SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ____)
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
AMERIPRIME FUNDS
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
1) Title of each class of securities to which transaction applies
______________________________________________________________
2) Aggregate number of securities to which transaction applies:
______________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
______________________________________________________________
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
______________________________________________________________
2) Form, Schedule or Registration Statement No.:
______________________________________________________________
3) Filing Party:
______________________________________________________________
4) Date Filed:
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<PAGE>
SHEPHERD VALUES GROWTH FUND
SHEPHERD VALUES MARKET NEUTRAL FUND
1793 KINGSWOOD DRIVE, SUITE 200
SOUTHLAKE, TEXAS 76092
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 17, 1999
Dear Shareholders:
The Board of Trustees of AmeriPrime Funds (the "Trust"), an open-end management
investment company organized as an Ohio business trust, has called a special
meeting of the shareholders of the Shepherd Values Growth Fund and the Shepherd
Values Market Neutral Fund series of the Trust, to be held at 175 Westwood,
Southlake, Texas 76092 on Friday, December 17, 1999 at 10:00 a.m., Central
Standard Time, for the following purposes:
1. Approval of the present management agreements of the Shepherd
Values Growth Fund and Shepherd Values Market Neutral Fund
with Cornerstone Capital Management, Inc.
2. Approval of new management agreements for the Shepherd Values
Growth Fund and Shepherd Values Market Neutral Fund with
Shepherd Advisory Services, Inc. and sub-advisory agreements
for the Shepherd Values Growth Fund and Shepherd Values Market
Neutral Fund with Cornerstone Capital Management, Inc. NO FEE
INCREASE IS PROPOSED.
3. Ratification of the selection of McCurdy & Associates CPA's,
Inc. as the independent public accountants for the Shepherd
Values Growth Fund and Shepherd Values Market Neutral Fund for
the fiscal year ended October 31, 2000.
4. Transaction of such other business as may properly come before the
meeting or any adjournment(s) thereof.
Shareholders of record at the close of business on October 18, 1999 are
entitled to notice of, and to vote at, the special meeting and any
adjournment(s) or postponement(s) thereof.
By Order of the Board of Trustees
PAUL S. BELLANY
Secretary
November 19, 1999
YOUR VOTE IS IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE OR BY FAXING IT TO (317)
266-8756, WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING. IF YOU ATTEND
THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE>
17
SHEPHERD VALUES GROWTH FUND
SHEPHERD VALUES MARKET NEUTRAL FUND
1793 KINGSWOOD DRIVE, SUITE 200
SOUTHLAKE, TEXAS 76092
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 17, 1999
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Trustees of AmeriPrime Funds (the "Trust"), on behalf
of the Shepherd Values Growth Fund (the "Growth Fund") and the Shepherd Values
Market Neutral Fund (the "Market Neutral Fund") for use at the Special Meeting
of Shareholders of the two funds (the "Meeting") to be held at 175 Westwood,
Southlake, Texas 76092 on Friday, December 17, 1999 at 10:00 a.m., Central
Standard Time, and at any and all adjournments thereof. The Notice of Meeting,
Proxy Statement and accompanying form of proxy will first be mailed to
shareholders on or about November 19, 1999.
Cornerstone Capital Management, Inc. ("Cornerstone") currently serves
as the investment adviser for the Growth Fund and the Market Neutral Fund. On
June 1, 1999, The National Capital Companies, LLC acquired all of the stock of
Cornerstone. Pursuant to the Investment Company Act of 1940, as amended, this
change in control of Cornerstone resulted in a technical assignment and
termination of the Growth Fund's and the Market Neutral Fund's management
agreements with Cornerstone. Because of the termination of those agreements, the
Board approved the present management agreements with Cornerstone on September
22, 1999, to be effective as of June 1, 1999, subject to shareholder approval.
Accordingly, the Board is now asking shareholders to approve the present
management agreements with Cornerstone. The present management agreements
contain exactly the same terms as the previous agreements, except for the
effective dates and expiration dates of the agreements. In addition, Cornerstone
has agreed not to take any investment advisory fees or expenses pursuant to the
present management agreements for the period from June 1, 1999 until the date of
shareholder approval of the agreements.
The Growth Fund and Market Neutral Fund, together with the Shepherd
Values Small-Cap Fund, Shepherd Values International Fund, Shepherd Values VIF
Equity Fund and Shepherd Values Fixed Income Fund (which four funds are not
being asked to vote on any issues in this Proxy Statement), constitute the
family of funds referred to as the "Shepherd Values Funds." Shepherd Advisory
Services, Inc. ("Shepherd Advisory Services") currently serves as the investment
adviser to the other four Shepherd Values Funds. Subject to the shareholder
approval requested herein, the Board of Trustees has selected Shepherd Advisory
Services to also serve as the investment adviser for the Growth Fund and Market
Neutral Fund in the future. The Board believes that the overall supervision,
management and regulatory compliance of all six Shepherd Values Funds will be
more consistent by having the same investment adviser oversee the management of
all six funds. If shareholders approve Shepherd Advisory Services as the new
investment adviser for the Growth Fund and the Market Neutral Fund, the Board
has selected, and is requesting herein that shareholders approve, Cornerstone to
serve as the Growth Fund's and Market Neutral Fund's sub-adviser, subject to the
general supervision of Shepherd Advisory Services. NO INCREASE IN THE ADVISORY
FEES OF THE GROWTH FUND OR THE MARKET NEUTRAL FUND IS PROPOSED. Shepherd
Advisory Services will pay all of the sub-advisory fees of Cornerstone out of
the advisory fees it earns as the adviser under the new management agreements.
Accordingly, shareholders of each of the Growth Fund and Market Neutral Fund are
being asked to consider the following:
(1) Approval of the current management agreement with Cornerstone
Capital Management, Inc.
(2) Approval of a new management agreement with Shepherd Advisory
Services, Inc. and a sub-advisory agreement with Cornerstone
Capital Management, Inc.
(3) Ratification of the selection of McCurdy & Associates CPA's,
Inc. as the independent public accountants for the fiscal year
ended October 31, 2000.
(4) Transaction of such other business, not currently
contemplated, that may properly come before the meeting or any
adjournment(s) thereof.
THE GROWTH FUND AND MARKET NEUTRAL FUND COMMENCED OPERATIONS ON APRIL
1, 1999, AND THEREFORE HAVE NOT YET BEEN REQUIRED TO MAKE AN ANNUAL OR
SEMI-ANNUAL REPORT. THE FIRST SEMI-ANNUAL REPORT IS SCHEDULED TO BE MAILED TO
SHAREHOLDERS IN NOVEMBER 1999. THE TRUST WILL SUPPLY WITHOUT COST, UPON WRITTEN
REQUEST, A COPY OF THE SEMI-ANNUAL REPORT OF THE GROWTH FUND AND THE MARKET
NEUTRAL FUND WHEN IT IS AVAILABLE, WHICH WILL INCLUDE FINANCIAL AND OTHER
INFORMATION ABOUT THE FUNDS. SUCH REQUEST SHOULD BE DIRECTED TO MR. PAUL S.
BELLANY, TREASURER, AMERIPRIME FUNDS, 1793 KINGSWOOD DRIVE, SUITE 200,
SOUTHLAKE, TEXAS 76092, TELEPHONE NUMBER (800) 298-1995.
PROPOSAL I
APPROVAL OF PRESENT MANAGEMENT AGREEMENTS WITH CORNERSTONE
THE PRESENT MANAGEMENT AGREEMENTS
Cornerstone Capital Management, Inc. served as the investment adviser
for the Growth Fund and the Market Neutral Fund from their inception pursuant to
management agreements that were initially approved by the Board of Trustees,
including a majority of the Trustees who are not interested persons as defined
in the Investment Company Act of 1940, as amended (the "Investment Company Act")
on February 1-2 and March 10, 1999, and by a majority of the shareholders of the
each fund (as defined by the Investment Company Act) on March 4, 1999.
On June 1, 1999, there was a change in control of Cornerstone because
The National Capital Companies, LLC acquired 100% of the stock of Cornerstone.
Pursuant to the Investment Company Act, a change in control of an adviser
results in a technical assignment and termination of a management agreement with
that adviser. Cornerstone did not realize this change in control terminated the
management agreements and therefore did not inform the Trust of the change in
control until September, 1999. Therefore, on September 22, 1999, as soon as
possible after the Board of Trustees was informed about the change in control,
the Board, including a majority of the Trustees who are not interested persons
as defined in the Investment Company Act (the "Disinterested Trustees"),
approved, subject to shareholder approval, new management agreements for the
Growth Fund and the Market Neutral Fund to be effective as of June 1, 1999, the
date of the change in control (the "Current Agreements"). The Board and
Cornerstone agreed that Cornerstone will not receive any advisory fees from
either fund for the period from June 1, 1999 to the date of shareholder approval
of the Current Agreements. The staff of the Securities and Exchange Commission
has advised the Trust's counsel that not obtaining Board and shareholder
approval of new management agreements until after the change in control occurred
is a technical violation of the Investment Company Act. Cornerstone has
indemnified the funds and their affiliates against any losses arising out of or
in any way related to the change in control or the termination of the initial
management agreements. The Growth Fund and Market Neutral Fund do not know what
action, if any, the Securities and Exchange Commission may take as a result of
this technical violation of the Investment Company Act.
The Current Agreements are identical to the previous management
agreements with Cornerstone, except for the effective dates and expiration dates
of the agreements. The Current Agreements are identical to each other except
that the Growth Fund and Market Neutral Fund pay different advisory fees. The
form of the Current Agreement is attached hereto as Exhibit A. You should read
the form of agreement. The description in this Proxy Statement of the Current
Agreements is only a summary.
The Current Agreements require Cornerstone to provide the Growth Fund
and the Market Neutral Fund with such investment advice as it deems advisable,
to furnish a continuous investment program for each fund consistent with the
applicable fund's investment objectives and policies and to determine the
securities to be purchased for each fund, the portfolio securities to be held or
sold by each fund and the portion of each fund's assets to be held uninvested,
subject always to the applicable fund's investment objectives, policies and
restrictions as are in effect from time to time and subject further to such
policies and instructions as the Board may from time to time establish. The
Current Agreements also provide that Cornerstone will advise and assist the
officers of the Trust in taking such steps as are necessary or appropriate to
carry out the decisions of the Board and the appropriate committees of the Board
regarding the conduct of the business of the Growth Fund and the Market Neutral
Fund.
Under the terms of the Current Agreements, Cornerstone pays all of the
organizational and operating expenses of the Growth Fund and the Market Neutral
Fund, except brokerage fees and commissions, taxes, borrowing costs (such as
interest and dividend expense on securities sold short), fees and expenses of
the non-interested person trustees, 12b-1 expenses and extraordinary or
non-recurring expenses as may arise, including litigation to which the
applicable fund may be a party and indemnification of the Trust's trustees and
officers with respect thereto.
Pursuant to the Current Agreements, the Shepherd Values Growth Fund
pays Cornerstone a fee computed and accrued daily and paid monthly at an annual
rate of 1.75% of its average daily net assets, and the Shepherd Values Market
Neutral Fund pays Cornerstone at the annual rate of 2.25% of its average daily
net assets. These are the same advisory fees paid under the previous agreements;
no increase in advisory fees is proposed. In addition, Cornerstone has agreed
not to take any advisory fees or expenses from the Growth Fund or the Market
Neutral Fund for the period from June 1, 1999 (the date of its change in
control) to the date of shareholder approval of the Current Agreements.
Accordingly, Cornerstone was only paid advisory fees for the period from April
1, 1999 (the commencement of the funds' operations) to May 31, 1999, during
which period it was paid advisory fees in the amount of $98.93 from the Growth
Fund and $111.73 from the Market Neutral Fund.
If the proposed management agreements with Shepherd Advisory Services
and sub-advisory agreements with Cornerstone (see below) are approved by the
shareholders of the Growth Fund and the Market Neutral Fund, the Current
Agreement for each fund will terminate and the new agreements will become
effective immediately upon such shareholder approval. If either fund does not
approve both the new management agreement and sub-advisory agreement for that
fund, Cornerstone will continue to serve as the investment adviser for that fund
pursuant to the Current Agreement for the fund (assuming the Current Agreement
for that fund is approved by the shareholders at the meeting). If neither the
Current Agreement or the proposed new agreements for a fund are approved by the
shareholders of a fund, the Board of Trustees will promptly take such actions as
it considers are in the best interests of that fund and its shareholders.
INFORMATION REGARDING CORNERSTONE
Cornerstone Capital Management, Inc., 102 South Tejon, Suite 430,
Colorado Springs, Colorado 80903 is a registered investment advisory firm formed
as a Colorado corporation on April 1, 1997. Cornerstone is a wholly owned
subsidiary of The National Capital Companies, LLC, located at 18952 MacArthur
Blvd., Suite 315, Irvine, California 92612. Darrel T. Uselton, a director of
Cornerstone, is the controlling shareholder of The National Capital Companies,
LLC.
The names, addresses and principal occupations of the principal
executive officers and directors of Cornerstone are set forth below. The
business address of the officers and directors is 102 South Tejon, Suite 430,
Colorado Springs, Colorado 80903.
<TABLE>
<S> <C> <C>
- ------------------------------------------- ----------------------------------------- -----------------------------------------
NAME POSITION WITH CORNERSTONE PRINCIPAL OCCUPATION
- ------------------------------------------- ----------------------------------------- -----------------------------------------
- ------------------------------------------- ----------------------------------------- -----------------------------------------
Darrel T. Uselton Director Director of Cornerstone; Chairman of
- ------------------------------------------- ----------------------------------------- -----------------------------------------
- ------------------------------------------- ----------------------------------------- -----------------------------------------
Joseph A. Cerbone Director Director of Cornerstone; President of
- ------------------------------------------- ----------------------------------------- -----------------------------------------
- ------------------------------------------- ----------------------------------------- -----------------------------------------
Jason D. Huntley Managing Director, President and Managing Director of Cornerstone; Vice
- ------------------------------------------- ----------------------------------------- -----------------------------------------
- ------------------------------------------- ----------------------------------------- -----------------------------------------
Donald B. Ellsworth Managing Director Managing Director of Cornerstone
- ------------------------------------------- ----------------------------------------- -----------------------------------------
- ------------------------------------------- ----------------------------------------- -----------------------------------------
Colleen G. Helm Managing Director Managing Director of Cornerstone
- ------------------------------------------- ----------------------------------------- -----------------------------------------
</TABLE>
<PAGE>
Cornerstone serves as the sub-adviser to the affiliated registered
investment company listed below:
<TABLE>
<S> <C> <C>
- ----------------------------------------------------- ------------------------------- -----------------------------------------
NAME OF FUND NET ASSETS AS OF ANNUAL ADVISORY FEE
OCTOBER 19, 1999 (as a percentage of assets)
- ----------------------------------------------------- ------------------------------- -----------------------------------------
- ----------------------------------------------------- ------------------------------- -----------------------------------------
AMERIPRIME FUNDS
- ----------------------------------------------------- ------------------------------- -----------------------------------------
- ----------------------------------------------------- ------------------------------- -----------------------------------------
Shepherd Values VIF Equity Fund $0 .20% of average daily net assets
- ----------------------------------------------------- ------------------------------- -----------------------------------------
</TABLE>
EVALUATION OF THE CURRENT AGREEMENTS BY THE BOARD OF TRUSTEES
The Board has determined that continuity and efficiency of portfolio
management services can best be assured by approving the Current Agreements. The
Board believes that the Current Agreements have and will continue to provide the
Growth Fund and the Market Neutral Fund with high quality advisory services at
appropriate and reasonable costs. Therefore, the Board believes that approval of
the Current Agreements is in the best interests of the Trust and the
shareholders of the Growth Fund and the Market Neutral Fund.
At a meeting of the Board of Trustees held on September 22, 1999, the
Board, including the Disinterested Trustees, evaluated Cornerstone. In
evaluating Cornerstone, the Board, including the Disinterested Trustees, relied
on information furnished by Cornerstone regarding financial and operational
aspects of Cornerstone and information about its investment personnel, including
information provided at the February 1-2 and March 10, 1999 meetings of the
Board at which the Board approved the previous management agreements.
Based on its review, the Board of Trustees believes that the terms of
the Current Agreements are fair to, and in the best interests of, the Trust and
the shareholders of each fund. Accordingly, the Board of Trustees, including the
Disinterested Trustees, unanimously recommends that the shareholders approve the
Current Agreements. In making this recommendation, the Trustees primarily
evaluated (i) the experience, reputation, qualifications and background of
Cornerstone's investment personnel, (ii) the nature and quality of operations
and services that Cornerstone has provided the Growth Fund and the Market
Neutral Fund, (iii) the continuity of services provided under the Current
Agreements, (iv) the ability of Cornerstone to retain and attract qualified
personnel, and (v) the ownership of Cornerstone.
The Trustees also gave careful consideration to factors deemed relevant
to the Trust and the Growth Fund and the Market Neutral Fund, including, but not
limited to: (1) the performance of each fund since commencement of its
operations; (2) the distinct investment objective and policies of each fund, (3)
that the compensation to be paid under the Current Agreements is the same as
under the previous management agreements; (4) the financial condition of
Cornerstone; and (5) the commitment of Cornerstone to continue to pay certain
expenses of the funds.
THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING THE DISINTERESTED
TRUSTEES, UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF THE
CURRENT AGREEMENTS.
<PAGE>
PROPOSAL 2
MANAGEMENT AGREEMENTS WITH SHEPHERD ADVISORY SERVICES, INC. AND SUBADVISORY
AGREEMENTS WITH CORNERSTONE CAPITAL MANAGEMENT, INC.
BACKGROUND
Shepherd Advisory Services, Inc. currently serves as the investment
adviser to the other four Shepherd Values Funds (the Shepherd Values Small-Cap
Fund, Shepherd Values International Fund, Shepherd Values VIF Equity Fund and
Shepherd Values Fixed Income Fund). The Board believes the overall management
and supervision of all six Shepherd Values Funds will be more consistent if one
investment adviser, Shepherd Advisory Services, serves as the investment advisor
to and oversees the management and operations of all six of the Shepherd Values
Funds. This will also enable all six funds to be marketed under one umbrella as
the "Shepherds Values Funds." If the proposed new management and sub-advisory
agreements are approved, Cornerstone will continue to make the investment
decisions for the funds as their sub-adviser; however, the decisions will be
subject to the supervision of Shepherd Advisory Services. THIS CHANGE IN THE
ADVISER AND THE APPOINTMENT OF CORNERSTONE AS SUB-ADVISER WILL NOT RESULT IN ANY
INCREASE IN THE ADVISORY FEES PAID BY THE GROWTH FUND OR THE MARKET NEUTRAL
FUND.
THE NEW MANAGEMENT AGREEMENTS
The proposed new management agreements (the "Proposed Agreements") are
materially the same as the Current Agreements, other than changing the adviser
to Shepherd Advisory Services, Inc. ("Shepherd Advisory Services") from
Cornerstone, adding a provision that permits Shepherd Advisory Services to
retain one or more sub-advisers (although Shepherd Advisory Services only
intends to appoint one sub-adviser - Cornerstone), and the effective and
expiration dates of the agreements. The form of the Proposed Agreement is
attached hereto as Exhibit B. You should read the form of agreement. The
description in this Proxy Statement of the Proposed Agreements is only a
summary.
The Proposed Agreements provide that the Shepherd Advisory Services
will provide the funds with such investment advice as it deems advisable;
furnish a continuous investment program for each fund consistent with the fund's
investment objectives and policies and determine the securities to be purchased
for each fund, the portfolio securities to be held or sold by each fund and the
portion of each fund's assets to be held uninvested, subject always to the
fund's investment objectives, policies and restrictions, as each of the same
shall be from time to time in effect, and subject further to such policies and
instructions as the Board may from time to time establish. The Proposed
Agreements also provide that Shepherd Advisory Services 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 Growth Fund and the Market
Neutral Fund.
Under the terms of the Proposed Agreements, like the Current
Agreements, Shepherd Advisory Services will pay all of the organizational and
operating expenses of each fund, except brokerage fees and commissions, taxes,
borrowing costs (such as interest and dividend expense on securities sold
short), fees and expenses of the non-interested person trustees, 12b-1 expenses
and extraordinary or non-recurring expenses as may arise, including litigation
to which a fund may be a party and indemnification of the Trust's trustees and
officers with respect thereto.
As compensation for advisory services and the payment of the expenses
of the funds set forth above, the Growth Fund will pay Shepherd Advisory
Services a fee computed and accrued daily and paid monthly at an annual rate of
1.75% of its average daily net assets, and the Market Neutral will pay 2.25% of
its average daily net assets. These are the same fees charged in the Current
Agreements; there will be no increase in advisory fees. Shepherd Advisory
Services will pay all sub-advisory fees charged by Cornerstone out of the fees
it receives under the Proposed Agreements.
In connection with purchases or sales of portfolio securities for the
account of a fund, Shepherd Advisory Services arranges for the placing of all
orders for the purchase and sale of portfolio securities for the account with
brokers or dealers selected by the Shepherd Advisory Services, subject to review
of these selections by the Board from time to time. Shepherd Advisory Services
is responsible for the negotiation and allocation of principal business and
portfolio brokerage. In the selection of such brokers or dealers and the placing
of such orders, Shepherd Advisory Services must at all times seek for a 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.
Shepherd Advisory Services generally seeks favorable prices and
commission rates that are reasonable in relation to the benefits received. In
seeking best qualitative execution, Shepherd Advisory Services is authorized to
select brokers or dealers who also provide brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934)
to the fund and/or the other accounts over which Shepherd Advisory Services
exercises investment discretion. The Proposed Agreements also authorize Shepherd
Advisory Services 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 Shepherd Advisory Services determines
in good faith that the amount of the commission is reasonable in relation to the
value of the brokerage and research services provided by the executing broker or
dealer. The determination may be viewed in terms of either a particular
transaction or the overall responsibilities of Shepherd Advisory Services with
respect to the fund and to accounts over which Shepherd Advisory Services
exercises investment discretion. Shepherd Advisory Services and the Growth Fund
and Market Neutral Fund understand and acknowledge that, although the
information may be useful to a fund and Shepherd Advisory Services, it is not
possible to place a dollar value on such information. The Board shall
periodically review the commissions paid by each fund to determine if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the applicable fund. Consistent with the Rules of Fair
Practice of the National Association of Securities Dealers, Inc., and subject to
seeking best qualitative execution as described above, Shepherd Advisory
Services may give consideration to sales of shares of a fund as a factor in the
selection of brokers and dealers to execute fund portfolio transactions.
Subject to the provisions of the Investment Company Act and other
applicable law, Shepherd Advisory Services, any of its affiliates or any
affiliates of its affiliates may retain compensation in connection with
effecting a fund's portfolio transactions, including transactions effected
through others.
<PAGE>
If any occasion should arise in which Shepherd Advisory Services gives
any advice to its clients concerning the shares of a fund, it will act solely as
investment counsel for such client and not in any way on behalf of the fund.
Shepherd Advisory Services' services to a fund pursuant to the Proposed
Agreements are not to be deemed to be exclusive and it is understood that
Shepherd Advisory Services may render investment advice, management and other
services to others, including other registered investment companies.
The Proposed Agreements state that Shepherd Advisory Services and its
shareholders, members, officers, directors, employees, agents, control persons
or affiliates of any thereof shall not be liable for any damages, expenses or
losses incurred by the Trust in connection with any error of judgment, mistake
of law, any act or omission connected with or arising out of any services
rendered under, or payments made pursuant to, the Proposed Agreements or any
other matter to which the Agreements relate, except by reason of willful
misfeasance, bad faith or gross negligence on the part of any such persons in
the performance of Shepherd Advisory Services' duties under the Proposed
Agreements, or by reason of reckless disregard by any of such persons of
Shepherd Advisory Services' obligations and duties under the Proposed
Agreements.
Under the Proposed Agreements, the Trust and Shepherd Advisory Services
acknowledge that all rights to the name "Shepherd Values" or any variation
thereof belong to Shepherd Advisory Services and that the Trust is being granted
a limited license to use such words in the names of its funds or in any class
name. In the event Shepherd Advisory Services ceases to be the adviser to the
funds, the Trust's rights to the use of the name "Shepherd Values" will
automatically cease on the ninetieth day following the termination of the
Proposed Agreements. The use of the name may also be withdrawn by Shepherd
Advisory Services during the term of the Proposed Agreements upon ninety (90)
days' written notice to the Trust. Nothing contained in the Agreements impair or
diminish in any respect, Shepherd Advisory Services' right to use the name
"Shepherd Values" in the name of, or in connection with, any other business
enterprises with which Shepherd Advisory Services is or may become associated.
There is no charge to the Trust for the right to use the name.
No provisions of the Proposed Agreements may be changed, waived,
discharged or terminated orally, and no amendment of the Agreements are
effective until approved by the Board, including a majority of the trustees who
are not interested persons of Shepherd Advisory Services or of the Trust, cast
in person at a meeting called for the purpose of voting on such approval, and
(if required under current interpretations of the Investment Company Act by the
Securities and Exchange Commission) by vote of the holders of a majority of the
outstanding voting securities of the series to which the amendment relates.
A Proposed Agreement will become effective on the date the shareholders
of a fund approve both the Proposed Agreement and the sub-advisory agreement for
that fund (see below). The Proposed Agreements will continue in effect for two
years from the effective date, and may continue thereafter on a year-to-year
basis, subject to approval by the Trustees of the Trust or the vote of the
holders of a majority of the outstanding shares of a fund (as defined in the
Investment Company Act), and also, in either event by a vote of the majority of
the disinterested Trustees of the Trust in accordance with the Investment
Company Act and pursuant to the terms and conditions of the Proposed Agreements.
The Proposed Agreements may be terminated upon sixty days written notice by the
Board of Trustees of the Trust, by a vote of a majority of the outstanding
voting securities of the Growth Fund or the Market Neutral Fund, or by Shepherd
Advisory Services.
If either fund does not approve both the Proposed Agreement and
sub-advisory agreement for that fund, Cornerstone will continue to serve as the
investment adviser for that fund pursuant to the Current Agreement for the fund
(assuming the Current Agreement for that fund is approved by the shareholders at
the meeting). If neither the Current Agreement or the proposed new agreements
for a fund are approved by the shareholders of a fund, the Board of Trustees
will promptly take such actions as it considers are in the best interests of
that fund and its shareholders.
INFORMATION REGARDING THE SHEPHERD ADVISORY SERVICES
Shepherd Advisory Services, Inc., 2505 21st Avenue South, Suite 204,
Nashville, Tennessee 37212 is a registered investment advisory firm organized as
a Tennessee corporation on July 28, 1998. Shepherd Financial Services, Inc.,
2505 21st Avenue South, Suite 204, Nashville, Tennessee 37212 owns 100% of the
stock of Shepherd Advisory Services, and Stephen R. Bolt, Mark Bolt and Joe
Rodgers each own over 10% of Shepherd Financial Services, Inc.
The names and principal occupations of the principal executive officers
and directors of Shepherd Advisory Services are set forth below. The business
address of each director and officer is 2505 21st Avenue South, Suite 204,
Nashville, Tennessee 37212.
<PAGE>
<TABLE>
<S> <C> <C>
- ---------------------------------- --------------------------------- ----------------------------------------------------------
NAME TITLE OR STATUS WITH SHEPHERD PRINCIPAL OCCUPATION
- ---------------------------------- --------------------------------- ----------------------------------------------------------
- ---------------------------------- --------------------------------- ----------------------------------------------------------
Stephen R. Bolt President and a Director President and a Director of Shepherd Advisory Services
- ---------------------------------- --------------------------------- ----------------------------------------------------------
- ---------------------------------- --------------------------------- ----------------------------------------------------------
J. Christopher McKnight Chief Financial Officer and Chief Financial Officer and Secretary of Shepherd
- ---------------------------------- --------------------------------- ----------------------------------------------------------
- ---------------------------------- --------------------------------- ----------------------------------------------------------
Jason D. Huntley Vice President, Chief Vice President, Chief Investment Officer and Managing
- ---------------------------------- --------------------------------- ----------------------------------------------------------
- ---------------------------------- --------------------------------- ----------------------------------------------------------
John Maggart Director A Director of Shepherd Advisory Services and Shepherd
- ---------------------------------- --------------------------------- ----------------------------------------------------------
- ---------------------------------- --------------------------------- ----------------------------------------------------------
Joe Rodgers Director A Director of Shepherd Advisory Services and Shepherd
- ---------------------------------- --------------------------------- ----------------------------------------------------------
</TABLE>
<PAGE>
Shepherd Advisory Services serves as the investment adviser to the
affiliated registered investment companies listed below:
<TABLE>
<S> <C> <C>
- ----------------------------------------------------- ------------------------------- -----------------------------------------
NAME OF FUND NET ASSETS AS OF ANNUAL ADVISORY FEE
OCTOBER 19, 1999 (as a percentage of assets)
- ----------------------------------------------------- ------------------------------- -----------------------------------------
- ----------------------------------------------------- ------------------------------- -----------------------------------------
AMERIPRIME FUNDS
- ----------------------------------------------------- ------------------------------- -----------------------------------------
- ----------------------------------------------------- ------------------------------- -----------------------------------------
Shepherd Values Small-Cap Fund $0 1.80% of average daily net assets
- ----------------------------------------------------- ------------------------------- -----------------------------------------
- ----------------------------------------------------- ------------------------------- -----------------------------------------
Shepherd Values International Fund $0 1.95% of average daily net assets
- ----------------------------------------------------- ------------------------------- -----------------------------------------
- ----------------------------------------------------- ------------------------------- -----------------------------------------
Shepherd Values VIF Equity Fund $0 1.00% of average daily net assets
- ----------------------------------------------------- ------------------------------- -----------------------------------------
- ----------------------------------------------------- ------------------------------- -----------------------------------------
Shepherd Values Fixed Income Fund $0 1.25% of average daily net assets
- ----------------------------------------------------- ------------------------------- -----------------------------------------
</TABLE>
THE SUBADVISORY AGREEMENTS.
Cornerstone Capital Management, Inc. currently acts as investment
adviser to the Growth Fund and the Market Neutral Fund. Under the proposed
sub-advisory agreements (the "Sub-Advisory Agreements"), Cornerstone would
become the sub-adviser to each fund, subject to the general supervision of
Shepherd Advisory Services (the funds previously had no sub-adviser).
Cornerstone is currently the sub-adviser for the Shepherds Value VIF Equity
Fund.
The proposed form of Sub-Advisory Agreement is attached hereto as
Exhibit C. The Sub-Advisory Agreements for each fund are identical except that
Shepherd Advisory Services pays different sub-advisory fees for the Growth Fund
and the Market Neutral Fund. You should read the form of agreement. The
description in this Proxy Statement of the Sub-Advisory Agreements is only a
summary.
Pursuant to the Sub-Advisory Agreement, Cornerstone, subject to the
general supervision of the Trust's Board of Trustees and Shepherd Advisory
Services, will manage the investment operations of each fund and the composition
of the portfolio securities and investments (including cash) belonging to each
fund, including the purchase, retention and disposition thereof and the
execution of agreements relating thereto, in accordance with the fund's
investment objectives, policies and restrictions as stated in the fund's
then-current Prospectus and Statement of Additional Information.
In placing orders with brokers or dealers, Cornerstone must at all
times seek for a fund the best price and execution for purchases and sales on
behalf of 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.
Cornerstone will generally seek favorable prices and commission rates
that are reasonable in relation to the benefits received. Subject to such
conditions as may be imposed by the Trust's Board of Trustees, Cornerstone may
pay commissions to brokers and/or dealers that are higher than might be charged
by another qualified broker to obtain brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934, as
amended) considered by Cornerstone to be useful or desirable in the performance
of its duties under the Sub-Advisory Agreement, if Cornerstone determines in
good faith that the amount of the commission is reasonable in relation to the
value of the brokerage and research services provided by the executing broker or
dealer. The determination may be viewed in terms of either a particular
transaction or the overall responsibilities of Cornerstone with respect to the
applicable fund and to accounts over which Cornerstone exercises investment
discretion. The Growth Fund and the Market Neutral Fund and Cornerstone
understand and acknowledge that, although the information may be useful to a
fund and Cornerstone, it is not possible to place a dollar value on such
information. The Board shall periodically review the commissions paid by the
funds to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the applicable fund. Consistent
with the Rules of Fair Practice of the National Association of Securities
Dealers, Inc., and subject to seeking best qualitative execution as described
above, Cornerstone may give consideration to sales of shares of a fund as a
factor in the selection of brokers and dealers to execute fund portfolio
transactions.
Subject to such conditions as may be imposed by the Board of Trustees
and Shepherd Advisory Services and the provisions of the Investment Company Act
and other applicable law, nothing in the Sub-Advisory Agreements will prohibit
Cornerstone from selecting brokers and/or dealers who are "affiliated persons"
of Cornerstone, Shepherd Advisory Services or the Trust. On occasions when
Cornerstone deems the purchase or sale of a security to be in the best interest
of a fund as well as other customers, Cornerstone may, to the extent permitted
by applicable laws and regulations, but shall not be obligated to, aggregate the
securities to be sole or purchased in order to obtain the best execution and
lower brokerage commissions, if any. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transaction, will
be made by Cornerstone in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Trust and, if applicable, to
such other customers.
If any occasion should arise in which Cornerstone gives any advice to
its clients concerning the shares of a fund, it will act solely as investment
counsel for such client and not in any way on behalf of the fund. Cornerstone's
services to the funds pursuant to the Sub-Advisory Agreements are not to be
deemed to be exclusive and it is understood that Cornerstone may render
investment advice, management and other services to others, including other
registered investment companies.
During the term of the Sub-Advisory Agreements, Cornerstone will pay
all expenses (including without limitation the compensation of all trustees and
officers of the Trust who are "interested persons" of Cornerstone, as defined in
the Investment Company Act) incurred by it in connection with its activities
under the Sub-Advisory Agreements, other than the cost of securities and
investments purchased for each fund (including taxes and brokerage commissions,
if any).
For the services provided and the expenses borne pursuant to the
Sub-Advisory Agreements, Shepherd Advisory Services will pay to Cornerstone a
fee computed and accrued daily and paid monthly at an annual rate of .75% of the
average daily net assets of the Market Neutral Fund and .50% of the average
daily net assets of the Growth Fund. The Sub-Advisory Agreements do not result
in any increase in the advisory fees paid by the Growth Fund or the Market
Neutral Fund because Shepherd Advisory Services will pay all of the sub-advisory
fees.
The Sub-Advisory Agreements state that Cornerstone and its
shareholders, members, officers, directors, employees, agents control persons or
affiliates of any thereof shall not be liable for any damages, expenses or
losses incurred by the Trust in connection with any error of judgment, mistake
of law, or for any loss suffered by a fund in connection with the matters to
which the Sub-Advisory Agreement relates except a loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the Investment Company Act) or a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of any such
persons in the performance of Cornerstone's duties under the Sub-Advisory
Agreement, or from reckless disregard by any of such persons of Cornerstone's
obligations and duties under the Sub-Advisory Agreement.
No provisions of the Sub-Advisory Agreements may be amended until
approved by Cornerstone and the Board, including a majority of the trustees who
are not parties to the agreement or "interested persons" as defined in the
Investment Company Act, cast in person at a meeting called for the purpose of
voting on such approval, and (if required under current interpretations of the
Investment Company Act by the Securities and Exchange Commission) by vote of the
holders of a majority of the outstanding voting securities of the fund to which
the amendment relates.
The Sub-Advisory Agreement will become effective on the date the
shareholders of the applicable fund approve it and the new management agreement
with Shepherd Advisory Services. The Sub-Advisory Agreements will continue in
effect for two years from the effective date, and may continue thereafter on a
year-to-year basis, subject to approval by (a) the vote of the holders of a
majority of the outstanding shares of a fund (as defined in the Investment
Company Act), or by vote of the Trust's Board of Trustees, cast in person at a
meeting called for the purpose of voting on such approval, and (b) by a vote of
the majority of the Trustees of the Trust who are not parties to the agreement
or "interested persons" (as defined in the Investment Company Act) of any party
to the agreement, cast in person at a meeting called for the purpose of voting
on such approval. The Sub-Advisory Agreements may be terminated upon thirty days
written notice by the Board of Trustees of the Trust or by a vote of a majority
of the outstanding voting securities of a fund, or upon ninety days written
notice by Cornerstone.
EVALUATION OF THE PROPOSED MANAGEMENT AGREEMENTS AND SUB-ADVISORY
AGREEMENTS BY THE BOARD OF TRUSTEES
The Board has determined that it is desirable to approve the Proposed
Management Agreements and Sub-Advisory Agreements to achieve consistent overall
supervision, management and marketing of all six Shepherd Values Funds,
including the Market Neutral Fund and the Growth Fund. The Board believes that
the Proposed Agreements and Sub-Advisory Agreements will enable the Trust to
continue to obtain high quality advisory services at appropriate and reasonable
costs. Therefore, the Board believes that approval of the Proposed Agreements
and Sub-Advisory Agreements is in the best interests of the Trust and the
shareholders of the Growth Fund and the Market Neutral Fund.
At a meeting of the Board of Trustees held on September 22, 1999, the
Board, including the Disinterested Trustees, evaluated the Shepherd Advisory
Services and requested and reviewed, with the assistance of legal counsel,
materials furnished by Shepherd Advisory Services, including financial
information. At a meeting of the Board of Trustees held on September 22, 1999,
the Board, including the Disinterested Trustees, evaluated Cornerstone. In
evaluating Cornerstone, the Board, including the Disinterested Trustees, relied
on information furnished by Cornerstone, including information supplied at the
February 1-2 and March 10, 1999 Board meetings.
Based on its review, the Board of Trustees believes that the terms of
the Proposed Agreements and Sub-Advisory Agreements are fair to, and in the best
interests of, the Trust and the shareholders of the Growth Fund and the Market
Neutral Fund. Accordingly, the Board of Trustees, including the Disinterested
Trustees, unanimously recommends approval by the shareholders of the Proposed
Agreements and Sub-Advisory Agreements. In making this recommendation, the
Trustees primarily evaluated (i) the experience, reputation, qualifications and
background of Shepherd Advisory Services' and Cornerstone's investment
personnel, (ii) the nature and quality of operations and services that Shepherd
Advisory Services and Cornerstone are expected to provide the funds with no
change in fee rates, (iii) the expected continuity of services (because
Cornerstone will continue to provide, pursuant to the Sub-Advisory Agreements,
the services it was providing under the Current Agreements, subject to the
supervision of Shepherd Advisory Services), (iv) the ability of the Shepherd
Advisory Services and Cornerstone to retain and attract qualified personnel, and
(v) the ownership of Shepherd Advisory Services and Cornerstone.
The Trustees also gave careful consideration to factors deemed relevant
to the Trust and the Growth Fund and Market Neutral Fund, including, but not
limited to: (1) the performance of the funds since commencement of their
operations; (2) the distinct investment objective and policies of each fund, (3)
that the compensation to be paid under the Proposed Agreements will be the same
as the rate paid under the Current Agreements; (4) that the compensation to be
paid under the Sub-Advisory Agreements will be paid by Shepherd Advisory
Services; (5) that the terms of the Proposed Agreements are identical to the
terms of the Current Agreements, except for the change of the adviser, a new
provision permitting the adviser to retain one or more sub-advisers and
different effective and expiration dates; (6) the financial condition of the
Shepherd Advisory Services and Cornerstone; and (7) the commitment of Shepherd
Advisory Services and Cornerstone to pay or reimburse the Trust for certain
operating expenses of the funds.
The Board viewed as significant that Jason D. Huntley, the Managing
Director of Cornerstone, is also the Vice President, Chief Investment Officer
and Managing Director of Shepherd Advisory Services, and will continue, at both
companies, to monitor the investments of the funds. The Board also viewed as
important the representation of Shepherd Advisory Services that no diminution of
the scope and quality of advisory services provided to the funds will result
from the Proposed Agreements or the Sub-Advisory Agreements.
THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING THE DISINTERESTED
TRUSTEES, UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF THE
PROPOSED MANAGEMENT AGREEMENTS AND SUB-ADVISORY AGREEMENTS.
PROPOSAL 3
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
McCurdy & Associates CPA's, Inc. has been selected by the vote of the
Board of Trustees, including a majority of the Independent Trustees, as the
independent public accountants for the Growth Fund and the Market Neutral Fund
for the current fiscal year ending October 31, 2000. The employment of McCurdy &
Associates CPA's, Inc. is conditioned upon the right of either fund, by a vote
of a majority of the fund's outstanding shares, to terminate the employment
without any penalties. If a fund's shareholders do not ratify the selection of
McCurdy & Associates CPA's, Inc., other certified public accountants will be
considered for selection for that fund by the Board of Trustees.
Representatives of McCurdy & Associates CPA's, Inc. are not expected to
be present at the meeting although they will have an opportunity to attend and
to make a statement, if they desire to do so. If representatives of McCurdy &
Associates CPA's, Inc. are present, they will be available to respond to
appropriate questions from shareholders.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS RATIFY THE SELECTION OF
MCCURDY & ASSOCIATES CPA'S, INC.
OPERATION OF THE FUNDS
The Growth Fund and the Market Neutral Fund are diversified series of
AmeriPrime Funds, an open-end management investment company organized as an Ohio
business trust on August 8, 1995. The Board of Trustees supervises the business
activities of the Growth Fund and Market Neutral Fund. Like other mutual funds,
the Trust retains various organizations to perform specialized services. As
described above, the funds currently retain Cornerstone Capital Management,
Inc., 102 South Tejon, Suite 430, Colorado Springs, Colorado 80903 as their
investment adviser. The funds retain AmeriPrime Financial Services, Inc. (the
"Administrator") to manage the funds' business affairs and provide each fund
with administrative services, including all regulatory reporting and necessary
office equipment, personnel and facilities. The Trust retains AmeriPrime
Financial Securities, Inc., 1793 Kingswood Drive, Suite 200, Southlake, Texas
76092 to act as the principal distributor of the funds' shares. The funds retain
Unified Fund Services, Inc., 431 North Pennsylvania Street, Indianapolis,
Indiana 46204 to serve as transfer agent, dividend paying agent and shareholder
services agent.
THE PROXY
The Board of Trustees solicits proxies so that each shareholder has the
opportunity to vote on the proposals to be considered at the Meeting. A proxy
for voting your shares at the Meeting is enclosed. The shares represented by
each valid proxy received in time will be voted at the meeting as specified. If
no specification is made, the shares represented by a duly executed proxy will
be voted (i) for approval of the Current Agreement of each fund, (ii) for
approval of the proposed new management agreement and sub-advisory agreement for
each fund, (iii) for the ratification of the selection of McCurdy & Associates
CPA's, Inc. as each fund's independent public accountant, and (iv) at the
discretion of the holders of the proxy, in accordance with the recommendations
of the Board of Trustees, if any, on any other matter that may come before the
meeting that the Trust did not have notice of a reasonable time prior to the
mailing of this Proxy Statement. You may revoke your proxy at any time before it
is exercised by (i) submitting a duly executed proxy bearing a later date, (ii)
submitting a written notice to the President of the Trust revoking the proxy, or
(iii) attending and voting in person at the Meeting.
VOTING SECURITIES AND VOTING
The Board of Trustees fixed the close of business on October 18, 1999
as the record date for determining the shareholders entitled to notice of and to
vote at the Meeting or any adjournment(s) thereof (the "Record Date"). There
were 21,106.98 shares of beneficial interest of the Growth Fund and 28,177.58
shares of beneficial interest of the Market Neutral Fund issued and outstanding
as of the Record Date. Only shareholders of record on the Record Date are
entitled to vote at the Meeting. Each shareholder is entitled to one (1) vote
per share held, and fractional votes for fractional shares held, on any matter
submitted to a vote at the Meeting. The presence, in person or by proxy, of the
holders of at least a majority of the total number of outstanding shares of a
fund is necessary to constitute a quorum for that fund at the Meeting.
An affirmative vote of the holders of a majority of the outstanding
shares of a fund is required for the approval of the proposed management
agreement and sub-advisory agreement for that fund and any other matter
presented at the Meeting. As defined in the Investment Company Act, a vote of
the holders of a majority of the outstanding shares of a fund means the vote of
(i) 67% or more of the voting shares of the fund present at the Meeting, if the
holders of more than 50% of the outstanding shares of the fund are present in
person or represented by proxy, or (ii) more than 50% of the outstanding voting
shares of the fund, whichever is less.
Broker non-votes and abstentions will be considered present for
purposes of determining the existence of a quorum and the number of shares of a
fund represented at the meeting, but since they are not affirmative votes for
any proposal, they will have the same effect as a vote against the proposal.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information, as of the Record Date, with
respect to each person (including any "group" as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended) known by the Trust
to be the beneficial owner of more than 5% of the outstanding shares of the
Growth Fund or the Market Neutral Fund.
<TABLE>
<S> <C> <C>
- ------------------------------------------------ --------------------------------- --------------------------
NAME AND ADDRESS OF AMOUNT PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
- ------------------------------------------------ --------------------------------- --------------------------
- ------------------------------------------------ --------------------------------- --------------------------
SHEPHERDS VALUES GROWTH FUND:
- ------------------------------------------------ --------------------------------- --------------------------
- ------------------------------------------------ --------------------------------- --------------------------
Marilyn C. Franken 6,965.17 33.00%
2713 Angel Drive
Stockton, CA 95209
- ------------------------------------------------ --------------------------------- --------------------------
- ------------------------------------------------ --------------------------------- --------------------------
IRA FBO Joyce A. Tref 2,055.50 9.74%
P. O. Box 2052
Jersey City, NJ 07303
- ------------------------------------------------ --------------------------------- --------------------------
- ------------------------------------------------ --------------------------------- --------------------------
SHEPHERDS VALUES MARKET NEUTRAL FUND:
- ------------------------------------------------ --------------------------------- --------------------------
- ------------------------------------------------ --------------------------------- --------------------------
Mary A. Trapani Roth IRA 4,967.10 17.63%
355 Maureen Lane
Pleasant Hill, CA 94523
- ------------------------------------------------ --------------------------------- --------------------------
- ------------------------------------------------ --------------------------------- --------------------------
Marilyn C. Franken 3,384.91 12.01%
2713 Angel Drive
Stockton, CA 95209
- ------------------------------------------------ --------------------------------- --------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------- --------------------------------- --------------------------
Donaldson Lufkin Jenrette, Thomet Family Trust 8,973.08 31.84%
P. O. Box 2052
Jersey City, NJ 07303
- --------------------------------------------------------------- --------------------------------- --------------------------
- --------------------------------------------------------------- --------------------------------- --------------------------
Elmer A. Lundgren 4,935.83 17.52%
1 Pershing Plaza
Jersey City, NJ 07399
- --------------------------------------------------------------- --------------------------------- --------------------------
- --------------------------------------------------------------- --------------------------------- --------------------------
Donaldson Lufkin, Jenrette IRA Joyce A. Tref 2,961.50 10.51%
P. O. Box 2052
Jersey City, NJ 07303
- --------------------------------------------------------------- --------------------------------- --------------------------
</TABLE>
As of the Record Date, each Trustee and officer of the Trust
beneficially owned less than 1% of the outstanding shares of the Growth Fund and
the Market Neutral Fund, and all Trustees and officers of the Trust as a group
owned less than 1% of the outstanding shares of the Growth Fund and the Market
Neutral Fund.
SHAREHOLDER PROPOSALS
The Trust has not received any shareholder proposals to be considered
for presentation at the Meeting. Under the proxy rules of the Securities and
Exchange Commission, shareholder proposals may, under certain conditions, be
included in the Trust's proxy statement and proxy for a particular meeting.
Under these rules, proposals submitted for inclusion in the Trust's proxy
materials must be received by the Trust a reasonable time before the
solicitation is made. The fact that the Trust receives a shareholder proposal in
a timely manner does not insure its inclusion in its proxy materials, because
there are other requirements in the proxy rules relating to such inclusion. You
should be aware that annual meetings of shareholders are not required as long as
there is no particular requirement under the Investment Company Act which must
be met by convening such a shareholder meeting. Any shareholder proposal should
be sent to Mr. Paul S. Bellany, Secretary, AmeriPrime Funds, 1793 Kingswood
Drive, Suite 200, Southlake, Texas 76092.
COST OF SOLICITATION
The Board of Trustees of the Trust is making this solicitation of
proxies. The cost of preparing and mailing this Proxy Statement, the
accompanying Notice of Special Meeting and proxy and any additional materials
relating to the meeting and the cost of soliciting proxies will be borne by
Cornerstone. In addition to solicitation by mail, Cornerstone will request
banks, brokers and other custodial nominees and fiduciaries to supply proxy
materials to the beneficial owners of shares of the funds of whom they have
knowledge, and will reimburse them for their expenses in so doing. Certain
officers, employees and agents of the Trust, Cornerstone and Shepherd Advisory
Services may solicit proxies in person or by telephone, facsimile transmission
or mail, for which they will not receive any special compensation.
<PAGE>
OTHER MATTERS
The Trust's Board of Trustees knows of no other matters to be presented
at the Meeting other than as set forth above. If any other matters properly come
before the meeting, the holders of the proxy will vote the shares represented by
the proxy on such matters in accordance with their best judgment, in accordance
with the recommendations of the Board of Trustees, if any, and discretionary
authority to do so is included in the proxy.
BY ORDER OF THE BOARD OF TRUSTEES
PAUL S. BELLANY
Secretary
Dated November 19, 1999
PLEASE DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
REPLY ENVELOPE OR FAX IT TO (317) 266-8756.
<PAGE>
- 3 -
<PAGE>
EXHIBIT A
MANAGEMENT AGREEMENT
TO: Cornerstone Capital Management, Inc.
102 South Tejon, Suite 430
Colorado Springs, Colorado 80903
Dear Sirs:
AmeriPrime Funds (the "Trust") herewith confirms our agreement with
you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers several series of shares to investors, one
of which is the Shepherd Values _____________ Fund (the "Fund").
You have been selected to act as the sole investment adviser of the
Fund and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows effective upon the date of the execution of this
Agreement.
1. ADVISORY SERVICES
You will regularly provide the Fund with such investment
advice as you in your discretion deem advisable and will furnish a continuous
investment program for the Fund consistent with the Fund's investment objectives
and policies. You will determine the securities to be purchased for the Fund,
the portfolio securities to be held or sold by the Fund and the portion of the
Fund's assets to be held uninvested, subject always to the Fund's investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect, and subject further to such policies and instructions as the
Board may from time to time establish. You will advise and assist the officers
of the Trust in taking such steps as are necessary or appropriate to carry out
the decisions of the Board and the appropriate committees of the Board regarding
the conduct of the business of the Fund.
2. ALLOCATION OF CHARGES AND EXPENSES
You will pay all operating expenses of the Fund, including the
compensation and expenses of any employees of the Fund and of any other persons
rendering any services to the Fund; clerical and shareholder service staff
salaries; office space and other office expenses; fees and expenses incurred by
the Fund in connection with membership in investment company organizations;
legal, auditing and accounting expenses; expenses of registering shares under
federal and state securities laws, including expenses incurred by the Fund in
connection with the organization and initial registration of shares of the Fund;
insurance expenses; fees and expenses of the custodian, transfer agent, dividend
disbursing agent, shareholder service agent, plan agent, administrator,
accounting and pricing services agent and underwriter of the Fund; expenses,
including clerical expenses, of issue, sale, redemption or repurchase of shares
of the Fund; the cost of preparing and distributing reports and notices to
shareholders, the cost of printing or preparing prospectuses and statements of
additional information for delivery to the Fund's current and prospective
shareholders; the cost of printing or preparing stock certificates or any other
documents, statements or reports to shareholders; expenses of shareholders'
meetings and proxy solicitations; advertising, promotion and other expenses
incurred directly or indirectly in connection with the sale or distribution of
the Fund's shares excluding expenses which the Fund is authorized to pay
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the
"1940 Act"); and all other operating expenses not specifically assumed by the
Fund.
The Fund will pay all brokerage fees and commissions, taxes,
borrowing costs (such as (a) interest and (b) dividend expenses on securities
sold short), fees and expenses of the non-interested person trustees and such
extraordinary or non-recurring expenses as may arise, including litigation to
which the Fund may be a party and indemnification of the Trust's trustees and
officers with respect thereto. The Fund will also pay expenses which it is
authorized to pay pursuant to Rule 12b-1 under the 1940 Act. You may obtain
reimbursement from the Fund, at such time or times as you may determine in your
sole discretion, for any of the expenses advanced by you, which the Fund is
obligated to pay, and such reimbursement shall not be considered to be part of
your compensation pursuant to this Agreement.
3. COMPENSATION OF THE ADVISER
For all of the services to be rendered and payments to be made
as provided in this Agreement, as of the last business day of each month, the
Fund will pay you a fee at the annual rate of ________% of the average value of
its daily net assets.
The average value of the daily net assets of the Fund shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of the Fund is suspended for
any particular business day, then for the purposes of this paragraph, the value
of the net assets of the Fund as last determined shall be deemed to be the value
of the net assets as of the close of the business day, or as of such other time
as the value of the Fund's net assets may lawfully be determined, on that day.
If the determination of the net asset value of the Fund has been suspended for a
period including such month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the Fund as
last determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
In connection with purchases or sales of portfolio securities
for the account of the Fund, it is understood that you will arrange for the
placing of all orders for the purchase and sale of portfolio securities for the
account with brokers or dealers selected by you, subject to review of this
selection by the Board from time to time. You will be responsible for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed at all times to seek for the Fund the best qualitative execution,
taking into account such factors as price (including the applicable brokerage
commission or dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and research
services provided by the broker or dealer.
You should generally seek favorable prices and commission
rates that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services to the Fund and/or the other accounts
over which you exercise investment discretion. You are authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a Fund portfolio transaction which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if you determine in good faith that the amount of the commission is
reasonable in relation to the value of the brokerage and research services
provided by the executing broker or dealer. The determination may be viewed in
terms of either a particular transaction or your overall responsibilities with
respect to the Fund and to accounts over which you exercise investment
discretion. The Fund and you understand and acknowledge that, although the
information may be useful to the Fund and you, it is not possible to place a
dollar value on such information. The Board shall periodically review the
commissions paid by the Fund to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits to
the Fund.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute Fund
portfolio transactions.
Subject to the provisions of the 1940 Act, and other
applicable law, you, any of your affiliates or any affiliates of your affiliates
may retain compensation in connection with effecting the Fund's portfolio
transactions, including transactions effected through others. If any occasion
should arise in which you give any advice to clients of yours concerning the
shares of the Fund, you will act solely as investment counsel for such client
and not in any way on behalf of the Fund. Your services to the Fund pursuant to
this Agreement are not to be deemed to be exclusive and it is understood that
you may render investment advice, management and other services to others,
including other registered investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the 1940 Act or
the rules thereunder, neither you nor your shareholders, members, officers,
directors, employees, agents, control persons or affiliates of any thereof shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Trust in connection with, any error of judgment, mistake of law, any act or
omission connected with or arising out of any services rendered under, or
payments made pursuant to, this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or gross
negligence on the part of any such persons in the performance of your duties
under this Agreement, or by reason of reckless disregard by any of such persons
of your obligations and duties under this Agreement.
Any person, even though also a director, officer, employee,
member, shareholder or agent of you, who may be or become an officer, director,
trustee, employee or agent of the Trust, shall be deemed, when rendering
services to the Trust or acting on any business of the Trust (other than
services or business in connection with your duties hereunder), to be rendering
such services to or acting solely for the Trust and not as a director, officer,
employee, member, shareholder or agent of you, or one under your control or
direction, even though paid by you.
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its execution,
and shall remain in force for a period of two (2) years from the date of its
execution, and from year to year thereafter, subject to annual approval by (i)
the Board or (ii) a vote of a majority of the outstanding voting securities of
the Fund, provided that in either event continuance is also approved by a
majority of the trustees who are not interested persons of you or the Trust, by
a vote cast in person at a meeting called for the purpose of voting such
approval.
If the shareholders of the Fund fail to approve the Agreement
in the manner set forth above, upon request of the Board, you will continue to
serve or act in such capacity for the Fund for the period of time pending
required approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to you for your services to and payments on behalf of the Fund will be
equal to the lesser of your actual costs incurred in furnishing such services
and payments or the amount you would have received under this Agreement for
furnishing such services and payments.
This Agreement may, on sixty days written notice, be
terminated with respect to the Fund, at any time without the payment of any
penalty, by the Board, by a vote of a majority of the outstanding voting
securities of the Fund, or by you. This Agreement shall automatically terminate
in the event of its assignment.
7. USE OF NAME
The Trust and you acknowledge that all rights to the name
"Shepherd Values" or any variation thereof belong to you, and that the Trust is
being granted a limited license to use such words in its Fund name or in any
class name. In the event you cease to be the adviser to the Fund, the Trust's
right to the use of the name "Shepherd Values" shall automatically cease on the
ninetieth day following the termination of this Agreement. The right to the name
may also be withdrawn by you during the term of this Agreement upon ninety (90)
days' written notice by you to the Trust. Nothing contained herein shall impair
or diminish in any respect, your right to use the name "Shepherd Values" in the
name of, or in connection with, any other business enterprises with which you
are or may become associated. There is no charge to the Trust for the right to
use this name.
8. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived,
discharged or terminated orally, and no amendment of this Agreement shall be
effective until approved by the Board, including a majority of the trustees who
are not interested persons of you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
interpretations of the 1940 Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the series to which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "AmeriPrime Funds" means and refers to the Trustees
from time to time serving under the Trust's Declaration of Trust as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Trust and signed by officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the State of Ohio.
10. SEVERABILITY
In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(b) For the purpose of this Agreement, the terms "majority of
the outstanding voting securities," "control" and "interested person" shall have
their respective meanings as defined in the 1940 Act and rules and regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the 1940 Act; and the term "brokerage
and research services" shall have the meaning given in the Securities Exchange
Act of 1934.
(c) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretation thereof, if any, by the United
States courts or in the absence of any controlling decision of any such court,
by the Securities and Exchange Commission or its staff. In addition, where the
effect of a requirement of the 1940 Act, reflected in any provision of this
Agreement, is revised by rule, regulation, order or interpretation of the
Securities and Exchange Commission or its staff, such provision shall be deemed
to incorporate the effect of such rule, regulation, order or interpretation.
12. NOTICES
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust is
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092, and your address for
this purpose shall be 102 South Tejon, Suite 430, Colorado Springs, Colorado
80903.
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
14. BINDING EFFECT
Each of the undersigned expressly warrants and represents that
he has the full power and authority to sign this Agreement on behalf of the
party indicated, and that his signature will operate to bind the party indicated
to the foregoing terms.
15. CAPTIONS
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
<PAGE>
If you are in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterpart of this letter and return
such counterpart to the Trust, whereupon this letter shall become a binding
contract upon the date thereof.
Yours very truly,
ATTEST:
AmeriPrime Funds
By: /s/ Monta B. Henry By: /s/ Kenneth D. Trumpfheller
Name/Title: Monta B. Henry Name/Title: Kenneth D. Trumpfheller,
President
Dated: as of June 1, 1999
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST:
Cornerstone Capital Management, Inc.
By: /s/ Heather C. King By: /s/ Jason D. Huntley
Name/Title: Heather C. King, Name/Title: Jason D. Huntley,
Executive Assistant Managing Director
Dated: as of June 1, 1999
<PAGE>
EXHIBIT B
MANAGEMENT AGREEMENT
TO: Shepherd Advisory Services, Inc.
2505 21st Avenue South, Suite 204
Nashville, Tennessee 37212
Dear Sirs:
AmeriPrime Funds (the "Trust") herewith confirms our agreement with
you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers several series of shares to investors, one
of which is the "Shepherd Values __________ Fund" (the "Fund").
You have been selected to act as the sole investment adviser of the
Fund and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows effective upon the date of the execution of this
Agreement.
1. ADVISORY SERVICES
You will regularly provide the Fund with such investment
advice as you in your discretion deem advisable and will furnish a continuous
investment program for the Fund consistent with the Fund's investment objectives
and policies. You will determine the securities to be purchased for the Fund,
the portfolio securities to be held or sold by the Fund and the portion of the
Fund's assets to be held uninvested, subject always to the Fund's investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect, and subject further to such policies and instructions as the
Board may from time to time establish. You will advise and assist the officers
of the Trust in taking such steps as are necessary or appropriate to carry out
the decisions of the Board and the appropriate committees of the Board regarding
the conduct of the business of the Fund as it relates to your responsibilities
otherwise provided for in this agreement. You may delegate any or all of the
responsibilities, rights or duties described in this paragraph 1 to one or more
sub-advisers who shall enter into agreements with you, which agreements shall be
approved and ratified by the Board including a majority of the trustees who are
not interested persons of you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
interpretations of the 1940 Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the Fund.
2. ALLOCATION OF CHARGES AND EXPENSES
You will pay all operating expenses of the Fund, including the
compensation and expenses of any employees of the Fund and of any other persons
rendering any services to the Fund; clerical and shareholder service staff
salaries; office space and other office expenses; fees and expenses incurred by
the Fund in connection with membership in investment company organizations;
legal, auditing and accounting expenses; expenses of registering shares under
federal and state securities laws, including expenses incurred by the Fund in
connection with the organization and initial registration of shares of the Fund;
insurance expenses; fees and expenses of the custodian, transfer agent, dividend
disbursing agent, shareholder service agent, plan agent, administrator,
accounting and pricing services agent and underwriter of the Fund; expenses,
including clerical expenses, of issue, sale, redemption or repurchase of shares
of the Fund; the cost of preparing and distributing reports and notices to
shareholders, the cost of printing or preparing prospectuses and statements of
additional information for delivery to the Fund's current and prospective
shareholders; the cost of printing or preparing stock certificates or any other
documents, statements or reports to shareholders; expenses of shareholders'
meetings and proxy solicitations; advertising, promotion and other expenses
incurred directly or indirectly in connection with the sale or distribution of
the Fund's shares excluding expenses which the Fund is authorized to pay
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the
"1940 Act"); and all other operating expenses not specifically assumed by the
Fund.
The Fund will pay all brokerage fees and commissions, taxes,
borrowing costs (such as (a) interest and (b) dividend expense on securities
sold short), fees and expenses of the non-interested person trustees and such
extraordinary or non-recurring expenses as may arise, including litigation to
which the Fund may be a party and indemnification of the Trust's trustees and
officers with respect thereto. The Fund will also pay expenses which it is
authorized to pay pursuant to Rule 12b-1 under the 1940 Act. You may obtain
reimbursement from the Fund, at such time or times as you may determine in your
sole discretion, for any of the expenses advanced by you, which the Fund is
obligated to pay, and such reimbursement shall not be considered to be part of
your compensation pursuant to this Agreement.
3. COMPENSATION OF THE ADVISER
For all of the services to be rendered and payments to be made
as provided in this Agreement, as of the last business day of each month, the
Fund will pay you a fee at the annual rate of ________% of the average value of
its daily net assets.
The average value of the daily net assets of the Fund shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of the Fund is suspended for
any particular business day, then for the purposes of this paragraph, the value
of the net assets of the Fund as last determined shall be deemed to be the value
of the net assets as of the close of the business day, or as of such other time
as the value of the Fund's net assets may lawfully be determined, on that day.
If the determination of the net asset value of the Fund has been suspended for a
period including such month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the Fund as
last determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
In connection with purchases or sales of portfolio securities
for the account of the Fund, it is understood that you will arrange for the
placing of all orders for the purchase and sale of portfolio securities for the
account with brokers or dealers selected by you, subject to review of this
selection by the Board from time to time. You will be responsible for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed at all times to seek for the Fund the best qualitative execution,
taking into account such factors as price (including the applicable brokerage
commission or dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and research
services provided by the broker or dealer.
<PAGE>
You should generally seek favorable prices and commission
rates that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services to the Fund and/or the other accounts
over which you exercise investment discretion. You are authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a Fund portfolio transaction which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if you determine in good faith that the amount of the commission is
reasonable in relation to the value of the brokerage and research services
provided by the executing broker or dealer. The determination may be viewed in
terms of either a particular transaction or your overall responsibilities with
respect to the Fund and to accounts over which you exercise investment
discretion. The Fund and you understand and acknowledge that, although the
information may be useful to the Fund and you, it is not possible to place a
dollar value on such information. The Board shall periodically review the
commissions paid by the Fund to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits to
the Fund.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute Fund
portfolio transactions.
Subject to the provisions of the 1940 Act, and other
applicable law, you, any of your affiliates or any affiliates of your affiliates
may retain compensation in connection with effecting the Fund's portfolio
transactions, including transactions effected through others. If any occasion
should arise in which you give any advice to clients of yours concerning the
shares of the Fund, you will act solely as investment counsel for such client
and not in any way on behalf of the Fund. Your services to the Fund pursuant to
this Agreement are not to be deemed to be exclusive and it is understood that
you may render investment advice, management and other services to others,
including other registered investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the 1940 Act or
the rules thereunder, neither you nor your shareholders, members, officers,
directors, employees, agents, control persons or affiliates of any thereof shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Trust in connection with, any error of judgment, mistake of law, any act or
omission connected with or arising out of any services rendered under, or
payments made pursuant to, this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or gross
negligence on the part of any such persons in the performance of your duties
under this Agreement, or by reason of reckless disregard by any of such persons
of your obligations and duties under this Agreement.
Any person, even though also a director, officer, employee,
member, shareholder or agent of you, who may be or become an officer, director,
trustee, employee or agent of the Trust, shall be deemed, when rendering
services to the Trust or acting on any business of the Trust (other than
services or business in connection with your duties hereunder), to be rendering
such services to or acting solely for the Trust and not as a director, officer,
employee, member, shareholder or agent of you, or one under your control or
direction, even though paid by you.
<PAGE>
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its execution,
and shall remain in force for a period of two (2) years from the date of its
execution, and from year to year thereafter, subject to annual approval by (i)
the Board or (ii) a vote of a majority of the outstanding voting securities of
the Fund, provided that in either event continuance is also approved by a
majority of the trustees who are not interested persons of you or the Trust, by
a vote cast in person at a meeting called for the purpose of voting such
approval.
If the shareholders of the Fund fail to approve the Agreement
in the manner set forth above, upon request of the Board, you will continue to
serve or act in such capacity for the Fund for the period of time pending
required approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to you for your services to and payments on behalf of the Fund will be
equal to the lesser of your actual costs incurred in furnishing such services
and payments or the amount you would have received under this Agreement for
furnishing such services and payments.
This Agreement may, on sixty days written notice, be
terminated with respect to the Fund, at any time without the payment of any
penalty, by the Board, by a vote of a majority of the outstanding voting
securities of the Fund, or by you. This Agreement shall automatically terminate
in the event of its assignment.
7. USE OF NAME
The Trust and you acknowledge that all rights to the name
"Shepherd Values" or any variation thereof belong to you, and that the Trust is
being granted a limited license to use such words in its Fund name or in any
class name. In the event you cease to be the adviser to the Fund, the Trust's
right to the use of the name "Shepherd Values" shall automatically cease on the
ninetieth day following the termination of this Agreement. The right to the name
may also be withdrawn by you during the term of this Agreement upon ninety (90)
days' written notice by you to the Trust. Nothing contained herein shall impair
or diminish in any respect, your right to use the name "Shepherd Values" in the
name of, or in connection with, any other business enterprises with which you
are or may become associated. There is no charge to the Trust for the right to
use this name.
8. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived,
discharged or terminated orally, and no amendment of this Agreement shall be
effective until approved by the Board, including a majority of the trustees who
are not interested persons of you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
interpretations of the 1940 Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the series to which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "AmeriPrime Funds" means and refers to the Trustees
from time to time serving under the Trust's Declaration of Trust as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Trust and signed by officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the State of Ohio.
10. SEVERABILITY
In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(b) For the purpose of this Agreement, the terms "majority of
the outstanding voting securities," "control" and "interested person" shall have
their respective meanings as defined in the 1940 Act and rules and regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the 1940 Act; and the term "brokerage
and research services" shall have the meaning given in the Securities Exchange
Act of 1934.
(c) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretation thereof, if any, by the United
States courts or in the absence of any controlling decision of any such court,
by the Securities and Exchange Commission or its staff. In addition, where the
effect of a requirement of the 1940 Act, reflected in any provision of this
Agreement, is revised by rule, regulation, order or interpretation of the
Securities and Exchange Commission or its staff, such provision shall be deemed
to incorporate the effect of such rule, regulation, order or interpretation.
12. NOTICES
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust is
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092, and your address for
this purpose shall be 2505 21st Avenue South, Suite 204, Nashville, Tennessee
37212.
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
<PAGE>
14. BINDING EFFECT
Each of the undersigned expressly warrants and represents that
he has the full power and authority to sign this Agreement on behalf of the
party indicated, and that his signature will operate to bind the party indicated
to the foregoing terms.
15. CAPTIONS
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
If you are in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterpart of this letter and return
such counterpart to the Trust, whereupon this letter shall become a binding
contract upon the date thereof.
Yours very truly,
ATTEST:
AmeriPrime Funds
By: ____________________________ By: ____________________________
Name/Title: ________________________ Name/Title: ________________________
Dated: ________, 1999
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST:
Shepherd Advisory Services, Inc.
By: ___________________________ By: ___________________________
Name/Title: _____________________ Name/Title: ___________________________
Dated: _______, 1999
<PAGE>
5
EXHIBIT C
AMERIPRIME FUND
INVESTMENT SUB-ADVISORY AGREEMENT
This INVESTMENT SUB-ADVISORY AGREEMENT is effective as of ____________
__, 1999, between Shepherd Advisory Services, Inc., a Tennessee corporation (the
"Adviser") and Cornerstone Capital Management, Inc., a Colorado corporation (the
"Sub-Adviser").
W I T N E S E T H:
WHEREAS, the Adviser acts as the investment adviser to the Shepherd
Values ___________ Fund (the "Fund"), a series of AmeriPrime Fund, an Ohio
business trust (the "Trust"), pursuant to a Management Agreement for the Fund
effective as of ___________, 1999 (the "Advisory Agreement");
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to render
investment sub-advisory services to the Fund, and the Sub-Adviser is willing to
render such services.
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, the parties hereto agree as follows:
SECTION 1. APPOINTMENT AND STATUS OF SUB-ADVISER. The Adviser hereby
appoints the Sub-Adviser to act as its agent to provide investment advisory
service to the Fund, for the period and on the terms set forth in this
Agreement. The Sub-Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided. Although the
Sub-Adviser shall be an agent of the Adviser, the Sub-Adviser shall for all
purposes herein be deemed to be an independent contractor of the Adviser and the
Trust and shall, unless otherwise expressly provided herein or authorized by the
Adviser or the Board of Trustees of the Trust from time to time, have no
authority to act for or represent the Adviser or the Trust in any way or
otherwise be deemed an agent of the Trust.
SECTION 2. SUB-ADVISER'S DUTIES. Subject to the general supervision of
the Trust's Board of Trustees (the "Board") and the Adviser, the Sub-Adviser
shall, employing its discretion, manage the investment operations of the Fund
and the composition of the portfolio of securities and investments (including
cash) belonging to the Fund, including the purchase, retention and disposition
thereof and the execution of agreements relating thereto, in accordance with the
Fund's investment objectives, policies and restrictions as stated in the Fund's
then-current Prospectus and Statement of Additional Information (together, the
"Prospectus") and subject to the following understandings:
(a) The Sub-Adviser shall furnish a continuous investment program for
the Fund and determine from time to time what investments or securities will be
purchased, retained or sold by the Fund and what portion of the assets belonging
to the Fund will be invested or held uninvested as cash;
(b) The Sub-Adviser shall use its best judgment in the performance of
its duties under this Agreement;
<PAGE>
(c) The Sub-Adviser, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Trust's Declaration of
Trust, its By-Laws and the Fund's Prospectus and with the instructions and
directions of the Trust's Board of Trustees and the Adviser and will conform to
and comply with the requirements of the 1940 Act and all other applicable
federal and state laws and regulations;
(d) The Sub-Adviser shall determine the securities to be purchased or
sold by the Fund and as agent for the Trust will effect portfolio transactions
pursuant to its determinations either directly with the issuer or with any
broker and/or dealer in such securities, subject to Section 3 below;
(e) The Sub-Adviser shall maintain books and records with respect to
the securities transactions of the Fund and shall render to the Adviser and the
Trust's Board of Trustees such periodic and special reports as the Adviser or
the Board may request; and
(f) The Sub-Adviser shall provide the Trust's custodian with such
information relating to the Trust as may be required under the terms of the
then-current custody agreement between the Trust and the custodian.
SECTION 3. BROKERAGE. In placing orders with brokers and/or dealers,
the Sub-Adviser is directed at all times to seek best price and execution for
purchases and sales on behalf of the Fund, taking into account such factors as
price (including the applicable brokerage commission or dealer spread), the
execution capability, financial responsibility and responsiveness of the broker
or dealer and the brokerage and research services provided by the broker or
dealer. Sub-Adviser should generally seek favorable prices and commission rates
that are reasonable in relation to the benefits received. Subject to such
conditions as may be imposed by the Trust's Board of Trustees, the Sub-Adviser
may pay commissions to brokers and/or dealers that are higher than might be
charged by another qualified broker to obtain brokerage and/or research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) considered by the Sub-Adviser to be
useful or desirable in the performance of the Sub-Adviser's duties hereunder, if
the Sub-Adviser determines in good faith that the amount of the commission is
reasonable in relation to the value of the brokerage and research services
provided by the executing broker or dealer. The determination may be viewed in
terms of either a particular transaction or Sub-Adviser's overall
responsibilities with respect to the Fund and to accounts over which Sub-Adviser
exercises investment discretion. The Fund and the Sub-Adviser understand and
acknowledge that, although the information may be useful to the Fund and the
Sub-Adviser, it is not possible to place a dollar value on such information. The
Board shall periodically review the commissions paid by the Fund to determine if
the commissions paid over representative periods of time were reasonable in
relation to the benefits to the Fund.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to seeking best qualitative execution
as described above, the Sub-Adviser may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute Fund
portfolio transactions.
Subject to the foregoing and to such conditions as may be imposed by
the Adviser or the Trust's Board of Trustees and the provisions of the 1940 Act,
Exchange Act, and other applicable law, nothing herein shall prohibit the
Sub-Adviser from selecting brokers and/or dealers who are "affiliated persons"
of the Sub-Adviser, the Adviser or the Trust. On occasions when the Sub-Adviser
deems the purchase or sale of a security to be in the best interests of the
Trust as well as other customers, the Sub-Adviser may, to the extent permitted
by applicable laws and regulations, but shall not be obligated to, aggregate the
securities to be so sold or purchased in order to obtain the best execution and
lower brokerage commissions, if any. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transaction, will
be made by the Sub-Adviser in the manner it considers to be the most equitable
and consistent with its fiduciary obligations to the Trust and, if applicable,
to such other customers.
If any occasion should arise in which the Sub-Adviser gives any advice
to clients of Sub-Adviser concerning the shares of the Fund, Sub-Adviser will
act solely as investment counsel for such client and not in any way on behalf of
the Fund. Sub-Adviser's services to the Fund pursuant to this Agreement are not
to be deemed to be exclusive and it is understood that Sub-Adviser may render
investment advice, management and other services to others, including other
registered investment companies.
SECTION 4. BOOKS AND RECORDS. The Sub-Adviser shall keep the Trust's
books and records required to be maintained by it pursuant to Section 2(e) of
this Agreement. The Sub-Adviser agrees that all records which it maintains for
the Trust are the property of the Trust and it will promptly surrender any of
such records to the Trust upon the Trust's request. The Sub-Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
any such records as are required to be maintained by the Sub-Adviser with
respect to the Trust by Rule 31a-1 under the 1940 Act.
SECTION 5. EXPENSES OF THE SUB-ADVISER. During the term of this
Agreement, the Sub-Adviser will pay all expenses (including without limitation
the compensation of all trustees or officers of the Trust who are "interested
persons" of the Sub-Adviser, as defined in the 1940 Act) incurred by it in
connection with its activities under this Agreement other than the cost of
securities and investments purchased for the Fund (including taxes and brokerage
commissions, if any).
SECTION 6. COMPENSATION OF THE SUB-ADVISER. For the services provided
and the expenses borne pursuant to this Agreement, the Adviser will pay to the
Sub-Adviser as full compensation therefor a fee computed and accrued daily and
paid monthly at an annual rate equal to ____% of the average daily net assets of
the Fund. The fee for each month will be paid to the Sub-Adviser during the
succeeding month. For purposes of determining the fee payable hereunder, the net
asset value of the Fund shall be calculated in the manner specified in the
Fund's Prospectus.
SECTION 7. USE OF NAME. The Sub-Adviser acknowledges that all rights to
the name "Shepherd Values" belong to the Adviser, and that the Trust is being
granted a limited license to use such words in its Fund name or in any class
name. In the event the Adviser ceases to be the Adviser, the Trust's right to
the use of the name "Shepherd Values" shall automatically cease on the ninetieth
day following the termination of this Agreement. The right to the name may also
be withdrawn by the Adviser during the term of the Management Agreement upon
ninety (90) days' written notice by the Adviser to the Trust. Nothing contained
herein shall impair or diminish in any respect the Adviser's right to use the
name "Shepherd Values" in the name of, or in connection with, any other business
enterprises with which the Adviser is or may become associated. There is no
charge to the Trust for the right to use these names.
SECTION 8. LIABILITY OF THE SUB-ADVISER. Neither Sub-Adviser nor its
shareholders, members, officers, directors, employees, agents, control persons
or affiliates of any thereof, shall be liable for any error of judgment or
mistake of law or for any loss suffered by any Fund in connection with the
matters to which this Agreement relates except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the 1940 Act) or a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
Any person, even though also a director, officer, employee,
shareholder, member or agent of Sub-Adviser, who may be or become an officer,
director, trustee, employee or agent of the Trust, shall be deemed, when
rendering services to the Trust or acting on any business of the Trust (other
than services or business in connection with Sub-Adviser's duties hereunder), to
be rendering such services to or acting solely for the Trust and not as a
director, officer, employee, shareholder, member or agent of Sub-Adviser, or one
under Sub-Adviser's control or direction, even though paid by Sub-Adviser.
SECTION 9. DURATION AND TERMINATION. The term of this Agreement shall
begin on the effective date of this Agreement and shall continue in effect for a
period of two years. This Agreement shall continue in effect from year to year
thereafter, subject to termination as hereinafter provided, if such continuance
is approved at least annually by (a) a majority of the outstanding voting
securities (as defined in the 1940 Act) of the Fund or by vote of the Trust's
Board of Trustees, cast in person at a meeting called for the purpose of voting
on such approval, and (b) by vote of a majority of the Trustees of the Trust who
are not parties to this Agreement or "interested persons" (as defined in the
1940 Act) of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval. This Agreement may be terminated by the
Adviser or the Trust at any time, without the payment of any penalty, by the
Adviser with the consent of the Trust's Board of Trustees, by the Trust's Board
of Trustees, or by vote of a majority of the outstanding voting securities (as
defined in the 1940 Act) of the Fund, in any such case on 30 days' written
notice to the Sub-Adviser, or by the Sub-Adviser at any time, without the
payment of any penalty, on 90 days' written notice to the Adviser. This
Agreement will automatically and immediately terminate in the event of its
assignment (as defined in the 1940 Act).
SECTION 10. AMENDMENT. This Agreement may be amended by mutual consent
of the Adviser, the Sub-Adviser and the Trust, but the consent of the Trust must
be approved (a) by vote of a majority of those Trustees of the Trustee who are
not parties to this Agreement or "interested persons" (as defined in the 1940
Act) of any such party, cast in person at a meeting called for the purpose of
voting on such amendment, and (b) if required under then current interpretations
of the 1940 Act by the Securities and Exchange Commission, by vote of a majority
of the outstanding voting securities (as defined in the 1940 Act) of the Fund
affected by such amendment.
SECTION 11. NOTICES. Notices of any kind to be given in writing and
shall be duly given if mailed or delivered to the Sub-Adviser at 102 South
Tejon, Suite 430, Colorado Springs, Colorado 80903, and to the Adviser at 2505
21st Avenue South, Suite 204, Nashville, Tennessee 37212, or at such other
address or to such other individual as shall be specified by the party to be
given notice.
SECTION 12. GOVERNING LAW. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio, without regard to
the conflicts of laws principles thereof, and (b) any question of interpretation
of any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act, shall be resolved by reference
to such term or provision of the 1940 Act and to interpretation thereof, if any,
by the United States courts or in the absence of any controlling decision of any
such court, by rules, regulations or orders of the Securities and Exchange
Commission issued pursuant to said 1940 Act. In addition, where the effect of a
requirement of the Act, reflected in any provision of this Agreement is revised
by rule, regulation or order of the Securities and Exchange Commission, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order.
SECTION 13. SEVERABILITY. In the event any provision of this Agreement is
determined to be void or unenforceable, such determination shall not affect the
remainder of this Agreement, which shall continue to be in force.
SECTION 14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 15. BINDING EFFECT. Each of the undersigned expressly warrants
and represents that he/she has the full power and authority to sign this
Agreement on behalf of the party indicated, and that his/her signature will
operate to bind the party indicated to the foregoing terms.
SECTION 16. CAPTIONS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereto for otherwise affect their construction or effect.
SECTION 17. CHANGE OF CONTROL. Sub-Adviser undertakes to notify Adviser
and the Trust in writing sufficiently in advance of any change of control, as
defined in Section 2(a)(9) of the 1940 Act, as will enable the Trust to consider
whether an assignment, as defined in Section 2(a)(4) of the 1940 Act, would
occur.
SECTION 18. OTHER BUSINESS. Except as set forth above, nothing in this
Agreement shall limit or restrict the right of any of the Sub-Adviser's
partners, officers or employees who may also be a trustee, officer, partner or
employee of the Trust to engage in any other business or to devote his or her
time and attention in part to the management or other aspects of any business,
whether of a similar or a dissimilar nature, nor limit or restrict the
Sub-Adviser's right to engage in any other business or to render services of any
kind to any other corporation, firm, individual or association.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers designated below as of the date and
year first above written.
Shepherd Advisory Services, Inc. Cornerstone Capital Management, Inc.
By: __________________________________ By: _________________________________
Name: _______________________________ Name: _______________________________
Title: ________________________________ Title: ______________________________
<PAGE>
PROXY
SHEPHERD VALUES MARKET NEUTRAL FUND
SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 17, 1999
The undersigned shareholder of Shepherd Values Market Neutral Fund (the
"Fund"), a series of AmeriPrime Funds (the "Trust"), hereby nominates,
constitutes and appoints Kenneth D. Trumpfheller and Paul S. Bellany, and each
of them, the attorney, agent and proxy of the undersigned, with full powers of
substitution, to vote all the stock of the Fund which the undersigned is
entitled to vote at the Special Meeting of Shareholders of the Fund to be held
at 175 Westwood, Southlake, Texas 76092, on Friday, December 17, 1999 at 10:00
a.m. Central Standard Time and at any and all adjournments thereof, as fully and
with the same force and effect as the undersigned might or could do if
personally present as follows:
1. APPROVAL OF PRESENT MANAGEMENT AGREEMENT WITH CORNERSTONE CAPITAL
MANAGEMENT, INC.
|_| FOR |_| AGAINST |_| ABSTAIN
2. APPROVAL OF NEW MANAGEMENT AGREEMENT WITH SHEPHERD ADVISORY SERVICES, INC.
AND SUB-ADVISORY AGREEMENT WITH CORNERSTONE CAPITAL MANAGEMENT, INC.
|_| FOR |_| AGAINST |_| ABSTAIN
3. RATIFICATION OF THE SELECTION OF MCCURDY & ASSOCIATES CPA'S, INC. AS THE
FUND'S INDEPENDENT PUBLIC ACCOUNTANT.
|_| FOR |_| AGAINST |_| ABSTAIN
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" ON PROPOSALS 1, 2 AND 3.
THE PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES UNLESS A CONTRARY INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY
SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS. IN ALL OTHER MATTERS, IF
ANY, PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED IN THE DISCRETION OF
THE PROXY HOLDERS, IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES, IF ANY.
________________ DATED:________, 1999 ____________________________________
(Number of Shares) (Please Print Your Name)
------------------------------------
(Signature of Shareholder)
------------------------------------
(Please Print Your Name)
------------------------------------
(Signature of Shareholder)
(Please date this proxy and sign
your name as it appears on the
label. Executors, administrators,
trustees, etc. should give their
full titles. All joint owners
should sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUST'S BOARD OF TRUSTEES, AND MAY BE
REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE PRESIDENT OF THE TRUST AN
INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR
BY APPEARING IN PERSON AND VOTING AT THE MEETING.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.
<PAGE>
8
PROXY
SHEPHERD VALUES GROWTH FUND
SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 17, 1999
The undersigned shareholder of Shepherd Values Growth Fund (the
"Fund"), a series of AmeriPrime Funds (the "Trust"), hereby nominates,
constitutes and appoints Kenneth D. Trumpfheller and Paul S. Bellany, and each
of them, the attorney, agent and proxy of the undersigned, with full powers of
substitution, to vote all the stock of the Fund which the undersigned is
entitled to vote at the Special Meeting of Shareholders of the Fund to be held
at 175 Westwood, Southlake, Texas 76092, on Friday, December 17, 1999 at 10:00
a.m. Central Standard Time and at any and all adjournments thereof, as fully and
with the same force and effect as the undersigned might or could do if
personally present as follows:
1. APPROVAL OF PRESENT MANAGEMENT AGREEMENT WITH CORNERSTONE CAPITAL
MANAGEMENT, INC.
|_| FOR |_| AGAINST |_| ABSTAIN
2. APPROVAL OF NEW MANAGEMENT AGREEMENT WITH SHEPHERD ADVISORY SERVICES, INC.
AND SUB-ADVISORY AGREEMENT WITH CORNERSTONE CAPITAL MANAGEMENT, INC.
|_| FOR |_| AGAINST |_| ABSTAIN
3. RATIFICATION OF THE SELECTION OF MCCURDY & ASSOCIATES CPA'S, INC. AS THE
FUND'S INDEPENDENT PUBLIC ACCOUNTANT.
|_| FOR |_| AGAINST |_| ABSTAIN
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" ON PROPOSALS 1, 2 AND 3.
THE PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES UNLESS A CONTRARY INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY
SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS. IN ALL OTHER MATTERS, IF
ANY, PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED IN THE DISCRETION OF
THE PROXY HOLDERS, IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES, IF ANY.
________________ DATED:________, 1999 ____________________________________
(Number of Shares) (Please Print Your Name)
------------------------------------
(Signature of Shareholder)
------------------------------------
(Please Print Your Name)
------------------------------------
(Signature of Shareholder)
(Please date this proxy and sign
your name as it appears on the
label. Executors, administrators,
trustees, etc. should give their
full titles. All joint owners
should sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUST'S BOARD OF TRUSTEES, AND MAY BE
REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE PRESIDENT OF THE TRUST AN
INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR
BY APPEARING IN PERSON AND VOTING AT THE MEETING.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.
