SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
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Pre-Effective Amendment No. / /
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Post-Effective Amendment No. 47 /X/
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / /
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Amendment No. 48 /X/
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(Check appropriate box or boxes.)
AmeriPrime Funds - File Nos. 33-96826 and 811-9096
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1793 Kingswood Drive, Suite 200, Southlake, Texas 76092
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(Address of Principal Executive Offices) Zip Code
Registrant's Telephone Number, including Area Code: (817) 431-2197
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Kenneth Trumpfheller, 1793 Kingswood Dr., Suite 200, Southlake, TX 76092
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(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective:
/X/ immediately upon filing pursuant to paragraph (b)
/ / on ___________ pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Shepherd Values Funds
Prospectus
November 16, 2000
Shepherd Values Growth Fund
Shepherd Values Small-Cap Fund
Shepherd Values International Fund
Shepherd Values Fixed Income Fund
2505 21st Ave., Suite 204
Nashville, TN 37212
Toll Free (877) 636-2766
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
PAGE
RISK/RETURN SUMMARY.........................................................1
SHEPHERD VALUES GROWTH FUND.................................................1
SHEPHERD VALUES SMALL-CAP FUND..............................................2
SHEPHERD VALUES INTERNATIONAL FUND..........................................3
SHEPHERD VALUES FIXED INCOME FUND...........................................5
FEES AND EXPENSES OF INVESTING IN THE FUNDS.................................8
HOW TO BUY SHARES...........................................................9
EXCHANGE PRIVILEGE..........................................................12
HOW TO REDEEM SHARES........................................................12
DETERMINATION OF NET ASSET VALUE............................................13
DIVIDENDS, DISTRIBUTIONS AND TAXES..........................................14
MANAGEMENT OF THE FUNDS.....................................................14
OTHER INFORMATION ABOUT INVESTMENTS.........................................15
FINANCIAL HIGHLIGHTS........................................................18
FOR MORE INFORMATION................................................Back Cover
<PAGE>
RISK/RETURN SUMMARY
Values Based Investing
Each Fund utilizes a set of non-financial screening criteria to
maintain a portfolio of securities consistent with the Shepherd Values
investment philosophy. This specialization generally involves a substantial
amount of additional primary and secondary research and information resources
above and beyond traditional financial analysis. The Funds' advisor primarily
utilizes the services of Values Investment Forum, Inc. ("VIF") in order to work
with each Fund's sub-advisor in the application of this non-financial screening
process to each Fund's portfolio.
Each Fund screens potential holdings to exclude issuers that, in the
advisor's opinion, are offensive to traditional Judeo-Christian values. The
Funds will not knowingly invest in businesses that are engaged to any
significant degree, directly or through subsidiaries, in the alcoholic beverage,
tobacco, pornographic and gambling industries or companies involved in the
business of aborting life before birth. A company is considered by the advisor
to be engaged to a "significant degree" in such activities if 25% or more of its
revenues are derived from these activities. This includes companies involved in
either the production or distribution of products or services related to these
activities. In addition, the advisor reserves the right to exercise its best
judgement to exclude ownership in other companies whose corporate practices are,
in the advisor's opinion, offensive to traditional Judeo-Christian values. For
example, the advisor may exclude companies which, based on VIF's research,
promote same sex lifestyles by, for example, providing domestic partner benefits
or through its philanthropic activities.
SHEPHERD VALUES GROWTH FUND
Investment Objective
The investment objective of the Shepherd Values Growth Fund is long term capital
appreciation.
Principal Strategies
The Fund seeks to achieve this objective by investing primarily in
common stocks of large capitalization ($5 billion or more) U.S. companies that
the Fund's sub-advisor, Cornerstone Capital Management, Inc., believes are more
likely to experience growth in market price based on the advisor's proprietary
models. The models consider certain financial characteristics, such as:
o return on equity
o sales and earnings growth
o cash flow
o earnings consistency, and
o debt load.
In searching for investments for the Fund, the sub-advisor employs a
style that focuses on securities that it believes offer growth opportunities at
a reasonable price, based on the characteristics described above. The Fund
engages in a "buy and hold" strategy emphasizing long term investment.
The Fund may sell a security when the sub-advisor believes that 1) the
sub-advisor's models indicate that the company's prospects for growth have
deteriorated, 2) there has been a change in the company's business model, or 3)
the sub-advisor's models identify a better investment opportunity. The Fund may
also sell a security if the issuing company engages in activities that are
inconsistent with the advisor's values based criteria.
In addition to these principal strategies, the Fund is subject to the advisor's
"values based" non-financial screening criteria described above on page 3.
Principal Risks of Investing in the Shepherd Values Growth Fund
o Management Risk. The sub-advisor's value-oriented approach may fail to
produce the intended results. The Fund's sub-advisor has no prior
experience managing the assets of a mutual fund.
o Company Risk. The value of the Fund may decrease in response to the
activities and financial prospects of an individual company in the Fund's
portfolio. The value of an individual company can be more volatile than the
market as a whole.
o Market Risk. Overall stock market risks may also affect the value of the
Fund. Factors such as domestic economic growth and market conditions,
interest rate levels, and political events affect the securities markets
and could cause the Fund's share price to fall.
o An investment in the Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
o The Fund is not a complete investment program. As with any mutual fund
investment, the Fund's returns will vary and you could lose money.
SHEPHERD VALUES SMALL-CAP FUND
Investment Objective
The investment objective of the Shepherd Values Small-Cap Fund is long term
capital appreciation.
Principal Strategies
Under normal circumstances, the Fund invests at least 65% of its net
assets in common stock of U.S. companies with market capitalizations
corresponding to the middle 90% of the Russell 2000 Value Index ("small
capitalizations"). In the sub-advisor's opinion, the middle 90% (as of the date
of this prospectus) of the Russell 2000 Value Index includes companies with
capitalizations between $197 million and $2.5 billion. The Fund's sub-advisor,
Nicholas-Applegate Capital Management, follows a value investment philosophy to
select stock of undervalued, fundamentally strong companies undergoing positive
change, based on certain financial characteristics. The sub-advisor looks
primarily for stocks with low price-to-earnings and low price-to-book ratios and
high dividend yields. The sub-advisor focuses on individual companies rather
than on specific industries, building the Fund one stock at a time.
The Fund may sell a security when it has reached the valuation target
set by the sub-advisor's valuation models, when the sub-advisor believes that
the company's fundamentals have deteriorated, or when the sub-advisor's
valuation models identify a better investment opportunity. The Fund may also
sell a security if the issuing company engages in activities that are
inconsistent with the advisor's values based criteria.
In addition to these principal strategies, the Fund is subject to the
advisor's "values based" non-financial screening criteria described above on
page 3.
Principal Risks of Investing in the Shepherd Values Small-Cap Fund
o Management Risk. The sub-advisor's value-oriented approach may fail to
produce the intended results.
o Company Risk. The value of the Fund may decrease in response to the
activities and financial prospects of an individual company in the Fund's
portfolio. The value of an individual company can be more volatile than the
market as a whole.
o Market Risk. Overall stock market risks may also affect the value of the
Fund. Factors such as domestic economic growth and market conditions,
interest rate levels, and political events affect the securities markets
and could cause the Fund's share price to fall.
o Smaller Company Risk. To the extent the Fund invests in smaller
capitalization companies, the Fund will be subject to additional risks.
These include:
o The earnings and prospects of smaller companies are more volatile than
larger companies.
o Smaller companies may experience higher failure rates than do larger
companies.
o The trading volume of securities of smaller companies is normally less
than that of larger companies and, therefore, may disproportionately
affect their market price, tending to make them fall more in response
to selling pressure than is the case with larger companies.
o Smaller companies may have limited markets, product lines or financial
resources and may lack management experience.
o An investment in the Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
o The Fund is not a complete investment program. As with any mutual fund
investment, the Fund's returns will vary and you could lose money.
SHEPHERD VALUES INTERNATIONAL FUND
Investment Objective
The investment objective of the Shepherd Values International Fund is long term
capital appreciation.
Principal Strategies
The Fund invests primarily in common stock of foreign companies. The
Fund's sub-advisor, Templeton Portfolio Advisory (a division of
Templeton/Franklin Investment Services, Inc.) applies a bottom-up, long term,
value oriented approach to individual stock selection. The Fund's portfolio will
be built around stock selections using a bargain-list approach, looking for the
best available bargains on a global basis regardless of industry or location.
Although at least 65% of the Fund's total assets will be invested in at least
three foreign countries, country, industry and geographic allocations are a
secondary, not primary, consideration. As the Fund is non-diversified it's
portfolio may at times focus on a limited number of companies that the
sub-advisor believes offer superior prospects for growth. The sub-advisor does
not actively hedge currencies.
After identifying a stock that may meet its buy criteria, the
sub-advisor determines whether it is selling at a price substantially below its
long-term worth on the basis of either asset values or earnings. For example
earnings are analyzed based on five-year projections rather than on the current
quarter or year. At present a company whose stock is selling for five to six
times earnings projections (based on the sub-advisor's analysis) would be
considered a prospective bargain. To be added to the bargain-list, the stock
will also have to be a bargain relative to itself historically, relative to its
industry, relative to other stocks in its own market and other stocks in the
sub-advisor's research data base.
In its search for prospective bargains, the sub-advisor will look in
both developed and less developed or emerging markets worldwide. The Fund may be
fully invested in foreign countries, but under normal circumstances, it is
expected that both foreign and US companies stock will be in the Fund's
portfolio. The sub-advisor expects to purchase equity interests in foreign
companies in the form of American Depositary Receipts and ordinary shares.
The sub-advisor's decisions to sell a stock held in the Fund are based
on a price increase (stock approaches target valuation), a change in projections
(fundamentals deteriorate), or the discovery of a better bargain (stock can be
replaced with a substantially cheaper stock). The Fund may also sell a security
if the issuing company engages in activities that are inconsistent with the
advisor's values based criteria.
In addition to these principal strategies, the Fund is subject to the
advisor's "values based" non-financial screening criteria described above on
page 3.
Principal Risks of Investing in the Shepherd Values International Fund
o Management Risk. The sub-advisor's value-oriented approach may fail to
produce the intended results. The Fund's sub-advisor has no prior
experience managing the assets of a mutual fund.
o Company Risk. The value of the Fund may decrease in response to the
activities and financial prospects of an individual company in the Fund's
portfolio. The value of an individual company can be more volatile than the
market as a whole.
o Market Risk. Overall stock market risks may also affect the value of the
Fund. Factors such as economic growth and market conditions, interest rate
levels, and political events affect the securities markets and could cause
the Fund's share price to fall.
o Non-diversification Risk. As a non-diversified fund, the Fund will be
subject to substantially more investment risk and potential for volatility
than a diversified fund because its portfolio may at times focus on a
limited number of companies.
o Foreign Risk. The Fund's performance will depend on issues other than the
performance of a particular company. Changes in foreign economies and
political climates are more likely to adversely affect the Fund than a
mutual fund that invests exclusively in U.S. companies. The value of
foreign securities may be adversely affected by the value of the local
currency relative to the U.S. dollar. There may also be less government
supervision of foreign markets, resulting in non-uniform accounting
practices and less publicly available information. All of these risks are
heightened to the extent the Fund invests in emerging foreign markets.
o An investment in the Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
o The Fund is not a complete investment program. As with any mutual fund
investment, the Fund's returns will vary and you could lose money.
SHEPHERD VALUES FIXED INCOME FUND
Investment Objective
The investment objective of the Shepherd Values Fixed Income Fund is a high
level of income over the long term consistent with the preservation of capital.
Principal Strategies
The Fund invests primarily in a broad range of investment grade fixed
income securities, generally rated Baa or higher by Moody's Investors Service,
Inc. or BBB or higher by Standard and Poor's Corporation ("S&P"). The Fund may
invest in fixed income securities which are unrated if the Fund's sub-advisor,
Potomac Asset Management Company, Inc., determines that they are of comparable
quality to securities rated investment grade. Under normal circumstances the
Fixed Income Fund will invest at least 65% of its total assets in fixed income
securities, including bonds, notes, domestic and foreign corporate and
government securities, mortgage backed securities, municipal securities, zero
coupon bonds and short term obligations (such as commercial paper). The
sub-advisor anticipates the securities in the Fund's portfolio will have an
average duration of 2-10 years.
The sub-advisor selects securities for the Fund using a "top down"
methodology, in other words, the sub-advisor reviews current economic
conditions, the interest rate environment and the key factors shaping the
economy. Based on this review, the sub-advisor then lengthens or shortens the
portfolio's average maturity and purchases fixed income securities from sectors
(e.g. government, corporate, domestic, foreign, etc.) it believes are
appropriate.
The Fund may sell a security if the credit rating has fallen below the
acceptable quality or it no longer meets the sub-advisor's investment criteria.
The Fund may also sell a security if the issuing company engages in activities
that are inconsistent with the advisor's values based criteria.
In addition to these principal strategies, the Fund is subject to the
advisor's "values based " non-financial screening criteria described above on
page 3.
Principal Risks of Investing in the Shepherd Values Fixed Income Fund
o Management risk. The sub-advisor's strategy may fail to produce the
intended results. The Fund's sub-advisor has no prior experience managing
the assets of a mutual fund.
o Interest rate risk. The value of your investment may decrease when interest
rates rise. Fixed income securities with longer effective maturities are
more sensitive to interest rate changes than those with shorter effective
maturities.
o Credit risk. The issuer of the fixed income security may not be able to
make interest and principal payments when due, which could cause the Fund's
share price or yield to fall.
o Prepayment risk. During periods of declining interest rates, prepayment of
loans underlying mortgage-backed securities usually accelerates. Prepayment
may shorten the effective maturities of these securities and the Fund may
have to reinvest at a lower interest rate.
o Call risk. The Fund's returns may be reduced if issuers redeem bonds prior
to maturity and the Fund must invest in bonds paying a lower interest rate.
o An investment in the Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
o The Fund is not a complete investment program. As with any mutual fund
investment, the Fund's returns will vary and you could lose money.
How the Funds have Performed
Although past performance of a Fund is no guarantee of how it will
perform in the future, historical performance may give you some indication of
the risk of investing in the Fund because it demonstrates how its returns have
varied over time. The Bar Chart and Performance Table that would otherwise
appear in this prospectus have been omitted because each Fund is recently
organized and has annual returns of less than one year.
<TABLE>
FEES AND EXPENSES OF INVESTING IN THE FUNDS
<S> <C> <C> <C> <C>
Growth Small-Cap International Fixed Income
Shareholder Fees (fees paid directly from your investment) Shareholder Fund Fund Fund Fund
Transaction Expenses
Maximum Sales Charge (Load) Imposed on Purchases 3.50% 3.50% 3.50% 3.50%
Maximum Deferred Sales Charge (Load) None None None None
Exchange Fee None None None None
Annual Fund Operating Expenses Annual Fund Operating Expenses (expenses that are
deducted from Fund assets)
Management Fees(1) 1.75% 1.80% 1.95% 1.25%
Distribution (12b-1) Fees 0.00% 0.00% 0.00% 0.00%
Other Expenses(2) 0.63% 0.25% 0.40% 0.45%
Total Annual Fund Operating Expenses 2.38% 2.05% 2.35% 1.70%
Expense Reimbursement(3) 0.63% 0.25% 0.40% 0.45%
Net Annual Fund Operating Expenses 1.75% 1.80% 1.95% 1.25%
1 The Growth Fund's management fees have been restated to reflect current fees.
2 The Growth Fund's "other expenses" do not include an extraordinary tax expense, which was reimbursed by the Fund's advisor.
"Other expenses" would have been 5.57% had the extraordinary expense been included. "Other expenses" for the
Small-Cap Fund, International Fund and Fixed Income Fund are estimated.
3 The Funds' advisor has contractually agreed to reimburse each Fund's trustee fees and expenses to maintain
net annual fund operating expenses as indicated through July 31, 2003.
</TABLE>
Example:
The example below is intended to help you compare the cost of investing
in a Fund with the cost of investing in other mutual funds. The example uses the
same assumptions as other mutual fund prospectuses: a $10,000 initial investment
for the time periods indicated, reinvestment of dividends and distributions, 5%
annual total return, constant operating expenses, and sale of all shares at the
end of each time period. Although your actual expenses may be different, based
on these assumptions your costs will be:
1 year 3 years 5 years 10 years
------ ------- ------- --------
Shepherd Values Growth Fund $523 $886 $1411 $2846
Shepherd Values Small-Cap Fund $528 $901
Shepherd Values International Fund $543 $946
Shepherd Values Fixed Income Fund $474 $735
HOW TO BUY SHARES
The minimum initial investment in each Fund is $2,500 ($1,000 for
qualified retirement accounts) and minimum subsequent investments are $50. For
accounts participating in an automatic investment program, the minimum initial
investment is $500 and the minimum subsequent investment is $50 per month. If
your investment is aggregated into an omnibus account established by an
investment advisor, broker or other intermediary, the account minimums apply to
the omnibus account, not to your individual investment. If you purchase or
redeem shares through a broker/dealer or another intermediary, you may be
charged a fee by that intermediary.
Initial Purchase
By Mail- To be in proper form, your initial purchase request must
include: o a completed and signed investment application form (which accompanies
this Prospectus); and o a check (subject to the minimum amounts) made payable to
the appropriate Fund.
Mail the application and check to:
<TABLE>
<S> <C> <C> <C> <C>
U.S. Mail: Shepherd Values Funds Overnight: Shepherd Values Funds
c/o Unified Fund Services, Inc. c/o Unified Fund Services, Inc.
P.O. Box 6110 431 North Pennsylvania Street
Indianapolis, Indiana 46206-6110 Indianapolis, Indiana 46204
</TABLE>
By Wire- You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. To wire money,
you must call Unified Fund Services, Inc., the Funds' transfer agent, at (877)
636-2766 to set up your account and obtain an account number. You should be
prepared at that time to provide the information on the application. Then,
provide your bank with the following information for purposes of wiring your
investment:
Firstar Bank, N.A.
ABA #0420-0001-3
Attn: Shepherd Values Purchase Account
Fund Portfolio Name ______________________(write in name of fund)
Account Name _________________(write in shareholder name) For the
Account # ______________(write in account number) D.D.A.#821602695
You must mail a signed application to Firstar Bank, N.A, the Funds'
custodian, at the above address in order to complete your initial wire purchase.
Wire orders will be accepted only on a day on which the Funds, custodian and
transfer agent are open for business. A wire purchase will not be considered
made until the wired money is received and the purchase is accepted by the
Funds. Any delays which may occur in wiring money, including delays which may
occur in processing by the banks, are not the responsibility of the Funds or the
transfer agent. There is presently no fee for the receipt of wired funds, but
the Funds may charge shareholders for this service in the future.
Your purchase of shares of a Fund will be effected at the public
offering price. The public offering price is the next determined net asset value
per share plus a sales load as shown in the following table.
<TABLE>
<S> <C> <C> <C>
======================================= ================================================ ================================
Sales Load as a % of:
Public Net
Offering Amount Dealer Reallowance as % of
Amount of Investment Price Public Offering Price
Invested
======================================= ================================================ ================================
Less than $100,000 3.50% 3.63% 3.50%
$100,000 but less than $250,000 2.50% 2.56% 2.50%
$250,000 but less than $500,000 1.50% 1.52% 1.50%
$500,000 but less than $1,000,000 1.00% 1.01% 1.00%
$1,000,000 or more None None None
======================================= ================================================ ================================
</TABLE>
Under certain circumstances, the Funds' distributor may change the
reallowance to dealers. Dealers engaged in the sale of shares of the Fund may be
deemed to be underwriters under the Securities Act of 1933. The Funds'
distributor retains the entire sales load on all direct initial investments in
the Fund and on all investments in accounts with no designated dealer of record.
Additional Investments
You may purchase additional shares of any Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain:
-your name -the name of your account(s)
-your account number(s) -the name of the Fund
-a check made payable to the appropriate fund
Checks should be sent to the Shepherd Values Funds at the address listed above.
A bank wire should be sent as outlined above.
Automatic Investment Plan
You may make regular investments in a Fund with an Automatic Investment
Plan by completing the appropriate section of the account application and
attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting $50 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time.
Tax Sheltered Retirement Plans
Since the Funds are oriented to longer-term investments, the Funds may
be an appropriate investment medium for tax-sheltered retirement plans,
including: individual retirement plans (IRAs); simplified employee pensions
(SEPs); 401(k) plans; qualified corporate pension and profit-sharing plans (for
employees); tax deferred investment plans (for employees of public school
systems and certain types of charitable organizations); and other qualified
retirement plans. You should contact the Fund's transfer agent for the procedure
to open an IRA or SEP plan, as well as more specific information regarding these
retirement plan options. Please consult with an attorney or tax advisor
regarding these plans. You must pay custodial fees for your IRA by redemption of
sufficient shares of the Fund from the IRA unless you pay the fees directly to
the IRA custodian. Call the Fund's transfer agent about the IRA custodial fees.
Other Purchase Information
The Funds may limit the amount of purchases and refuse to sell to any
person. If your check or wire does not clear, you will be responsible for any
loss incurred by the Funds. If you are already a shareholder, the Fund can
redeem shares from any identically registered account in the Fund as
reimbursement for any loss incurred. You may be prohibited or restricted from
making future purchases in the Fund.
Reduced Sales Load
You may use the Right of Accumulation to combine the cost or current
net asset value (whichever is higher) of your shares of a Fund with the amount
of your current purchases in order to take advance of the reduced sales load set
forth in the table above. Purchases made pursuant to a Letter of Intent may also
be eligible for the reduced sales loads. The minimum initial investment under a
Letter of Intent is $25,000. Shareholders should contact the Transfer Agent for
information about the Right of Accumulation and Letter of Intent.
Purchases at Net Asset Value
You may purchase shares of any Fund at net asset value when the payment
for your investment represents the proceeds from the redemption of shares of any
other mutual fund which has a front-end sales load. Your investment will qualify
for this provision if the purchase price of the shares of the other fund
included a sales load and the redemption occurred within one year of the
purchase of such shares and no more than sixty days prior to your purchase of
shares of the Fund. To make a purchase at net asset value pursuant to this
provision, you must submit photocopies of the confirmation (or similar evidence)
showing the purchase and redemption of shares of the other fund. Your payment
may be made with the redemption check representing the proceeds of the shares
redeemed, endorsed to the order of the Fund. The redemption of shares of the
other fund is, for federal income tax purposes, a sale on which you may realize
a gain or loss. These provisions may be modified or terminated at any time.
Contact your securities dealer or the Fund for further information.
Shares may be purchased at net asset value through a broker-dealer of
other financial institution authorized by the Fund's distributor to hold shares
in an omnibus account. Investors may be charged a fee by the financial
institution for the service. Shares may also be purchased at net asset value by
investors who participate in certain broker-dealer wrap accounts or similar fee
based programs.
In addition, shares of the Fund may be purchased at net asset value by
broker-dealers who have a sales agreement with the Funds' distributor, and their
registered personnel and employees, including members of the immediate families
of such registered personnel and employees.
Trustees, directors, officers and employees of the Trust, the advisors
and service providers to the Trust, including members of the immediate family of
such individuals and employee benefit plans established by such entities, may
also purchase shares of each Fund at net asset value.
EXCHANGE PRIVILEGE
By telephoning the Funds at (877) 636-2766 or writing the Funds at P.O.
Box 6110, Indianapolis, Indiana 46206-6110, you may exchange, without charge,
any or all of your shares in a Fund for the shares of another Shepherd Fund or
for shares of The Unified Taxable Money Market Fund, a separately managed money
market fund. Exchanges may be made only if the fund in which you wish to invest
is registered in your state of residence. The exchange privilege with the money
market fund does not constitute an offering or recommendation of the money
market fund.
It is your responsibility to obtain and read a prospectus of the money
market fund before you make an exchange with the money market fund. By giving
exchange instructions for the money market fund, you will be deemed to have
acknowledged receipt of the prospectus for the money market fund. You may make
up to one exchange out of each Fund during a calendar month and four exchanges
out of each Fund during a calendar year. This limit helps keep each Fund's net
asset base stable and reduces the Fund's administrative expenses. There
currently is no limit on exchanges out of the money market fund. In times of
extreme economic or market conditions, exchanging Fund or the money market fund
shares by telephone may be difficult.
Redemptions of shares in connection with exchanges into or out of a
Fund are made at the net asset value per share next determined after the
exchange request is received. To receive a specific day's price, your letter or
call must be received before that day's close of the New York Stock Exchange. A
day or more delay may be experienced prior to the investment of the redemption
proceeds into the money market fund. Each exchange represents the sale of shares
from one fund and the purchase of shares in another, which may produce a gain or
loss for Federal income tax purposes.
All exchanges out of a Fund into another Shepherd Fund or the money
market fund are subject to the minimum and subsequent investment requirements of
the fund in which you are investing. Exchanges may be made through a third party
which maintains an omnibus account with the money market fund for all
shareholders of the Funds. Neither the Funds, the money market fund, nor the
transfer agent assume responsibility for the authenticity of exchange
instructions communicated by telephone or in writing which are believed to be
genuine.
HOW TO REDEEM SHARES
You may receive redemption payments by check or federal wire transfer.
The proceeds may be more or less than the purchase price of your shares,
depending on the market value of the Fund's securities at the time of your
redemption. Presently there is no charge for wire redemptions; however, the
Funds may charge for this service in the future. Any charges for wire
redemptions will be deducted from your Fund account by redemption of shares. If
you redeem your shares through a broker/dealer or other institution, you may be
charged a fee by that institution.
By Mail - You may redeem any part of your account in a Fund at no
charge by mail. Your request should be addressed to:
Shepherd Values Funds
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, Indiana 46206-6110
Requests to sell shares are processed at the net asset value next
calculated after we receive your order in proper form. To be in proper form,
your request for a redemption must include your letter of instruction, including
the Fund name, account number, account name(s), the address, and the dollar
amount or number of shares you wish to redeem. This request must be signed by
all registered share owner(s) in the exact name(s) and any special capacity in
which they are registered. The Funds may require that signatures be guaranteed
by a bank or member firm of a national securities exchange. Signature guarantees
are for the protection of shareholders. At the discretion of the Funds or the
Funds' transfer agent, a shareholder, prior to redemption, may be required to
furnish additional legal documents to insure proper authorization.
By Telephone - You may redeem any part of your account in a Fund by
calling the Funds' transfer agent at (877) 636-2766. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the transfer agent and the custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The Funds or the transfer agent may terminate the telephone redemption
procedures at any time. During periods of extreme market activity, it is
possible that shareholders may encounter some difficulty in telephoning the
Funds, although neither the Funds nor the transfer agent has ever experienced
difficulties in receiving and in a timely fashion responding to telephone
requests for redemptions or exchanges. If you are unable to reach the Funds by
telephone, you may request a redemption or exchange by mail.
Additional Information - If you are not certain of the
requirements for a redemption please call the Funds' transfer agent at (877)
636-2766. Redemptions specifying a certain date or share price cannot be
accepted and will be returned. You will be mailed the proceeds on or before the
fifth business day following the redemption. However, payment for redemption
made against shares purchased by check will be made only after the check has
been collected, which normally may take up to fifteen calendar days. Also, when
the New York Stock Exchange is closed (or when trading is restricted) for any
reason other than its customary weekend or holiday closing, or under any
emergency circumstances (as determined by the Securities and Exchange
Commission) the Funds may suspend redemptions or postpone payment dates.
Because the Funds incur certain fixed costs in maintaining shareholder
accounts, the Fund may require you to redeem all of your shares in a Fund on 30
days' written notice if the value of your shares in the Fund is less than $2,500
due to redemption, or such other minimum amount as the Fund may determine from
time to time. An involuntary redemption constitutes a sale. You should consult
your tax advisor concerning the tax consequences of involuntary redemptions. You
may increase the value of your shares in a Fund to the minimum amount within the
30-day period. Your shares are subject to redemption at any time if the Board of
Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Funds.
DETERMINATION OF NET ASSET VALUE
The price you pay for your shares is based on the Fund's net asset
value per share (NAV). The NAV is calculated at the close of trading (normally
4:00 p.m. Eastern time) on each day the New York Stock Exchange is open for
business (the Stock Exchange is closed on weekends, Federal holidays and Good
Friday). The NAV is calculated by dividing the value of the Fund's total assets
(including interest and dividends accrued but not yet received) minus
liabilities (including accrued expenses) by the total number of shares
outstanding.
The Fund's assets are generally valued at their market value. If market
prices are not available, or if an event occurs after the close of the trading
market that materially affects the values, assets may be valued by the Fund's
advisor at their fair value, according to procedures approved by the Fund's
board of trustees. The International Fund and the Fixed Income Fund may own
securities that are traded primarily on foreign exchanges that trade on weekends
or other days the Funds do not price their shares. As a result, the NAV of a
Fund may change on days when you will not be able to purchase or redeem your
shares of the Fund.
Requests to purchase and sell shares are processed at the NAV next
calculated after we receive your order in proper form.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Dividends and Distributions. Each Fund typically distributes
substantially all of its net investment income in the applicable form of
dividends and taxable capital gains to its shareholders. These distributions are
automatically reinvested in the applicable Fund unless you request cash
distributions on your application or through a written request. Each Fund
(except the Fixed Income Fund) expects that its distributions will consist
primarily of capital gains. The Fixed Income Fund expects that its distributions
will consist primarily of income.
Taxes. In general, selling shares of a Fund and receiving distributions
(whether reinvested or taken in cash) are taxable events. Depending on the
purchase price and the sale price, you may have a gain or a loss on any shares
sold. Any tax liabilities generated by your transactions or by receiving
distributions are your responsibility. You may want to avoid making a
substantial investment when a Fund is about to make a capital gains distribution
because you would be responsible for any taxes on the distribution regardless of
how long you have owned your shares.
Early each year, the Funds will mail to you a statement setting forth
the federal income tax information for all distributions made during the
previous year. If you do not provide your taxpayer identification number, your
account will be subject to backup withholding.
The tax considerations described in this section do not apply to
tax-deferred accounts or other non-taxable entities. Because each investor's tax
circumstances are unique, please consult with your tax advisor about your
investment.
MANAGEMENT OF THE FUNDS
Shepherd Advisory Services, Inc., 2505 21st Ave., Suite 204, Nashville,
TN 37212 serves as investment advisor to each Fund. Shepherd, a recently
registered investment advisory firm, was organized as a Tennessee corporation on
July 28, 1998. Shepherd has engaged a sub-advisor (at Shepherd's expense) to
provide portfolio management services to each Fund. Shepherd is authorized to
receive an annual fee equal to a percentage of each Fund's average daily net
assets as follows: Small-Cap Fund, 1.80%; International Fund, 1.95%; Growth
Fund, 1.75%; and Fixed Income Fund, 1.25%.
Shepherd has entered into a Sub-Advisory Agreement with
Nicholas-Applegate Capital Management, 600 West Broadway, Suite 2900, San Diego,
California to serve as the sub-advisor of the Small-Cap Fund. As of January 1,
2000, Nicholas-Applegate manages approximately $40 billion in assets for
numerous clients, including employee benefit plans of corporations, public
retirement systems and unions, university endowments, foundations, and other
institutional investors and individuals. The investment decisions of the
Small-Cap Fund are made by a team of investment professionals who are primarily
responsible for the day-to-day management of the Fund: Catherine Somhegyi,
partner and Chief Investment Officer of Global Equity Management, joined the
firm in 1987; Larry Speidell, CFA, partner and Director of Global/Systematic
Portfolio Management and Research, joined the firm in 1994; John J. Kane,
partner and Portfolio Manager, joined the firm in 1994; and Mark Stuckelman,
Portfolio Manager, joined the firm in 1995, prior to that time he had five years
prior investment experience with Wells Fargo Bank Investment Management Group,
Fidelity Management Trust Co., and BARRA. Shepherd has agreed to pay
Nicholas-Applegate a sub-advisory fee equal to an annual rate of 0.65% of the
average daily net assets of the Small-Cap Fund.
Shepherd has entered into a Sub-Advisory Agreement with Templeton
Portfolio Advisory, 500 E. Broward Boulevard, Suite 2100, Fort Lauderdale,
Florida, to serve as the sub-advisor of the International Fund. As of January 1,
2000, Templeton Portfolio Advisory manages over $2.1 billion in assets for
various clients, including corporations, foundations and charitable endowments,
and individuals. The investment decisions of the International Fund are made by
a committee of Templeton Portfolio Advisory, which is primarily responsible for
the day-to-day management of the Fund. Shepherd has agreed to pay Templeton
Portfolio Advisory a sub-advisory fee equal to an annual rate of 0.75% of the
average daily net assets of the International Fund.
Shepherd became the Growth Fund's advisor on January 21, 2000. Shepherd
has entered into a Sub-Advisory Agreement with Cornerstone Capital Management,
Inc., 102 South Tejon, Suite 430, Colorado Springs, CO 80903 to serve as the
sub-advisor of the Growth Fund. Cornerstone manages assets for corporations,
endowments, foundations, institutional investors, individuals and limited
partnerships. The investment decisions of the Growth Fund are made by a
committee of Cornerstone, which is primarily responsible for the day-to-day
management of the Fund. Shepherd has agreed to pay Cornerstone sub-advisory fees
equal to an annual rate of 0.50% of the average daily net assets of the Growth
Fund. From April 13, 1999 (commencement of operations) to January 20, 2000,
Cornerstone acted as the Growth Fund's advisor, and there was no sub-advisor to
the Growth Fund. As advisor, Cornerstone was authorized to receive a fee equal
to an annual rate of 1.75% of the average daily net assets of the Growth Fund.
Shepherd has entered into a Sub-Advisory Agreement with Potomac Asset
Management Company, Inc., 3 Bethesda Metro Center, Suite 530, Bethesda, MD
20814, to serve as the sub-advisor of the Fixed Income Fund. As of January 1,
2000, Potomac managed assets for institutional clients, including pension plans,
non-profits, endowments, foundations and health care organizations, and high net
worth individuals. The investment decisions of the Fixed Income Fund are made by
a committee of Potomac, which is primarily responsible for the day-to-day
management of the Fund. Shepherd has agreed to pay Potomac a sub-advisory fee
equal to an annual rate of 0.35% of the average daily net assets of the Fixed
Income Fund.
The advisor (not the Fund) may pay certain financial institutions
(which may include banks, brokers, securities dealers and other industry
professionals) a fee for providing distribution related services and/or for
performing certain administrative servicing functions for Fund shareholders to
the extent these institutions are allowed to do so by applicable statute, rule
or regulation.
OTHER INFORMATION ABOUT INVESTMENTS
General
The investment objective of each Fund may be changed without shareholder
approval.
From time to time, the Funds may take temporary defensive positions which
are inconsistent with the Funds' principal investment strategies, in attempting
to respond to adverse market, economic, political, or other conditions. For
example, each Fund may hold all or a portion of its assets in money market
instruments, securities of other no-load mutual funds or repurchase agreements.
If a Fund invests in shares of another mutual fund, the shareholders of the
Funds generally will be subject to duplicative management fees. As a result of
engaging in these temporary measures, a Fund may not achieve its investment
objective. The Funds may also invest in such instruments at any time to maintain
liquidity or pending selection of investments in accordance with its policies.
Additional Information About Principal Strategies
Foreign Securities. The Fixed Income Fund may invest up to 25% of its
net assets in foreign debt securities. There is no limitation on the amount of
the International Fund's assets that may be invested in foreign securities,
except that no more than 25% of the Fund's assets may be invested in any one
foreign country or companies operating exclusively in one foreign country. To
the extent a Fund invests in foreign securities, either directly or through the
purchase of depositary receipts, the Fund will be subject to special risks.
Foreign debt and equity securities, and securities denominated in or indexed to
foreign currencies may be affected by the strength of those currencies relative
to the U.S. dollar, or by political or economic developments in foreign
countries. These developments could include restrictions on foreign currency
transactions and rules of exchange, or changes in administrations or monetary
policies of foreign governments. Foreign securities purchased using foreign
currencies may incur currency conversion costs. Foreign issuers and brokers may
not be subject to accounting standards or governmental supervision comparable to
U.S. issuers and brokers, and there may be less public information about their
operations. In addition, foreign markets may be less liquid or more volatile
than U.S. markets, and may offer less protection to investors.
The International Fund and Fixed Income Fund may enter into currency
forward contracts (agreements to exchange one currency for another at a future
date) to manage currency risks and to facilitate transactions in foreign
securities. Although currency forward contracts can be used to protect a Fund
from adverse exchange rate changes, the Fund may incur a loss if the sub-advisor
incorrectly predicts foreign currency values.
With respect to certain countries in which capital markets are either
less developed or not easily accessed (emerging markets), investments by the
International Fund and the Fixed Income Fund may be made through investment in
other registered investment companies that in turn are authorized to invest in
the securities of such countries. Investment in other investment companies will
involve the indirect payment of a portion of the expenses, including advisory
fees, of such other investment companies and will result in a duplication of
fees and expenses.
Fixed Income Securities. The Fixed Income Fund may invest in corporate
debt securities. These are long and short-term debt obligations issued by
companies (such as publicly issued and privately placed bonds, notes and
commercial paper). Fixed income securities are generally considered to be
interest rate sensitive, which means that their value will generally decrease
when interest rates rise and increase when interest rates fall. Securities with
shorter maturities, while offering lower yields, generally provide greater price
stability than longer term securities and are less affected by changes in
interest rates.
The sub-advisor considers corporate debt securities to be of investment
grade quality if they are rated BBB or higher by Standard & Poor's Corporation
("S&P"), Baa or higher by Moody's Investors Services, Inc. ("Moody's"), or if
unrated, determined by the sub-advisor to be of comparable quality. Investment
grade debt securities generally have adequate to strong protection of principal
and interest payments. In the lower end of this category, credit quality may be
more susceptible to potential future changes in circumstances and the securities
have speculative elements. The Fund will not invest more than 20% of its assets
in corporate debt rated in the lowest investment grade category (i.e., "junk
bonds"). If the rating of a security by S&P or Moody's drops below investment
grade, the sub-advisor will dispose of the security as soon as practicable
(depending on market conditions) unless the sub-advisor determines, based on its
own credit analysis, that the security provides the opportunity of meeting the
Fund's objective without presenting excessive risk.
Information About Non-Principal Strategies
Short Sales. The Growth Fund may a sell a security short in
anticipation of a decline in the market value of the security. The Growth Fund
will limit its short sales so that no more than 10% of its net assets (less all
its liabilities other than obligations under the short sales) will be deposited
as collateral and allocated to the segregated account. For information about
short sales, see the section above titled "Additional Information About
Principal Strategies - Short Sales."
Corporate Debt Securities. The Growth Fund may invest in investment
grade corporate debt securities. For information about corporate debt
securities, see the section above titled "Additional Information About Principal
Strategies - Fixed Income Securities."
When-Issued and Delayed Delivery Securities. The Growth Fund and the
Fixed Income Fund may purchase securities on a when-issued or delayed delivery
basis. Delivery of and payment for these securities may take place as long as a
month or more after the date of the purchase commitment. The value of these
securities is subject to market fluctuation during this period and no income
accrues to the Fund until settlement takes place. The Fund maintains with its
Custodian a segregated account containing liquid securities in an amount at
least equal to these commitments.
Investment In Relatively New Issues. Each Fund may invest in securities
of selected new issuers. Investments in relatively new issuers, i.e., those
having continuous operating histories of less than three years, may carry
special risks and may be more speculative because such companies are relatively
unseasoned. Such companies may also lack sufficient resources, may be unable to
generate internally the funds necessary for growth and may find external
financing to be unavailable on favorable terms or even totally unavailable.
Those companies will often be involved in the development or marketing of a new
product with no established market, which could lead to significant losses.
Portfolio Turnover. None of the Funds intends to purchase or sell
securities for short term trading purposes. However, if the objective of a Fund
would be better served, short term profits or losses may be realized from time
to time. To the extent a Fund has high portfolio turnover, it will generally
incur higher brokerage commissions than those incurred by a fund with a lower
portfolio turnover rate (which would lower the Fund's total return), and the
higher turnover rate may result in the realization for federal tax purposes of
more net capital gains (which may be ordinary income).
<PAGE>
FINANCIAL HIGHLIGHTS
The following condensed supplementary financial information for the
period from the inception of each Fund through March 31, 2000 is derived from
the audited financial statements of the Funds. The financial statements of the
Funds have been audited by McCurdy & Associates CPA's, Inc., independent public
accountants, and are included in the Annual Report. The Annual Report contains
additional performance information and is available upon request and without
charge.
Shepherd Values Growth Fund
Financial Highlights for the period April 13, 1999
(Commencement of Operations) to March 31, 2000
Selected Per Share Data
Net asset value, beginning of period $10.00
-------
Income from investment operations
Net investment income (loss) -
Net realized and unrealized gain 1.81
-------
Total from investment operations 1.81
-------
Less Distributions
From net investment income -
From net realized gain(loss) -
-------
Total distributions -
Net asset value, end of period $ 11.81
======
Total Return (b) (c) 18.10%
Ratios and Supplemental Data
Net assets, end of period (000) $ 1,213
Ratio of expenses to average net assets 1.03% (a)
Ratio of expenses to average net assets
before waivers & reimbursements 6.60% (a)
Ratio of net investment income to
average net assets 0.02% (a)
Ratio of net investment income to average
net assets before waivers & reimbursements (5.56)%(a)
Portfolio turnover rate 175.06%(a)
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) Total return calculations exclude the effect of sales charges.
<PAGE>
Shepherd Values Small-Cap Fund
Financial Highlights for the period October 22, 1999
(Commencement of Operations) to March 31, 2000
Selected Per Share Data
Net asset value, beginning of period $ 10.00
--------
Income from investment operations
Net investment income (loss) (0.05)
Net realized and unrealized gain 0.42
--------
Total from investment operations 0.37
--------
Less Distributions
From net investment income (0.02)
From net realized gain(loss) -
--------
Total distributions (0.02)
Net asset value, end of period $ 10.35
========
Total Return (b) (c) 3.70%
Ratios and Supplemental Data
Net assets, end of period (000) $ 487
Ratio of expenses to average net assets 1.80%(a)
Ratio of expenses to average net assets
before reimbursement 2.30%(a)
Ratio of net investment income to
average net assets (1.23)%(a)
Ratio of net investment income to
average net assets before reimbursement (1.74)%(a)
Portfolio turnover rate 41.01%(a)
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) Total return calculations exclude the effect of sales charges.
<PAGE>
Shepherd Values International Fund
Financial Highlights for the period October 22, 1999
(Commencement of Operations) to March 31, 2000
Selected Per Share Data
Net asset value, beginning of period $10.00
-------
Income from investment operations
Net investment income (loss) (0.02)
Net realized and unrealized gain -
-------
Total from investment operations (0.02)
-------
Less Distributions
From net investment income (0.04)
From net realized gain(loss) -
-------
Total distributions (0.04)
Net asset value, end of period $ 9.94
=======
Total Return (b) (c) (0.24)%
Ratios and Supplemental Data
Net assets, end of period (000) $ 206
Ratio of expenses to average net assets 1.95%(a)
Ratio of expenses to average net assets
before reimbursement 2.75%(a)
Ratio of net investment income to
average net assets (0.48)%(a)
Ratio of net investment income to
average net assets before reimbursement (1.28)%(a)
Portfolio turnover rate 0.00%(a)
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) Total return calculations exclude the effect of sales charges.
<PAGE>
Shepherd Values Fixed Income Fund
Financial Highlights for the period October 22, 1999
(Commencement of Operations) to March 31, 2000
Selected Per Share Data
Net asset value, beginning of period $ 10.00
-------
Income from investment operations
Net investment income (loss) 0.09
Net realized and unrealized gain (0.03)
-------
Total from investment operations 0.06
--------
Less Distributions
From net investment income (0.04)
From net realized gain 0.00
--------
Total Distributions (0.04)
---------
Net asset value, end of period $ 10.02
========
Total Return (b) (c) 0.52%
Ratios and Supplemental Data
Net assets, end of period (000) $ 153
Ratio of expenses to average net assets 1.25%(a)
Ratio of expenses to average net assets
before reimbursement 2.16%(a)
Ratio of net investment income to
average net assets 2.11%(a)
Ratio of net investment income to
average net assets before reimbursement 1.20%(a)
Portfolio turnover rate 836.69%(a)
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) Total return calculations exclude the effect of sales charges.
<PAGE>
FOR MORE INFORMATION
Several additional sources of information are available to you. The
Statement of Additional Information (SAI), incorporated into this prospectus by
reference, contains detailed information on Fund policies and operations. Annual
and semi-annual reports contain management's discussion of market conditions,
investment strategies and performance results as of the Funds' latest
semi-annual or annual fiscal year end.
Call the Funds at 877-636-2766 to request free copies of the SAI and
the Funds' annual and semi-annual reports, to request other information about
the Funds and to make shareholder inquiries.
You may review and copy information about the Funds (including the SAI
and other reports) at the Securities and Exchange Commission (SEC) Public
Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090 for room hours
and operation. You may also obtain reports and other information about the Funds
on the EDGAR Database on the SEC's Internet site at http.//www.sec.gov, and
copies of this information may be obtained, after paying a duplicating fee, by
electronic request at the following e-mail address: [email protected], or by
writing the SEC's Public Reference Section of the SEC, Washington, D.C.
20549-0102.
Investment Company Act #811-9096
<PAGE>
SHEPHERD VALUES FUNDS
Shepherd Values Growth Fund
Shepherd Values Small-Cap Fund
Shepherd Values International Fund
Shepherd Values Fixed Income Fund
STATEMENT OF ADDITIONAL INFORMATION
November 16, 2000
This Statement of Additional Information ("SAI") is not a prospectus.
It should be read in conjunction with the Prospectus of Shepherd Values Funds
dated November 16, 2000. This SAI incorporates by reference the Funds' Annual
Report to Shareholders for the period ended March 31, 2000 ("Annual Report"). A
free copy of the Prospectus and Annual Report can be obtained by writing the
Transfer Agent at 431 North Pennsylvania Street, Indianapolis, Indiana 46204, or
by calling 1-877-636-2766.
TABLE OF CONTENTS PAGE
DESCRIPTION OF THE TRUST AND FUND..........................................2
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS............................................................4
INVESTMENT LIMITATIONS.....................................................9
THE INVESTMENT ADVISORS AND SUB-ADVISORS..................................11
TRUSTEES AND OFFICERS.....................................................13
PORTFOLIO TRANSACTIONS AND BROKERAGE......................................14
DETERMINATION OF SHARE PRICE..............................................15
INVESTMENT PERFORMANCE....................................................15
CUSTODIAN.................................................................17
TRANSFER AGENT............................................................17
ACCOUNTANTS...............................................................18
DISTRIBUTOR...............................................................18
ADMINISTRATOR.............................................................18
FINANCIAL STATEMENTS......................................................18
<PAGE>
DESCRIPTION OF THE TRUST AND FUND
The Shepherd Values Growth Fund was organized as a diversified series
of AmeriPrime Funds (the "Trust") on February 2, 1999. The Small-Cap Fund and
Fixed Income Fund were organized as diversified series of the Trust on June 25,
1999. The International Fund was organized as non-diversified series of the
Trust on June 25, 1999. The Trust is an open-end investment company established
under the laws of Ohio by an Agreement and Declaration of Trust dated August 8,
1995 (the "Trust Agreement"). The Trust Agreement permits the Trustees to issue
an unlimited number of shares of beneficial interest of separate series without
par value. Each series of the Trust is referred to herein as a "Fund" or
collectively as the "Funds." Each Fund is one of a series of funds currently
authorized by the Trustees.
The Fund does not issue share certificates. All shares are held in
non-certificate form registered on the books of the Fund and the Fund's transfer
agent for the account of the Shareholder. Each share of a series represents an
equal proportionate interest in the assets and liabilities belonging to that
series with each other share of that series and is entitled to such dividends
and distributions out of income belonging to the series as are declared by the
Trustees. The shares do not have cumulative voting rights or any preemptive or
conversion rights, and the Trustees have the authority from time to time to
divide or combine the shares of any series into a greater or lesser number of
shares of that series so long as the proportionate beneficial interest in the
assets belonging to that series and the rights of shares of any other series are
in no way affected. In case of any liquidation of a series, the holders of
shares of the series being liquidated will been titled to receive as a class a
distribution out of the assets, net of the liabilities, belonging to that
series. Expenses attributable to any series are borne by that series. Any
general expenses of the Trust not readily identifiable as belonging to a
particular series are allocated by or under the direction of the Trustees in
such manner as the Trustees determine to be fair and equitable. No shareholder
is liable to further calls or to assessment by the Trust without his or her
express consent.
Any Trustee of the Trust may be removed by vote of the shareholders
holding not less than two-thirds of the outstanding shares of the Trust. The
Trust does not hold an annual meeting of shareholders. When matters are
submitted to shareholders for a vote, each shareholder is entitled to one vote
for each whole share he owns and fractional votes for fractional shares he owns.
All shares of the Fund have equal voting rights and liquidation rights. The
Declaration of Trust can be amended by the Trustees, except that any amendment
that adversely effects the rights of shareholders must be approved by the
shareholders affected. Each share of the Fund is subject to redemption at any
time if the Board of Trustees determines in its sole discretion that failure to
so redeem may have materially adverse consequences to all or any of the Fund's
shareholders.
As of October 31, 2000, the following persons may be deemed to
beneficially own or hold of record five percent (5%) or more of the Shepherd
Values Growth Fund: Ian MacDonald and R Tho ____________[need address] 24.73%;
National Financial Services Corp., One World Financial Center, 200 Liberty
Street, Fifth Floor, New York, NY 10281, 16.40%; Charles Schwab & Co, 101
Montgomery Street, San Francisco, CA 94102, 9.23%; and Donaldson Lufkin Jenrette
Securities Corporation, Inc., P.O. Box 2052, Jersey City, NJ 07303, 5.14%.
As of October 31, 2000 the following persons may be deemed to
beneficially own or hold of record five percent (5%) or more of the Shepherd
Values Small Cap Fund: National Financial Services Corp., One World Financial
Center, 200 Liberty Street, Fifth Floor, New York, NY 10281, 23.12%; Charles
Schwab & Co., 101 Montgomery Street, San Francisco, CA 94102, 14.85%; Donaldson
Lufkin Jenrette Securities Corporation, Inc., P.O. Box 2052, Jersey City, NJ
07303, 11.04%; National Investor Services, 55 Water Street, 32nd Floor, New
York, NY 10041, 10.33%; Roy W. Anderson Jr., 69 Murdock Road, Baltimore, MD
21212, 8.98%; Elmer Lundgren, P.O. Box 2052, Jersey City, NJ 07303, 7.49%; Mary
A. Trapani, 355 Maureen Lane, Pleasant Hill, CA 94523, 6.30%; and Charles Schwab
& Co, 101 Montgomery Street, San Francisco, CA 94102, 5.94%.
As of October 31, 2000, the following persons may be deemed to
beneficially own or hold of record five percent (5%) or more of the Shepherd
Values International Fund: National Investor Services, 55 Water Street, 32nd
Floor, New York, NY 10041, 24.83%; Charles Schwab & Co, 101 Montgomery Street,
San Francisco, CA 94102, 21.74%; National Financial Services Corp, One World
Financial Center, 200 Liberty Street, New York, NY 10281, 12.12%; Jeffrey M.
Jones, 5738 Richmond Drive, Madison, WI 53719, 6.92%; Donaldson Lufkin Jenrette
Securities Corporation, Inc., P.O. Box 2052, Jersey City, NJ 07303, 6.83%; and
Cheryl L. Tuttle, 6144 W. Saguaro Pk Lane, Glendale, AZ 85310, 6.25%.
As of October 31, 2000 the following persons may be deemed to
beneficially own or hold of record five percent (5%) or more of the Shepherd
Values Fixed Income Fund: Charles Schwab & Co, 101 Montgomery Street, San
Francisco, CA 94102, 23.24%; National Financial Services Corp, One World
Financial Center, 200 Liberty Street, New York, NY 10281, 20.43%; Dorothy M.
Graybill, Rural Route 1, Box 149, Hershey, Pennsylvania 17033, 12.34%; Jeffrey
M. Jones, 5738 Richmond Drive, Madison, Wisconsin 53719, 11.93%; National
Investor Services, 55 Water Street, 32nd Floor, New York, NY 10041, 7.98%; and
Anna J. Graybill, Rural Route 1, Box 149, Hershey, Pennsylvania 17033, 5.48%.
As of October 31, 2000, the officers and Trustees as a group own less
than one percent (1%) of the Fund.
For information concerning the purchase and redemption of shares of the
Fund, see "How to Buy Shares" and "How to Redeem Shares" in the Fund's
Prospectus. For a description of the methods used to determine the share price
and value of the Fund's assets, see "Determination of Net Asset Value" in the
Fund's Prospectus and this Statement of Additional Information.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a discussion of some of the investments the Fund
may make and some of the techniques it may use.
A. American Depositary Receipts (ADRs). Each Fund (except the Fixed
Income Fund) may invest in foreign equity securities by purchasing American
Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs") or Global
Depositary Receipts ("GDRs"). Depositary Receipts are certificates evidencing
ownership of shares of a foreign-based issuer held in trust by a bank or similar
financial institution. They are alternatives to the direct purchase of the
underlying securities in their national markets and currencies. The
International Fund may invest directly in foreign equity securities as well as
Depositary Receipts. Depositary Receipts are subject to risks similar to those
associated with direct investment in foreign securities. For example, there may
be less information publicly available about a foreign company then about a U.S.
company, and foreign companies are not generally subject to accounting, auditing
and financial reporting standards and practices comparable to those in the U.S.
Other risks associated with investments in foreign securities include changes in
restrictions on foreign currency transactions and rates of exchanges, changes in
the administrations or economic and monetary policies of foreign governments,
the imposition of exchange control regulations, the possibility of expropriation
decrees and other adverse foreign governmental action, the imposition of foreign
taxes, less liquid markets, less government supervision of exchanges, brokers
and issuers, difficulty in enforcing contractual obligations, delays in
settlement of securities transactions and greater price volatility. In addition,
investing in foreign securities will generally result in higher commissions than
investing in similar domestic securities. The Funds have no present intention to
invest in unsponsored Depositary Receipts.
B. Option Transactions. The Funds may engage in option transactions
involving individual stocks as well as stock indexes. An option involves either
(a) the right or the obligation to buy or sell a specific instrument at a
specific price until the expiration date of the option, or (b) the right to
receive payments or the obligation to make payments representing the difference
between the closing price of a market index and the exercise price of the option
expressed in dollars times a specified multiple until the expiration date of the
option. Options are sold (written) on securities and market indexes. The
purchaser of an option on a security pays the seller (the writer) a premium for
the right granted but is not obligated to buy or sell the underlying security.
The purchaser of an option on a market index pays the seller a premium for the
right granted, and in return the seller of such an option is obligated to make
the payment. A writer of an option may terminate the obligation prior to
expiration of the option by making an offsetting purchase of an identical
option. Options are traded on organized exchanges and in the over-the-counter
market. Call options on securities which the Funds sell (write) will be covered
or secured, which means that the Fund will own the underlying security in the
case of a call option. When the Funds write options, they may be required to
maintain a margin account, to pledge the underlying securities or U.S.
government obligations or to deposit assets in escrow with the Custodian. The
Funds may also utilize spreads and straddle strategies. A spread is the
difference in price resulting from a combination of put and call options within
the same class on the same underlying security. A straddle strategy consists of
an equal number of put and call options on the same underlying stock, stock
index, or commodity future at the same strike price and maturity date.
The purchase and writing of options involves certain risks. The
purchase of options limits a Fund's potential loss to the amount of the premium
paid and can afford a Fund the opportunity to profit from favorable movements in
the price of an underlying security to a greater extent than if transactions
were effected in the security directly. However, the purchase of an option could
result in a Fund losing a greater percentage of its investment than if the
transaction were effected directly. When a Fund writes a covered call option, it
will receive a premium, but it will give up the opportunity to profit from a
price increase in the underlying security above the exercise price as long as
its obligation as a writer continues, and it will retain the risk of loss should
the price of the security decline. In addition, there can be no assurance that a
Fund can effect a closing transaction on a particular option it has written.
Further, the total premium paid for any option may be lost if the Fund does not
exercise the option or, in the case of over-the-counter options, the writer does
not perform its obligations.
C. Real Estate Investment Trusts. A real estate investment trust
("REIT") is a corporation or business trust that invests substantially all of
its assets in interests in real estate. Equity REITs are those which purchase or
lease land and buildings and generate income primarily from rental income.
Equity REITs may also realize capital gains (or losses) when selling property
that has appreciated (or depreciated) in value. Mortgage REITs are those which
invest in real estate mortgages and generate income primarily from interest
payments on mortgage loans. Hybrid REITs generally invest in both real property
and mortgages. In addition, REITs are generally subject to risks associated with
direct ownership of real estate, such as decreases in real estate values or
fluctuations in rental income caused by a variety of factors, including
increases in interest rates, increases in property taxes and other operating
costs, casualty or condemnation losses, possible environmental liabilities and
changes in supply and demand for properties. Risks associated with REIT
investments include the fact that equity and mortgage REITs are dependent upon
specialized management skills and are not fully diversified. These
characteristics subject REITs to the risks associated with financing a limited
number of projects. They are also subject to heavy cash flow dependency,
defaults by borrowers, and self-liquidation. Additionally, equity REITs may be
affected by any changes in the value of the underlying property owned by the
trusts, and mortgage REITs may be affected by the quality of any credit
extended.
D. Foreign Securities. Foreign government obligations generally consist
of debt securities supported by national, state or provincial governments or
similar political units or governmental agencies. Such obligations may or may
not be backed by the national government's full faith and credit and general
taxing powers. Investments in foreign securities also include obligations issued
by international organizations. International organizations include entities
designated or supported by governmental entities to promote economic
reconstruction or development as well as international banking institutions and
related government agencies. Examples are the International Bank for
Reconstruction and Development (the World Bank), the European Coal and Steel
Community, the Asian Development Bank and the InterAmerican Development Bank. In
addition, investments in foreign securities may include debt securities
denominated in multinational currency units of an issuer (including
international issuers). An example of a multinational currency unit is the
European Currency Unit. A European Currency Unit represents specified amounts of
the currencies of certain member states of the European Economic Community, more
commonly known as the Common Market.
Purchases of foreign securities are usually made in foreign currencies
and, as a result, a Fund may incur currency conversion costs and may be affected
favorably or unfavorably by changes in the value of foreign currencies against
the U.S. dollar. In addition, there may be less information publicly available
about a foreign company then about a U.S. company, and foreign companies are not
generally subject to accounting, auditing and financial reporting standards and
practices comparable to those in the U.S. Other risks associated with
investments in foreign securities include changes in restrictions on foreign
currency transactions and rates of exchanges, changes in the administrations or
economic and monetary policies of foreign governments, the imposition of
exchange control regulations, the possibility of expropriation decrees and other
adverse foreign governmental action, the imposition of foreign taxes, less
liquid markets, less government supervision of exchanges, brokers and issuers,
difficulty in enforcing contractual obligations, delays in settlement of
securities transactions and greater price volatility. In addition, investing in
foreign securities will generally result in higher commissions than investing in
similar domestic securities.
E. Financial Services Industry Obligations.
(1) Certificate of Deposit. Certificates of deposit are negotiable
certificates evidencing the indebtedness of a commercial bank or a savings and
loan association to repay funds deposited with it for a definite period of time
(usually from fourteen days to one year) at a stated or variable interest rate.
(2) Time Deposits. Time deposits are non-negotiable deposits maintained
in a banking institution or a savings and loan association for a specified
period of time at a stated interest rate.
(3) Bankers' Acceptances. Bankers' acceptances are credit instruments
evidencing the obligation of a bank to pay a draft which has been drawn on it by
a customer, which instruments reflect the obligation both of the bank and of the
drawer to pay the face amount of the instrument upon maturity.
F. Zero Coupon Securities. Zero coupon securities are debt securities
issued or sold at a discount from their face value which do not entitle the
holder to any periodic payment of interest prior to maturity or a specified
redemption date (or cash payment date). These involve risks that are similar to
those of other debt securities, although they may be more volatile, and certain
zero coupon securities move in the same direction as interest rates. The amount
of the discount varies depending on the time remaining until maturity or cash
payment date, prevailing interest rates, liquidity of the security and perceived
credit quality of the issuer. Zero coupon securities also may take the form of
debt securities that have been stripped of their unmatured interest coupons, the
coupons themselves and receipts or certificates representing interests in such
stripped debt obligations and coupons. The market prices of zero coupon
securities generally are more volatile than the market prices of
interest-bearing securities and are likely to respond to a greater degree to
changes in interest rates than interest-bearing securities having similar
maturities and credit qualities.
G. STRIPS. The Federal Reserve creates STRIPS (Separate Trading of
Registered Interest and Principal of Securities) by separating the coupon
payments and the principal payment from an outstanding Treasury security and
selling them as individual securities. To the extent a Fund purchases the
principal portion of the STRIP, the Fund will not receive regular interest
payments. Instead they are sold at a deep discount from their face value. A Fund
will accrue income on such STRIPS for tax and accounting purposes, in accordance
with applicable law, which income is distributable to shareholders. Because no
cash is received at the time such income is accrued, a Fund may be required to
liquidate other Fund securities to satisfy its distribution obligations. Because
the principal portion of the STRIP does not pay current income, its price can be
very volatile when interest rates change. In calculating its dividend, a Fund
takes into account as income a portion of the difference between the principal
portion of the STRIP's purchase price and its face value.
H. Floating Rate, Inverse Floating Rate, and Index Obligations. The
Fixed Income Fund and the Growth Fund may invest in debt securities with
interest payments or maturity values that are not fixed, but float in
conjunction with (or inversely to) an underlying index or price. These
securities may be backed by U.S. Government or corporate issuers, or by
collateral such as mortgages. The indices and prices upon which such securities
can be based include interest rates, currency rates and commodities prices.
However, the Funds will not invest in any instrument whose value is computed
based on a multiple of the change in price or value of an asset or an index of
or relating to assets in which the Fund cannot or will not invest.
Floating rate securities pay interest according to a coupon which is
reset periodically. The reset mechanism may be formula based, or reflect the
passing through of floating interest payments on an underlying collateral pool.
The coupon is usually reset daily, weekly, monthly, quarterly or semi-annually,
but other schedules are possible. Floating rate obligations generally exhibit a
low price volatility for a given stated maturity or average life because their
coupons adjust with changes in interest rates. If their underlying index is not
an interest rate, or the reset mechanism lags the movement of rates in the
current market, greater price volatility may be experienced.
Inverse floating rate securities are similar to floating rate
securities except that their coupon payments vary inversely with an underlying
index by use of a formula. Inverse floating rate securities tend to exhibit
greater price volatility than other floating rate securities. Because the
changes in the coupon are usually negatively correlated with changes in overall
interest rates, interest rate risk and price volatility on inverse floating rate
obligations can be high, especially if leverage is used in the formula. Index
securities pay a fixed rate of interest, but have a maturity value that varies
by formula, so that when the obligation matures, a gain or loss is realized. The
risk of index obligations depends on the volatility of the underlying index, the
coupon payment and the maturity of the obligation.
I. Mortgage-Backed Securities. Mortgage-backed securities represent
participation interests in pools of one-to-four family residential mortgage
loans originated by private mortgage originators. Traditionally, residential
mortgage-backed securities have been issued by governmental agencies such as
Fannie Mae, Freddie Mac and Ginnie Mae. The Fund intends to invest only in those
securities guaranteed by governmental agencies. The Fund does not intend to
invest in commercial mortgage-backed securities. Non-governmental entities that
have issued or sponsored residential mortgage-backed securities offerings
include savings and loan associations, mortgage banks, insurance companies,
investment banks and special purpose subsidiaries of the foregoing.
While residential loans do not typically have prepayment penalties or
restrictions, they are often structured so that subordinated classes may be
locked out of prepayments for a period of time. However, in a period of
extremely rapid prepayments, during which senior classes may be retired faster
than expected, the subordinated classes may receive unscheduled payments of
principal and would have average lives that, while longer than the average lives
of the senior classes, would be shorter than originally expected. The types of
residential mortgage-backed securities which the Fund may invest in may include
the following:
J. Repurchase Agreements. A repurchase agreement is a short term
investment in which the purchaser (i.e., a Fund) acquires ownership of an
obligation issued by the U.S. Government or by an agency of the U.S. Government
("U.S. Government Obligations") (which may be of any maturity) and the seller
agrees to repurchase the obligation at a future time at a set price, thereby
determining the yield during the purchaser's holding period (usually not more
than seven days from the date of purchase). Any repurchase transaction in which
a Fund engages will require full collateralization of the seller's obligation
during the entire term of the repurchase agreement. In the event of a bankruptcy
or other default of the seller, a Fund could experience both delays in
liquidating the underlying security and losses in value. However, each Fund
intends to enter into repurchase agreements only with the Custodian, other banks
with assets of $1 billion or more and registered securities dealers determined
by the Fund's advisor to be creditworthy. The Fund's advisor monitors the
creditworthiness of the banks and securities dealers with which a Fund engages
in repurchase transactions.
K. Illiquid Securities. Illiquid securities generally include
securities which cannot be disposed of promptly and in the ordinary course of
business without taking a reduced price. Securities may be illiquid due to
contractual or legal restrictions on resale or lack of a ready market. The
following securities are considered to be illiquid: repurchase agreements
maturing in more than seven days, nonpublicly offered securities and restricted
securities. Restricted securities are securities the resale of which is subject
to legal or contractual restrictions. Restricted securities may be sold only in
privately negotiated transactions, in a public offering with respect to which a
registration statement is in effect under the Securities Act of 1933 or pursuant
to Rule 144 or Rule 144A promulgated under such Act. Where registration is
required, the Fund may be obligated to pay all or part of the registration
expense, and a considerable period may elapse between the time of the decision
to sell and the time such security may be sold under an effective registration
statement. If during such a period adverse market conditions were to develop,
the Fund might obtain a less favorable price than the price it could have
obtained when it decided to sell. None of the Funds will invest more than 15% of
its net assets in illiquid securities.
L. Borrowing. Each Fund may borrow amounts up to 5% of its net assets
to meet redemption requests. Because each Fund's investments will fluctuate in
value, whereas the interest obligations on borrowed funds may be fixed, during
times of borrowing, a Fund's net asset value may tend to increase more when its
investments increase in value, and decrease more when its investments decrease
in value. In addition, interest costs on borrowings may fluctuate with changing
market interest rates and may partially offset or exceed the return earned on
the borrowed funds. Also, during times of borrowing under adverse market
conditions, a Fund might have to sell portfolio securities to meet interest or
principal payments at a time when fundamental investment considerations would
not favor such sales.
M. Equity Securities. Equity securities consist of common stock,
convertible preferred stock, convertible bonds, rights and warrants. Common
stocks, the most familiar type, represent an equity (ownership) interest in a
corporation. Warrants are options to purchase equity securities at a specified
price for a specific time period. Rights are similar to warrants, but normally
have a short duration and are distributed by the issuer to its shareholders.
Although equity securities have a history of long term growth in value, their
prices fluctuate based on changes in a company's financial condition and on
overall market and economic conditions. Each Fund's investment in convertible
securities will be limited to those of investment grade.
Equity securities include S&P Depositary Receipts ("SPDRs") and other
similar instruments. SPDRs are shares of a publicly traded unit investment trust
which owns the stocks included in the S&P 500 Index, and changes in the price of
SPDRs track the movement of the Index relatively closely.
Equity securities also include common stocks and common stock
equivalents of domestic real estate investment trusts ("REITs") and other
companies which operate as real estate corporations or which have a significant
portion of their assets in real estate. A Fund will not acquire any direct
ownership of real estate.
Investments in equity securities are subject to inherent market risks
and fluctuations in value due to earnings, economic conditions and other factors
beyond the control of the advisor. As a result, the return and net asset value
of the Fund will fluctuate. Securities in the Fund's portfolios may not increase
as much as the market as a whole and some undervalued securities may continue to
be undervalued for long periods of time. Although profits in some Fund holdings
may be realized quickly, it is not expected that most investments will
appreciate rapidly.
N. U.S. Government Obligations. Each Fund may invest in U.S. government
obligations. These securities may be backed by the credit of the government as a
whole or only by the issuing agency. U.S. Treasury bonds, notes, and bills and
some agency securities, such as those issued by the Federal Housing
Administration and the Government National Mortgage Association (GNMA), are
backed by the full faith and credit of the U.S. government as to payment of
principal and interest and are the highest quality government securities. Other
securities issued by U.S. government agencies or instrumentalities, such as
securities issued by the Federal Home Loan Banks and the Federal Home Loan
Mortgage Corporation, are supported only by the credit of the agency that issued
them, and not by the U.S. government. Securities issued by the Federal Farm
Credit System, the Federal Land Banks, and the Federal National Mortgage
Association (FNMA) are supported by the agency's right to borrow money from the
U.S. Treasury under certain circumstances, but are not backed by the full faith
and credit of the U.S. government.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to each Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of each Fund. As used in the Prospectus and
the Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").
1. Borrowing Money. The Funds will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. Senior Securities. The Funds will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is consistent with or permitted by the Investment
Company Act of 1940, as amended, the rules and regulations promulgated
thereunder or interpretations of the Securities and Exchange Commission or its
staff.
3. Underwriting. The Funds will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. Real Estate. The Funds will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. Commodities. The Funds will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. Loans. The Funds will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. No Fund will invest 25% or more of its total assets
in a particular industry. This limitation is not applicable to investments in
obligations issued or guaranteed by the U.S. government, its agencies and
instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
Non-Fundamental. The following limitations have been adopted by the
Trust with respect to the Fund and are Non-Fundamental (see "Investment
Restrictions" above).
1. Pledging. The Funds will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
2. Borrowing. No Fund will purchase any security while borrowings
(including reverse repurchase agreements) representing more than one third of
its total assets are outstanding.
3. Margin Purchases. No Fund will purchase securities or evidences of
interest thereon on "margin." This limitation is not applicable to short term
credit obtained by a Fund for the clearance of purchases and sales or redemption
of securities, or to arrangements with respect to transactions involving
options, futures contracts, short sales and other permitted investments and
techniques.
4. Options. No Fund will purchase or sell puts, calls, options or
straddles except as described in the Funds' Prospectus and Statement of
Additional Information.
5. Illiquid Investments. No Fund will invest more than 15% of its net
assets in securities for which there are legal or contractual restrictions on
resale and other illiquid securities.
6. Loans of Portfolio Securities. No Fund will make loans of portfolio
securities.
THE INVESTMENT ADVISOR AND SUB-ADVISORS
The Advisor.
The investment advisor to the Shepherd Values Funds is Shepherd
Advisory Services, Inc., 2505 21st Avenue South, Suite 204, Nashville, Tennessee
37212 ("Shepherd" or the "Advisor"). Shepherd is a wholly owned subsidiary of
Shepherd Financial Services, Inc., a financial services company.
Under the terms of the management agreement (the "Agreement"), Shepherd
manages each Fund's investments subject to approval of the Board of Trustees and
pays all of the expenses of each Fund except brokerage, taxes, borrowing costs
(such as (a) interest and (b) dividend expenses on securities sold short), fees
and expenses of the non-interested person trustees and extraordinary expenses.
As compensation for its management services and agreement to pay the Fund's
expenses, each Fund is obligated to pay Shepherd a fee (based on average daily
net assets) computed and accrued daily and paid monthly at the following annual
rates: Small-Cap Fund, 1.80%; Fixed Income Fund, 1.25%; International Fund,
1.95%; Growth Fund, 1.75%.
For the fiscal periods indicated, the Funds paid the following fees to
the Advisor:
<TABLE>
<S> <C> <C> <C> <C>
---------------------- ------------------- ------------------ ---------------------------------------
Small-Cap Fund Fixed Income Fund International Growth
Fund Fund*
---------------------- ------------------- ------------------ ---------------------------------------
$950 $365 $647 $3209
---------------------- ------------------- ------------------ ---------------------------------------
Period 10/22/99- 10/22/99- 10/22/99- 1/21/00-
3/31/00 3/31/00 3/31/00 3/31/00
---------------------- ------------------- ------------------ ---------------------------------------
*For the period from 4/13/99 to 1/20/00, Cornerstone Capital
management, Inc. was the Advisor to the Growth Fund, and received $97 from the
Growth Fund for its advisory services.
</TABLE>
The Advisor retains the right to use the name "Shepherd Values" in
connection with another investment company or business enterprise with which
Shepherd is or may become associated. The Trust's right to use the name
"Shepherd Values" automatically ceases ninety days after termination of the
Agreement and may be withdrawn by Shepherd on ninety days written notice.
The Advisor may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. If a bank
or other financial institution were prohibited from continuing to perform all or
a part of such services, management of the Fund believes that there would be no
material impact on the Fund or its shareholders. Banks and other financial
institutions may charge their customers fees for offering these services to the
extent permitted by applicable regulatory authorities, and the overall return to
those shareholders availing themselves of the bank services will be lower than
to those shareholders who do not. The Fund may from time to time purchase
securities issued by banks and other financial institutions which provide such
services; however, in selecting investments for the Fund, no preference will be
shown for such securities.
The Sub-Advisors. Templeton Portfolio Advisory, a division of
Templeton/Franklin Investment Services, Inc. ("TFIS"), is the sub-advisor to the
International Fund. Under the terms of the sub-advisory agreement, Templeton
Portfolio Advisory receives a fee from the Fund's advisor computed and accrued
daily and paid monthly at an annual rate of 0.75% of the average daily net
assets of the International Fund.
Nicholas-Applegate Capital Management ("Nicholas-Applegate") is the
sub-advisor to the Small-Cap Fund. Under the sub-advisory agreement,
Nicholas-Applegate receives a fee from the Fund's advisor computed and accrued
daily and paid monthly at an annual rate of 0.65% of the average daily net
assets of the Small-Cap Fund.
Potomac Asset Management Company, Inc. ("Potomac") is the sub-advisor
to the Fixed Income Fund. Under the terms of the sub-advisory agreement, Potomac
receives a fee from the Fund's advisor computed and accrued daily and paid
monthly at an annual rate of 0.35% of the average daily net assets of the Fixed
Income Fund.
Cornerstone Capital Management, Inc, 102 South Tejon, Suite 430,
Colorado Springs, Colorado 80903 ("Cornerstone") is the sub-advisor to the
Growth Fund. Cornerstone Capital Management, Inc., 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. Darrel T.
Uselton, a director of Cornerstone, is the controlling shareholder of The
National Capital Companies, LLC. Under the terms of the sub-advisory agreements,
Cornerstone receives a fee from the Fund's advisor computed and accrued daily
and paid monthly at an annual rate of 0.50% of the average daily net assets of
the Growth Fund.
Subject always to the control of the Board of Trustees, each
sub-advisor, at its expense, furnishes continuously an investment program for
the Fund or Funds for which it acts as sub-advisor. Each sub-advisor must use
its best judgement to make investment decisions, place all orders for the
purchase and sale of portfolio securities and execute all agreements related
thereto. Each sub-advisor makes its officers and employees available to the
Fund's advisor from time to time at reasonable times to review investment
policies and to consult with the Advisor regarding the investment affairs of the
applicable Fund. Each sub-advisor maintains books and records with respect to
the securities transactions and renders to the Fund's advisor such periodic and
special reports as the Advisor or the Trustees may request. Each sub-advisor
pays all expenses incurred by it in connection with its activities under the
sub-advisory agreement other than the cost (including taxes and brokerage
commissions, if any) of securities and investments purchased for a Fund.
The Trust and the Advisor have each adopted a Code of Ethics under Rule
17j-1 of the Investment Company Act of 1940. The Code significantly restricts
the personal investing activities of all employees of the Advisor. The Code
requires that all employees of the Advisor preclear any personal securities
investment. The preclearance requirement and associated procedures are designed
to identify any substantive prohibition or limitation applicable to the proposed
investment. In addition, no employee may purchase or sell any security which at
the time is being purchased or sold, or to the knowledge of the employee is
being considered for purchase or sale, by the Fund. The substantive restrictions
also include a ban on acquiring any securities in an initial public offering and
provides for trading "blackout periods" which prohibit trading by portfolio
managers of the Fund within periods of trading by the Fund in the same (or
equivalent) security. The restrictions and prohibitions apply to most securities
transactions by employees of the Advisor, with limited exceptions for some
securities (such as securities that have a market capitalization and average
daily trading volume above certain minimums).
<PAGE>
TRUSTEES AND OFFICERS
The Board of Trustees supervises the business activities of the Trust.
The names of the Trustees and executive officers of the Trust are shown below.
Each Trustee who is an "interested person" of the Trust, as defined in the
Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<S> <C> <C>
==================================== ================ ======================================================================
Name, Age and Address Position Principal Occupations During Past 5 Years
------------------------------------------------------------------------------------------------------------------------------------
*Kenneth D. Trumpfheller President, Managing Director of Unified Fund Services, Inc., the Funds'
1793 Kingswood Drive Secretary and administrator, since October 2000. President, Treasurer and
Suite 200 Trustee Secretary of AmeriPrime Financial Services, Inc., a fund
Southlake, Texas 76092 administrator (which merged with Unified Fund Services, Inc.) and
Year of Birth: 1958 AmeriPrime Financial Securities, Inc., the Funds' distributor, from
1994 to October 2000;President and Trustee of AmeriPrime Advisors
Trust and AmeriPrime Insurance Trust; Prior to December, 1994, a senior
client executive with SEI Financial Services.
------------------------------------ ---------------- ----------------------------------------------------------------------
*Robert A. Chopyak Treasurer and Assistant Vice President of Financial Administration of Unified Fund
1793 Kingswood Drive Chief Services, Inc., the Funds' Administrator, since August 2000. Manager
Suite 200 Financial of AmeriPrime Financial Services, Inc., (which merged with Unified
Southlake, Texas 76092 Officer Fund Services, Inc.), from February to August 2000. Self-employed,
Year of Birth: 1968 performing Y2K testing, January 1999 to January 2000. Vice
President of Fund Accounting, American Data Services, Inc., a mutual
fund services company, October 1992 to December 1998.
------------------------------------ ---------------- ----------------------------------------------------------------------
Steve L. Cobb Trustee President of Chandler Engineering Company, L.L.C., oil and gas
2001 N. Indianwood Avenue services company; various positions with Carbo Ceramics, Inc., oil
Broken Arrow, OK 74012 field manufacturing/supply company, from 1984 to 1997, most recently
Year of Birth: 1957 Vice President of Marketing.
------------------------------------ ---------------- ----------------------------------------------------------------------
Gary E. Hippenstiel Trustee Director, Vice President and Chief Investment Officer of Legacy
600 Jefferson Street Trust Company since 1992; President and Director of Heritage Trust
Suite 350 Company from 1994-1996; Vice President and Manager of Investments of
Houston, TX 77002 Kanaly Trust Company from 1988 to 1992.
Year of Birth: 1947
==================================== ================ ======================================================================
</TABLE>
The compensation paid to the Trustees of the Trust for the Funds'
fiscal year ended March 31, 2000 is set forth in the following table. Trustee
fees are Trust expenses and each series of the Trust pays a portion of the
Trustee fees.
Aggregate Total Compensation
Name Compensation from Trust (the Trust is
from Trust not in a Fund Complex)
Kenneth D. Trumpfheller 0 0
Steve L. Cobb $20,112.50 $20,112.50
Gary E. Hippenstiel $20,112.50 $20,112.50
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
each Fund's sub-advisor is responsible for each Fund's portfolio decisions and
the placing of each Fund's portfolio transactions. In placing portfolio
transactions, each Fund's sub-advisor seeks the best qualitative execution for
each Fund, taking into account such factors as price (including the applicable
brokerage commission or dealer spread), the execution capability, financial
responsibility and responsiveness of the broker or dealer and the brokerage and
research services provided by the broker or dealer. The Fund's sub-advisor
generally seeks favorable prices and commission rates that are reasonable in
relation to the benefits received. Consistent with the Rules of Fair Practice of
the National Association of Securities Dealers, Inc., and subject to its
obligation of seeking best qualitative execution, the Fund's sub-advisor may
give consideration to sales of shares of the Trust as a factor in the selection
of brokers and dealers to execute portfolio transactions.
Each Fund's sub-advisor is specifically authorized to select brokers or
dealers who also provide brokerage and research services to the Funds and/or the
other accounts over which the Fund's sub-advisor exercises investment discretion
and to pay such brokers or dealers a commission in excess of the commission
another broker or dealer would charge if the Fund's sub-advisor determines in
good faith that the commission is reasonable in relation to the value of the
brokerage and research services provided. The determination may be viewed in
terms of a particular transaction or the Fund's sub-advisor's overall
responsibilities with respect to the Trust and to other accounts over which it
exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Funds effect securities
transactions may also be used by the Fund's sub-advisor in servicing all of its
accounts. Similarly, research and information provided by brokers or dealers
serving other clients may be useful to the Fund's sub-advisor in connection with
its services to the Funds. Although research services and other information are
useful to the Funds and the Fund's sub-advisor, it is not possible to place a
dollar value on the research and other information received. It is the opinion
of the Board of Trustees and the Fund's sub-advisor that the review and study of
the research and other information will not reduce the overall cost to the
Fund's sub-advisor of performing its duties to the Funds under the Agreement.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
When a Portfolio and another of the sub-advisor's clients seek to
purchase or sell the same security at or about the same time, the sub-advisor
may execute the transaction on a combined ("blocked") basis. Blocked
transactions can produce better execution for the Portfolios because of the
increased volume of the transaction. If the entire blocked order is not filled,
the Portfolio may not be able to acquire as large a position in such security as
it desires or it may have to pay a higher price for the security. Similarly, the
Portfolio may not be able to obtain as large an execution of an order to sell or
as high a price for any particular portfolio security if the other client
desires to sell the same portfolio security at the same time. In the event that
the entire blocked order is not filled, the purchase or sale will normally be
allocated on a pro rata basis. The allocation may be adjusted by the Fund's
sub-advisor, taking into account such factors as the size of the individual
orders and transaction costs, when the Fund's sub-advisor believes an adjustment
is reasonable.
The Trust, the Avisor and the Funds' distributor have each adopted a
Code of Ethics (the "Code") under Rule 17j-1 of the Investment Company Act of
1940. The personnel subject to the Code are permitted to invest in securities,
including securities that may be purchased or held by the Fund. You may obtain a
copy of the Code from the Securities and Exchange Commission.
For the fiscal periods indicated, the Funds paid the following in
brokerage commissions:
<TABLE>
<S> <C> <C> <C> <C>
---------------------- ------------------- ------------------ -------------------- ----------------
Small-Cap Fund Fixed Income Fund International Fund Growth
Fund
---------------------- ------------------- ------------------ -------------------- ----------------
$838 $0 $1033 $4912
---------------------- ------------------- ------------------ -------------------- ----------------
Period 10/22/99- 10/22/99- 10/22/99- 4/13/99-
3/31/00 3/31/00 3/31/00 3/31/00
---------------------------------------------------------------------------------------------------
</TABLE>
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of each Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day, Martin
Luther King Day, President's Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving and Christmas.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Fund's advisor's opinion, the last bid price does not accurately reflect the
current value of the security. All other securities for which over-the-counter
market quotations are readily available are valued at their last bid price. When
market quotations are not readily available, when the Fund's advisor determines
the last bid price does not accurately reflect the current value or when
restricted securities are being valued, such securities are valued as determined
in good faith by the Fund's advisor, subject to review of the Board of Trustees
of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Fund's advisor believes such prices accurately reflect the fair
market value of such securities. A pricing service utilizes electronic data
processing techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Fund's advisor, subject to review of the Board of Trustees.
Short term investments in fixed income securities with maturities of less than
60 days when acquired, or which subsequently are within 60 days of maturity, are
valued by using the amortized cost method of valuation, which the Board has
determined will represent fair value.
INVESTMENT PERFORMANCE
The Fund may periodically advertise "average annual total return."
"Average annual total return," as defined by the Securities and Exchange
Commission, is computed by finding the average annual compounded rates of return
for the period indicated that would equate the initial amount invested to the
ending redeemable value, according to the following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
A Fund's "yield" is determined in accordance with the method defined by
the Securities and Exchange Commission. A yield quotation is based on a 30 day
(or one month) period and is computed by dividing the net investment income per
share earned during the period by the maximum offering price per share on the
last day of the period, according to the following formula:
Yield = 2[(a-b/cd+1)6-1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period
that were entitled to receive dividends d = the maximum offering price
per share on the last day of the period
Solely for the purpose of computing yield, dividend income is
recognized by accruing 1/360 of the stated dividend rate of the security each
day that the Fund owns the security. Generally, interest earned (for the purpose
of "a" above) on debt obligations is computed by reference to the yield to
maturity of each obligation held based on the market value of the obligation
(including actual accrued interest) at the close of business on the last
business day prior to the start of the 30-day (or one month) period for which
yield is being calculated, or, with respect to obligations purchased during the
month, the purchase price (plus actual accrued interest). With respect to the
treatment of discount and premium on mortgage or other receivable-backed
obligations which are expected to be subject to monthly paydowns of principal
and interest, gain or loss attributable to actual monthly paydowns is accounted
for as an increase or decrease to interest income during the period and discount
or premium on the remaining security is not amortized.
Each Fund may also advertise performance information (a
"non-standardized quotation") which is calculated differently from average
annual total return. A non-standardized quotation of total return may be a
cumulative return which measures the percentage change in the value of an
account between the beginning and end of a period, assuming no activity in the
account other than reinvestment of dividends and capital gains distributions. A
non-standardized quotation may also be an average annual compounded rate of
return over a specified period, which may be a period different from those
specified for average annual total return. In addition, a non-standardized
quotation may be an indication of the value of a $10,000 investment (made on the
date of the initial public offering of the Fund's shares) as of the end of a
specified period. These non-standardized quotations do not include the effect of
the applicable sales load which, if included, would reduce the quoted
performance. A non-standardized quotation of total return will always be
accompanied by the Fund's average annual total return as described above.
Each Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with each Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue.
For the periods indicated, each Fund's total return was as follows:
<TABLE>
<S> <C> <C> <C> <C>
--------------------- ------------------ ------------------ -------------------- -----------------
Small-Cap Fund Fixed Income Fund International Fund Growth
Fund
--------------------- ------------------ ------------------ -------------------- -----------------
Return % % % %
--------------------- ------------------ ------------------ -------------------- -----------------
Period 10/22/99-3/31/00 10/22/99-3/31/00 10/22/99-3/31/00 4/13/99-3/31/00
--------------------- ------------------ ------------------ -------------------- -----------------
</TABLE>
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of any of the
Funds may be compared to indices of broad groups of unmanaged securities
considered to be representative of or similar to the portfolio holdings of the
Funds or considered to be representative of the stock market in general. The
Funds may use the Standard & Poor's 500 Stock Index, the NASDAQ Composite Index,
the VIF 400 Values Index or the Dow Jones Industrial Average.
In addition, the performance of any of the Funds may be compared to
other groups of mutual funds tracked by any widely used independent research
firm which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of any of the Funds. Performance rankings and
ratings reported periodically in national financial publications such as
Barron's and Fortune also may be used.
CUSTODIAN
Firstar Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is
custodian of the Funds' investments. The custodian acts as the Funds'
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Funds' request and
maintains records in connection with its duties.
TRANSFER AGENT
Unified Fund Services, Inc. ("Unified"), 431 North Pennsylvania Street,
Indianapolis, Indiana 46204, acts as the Funds' transfer agent and, in such
capacity, maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Funds' shares, acts as dividend and distribution disbursing
agent and performs other transfer agency and shareholder service functions. For
its services as transfer agent, Unified receives a monthly fee from the Advisor
of $1.20 per shareholder (subject to a minimum monthly fee of $750). In
addition, Unified provides the Funds with fund accounting services, which
includes certain monthly reports, record-keeping and other management-related
services. For its services as fund accountant, Unified receives an annual fee
from the Funds' advisor equal to 0.0275% of each Fund's assets up to $100
million and 0.0250% of the Fund's assets from $100 million to $300 million, and
0.0200% of the Fund's assets over $300 million (subject to various monthly
minimum fees, the maximum being $2,000 per month for assets of $20 to $100
million). The Administrator, the Distributor and the Transfer Agent are each
controlled by Unified Financial Services, Inc.
The following chart discloses the fees paid by the Advisor (not the
Funds) to Unified for these fund accounting services:
<TABLE>
<S> <C> <C> <C> <C>
---------------------- ------------------- ------------------ -------------------- ----------------
Small-Cap Fund Fixed Income Fund International Fund Growth
Fund
---------------------- ------------------- ------------------ -------------------- ----------------
$______ $______ $______ $______
---------------------- ------------------- ------------------ -------------------- ----------------
Period 10/22/99- 10/22/99- 10/22/99- 4/13/99-
3/31/00 3/31/00 3/31/00 3/31/00
---------------------- ------------------- ------------------ -------------------- ----------------
</TABLE>
ACCOUNTANTS
The firm of McCurdy & Associates CPA's, Inc., 27955 Clemens Road,
Westlake, Ohio 44145, has been selected as independent public accountants for
each Fund for the fiscal year ending March 31, 2001. McCurdy & Associates
performs an annual audit of the Funds' financial statements and provides
financial, tax and accounting consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc. (the "Distributor"), 1793
Kingswood Drive, Suite 200, Southlake, Texas 76092, is the exclusive agent for
distribution of shares of the Funds. Kenneth D. Trumpfheller, a Trustee and
officer of the Trust, is an affiliate of the Distributor. The Distributor is
obligated to sell the shares of the Funds on a best efforts basis only against
purchase orders for the shares. Shares of the Funds are offered to the public on
a continuous basis. The Administrator, the Distributor and the Transfer Agent
are each controlled by Unified Financial Services, Inc.
ADMINISTRATOR
The Fund retains Unified Fund Services, Inc. (formerly known as
Ameriprime Financial Services, Inc.), 431 N. Pennsylvania St., Indianapolis, IN
46204, (the "Administrator") to manage the Fund's business affairs and provide
the Fund with administrative services, including all regulatory reporting and
necessary office equipment, personnel and facilities. The Administrator receives
a monthly fee from the Advisor equal to an annual rate of 0.10% of each Fund's
assets under $50 million, 0.075% of each Fund's assets from $50 million to $100
million, and 0.050% of each Fund's assets over $100 million (subject to a
minimum fee of $2,500 per month). The Administrator, the Distributor, and the
Transfer Agent are each controlled by Unified Financial Services, Inc.
The following chart discloses the fees paid by the Advisor (not the
Fund) to the Administrator for these services:
<TABLE>
<S> <C> <C> <C> <C>
---------------------- ------------------- ------------------ -------------------- ----------------
Small-Cap Fund Fixed Income Fund International Fund Growth
Fund
---------------------- ------------------- ------------------ -------------------- ----------------
$______ $______ $______ $______
---------------------- ------------------- ------------------ -------------------- ----------------
Period 10/22/99- 10/22/99- 10/22/99- 4/13/99-
3/31/00 3/31/00 3/31/00 3/31/00
---------------------- ------------------- ------------------ -------------------- ----------------
</TABLE>
FINANCIAL STATEMENTS
The financial statements and independent auditor's report required to
be included in the Statement of Additional Information are incorporated herein
by reference to the Funds' Annual Report to Shareholders for the periods from
each Fund's inception through March 31, 2000. The Funds will provide the Annual
Report without charge by calling the Funds at 1-877-636-2766.
<PAGE>
AmeriPrime Funds
PART C. OTHER INFORMATION
-----------------
Item 23. Exhibits
(a) Articles of Incorporation.
(i) Copy of Registrant's Declaration of Trust, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby incorporated
by reference.
(ii) Copy of Amendment No. 1 to Registrant's Declaration of Trust, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is
hereby incorporated by reference.
(iii) Copy of Amendment No. 2 to Registrant's Declaration of Trust, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 1, is
hereby incorporated by reference.
(iv) Copy of Amendment No. 3 to Registrant's Declaration of Trust, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 4, is
hereby incorporated by reference.
(v) Copy of Amendment No. 4 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 4, is hereby
incorporated by reference.
(vi) Copy of Amendment No. 5 and Amendment No. 6 to Registrant's
Declaration of Trust, which were filed as an Exhibit to Registrant's
Post-Effective Amendment No. 8, are hereby incorporated by reference.
(viii) Copy of Amendment No. 7 to Registrant's Declaration of Trust, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is
hereby incorporated by reference.
(ix) Copy of Amendment No. 8 to Registrant's Declaration of Trust, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 12, is
hereby incorporated by reference.
(x) Copy of Amendment No. 9 to Registrant's Declaration of Trust which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 15, is hereby
incorporated by reference.
(xi) Copy of Amendment No. 10 to Registrant's Declaration of Trust, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 16, is
hereby incorporated by reference.
(xii) Copy of Amendment No. 11 to Registrant's Declaration of Trust, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 17, is
hereby incorporated by reference.
(xiii) Copy of Amendment No. 12 to Registrant's Declaration of Trust, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 23, is
hereby incorporated by reference.
(xiv) Copy of Amendment No. 13 to Registrant's Declaration of Trust, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 23, is
hereby incorporated by reference.
(xv) Copy of Amendments No. 14-17 to Registrant's Declaration of Trust,
which were filed as Exhibits to Registrant's Post-Effective Amendment No. 27,
are hereby incorporated by reference.
(xvi) Copy of Amendments No. 18-19 to Registrant's Declaration of Trust,
which were filed as Exhibits to Registrant's Post-Effective Amendment No. 30,
are hereby incorporated by reference.
(xvii) Copy of Amendment No. 20 to Registrant's Declaration of Trust, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 40, is
hereby incorporated by reference.
(b) By-Laws. Copy of Registrant's By-Laws, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 11, is hereby incorporated by
reference.
(c) Instruments Defining Rights of Security Holders. None other than in the
Declaration of Trust, as amended, and By-Laws of the Registrant.
(d) Investment Advisory Contracts.
(i) Copy of Registrant's Management Agreement with Carl Domino Associates,
L.P., advisor to Carl Domino Equity Income Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 11, is hereby incorporated by
reference.
(ii) Copy of Registrant's Management Agreement with Jenswold, King &
Associates, advisor to Fountainhead Special Value Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 8, is hereby incorporated
by reference.
(iii) Copy of Registrant's Management Agreement with GLOBALT, Inc., advisor
to GLOBALT Growth Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 44, is hereby incorporated by reference.
(iv) Copy of Registrant's Management Agreement with IMS Capital Management,
Inc., advisor to the IMS Capital Value Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 2, is hereby incorporated by
reference.
(v) Copy of Registrant's Management Agreement with Commonwealth Advisors,
Inc., advisor to Florida Street Bond Fund and Florida Street Growth Fund, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 8, is
hereby incorporated by reference.
(vi) Copy of Registrant's Management Agreement with Corbin & Company,
advisor to Corbin Small-Cap Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 8, is hereby incorporated by reference.
(vii) Copy of Registrant's Management Agreement with Spectrum Advisory
Services, Inc., advisor to the Marathon Value Portfolio, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 42, is hereby incorporated
by reference.
(viii) Copy of Registrant's Management Agreement with The Jumper Group,
Inc., advisor to the Jumper Strategic Advantage Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby incorporated
by reference.
(ix) Copy of Registrant's Management Agreement with Appalachian Asset
Management, Inc., advisor to the AAM Equity Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 17, is hereby incorporated by
reference.
(x) Copy of Registrant's Management Agreement with Martin Capital Advisors,
L.L.P., advisor to the Austin Opportunity Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 23, is hereby incorporated by
reference.
(xi) Copy of Registrant's Management Agreement with Martin Capital Advisors
L.L.P., advisor to the Texas Opportunity Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 44, is hereby incorporated by
reference.
(xii) Copy of Registrant's Management Agreement with Martin Capital
Advisors L.L.P., advisor to the U.S. Opportunity Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 29, is hereby incorporated
by reference.
(xiii) Copy of Registrant's Management Agreement with Gamble, Jones, Morphy
& Bent, advisor to the GJMB Growth Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 23, is hereby incorporated by
reference.
(xiv) Copy of Registrant's Management Agreement with Carl Domino
Associates, L.P., advisor to the Carl Domino Growth Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby incorporated
by reference.
(xv) Copy of Registrant's Management Agreement with Carl Domino Associates,
L.P., advisor to the Carl Domino Global Equity Income Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby
incorporated by reference.
(xvi) Copy of Registrant's Management Agreement with Dobson Capital
Management, Inc., advisor to the Dobson Covered Call Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 25, is hereby incorporated
by reference.
(xvii) Copy of Registrant's Management Agreement with Auxier Asset
Management, LLC, advisor to the Auxier Focus Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 31, is hereby incorporated by
reference.
(xviii) Copy of Registrant's Management Agreement with Shepherd Advisory
Services, Inc., advisor to the Shepherd Values Growth Fund, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 42, is hereby
incorporated by reference.
(xix) Copy of Registrant's Management Agreement with Columbia Partners,
L.L.C., Investment Management, advisor to the Columbia Partners Equity Fund,
which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 31,
is hereby incorporated by reference.
(xx) Copy of Registrant's Management Agreement with Cash Management
Systems, Inc. ("CMS"), advisor to The Cash Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 31, is hereby incorporated by
reference.
(xxi) Copy of Registrant's Management Agreement with Ariston Capital
Management Corporation, advisor to the Ariston Convertible Securities Fund,
which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 27,
is hereby incorporated by reference.
(xxii) Copy of Registrant's Management Agreement with Leader Capital
Corp., advisor to the Leader Converted Mutual Bank Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 29, is hereby incorporated
by reference.
(xxiii) Copy of Registrant's Management Agreement with Shepherd Advisory
Services, Inc., advisor to the Shepherd Values VIF Equity Fund, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby
incorporated by reference.
(xxiv) Copy of Registrant's Management Agreement with Shepherd Advisory
Services, Inc., advisor to the Shepherd Values Small-Cap Fund, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby
incorporated by reference.
(xxv) Copy of Registrant's Management Agreement with Shepherd Advisory
Services, Inc., advisor to the Shepherd Values International Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby
incorporated by reference.
(xxvi) Copy of Registrant's Management Agreement with Shepherd Advisory
Services, Inc., advisor to the Shepherd Values Fixed Income Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby
incorporated by reference.
(xxvii) Copy of Sub-Advisory Agreement between Shepherd Advisory Services,
Inc. and Cornerstone Capital Management, Inc., sub-advisor to the Shepherd
Values VIF Equity Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 34, is hereby incorporated by reference.
(xxviii) Copy of Sub-Advisory Agreement between Shepherd Advisory Services,
Inc. and Templeton Portfolio Advisory, sub-advisor to the Shepherd Values
International Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 34, is hereby incorporated by reference.
(xxix) Copy of Sub-Advisory Agreement between Shepherd Advisory Services,
Inc. and Nicholas-Applegate Capital Management, sub-advisor to the Shepherd
Values Small-Cap Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 34, is hereby incorporated by reference.
(xxx) Copy of Sub-Advisory Agreement between Shepherd Advisory Services,
Inc. and Potomac Asset Management Company, Inc., sub-advisor to the Shepherd
Values Fixed Income Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 34, is hereby incorporated by reference.
(xxxi) Copy of Sub-Advisory Agreement between Shepherd Advisory Services,
Inc. and Cornerstone Capital Management, Inc., sub-advisor to the Shepherd
Values Market Neutral Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 42, is hereby incorporated by reference.
(xxxii) Copy of Sub-Advisory Agreement between Shepherd Advisory Services,
Inc. and Cornerstone Capital Management, Inc., sub-advisor to the Shepherd
Values Growth Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 42, is hereby incorporated by reference.
(xxxiii) Copy of Registrant's Management Agreement with Aegis Asset
Management, Inc., advisor to the Westcott Technology Fund (f/k/a the Westcott
Nothing But Net Fund), which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 39, is hereby incorporated by reference.
(xxxiv) Copy of Registrant's Management Agreement with Aegis Asset
Management, Inc., advisor to the Westcott Large-Cap Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 39, is hereby incorporated
by reference.
(xxxv) Copy of Registrant's Management Agreement with Aegis Asset
Management, Inc., advisor to the Westcott Fixed Income Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 39, is hereby
incorporated by reference.
(xxxvi) Copy of Registrant's Management Agreement with Jenswold, King &
Associates, advisor to the Fountainhead Kaleidoscope Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 38, is hereby incorporated
by reference.
(xxxvii) Copy of Registrant's Management Agreement with Ariston Capital
Management Corporation, advisor to the Ariston Internet Convertible Fund, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 45, is
hereby incorporated by reference.
(e) Underwriting Contracts.
(i) Copy of Registrant's Amended and Restated Underwriting Agreement with
AmeriPrime Financial Securities, Inc., which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 8, is hereby incorporated by
reference.
(ii) Copy of Registrant's Exhibit A to the Amended and Restated
Underwriting Agreement, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 40, is hereby incorporated by reference.
(f) Bonus or Profit Sharing Contracts. None.
(g) Custodian Agreements.
(i) Copy of Registrant's Agreement with the Custodian, Firstar Bank, N.A.
(formerly Star Bank), which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 11, is hereby incorporated by reference.
(ii) Copy of Registrant's Appendix B to the Agreement with the Custodian,
Firstar Bank, N.A., which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 43, is hereby incorporated by reference.
(iii) Copy of Registrant's Agreement with UMB Bank, N.A., Custodian to the
Dobson Covered Call Fund and the Florida Street Funds, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 28, is hereby incorporated
by reference.
(h) Other Material Contracts.
(i) Copy of Registrant's Administrative Services Agreement with the
Administrator, AmeriPrime Financial Services, Inc., which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby incorporated
by reference.
(ii) Copy of Amended Exhibit A to the Administrative Services Agreement -
to be supplied.
(iii) Copy of the Master-Feeder Participation Agreement for the Cash Fund -
to be supplied.
(iv) Copy of Sub-Administration Agreement for the Cash Fund - to be
supplied.
(v) Copy of Administration Agreement for the Cash Fund - to be supplied.
(i) Legal Opinion.
(i) Opinion of Brown, Cummins & Brown Co., L.P.A., which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 9, is hereby incorporated
by reference.
(ii) Opinion of Brown, Cummins & Brown Co., L.P.A., which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 29, is hereby incorporated
by reference.
(iii) Opinion of Brown, Cummins & Brown Co., L.P.A., which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 41, is hereby incorporated
by reference.
(iv) Consent of Brown, Cummins & Brown Co., L.P.A. is filed herewith.
(j) Other Opinions.
(i) Consent of McCurdy & Associates CPA's, Inc. is filed herewith.
(k) Omitted Financial Statements. None.
(l) Initial Capital Agreements. Copy of Letter of Initial Stockholders, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is
hereby incorporated by reference.
(m) Rule 12b-1 Plan.
(i) Form of Registrant's Rule 12b-1 Service Agreement, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 1, is hereby
incorporated by reference.
(ii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Austin
Opportunity Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 17, is hereby incorporated by reference.
(iii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Texas
Opportunity Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 17, is hereby incorporated by reference.
(iv) Copy of Registrant's Rule 12b-1 Distribution Plan for the U.S.
Opportunity Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 17, is hereby incorporated by reference.
(v) Copy of Registrant's Rule 12b-1 Distribution Plan for the Jumper
Strategic Advantage Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 24, is hereby incorporated by reference.
(vi) Copy of Registrant's Rule 12b-1 Distribution Plan for the Dobson
Covered Call Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 24, is hereby incorporated by reference.
(vii) Copy of Registrant's Rule 12b-1 Distribution Plan for the
Ariston Convertible Securities Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 27, is hereby incorporated by
reference.
(viii) Copy of Registrant's Rule 12b-1 Distribution Plan for the
Leader Converted Mutual Bank Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 27, is hereby incorporated by
reference.
(ix) Copy of Registrant's Rule 12b-1 Distribution Plan for the
Westcott Technology Fund (f/k/a the Westcott Nothing But Net Fund), which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 28, is
hereby incorporated by reference.
(x) Copy of Registrant's Rule 12b-1 Distribution Plan for the Westcott
Large-Cap Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 28, is hereby incorporated by reference.
(xi) Copy of Registrant's Rule 12b-1 Distribution Plan for the
Westcott Fixed Income Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 28, is hereby incorporated by reference.
(xii) Copy of Registrant's Rule 12b-1 Distribution Plan for the
Ariston Internet Convertible Fund which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 41, is hereby incorporated by
reference.
(xiii) Copy of Registrant's Rule 12b-1 Distribution Plan for the
Florida Street Growth Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 42, is hereby incorporated by reference.
(xiv) Copy of Registrant's Rule 12b-1 Distribution Plan for the
Florida Street Bond Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 42, is hereby incorporated by reference.
(xv) Copy of Registrant's Shareholder Servicing Plan for the Florida
Street Growth Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 42, is hereby incorporated by reference.
(xvi) Copy of Registrant's Shareholder Servicing Plan for the Florida
Street Bond Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 42, is hereby incorporated by reference.
(n) Rule 18f-3 Plan.
(i) Rule 18f-3 Plan for the Carl Domino Equity Income Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 16, is
hereby incorporated by reference.
(ii) Rule 18f-3 Plan for the Jumper Strategic Advantage Fund, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 21, is
hereby incorporated by reference.
(iii) Rule 18f-3 Plan for the Westcott Funds, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 28, is hereby
incorporated by reference.
(iv) Rule 18f-3 Plan for the Ariston Internet Convertible Fund, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 41, is
hereby incorporated by reference.
(v) Rule 18f-3 Plan for the Florida Street Bond Fund, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 42, is hereby
incorporated by reference.
(vi) Rule 18f-3 Plan for the Florida Street Growth Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 42, is
hereby incorporated by reference.
(o) Reserved.
(p) Codes of Ethics.
(i) Code of Ethics of Registrant, its underwriter and advisers, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 45, is
hereby incorporated by reference.
(ii) Code of Ethics of Northern Trust Quantitative Advisors, Inc.,
advisor to the Carl Domino Equity Income Fund, the Carl Domino Growth Fund
and the Carl Domino Global Equity Income Fund, is filed herewith.
(q) Powers of Attorney
(i) Power of Attorney for Registrant and Certificate with respect
thereto, which were filed as an Exhibit to Registrant's Post-Effective
Amendment No. 5, are hereby incorporated by reference.
(ii) Powers of Attorney for Trustees of the Trust, which were filed as
an Exhibit to Registrant's Post-Effective Amendment No. 5, are hereby
incorporated by reference.
(iii) Power of Attorney for the President (and a Trustee) of the
Trust, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 35, is hereby incorporated by reference.
(iv) Power of Attorney for the Treasurer of the Trust, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 43, is hereby
incorporated by reference.
(v) Powers of Attorney for the Trustees of the AMR Investment Services
Trust, which were filed as an Exhibit to Registrant's Post-Effective
Amendment No. 45, are hereby incorporated by reference.
Item 24. Persons Controlled by or Under Common Control with the Registrant
-------- ------------------------------------------------------------------
(As of November 3, 2000)
-----------------------
(a) Charles L. Dobson, may be deemed to control the Dobson Covered Call Fund as
a result of his beneficial ownership of the Fund (72.68%). Charles L.
Dobson controls Dobson Capital Management, Inc. (a California corporation)
because he owns 100% of its shares. As a result, Dobson Capital Management,
Inc. and the Fund may be deemed to be under the common control of Charles
L. Dobson.
(b) J. Jeffrey Auxier may be deemed to control the Auxier Focus Fund as a
result of his beneficial ownership of the Fund (36.45%). J. Jeffrey Auxier
controls Auxier Asset Management, LLC (an Oregon limited liability company)
because he owns a majority of its shares. As a result, Auxier Asset
Management, LLC and the Fund may be deemed to be under the common control
of J. Jeffrey Auxier.
(c) Roger E. King may be deemed to control the Fountainhead Kaleidoscope Fund
as a result of his beneficial ownership of the Fund (26.00%). Roger E. King
controls King Investment Advisors, Inc. (a Texas corporation) because he
owns a majority of its shares. As a result, King Investment Advisors, Inc.
and the Fund may be deemed to be under the common control of Roger E. King.
Item 25. Indemnification
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(a) Article VI of the Registrant's Declaration of Trust provides for
indemnification of officers and Trustees as follows:
Section 6.4 Indemnification of Trustees, Officers, etc. Subject to and
--------------------------------------------------------
except as otherwise provided in the Securities Act of 1933, as amended, and the
1940 Act, the Trust shall indemnify each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise (hereinafter referred to as a "Covered Person") against
all liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, director or trustee, and except that no Covered
Person shall be indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
Section 6.5 Advances of Expenses. The Trust shall advance attorneys'
---------------------------------
fees or other expenses incurred by a Covered Person in defending a proceeding to
the full extent permitted by the Securities Act of 1933, as amended, the 1940
Act, and Ohio Revised Code Chapter 1707, as amended. In the event any of these
laws conflict with Ohio Revised Code Section 1701.13(E), as amended, these laws,
and not Ohio Revised Code Section 1701.13(E), shall govern.
Section 6.6 Indemnification Not Exclusive, etc. The right of
--------------------------------------------------------
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
The Registrant may not pay for insurance which protects the Trustees
and officers against liabilities rising from action involving willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of their offices.
(b) The Registrant may maintain a standard mutual fund and investment advisory
professional and directors and officers liability policy. The policy, if
maintained, would provide coverage to the Registrant, its Trustees and officers,
and could cover its advisors, among others. Coverage under the policy would
include losses by reason of any act, error, omission, misstatement, misleading
statement, neglect or breach of duty.
(c) Pursuant to the Underwriting Agreement, the Trust shall indemnify
Underwriter and each of Underwriter's Employees (hereinafter referred to as a
"Covered Person") against all liabilities, including but not limited to amounts
paid in satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise or with which such person may be or
may have been threatened, while serving as the underwriter for the Trust or as
one of Underwriter's Employees, or thereafter, by reason of being or having been
the underwriter for the Trust or one of Underwriter's Employees, including but
not limited to liabilities arising due to any misrepresentation or misstatement
in the Trust's prospectus, other regulatory filings, and amendments thereto, or
in other documents originating from the Trust. In no case shall a Covered Person
be indemnified against any liability to which such Covered Person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties of such Covered Person.
(d) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
Registrant pursuant to the provisions of Ohio law and the Agreement and
Declaration of the Registrant or the By-Laws of the Registrant, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Trust in the successful defense of any action, suit or proceeding)
is asserted by such trustee, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
Item 26. Business and Other Connections of Investment Advisor
-------- ----------------------------------------------------
A. Northern Trust Quantitative Advisors, Inc., 50 South LaSalle Street,
Chicago, Illinois 60675, ("Northern"), Advisor to the Carl Domino Equity Income
Fund, the Carl Domino Growth Fund and the Carl Domino Global Equity Income Fund,
is a registered investment advisor.
(1) Northern has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of Northern is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-33358).
B. King Investment Advisors Inc., 1980 Post Oak Boulevard, Suite 2400,
Houston, Texas 77056-3898 ("King "), Advisor to the Fountainhead Special Value
Fund and the Fountainhead Kaleidoscope Fund, is a registered investment advisor.
(1) King has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of King is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-27224).
C. GLOBALT, Inc., 3060 Peachtree Road, N.W., One Buckhead Plaza, Suite 225,
Atlanta, Georgia 30305 ("GLOBALT"), Advisor to GLOBALT Growth Fund, is a
registered investment advisor.
(1) GLOBALT has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of GLOBALT is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-38123).
D. IMS Capital Management, Inc., 10159 S.E. Sunnyside Road, Suite 330,
Portland, Oregon 97015, ("IMS"), Advisor to the IMS Capital Value Fund, is a
registered investment advisor.
(1) IMS has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of IMS is incorporated
by reference to Schedule D of Form ADV filed by it under the Investment Advisers
Act (File No. 801-33939).
E. CommonWealth Advisors, Inc., 929 Government Street, Baton Rouge,
Louisiana 70802, ("CommonWealth"), Advisor to the Florida Street Bond Fund and
the Florida Street Growth Fund, is a registered investment advisor.
(1) CommonWealth has engaged in no other business during the past two fiscal
years.
(2) Information with respect to each officer and director of CommonWealth is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-39749).
F. Corbin & Company, 6300 Ridglea Place, Suite 1111, Fort Worth, Texas
76116, ("Corbin"), Advisor to the Corbin Small-Cap Value Fund, is a registered
investment advisor.
(1) Corbin has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of Corbin is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-41371).
G. Spectrum Advisory Services, Inc. ("Spectrum"), 1050 Crown Pointe
Parkway, Suite 950, Atlanta, Georgia 30338, Advisor to the Marathon Value
Portfolio, is a registered investment advisor.
(1) Spectrum has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of Spectrum is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-40286).
H. The Jumper Group, Inc., 1 Union Square, Suite 505, Chattanooga,
Tennessee 37402, ("Jumper"), Advisor to the Jumper Strategic Advantage Fund, is
a registered investment advisor.
(1) Jumper has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of Jumper is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-45453).
I. Appalachian Asset Management, Inc., 1018 Kanawha Blvd., East, Suite 209,
Charleston, WV 25301 ("AAM"), Advisor to AAM Equity Fund, is a registered
investment advisor.
(1) AAM has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of AAM is incorporated
by reference to Schedule D of Form ADV filed by it under the Investment Advisers
Act (File No. 801-41463).
J. Martin Capital Advisors, L.L.P. ("Martin"), 816 Congress Avenue, Suite
1540, Austin, TX 78701 ("Martin"), Advisor to Austin Opportunity Fund, Texas
Opportunity Fund, and U.S. Opportunity Fund, is a registered investment advisor.
(1) Martin has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and member of Martin is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-55669).
K. Gamble, Jones, Morphy & Bent, Inc., 301 East Colorado Boulevard, Suite
802, Pasadena, California 91101 ("GJMB"), Advisor to the GJMB Fund, is a
registered investment advisor.
(1) GJMB has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of GJMB is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-36855).
L. Dobson Capital Management, Inc., 1422 Van Ness Street, Santa Ana, CA
92707 ("Dobson"), Advisor to the Dobson Covered Call Fund, is a registered
investment advisor.
(1) Dobson has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of Dobson is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-56099).
M. Auxier Asset Management, LLC, 8050 S.W. Warm Springs, Suite 130,
Tualatin, OR 97062 ("Auxier"), Advisor to the Auxier Focus Fund, is registered
investment advisor.
(1) Auxier has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and member of Auxier is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-55757).
N. Shepherd Advisory Services, Inc., 2505 21st Avenue, Suite 204,
Nashville, Tennessee 37212 ("Shepherd"), Advisor to the Shepherd Values Funds,
is a registered investment advisor.
(1) Shepherd has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of Shepherd is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-38210).
O. Columbia Partners, L.L.C., Investment Management, 1775 Pennsylvania
Avenue, N.W., Washington, DC 20006 ("Columbia"), Advisor to the Columbia
Partners Equity Fund, is a registered investment advisor.
(1) Columbia has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and member of Columbia is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-50156).
P. Legacy Investment Group, LLC, d/b/a Cash Management Systems, 290
Turnpike Road, #338, Westborough, Massachusetts ("CMS), Advisor to The Cash
Fund, is a registered investment advisor.
(1) CMS has engaged in no other business during the past two years.
(2) Information with respect to each officer and member of CMS is incorporated
by reference to Schedule D of Form ADV filed by it under the Investment Advisers
Act (File No. 801-56211).
Q. Ariston Capital Management Corporation, 40 Lake Bellevue Drive, Suite
220, Bellevue, Washington 98005 ("Ariston"), Advisor to the Ariston Convertible
Securities Fund and the Ariston Internet Convertible Fund, is a registered
investment advisor.
(1) Ariston has engaged in no other business during the past two years.
(2) Information with respect to each officer and director of Ariston is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-13209).
R. Leader Capital Corp., 121 S.W. Morrison St., Ste. 450, Portland, OR
97204 ("Leader"), Advisor to the Leader Converted Mutual Bank Fund, is a
registered investment advisor.
(1) Leader has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of Leader is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-56684).
S. Aegis Asset Management, Inc. ("Aegis"), 230 Westcott, Suite 1, Houston,
Texas 77007, Advisor to the Westcott Technology Fund (f/k/a the Westcott Nothing
But Net Fund), Westcott Large-Cap Fund and Westcott Fixed Income Fund, is a
registered investment advisor.
(1) Aegis has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of Aegis is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-56040).
Item 27. Principal Underwriters
------- ----------------------
A. AmeriPrime Financial Securities, Inc., is the Registrant's principal
underwriter. Kenneth D. Trumpfheller, 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the President, Secretary and Treasurer of the
underwriter and the President, Treasurer and Secretary and a Trustee of the
Registrant. It is also the underwriter for the AmeriPrime Insurance Trust,
AmeriPrime Advisors Trust, the Kenwood Funds, the Rockland Funds Trust, the
10K SmartTrust and the TANAKA Funds, Inc.
B. Information with respect to each director and officer of AmeriPrime
Financial Securities, Inc. is incorporated by reference to Schedule A of
Form BD filed by it under the Securities Exchange Act of 1934 (File No.
8-48143).
C. Not applicable.
Item 28. Location of Accounts and Records
------- --------------------------------
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder will be maintained by the Registrant at 1793 Kingswood Drive, Suite
200, Southlake, Texas 76092; and/or by the Registrant's Custodians, Firstar
Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202; and UMB Bank, N.A.,
Securities Administration Dept., 928 Grand Blvd., 10th Floor, Kansas City, MO
64106; and/or transfer and shareholder service agent, Unified Fund Services,
Inc., 431 Pennsylvania Street, Indianapolis, IN 46204.
Item 29. Management Services Not Discussed in Parts A or B
-------- -------------------------------------------------
None.
Item 30. Undertakings
------- ------------
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement under Rule
485(b) under the Securities Act and has duly caused this Registration Statement
to be signed on its behalf by the undersigned, duly authorized, in the City of
Cincinnati, State of Ohio, on the 16th day of November, 2000.
AmeriPrime Funds
By: _______________/s/_________________
Donald S.Mendelsohn,
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Kenneth D. Trumpfheller,*
President and Trustee
Gary E. Hippensteil,* Trustee *By: __________/s/_____________________
Donald S. Mendelsohn,
Steve L. Cobb,* Trustee Attorney-in-Fact
Robert A. Chopyak,* Treasurer November 16, 2000
and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
1. Consent of Counsel ...........................................EX-99.23.i.iv
2. Consent of Auditors...........................................EX-99.23.j.i
3. Code of Ethics of Northern Trust Quantitative Advisers, Inc...EX-99.23.p.ii