SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 22 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / /
Amendment No. 23 /X /
(Check appropriate box or boxes.)
AmeriPrime Funds - File Nos. 33-96826 and 811-9096
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092
(Address of Principal Executive Offices) Zip Code
Registrant's Telephone Number, including Area Code: (817) 431-2197
Kenneth Trumpfheller, 1793 Kingswood Dr., Suite 200, Southlake, TX 76092
(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b) / / on pursuant
to paragraph (b) / / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1) /X / 75 days after filing
pursuant to paragraph (a)(2) / / on (date) pursuant to paragraph (a)(2)
of Rule 485
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
7747 1/21/99 3:40 PM
PROSPECTUS
January , 1999
The Cash Fund
290 Turnpike Road, #338
Westborough, MA 01581
Toll-free (888)xxx-xxxx
TABLE OF CONTENTS
Fund Basics
Fund Expenses
Management
Performance
Shareholder Information
Distributions
Taxes
For More Information
INVESTMENT OBJECTIVE
Maximum current income to the extent
consistent with stability of capital.
Cash Management Systems Money Program
The Cash Fund
Like all mutual funds, the Securities and Exchange Commission has not approved
or disapproved these securities or passed upon the adequacy of this prospectus.
Any representation to the contrary is a criminal offense.
[LOGO]
<PAGE>
FUND BASICS
Objectives and Principal Strategies.
This is a money market fund that intends to have a constant share price of
$1.00. The Fund's investment objective is maximum current income to the extent
consistent with stability of capital. To achieve this objective, we invest only
in high quality short-term Cash instruments that present minimal credit
risks, as determined by the Fund's portfolio managers. The Fund will only
purchase Cash instruments that mature in thirteen months or less. The
Fund intends to maintain an average portfolio maturity of 90 days or less.
SIDE BAR
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SHARE PRICE
Like all Cash funds, the Fund will make every effort to maintain a net
asset value of $1 per share. There can be no guarantee that the Fund will always
be able to do so.
PORTFOLIO MATURITY
The maturity date is the date that the principal amount of the notes, drafts, or
other debt instruments are due and payable. A Cash Fund's portfolio is
appropriately weighted and adjusted to ensure that the portfolio always has an
average maturity of 90 days or less.
HIGH QUALITY
High quality Cash instruments include those that are:
1. 1. rated in one of the two highest rating categories for short-term debt
(by any two nationally recognized statistical rating organizations, or by one
rating organization if only one has issued a rating) , or
2. Unrated and determined by Janus Capital to be of comparable quality.
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The Fund invests primarily in high quality corporate debt obligations, U.S.
Government securities, and obligations of financial institutions. The Fund may
also invest in municipal securities. Debt obligations include commercial paper,
which are short term promissory notes issued by domestic companies to finance
current obligations. Notes, bonds and variable amount master demand notes are
also forms of debt obligations. U.S. Government securities include direct
obligations of the U.S. Treasury, such as U.S. Treasury bills, notes and bonds,
as well as bonds and notes of U.S. government agencies or instrumentalities.
Obligations of financial institutions include negotiable certificates of
deposit, bankers' acceptances, time deposits and other obligations of large U.S.
banks. The Fund invests from time to time in Eurodollar and Yankee bank
obligations as well as other U.S. dollar-denominated obligations of foreign
banks having total assets over ten billion dollars.
PRINCIPAL RISKS
All investments involve risk. An investment in the Fund is not a bank deposit
and is not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency. Although the Fund seeks to preserve the value of
your investment at $1 per share, it is possible to lose money by investing in
the Fund.
The Fund's investments in Cash instruments involve both credit risk -the
possibility that the issuer will default, and market risk -- the risk that an
instrument will lose value because interest rates change or investors lose
confidence in the issuer's ability to pay back the debt. To limit these risks,
we invest only in high-quality securities with short maturities (no more than
thirteen months).
The Fund's investments in foreign securities involve certain additional risks.
For example, foreign banks and companies generally are not subject to regulatory
requirements comparable to those applicable to U.S. banks and companies. In
addition, political developments and changes in currency rates may adversely
affect the value of the Fund's foreign securities. In all cases, however, we
invest only in U.S. dollar-denominated securities.
Certain strategies that the fund may use can involve risk. Repurchase agreements
are transactions in which the Fund purchases securities and simultaneously
commits to resell the securities to the seller at an agreed-upon price on an
agreed upon future date. If the seller of the securities fails to pay the agreed
resale price on the agreed delivery date, the Fund could incur costs in selling
the collateral.
The Fund's Board of Trustees may change the objective of the Fund without
shareholder approval. The Fund will notifiy you if there is any material change.
If there is a change in the objective, you should consider whether the Fund
would continue to be the right investment for you. There is no guarantee that
the Fund will meet its objective.
<PAGE>
FUND EXPENSES
As an investor, you pay certain fees and expenses in connection with
the funds, which are described in the table below. Shareholder
transaction fees are paid from your account. Annual Fund operating
expenses are included in the management fee paid to the investment
adviser.
Shareholder Fees (expenses that are deducted from your account) - NONE
Annual Fund Operating Expenses (expenses that are deducted from Fund
assets)
Management Fees..........................[ ]%
Distribution (12b-1) Fees.......................None
Other Expenses.............................. 01
Total Annual Fund Operating Expenses.....
1 Other expenses are based on estimated amount for the current year. The fund
estimates that other expenses paid by the fund will be less than 0.01% of
average net assets for the current fiscal year.
Example: This example is intended to help you compare the cost of investment in
the Fund with the cost of investing in other mutual funds.
This example assumes that you invest $10,000 in the Fund for
the time periods indicated and then redeem all of your shares
at the end of those periods. The Example also assumes that
your investment has a 5% return each year and that the Fund's
operating expenses remain the same. Although your actual costs
may be higher or lower, based on these assumptions your costs
would be:
1 year 3 years
Fees:
Management fee: fee paid to the investment adviser for managing the
Fund's portfolio.
Distribution fee: fee paid to the Fund's distributor for maintaining
shareholder accounts, providing information for prospective investors
and account maintenance.
Other expenses: expenses incurred by the Fund for miscellaneous items
such as custody, administration and registration fees. Unlike most
other mutual funds, the Fund's investment adviser pays the Fund's other
expenses (with a few exceptions).
<PAGE>
MANAGEMENT
HOW THE FUND IS MANAGED
The Investment Adviser for the Fund is Cash Management Systems ("CMS"), 290
Turnpike Road, Suite 338, Westborough, MS 01581. CMS is a, registed trademark of
Legacy Investment Group, LLC and newly formed investment advisory firm that was
created to oversee the asset management program for the Fund. CMS has no
previous experience managing a mutual fund, however, the sub-adviser, Janus
Capital manages assets in the amount of %50 billion. David Reavill, the Managing
Director of CMS has over 25 years experience in the securities industry. And for
the past 10 years has designed cash sweep products for broker dealers
nationwide. Legacy Investment Group, LLC is the sole shareholder of the
investment advisor and holds 100% of the stock. The Fund pays the adviser a fee
of equal to an annual average rate of 1.0 % of its average daily net assets. The
Advisor pays all of the operating expenses of the Fund except brokerage, taxes,
interest, fees and expenses of non-interested person trustees and extraordinary
expenses. It should be noted that most investment companies pay their own
operating expenses directly, while this Fund's expenses (except those specified)
are paid by the Adviser. The Adviser selected Janus Capital, 100 Fillmore
Street, Denver, Colorado, 80206 as the sub-adviser for the Fund. As sub-adviser,
Janus Capital has responsibility for managing the assets of the portfolio. Janus
Capital began serving as investment adviser to the Janus Fund in 1970 and
currently serves as investment adviser to all of the Janus Funds. Janus acts as
sub-adviser for a number of a private-label mutual funds and provides separate
account advisory services for institutional accounts. The Adviser pays all
expenses of the sub-adviser. .
Performance
Investors may call the Fund at 1-800- to obtain the current 7-day yield.
YEAR 2000
Many computer systems used today cannot tell the year 2000 from the year 1900
because of the way dates are encoded. This could be a problem when the year 2000
arrives and could affect securities trades, interest and dividend payments,
pricing and account services. Although we can't guarantee that this won't be a
problem, the Fund's service providers have been working on adapting their
computer systems. They expect that their systems, and the systems of their
service providers, will be ready for the new millennium.
SHAREHOLDER INFORMATION
Purchasing Shares
You may purchase shares of the Fund with an initial investment of [$2,500] and
additional investments of as little as [$50.00]. You can also choose to
participate in the automatic investment program with automatic purchases in an
amount as little as $ . Your price for Fund shares is the Fund's net asset value
per share ("NAV"). The NAV is calculated each day that the New York Stock
Exchange (NYSE) is open and is based on the value of the Funds' investments.
These investments are priced based on their current market value. When market
quotations are not readily available, the investments are priced at fair value
as determined by the Fund's adviser subject to the Board of Trustees' review.
Opening an Account
Decide whether your first investment will be paid by check or wire. Initial
payment must be at least 2,500. By check. Complete application and send it,
along with a check made payable to the Fund to The Cash Fund c/o Unified
Funds Service, Inc. P.O.
Box 6110 Indianapolis, Indiana 46204-6110.
By wire. Call the Transfer Agent at 888- to set up your account and to receive
an account number. Call your bank and have your investment amount wired. Your
bank will need the following information.
Star Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: The Cash Fund
D.D.A. #
Account Name
Your Account #
Purchasing Additional Shares
Decide whether the purchases will be by mail, wire or automatic investment. Your
purchase must meet the $50.00 minimum.
By mail. Send check along with: your name, your account number and the name of
the Fund. By wire. Call your bank and have your investment amount wired. Your
bank will need the following information: Star Bank, N.A. ABA #0420-0001-3
Attention The Cash Fund Account Name and Account number.
Automatic Investment Program. Fill out the application, designating automatic
investment option and attach a voided check. The Fund automatically deducts
payment from your account on a regular basis.
[sidebar]
Net Asset Value- This is the price per share of a mutual fund. It is determined
by taking the total value of the fund (assets liabilities) divided by the total
number of fund shares outstanding. A Cash fund uses the amortized cost
method for valuing securities. , which normally approximates market value, and
is intended to result in an NAV of $1.00 per share at all times.
Selling shares
Your shares will be sold at the next NAV calculated after your order is accepted
by the Funds' transfer agent. You may receive your payment by check or federal
wire transfer. The proceeds may be more or less than the payment by check or
federal wire transfer. The proceeds may be more or less than the purchase price
of your shares. Presently there is no charge for wire redemptions. The Fund
reserves the right to charge for this service in the future.
1. If you completed the Optional Telephone Redemption and Exchange section of
the Fund's application, you may redeem by telephone.
2. By Telephone Call the transfer agent at 888- . Through your broker. Call
your broker/dealer or other financial institution. You may be charged a fee
by the institution. By mail. Write to the Fund's transfer agent at: The
Cash Fund c/o Unified Fund Services, Inc. 431 North Pennsylvania
Street, Indianapolis, IN 46204.
The Fund may redeem any account that has less than $2,500.
Your shares will be sold at the next NAV calculated after your order is accepted
by the Funds' transfer agent. You may receive your payment by check or federal
wire transfer. The proceeds may be more or less than the purchase price of your
shares. Presently there is no charge for wire redemptions. The Fund reserves the
right to charge for this service in the future.
DISTRIBUTIONS
The Fund pays dividends to shareholders from net investment income every month.
Although the Fund is not likely to receive capital gains because of the types of
securities purchased, any received will be distributed to shareholders once a
year.
For your convenience, dividends and capital gains are automatically reinvested
in the Fund. If you ask us to pay the distributions in cash, we will send you a
check instead of purchasing more shares of the Fund. You will receive
confirmation that shows the payment amount and a summary of all transactions.
Check are normally mailed within five business days of the payment date.
TAXES
As with any investment, you should consider how your investment in the Fund will
be taxed. If your account is not a tax-deferred retirement account, you should
be aware of these tax consequences. For federal tax purposes, the Fund's income
and short-term capital gain distributions are taxed as dividends; long-term
capital gain distributions are taxed as long-term capital gains. Your
distributions may also be subject to state income tax. The distributions are
taxable when they are paid, whether you take them in cash or participate in the
dividend reinvestment program. Each January, the Fund will mail you a form
indicating the federal tax status of your dividend and capital gain
distributions.
All shareholders must provide the Fund with a correct taxpayer identification
number (generally your Social Security Number) and certify that you are not
subject to backup withholding. If you fail to do so, the IRS can require the
Fund to withhold 31% of your taxable distributions and redemptions. Federal law
also requires the Funds to withhold 30% of the applicable tax treaty rate from
dividends paid to certain non-resident alien, non-US partnership and non-U.S.
corporation shareholder accounts.
Please see the statement of additional information and your own tax adviser for
further information.
The Taxpayer Relief Act of 1997 made certain changes to capital gains tax rates.
Under the law, taxpayers in all brackets will have an advantage when it comes to
capital gains tax rates. The Fund will provide information relating to the
portion of any Fund distribution that is eligible for the reduced capital gains
tax rate.
[Back Cover]
FOR MORE INFORMATION
General Information and Other Available Information
The Fund sends investors a semi-annual report and an audited annual report.
These reports include a list of the Fund investments and the Fund's financial
statements.
The Fund has a Statement of Additional Information that contains more detailed
information on all aspects of the Fund and is incorporated by reference into
this prospectus. Call the Fund at 800- to request free copies of these
documents, or to make other inquiries. The Statement of Additional Information
and other reports are available for review at the Securities and Exchange
Commission. Public Reference Room (call 1-800-SEC-0330 for room hours and
operation) or on the SEC's web site at http://www.sec.gov. You may also obtain
Fund information by sending a written request and duplicating fee to the Public
Reference Section of the SEC, Washington, D.C. 20549-6609.
.
Investment Company File No. 811-
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The Cash Fund
A Series of the AmeriPrime Funds
STATEMENT OF ADDITIONAL INFORMATION
January , 1999
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This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the Prospectus of the The Cash Fund, dated January , 1999.
A copy of the Prospectus can be obtained by writing the Fund c/o Unified Fund
Services, 431 North Pennsylvania Street, Indianapolis, Indiana 46204. You may
also call 1-800 ___________.
TABLE OF CONTENTS PAGE
Fund History
Types of Investments and Investment Techniques Investment Limitations Investment
Adviser Management of the Fund Control Persons and Principal Holders of
Securities Portfolio Transactions and Brokerage How to Invest in the Fund How to
Redeem Shares Share Price Calculation Performance Taxes Other Information
7656 1/12/99
FUND HISTORY
The Cash Fund (the "Fund") was organized as a series of the AmeriPrime
Funds (the "Trust") on January __, 1999. The Trust is an open-end investment
company established under the laws of Ohio by an Agreement and Declaration of
Trust dated August 8, 1995 (the "Trust Agreement"). The Trust Agreement permits
the Trustees to issue an unlimited number of shares of beneficial interest of
separate series without par value. The Fund is one of a series of funds
currently authorized by the Trustees.
Any Trustee of the Trust may be removed by vote of the shareholders
holding not less than two-thirds of the outstanding shares of the Trust. The
Trust does not hold an annual meeting of shareholders. When matters are
submitted to shareholders for a vote, each shareholder is entitled to one vote
for each whole share he owns and fractional votes for fractional shares he owns.
All shares of the Fund have equal voting rights and liquidation rights. Prior to
the public offering of the Fund, ________________________________ purchased for
investment all of the outstanding shares of the Fund and may be deemed to
control the Fund.
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series. Each other share of that
series is entitled to dividends and distributions out of income belonging to the
series as are declared by the Trustees. The shares do not have cumulative voting
rights or any preemptive or conversion rights. Trustees have the authority from
time to time to divide or combine the shares of any series into a greater or
lesser number of shares of that series, so long as, the proportionate beneficial
interest in the assets belonging to that series and the rights of shares of any
other series are in no way affected. In case of any liquidation of a series,
shareholders of the series being liquidated will be entitled to receive as a
group, a distribution out of the assets, net of the liabilities, belonging to
that series. Expenses attributable to any series are borne by that series. Any
general expenses of the Trust not readily identifiable as belonging to a
particular series are allocated by or under the direction of the Trustees in
such manner as the Trustees determine to be fair and equitable. No shareholder
is liable to further calls or to assessment by the Trust without his or her
express consent.
TYPES OF INVESTMENTS AND INVESTMENT TECHNIQUES
The Fund is a diversified fund. This means that with respect to 75% of
the Fund's assets, the Fund may not invest more than 5% in the securities of any
single issuer. In addition, the Fund does not invest more than 25% of its total
assets in any one industry. This limit does not apply to U.S. Government
Securities, bank obligations or municipal securities.
The Fund is a money market fund that invests at least 95% of its total
assets in securities in the highest rating category (as determined pursuant to
SEC Rule 2a-7). High quality money instruments include those that are rated in
one of the two highest rating categories for short-term debt by any two
nationally recognized statitisical rating organizations ("NRSROs"). They also
include securities that may not be rated, but are issued by an issuer with a
comparable outstanding short-term debt that is rated. High quality money
instruments may also be rated by only one NRSRO. An unrated security may be
determined to be high quality by the investment adviser or sub-adviser.
The Fund pursues its objective by investing primarily in high quality
debt obligations and obligations of financial institutions. The Fund may also
invest in U.S. Government securities (defined below) and municipal securities.
Fixed Income Securities. The Fund may invest in fixed income securities. Fixed
income securities include corporate debt securities, U.S. government securities
and participation interests in such securities. Fixed income securities are
generally considered to be interest rate sensitive, which means that their value
will generally decrease when interest rates rise and increase when interest
rates fall. Securities with shorter maturities, while offering lower yields,
generally provide greater price stability than longer-term securities and are
less affected by changes in interest rates.
Corporate Debt Securities. Corporate debt securities are long and short-term
debt obligations issued by companies (such as publicly issued and privately
placed bonds, notes and commercial paper). The Advisor considers corporate debt
securities to be of investment grade quality if they are rated BBB or higher by
Standard & Poor's Corporation, or Baa or higher by Moody's Investors Services,
Inc., or if unrated, determined by the Advisor to be of comparable quality.
Investment grade debt securities generally have adequate to strong protection of
principal and interest payments. In the lower end of this category, credit
quality may be more susceptible to potential future changes in circumstances and
the securities have speculative elements. The Fund will not invest more than 5%
of the value of its net assets in securities that are below investment grade.
Obligations of Financial Institutions. The Fund may invest in obligations of
financial institutions. Examples of obligations in which the fund may invest
include negotiable certificates of deposit, bankers acceptances, time deposits
and other obligations of U.S. banks (including savings and loan associations)
having total assets in excess of ten billion dollars. The Fund may also invest
in Eurodollar and Yankee bank obligations as discussed below and other U.S.
dollar-denominated obligations of foreign banks having total assets in excess of
ten billion dollars that the sub-advisor believes are of investment quality.
Certificates of deposit represent an institution's obligation to repay
funds deposited with it that earn a specified interest rate over a given period.
Bankers' acceptances are negotiable obligations of a bank to pay a draft, which
has been drawn by a customer, and are usually backed by goods in international
trade. Time deposits are non-negotiable deposits with a banking institution that
earn a specified interest rate over a given period. Fixed time deposits, which
are payable at a stated maturity date and bear a fixed rate of interest,
generally may be withdrawn on demand by the Fund but may be subject early
withdrawal penalties that could reduce the Fund's yield. Unless there is a
readily available market for them, time deposits that are subject to early
withdrawal penalties and that mature in more than seven days will be treated as
illiquid securities.
Eurodollar bank obligations are dollar-denominated certificates of deposit
or time deposits issued outside the U.S. capital markets by foreign branches of
U.S. banks and by foreign banks. Yankee bank obligations are dollar-denominated
obligations issued in the U.S. capital markets by foreign banks.
Foreign, Eurodollar (and to a limited extent, Yankee) bank obligations
are subject to certain sovereign risks. One such risk is the possibility that a
foreign government might prevent dollar-denominated funds from flowing across
its borders. Other risks include: adverse political and economic developments in
a foreign country; the extent and quality of government regulation of financial
markets and institutions; the imposition of foreign withholding taxes; and
expropriation or nationalization of foreign issuers.
U.S. Government Obligations. The Fund may invest without limit in U.S.
government securities. U.S. government securities include securities issued or
guaranteed by the U.S. government, its agencies and instrumentalities. U.S.
Treasury bonds, notes, and bills and some agency securities, such as those
issued by the Federal Housing Administration and the Government National
Mortgage Association (GNMA), are backed by the full faith and credit of the U.S.
government as to payment of principal and interest and are the highest quality
government securities. Other securities issued by U.S. government agencies or
instrumentalities, such as securities issued by the Federal Home Loan Banks and
the Federal Home Loan Mortgage Corporation, are supported only by the credit of
the agency that issued them, and not by the U.S. government. Securities issued
by the Federal Farm Credit System, the Federal Land Banks, and the Federal
National Mortgage Association (FNMA) are supported by the agency's right to
borrow money from the U.S. Treasury under certain circumstances, but are not
backed by the full faith and credit of the U.S. government. There is no
guarantee that the U.S. government will support securities not backed by its
full faith and credit. Accordingly, although these securities have historically
involved little risk of loss of principal if held to maturity. These securities
may involve more risk than securities backed by the full faith and credit of the
U.S. government.
Municipal Securities. The municipal securities in which the Fund may invest
include municipal notes and short-term municipal bonds. Municipal notes are
generally used to provide for the issuer's short-term capital needs and
generally have maturities of 397 days or less. Examples include tax anticipation
and revenue anticipation notes, which generally are issued in anticipation of
various seasonal revenues, bond anticipation notes, construction loan notes and
tax-exempt commercial paper. Short-term municipal bonds may include general
obligation bonds, revenue bonds and industrial development bonds. General
obligation bonds are secured by the issuer's pledge of its faith, credit and
taxing power for payment of principal and interest. Revenue bonds are generally
paid from the revenues of a particular facility or a specific excise tax or
other source. Industrial development bonds are issued by or on behalf of public
authorities to provide funding for various privately operated industrial and
commercial facilities. The Fund may also invest in high quality participation
interests in municipal securities.
Rule 144A Securities. These securities are not registered for sale under Federal
securities laws but which can be resold to institutions under SEC Rule 144A.
Provided that a dealer or institutional trading market in such securities
exists, these restricted securities are treated as exempt from the 15% limit on
illiquid securities. Under the supervision of the Board of Trustees, the Advisor
for each Fund determines the liquidity of restricted securities. The Board of
Trustees monitors trading activity in restricted securities through reports from
each Fund's Advisor. If institutional trading in restricted securities were to
decline, the liquidity of a Fund could be adversely affected.
Demand Features. The Fund may invest in securities that are subject to puts and
stand-by commitments, which are defined as, demand features. Demand features
give the Fund the right to resell securities at specified periods prior to their
maturity dates to the seller or to some third party at an agreed-upon price or
yield. Securities with demand features may involve certain expenses and risks,
including the inability of the issuer of the instrument to pay for the
securities at the time the instrument is exercised, non-marketability of the
instrument and differences between the maturity of the underlying security and
the maturity of the instrument. Securities may cost more with demand features
than without them. Demand features can serve three purposes: to shorten the
maturity of a variable or floating rate security, to enhance the instrument's
credit quality and to provide a source of liquidity.
Variable and Floating Rate Securities. The securities in which the Fund invests
may have variable or floating rates of interest. These securities pay interest
at rates that are adjusted periodically according to a specified formula,
usually with reference to some interest rate index or market interest rate.
Securities with ultimate maturities of greater than 397 days may be purchased
only pursuant to Rule 2a-7. Under that Rule, only those long-term instruments
that have demand features, which comply with certain requirements and certain
variable rate, demand U.S. government securities may be purchased. Similar to
fixed rate debt instruments, variable and floating rate instruments are subject
to changes in value based on changes in market interest rates or changes in the
issuer's or guarantor's creditworthiness. The rate of interest on securities
purchased by the Fund may be tied to short-term Treasury or other government
securities or indices on securities that are permissible investments of the
Fund, as well as other money market rates of interest. The Fund will not
purchase securities whose values are tied to interest rates or indices that are
not appropriate for the duration and volatility standards of a Cash
fund.
Mortgage- and Asset-Backed Securities. The Fund may purchase fixed or adjustable
rate mortgage-backed securities issued by the Government National Mortgage
Association, Federal National Mortgage Association, the Federal Home Loan
Mortgage Corporation, or other governmental or government-related entities. The
Fund may also purchase other asset-backed securities, including securities
backed by automobile loans, equipment leases or credit card receivables. These
securities directly or indirectly represent a participation in, or are secured
by and payable from, fixed or adjustable rate mortgage or other loans, which may
be secured by real estate or other assets. Unlike traditional debt instruments,
payments on these securities include both interest and a partial payment of
principal. Prepayments of the principal of underlying loans may shorten the
effective maturities of these securities and may result in a Fund having to
reinvest proceeds at a lower interest rate.
Repurchase Agreements. The Fund may invest in repurchase agreements fully
collateralized by U.S. Government obligations. Repurchase agreements are
transactions in which a Fund purchases securities and simultaneously commits to
resell those securities to the seller at an agreed-upon price on an agreed-upon
future date. The resale price reflects a market rate of interest that is not
related to the coupon rate or maturity of the purchased securities. If the
seller of the securities underlying a repurchase agreement fails to pay the
agreed resale price on the agreed delivery date, a Fund may incur costs in
disposing of the collateral and may experience losses if there is any delay in
its ability to do so. Any repurchase transaction will require full
collateralization of the seller's obligation during the entire term of the
repurchase agreement. The Advisor monitors the creditworthiness of the banks and
securities dealers with whom the Fund engages in repurchase transactions.
[Reverse Repurchase Agreements. Each Fund may enter into reverse repurchase
agreements. Reverse repurchase agreements are transactions in which a Fund sells
a security and simultaneously commits to repurchase that security from the buyer
at an agreed upon price on an agreed upon future date. This technique will be
used primarily for temporary or emergency purposes, such as meeting redemption
requests. ]
Delayed Delivery Securities. Each Fund may purchase securities on a when-issued
or delayed delivery basis. Securities so purchased are subject to market price
fluctuation from the time of purchase but no interest on the securities accrues
to a Fund until delivery and payment for the securities take place. Accordingly,
the value of the securities on the delivery date may be more or less than the
purchase price. Forward commitments will be entered into only when a Fund has
the intention of taking possession of the securities, but a Fund may sell the
securities before the settlement date if deemed advisable.
Illiquid Securities. The portfolio of the Fund may contain illiquid securities.
Illiquid securities generally include securities which cannot be disposed of
promptly and in the ordinary course of business without taking a reduced price.
Securities may be illiquid due to contractual or legal restrictions on resale or
lack of a ready market. The following securities are considered to be illiquid:
repurchase agreements and reverse repurchase agreements maturing in more than
seven days, nonpublicly offered securities and restricted securities. Restricted
securities are securities the resale of which is subject to legal or contractual
restrictions. Restricted securities may be sold only in privately negotiated
transactions, in a public offering with respect to which a registration
statement is in effect under the Securities Act of 1933 or pursuant to Rule 144
or Rule 144A promulgated under such Act. Where registration is required, the
Fund may be obligated to pay all or part of the registration expense, and a
considerable period may elapse between the time of the decision to sell and the
time such security may be sold under an effective registration statement. If
during such a period adverse market conditions were to develop; the Fund might
obtain a less favorable price than the price it could have obtained when it
decided to sell. The Fund will not invest more than 5% of its net assets in
illiquid securities.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), i.e.; they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
this Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").
1. Borrowing Money. The Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. Senior Securities. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is (a) consistent with or permitted by the
Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder or interpretations of the Securities and Exchange
Commission or its staff and (b) as described in the Prospectus and this
Statement of Additional Information.
3. Underwriting. The Fund will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. Real Estate. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities, which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. Commodities. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. Loans. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. The Fund will not invest 25% or more of its total
assets in a particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
Non-Fundamental. The following limitations have been adopted by the Trust
with respect to the Fund and are Non-Fundamental (see "Investment Restrictions"
above).
i. Pledging. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
ii. Borrowing. The Fund will not purchase any security while borrowings
(including reverse repurchase agreements) representing more than 5% of its total
assets are outstanding. [The Fund will not invest more than 5% of its net assets
in reverse repurchase agreements.]
iii. Margin Purchases. The Fund will not purchase securities or
evidences of interest thereon on "margin." This limitation is not applicable to
short term credit obtained by the Fund for the clearance of purchases and sales
or redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
iv. Short Sales. The Fund will not effect short sales of securities
unless it owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short.
v. Options. The Fund will not purchase or sell puts, calls, options or
straddles.
vi. Illiquid Investments. The Fund will not invest more than 5% of its
net assets in securities for which there are legal or contractual
restrictions on resale and other illiquid securities.
<PAGE>
MANAGEMENT OF THE FUND
Trustees and Officers. The Board of Trustees are responsible for the management
and supervision of the Fund. The Board of Trustees approve all contracts with
the Fund. The names of the Trustees and executive officers of the Trust are
shown below. An asterisk indicates each Trustee who is an "interested person" of
the Trust, as defined in the Investment Company Act of 1940.
<TABLE>
<S> <C> <C>
==================================== ---------------- ======================================================================
Name, Age and Address Position Principal Occupations During Past 5 Years
==================================== ---------------- ======================================================================
*Kenneth D. Trumpfheller President and President, Treasurer and Secretary of AmeriPrime Financial Services,
Age: 40 Trustee Inc., the Fund's administrator, and AmeriPrime Financial Securities,
1793 Kingswood Drive Inc., the Fund's distributor, since 1994. Prior to December, 1994,
Suite 200 a senior client executive with SEI Financial Services.
Southlake, Texas 76092
==================================== ---------------- ======================================================================
Paul S. Bellany Secretary, Secretary, Treasurer and Chief Financial Officer of AmeriPrime
Age: 39 Treasurer Financial Services, Inc. and AmeriPrime Financial Securities, Inc.;
1793 Kingswood Drive various positions with Fidelity Investments from 1987 to 1998; most
Suite 200 recently Fund Reporting Unit Manager.
Southlake, Texas 76092
==================================== ---------------- ======================================================================
Steve L. Cobb Trustee President of Chandler Engineering Company, L.L.C., oil and gas
Age: 41 services company; various positions with Carbo Ceramics, Inc., oil
2001 Indianwood Avenue field manufacturing/supply company, from 1984 to 1997, most recently
Broken Arrow, OK 74012 Vice President of Marketing.
==================================== ================ ======================================================================
Gary E. Hippenstiel Trustee Director, Vice President and Chief Investment Officer of Legacy
Age: 51 Trust Company since 1992; President and Director of Heritage Trust
600 Jefferson Street Company from 1994-1996; Vice President and Manager of Investments of
Suite 350 Kanaly Trust Company from 1988 to 1992.
Houston, TX 77063
==================================== ================ ======================================================================
</TABLE>
The compensation paid to the Trustees of the Trust for the fiscal year
ended October 31, 1998 is set forth in the following table. Trustee fees are
Trust expenses and each series of the Trust pays a portion of the Trustee fees.
<TABLE>
<S> <C> <C>
==================================== ----------------------- ==================================
Aggregate Total Compensation
Compensation from Trust (the Trust is
Name from Trust not in a Fund Complex)
==================================== ----------------------- ==================================
Kenneth D. Trumpfheller 0 0
==================================== ----------------------- ==================================
Steve L. Cobb $4,000 $4,000
==================================== ======================= ==================================
Gary E. Hippenstiel $4,000 $4,000
==================================== ======================= ==================================
</TABLE>
The Investment Advisor.....The Fund's investment advisor is Legacy Group, LLC,
dba Cash Management Systems, 290 Turnpike Road, #338, Westborough,
Massachusetts, 01581 (the "Advisor" or "CMS"). David Reavill may be deemed to be
a controlling person of the Advisor due to his ownership of a majority of its
shares..
Under the terms of the management agreement (the "Agreement"), the
Advisor is responsible for managing the Fund's investments subject to approval
of the Board of Trustees. The Advisor pays all of the expenses of the Fund
except brokerage, taxes, interest, fees and expenses of the non-interested
person trustees and extraordinary expenses. As compensation for its management
services and agreement to pay the Fund's expenses, the Fund is obligated to pay
the Advisor a fee computed and accrued daily and paid monthly at an annual rate
of __% of the average daily net assets of the Fund.
The Advisor retains the right to use the name "CMS" in connection with
another investment company or business enterprise with which the Advisor is or
may become associated. The Trust's right to use the name "CMS" automatically
ceases ninety days after termination of the Agreement and may be withdrawn by
the Advisor on ninety days written notice.
The Advisor may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Fund believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Fund believes that there would be no material impact on the Fund or its
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
The Sub-Advisor. The Advisor has hired Janus Capital, 100 Fillmore Street,
Denver, Colorado, 80206 as the sub-advisor for the fund. [Insert information
regarding the sub-advisor as required by item 15]
The Administrator. .......The Fund retains AmeriPrime Financial Services, Inc.
(the "Administrator") to manage the Fund's business affairs and provide the Fund
with administrative services, including all regulatory reporting and necessary
office equipment, personnel and facilities. The Administrator receives a monthly
fee from the Advisor equal to an annual average rate of .075% of the Fund's
average daily net assets from fifty to one hundred million dollars and 0.050% of
the fund's average daily net assets over one hundred million dollars. The Fund
retains Unified Fund Services, Inc., 431 North Pennsylvania Street,
Indianapolis, Indiana 46204 (the "Transfer Agent") to serve as transfer agent,
dividend paying agent and shareholder service agent. The Trust retains
AmeriPrime Financial Securities, Inc. 1793 Kingswood Drive , Suite 200,
Southlake, TX 76092 (the "Distributor") to act as the principal distributor of
the Fund's shares. Kenneth D. Trumpfheller, officer and sole shareholder of the
Administrator and the Distributor, is an officer and trustee of the Trust. The
services of the Administrator, Transfer Agent and Distributor are operating
expenses paid by the Advisor.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Advisor is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In placing portfolio transactions, the
Advisor seeks the best qualitative execution for the Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Advisor generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received.
The Advisor is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Fund and/or the other
accounts over which the Advisor exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Advisor determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Advisor's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Fund effects securities
transactions may also be used by the Advisor in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Advisor in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Advisor, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Advisor that the review and study of the research and other information will not
reduce the overall cost to the Advisor of performing its duties to the Fund
under the Agreement.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
[To the extent that the Trust and another of the Advisor's clients seek
to acquire the same security at about the same time, the Trust may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Trust may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Trust. In the event that more than one client wants to purchase or sell the same
security on a given date, the purchases and sales will normally be made by
random client selection.]
PURCHASE AND SALE INFORMATION
How To Invest In the Fund. TheFund is "no-load" and shares of the Fund are sold
directly to investors on a continuous basis, subject to a minimum initial
investment of $2,500 and minimum subsequent investments of $50. These minimums
may be waived by the Advisor for accounts participating in an automatic
investment program. Investors choosing to purchase or redeem their shares
through a broker/dealer or other institution may be charged a fee by that
institution. Investors choosing to purchase or redeem shares directly from the
Fund will not incur charges on purchases or redemptions. To the extent
investments of individual investors are aggregated into an omnibus account
established by an investment adviser, broker or other intermediary, the account
minimums apply to the omnibus account, not to the account of the individual
investor.
Wire orders will be accepted only on a day on which the Fund, Custodian and
Transfer Agent are open for business. A wire purchase will not be considered
made until the wired money is received and the purchase is accepted by the Fund.
Any delays which may occur in wiring money, including delays which may occur in
processing by the banks, are not the responsibility of the Fund or the Transfer
Agent. There is presently no fee for the receipt of wired funds, but the right
to charge shareholders for this service is reserved by the Fund.
Additional Investments - You may purchase additional shares of the Fund
at any time (subject to minimum investment requirements) by mail, wire, or
automatic investment. Each additional mail purchase request must contain your
name, the name of your account(s), your account number(s), and the name of the
Fund. Checks should be made payable to Mutual Fund and should be sent to the
address listed above. A bank wire should be sent as outlined above.
Automatic Investment Plan - You may make regular investments in the
Fund with an Automatic Investment Plan by completing the appropriate section of
the account application and attaching a voided personal check. Investments may
be made monthly to allow dollar-cost averaging by automatically deducting $50 or
more from your bank checking account. You may change the amount of your monthly
purchase at any time.
Tax Sheltered Retirement Plans - Since the Fund is oriented to longer
term investments, shares of the Fund may be an appropriate investment medium for
tax sheltered retirement plans, including: individual retirement plans (IRAs);
simplified employee pensions (SEPs); SIMPLE plans; 401(k) plans; qualified
corporate pension and profit sharing plans (for employees); tax deferred
investment plans (for employees of public school systems and certain types of
charitable organizations); and other qualified retirement plans. You should
contact the Transfer Agent for the procedure to open an IRA or SEP plan, as well
as more specific information regarding these retirement plan options.
Consultation with an attorney or tax advisor regarding these plans is advisable.
Custodial fees for an IRA will be paid by the shareholder by redemption of
sufficient shares of the Fund from the IRA unless the fees are paid directly to
the IRA custodian. You can obtain information about the IRA custodial fees from
the Transfer Agent.
Other Purchase Information - Dividends begin to accrue after you become
a shareholder. The Fund does not issue share certificates. All shares are held
in non-certificate form registered on the books of the Fund and the Fund's
Transfer Agent for the account of the shareholder. The rights to limit the
amount of purchases and to refuse to sell to any person are reserved by the
Fund. If your check or wire does not clear, you will be responsible for any loss
incurred by the Fund. If you are already a shareholder, the Fund can redeem
shares from any identically registered account in the Fund as reimbursement for
any loss incurred. You may be prohibited or restricted from making future
purchases in the Fund.
How To Redeem Shares. All redemptions will be made at the net asset value
determined after the redemption request has been received by the Transfer Agent
in proper order. Shareholders may receive redemption payments in the form of a
check or federal wire transfer. The proceeds of the redemption may be more or
less than the purchase price of your shares, depending on the market value of
the Fund's securities at the time of your redemption. Presently there is no
charge for wire redemptions; however, the Fund reserves the right to charge for
this service. Any charges for wire redemptions will be deducted from the
shareholder's Fund account by redemption of shares. Investors choosing to
purchase or redeem their shares through a broker/dealer or other institution may
be charged a fee by that institution.
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the Fund
requires that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Fund or American Data Services, Inc., a
shareholder, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
By Telephone - You may redeem any part of your account in the Fund by
calling the Transfer Agent at (800) ___-____. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at
any time by the Fund or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Fund, although neither the Fund nor the Transfer Agent has ever
experienced difficulties in receiving and in a timely fashion responding to
telephone requests for redemptions or exchanges. If you are unable to reach the
Fund by telephone, you may request a redemption or exchange by mail.
Additional Information - If you are not certain of the requirements for
a redemption please call the Transfer Agent at (800) ___-____. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing or under any emergency circumstances, as determined
by the Securities and Exchange Commission, the Fund may suspend redemptions or
postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $2,000 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax advisor concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption at any time if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
SHARE PRICE CALCULATION
The price (net asset value) of the shares of the Fund is determined as
of 4:00 p.m., Eastern Time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day, Martin
Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas. For a description of the methods
used to determine the net asset value (share price), see "Share Price
Calculation" in the Prospectus.
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day on which there is sufficient trading in the
Fund's securities to materially affect the net asset value. The net asset value
per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Advisor's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Advisor determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Advisor, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Advisor believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Advisor, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within 60 days of maturity, are valued
by using the amortized cost method of valuation, which the Board has determined
will represent fair value.
PERFORMANCE
["Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return for the period indicated that would equate the initial amount invested
to the ending redeemable value, according to the following formula:
......... P(1+T)n=ERV
Where: P =a hypothetical $1,000 initial investment
T =average annual total return
n =number of years
ERV =ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the applicable
period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue.]
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the Standard & Poor's 500 Stock Index or the Dow Jones Industrial Average.
In addition, the performance of the Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. For The
Cash Fund, comparisons may also include Bank Rate Monitor (TM), N. Palm
Beach, Fla. 33408, IBC's Money Fund Report(TM), CDA Investment Technologies,
Inc., Wiesenberger Investment Companies Services, and other industry
publications. The objectives, policies, limitations and expenses of other mutual
funds in a group may not be the same as those of the Fund. Performance rankings
and ratings reported periodically in national financial publications such as
Barron's and Fortune also may be used.
From time to time, The Cash Fund advertises its yield and effective
yield. Both yield figures are based on historical earnings and are not intended
to indicate future performance. It can be expected that these yields will
fluctuate substantially. The yield of the Cash Fund refers to the income
generated by an investment in the Fund over a seven-day period (which period
will be stated in the advertisement) This income is then annualized. That is the
amount of income generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
investment. The effective yield is calculated similarly but, when annualized,
the income earned by an investment in the Fund is assumed to be reinvested. The
effective yield will be slightly higher than the yield because of the
compounding effect of this assumed reinvestment. The Fund' s yield and effective
yield may reflect absorbed expenses pursuant to any undertakings that may be in
effect.
TAXES
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
the Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any realized
capital gains.
For federal income tax purposes, dividends paid by the Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 (the "Tax Reform Act"), all distributions of net
short term capital gains to individuals are taxed at the same rate as ordinary
income. All distributions of net capital gains to corporations are taxed at
regular corporate rates. Any distributions designated as being made from net
realized long term capital gains are taxable to shareholders as long term
capital gains regardless of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisors regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
On the application or other appropriate form, the Fund will request the
shareholder's certified taxpayer identification number (social security number
for individuals) and a certification that the shareholder is not subject to
backup withholding. Unless the shareholder provides this information, the Fund
will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the Fund may
make a corresponding charge against the account. CUSTODIAN
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is
Custodian of the Fund's investments. The Custodian acts as the Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
TRANSFER AGENT
Unified Fund Services, Inc. ("Unified"), 431 North
Pennsylvania Street, Indianapolis, Indiana 46204, acts as the Fund's transfer
agent and dividend paying agent and, in such capacities, maintains the records
of each shareholder's account, answers shareholders' Inquiries concerning their
accounts, processes purchases and redemptions of the Fund's shares, acts as
dividend and distribution disbursing agent and performs other accounting and
shareholder service functions. In addition, Unified provides the Fund with fund
accounting services, which includes certain monthly reports, record-keeping and
other management-related services. For its services as fund accountant, Unified
receives an annual fee from the Advisor equal to 0.0275% of the Fund's assets up
to $100 million (subject to various monthly minimum fees, the maximum being
$2,000 per month for assets of $20 to $100 million).
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent public accountants for the Trust
for the fiscal year ending October 31, 1998. McCurdy & Associates performs an
annual audit of the Fund's financial statements and provides financial, tax and
accounting consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the exclusive agent for distribution of shares of the
Fund. The Distributor is obligated to sell the shares of the Fund on a best
efforts basis only against purchase orders for the shares. Shares of the Fund
are offered to the public on a continuous basis.
<PAGE>
AmeriPrime Funds
PART C. OTHER INFORMATION
Item 23. Exhibits
(a) Articles of Incorporation.
(i) Copy of Registrant's Declaration of Trust, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 11, is hereby incorporated by
reference.
(ii) Copy of Amendment No. 1 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby
incorporated by reference.
(iii) Copy of Amendment No. 2 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 1, is hereby
incorporated by reference.
(iv) Copy of Amendment No. 3 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 4, is hereby
incorporated by reference.
(v) Copy of Amendment No. 4 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 4, is hereby
incorporated by reference.
(vi) Copy of Amendment No. 5 and Amendment No. 6 to Registrant's Declaration of
Trust, which were filed as an Exhibit to Registrant's Post-Effective Amendment
No. 8, are hereby incorporated by reference.
(viii) Copy of Amendment No. 7 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby
incorporated by reference.
(ix) Copy of Amendment No. 8 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 12, is hereby
incorporated by reference.
(x) Copy of Amendment No. 9 to Registrant's Declaration of Trust which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 15, is hereby
incorporated by reference.
(xi) Copy of Amendment No. 10 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 16, is hereby
incorporated by reference.
(xii) Copy of Amendment No. 11 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 17, is hereby
incorporated by reference.
(b) By-Laws. Copy of Registrant's By-Laws, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 11, is hereby incorporated by
reference.
(c) Instruments Defining Rights of Security Holders. - None other than in the
Declaration of Trust, as amended, and By-Laws of the Registrant.
(d) Investment Advisory Contracts.
(i) Copy of Registrant's Management Agreement with Carl Domino Associates, L.P.,
Adviser to Carl Domino Equity Income Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 11, is hereby incorporated by
reference.
(ii) Copy of Registrant's Management Agreement with Jenswold, King & Associates,
Adviser to Fountainhead Special Value Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 8, is hereby incorporated by
reference.
(iii) Copy of Registrant's Management Agreement with Advanced Investment
Technology, Inc., Adviser to AIT Vision U.S. Equity Portfolio, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby
incorporated by reference.
(iv) Copy of Registrant's Management Agreement with GLOBALT, Inc., Adviser to
GLOBALT Growth Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 11, is hereby incorporated by reference.
(v) Copy of Registrant's Management Agreement with Newport Investment Advisors,
Inc., Adviser to the MAXIM Contrarian Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 2, is hereby incorporated by
reference.
(vi) Copy of Registrant's Management Agreement with IMS Capital Management,
Inc., Adviser to the IMS Capital Value Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 2, is hereby incorporated by
reference.
(vii) Copy of Registrant's Management Agreement with Commonwealth Advisors,
Inc., Adviser to Florida Street Bond Fund and Florida Street Growth Fund, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 8, is
hereby incorporated by reference.
(viii) Copy of Registrant's Management Agreement with Corbin & Company, Adviser
to Corbin Small-Cap Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 8, is hereby incorporated by reference.
(ix) Copy of Registrant's proposed Management Agreement with Vuong Asset
Management Company, LLC, Adviser to MAI Enhanced Index Fund, MAI Growth & Income
Fund, MAI Aggressive Growth Fund, MAI High-Yield Income Fund, MAI Capital
Appreciation Fund and MAI Global Equity Fund (the "MAI Family of Funds"), which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 12, is
hereby incorporated by reference.
(x) Copy of Registrant's proposed Management Agreement with CWH Associates,
Inc., Advisor to Worthington Theme Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 10, is hereby incorporated by
reference.
(xi) Copy of Registrant's Management Agreement with Burroughs & Hutchinson,
Inc., Advisor to the Marathon Value Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 15, is hereby incorporated by
reference.
(xii) Copy of Registrant's proposed Management Agreement with The Jumper Group,
Inc., Adviser to the Jumper Strategic Advantage Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 21, is hereby incorporated
by reference.
(xiii) Copy of Registrant's Management Agreement with Appalachian Asset
Management, Inc., Advisor to the AAM Equity Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 17, is hereby incorporated by
reference.
(xiv) Copy of Registrant's proposed Management Agreement with Paul B. Martin,
Jr. d/b/a Martin Capital Advisors, Advisor to the Austin Opportunity Fund, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 17, is
hereby incorporated by reference.
(xv) Copy of Registrant's proposed Management Agreement with Paul B. Martin, Jr.
d/b/a Martin Capital Advisors, Advisor to the Texas Opportunity Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 17, is hereby
incorporated by reference.
(xvi) Copy of Registrant's proposed Management Agreement with Paul B. Martin,
Jr. d/b/a Martin Capital Advisors, Advisor to the U.S. Opportunity Fund, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 17, is
hereby incorporated by reference.
(xvii) Copy of Registrant's Proposed Management Agreement with Gamble, Jones,
Morphy & Bent, Advisor to the GJMB Growth Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No.18, is hereby incorporated by
reference.
(xviii) Copy of Registrant's Proposed Management Agreement with Cornerstone
Investment Management, Advisor to the Cornerstone MVP Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No.18, is hereby
incorporated by reference.
(xix) Copy of Registrant's Proposed Management Agreement with Carl Domino
Associates, L.P., Advisor to the Carl Domino Growth Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No.18, is hereby incorporated
by reference.
(xx) Copy of Registrant's Proposed Management Agreement with Carl Domino
Associates, L.P., Advisor to the Carl Domino Global Equity Income Fund which was
filed as an Exhibit to Registrant's Post-Effective Amendment No.18, is hereby
incorporated by reference.
(xxi) Copy of Registrant's Proposed Management Agreement with Dobson Capital
Management, Inc,. Advisor to the Dobson Covered Call Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 19, is hereby incorporated
by reference.
(xxii) Copy of Registrant's Proposed Management Agreement with Auxier Investment
Management, LLC, Advisor to the Auxier Equity Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 19, is hereby incorporated
by reference.
(xxiii) Copy of Registrant's Proposed Management Agreement with Cornerstone
Capital Management, Inc., Advisor to the Shepherd Values Market Neutral Fund,
which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 19,
is hereby incorporated by reference.
(xxiv) Copy of Registrant's Proposed Management Agreement with Cornerstone
Capital Management, Inc., Advisor to the Shepherd Values Growth Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 19, is hereby
incorporated by reference.
(xxv) Copy of Registrant's Proposed Management Agreement with Monument
Investments, Inc., Advisor to the 10K Smart Trust, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 19, is hereby incorporated by
reference.
(xxvi) Copy of Registrant's Proposed Management Agreement with Columbia
Partners, L.L.C., Investment Management, Advisor to the Columbia Partners Equity
Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No.
20, is hereby incorporated by reference.
(xxvii) Copy of Registrant's Proposed Management Agreement with Legacy
Investment Group, LLC, d/b/a Cash Management Systems ("CMS"), Adviser to the CMS
Money Fund, is filed herewith.
(xxviii) Sub-Advisory Agreement for the The Cash Fund [to be supplied].
(e) Underwriting Contracts.
(i) Copy of Registrant's Amended and Restated Underwriting Agreement with
AmeriPrime Financial Securities, Inc., which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 8, is hereby incorporated by
reference.
(ii) Copy of Registrant's proposed Underwriting Agreement with AmeriPrime
Financial Securities, Inc. and OMNI Financial Group, LLC, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 12, is hereby incorporated
by reference.
(f) Bonus or Profit Sharing Contracts.- None.
(g) Custodial Agreements.
(i) Copy of Registrant's Agreement with the Custodian, Star Bank, N.A., which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is
hereby incorporated by reference.
(ii) Copy of Registrant's Appendix B to the Agreement with the Custodian, Star
Bank, N.A., which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 8, is hereby incorporated by reference.
(h) Other Material Contracts. Copy of Registrant's Agreement with the
Administrator, AmeriPrime Financial Services, Inc., which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby incorporated
by reference.
(i) Legal Opinion. Opinion and Consent of Brown, Cummins & Brown Co., L.P.A.,
which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 9, is
hereby incorporated by reference.
(j) Other Opinions. Consent of Accountant is filed herewith.
(k) Omitted Financial Statements.- None.
(l) Initial Capital Agreements. Copy of Letter of Initial Stockholders, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is
hereby incorporated by reference.
(m) Rule 12b-1 Plan.
(i) Copy of Registrant's Rule 12b-1 Distribution Plan for The MAXIM Contrarian
Fund (now the NewCap Contrarian Fund), which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 1, is hereby incorporated by
reference.
(ii) Form of Registrant's Rule 12b-1 Service Agreement which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 1, is hereby incorporated
by reference.
(iii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Austin
Opportunity Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 17, is hereby incorporated by reference.
(iv) Copy of Registrant's Rule 12b-1 Distribution Plan for the Texas Opportunity
Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No.
17, is hereby incorporated by reference.
(v) Copy of Registrant's Rule 12b-1 Distribution Plan for the U.S. Opportunity
Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No.
17, is hereby incorporated by reference.
(vi) Copy of Registrant's Proposed Rule 12b-1 Distribution Plan for the 10K
Smart Trust, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 19, is hereby incorporated by reference.
(vii) Copy of Registrant's Proposed Rule 12b-1 Distribution Plan for the
Jumper Strategic Advantage Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 21, is hereby incorporated by
reference.
(n) Financial Data Schedule. - None.
(o) Rule 18f-3 Plan.
(i) Rule 18f-3 Plan for the Carl Domino Equity Income Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 16, is hereby
incorporated by reference.
(ii) Rule 18f-3 Plan for the Jumper Strategic Advantage Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 21, is hereby
incorporated by reference.
(p)Power of Attorney.
(i) Power of Attorney for Registrant and Certificate with respect thereto, which
were filed as an Exhibit to Registrant's Post-Effective Amendment No. 5, are
hereby incorporated by reference.
(ii) Powers of Attorney for Trustees and Officers which were filed as an Exhibit
to Registrant's Post-Effective Amendment No. 5, are hereby incorporated by
reference.
(iii) Power of Attorney for the Treasurer of the Trust, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 8, is hereby incorporated
by reference.
Item 24. Persons Controlled by or Under Common Control with the Registrant (As
of November 18, 1998)
(a) Carl Domino may be deemed to control the Carl Domino Equity Income Fund as
a result of his beneficial ownership of the Carl Domino Equity Income Fund.
The Fund and the Fund's adviser, Carl Domino Associates, L.P., may be under
common control.
(b) U.S. Trust Company of Florida, as Trustee of the Killian Charitable
Remainder Unitrust, may be deemed to control the AIT Vision U.S. Equity
Portfolio as a result of its beneficial ownership of the Portfolio. The
Registrant is unaware of any person under common control with the
Portfolio.
(c) Cheryl and Kenneth Holeski may be deemed to control The NewCap Contrarian
Fund as a result of their beneficial ownership of the Fund. The Fund and
the Fund's adviser, Newport Investment Advisors, Inc., may be under common
control.
(d) Sun Trust Bank, as custodian for the Arthur S. Damos Foundation, may be
deemed to control the Jumper Strategic Advantage Fund as a result of its
beneficial ownership of the Fund. The Registrant is unaware of any person
under common control with the Fund.
Item 25. Indemnification
(a) Article VI of the Registrant's Declaration of Trust provides for
indemnification of officers and Trustees as follows:
Section 6.4 Indemnification of Trustees, Officers, etc. Subject to and
except as otherwise provided in the Securities Act of 1933, as amended, and the
1940 Act, the Trust shall indemnify each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise (hereinafter referred to as a "Covered Person") against
all liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, director or trustee, and except that no Covered
Person shall be indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
Section 6.5 Advances of Expenses. The Trust shall advance attorneys'
fees or other expenses incurred by a Covered Person in defending a proceeding to
the full extent permitted by the Securities Act of 1933, as amended, the 1940
Act, and Ohio Revised Code Chapter 1707, as amended. In the event any of these
laws conflict with Ohio Revised Code Section 1701.13(E), as amended, these laws,
and not Ohio Revised Code Section 1701.13(E), shall govern.
Section 6.6 Indemnification Not Exclusive, etc. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
The Registrant may not pay for insurance which protects the Trustees
and officers against liabilities rising from action involving willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of their offices.
(b) The Registrant may maintain a standard mutual fund and investment advisory
professional and directors and officers liability policy. The policy, if
maintained, would provide coverage to the Registrant, its Trustees and officers,
and could cover its Advisers, among others. Coverage under the policy would
include losses by reason of any act, error, omission, misstatement, misleading
statement, neglect or breach of duty.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
Registrant pursuant to the provisions of Ohio law and the Agreement and
Declaration of the Registrant or the By-Laws of the Registrant, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Trust in the successful defense of any action, suit or proceeding)
is asserted by such trustee, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser
A. Carl Domino Associates, L.P., 580 Village Boulevard, Suite 225, West Palm
Beach, Florida 33409, ("CDA"), adviser to the Carl Domino Equity Income Fund,
the Carl Domino Growth Fund and the Carl Domino International Global Equity
Income Fund, is a registered investment adviser.
(1) CDA has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
partners and officers of CDA during the past two years.
(a) Lawrence Katz, a partner in CDA, is an orthopedic surgeon in private
practice.
(b) Saltzman Partners, a partner in CDA, is a limited partnership that invests
in companies and businesses.
(c) Cango Inversiones, SA, a partner in CDA, is a foreign business entity that
invests in U.S. companies and businesses.
B. King Investment Advisors Inc., 1980 Post Oak Boulevard, Suite 2400, Houston,
Texas 77056-3898 ("King King"), adviser to the Fountainhead Special Value Fund,
is a registered investment adviser.
(1) King has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of King during the past two years.
(a) John Servis, a director of JKA King, is a licensed real estate broker.
C. Advanced Investment Technology, Inc., 311 Park Place Boulevard, Suite 250,
Clearwater, Florida 34619 ("AIT"), adviser to AIT Vision U.S. Equity Portfolio,
is a registered investment adviser.
(1) AIT has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of AIT during the past two fiscal years.
(a) Dean S. Barr, director and the CEO of AIT, was has been the managing
director LBS Capital Management, Inc., 311 Park Place Blvd., Clearwater, Florida
from 1989 1996, head of research at State Street Global Advisors in Boston,
Massachasetts since October 1997.
(b) Nicholas Lopardo, a director of AIT, is the Investment Advisor CEO of State
Street Global Advisors, Bank and Trust in Boston, Massachusetts.
(c) Bryan Stypul, CFO & Treasure of AIT, was the comptroller for Terra
Communications, Clearwater, Florida in 1996, and prior to that, the CEO of
Beacong Advisors, Treasure Island, Florida
(d) Raymond L. Killian, a director of AIT, is the Chairman of the Board of
Investment Technology Group, Inc., 900 3rd Avenue, New York, New York.
(e) Marc Simmons, a director of AIT, is a principal of State Street Global
Advisors.
(f) Alan Brown, a director of AIT, is the CEO of State Street Global Advisors.,
28 King Street, London, England.
(g) John Snow, a director of AIT, is the managing director of State Street
Global Advisors. Prior to 1997, he was the president of NatWest Investment
Advisers, Boston Massachussetts.
D. GLOBALT, Inc., 3060 Peachtree Road, N.W., One Buckhead Plaza, Suite 225,
Atlanta, Georgia 30305 ("GLOBALT"), adviser to GLOBALT Growth Fund, is a
registered investment adviser.
(1) GLOBALT has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
officers and directors of GLOBALT during the past two years.
(a) Gregory S. Paulette, an officer of GLOBALT, is the president of GLOBALT
Capital Management, a division of GLOBALT.
E. Newport Investment Advisors, Inc., 20600 Chagrin Boulevard, Suite 1020,
Shaker Heights, Ohio 44122 ("Newport"), adviser to The NewCap Contrarian Fund,
is a registered investment adviser.
(1) Newport has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
officers and directors of Newport during the past two years.
(a) Kenneth Holeski, president of Newport, is the vice president of Newport
Evaluation Services, Inc., a fiduciary consulting business at 20600 Chagrin
Boulevard, Shaker Heights, Ohio 44122, and a registered representative of WRP
Investments, Inc., 4407 Belmont Avenue, Youngstown, Ohio 44505, a registered
broker/dealer.
(b) Donn M. Goodman, vice president of Newport, is the president of Newport
Evaluation Services, Inc.
F. IMS Capital Management, Inc., 10159 S.E. Sunnyside Road, Suite 330, Portland,
Oregon 97015, ("IMS"), Adviser to the IMS Capital Value Fund, is a registered
investment adviser.
(1) IMS has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of IMS during the past two years - None.
G. CommonWealth Advisors, Inc., 929 Government Street, Baton Rouge, Louisiana
70802, ("CommonWealth"), Adviser to the Florida Street Bond Fund and the Florida
Street Growth Fund, is a registered investment adviser.
(1) CommonWealth has engaged in no other business during the past two fiscal
years.
(2) The following list sets forth other substantial business activities of the
directors and officers of CommonWealth during the past two years.
(a) Walter A. Morales, President/Chief Investment Officer of CommonWealth was
the Director of an insurance/broadcasting corporation, Guaranty Corporation, 929
Government Street, Baton Rouge, Louisiana 70802 from August 1994 to February
1996. From September 1994 through the present, a registered representative of a
Broker/Dealer company, Securities Service Network, 2225 Peters Road, Knoxville,
Tennessee 37923. Beginning August 1995 through the present, an instructor at the
University of Southwestern Louisiana in Lafayette, Louisiana.
H. Corbin & Company, 1320 S. University Drive, Suite 406, Fort Worth, Texas
76107, ("Corbin"), Adviser to the Corbin Small-Cap Value Fund, is a registered
investment adviser.
(1) Corbin has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of Corbin during the past two years - None.
I. Vuong Asset Management Company, LLC, 6575 West Loop South, Suite 110,
Houston, Texas 77401, ("VAMCO"), Adviser to the MAI Family of Funds, is a
registered investment adviser.
(1) VAMCO has engaged in no other business during the past two fiscal years.
(2) The following list sets forth substantial business activities of the
directors and officers of VAMCO during the past two years.
(a) Qui Tu Vuong, the Chief Investment Officer and head of Equity Asset
Management of VAMCO, is the Chief Executive Officer of Vuong & Co., LLC, a
holding company at 6575 West Loop South #110, Bellaire, Texas 77401; and Sales
Manager/Equities Regulation Representative of Omni Financial Group, LLC, a
securities brokerage company at 6575 West Loop South #110, Bellaire, Texas
77401; and President of Oishiicorp, Inc., an investment advising corporation at
6575 West Loop South #110, Bellaire, Texas 77401; and Managing General Partner
of Sigma Delta Capital Appreciation Funds, LP, an investment company at 6575
West Loop South #110, Bellaire, Texas 77401; and President of Premier Capital
Management and Consulting Group, Inc., a financial consulting corporation at
6575 West Loop South #170, Bellaire, Texas 77401; and from August, 1992 through
February, 1996, he was a registered representative of Securities America, Inc.,
a securities brokerage corporation at 6575 West Loop South #170, Bellaire, Texas
77401.
(b) Quyen Ngoc Vuong, President, Chairman and Chief Financial Officer of VAMCO,
is the Manager of Vuong & Company, LLC, and Manager of Omni Financial Group,
LLC.
(c) Can Viet Le, Manager of VAMCO, is the Manager of Vuong and Company, LLC, and
was Co Founder and Chief Financial Officer of Tribe Computer Works, a
manufacturing network in Alameda, California from April 1990 through January,
1996.
J. CWH Associates, Inc., 200 Park Avenue, Suite 3900, New York, New York 10166,
("CWH"), Advisor to the Worthington Theme Fund, is a registered investment
Advisor.
(1) CWH has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of CWH during the past two years.
Andrew M. Abrams, the Chief Operating Officer of CWH, is a General Partner of
Abrams Investment Partners, L.P., an investment limited partnership at 200 Park
Avenue, Suite 3900, New York, New York 10166.
K. Burroughs & Hutchinson, Inc., 702 West Idaho Street, Suite 810, Boise, Idaho
("B&H"), advisor to Marathon Value Fund, is a registered investment adviser.
(1) B&H has engaged in no other business during the past two fiscal years.
<PAGE>
(2) The following list sets forth other substantial business activities of the
directors and officers of B&H during the past two years.
Mark R. Matskoo, Vice President and Director of B&H, was broker with D.A.
Davidson & Co., a broker/dealer in Boise, Idaho, from 1994 to 1996.
L. The Jumper Group, Inc., 1 Union Square, Suite 505, Chattanooga, Tennessee
37402, ("Jumper"), Advisor to the Jumper Strategic Advantage Fund, is a
registered investment advisor.
(1) Jumper has engaged in no other business during the past two fiscal years.
(2) The following list set forth other substantial business activities of the
directors and officers of Jumper during the past two years - None.
M. Appalachian Asset Management, Inc., 1018 Kanawha Blvd., East, Suite 209,
Charleston, WV 25301 ("AAM"), advisor to AAM Equity Fund, is a registered
investment advisor.
(1) AAM has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of AAM during the past two years - None.
N. Paul B. Martin, Jr. d/b/a Martin Capital Advisors, 812 San Antonio, Suite
G14, Austin, TX 78701 ("Martin"), advisor to Austin Opportunity Fund, Texas
Opportunity Fund, and U.S. Opportunity Fund, is a registered investment advisor.
(1) Martin has engaged in no other business during the past two fiscal years.
O. Gamble, Jones, Morphy & Bent, Inc., 301 East Colorado Boulevard, Suite 802,
Pasadena, California 91101 ("GJMB"), Advisor to the GJMB Fund, is a registered
investment advisor.
(1) GJMB has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of GJMB during the past two years - None.
P. Cornerstone Investment Management, L.L.C. 132 West Main Street, Aspen,
Colorado 81611 ("Cornerstone"), Advisor to the Cornerstone MVP Fund, is a
registered investment advisor.
(1) Cornerstone has engaged in no other business during the past two fiscal
years.
(2) The following list sets forth other substantial business activities of the
directors and officers of Cornerstone during the past two years:
Christopher Shawn Ryan, managing member of Cornerstone, was Vice
President-Portfolio Manager at NationsBank in Dallas, Texas from January 1994 to
October 1997.
Q. Dobson Capital Management, Inc., 1422 Van Ness Street., Santa Ana, CA 92707
("Dobson"), Advisor to the Dobson Covered Call Fund, is a registered investment
advisor.
(1) Dobson has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of Dobson during the past two years: Charles L. Dobson,
President of Dobson, was the Director of Trading with Analytic/TSA Global Asset
Management, 700 S. Flower Street, Suite 2400, Los Angeles CA, from 1996 to 1998.
R. Auxier Investment, Inc., LLC, 25628 N.E. Glass Road, Oregon, OR 97002
("Auxier"), Advisor to the Auxier Equity Fund, is registered investment advisor.
(1) Auxier has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of Auxier during the past two years: Jeffrey Auxier,
Managing Member of Auxier, was a Senior Portfolio Management Director with Smith
Barney, Inc. until 1998.
S. Cornerstone Capital Management, Inc., 6760 Corporate Drive, Suite 230,
Colorado Springs, CO 80919 ("CCM"), Adviser to the Shepherd Value Market Fund
and the Shepherd Value Growth Fund, is a registered investment advisor.
(1) CCM has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of CCM during the past two years:
a) Ted M. Ehrlichman, Director of CCM, was a principal with SunTek, Inc.,
Colorado Springs, CO, a pension consulting firm, from 1995 to 1997.
b) Frank Franiak, Director of CCM, is the President of Monroe Capital, Inc.,
Chicago, IL, a consulting firm, and a registered representative of March
Capital, Inc., Chicago, IL, a broker-dealer.
c) Jason D. Huntley, Director of CCM, was Director of Institutional Services
with First Affirmative/Walnut Street Advisers, Colorado Springs, CO, an
investment advisory firm, from 1996 to 1997.
d) Craig D. Van Hulzen, Director of CCM, was Director of Research with First
Affirmative/Walnut Street Advisers, and a registered representative of Walnut
Street Securities, Colorado Springs, CO, a broker-dealer, from 1995 to 1997.
T. Monument Investments, Inc., 5952 Royal Lane, Suite 270, Dallas, TX 85230
("Monument"), Advisor to the 10K Smart Trust, is a registered investment
advisor.
(1) Monument has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of Monument during the past two years:
Gerald R. James, Jr. a director of Monument, has been a Vice President/Bank
Manager at First State Bank of North Texas in Dallas, Texas since February 1998.
From February 1996 to February 1998, Mr. James served as Vice President of
Fidelity Bank in Dallas, Texas.
Robert W. Manry, a director of Monument, has been an Account Executive at Global
Dallas (a trucking company) in Irving, Texas since 1987.
U. Columbia Partners, L.L.C., Investment Management, 1775 Pennsylvania Avenue,
N.W., Washington, DC 20006 ("Columbia"), Advisor to the Columbia Partners Equity
Fund, is a registered investment advisor.
(1) Columbia has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of Columbia during the past two years:
Rhys H. Williams, a principal of Columbia, has been a portfolio manager at
Columbia since late 1997. Prior to that time, Mr. Williams was the Senior Vice
President at Prudential Securities in Philadelphia, PA since 1987.
V. Legacy Investment Group, LLC, d/b/a Cash Management Systems, 290 Turnpike
Road, #338, Westborogh, Massachusetts ("CMS), Advisor to the The CashFund, is
a registered investment advisor.
1. CMS has engaged in no other business during the past two years.
2. The following list sets forth other substantial business activities of
the directors and officers of CMS during the past two years:
David W. Reavill, Member of CMS, was a Vice President with Fixed Income Discount
Advisory Corp., Shrewsbury, MA, a Cash firm, from 1997 to 1998 and a
Vice President of Reich & Tang, LLC, Westlake Village, CA, a Cash firm,
from 1996 to 1997.
Item 27. Principal Underwriters
A. AmeriPrime Financial Securities, Inc., is the Registrant's principal
underwriter. Kenneth D. Trumpfheller, 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the President, Secretary and Treasurer of the
underwriter and the President and a Trustee of the Registrant.
B. Omni Financial Group, LLC ("OMNI") acts as co-distributor, along with
AmeriPrime Financial Securities, Inc., of the MAI Family of Funds. Qui T. Vuong,
Quyen N. Vuong and Diep N. Vuong, each of whose principal business address is
6575 West Loop South, Suite 125, Bellaire, Texas 77401, are the managers of
OMNI, and they hold no offices or position with the Registrant.
Item 28. Location of Accounts and Records
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder will be maintained by the Registrant at 1793 Kingswood Drive, Suite
200, Southlake, Texas 76092 and/or by the Registrant's Custodian, Star Bank,
N.A., 425 Walnut Street, Cincinnati, Ohio 45202, and/or transfer and shareholder
service agents, American Data Services, Inc., Hauppauge Corporate Center, 150
Motor Parkway, Hauppauge, New York 11760 and Unified Fund Services, Inc., 431
Pennsylvania Street, Indianapolis, IN 46204.
Item 29. Management Services Not Discussed in Parts A or B
None.
Item 32. Undertakings
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, duly authorized, in the
City of Cincinnati, State of Ohio, on the 22nd day of January, 1999.
AmeriPrime Funds
/s/
By:___________________________________
Donald S. Mendelsohn,
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Kenneth D. Trumpfheller, /s/
President and Trustee By:__________________________________
Donald S. Mendelsohn,
Gary E. Hippensteil, Trustee Attorney-in-Fact
Steve L. Cobb, Trustee January 22, 1999
/s/
_______________________ January 22, 1999
Paul S. Bellany, Treasurer
<PAGE>
EXHIBIT INDEX
1. Proposed Management Agreement for the The CashFund..............EX-99.B5.1
2. Consent of Public Accountant.......................................EX-99.B11
MANAGEMENT AGREEMENT
TO: Legacy Investment Group, LLC
d/b/a Cash Management Systems
290 Turnpike Road, #338
Westborough, MA 01581
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 Cash 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
Trust's Board of Trustees (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 and the Trust, 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, (the"1940 Act")
as amended); and all other operating expenses not specifically assumed by the
Fund.
.........The Fund will pay all brokerage fees and commissions, taxes,
interest, fees and expenses of the non-interested person trustees and such
extraordinary or non-recurring expenses as may arise, including litigation to
which the Fund may be a party and indemnification of the Trust's trustees and
officers with respect thereto. 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 names
"Legacy" and "CMS" 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 names "Legacy" and "CMS" 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 names "Legacy" and
"CMS" 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 290 Turnpike Road, #338, Westborough, MA 01581.
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: By:_______________________________
Name/Title: Name/Title:_________________________
Dated: ___________, 1999
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST: .........
......... Legacy Investment Group, LLC
By: By:________________________________
Name/Title: Name/Title: _______________________
Dated: ___________, 1999
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the use in this Post-Effective Amendment No. 22 to the AmeriPrime
Funds' Registration Statement on Form N-1A to the references made to us under
the caption "Accountants" included in the Statement of Additional Information.
/s/
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
January 22, 1999
