SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ____)
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
AMERIPRIME FUNDS
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
______________________________________________________________
2) Aggregate number of securities to which transaction applies:
______________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
______________________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________________
5) Total fee paid:
______________________________________________________________
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
______________________________________________________________
2) Form, Schedule or Registration Statement No.:
______________________________________________________________
3) Filing Party:
______________________________________________________________
4) Date Filed:
______________________________________________________________
<PAGE>
SHEPHERD VALUES GROWTH FUND
SHEPHERD VALUES MARKET NEUTRAL FUND
1793 KINGSWOOD DRIVE, SUITE 200
SOUTHLAKE, TEXAS 76092
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 2, 1999
Dear Shareholders:
The Board of Trustees of AmeriPrime Funds (the "Trust"), an open-end management
investment company organized as an Ohio business trust, has called a special
meeting of the shareholders of the Shepherd Values Growth Fund and the Shepherd
Values Market Neutral Fund series of the Trust (the "Funds"), to be held at 175
Westwood, Southlake, Texas 76092 on Thursday, December 2, 1999 at 10:00 a.m.,
Eastern Standard Time, for the following purposes:
1. Ratification of the present management agreement of each Fund
with Cornerstone Capital Management, Inc.
2. Approval or disapproval of a new management agreement for each
Fund with Shepherd Advisory Services, Inc. and a sub-advisory
agreement for each Fund with Cornerstone Capital Management, Inc.
NO FEE INCREASE IS PROPOSED.
3. Transaction of such other business as may properly come before
the meeting or any adjournment(s) thereof.
Shareholders of record at the close of business on October 18, 1999 are
entitled to notice of, and to vote at, the special meeting and any
adjournment(s) or postponement(s) thereof.
By Order of the Board of Trustees
PAUL S. BELLANY
Secretary
November 2, 1999
YOUR VOTE IS IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE OR BY FAXING IT TO (317)
266-8756, WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING. IF YOU ATTEND
THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE>
SHEPHERD VALUES GROWTH FUND
SHEPHERD VALUES MARKET NEUTRAL FUND
1793 KINGSWOOD DRIVE, SUITE 200
SOUTHLAKE, TEXAS 76092
------------
PROXY STATEMENT
------------
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 2, 1999
------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Trustees of AmeriPrime Funds (the "Trust"), on behalf
of the Shepherd Values Growth Fund and Shepherd Values Market Neutral Fund (the
"Funds") for use at the Special Meeting of Shareholders of the Funds (the
"Meeting") to be held at 175 Westwood, Southlake, Texas 76092 on Thursday,
December 2, 1999 at 10:00 a.m., Eastern Standard Time, and at any and all
adjournments thereof. The Notice of Meeting, Proxy Statement and accompanying
form of proxy will first be mailed to shareholders on or about November 2, 1999.
Cornerstone Capital Management, Inc. ("Cornerstone") serves as each
Fund's investment adviser. On June 1, 1999, The National Capital Companies, LLC
acquired Cornerstone. Pursuant to the Investment Company Act of 1940, as
amended, this change in control resulted in a technical assignment and
termination of each Fund's management agreement with Cornerstone. Accordingly,
from June 1, 1999 to the present, Cornerstone has been serving as the investment
adviser to the Funds (without taking any fees) pursuant to new management
agreements, containing exactly the same terms as the previous agreement, that
were approved by the Board subject to shareholder approval. Therefore, the Board
is asking shareholders to ratify these present management agreements.
Shepherd Advisory Services, Inc. (the "Adviser") serves as the
investment adviser to the four other Shepherd Values Funds (Shepherd Values
Small-Cap Fund, Shepherd Values International Fund, Shepherd Values VIF Equity
Fund and Shepherd Values Fixed Income Fund). These four funds, together with the
Shepherd Values Growth Fund and the Shepherd Values Market Neutral Fund,
constitute the family of funds referred to as the "Shepherd Values Funds." To
maintain consistency and efficiency with respect to the overall supervision and
management of the Shepherd Values Funds, the Board of Trustees has selected the
Adviser to serve as the investment adviser to the Funds in the future, subject
to shareholder approval. The Board has selected the Funds' current investment
adviser, Cornerstone, to serve as the Funds' sub-adviser, subject to shareholder
approval. NO INCREASE IN THE ADVISORY FEES OF EITHER FUND IS PROPOSED. The
Adviser will pay all sub-advisory fees out of the fees it earns as the adviser
under the new management agreements.
Accordingly, shareholders of each Fund are being asked to consider the
following:
(1) Ratification of the current management agreement with Cornerstone
Capital Management, Inc.
(2) Approval of a new management agreement with Shepherd Advisory
Services, Inc. and a sub-advisory agreement with Cornerstone Capital
Management, Inc.
(3) Transaction of such other business, not currently contemplated, that
may properly come before the meeting or any adjournment(s) thereof.
THE FUNDS COMMENCED OPERATIONS ON APRIL 1, 1999, AND THEREFORE HAVE NOT
YET BEEN REQUIRED TO MAKE AN ANNUAL OR SEMI-ANNUAL REPORT. THE FIRST SEMI-ANNUAL
REPORT IS SCHEDULED TO BE MAILED TO SHAREHOLDERS IN NOVEMBER 1999. THE TRUST
WILL SUPPLY WITHOUT COST, UPON WRITTEN REQUEST, A COPY OF THE FUNDS' SEMI-ANNUAL
REPORT WHEN IT IS AVAILABLE, WHICH WILL INCLUDE FINANCIAL AND OTHER INFORMATION
ABOUT THE FUNDS. SUCH REQUEST SHOULD BE DIRECTED TO MR. PAUL S. BELLANY,
TREASURER, AMERIPRIME FUNDS, 1793 KINGSWOOD DRIVE, SUITE 200, SOUTHLAKE, TEXAS
76092, TELEPHONE NUMBER (800) 298-1995.
PROPOSAL I
RATIFICATION OF PRESENT MANAGEMENT AGREEMENTS WITH CORNERSTONE
THE PRESENT MANAGEMENT AGREEMENTS
Cornerstone Capital Management, Inc. served as the investment adviser
for the Funds from their inception pursuant to management agreements that were
initially approved by the Board of Trustees, including a majority of the
Trustees who are not interested persons as defined in the Investment Company Act
of 1940, as amended (the "Investment Company Act") on February 1-2 and March 10,
1999, and by a majority of the shareholders of the applicable Fund (as defined
by the Investment Company Act) on March 4, 1999. On June 1, 1999, there was a
change in control of Cornerstone because The National Capital Companies, LLC
acquired 100% of the stock of Cornerstone. Pursuant to the Investment Company
Act, a change in control of an adviser results in a technical assignment and
termination of a management agreement with that adviser. Therefore, on September
22, 1999, the Board of Trustees, including a majority of the Trustees who are
not interested persons as defined in the Investment Company Act (the
"Disinterested Trustees"), approved, subject to shareholder approval, new
management agreements for the Funds effective as of June 1, 1999, the date of
the change in control (the "Current Agreements"). Cornerstone has waived all
advisory fees from June 1, 1999 until the shareholders approve the Current
Agreements.
The Current Agreements are identical to the previous management
agreements with Cornerstone, except for the dates of effectiveness, termination
and execution. The Current Agreements are identical to each other except for the
advisory fee paid. The form of the Current Agreement for each of the Funds is
attached hereto as Exhibit A. You should read the form of agreement. The
description in this Proxy Statement of the Current Agreements is only a summary.
The Current Agreements require Cornerstone to provide the Funds with
such investment advice as it deems advisable, to furnish a continuous investment
program for each Fund consistent with the Fund's investment objectives and
policies and to 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 are in effect from time to time and
subject further to such policies and instructions as the Board may from time to
time establish. The Current Agreements also provide that Cornerstone will advise
and assist the officers of the Trust in taking such steps as are necessary or
appropriate to carry out the decisions of the Board and the appropriate
committees of the Board regarding the conduct of the business of the Funds.
Under the terms of the Current Agreements, Cornerstone pays all of the
organizational and operating expenses of the Funds, except brokerage fees and
commissions, taxes, borrowing costs (such as interest and dividend expense on
securities sold short), fees and expenses of the non-interested person trustees,
12b-1 expenses and extraordinary or non-recurring expenses as may arise,
including litigation to which the applicable Fund may be a party and
indemnification of the Trust's trustees and officers with respect thereto.
Pursuant to the Current Agreements, the Shepherd Values Growth Fund
pays Cornerstone a fee computed and accrued daily and paid monthly at an annual
rate of 1.75% of its average daily net assets, and the Shepherd Values Market
Neutral Fund pays Cornerstone at the annual rate of 2.25% its average daily net
assets. Cornerstone has waived all advisory fees since June 1, 1999, the date of
its change in control. Accordingly, Cornerstone was only paid advisory fees for
the period from April 1, 1999 (the commencement of the Funds' operations) to May
31, 1999, during which period it was paid advisory fees in the amount of $98.93
from the Shepherd Values Growth Fund and $111.73 from the Shepherd Values Market
Neutral Fund.
If the proposed management agreement with Shepherd Advisory Services,
Inc. and sub-advisory agreement with Cornerstone (see below) are approved by the
shareholders of each Fund, the Current Agreements will terminate and the new
agreements will become effective immediately upon such shareholder approval. If
a Fund does not approve new agreements, Cornerstone will continue to serve as
the investment adviser for that Fund pursuant to the Current Agreement for the
Fund (assuming the Current Agreement for that Fund is approved by the
shareholders at the meeting). If neither the Current Agreement or the proposed
new agreements for a Fund are approved by the shareholders of that Fund, the
Board of Trustees will promptly take such actions as it considers are in the
best interests of the Fund and its Shareholders.
INFORMATION REGARDING CORNERSTONE
Cornerstone Capital Management, Inc., 102 South Tejon, Suite 430,
Colorado Springs, Colorado 80903 is a registered investment advisory firm formed
as a Colorado corporation on April 1, 1997. Cornerstone is a wholly owned
subsidiary of The National Capital Companies, LLC, located at 18952 MacArthur
Blvd., Suite 315, Irvine, California 92612. Darrel T. Uselton, a director of
Cornerstone, is the controlling shareholder of The National Capital Companies,
LLC.
The names, addresses and principal occupations of the principal
executive officers and directors of Cornerstone are set forth below. The
business address of the officers and directors is 102 South Tejon, Suite 430,
Colorado Springs, Colorado 80903.
<PAGE>
<TABLE>
<S> <C> <C>
- ------------------------------------------- ----------------------------------------- -----------------------------------------
NAME POSITION WITH CORNERSTONE PRINCIPAL OCCUPATION
- ------------------------------------------- ----------------------------------------- -----------------------------------------
- ------------------------------------------- ----------------------------------------- -----------------------------------------
Darrel T. Uselton Director Director of Cornerstone; Chairman of
the Board, The National Capital
Companies
- ------------------------------------------- ----------------------------------------- -----------------------------------------
- ------------------------------------------- ----------------------------------------- -----------------------------------------
Joseph A. Cerbone Director Director of Cornerstone; President of
The National Capital Companies
- ------------------------------------------- ----------------------------------------- -----------------------------------------
- ------------------------------------------- ----------------------------------------- -----------------------------------------
Jason D. Huntley Managing Director, President and Managing Director of Cornerstone; Vice
Secretary President, Chief Investment Officer and
Managing Director of Shepherd Advisory
Services, Inc.
- ------------------------------------------- ----------------------------------------- -----------------------------------------
- ------------------------------------------- ----------------------------------------- -----------------------------------------
Donald B. Ellsworth Managing Director Managing Director of Cornerstone
- ------------------------------------------- ----------------------------------------- -----------------------------------------
- ------------------------------------------- ----------------------------------------- -----------------------------------------
Colleen G. Helm Managing Director Managing Director of Cornerstone
- ------------------------------------------- ----------------------------------------- -----------------------------------------
</TABLE>
Cornerstone serves as the sub-adviser to the affiliated registered
investment company listed below:
<TABLE>
<S> <C> <C>
- ----------------------------------------------------- ------------------------------- -----------------------------------------
NAME OF FUND NET ASSETS AS OF ANNUAL ADVISORY FEE
OCTOBER 19,1999 (AS A PERCENTAGE OF ASSETS
- ----------------------------------------------------- ------------------------------- -----------------------------------------
- ----------------------------------------------------- ------------------------------- -----------------------------------------
AMERIPRIME FUNDS
- ----------------------------------------------------- ------------------------------- -----------------------------------------
- ----------------------------------------------------- ------------------------------- -----------------------------------------
Shepherd Values VIF Equity Fund $0 .20% of average daily net assets
- ----------------------------------------------------- ------------------------------- -----------------------------------------
</TABLE>
EVALUATION OF THE CURRENT AGREEMENTS BY THE BOARD OF TRUSTEES
The Board has determined that continuity and efficiency of portfolio
management services can best be assured by approving the Current Agreements. The
Board believes that the Current Agreements have and will continue to (if the
proposed new management agreements with Shepherd Advisory Services, Inc. are not
approved) enable the Funds to obtain advisory services of high quality at costs
that it deems appropriate and reasonable and that approval of the Current
Agreements is in the best interests of the Trust and the shareholders of the
Funds.
At a meeting of the Board of Trustees held on September 22, 1999, the
Board, including the Disinterested Trustees, evaluated Cornerstone. In
evaluating Cornerstone, the Board, including the Disinterested Trustees, relied
on information furnished by Cornerstone regarding financial and operational
aspects of Cornerstone and information about its investment personnel, including
information provided at the February 1-2 and March 10, 1999 meetings of the
Board at which the Board approved the previous management agreement.
Based on its review, the Board of Trustees believes that the terms of
the Current Agreements are fair to, and in the best interests of, the Trust and
the Funds' shareholders. Accordingly, the Board of Trustees, including the
Disinterested Trustees, unanimously recommends that the shareholders ratify the
Current Agreements. In making this recommendation, the Trustees primarily
evaluated (i) the experience, reputation, qualifications and background of
Cornerstone's investment personnel, (ii) the nature and quality of operations
and services that Cornerstone has provided the Funds, (iii) the benefits of
continuity in services to be provided under the Current Agreements, (iv) the
ability of Cornerstone to retain and attract qualified personnel, and (v) the
ownership of Cornerstone.
The Trustees also gave careful consideration to factors deemed relevant
to the Trust and the Funds, including, but not limited to: (1) the performance
of the Funds since commencement of their operations; (2) the distinct investment
objective and policies of each Fund, (3) that the compensation to be paid under
the Current Agreements is the same as under the previous management agreements;
(4) the financial condition of Cornerstone; (5) the commitment of Cornerstone to
continue to pay certain expenses of the Funds; and (6) other factors deemed
relevant.
THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING THE DISINTERESTED
TRUSTEES, UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR RATIFICATION OF THE
CURRENT AGREEMENTS.
PROPOSAL 2
MANAGEMENT AGREEMENTS WITH SHEPHERD ADVISORY SERVICES, INC. AND SUBADVISORY
AGREEMENTS WITH CORNERSTONE CAPITAL MANAGEMENT, INC.
BACKGROUND
Shepherd Advisory Services, Inc. currently serves as the investment
adviser to the other four Shepherd Values Funds. The Board believes it will be
more consistent and efficient with respect to the overall management and
supervision of all of the Shepherd Values Funds if Shepherd Advisory Services,
Inc. also serves as the investment adviser to the Funds, and Cornerstone, the
current investment adviser to the Funds, serves as the Funds' sub-adviser. This
change will not result in any increase in the advisory fees paid by either Fund.
As in the past, Cornerstone will still make the investment decisions for the
Funds; however, the decisions will be subject to the supervision of the Adviser
if the proposed new management agreements are approved. The Adviser will then be
able to provide consistent and efficient general supervision and marketing
services to all six Shepherd Values Funds.
THE NEW MANAGEMENT AGREEMENTS
The proposed new management agreements (the "Proposed Agreements") are
materially the same as the Current Agreements, other than changing the adviser
to Shepherd Advisory Services, Inc. (the "Adviser) from Cornerstone, adding a
provision that permits the Adviser to retain one or more sub-advisers, and the
dates of effectiveness and expiration. The form of the Proposed Agreement for
each Fund is attached hereto as Exhibit B. You should read the form of
agreement. The description in this Proxy Statement of the Proposed Agreements is
only a summary.
The Proposed Agreements provide that the Adviser will provide the
applicable Fund with such investment advice as it deems advisable; furnish a
continuous investment program for the Fund consistent with the Fund's investment
objectives and policies and 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. The Proposed Agreements also provide that
the Adviser will advise and assist the officers of the Trust in taking such
steps as are necessary or appropriate to carry out the decisions of the Board
and the appropriate committees of the Board regarding the conduct of the
business of the Funds.
Under the terms of the Proposed Agreements, like the Current
Agreements, the Adviser will pay all of the organizational and operating
expenses of the Fund, except brokerage fees and commissions, taxes, borrowing
costs (such as interest and dividend expense on securities sold short), fees and
expenses of the non-interested person trustees, 12b-1 expenses and 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.
As compensation for the Adviser's advisory services and agreement to
pay the expenses of the Funds set forth above, the Shepherd Values Growth Fund
will pay the Adviser a fee computed and accrued daily and paid monthly at an
annual rate of 1.75% of the average daily net assets of the Fund, and the
Shepherd Values Market Neutral Fund will pay 2.25% of its average daily net
assets.
In connection with purchases or sales of portfolio securities for the
account of a Fund, the Adviser arranges for the placing of all orders for the
purchase and sale of portfolio securities for the account with brokers or
dealers selected by the Adviser, subject to review of these selections by the
Board from time to time. The Adviser is responsible for the negotiation and
allocation of principal business and portfolio brokerage. In the selection of
such brokers or dealers and the placing of such orders, the Adviser must at all
times 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.
The Adviser generally seeks favorable prices and commission rates that
are reasonable in relation to the benefits received. In seeking best qualitative
execution, the Adviser is 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 the Adviser exercises investment discretion. The Proposed
Agreements also authorize the Adviser 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 the Adviser
determines 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 the overall responsibilities of the Adviser with
respect to the Fund and to accounts over which the Adviser exercises investment
discretion. The Fund and the Adviser understand and acknowledge that, although
the information may be useful to the Fund and the Adviser, 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, the Adviser 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 and other
applicable law, the Adviser, any of its affiliates or any affiliates of its
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 the Adviser gives any advice to
its clients concerning the shares of the Fund, it will act solely as investment
counsel for such client and not in any way on behalf of the Fund. The Adviser's
services to the Fund pursuant to the Agreements are not to be deemed to be
exclusive and it is understood that the Adviser may render investment advice,
management and other services to others, including other registered investment
companies.
The Proposed Agreements state that the Adviser and its shareholders,
members, officers, directors, employees, agents, control persons or affiliates
of any thereof shall not be liable for 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, the Proposed Agreements or any other matter to which
the Agreements relate, except by reason of willful misfeasance, bad faith or
gross negligence on the part of any such persons in the performance of the
Adviser's duties under the Proposed Agreements, or by reason of reckless
disregard by any of such persons of the Adviser's obligations and duties under
the Proposed Agreements.
Under the Proposed Agreements, the Trust and the Adviser acknowledge
that all rights to the name "Shepherd Values" or any variation thereof belong to
the Adviser 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 the Adviser ceases to
be the Adviser to the Fund, the Trust's rights to the use of the name "Shepherd
Values" will automatically cease on the ninetieth day following the termination
of the Proposed Agreements. The use of the name may also be withdrawn by the
Adviser during the term of the Proposed Agreements upon ninety (90) days'
written notice by the Adviser to the Trust. Nothing contained in the Agreements
impair or diminish in any respect, the Adviser's right to use the name "Shepherd
Values" in the name of, or in connection with, any other business enterprises
with which the Adviser is or may become associated. There is no charge to the
Trust for the right to use the name.
No provisions of the Proposed Agreements may be changed, waived,
discharged or terminated orally, and no amendment of the Agreements are
effective until approved by the Board, including a majority of the trustees who
are not interested persons of the Adviser 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 Investment Company 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.
A Proposed Agreement will become effective on the date the shareholders
of the applicable Fund approve the Proposed Agreement. The Proposed Agreements
will continue in effect for two years from the effective date, and may continue
thereafter on a year-to-year basis, subject to approval by the Trustees of the
Trust or the vote of the holders of a majority of the outstanding shares of the
Fund (as defined in the Investment Company Act), and also, in either event by a
vote of the majority of the disinterested Trustees of the Trust in accordance
with the Investment Company Act and pursuant to the terms and conditions of the
Proposed Agreements. The Proposed Agreements may be terminated upon sixty days
written notice by the Board of Trustees of the Trust, by a vote of a majority of
the outstanding voting securities of the Fund, or by the Adviser.
INFORMATION REGARDING THE ADVISER
Shepherd Advisory Services, Inc., 2505 21st Avenue South, Suite 204,
Nashville, Tennessee 37212 is a registered investment advisory firm organized as
a Tennessee corporation on July 28, 1998. Shepherd Financial Services, Inc.,
2505 21st Avenue South, Suite 204, Nashville, Tennessee 37212 owns 100% of the
stock of the Adviser, and Stephen R. Bolt, President of the Adviser, owns ___%
of Shepherd Financial Services, Inc. [other control shareholders and percentage
owned].
The names and principal occupations of the principal executive officers
and directors of the Adviser are set forth below. The business address of each
director and officer is 2505 21st Avenue South, Suite 204, Nashville, Tennessee
37212.
<TABLE>
<S> <C> <C>
- ---------------------------------- --------------------------------- ----------------------------------------------------------
NAME TITLE OR STATUS PRINCIPAL OCCUPATION
- ---------------------------------- --------------------------------- ----------------------------------------------------------
- ---------------------------------- --------------------------------- ----------------------------------------------------------
Stephen R. Bolt President President of the Adviser and Shepherd Financial
Services, Inc.
- ---------------------------------- --------------------------------- ----------------------------------------------------------
- ---------------------------------- --------------------------------- ----------------------------------------------------------
J. Christopher McKnight Chief Financial Officer and Chief Financial Officer and Secretary of the Adviser
Secretary
- ---------------------------------- --------------------------------- ----------------------------------------------------------
- ---------------------------------- --------------------------------- ----------------------------------------------------------
Jason D. Huntley Vice President, Chief Vice President, Chief Investment Officer and Managing
Investment Officer and Managing Director of the Adviser; Managing Director, President
Director and Secretary Cornerstone Capital Management, Inc.
- ---------------------------------- --------------------------------- ----------------------------------------------------------
</TABLE>
[add directors of the Adviser]
The Adviser serves as investment adviser to the affiliated registered
investment companies listed below:
<TABLE>
<S> <C> <C>
- ----------------------------------------------------- ------------------------------- -----------------------------------------
NAME OF FUND NET ASSETS AS OF ANNUAL ADVISORY FEE
OCTOBER 19, 1999 (AS A PERCENTAGE OF ASSETS
- ----------------------------------------------------- ------------------------------- -----------------------------------------
- ----------------------------------------------------- ------------------------------- -----------------------------------------
AMERIPRIME FUNDS
- ----------------------------------------------------- ------------------------------- -----------------------------------------
- ----------------------------------------------------- ------------------------------- -----------------------------------------
Shepherd Values Small-Cap Fund $0 1.80% of average daily net assets
- ----------------------------------------------------- ------------------------------- -----------------------------------------
- ----------------------------------------------------- ------------------------------- -----------------------------------------
Shepherd Values International Fund $0 1.95% of average daily net assets
- ----------------------------------------------------- ------------------------------- -----------------------------------------
- ----------------------------------------------------- ------------------------------- -----------------------------------------
Shepherd Values VIF Equity Fund $0 1.00% of average daily net assets
- ----------------------------------------------------- ------------------------------- -----------------------------------------
- ----------------------------------------------------- ------------------------------- -----------------------------------------
Shepherd Values Fixed Income Fund $0 1.25% of average daily net assets
- ----------------------------------------------------- ------------------------------- -----------------------------------------
</TABLE>
THE SUBADVISORY AGREEMENTS.
Cornerstone Capital Management, Inc. currently acts as investment
adviser to the Funds. Under the proposed sub-advisory agreements (the
"Sub-Advisory Agreements"), Cornerstone would become the sub-adviser to the
Funds, subject to the general supervision of the Adviser. Cornerstone is
currently the sub-adviser for the Shepherds Value VIF Equity Fund.
<PAGE>
The proposed form of Sub-Advisory Agreement for the Shepherd Values
Growth Fund and the Shepherd Values Market Neutral Fund is attached hereto as
Exhibit C. The Sub-Advisory Agreements are identical except for the sub-advisory
fee paid. You should read the form of agreement. The description in this Proxy
Statement of the Sub-Advisory Agreements is only a summary.
Pursuant to the Sub-Advisory Agreement, Cornerstone, subject to the
general supervision of the Trust's Board of Trustees and the Adviser, will
manage the investment operations of each Fund and the composition of the
portfolio securities and investments (including cash) belonging to each Fund,
including the purchase, retention and disposition thereof and the execution of
agreements relating thereto, in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Fund' then-current
Prospectus and Statement of Additional Information.
In placing orders with brokers or dealers, Cornerstone must at all
times seek for a Fund the best price and execution for purchases and sales on
behalf of 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.
Cornerstone will generally seek favorable prices and commission rates
that are reasonable in relation to the benefits received. Subject to such
conditions as may be imposed by the Trust's Board of Trustees, Cornerstone may
pay commissions to brokers and/or dealers that are higher than might be charged
by another qualified broker to obtain brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934, as
amended) considered by Cornerstone to be useful or desirable in the performance
of its duties under the Sub-Advisory Agreement, if Cornerstone determines 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 the overall responsibilities of Cornerstone with respect to the
applicable Fund and to accounts over which Cornerstone exercises investment
discretion. The Funds and Cornerstone understand and acknowledge that, although
the information may be useful to a Fund and Cornerstone, it is not possible to
place a dollar value on such information. The Board shall periodically review
the commissions paid by the Funds to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits to
the applicable 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, Cornerstone may give consideration to sales of
shares of a Fund as a factor in the selection of brokers and dealers to execute
Fund portfolio transactions.
Subject to such conditions as may be imposed by the Board of Trustees
and the Adviser and the provisions of the Investment Company Act and other
applicable law, nothing in the Sub-Advisory Agreements will prohibit Cornerstone
from selecting brokers and/or dealers who are "affiliated persons" of
Cornerstone, the Adviser or the Trust. On occasions when Cornerstone deems the
purchase or sale of a security to be in the best interest of a Fund as well as
other customers, Cornerstone may, to the extent permitted by applicable laws and
regulations, but shall not be obligated to, aggregate the securities to be sole
or purchased in order to obtain the best execution and lower brokerage
commissions, if any. In such event, allocation of the securities so purchased or
sold, as well as the expenses incurred in the transaction, will be made by
Cornerstone in the manner it considers to be the most equitable and consistent
with its fiduciary obligations to the Trust and, if applicable, to such other
customers.
If any occasion should arise in which Cornerstone gives any advice to
its clients concerning the shares of a Fund, it will act solely as investment
counsel for such client and not in any way on behalf of the Fund. Cornerstone's
services to the Funds pursuant to the Sub-Advisory Agreements are not to be
deemed to be exclusive and it is understood that Cornerstone may render
investment advice, management and other services to others, including other
registered investment companies.
During the term of the Sub-Advisory Agreements, Cornerstone will pay
all expenses (including without limitation the compensation of all trustees and
officers of the Trust who are "interested persons" of Cornerstone, as defined in
the Investment Company Act) incurred by it in connection with its activities
under the Sub-Advisory Agreements, other than the cost of securities and
investments purchased for each Fund (including taxes and brokerage commissions,
if any).
For the services provided and the expenses borne pursuant to the
Sub-Advisory Agreements, the Adviser will pay to Cornerstone a fee computed and
accrued daily and paid monthly at an annual rate of .75% of the average daily
net assets of the Shepherd Values Market Neutral Fund and .50% of the average
daily net assets of the Shepherd Values Growth Fund.
The Sub-Advisory Agreements state that Cornerstone and its
shareholders, members, officers, directors, employees, agents control persons or
affiliates of any thereof shall not be liable for any damages, expenses or
losses incurred by the Trust in connection with any error of judgment, mistake
of law, or for any loss suffered by any Fund in connection with the matters to
which the Sub-Advisory Agreement relates except a loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the Investment Company Act) or a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of any such
persons in the performance of Cornerstone's duties under the Sub-Advisory
Agreement, or from reckless disregard by any of such persons of Cornerstone's
obligations and duties under the Sub-Advisory Agreement.
No provisions of the Sub-Advisory Agreements may be amended until
approved by Cornerstone and the Board, including a majority of the trustees who
are not parties to the agreement or "interested persons" as defined in the
Investment Company Act, cast in person at a meeting called for the purpose of
voting on such approval, and (if required under current interpretations of the
Investment Company Act by the Securities and Exchange Commission) by vote of the
holders of a majority of the outstanding voting securities of the Fund to which
the amendment relates.
The Sub-Advisory Agreements will become effective on the date the
shareholders of the applicable Fund approve it. The Sub-Advisory Agreements will
continue in effect for two years from the effective date, and may continue
thereafter on a year-to-year basis, subject to approval by (a) the vote of the
holders of a majority of the outstanding shares of the Fund (as defined in the
Investment Company Act), or by vote of the Trust's Board of Trustees, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by a vote of the majority of the Trustees of the Trust who are not parties to
the agreement or "interested persons" (as defined in the Investment Company Act)
of any party to the agreement, cast in person at a meeting called for the
purpose of voting on such approval. The Sub-Advisory Agreements may be
terminated upon thirty days written notice by the Board of Trustees of the Trust
or by a vote of a majority of the outstanding voting securities of a Fund, or
upon ninety days written notice by the Adviser.
EVALUATION OF THE PROPOSED MANAGEMENT AGREEMENTS AND SUB-ADVISORY
AGREEMENTS BY THE BOARD OF TRUSTEES
The Board has determined that it is desirable to approve the Proposed
Management Agreements and Sub-Advisory Agreements in order to achieve
consistency and efficiency with respect to the overall supervision and
management of the Shepherd Values Funds, including the Market Neutral Fund and
the Growth Fund. The Board believes that the Proposed Agreements and
Sub-Advisory Agreements will enable the Trust to continue to obtain advisory
services of high quality at costs that it deems appropriate and reasonable and
that approval of the Proposed Agreement and Sub-Advisory Agreements is in the
best interests of the Trust and the shareholders of the Funds.
At a meeting of the Board of Trustees held on September 22, 1999, the
Board, including the Disinterested Trustees, evaluated the Adviser and requested
and reviewed, with the assistance of legal counsel, materials furnished by the
Adviser, including financial information. At a meeting of the Board of Trustees
held on September 22, 1999, the Board, including the Disinterested Trustees,
evaluated Cornerstone. In evaluating Cornerstone, the Board, including the
Disinterested Trustees, relied on information furnished by Cornerstone,
including information supplied at the February 1-2 and March 10, 1999 Board
meetings.
Based on its review, the Board of Trustees believes that the terms of
the Proposed Agreements and Sub-Advisory Agreements are fair to, and in the best
interests of, the Trust and the Funds' shareholders. Accordingly, the Board of
Trustees, including the Disinterested Trustees, unanimously recommends approval
by the shareholders of the Proposed Agreements and Sub-Advisory Agreements. In
making this recommendation, the Trustees primarily evaluated (i) the experience,
reputation, qualifications and background of the Adviser's and Cornerstone's
investment personnel, (ii) the nature and quality of operations and services
that the Adviser and Cornerstone are expected to provide the Funds with no
change in fee rates, (iii) the benefits of continuity in services to be provided
by Cornerstone under the Sub-Advisory Agreements, (iv) the ability of the
Adviser and Cornerstone to retain and attract qualified personnel and (v) the
ownership of the Adviser and Cornerstone.
The Trustees also gave careful consideration to factors deemed relevant
to the Trust and the Funds, including, but not limited to: (1) the performance
of the Funds since commencement of their operations; (2) the distinct investment
objective and policies of each Fund, (3) that the compensation to be paid under
the Proposed Agreements will be the same as the rate paid under the Current
Agreements; (4) that the compensation to be paid under the Sub-Advisory
Agreements will be paid by the Adviser; (5) that the terms of the Proposed
Agreements are identical to the terms of the Current Agreements, except for the
change of the adviser, a new provision permitting the adviser to retain one or
more sub-advisers and different effective, expiration and execution dates; (6)
the financial condition of the Adviser and Cornerstone; (7) the commitment of
the Adviser and Cornerstone to pay or reimburse the Trust for certain operating
expenses of the Funds; and (8) other factors deemed relevant.
<PAGE>
The Board viewed as significant that Jason D. Huntley, the Managing
Director of Cornerstone, is also the Vice President, Chief Investment Officer
and Managing Director of the Adviser, and will continue, at both companies, to
monitor the investments of the Funds. The Board also viewed as important the
representation of the Adviser that no diminution of the scope and quality of
advisory services provided to the Funds will result from the Proposed Agreements
or the Sub-Advisory Agreements.
THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING THE DISINTERESTED
TRUSTEES, UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF THE
PROPOSED MANAGEMENT AGREEMENTS AND SUB-ADVISORY AGREEMENTS.
OPERATION OF THE FUNDS
Each Fund is a diversified series of AmeriPrime Funds, an open-end
management investment company organized as an Ohio business trust on August 8,
1995. The Board of Trustees supervises the business activities of the Funds.
Like other mutual funds, the Trust retains various organizations to perform
specialized services. As described above, the Funds currently retain Cornerstone
Capital Management, Inc., 102 South Tejon, Suite 430, Colorado Springs, Colorado
80903 as their investment advisor. 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 Trust
retains AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092 to act as the principal distributor of the Funds' shares.
The Funds retain Unified Fund Services, Inc., 431 North Pennsylvania Street,
Indianapolis, Indiana 46204 to serve as transfer agent, dividend paying agent
and shareholder services agent.
THE PROXY
The Board of Trustees solicits proxies so that each shareholder has the
opportunity to vote on the proposals to be considered at the Meeting. A proxy
for voting your shares at the Meeting is enclosed. The shares represented by
each valid proxy received in time will be voted at the meeting as specified. If
no specification is made, the shares represented by a duly executed proxy will
be voted (i) for approval of the proposed management agreement for the
applicable Fund; (ii) for approval of the proposed sub-advisory agreement for
the applicable Fund, and (iii) at the discretion of the holders of the proxy, in
accordance with the recommendations of the Board of Trustees, if any, on any
other matter that may come before the meeting that the Trust did not have notice
of a reasonable time prior to the mailing of this Proxy Statement. You may
revoke your proxy at any time before it is exercised by (i) submitting a duly
executed proxy bearing a later date, (ii) submitting a written notice to the
President of the Trust revoking the proxy, or (iii) attending and voting in
person at the Meeting.
VOTING SECURITIES AND VOTING
The Board of Trustees has fixed the close of business on October 18,
1999 as the record date for determining the shareholders entitled to notice of
and to vote at the Meeting or any adjournment(s) thereof (the "Record Date").
There were 21,106.98 shares of beneficial interest of the Shepherd Values Growth
Fund and 28,177.58 shares of beneficial interest of the Shepherd Values Market
Neutral Fund issued and outstanding as of the Record Date. Only shareholders of
record on the Record Date are entitled to vote at the Meeting. Each shareholder
is entitled to one (1) vote per share held, and fractional votes for fractional
shares held, on any matter submitted to a vote at the Meeting. The presence, in
person or by proxy, of the holders of at least a majority of the total number of
outstanding shares of a Fund is necessary to constitute a quorum for the Fund at
the Meeting.
An affirmative vote of the holders of a majority of the outstanding
shares of a Fund is required for the approval of the proposed management
agreement and sub-advisory agreement for that Fund and any other matter
presented at the Meeting. As defined in the Investment Company Act, a vote of
the holders of a majority of the outstanding shares of a Fund means the vote of
(i) 67% or more of the voting shares of the Fund present at the Meeting, if the
holders of more than 50% of the outstanding shares of the Fund are present in
person or represented by proxy, or (ii) more than 50% of the outstanding voting
shares of the Fund, whichever is less.
Broker non-votes and abstentions will be considered present for
purposes of determining the existence of a quorum and the number of shares of a
Fund represented at the meeting, but since they are not affirmative votes for
any proposal, they will have the same effect as a vote against the proposal.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information, as of the Record Date, with
respect to each person (including any "group" as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended) known by the Trust
to be the beneficial owner of more than 5% of either Fund's outstanding shares.
NAME AND ADDRESS OF AMOUNT PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
SHEPHERDS VALUES GROWTH FUND:
Marilyn C. Franken 6,965.17 33.00%
2713 Angel Drive
Stockton, CA 95209
IRA FBO Joyce A. Tref 2,055.50 9.74%
P. O. Box 2052
Jersey City, NJ 07303
SHEPHERDS VALUES MARKET NEUTRAL FUND:
Mary A. Trapani Roth IRA 4,967.10 17.63%
355 Maureen Lane
Pleasant Hill, CA 94523
Marilyn C. Franken 3,384.91 12.01%
2713 Angel Drive
Stockton, CA 95209
<PAGE>
Donaldson Lufkin Jenrette, Thomet Family Trust 8,973.08 31.84%
P. O. Box 2052
Jersey City, NJ 07303
Elmer A. Lundgren 4,935.83 17.52%
1 Pershing Plaza
Jersey City, NJ 07399
Donaldson Lufkin, Jenrette IRA Joyce A. Tref 2,961.50 10.51%
P. O. Box 2052
Jersey City, NJ 07303
As of the Record Date, each Trustee and officer of the Trust
beneficially owned less than 1% of the outstanding shares of each Fund, and all
Trustees and officers of the Trust as a group owned less than 1% of the
outstanding shares of each Fund.
SHAREHOLDER PROPOSALS
The Trust has not received any shareholder proposals to be considered
for presentation at the Meeting. Under the proxy rules of the Securities and
Exchange Commission, shareholder proposals may, under certain conditions, be
included in the Trust's proxy statement and proxy for a particular meeting.
Under these rules, proposals submitted for inclusion in the Trust's proxy
materials must be received by the Trust a reasonable time before the
solicitation is made. The fact that the Trust receives a shareholder proposal in
a timely manner does not insure its inclusion in its proxy materials, because
there are other requirements in the proxy rules relating to such inclusion. You
should be aware that annual meetings of shareholders are not required as long as
there is no particular requirement under the Investment Company Act which must
be met by convening such a shareholder meeting.
COST OF SOLICITATION
The Board of Trustees of the Trust is making this solicitation of
proxies. The cost of preparing and mailing this Proxy Statement, the
accompanying Notice of Special Meeting and proxy and any additional materials
relating to the meeting and the cost of soliciting proxies will be borne by
Cornerstone. In addition to solicitation by mail, Cornerstone will request
banks, brokers and other custodial nominees and fiduciaries to supply proxy
materials to the beneficial owners of shares of the Funds of whom they have
knowledge, and will reimburse them for their expenses in so doing. Certain
officers, employees and agents of the Trust, Cornerstone and the Adviser may
solicit proxies in person or by telephone, facsimile transmission or mail, for
which they will not receive any special compensation.
<PAGE>
OTHER MATTERS
The Trust's Board of Trustees knows of no other matters to be presented
at the Meeting other than as set forth above. If any other matters properly come
before the meeting, the holders of the proxy will vote the shares represented by
the proxy on such matters in accordance with their best judgment, in accordance
with the recommendations of the Board of Trustees, if any, and discretionary
authority to do so is included in the proxy.
BY ORDER OF THE BOARD OF TRUSTEES
PAUL S. BELLANY
Secretary
Dated November 2, 1999
PLEASE DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
REPLY ENVELOPE OR FAX IT TO (317) 266-8756.
<PAGE>
- 6 -
<PAGE>
EXHIBIT A
MANAGEMENT AGREEMENT
TO: Cornerstone Capital Management, Inc.
102 South Tejon, Suite 430
Colorado Springs, Colorado 80903
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 Shepherd Values _____________ 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, including expenses incurred by the Fund in
connection with the organization and initial registration of shares of the Fund;
insurance expenses; fees and expenses of the custodian, transfer agent, dividend
disbursing agent, shareholder service agent, plan agent, administrator,
accounting and pricing services agent and underwriter of the Fund; expenses,
including clerical expenses, of issue, sale, redemption or repurchase of shares
of the Fund; the cost of preparing and distributing reports and notices to
shareholders, the cost of printing or preparing prospectuses and statements of
additional information for delivery to the Fund's current and prospective
shareholders; the cost of printing or preparing stock certificates or any other
documents, statements or reports to shareholders; expenses of shareholders'
meetings and proxy solicitations; advertising, promotion and other expenses
incurred directly or indirectly in connection with the sale or distribution of
the Fund's shares excluding expenses which the Fund is authorized to pay
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the
"1940 Act"); and all other operating expenses not specifically assumed by the
Fund.
The Fund will pay all brokerage fees and commissions, taxes,
borrowing costs (such as (a) interest and (b) dividend expenses on securities
sold short), 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. The Fund will also pay expenses which it is
authorized to pay pursuant to Rule 12b-1 under the 1940 Act. 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 ________% 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 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 1940 Act, 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 1940 Act or
the rules thereunder, neither you nor your shareholders, members, 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,
member, 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, member, 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 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 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
"Shepherd Values" or any variation thereof 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 "Shepherd Values" 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 "Shepherd Values" 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 this name.
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 1940 Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the series to which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "AmeriPrime Funds" means and refers to the Trustees
from time to time serving under the Trust's Declaration of Trust as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Trust and signed by officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the State of Ohio.
10. SEVERABILITY
In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(b) For the purpose of this Agreement, the terms "majority of
the outstanding voting securities," "control" and "interested person" shall have
their respective meanings as defined in the 1940 Act and rules and regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the 1940 Act; and the term "brokerage
and research services" shall have the meaning given in the Securities Exchange
Act of 1934.
(c) 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 1940 Act shall be resolved by reference to such term or
provision of the 1940 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 1940 Act, reflected in any provision of this
Agreement, is revised by rule, regulation, order or interpretation of the
Securities and Exchange Commission or its staff, 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, Texas 76092, and your address for
this purpose shall be 102 South Tejon, Suite 430, Colorado Springs, Colorado
80903.
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.
<PAGE>
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: /s/ Monta B. Henry By: /s/ Kenneth D. Trumpfheller
Name/Title: Monta B. Henry Name/Title: Kenneth D. Trumpfheller,
President
Dated: as of June 1, 1999
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST:
Cornerstone Capital Management, Inc.
By: /s/ Heather C. King By: /s/ Jason D. Huntley
Name/Title: Heather C. King, Name/Title: Jason D. Huntley,
Executive Assistant Managing Director
Dated: as of June 1, 1999
<PAGE>
EXHIBIT B
MANAGEMENT AGREEMENT
TO: Shepherd Advisory Services, Inc.
2505 21st Avenue South, Suite 204
Nashville, Tennessee 37212
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 "Shepherd Values __________ 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 as it relates to your responsibilities
otherwise provided for in this agreement. You may delegate any or all of the
responsibilities, rights or duties described in this paragraph 1 to one or more
sub-advisers who shall enter into agreements with you, which agreements shall be
approved and ratified 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 1940 Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
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, including expenses incurred by the Fund in
connection with the organization and initial registration of shares of the Fund;
insurance expenses; fees and expenses of the custodian, transfer agent, dividend
disbursing agent, shareholder service agent, plan agent, administrator,
accounting and pricing services agent and underwriter of the Fund; expenses,
including clerical expenses, of issue, sale, redemption or repurchase of shares
of the Fund; the cost of preparing and distributing reports and notices to
shareholders, the cost of printing or preparing prospectuses and statements of
additional information for delivery to the Fund's current and prospective
shareholders; the cost of printing or preparing stock certificates or any other
documents, statements or reports to shareholders; expenses of shareholders'
meetings and proxy solicitations; advertising, promotion and other expenses
incurred directly or indirectly in connection with the sale or distribution of
the Fund's shares excluding expenses which the Fund is authorized to pay
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the
"1940 Act"); and all other operating expenses not specifically assumed by the
Fund.
The Fund will pay all brokerage fees and commissions, taxes,
borrowing costs (such as (a) interest and (b) dividend expense on securities
sold short), 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. The Fund will also pay expenses which it is
authorized to pay pursuant to Rule 12b-1 under the 1940 Act. 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 ________% 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.
<PAGE>
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 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 1940 Act, 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 1940 Act or
the rules thereunder, neither you nor your shareholders, members, 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,
member, 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, member, shareholder or agent of you, or one under your control or
direction, even though paid by you.
<PAGE>
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its execution,
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 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 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
"Shepherd Values" or any variation thereof 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 "Shepherd Values" 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 "Shepherd Values" 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 this name.
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 1940 Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the series to which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "AmeriPrime Funds" means and refers to the Trustees
from time to time serving under the Trust's Declaration of Trust as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Trust and signed by officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the State of Ohio.
10. SEVERABILITY
In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(b) For the purpose of this Agreement, the terms "majority of
the outstanding voting securities," "control" and "interested person" shall have
their respective meanings as defined in the 1940 Act and rules and regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the 1940 Act; and the term "brokerage
and research services" shall have the meaning given in the Securities Exchange
Act of 1934.
(c) 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 1940 Act shall be resolved by reference to such term or
provision of the 1940 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 1940 Act, reflected in any provision of this
Agreement, is revised by rule, regulation, order or interpretation of the
Securities and Exchange Commission or its staff, 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, Texas 76092, and your address for
this purpose shall be 2505 21st Avenue South, Suite 204, Nashville, Tennessee
37212.
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.
<PAGE>
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: ____________________________ By: ____________________________
Name/Title: ________________________ Name/Title: ________________________
Dated: ________, 1999
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST:
Shepherd Advisory Services, Inc.
By: ___________________________ By: ________________________________
Name/Title: _____________________ Name/Title: _______________________
Dated: _______, 1999
<PAGE>
EXHIBIT C
AMERIPRIME FUND
INVESTMENT SUB-ADVISORY AGREEMENT
This INVESTMENT SUB-ADVISORY AGREEMENT is effective as of ____________
__, 1999, between Shepherd Advisory Services, Inc., a Tennessee corporation (the
"Adviser") and Cornerstone Capital Management, Inc., a Colorado corporation (the
"Sub-Adviser").
W I T N E S E T H:
WHEREAS, the Adviser acts as the investment adviser to the Shepherd
Values ___________ Fund (the "Fund"), a series of AmeriPrime Fund, an Ohio
business trust (the "Trust"), pursuant to a Management Agreement for the Fund
effective as of ___________, 1999 (the "Advisory Agreement");
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to render
investment sub-advisory services to the Fund, and the Sub-Adviser is willing to
render such services.
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, the parties hereto agree as follows:
SECTION 1. APPOINTMENT AND STATUS OF SUB-ADVISER. The Adviser hereby
appoints the Sub-Adviser to act as its agent to provide investment advisory
service to the Fund, for the period and on the terms set forth in this
Agreement. The Sub-Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided. Although the
Sub-Adviser shall be an agent of the Adviser, the Sub-Adviser shall for all
purposes herein be deemed to be an independent contractor of the Adviser and the
Trust and shall, unless otherwise expressly provided herein or authorized by the
Adviser or the Board of Trustees of the Trust from time to time, have no
authority to act for or represent the Adviser or the Trust in any way or
otherwise be deemed an agent of the Trust.
SECTION 2. SUB-ADVISER'S DUTIES. Subject to the general supervision of
the Trust's Board of Trustees (the "Board") and the Adviser, the Sub-Adviser
shall, employing its discretion, manage the investment operations of the Fund
and the composition of the portfolio of securities and investments (including
cash) belonging to the Fund, including the purchase, retention and disposition
thereof and the execution of agreements relating thereto, in accordance with the
Fund's investment objectives, policies and restrictions as stated in the Fund's
then-current Prospectus and Statement of Additional Information (together, the
"Prospectus") and subject to the following understandings:
(a) The Sub-Adviser shall furnish a continuous investment program for
the Fund and determine from time to time what investments or securities will be
purchased, retained or sold by the Fund and what portion of the assets belonging
to the Fund will be invested or held uninvested as cash;
(b) The Sub-Adviser shall use its best judgment in the performance of
its duties under this Agreement;
<PAGE>
(c) The Sub-Adviser, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Trust's Declaration of
Trust, its By-Laws and the Fund's Prospectus and with the instructions and
directions of the Trust's Board of Trustees and the Adviser and will conform to
and comply with the requirements of the 1940 Act and all other applicable
federal and state laws and regulations;
(d) The Sub-Adviser shall determine the securities to be purchased or
sold by the Fund and as agent for the Trust will effect portfolio transactions
pursuant to its determinations either directly with the issuer or with any
broker and/or dealer in such securities, subject to Section 3 below;
(e) The Sub-Adviser shall maintain books and records with respect to
the securities transactions of the Fund and shall render to the Adviser and the
Trust's Board of Trustees such periodic and special reports as the Adviser or
the Board may request; and
(f) The Sub-Adviser shall provide the Trust's custodian with such
information relating to the Trust as may be required under the terms of the
then-current custody agreement between the Trust and the custodian.
SECTION 3. BROKERAGE. In placing orders with brokers and/or dealers,
the Sub-Adviser is directed at all times to seek best price and execution for
purchases and sales on behalf of the Fund, taking into account such factors as
price (including the applicable brokerage commission or dealer spread), the
execution capability, financial responsibility and responsiveness of the broker
or dealer and the brokerage and research services provided by the broker or
dealer. Sub-Adviser should generally seek favorable prices and commission rates
that are reasonable in relation to the benefits received. Subject to such
conditions as may be imposed by the Trust's Board of Trustees, the Sub-Adviser
may pay commissions to brokers and/or dealers that are higher than might be
charged by another qualified broker to obtain brokerage and/or research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) considered by the Sub-Adviser to be
useful or desirable in the performance of the Sub-Adviser's duties hereunder, if
the Sub-Adviser determines 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 Sub-Adviser's overall
responsibilities with respect to the Fund and to accounts over which Sub-Adviser
exercises investment discretion. The Fund and the Sub-Adviser understand and
acknowledge that, although the information may be useful to the Fund and the
Sub-Adviser, 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, the Sub-Adviser 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 foregoing and to such conditions as may be imposed by
the Adviser or the Trust's Board of Trustees and the provisions of the 1940 Act,
Exchange Act, and other applicable law, nothing herein shall prohibit the
Sub-Adviser from selecting brokers and/or dealers who are "affiliated persons"
of the Sub-Adviser, the Adviser or the Trust. On occasions when the Sub-Adviser
deems the purchase or sale of a security to be in the best interests of the
Trust as well as other customers, the Sub-Adviser may, to the extent permitted
by applicable laws and regulations, but shall not be obligated to, aggregate the
securities to be so sold or purchased in order to obtain the best execution and
lower brokerage commissions, if any. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transaction, will
be made by the Sub-Adviser in the manner it considers to be the most equitable
and consistent with its fiduciary obligations to the Trust and, if applicable,
to such other customers.
If any occasion should arise in which the Sub-Adviser gives any advice
to clients of Sub-Adviser concerning the shares of the Fund, Sub-Adviser will
act solely as investment counsel for such client and not in any way on behalf of
the Fund. Sub-Adviser's services to the Fund pursuant to this Agreement are not
to be deemed to be exclusive and it is understood that Sub-Adviser may render
investment advice, management and other services to others, including other
registered investment companies.
SECTION 4. BOOKS AND RECORDS. The Sub-Adviser shall keep the Trust's
books and records required to be maintained by it pursuant to Section 2(e) of
this Agreement. The Sub-Adviser agrees that all records which it maintains for
the Trust are the property of the Trust and it will promptly surrender any of
such records to the Trust upon the Trust's request. The Sub-Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
any such records as are required to be maintained by the Sub-Adviser with
respect to the Trust by Rule 31a-1 under the 1940 Act.
SECTION 5. EXPENSES OF THE SUB-ADVISER. During the term of this
Agreement, the Sub-Adviser will pay all expenses (including without limitation
the compensation of all trustees or officers of the Trust who are "interested
persons" of the Sub-Adviser, as defined in the 1940 Act) incurred by it in
connection with its activities under this Agreement other than the cost of
securities and investments purchased for the Fund (including taxes and brokerage
commissions, if any).
SECTION 6. COMPENSATION OF THE SUB-ADVISER. For the services provided
and the expenses borne pursuant to this Agreement, the Adviser will pay to the
Sub-Adviser as full compensation therefor a fee computed and accrued daily and
paid monthly at an annual rate equal to ____% of the average daily net assets of
the Fund. The fee for each month will be paid to the Sub-Adviser during the
succeeding month. For purposes of determining the fee payable hereunder, the net
asset value of the Fund shall be calculated in the manner specified in the
Fund's Prospectus.
SECTION 7. USE OF NAME. The Sub-Adviser acknowledges that all rights to
the name "Shepherd Values" belong to the Adviser, 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 the Adviser ceases to be the Adviser, the Trust's right to
the use of the name "Shepherd Values" shall automatically cease on the ninetieth
day following the termination of this Agreement. The right to the name may also
be withdrawn by the Adviser during the term of the Management Agreement upon
ninety (90) days' written notice by the Adviser to the Trust. Nothing contained
herein shall impair or diminish in any respect the Adviser's right to use the
name "Shepherd Values" in the name of, or in connection with, any other business
enterprises with which the Adviser is or may become associated. There is no
charge to the Trust for the right to use these names.
SECTION 8. LIABILITY OF THE SUB-ADVISER. Neither Sub-Adviser nor its
shareholders, members, officers, directors, employees, agents, control persons
or affiliates of any thereof, shall be liable for any error of judgment or
mistake of law or for any loss suffered by any Fund in connection with the
matters to which this Agreement relates except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the 1940 Act) or a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
Any person, even though also a director, officer, employee,
shareholder, member or agent of Sub-Adviser, 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 Sub-Adviser's duties hereunder), to
be rendering such services to or acting solely for the Trust and not as a
director, officer, employee, shareholder, member or agent of Sub-Adviser, or one
under Sub-Adviser's control or direction, even though paid by Sub-Adviser.
SECTION 9. DURATION AND TERMINATION. The term of this Agreement shall
begin on the effective date of this Agreement and shall continue in effect for a
period of two years. This Agreement shall continue in effect from year to year
thereafter, subject to termination as hereinafter provided, if such continuance
is approved at least annually by (a) a majority of the outstanding voting
securities (as defined in the 1940 Act) of the Fund or by vote of the Trust's
Board of Trustees, cast in person at a meeting called for the purpose of voting
on such approval, and (b) by vote of a majority of the Trustees of the Trust who
are not parties to this Agreement or "interested persons" (as defined in the
1940 Act) of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval. This Agreement may be terminated by the
Adviser or the Trust at any time, without the payment of any penalty, by the
Adviser with the consent of the Trust's Board of Trustees, by the Trust's Board
of Trustees, or by vote of a majority of the outstanding voting securities (as
defined in the 1940 Act) of the Fund, in any such case on 30 days' written
notice to the Sub-Adviser, or by the Sub-Adviser at any time, without the
payment of any penalty, on 90 days' written notice to the Adviser. This
Agreement will automatically and immediately terminate in the event of its
assignment (as defined in the 1940 Act).
SECTION 10. AMENDMENT. This Agreement may be amended by mutual consent
of the Adviser, the Sub-Adviser and the Trust, but the consent of the Trust must
be approved (a) by vote of a majority of those Trustees of the Trustee who are
not parties to this Agreement or "interested persons" (as defined in the 1940
Act) of any such party, cast in person at a meeting called for the purpose of
voting on such amendment, and (b) if required under then current interpretations
of the 1940 Act by the Securities and Exchange Commission, by vote of a majority
of the outstanding voting securities (as defined in the 1940 Act) of the Fund
affected by such amendment.
SECTION 11. NOTICES. Notices of any kind to be given in writing and
shall be duly given if mailed or delivered to the Sub-Adviser at 102 South
Tejon, Suite 430, Colorado Springs, Colorado 80903, and to the Adviser at 2505
21st Avenue South, Suite 204, Nashville, Tennessee 37212, or at such other
address or to such other individual as shall be specified by the party to be
given notice.
SECTION 12. GOVERNING LAW. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio, without regard to
the conflicts of laws principles thereof, and (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 1940 Act, shall be resolved by reference
to such term or provision of the 1940 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 1940 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.
SECTION 13. 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.
SECTION 14. 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.
SECTION 15. BINDING EFFECT. Each of the undersigned expressly warrants and
represents that he/she has the full power and authority to sign this Agreement
on behalf of the party indicated, and that his/her signature will operate to
bind the party indicated to the foregoing terms.
SECTION 16. CAPTIONS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereto for otherwise affect their construction or effect.
SECTION 17. CHANGE OF CONTROL. Sub-Adviser undertakes to notify Adviser and
the Trust in writing sufficiently in advance of any change of control, as
defined in Section 2(a)(9) of the 1940 Act, as will enable the Trust to consider
whether an assignment, as defined in Section 2(a)(4) of the 1940 Act, would
occur.
SECTION 18. OTHER BUSINESS. Except as set forth above, nothing in this
Agreement shall limit or restrict the right of any of the Sub-Adviser's
partners, officers or employees who may also be a trustee, officer, partner or
employee of the Trust to engage in any other business or to devote his or her
time and attention in part to the management or other aspects of any business,
whether of a similar or a dissimilar nature, nor limit or restrict the
Sub-Adviser's right to engage in any other business or to render services of any
kind to any other corporation, firm, individual or association.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers designated below as of the date and
year first above written.
Shepherd Advisory Services, Inc. Cornerstone Capital Management, Inc.
By: __________________________________ By: _________________________________
Name: _______________________________ Name: _______________________________
Title: ________________________________ Title: ________________________________
<PAGE>
PROXY
SHEPHERD VALUES MARKET NEUTRAL FUND
SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 2, 1999
The undersigned shareholder of Shepherd Values Market Neutral Fund (the
"Fund"), a series of AmeriPrime Funds (the "Trust"), hereby nominates,
constitutes and appoints Kenneth D. Trumpfheller and Paul S. Bellany, and each
of them, the attorney, agent and proxy of the undersigned, with full powers of
substitution, to vote all the stock of the Fund which the undersigned is
entitled to vote at the Special Meeting of Shareholders of the Fund to be held
at 175 Westwood, Southlake, Texas 76092, on Thursday, December 2, 1999 at 10:00
a.m. Eastern Standard Time and at any and all adjournments thereof, as fully and
with the same force and effect as the undersigned might or could do if
personally present as follows:
1. RATIFICATION OF PRESENT MANAGEMENT AGREEMENT WITH CORNERSTONE CAPITAL
MANAGEMENT, INC.
|_| FOR |_| AGAINST |_| ABSTAIN
2. APPROVAL OF MANAGEMENT AGREEMENT WITH SHEPHERD ADVISORY SERVICES, INC.
AND SUB-ADVISORY AGREEMENT WITH CORNERSTONE CAPITAL MANAGEMENT, INC.
|_| FOR |_| AGAINST |_| ABSTAIN
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" ON PROPOSALS 1 AND 2. THE
PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES UNLESS A CONTRARY INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY
SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS. IN ALL OTHER MATTERS, IF
ANY, PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED IN THE DISCRETION OF
THE PROXY HOLDERS, IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES, IF ANY.
________________ DATED:________, 1999 ____________________________________
(Number of Shares) (Please Print Your Name)
------------------------------------
(Signature of Shareholder)
------------------------------------
(Please Print Your Name)
------------------------------------
(Signature of Shareholder)
(Please date this proxy and sign
your name as it appears on the label.
Executors, administrators, trustees,
etc.should give their full titles.
All joint owners should sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUST'S BOARD OF TRUSTEES, AND MAY BE
REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE PRESIDENT OF THE TRUST AN
INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR
BY APPEARING IN PERSON AND VOTING AT THE MEETING.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.
<PAGE>
PROXY
SHEPHERD VALUES GROWTH FUND
SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 2, 1999
The undersigned shareholder of Shepherd Values Growth Fund (the
"Fund"), a series of AmeriPrime Funds (the "Trust"), hereby nominates,
constitutes and appoints Kenneth D. Trumpfheller and Paul S. Bellany, and each
of them, the attorney, agent and proxy of the undersigned, with full powers of
substitution, to vote all the stock of the Fund which the undersigned is
entitled to vote at the Special Meeting of Shareholders of the Fund to be held
at 175 Westwood, Southlake, Texas 76092, on Thursday, December 2, 1999 at 10:00
a.m. Eastern Standard Time and at any and all adjournments thereof, as fully and
with the same force and effect as the undersigned might or could do if
personally present as follows:
1. RATIFICATION OF PRESENT MANAGEMENT AGREEMENT WITH CORNERSTONE CAPITAL
MANAGEMENT, INC.
|_| FOR |_| AGAINST |_| ABSTAIN
2. APPROVAL OF MANAGEMENT AGREEMENT WITH SHEPHERD ADVISORY SERVICES, INC.
AND SUB-ADVISORY AGREEMENT WITH CORNERSTONE CAPITAL MANAGEMENT, INC.
|_| FOR |_| AGAINST |_| ABSTAIN
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" ON PROPOSALS 1 AND 2. THE
PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES UNLESS A CONTRARY INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY
SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS. IN ALL OTHER MATTERS, IF
ANY, PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED IN THE DISCRETION OF
THE PROXY HOLDERS, IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES, IF ANY.
________________ DATED:________, 1999 ____________________________________
(Number of Shares) (Please Print Your Name)
------------------------------------
(Signature of Shareholder)
------------------------------------
(Please Print Your Name)
------------------------------------
(Signature of Shareholder)
(Please date this proxy and sign
your name as it appears on the
label. Executors, administrators,
trustees, etc. should give their
full titles. All joint owners
should sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUST'S BOARD OF TRUSTEES, AND MAY BE
REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE PRESIDENT OF THE TRUST AN
INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR
BY APPEARING IN PERSON AND VOTING AT THE MEETING.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.
