable Federal
statute or regulation all records required to be so preserved. All such books
and records shall be the property of the Trust, and shall be available, upon
request, for inspection by duly authorized officers, employees or agents of the
Trust and employees of the SEC.
VIII. K. Internal Accounting Control Systems. The Custodian shall send to
the Trust any report received on the systems of internal accounting control of
the Custodian, or its agents or sub-custodians, as the Trust may reasonably
request from time to time.
VIII. L. No Management of Assets by Custodian. The Custodian performs
only the services of a custodian and shall have no responsibility for the
management, investment or reinvestment of the Securities or other assets from
time to time owned by any Fund. The Custodian is not a selling agent for Shares
of any Fund and performance of its duties as custodian shall not be deemed to be
a recommendation to any Fund's depositors or others of Shares of the Fund as an
investment. The Custodian shall have no duties or obligations whatsoever except
such duties and obligations as are specifically set forth in this Agreement, and
no covenant or obligation shall be implied in this Agreement against the
Custodian.
VIII. M. Assistance to Trust. The Custodian shall take all reasonable
action, that the Trust may from time to time request, to assist the Trust in
obtaining favorable opinions from the Trust's independent accountants, with
respect to the Custodian's activities hereunder, in connection with the
preparation of the Fund's Form N- IA, Form N-SAR, or other annual reports to the
SEC.
ARTICLE IX
Termination
IX. A. Termination. Either party hereto may terminate this
Agreement for any reason by giving to the other party a notice in writing
specifying the date of such termination, which shall be not less than ninety
(90) days after the date of giving of such notice. If such notice is given by
the Trust, it shall be accompanied by a copy of a resolution of the Board of
Trustees of the Trust, certified by the Secretary of the Trust, electing to
terminate this Agreement and designating a successor custodian or custodians
each of which shall be a bank or trust company having not less than $100,000,000
aggregate capital, surplus, and undivided profits. In the event such notice is
given by the Custodian, the Trust shall, on or before the termination date,
deliver to the Custodian a copy of a resolution of the Board of Trustees of the
Trust, certified by the Secretary, designating a successor custodian or
custodians to act on behalf of the Trust. In the absence of such designation by
the Trust, the Custodian may designate a successor custodian which shall be a
bank or trust company having not less than $100,000,000 aggregate capital,
surplus, and undivided profits. Upon the date set forth in such notice this
Agreement shall terminate, and the Custodian, provided that it has received a
notice of acceptance by the successor custodian, shall deliver, on that date,
directly to the successor custodian all Securities and monies then owned by the
Fund and held by it as Custodian. Upon termination of this Agreement, the Trust
shall pay to the Custodian on behalf of the Trust such compensation as may be
due as of the date of such termination. The Trust agrees on behalf of the Trust
that the Custodian shall be reimbursed for its reasonable costs in connection
with the termination of this Agreement.
IX. B. Failure to Designate Successor Trustee. If a successor custodian
is not designated by the Trust, or by the Custodian in accordance with the
preceding paragraph, or the designated successor cannot or will not serve, the
Trust shall, upon the delivery by the Custodian to the Trust of all Securities
(other than Securities held in the Book-Entry System which cannot be delivered
to the Trust) and moneys then owned by the Trust, be deemed to be the custodian
for the Trust, and the Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than the duty with respect to
Securities held in the Book-Entry System, which cannot be delivered to the
Trust, which shall be held by the Custodian in accordance with this Agreement.
ARTICLE X
Force Majeure
Neither the Custodian nor the Trust shall be liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; sabotage; strikes; epidemics; riots; labor
disputes; acts of civil or military authority; governmental actions; or
inability to obtain labor, material, equipment or transportation; provided,
however, that the Custodian, in the event of a failure or delay, shall use its
best efforts to ameliorate the effects of any such failure or delay.
ARTICLE XI
Miscellaneous
XI. A. Designation of Authorized Persons. Appendix A sets forth the
names and the signatures of all Authorized Persons as of this date, as certified
by the Secretary of the Trust. The Trust agrees to furnish to the Custodian a
new Appendix A in form similar to the attached Appendix A, if any present
Authorized Person ceases to be an Authorized Person or if any other or
additional Authorized Persons are elected or appointed. Until such new Appendix
A shall be received, the Custodian shall be fully protected in acting under the
provisions of this Agreement upon Oral Instructions or signatures of the then
current Authorized Persons as set forth in the last delivered Appendix A.
XI. B. Limitation of Personal Liability. No recourse under any
obligation of this Agreement or for any claim based thereon shall be had against
any organizer, shareholder, officer, trustee, past, present or future as such,
of the Trust or of any predecessor or successor, either directly or through the
Trust or any such predecessor or successor, whether by virtue of any
constitution, statute or rule of law or equity, or by the enforcement of any
assessment or penalty or otherwise; it being expressly agreed and understood
that this Agreement and the obligations thereunder are enforceable solely
against the assets of the Trust, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, the organizers, shareholders,
officers, or trustees of the Trust or of any predecessor or successor, or any of
them as such, because of the obligations contained in this Agreement or implied
therefrom and that any and all such liability is hereby expressly waived and
released by the Custodian as a condition of, and as a consideration for, the
execution of this Agreement.
XI. C. Authorization By Board. The obligations set forth in this
Agreement as having been made by the Trust have been made by the Board of
Trustees, acting as such Trustees for and on behalf of the Trust, pursuant to
the authority vested in them under the laws of the State of Ohio, the
Declaration of Trust and the By-Laws of the Trust. This Agreement has been
executed by Officers of the Trust as officers, and not individually, and the
obligations contained herein are not binding upon any of the Trustees, Officers,
agents or holders of shares, personally, but bind only the Trust and then only
to the extent of the assets of the Trust.
XI. D. Custodian's Consent to Use of Its Name. The Trust shall obtain
the Custodian's consent prior to the publication and/or dissemination or
distribution, of the Prospectus and any other documents (including advertising
material) specifically mentioning the Custodian (other than merely by name and
address).
XI. E. Notices to Custodian. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the Custodian, shall be
sufficiently given if addressed to the Custodian and mailed or delivered to it
at its offices at Star Bank Center, 425 Walnut .Street, M. L. 6118, Cincinnati,
Ohio 45202, attention Mutual Fund Custody Department, or at such other place as
the Custodian may from time to time designate in writing.
XI. F. Notices to Trust. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the Trust shall be
sufficiently given when delivered to the Trust or on the second Business Day
following the time such notice is deposited in the U.S. mail postage prepaid and
addressed to the Trust at its office at 425 Walnut Street, Cincinnati, Ohio
45202 or at such other place as the Trust may from time to time designate in
writing.
XI. G. Amendments In Writing. This Agreement, with the exception of the
Appendices, may not be amended or modified in any manner except by a written
agreement executed by both parties with the same formality as this Agreement,
and authorized and approved by a resolution of the Board of Trustees of the
Trust.
XI. H. Successors and Assigns. This Agreement shall extend to and shall
be binding upon the parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by the Trust or
by the Custodian, and no attempted assignment by the Trust or the Custodian
shall be effective without the written consent of the other party hereto.
XI. I. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Ohio.
XI. J. Jurisdiction. Any legal action, suit or proceeding to be
instituted by either party with respect to
this Agreement shall be brought by such party exclusively in the courts of the
State of Ohio or in the courts of the United States for the Southern District of
Ohio, and each party, by its execution of this Agreement, irrevocably (i)
submits to such jurisdiction and (ii) consents to the service of any process or
pleadings by first class U.S. mail, postage prepaid and return receipt
requested, or by any other means from time to time authorized by the laws of
such jurisdiction.
XI. K. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
XI. L. Headings. The headings of paragraphs in this Agreement are for
convenience of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective Officers, thereunto duly authorized as of the day
and year first above written.
ATTEST: TRUST:
AmeriPrime Funds
/s/ Kelli J. Shomaker By:/s/ Ken Trumpfheller
Title: President
ATTEST: CUSTODIAN:
Star Bank, N.A.
By: /s/ Marsha Croxton
/s/ Mark Dowling Title: Vice President
fairagmt.sam
<PAGE>
APPENDIX A
Authorized Persons Specimen Signatures
Chairman: Kenneth D. Trumpfheller /s/
President: Kenneth D. Trumpfheller /s/
Secretary: Julie A. Feleo /s/
Treasurer: Julie A. Feleo /s/
Senior Vice
President: __________________ ___________________
Assistant
Secretary: __________________ ___________________
Assistant
Treasurer: __________________ ___________________
Adviser Employees: __________________ ___________________
Transfer Agent/Trust Accountant
Employees: __________________ ___________________
------------------ -------------------
------------------ -------------------
------------------ -------------------
APPENDIX B
1. Carl Domino Equity Income Fund
2. Fountainhead Special Value Fund
3. AIT Vision U.S. Equity Portfolio
4. Globalt Growth Fund
5. NewCap Contrarian Fund
6. IMS Capital Value Fund
7. Corbin Small-Cap Value Fund
8. Florida Street Growth Fund
9. Florida Street Bond Fund
10. MAI Enhanced Equity Benchmark Fund
11. MAI Enhanced Growth & Income Fund
12. MAI Enhanced Aggressive Growth Fund
13. MAI Enhanced Income Fund
14. MAI Enhanced Capital Appreciation Fund
15. MAI Enhanced Global Fund
<PAGE>
APPENDIX C
Agents of the Custodian
The following agents are employed currently by Star Bank, N.A. for
securities processing and control ...
The Depository Trust Company (New York)
7 Hanover Square
New York, NY 10004
The Federal Reserve Bank
Cincinnati and Cleveland Branches
Bankers Trust Company
16 Wall Street
New York, NY 10005
(For Foreign Securities and certain non-DTC eligible
Securities)
<PAGE>
APPENDIX D
Standards of Service Guide
Star Bank, N.A.
Standards of Service Guide
Star Bank, N.A. is committed to providing superior quality service to
all customers and their agents at all times. We have compiled this guide as a
tool for our clients to determine our standards for the processing of security
settlements, payment collection, and capital change transactions. Deadlines
recited in this guide represent the times required for Star Bank to guarantee
processing. Failure to meet these deadlines will result in settlement at our
client's risk. In all cases, Star Bank will make every effort to complete all
processing on a timely basis.
Star Bank is a direct participant of the Depository Trust Company, a
direct member of the Federal Reserve Bank of Cleveland, and utilizes the Bankers
Trust Company as its agent for ineligible and foreign securities.
For corporate reorganizations, Star Bank utilizes SEI's Reorg Source,
Financial Information, Inc., XCITEK, DTC Important Notices, and the Wall Street
Journal.
For bond calls and mandatory puts, Star Bank utilizes SEI's Bond
Source, Kenny Information Systems, Standard & Poor's Corporation, and DTC
Important Notices. Star Bank will not notify clients of optional put
opportunities.
Any securities delivered free to Star Bank or its agents must be
received three (3) business days prior to any payment or settlement in order for
the Star Bank standards of service to apply.
Should you have any questions regarding the information contained in
this guide, please feel free to contact your account representative.
The information contained in this Standards of Service Guide is
subject to change. Should any changes be made Star Bank will
provide you with an updated copy of its Standards of Service
Guide.
Star Bank Payment Standards
Security Type Income Principal
Equities Payable Date + 1
Municipal Bonds* Payable Date Payable Date
Corporate Bonds* Payable Date + 1 Payable Date
Federal Reserve Bank Book Entry* Payable Date Payable Date
CMOs *
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 2 Payable Date + 2
SBA Loan Certificates When Received When Received
Unit Investment Trust Certificates* Payable Date + 1 Payable Date + 1
Certificates of Deposit* Payable Date + 1 Payable Date + 1
Limited Partnerships When Received When Received
Foreign Securities When Received When Received
*Variable Rate Securities
Federal Reserve Bank Book Entry Payable Date Payable Date
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 2 Payable Date + 2
NOTE: If a payable date falls on a weekend or bank holiday, payment
will be made on the immediately following business day.
Star Bank Corporate Reorganization Standards
Type of Action
Notification to Client
Deadline for Client Instructions to Star Bank
Transaction Posting
Rights, Warrants, and Optional Mergers Later of 10 business days prior to
expiration or receipt of notice 5 business days prior to expiration Upon receipt
Mandatory Puts with Option to Retain Later of 10 business days prior to
expiration or receipt of notice 5 business days prior to expiration Upon receipt
Class Actions 10 business days prior to expiration date 5 business days
prior to expirationUpon receipt
Voluntary Tenders, Exchanges, and Conversions Later of 10 business days prior to
expiration or receipt of notice 5 business days prior to expiration Upon receipt
Mandatory Puts, Defaults, Liquidations, Bankruptcies, Stock Splits,
Mandatory Exchanges At posting of funds or securities received None Upon receipt
Full and Partial Calls Later of 10 business days prior to expiration or receipt
of notice None Upon receipt
NOTE: Fractional shares/par amounts resulting from any of the above will
be sold.
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT dated as of October 20, 1995, between AmeriPrime Funds (the
"Trust"), an Ohio business trust, and AmeriPrime Financial Services, Inc. (the
"Administrator"), a Texas corporation.
WHEREAS, the Trust has been organized to operate as an open-end
management investment company registered under the Investment Company Act of
1940 (the "Act"); and
WHEREAS, the Trust wishes to avail itself of the information, advice,
assistance and facilities of the Administrator to perform on behalf of the Trust
the services as hereinafter described; and
WHEREAS, the Administrator wishes to provide such services to the Trust
under the conditions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Trust and the Administrator agree as follows:
1. Employment. The Trust, being duly authorized, hereby employs the
Administrator to perform those services described in this Agreement. The
Administrator shall perform the obligations thereof upon the terms and
conditions hereinafter set forth. Any administrative services undertaken by the
Administrator pursuant to this Agreement, as well as any other activities
undertaken by the Administrator on behalf of the Trust pursuant hereto, shall at
all times be subject to any directives of the Board of Trustees of the Trust.
2. Trust Administration. The Administrator shall give the Trust the
benefit of its best judgment, efforts and facilities in rendering its services
as administrator. The Administrator shall at all times conform to: (i) all
applicable provisions of the Act and any rules and regulations adopted
thereunder, (ii) the provisions of the Registration Statement of the Trust under
the Securities Act of 1933 and the Act as amended from time to time, (iii) the
provisions of the Agreement and Declaration of Trust and the By-Laws of the
Trust, and (iv) any other applicable provisions of state and federal law.
Subject to the direction and control of the Trust, the Administrator
shall supervise the Trust's business affairs not otherwise supervised by other
agents of the Trust. To the extent not otherwise the primary responsibility of,
or provided by, other parties under agreement with the Trust, the Administrator
shall supply (i) non-investment related statistical and research data, (ii)
internal regulatory compliance services, and (iii) executive and administrative
services. The Administrator shall supervise the preparation of (i) tax returns,
(ii) reports to shareholders of the Trust, (iii) reports to and filings with the
Securities and Exchange Commission, state securities commissions and Blue Sky
authorities including preliminary and definitive proxy materials and
post-effective amendments to the Trust's registration statement, and (iv)
necessary materials for meetings of the Trust's Board of Trustees. The
Administrator shall provide personnel to serve as officers of the Trust if so
elected by the Board of Trustees; provided, however, that the Trust shall
reimburse the
Administrator for the expenses incurred by such personnel in attending Board of
Trustees' meetings and shareholders' meetings of the Trust. Executive and
administrative services include, but are not limited to, the coordination of all
third parties furnishing services to the Trust, review of the books and records
of the Trust maintained by such third parties, and the review and submission to
the officers of the Trust for their approval, of invoices or other requests for
payment of Trust expenses; and such other action with respect to the Trust as
may be necessary in the opinion of the Administrator to perform its duties
hereunder.
3. Record Keeping and Other Information. The Administrator shall
create and maintain all necessary records in accordance with all applicable
laws, rules and regulations, including but not limited to records required by
Section 31(a) of the Investment Company Act of 1940 and the rules thereunder, as
the same may be amended from time to time, pertaining to the various functions
performed by it and not otherwise created and maintained by another party
pursuant to contract with the Trust. Where applicable, such records shall be
maintained by the Administrator for the periods and in the places required by
Rule 31a-2 under the Investment Company Act of 1940.
4. Audit, Inspection and Visitation. The Administrator shall make
available to the Trust during regular business hours all records and other data
created and maintained pursuant to the foregoing provisions of this Agreement
for reasonable audit and inspection by the Trust or any regulatory agency having
authority over the Trust.
5. Compensation. For the performance of the Administrator's
obligations under this Agreement, each series of the Trust shall pay the
Administrator, on the first business day following the end of each month, a fee
as set out in the fee schedule attached hereto as Exhibit A. The Administrator
shall not be required to reimburse the Trust or the Trust's investment adviser
for (or have deducted from its fees) any expenses in excess of expense
limitations imposed by certain state securities commissions having jurisdiction
over the Trust.
6. Limitation of Liability. Administrator may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be required by the Act or the rules thereunder, neither Administrator nor its
shareholders, officers, directors, employees, agents, control persons or
affiliates of any thereof (collectively, the "Administrator's Employees") shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Trust in connection with, any error of judgment, mistake of law, any act or
omission in connection with or arising out of any services rendered under or
payments made pursuant to this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or gross
negligence on the part of any such persons in the performance of the duties of
Administrator under this Agreement or by reason of reckless disregard by any of
such persons of the obligations and duties of Administrator under this
Agreement. Any person, even though also a director, officer, employee,
shareholder or agent of the Administrator, who may be or become an officer,
trustee, employee or agent of the Trust, shall be deemed, when rendering
services to the Trust or acting on any business of the Trust (other than
services or business in connection with the Administrator's duties hereunder),
to be rendering such services to or acting solely for the Trust and not as a
director, officer, employee, shareholder or agent, or one under the control or
direction of the Administrator, even though paid by it.
7. Indemnification of Administrator. Subject to and except as
otherwise provided in the Securities Act of 1933, as amended, and the Act, the
Trust shall indemnify Administrator and each of Administrator's Employees
(hereinafter collectively referred to as a "Covered Person") against all
liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while serving as the administrator for the Trust or as one of
Administrator's Employees, or, thereafter, by reason of being or having been the
administrator for the Trust or one of Administrator's Employees, including but
not limited to liabilities arising due to any misrepresentation or misstatement
in the Trust's prospectus, other regulatory filings, and amendments thereto, or
in other documents originating from the Trust. In no case shall a Covered Person
be indemnified against any liability to which such Covered Person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties of such Covered Person.
8. Services for Others. Nothing in this Agreement shall prevent the
Administrator or any affiliated person of the Administrator from providing
services for any other person, firm or corporation, including other investment
companies; provided, however, that the Administrator expressly represents that
it will undertake no activities which, in its judgment, will adversely affect
the performance of its obligations to the Trust under this Agreement.
9. Compliance with the Act. The parties hereto acknowledge and agree
that nothing contained herein shall be construed to require the Administrator to
perform any services for any series of the Trust which services could cause the
Administrator to be deemed an "investment adviser" of the Series within the
meaning of Section 2(a)(20) of the Act or to supersede or contravene the
Prospectus or Statement of Additional Information of any series of the Trust or
any provisions of the Act and the rules thereunder.
10. Renewal and Termination. This Agreement shall become effective on
the date first above written and shall remain in force for a period of two (2)
years from such date, and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by the vote of a majority
of the Trustees who are not interested persons of the Trust or the
Administrator, cast in person at a meeting called for the purpose of voting on
such approval and by a vote of the Board of Trustees or of a majority of the
Trust's outstanding voting securities. This Agreement may be terminated without
the payment of any penalty by either party upon sixty (60) days' written notice
to the other party. This Agreement shall terminate automatically in the event of
its assignment. Upon the termination of this Agreement, the Trust shall pay the
Administrator such compensation as may be payable for the period prior to the
effective date of such termination.
11. The Trust. The term "AmeriPrime Funds" means and refers to the
Trustees from time to time serving under the Trust's Agreement and Declaration
of Trust as the same may subsequently thereto have been, or subsequently hereto
may be, amended. It is expressly agreed that the obligations of the Trust
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agent or employees of the Trust, personally, but bind only the trust
property of the Trust. The execution and delivery of this Agreement have been
authorized by the Trustees of the Trust and signed by an officer of the Trust,
acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the trust property of the Trust.
12. Miscellaneous. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Ohio. 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 or effect.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
AmeriPrime Funds
By: /s/
Its: Ken Trumphfeller, President
AmeriPrime Financial Services, Inc.
By: /s/
Its: Ken Trumphfeller, President
<PAGE>
EXHIBIT A
ADMINISTRATIVE SERVICES AGREEMENT
Monthly Fee Schedule*
Average Value of Daily Net Assets Annual Rate
Under Fifty Million Dollars 0.10%
Fifty to One Hundred Million Dollars 0.075%
Over One Hundred Million Dollars 0.050%
* Subject to a minimum fee of $2,500 per month for each series.
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the use in this Post-Effective Amendment No. 12 to the AmeriPrime
Funds' Registration Statement on Form N-1A of our report dated November 17, 1997
on the financial statements of the AmeriPrime Funds and the Financial Highlights
included in the Prospectus and to the references made to us under the caption
"Financial Highlights" and "Auditors" included in each Prospectus and under the
caption "Accountants" included in each Statement of Additional Information.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
December 11, 1997
<PAGE>
October 20, 1995
AmeriPrime Funds
1793 Kingswood Drive
Suite 200
Southlake, Texas 76092
Gentlemen:
The undersigned hereby purchases 2,500 shares of each of the following
Funds: Domino Equity Income Fund; JKA Value Fund; AIT Vision U.S. Equity
Portfolio; and GLOBALT Growth Fund at $10.00 per share, representing a total
investment of $100,000.00 in the shares of the series of AmeriPrime Funds. The
undersigned hereby represents that (i) such purchase is for investment purposes,
and (ii) the undersigned has no present intention of redeeming or selling said
shares.
AmeriPrime Financial Securities, Inc.
By:/s/
Kenneth D. Trumpfheller, President
<PAGE>
