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. 42 /X/
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / /
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Amendment No. 40 /X /
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(Check appropriate box or boxes.)
AMERIPRIME FUNDS - FILE NOS. 33-96826 AND 811-9096
1793 KINGSWOOD DRIVE, SUITE 200, SOUTHLAKE, TEXAS 76092
(Address of Principal Executive Offices) Zip Code
Registrant's Telephone Number, including Area Code: (817) 431-2197
--------------
KENNETH TRUMPFHELLER, 1793 KINGSWOOD DR., SUITE 200, SOUTHLAKE, TX 76092
- -------------------------------------------------------------------------
(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b)
/ / on ___________ pursuant to paragraph (b)
/X/ 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.
7982
<PAGE>
MARATHON VALUE PORTFOLIO
PROSPECTUS
MARCH _, 2000
INVESTMENT OBJECTIVE:
Long term capital appreciation
1050 Crown Pointe Parkway,
Suite 950
Atlanta, GA 30338
(800) 788-6086
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.
10143 11/4/99 9:57 AM
<PAGE>
TABLE OF CONTENTS
PAGE
ABOUT THE FUND.................................................................1
FEES AND EXPENSES OF INVESTING IN THE FUND.....................................3
HOW TO BUY SHARES..............................................................3
HOW TO REDEEM SHARES...........................................................5
DETERMINATION OF NET ASSET VALUE...............................................6
DIVIDENDS, DISTRIBUTIONS AND TAXES.............................................6
MANAGEMENT OF THE FUND.........................................................6
FINANCIAL HIGHLIGHTS...........................................................7
FOR MORE INFORMATION..................................................BACK COVER
<PAGE>
ABOUT THE FUND
INVESTMENT OBJECTIVE
The investment objective of the Marathon Value Portfolio (the "Fund") is
to provide shareholders with long term capital appreciation.
PRINCIPAL STRATEGIES
The Fund invests primarily in common stocks of small, medium and large
U.S. companies that the Fund's advisor believes are undervalued. Under normal
circumstances the Fund may invest up to 50% of its assets in smaller companies
(those with market capitalizations under $1 billion). Undervalued stocks are
typically viewed as out-of-favor and have a share price that, in the advisor's
opinion, does not reflect the intrinsic value of the company.
In valuing a company, the advisor takes a long term approach, with an
emphasis on management strength and the fundamental profitability of the
company's business. To assess management strength, the advisor looks for
characteristics such as a long term record of success or positive opinions from
industry observers. The advisor seeks companies whose businesses possess, in
the advisor's opinion, inherent strength based on factors such as superior
production or distribution processes, unique products or quality franchises.
The Fund may also purchase a company's stock if the advisor's assessment of the
private market value of the company (i.e., the price which knowledgeable buyers
and sellers would exchange a comparable business) exceeds, by a material
amount, the price of the security. The advisor`s assessment of private market
value is based on reported similar transactions, information in industry
publications or from individuals within the industry, or other sources of
information.
The advisor believes its price driven, value-oriented approach will provide
investors with the opportunity for growth, while providing some protection
against adverse events. The advisor seeks to reduce risk by buying stocks the
advisor believes are reasonably priced relative to the company's earnings and
sales, by diversifying broadly and by avoiding current market favorites.
The advisor's decision to purchase a stock (and the size of the position
taken) is made without regard to the market capitalization of the company or its
weighting in any market index. As a result, the Fund may have a significant
portion of the protfolio invested in smaller companies (those with market
capitalizations under $2 billion).
The Fund may sell a security when the advisor believes the price is no
longer undervalued relative to the company's earnings and sales, the company's
prospects have deteriorated, there has been a change in management, or better
investment opportunities are available.
PRINCIPAL RISKS OF INVESTING IN THE FUND
o MANAGEMENT RISK. The advisor's value-oriented approach may fail to produce
the intended results.
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 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.
IS THE FUND RIGHT FOR YOU?
The Fund may be suitable for:
o Long-term investors seeking a fund with a value investment strategy
o Investors who can tolerate the risks associated with common stock
investments
o Investors willing to accept the greater market price fluctuations of
smaller companies
GENERAL
The investment objective of the Fund may be changed without shareholder
approval.
From time to time, the Fund may take temporary defensive positions which
are inconsistent with the Fund's principal investment strategies, in attempting
to respond to adverse market, economic, political, or other conditions. For
example, the 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 the Fund invests in shares of another mutual fund, the shareholders of the
Fund generally will be subject to duplicative management fees. As a result of
engaging in these temporary measures, the Fund may not achieve its investment
objective. The Fund may also invest in such instruments at any time to maintain
liquidity or pending selection of investments in accordance with its policies.
HOW THE FUND HAS PERFORMED*
The bar chart shows changes in the Fund's returns since the Fund's
inception. The table shows how the Fund's average annual total returns compare
over time to those of a broad-based securities market index.
During the period shown, the highest return for a quarter was (__)% (Q_,
1999); and the lowest return was (__)% (Q_, 1999).
* Prior to March __, 2000, the Fund's portfolio was managed by a different
investment advisor.
AVERAGE ANNUAL TOTAL RETURNS:
ONE YEAR SINCE INCEPTION
The Fund (___)% (___)%
_____ Index (___)% (___)%
<PAGE>
FEES AND EXPENSES OF INVESTING IN THE FUND
The tables describe the fees and expenses that you may pay if you buy and hold
shares of the Fund.
SHAREHOLDER FEES (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases ...........................NONE
Maximum Deferred Sales Charge (Load)........................................NONE
Redemption Fee..............................................................NONE
Exchange Fee................................................................NONE
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)*
Management Fees............................................................1.25%
Distribution (12b-1) Fees...................................................NONE
Other Expenses ............................................................0.03%
Total Annual Fund Operating Expenses ......................................1.28%
* The Fund's Operating Expenses have been restated to reflect current fees.
EXAMPLE:
The example below is intended to help you compare the cost of investing
in the 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
------ -------- ------- --------
HOW TO BUY SHARES
The minimum initial investment in the Fund is $2,500 and minimum
subsequent investments are $100. 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 Fund.
Mail the application and check to:
U.S. Mail: Overnight:
Marathon Value Portfolio Marathon Value Portfolio
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
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 Fund's transfer agent at (800)
788-6086 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: Marathon Value Portfolio
Account Name _________________(write in shareholder name) For the
Account # ______________(write in account number) D.D.A.#488886904
You must mail a signed application to the Fund, at the above address in
order to complete your initial wire purchase. Wire orders will be accepted only
on a day on which the Fund, custodian and transfer agent are open for business.
A wire purchase will not be considered made until the wired money is received
and the purchase is accepted by the Fund. Any delays which may occur in wiring
money, including delays which may occur in processing by the banks, are not the
responsibility of the Fund or the transfer agent. There is presently no fee for
the receipt of wired funds, but the Fund may charge shareholders for this
service in the future.
ADDITIONAL INVESTMENTS
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain:
-your name -the name of your account(s)
-your account number(s) -a check made payable to Marathon Value Portfolio
Checks should be sent to the Marathon Value Portfolio at the address listed
above. A bank wire should be sent as outlined above.
AUTOMATIC INVESTMENT PLAN
You may make regular investments in the Fund with an Automatic
Investment Plan by completing the appropriate section of the account application
and attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting $100 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time.
TAX SHELTERED RETIREMENT PLANS
Since the Fund is oriented to longer-term investments, the Fund 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 Fund 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 Fund. If you are already a shareholder, the Fund can redeem
shares from any identically registered account in the Fund as reimbursement for
any loss incurred. You may be prohibited or restricted from making future
purchases in the Fund.
The Fund has authorized certain broker-dealers and other financial
institutions (including their designated intermediaries) to accept on its behalf
purchase and sell orders. The Fund is deemed to have received an order when the
authorized person or designee accepts the order, and the order is processed at
the net asset value next calculated thereafter. It is the responsibility of the
broker-dealer or other financial institution to transmit orders promptly to the
Fund's transfer agent.
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 Fund
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 the Fund at no charge
by mail. Your request should be addressed to:
Marathon Value Portfolio
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 Fund 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 Fund or the
Fund's 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 the Fund by
calling the Fund's transfer agent at (800) 788-6086. 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 Fund 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
Fund, although neither the Fund nor the transfer agent has ever experienced
difficulties in receiving and in a timely fashion responding to telephone
requests for redemptions or exchanges. If you are unable to reach the Fund by
telephone, you may request a redemption or exchange by mail.
ADDITIONAL INFORMATION - If you are not certain of the
requirements for a redemption please call the Fund's transfer agent at (800)
788-6086. 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 Fund may suspend redemptions or postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund may require you to redeem all of your shares in the 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 the 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 Fund.
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. Requests to purchase and sell shares are processed at the NAV next
calculated after we receive your order in proper form.
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.
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. The Fund typically distributes
substantially all of its net investment income in the form of dividends and
taxable capital gains to its shareholders. These distributions are automatically
reinvested in the Fund unless you request cash distributions on your application
or through a written request. The Fund expects that its distributions will
consist primarily of capital gains.
TAXES. In general, selling shares of the 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 Fund 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 FUND
Spectrum Advisory Services, Inc., 1050 Crown Pointe Parkway, Suite 950,
Atlanta, GA 30338, serves as investment advisor to the Fund. Spectrum has been
providing portfolio management services since its founding in 1991 by Marc S.
Heilweil. The advisor provides equity and fixed income portfolio management
services to a select group of individuals, pension and profit sharing plans,
trusts, estates and non-profit organizations and, as of January 1, 2000, manages
over $200 million in assets. The Fund is authorized to pay the advisor an annual
fee equal to 1.25% of its average daily net assets
Marc S. Heilweil has been primarily responsible for the day-to-day
management of the Fund's portfolio since March __, 2000. Mr. Heilweil has been
President of the advisor since 1991. His principal occupation since 1977 has
been that of an investment counselor. Mr. Heilweil manages equity and fixed
income portfolios for the advisor's clients.
The advisor pays all of the operating expenses of the Fund except
brokerage, taxes, borrowing costs (such as interest and dividend expense of
securities sold short), interest, fees and expenses of non-interested person
trustees and extraordinary expenses and expenses incurred pursuant to Rule 12b-1
under the Investment Company Act of 1940. In this regard, it should be noted
that most investment companies pay their own operating expenses directly, while
the Fund's expenses, except those specified above, are paid by the advisor. 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.
FINANCIAL HIGHLIGHTS
The following condensed supplementary financial information for the
period March 12, 1998 (commencement of operations) to October 31, 1998, and for
the fiscal year ended October 31, 1999 is derived from the audited financial
statements of the Fund. The financial statements of the Fund have been audited
by McCurdy & Associates CPA's, Inc., independent public accountants, and are
included in the Fund's Annual Report. The Annual Report contains additional
performance information and is available upon request and without charge.
<TABLE>
<S> <C> <C>
YEAR PERIOD
ENDED ENDED
OCTOBER 31, OCTOBER 31,
1999 1998 (A)
------------------ ------------------------
SELECTED PER SHARE DATA
Net asset value, beginning of period $8.48 $10.00
------------------ ------------------------
Income from investment operations
Net investment income (0.01) 0.02
Net realized and unrealized gain (loss) 0.78 (1.54)
------------------ ------------------------
Total from investment operations 0.77 (1.52)
------------------ ------------------------
Less Distributions
From net investment income (0.02) -
------------------ ------------------------
Net asset value, end of period $9.23 $8.48
================== ========================
TOTAL RETURN (b) 9.04% (15.20)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000) $4,116 $3,259
Ratio of expenses to average net assets 1.48% 1.47% (c)
Ratio of expenses to average net assets
before reimbursement 1.51% 1.50% (c)
Ratio of net investment income (loss) to
average net assets (0.07)% 0.36% (c)
Ratio of net investment income (loss) to
average net assets before reimbursement (0.11)% 0.33% (c)
Portfolio turnover rate 140.37% 61.04% (c)
</TABLE>
(a) March 12, 1998 (commencement of operations) to October 31, 1998
(b) For periods of less than a full year, total returns are not annualized.
(c) Annualized
<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 Fund's latest
semi-annual or annual fiscal year end.
Call the Funds at 800-788-6086 to request free copies of the SAI and
the Fund's annual and semi-annual reports, to request other information about
the Fund and to make shareholder inquiries.
You may review and copy information about the Fund (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 Fund
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>
MARATHON VALUE PORTFOLIO
STATEMENT OF ADDITIONAL INFORMATION
March __, 2000
This Statement of Additional Information ("SAI") is not a prospectus.
It should be read in conjunction with the Prospectus of Marathon Value Portfolio
dated March __, 2000. This SAI incorporates by reference the Fund's Annual
Report to Shareholders for the fiscal year ended October 31, 1999 ("Annual
Report"). A free copy of the Prospectus and Annual Report can be obtained by
writing the Transfer Agent at Unified Financial Services, Inc., 431 North
Pennsylvania Street, Indianapolis, Indiana 46204, or by calling (877) 687-7859,
or by calling (800) 788-6086.
TABLE OF CONTENTS
PAGE
DESCRIPTION OF THE TRUST AND FUND..............................................2
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS................................................................3
INVESTMENT LIMITATIONS.........................................................9
THE INVESTMENT ADVISOR........................................................10
TRUSTEES AND OFFICERS.........................................................11
PORTFOLIO TRANSACTIONS AND BROKERAGE..........................................12
DETERMINATION OF SHARE PRICE..................................................13
INVESTMENT
PERFORMANCE..........................................................14
CUSTODIAN.....................................................................15
TRANSFER AGENT................................................................15
ACCOUNTANTS...................................................................15
DISTRIBUTOR...................................................................15
ADMINISTRATOR.................................................................15
FINANCIAL STATEMENTS..........................................................16
5936 11/4/99 2:51 PM
<PAGE>
DESCRIPTION OF THE TRUST AND FUND
Marathon Value Portfolio (the "Fund") was organized as a series of
AmeriPrime Funds (the "Trust") on December 29, 1997. The Trust is an open-end
investment company established under the laws of Ohio by an Agreement and
Declaration of Trust dated August 8, 1995 (the "Trust Agreement"). The Trust
Agreement permits the Trustees to issue an unlimited number of shares of
beneficial interest of separate series without par value. The Fund is one of a
series of funds currently authorized by the Trustees.
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 be entitled 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 March 1, 2000, the following persons may be deemed to
beneficially own five percent (5%) or more of the Fund: to be supplied
As of March 1, 2000, the officers and trustees as a group own ___% 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 Share Price" in the Fund's
Prospectus and this Statement of Additional Information.
<PAGE>
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. EQUITY SECURITIES. Equity securities include common stock and common
stock equivalents (such as rights and warrants, convertible securities).
Warrants are options to purchase equity securities at a specified price valid
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. The Fund
may invest up to 5% of its net assets at the time of purchase in each of the
following: rights, warrants, or convertible securities.
The Fund may invest up to 5% of its assets in foreign equity securities
including American Depositary Receipts. Foreign investments can involve
significant risks in addition to the risks inherent in U.S. investments. The
value of securities denominated in or indexed to foreign currencies, and of
dividends and interest from such securities, can change significantly when
foreign currencies strengthen or weaken relative to the U.S. dollar. Foreign
securities markets generally have less trading volume and less liquidity than
U.S. markets, and prices on some foreign markets can be highly volatile. Many
foreign countries lack uniform accounting and disclosure standards comparable to
those applicable to U.S. companies, and it may be more difficult to obtain
reliable information regarding an issuer's financial condition and operations.
In addition, the costs of foreign investing, including withholding taxes,
brokerage commissions, and custodial costs, generally are higher than for U.S.
investments.
Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers, brokers, and securities markets may be subject to less
government supervision. Foreign security trading practices, including those
involving the release of assets in advance of payment, may invoke increased
risks in the event of a failed trade or the insolvency of a broker-dealer, and
may involve substantial delays. It also may be difficult to enforce legal rights
in foreign countries.
Investing abroad also involves different political and economic risks.
Foreign investments may be affected by actions of foreign governments adverse to
the interests of U.S. investors, including the possibility of expropriation or
nationalization of assets, confiscatory taxation, restrictions on U.S.
investment or on the ability to repatriate assets or convert currency into U.S.
dollars, or other government intervention. There may be a greater possibility of
default by foreign governments or foreign government-sponsored enterprises.
Investments in foreign countries also involve a risk of local political,
economic or social instability, military action or unrest, or adverse diplomatic
developments. There is no assurance that an Advisor will be able to anticipate
or counter these potential events and their impacts on the Fund's share price.
The considerations noted above generally are intensified for
investments in developing countries. Developing countries may have relatively
unstable governments, economies based on only a few industries, and securities
markets that trade a small number of securities.
The Fund may invest in foreign securities that impose restrictions on
transfer within the U.S. or to U.S. persons. Although securities subject to
transfer restrictions may be marketable abroad, they may be less liquid than
foreign securities of the same class that are not subject to such restrictions.
American Depositary Receipts and European Depositary Receipts ("ADRs"
and "EDRs") are certificates evidencing ownership of shares of a foreign-based
issuer held in trust by a bank or similar financial institution. Designed for
use in U.S. and European securities markets, respectively, ADRs and EDRs are
alternatives to the purchase of the underlying securities in their national
market and currencies.
B. REITS. The Fund may invest up to 15% of its assets in real estate
investment trusts ("REITs"). A 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.
Mortage REITs are those which invest in real estate mortgages and generate
income primarily from interest payments on mortgage loans. Hydrid REITs
generally invest in both real property and mortgages. In addition, REITs are
generally subject to risks associated with direct ownership of real estate, such
as decreases in real estate values or fluctuations in rental income caused by a
variety of factors, including increases in interest rates, increases in property
taxes and other operating costs, casualty or condemnation losses, possible
environmental liabilities and changes in supply and demand for properties. Risks
associated with REIT investments include the fact that equity and mortgage REITs
are dependent upon specialized management skills and are not fully diversified.
These characteristics subject REITs to the risks associated with financing a
limited number of projects. They are also subject to heavy cash flow dependency,
defaults by borrowers, and self-liquidation. Additionally, equity REITs may be
affected by any changes in the value of the underlying property owned by the
trusts, and mortgage REITs may be affected by the quality of any credit
extended.
C. INDEXED SECURITIES. The Fund may invest up to 5% of its net assets in
purchases of securities whose prices are indexed to the prices of other
securities, securities indices, or other financial indicators. Indexed
securities typically, but not always, are debt securities or deposits whose
value at maturity or coupon rate is determined by reference to a specific
instrument or statistic.
The performance of indexed securities depends to a great extent on the
performance of the security, or other instrument to which they are indexed, and
also may be influenced by interest rate changes in the U.S. and abroad. At the
same time, indexed securities are subject to the credit risks associated with
the issuer of the security, and their values may decline substantially if the
issuer's creditworthiness deteriorates. Recent issuers of indexed securities
have included banks, corporations, and certain U.S. Government agencies.
D. CONVERTIBLE SECURITIES. A convertible security is a bond, debenture,
preferred stock or other security that may be converted into or exchanged for a
prescribed amount of common stock. The Fund may invest up to 5% of its assets in
convertible securities rated B or higher by Standard & Poor's Corporation
("S&P") or by Moody's Investors Services, Inc. ("Moody's"), or if unrated,
determined by the Advisor to be of comparable quality. Generally, investments in
securities in the lower rating categories provide higher yields but involve
greater volatility of price and risk of loss of principal and interest than
investments in securities with higher ratings. Securities rated lower than Baa
by Moody's or BBB by S&P are considered speculative. In addition, lower ratings
reflect a greater possibility of an adverse change in the financial conditions
affecting the ability of the issuer to make payments of principal and interest.
The market price of lower rated securities generally responds to short term
corporate and market developments to a greater extent than higher rated
securities which react primarily to fluctuations in the general level of
interest rates. Lower rated securities will also be affected by the market's
perception of their credit quality and the outlook for economic growth.
In the past, economic downturns or an increase in interest rates have
under certain circumstances caused a higher incidence of default by the issuers
of these securities and may do so in the future, especially in the case of
highly leverages issuers.
The prices for these securities may be affected by legislative and
regulatory developments. For example, new federal rules require that savings and
loan associations gradually reduce their holdings of high-yield securities. An
effect of such legislation may be to significantly depress the prices of
outstanding lower rated securities. The market for lower rated securities may be
less liquid than the market for higher rated securities. Furthermore, the
liquidity of lower rated securities may be affected by the market's perception
of their credit quality. Therefore, judgment may at times play a greater role in
valuing these securities than in the case of higher rated securit-ies, and it
also may be more difficult during certain adverse market conditions to sell
lower rated securities at their fair value to meet redemption requests or to
respond to changes in the market.
If the rating of a security by S&P or Moody's drops below B, the
Advisor will dispose of the security as soon as practicable (depending on market
conditions) unless the Advisor determines based on its own credit analysis that
the security provides the opportunity of meeting the Fund's objective without
presenting excessive risk. The Advisor will consider all factors which it deems
appropriate, including ratings, in making investment decisions for the Fund and
will attempt to minimize investment risk through conditions and trends. While
the Advisor may refer to ratings, it does not rely exclusively on ratings, but
makes its own independent and ongoing review of credit quality.
E. REPURCHASE AGREEMENTS. A repurchase agreement is a short term
investment in which the purchaser (i.e., the 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
the Fund engages will require full collateralization of the seller's obligation
during the entire term of the repurchase agreement. In the event of a bankruptcy
or other default of the seller, the Fund could experience both delays in
liquidating the underlying security and losses in value. However, the 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 Advisor to be creditworthy. The Fund's Advisor monitors the
creditworthiness of the banks and securities dealers with which the Fund engages
in repurchase transactions, and the Fund will not invest more than 5% of its net
assets in repurchase agreements.
F. MORTGAGE-BACKED SECURITIES. Mortgage-backed securities include
securities representing interests in a pool of mortgages. These securities,
including securities issued by FNMA, GNMA and the Federal Home Loan Mortgage
Corporation, provide investors with payments consisting of both interest and
principal as the mortgages in the underlying mortgage pools are repaid. The Fund
will only invest in pools of mortgage loans assembled for the sale to investors
by agencies or instrumentalities of the U.S. government and will limit their
investment to 15% of net assets. Unscheduled or early payments on the underlying
mortgages may shorten the securities' effective maturities.
The average life of securities representing interests in pools of
mortgage loans is likely to be substantially less than the original maturity of
the mortgage pools as a result of prepayments or foreclosures of such mortgages.
Prepayments are passed through to the registered holder with the regular monthly
payments of principal and interest, and have the effect of reducing future
payments. To the extent the mortgages underlying a security representing an
interest in a pool of mortgages are prepaid, the Fund may experience a loss (if
the price at which the respective security was acquired by the Fund was at a
premium over par, which represents the price at which the security will be
redeemed upon prepayment). In addition, prepayments of such securities held by
the Fund will reduce the share price of each Fund to the extent the market value
of the securities at the time of prepayment exceeds their par value.
Furthermore, the prices of mortgage-backed securities can be significantly
affected by changes in interest rates. Prepayments may occur with greater
frequency in periods of declining mortgage rates because, among other reasons,
it may be possible for mortgagors to refinance their outstanding mortgages at
lower interest rates. In such periods, it is likely that any prepayment proceeds
would be reinvested by the Fund at lower rates of return.
G. WHEN ISSUED SECURITIES AND FORWARD COMMITMENTS. The Fund may buy and
sell securities on a when-issued or delayed delivery basis, with payment and
delivery taking place at a future date. The price and interest rate that will be
received on the securities are each fixed at the time the buyer enters into the
commitment. The Fund may enter into such forward commitments if the Fund holds,
and maintains until the settlement date in a separate account at the Fund's
Custodian, cash or U.S. government securities in an amount sufficient to meet
the purchase price. The Fund will not invest more than 5% of its total assets in
forward commitments. Forward commitments involve a risk of loss if the value of
the security to be purchased declines prior to the settlement date. Any change
in value could increase fluctuations in the Fund's share price and yield.
Although the Fund will generally enter into forward commitments with the
intention of acquiring securities for its portfolio, the Fund may dispose of a
commitment prior to the settlement if the Advisor deems it appropriate to do so.
H. 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 the 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. The
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, the Fund may be
required to liquidate other portfolio 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, the 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. The Fund will not invest more than 5% of its net assets in STRIPS.
I. ILLIQUID SECURITIES. The portfolio of the Fund may contain illiquid
securities. Illiquid securities generally include securities which cannot be
disposed of promptly and in the ordinary course of business without taking a
reduced price. Securities may be illiquid due to contractual or legal
restrictions on resale or lack of a ready market. The following securities are
considered to be illiquid: repurchase agreements maturing in more than seven
days, nonpublicly offered securities and restricted securities. Restricted
securities are securities the resale of which is subject to legal or contractual
restrictions. Restricted securities may be sold only in privately negotiated
transactions, in a public offering with respect to which a registration
statement is in effect under the Securities Act of 1933 or pursuant to Rule 144
or Rule 144A promulgated under such Act. Where registration is required, the
Fund may be obligated to pay all or part of the registration expense, and a
considerable period may elapse between the time of the decision to sell and the
time such security may be sold under an effective registration statement. If
during such a period adverse market conditions were to develop, the Fund might
obtain a less favorable price than the price it could have obtained when it
decided to sell. The Fund will not invest more than 5% of its net assets in
illiquid securities.
J. OPTION TRANSACTIONS. The Fund may write covered call options. 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 indices. 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. Options on securities which the Fund sells (writes)
will be covered or secured, which means that it will own the underlying security
(for a call option); will segregate with the Custodian high quality liquid debt
obligations equal to the option exercise price (for a put option); or (for an
option on a stock index) will hold a portfolio of securities substantially
replicating the movement of the index (or, to the extent it does not hold such a
portfolio, will maintain a segregated account with the Custodian of high quality
liquid debt obligations equal to the market value of the option, marked to
market daily). When the Fund writes options, it may be required to maintain a
margin account, to pledge the underlying securities or U.S. government
obligations or to deposit liquid high quality debt obligations in a separate
account with the Custodian. The Fund may also buy and write put options on
securities and securities indexes provided the Fund's investment (including
premiums and potential settlement obligations) does not exceed 5% of its net
assets.
The purchase and writing of options involves certain risks; for
example, the possible inability to effect closing transactions at favorable
prices and an appreciation limit on the securities set aside for settlement, as
well as (in the case of options on a stock index) exposure to an indeterminate
liability. The purchase of options limits the Fund's potential loss to the
amount of the premium paid and can afford the 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 the Fund losing a greater percentage of
its investment than if the transaction were effected directly. When the Fund
writes a covered call option, it will receive a premium, but it will give up the
opportunity to profit from a price increase in the underlying security above the
exercise price as long as its obligation as a writer continues, and it will
retain the risk of loss should the price of the security decline. When the Fund
writes a covered put option, it will receive a premium, but it will assume the
risk of loss should the price of the underlying security fall below the exercise
price. When the Fund writes a covered put option on a stock index, it will
assume the risk that the price of the index will fall below the exercise price,
in which case the Fund may be required to enter into a closing transaction at a
loss. An analogous risk would apply if the Fund writes a call option on a stock
index and the price of the index rises above the exercise price.
K. LOANS OF PORTFOLIO SECURITIES. The Fund may make short and long term
loans of its portfolio securities. Under the lending policy authorized by the
Board of Trustees and implemented by the Advisor in response to requests of
broker-dealers or institutional investors which the Advisor deems qualified, the
borrower must agree to maintain collateral, in the form of cash or U.S.
government obligations, with the Fund on a daily mark-to-market basis in an
amount at least equal to 100% of the value of the loaned securities. The Fund
will continue to receive dividends or interest on the loaned securities and may
terminate such loans at any time or reacquire such securities in time to vote on
any matter which the Board of Trustees determines to be important. With respect
to loans of securities, there is the risk that the borrower may fail to return
the loaned securities or that the borrower may not be able to provide additional
collateral.
L. SHORT SALES. The Fund may sell a security short in anticipation of a
decline in the market value of the security. When the Fund engages in a short
sale, it sells a security which it does not own. To complete the transaction,
the Fund must borrow the security in order to deliver it to the buyer. The Fund
must replace the borrowed security by purchasing it at the market price at the
time of replacement, which may be more or less than the price at which the Fund
sold the security. The Fund will incur a loss as a result of the short sale if
the price of the security increases between the date of the short sale and the
date on which the Fund replaces the borrowed security. The Fund will realize a
profit if the security declines in price between those dates.
In connection with its short sales, the Fund will be required to
maintain a segregated account with the Custodian of cash or high grade liquid
assets equal to the market value of the securities sold less any collateral
deposited with its broker. The 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. However, the segregated account and deposits will not
necessarily limit the Fund's potential loss on a short sale, which is unlimited.
The Fund's policy with respect to short sales is Non-Fundamental (see Investment
Limitations below), and may be changed by the Board of Trustees without the vote
of the Fund's shareholders.
<PAGE>
INVESTMENT LIMITATIONS
FUNDAMENTAL. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), I.E., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
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 Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. SENIOR SECURITIES. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is 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 Fund will not act as underwriter of securities issued
by other persons. This limitation is not applicable to the extent that, in
connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. REAL ESTATE. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. COMMODITIES. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. LOANS. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. CONCENTRATION. The Fund will not invest 25% or more of its total assets
in a particular industry. This limitation is not applicable to investments in
obligations issued or guaranteed by the U.S. government, its agencies and
instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
NON-FUNDAMENTAL. The following limitations have been adopted by the
Trust with respect to the Fund and are Non-Fundamental (see "Investment
Restrictions" above).
i. PLEDGING. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
ii. BORROWING. The Fund will not purchase any security while borrowings
(including reverse repurchase agreements) representing more than 5% of its total
assets are outstanding. The Fund will not enter into reverse repurchase
agreements.
iii. MARGIN PURCHASES. The Fund will not purchase securities or
evidences of interest thereon on "margin." This limitation is not applicable to
short term credit obtained by the Fund for the clearance of purchases and sales
or redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
iv. REPURCHASE AGREEMENTS. The Fund will not invest more than 5% of its net
assets in repurchase agreements.
v. ILLIQUID INVESTMENTS. The Fund will not invest more than 5% of its net
assets in securities for which there are legal or contractual restrictions on
resale and other illiquid securities.
THE INVESTMENT ADVISOR
The Fund's investment adviser is Spectrum Advisory Services, Inc., 1050
Crown Pointe Parkway, Suite 950, Atlanta, GA 30338. Marc Stephen Heilweil,
President of the Advisor is the controlling shareholder of the Advisor.
Under the terms of the management agreement (the "Agreement"), the
Advisor manages the Fund's investments subject to approval of the Board of
Trustees and pays all of the expenses of the Fund except brokerage, taxes,
interest, fees and expenses of the non-interested person trustees and
extraordinary expenses. As compensation for its management services and
agreement to pay the Fund's expenses, the Fund is obligated to pay the Advisor a
fee computed and accrued daily and paid monthly at an annual rate of 1.25% of
the average daily net assets of the Fund. The Advisor may waive all or part of
its fee, at any time, and at its sole discretion, but such action shall not
obligate the Advisor to waive any fees in the future. Prior to March __, 2000
Burroughs & Hutchinson, 702 W. Idaho Street, Suite 810, Boise, Idaho 83702 was
the Fund's investment advisor. For the period March 12,1998 (commencement of
operations) through October 31, 1998 and for the fiscal year ended October 31,
1999, the Fund paid advisory fees to Burroughs & Hutchinson of $25,666 and
$______, respectively.
The Advisor retains the right to use the name ["Spectrum"] in
connection with another investment company or business enterprise with which the
Advisor is or may become associated. The Trust's right to use the name
["Spectrum"] automatically ceases ninety days after termination of the Agreement
and may be withdrawn by the Advisor on ninety days written notice.
The Advisor may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. 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.
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, a 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 President, Treasurer , and Secretary
1793 Kingswood Drive and Trustee of AmeriPrime Financial Services, Inc. the Fund's
Suite 200 administrator, and AmeriPrime Financial Securities, Inc.,
Southlake, TX 76092 the Fund's distributor, since 1994; President and Trustee of
AmeriPrime Advisors Trust and AmeriPrime Insurance
Year of Birth: 1958 Trust; Prior to December, 1994, a senior client executive
with SEI Financial Services.
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Steve L. Cobb Trustee President of Chandler Engineering Company, L.L.C.,
2001 N. Indianwood Avenue oil and gas services company; various positions with
Broken Arrow, OK 74012 Carbo Ceramics, Inc., oil field manufacturing/ supply
company, from 1984 to 1997, most recently Vice President
Year of Birth: 1657 of Marketing
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Gary E. Hippenstiel Trustee Director, Vice President and Chief Investment Officer
600 Jefferson Street of Legacy Trust Company since 1992; President
Suite 350 and Director of Heritage Trust Company from 1994-1996.
Houston, TX 77002
Year of Birth: 1947
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The compensation paid to the Trustees of the Trust for the Fund's
fiscal year ended October 31, 1999 is set forth in the following table. Trustee
fees are Trust expenses and each series of the Trust is responsible for a
portion of the Trustee fees.
<TABLE>
<S> <C> <C>
============================== ============================== ==========================================
AGGREGATE COMPENSATION TOTAL COMPENSATION FROM TRUST
NAME FROM TRUST (THE TRUST IS NOT IN A FUND COMPLEX)
- ------------------------------ ------------------------------ ------------------------------------------
Kenneth D. Trumpfheller 0 0
- ------------------------------ ------------------------------ ------------------------------------------
Steve L. Cobb $____ $____
- ------------------------------ ------------------------------ ------------------------------------------
Gary E. Hippenstiel $____ $____
============================== ============================== ==========================================
</TABLE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Advisor is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In placing portfolio transactions, the
Advisor seeks the best qualitative execution for the Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Advisor generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received. 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 adviser may give consideration to sales of shares of the Trust as a
factor in the selection of brokers and dealers to execute portfolio
transactions.
The Advisor is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Fund and/or the other
accounts over which the Advisor exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Advisor determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Advisor's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Fund effects securities
transactions may also be used by the Advisor in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Advisor in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Advisor, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Advisor that the review and study of the research and other information will not
reduce the overall cost to the Advisor of performing its duties to the Fund
under the Agreement.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
To the extent that the Trust and another of the Advisor's clients seek
to acquire the same security at about the same time, the Trust may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Trust may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Trust. In the event that more than one client wants to purchase or sell the same
security on a given date, the purchases and sales will normally be made by
random client selection. For the period March 12, 1998 (commencement of
operations) through October 31, 1998 and for the fiscal year ended October 31,
1999, the Fund paid brokerage commissions of $26,124 and $_____, respectively.
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of the Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day, Martin
Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas. For a description of the methods
used to determine the net asset value (share price), see "Share Price
Calculation" in the Prospectus.
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 adviser'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 adviser 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 adviser, 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 adviser 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 adviser, 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
(over the one and five year periods and the period from initial public offering
through the end of the Fund's most recent fiscal year) that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue. For the period March 12,
1998 (commencement of operations) through October 31, 1999 and for the fiscal
year ended October 31, 1999, the Fund's average annual total return was ____%
and 9.04%, respectively.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the Russell Midcap Index.
In addition, the performance of the Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of the Fund. Performance rankings and ratings
reported periodically in national financial publications such as Barron's and
Fortune also may be used.
CUSTODIAN
Firstar, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is Custodian
of the Fund's investments. The Custodian acts as the Fund's depository,
safekeeps its portfolio securities, collects all income and other payments with
respect thereto, disburses funds at the Fund's request and maintains records in
connection with its duties.
TRANSFER AGENT
Unified Fund Services, Inc. ("Unified"), 431 North Pennsylvania Street,
Indianapolis, Indiana 46204, acts as the Fund's transfer agent and, in such
capacity, maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution disbursing
agent and performs other transfer agent 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 Fund with fund accounting services, which include
certain monthly reports, record-keeping and other management-related services.
For its services as fund accountant, Unified receives an annual fee from the
Advisor equal to 0.0275% of the Fund's assets up to $100 million, 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). For the fiscal year
ended October 31, 1999, Unified received $____, from the Advisor (not the Fund)
for these services.
ACCOUNTANTS
The firm of McCurdy & Associates CPA's, Inc., 27955 Clemens Road,
Westlake, Ohio 44145, has been selected as independent public accountants for
the Fund for the fiscal year ending October 31, 2000. McCurdy & Associates
performs an annual audit of the Fund's financial statements and provides
financial, tax and accounting consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the exclusive agent for distribution of shares of the
Fund. 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 Fund on a best efforts basis only against purchase orders for the shares.
Shares of the Fund are offered to the public on a continuous basis.
ADMINISTRATOR
The Fund retains AmeriPrime Financial Services, Inc., 1793 Kingswood
Drive, Suite 200, Southlake TX 76092, (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 the Fund's assets under $50 million, 0.075% of the
Fund's assets from $50 million to $100 million, and 0.050% of the Fund's assets
over $100 million (subject to a minimum fee of $2,500 per month). The
Administrator, the Distributor, and Unified (the Fund's transfer agent) are
controlled by Unified Financial Services, Inc. For the period March 12, 1998
(commencement of operations) through October 31, 1998 and the fiscal year ended
October 31, 1999, the Administrator received $17,500 and $____, respectively,
from the Advisor (not the Fund) for these services.
<PAGE>
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 Fund's Annual Report to Shareholders for the period ended
October 31, 1999. The Trust will provide the Annual Report without charge by
calling the Fund at 1-800-788-6086.
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.,
Adviser to Carl Domino Equity Income Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 11, is hereby incorporated by
reference.
(ii) Copy of Registrant's Management Agreement with Jenswold, King & Associates,
Adviser to Fountainhead Special Value Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 8, is hereby incorporated by
reference.
(iii) Copy of Registrant's Management Agreement with GLOBALT, Inc., Adviser to
GLOBALT Growth Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 11, is hereby incorporated by reference.
(iv) Copy of Registrant's Management Agreement with IMS Capital Management,
Inc., Adviser to the IMS Capital Value Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 2, is hereby incorporated by
reference.
(v) Copy of Registrant's Management Agreement with Commonwealth Advisors, Inc.,
Adviser to Florida Street Bond Fund and Florida Street Growth Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 8, is hereby
incorporated by reference.
(vi) Copy of Registrant's Management Agreement with Corbin & Company, Adviser to
Corbin Small-Cap Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 8, is hereby incorporated by reference.
(vii) Copy of Registrant's Proposed Management Agreement with Spectrum Advisory
Services, Inc., Advisor to the Marathon Value Portfolio, is filed herewith.
(viii) Copy of Registrant's Management Agreement with The Jumper Group, Inc.,
Adviser to the Jumper Strategic Advantage Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 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 proposed Management Agreement with Paul B. Martin, Jr.
d/b/a Martin Capital Advisors, Advisor to the Texas Opportunity Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 17, is hereby
incorporated by reference.
(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 Cornerstone Investment
Management, Advisor to the Cornerstone MVP Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 29, is hereby incorporated by
reference.
(xv) 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.
(xvi) 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.
(xvii) 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.
(xviii) 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.
(xix) Copy of Registrant's Management Agreement with Cornerstone Capital
Management, Inc., Advisor to the Shepherd Values Market Neutral Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 27, is hereby
incorporated by reference.
(xx) Copy of Registrant's Management Agreement with Cornerstone Capital
Management, Inc., Advisor to the Shepherd Values Growth Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 27, is hereby
incorporated by reference.
(xxi) 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.
(xxii) Registrant's Management Agreement with Cash Management Systems , Inc.
("CMS"), Adviser to The Cash Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 31, is hereby incorporated by reference.
(xxiii) Copy of Sub-Advisory Agreement between Cash Management Systems, Inc. and
Milestone Capital Management, L.P., Sub-Advisor to The Cash Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 30, is hereby
incorporated by reference.
(xxiv) 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.
(xxv) 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.
(xxvi) 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.
(xxvii) 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.
(xxviii) 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.
(xxix) 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.
(xxx) 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.
(xxxi) 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.
(xxxii) 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.
(xxxiii) 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.
(xxxiv) Copy of Registrant's Management Agreement with Aegis Asset Management,
Inc., Advisor to 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.
(xxxv) 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.
(xxxvi) 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.
(xxxvii) Copy of Registrant's Management Agreement with Jenswold, King &
Associates, Adviser to the Fountainhead Kaleidoscope Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 38, is hereby incorporated
by reference.
(xxxviii) Copy of Registrant's Proposed Management Agreement with Ariston
Capital Management Corporation, Adviser to the Ariston Internet Convertible
Fund, is filed herewith.
(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. 40, is hereby incorporated by reference.
(iii) Copy of Registrant's Agreement with UMB Bank, N.A., Custodian to the
Dobson Covered Call Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 28, is hereby incorporated by reference.
(h) Other Material Contracts. Copy of Registrant's Agreement with the
Administrator, AmeriPrime Financial Services, Inc., which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby incorporated
by reference.
(i) Legal Opinion.
(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 and 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 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 is filed herewith.
(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 is filed
herewith.
(o) Reserved.
(p) Codes of Ethics.
(i) Copy of Registrant's Code of Ethics, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 40, is hereby incorporated by
reference.
(ii) Copy of Registrant's Code of Ethics Type J, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 40, is hereby incorporated by
reference.
(iii) Copy of Registrant's Code of Ethics Type D, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 40, is hereby incorporated by
reference.
(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 Treasurer and 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.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE REGISTRANT
- -------- ------------------------------------------------------------------
(AS OF FEBRUARY 29, 2000)
- -------------------------
(a) Carl Domino may be deemed to control the Carl Domino Equity Income Fund as
a result of his beneficial ownership of the Fund (26.46%). Each of Carl
Domino and Carl Domino Associates, L.P., may be deemed to control the
Domino Global Equity Income Fund as a result of their respective beneficial
ownership of the Fund (62.1% and 37.9% respectively). Carl Domino may be
deemed to control the Domino Growth Fund as a result of his beneficial
ownership of the Fund (66.36%). Carl Domino controls Carl Domino
Associates, L. P. (a Florida limited partnership) because he controls the
general partner. As a result, Carl Domino Associates, L.P., the Domino
Equity Income Fund, the Domino Growth Fund and the Domino Global Equity
Income Fund may be deemed to be under the common control of Carl Domino.
(b) Charles L. Dobson, may be deemed to control the Dobson Covered Call Fund as
a result of his beneficial ownership of the Fund (58.54%). 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.
(c) J. Jeffrey Auxier may be deemed to control the Auxier Focus Fund as a
result of his beneficial ownership of the Fund (57.92%). 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.
(d) Roger E. King may be deemed to control the Fountainhead Kaleidoscope Fund
as a result of his beneficial ownership of the Fund (47.28%). 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
(a) Article VI of the Registrant's Declaration of Trust provides for
indemnification of officers and Trustees as follows:
SECTION 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. Subject to and
except as otherwise provided in the Securities Act of 1933, as amended, and the
1940 Act, the Trust shall indemnify each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise (hereinafter referred to as a "Covered Person") against
all liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, director or trustee, and except that no Covered
Person shall be indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
SECTION 6.5 ADVANCES OF EXPENSES. The Trust shall advance attorneys'
fees or other expenses incurred by a Covered Person in defending a proceeding to
the full extent permitted by the Securities Act of 1933, as amended, the 1940
Act, and Ohio Revised Code Chapter 1707, as amended. In the event any of these
laws conflict with Ohio Revised Code Section 1701.13(E), as amended, these laws,
and not Ohio Revised Code Section 1701.13(E), shall govern.
SECTION 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
The Registrant may not pay for insurance which protects the Trustees
and officers against liabilities rising from action involving willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of their offices.
(b) The Registrant may maintain a standard mutual fund and investment advisory
professional and directors and officers liability policy. The policy, if
maintained, would provide coverage to the Registrant, its Trustees and officers,
and could cover its Advisers, among others. Coverage under the policy would
include losses by reason of any act, error, omission, misstatement, misleading
statement, neglect or breach of duty.
(c) 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 ADVISER
A. Carl Domino Associates, L.P., 580 Village Boulevard, Suite 225, West Palm
Beach, Florida 33409, ("CDA"), adviser to the Carl Domino Equity Income Fund,
the Carl Domino Growth Fund and the Carl Domino International Global Equity
Income Fund, is a registered investment adviser.
(1) CDA has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
partners and officers of CDA during the past two years.
(a) Lawrence Katz, a partner in CDA, is an orthopedic surgeon in private
practice.
(b) Saltzman Partners, a partner in CDA, is a limited partnership that invests
in companies and businesses.
(c) Cango Inversiones, SA, a partner in CDA, is a foreign business entity that
invests in U.S. companies and businesses.
B. King Investment Advisors Inc., 1980 Post Oak Boulevard, Suite 2400, Houston,
Texas 77056-3898 ("King King"), adviser to the Fountainhead Special Value Fund
and the Fountainhead Kaleidoscope Fund, is a registered investment adviser.
(1) King has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of King during the past two years.
(a) John Servis, a director of JKA King, is a licensed real estate broker.
C. GLOBALT, Inc., 3060 Peachtree Road, N.W., One Buckhead Plaza, Suite 225,
Atlanta, Georgia 30305 ("GLOBALT"), adviser to GLOBALT Growth Fund, is a
registered investment adviser.
(1) GLOBALT has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
officers and directors of GLOBALT during the past two years.
(a) Gregory S. Paulette, an officer of GLOBALT, is the president of GLOBALT
Capital Management, a division of GLOBALT.
D. IMS Capital Management, Inc., 10159 S.E. Sunnyside Road, Suite 330, Portland,
Oregon 97015, ("IMS"), Adviser to the IMS Capital Value Fund, is a registered
investment adviser.
(1) IMS has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of IMS during the past two years - None.
E. CommonWealth Advisors, Inc., 929 Government Street, Baton Rouge, Louisiana
70802, ("CommonWealth"), Adviser to the Florida Street Bond Fund and the Florida
Street Growth Fund, is a registered investment adviser.
(1) CommonWealth has engaged in no other business during the past two fiscal
years.
(2) The following list sets forth other substantial business activities of the
directors and officers of CommonWealth during the past two years.
(a) Walter A. Morales, President/Chief Investment Officer of CommonWealth was
the Director of an insurance/broadcasting corporation, Guaranty Corporation, 929
Government Street, Baton Rouge, Louisiana 70802 from August 1994 to February
1996. From September 1994 through the present, a registered representative of a
Broker/Dealer company, Securities Service Network, 2225 Peters Road, Knoxville,
Tennessee 37923. Beginning August 1995 through the present, an instructor at the
University of Southwestern Louisiana in Lafayette, Louisiana.
F. Corbin & Company, 1320 S. University Drive, Suite 406, Fort Worth, Texas
76107, ("Corbin"), Adviser to the Corbin Small-Cap Value Fund, is a registered
investment adviser.
(1) Corbin has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of Corbin during the past two years - None.
Spectrum Advisory Services, Inc. ("Spectrum"), 1050 Crown Pointe Parkway, Suite
950, Atlanta, Georgia 30338, Adviser to the Marathon Value Portfolio, is a
registered investment adviser.
Spectrum has engaged in no other business during the past two fiscal years.
The following list sets forth other substantial business activities of the
directors and officers of Spectrum during the past two(2) years - None.
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.
F(2) The following list set forth other substantial business activities of the
directors and officers of Jumper during the past two years - None.
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) The following list sets forth other substantial business activities of the
directors and officers of AAM during the past two years - None.
J. Martin Capital Advisors, L.L.P. ("Martin"), 816 Congress Ave., 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) The following list sets forth other substantial business activities of the
directors and officers of GJMB during the past two years - None.
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) The following list sets forth other substantial business activities of the
directors and officers of GJMB during the past two years - None.
L. Cornerstone Investment Management, L.L.C. 132 West Main Street, Aspen,
Colorado 81611 ("Cornerstone"), Advisor to the Cornerstone MVP Fund, is a
registered investment advisor.
(1) Cornerstone has engaged in no other business during the past two fiscal
years.
(2) The following list sets forth other substantial business activities of the
directors and officers of Cornerstone during the past two years:
Christopher Shawn Ryan, managing member of Cornerstone, was Vice
President-Portfolio Manager at NationsBank in Dallas, Texas from January 1994 to
October 1997.
M. Dobson Capital Management, Inc., 1422 Van Ness Street., Santa Ana, CA 92707
("Dobson"), Advisor to the Dobson Covered Call Fund, is a registered investment
advisor.
(1) Dobson has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of Dobson during the past two years: Charles L. Dobson,
President of Dobson, was the Director of Trading with Analytic/TSA Global Asset
Management, 700 S. Flower Street, Suite 2400, Los Angeles CA, from 1996 to 1998.
N. 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) The following list sets forth other substantial business activities of the
directors and officers of Auxier during the past two years: Jeffrey Auxier,
Managing Member of Auxier, was a Senior Portfolio Management Director with Smith
Barney, Inc. until 1998.
O. Cornerstone Capital Management, Inc., 6760 Corporate Drive, Suite 230,
Colorado Springs, CO 80919 ("CCM"), Adviser to the Shepherd Value Market Fund
and the Shepherd Value Growth Fund, is a registered investment advisor.
(1) CCM has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of CCM during the past two years:
a) Darrel Uselton, Director of CCM, is the Chairman of The National Capital
Companies, an investment banking firm.
b) Joseph Cerbone, Director of CCM, is the President of The National Capital
Companies, an investment banking firm.
c) Jason D. Huntley, Director of CCM, was Director of Institutional Services
with First Affirmative/Walnut Street Advisers, Colorado Springs, CO, an
investment advisory firm, from 1996 to 1997.
d) Colleen Helm, Director of CCM, was a portfolio manager with Angell Financial,
an investment adviser, from January 1998 to November 1999. Prior to that, she
was a portfolio manager with Pinnacle Financial Advisory Group, an investment
adviser.
e) Donald Ellsworth, Director of CCM, was the President of Ellsworth Advisory
Group, Inc., an investment counseling firm, from June 1987 until June 1999.
P. Columbia Partners, L.L.C., Investment Management, 1775 Pennsylvania Avenue,
N.W., Washington, DC 20006 ("Columbia"), Advisor to the Columbia Partners Equity
Fund, is a registered investment advisor.
(1) Columbia has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of Columbia during the past two years:
Rhys H. Williams, a principal of Columbia, has been a portfolio manager at
Columbia since late 1997. Prior to that time, Mr. Williams was the Senior Vice
President at Prudential Securities in Philadelphia, PA since 1987.
Q. Legacy Investment Group, LLC, d/b/a Cash Management Systems, 290 Turnpike
Road, #338, Westborogh, 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. The following list sets forth other substantial business activities of the
directors and officers of CMS during the past two years:
David W. Reavill, Member of CMS, was a Vice President with Fixed Income Discount
Advisory Corp., Shrewsbury, MA, a money market firm, from 1997 to 1998 and a
Vice President of Reich & Tang, LLC, Westlake Village, CA, a money market firm,
from 1996 to 1997.
R. 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. The following list sets forth other substantial business activities of the
directors and officers of Ariston during the past two years: None.
S. Leader Capital Corp., 121 S.W. Morrison St., Ste. 450, Portland, OR 97204
("Leader"), Adviser 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. The following list sets forth other substantial business activities of the
directors and officers of Leader during the past two years:
(a) John Lekas, President of Leader, was a registered representative with Smith
Barney from July 1993 to November 1997.
(b) Jason McMillen, Vice President of Leader, was a research assistant with
Smith Barney from December 1996 to December 1997.
(c) Carey Guenther, Secretary of Leader, was a customer account representative
with Columbia Funds from July 1997 to January, 1998.
T. Aegis Asset Management, Inc. ("Aegis"), 230 Westcott, Suite 1, Houston, Texas
77007, Adviser to Westcott Nothing But Net Fund, Westcott Large-Cap Fund and
Westcott Fixed Income Fund, is a registered investment adviser.
1. Aegis has engaged in no other business during the past two fiscal years.
2. The following list sets forth other substantial business activities of the
directors and officers of Aegis during the past two years:
(a) Thomas Layng Guerriero, President of Aegis, has been the President of
Westcott Securities, L.L.C., a broker/dealer, from April 1998 to the present.
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,
the Kenwood Funds, the Rockland Funds Trust 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, Bank of New York, 1 Wall
Street, New York, NY 10286, and UMB Bank, N.A., Securities Administration Dept.,
928 Grand Blvd., 10th Floor, Kansas City, MO 64106, and/or transfer and
shareholder service agents, American Data Services, Inc., Hauppauge Corporate
Center, 150 Motor Parkway, Hauppauge, New York 11760 and Unified Fund Services,
Inc., 431 Pennsylvania Street, Indianapolis, IN 46204.
ITEM 29. MANAGEMENT SERVICES NOT DISCUSSED IN PARTS A OR B
- -------- -------------------------------------------------
None.
ITEM 30. UNDERTAKINGS
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, duly authorized, in the
City of Cincinnati, State of Ohio, on the 10th day of March, 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, Treasurer and Trustee
*By: _____/s/_____________________________
Donald S. Mendelsohn,
Gary E. Hippensteil,* Trustee Attorney-in-Fact
Steve L. Cobb,* Trustee March 10, 2000
<PAGE>
EXHIBIT INDEX
1. Proposed Management Agreement for Marathon Value Portfolio.....EX-99.23.d.1
2. Proposed Management Agreement for Ariston Internet Convertible Fund........
....................................................................EX-99.23.d.2
3. Opinion and Consent of Counsel...................................EX-99.23.i
4. Consent of Auditors..............................................EX-99.23.j
5. Rule 12b-1 Distribution Plan ....................................EX-99.23.m
6. Rule 18f-3 Plan..................................................EX-99.23.n
MANAGEMENT AGREEMENT
TO: Spectrum Advisory Services, Inc.
1050 Crown Pointe Parkway
Atlanta, GA 30338
Dear Sirs:
AmeriPrime Funds (the "Trust") herewith confirms our agreement with
you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers several series of shares to investors, one
of which is Marathon Value Fund (the "Fund").
You have been selected to act as the sole investment adviser of the
Fund and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows effective upon the date of the execution of this
Agreement.
1........ADVISORY SERVICES
.........You will regularly provide the Fund with such investment
advice as you in your discretion deem advisable and will furnish a continuous
investment program for the Fund consistent with the Fund's investment objectives
and policies. You will determine the securities to be purchased for the Fund,
the portfolio securities to be held or sold by the Fund and the portion of the
Fund's assets to be held uninvested, subject always to the Fund's investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect, and subject further to such policies and instructions as the
Board may from time to time establish. You will advise and assist the officers
of the Trust in taking such steps as are necessary or appropriate to carry out
the decisions of the Board and the appropriate committees of the Board regarding
the conduct of the business of the Fund.
2........ALLOCATION OF CHARGES AND EXPENSES
.........You will pay all operating expenses of the Fund, including the
compensation and expenses of any employees of the Fund and of any other persons
rendering any services to the Fund; clerical and shareholder service staff
salaries; office space and other office expenses; fees and expenses incurred by
the Fund in connection with membership in investment company organizations;
legal, auditing and accounting expenses; expenses of registering shares under
federal and state securities laws, including expenses incurred by the Fund in
connection with the organization and initial registration of shares of the Fund;
insurance expenses; fees and expenses of the custodian, transfer agent, dividend
disbursing agent, shareholder service agent, plan agent, administrator,
accounting and pricing services agent and underwriter of the Fund; expenses,
including clerical expenses, of issue, sale, redemption or repurchase of shares
of the Fund; the cost of preparing and distributing reports and notices to
shareholders, the cost of printing or preparing prospectuses and statements of
additional information for delivery to the Fund's current and prospective
shareholders; the cost of printing or preparing stock certificates or any other
documents, statements or reports to shareholders; expenses of shareholders'
meetings and proxy solicitations; advertising, promotion and other expenses
incurred directly or indirectly in connection with the sale or distribution of
the Fund's shares excluding expenses which the Fund is authorized to pay
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended
(the"1940 Act"); and all other operating expenses not specifically assumed by
the Fund.
<PAGE>
.........The Fund will pay all brokerage fees and commissions, taxes,
borrowing costs (such as divided expense on securities sold short and interest),
fees and expenses of the non-interested person trustees and such extraordinary
or non-recurring expenses as may arise, including litigation to which the Fund
may be a party and indemnification of the Trust's trustees and officers with
respect thereto. The Fund will also pay expenses which it is authorized to pay
pursuant to Rule 12b-1 under the 1940 Act ("12b-1 Expenses"). You may obtain
reimbursement from the Fund, at such time or times as you may determine in your
sole discretion, for any of the expenses advanced by you, which the Fund is
obligated to pay, and such reimbursement shall not be considered to be part of
your compensation pursuant to this Agreement.
3........COMPENSATION OF THE ADVISER
.........For all of the services to be rendered and payments to be made as
provided in this Agreement, as of the last business day of each month, the Fund
will pay you a fee at the annual rate of 1.25% of the average value of its daily
net assets
.........The average value of the daily net assets of the Fund shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of the Fund is suspended for
any particular business day, then for the purposes of this paragraph, the value
of the net assets of the Fund as last determined shall be deemed to be the value
of the net assets as of the close of the business day, or as of such other time
as the value of the Fund's net assets may lawfully be determined, on that day.
If the determination of the net asset value of the Fund has been suspended for a
period including such month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the Fund as
last determined (whether during or prior to such month).
4........EXECUTION OF PURCHASE AND SALE ORDERS
.........In connection with purchases or sales of portfolio securities
for the account of the Fund, it is understood that you will arrange for the
placing of all orders for the purchase and sale of portfolio securities for the
account with brokers or dealers selected by you, subject to review of this
selection by the Board from time to time. You will be responsible for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed at all times to seek for the Fund the best qualitative execution,
taking into account such factors as price (including the applicable brokerage
commission or dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and research
services provided by the broker or dealer.
.........You should generally seek favorable prices and commission
rates that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services to the Fund and/or the other accounts
over which you exercise investment discretion. You are authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a Fund portfolio transaction which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if you determine in good faith that the amount of the commission is
reasonable in relation to the value of the brokerage and research services
provided by the executing broker or dealer. The determination may be viewed in
terms of either a particular transaction or your overall responsibilities with
respect to the Fund and to accounts over which you exercise investment
discretion. The Fund and you understand and acknowledge that, although the
information may be useful to the Fund and you, it is not possible to place a
dollar value on such information. The Board shall periodically review the
commissions paid by the Fund to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits to
the Fund.
.........Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute Fund
portfolio transactions.
.........Subject to the provisions of the 1940 Act, and other
applicable law, you, any of your affiliates or any affiliates of your affiliates
may retain compensation in connection with effecting the Fund's portfolio
transactions, including transactions effected through others. If any occasion
should arise in which you give any advice to clients of yours concerning the
shares of the Fund, you will act solely as investment counsel for such client
and not in any way on behalf of the Fund. Your services to the Fund pursuant to
this Agreement are not to be deemed to be exclusive and it is understood that
you may render investment advice, management and other services to others,
including other registered investment companies.
5........LIMITATION OF LIABILITY OF ADVISER
.........You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the 1940 Act or
the rules thereunder, neither you nor your shareholders, members, officers,
directors, employees, agents, control persons or affiliates of any thereof shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Trust in connection with, any error of judgment, mistake of law, any act or
omission connected with or arising out of any services rendered under, or
payments made pursuant to, this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or gross
negligence on the part of any such persons in the performance of your duties
under this Agreement, or by reason of reckless disregard by any of such persons
of your obligations and duties under this Agreement.
.........Any person, even though also a director, officer, employee,
member, shareholder or agent of you, who may be or become an officer, director,
trustee, employee or agent of the Trust, shall be deemed, when rendering
services to the Trust or acting on any business of the Trust (other than
services or business in connection with your duties hereunder), to be rendering
such services to or acting solely for the Trust and not as a director, officer,
employee, member, shareholder or agent of you, or one under your control or
direction, even though paid by you.
6........DURATION AND TERMINATION OF THIS AGREEMENT
.........This Agreement shall take effect on the date of its execution,
and shall remain in force for a period of two (2) years from the date of its
execution, and from year to year thereafter, subject to annual approval by (i)
the Board or (ii) a vote of a majority of the outstanding voting securities of
the Fund, provided that in either event continuance is also approved by a
majority of the trustees who are not interested persons of you or the Trust, by
a vote cast in person at a meeting called for the purpose of voting such
approval.
.........If the shareholders of the Fund fail to approve the Agreement
in the manner set forth above, upon request of the Board, you will continue to
serve or act in such capacity for the Fund for the period of time pending
required approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to you for your services to and payments on behalf of the Fund will be
equal to the lesser of your actual costs incurred in furnishing such services
and payments or the amount you would have received under this Agreement for
furnishing such services and payments.
.........This Agreement may, on sixty days written notice, be terminated
with respect to the Fund, at any time without the payment of any penalty, by the
Board, by a vote of a majority of the outstanding voting securities of the Fund,
or by you. This Agreement shall automatically terminate in the event of its
assignment.
7........USE OF NAME
-----------
.........The Trust and you acknowledge that all rights to the name
"Spectrum" or any variation thereof belong to you, and that the Trust is being
granted a limited license to use such words in its Fund name or in any class
name. In the event you cease to be the adviser to the Fund, the Trust's right to
the use of the name "Spectrum" shall automatically cease on the ninetieth day
following the termination of this Agreement. The right to the name may also be
withdrawn by you during the term of this Agreement upon ninety (90) days'
written notice by you to the Trust. Nothing contained herein shall impair or
diminish in any respect, your right to use the name "Spectrum" in the name of,
or in connection with, any other business enterprises with which you are or may
become associated. There is no charge to the Trust for the right to use this
name.
8........AMENDMENT OF THIS AGREEMENT
.........No provision of this Agreement may be changed, waived,
discharged or terminated orally, and no amendment of this Agreement shall be
effective until approved by the Board, including a majority of the trustees who
are not interested persons of you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
interpretations of the 1940 Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the series to which the amendment relates.
9........LIMITATION OF LIABILITY TO TRUST PROPERTY
.........The term "AmeriPrime Funds" means and refers to the Trustees
from time to time serving under the Trust's Declaration of Trust as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Trust and signed by officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the State of Ohio.
10.......SEVERABILITY
.........In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
11.......QUESTIONS OF INTERPRETATION
.........(a) This Agreement shall be governed by the laws of the State of
Ohio.
.........(b) For the purpose of this Agreement, the terms "majority of
the outstanding voting securities," "control" and "interested person" shall have
their respective meanings as defined in the 1940 Act and rules and regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the 1940 Act; and the term "brokerage
and research services" shall have the meaning given in the Securities Exchange
Act of 1934.
.........(c) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretation thereof, if any, by the United
States courts or in the absence of any controlling decision of any such court,
by the Securities and Exchange Commission or its staff. In addition, where the
effect of a requirement of the 1940 Act, reflected in any provision of this
Agreement, is revised by rule, regulation, order or interpretation of the
Securities and Exchange Commission or its staff, such provision shall be deemed
to incorporate the effect of such rule, regulation, order or interpretation.
12.......NOTICES
.........Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust is
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092, and your address for
this purpose shall be 1050 Crown Pointe Parkway, Atlanta, GA 30338.
13.......COUNTERPARTS
.........This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
14.......BINDING EFFECT
.........Each of the undersigned expressly warrants and represents that
he has the full power and authority to sign this Agreement on behalf of the
party indicated, and that his signature will operate to bind the party indicated
to the foregoing terms.
15.......CAPTIONS
.........The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
.........If you are in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterpart of this letter and return
such counterpart to the Trust, whereupon this letter shall become a binding
contract upon the date thereof.
......... Yours very truly,
ATTEST: .........
......... AmeriPrime Funds
By:__________________________ By:_____________________________
Monta B. Henry Kenneth D. Trumpfheller, President
Dated:
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST:
Spectrum Advisory Services, Inc.
By:__________________________ By:______________________________________
Name/Title: Name/Title: Marc S. Heilweil, President
Dated:
MANAGEMENT AGREEMENT
TO: Ariston Capital Management Corporation
40 Lake Bellevue Drive, Suite 220
Bellevue, Washington 98005
Dear Sirs:
AmeriPrime Funds (the "Trust") herewith confirms our agreement with
you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers several series of shares to investors, one
of which is Ariston Internet Convertible Fund (the "Fund").
You have been selected to act as the sole investment adviser of the
Fund and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows effective upon the date of the execution of this
Agreement.
1. ADVISORY SERVICES
You will regularly provide the Fund with such investment
advice as you in your discretion deem advisable and will furnish a continuous
investment program for the Fund consistent with the Fund's investment objectives
and policies. You will determine the securities to be purchased for the Fund,
the portfolio securities to be held or sold by the Fund and the portion of the
Fund's assets to be held uninvested, subject always to the Fund's investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect, and subject further to such policies and instructions as the
Board may from time to time establish. You will advise and assist the officers
of the Trust in taking such steps as are necessary or appropriate to carry out
the decisions of the Board and the appropriate committees of the Board regarding
the conduct of the business of the Fund.
2. ALLOCATION OF CHARGES AND EXPENSES
You will pay all operating expenses of the Fund, including the
compensation and expenses of any employees of the Fund and of any other persons
rendering any services to the Fund; clerical and shareholder service staff
salaries; office space and other office expenses; fees and expenses incurred by
the Fund in connection with membership in investment company organizations;
legal, auditing and accounting expenses; expenses of registering shares under
federal and state securities laws, including expenses incurred by the Fund in
connection with the organization and initial registration of shares of the Fund;
insurance expenses; fees and expenses of the custodian, transfer agent, dividend
disbursing agent, shareholder service agent, plan agent, administrator,
accounting and pricing services agent and underwriter of the Fund; expenses,
including clerical expenses, of issue, sale, redemption or repurchase of shares
of the Fund; the cost of preparing and distributing reports and notices to
shareholders, the cost of printing or preparing prospectuses and statements of
additional information for delivery to the Fund's current and prospective
shareholders; the cost of printing or preparing stock certificates or any other
documents, statements or reports to shareholders; expenses of shareholders'
meetings and proxy solicitations; advertising, promotion and other expenses
incurred directly or indirectly in connection with the sale or distribution of
the Fund's shares excluding expenses which the Fund is authorized to pay
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended
(the"1940 Act"); and all other operating expenses not specifically assumed by
the Fund.
The Fund will pay all brokerage fees and commissions, taxes,
borrowing costs (such as divided expense on securities sold short and interest),
fees and expenses of the non-interested person trustees and such extraordinary
or non-recurring expenses as may arise, including litigation to which the Fund
may be a party and indemnification of the Trust's trustees and officers with
respect thereto. The Fund will also pay expenses which it is authorized to pay
pursuant to Rule 12b-1 under the 1940 Act ("12b-1 Expenses"). You may obtain
reimbursement from the Fund, at such time or times as you may determine in your
sole discretion, for any of the expenses advanced by you, which the Fund is
obligated to pay, and such reimbursement shall not be considered to be part of
your compensation pursuant to this Agreement.
3. COMPENSATION OF THE ADVISER
For all of the services to be rendered and payments to be made
as provided in this Agreement, as of the last business day of each month, the
Fund will pay you a fee at the annual rate of (a) 2.25% of the average value of
its daily net assets; minus (b) fees and expenses of the non-interested person
trustees incurred by the Fund.
The average value of the daily net assets of the Fund shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of the Fund is suspended for
any particular business day, then for the purposes of this paragraph, the value
of the net assets of the Fund as last determined shall be deemed to be the value
of the net assets as of the close of the business day, or as of such other time
as the value of the Fund's net assets may lawfully be determined, on that day.
If the determination of the net asset value of the Fund has been suspended for a
period including such month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the Fund as
last determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
In connection with purchases or sales of portfolio securities
for the account of the Fund, it is understood that you will arrange for the
placing of all orders for the purchase and sale of portfolio securities for the
account with brokers or dealers selected by you, subject to review of this
selection by the Board from time to time. You will be responsible for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed at all times to seek for the Fund the best qualitative execution,
taking into account such factors as price (including the applicable brokerage
commission or dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and research
services provided by the broker or dealer.
You should generally seek favorable prices and commission
rates that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services to the Fund and/or the other accounts
over which you exercise investment discretion. You are authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a Fund portfolio transaction which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if you determine in good faith that the amount of the commission is
reasonable in relation to the value of the brokerage and research services
provided by the executing broker or dealer. The determination may be viewed in
terms of either a particular transaction or your overall responsibilities with
respect to the Fund and to accounts over which you exercise investment
discretion. The Fund and you understand and acknowledge that, although the
information may be useful to the Fund and you, it is not possible to place a
dollar value on such information. The Board shall periodically review the
commissions paid by the Fund to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits to
the Fund.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute Fund
portfolio transactions.
Subject to the provisions of the 1940 Act, and other
applicable law, you, any of your affiliates or any affiliates of your affiliates
may retain compensation in connection with effecting the Fund's portfolio
transactions, including transactions effected through others. If any occasion
should arise in which you give any advice to clients of yours concerning the
shares of the Fund, you will act solely as investment counsel for such client
and not in any way on behalf of the Fund. Your services to the Fund pursuant to
this Agreement are not to be deemed to be exclusive and it is understood that
you may render investment advice, management and other services to others,
including other registered investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the 1940 Act or
the rules thereunder, neither you nor your shareholders, members, officers,
directors, employees, agents, control persons or affiliates of any thereof shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Trust in connection with, any error of judgment, mistake of law, any act or
omission connected with or arising out of any services rendered under, or
payments made pursuant to, this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or gross
negligence on the part of any such persons in the performance of your duties
under this Agreement, or by reason of reckless disregard by any of such persons
of your obligations and duties under this Agreement.
Any person, even though also a director, officer, employee,
member, shareholder or agent of you, who may be or become an officer, director,
trustee, employee or agent of the Trust, shall be deemed, when rendering
services to the Trust or acting on any business of the Trust (other than
services or business in connection with your duties hereunder), to be rendering
such services to or acting solely for the Trust and not as a director, officer,
employee, member, shareholder or agent of you, or one under your control or
direction, even though paid by you.
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its execution,
and shall remain in force for a period of two (2) years from the date of its
execution, and from year to year thereafter, subject to annual approval by (i)
the Board or (ii) a vote of a majority of the outstanding voting securities of
the Fund, provided that in either event continuance is also approved by a
majority of the trustees who are not interested persons of you or the Trust, by
a vote cast in person at a meeting called for the purpose of voting such
approval.
If the shareholders of the Fund fail to approve the Agreement
in the manner set forth above, upon request of the Board, you will continue to
serve or act in such capacity for the Fund for the period of time pending
required approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to you for your services to and payments on behalf of the Fund will be
equal to the lesser of your actual costs incurred in furnishing such services
and payments or the amount you would have received under this Agreement for
furnishing such services and payments.
This Agreement may, on sixty days written notice, be
terminated with respect to the Fund, at any time without the payment of any
penalty, by the Board, by a vote of a majority of the outstanding voting
securities of the Fund, or by you. This Agreement shall automatically terminate
in the event of its assignment.
7. USE OF NAME
The Trust and you acknowledge that all rights to the name
"Ariston" or any variation thereof belong to you, and that the Trust is being
granted a limited license to use such words in its Fund name or in any class
name. In the event you cease to be the adviser to the Fund, the Trust's right to
the use of the name "Ariston" shall automatically cease on the ninetieth day
following the termination of this Agreement. The right to the name may also be
withdrawn by you during the term of this Agreement upon ninety (90) days'
written notice by you to the Trust. Nothing contained herein shall impair or
diminish in any respect, your right to use the name "Ariston" in the name of, or
in connection with, any other business enterprises with which you are or may
become associated. There is no charge to the Trust for the right to use this
name.
8. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived,
discharged or terminated orally, and no amendment of this Agreement shall be
effective until approved by the Board, including a majority of the trustees who
are not interested persons of you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
interpretations of the 1940 Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the series to which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "AmeriPrime Funds" means and refers to the Trustees
from time to time serving under the Trust's Declaration of Trust as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Trust and signed by officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the State of Ohio.
10. SEVERABILITY
In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State of Ohio.
(b) For the purpose of this Agreement, the terms "majority of
the outstanding voting securities," "control" and "interested person" shall have
their respective meanings as defined in the 1940 Act and rules and regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the 1940 Act; and the term "brokerage
and research services" shall have the meaning given in the Securities Exchange
Act of 1934.
(c) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretation thereof, if any, by the United
States courts or in the absence of any controlling decision of any such court,
by the Securities and Exchange Commission or its staff. In addition, where the
effect of a requirement of the 1940 Act, reflected in any provision of this
Agreement, is revised by rule, regulation, order or interpretation of the
Securities and Exchange Commission or its staff, such provision shall be deemed
to incorporate the effect of such rule, regulation, order or interpretation.
12. NOTICES
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust is
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092, and your address for
this purpose shall be 40 Lake Bellevue Drive, Suite 220, Bellevue, Washington
98005.
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
14. BINDING EFFECT
Each of the undersigned expressly warrants and represents that
he has the full power and authority to sign this Agreement on behalf of the
party indicated, and that his signature will operate to bind the party indicated
to the foregoing terms.
15. CAPTIONS
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
If you are in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterpart of this letter and return
such counterpart to the Trust, whereupon this letter shall become a binding
contract upon the date thereof.
Yours very truly,
ATTEST:
AmeriPrime Funds
By:______________________________ By:_____________________________
Name/Title:______________________ Name/Title:
Dated:
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST:
Ariston Capital Management Corporation
By:
Name/Title:________________________________ Name/Title:___________________
Dated:
BROWN, CUMMINS & BROWN CO., L.P.A.
ATTORNEYS AND COUNSELORS AT LAW
3500 CAREW TOWER
J. W. BROWN (1911-1995) 441 VINE STREET JOANN M. STRASSER
JAMES R. CUMMINS CINCINNATI, OHIO 45202 AARON A. VANDERLAAN
ROBERT S BROWN TELEPHONE (513) 381-2121
DONALD S. MENDELSOHN TELECOPIER (513) 381-2125 OF COUNSEL
LYNNE SKILKEN GILBERT BETTMAN
AMY G. APPLEGATE
KATHRYN KNUE PRZYWARA
MELANIE S. CORWIN
March 10, 2000
VIA ELECTRONIC FILING
AmeriPrime Funds
1793 Kingswood Drive, Suite 200
Southlake, Texas 76092
RE: AMERIPRIME FUNDS, FILE NOS. 33-96826 AND 811-9096
Gentlemen:
This letter is in response to your request for our opinion in
connection with the filing of the Post-Effective Amendment No. 41 to the
Registration Statement (the "Amendment") of the AmeriPrime Funds (the "Trust".)
We have examined a copy of the Trust's Agreement and Declaration of
Trust, the Trust's By-Laws, the Trust's record of the various actions by the
Trustees thereof, and all such agreements, certificates of public officials,
certificates of officers and representatives of the Trust and others, and such
other documents, papers, statutes and authorities as we deem necessary to form
the basis of the opinion hereinafter expressed. We have assumed the genuineness
of the signatures and the conformity to original documents of the copies of such
documents supplied to us as original or photostat copies.
Based upon the foregoing, we are of the opinion that after
Post-Effective Amendment No. 40 is effective for purposes of federal and
applicable state securities laws, the shares of Ariston Internet Convertible
Fund, a series of the Trust, if issued in accordance with the then current
Prospectus and Statement of Additional Information of such Fund, will be legally
issued, fully paid and non-assessable. We herewith give you our permission to
file this opinion with the Securities and Exchange Commission as an exhibit to
the Amendment.
Legal opinions that we prepared were filed with Post-Effective
Amendment No. 9 and Post-Effective Amendment No. 29 (the "Legal Opinions") to
the Registration Statement. We hereby give you our consent to incorporate by
reference the Legal Opinions into the Amendment, and consent to all references
to us in the Amendment.
Very truly yours,
_____/s/__________________________
BROWN, CUMMINS & BROWN CO., L.P.A.
cc. Keith Gregory
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated November 21, 1999 for the Marathon Value Portfolio and to all references
to our firm included in or made a part of this Post-Effective Amendment No. 41
to AmeriPrime Fund's Registration Statement on Form N-1A (file No. 33-96826),
including the references to our firm under the heading "Financial Highlights" in
the Prospectus and heading "Accountants" in the Statement of Additional
Information.
/s/
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
March 6, 2000
Ariston Internet Convertible Fund
Distribution Plan
WHEREAS, The AmeriPrime Funds, an Ohio business trust (the "Trust"),
engages in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust is authorized to issue an unlimited number of shares
of beneficial interest without par value (the "Shares"), which may be divided
into one or more series of Shares ("Series"); and
WHEREAS, the Trust currently offers several Series, one of which is the
Ariston Internet Convertible Fund (the "Fund"); and
WHEREAS, the Trustees of the Trust as a whole, and the Trustees who are
not interested persons of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement relating hereto (the "Qualified Trustees"), having determined, in the
exercise of reasonable business judgment and in light of their fiduciary duties
under state law and under Section 36(a) and (b) of the 1940 Act, that there is a
reasonable likelihood that this Plan will benefit the Fund and its shareholders,
have approved this Plan by votes cast in person at a meeting called for the
purpose of voting hereon and on any agreements related hereto;
NOW THEREFORE, the Trust hereby adopts this Plan for the Premier shares
of the Fund (the "Premier Shares"), subject to shareholder approval, in
accordance with Rule 12b-1 under the 1940 Act, on the following terms and
conditions:
1. DISTRIBUTION ACTIVITIES. Subject to the supervision of the Trustees
of the Trust, the Trust may, directly or indirectly, engage in any activities
related to the distribution of Premier Shares of the Fund, which activities may
include, but are not limited to, the following: (a) payments, including
incentive compensation, to securities dealers or other financial intermediaries,
financial institutions, investment advisors and others that are engaged in the
sale of Premier Shares, or that may be advising shareholders of the Trust
regarding the purchase, sale or retention of Premier Shares; (b) payments,
including incentive compensation, to securities dealers or other financial
intermediaries, financial institutions, investment advisors and others that hold
Premier Shares for shareholders in omnibus accounts or as shareholders of record
or provide shareholder support or administrative services to the Premier Class
of the Fund and its shareholders; (c) expenses of maintaining personnel
(including personnel of organizations with which the Trust has entered into
agreements related to this Plan) who engage in or support distribution of
Premier Shares or who render shareholder support services, including, but not
limited to, allocated overhead, office space and equipment, telephone facilities
and expenses, answering routine inquiries regarding the Trust, processing
shareholder transactions, and providing such other shareholder services as the
Trust may reasonably request; (d) costs of preparing, printing and distributing
prospectuses and statements of additional information and reports of the Premier
Shares of the Fund for recipients other than existing shareholders of the Fund;
(e) costs of formulating and implementing marketing and promotional activities,
including, but not limited to, sales seminars, direct mail promotions and
television, radio, newspaper, magazine and other mass media advertising; (f)
costs of preparing, printing and distributing sales literature; (g) costs of
obtaining such information, analyses and reports with respect to marketing and
promotional activities as the Trust may, from time to time, deem advisable; and
(h) costs of implementing and operating this Plan. The Trust is authorized to
engage in the activities listed above, and in any other activities related to
the distribution of Premier Shares, either directly or through other persons
with which the Trust has entered into agreements related to this Plan.
2. MAXIMUM EXPENDITURES. The expenditures to be made by the Trust
pursuant to this Plan and the basis upon which payment of such expenditures will
be made shall be determined by the Trustees of the Trust, but in no event may
such expenditures exceed in any fiscal year an amount calculated at the rate of
0.70% of the average daily net asset value of the Premier Shares of the Fund.
The Trust may pay such distribution expenses directly or the Fund's investment
adviser or distributor may pay such distribution expenses and obtain
reimbursement from the Trust.
3. TERM AND TERMINATION.
(a) This Plan shall become effective upon the commencement of
the operations of the Premier Class of the Fund.
(b) Unless terminated as herein provided, this Plan shall
continue in effect for one year from the effective date and shall continue in
effect for successive periods of one year thereafter, but only so long as each
such continuance is specifically approved by votes of a majority of both (i) the
Trustees of the Trust and (ii) the Qualified Trustees, cast in person at a
meeting called for the purpose of voting on such approval.
(c) This Plan may be terminated at any time by the vote of a
majority of the Qualified Trustees or by vote of a majority of the outstanding
voting securities (as defined in the 1940 Act) of the Fund. If this Plan is
terminated, the Fund will not be required to make any payments for expenses
incurred after the date of termination.
4. AMENDMENTS. All material amendments to this Plan must be approved in
the manner provided for annual renewal of this Plan in Section 3(b) hereof. In
addition, this Plan may not be amended to increase the amount of expenditures
provided for in Section 2 hereof unless such amendment is approved by a vote of
the majority of the outstanding voting securities of the Premier Class of the
Fund (as defined in the 1940 Act).
5. SELECTION AND NOMINATION OF TRUSTEES. While this Plan is in effect, the
selection and nomination of Trustees who are not interested persons (as defined
in the 1940 Act) of the Trust shall be committed to the discretion of the
Trustees who are not interested persons of the Trust.
6. QUARTERLY REPORTS. The Treasurer of the Trust shall provide to the
Trustees and the Trustees shall review, at least quarterly, a written report of
the amounts expended pursuant to this Plan and any related agreement and the
purposes for which such expenditures were made.
7. RECORDKEEPING. The Trust shall preserve copies of this Plan and any
related agreement and all reports made pursuant Section 6 hereof, for a period
of not less than six years from the date of this Plan, the agreements or such
reports, as the case may be, the first two years in an easily accessible place.
8. LIMITATION OF LIABILITY. A copy of the Agreement and Declaration of
Trust of the Trust, as amended, is on file with the Secretary of the State of
Ohio and notice is hereby given that this Plan is executed on behalf of the
Trustees of the Trust as trustees and not individually and that the obligations
of this instrument are not binding upon the Trustees, the shareholders of the
Trust individually or the assets or property of any other series of the Trust,
but are binding only upon the assets and property of the Fund.
AMERIPRIME FUNDS
MULTIPLE CLASS PLAN PURSUANT TO RULE 18F-3
FOR THE ARISTON INTERNET CONVERTIBLE FUND
This Multiple Class Plan (the "Plan") is adopted in accordance with
Rule 18f-3 (the "Rule") under the Investment Company Act of 1940, as amended
(the "Act") by the AmeriPrime Funds (the "Trust") on behalf of Artison Internet
Convertible Fund (the "Fund"), a series of the Trust. A majority of the
Trustees, including a majority of the Trustees who are not interested persons of
the Trust (as defined in the Act), having determined that the Plan is in the
best interests of each class of the Fund individually, the Fund and the Trust as
a whole, have approved the Plan.
The provisions of the Plan are:
1. GENERAL DESCRIPTION OF CLASSES. Each class of shares of the Fund shall
represent interests in the same portfolio of investments of the Fund. There
currently are two classes designated: Premier and Elite.
a. Premier shares of the Fund are offered and sold subject to a maximum
initial sales charge of 4.00%. The initial sales charge for the
Premier shares of the Fund may be waived for certain eligible
purchasers, as may be determined from time to time by the Trustees of
the Trust. Premier shares of the Fund acquired through reinvestment of
dividends or distributions of short term or long term capital gains
are not subject to the initial sales charge. Premier shares are
subject to a 12b-1 fee at a maximum annual rate of 0.70% of Premier
share assets.
b. Elite shares are offered and sold at net asset value without an
initial sales charge or contingent deferred sales charge. Elite shares
are not subject to a 12b-1 fee.
2. EXPENSE ALLOCATIONS TO EACH CLASS.
a. Certain expenses may be attributable to a particular class of shares
of the Fund ("Class Expenses"). Class Expenses are charged directly to
net assets of the class to which the expense is attributed and are
borne on a pro rata basis by the outstanding shares of that class.
Class Expenses may include:
(i) expenses incurred in connection with a meeting of shareholders;
(ii) litigation expenses;
(iii) printing and postage expenses of shareholders reports,
prospectuses and proxies to current shareholders of a specific
class;
(iv) expenses of administrative personnel and services required to
support the shareholders of a specific class; (v) distribution
expenses incurred with respect to a specific class; (vi) transfer
agent fees and shareholder servicing expenses; and (vii) such
other expenses incurred by or attributable to a specific class.
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b. All other expenses of the Fund are allocated to each class on the
basis of the net asset value of that class in relation to the net
asset value of the Fund. Notwithstanding the foregoing, the
distributor or adviser of the Fund may waive or reimburse the expenses
of a specific class or classes to the extent permitted under the Rule.
3. CLASS DESIGNATION. Subject to the approval by the Trustees of the Trust,
the Fund may alter the nomenclature for the designations of one or more of its
classes of shares.
4. ADDITIONAL INFORMATION. This plan is qualified by and subjected to the
terms of the then current Prospectus for the applicable class of shares;
provided, however, that none of the terms set forth in any such Prospectus shall
be inconsistent with the terms of this Plan. The Prospectus for each class
contains additional information about the class and the Fund's multiple class
structure.
5. EFFECTIVE DATE. This Plan is effective on the date the Fund commences
the public offering of its shares. This Plan may be terminated or amended at any
time by a majority of the Trustees, including a majority of the Trustees who are
not interested persons of the Trust (as defined in the Act).
