SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
--
Pre-Effective Amendment No. / /
------- --
Post-Effective Amendment No. 49 /X/
------ --
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / /
---
Amendment No. 50 /X/
------
(Check appropriate box or boxes.)
AmeriPrime Funds - File Nos. 33-96826 and 811-9096
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (817) 431-2197
Kenneth Trumpfheller, 1793 Kingswood Dr., Suite 200, Southlake, TX 76092
(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, 441 Vine Street, 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) /X/ on December
19, 2000 pursuant to paragraph (b) / / 60 days after filing pursuant to
paragraph (a)(1) / / on (date) pursuant to paragraph (a)(1) / / 75 days
after filing pursuant to paragraph (a)(2) / / on (date) pursuant to
paragraph (a)(2) of Rule 485
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
CMS
The Cash Fund - Pinnacle Shares
PROSPECTUS
January 1, 2001
INVESTMENT OBJECTIVE
Current income, liquidity and maintenance of a stable price of $1.00 per share
290 Turnpike Road, #338
Westborough, MA 01581
Toll-free (888)xxx-xxxx
Like all mutual funds, the Securities and Exchange Commission has not approved
or disapproved these securities or passed upon the adequacy of this prospectus.
Any representation to the contrary is a criminal offense.
8371 10/16/2000
<PAGE>
CONTENTS Page
Master-Feeder Structure
Risk/Return Summary
o Objective and Principal Strategies
o Principal Risks
Fund Fees and Expenses
Management
Performance
Distributions
Shareholder Information
o Purchasing Shares
o Selling Shares
Description of the Class
Taxes
Distribution (12b-1) Fees
Servicing Fees
For More Information Back Cover
<PAGE>
MASTER-FEEDER STRUCTURE
The Fund operates under a master-feeder structure. This means that the Fund
seeks to achieve its investment objective by investing all of its investable
assets in the Money Market Portfolio of the AMR Investment Services Trust. The
Portfolio is a separate mutual fund managed by AMR Investment Services, Inc. The
investment objective and strategies of the Portfolio are substantially the same
as the Fund. Throughout this Prospectus, statements regarding investments made
by the Fund refer to investments made by the Portfolio.
RISK/RETURN SUMMARY
Objective and Principal Strategies.
The Fund's investment objective is current income, liquidity and maintenance of
a stable price of $1.00 per share. To achieve this objective, we invest only in
high quality short-term money market instruments that present minimal credit
risks, as determined by the Portfolio's investment adviser subject to the
oversight and review of the Portfolio's Board of Trustees. Generally, the Fund
will only purchase money market instruments that mature in thirteen months or
less, although instruments subject to repurchase agreements and certain variable
and floating rate obligations may have longer final maturities. The Fund intends
to maintain a dollar-weighted average portfolio maturity of 90 days or less.
The Fund invests primarily in high quality corporate debt obligations,
securities of the U.S. Government, its agencies or instrumentalities, and
obligations of financial institutions. Debt obligations include commercial
paper, which are short term promissory notes issued by domestic companies to
finance current obligations. Notes, bonds, variable amount master demand notes,
mortgage-backed and asset-backed securities, and variable and floating rate
securities are also forms of debt obligations. U.S. Government securities
include direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes and bonds, as well as bonds and notes of U.S. government agencies or
instrumentalities.
The Fund invests more than 25% of its total assets in obligations issued by the
banking industry. However, for temporary defensive purposes when the Portfolio's
investment adviser believes that maintaining this concentration may be
inconsistent with the best interests of shareholders, the Fund may not maintain
this concentration.
Obligations of financial institutions include negotiable certificates of
deposit, bankers' acceptances, time deposits and other obligations of large U.S.
banks. The Fund invests from time to time in U.S. dollar-denominated Eurodollar
and Yankeedollar bank obligations as well as other U.S. dollar-denominated
obligations of foreign banks, foreign corporations and foreign governments.
The Fund's Board of Trustees may change the objective of the Fund without
shareholder approval. The Fund will notify you if there is any material change.
If there is a change in the objective, you should consider whether the Fund
would continue to be the right investment for you. There is no guarantee that
the Fund will meet its objective.
Side Bar
SHARE PRICE
Like all money market funds, the Fund will make every effort to maintain a net
asset value of $1 per share. There can be no guarantee that the Fund will always
be able to do so.
PORTFOLIO MATURITY
The maturity date is the date that the principal amount of the notes, drafts, or
other debt instruments are due and payable. A money market Fund's portfolio is
appropriately weighted and adjusted to ensure that the portfolio always has an
average maturity of 90 days or less.
HIGH QUALITY
High quality money market instruments include those that are:
1. Rated in the highest rating category for short-term debt (by any two
nationally recognized statistical rating organizations, or by
one rating organization if only one has issued a rating) , or
2. Unrated and determined by the Fund's Advisor to be of comparable
quality, subject to the oversight and review of the Portfolio's
Board of Trustees.
<PAGE>
PRINCIPAL RISKS
All investments involve risk, and the Fund's principal risks are described
below. To limit these risks, we invest only in high-quality securities with
short maturities (no more than thirteen months).
An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Fund.
Interest Rate Risk. A money market fund's yield changes as current interest
rates change. When interest rates are low, the Fund's yield (and total return)
will also be low. The longer the average maturity of the securities held by the
Fund, the more sensitive the Fund will be to interest rate changes.
Prepayment Risk. During periods of declining interest rates, prepayment of loans
underlying mortgage-backed and asset-backed securities usually accelerates.
Prepayment may shorten the effective maturities of these securities and the Fund
may have to reinvest at a lower interest rate.
Credit Risk. The issuer of a security in the Fund's portfolio may default on its
payment obligation, which could cause the Fund's share price or yield to fall.
The Fund could also be negatively affected if investors lose confidence in the
issuer's ability to pay back its debt.
Government Risk. It is possible that the U.S. Government would not provide
financial support to its agencies or instrumentalities if it is not required to
do so by law. If a U.S. Government agency or instrumentality in which the Fund
invests defaults and the U.S. Government does not stand behind the obligation,
the Fund's share price or yield could fall.
Management Risk. If the Portfolio's investment adviser incorrectly predicts
interest rate trends, the Fund could underperform compared to other money market
funds..
Foreign Risk. The Fund's investments in foreign securities involve certain
additional risks. For example, foreign banks and companies generally are not
subject to regulatory requirements comparable to those applicable to U.S.
banks and companies. In addition, political and economic developments may
adversely affect the value of the Fund's foreign securities. In all cases,
however, we invest only in U.S. dollar-denominated securities.
Counter-Party Risk. The Fund may use repurchase agreements, which are
transactions in which the Fund purchases securities and simultaneously commits
to resell the securities to the seller at an agreed-upon price on an agreed upon
future date. If the seller of the securities (the Counter-Party) fails to pay
the agreed resale price on the agreed delivery date, the Fund could incur costs
in selling the collateral.
Side Bar
HOW THE FUND HAS PERFORMED
Although past performance of a fund is no guarantee of how it will perform in
the future, historical performance may give you some indication of the risk of
investing in the fund because it demonstrates how its returns have varied over
time. The Bar Chart and Performance Table that would otherwise appear in this
prospectus have been omitted because the Fund is recently organized and has
annual returns of less than one year.
<PAGE>
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.1
Shareholder Fees2 (fees paid directly from your investment) - NONE
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
Management Fees..........................................0.10%
Distribution (12b-1) Fees................................0.75%
Other Expenses3..........................................0.20%
Total Annual Fund Operating Expenses.....................1.05%
1 The expense table and the example below reflect the expenses of both the Fund
and the Portfolio.
2 Shares may be purchased and sold through certain financial institutions.
These institutions may charge transaction or other fees.
3 Other expenses are based on estimated amounts for the current year. They
consist of an annual administration fee paid to the Fund's adviser of 0.20%.
The Fund estimates that the remaining other expenses paid by the Fund will be
less than 0.005% of average net assets for the current fiscal year.
Example: This example is intended to help you compare the cost of investment
in the Fund with the cost of investing in other mutual funds.
This example assumes that you invest $10,000 in the Fund for the time periods
indicated , reinvest your dividends and distributions, and then redeem all of
your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
1 year 3 years
------ -------
$108 $336
Side Bar
Fees:
Management fees: fees paid to the investment adviser for managing the Fund's
assets. The Portfolio's investment adviser receives the management fees for the
periods that the Fund invests in the Portfolio. The Fund's investment adviser
receives the management fees for the periods that the Fund does not invest in
the Portfolio or another master fund.
Distribution fees: fees paid to the Fund's distributor for maintaining
shareholder accounts, providing information for prospective investors and
account maintenance.
Other expenses: expenses incurred by the Fund for miscellaneous items such as
custody, administration and registration fees. Unlike most other mutual funds,
the Fund's investment adviser pays the Fund's other expenses (with a few
exceptions).
<PAGE>
MANAGEMENT
The Fund's Adviser
The investment adviser for the Fund is Cash Management Systems, Inc. ("CMS"), a
wholly owned subsidiary of Legacy Investment Group, LLC, 290 Turnpike Road,
#338,Westborough, Massachusetts 01581. CMS is newly formed investment advisory
firm that designs, produces and markets cash management products for financial
institutions. The President of CMS is David Reavill. While CMS has no previous
experience managing a mutual fund, Mr. Reavill has over 25 years of experience
in the financial services industry. For the past 13 years he has designed and
marketed money market funds and other short term instruments for banks and
broker/dealers nationwide. He is the creator of the Open Architecture Fund, an
innovative cash management program that uses advanced new clearing technology to
produce cash management instruments for investment professionals and their
clients. Mr. Reavill holds five NASD principal licenses and is listed in Who's
Who in Finance and Business.
The Fund is authorized to pay CMS a fee of equal to an annual average rate of
0.10 % of its average daily net assets. CMS receives no advisory fee for the
periods that the Fund is a "feeder" in a master-feeder relationship. During
these periods, investment decisions will be made by the investment adviser to
the "master" fund.
The Portfolio's Adviser
AMR Investment Services, Inc. ("AMR") is the Portfolio's investment adviser.
AMR's address is 4333 Amon Carter Boulevard, Fort Worth, Texas 76155. AMR is a
wholly-owned subsidiary of AMR Corporation, the parent company of American
Airlines, Inc. AMR was organized in 1986 to provide investment management,
advisory, administrative and asset management consulting services. As of March
31, 2000 AMR had the approximately $23.3 billion of assets under management,
including approximately $10.1 billion under active management and $13.2 billion
as named fiduciary or financial adviser. Of this total, approximately $14.9
billion of assets are related to AMR Corporation.
PERFORMANCE
Investors may call the Fund at 1-800-___-____ to obtain the current 7-day yield.
<PAGE>
DISTRIBUTIONS
The Fund pays dividends to shareholders from net investment income every month.
Although the Fund is not likely to receive capital gains because of the types of
securities purchased, any received will be distributed to shareholders at least
once a year.
For your convenience, we automatically reinvest dividends and capital gains in
the Fund. If you want distributions in cash, simply mark the appropriate box on
your account application and we will send you a check instead of purchasing more
shares of the Fund. You will receive confirmation that shows the payment amount
and a summary of all transactions. Checks are normally mailed within five
business days of the payment date.
SHAREHOLDER INFORMATION
Purchasing Shares
You may purchase shares of the Fund with an initial investment of $2,500 and
additional investments of as little as $50. You can also choose to participate
in the automatic investment program with automatic purchases in an amount as
little as $50. Your price for Fund shares is the Fund's net asset value per
share ("NAV") next calculated after receiving your order in proper form. The NAV
is based on the value of the Fund's investments (using the amortized cost
method). These investments are priced based on their current market value. The
Fund is not open, and NAV is not calculated, on each day that the New York Stock
Exchange is closed for business, and on Columbus Day and Veterans Day. When
market quotations are not readily available, the investments are priced at fair
value as determined by the Portfolio's investment adviser subject to the review
of the Portfolio's Board of Trustees.
Selling shares
Your shares will be sold at the next NAV calculated after your order is received
in proper order by the Fund's transfer agent. You may receive your payment by
check or federal wire transfer. The proceeds may be more or less than the
payment by check or federal wire transfer. The proceeds may be more or less than
the purchase price of your shares. Presently there is no charge for wire
redemptions. The Fund reserves the right to charge for this service in the
future.
Side Bar
Net Asset Value- This is the price per share of a mutual fund. NAV is calculated
as of the close of the New York Stock Exchange (4:00 p.m., Eastern Time). It is
determined by taking the net assets of the Fund (assets - liabilities) divided
by the total number of fund shares outstanding.
A money market fund uses the amortized cost method for valuing securities, which
normally approximates market value, and is intended to result in an NAV of $1.00
per share at all times.
Proper Order - When buying and selling shares, proper order means that all
required documents are properly completed, signed and received by the Fund or
its agents.
<PAGE>
Opening an Account
Decide whether your first investment will be paid by check or wire. Initial
payment must be at least $2,500.
1. By check. Complete your account application and send it, along with
a check made payable to the Fund to The Cash Fund - Pinnacle Shares, c/o Unified
Funds Service, Inc. P.O. Box 6110 Indianapolis, Indiana 46204-6110.
2. By wire. Call the Transfer Agent at 888-___-____ to set up your
account and to receive an account number. Call your bank and have your
investment amount wired. Your bank will need the following information.
-------------------
ABA routing #___________
Attn: The Cash Fund - Pinnacle shares
D.D.A. #_______________
Account Name
Your Account #
Purchasing Additional Shares
Decide whether the purchases will be by mail, wire or automatic investment. Your
purchase must meet the $50.00 minimum.
1. By mail. Send check to The Cash Fund, c/o Unified Funds Service, Inc.
P.O. Box 6110 Indianapolis, Indiana 46204-6110, along with: your name, your
account number and the name of the Fund.
2. By wire. Call your bank and have your investment amount wired.
Your bank will need the following information:_____________. ABA
routing #_____________ Attention The Cash Fund Account Name and Account number.
3. Automatic Investment Program. Fill out your account application,
designating automatic investment option and attach a voided check. The Fund
automatically deducts payment from your account on a regular basis.
<PAGE>
Selling Shares
If you completed the Optional Telephone Redemption and Exchange section of the
Fund's account application, you may redeem by telephone.
1. By Telephone. Call the transfer agent at 888-___-____.
2. Through your broker. Call your broker/dealer or other financial
institution. You may be charged a fee by the institution.
3. By mail. Write to the Fund's transfer agent at: The Cash Fund c/o
Unified Fund Services, Inc. 431 North Pennsylvania Street,
Indianapolis, IN 46204.
On 30 days' written notice, the Fund may redeem any account that has less than
$2,500. A shareholder may increase the value of the account to the minimum
amount during the 30 day period.
ADDITIONAL INVESTMENT STRATEGIES
The Fund may invest up to 10% of its net assets in illiquid securities. For
temporary purposes, the Fund may borrow amounts of up to one third of its total
assets. These strategies and their related risks are described in detail in the
Statement of Additional Information.
ADDITIONAL INFORMATION ABOUT THE MASTER-FEEDER STRUCTURE
The Fund is a "feeder" fund that invests all of its investable assets
in a "master" fund with the same investment objective. The "master" fund
purchases securities for investment. The master-feeder structure works as
follows:
--------------------------------------------------
Investor
--------------------------------------------------
~/ purchases shares of
--------------------------------------------------
Feeder Fund
--------------------------------------------------
~/ which invests in
--------------------------------------------------
Master Fund
--------------------------------------------------
~/ which buys
--------------------------------------------------
Investment Securities
--------------------------------------------------
The Fund can withdraw its investment in the Portfolio at any time if
the Board determines that it is in the best interest of the Fund and its
shareholders to do so. If this happens, the Fund's assets will be invested
according to the investment policies and restrictions described in this
Prospectus.
<PAGE>
TAXES
As with any investment, you should consider how your investment in the Fund will
be taxed. If your account is not a tax-deferred retirement account, you should
be aware of these tax consequences. For federal tax purposes, the Fund's income
and short-term capital gain distributions are taxed as dividends; long-term
capital gain distributions are taxed as long-term capital gains. Your
distributions may also be subject to state income tax. The distributions are
taxable when they are paid, whether you take them in cash or participate in the
dividend reinvestment program. Each January, the Fund will mail you a form
indicating the federal tax status of your dividend and capital gain
distributions.
All shareholders must provide the Fund with a correct taxpayer identification
number (generally your Social Security Number) and certify that you are not
subject to backup withholding. If you fail to do so, the IRS can require the
Fund to withhold 31% of your taxable distributions and redemptions. Federal law
also requires the Funds to withhold 30% of the applicable tax treaty rate from
dividends paid to certain non-resident alien, non-US partnership and non-U.S.
corporation shareholder accounts.
Please see the statement of additional information and your own tax adviser for
further information.
DESCRIPTION OF THE CLASS
This prospectus offers shares of the Pinnacle shares, a class of The Cash Fund.
These shares are regular retail shares and may be purchased through certain
broker-dealers. This class pays the 12b-1 fees and shar holder servicing fees
described below. The Fund may offer other classes of shares.
DISTRIBUTION (12b-1) FEES
The Fund has adopted a plan under rule 12b-1 that allows the Fund to pay
distribution and other fees for the sale and distribution of its shares. These
12b-1 fees may not exceed 0.75% per year. All or a substantial portion of the
12b-1 fees are paid to the dealer of record. Because the distribution fees are
paid out of the Fund's assets on an on-going basis, over time these fees will
increase the cost of your investment and may cost you more than paying other
types of sales charges.
SERVICING FEES
The Fund has adopted a plan that allows the Fund to pay certain financial
institutions (which may include banks, securities dealers and other industry
professionals) a servicing fee for services provided to shareholders. These
servicing fees may not exceed 0.25% per year. There is no present intention to
charge the Pinnacle shares a servicing fee. Shareholders will be notified in
advance if a servicing fee will be charged.
Side Bar
The Taxpayer Relief Act of 1997 made certain changes to capital gains tax rates.
Under the law, taxpayers in all brackets will have an advantage when it comes to
capital gains tax rates. The Fund will provide information relating to the
portion of any Fund distribution that is eligible for the reduced capital gains
tax rate.
<PAGE>
FOR MORE INFORMATION
Several additional sources of information are available to you. The
Statement of Additional Information (SAI), incorporated into this prospectus by
reference, contains detailed information on Fund policies and operations. Annual
and semi-annual reports contain management's discussion of market conditions,
investment strategies and performance results as of the Funds' latest
semi-annual or annual fiscal year end.
Call the Fund at 800 __-____ 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>
------------------------------------------------------------------------------
THE CASH FUND
A Series of the AmeriPrime Funds
STATEMENT OF ADDITIONAL INFORMATION
January 1, 2001
------------------------------------------------------------------------------
This Statement of Additional Information ("SAI") is not a prospectus. It should
be read in conjunction with the Prospectus of The Cash Fund dated January 1,
2001. This SAI incorporates by reference the American Aadvantage Money Market
Fund's Annual Report to Shareholders for the fiscal year ended December 31, 1999
("Annual Report"). A copy of the Prospectus or Annual Report can be obtained by
writing The Cash Fund c/o Unified Fund Services, 431 North Pennsylvania Street,
Indianapolis, Indiana 46204. You may also call 1-800 ___-_____.
TABLE OF CONTENTS PAGE
About the Fund
Types of Investments and Investment Techniques
Investment Limitations
Management of the Fund
Trustees and Officers of the AMR Trust
Distribution Plan
Shareholder Servicing Plan
Portfolio Transactions and Brokerage
Purchase and Sale Information
Share Price Calculation
Performance
Taxes
Custodian
Transfer Agent
Accountants
Distributor
Financial Statements
<PAGE>
ABOUT THE FUND
The Cash Fund (the "Fund") was organized as a series of the AmeriPrime
Funds (the "Trust") on February 2, 1999. The Trust is an open-end investment
company established under the laws of Ohio by an Agreement and Declaration of
Trust dated August 8, 1995 (the "Trust Agreement"). The Trust Agreement permits
the Trustees to issue an unlimited number of shares of beneficial interest of
separate series without par value. The Fund is one of a series of funds
currently authorized by the Trustees.
Any Trustee of the Trust may be removed by vote of the shareholders
holding not less than two-thirds of the outstanding shares of the Trust. The
Trust does not hold an annual meeting of shareholders. When matters are
submitted to shareholders for a vote, each shareholder is entitled to one vote
for each whole share he owns and fractional votes for fractional shares he owns.
All shares of the Fund have equal voting rights and liquidation rights. Prior to
the public offering of the Fund, AmeriPrime Financial Securities, Inc. purchased
for investment all of the outstanding shares of the Fund and may be deemed to
control the Fund.
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series. Each other share of that
series is entitled to dividends and distributions out of income belonging to the
series as are declared by the Trustees. The shares do not have cumulative voting
rights or any preemptive or conversion rights. Trustees have the authority from
time to time to divide or combine the shares of any series into a greater or
lesser number of shares of that series, so long as, the proportionate beneficial
interest in the assets belonging to that series and the rights of shares of any
other series are in no way affected. In case of any liquidation of a series,
shareholders of the series being liquidated will be entitled to receive as a
group, a distribution out of the assets, net of the liabilities, belonging to
that series. Expenses attributable to any series are borne by that series. Any
general expenses of the Trust not readily identifiable as belonging to a
particular series are allocated by or under the direction of the Trustees in
such manner as the Trustees determine to be fair and equitable. No shareholder
is liable to further calls or to assessment by the Trust without his or her
express consent.
MASTER-FEEDER STRUCTURE. As of the date of this Statement of Additional
Information, the Fund employs a master-feeder structure and seeks to achieve its
investment objective by investing all of its investable assets in the Portfolio
(the "Portfolio") of the AMR Investment Services Trust (the "AMR Trust").
Accordingly, the Portfolio directly acquires portfolio securities and the Fund
acquires an indirect interest in those securities. The assets of the Portfolio
belong only to, and the liabilities of the Portfolio are borne solely by, the
Portfolio and no other series of the AMR Trust.
The Fund's investment in the Portfolio is in the form of
non-transferable beneficial interests. All investors in the Portfolio will
invest on the same terms and conditions and will pay a proportionate share of
the Portfolio's expenses. The Portfolio does not sell its shares directly to
members of the general public. Other investors in the Portfolio, such as other
investment companies that might sell their shares to the public, are not
required to sell their shares at the same public offering price as the Fund, and
could have different advisory and other fees and expenses than the Fund.
Therefore, the Fund's shareholders may have different returns than shareholders
in other investment companies that invest in the Portfolio.
CERTAIN RISKS OF INVESTING IN THE PORTFOLIO. The Fund's investment in the
Portfolio may be affected by the actions of other large investors in the
Portfolio. For example, if the Portfolio has a large investor other than the
Fund that redeems its interest, the Portfolio's remaining investors (including
the Fund) might, as a result, experience higher pro rata operating expenses,
thereby producing lower returns. As there may be other investors in the
Portfolio, there can be no assurance that any issue that receives a majority of
the votes cast by the Fund's shareholders will receive a majority of votes cast
by all investors in the Portfolio. Other investors holding a majority interest
in the Portfolio could have voting control of the Portfolio. The Fund may
withdraw its entire investment from the Portfolio at any time if the AmeriPrime
Advisors Trust's Board of Trustees (the "Trust's Board") determines that it is
in the best interests of the Fund and its shareholders. The Fund might withdraw,
for example, if there were other investors in the Portfolio with power to, and
who did by a vote of all investors (including the Fund), change the investment
objective or policies of the Portfolio in a manner not acceptable to the Trust's
Board. A withdrawal could result in a distribution in kind of portfolio
securities (as opposed to a cash distribution) by the Portfolio. That
distribution could result in a smaller less diversified portfolio of investments
for the Fund. This could in turn increase the Fund's expense ratio, and result
in lower returns for the Fund's investors. If the Fund decided to convert those
securities to cash, it would incur transaction costs. If the Fund withdrew its
investment from the Portfolio, the Trust's Board would consider what action
might be taken, including the management of the Fund's assets directly by the
Fund's investment adviser (the "Adviser") or the investment of the Fund's assets
in another pooled investment entity. The inability of the Fund to find a
suitable replacement investment, in the event the Board decided not to permit
the Adviser to manage the Fund's assets directly, could have a significant
impact on shareholders of the Fund.
TYPES OF INVESTMENTS AND INVESTMENT TECHNIQUES
All investments acquired by the Fund will, at the time of acquisition,
be "eligible securities" as defined by SEC Rule 2a-7. High quality money market
instruments include those that are rated in one of the two highest rating
categories for short-term debt by any two nationally recognized statistical
rating organizations ("NRSROs"). They also include securities that may not be
rated, but are issued by an issuer with a comparable outstanding short-term debt
that is rated. High quality money market instruments may also be rated by only
one NRSRO. An unrated security may be determined to be high quality by the
Portfolio's investment adviser, subject to the oversight and review of the AMR
Trust Board of Trustees (the "AMR Trust's Board").
Fixed Income Securities. The Fund may invest in fixed income securities. Fixed
income securities include corporate debt securities, U.S. government securities
and participation interests in such securities. Fixed income securities are
generally considered to be interest rate sensitive, which means that their value
will generally decrease when interest rates rise and increase when interest
rates fall. Securities with shorter maturities, while offering lower yields,
generally provide greater price stability than longer-term securities and are
less affected by changes in interest rates.
Corporate Debt Securities. Corporate debt securities are long and short-term
debt obligations issued by companies (such as publicly issued and privately
placed bonds, notes and commercial paper). The Portfolio considers corporate
debt securities to be of investment grade quality if they are rated BBB or
higher by Standard & Poor's Corporation, or Baa or higher by Moody's Investors
Service, Inc., or if unrated, determined by the Portfolio's investment adviser
to be of comparable quality. Investment grade debt securities generally have
adequate to strong protection of principal and interest payments. In the lower
end of this category, credit quality may be more susceptible to potential future
changes in circumstances and the securities have speculative elements.
Obligations of Financial Institutions. The Fund may invest in obligations of
financial institutions. Examples of obligations in which the fund may invest
include negotiable certificates of deposit, bankers acceptances, time deposits
and other obligations of U.S. banks (including savings and loan associations)
having total assets in excess of ten billion dollars. The Fund may also invest
in U.S. dollar-denominated Eurodollar and Yankeedollar bank obligations as
discussed below and other U.S. dollar-denominated obligations of foreign banks
having total assets in excess of ten billion dollars that the sub-adviser
believes are of investment quality.
Certificates of deposit represent an institution's obligation to repay
funds deposited with it that earn a specified interest rate over a given period.
Bankers' acceptances are negotiable obligations of a bank to pay a draft, which
has been drawn by a customer, and are usually backed by goods in international
trade. Time deposits are non-negotiable deposits with a banking institution that
earn a specified interest rate over a given period. Fixed time deposits, which
are payable at a stated maturity date and bear a fixed rate of interest,
generally may be withdrawn on demand by the Fund but may be subject to early
withdrawal penalties that could reduce the Fund's yield. Unless there is a
readily available market for them, time deposits that are subject to early
withdrawal penalties and that mature in more than seven days will be treated as
illiquid securities.
Eurodollar bank obligations are U.S. dollar-denominated certificates of
deposit or time deposits issued outside the U.S. capital markets by foreign
branches of U.S. banks and by foreign banks. Yankeedollar bank obligations are
U.S. dollar-denominated obligations issued in the U.S. capital markets by
foreign banks.
Foreign, U.S. dollar-denominated Eurodollar (and to a limited extent,
Yankeedollar) bank obligations are subject to certain sovereign risks. One such
risk is the possibility that a foreign government might prevent U.S.
dollar-denominated funds from flowing across its borders. Other risks include:
adverse political and economic developments in a foreign country; the extent and
quality of government regulation of financial markets and institutions; the
imposition of foreign withholding taxes; and expropriation or nationalization of
foreign issuers.
Loan Participation Interests. Loan participation interests represent interests
in bank loans made to corporations. The contractual arrangement with the bank
transfers the cash stream of the underlying bank loan to the participating
investor. Because the issuing bank does not guarantee the participations, they
are subject to the credit risks generally associated with the underlying
corporate borrower. In addition, because it may be necessary under the terms of
the loan participation for the investor to assert through the issuing bank such
rights as may exist against the underlying corporate borrower, in the event the
underlying corporate borrower fails to pay principal and interest when due, the
investor may be subject to delays, expenses and risks that are greater than
those that would have been involved if the investor had purchased a direct
obligation (such as commercial paper) of such borrower. Moreover, under the
terms of the loan participation, the investor may be regarded as a creditor of
the issuing bank (rather than of the underlying corporate borrower), so that the
issuer may also be subject to the risk that the issuing bank may become
insolvent. Further, in the event of the bankruptcy or insolvency of the
corporate borrower, the loan participation may be subject to certain defenses
that can be asserted by such borrower as a result of improper conduct by the
issuing bank. The secondary market, if any, for these loan participations is
extremely limited and any such participations purchased by the Fund are regarded
as illiquid.
U.S. Government Obligations. The Fund may invest without limit in U.S.
government securities. U.S. government securities include securities issued or
guaranteed by the U.S. government, its agencies and instrumentalities. U.S.
Treasury bonds, notes, and bills and some agency securities, such as those
issued by the Federal Housing Administration and the Government National
Mortgage Association (GNMA), are backed by the full faith and credit of the U.S.
government as to payment of principal and interest and are the highest quality
government securities. Other securities issued by U.S. government agencies or
instrumentalities, such as securities issued by the Federal Home Loan Banks and
the Federal Home Loan Mortgage Corporation, are supported only by the credit of
the agency that issued them, and not by the U.S. government. Securities issued
by the Federal Farm Credit System, the Federal Land Banks, and the Federal
National Mortgage Association (FNMA) are supported by the agency's right to
borrow money from the U.S. Treasury under certain circumstances, but are not
backed by the full faith and credit of the U.S. government. There is no
guarantee that the U.S. government will support securities not backed by its
full faith and credit. Accordingly, although these securities have historically
involved little risk of loss of principal if held to maturity. These securities
may involve more risk than securities backed by the full faith and credit of the
U.S. government.
Rule 144A Securities. These securities are not registered for sale under Federal
securities laws but can be resold to institutions under SEC Rule 144A. Provided
that a dealer or institutional trading market in such securities exists, these
restricted securities are treated as exempt from the 10% limit on illiquid
securities. Under the supervision of the AMR Trust's Board, the Portfolio's
investment adviser determines the liquidity of restricted securities. The AMR
Trust's Board monitors trading activity in restricted securities through reports
from the Portfolio's investment adviser. If institutional trading in restricted
securities were to decline, the liquidity of a Fund could be adversely affected.
Demand Features. The Fund may invest in securities that are subject to puts and
stand-by commitments, which are defined as demand features. Demand features give
the Fund the right to resell securities at specified periods prior to their
maturity dates to the seller or to some third party at an agreed-upon price or
yield. Securities with demand features may involve certain expenses and risks,
including the inability of the issuer of the instrument to pay for the
securities at the time the instrument is exercised, non-marketability of the
instrument and differences between the maturity of the underlying security and
the maturity of the instrument. Securities may cost more with demand features
than without them. Demand features can serve three purposes: to shorten the
maturity of a variable or floating rate security, to enhance the instrument's
credit quality and to provide a source of liquidity.
Variable and Floating Rate Securities. The securities in which the Fund invests
may have variable or floating rates of interest. These securities pay interest
at rates that are adjusted periodically according to a specified formula,
usually with reference to some interest rate index or market interest rate.
Securities with ultimate maturities of greater than 397 days may be purchased
only pursuant to Rule 2a-7. Under that Rule, only those long-term instruments
that have demand features, which comply with certain requirements and certain
variable rate, demand U.S. government securities may be purchased. Similar to
fixed rate debt instruments, variable and floating rate instruments are subject
to changes in value based on changes in market interest rates or changes in the
issuer's or guarantor's creditworthiness. The rate of interest on securities
purchased by the Fund may be tied to short-term Treasury or other government
securities or indices on securities that are permissible investments of the
Fund, as well as other money market rates of interest. The Fund will not
purchase securities whose values are tied to interest rates or indices that are
not appropriate for the duration and volatility standards of a money market
fund.
Mortgage- Backed and Asset-Backed Securities. The Fund may purchase fixed or
adjustable rate mortgage-backed securities issued by the Government National
Mortgage Association, Federal National Mortgage Association, the Federal Home
Loan Mortgage Corporation, or other governmental or government-related entities.
Mortgage-backed securities consist of both collateralized mortgage obligations
and mortgage pass-through certificates.
Collateralized Mortgage Obligations ("CMOs")-CMOs and interests in real estate
mortgage investment conduits ("REMICs") are debt securities collateralized by
mortgages, or mortgage pass-through securities. CMOs divide the cash flow
generated from the underlying mortgages or mortgage pass-through securities into
different groups referred to as "tranches," which are then retired sequentially
over time in order of priority. The principal governmental issuers of such
securities are the Federal National Mortgage Association ("FNMA"), a government
sponsored corporation owned entirely by private stockholders and the Federal
Home Loan Mortgage Corporation ("FHLMC"), a corporate instrumentality of the
United States created pursuant to an act of Congress which is owned entirely by
Federal Home Loan Banks. The issuers of CMOs are structured as trusts or
corporations established for the purpose of issuing such CMOs and often have no
assets other than those underlying the securities and any credit support
provided. A REMIC is a mortgage securities vehicle that holds residential or
commercial mortgages and issues securities representing interests in those
mortgages. A REMIC may be formed as a corporation, partnership, or segregated
pool of assets. The REMIC itself is generally exempt from federal income tax,
but the income from the mortgages is reported by investors. For investment
purposes, interests in REMIC securities are virtually indistinguishable from
CMOs.
Mortgage Pass-Through Certificates-Mortgage pass-through certificates are
issued by governmental, government-related and private organizations which are
backed by pools of mortgage loans.
(1) Government National Mortgage Association ("GNMA") Mortgage Pass-Through
Certificates ("Ginnie Maes")-GNMA is a wholly owned U.S. Government corporation
within the Department of Housing and Urban Development. Ginnie Maes represent an
undivided interest in a pool of mortgages that are insured by the Federal
Housing Administration or the Farmers Home Administration or guaranteed by the
Veterans Administration. Ginnie Maes entitle the holder to receive all payments
(including prepayments) of principal and interest owed by the individual
mortgagors, net of fees paid to GNMA and to the issuer which assembles the
mortgage pool and passes through the monthly mortgage payments to the
certificate holders (typically, a mortgage banking firm), regardless of whether
the individual mortgagor actually makes the payment. Because payments are made
to certificate holders regardless of whether payments are actually received on
the underlying mortgages, Ginnie Maes are of the "modified pass-through"
mortgage certificate type. The GNMA is authorized to guarantee the timely
payment of principal and interest on the Ginnie Maes. The GNMA guarantee is
backed by the full faith and credit of the United States, and the GNMA has
unlimited authority to borrow funds from the U.S. Treasury to make payments
under the guarantee. The market for Ginnie Maes is highly liquid because of the
size of the market and the active participation in the secondary market of
security dealers and a variety of investors.
(2) FHLMC Mortgage Participation Certificates ("Freddie Macs")-Freddie Macs
represent interests in groups of specified first lien residential conventional
mortgages underwritten and owned by the FHLMC. Freddie Macs entitle the holder
to timely payment of interest, which is guaranteed by the FHLMC. The FHLMC
guarantees either ultimate collection or timely payment of all principal
payments on the underlying mortgage loans. In cases where the FHLMC has not
guaranteed timely payment of principal, the FHLMC may remit the amount due
because of its guarantee of ultimate payment of principal at any time after
default on an underlying mortgage, but in no event later than one year after it
becomes payable. Freddie Macs are not guaranteed by the United States or by any
of the Federal Home Loan Banks and do not constitute a debt or obligation of the
United States or of any Federal Home Loan Bank. The secondary market for Freddie
Macs is highly liquid because of the size of the market and the active
participation in the secondary market of the FHLMC, security dealers and a
variety of investors.
(3) FNMA Guaranteed Mortgage Pass-Through Certificates ("Fannie
Maes")-Fannie Maes represent an undivided interest in a pool of conventional
mortgage loans secured by first mortgages or deeds of trust, on one family or
two to four family, residential properties. The FNMA is obligated to distribute
scheduled monthly installments of principal and interest on the mortgages in the
pool, whether or not received, plus full principal of any foreclosed or
otherwise liquidated mortgages. The obligation of the FNMA under its guarantee
is solely its obligation and is not backed by, nor entitled to, the full faith
and credit of the United States.
(4) Mortgage-Related Securities Issued by Private Organizations-Pools
created by non-governmental issuers generally offer a higher rate of interest
than government and government-related pools because there are no direct or
indirect government guarantees of payments in such pools. However, timely
payment of interest and principal of these pools is often partially supported by
various enhancements such as over-collateralization and senior/subordination
structures and by various forms of insurance or guarantees, including individual
loan, title, pool and hazard insurance. The insurance and guarantees are issued
by government entities, private insurers or the mortgage poolers. Although the
market for such securities is becoming increasingly liquid, securities issued by
certain private organizations may not be readily marketable.
The Fund may also purchase other asset-backed securities, including
securities backed by automobile loans, equipment leases or credit card
receivables. These securities directly or indirectly represent a participation
in, or are secured by and payable from, fixed or adjustable rate mortgage or
other loans, which may be secured by real estate or other assets. Unlike
traditional debt instruments, payments on these securities include both interest
and a partial payment of principal. Prepayments of the principal of underlying
loans may shorten the effective maturities of these securities and may result in
a Fund having to reinvest proceeds at a lower interest rate.
Repurchase Agreements. The Fund may invest in repurchase agreements fully
collateralized by U.S. Government obligations. Repurchase agreements are
transactions in which a Fund purchases securities and simultaneously commits to
resell those securities to the seller at an agreed-upon price on an agreed-upon
future date. The resale price reflects a market rate of interest that is not
related to the coupon rate or maturity of the purchased securities. If the
seller of the securities underlying a repurchase agreement fails to pay the
agreed resale price on the agreed delivery date, a Fund may incur costs in
disposing of the collateral and may experience losses if there is any delay in
its ability to do so. Any repurchase transaction will require full
collateralization of the seller's obligation during the entire term of the
repurchase agreement. The Adviser monitors the creditworthiness of the banks and
securities dealers with whom the Fund engages in repurchase transactions.
Reverse Repurchase Agreements. The Fund may borrow funds for temporary purposes
by entering into reverse repurchase agreements. Pursuant to such agreements, the
Fund would sell portfolio securities to financial institutions such as banks and
broker/dealers and agree to repurchase them at a mutually agreed-upon date and
price. The Fund intends to enter into reverse repurchase agreements only to
avoid selling securities to meet redemptions during market conditions deemed
unfavorable by the investment adviser possessing investment authority. At the
time the Fund enters into a reverse repurchase agreement, it will place in a
segregated custodial account assets such as liquid high quality debt securities
having a value not less than 100% of the repurchase price (including accrued
interest), and will subsequently monitor the account to ensure that such
required value is maintained. Reverse repurchase agreements involve the risk
that the market value of the securities sold by the Fund may decline below the
price at which the Fund is obligated to repurchase the securities. Reverse
repurchase agreements are considered to be borrowings by an investment company
under the 1940 Act.
Delayed Delivery Securities. The Fund may purchase securities on a when-issued
or delayed delivery basis. Securities so purchased are subject to market price
fluctuation from the time of purchase but no interest on the securities accrues
to a Fund until delivery and payment for the securities take place. Accordingly,
the value of the securities on the delivery date may be more or less than the
purchase price. Forward commitments will be entered into only when a Fund has
the intention of taking possession of the securities, but a Fund may sell the
securities before the settlement date if deemed advisable.
Investment Companies. The Fund may invest in other investment companies
(including affiliated investment companies) to the extent permitted by the
Investment Company Act of 1940 ("1940 Act") or exemptive relief granted by the
Securities and Exchange Commission.
Lending. The Fund may loan securities to broker-dealers or other institutional
investors. Securities loans will not be made if, as a result, the aggregate
amount of all outstanding securities loans by a Portfolio exceeds 33 1/3% of its
total assets (including the market value of collateral received). For purposes
of complying with a Portfolio's investment policies and restrictions, collateral
received in connection with securities loans is deemed an asset of the Portfolio
to the extent required by law. AMR Investment Services, Inc. (the "Manager")
receives compensation for administrative and oversight functions with respect to
securities lending. The amount of such compensation depends on the income
generated by the loan of the securities. A Portfolio continues to receive
interest on the securities loaned and simultaneously earns either interest on
the investment of the cash collateral or fee income if the loan is otherwise
collateralized.
Illiquid Securities. The portfolio of the Fund may contain illiquid securities.
Illiquid securities generally include securities which cannot be disposed of
promptly and in the ordinary course of business without taking a reduced price.
Securities may be illiquid due to contractual or legal restrictions on resale or
lack of a ready market. The following securities are considered to be illiquid:
repurchase agreements and reverse repurchase agreements maturing in more than
seven days, nonpublicly offered securities and restricted securities (other than
certain Rule 144A securities determined to be liquid). Certain repurchase
agreements, which provide for settlement in more than seven days, can be
liquidated before the nominal fixed term on seven days or less notice. Such
repurchase agreements will be regarded as liquid instruments. 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 10% of its net assets in
illiquid securities.
Borrowing. The Fund may borrow for temporary or emergency purposes, including
the meeting of redemption requests, in amounts up to 10% of the Fund's total
assets. Interest costs on borrowings may fluctuate with changing market rates of
interest and may partially offset or exceed the return earned on borrowed funds
(or on the assets that were retained rather than sold to meet the needs for
which funds were borrowed). Under adverse market conditions, the Fund might have
to sell portfolio securities to meet interest or principal payments at a time
when investment considerations would not favor such sales.
INVESTMENT LIMITATIONS
The Fund has the following fundamental investment policy that enables
it to invest in the Money Market Portfolio (the "Portfolio") of the AMR Trust:
Notwithstanding any other limitation, the Fund may invest all of its
investable assets in an open-end management investment company with
substantially the same investment objectives, policies and limitations
as the Fund.
For this purpose, "all of the Fund's investable assets" means that the only
investment securities that will be held by the Fund will be the Fund's interest
in the investment company.
All other fundamental investment policies and the non-fundamental
policies of the Fund and the Portfolio are identical. Therefore, although the
following discusses the investment policies of the Portfolio and the AMR Trust's
Board, it applies equally to the Fund and the Trust's Board. In addition to the
investment limitations noted in the Prospectus, the following restrictions have
been adopted by the Portfolio and may be changed with respect to the Portfolio
only by the majority vote of the Portfolio's outstanding interests. "Majority of
the outstanding voting securities" under the Investment Company Act of 1940, as
amended (the "1940 Act"), and as used here in means, with respect to the
Portfolio, the lesser of (a) 67% of the interests of the Portfolio present at
the meeting if the holders of more than 50% of the interests are present and
represented at the interest holders' meeting or (b) more than 50% of the
interests of the Portfolio. Whenever the Fund is requested to vote on a change
in the investment restrictions of the Portfolio, the Fund will hold a meeting of
its shareholders and will cast its votes as instructed by its shareholders. The
percentage of the Fund's votes representing the Fund's shareholders not voting
will be voted by the Trust's Board in the same proportion as those Fund
shareholders who do, in fact, vote. The Portfolio may not:
1. Purchase or sell real estate or real estate limited partnership
interests, provided, however, that the Portfolio may invest in securities
secured by real estate or interests therein or issued by companies which invest
in real estate or interests therein when consistent with the other policies and
limitations described in the Prospectus.
2. Purchase or sell commodities (including direct interests and/or
leases in oil, gas or minerals) or commodities contracts, except with respect to
forward foreign currency exchange contracts, foreign currency futures contracts
and when-issued securities when consistent with the other policies and
limitations described in the Prospectus.
3. Engage in the business of underwriting securities issued by others
except to the extent that, in connection with the disposition of securities, the
Portfolio may be deemed an underwriter under federal securities law.
4. Make loans to any person or firm, provided, however, that the making
of a loan shall not be construed to include (i) the acquisition for investment
of bonds, debentures, notes or other evidences of indebtedness of any
corporation or government which are publicly distributed or (ii) the entry into
repurchase agreements and further provided, however, that each Portfolio may
lend its investment securities to broker-dealers or other institutional
investors in accordance with the guidelines stated in the Prospectus.
5. Purchase from or sell portfolio securities to its officers, Trustees
or other "interested persons" of the AMR Trust, as defined in the 1940 Act,
including its investment advisers and their affiliates, except as permitted by
the 1940 Act and exemptive rules or orders thereunder.
6. Issue senior securities except that the Portfolio may engage in
when-issued and forward commitment transactions.
7. Borrow money, except from banks or through reverse repurchase
agreements for temporary purposes in an aggregate amount not to exceed 10% of
the value of its total assets at the time of borrowing. In addition, although
not a fundamental policy, the Portfolios intend to repay any money borrowed
before any additional portfolio securities are purchased.
8. Invest more than 5% of its total assets (taken at market value) in
securities of any one issuer, other than obligations issued by the U.S.
Government, its agencies and instrumentalities, or purchase more than 10% of the
voting securities of any one issuer, with respect to 75% of the Portfolio's
total assets; or
9. Invest more than 25% of its total assets in the securities of
companies primarily engaged in any one industry (except for the banking
industry), provided that: (i) this limitation does not apply to obligations
issued or guaranteed by the U.S. Government, its agencies and instrumentalities;
(ii) municipalities and their agencies and authorities are not deemed to be
industries; and (iii) financial service companies are classified according to
the end users of their services (for example, automobile finance, bank finance,
and diversified finance will be considered separate industries).
The following non-fundamental investment restrictions may be changed
with respect to the Fund by a vote of a majority of the Trust's Board or, with
respect to the Portfolio, by a vote of a majority of the AMR Trust's Board. The
Portfolio may not:
1. Invest more than 10% of its net assets in illiquid securities, including
time deposits and repurchase agreements that mature in more than seven days; or
2. Purchase securities on margin, effect short sales (except that a
Portfolio may obtain such short term credits as may be necessary for the
clearance of purchases or sales of securities) or purchase or sell call options
or engage in the writing of such options.
The Portfolio may invest up to 10% of its total assets in the
securities of other investment companies to the extent permitted by law. The
Portfolio may incur duplicate advisory or management fees when investing in
another mutual fund
MANAGEMENT OF THE FUND
Trustees and Officers
The Board of Trustees supervises the business activities of the Trust.
The names of the Trustees and executive officers of the Trust are shown below.
Each Trustee who is an "interested person" of the Trust, as defined in the
Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<S> <C> <C>
===================================== ================ ======================================================================
Name, Age and Address Position Principal Occupations During Past 5 Years
------------------------------------------------------------------------------------------------------------------------------------
*Kenneth D. Trumpfheller President, Managing Director of Unified Fund Services, Inc., the Funds'
1793 Kingswood Drive Secretary and administrator, since October 2000. President, Treasurer and
Suite 200 Trustee Secretary of AmeriPrime Financial Services, Inc., a fund
Southlake, Texas 76092 administrator (which merged with Unified Fund Services, Inc.) and
Year of Birth: 1958 AmeriPrime Financial Securities, Inc., the Funds' distributor, from
1994 to October 2000;President and Trustee of AmeriPrime Advisors
Trust and AmeriPrime Insurance Trust;Prior to December,1994, a senior
client executive with SEI Financial Services.
------------------------------------ ---------------- ----------------------------------------------------------------------
*Robert A. Chopyak Treasurer and Assistant Vice President of Financial Administration of Unified Fund
1793 Kingswood Drive Chief Services, Inc., the Funds' Administrator, since August 2000. Manager
Suite 200 Financial of AmeriPrime Financial Services, Inc., (which merged with Unified
Southlake, Texas 76092 Officer Fund Services, Inc.), from February to August 2000. Self-employed,
Year of Birth: 1968 performing Y2K testing, January 1999 to January 2000. Vice
President of Fund Accounting, American Data Services, Inc., a mutual
fund services company, October 1992 to December 1998.
------------------------------------ ---------------- ----------------------------------------------------------------------
Steve L. Cobb Trustee President of Chandler Engineering Company, L.L.C., oil and gas
2001 N. Indianwood Avenue services company; various positions with Carbo Ceramics, Inc., oil
Broken Arrow, OK 74012 field manufacturing/supply company, from 1984 to 1997, most recently
Year of Birth: 1957 Vice President of Marketing.
------------------------------------ ---------------- ----------------------------------------------------------------------
Gary E. Hippenstiel Trustee Director, Vice President and Chief Investment Officer of Legacy
600 Jefferson Street Trust Company since 1992; President and Director of Heritage Trust
Suite 350 Company from 1994-1996; Vice President and Manager of Investments of
Houston, TX 77002 Kanaly Trust Company from 1988 to 1992.
Year of Birth: 1947
==================================== ================ ======================================================================
</TABLE>
The compensation paid to the Trustees of the Trust for the fiscal year
ended October 31, 2000 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.
============================ ===================== ============================
Name Aggregate Total Compensation
Compensation from from Trust (the Trust is
Trust not in a Fund Complex)
---------------------------- --------------------- ----------------------------
Kenneth D. Trumpfheller 0 0
---------------------------- --------------------- ----------------------------
Steve L. Cobb $________ $________
---------------------------- --------------------- ----------------------------
Gary E. Hippenstiel $________ $________
============================ ===================== ============================
The compensation paid to the Trustees of the Trust for the fiscal year
ended December 31, 2000 is set forth in the following table. Trustee fees are
Trust expenses and each series of the Trust pays a portion of the Trustee fees.
========================== ==================== ===============================
Aggregate Total Compensation
Name Compensation from Trust (the Trust is
from Trust not in a Fund Complex)
-------------------------- -------------------- -------------------------------
Kenneth D. Trumpfheller 0 0
-------------------------- -------------------- -------------------------------
Steve L. Cobb $_____ $_____
-------------------------- -------------------- -------------------------------
Gary E. Hippenstiel $_____ $_____
========================== ==================== ===============================
The Investment Adviser
The Fund's investment Adviser is Legacy Group, LLC, d.b.a. Cash Management
Systems, 290 Turnpike Road, #338, Westborough, Massachusetts, 01581 (the
"Adviser" or "CMS"). David Reavill may be deemed to be a controlling person of
the Adviser due to his ownership of a majority of its shares.
Under the terms of the management agreement (the "Agreement"), the
Adviser is responsible for managing the Fund's investments subject to approval
of the Trust's Board. As compensation for its management services and agreement
to pay the Fund's expenses, the Fund is obligated to pay the Adviser a fee
computed and accrued daily and paid monthly at an annual rate of 0.10% of the
average daily net assets of the Fund. CMS receives no advisory fee for the
periods that the Fund is a "feeder" in a master-feeder relationship.
The Adviser retains the right to use the name "CMS" in connection with
another investment company or business enterprise with which the Adviser is or
may become associated. The Trust's right to use the name "CMS" automatically
ceases ninety days after termination of the Agreement and may be withdrawn by
the Adviser on ninety days written notice.
The Adviser (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. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
<PAGE>
Other Service Providers. The Fund retains AmeriPrime Financial Services, Inc.
(the "Administrator") to manage the Fund's business affairs and provide the Fund
with administrative services, including all regulatory reporting and necessary
office equipment, personnel and facilities. The Administrator receives a monthly
fee from CMS equal to an annual average rate of 0.10% of the Fund's average
daily net assets if the Fund's assets are one hundred million dollars or less
and 0.050% of the Fund's average daily net assets if the Fund's assets are over
one hundred million dollars. The Administrator has entered into a
Sub-Administration agreement with AMR Investment Services, Inc. Pursuant to the
Sub-Administration Agreement, AMR Investment Services, Inc. receives a fee equal
to 0.05% of the Fund's assets if the Fund's assets are $100 million or less for
providing certain administrative services to the Fund on behalf of the
Administrator. The Fund retains Unified Fund Services, Inc., 431 North
Pennsylvania Street, Indianapolis, Indiana 46204 (the "Transfer Agent") to serve
as transfer agent, dividend paying agent and shareholder service agent. The
Trust retains AmeriPrime Financial Securities, Inc. 1793 Kingswood Drive, Suite
200, Southlake, TX 76092 (the "Distributor") to act as the principal distributor
of the Fund's shares. Kenneth D. Trumpfheller, officer and sole shareholder of
the Administrator and the Distributor, is an officer and trustee of the Trust.
The services of the Administrator, Transfer Agent and Distributor are operating
expenses paid by CMS.
The Fund has retained CMS to provide certain supplemental
administrative services to the Fund. Subject to the direction and control of the
Trust, CMS is primarily responsible for developing and maintaining the Fund's
relationships with institutional clients and brokers. CMS is responsible for (i)
designing a multiple class structure for the Fund, (ii) negotiating with brokers
and service providers to implement multiple classes for the Fund, (iii)
completing or supervising filings with the Securities and Exchange Commission
and state securities commissions, (iv) registering trade names and service
marks, (v) supervising asset conversions including shareholder communication and
coordination among service providers, (vi) developing and maintaining
relationships with key personnel within the institutional investor and broker
community and (vii) monitoring shareholder servicing and client satisfaction.
CMS pays its own costs associated with these services, as well as all of the
operating expenses of the Fund, except brokerage, taxes, 12b-1 and servicing
fees, borrowing costs, fees and expenses of non-interested person trustees, the
management fee paid to CMS and extraordinary expenses. It should be noted that
most investment companies pay their own operating expenses directly, while this
Fund's expenses (except those specified) are paid by CMS. For these services,
CMS receives a monthly fee equal to an annual rate of 0.20% of the Fund's
average daily net assets. This is in addition to the management fee paid to CMS.
TRUSTEES AND OFFICERS OF THE AMR TRUST
The Trustees and officers of the AMR Trust are listed below, together
with their principal occupations during the past five years. Unless otherwise
indicated, the address of each person listed below is 4333 Amon Carter
Boulevard, MD 5645, Fort Worth, Texas 76155.
Name, Year of Birth and Position with Principal Occupation During
Address AMR Trust Past 5 Years
------------------------ ------------- --------------------------------
William F. Quinn* (1948) Trustee and President, AMR Investment
President Services, Inc. (1986-Present);
Chairman, President American
Airlines Employees Federal
Credit Union (1989-Present);
Director, Crescent Real Estate
Equities, Inc. (1994-Present);
Vice Chairman, United Way of
Tarrant County, Texas
(1988-Present);Director
,Southern Methodist University
Cox School of Business (1999
-Present); Director, Southern
Methodist University Endowment
Fund Advisory Board (1996-
Present); Trustee, American
AAdvantage Mileage Funds (1995-
Present); Trustee, American
Select Funds (1999-Present).
Alan D. Feld (1936) Trustee Partner, Akin, Gump, Strauss
1700 Pacific Avenue ,Hauer & Feld, LLP (1960-
Suite 4100 Present)#;Director, Clear
Dallas, Texas 75201 Channel Communications (1984-
Present); Director, Centerpoint
Properties, Inc. (1994-Present);
Trustee, American Aadvantage
Mileage Funds (1996 - Present);
Trustee, American Select Funds
(1999-Present).
Ben J. Fortson (1932) Trustee President and CEO, Fortson
301 Commerce Street Oil Company (1958-Present);
Suite 3301 Director, Kimbell Art
Fort Worth, Texas 76102 Foundation (1964-Present);
Director, Burnett Foundation
(1987-Present); Homorary Trustee
,Texas Christian University
(1986-Present); Trustee,
American Aadvantage Mileage
Funds (1996-Present); Trustee,
American Select Funds (1999-
Present).
John S. Justin (1917) Trustee Chairman (1969-Present), Chief
2821 West Seventh Street Executive Officer (1969-1999),
Fort Worth, Texas 76107 Justin Industries, Inc. (a
diversified holding company);
Executive Board Member, Blue
Cross/Blue Shield of Texas (1985
-Present); Board Member, Zale
Lipshy Hospital (1993-Present);
Trustee, Texas Christian
University (1980-Present);
Director and Executive Board
Member, Moncrief Radiation
Center (1985-Present); Trustee,
American Aadvantage Mileage
Funds (1995-Present); Trustee,
American Select Funds (1999-
Present).
Stephen D. O'Sullivan* (1935) Trustee
Consultant (1994-Present);
Trustee, American AAdvantage
Mileage Funds (1995-Present);
Trustee, American Select Funds
(1999-Present).
Roger T. Staubach (1942) Trustee Chairman of the Board and
15601 Dallas Parkway Chief Executive Officer of
Suite 400 The Staubach
Dallas, Texas 75001
Kneeland Youngblood (1955) Trustee Managing Partner, Pharos
100 Crescent Court Capital Group, LLC (a private
Suite 1740 equity firm)
Dallas, Texas 75201
Nancy A. Eckl (1962) Vice Vice President, Trust
President Investments, AMR Investment
Services, Inc.
(1990-Present).
<PAGE>
Name, Year of Birth and Position with Principal Occupation During
Address Each Trust Past 5 Years
Michael W. Fields (1954) Vice Vice President, Fixed Income
Investments, AMR Investment
Services, Inc. (1988-Present).
Barry Y. Greenberg (1963) Vice President Vice President, Legal and
Compliance, AMR Investment
Services, Inc.
Rebecca L. Harris (1966) Treasurer Vice President, Finance
(1995-Present), Controller
(1991-1995), AMR
John B. Roberson (1958) Vice Vice President, Sales and
Marketing, AMR Investment
Services, Inc.
Robert J. Zutz (1953) Secretary Partner, Kirkpatrick &
1800 Massachusetts Ave. NW Lockhart LLP (law firm)
2nd Floor
Washington, D.C. 20036
* Messrs. Quinn and O'Sullivan are deemed to be "interested persons" of
the AMR Trust as defined by the 1940 Act.
2 The law firm of Akin, Gump, Strauss, Hauer & Feld LLP ("Akin, Gump")
provides legal services to American Airlines, Inc., an affiliate of
the manager of the AMR Trust. Mr. Feld has advised the Trusts that he
has had no material involvement in the services provided by Akin, Gump
to American Airlines, Inc. and that he has received no material
benefit in connection with these services. Akin, Gump does not provide
legal services to the manager of the AMT Trust or AMR Corporation.
All Trustees and officers as a group own less than 1% of the
outstanding shares of any of the Funds.
As compensation for their service to the American AAdvantage Funds, the
American AAdvantage Mileage Funds, the American Select Funds and the AMR Trust
(collectively, the "Trusts"), the Independent Trustees and their spouses receive
free air travel from American Airlines, Inc., an affiliate of the Manager. The
Trusts pay American Airlines the flight service charges incurred for these
travel arrangements. The Trusts compensate each Trustee with payments in an
amount equal to the Trustees' income tax on the value of this free airline
travel. Mr. O'Sullivan, as a retiree of American Airlines, Inc., already
receives flight benefits. Prior to March 1, 2000, the Trusts compensated Mr.
O'Sullivan up to $10,000 annually to cover his personal flight service charges
and the charges for his three adult children, as well as any income tax charged
on the value of these flight benefits. Beginning March 1, 2000, Mr. O'Sullivan
will receive an annual retainer of $20,000 plus $1,250 for each Board meeting
attended. Trustees are also reimbursed for any expenses incurred in attending
Board meetings. These amounts (excluding reimbursements) are reflected in the
following table for the fiscal year ended October 31, 2000. The compensation
amounts below include the flight service charges paid by the Trusts to American
Airlines.
<TABLE>
<S> <C> <C> <C> <C>
Pension or Retirement
Aggregate Benefits Accrued as Part Total Compensation
Compensation of the AAdvantage Estimated Annual From the
From the AAdvantage Trust's Expenses Benefits Upon Trusts
----------- ---------------- ------
Name of Trustee Trust Retirement
--------------- ----- ----------
William F. Quinn $0 $0 $0 $0
Alan D. Feld $_____ $0 $0 $_______
Ben J. Fortson $_____ $0 $0 $______
John S. Justin $0 $0 $0 $0
Stephen D. O'Sullivan $0 $0 $0 $0
Roger T. Staubach $_____ $0 $0 $______
Kneeland Youngblood $_____ $0 $0 $______
</TABLE>
DISTRIBUTION PLAN
With respect to the Fund, the Trust has adopted a Distribution Plan
pursuant to Rule 12b-1 which was promulgated by the Securities and Exchange
Commission pursuant to the Investment Company Act of 1940 (the "Plan"). 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 the 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 Advisers
and others that are engaged in the sale of Fund Shares, or that may be advising
shareholders of the Fund regarding the purchase, sale or retention of shares;
(b) expenses of maintaining personnel who engage in or support distribution of
Fund shares; (c) costs of preparing, printing and distributing prospectuses and
statements of additional information and reports of the Fund for recipients
other than existing shareholders of the Fund; (d) costs of formulating and
implementing marketing and promotional activities; (e) costs of preparing,
printing and distributing sales literature; (f) 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 (g) 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 Fund shares, either directly or through other persons with which the Trust
has entered into agreements related to this Plan. The expenditures to be made by
the Trust for these distribution activities, 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 0.75% of the average daily net asset value of the
Fund. Such payments for distribution activities may be made directly by the
Trust or the Trust's investment adviser and distributor may pay such expenses
and obtain reimbursement from the Trust.
The Trustees expect that the adoption of the Plan will significantly
enhance the Fund's ability to expand distribution. It is also anticipated that
an increase in the size of the Fund will facilitate more efficient portfolio
management and assist the Fund in seeking to achieve its investment objective.
The Plan has been approved by the Fund's Board of Trustees, including a majority
of the Trustees who are not "interested persons" of the Fund and who have no
direct or indirect financial interest in the Plan or any related agreement, by a
vote cast in person. Continuation of the Plan and the related agreements must be
approved by the Trustees annually, in the same manner, and the Plan or any
related agreement may be terminated at any time without penalty by a majority of
such independent Trustees or by a majority of the outstanding shares of the
Fund. Any amendment increasing the maximum percentage payable under the Plan or
other material change must be approved by a majority of the outstanding shares
of the Fund, and all other material amendments to a Plan or any related
agreement must be approved by a majority of the independent Trustees.
SHAREHOLDER SERVICING PLAN
With respect to the Fund, the Trust has adopted a Shareholder Servicing
Plan (the "Servicing Plan"). Pursuant to the Servicing Plan, and in order to
further enhance the distribution of the Fund's shares, the Fund may incur
expenses at a rate of up to 0.25% of the average daily net assets of the Fund
for payments made to securities dealers or other financial intermediaries,
financial institutions, investment advisers and others that (a) hold shares of
the Fund for shareholders in omnibus accounts or as shareholders of record or
provide shareholder support or administrative services to the Fund and its
shareholders or (b) render shareholder support services not otherwise provided
by the Trust's transfer agent, 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. These payments are in addition to those made under the
Distribution Plan.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Adviser is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In placing portfolio transactions, the
Adviser 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 Adviser 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 Adviser may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute
portfolio transactions.
The Adviser 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 Adviser 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 Adviser 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 Adviser'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 Adviser in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Adviser in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Adviser, 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
Adviser that the review and study of the research and other information will not
reduce the overall cost to the Adviser 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 Adviser's clients seek
to acquire the same security at about the same time, the Trust may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Trust may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Trust. In the event that more than one client wants to purchase or sell the same
security on a given date, the purchases and sales will normally be made by
random client selection.
PURCHASE AND SALE INFORMATION
How To Invest In the Fund. The Fund is "no-load" and shares of the Fund are sold
directly to investors on a continuous basis, subject to a minimum initial
investment of $2,500 and minimum subsequent investments of $50. These minimums
may be waived by the Adviser for accounts participating in an automatic
investment program. Investors choosing to purchase or redeem their shares
through a broker/dealer or other institution may be charged a fee by that
institution. Investors choosing to purchase or redeem shares directly from the
Fund will not incur charges on purchases or redemptions. To the extent
investments of individual investors are aggregated into an omnibus account
established by an investment adviser, broker or other intermediary, the account
minimums apply to the omnibus account, not to the account of the individual
investor.
Wire orders will be accepted only on a day on which the Fund, Custodian and
Transfer Agent are open for business. A wire purchase will not be considered
made until the wired money is received and the purchase is accepted by the Fund.
Any delays which may occur in wiring money, including delays which may occur in
processing by the banks, are not the responsibility of the Fund or the Transfer
Agent. There is presently no fee for the receipt of wired funds, but the right
to charge shareholders for this service is reserved by the Fund.
Additional Investments - You may purchase additional shares of the Fund
at any time (subject to minimum investment requirements) by mail, wire, or
automatic investment. Each additional mail purchase request must contain your
name, the name of your account(s), your account number(s), and the name of the
Fund. Checks should be made payable to Mutual Fund and should be sent to the
address listed above. A bank wire should be sent as outlined above.
Automatic Investment Plan - You may make regular investments in the
Fund with an Automatic Investment Plan by completing the appropriate section of
the account application and attaching a voided personal check. Investments may
be made monthly to allow dollar-cost averaging by automatically deducting $50 or
more from your bank checking account. You may change the amount of your monthly
purchase at any time.
Tax Sheltered Retirement Plans - Since the Fund is oriented to longer
term investments, shares of the Fund may be an appropriate investment medium for
tax sheltered retirement plans, including: individual retirement plans (IRAs);
simplified employee pensions (SEPs); SIMPLE plans; 401(k) plans; qualified
corporate pension and profit sharing plans (for employees); tax deferred
investment plans (for employees of public school systems and certain types of
charitable organizations); and other qualified retirement plans. You should
contact the Transfer Agent for the procedure to open an IRA or SEP plan, as well
as more specific information regarding these retirement plan options.
Consultation with an attorney or tax Adviser regarding these plans is advisable.
Custodial fees for an IRA will be paid by the shareholder by redemption of
sufficient shares of the Fund from the IRA unless the fees are paid directly to
the IRA custodian. You can obtain information about the IRA custodial fees from
the Transfer Agent.
Other Purchase Information - Dividends begin to accrue after you become
a shareholder. The Fund does not issue share certificates. All shares are held
in non-certificate form registered on the books of the Fund and the Fund's
Transfer Agent for the account of the shareholder. The rights to limit the
amount of purchases and to refuse to sell to any person are reserved by the
Fund. If your check or wire does not clear, you will be responsible for any loss
incurred by the Fund. If you are already a shareholder, the Fund can redeem
shares from any identically registered account in the Fund as reimbursement for
any loss incurred. You may be prohibited or restricted from making future
purchases in the Fund.
How To Redeem Shares. All redemptions will be made at the net asset value
determined after the redemption request has been received by the Transfer Agent
in proper order, as defined below. Shareholders may receive redemption payments
in the form of a check or federal wire transfer. The proceeds of the redemption
may be more or less than the purchase price of your shares, depending on the
market value of the Fund's securities at the time of your redemption. Presently
there is no charge for wire redemptions; however, the Fund reserves the right to
charge for this service. Any charges for wire redemptions will be deducted from
the shareholder's Fund account by redemption of shares. Investors choosing to
purchase or redeem their shares through a broker/dealer or other institution may
be charged a fee by that institution.
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the Fund
requires that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Fund or American Data Services, Inc., a
shareholder, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
By Telephone - You may redeem any part of your account in the Fund by
calling the Transfer Agent at (800) ___-____. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at
any time by the Fund or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Fund, although neither the Fund nor the Transfer Agent has ever
experienced difficulties in receiving and in a timely fashion responding to
telephone requests for redemptions or exchanges. If you are unable to reach the
Fund by telephone, you may request a redemption or exchange by mail.
Additional Information - If you are not certain of the requirements for
a redemption please call the Transfer Agent at (800) ___-____. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing or under any emergency circumstances, as determined
by the Securities and Exchange Commission, the Fund may suspend redemptions or
postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $2,500 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 Adviser concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption at any time if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding. Net asset value per
share is determined as of the close of the New York Stock Exchange (4:00 p.m.,
Eastern time), and on any other day on which there is sufficient trading in the
Fund's securities to materially affect the net asset value. The Fund is not
open, and NAV is not calculated, on each day that the Exchange is closed for
business, and on Columbus Day and Veterans Day.
The portfolio securities of the Fund are valued using the amortized
cost method of valuation, which normally approximates market value, and which is
intended to result in a constant net asset value of $1.00 per share. Although
every effort is made to maintain the net asset value of the Fund at $1.00 per
share, there can be no assurance that this constant net asset value will be
maintained at all time. For example, in the event of rapid and sharp increases
in current interest rates, a national credit crisis, or a default by one or more
of the issuers of the Fund's portfolio securities, then it is possible that the
Fund's net asset value could decline below $1.00 per share.
PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return for the period indicated that would equate the initial amount invested
to the ending redeemable value, according to the following formula:
P(1+T)n=ERV
Where: P =a hypothetical $1,000 initial investment
T =average annual total return
n =number of years
ERV =ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the applicable
period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
The "yield" of the Fund refers to the income generated by an investment
in the Fund over a seven-day period. This income is then annualized. The amount
of income generated by investments during the week is assumed to be generated
each week over a 52-week period and is shown as a percentage of the investment.
The "effective yield" is calculated similarly but, when annualized, the income
earned by an investment in the Fund is assumed to be reinvested. The effective
yield will be slightly higher than the yield because of the compounding effect
of this assumed reinvestment.
The yield of the Fund does not necessarily reflect income actually
earned by the Fund because of certain adjustments required by the Securities and
Exchange Commission and, therefore, may not correlate to the dividends or other
distributions paid to shareholders. To the extent that financial institutions
and broker/dealers charge fees in connection with services provided in
conjunction with an investment in the Fund, performance will be reduced for
those shareholders paying those fees.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the Standard & Poor's 500 Stock Index or the Dow Jones Industrial Average.
In addition, the performance of the Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. For the
Fund, comparisons may also include Bank Rate Monitor (TM), N. Palm Beach, Fla.
33408, IBC's Money Fund Report(TM), CDA Investment Technologies, Inc.,
Wiesenberger Investment Companies Services, and other industry publications. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of the Fund. Performance rankings and ratings
reported periodically in national financial publications such as Barron's and
Fortune also may be used.
From time to time, the Fund advertises its yield and effective yield. Both yield
figures are based on historical earnings and are not intended to indicate future
performance. It can be expected that these yields will fluctuate substantially.
The yield of the Fund refers to the income generated by an investment in the
Fund over a seven-day period (which period will be stated in the advertisement).
This income is then annualized. That is the amount of income generated by the
investment during that week is assumed to be generated each week over a 52-week
period and is shown as a percentage of the investment. The effective yield is
calculated similarly but, when annualized, the income earned by an investment in
the Fund is assumed to be reinvested. The effective yield will be slightly
higher than the yield because of the compounding effect of this assumed
reinvestment. The Fund' s yield and effective yield may reflect absorbed
expenses pursuant to any undertakings that may be in effect.
TAXES
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
the Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any realized
capital gains.
For federal income tax purposes, dividends paid by the Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 (the "Tax Reform Act"), all distributions of net
short term capital gains to individuals are taxed at the same rate as ordinary
income. All distributions of net capital gains to corporations are taxed at
regular corporate rates. Any distributions designated as being made from net
realized long term capital gains are taxable to shareholders as long term
capital gains regardless of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisers regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
On the application or other appropriate form, the Fund will request the
shareholder's certified taxpayer identification number (social security number
for individuals) and a certification that the shareholder is not subject to
backup withholding. Unless the shareholder provides this information, the Fund
will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the Fund may
make a corresponding charge against the account.
CUSTODIAN
______________________________, address____________________________, is
Custodian of the Fund's investments. The Custodian acts as the Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
TRANSFER AGENT
Unified Fund Services, Inc. ("Unified"), 431 North
Pennsylvania Street, Indianapolis, Indiana 46204, acts as the Fund's transfer
agent and dividend paying agent and, in such capacities, maintains the records
of each shareholder's account, answers shareholders' Inquiries concerning their
accounts, processes purchases and redemptions of the Fund's shares, acts as
dividend and distribution disbursing agent and performs other accounting and
shareholder service functions. In addition, Unified provides the Fund with fund
accounting services, which includes certain monthly reports, record-keeping and
other management-related services. For its services as fund accountant, Unified
receives an annual fee from the Adviser equal to 0.0275% of the Fund's assets up
to $100 million (subject to various monthly minimum fees, the maximum being
$2,000 per month for assets of $20 to $100 million).
ACCOUNTANTS
The firm of Ernst & Young, LLP, _____________, Dallas, Texas, has been selected
as independent public accountants for the Fund for the fiscal year ending
December 31, 2001. Ernst & Young LLP performs an annual audit of the Fund's
financial statements and provides financial, tax and accounting consulting
services as requested.
DISTRIBUTOR
[AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite
200, Southlake, Texas 76092], is the exclusive agent for distribution of shares
of the Fund. The Distributor is obligated to sell the shares of the Fund on a
best efforts basis only against purchase orders for the shares. Shares of the
Fund are offered to the public on a continuous basis.
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 American Aadvantage Money Market Fund's Annual Report to
Shareholders for the fiscal year ended December 31, 1999. The Trust will provide
the Annual Report without charge by calling the Fund at 1-800-506-9922.
<PAGE>
Appendix
Ratings of Long-Term Obligations-The Portfolio utilizes ratings
provided by the following nationally recognized statistical rating organizations
("Rating Organizations") in order to determine eligibility of long-term
obligations.
The four highest Moody's Investors Service, Inc. ("Moody's") ratings
for long-term obligations (or issuers thereof) are Aaa, Aa, A and Baa.
Obligations rated Aaa are judged by Moody's to be of the best quality.
Obligations rated Aa are judged to be of high quality by all standards. Together
with the Aaa group, such debt comprises what is generally known as high-grade
debt. Moody's states that debt rated Aa is rated lower than Aaa debt because
margins of protection or other elements make long-term risks appear somewhat
larger than for Aaa debt. Obligations which are rated A by Moody's possess many
favorable investment attributes and are considered "upper medium-grade
obligations." Obligations which are rated Baa by Moody's are considered to be
medium grade obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Moody's also
supplies numerical indicators 1, 2, and 3 to rating categories. The modifier 1
indicates that the security is in the higher end of its rating category; the
modifier 2 indicates a mid-range ranking; and modifier 3 indicates a ranking
toward the lower end of the category.
The four highest Standard & Poor's ratings for long-term obligations
are AAA, AA, A and BBB. Obligations rated AAA have the highest rating assigned
by Standard & Poor's. Capacity to pay interest and repay principal is extremely
strong. Obligations rated AA have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in a small degree.
Obligations rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions. Obligations rated BBB by Standard &
Poor's are regarded as having adequate capacity to pay interest and repay
principal. Whereas it normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal for debt in this category
than in higher rated categories.
Duff & Phelps' four highest ratings for long-term obligations are AAA,
AA, A and BBB. Obligations rated AAA have the highest credit quality with risk
factors being negligible. Obligations rated AA are of high credit quality and
strong protection factors. Risk is modest but may vary slightly from time to
time because of economic conditions. Obligations rated A have average but
adequate protection factors. However, risk factors are more variable and greater
in periods of economic stress. Obligations rated BBB have below average
protection factors with considerable variability in risk during economic cycles,
but are still considered sufficient for prudent investment.
Thomson BankWatch ("BankWatch") long-term debt ratings apply to
specific issues of long-term debt and preferred stock. They specifically assess
the likelihood of an untimely repayment of principal or interest over the term
to maturity of the rated instrument. BankWatch's four highest ratings for
long-term obligations are AAA, AA, A and BBB. Obligations rated AAA indicate
that the ability to repay principal and interest on a timely basis is very high.
Obligations rated AA indicate a superior ability to repay principal and interest
on a timely basis, with limited incremental risk compared to issues rated in the
highest category. Obligations rated A indicate the ability to repay principal
and interest is strong. Issues rated A could be more vulnerable to adverse
developments (both internal and external) than obligations with higher ratings.
BBB is the lowest investment grade category and indicates an acceptable capacity
to repay principal and interest. Issues rated BBB are, however, more vulnerable
to adverse developments (both internal and external) than obligations with
higher ratings.
Fitch IBCA, Inc. ("Fitch") investment grade bond ratings provide a
guide to investors in determining the credit risk associated with a particular
security. The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt in a timely
manner. Obligations rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonable
foreseeable events. Bonds rated AA are considered to be investment grade and of
very high credit quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as bonds rated AAA. Bonds
rated A are considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings. Bonds rated BBB are considered to
be investment grade and of satisfactory credit quality. The obligor's ability to
pay interest and repay principal is considered to be adequate. Adverse changes
in economic conditions and circumstances, however, are more likely to have
adverse impact on these bonds, and therefore impair timely payment. The
likelihood that the ratings of these bonds will fall below investment grade is
higher than for bonds with higher ratings.
Standard & Poor's, Duff & Phelps and Fitch apply indicators, such as
"+","-," or no character, to indicate relative standing within the major rating
categories.
Ratings of Short-Term Obligations-The rating P-1 is the highest
short-term rating assigned by Moody's. Among the factors considered by Moody's
in assigning ratings are the following: (1) evaluations of the management of the
issuer; (2) economic evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in certain areas; (3)
evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of a parent
company and the relationships which exist with the issuer; and (8) recognition
by the management of obligations which may be present or may arise as a result
of public interest questions and preparations to meet such obligations.
Short-term obligations (or issuers thereof) rated A-1 by Standard &
Poor's have the following characteristics. Liquidity ratios are adequate to meet
cash requirements. The issuer has access to at least two additional channels of
borrowing. Basic earnings and cash flow have an upward trend with allowance made
for unusual circumstances. Typically, the issuer's industry is well established
and the issuer has a strong position within the industry. The reliability and
quality of management are unquestioned. Relative strength or weakness of the
above factors determines whether the issuer's short-term obligation is rated
A-1, A-2, or A-3.
The distinguishing feature of Duff & Phelps Credit Ratings' short-term
rating is the refinement of the traditional 1 category. The majority of
short-term debt issuers carry the highest rating, yet quality differences exist
within that tier. Obligations rated D-1+ indicate the highest certainty of
timely payment. Safety is just below risk-free U.S. Treasury obligations.
Obligations rated D-1 have a very high certainty of timely payment. Risk factors
are minor. Obligations rated D-1- have a high certainty of timely payment. Risk
factors are very small. Obligations rated D-2 have good certainty of timely
payment. Liquidity factors and company fundamentals are sound. Although ongoing
funding needs may enlarge total financing requirements, access to capital
markets is good. Risk factors are small.
Thomson BankWatch short-term ratings are intended to assess the
likelihood of an untimely or incomplete payment of principal or interest.
Obligations rated TBW-1 indicate a very high likelihood that principal and
interest will be paid on a timely basis. While the degree of safety regarding
timely payment of principal and interest is strong for an obligation rated
TBW-2, the relative degree of safety is not as high as for issues rated TBW-1.
Fitch's short-term ratings apply to debt obligations that are payable on demand
or have original maturities of generally up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes. A rating of F-1+ indicates exceptionally strong credit quality. Issues
assigned this rating are regarded as having the strongest degree of assurance
for timely payment. Obligations rated F-1 have very strong credit quality.
Issues assigned this rating reflect an assurance of timely payment only slightly
less in degree than issues rated F-1+. Issues assigned a rating of F-2 indicate
good credit quality. Issues assigned this rating have a satisfactory degree of
assurance for timely payment, but the margin of safety is not as great as for
issues assigned F-1+ and F-1 ratings.
<PAGE>
WESTCOTT
FUNDS
Prospectus dated December 19, 2000
Westcott Technology Fund
Westcott Large-Cap Fund
Westcott Fixed Income Fund
230 Westcott, Suite 1
Houston, Texas 77007
(800) 998-6658
Like all mutual fund shares and prospectuses, the Securities and Exchange
Commission has not approved or disapproved these shares or passed upon the
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
8922 11/27/00 8:51 AM
<PAGE>
TABLE OF CONTENTS
Page
Westcott Technology Fund........................................................
Westcott Large-Cap Fund.........................................................
Westcott Fixed Income Fund......................................................
How the Funds Have Performed....................................................
Fees and Expenses of the Funds..................................................
How To Buy Shares...............................................................
Distribution Plans..............................................................
Additional Purchase Information.................................................
How To Redeem Shares............................................................
How To Exchange Shares..........................................................
Determination of Net Asset Value................................................
Dividends, Distributions and Taxes..............................................
Management of the Funds.........................................................
Other Information About Investments.............................................
Financial Highlights............................................................
For More Information ...............................................Back Cover
<PAGE>
WESTCOTT TECHNOLOGY FUND
Investment Objective
The investment objective of the Technology Fund is long term growth of
capital.
Principal Strategies
Under normal circumstances, the Fund will invest at least 65% of its total
assets in common stocks of U.S. companies that rely extensively on technology in
their product development and/or operations or will derive a substantial portion
of their sales from technology and technology-related products or services.
These companies are in fields such as internet services and development,
computer software and hardware, telecommunication services and equipment,
electronics, data management and storage, networking, IT (information
technology) services and consulting, biotechnology, robotics and video
technologies. Any ordinary income received from portfolio securities is entirely
incidental to the Fund's principal strategy.
While the Fund invests in technology companies generally, the Fund will,
under normal circumstances, invest at least 25% of its assets in internet
companies. These companies are in internet services and development fields such
as internet retailing, internet infrastructure, internet software development,
online advertising, internet business development consulting, and internet
business development incubators.
The Fund may sell a stock if the Fund's adviser believes the company's
long term growth prospects have deteriorated. Growth prospects may be measured
by earnings, revenue growth, stock price performance, market dominance or
technological innovation.
Principal Risks of Investing in the Fund
o Company risk is the risk that the Fund might decrease in value in response to
the activities and financial prospects of an individual company.
o Market risk is the risk that the Fund might decrease in value in response to
general market and economic conditions.
o Technology sector risk is the risk that because the Fund is concentrated in
the technology sector, significant weakness in this sector could result in
significant losses to the Fund. Technology companies may be significantly
affected by falling prices and profits and intense competition, and their
products may be subject to rapid obsolescence. Changes in governmental policies,
such as telephone and cable regulations and anti-trust enforcement, may have a
material effect on the products and services of technology companies, including
internet companies. In addition, the rate of technological change often requires
extensive and sustained investment in research and development.
o Internet concentration risk means that your investment in the Fund is subject
to special risks because the Fund invests at least 25% of its assets in internet
companies. Significant weakness in internet companies could result in
significant losses to the Fund. Internet companies are subject to competitive
pressures and changing demands that may have a significant effect on the
financial condition of internet companies. It is likely that some of today's
public internet companies will not exist in the future. The price of many
internet stocks has risen based on projections of future earnings and company
growth. If a company does not perform as expected, the price of the stock could
decline significantly. Many internet companies are currently operating at a loss
and may never be profitable. o Volatility risk means that common stocks of
technology companies, including internet companies, tend to be more volatile
than other investment choices. Because of its narrow focus, the Fund's
performance is closely tied to any factors which may affect technology
companies, including internet companies, and, as a result, is more likely to
fluctuate than that of a fund which is invested in a broader range of companies.
o Smaller company risk means that the stocks of smaller sized companies are
subject to certain risks, including: possible dependence on a limited product
line, market, financial resources or management group, less frequent trading and
trading with smaller volume than larger stocks, which may make it difficult for
the Fund to buy or sell the stocks, and greater fluctuation in value than
larger, more established company stocks.
o Portfolio turnover risk is the risk that the adviser's investment strategy may
involve active trading and could result in a high portfolio turnover rate. The
Fund does not intend to purchase or sell securities for short term trading
purposes. However, if the objective of the Fund would be better served, short
term profits or losses may be realized from time to time. To the extent the Fund
has high portfolio turnover, it will generally incur higher brokerage
commissions than those incurred by a fund with a lower portfolio turnover rate
(which would lower the Fund's total return), and the higher turnover rate may
result in the realization for federal tax purposes of more net capital gains
(which may be ordinary income).
o As with any mutual fund investment, the Fund's returns will vary and you could
lose money. o The Fund is not a complete investment program.
Is this Fund Right for You?
The Fund may be a suitable investment for:
o long term investors seeking to diversify into technology securities o
investors willing to accept significant price fluctuations in their investment o
investors who can tolerate the greater risks associated with technology
investments
WESTCOTT LARGE-CAP FUND
Investment Objective
The investment objective of the Large-Cap Fund is long term growth of
capital.
Principal Strategies
The Fund will normally invest at least 65 % of its assets in common stocks
of larger-sized U.S. companies (those with a market capitalization above $5
billion). The Fund's advisor selects stocks based on their long-term earnings
potential and capital appreciation prospects. The adviser focuses on companies
with high earnings growth and stock prices that the adviser considers to be
undervalued based on the company's historic returns.
The Fund may sell a stock if the Fund's adviser believes that the stock no
longer possesses superior earnings and price growth relative to its peers and/or
the S&P 500 Index. The adviser will also consider negative changes in earnings
per share estimates and material changes in the company's business plan that may
adversely affect future earnings momentum.
Principal Risks of Investing in the Fund
o Company risk is the risk that the Fund might decrease in value in response to
the activities and financial prospects of an individual company.
o Market risk is the risk that the Fund might decrease in value in response to
general market and economic conditions.
o Volatility risk means that common stocks tend to be more volatile than
other investment choices.
o The Fund is not a complete investment program.
o As with any mutual fund investment, the Fund's returns will vary and you could
lose money.
WESTCOTT FIXED INCOME FUND
Investment Objective
The investment objective of the Fixed Income Fund is income over the long
term consistent with preservation of capital.
Principal Strategies
The Fund invests primarily in a broad range of investment grade fixed
income securities. These include bonds, notes, convertible bonds,
mortgage-backed securities, collateralized mortgage obligations, corporate debt,
government securities, zero coupon bonds and short term obligations, such as
commercial paper and repurchase and reverse repurchase agreements. The Fund's
advisor typically selects fixed income securities with maturities of less than
five years, based on the available yield at various maturity levels. The Fund
will normally invest at least 65% of its assets in fixed income securities.
The Fund may sell a security if its rating is downgraded, to shorten or lengthen
the average maturity of the Fund's portfolio, or if the Fund's adviser believes
that the issuer's business is experiencing material negative changes.
Principal Risks of Investing in the Fund
o Interest rate risk is the risk that the value of your investment may decrease
when interest rates rise. To the extent the Fund invests in fixed income
securities with longer maturities, the Fund will be more greatly affected by
changes in interest rates, and will be more volatile, than a fund that invests
in securities with shorter maturities.
o Credit risk is the risk that the issuer of the fixed income security may not
be able to make interest and principal payments when due. Generally, the
lower the credit rating of a security, the greater the risk that the issuer
will default on its obligation.
o Prepayment risk means that during periods of declining interest rates,
prepayment of loans underlying mortgage-backed securities usually accelerate.
Prepayment may shorten the effective maturities of these securities and the Fund
may have to reinvest at lower interest rates.
o The Fund is not a complete investment program.
o As with any mutual fund investment, the Fund's returns will vary and you could
lose money.
<PAGE>
HOW THE FUNDS HAVE PERFORMED
Although past performance of a fund is no guarantee of how it will perform
in the future, historical performance may give you some indication of the risk
of investing in the fund because it demonstrates how its returns have varied
over time. The Bar Chart and Performance Table that would otherwise appear in
this prospectus have been omitted because the Funds are recently organized and
have limited performance histories.
FEES AND EXPENSES OF THE FUNDS
The tables describe the fees and expenses that you may pay if you buy and
hold shares of a Fund.
<TABLE>
<S> <C> <C> <C>
Shareholder Fees
(fees paid directly from your investment) Class A Class B Institutional
------- ------- -------------
Technology Fund
Maximum Sales Charge (Load) Imposed on
Purchases (as a percentage of offering price) 5.00% NONE NONE
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price or
redemption proceeds, whichever is less) NONE* 5.00% NONE
Large-Cap Fund
Maximum Sales Charge (Load) Imposed on
Purchases (as a percentage of offering price) 5.00% NONE NONE
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price or
redemption proceeds, whichever is less) NONE* 5.00% NONE
Fixed Income Fund
Maximum Sales Charge (Load) Imposed on
Purchases (as a percentage of offering price) 3.00% NONE NONE
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price or
redemption proceeds, whichever is less) NONE* 3.00% NONE
</TABLE>
*If you purchase $1 million or more of Class A shares of a Fund, the purchase
may be made without an initial sales load. However, those shares are subject to
a CDSC if redeemed within one year of the date of purchase. See "How To Buy
Shares".
<PAGE>
<TABLE>
<S> <C> <C> <C>
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Technology Fund Class A Class B Institutional
------- ------- -------------
Management Fees 1.70% 1.70% 1.70%
Distribution and/or Service (12b-1) Fees 0.25% 1.00% None
Other Expenses 0.14% 0.15%1 0.16%
----- ------ -----
Total Annual Fund Operating Expenses 2.09% 2.85% 1.86%
Expense Reimbursement2 0.14% 0.15% 0.16%
----- ----- -----
Net Expenses 1.95% 2.70% 1.70%
Large-Cap Fund
Management Fees 1.00% 1.00% 1.00%
Distribution and/or Service (12b-1) Fees 0.25% 1.00% None
Other Expenses1 0.15% 0.15% 0.15%
----- ----- --------------
Total Annual Fund Operating Expenses 1.40% 2.15% 1.15%
Expense Reimbursement2 0.15% 0.15% 0.15%
----- ----- -----
Net Expenses 1.25% 2.00% 1.00%
Fixed Income Fund
Management Fees 0.75% 0.75% 0.75%
Distribution and/or Service (12b-1) Fees 0.25% 1.00% None
Other Expenses1 0.15% 0.15% 0.15%
----- ----- --------------
Total Annual Fund Operating Expenses 1.15% 1.90% 0.90%
Expense Reimbursement2 0.15% 0.15% 0.15%
----- ----- --------------
Net Expenses 1.00% 1.75% 0.75%
</TABLE>
1 "Other Expenses" are based on estimated amounts for the current fiscal year.
2 The Funds' adviser has contractually agreed to reimburse each Fund for the
fees and expenses of the disinterested Trustees incurred by the Fund through
February 1, 2002.
Example:
This Example is intended to help you compare the cost of investing in the
Funds with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time
periods indicated, reinvest dividends, and then redeem all of your shares at the
end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Funds operating expenses remain the same. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<S> <C> <C> <C> <C>
Technology Fund 1 year 3 years 5 years 10 years
------ ------- ------- --------
Class A $[ ] $[ ] $[ ] $[ ]
Class B $[ ] $[ ] $[ ] $[ ]
Institutional $[ ] $[ ] $[ ] $[ ]
<PAGE>
Large-Cap Fund 1 year 3 years
------ -------
Class A $[ ] $[ ]
Class B $[ ] $[ ]
Institutional $[ ] $[ ]
Fixed Income Fund 1 year 3 years
------ -------
Class A $[ ] $[ ]
Class B $[ ] $[ ]
Institutional $[ ] $[ ]
</TABLE>
<TABLE>
For Class B shares, you would pay the following expenses if you did not
redeem your shares:
<S> <C> <C>
1 year 3 years
------ -------
Technology Fund $[ ] $[ ]
Large-Cap Fund $[ ] $[ ]
Fixed Income Fund $[ ] $[ ]
</TABLE>
HOW TO BUY SHARES
Initial Purchase
The minimum initial investment in each Fund is $1,000 ($200 for qualified
retirement accounts and medical savings accounts). The minimum initial
investment in each Fund is $50 for shareholders participating in the continuing
automatic investment plan.
You may open an account and make an initial investment through securities
dealers who have a sales agreement with Unified Financial Securities, Inc., the
Funds' distributor. Your securities dealer may charge you additional fees. To
the extent investments of individual investors are aggregated into an omnibus
account established by an investment adviser, broker or other intermediary, the
account minimums apply to the omnibus account, not to the account of the
individual investor.
By Mail
You may also make a direct initial investment by following these steps:
complete and sign the investment application form which accompanies this
Prospectus;
o draft a check made payable to the appropriate Fund;
o identify on the check and the application the Class in which you would like
to invest;
o mail the application and check to:
U.S. Mail: Westcott Funds Overnight: Westcott Funds
Unified Fund Services, Inc. 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 a 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 "Transfer Agent") at (800) 998-6658 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: Westcott Funds
Fund Name ____________________________ (write in fund name) Class Name
____________________________ (write in class name) Account Name
__________________________ (write in shareholder name) For the Account #
________________________ (write in account number) D.D.A.# 821-637634
You must mail a signed application to Unified Fund Services, Inc 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.
Sales Loads
o Class A Shares
Shares of the Fund are purchased at the public offering price. The public
offering price for Class A shares of each fund is the next determined NAV plus a
sales load as shown in the following table.
<TABLE>
<S> <C> <C> <C>
======================================== ================================================ ================================
Sales Load as of % of:
Technology Fund and Public Net Dealer Reallowance as % of
Large Cap Fund Offering Amount Public Offering Price
Price
Amount of Investment Invested
======================================== ================================================ ================================
Less than $25,000 5.00% 5.26% 5.00%
$25,000 but less than $50,000 4.75% 4.99% 4.75%
$50,000 but less than $100,000 4.50% 4.71% 4.50%
$100,000 but less than $200,000 3.75% 3.90% 3.75%
$200,000 but less than $500,000 3.25% 3.36% 3.25%
$500,000 but less than $1million 2.00% 2.04% 2.00%
$1 million or more None* None* 1.00%
======================================== ================================================ ================================
======================================== ================================================ ================================
Sales Load as of % of:
Fixed Income Fund Public Net Dealer Reallowance as % of
Offering Amount Public Offering Price
Amount of Investment Price
Invested
======================================== ================================================ ================================
Less than $50,000 3.00% 3.09% 3.00%
$50,000 but less than $100,000 2.25% 2.30% 2.25%
$100,000 but less than $250,000 1.75% 1.78% 1.75%
$250,000 but less than $500,000 1.50% 1.52% 1.50%
$500,000 but less than $1million 0.50% 0.50% 0.50%
$1 million or more None* None* 0.25%
======================================== ================================================ ================================
</TABLE>
*If you purchase $1 million or more of Class A shares of a Fund, the purchase
may be made without an initial sales load. However, those shares are subject to
a contingent deferred sales charge ("CDSC") if redeemed within one year of the
date of purchase. The CDSC is 1.00% for the Technology Fund and Large Cap Fund,
and 0.25% for the Fixed Income Fund, based on the lower of the original purchase
price or net asset value at the time of the redemption. Reinvested dividends and
distributions from Class A shares are not subject to the CDSC.
<PAGE>
Class B Shares
You can purchase Class B shares at NAV. However, when you redeem them, you
may pay a contingent deferred sales change ("CDSC") in the following
percentages:
<TABLE>
<S> <C> <C> <C>
Year Since Purchase Date TECHNOLOGY Fund* Large Cap Fund* Fixed Income Fund**
First 5% 5% 3%
Second 4 4 2
Third 3 3 2
Fourth 3 3 1
Fifth 2 2 None
Sixth 1 1 None
Seventh and following None None None
</TABLE>
* Convert to Class A shares after eighth year. **Convert to Class A shares after
sixth year.
o Institutional Shares
Institutional shares are available for purchase by registered investment
advisers, bank trust departments, financial planners and other financial
intermediaries on behalf of their clients. Institutional shareholders pay no
sales load or 12b-1 fees.
DISTRIBUTION PLANS
Each Fund has adopted plans under Rule 12b-1 that allow Class A shares and
Class B shares of the Fund to pay distribution fees for the sale and
distribution of its shares. The distribution plan for Class B shares also allows
the class to pay for services provided to shareholders. Class A shares pay
annual 12b-1 expenses of 0.25% and Class B shares pay annual 12b-1 expenses of
1.00% (of which 0.75% is an asset based sales charge and 0.25% is a service
fee). Because these fees are paid out of the Fund's assets on an on-going basis,
over time these fees will increase the cost of your investment and may cost you
more than paying other types of sales charges.
ADDITIONAL PURCHASE INFORMATION
Additional Purchases
You may purchase additional shares of any Fund (subject to the minimum
investment of $50) by mail, wire or automatic investment. If you purchase
additional Class A shares, you will pay a sales load unless the purchase is made
by reinvesting a dividend or capital gains distribution. If your securities
dealer received concessions for selling shares of a Fund to you, such securities
dealer will receive the concessions described above with respect to additional
investments. Each additional mail purchase request must contain:
o your name
o the name of your account(s),
o your account number(s),
o the name of the Fund
o a check
Send your purchase request to the address listed above. A bank wire should be
sent as outlined above.
Automatic Investment Plan
You may make regular investments in a Fund with an Automatic Investment
Plan by completing the appropriate section of the account application and
attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting $50 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time.
Reduced Sales Load
You may use the Right of Accumulation to combine the cost or current net
asset value (whichever is higher) of your shares of a Fund with the amount of
your current purchases in order to take advantage of the reduced sales loads set
forth in the table above. Purchases made pursuant to a Letter of Intent may also
be eligible for the reduced sales loads. The minimum initial investment under a
Letter of Intent is $50,000. Shareholders should contact the Transfer Agent for
information about the Right of Accumulation and Letter of Intent.
Purchases at Net Asset Value
Purchases of Class A shares may be effected at net asset value for the
benefit of the clients of brokers-dealers and registered investment advisers
affiliated with a broker-dealer, if such broker-dealer or investment adviser has
entered into an agreement with the Funds' distributor providing specifically for
the purchase of Fund shares in connection with special investment products, such
as wrap accounts or similar fee based programs.
Trustees, directors, officers and employees of the Trust, the Advisor and
service providers to the Trust, including members of the immediate family of
such individuals and employee benefit plans established by such entities, may
also purchase shares of each Fund at net asset value.
Additional Information
For purposes of determining the applicable sales load, a purchaser
includes an individual, his spouse and their children under the age of 21,
purchasing shares for his or their own account; or a trustee or other fiduciary
purchasing shares for a single fiduciary account although more than one
beneficiary is involved; or employees of a common employer, provided that
economies of scale are realized through remittances from a single source and
quarterly confirmation of such purchases; or an organized group, provided that
the purchases are made through a central administration, or a single dealer or
by other means which result in economy of sales effort or expense.
Tax Sheltered Retirement Plans
Since the Funds are oriented to longer term investments, shares of the
Funds may be an appropriate investment medium for tax sheltered retirement
plans, including: individual retirement plans (IRAs); simplified employee
pensions (SEPs); SIMPLE plans; 401(k) plans; qualified corporate pension and
profit sharing plans (for employees); tax deferred investment plans (for
employees of public school systems and certain types of charitable
organizations); and other qualified retirement plans. Contact the Transfer Agent
for the procedure to open an IRA or SEP plan and more specific information
regarding these retirement plan options. Please consult with your 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 Transfer Agent about the IRA custodial
fees.
<PAGE>
Other Purchase Information
Each 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 Funds. If you are already a shareholder, the Funds can
redeem shares from any identically registered account in the Funds as
reimbursement for any loss incurred. You may be prohibited or restricted from
making future purchases in the Funds.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after the
redemption request has been received by the Transfer Agent in proper form, less
any applicable CDSC. You may receive redemption payments in the form of a check
or federal wire transfer. Presently there is no charge for wire redemptions;
however, the Funds may charge for this service in the future. Any charges for
wire redemptions will be deducted from the shareholder's Fund account by
redemption of shares. If you redeem your shares through a broker/dealer or other
institution, you may be charged a fee by that institution.
By Mail - You may redeem any part of your account in a Fund at no charge
by mail. Your request should be addressed to:
U.S. Mail: Westcott Funds Overnight: Westcott Funds
Unified Fund Services, Inc. Unified Fund Services, Inc.
P.O. Box 6110 431 North Pennsylvania Street
Indianapolis, Indiana 46206-6110 Indianapolis, Indiana 46204
"Proper form" means your request for a redemption must include your letter
of instruction, including the Fund name, account number, account name(s), the
address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the
Funds require that signatures be guaranteed by a bank or member firm of a
national securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Funds or Unified Fund Services, Inc., you
may be required to furnish additional legal documents to insure proper
authorization.
By Telephone - You may redeem any part of your account in a Fund by
calling the Transfer Agent (800) 998-6658. You must first complete the Optional
Telephone Redemption and Exchange section of the investment application to
institute this option. The Fund, the Transfer Agent and the custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The Funds may terminate the telephone redemption and exchange procedures
at any time. During periods of extreme market activity it is possible that
shareholders may encounter some difficulty in telephoning the Funds, although
neither the Funds nor the Transfer Agent has ever experienced difficulties in
receiving and in a timely fashion responding to telephone requests for
redemptions or exchanges. If you are unable to reach the Funds by telephone, you
may request a redemption or exchange by mail.
Additional Information - If you are not certain of the requirements for a
redemption please call the Transfer Agent at (800) 998-6658. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen calendar days. Also, when the New York Stock
Exchange is closed (or when trading is restricted) for any reason other than its
customary weekend or holiday closing or under any emergency circumstances, as
determined by the Securities and Exchange Commission, the Funds may suspend
redemptions or postpone payment dates.
Because the Funds incur certain fixed costs in maintaining shareholder
accounts, each 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
$1,000 due to redemption, or such other minimum amount as the Fund may determine
from time to time. An involuntary redemption constitutes a sale. You should
consult your tax advisor concerning the tax consequences of involuntary
redemptions. 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 Funds.
HOW TO EXCHANGE SHARES
You may exchange any or all of your shares in a Fund for shares of another
Westcott Fund or The Cash Fund, a separately managed money market fund. The
exchange is made without charge unless you exchange Class A shares of the Fixed
Income Fund for Class A shares of another Westcott Fund with a higher sales
load. In that case, you would pay the incremental amount of the sales load. For
exchanges between Westcott Funds, shares of a particular class may be exchanged
only for shares of the same class.
You may request the exchange by telephoning the Transfer Agent at (800)
998-6658 or writing the Transfer Agent at P.O. Box 6110, Indianapolis, Indiana
46206-6110. Shares of the fund selected must be registered for sale in your
state of residence. The exchange privilege with The Cash Fund does not
constitute an offering or recommendation of The Cash Fund. It is your
responsibility to obtain and read a prospectus of The Cash Fund before you make
an exchange.
o You may make up to one exchange out of each Fund during a calendar month
and four exchanges out of each Fund during a calendar year. This limit
helps keep each Fund's net asset base stable and reduces the Fund's
administrative expenses.
o If you exchange shares into or out of a Fund, the exchange is made at the
net asset value per share of each Fund next determined after the exchange
request is received, plus any applicable sales load.
o If you exchange Class B shares of a Fund for The Cash Fund, the time you
own The Cash Fund shares will not be included when the holding period for
the CDSC is calculated.
o If you exchange Class B shares of a Westcott Fund for another Westcott Fund
(or Class A shares of a Westcott Fund that were subject to a CDSC because
of a sales load waiver), the holding periods are combined, however the
highest applicable CDSC will be charged if the shares are redeemed.
o If you exchange only a portion of your Class B shares, shares not subject
to a CDSC are exchanged first.
o If you redeem shares from The Cash Fund that were previously Class B shares
of a Westcott Fund (or Class A shares of a Westcott Fund that were subject
to a CDSC because of a sales load waiver), the redemption is made at the
net asset value per share next determined after the redemption request is
received, less any CDSC that applied to the Westcott Fund shares.
In times of extreme economic or market conditions, exchanging Fund or The
Cash Fund shares by telephone may be difficult. To receive a specific day's
price, your letter or call must be received before that day's close of the New
York Stock Exchange. A day or more delay may be experienced prior to the
investment of the redemption proceeds into The Cash Fund. Each exchange
represents the sale of shares from one Fund and the purchase of shares in
another, which may produce a gain or loss for Federal income tax purposes.
All exchanges out of a Westcott Fund into The Cash Fund are subject to the
minimum and subsequent investment requirements of The Cash Fund. No exchange
will be accepted unless the registration of the two accounts is identical.
Neither the Funds, The Cash Fund, nor the Transfer Agent assumes responsibility
for the authenticity of exchange instructions communicated by telephone or in
writing which are believed to be genuine. They will use reasonable procedures to
confirm that telephone instructions are genuine.
DETERMINATION OF NET ASSET VALUE
The price you pay for your shares is based on the applicable Fund's net
asset value per share (NAV). The NAV is calculated at the close of trading
(normally 4:00 p.m. Eastern time) on each day the New York Stock Exchange is
open for business (the Stock Exchange is closed on weekends, Federal holidays
and Good Friday). The NAV is calculated by dividing the value of the Fund's
total assets (including interest and dividends accrued but not yet received)
minus liabilities (including accrued expenses) by the total number of shares
outstanding.
The Funds' 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 at their fair
value.
Requests to purchase and sell shares are processed at the NAV next
calculated after we receive your order in proper form.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Dividends and Distributions. Each Fund typically distributes substantially
all of its net investment income in the 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. Dividends paid by the Funds may be eligible in part for the
dividends received deduction for corporations.
Taxes. In general, selling shares of a Fund and receiving distributions
(whether reinvested or taken in cash) are taxable events. Depending on the
purchase price and the sale price, you may have a gain or a loss on any shares
sold. Any tax liabilities generated by your transactions or by receiving
distributions are your responsibility. Because distributions of long term
capital gains are subject to capital gains taxes, regardless of how long you
have owned your shares, you may want to avoid making a substantial investment
when a Fund is about to make a long term capital gains distribution.
Early each year, the Funds will mail to you a statement setting forth the
federal income tax information for all distributions made during the previous
year. If you do not provide your taxpayer identification number, your account
will be subject to backup withholding.
The tax considerations described in this section do not apply to
tax-deferred accounts or other non-taxable entities. Because each investor's tax
circumstances are unique, please consult with your tax adviser about your
investment.
MANAGEMENT OF THE FUNDS
Aegis Management, Inc., 230 Westcott St., Suite 1, Houston, Texas 77007,
serves as investment adviser to the Funds. The adviser was organized as a Texas
corporation in 1993. The adviser manages large capitalization equity, medium
capitalization equity, balanced and fixed income portfolios for a variety of
tax-exempt and taxable clients. The investment decisions for each Fund are made
by a committee of the adviser, which is primarily responsible for the day-to-day
management of each Fund's portfolio. Each Fund is authorized to pay the adviser
an annual fee as follows: Technology Fund, 1.70%; Large-Cap Fund, 1.00%; and
Fixed Income Fund, 0.75%.
OTHER INFORMATION ABOUT INVESTMENTS
The Technology Fund invests at least 25% of its assets in internet
companies. The internet is a global network of computers that allows users to
quickly and easily share information and conduct business. Users of the internet
include commercial and professional organizations, educational institutions,
government agencies and consumers; they use the internet to communicate
electronically, access and share information and conduct business. Internet and
internet related companies include internet access providers; companies that
develop software tools to access the internet and facilitate secure internet
transactions; companies that manufacture personal computers and other hardware
used in conjunction with the internet; companies that manufacture software and
other technologies used in conjunction with the internet; companies engaging in
electronic commerce; companies publishing information about the internet;
companies that develop or provide communication systems or other infrastructure
for the internet; companies that supply information, such as games, music and
video, on the internet; companies that consult on the design and implementation
of internet strategies; and other internet and intranet related businesses and
technologies. The types of companies that are considered "internet" and
"internet related" companies will change as technology and applications change.
The Fixed Income Fund invests primarily in investment grade fixed income
securities. The Fund may also invest in fixed income securities which are
unrated if the Fund's adviser determines that they are of comparable quality to
securities rated investment grade. Investment grade debt securities generally
have adequate to strong protection of principal and interest payments. In the
lower end of this category, credit quality may be more susceptible to potential
future changes in circumstances and the securities have speculative elements. In
addition, changes in economic conditions or other circumstances are more likely
to lead to a weakened capacity to make principal and interest payments than with
higher grade securities. If the rating of an investment grade security drops
below investment grade, the Fund's adviser will dispose of the security as soon
as practicable (depending on market conditions) unless the adviser determines
based on its own credit analysis that the security provides the opportunity of
meeting the Fund's objective without presenting excessive risk.
The Technology Fund and the Large-Cap Fund are each expected under normal
circumstances to invest no more than 15% of its net assets in American
Depositary Receipts (ADRs). An ADR is a certificate of ownership issued by an
U.S. bank as a convenience to investors instead of the underlying foreign
security, which the bank holds in custody. In general, foreign investments
involve higher risks than U.S. investments. Foreign markets tend to be more
volatile than those of the U.S. and bring increased exposure to foreign
economic, political and other events that can have a negative effect on the
value of issuers in a particular foreign country.
Each Fund may from time to time take temporary defensive positions that
are inconsistent with the Fund's principal investment strategies in attempting
to respond to adverse market, economic, political or other conditions. For
example, any Fund may hold all or a portion of its assets in money market
instruments, securities of no-load mutual funds or repurchase agreements. If a
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 Funds may not achieve their investment
objectives. Each Fund may also invest in such instruments at any time to
maintain liquidity or pending selection of investments in accordance with its
policies.
The investment objectives and strategies of any Fund may be changed
without shareholder approval.
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables are intended to help you better understand the Funds'
financial performance since their inceptions. Certain information reflects
financial results for a single Fund share. The total returns represent the rate
you would have earned (or lost) on an investment in the applicable Fund,
assuming reinvestment of all dividends and distributions. This information has
been audited by McCurdy & Associates CPA's, Inc., whose report, along with the
Funds' financial statements, are included in the Funds' annual report, which is
available upon request.
Westcott Technology Fund (formally Nothing But Net Fund)
Class A
Financial Highlights for the period December 9, 1999
(Commencement of Operations) to September 30, 2000
<TABLE>
<S> <C>
Selected Per Share Data
Net asset value, beginning of period $
10.00
--------------
Income from investment operations
Net investment loss (0.10)
Net realized and unrealized loss (4.07)
--------------
Total from investment operations (4.17)
--------------
Less distributions:
Distributions from net investment income
-
Distributions from net realized gains
-
--------------
Total distributions
-
--------------
--------------
Net asset value, end of period $ 5.83
==============
Total Return (41.70)% (a)
Ratios and Supplemental Data
Net assets, end of period (000) $169
Ratio of expenses to average net assets 1.97% (b)
Ratio of expenses to average net assets
Before reimbursement 2.09% (b)
Ratio of net investment income(loss) to
Average net assets (1.61)% (b)
Ratio of net investment income (loss) to
Average net assets before reimbursement (1.73)% (b)
Portfolio turnover rate 190.14% (b)
</TABLE>
(a) For periods of less than a full year, total return is not annualized.
(b) Annualized
<PAGE>
Westcott Technology Fund (formally Nothing But Net Fund)
Institutional Class
Financial Highlights for the period December 9, 1999
(Commencement of Operations) to September 30, 2000
<TABLE>
<S> <C>
Selected Per Share Data
Net asset value, beginning of period $ 10.00
--------------
Income from investment operations
Net investment loss (0.08)
Net realized and unrealized loss (4.15)
--------------
Total from investment operations (4.23)
--------------
Less distributions:
Distributions from net investment income
-
Distributions from net realized gains
-
--------------
Total distributions
-
--------------
--------------
Net asset value, end of period $ 5.77
==============
Total Return (42.30)% (a)
Ratios and Supplemental Data
Net assets, end of period (000) $1,395
Ratio of expenses to average net assets 1.72% (b)
Ratio of expenses to average net assets
Before reimbursement 1.86% (b)
Ratio of net investment income(loss) to
Average net assets (1.32)% (b)
Ratio of net investment income (loss) to
Average net assets before reimbursement (1.46)% (b)
Portfolio turnover rate 190.14% (b)
</TABLE>
(a) For periods of less than a full year, total return is not annualized.
(b) 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 Funds' latest
semi-annual or annual fiscal year end.
Call the Funds at 800-998-6658 to request free copies of the SAI and the
Funds' annual and semi-annual reports, to request other information about the
Funds and to make shareholder inquiries.
You may review and copy information about the Funds (including the SAI and
other reports) at the Securities and Exchange Commission (SEC) Public Reference
Room in Washington, D.C. Call the SEC at 1-202-942-8090 for room hours and
operation. You may also obtain reports and other information about the Funds on
the EDGAR Database on the SEC's Internet site at http://www.sec.gov, and copies
of this information may be obtained, after paying a duplicating fee, by
electronic request at the following email address: [email protected], or by
writing the SEC's Public Reference Section, Washington, D.C. 20549-0102.
Investment Company Act #811-9096
<PAGE>
WESTCOTT FUNDS
Westcott Technology Fund
Westcott Large-Cap Fund
Westcott Fixed Income Fund
STATEMENT OF ADDITIONAL INFORMATION
December 19, 2000
This Statement of Additional Information is not a prospectus. It should be
read in conjunction with the Prospectus of the Westcott Funds dated December 19,
2001. A free copy of the Prospectus can be obtained by writing the Transfer
Agent at 431 North Pennsylvania Street, Indianapolis, Indiana 46204, or by
calling (800) 998-6658.
TABLE OF CONTENTS PAGE
DESCRIPTION OF THE TRUST AND THE FUND...........................................
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS.................................................................
INVESTMENT LIMITATIONS..........................................................
THE INVESTMENT ADVISOR..........................................................
TRUSTEES AND OFFICERS...........................................................
PORTFOLIO TRANSACTIONS AND BROKERAGE............................................
DETERMINATION OF SHARE PRICE....................................................
INVESTMENT PERFORMANCE..........................................................
CUSTODIAN.......................................................................
FUND SERVICES...................................................................
ACCOUNTANTS.....................................................................
DISTRIBUTOR.....................................................................
FINANCIAL STATEMENTS............................................................
<PAGE>
DESCRIPTION OF THE TRUST AND THE FUND
The Westcott Technology Fund, Westcott Large-Cap Fund and Westcott Fixed
Income Fund (each a "Fund" or collectively, the "Funds") were organized as
diversified series of AmeriPrime Funds (the "Trust") on September 29, 1999. The
Trust is an open-end investment company established under the laws of Ohio by an
Agreement and Declaration of Trust dated August 8, 1995 (the "Trust Agreement").
The Trust Agreement permits the Trustees to issue an unlimited number of shares
of beneficial interest of separate series without par value. Each Fund is one of
a series of funds currently authorized by the Trustees. The investment advisor
to each Fund is Aegis Asset Management, Inc. (the "Advisor"). The Westcott
Technology Fund commenced operations on December 9, 1999. As of the date of this
Statement of Additional Information, the Westcott Large-Cap Fund and the
Westcott Fixed Income Fund have not commenced operations.
The Funds do not issue share certificates. All shares are held in
non-certificate form registered on the books of the Fund's transfer agent for
the account of the shareholders. 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.
Prior to the public offering of the Funds, Unified Financial Securities,
Inc. (the Fund's distributor), 1793 Kingswood Drive, Suite 200, Southlake, Texas
76092, purchased all of the outstanding shares of each Fund and may be deemed to
control the Funds. After the public offering commences, it is anticipated that
Unified Financial Securities, Inc. will no longer control the Funds. As the
controlling shareholder, Unified Financial Securities, Inc. would control the
outcome of any proposal submitted to the shareholders for approval, including
changes to a Fund's fundamental policies or the terms of the management
agreement with the Advisor.
For information concerning the purchase and redemption of shares of the
Fund, see "How to Buy Shares" and "How to Redeem Shares" in the Fund's
Prospectus. For a description of the methods used to determine the share price
and value of the Fund's assets, see "Determination of Net Asset Value" in the
Funds' Prospectus.
As of December 6, 2000, the following persons may be deemed to
beneficially own five percent (5%) or more of the Westcott Technology Fund Class
A Shares: Margaret Guerriero, Post Office Box 2052, Jersey City, New Jersey
07303-9998 - 45.28%; Lora Jean Kilroy, Post Office Box 2052, Jersey City, New
Jersey 07303-9998 - 16.98%; and Walter Konrad, Post Office Box 2052, Jersey
City, New Jersey 07303-9998 - 11.57%.]
As of December 6, 2000, the following persons may be deemed to
beneficially own five percent (5%) or more of the Westcott Technology Fund
Institutional Shares: Eckhard Pfeiffer, Post Office Box 2052, Jersey City, New
Jersey 07303-9998 - 49.33%; and Joann Dillon, Post Office Box 2052, Jersey City,
New Jersey 07303-9998 - 17.59%.
As of December 6, 2000, Eckhard Pfeiffer may be deemed to control the
Westcott Technology Fund as a result of his beneficial ownership of the shares
of the Fund. As a controlling shareholder, he would control the outcome of any
proposal submitted to the shareholders for approval, including changes to the
Fund's fundamental policies or the terms of the management agreement with the
Fund's adviser.]
As of December 6, 2000, the officers and trustees of the Trust as a group
beneficially owned less than 1% of the Westcott Technology Fund.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a more detailed discussion of some of the
investments the Fund may make and some of the techniques it may use, as
described in the Prospectus (see "Investment Objectives and Strategies" and
"Investment Policies and Techniques and Risk Considerations").
A. American Depositary Receipts (ADRs). ADRs are subject to risks similar
to those associated with direct investment in foreign securities. For example,
there may be less information publicly available about a foreign company then
about a U.S. company, and foreign companies are not generally subject to
accounting, auditing and financial reporting standards and practices comparable
to those in the U.S. Other risks associated with investments in foreign
securities include changes in restrictions on foreign currency transactions and
rates of exchanges, changes in the administrations or economic and monetary
policies of foreign governments, the imposition of exchange control regulations,
the possibility of expropriation decrees and other adverse foreign governmental
action, the imposition of foreign taxes, less liquid markets, less government
supervision of exchanges, brokers and issuers, difficulty in enforcing
contractual obligations, delays in settlement of securities transactions and
greater price volatility. In addition, investing in foreign securities will
generally result in higher commissions than investing in similar domestic
securities. The Funds have no present intention to invest in unsponsored ADRs.
B. Fixed Income Securities. The Fixed Income Fund may invest in a broad
range of fixed income securities, including corporate debt securities, U.S.
government securities, mortgage-backed securities, zero coupon bonds,
asset-backed and receivable-backed securities and participation interests in
such securities. Preferred stock and certain common stock equivalents may also
be considered to be fixed income securities. Fixed income securities are
generally considered to be interest rate sensitive, which means that their value
will generally decrease when interest rates rise and increase when interest
rates fall. Securities with shorter maturities, while offering lower yields,
generally provide greater price stability than longer term securities and are
less affected by changes in interest rates.
Corporate debt securities are bonds or notes issued by corporations and
other business organizations, including business trusts, in order to finance
their credit needs. Corporate debt securities include commercial paper which
consists of short term (usually from one to two hundred seventy days) unsecured
promissory notes issued by corporations in order to finance their current
operations. The Advisor considers corporate debt securities to be of investment
grade quality if they are rated BBB or higher by Standard & Poor's Corporation
("S&P"), Baa or higher by Moody's Investors Services, Inc. ("Moody's"), or if
unrated, determined by the Advisor to be of comparable quality. Investment grade
debt securities generally have adequate to strong protection of principal and
interest payments. In the lower end of this category, credit quality may be more
susceptible to potential future changes in circumstances and the securities have
speculative elements. If the rating of a security by S&P or Moody's drops below
investment grade, 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.
Convertible bonds may be converted into or exchanged for a prescribed
amount of common stock of the same or a different issuer within a particular
period of time at a specified price or formula. A convertible security entitles
the holder to receive interest generally paid or accrued on debt or the dividend
paid on preferred stock until the convertible security matures or is redeemed,
converted or exchanged. Convertible securities have several unique investment
characteristics, such as (a) higher yields than common stocks, but lower yields
than comparable nonconvertible securities, (b) a lesser degree of fluctuation in
value than the underlying stock since they have fixed income characteristics,
and (c) the potential for capital appreciation if the market price of the
underlying common stock increases. A convertible security might be subject to
redemption at the option of the issuer at a price established in the convertible
security's governing instrument. If a convertible security held by the Fund is
called for redemption, the Fund may be required to permit the issuer to redeem
the security.
Municipal securities are long and short term debt obligations issued by or
on behalf of states, territories and possessions of the United States, the
District of Columbia and their political subdivisions, agencies,
instrumentalities and authorities, as well as other qualifying issuers
(including the U.S. Virgin Islands, Puerto Rico and Guam), the income from which
is exempt from regular federal income tax and exempt from state tax in the state
of issuance. Municipal securities are issued to obtain funds to construct,
repair or improve various public facilities such as airports, bridges, highways,
hospitals, housing, schools, streets and water and sewer works, to pay general
operating expenses or to refinance outstanding debts. They also may be issued to
finance various private activities, including the lending of funds to public or
private institutions for construction of housing, educational or medical
facilities or the financing of privately owned or operated facilities. Municipal
securities consist of tax exempt bonds, tax exempt notes and tax exempt
commercial paper. Municipal notes, which are generally used to provide short
term capital needs and have maturities of one year of less, include tax
anticipation notes, revenue anticipation notes, bond anticipation notes and
construction loan notes. Tax exempt commercial paper typically represents short
term, unsecured, negotiable promissory notes. The Fund may invest in other
municipal securities such as variable rate demand instruments.
The two principal classifications of municipal securities are "general
obligations" and "revenue" bonds. General obligation bonds are backed by the
issuer's full credit and taxing power. Revenue bonds are backed by the revenues
of a specific project, facility or tax. Industrial development revenue bonds are
a specific type of revenue bond backed by the credit of the private issuer of
the facility, and therefore investments in these bonds have more potential risk
that the issuer will not be able to meet scheduled payments of principal and
interest.
The Advisor considers municipal securities to be of investment grade
quality if they are rated BBB or higher by S&P, Baa or higher by Moody's, or if
unrated, determined by the Advisor to be of comparable quality. Investment grade
debt securities generally have adequate to strong protection of principal and
interest payments. In the lower end of this category, credit quality may be more
susceptible to potential future changes in circumstances and the securities have
speculative elements. If the rating of a security by S&P or Moody's drops below
investment grade, 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.
U.S. government securities may be backed by the credit of the government
as a whole or only by the issuing agency. U.S. Treasury bonds, notes, and bills
and some agency securities, such as those issued by the Federal Housing
Administration and the Government National Mortgage Association (GNMA), are
backed by the full faith and credit of the U.S. government as to payment of
principal and interest and are the highest quality government securities. Other
securities issued by U.S. government agencies or instrumentalities, such as
securities issued by the Federal Home Loan Banks and the Federal Home Loan
Mortgage Corporation, are supported only by the credit of the agency that issued
them, and not by the U.S. government. Securities issued by the Federal Farm
Credit System, the Federal Land Banks, and the Federal National Mortgage
Association (FNMA) are supported by the agency's right to borrow money from the
U.S. Treasury under certain circumstances, but are not backed by the full faith
and credit of the U.S. government.
Mortgage-backed securities represent an interest in a pool of mortgages.
These securities, including securities issued by FNMA and GNMA, provide
investors with payments consisting of both interest and principal as the
mortgages in the underlying mortgage pools are repaid. 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 Fixed Income 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 sold upon prepayment). In addition, prepayments of such
securities held by the Fund will reduce the share price of the 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.
Collateralized mortgage obligations (CMOs) are securities collateralized
by mortgages or mortgage-backed securities. CMOs are issued with a variety of
classes or series, which have different maturities and are often retired in
sequence. CMOs may be issued by governmental or non-governmental entities such
as banks and other mortgage lenders. Non-government securities may offer a
higher yield but also may be subject to greater price fluctuation than
government securities. Investments in CMOs are subject to the same risks as
direct investments in the underlying mortgage and mortgage-backed securities. In
addition, in the event of a bankruptcy or other default of an entity who issued
the CMO held by the Fund, the Fund could experience both delays in liquidating
its position and losses.
Financial services industry obligations consist of certificates of
deposit, time deposits and bankers' acceptance certificates. Certificates of
deposit are negotiable certificates evidencing the indebtedness of a commercial
bank or a savings and loan association to repay funds deposited with it for a
definite period of time (usually from fourteen days to one year) at a stated or
variable interest rate. Time deposits are non-negotiable deposits maintained in
a banking institution or a savings and loan association for a specified period
of time at a stated interest rate. Bankers' acceptances are credit instruments
evidencing the obligation of a bank to pay a draft which has been drawn on it by
a customer, which instruments reflect the obligation both of the bank and of the
drawer to pay the face amount of the instrument upon maturity.
Zero coupon securities are debt securities issued or sold at a discount
from their face value which do not entitle the holder to any periodic payment of
interest prior to maturity or a specified redemption date (or cash payment
date). These involve risks that are similar to those of other debt securities,
although they may be more volatile, and certain zero coupon securities move in
the same direction as interest rates. The amount of the discount varies
depending on the time remaining until maturity or cash payment date, prevailing
interest rates, liquidity of the security and perceived credit quality of the
issuer. Zero coupon securities also may take the form of debt securities that
have been stripped of their unmatured interest coupons, the coupons themselves
and receipts or certificates representing interests in such stripped debt
obligations and coupons. The market prices of zero coupon securities generally
are more volatile than the market prices of interest-bearing securities and are
likely to respond to a greater degree to changes in interest rates than
interest-bearing securities having similar maturities and credit qualities.
C. Foreign Securities. The Fixed Income Fund may invest in foreign
corporate and foreign government securities. Foreign government obligations
generally consist of debt securities supported by national, state or provincial
governments or similar political units or governmental agencies. Such
obligations may or may not be backed by the national government's full faith and
credit and general taxing powers. Investments in foreign securities also include
obligations issued by international organizations. International organizations
include entities designated or supported by governmental entities to promote
economic reconstruction or development as well as international banking
institutions and related government agencies. Examples are the International
Bank for Reconstruction and Development (the World Bank), the European Coal and
Steel Community, the Asian Development Bank and the InterAmerican Development
Bank. In addition, investments in foreign securities may include debt securities
denominated in multinational currency units of an issuer (including
international issuers). An example of a multinational currency unit is the
European Currency Unit. A European Currency Unit represents specified amounts of
the currencies of certain member states of the European Economic Community, more
commonly known as the Common Market.
Purchases of foreign securities are usually made in foreign currencies
and, as a result, a Fund may incur currency conversion costs and may be affected
favorably or unfavorably by changes in the value of foreign currencies against
the U.S. dollar. In addition, there may be less information publicly available
about a foreign company then about a U.S. company, and foreign companies are not
generally subject to accounting, auditing and financial reporting standards and
practices comparable to those in the U.S. Other risks associated with
investments in foreign securities include changes in restrictions on foreign
currency transactions and rates of exchanges, changes in the administrations or
economic and monetary policies of foreign governments, the imposition of
exchange control regulations, the possibility of expropriation decrees and other
adverse foreign governmental action, the imposition of foreign taxes, less
liquid markets, less government supervision of exchanges, brokers and issuers,
difficulty in enforcing contractual obligations, delays in settlement of
securities transactions and greater price volatility. In addition, investing in
foreign securities will generally result in higher commissions than investing in
similar domestic securities.
D. Floating Rate, Inverse Floating Rate and Index Obligations. The Fixed
Income Fund may invest in debt securities with interest payments or maturity
values that are not fixed, but float in conjunction with (or inversely to) an
underlying index or price. These securities may be backed by U.S. Government or
corporate issuers, or by collateral such as mortgages. The indices and prices
upon which such securities can be based include interest rates, currency rates
and commodities prices. However, the Funds will not invest in any instrument
whose value is computed based on a multiple of the change in price or value of
an asset or an index of or relating to assets in which the Fund cannot or will
not invest.
Floating rate securities pay interest according to a coupon which is reset
periodically. The reset mechanism may be formula based, or reflect the passing
through of floating interest payments on an underlying collateral pool. The
coupon is usually reset daily, weekly, monthly, quarterly or semi-annually, but
other schedules are possible. Floating rate obligations generally exhibit a low
price volatility for a given stated maturity or average life because their
coupons adjust with changes in interest rates. If their underlying index is not
an interest rate, or the reset mechanism lags the movement of rates in the
current market, greater price volatility may be experienced.
Inverse floating rate securities are similar to floating rate securities
except that their coupon payments vary inversely with an underlying index by use
of a formula. Inverse floating rate securities tend to exhibit greater price
volatility than other floating rate securities. Because the changes in the
coupon are usually negatively correlated with changes in overall interest rates,
interest rate risk and price volatility on inverse floating rate obligations can
be high, especially if leverage is used in the formula. Index securities pay a
fixed rate of interest, but have a maturity value that varies by formula, so
that when the obligation matures, a gain or loss is realized. The risk of index
obligations depends on the volatility of the underlying index, the coupon
payment and the maturity of the obligation.
E. Repurchase Agreements. A repurchase agreement is a short term
investment in which the purchaser (i.e., a Fund) acquires ownership of an
obligation issued by the U.S. Government or by an agency of the U.S. Government
(a "U.S. Government obligation") (which may be of any maturity) and the seller
agrees to repurchase the obligation at a future time at a set price, thereby
determining the yield during the purchaser's holding period (usually not more
than seven days from the date of purchase). Any repurchase transaction in which
a Fund engages will require full collateralization of the seller's obligation
during the entire term of the repurchase agreement. In the event of a bankruptcy
or other default of the seller, a Fund could experience both delays in
liquidating the underlying security and losses in value. However, each Fund
intends to enter into repurchase agreements only with the custodian, other banks
with assets of $1 billion or more and registered securities dealers determined
by the Advisor to be creditworthy. The Advisor monitors the creditworthiness of
the banks and securities dealers with which a Fund engages in repurchase
transactions.
F. Reverse Repurchase Agreements. The Fixed Income Fund may enter into
reverse repurchase agreements. Reverse repurchase agreements involve sales of
portfolio securities by the Fund to member banks of the Federal Reserve System
or recognized securities dealers, concurrently with an agreement by the Fund to
repurchase the same securities at a later date at a fixed price, which is
generally equal to the original sales price plus interest. The Fund retains
record ownership and the right to receive interest and principal payments on the
portfolio security involved. The Fund's objective in such a transaction would be
to obtain funds to pursue additional investment opportunities whose yield would
exceed the cost of the reverse repurchase transaction. Generally, the use of
reverse repurchase agreements should reduce portfolio turnover and increase
yield. In connection with each reverse repurchase agreement, the Fund will
direct its custodian to place cash or U.S. government obligations in a separate
account in an amount equal to the repurchase price. In the event of bankruptcy
or other default by the purchaser, the Fund could experience both delays in
repurchasing the portfolio securities and losses.
When a separate account is maintained in connection with reverse
repurchase agreements, the securities deposited in the separate account will be
valued daily at market for the purpose of determining the adequacy of the
securities in the account. If the market value of such securities declines,
additional cash, U.S. government obligations or liquid high grade debt
obligations will be placed in the account on a daily basis so that the market
value of the account will equal the amount of the Fund's commitments to
repurchase securities. To the extent funds are in a separate account, they will
not be available for new investment or to meet redemptions. Reverse repurchase
agreements constitute a borrowing by the Fund and, together with all other
borrowings, will not represent more than 5% of the net assets of the Fund.
Securities subject to reverse repurchase agreements and the securities
held in the Fund's portfolio are subject to changes in market value based upon
the public's perception of the creditworthiness of the issuer and changes in the
level of interest rates (which will generally result in all of those securities
changing in value in the same way, i.e., all those securities experiencing
appreciation when interest rates decline and depreciation when interest rates
rise). Therefore, if in order to achieve a higher level of income, the Fund
remains substantially fully invested at the same time that it has entered into
reverse repurchase transactions, there will be a possibility that the market
value of the Fund's assets will have greater fluctuation.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been adopted
by the Trust with respect to each Fund and are fundamental ("Fundamental"),
i.e., they may not be changed without the affirmative vote of a majority of the
outstanding shares of each Fund. As used in the Prospectus and the Statement of
Additional Information, the term "majority" of the outstanding shares of the
Fund means the lesser of (1) 67% or more of the outstanding shares of the Fund
present at a meeting, if the holders of more than 50% of the outstanding shares
of the Fund are present or represented at such meeting; or (2) more than 50% of
the outstanding shares of the Fund. Other investment practices which may be
changed by the Board of Trustees without the approval of shareholders to the
extent permitted by applicable law, regulation or regulatory policy are
considered non-fundamental ("Non-Fundamental").
1. Borrowing Money. The Funds will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. Senior Securities. The Funds will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is consistent with or permitted by the Investment
Company Act of 1940, as amended, the rules and regulations promulgated
thereunder or interpretations of the Securities and Exchange Commission or its
staff.
3. Underwriting. The Funds will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent
that, in connection with the disposition of portfolio securities (including
restricted securities), the Fund may be deemed an underwriter under
certain federal securities laws.
4. Real Estate. The Funds will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. Commodities. The Funds will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. Loans. The Funds will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. Neither the Large-Cap Fund nor the Fixed Income Fund will
invest 25% or more of its total assets in a particular industry. The
Technology Fund will not invest 25% or more of its total assets in a
particular industry, other than the internet industry. This limitation is
not applicable to investments in obligations issued or guaranteed by the
U.S. government, its agencies and instrumentalities or repurchase
agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment company,
whether organized as a trust, association or corporation, or a personal holding
company, may be merged or consolidated with or acquired by the Trust, provided
that if such merger, consolidation or acquisition results in an investment in
the securities of any issuer prohibited by said paragraphs, the Trust shall,
within ninety days after the consummation of such merger, consolidation or
acquisition, dispose of all of the securities of such issuer so acquired or such
portion thereof as shall bring the total investment therein within the
limitations imposed by said paragraphs above as of the date of consummation.
Non-Fundamental. The following limitations have been adopted by the Trust
with respect to the Fund and are Non-Fundamental (see "Investment Restrictions"
above).
1. Pledging. The Funds will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
2. Borrowing. No Fund will purchase any security while borrowings
(including reverse repurchase agreements) reresenting more than one third of its
total assets are outstanding.
3. Margin Purchases. No Fund will purchase securities or evidences of
interest thereon on "margin." This limitation is not applicable to short term
credit obtained by a Fund for the clearance of purchases and sales or redemption
of securities, or to arrangements with respect to transactions involving
options, futures contracts, short sales and other permitted investments and
techniques.
4. Options. The Funds will not purchase or sell puts, calls, options or
straddles.
5. Illiquid Investments. The Funds will not invest in securities for
which there are legal or contractual restrictions on resale and other
illiquid securities.
6. Loans of Portfolio Securities. The Funds will not make loans of
portfolio securities.
THE INVESTMENT ADVISOR
The investment advisor to the Westcott Funds is Aegis Asset Management,
Inc., 230 Westcott, Suite 1, Houston, Texas 77007 (the "Advisor"). William S.
Kilroy, Jr. is the controlling shareholder of the Advisor.
Under the terms of the management agreement (the "Agreement"), the Advisor
manages each Fund's investments subject to approval of the Board of Trustees and
pays all of the expenses of each Fund except brokerage, taxes, borrowing costs
(such as (a) interest and (b) dividend expenses on securities sold short), fees
and expenses of the non-interested person trustees and extraordinary expenses.
As compensation for its management services and agreement to pay the Fund's
expenses, each Fund is obligated to pay the Advisor a fee (based on average
daily net assets) computed and accrued daily and paid monthly at the following
annual rates: Technology Fund, 1.70%; Large-Cap Fund, 1.00%; and Fixed Income
Fund, 0.75%. For the period December 9, 1999 (commencement of operations)
through September 30, 2000, the Westcott Technology Fund paid advisory fees of
$[ ] to the Advisor.
The Advisor retains the right to use the name "Westcott" 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 "Westcott"
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. Banks may
charge their customers fees for offering these services to the extent permitted
by applicable regulatory authorities, and the overall return to those
shareholders availing themselves of the bank services will be lower than to
those shareholders who do not. The Funds may from time to time purchase
securities issued by banks which provide such services; however, in selecting
investments for the Funds, no preference will be shown for such securities.
<PAGE>
TRUSTEES AND OFFICERS
The Board of Trustees supervises the business activities of the Trust. The
names of the Trustees and executive officers of the Trust are shown below. Each
Trustee who is an "interested person" of the Trust, as defined in the Investment
Company Act of 1940, is indicated by an asterisk.
<TABLE>
<S> <C> <C>
==================================== ================ ======================================================================
Name, Age and Address Position Principal Occupations During Past 5 Years
------------------------------------ ---------------- ----------------------------------------------------------------------
*Kenneth D. Trumpfheller President, Managing Director of Unified Fund Services, Inc., the Fund's
1793 Kingswood Drive Secretary and transfer agent, fund accountant and administrator, since October
Suite 200 Trustee 2000. President, Treasurer and Secretary of AmeriPrime Financial
Southlake, Texas 76092 Services, Inc., a fund administrator, (which merged with Unified
Year of Birth: 1958 Fund Services, Inc.) from 1994 through October 2000. President,
Treasurer and Secretary of AmeriPrime Financial
Securities, Inc., the Fund's distributor, from
1994 through November 2000; President and
Trustee of AmeriPrime Advisors Trust and
AmeriPrime Insurance Trust.
------------------------------------ ---------------- ----------------------------------------------------------------------
*Robert A. Chopyak Treasurer and Assistant Vice-President of Financial Administration of Unified Fund
1793 Kingswood Drive Chief Services, Inc., the Fund's transfer agent, fund accountant and
Suite 200 Financial administrator, since August 2000. Manager of AmeriPrime Financial
Southlake, Texas 76092 Officer Services, Inc. from February 2000 to August 2000. Self-employed,
Year of Birth: 1968 performing Y2K testing, January 1999 to January 2000. Vice
President of Fund Accounting, American Data Services, Inc., a mutual
fund services company, October 1992 to December 1998.
------------------------------------ ---------------- ----------------------------------------------------------------------
Steve L. Cobb Trustee President of Chandler Engineering Company, L.L.C., oil and gas
2001 N. Indianwood Avenue services company; various positions with Carbo Ceramics, Inc., oil
Broken Arrow, OK 74012 field manufacturing/supply company, from 1984 to 1997, most recently
Year of Birth: 1957 Vice President of Marketing.
------------------------------------ ---------------- ----------------------------------------------------------------------
Gary E. Hippenstiel Trustee Director, Vice President and Chief Investment Officer of Legacy
600 Jefferson Street Trust Company since 1992; President and Director of Heritage Trust
Suite 350 Company from 1994-1996; Vice President and Manager of Investments of
Houston, TX 77002 Kanaly Trust Company from 1988 to
1992.
Year of Birth: 1947
==================================== ================ ======================================================================
</TABLE>
<PAGE>
The compensation paid to the Trustees of the Trust for the fiscal year
ended September 30, 2000 is set forth in the following table. Trustee fees are
Trust expenses and each series of the Trust pays a portion of the Trustee fees.
<TABLE>
<S> <C> <C>
==================================== ======================= ==================================
Aggregate Total Compensation
Compensation from Trust (the Trust is
Name from Trust not in a Fund Complex)
------------------------------------ ----------------------- ----------------------------------
Kenneth D. Trumpfheller 0 0
------------------------------------ ----------------------- ----------------------------------
Steve L. Cobb $21,000 $21,000
------------------------------------ ----------------------- ----------------------------------
Gary E. Hippenstiel $21,000 $21,000
==================================== ======================= ==================================
</TABLE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust, the
Advisor is responsible for each Fund's portfolio decisions and the placing of
each Fund's portfolio transactions. In placing portfolio transactions, the
Advisor seeks the best qualitative execution for each Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The 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
Advisor may give consideration to sales of shares of the Trust as a factor in
the selection of brokers and dealers to execute portfolio transactions.
The Advisor is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Funds and/or the other
accounts over which the 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 Funds effect 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 Funds.
Although research services and other information are useful to the Funds 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 Funds under the
Agreement.
While each Fund does not deem it practicable and in its best interests to
solicit competitive bids for commission rates on each transaction, consideration
is regularly given to posted commission rates as well as other information
concerning the level of commissions charged on comparable transactions by
qualified brokers.
None of the Funds has any obligation to deal with any broker or dealer in
the execution of its transactions. However, it is contemplated that Westcott
Securities, L.L.C., in its capacity as a registered broker-dealer, will effect
substantially all securities transactions which are executed on a national
securities exchange and over-the-counter transactions conducted on an agency
basis. Such transactions will be executed at competitive commission rates
through Pershing, Inc.
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.
Under the Investment Company Act of 1940, persons affiliated with an
affiliate of the Advisor (such as Westcott Securities, L.L.C.) may be prohibited
from dealing with a Fund as a principal in the purchase and sale of securities.
Therefore, Westcott Securities, L.L.C. will not serve as a Fund's dealer in
connection with over-the-counter transactions. However, Westcott Securities,
L.L.C. may serve as a Fund's broker in over-the-counter transactions conducted
on an agency basis and will receive brokerage commissions in connection with
such transactions. Such agency transactions will be executed through Pershing,
Inc.
A Fund will not effect any brokerage transactions in its portfolio
securities with Westcott Securities, L.L.C. if such transactions would be unfair
or unreasonable to Fund shareholders, and the commissions will be paid solely
for the execution of trades and not for any other services. The Agreement
provides that affiliates of affiliates of the Advisor may receive brokerage
commissions in connection with effecting such transactions for the Fund. In
determining the commissions to be paid to Westcott Securities, L.L.C., it is the
policy of each Fund that such commissions will, in the judgment of the Trust's
Board of Trustees, be (a) at least as favorable to the Fund as those which would
be charged by other qualified brokers having comparable execution capability and
(b) at least as favorable to the Fund as commissions contemporaneously charged
by Westcott Securities, L.L.C. on comparable transactions for its most favored
unaffiliated customers, except for customers of Westcott Securities, L.L.C.
considered by a majority of the Trust's disinterested Trustees not to be
comparable to the Fund. The disinterested Trustees from time to time review,
among other things, information relating to the commissions charged by Westcott
Securities, L.L.C. to the Fund and its other customers, and rates and other
information concerning the commissions charged by other qualified brokers.
The Agreement does not provide for a reduction of the Advisor's fee by the
amount of any profits earned by Westcott Securities, L.L.C. from brokerage
commissions generated from portfolio transactions of the Funds.
While the Funds contemplate no ongoing arrangements with any other
brokerage firms, brokerage business may be given from time to time to other
firms. Westcott Securities, L.L.C. will not receive reciprocal brokerage
business as a result of the brokerage business placed by the Funds with others.
When a Fund and another of the Advisor's clients seek to purchase or sell
the same security at or about the same time, the Advisor may execute the
transaction on a combined ("blocked") basis. Blocked transactions can produce
better execution for the Funds because of the increased volume of the
transaction. If the entire blocked order is not filled, a Fund 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, a Fund may not be able to obtain
as large an execution of an order to sell or as high a price for any particular
portfolio security if the other client desires to sell the same portfolio
security at the same time. In the event that the entire blocked order is not
filled, the purchase or sale will normally be allocated on a pro rata basis. The
allocation may be adjusted by the Advisor, taking into account such factors as
the size of the individual orders and transaction costs, when the Advisor
believes an adjustment is reasonable.
For the period December 9, 1999 (commencement of operations ) through
September 30, 2000, the Westcott Technology Fund paid brokerage commissions of
$[ ].
The Trust, the Advisor and the Funds' distributor have each adopted a Code
of Ethics (the "Code") under Rule 17j-1 of the Investment Company Act of 1940.
The personnel subject to the Code are permitted to invest in securities,
including securities that may be purchased or held by the Fund. You may obtain a
copy of the Code from the Securities and Exchange Commission.
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of each Fund is determined as of
4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day, Martin
Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas.
Securities that are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Advisor's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Advisor determines the last bid
price does not accurately reflect the current value, or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Advisor, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Advisor believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. If the Advisor decides that a price
provided by the pricing service does not accurately reflect the fair market
value of the securities, when prices are not readily available from a pricing
service or when restricted or illiquid securities are being valued, securities
are valued at fair value as determined in good faith by the Advisor. 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
Each Fund may periodically advertise "average annual total return."
"Average annual total return," as defined by the Securities and Exchange
Commission, is computed by finding the average annual compounded rates of return
for the period indicated that would equate the initial amount invested to the
ending redeemable value, according to the following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates that the maximum sales load is
deducted from the initial $1,000 and that a complete redemption occurs at the
end of the applicable period. If the Fund has been in existence less than one,
five or ten years, the time period since the date of the initial public offering
of shares will be substituted for the periods stated.
A Fund's "yield" is determined in accordance with the method defined by
the Securities and Exchange Commission. A yield quotation is based on a 30 day
(or one month) period and is computed by dividing the net investment income per
share earned during the period by the maximum offering price per share on the
last day of the period, according to the following formula:
Yield = 2[(a-b/cd+1)6-1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period
that were entitled to receive dividends d = the maximum offering price
per share on the last day of the period
Solely for the purpose of computing yield, dividend income is recognized by
accruing 1/360 of the stated dividend rate of the security each day that the
Fund owns the security. Generally, interest earned (for the purpose of "a"
above) on debt obligations is computed by reference to the yield to maturity of
each obligation held based on the market value of the obligation (including
actual accrued interest) at the close of business on the last business day prior
to the start of the 30-day (or one month) period for which yield is being
calculated, or, with respect to obligations purchased during the month, the
purchase price (plus actual accrued interest). With respect to the treatment of
discount and premium on mortgage or other receivable-backed obligations which
are expected to be subject to monthly paydowns of principal and interest, gain
or loss attributable to actual monthly paydowns is accounted for as an increase
or decrease to interest income during the period and discount or premium on the
remaining security is not amortized. As of the date of this Statement of
Additional Information, the Westcott Fixed Income Fund has not commenced
operations; therefor, no yield for the one month period ended September 30, 2000
is available.
Each Fund may also advertise performance information (a "non-standardized
quotation") which is calculated differently from average annual total return. A
non-standardized quotation of total return may be a cumulative return which
measures the percentage change in the value of an account between the beginning
and end of a period, assuming no activity in the account other than reinvestment
of dividends and capital gains distributions. A non-standardized quotation may
also be an average annual compounded rate of return over a specified period,
which may be a period different from those specified for average annual total
return. In addition, a non-standardized quotation may be an indication of the
value of a $10,000 investment (made on the date of the initial public offering
of the Fund's shares) as of the end of a specified period. These
non-standardized quotations do not include the effect of the applicable sales
load which, if included, would reduce the quoted performance. A non-standardized
quotation of total return will always be accompanied by the Fund's average
annual total return as described above.
Each Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with each Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue. For the period December
9, 1999 (commencement of operations) through September 30, 2000, the Westcott
Technology Fund's average annual total return was [ ]%.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of any of the
Funds may be compared to indices of broad groups of unmanaged securities
considered to be representative of or similar to the portfolio holdings of the
Funds or considered to be representative of the stock market in general. The
Funds may use the Standard & Poor's 500 Stock Index, the NASDAQ Composite Index
or the Dow Jones Industrial Average.
In addition, the performance of any of the Funds may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of any of the Funds. Performance rankings and
ratings reported periodically in national financial publications such as
Barron's and Fortune also may be used.
CUSTODIAN
Firstar Bank, N.A., 425 Walnut Street, M.L 6118, Cincinnati, Ohio 45202,
is the custodian (the "Custodian") of the Funds' investments. The Custodian acts
as the Funds' depository, safekeeps its portfolio securities, collects all
income and other payments with respect thereto, disburses funds at the Funds'
request and maintains records in connection with its duties.
FUND SERVICES
Unified Fund Services, Inc. ("Unified"), 431 North Pennsylvania Street,
Indianapolis, Indiana 46204, acts as the Funds' transfer agent and, in such
capacity, maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of each Fund's shares, acts as dividend and distribution disbursing
agent and performs other transfer agent and shareholder service functions.
Unified receives a monthly fee from the Advisor of $1.20 per shareholder
(subject to a minimum monthly fee of $900 per Fund) for these transfer agency
services.
In addition, Unified provides the Funds with fund accounting services,
which includes certain monthly reports, record-keeping and other
management-related services. For its services as fund accountant, Unified
receives an annual fee from the Advisor equal to 0.0275% of each Fund's assets
up to $100 million, 0.0250% of each Fund's assets from $100 million to $300
million, and 0.0200% of each 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 period December 9, 1999 (commencement of operations)
through September 30, 2000, Unified received $[ ] from the Advisor on behalf of
the Westcott Technology Fund for these accounting services.
Unified also provides the Funds with administrative services, including
all regulatory reporting and necessary office equipment, personnel and
facilities. Unified receives a monthly fee from the Advisor equal to an annual
rate of 0.10% of each Fund's assets under $50 million, 0.075% of each Fund's
assets from $50 million to $100 million, and 0.050% of each Fund's assets over
$100 million (subject to a minimum fee of $2,500 per month). For the period
December 9, 1999 (commencement of operations) through September 30, 2000,
Unified received $[ ] from the Advisor on behalf of the Westcott Technology Fund
for these administrative services.
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent public accountants for the Trust
for the fiscal year ending September 30, 2001. McCurdy & Associates performs an
annual audit of the Funds' financial statements and provides financial, tax and
accounting consulting services as requested.
DISTRIBUTOR
Unified Financial Securities, Inc., 431 North Pennsylvania Street,
Indianapolis, Indiana 46204 (the "Distributor"), is the exclusive agent for
distribution of shares of the Funds. Kenneth D. Trumpfheller, a Trustee and
officer of the Trust, is registered principal of, and may be deemed to be an
affiliate of, the Distributor. The Distributor is obligated to sell the shares
of the Funds on a best efforts basis only against purchase orders for the
shares. Shares of the Funds are offered to the public on a continuous basis. The
Distributor and Unified are controlled by Unified Financial Services, Inc.
FINANCIAL STATEMENTS
The financial statements and independent auditor's report required to be
included in the statement of additional information are hereby incorporated by
reference to the Annual Report of the Wescott Technology Fund (formally the
Wescott Nothing But Net Fund) for the period ended September 30, 2000. The Trust
will provide the Annual Report without charge by calling the Funds at
(800)-998-6658.
<PAGE>
AmeriPrime Funds
PART C. OTHER INFORMATION
-----------------
Item 23. Exhibits
(a) Articles of Incorporation.
(i) Copy of Registrant's Declaration of Trust, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 11, is hereby incorporated by
reference.
(ii) Copy of Amendment No. 1 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby
incorporated by reference.
(iii) Copy of Amendment No. 2 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 1, is hereby
incorporated by reference.
(iv) Copy of Amendment No. 3 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's
Post-Effective Amendment No. 4, is hereby incorporated by reference.
(v) Copy of Amendment No. 4 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 4, is hereby
incorporated by reference.
(vi) Copy of Amendment No. 5 and Amendment No. 6 to Registrant's Declaration of
Trust, which were filed as an Exhibit to Registrant's Post-Effective Amendment
No. 8, are hereby incorporated by reference.
(viii) Copy of Amendment No. 7 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby
incorporated by reference.
(ix) Copy of Amendment No. 8 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 12, is hereby
incorporated by reference.
(x) Copy of Amendment No. 9 to Registrant's Declaration of Trust which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 15, is hereby
incorporated by reference.
(xi) Copy of Amendment No. 10 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 16, is hereby
incorporated by reference.
(xii) Copy of Amendment No. 11 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 17, is hereby
incorporated by reference.
(xiii) Copy of Amendment No. 12 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby
incorporated by reference.
(xiv) Copy of Amendment No. 13 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby
incorporated by reference.
(xv) Copy of Amendments No. 14-17 to Registrant's Declaration of Trust, which
were filed as Exhibits to Registrant's Post-Effective Amendment No. 27, are
hereby incorporated by reference.
(xvi) Copy of Amendments No. 18-19 to Registrant's Declaration of Trust, which
were filed as Exhibits to Registrant's Post-Effective Amendment No. 30, are
hereby incorporated by reference.
(xvii) Copy of Amendment No. 20 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 40, is hereby
incorporated by reference.
(b) By-Laws. Copy of Registrant's By-Laws, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 11, is hereby incorporated by
reference.
(c) Instruments Defining Rights of Security Holders. None other than in the
Declaration of Trust, as amended, and By-Laws of the Registrant.
(d) Investment Advisory Contracts.
(i) Copy of Registrant's Management Agreement with Carl Domino Associates,
L.P., advisor to Carl Domino Equity Income Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 11, is hereby incorporated by
reference.
(ii) Copy of Registrant's Management Agreement with Jenswold, King &
Associates, advisor to Fountainhead Special Value Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 8, is hereby incorporated
by reference.
(iii) Copy of Registrant's Management Agreement with GLOBALT, Inc., advisor to
GLOBALT Growth Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 44, is hereby incorporated by reference.
(iv) Copy of Registrant's Management Agreement with IMS Capital Management,
Inc., advisor to the IMS Capital Value Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 2, is hereby incorporated by
reference.
(v) Copy of Registrant's Management Agreement with Commonwealth Advisors, Inc.,
advisor to Florida Street Bond Fund and Florida Street Growth Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 8, is hereby
incorporated by reference.
(vi) Copy of Registrant's Management Agreement with Corbin & Company, advisor to
Corbin Small-Cap Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 8, is hereby incorporated by reference.
(vii) Copy of Registrant's Management Agreement with Spectrum Advisory
Services, Inc., advisor to the Marathon Value Portfolio, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 42, is hereby incorporated
by reference.
(viii) Copy of Registrant's Management Agreement with The Jumper Group, Inc.,
advisor to the Jumper Strategic Advantage Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 23, is hereby incorporated by
reference.
(ix) Copy of Registrant's Management Agreement with Appalachian Asset
Management, Inc., advisor to the AAM Equity Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 17, is hereby incorporated by
reference.
(x) Copy of Registrant's Management Agreement with Martin Capital Advisors,
L.L.P., advisor to the Austin Opportunity Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 23, is hereby incorporated by
reference.
(xi) Copy of Registrant's Management Agreement with Martin Capital Advisors
L.L.P., advisor to the Texas Opportunity Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 44, is hereby incorporated by
reference.
(xii) Copy of Registrant's Management Agreement with Martin Capital Advisors
L.L.P., advisor to the U.S. Opportunity Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 29, is hereby incorporated by
reference.
(xiii) Copy of Registrant's Management Agreement with Gamble, Jones, Morphy &
Bent, advisor to the GJMB Growth Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 23, is hereby incorporated by
reference.
(xiv) Copy of Registrant's Management Agreement with Carl Domino Associates,
L.P., advisor to the Carl Domino Growth Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 23, is hereby incorporated by
reference.
(xv) Copy of Registrant's Management Agreement with Carl Domino Associates,
L.P., advisor to the Carl Domino Global Equity Income Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby
incorporated by reference.
(xvi) Copy of Registrant's Management Agreement with Dobson Capital Management,
Inc., advisor to the Dobson Covered Call Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 25, is hereby incorporated by
reference.
(xvii) Copy of Registrant's Management Agreement with Auxier Asset Management,
LLC, advisor to the Auxier Focus Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 31, is hereby incorporated by
reference.
(xviii) Copy of Registrant's Management Agreement with Shepherd Advisory
Services, Inc., advisor to the Shepherd Values Growth Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 42, is hereby
incorporated by reference.
(xix) Copy of Registrant's Management Agreement with Columbia Partners, L.L.C.,
Investment Management, advisor to the Columbia Partners Equity Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby
incorporated by reference.
(xx) Copy of Registrant's Management Agreement with Cash Management Systems,
Inc. ("CMS"), advisor to The Cash Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 31, is hereby incorporated by
reference.
(xxi) Copy of Registrant's Management Agreement with Ariston Capital Management
Corporation, advisor to the Ariston Convertible Securities Fund, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 27, is hereby
incorporated by reference.
(xxii) Copy of Registrant's Management Agreement with Leader Capital Corp.,
advisor to the Leader Converted Mutual Bank Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 29, is hereby incorporated by
reference.
(xxiii) Copy of Registrant's Management Agreement with Shepherd Advisory
Services, Inc., advisor to the Shepherd Values Small-Cap Fund, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby
incorporated by reference.
(xxiv) Copy of Registrant's Management Agreement with Shepherd Advisory
Services, Inc., advisor to the Shepherd Values International Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby
incorporated by reference.
(xxv) Copy of Registrant's Management Agreement with Shepherd Advisory Services,
Inc., advisor to the Shepherd Values Fixed Income Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby incorporated
by reference.
(xxvi) Copy of Sub-Advisory Agreement between Shepherd Advisory Services, Inc.
and Templeton Portfolio Advisory, sub-advisor to the Shepherd Values
International Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 34, is hereby incorporated by reference.
(xxvii) Copy of Sub-Advisory Agreement between Shepherd Advisory Services, Inc.
and Nicholas-Applegate Capital Management, sub-advisor to the Shepherd Values
Small-Cap Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 34, is hereby incorporated by reference.
(xxviii) Copy of Sub-Advisory Agreement between Shepherd Advisory Services, Inc.
and Potomac Asset Management Company, Inc., sub-advisor to the Shepherd Values
Fixed Income Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 34, is hereby incorporated by reference.
(xxix) Copy of Sub-Advisory Agreement between Shepherd Advisory Services, Inc.
and Cornerstone Capital Management, Inc., sub-advisor to the Shepherd Values
Growth Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 42, is hereby incorporated by reference.
(xxx) Copy of Registrant's Management Agreement with Aegis Asset Management,
Inc., advisor to the Westcott Technology Fund (f/k/a the Westcott Nothing But
Net Fund), which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 39, is hereby incorporated by reference.
(xxxi) 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.
(xxxii) 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.
(xxxiii) Copy of Registrant's Management Agreement with Jenswold, King &
Associates, advisor to the Fountainhead Kaleidoscope Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 38, is hereby incorporated
by reference.
(xxxiv) Copy of Registrant's Management Agreement with Ariston Capital
Management Corporation, advisor to the Ariston Internet Convertible Fund, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 45, is
hereby incorporated by reference.
(e) Underwriting Contracts.
(i) Copy of Registrant's Amended and Restated Underwriting Agreement with
AmeriPrime Financial Securities, Inc., which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 8, is hereby incorporated by
reference.
(ii) Copy of Registrant's Exhibit A to the Amended and Restated Underwriting
Agreement, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 40, is hereby incorporated by reference.
(f) Bonus or Profit Sharing Contracts. None.
(g) Custodian Agreements.
(i) Copy of Registrant's Agreement with the Custodian, Firstar Bank, N.A.
(formerly Star Bank), which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 11, is hereby incorporated by reference.
(ii) Copy of Registrant's Appendix B to the Agreement with the Custodian,
Firstar Bank, N.A., which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 43, is hereby incorporated by reference.
(iii) Copy of Registrant's Agreement with UMB Bank, N.A., Custodian to the
Dobson Covered Call Fund and the Florida Street Funds, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 28, is hereby incorporated
by reference.
(h) Other Material Contracts.
(i) Copy of Registrant's Administrative Services Agreement with the
Administrator, AmeriPrime Financial Services, Inc., which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby incorporated
by reference.
(ii) Copy of Amended Exhibit A to the Administrative Services Agreement - to be
supplied.
(iii) Copy of the Master-Feeder Participation Agreement for the Cash Fund - to
be supplied.
(iv) Copy of Sub-Administration Agreement for the Cash Fund - to be supplied.
(v) Copy of Administration Agreement for the Cash Fund - to be supplied.
(i) Legal Opinion.
(i) Opinion of Brown, Cummins & Brown Co., L.P.A., which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 9, is hereby incorporated by
reference.
(ii) Opinion of Brown, Cummins & Brown Co., L.P.A., which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 29, is hereby incorporated
by reference.
(iii) Opinion of Brown, Cummins & Brown Co., L.P.A., which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 41, is hereby incorporated
by reference.
(iv) Consent of Brown, Cummins & Brown Co., L.P.A. is filed herewith.
(j) Other Opinions.
(i) Consent of McCurdy & Associates CPA's, Inc. is filed herewith.
(ii) Consent of Ernst & Young LLP is filed herewith.
(k) Omitted Financial Statements. None.
(l) Initial Capital Agreements. Copy of Letter of Initial Stockholders, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is
hereby incorporated by reference.
(m) Rule 12b-1 Plan.
(i) Form of Registrant's Rule 12b-1 Service Agreement, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 1, is hereby incorporated
by reference.
(ii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Austin
Opportunity Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 17, is hereby incorporated by reference.
(iii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Texas
Opportunity Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 17, is hereby incorporated by reference.
(iv) Copy of Registrant's Rule 12b-1 Distribution Plan for the U.S. Opportunity
Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No.
17, is hereby incorporated by reference.
(v) Copy of Registrant's Rule 12b-1 Distribution Plan for the Jumper Strategic
Advantage Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 24, is hereby incorporated by reference.
(vi) Copy of Registrant's Rule 12b-1 Distribution Plan for the Dobson Covered
Call Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 24, is hereby incorporated by reference.
(vii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Ariston
Convertible Securities Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 27, is hereby incorporated by reference.
(viii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Leader
Converted Mutual Bank Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 27, is hereby incorporated by reference.
(ix) Copy of Registrant's Rule 12b-1 Distribution Plan for the Westcott
Technology Fund (f/k/a the Westcott Nothing But Net Fund), which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 28, is hereby incorporated
by reference.
(x) Copy of Registrant's Rule 12b-1 Distribution Plan for the Westcott Large-Cap
Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No.
28, is hereby incorporated by reference.
(xi) Copy of Registrant's Rule 12b-1 Distribution Plan for the Westcott Fixed
Income Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 28, is hereby incorporated by reference.
(xii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Ariston Internet
Convertible Fund which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 41, is hereby incorporated by reference.
(xiii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Florida Street
Growth Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 42, is hereby incorporated by reference.
(xiv) Copy of Registrant's Rule 12b-1 Distribution Plan for the Florida Street
Bond Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 42, is hereby incorporated by reference.
(xv) Copy of Registrant's Shareholder Servicing Plan for the Florida Street
Growth Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 42, is hereby incorporated by reference.
(xvi) Copy of Registrant's Shareholder Servicing Plan for the Florida Street
Bond Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 42, is hereby incorporated by reference.
(n) Rule 18f-3 Plan.
(i) Rule 18f-3 Plan for the Carl Domino Equity Income Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 16, is hereby
incorporated by reference.
(ii) Rule 18f-3 Plan for the Jumper Strategic Advantage Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 21, is hereby
incorporated by reference.
(iii) Rule 18f-3 Plan for the Westcott Funds, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 28, is hereby incorporated by
reference.
(iv) Rule 18f-3 Plan for the Ariston Internet Convertible Fund, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 41, is hereby
incorporated by reference.
(v) Rule 18f-3 Plan for the Florida Street Bond Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 42, is hereby incorporated
by reference.
(vi) Rule 18f-3 Plan for the Florida Street Growth Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 42, is hereby incorporated
by reference.
(o) Reserved.
(p) Codes of Ethics.
(i) Code of Ethics of Registrant, its underwriter and advisers, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 45, is hereby
incorporated by reference.
(ii) Code of Ethics of Northern Trust Quantitative Advisors, Inc., advisor to
the Carl Domino Equity Income Fund, the Carl Domino Growth Fund and the Carl
Domino Global Equity Income Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 47, 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 President (and a Trustee) of the Trust, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 35, is
hereby incorporated by reference.
(iv) Power of Attorney for the Treasurer of the Trust, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 43, is hereby incorporated
by reference.
(v) Powers of Attorney for the Trustees of the AMR Investment Services Trust,
which were filed as an Exhibit to Registrant's Post-Effective Amendment No. 45,
are hereby incorporated by reference.
Item 24. Persons Controlled by or Under Common Control with the Registrant
-------- ------------------------------------------------------------------
(As of December 14, 2000)
-------------------------
(a) Charles L. Dobson, may be deemed to control the Dobson Covered Call Fund as
a result of his beneficial ownership of the Fund (72.68%). Charles L.
Dobson controls Dobson Capital Management, Inc. (a California corporation)
because he owns 100% of its shares. As a result, Dobson Capital Management,
Inc. and the Fund may be deemed to be under the common control of Charles
L. Dobson.
(b) J. Jeffrey Auxier may be deemed to control the Auxier Focus Fund as a
result of his beneficial ownership of the Fund (34.07%). J. Jeffrey Auxier
controls Auxier Asset Management, LLC (an Oregon limited liability company)
because he owns a majority of its shares. As a result, Auxier Asset
Management, LLC and the Fund may be deemed to be under the common control
of J. Jeffrey Auxier.
(c) Roger E. King may be deemed to control the Fountainhead Kaleidoscope Fund
as a result of his beneficial ownership of the Fund (26.01%). 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 advisors, among others. Coverage under the policy would
include losses by reason of any act, error, omission, misstatement, misleading
statement, neglect or breach of duty.
(c) Pursuant to the Underwriting Agreement, the Trust shall indemnify
Underwriter and each of Underwriter's Employees (hereinafter referred to as a
"Covered Person") against all liabilities, including but not limited to amounts
paid in satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise or with which such person may be or
may have been threatened, while serving as the underwriter for the Trust or as
one of Underwriter's Employees, or thereafter, by reason of being or having been
the underwriter for the Trust or one of Underwriter's Employees, including but
not limited to liabilities arising due to any misrepresentation or misstatement
in the Trust's prospectus, other regulatory filings, and amendments thereto, or
in other documents originating from the Trust. In no case shall a Covered Person
be indemnified against any liability to which such Covered Person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties of such Covered Person.
(d) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
Registrant pursuant to the provisions of Ohio law and the Agreement and
Declaration of the Registrant or the By-Laws of the Registrant, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Trust in the successful defense of any action, suit or proceeding)
is asserted by such trustee, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
Item 26. Business and Other Connections of Investment Advisor
-------- ----------------------------------------------------
A. Northern Trust Quantitative Advisors, Inc., 50 South LaSalle Street, Chicago,
Illinois 60675, ("Northern"), Advisor to the Carl Domino Equity Income Fund, the
Carl Domino Growth Fund and the Carl Domino Global Equity Income Fund, is a
registered investment advisor.
(1) Northern has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of Northern is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-33358).
B. King Investment Advisors Inc., 1980 Post Oak Boulevard, Suite 2400, Houston,
Texas 77056-3898 ("King "), Advisor to the Fountainhead Special Value Fund and
the Fountainhead Kaleidoscope Fund, is a registered investment advisor.
(1) King has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of King is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-27224).
C. GLOBALT, Inc., 3060 Peachtree Road, N.W., One Buckhead Plaza, Suite 225,
Atlanta, Georgia 30305 ("GLOBALT"), Advisor to GLOBALT Growth Fund, is a
registered investment advisor.
(1) GLOBALT has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of GLOBALT is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-38123).
D. IMS Capital Management, Inc., 10159 S.E. Sunnyside Road, Suite 330, Portland,
Oregon 97015, ("IMS"), Advisor to the IMS Capital Value Fund, is a registered
investment advisor.
(1) IMS has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of IMS is incorporated
by reference to Schedule D of Form ADV filed by it under the Investment Advisers
Act (File No. 801-33939).
E. CommonWealth Advisors, Inc., 929 Government Street, Baton Rouge, Louisiana
70802, ("CommonWealth"), Advisor to the Florida Street Bond Fund and the Florida
Street Growth Fund, is a registered investment advisor.
(1) CommonWealth has engaged in no other business during the past two fiscal
years.
(2) Information with respect to each officer and director of CommonWealth is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-39749).
F. Corbin & Company, 6300 Ridglea Place, Suite 1111, Fort Worth, Texas 76116,
("Corbin"), Advisor to the Corbin Small-Cap Value Fund, is a registered
investment advisor.
(1) Corbin has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of Corbin is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-41371).
G. Spectrum Advisory Services, Inc. ("Spectrum"), 1050 Crown Pointe Parkway,
Suite 950, Atlanta, Georgia 30338, Advisor to the Marathon Value Portfolio, is a
registered investment advisor.
(1) Spectrum has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of Spectrum is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-40286).
H. The Jumper Group, Inc., 1 Union Square, Suite 505, Chattanooga, Tennessee
37402, ("Jumper"), Advisor to the Jumper Strategic Advantage Fund, is a
registered investment advisor.
(1) Jumper has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of Jumper is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-45453).
I. Appalachian Asset Management, Inc., 1018 Kanawha Blvd., East, Suite 209,
Charleston, WV 25301 ("AAM"), Advisor to AAM Equity Fund, is a registered
investment advisor.
(1) AAM has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of AAM is incorporated
by reference to Schedule D of Form ADV filed by it under the Investment Advisers
Act (File No. 801-41463).
J. Martin Capital Advisors, L.L.P. ("Martin"), 816 Congress Avenue, Suite 1540,
Austin, TX 78701 ("Martin"), Advisor to Austin Opportunity Fund, Texas
Opportunity Fund, and U.S. Opportunity Fund, is a registered investment advisor.
(1) Martin has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and member of Martin is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-55669).
K. Gamble, Jones, Morphy & Bent, Inc., 301 East Colorado Boulevard, Suite 802,
Pasadena, California 91101 ("GJMB"), Advisor to the GJMB Fund, is a registered
investment advisor.
(1) GJMB has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of GJMB is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-36855).
L. Dobson Capital Management, Inc., 1422 Van Ness Street, Santa Ana, CA 92707
("Dobson"), Advisor to the Dobson Covered Call Fund, is a registered investment
advisor.
(1) Dobson has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of Dobson is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-56099).
M. Auxier Asset Management, LLC, 8050 S.W. Warm Springs, Suite 130, Tualatin, OR
97062 ("Auxier"), Advisor to the Auxier Focus Fund, is registered investment
advisor.
(1) Auxier has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and member of Auxier is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-55757).
N. Shepherd Advisory Services, Inc., 2505 21st Avenue, Suite 204, Nashville,
Tennessee 37212 ("Shepherd"), Advisor to the Shepherd Values Funds, is a
registered investment advisor.
(1) Shepherd has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of Shepherd is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-38210).
O. Columbia Partners, L.L.C., Investment Management, 1775 Pennsylvania Avenue,
N.W., Washington, DC 20006 ("Columbia"), Advisor to the Columbia Partners Equity
Fund, is a registered investment advisor.
(1) Columbia has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and member of Columbia is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-50156).
P. Legacy Investment Group, LLC, d/b/a Cash Management Systems, 290 Turnpike
Road, #338, Westborough, Massachusetts ("CMS), Advisor to The Cash Fund, is a
registered investment advisor.
(1) CMS has engaged in no other business during the past two years.
(2) Information with respect to each officer and member of CMS is incorporated
by reference to Schedule D of Form ADV filed by it under the Investment Advisers
Act (File No. 801-56211).
Q. Ariston Capital Management Corporation, 40 Lake Bellevue Drive, Suite 220,
Bellevue, Washington 98005 ("Ariston"), Advisor to the Ariston Convertible
Securities Fund and the Ariston Internet Convertible Fund, is a registered
investment advisor.
(1) Ariston has engaged in no other business during the past two years.
(2) Information with respect to each officer and director of Ariston is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-13209).
R. Leader Capital Corp., 121 S.W. Morrison St., Ste. 450, Portland, OR 97204
("Leader"), Advisor to the Leader Converted Mutual Bank Fund, is a registered
investment advisor.
(1) Leader has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of Leader is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-56684).
S. Aegis Asset Management, Inc. ("Aegis"), 230 Westcott, Suite 1, Houston, Texas
77007, Advisor to the Westcott Technology Fund (f/k/a the Westcott Nothing But
Net Fund), Westcott Large-Cap Fund and Westcott Fixed Income Fund, is a
registered investment advisor.
(1) Aegis has engaged in no other business during the past two fiscal years.
(2) Information with respect to each officer and director of Aegis is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-56040).
Item 27. Principal Underwriters
-------- ----------------------
A. AmeriPrime Financial Securities, Inc., is the Registrant's principal
underwriter. Kenneth D. Trumpfheller, 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the President, Secretary and Treasurer of the
underwriter and the President, Treasurer and Secretary and a Trustee of the
Registrant. It is also the underwriter for the AmeriPrime Insurance Trust,
AmeriPrime Advisors Trust, the Kenwood Funds, the Rockland Funds Trust, the 10K
SmartTrust and the TANAKA Funds, Inc.
B. Information with respect to each director and officer of AmeriPrime Financial
Securities, Inc. is incorporated by reference to Schedule A of Form BD filed by
it under the Securities Exchange Act of 1934 (File No. 8-48143).
C. Not applicable.
Item 28. Location of Accounts and Records
-------- --------------------------------
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder will be maintained by the Registrant at 1793 Kingswood Drive, Suite
200, Southlake, Texas 76092; and/or by the Registrant's Custodians, Firstar
Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202; and UMB Bank, N.A.,
Securities Administration Dept., 928 Grand Blvd., 10th Floor, Kansas City, MO
64106; and/or transfer and shareholder service agent, Unified Fund Services,
Inc., 431 Pennsylvania Street, Indianapolis, IN 46204.
Item 29. Management Services Not Discussed in Parts A or B
-------- -------------------------------------------------
None.
Item 30. Undertakings
-------- ------------
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement under Rule
485(b) under the Securities Act and has duly caused this Registration Statement
to be signed on its behalf by the undersigned, duly authorized, in the City of
Cincinnati, State of Ohio, on the 18th day of December, 2000.
AmeriPrime Funds
By: ___/s/______
Donald S. Mendelsohn,
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Kenneth D. Trumpfheller,*
President and Trustee
Gary E. Hippensteil,* Trustee *By: _____/s/______________
Donald S. Mendelsohn,
Steve L. Cobb,* Trustee Attorney-in-Fact
Robert A. Chopyak,* Treasurer December 18, 2000
and Chief Financial Officer
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, AMR Investment Services Trust has duly caused
this Post-Effective Amendment No. 49 to the Registration Statement on Form N-1A
of Ameriprime Funds, as it relates to AMR Investment Services Trust, to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Fort Worth and the State of Texas, on the 15th day of December, 2000.
AMR Investment Services Trust
____/s/____
William F. Quinn
President
Attest:
____/s/____________
Barry Y. Greenberg
Vice President and Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933 this
Post-Effective Amendment No. 49 to the Registration Statement of the AmeriPrime
Funds as it relates to the AMR Investment Services Trust has been signed below
by the following persons in the capacities and on the dates indicated.
______/s/_______ December 15th, 2000
William F. Quinn
President and Trustee
Alan D. Feld*
Trustee
Ben J. Fortson*
Trustee
John S. Justin*
Trustee
Stephen D. O'Sullivan*
Trustee
Dr. Kneeland Youngblood*
Trustee
*By: December 15th, 2000
____/s/__________
William F. Quinn, Attorney-In-Fact
<PAGE>
EXHIBIT INDEX
1. Consent of Counsel .......................................EX-99.23.i.iv
2. Consent of McCurdy & Associates CPA's, Inc................EX-99.23.j.i
3. Consent of Ernst & Young LLP..............................EX-99.23.j.ii