<PAGE>
AmeriPrime Funds
CROSS REFERENCE SHEET
FORM N-1A
FOR AUSTIN OPPORTUNITY FUND
TEXAS OPPORTUNITY FUND
U.S. OPPORTUNITY FUND
ITEM SECTION IN PROSPECTUS
1........................Cover Page
2........................Summary of Fund Expenses
3........................Performance Information
4........................The Funds, Investment Objective and Strategies,
Investment Policies and Techniques and Risk
Considerations, Operation of the Funds, General
Information
5........................Operation of the Funds
5A.......................None..
6........................Cover Page, How to Invest in the Funds, How to Redeem
Shares, 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, Distribution
Plan
8........................How to Redeem Shares
9........................None..
13........................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 Advisor, 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........................None..
<PAGE>
PROSPECTUS _______________, 1998
MARTIN CAPITAL FUNDS
Austin Opportunity Fund
Texas Opportunity Fund
U.S. Opportunity Fund
812 San Antonio Street
Suite G14
Austin, TX 78701
For Information, Shareholder Services and Requests:
(888) 4MARTIN
(888) 462-7846
Investment Objective: The investment objective of each of the Martin Capital
Funds is long term capital appreciation. Each Fund seeks to achieve its
objective by investing primarily in common stocks which the Funds' advisor
believes offer superior growth potential. Each Fund is a non-diversified fund,
and this Prospectus provides information relating to additional risks associated
with non-diversification.
Austin Opportunity Fund: The Fund invests primarily in equity securities of
companies with significant operations in the city of Austin, Texas (defined as
the Austin-San Marcos Metropolitan Statistical Area which includes Bastrop,
Caldwell, Hays, Travis and Williamson counties). Under normal circumstances, at
least 65% of the Austin Opportunity Fund's assets will be invested in equity
securities of companies headquartered in Austin, or which have a majority of
their operations in Austin.
Texas Opportunity Fund: The Fund invests primarily in the equity securities of
companies with significant operations in the state of Texas. Under normal
circumstances, at least 65% of the Texas Opportunity Fund's assets will be
invested in equity securities of companies headquartered in the state of Texas,
or which have a majority of their operations in Texas.
U.S. Opportunity Fund: The Fund invests primarily in U.S. equity
securities. The asset allocation mix is managed with the goal of maximizing long
term investment returns. Under normal circumstances, at least 65% of the U.S.
Opportunity Fund's assets will be invested in equity securities of companies
headquartered in the United States, or which have a majority of their operations
in the United States.
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. Shareholders will be charged a fee for shares redeemed within one
year of purchase. 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 dated ___________________, 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. ASA0312A-090398-8
<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 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. The Funds do impose a redemption
fee on shares redeemed less than three years from the date of purchase. Unlike
most other mutual funds, the Funds do not pay directly for transfer agency,
pricing, custodial, auditing or legal services, nor do they pay directly any
general administrative or other significant operating expenses (including any
12b-1 charges). 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.
<TABLE>
Austin Texas U.S.
Opportunity Opportunity Opportunity
Shareholder Transaction Expenses Fund Fund Fund
-------------------------------------------------------------------
<S> <C> <C> <C>
Sales Load Imposed on Purchases None None None
Sales Load Imposed on Reinvested Dividends None None None
Deferred Sales Load None None None
Redemption Fees (as a % of redemption amount)1 1.00% 1.00% 1.00%
Exchange Fees None None None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees 1.25% 1.25% 1.25%
12b-1 Charges2 0.00% 0.00% 0.00%
Other Expenses3 0.00% 0.00% 0.00%
Total Fund Operating Expenses4 1.25% 1.25% 1.25%
<FN>
1 Each Fund charges a redemption fee of 1% on shares redeemed less than one year
from the date of purchase. 2 Distribution expenses incurred by the Funds under
the 12b-1 Distribution Plan are paid by the Advisor. 3 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. 4 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 3).
</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
a Fund.
Example As a shareholder in a Fund, you would pay the following expenses on a
$1,000 investment, assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
1 Year 3 Years
------ -------
$13 $40
<PAGE>
THE FUNDS
Austin Opportunity Fund, Texas Opportunity Fund and U.S. Opportunity
Fund (each a "Fund" or collectively the "Funds" or the "Martin Capital Funds")
were organized as series of AmeriPrime Funds, an Ohio business trust (the
"Trust") on ___________, 1998. 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 Martin Capital Advisors (the "Advisor").
INVESTMENT OBJECTIVE AND STRATEGIES
The investment objective of each of the Funds is long term capital
appreciation. Each Fund seeks to achieve its objective by investing primarily in
common stocks which the Advisor believes offer superior growth potential. After
screening for stocks which meet certain performance criteria, the Advisor uses a
variety of quantitative and qualitative strategies to analyze the growth
prospects of each company, focusing on the company's management, potential for
product or service growth, and technical and economic cycle considerations. As
each Fund will primarily invest in growth- oriented stocks, it is expected that
the Fund will generate a total return primarily from capital appreciation,
although current income is also expected. Each Fund is a non-diversified fund,
and as such, presents substantially more investment risk and potential for
volatility than a mutual fund which is diversified. The Funds are not a complete
investment program, and an investment in a Fund should be considered only a
portion of your overall investment portfolio.
Austin Opportunity Fund: The Fund invests in equity securities of companies with
significant operations in the city of Austin, Texas (defined as the Austin-San
Marcos Metropolitan Statistical Area, which includes Bastrop, Caldwell, Hays,
Travis and Williamson counties), but has the flexibility to invest in fixed
income securities and other financial instruments. Under normal circumstances,
at least 65% of the Austin Opportunity Fund's assets will be invested in equity
securities of companies headquartered in Austin, or which have a majority of
their operations in Austin (the "Austin Companies"). An investment strategy
focused on a single, albeit large, economy may be subject to greater investment
risk because changes in the Austin economy may have a disproportionate effect on
the Fund's portfolio. Austin has a greater concentration of technology companies
than the rest of the United States and weakness in this sector could result in
significant losses for the Fund.
Texas Opportunity Fund: The Fund invests primarily in equity securities of
companies with significant operations in the state of Texas, but has the
flexibility to invest in fixed income securities and other financial
instruments. Under normal circumstances, at least 65% of the Texas Opportunity
Fund's assets will be invested in equity securities of companies headquartered
in the state of Texas, or which have a majority of their operations in Texas
(the "Texas Companies"). An investment strategy focused on a single, albeit
large, economy may be subject to greater investment risk because changes in the
Texas economy may have a disproportionate effect on the Fund's portfolio. Texas
has a greater concentration of energy and technology companies than the rest of
the United States and weakness in these sectors could result in significant
losses for the Fund.
U.S. Opportunity Fund: The Fund invests primarily in U.S. equity
securities, but has the flexibility to invest in fixed income securities and
other financial instruments. The asset allocation mix is managed with the goal
of maximizing long term investment returns. Under normal circumstances, at least
65% of the U.S. Opportunity Fund's assets will be invested in equity securities
of companies - 3 -
<PAGE>
headquartered in the United States, or which have a majority of their
operations in the United States (the "U.S. Companies").
The Advisor has been managing accounts with investment objectives,
policies and strategies substantially similar to those of the U.S. Opportunity
Fund since 1990 (the "U.S. Composite"). The performance of the U.S. Composite
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 person
responsible for the performance of the composite is the same person as is
responsible for the investment management of the U.S. Opportunity Fund. As of
________, 1998 the assets in the U.S.
Composite totaled approximately $_____ million.
Summary of Martin Capital Advisors Annual Investment Returns*
<TABLE>
Period U.S. Composite S&P 500 Index
------ --------------- -------------
<S> <C> <C> <C>
1991.......................... 33.9% .................. 30.6%
1992......................... 26.8% .................. 7.7%
1993......................... 14.5% .................. 10.0%
1994 ........................ (2.1)% ................... 1.3%
1995.......................... 27.5% .................. 37.6%
1996........................ 29.4% ................. 23.0%
1997......................... 41.4% .................. 33.4%
1998 (through __/31) ____ ____
<FN>
* The Martin Capital Advisors performance is the time-weighted,
dollar-weighted average total return associated with a composite of equity
income accounts having objectives similar to the U.S. Opportunity Fund. Results
include the reinvestment of income on an accrual basis. Performance figures
reflected are net of management fees of the accounts and net of all expenses,
including transaction costs and commissions. Results include the reinvestment of
dividends and capital gains. Composite returns have been verified by an
independent accounting firm and comply 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 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,
availability of cash for new investments and the private character of accounts
compared with the public character of the Funds. In addition, the results for
different periods may vary.
</FN>
</TABLE>
The Advisor's security selection process for each Fund will attempt to
reflect the diversification
- 4 -
<PAGE>
of the Fund's designated economic market; however the Advisor may adjust sector
representation based upon the sector's performance outlook. Although each Fund
intends to invest primarily in equity securities within its designated economic
market, each Fund may invest in other economic markets and other types of
securities. See "Investment Policies and Techniques and Risk Considerations" on
page __ for additional information. For temporary defensive purposes under
abnormal market or economic conditions, each Fund may hold all or a portion of
its assets in money market instruments (including money market funds) or U.S.
government repurchase agreements. Each 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 a money market
fund, the shareholders of the Fund will be subject to additional management
fees.
The Advisor anticipates that a significant portion of the Austin
Opportunity Fund's portfolio (and some portion of the Texas Opportunity Fund)
could be invested in smaller capitalization companies. To the extent a Fund
invests in smaller 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. They 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.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, none of the Funds can give any assurance that its investment
objective will be achieved. In addition, it should be noted that the Advisor has
limited experience managing mutual funds and that 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.
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 a 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 a Fund will not incur sales charges
on purchases or redemptions except for the short term redemption fee described
under "How to Redeem Shares - Redemption Fee." 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 a 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 appropriate fund, and sent to the P.O. Box listed below. If
you prefer overnight delivery, use the overnight address listed below.
- 5 -
<PAGE>
U.S. Mail: Overnight:
Martin Capital Funds Martin Capital Funds
c/o Unified Fund Services, Inc. c/o Unified Fund Services, Inc.
P.O. Box 6110 431 North Pennsylvania Street
Indianapolis, Indiana 46204-6110 Indianapolis, Indiana 46204
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 888-4MARTIN 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 for: Austin Opportunity Fund
ABA #0420-0001-3 D.D.A.#
Attn: Martin Capital Funds Texas Opportunity Fund
Account Name _________________ D.D.A.#
(write in shareholder name) U.S. Opportunity Fund
For the Account # ______________ D.D.A.#
(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 any 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 appropriate 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 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 $50 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time.
Tax Sheltered Retirement Plans
- 6 -
<PAGE>
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); 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 Funds do
not issue share certificates. All shares are held in non-certificate form
registered on the books of each 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 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:
Martin Capital Funds
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, Indiana 46204-6110
"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 each of
- 7 -
<PAGE>
the Funds or Unified Fund 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 888-4MARTIN. 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 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.
Redemption Fee - Shares held less than 12 months and redeemed
(including exchanges) from a Fund are subject to a short term redemption fee
equal to 1.0% of the net asset value of shares redeemed. Solely for purposes of
calculating the one-year holding period, each Fund uses the "first-in, first
out" (FIFO) method. That is, the date of any redemption or exchange will be
compared to the earliest purchase date. If this holding period is less than one
year, the fee will be assessed. The fee will be prorated if a portion of the
shares being redeemed or exchanged has been held for more than one year. Shares
acquired through reinvested dividend or capital gain distributions are exempt
from the fee.
Additional Information - If you are not certain of the requirements for
a redemption please call the Transfer Agent at (888) 905-2283. 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 the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $500 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 each Fund is subject to redemption at anytime 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.
- 8 -
<PAGE>
SHARE PRICE CALCULATION
The value of an individual share in each 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
Each 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.
- 9 -
<PAGE>
TAXES
Each Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. 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 the Fund.
On the application or other appropriate form, each of 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.
DISTRIBUTION PLAN
Each Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (the "Plan") under which each Fund is
authorized to incur distribution expenses at an annual rate of 0.25% of the
average daily net assets of the Fund. All distribution expenses incurred by a
Fund under its Plan are Fund expenses, but they are paid by the Advisor pursuant
to the management agreement. The expenses may include payments to securities
dealers and others that are engaged in the sale of shares of the Fund or
advising shareholders regarding the purchase or retention of shares of the Fund;
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, each Fund may, under its Plan, make payments
to selected dealers and others which have entered into Service Agreements for
services provided to shareholders of the Fund. The services provided by selected
dealers and others pursuant to each Plan are 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 services provided pursuant to each Plan also may include
support services to the Fund such as establishing and maintaining shareholders'
- 10 -
<PAGE>
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.
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 retains various organizations to perform
specialized services. The Trust retains Martin Capital Advisors, 812 San Antonio
Street, Suite G14, Austin, Texas 78701 (the "Advisor") to manage the assets of
each Fund. The Advisor is a sole proprietorship owned by Paul Martin. Each Fund
is authorized to pay the Advisor a fee equal to an annual average rate of 1.25%
of the Fund's 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 Funds' expenses, except those specified above, are paid by
the Advisor.
Paul Martin and Chris Martin are responsible for the day-to-day
management of the Austin Opportunity Fund and the Texas Opportunity Fund and
Paul Martin is responsible for the day-to-day management of the U.S. Opportunity
Fund. Paul Martin is the owner and Chief Investment Officer of the Advisor, a
registered investment advisor managing investment portfolios for long-term
income and capital appreciation. As of ______ 1998, the firm manages over $30
million for individuals, trusts and pension plans. Prior to establishing Martin
Capital Advisors in November 1988, Mr. Martin worked four years as a stockbroker
in New York City, managing investment accounts at Merrill Lynch and Oppenheimer
& Company. Mr. Martin served seven years active duty with the U.S. Army and U.S.
Navy. He also served thirteen years with the U.S. Naval Reserve, which included
eight years with Naval Special Warfare and a two year assignment as the
Commanding Officer of Naval Reserve SEAL Delivery Vehicle Team Two. He retired
as a Commander in October, 1998. He has a B.A. degree in liberal arts from St.
John's College in Santa Fe, New Mexico.
Chris Martin, CFA, has been affiliated with the Advisor since 1991. He
is also Chief Investment Officer of CGM Investment Management, a registered
investment advisor. Mr. Martin established CGM Investment Management in January
1998 after working more than six years as research director of Martin Capital
Advisors. As of ________ 1998, the firm manages approximately $__ million of
long-term investment capital for individuals, trusts and pension plans. Chris
Martin is a CPA with a year and a half experience as a Tax Senior with Arthur
Young & Company in Houston, Texas. Mr. Martin has an M.B.A. degree in finance
from The University of Texas at Austin, and a B.B.A. degree in accounting and
finance from Texas A&M University.
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. The Administrator receives a monthly
fee from the Advisor equal to an annual average rate of 0.10% of each Fund's
average daily net assets up to fifty million dollars, 0.075% of each Fund's
average daily net assets from fifty to one hundred million dollars and 0.050% of
each Fund's average daily net assets over one hundred million
- 11 -
<PAGE>
dollars (subject to a minimum annual payment of $20,000). The Funds retain
Unified Fund Services, Inc., 431 North Pennsylvania Street, Indianapolis,
Indiana 46204 (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 Funds' 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
a Fund as a factor in the selection of brokers and dealers to execute portfolio
transactions.
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS
This section contains general information about various types of
securities and investment techniques that the Funds may purchase or employ. The
Statement of Additional Information provides more information.
Equity Securities. Equity securities consist of common stock, convertible
preferred stock, convertible bonds, 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 include 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.
Equity securities also include common stocks and common stock
equivalents of domestic real estate investment trusts ("REITS") and other
companies which operate as real estate corporations or which have a significant
portion of their assets in real estate. A Fund will not acquire any direct
ownership of real estate.
Each Fund may invest up to 35% of its assets in foreign equity
securities, including American Depository Receipts ("ADRs"). ADRs are
certificates evidencing ownership of shares of a foreign- based issuer held in
trust by a bank or similar financial institution. They are alternatives to the
direct purchase of the underlying securities in their national markets and
currencies. To the extent that the Fund does invest in foreign securities, such
investments may be subject to special risks. 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 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
- 12 -
<PAGE>
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.
Investments in equity securities are subject to inherent market risks
and fluctuations in value due to earnings, economic conditions and other factors
beyond the control of the Advisor. As a result, the return and net asset value
of a Fund will fluctuate. Securities in a Fund's portfolio may not increase as
much as the market as a whole and some undervalued securities may continue to be
undervalued for long periods of time. Although profits in some Fund holdings may
be realized quickly, it is not expected that most investments will appreciate
rapidly.
Fixed Income Securities. Each Fund may invest in fixed income securities. Each
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 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 dept 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. Each Fund may invest up to 5% of its assets in
corporate debt rated 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.
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
- 13 -
<PAGE>
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. Each 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, each 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.
Reverse Repurchase Agreements. Each Fund may invest in reverse repurchase
agreements. Reverse repurchase agreements involve sales of portfolio securities
by a Fund to member banks of the Federal Reserve System, or recognized 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 the event of bankruptcy
or other default by the purchaser, the Fund could experience both delays in
repurchasing the portfolio securities and losses.
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 portfolio 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 a Fund's securities and the Fund's net
asset value. 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.
Investment In Relatively New Issues. Each Fund intends to invest occasionally in
the common stock of selected new issuers. If a Fund invests in credit
instruments of relatively new issuers, it will only be in those issues where the
Advisor believes there are strong covenant protections for the holder. If
issuers meet the investment criteria discussed above, the Fund may invest in
securities without respect to the age of the issuer. Investments in relatively
new issuers, i.e., those having continuous operating histories of less than
three years, may carry special risks and may be more speculative because such
companies are relatively unseasoned. Such companies may also lack sufficient
resources,
- 14 -
<PAGE>
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.
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.
Options on Stocks or Bonds. Each Fund may write and purchase 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.
Options on Stock and Bond Indices. 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."
Successful use by a Fund of options on security indices will be subject to the
Advisor's ability to predict correctly movement in the direction of the security
market generally or of a particular industry. This requires different skills and
techniques than predicting changes in the price of individual securities.
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
- 15 -
<PAGE>
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. 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 if immediately thereafter its margin deposits on its
outstanding Futures Contracts, other than Futures Contracts used for hedging
purposes, would exceed 5% of the market value of the Fund's total assets.
Short Sales. Each Fund may a 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, each Fund will be required to
maintain a segregated account with the Custodian of cash or high grade liquid
assets equal to the market value of the securities sold less any collateral
deposited with its broker. Each Fund will limit its short sales so that no more
than 20% 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.
General. Each Fund may invest up to 5% of its net assets in each of
the following: mortgage-backed securities, zero coupon municipal securities,
zero coupon treasuries (also known as STRIPS), floating rate bonds, foreign
currency futures and exchange transactions, and options on foreign currencies.
Each Fund may also invest up to 5% of its net assets in illiquid securities
including Rule 144A securities (unregistered securities that can be resold to
institutions only under SEC Rule 144A).
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 - 16 -
<PAGE>
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. No 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 the portfolio turnover of each Fund will not exceed 100%
annually.
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. Prior to the offering made by this Prospectus, ___________ purchased for
investment all of the outstanding shares of each Fund and may be deemed to
control the Fund.
Each Fund acknowledges that it is solely responsible for the
information 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
therefor. 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.
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 advertise performance information (a
"non-standardized quotation") which is calculated differently from "average
annual total return." A non-standardized quotation of total return may be a
cumulative return which measures the percentage change in the value of an
account between the beginning and end of a period, assuming no activity in the
account other than reinvestment of dividends and capital gains distributions. A
non-standardized quotation may also be an average annual compounded rate of
return over a specified period, which may be a period different from those
specified for "average annual total return." In addition, a non-standardized
quotation may be an indication of 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. A non-standardized quotation will always be accompanied by the
Fund's "average annual total return" as described above.
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
- 17 -
<PAGE>
performance including the Standard & Poor's (S&P) 500 Index, the NASDAQ
Composite Index and the Dow Jones Industrial Average.
- 18 -
<PAGE>
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.
Investment Advisor
Martin Capital Advisors
812 San Antonio Street
Suite G14
Austin, TX 78701
Legal Counsel Administrator
Brown, Cummins & Brown Co., L.P.A. AmeriPrime Financial Services, Inc.
3500 Carew Tower, 441 Vine Street 1793 Kingswood Drive, Suite 200
Cincinnati, OH 45202 Southlake, Texas 76092
Custodian Distributor
Star Bank, N.A. AmeriPrime Financial Securities, Inc.
425 Walnut Street, M.L. 6118 1793 Kingswood Drive, Suite 200
Cincinnati, Ohio 45202 Southlake, Texas 76092
Transfer Agent (all purchases and Independent Auditors
all redemption requests) ___________________________
Unified Fund Services, Inc. ___________________________
431 North Pennsylvania Street ___________________________
Indianapolis, Indiana 46204
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 a
Fund. This Prospectus does not constitute an offer by any of the Funds to sell
its shares in any state to any person to whom it is unlawful to make such offer
in such state.
- 19 -
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY OF FUND EXPENSES.......................................................
Shareholder Transaction Expenses......................................
THE FUNDS......................................................................
INVESTMENT OBJECTIVE AND STRATEGIES...........................................
HOW TO INVEST IN THE FUNDS.....................................................
Initial Purchase.....................................................
Additional Investments...............................................
Tax Sheltered Retirement Plans.......................................
Other Purchase Information............................................
HOW TO REDEEM SHARES...........................................................
SHARE PRICE CALCULATION........................................................
DIVIDENDS AND DISTRIBUTIONS...................................................
TAXES .....................................................................
DISTRIBUTION PLAN.............................................................
OPERATION OF THE FUNDS........................................................
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS....................
Equity Securities....................................................
Fixed Income Securities..............................................
When-Issued and Delayed Delivery Securities..........................
Repurchase Agreements................................................
Investment Companies.................................................
Reverse Repurchase Agreements........................................
Leverage.............................................................
Investment In Relatively New Issues..................................
Derivatives..........................................................
Options on Stocks or Bonds...........................................
Options on Stock and Bond Indices....................................
Futures Contracts on Stock and Bond Indices..........................
Short Sales .........................................................
General..............................................................
GENERAL INFORMATION...........................................................
Fundamental Policies.................................................
Portfolio Turnover...................................................
Shareholder Rights...............................................
- 20 -
<PAGE>
PERFORMANCE INFORMATION........................................................
- 21 -
<PAGE>
Martin Capital Funds
Supplement Dated __________, 1998
to Prospectus Dated ___________, 1998
SPECIAL OFFERING PERIOD: It is anticipated that the initial public
offering of the Austin Opportunity Fund, the Texas Opportunity Fund and the U.S.
Opportunity Fund (the "Funds") will occur on __________, 1998. Investors may
arrange to purchase shares of one or more of the Funds by subscribing for the
purchase on or before ___________, 1998. To arrange for the subscription and
purchase, contact the Funds' transfer agent, Unified Fund Services, Inc. at
1-800-_______. All subscriptions for shares of a Fund will be deposited in an
interest-bearing escrow account. On ____________, 1998, each subscriber's
subscription amount, plus the prorated share of the interest earned in the
escrow account, will be used to purchase full or fractional shares of the Fund.
The escrow account will be maintained with Star Bank, N.A., the Funds'
custodian. Shares purchased by subscription will be subject to the Funds'
minimum initial investment requirement and will carry the same rights and
privileges as shares purchased subsequent to the special offering period.
This Supplement and the Prospectus dated _____________, 1998 provide
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
____________, 1998, which is incorporated herein by reference and can be
obtained without charge by calling the transfer agent at the phone number listed
above.
<PAGE>
MARTIN CAPITAL FUNDS
Austin Opportunity Fund
Texas Opportunity Fund
U.S. Opportunity Fund
STATEMENT OF ADDITIONAL INFORMATION
____________________, 1998
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of Austin Opportunity Fund, Texas
Opportunity Fund and U.S. Opportunity Fund dated ________________, 1998. A copy
of the Prospectus can be obtained by writing the Transfer Agent at 431 North
Pennsylvania Street, Indianapolis, Indiana 46204, or by calling 1-888-4MARTIN
(1-888-462-7846).
ASA03141-090898-5
<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 ADVISOR........................................................8
TRUSTEES AND OFFICERS.........................................................8
PORTFOLIO TRANSACTIONS AND BROKERAGE..........................................9
DETERMINATION OF SHARE PRICE.................................................10
INVESTMENT PERFORMANCE.......................................................11
CUSTODIAN....................................................................12
TRANSFER AGENT...............................................................12
ACCOUNTANTS..................................................................12
DISTRIBUTOR..................................................................12
-2-
<PAGE>
DESCRIPTION OF THE TRUST
The Austin Opportunity Fund, Texas Opportunity Fund and U.S.
Opportunity Fund (each a "Fund" or collectively, the "Funds") were organized as
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. Each 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 been titled 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.
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. American Depository Receipts (ADRs). ADRs are subject to risks
similar to those associated with direct investment in foreign securities. For
example, 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.
-3-
<PAGE>
B. Leveraging. Leveraging a Fund creates an opportunity for increased
net income but, at the same time, creates special risk considerations. For
example, leveraging may exaggerate changes in the net asset value of Fund shares
and in the yield on the Fund's portfolio. Although the principal of such
borrowings will be fixed, the Fund's assets may change in value during the time
the borrowing is outstanding. Leveraging will create interest expenses for the
Fund which can exceed the income from the assets retained. To the extent the
income derived from securities purchased with borrowed funds exceeds the
interest the Fund will have to pay, the Fund's net income will be greater than
if leveraging were not used. Conversely, if the income from the assets retained
with borrowed funds is not sufficient to cover the cost of leveraging, the net
income of the Fund will be less than if leveraging were not used, and therefore
the amount available for distribution to shareholders will be reduced.
C. Option Transactions. The Funds may engage in option transactions
involving individual stocks and bonds as well as stock and bond indexes. 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 indexes. 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. Call options on securities which the Funds sell (write)
will be covered or secured, which means that the Fund will own the underlying
security in the case of a call option. The Funds will sell (write) put options
only if the Fund is selling an equivalent amount of the same security short.
When the Funds write options, they may be required to maintain a margin account,
to pledge the underlying securities or U.S. government obligations or to deposit
assets in escrow with the Custodian. The Funds may also utilize spreads and
straddle strategies. A spread is the difference in price resulting from a
combination of put and call options within the same class on the same underlying
security. A straddle strategy consists of an equal number of put and call
options on the same underlying stock, stock index, or commodity future at the
same strike price and maturity date.
The purchase and writing of options involves certain risks. The
purchase of options limits a Fund's potential loss to the amount of the premium
paid and can afford a 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 a Fund losing a greater percentage of its investment than if the
transaction were effected directly. When a 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 a Fund writes a put option, it will
assume the risk that the price of the underlying security or instrument will
fall below the exercise price, in which case the Fund may be required to
purchase the security or instrument at a higher price than the market price of
the security or instrument. In addition, there can be no assurance that a Fund
can effect a closing transaction on a particular option it has written. Further,
the total premium paid for any option may be lost if the Fund does not exercise
the option or, in the case of over-the-counter options, the writer does not
perform its obligations.
-4-
<PAGE>
D. Floating Rate, Inverse Floating Rate, and Index Obligations. Each
Fund may invest 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 securities may be backed by U.S. Government or
corporate issuers, or by collateral such as mortgages. The indices and prices
upon which such securities can be based include interest rates, currency rates
and commodities prices. However, the Funds will not invest in any instrument
whose value is computed based on a multiple of the change in price or value of
an asset or an index of or relating to assets in which the Funds cannot or will
not invest.
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. 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. No Fund will
invest more than 5% of its total assets in inverse floating rate securities.
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. 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 may be realized.
The risk of index obligations depends on the volatility of the underlying index,
the coupon payment and the maturity of the obligation.
E. Real Estate Investment Trust. A real estate investment trust
("REIT") is a corporation or business trust that invests substantially all of
its assets in interests in real estate. Equity REITs are those which purchase or
lease land and buildings and generate income primarily from rental income.
Equity REITs may also realize capital gains (or losses) when selling property
that has appreciated (or depreciated) in value. Mortgage REITs are those which
invest in real estate mortgages and generate income primarily from interest
payments on mortgage loans. Hydrid REITs generally invest in both real property
and mortgages. In addition, REITs are generally subject to risks associated with
direct ownership of real estate, such as decreases in real estate values or
fluctuations in rental income caused by a variety of factors, including
increases in interest rates, increases in property taxes and other operating
costs, casualty or condemnation losses, possible environmental liabilities and
changes in supply and demand for properties. Risks associated with REIT
investments include the fact that equity and mortgage REITs are dependent upon
specialized management skills and are not fully diversified. These
characteristics subject REITs to the risks associated with financing a limited
number of projects. They are also subject to heavy cash flow dependency,
defaults by borrowers, and self-liquidation. Additionally, equity REITs may be
affected by any changes in the value of the underlying property owned by the
trusts, and mortgage REITs may be affected by the quality of any credit
extended.
F. Zero Coupon Treasuries and Municipal Securities. Zero coupon
securities are (i) notes or debentures which do not pay current interest and are
issued at substantial discounts from par value, or (ii) notes or debentures that
pay current interest until a stated date one or more years into the future,
after which the issuer is obligated to pay interest until maturity, usually at a
higher rate than if interest were payable from the date of issuance.
The Federal Reserve creates zero coupon treasuries, also known
as 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. A broker-dealer
creates a derivative zero by depositing a Treasury security with a custodian for
-5-
<PAGE>
safekeeping and then selling the coupon payments and principal payment that will
be generated by this security separately. Examples are Certificates of Accrual
on Treasury Securities (CATs), Treasury Investment Growth Receipts (TIGRs) and
generic Treasury Receipts (TRs). These derivative zero coupon obligations are
not considered to be government securities unless they are part of the STRIPS
program. Original issue zeros are zero coupon securities issued directly by the
U.S. Government, a government agency, or by a corporation.
Zero coupon municipal securities are long and short term debt
obligations issued by or on behalf of states, territories and possessions of the
United States, the District of Columbia and their political subdivisions,
agencies, instrumentalities and authorities, as well as other qualifying issuers
(including the U.S. Virgin Islands, Puerto Rico and Guam), the income from which
is exempt from regular federal income tax and exempt from state tax in the state
of issuance. Each Fund will accrue income on such securities for tax and
accounting purposes, in accordance with applicable law. This income will be
distributed 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 a zero coupon security does not
pay current income, its price can be very volatile when interest rates change.
In calculating its dividend, the Funds take into account as income a portion of
the difference between a zero coupon security's purchase price and its face
value.
Municipal securities are issued to obtain funds to construct,
repair or improve various public facilities such as airports, bridges, highways,
hospitals, housing, schools, streets and water and sewer works, to pay general
operating expenses or to refinance outstanding debts. They also may be issued to
finance various private activities, including the lending of funds to public or
private institutions for construction of housing, educational or medical
facilities or the financing of privately owned or operated facilities. Municipal
securities consist of tax exempt bonds, tax exempt notes and tax exempt
commercial paper. Tax exempt notes generally are used to provide short term
capital needs and generally have maturities of one year or less. Tax exempt
commercial paper typically represents short term, unsecured, negotiable
promissory notes.
The two principal classifications of municipal securities are
"general obligations" and "revenue" bonds. General obligation bonds are backed
by the issuer's full credit and taxing power. Revenue bonds are backed by the
revenues of a specific project, facility or tax. Industrial development revenue
bonds are a specific type of revenue bond backed by the credit of the private
issuer of the facility, and therefore investments in these bonds have more
potential risk that the issuer will not be able to meet scheduled payments of
principal and interest.
G. Mortgage-Backed Securities. Mortgage-backed 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
Funds will only invest in pools of mortgage loans assembled for the sale to
investors by agencies or instrumentalities of the U.S. government and will limit
their investment to 5% of net assets. Unscheduled or early payments on the
underlying mortgages may shorten the securities' effective maturities.
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
-6-
<PAGE>
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 Funds 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). [None of the Funds 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 Funds 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 Funds will reduce the share price of each Fund to the
extent the market value of the securities at the time of prepayment exceeds
their par value. Furthermore, the prices of mortgage-backed 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 Funds at lower rates of return.
H. Foreign Currency Exchange Transactions. The Funds may hold foreign
currency deposits from time to time, and may convert dollars and foreign
currencies in the foreign exchange markets. Currency conversion involves dealer
spreads and other costs, although commissions usually are not charged.
Currencies may be exchanged on a spot (i.e., cash) basis, or by entering into
forward contracts to purchase or sell foreign currencies at a future date and
price. Forward contracts generally are traded in an interbank market conducted
directly between currency traders (usually large commercial banks) and their
customers. The parties to a forward contract may agree to offset or terminate
the contract before its maturity, or may hold the contract to maturity and
complete the contemplated currency exchange.
-7-
<PAGE>
The Funds may use currency forward contracts to manage
currency risks and to facilitate transactions in foreign securities. The
following discussion summarizes the principal currency management strategies
involving forward contracts that could be used by any Fund.
In connection with purchases and sales of securities
denominated in foreign currencies, a Fund may enter into currency forward
contracts to fix a definite price for the purchase or sale in advance of the
trade's settlement date. This technique is sometimes referred to as a
"settlement hedge" or "transaction hedge." A Fund also could enter into forward
contracts to purchase or sell a foreign currency in anticipation of future
purchases or sales of securities denominated in foreign currency, even if the
specific investments have not yet been selected by the Advisor.
The Funds also may use forward contracts to hedge against a
decline in the value of existing investments denominated in foreign currency.
For example, if a Fund owned securities denominated in Deutschemarks, it could
enter into a forward contract to sell Deutschemarks in return for U.S. dollars
to hedge against possible declines in the Deutschemark's value. Such a hedge
(sometimes referred to as a "position hedge") would tend to offset both positive
and negative currency fluctuations, but would not offset changes in security
values caused by other factors. A Fund also could hedge the position by selling
another currency expected to perform similarly to the Deutschemark -- for
example, by entering into a forward contract to sell Deutschemarks or European
Currency Units in return for U.S. dollars. This type of hedge, sometimes
referred to as a "proxy hedge," could offer advantages in terms of cost, yield,
or efficiency, but generally will not hedge currency exposure as effectively as
a simple hedge into U.S. dollars. Proxy hedges may result in losses if the
currency used to hedge does not perform similarly to the currency in which the
hedge securities are denominated.
Under certain conditions, SEC guidelines require mutual funds
to segregate cash and appropriate liquid assets to cover currency forward
contracts. As required by SEC guidelines, the Funds will segregate cash or U.S.
Government securities or other high-grade liquid debt securities to cover
currency forward contracts, if any, whose purpose is essentially speculative.
The Funds will not segregate assets to cover forward contracts entered into for
hedging purposes, including settlement hedges, position hedges, and proxy
hedges. In segregating assets, the Funds' custodian or a designated subcustodian
either places such assets in a segregated account or separately identifies such
assets and renders them unavailable for investment by the Funds.
Successful use of forward currency contracts will depend on
the Advisor's skill in analyzing and predicting currency values. Forward
contracts may change the Funds' currency exchange rates substantially, and could
result in losses to the Funds if currencies do not perform as the Advisor
anticipates. For example, if a currency's value rose at a time when the Advisor
had hedged a Fund by selling currency in exchange for dollars, the Fund would be
unable to participate in the currency's appreciation. If the Advisor hedges
currency exposure through proxy hedges, the Fund could realize currency losses
from the hedge and the security position at the same time if the two currencies
do not move in tandem. Similarly, if the Advisor increases a Fund's exposure to
a foreign currency, and that currency's value declines, the Fund will realize a
loss. There is no assurance that the Advisor's use of forward currency contracts
will be advantageous to any of the Funds or that the Advisor will hedge at an
appropriate time.
I. Options and Futures 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
-8-
<PAGE>
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.
Currency futures contracts are similar to forward currency
exchange contracts, except that they are traded on exchanges (and have margin
requirements) and are standardized as to contract size and delivery date. Most
currency futures contracts call for payment or delivery in U.S. dollars. Each
Fund may purchase and sell currency futures to increase or decrease its exposure
to different foreign currencies. Currency futures can be expected to correlate
with exchange rates, but may not reflect other factors that affect the value of
a Fund's investments. A currency hedge, for example, should protect a
Yen-denominated security from a decline in the Yen, but will not protect a Fund
against a price decline resulting from deterioration in the issuer's
creditworthiness. Because the value of a Fund's foreign-denominated investments
change in response to many factors other than exchange rates, it may not be
possible to match the amount of currency futures to the value of the Fund's
investments exactly over time.
J. 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. Restricted securities are securities the resale of which is subject
to legal or contractual restrictions. Restricted securities may be sold only in
privately negotiated transactions, in a public offering with respect to which a
registration statement
-9-
<PAGE>
is in effect under the Securities Act of 1933 or pursuant to Rule 144 or Rule
144A promulgated under such Act. Where registration is required, the Fund may be
obligated to pay all or part of the registration expense, and a considerable
period may elapse between the time of the decision to sell and the time such
security may be sold under an effective registration statement. If during such a
period adverse market conditions were to develop, the Fund might obtain a less
favorable price than the price it could have obtained when it decided to sell.
K. Futures Contracts. When a Fund purchases a futures contract, it
agrees to purchase a specified underlying instrument at a specified future date.
When a Fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and sale
will take place is fixed when the Fund enters into the contract. Futures can be
held until their delivery dates, or can be closed out before then if a liquid
secondary market is available.
The value of a futures contract tends to increase and decrease
in tandem with the value of its underlying instrument or precious metal.
Therefore, purchasing futures contracts will tend to increase a Fund's exposure
to positive and negative price fluctuations in the underlying instrument, much
as if it had purchased the underlying instrument directly. When a Fund sells a
futures contract, by contrast, the value of its futures position will tend to
move in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive an negative market price changes,
much as if the underlying instrument or precious metal had been sold.
L. Debt Securities. Lower quality corporate 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. No Fund will invest
more than 5% of the value of its net assets in junk bonds.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to each Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of each 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 Funds 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
-10-
<PAGE>
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 Funds 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 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.
3. Underwriting. The Funds 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 Funds 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 Funds 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 Funds 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. No Fund will 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
-11-
<PAGE>
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).
1. Pledging. The Funds 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.
2. Borrowing. No Fund will purchase any security while borrowings
(including reverse repurchase agreements) representing more than one third of
its total assets are outstanding.
3. Margin Purchases. No Fund will purchase securities or evidences of
interest thereon on "margin." This limitation is not applicable to short term
credit obtained by a 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.
4. Options. No Fund will purchase or sell puts, calls, options or
straddles except as described in the Funds' Prospectus and Statement of
Additional Information.
5. Illiquid Investments. No Fund will invest more than 5% of its net
assets in securities for which there are legal or contractual restrictions on
resale and other illiquid securities.
6. Loans of Portfolio Securities. No Fund will make loans of portfolio
securities.
THE INVESTMENT ADVISOR
The investment advisor to each Fund is Paul B. Martin, Jr., doing
business as Martin Capital Advisors, 812 San Antonio Street, Suite G14, Austin,
Texas 78701 (the "Advisor"). Under the terms of the management agreement (the
"Agreement"), the Advisor manages each Fund's investments subject to approval of
the Board of Trustees and pays all of the expenses of each 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, each Fund is obligated to pay the
Advisor a fee computed and accrued daily and paid monthly at an annual rate of
1.25% 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.
The Advisor retains the right to use the names "Austin Opportunity,"
"Texas Opportunity" and "U.S. Opportunity" 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 names "Austin Opportunity," "Texas
Opportunity" and "U.S. Opportunity" automatically ceases ninety days after
termination of the Agreement and may be withdrawn by the Advisor on ninety days
written notice.
-12-
<PAGE>
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.
<TABLE>
<CAPTION>
===================================================================================================================================
Name, Age and Address Position Principal Occupations During Past 5 Years
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
*Kenneth D. Trumpfheller President President, Treasurer and Secretary of AmeriPrime Financial
Age: 40 and Trustee Services, Inc., the Fund's administrator, and AmeriPrime
1793 Kingswood Drive Financial Securities, Inc., the Fund's distributor. Prior to
Suite 200 December, 1994, a senior client executive with SEI
Southlake, Texas 76092 Financial Services.
- -----------------------------------------------------------------------------------------------------------------------------------
Julie A. Feleo Secretary, Secretary, Treasurer and Chief Financial Officer of
Age: 32 Treasurer AmeriPrime Financial Services, Inc. and AmeriPrime
1793 Kingswood Drive Financial Securities, Inc.; Fund Reporting Analyst at Fidelity
Suite 200 Investments from 1993 to 1997; Fund Accounting Analyst at
Southlake, Texas 76092 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 and
Age: 41 gas services company; various positions with Carbo Ceramics,
2001 Indianwood Avenue Inc., oil field manufacturing/supply company, from 1984 to
Broken Arrow, OK 74012 1997, most recently Vice President of Marketing.
- -----------------------------------------------------------------------------------------------------------------------------------
Gary E. Hippenstiel Trustee Director, Vice President and Chief Investment Officer of
Age: 51 Legacy Trust Company since 1992; President and Director of
600 Jefferson Street Heritage Trust Company from 1994-1996; Vice President and
Suite 350 Manager of Investments of Kanaly Trust Company from 1988
Houston, TX 77063 to 1992.
===================================================================================================================================
</TABLE>
-13-
<PAGE>
The compensation paid to the Trustees of the Trust for the fiscal year
ended October 31, 1998 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>
<S> <C> <C> <C>
=====================================================================================================
Aggregate Total Compensation
Compensation from Trust (the Trust is
Name from Trust not in a Fund Complex)
- -----------------------------------------------------------------------------------------------------
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 each Fund's portfolio decisions and the placing
of each Fund's portfolio transactions. In placing portfolio transactions, the
Advisor seeks the best qualitative execution for each 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 Funds 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 Funds effect 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
Funds. Although research services and other information are useful to the Funds
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 Funds
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.
-14-
<PAGE>
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.
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of each 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.
In addition to providing average annual total return, the Funds may
also provide non-standardized quotations of total return for differing periods
and may provide the value of a $10,000 investment (made on the date of the
initial public offering of the Funds' shares) as of the end of a specified
period.
Each 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 each 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.
-15-
<PAGE>
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of any of the
Funds may be compared to indices of broad groups of unmanaged securities
considered to be representative of or similar to the portfolio holdings of the
Funds or considered to be representative of the stock market in general. The
Funds may use the Standard & Poor's 500 Stock Index, the NASDAQ Composite Index
or the Dow Jones Industrial Average.
In addition, the performance of any of the Funds 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 any of the Funds. 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 Funds' investments. The Custodian acts as the Funds'
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Funds' request and
maintains records in connection with its duties.
TRANSFER AGENT
Unified Fund Services, Inc., 431 North Pennsylvania Street,
Indianapolis, Indiana 46204, acts as the Funds' 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 Funds' shares, acts as dividend and distribution disbursing
agent and performs other accounting and shareholder service functions. In
addition, Unified Fund Services, Inc., provides the Funds with certain monthly
reports, record-keeping and other management-related services.
ACCOUNTANTS
[TO BE SUPPLIED]
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the exclusive agent for distribution of shares of the
Funds. The Distributor is obligated to sell the shares of the Funds on a best
efforts basis only against purchase orders for the shares. Shares of the Funds
are offered to the public on a continuous basis.
-16-
<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. 17 /X/
------- --
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / /
--
Amendment No. 18 /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 Dr., Suite 200, Southlake, TX 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
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b) / / on pursuant
to paragraph (b) / / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1) /X/ 75 days after filing
pursuant to paragraph (a)(2) / / on (date) pursuant to paragraph (a)(2)
of Rule 485
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
Title of Securities Being Registered: Shares
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.
ASA030EC-090898-3
AmeriPrime Funds
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements.
Included in Part A: None.
Included in Part B: None.
(b) Exhibits
(1) (i) Copy of Registrant's Declaration of
Trust, which was filed as an
Exhibit to Registrant's
Post-Effective Amendment No. 11, is
hereby incorporated by reference.
(ii) Copy of Amendment No. 1 to
Registrant's Declaration of Trust,
which was filed as an Exhibit to
Registrant's Post-Effective
Amendment No. 11, is hereby
incorporated by reference.
(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
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
Post-Effective Amendment No. 8, are
hereby incorporated by reference.
(viii) Copy of Amendment No. 7 to
Registrant's Declaration of Trust,
which was filed as an Exhibit to
Registrant's Post-Effective
Amendment No.11, is hereby
incorporated by reference.
(ix) Copy of Amendment No. 8 to
Registrant's Declaration of Trust,
which was filed as an Exhibit to
Registrant's Post-Effective
Amendment No. 12, is hereby
incorporated by reference.
(x) Copy of Amendment No. 9 to
Registrant's Declaration of Trust
which was filed as an Exhibit to
Registrant's Post-Effective
Amendment No. 15, is hereby
incorporated by reference.
<PAGE>
(xi) Copy of Amendment No. 10 to
Registrant's Declaration of
Trust,which was filed as an Exhibit
to Registrant's Post-Effective
Amendment No. 16, is hereby
incorporated by reference.
(xii) Copy of Amendment No. 11 to
Registrant's Declaration of Trust is
filed herewith.
(2) Copy of Registrant's By-Laws, which was
filed as an Exhibit to Registrant's
Post-Effective Amendment No. 11, is hereby
incorporated by reference.
(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, which was
filed as an Exhibit to Registrant's
Post-Effective Amendment No. 11, is
hereby incorporated by reference.
(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
Post-Effective 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, which
was filed as an Exhibit to
Registrant's Post-Effective
Amendment No. 11, is hereby
incorporated by reference.
(iv) Copy of Registrant's Management
Agreement with GLOBALT, Inc.,
Adviser to GLOBALT Growth Fund,
which was filed as an Exhibit to
Registrant's Post-Effective
Amendment No. 11, is hereby
incorporated
by reference.
(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.
(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
<PAGE>
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"), which was filed as an
Exhibit to Registrant's
Post-Effective Amendment No. 12, is
hereby incorporated by reference.
(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.
(xi) Copy of Registrant's Management
Agreement with Burroughs &
Hutchinson, Inc., Advisor to the
Marathon Value Fund, which was filed
as an Exhibit to Registrant's
Post-Effective Amendment No. 15, is
hereby incorporated by reference.
(xii) Copy of Registrant's proposed
Management Agreement with The Jumper
Group, Inc., Adviser to the Jumper
Strategic Reserve Fund, which was
filed as an Exhibit to Registrant's
Post-Effective Amendment No. 13, is
hereby incorporated by reference.
(xiii) Copy of Registrant's Management
Agreement with Appalachian Asset
Management, Inc., Advisor to the AAM
Equity Fund, is filed herewith.
(xiv) Copy of Registrant's proposed
Management Agreement with Paul B.
Martin, Jr. d/b/a Martin Capital
Advisors, Advisor to the Austin
Opportunity Fund, is filed herewith.
(xv) Copy of Registrant's proposed
Management Agreement with Paul B.
Martin, Jr. d/b/a Martin Capital
Advisors, Advisor to the Texas
Opportunity Fund, is filed herewith.
(xvi) Copy of Registrant's proposed
Management Agreement with Paul B.
Martin, Jr. d/b/a Martin Capital
Advisors, Advisor to the U.S.
Opportunity Fund, is filed herewith.
(6) (i) 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.
(ii) Copy of Registrant's proposed
Underwriting Agreement with
AmeriPrime Financial Securities,
Inc. and OMNI Financial Group, LLC,
which was filed as an Exhibit to
Registrant's Post-Effective
Amendment No. 12, is hereby
incorporated by reference.
<PAGE>
(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.,
which was filed as an Exhibit to
Registrant's Post-Effective
Amendment No. 11, is hereby
incorporated by reference.
(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., which was filed as an
Exhibit to Registrant's Post-Effective
Amendment No. 11, is hereby incorporated by
reference.
(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 Accountant - None.
(12) Financial Statements Omitted from Item 23 -
None.
(13) Copy of Letter of Initial Stockholders,
which was filed as an Exhibit to
Registrant's Post-Effective Amendment No.
11, is hereby incorporated by reference.
(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 (now the NewCap
Contrarian Fund), which was filed as
an Exhibit to Registrant's
Post-Effective Amendment No. 1, is
hereby incorporated by reference.
(ii) Form of Registrant's Rule 12b-1
Service Agreement which was filed as
an Exhibit to Registrant's
Post-Effective Amendment No. 1, is
hereby incorporated by reference.
(iii) Copy of Registrant's Rule 12b-1
Distribution Plan for the Austin
Opportunity Fund is filed herewith.
(iv) Copy of Registrant's Rule 12b-1
Distribution Plan for the Texas
Opportunity Fund is filed herewith.
(v) Copy of Registrant's Rule 12b-1
Distribution Plan for the U.S.
Opportunity Fund is filed herewith.
(16) Schedules for Computation of Each
Performance Quotation, which was filed as
an Exhibit to Registrant's Post-Effective
Amendment No. 12, is hereby
incorporated by reference.
(17) Financial Data Schedule - None.
<PAGE>
(18) Rule 18f-3 Plan for the Carl Domino Equity
Income Fund, which was filed as
an Exhibit to Registrant's Post-Effective
Amendment No. 16, is hereby
incorporated by reference.
(19) (i) Power of Attorney for Registrant
and Certificate with respect
thereto, which were filed as an
Exhibit to Registrant's
Post-Effective 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 August 7, 1998)
----------------------------------------------------------------------
The Carl Domino Associates, L.P., Profit Sharing Trust may be
deemed to control the Carl Domino Equity Income Fund; U.S. Trust
Company of Florida, as Trustee of the Killian Charitable Remainder
Unitrust, may be deemed to control the AIT Vision U.S. Equity
Portfolio; 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 August 7, 1998)
- -------- ------------------------------------------------------
Title of Class Number of Record
Holders
Carl Domino Equity Income Fund (Investor Class) 173
Carl Domino Equity Income Fund (Class A Shares) 0
Fountainhead Special Value Fund 128
AIT Vision U.S. Equity Portfolio 31
GLOBALT Growth Fund 81
NewCap Contrarian Fund 28
IMS Capital Value Fund 378
Florida Street Bond Fund 18
Florida Street Growth Fund 11
Corbin Small-Cap Value Fund 90
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
Marathon Value Fund 37
Jumper Strategic Reserve Fund 0
AAM Equity Fund 18
Austin Opportunity Fund 0
Texas Opportunity Fund 0
U.S. Opportunity Fund 0
<PAGE>
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 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.
<PAGE>
(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.
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.
<PAGE>
(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.
(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) Nicholas Lopardo, a director of AIT,
is the CEO of State Street Global
Advisors, Boston, Massachusetts.
(c) Bryan Stypul, CFO & Treasurer of
AIT, was the comptroller for Terra
Comm Communications, Clearwater,
Florida in 1996, and prior to that,
the CEO of Beacon Advisors, Treasure
Island, Florida.
(d) Raymond L. Killian, a director of
AIT, is the Chairman of the Board of
Investment Technology Group, Inc.,
900 3rd Avenue, New York, New
York.
(e) Marc Simmons, a director of AIT, is
a principal of State Street Global
Advisors.
(f) Alan Brown, a director of AIT, is
the CIO of State Street Global
Advisors.
(g) John Snow, a director of AIT, is the
managing director of State Street
Global Advisors. Prior to 1997, he
was the president of NatWest
Investment Advisers, Boston
Massachussetts.
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.
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.
<PAGE>
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.
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.
K. Burroughs & Hutchinson, Inc., 702 West Idaho Street, Suite
810, Boise, Idaho ("B&H"), advisor to Marathon Value Fund, is
a registered investment adviser.
(1) B&H 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
B&H during the past two years.
Mark R. Matsko, Vice President and Director of B&H,
was a broker with D.A. Davidson & Co., a
broker/dealer in Boise, Idaho, from 1994 to 1996.
<PAGE>
L. The Jumper Group, Inc., 1 Union Square, Suite 505,
Chattanooga, Tennessee 37402, ("Jumper"), Advisor to the
Jumper Strategic Reserve Fund, is a registered investment
advisor.
(1) Jumper has engaged in no other business during the past
two fiscal years.
(2) The following list set forth other substantial
business activities of the directors and officers of
Jumper during the past two years - None.
M. Appalachian Asset Management, Inc., 1018 Kanawha Blvd., East,
Suite 209, Charleston, WV 25301 ("AAM"), advisor to AAM Equity
Fund, is a registered investment advisor.
(1) AAM 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
AAM during the past two years - None.
N. Paul B. Martin, Jr. d/b/a Martin Capital Advisors, 812 San
Antonio, Suite G14, Austin, TX
78701 ("Martin"), advisor to Austin Opportunity Fund, Texas
Opportunity Fund, and U.S. Opportunity Fund,
is a registered investment advisor.
(1) Martin has engaged in no other business during the past
two fiscal years.
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 agents, American Data
Services, Inc., Hauppauge Corporate Center, 150 Motor Parkway,
Hauppauge, New York 11760 and Unified Fund Services, Inc., 431
Pennsylvannia Street, Indianapolis, IN 46204.
<PAGE>
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 Registrant's latest applicable annual report
to shareholders, upon request and without charge.
<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 9th day of
September, 1998.
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 September 9, 1998
Gary E. Hippenstiel, Trustee
<PAGE>
EXHIBIT INDEX
EXHIBIT
1. Amendment No. 11 to Declaration of Trust.......................EX-99.B1
2. Management Agreement for the AAM Equity Fund.................EX-99.B5.1
3. Proposed Management Agreement for the Austin Opportunity FundEX-99.B5.2
4. Proposed Management Agreement for the Texas Opportunity Fund.EX-99.B5.3
5. Proposed Management Agreement for the U.S. Opportunity Fund..EX-99.B5.4
6. Distribution Plan for the Austin Opportunity Fund...........EX-99.B15.1
7. Distribution Plan for the Texas Opportunity Fund............EX-99.B15.2
8. Distribution Plan for the U.S. Opportunity Fund.............EX-99.B15.3
<PAGE>
AmeriPrime Funds Amendment No.11
Agreement & 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
change the name of the "Jumper Strategic Reserve Fund" to the
"Jumper Strategic Advantage Fund".
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 agreement.
/s/
Steve L. Cobb
/s/
Gary Hippenstiel
<PAGE>
MANAGEMENT AGREEMENT
TO: Appalachian Asset Management, Inc.
1018 Kanawha Blvd., East, Suite 209
Charleston, WV 25301
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 AAM Equity 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 effective 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 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, excluding 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
- 45 -
<PAGE>
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 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 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 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 1.15% 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
- 46 -
<PAGE>
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.
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its execution,
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.
- 47 -
<PAGE>
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
"AAM" 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 "AAM" 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 "AAM" 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.
- 48 -
<PAGE>
(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 1018 Kanawha Blvd., East, Suite 209, Charleston, WV 25301.
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:Julie A Feleo Kenneth D. Trumpfheller, President
Treasurer
- 49 -
<PAGE>
May 19, 1998
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST: Appalachian Asset Management, Inc.
By
Name/Title:Theresa K Shawver Name/Title:Knox H. Fuqua, President
Investment Assistant
Dated: May 19, 1998
- 50 -
MANAGEMENT AGREEMENT
TO: Paul B. Martin, Jr. d/b/a Martin Capital Advisors
812 San Antonio, Suite G14
Austin, TX 78701
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 Austin Opportunity 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 effective 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 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, excluding 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
<PAGE>
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, including expenses incurred pursuant to the
Fund's Distribution Plan; and all other 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 1.25% 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
-2-
<PAGE>
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.
-3-
<PAGE>
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its execution,
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
"Austin Opportunity" belong 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 "Austin Opportunity" 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 "U.S. Opportunity" 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
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.
-4-
<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 the Securities and Exchange
Commission or its staff. In addition, where the effect of a requirement of the
Act, reflected in any provision of this Agreement is revised by rule,
regulation, order or interpretation of the Securities and Exchange Commission,
such provision shall be deemed to incorporate the effect of such rule,
regulation, order or interpretation.
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, TX 76092, and your address for this
purpose shall be 812 San Antonio, Suite G14, Austin, TX 78701.
-5-
<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
By
Kenneth D. Trumpfheller, President
Name/Title:___________________
Dated: ___________, 1998
ACCEPTANCE
The foregoing Agreement is hereby accepted.
Paul B. Martin, Jr.
ASA03148-090898-4
-6-
<PAGE>
MANAGEMENT AGREEMENT
TO: Paul B. Martin, Jr. d/b/a Martin Capital Advisors
812 San Antonio, Suite G14
Austin, TX 78701
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 Texas Opportunity 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 effective 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 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, excluding 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
<PAGE>
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, including expenses incurred pursuant to the
Fund's Distribution Plan; and all other 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 1.25% 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
-2-
<PAGE>
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.
-3-
<PAGE>
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its execution,
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
"Texas Opportunity" belong 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 "Texas Opportunity" 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 "Texas Opportunity" 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
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.
-4-
<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 the Securities and Exchange
Commission or its staff. In addition, where the effect of a requirement of the
Act, reflected in any provision of this Agreement is revised by rule,
regulation, order or interpretation of the Securities and Exchange Commission,
such provision shall be deemed to incorporate the effect of such rule,
regulation, order or interpretation.
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, TX 76092, and your address for this
purpose shall be 812 San Antonio, Suite G14, Austin, TX 78701.
-5-
<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
By
Kenneth D. Trumpfheller, President
Name/Title:___________________
Dated: ___________, 1998
ACCEPTANCE
The foregoing Agreement is hereby accepted.
Paul B. Martin, Jr.
ASA03149-090898-4
-6-
<PAGE>
MANAGEMENT AGREEMENT
TO: Paul B. Martin, Jr. d/b/a Martin Capital Advisors
812 San Antonio, Suite G14
Austin, TX 78701
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 U.S. Opportunity 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 effective 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 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, excluding 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
<PAGE>
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, including expenses incurred pursuant to the
Fund's Distribution Plan; and all other 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 1.25% 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
-2-
<PAGE>
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.
-3-
<PAGE>
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its execution,
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
"U.S. Opportunity" belong 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 "U.S. Opportunity" 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 "U.S. Opportunity" 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
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.
-4-
<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 the Securities and Exchange
Commission or its staff. In addition, where the effect of a requirement of the
Act, reflected in any provision of this Agreement is revised by rule,
regulation, order or interpretation of the Securities and Exchange Commission,
such provision shall be deemed to incorporate the effect of such rule,
regulation, order or interpretation.
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, TX 76092, and your address for this
purpose shall be 812 San Antonio, Suite G14, Austin, TX 78701.
-5-
<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
By
Kenneth D. Trumpfheller, President
Name/Title:___________________
Dated: ___________, 1998
ACCEPTANCE
The foregoing Agreement is hereby accepted.
Paul B. Martin, Jr.
ASA03148-090898-4
-6-
<PAGE>
AUSTIN OPPORTUNITY FUND
DISTRIBUTION PLAN
WHEREAS, AmeriPrime Funds, an Ohio business trust (the "Trust"),
engages in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust is authorized to issue an unlimited number of shares
of beneficial interest without par value (the "Shares"), which may be divided
into one or more series of Shares ("Series"); and
WHEREAS, the Trust currently offers several Series, one of which is The
Austin Opportunity Fund (the "Fund"); and
WHEREAS, the Trustees of the Trust as a whole, and the Trustees who are
not interested persons of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement relating hereto (the "Qualified Trustees"), having determined, in the
exercise of reasonable business judgment and in light of their fiduciary duties
under state law and under Section 36(a) and (b) of the 1940 Act, that there is a
reasonable likelihood that this Plan will benefit the Fund and its shareholders,
have approved this Plan by votes cast in person at a meeting called for the
purpose of voting hereon and on any agreements related hereto;
NOW THEREFORE, the Trust hereby adopts this Plan for the Fund, subject
to shareholder approval, in accordance with Rule 12b-1 under the 1940 Act, on
the following terms and conditions:
1. Distribution Activities. Subject to the
supervision of the Trustees of the Trust, the Trust may,
directly or indirectly, engage in any activities related to
the distribution of Shares of the Fund, which activities may
include, but are not limited to, the following: (a) payments,
including incentive compensation, to securities dealers or
other financial intermediaries, financial institutions,
investment advisors and others that are engaged in the sale of
Shares, or that may be advising shareholders of the Trust
regarding the purchase, sale or retention of Shares; (b)
payments, including incentive compensation, to securities
dealers or other financial intermediaries, financial
institutions, investment advisors and others that hold Shares
for shareholders in omnibus accounts or as shareholders of
record or provide shareholder support or administrative
services to the Fund and its shareholders; (c) expenses of
maintaining personnel (including personnel of organizations
with which the Trust has entered into agreements related to
this Plan) who engage in or support distribution of Shares or
who render shareholder support services, including, but not
limited to, allocated overhead, office space and equipment,
telephone facilities and expenses, answering routine inquiries
regarding the Trust, processing shareholder transactions, and
providing such other
AGA031F1 090998-01
shareholder services as the Trust may reasonably request; (d) costs of
preparing, printing and distributing prospectuses and statements of additional
information and reports of the Fund for recipients other than existing
shareholders of the Fund; (e) costs of formulating and implementing marketing
and promotional activities, including, but not limited to, sales seminars,
direct mail promotions and television, radio, newspaper, magazine and other mass
media advertising; (f) costs of preparing, printing and distributing sales
literature; (g) costs of obtaining such information, analyses and reports with
respect to marketing and promotional activities as the Trust may, from time to
time, deem advisable; and (h) costs of implementing and operating this Plan. The
Trust is authorized to engage in the activities listed above, and in any other
activities related to the distribution of Shares, either directly or through
other persons with which the Trust has entered into agreements related to this
Plan.
2. Maximum Expenditures. The expenditures to be made by the Trust pursuant
to this Plan and the basis upon which payment of such expenditures will be made
shall be determined by the Trustees of the Trust, but in no event may such
expenditures exceed in any fiscal year an amount calculated at the rate of .25%
of the average daily net asset value of the Fund. Such payments for distribution
activities may be made directly by the Trust or the Trust's investment adviser
may pay such expenses and obtain reimbursement from the Trust.
3. Term and Termination. (a) This Plan shall become effective upon approval
by a majority of the outstanding voting securities (as defined in the 1940 Act)
of the Fund. ---------------------
(b) Unless terminated as herein provided, this Plan shall continue in effect
for one year from the effective date and shall continue in effect for
successive periods of one year thereafter, but only so long as each
such continuance is specifically approved by votes of a majority of both
(i) the Trustees of the Trust and (ii) the Qualified Trustees, cast in
person at a meeting called for the purpose of voting on such approval.
(c) This Plan may be terminated at any time by the vote of a majority of the
Qualified Trustees or by vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of the Fund. If this Plan is
terminated, the Fund will not be required to make any payments for
expenses incurred after the date of termination.
4. Amendments. All material amendments to this Plan must be approved in the
manner provided for annual renewal of this Plan in Section 3(b) hereof. In
addition, this Plan may not be amended to increase materially the amount of
expenditures provided for in Section 2 hereof unless such amendment is approved
by a vote of the majority of the outstanding voting securities of the Fund (as
defined in the 1940 Act).
5. Selection and Nomination of Trustees. While this Plan is in effect, the
selection and nomination of Trustees who are not interested persons (as defined
in the 1940 Act) of the Trust shall be committed to the discretion of the
Trustees who are not interested persons of the Trust.
6. Quarterly Reports. The Treasurer of the Trust shall provide to the
Trustees and the Trustees shall review, at least quarterly, a written report of
the amounts expended pursuant to this Plan and any related agreement and the
purposes for which such expenditures were made.
7. Recordkeeping. The Trust shall preserve copies of this Plan and any
related agreement and all reports made pursuant Section 6 hereof, for a period
of not less than six years from the date of this Plan, the agreements or such
reports, as the case may be, the first two years in an easily accessible place.
8. Limitation of Liability. A copy of the Agreement and Declaration of
Trust of the Trust, as amended, is on file with the Secretary of the State of
Ohio and notice is hereby given that this Plan is executed on behalf of the
Trustees of the Trust as trustees and not individually and that the obligations
of this instrument are not binding upon the Trustees, the shareholders of the
Trust individually or the assets or property of any other series of the Trust,
but are binding only upon the assets and property of the Fund.
<PAGE>
TEXAS OPPORTUNITY FUND
DISTRIBUTION PLAN
WHEREAS, AmeriPrime Funds, an Ohio business trust (the "Trust"),
engages in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust is authorized to issue an unlimited number of shares
of beneficial interest without par value (the "Shares"), which may be divided
into one or more series of Shares ("Series"); and
WHEREAS, the Trust currently offers several Series, one of which is The
Texas Opportunity Fund (the "Fund"); and
WHEREAS, the Trustees of the Trust as a whole, and the Trustees who are
not interested persons of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement relating hereto (the "Qualified Trustees"), having determined, in the
exercise of reasonable business judgment and in light of their fiduciary duties
under state law and under Section 36(a) and (b) of the 1940 Act, that there is a
reasonable likelihood that this Plan will benefit the Fund and its shareholders,
have approved this Plan by votes cast in person at a meeting called for the
purpose of voting hereon and on any agreements related hereto;
NOW THEREFORE, the Trust hereby adopts this Plan for the Fund, subject
to shareholder approval, in accordance with Rule 12b-1 under the 1940 Act, on
the following terms and conditions:
1. Distribution Activities. Subject to the
supervision of the Trustees of the Trust, the Trust may,
directly or indirectly, engage in any activities related to
the distribution of Shares of the Fund, which activities may
include, but are not limited to, the following: (a) payments,
including incentive compensation, to securities dealers or
other financial intermediaries, financial institutions,
investment advisors and others that are engaged in the sale of
Shares, or that may be advising shareholders of the Trust
regarding the purchase, sale or retention of Shares; (b)
payments, including incentive compensation, to securities
dealers or other financial intermediaries, financial
institutions, investment advisors and others that hold Shares
for shareholders in omnibus accounts or as shareholders of
record or provide shareholder support or administrative
services to the Fund and its shareholders; (c) expenses of
maintaining personnel (including personnel of organizations
with which the Trust has entered into agreements related to
this Plan) who engage in or support distribution of Shares or
who render shareholder support services, including, but not
limited to, allocated overhead, office space and equipment,
telephone facilities and expenses, answering routine inquiries
regarding the Trust, processing shareholder transactions, and
providing such other
AGA031F1 090998-01
shareholder services as the Trust may reasonably request; (d) costs of
preparing, printing and distributing prospectuses and statements of additional
information and reports of the Fund for recipients other than existing
shareholders of the Fund; (e) costs of formulating and implementing marketing
and promotional activities, including, but not limited to, sales seminars,
direct mail promotions and television, radio, newspaper, magazine and other mass
media advertising; (f) costs of preparing, printing and distributing sales
literature; (g) costs of obtaining such information, analyses and reports with
respect to marketing and promotional activities as the Trust may, from time to
time, deem advisable; and (h) costs of implementing and operating this Plan. The
Trust is authorized to engage in the activities listed above, and in any other
activities related to the distribution of Shares, either directly or through
other persons with which the Trust has entered into agreements related to this
Plan.
2. Maximum Expenditures. The expenditures to be made by the Trust pursuant
to this Plan and the basis upon which payment of such expenditures will be made
shall be determined by the Trustees of the Trust, but in no event may such
expenditures exceed in any fiscal year an amount calculated at the rate of .25%
of the average daily net asset value of the Fund. Such payments for distribution
activities may be made directly by the Trust or the Trust's investment adviser
may pay such expenses and obtain reimbursement from the Trust.
3. Term and Termination. (a) This Plan shall become effective upon approval
by a majority of the outstanding voting securities (as defined in the 1940 Act)
of the Fund. ---------------------
(b) Unless terminated as herein provided, this Plan shall continue in effect
for one year from the effective date and shall continue in effect for
successive periods of one year thereafter, but only so long as each
such continuance is specifically approved by votes of a majority of both
(i) the Trustees of the Trust and (ii) the Qualified Trustees, cast in
person at a meeting called for the purpose of voting on such approval.
(c) This Plan may be terminated at any time by the vote of a majority of the
Qualified Trustees or by vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of the Fund. If this Plan is
terminated, the Fund will not be required to make any payments for
expenses incurred after the date of termination.
4. Amendments. All material amendments to this Plan must be approved in the
manner provided for annual renewal of this Plan in Section 3(b) hereof. In
addition, this Plan may not be amended to increase materially the amount of
expenditures provided for in Section 2 hereof unless such amendment is approved
by a vote of the majority of the outstanding voting securities of the Fund (as
defined in the 1940 Act).
5. Selection and Nomination of Trustees. While this Plan is in effect, the
selection and nomination of Trustees who are not interested persons (as defined
in the 1940 Act) of the Trust shall be committed to the discretion of the
Trustees who are not interested persons of the Trust.
6. Quarterly Reports. The Treasurer of the Trust shall provide to the
Trustees and the Trustees shall review, at least quarterly, a written report of
the amounts expended pursuant to this Plan and any related agreement and the
purposes for which such expenditures were made.
7. Recordkeeping. The Trust shall preserve copies of this Plan and any
related agreement and all reports made pursuant Section 6 hereof, for a period
of not less than six years from the date of this Plan, the agreements or such
reports, as the case may be, the first two years in an easily accessible place.
8. Limitation of Liability. A copy of the Agreement and Declaration of
Trust of the Trust, as amended, is on file with the Secretary of the State of
Ohio and notice is hereby given that this Plan is executed on behalf of the
Trustees of the Trust as trustees and not individually and that the obligations
of this instrument are not binding upon the Trustees, the shareholders of the
Trust individually or the assets or property of any other series of the Trust,
but are binding only upon the assets and property of the Fund.
<PAGE>
U.S. OPPORTUNITY FUND
DISTRIBUTION PLAN
WHEREAS, AmeriPrime Funds, an Ohio business trust (the "Trust"),
engages in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust is authorized to issue an unlimited number of shares
of beneficial interest without par value (the "Shares"), which may be divided
into one or more series of Shares ("Series"); and
WHEREAS, the Trust currently offers several Series, one of which is The
U.S. Opportunity Fund (the "Fund"); and
WHEREAS, the Trustees of the Trust as a whole, and the Trustees who are
not interested persons of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement relating hereto (the "Qualified Trustees"), having determined, in the
exercise of reasonable business judgment and in light of their fiduciary duties
under state law and under Section 36(a) and (b) of the 1940 Act, that there is a
reasonable likelihood that this Plan will benefit the Fund and its shareholders,
have approved this Plan by votes cast in person at a meeting called for the
purpose of voting hereon and on any agreements related hereto;
NOW THEREFORE, the Trust hereby adopts this Plan for the Fund, subject
to shareholder approval, in accordance with Rule 12b-1 under the 1940 Act, on
the following terms and conditions:
1. Distribution Activities. Subject to the
supervision of the Trustees of the Trust, the Trust may,
directly or indirectly, engage in any activities related to
the distribution of Shares of the Fund, which activities may
include, but are not limited to, the following: (a) payments,
including incentive compensation, to securities dealers or
other financial intermediaries, financial institutions,
investment advisors and others that are engaged in the sale of
Shares, or that may be advising shareholders of the Trust
regarding the purchase, sale or retention of Shares; (b)
payments, including incentive compensation, to securities
dealers or other financial intermediaries, financial
institutions, investment advisors and others that hold Shares
for shareholders in omnibus accounts or as shareholders of
record or provide shareholder support or administrative
services to the Fund and its shareholders; (c) expenses of
maintaining personnel (including personnel of organizations
with which the Trust has entered into agreements related to
this Plan) who engage in or support distribution of Shares or
who render shareholder support services, including, but not
limited to, allocated overhead, office space and equipment,
telephone facilities and expenses, answering routine inquiries
regarding the Trust, processing shareholder transactions, and
providing such other
AGA031F1 090998-01
shareholder services as the Trust may reasonably request; (d) costs of
preparing, printing and distributing prospectuses and statements of additional
information and reports of the Fund for recipients other than existing
shareholders of the Fund; (e) costs of formulating and implementing marketing
and promotional activities, including, but not limited to, sales seminars,
direct mail promotions and television, radio, newspaper, magazine and other mass
media advertising; (f) costs of preparing, printing and distributing sales
literature; (g) costs of obtaining such information, analyses and reports with
respect to marketing and promotional activities as the Trust may, from time to
time, deem advisable; and (h) costs of implementing and operating this Plan. The
Trust is authorized to engage in the activities listed above, and in any other
activities related to the distribution of Shares, either directly or through
other persons with which the Trust has entered into agreements related to this
Plan.
2. Maximum Expenditures. The expenditures to be made by the Trust pursuant
to this Plan and the basis upon which payment of such expenditures will be made
shall be determined by the Trustees of the Trust, but in no event may such
expenditures exceed in any fiscal year an amount calculated at the rate of .25%
of the average daily net asset value of the Fund. Such payments for distribution
activities may be made directly by the Trust or the Trust's investment adviser
may pay such expenses and obtain reimbursement from the Trust.
3. Term and Termination. (a) This Plan shall become effective upon approval
by a majority of the outstanding voting securities (as defined in the 1940 Act)
of the Fund. ---------------------
(b) Unless terminated as herein provided, this Plan shall continue in effect
for one year from the effective date and shall continue in effect for
successive periods of one year thereafter, but only so long as each
such continuance is specifically approved by votes of a majority of both
(i) the Trustees of the Trust and (ii) the Qualified Trustees, cast in
person at a meeting called for the purpose of voting on such approval.
(c) This Plan may be terminated at any time by the vote of a majority of the
Qualified Trustees or by vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of the Fund. If this Plan is
terminated, the Fund will not be required to make any payments for
expenses incurred after the date of termination.
4. Amendments. All material amendments to this Plan must be approved in the
manner provided for annual renewal of this Plan in Section 3(b) hereof. In
addition, this Plan may not be amended to increase materially the amount of
expenditures provided for in Section 2 hereof unless such amendment is approved
by a vote of the majority of the outstanding voting securities of the Fund (as
defined in the 1940 Act).
5. Selection and Nomination of Trustees. While this Plan is in effect, the
selection and nomination of Trustees who are not interested persons (as defined
in the 1940 Act) of the Trust shall be committed to the discretion of the
Trustees who are not interested persons of the Trust.
6. Quarterly Reports. The Treasurer of the Trust shall provide to the
Trustees and the Trustees shall review, at least quarterly, a written report of
the amounts expended pursuant to this Plan and any related agreement and the
purposes for which such expenditures were made.
7. Recordkeeping. The Trust shall preserve copies of this Plan and any
related agreement and all reports made pursuant Section 6 hereof, for a period
of not less than six years from the date of this Plan, the agreements or such
reports, as the case may be, the first two years in an easily accessible place.
8. Limitation of Liability. A copy of the Agreement and Declaration of
Trust of the Trust, as amended, is on file with the Secretary of the State of
Ohio and notice is hereby given that this Plan is executed on behalf of the
Trustees of the Trust as trustees and not individually and that the obligations
of this instrument are not binding upon the Trustees, the shareholders of the
Trust individually or the assets or property of any other series of the Trust,
but are binding only upon the assets and property of the Fund.
<PAGE>
