SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
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Pre-Effective Amendment No. / /
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Post-Effective Amendment No. 40 /X/
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / /
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Amendment No. 41 /X /
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(Check appropriate box or boxes.)
AMERIPRIME FUNDS - FILE NOS. 33-96826 AND 811-9096
1793 KINGSWOOD DRIVE, SUITE 200, SOUTHLAKE, TEXAS 76092
(Address of Principal Executive Offices) Zip Code
Registrant's Telephone Number, including Area Code: (817) 431-2197
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KENNETH TRUMPFHELLER, 1793 KINGSWOOD DR., SUITE 200, SOUTHLAKE, TX 76092
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(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective:
/X/ immediately upon filing pursuant to paragraph (b)
/ / on ___________ pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
7982
<PAGE>
ARISTON CONVERTIBLE SECURITIES FUND
PROSPECTUS
MARCH __, 2000
INVESTMENT OBJECTIVE:
Total return
40 Lake Bellevue Drive, Suite 220
Bellevue, Washington 98005
For Information, Shareholder Services and Requests:
Toll Free (888)-387-2273
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
10272
TABLE OF CONTENTS
PAGE
ABOUT THE FUND..................................................................
FEES AND EXPENSES OF INVESTING IN THE FUND......................................
HOW TO BUY SHARES...............................................................
HOW TO REDEEM SHARES............................................................
DETERMINATION OF NET ASSET VALUE................................................
DIVIDENDS, DISTRIBUTIONS AND TAXES..............................................
MANAGEMENT OF THE FUND..........................................................
OTHER INVESTMENT INFORMATION....................................................
FINANCIAL HIGHLIGHTS............................................................
FOR MORE INFORMATION..................................................BACK COVER
<PAGE>
ABOUT THE FUND
INVESTMENT OBJECTIVE
The investment objective of the Ariston Convertible Securities Fund is
total return.
PRINCIPAL STRATEGIES
Under normal circumstances, the Fund will invest at least 65% of its
total assets in a diversified portfolio of convertible securities (i.e.,
convertible into shares of common stock). Types of convertible securities
include convertible bonds, convertible preferred stocks, exchangeable bonds,
zero coupon bonds and warrants. The convertible securities acquired by the Fund
may include a significant amount of high yield securities (commonly known as
"junk bonds") rated as low as B by Moody's Investors Service, Inc. ("Moody's")
or Standard and Poor's Corporation ("S&P") or, if unrated, of comparable quality
in the opinion of the advisor.
Convertible securities are considered by the advisor to be an
attractive investment vehicle for the Fund because they combine the benefits of
higher and more stable income than the underlying common stock generally
provides, with the potential of profiting from an appreciation in the value of
the underlying security. While convertible securities generally offer lower
interest or dividend yields than non-convertible debt securities of similar
quality, they do enable the investor to benefit from the increase in the market
price of the underlying common stock. The Fund's advisor selects convertible
securities based on the business fundamentals (such as earnings growth and
revenue growth) of the underlying company and its industry, overall portfolio
diversification goals, and creditworthiness of the underlying company. Common
stock received upon conversion or exchange of such securities will either be
sold in an orderly manner or held by the Fund.
While it is anticipated that the Fund will diversify its investments
across a range of industry sectors, certain sectors are likely to be
overweighted compared to others because the Fund's advisor seeks the best
investment opportunities regardless of sector. The Fund may, for example, be
overweighted at times in the technology sector. The sectors in which the Fund
may be overweighted will vary at different points in the economic cycle.
The Fund may sell a security if the Fund's advisor believes that the
business fundamentals of the underlying common stock and its convertible
security are deteriorating, the convertible security is called, there are more
attractive alternative issues, general market conditions are adverse, or to
maintain portfolio diversification.
PRINCIPAL RISKS OF INVESTING IN THE FUND
o MANAGEMENT RISK. The advisor's strategy may fail to produce the intended
results.
o COMPANY RISK. When the market price of a common stock underlying a
convertible security decreases in response to the activities and financial
prospects of the company, the value of the convertible security will also
decrease. The value of an individual company can be more volatile than the
market as a whole.
o MARKET RISK. Overall stock market risks may also affect the value of the
Fund. Factors such as domestic economic growth and market conditions,
interest rate levels, and political events affect the securities markets
and could cause the Fund's share price to fall.
o SECTOR RISK. If the Fund's portfolio is overweighted in a certain sector,
any negative development affecting that sector will have a greater impact
on the Fund than a fund that is not overweighted in that sector. The Fund
may have a greater concentration in technology companies and 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.
o INTEREST RATE RISK. The value of your investment may decrease when interest
rates rise. Convertible securities with longer effective maturities are
more sensitive to interest rate changes than those with shorter effective
maturities.
o HIGH YIELD RISK. The Fund may be subject to greater levels of interest
rate, credit and liquidity risk than funds that do not invest in junk
bonds. Junk bonds are considered predominantly speculative with respect to
the issuer's continuing ability to make principal and interest payments. An
economic downturn or period of rising interest rates could adversely affect
the market for junk bonds and reduce the Fund's ability to sell its junk
bonds (liquidity risk). See "High Yield Debt Securities" on page 8 for a
more detailed discussion of these lower rated securities.
o CREDIT RISK. The issuer of the convertible 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 An investment in the Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
o The Fund is not a complete investment program. As with any mutual fund
investment, the Fund's returns will vary and you could lose money.
IS THE FUND RIGHT FOR YOU?
The Fund may be suitable for:
o Long-term investors seeking a fund with a total return strategy
o Investors who can tolerate the greater risks associated with junk bonds
HOW THE FUND HAS PERFORMED
On April 30, 1999, the Fund acquired the assets and
liabilities of the Lexington Convertible Securities Fund in a tax-free
reorganization. The Fund is a continuation of the Lexington fund and, therefore,
the bar chart shows changes in the Fund's returns since the inception of the
Lexington fund. The table shows how the Fund's average annual total returns
(which include the Lexington fund) compare over time to those of a broad-based
securities market index.
Year-by-Year Performance
[Bar Chart with the following data:
1990 -3.39%
1991 45.05%
1992 12.82%
1993 6.53%
1994 1.30%
1995 18.63%
1996 4.89%
1997 13.16%
1998 2.09%
1999 94.61%]
During the period shown, the highest return for a quarter was 67.46% (Q4,
1999); and the lowest return was -16.04% (Q3, 1998).
AVERAGE ANNUAL TOTAL RETURNS:
ONE YEAR FIVE YEAR TEN YEAR
The Fund 94.61% 22.84% 16.92%
Russell 2000 Index 20.93% 16.62% 13.38%
Lehman Brothers Government/Corp Bond Index -2.16% 7.60% 7.65%
FEES AND EXPENSES OF INVESTING IN THE FUND
The tables describe the fees and expenses that you may pay if you buy and hold
shares of the Fund.
SHAREHOLDER FEES (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases ...........................NONE
Maximum Deferred Sales Charge (Load)........................................NONE
Redemption Fee..............................................................NONE
Exchange Fee................................................................NONE
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets) 1
Management Fees1...........................................................2.22%
Distribution (12b-1) Fees2.................................................0.00%
Other Expenses1 ...........................................................0.03%
Total Annual Fund Operating Expenses ......................................2.25%
1 Expenses have been restated to reflect current fees. Management Fees and
Other Expenses are estimated for the fiscal year ending December 31, 2001.
2 12b-1 fees may not exceed 0.25% annually.
EXAMPLE:
The example below is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. The example uses
the same assumptions as other mutual fund prospectuses: a $10,000 initial
investment for the time periods indicated, reinvestment of dividends and
distributions, 5% annual total return, constant operating expenses, and sale of
all shares at the end of each time period. Although your actual expenses may be
different, based on these assumptions your costs will be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
$231 $711 $1217 $2607
HOW TO BUY SHARES
The minimum initial investment in the Fund is $1,000 and minimum
subsequent investments are $50. The Fund may waive these minimums may for
accounts participating in an automatic investment program. If your investment is
aggregated into an omnibus account established by an investment advisor, broker
or other intermediary, the account minimums apply to the omnibus account, not to
your individual investment. If you purchase or redeem shares through a
broker/dealer or another intermediary, you may be charged a fee by that
intermediary.
INITIAL PURCHASE
BY MAIL- To be in proper form, your initial purchase request must
include: o a completed and signed investment application form (which accompanies
this Prospectus); and o a check (subject to the minimum amounts) made payable to
the Fund.
Mail the application and check to:
U.S. Mail: Overnight:
Ariston Convertible Ariston Convertible
Securities Fund Securities Fund
c/o Unified Fund Services, Inc. c/o Unified Fund Services, Inc.
P.O. Box 6110 431 North Pennsylvania Street
Indianapolis, Indiana 46206-6110 Indianapolis, Indiana 46204
<PAGE>
BY WIRE- You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. To wire money,
you must call Unified Fund Services, Inc. the Fund's transfer agent at
888-387-2273 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: Ariston Convertible Securities Fund
Account Name _________________(write in shareholder name)
For the Account # ______________(write in account number)
D.D.A.#821601382
You must mail a signed application to Firstar Bank, N.A, the Fund's
custodian, at the above address in order to complete your initial wire purchase.
Wire orders will be accepted only on a day on which the Fund, custodian and
transfer agent are open for business. A wire purchase will not be considered
made until the wired money is received and the purchase is accepted by the Fund.
Any delays which may occur in wiring money, including delays which may occur in
processing by the banks, are not the responsibility of the Fund or the transfer
agent. There is presently no fee for the receipt of wired funds, but the Fund
may charge shareholders for this service in the future.
ADDITIONAL INVESTMENTS
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain:
-your name -the name of your account(s)
-your account number(s) -a check made payable to Ariston
Convertible Securities Fund
Checks should be sent to the Ariston Convertible Securities Fund at the address
listed above. A bank wire should be sent as outlined above.
AUTOMATIC INVESTMENT PLAN
You may make regular investments in the Fund with an Automatic
Investment Plan by completing the appropriate section of the account application
and attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting $50 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time.
DISTRIBUTION PLAN
The Fund has adopted a plan under Rule 12b-1 that allows the Fund to
pay distribution fees for the sale and distribution of its shares and allows the
Fund to pay for services provided to shareholders. Shareholders of the Fund pay
annual 12b-1 expenses of up to 0.25%. 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.
<PAGE>
TAX SHELTERED RETIREMENT PLANS
Since the Fund is oriented to longer-term investments, the Fund may be
an appropriate investment medium for tax-sheltered retirement plans, including:
individual retirement plans (IRAs); simplified employee pensions (SEPs); 401(k)
plans; qualified corporate pension and profit-sharing plans (for employees); tax
deferred investment plans (for employees of public school systems and certain
types of charitable organizations); and other qualified retirement plans. You
should contact the Fund's transfer agent for the procedure to open an IRA or SEP
plan, as well as more specific information regarding these retirement plan
options. Please consult with an attorney or tax advisor regarding these plans.
You must pay custodial fees for your IRA by redemption of sufficient shares of
the Fund from the IRA unless you pay the fees directly to the IRA custodian.
Call the Fund's transfer agent about the IRA custodial fees.
OTHER PURCHASE INFORMATION
The Fund may limit the amount of purchases and refuse to sell to any
person. If your check or wire does not clear, you will be responsible for any
loss incurred by the Fund. If you are already a shareholder, the Fund can redeem
shares from any identically registered account in the Fund as reimbursement for
any loss incurred. You may be prohibited or restricted from making future
purchases in the Fund.
The Fund has authorized certain broker-dealers and other financial
institutions (including their designated intermediaries) to accept on its behalf
purchase and sell orders. The Fund is deemed to have received an order when the
authorized person or designee accepts the order, and the order is processed at
the net asset value next calculated thereafter. It is the responsibility of the
broker-dealer or other financial institution to transmit orders promptly to the
Fund's transfer agent.
HOW TO REDEEM SHARES
You may receive redemption payments by check or federal wire transfer.
The proceeds may be more or less than the purchase price of your shares,
depending on the market value of the Fund's securities at the time of your
redemption. Presently there is no charge for wire redemptions; however, the Fund
may charge for this service in the future. Any charges for wire redemptions will
be deducted from your Fund account by redemption of shares. If you redeem your
shares through a broker/dealer or other institution, you may be charged a fee by
that institution.
BY MAIL - You may redeem any part of your account in the Fund at no charge
by mail. Your request should be addressed to:
U.S. Mail: Overnight:
Ariston Convertible Ariston Convertible
Securities Fund Securities Fund
c/o Unified Fund Services, Inc. c/o Unified Fund Services, Inc.
P.O. Box 6110 431 North Pennsylvania Street
Indianapolis, Indiana 46206-6110 Indianapolis, Indiana 46204
Requests to sell shares are processed at the net asset value next
calculated after we receive your order in proper form. To be in proper form,
your request for a redemption must include your letter of instruction, including
the Fund name, account number, account name(s), the address, and the dollar
amount or number of shares you wish to redeem. This request must be signed by
all registered share owner(s) in the exact name(s) and any special capacity in
which they are registered. The Fund may require that signatures be guaranteed by
a bank or member firm of a national securities exchange. Signature guarantees
are for the protection of shareholders. At the discretion of the Fund or the
Fund's transfer agent, a shareholder, prior to redemption, may be required to
furnish additional legal documents to insure proper authorization.
BY TELEPHONE - You may redeem any part of your account in the Fund by
calling the Fund's transfer agent at 888-387-2273. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the transfer agent and the custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The Fund or the transfer agent may terminate the telephone redemption
procedures at any time. During periods of extreme market activity, it is
possible that shareholders may encounter some difficulty in telephoning the
Fund, although neither the Fund nor the transfer agent has ever experienced
difficulties in receiving and in a timely fashion responding to telephone
requests for redemptions or exchanges. If you are unable to reach the Fund by
telephone, you may request a redemption or exchange by mail.
ADDITIONAL INFORMATION - If you are not certain of the
requirements for a redemption please call the Fund's transfer agent at
888-387-2273. Redemptions specifying a certain date or share price cannot be
accepted and will be returned. You will be mailed the proceeds on or before the
fifth business day following the redemption. However, payment for redemption
made against shares purchased by check will be made only after the check has
been collected, which normally may take up to fifteen calendar days. Also, when
the New York Stock Exchange is closed (or when trading is restricted) for any
reason other than its customary weekend or holiday closing, or under any
emergency circumstances (as determined by the Securities and Exchange
Commission) the Fund may suspend redemptions or postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund may require you to redeem all of your shares in the Fund on
30 days' written notice if the value of your shares in the Fund is less than
$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 Fund.
DETERMINATION OF NET ASSET VALUE
The price you pay for your shares is based on the Fund's net asset
value per share (NAV). The NAV is calculated at the close of trading (normally
4:00 p.m. Eastern time) on each day the New York Stock Exchange is open for
business (the Stock Exchange is closed on weekends, Federal holidays and Good
Friday). The NAV is calculated by dividing the value of the Fund's total assets
(including interest and dividends accrued but not yet received) minus
liabilities (including accrued expenses) by the total number of shares
outstanding.
The Fund's assets are generally valued at their market value. If market
prices are not available, or if an event occurs after the close of the trading
market that materially affects the values, assets may be valued by the Fund's
advisor at their fair value, according to procedures approved by the Fund's
board of trustees.
Requests to purchase and sell shares are processed at the NAV next
calculated after we receive your order in proper form.
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS. The Fund typically distributes
substantially all of its net investment income in the form of dividends and
taxable capital gains to its shareholders. These distributions are automatically
reinvested in the Fund unless you request cash distributions on your application
or through a written request. The Fund expects that its distributions will
consist primarily of capital gains.
TAXES. In general, selling shares of the Fund and receiving
distributions (whether reinvested or taken in cash) are taxable events.
Depending on the purchase price and the sale price, you may have a gain or a
loss on any shares sold. Any tax liabilities generated by your transactions or
by receiving distributions are your responsibility. You may want to avoid making
a substantial investment when a Fund is about to make a capital gains
distribution because you would be responsible for any taxes on the distribution
regardless of how long you have owned your shares.
Early each year, the Fund will mail to you a statement setting forth
the federal income tax information for all distributions made during the
previous year. If you do not provide your taxpayer identification number, your
account will be subject to backup withholding.
The tax considerations described in this section do not apply to
tax-deferred accounts or other non-taxable entities. Because each investor's tax
circumstances are unique, please consult with your tax advisor about your
investment.
MANAGEMENT OF THE FUND
Ariston Capital Management, Corporation, 40 Lake Bellevue Drive, Suite
220, Bellevue, Washington 98005 serves as investment advisor to the Fund. The
advisor was founded in 1977 and provides investment management to client
portfolios that include individuals, corporations, pension and profit sharing
plans and other qualified retirement plan accounts, and as of December 31, 1999
manages over $45 million in assets.
Richard B. Russell, President and controlling shareholder of the
advisor, has been primarily responsible for the day-to-day management of the
Fund's portfolio since its inception. Mr. Russell is a graduate of the School of
Business at the University of Washington and has completed additional training
at the New York Institute of Finance. He has spent his entire professional
career as an independent money manager, dating from 1972. Before founding
Ariston in 1977, he was a full-time manager of private family assets.
The Fund is authorized to pay the advisor a fee equal to an annual
average rate of 2.25% of its average daily net assets, less the amount of its
12b-1 expenses and fees and expenses of non-interested person trustees. The
advisor (not the Fund) may pay certain financial institutions (which may include
banks, brokers, securities dealers and other industry professionals) a fee for
providing distribution related services and/or for performing certain
administrative servicing functions for Fund shareholders to the extent these
institutions are allowed to do so by applicable statute, rule or regulation.
OTHER INVESTMENT INFORMATION
GENERAL
The investment objective of the Fund may be changed without shareholder
approval.
From time to time, the Fund may take temporary defensive positions which
are inconsistent with the Fund's principal investment strategies, in attempting
to respond to adverse market, economic, political, or other conditions. For
example, the Fund may hold all or a portion of its assets in money market
instruments, U.S. government securities of other no-load mutual funds or
repurchase agreements. If the Fund invests in shares of another mutual fund, the
shareholders of the Fund generally will be subject to duplicative management
fees. As a result of engaging in these temporary measures, the Fund may not
achieve its investment objective. The Fund may also invest in such instruments
at any time to maintain liquidity or pending selection of investments in
accordance with its policies.
CONVERTIBLE SECURITIES
Convertible securities are securities that may be exchanged or
converted into a predetermined number of the issuer's underlying common shares,
the common shares of another company or that are indexed to an unmanaged market
index at the option of the holder during a specified time period. Convertible
securities may take the form of convertible preferred stock, convertible bonds
or debentures, stock purchase warrants, zero-coupon bonds or liquid-yield option
notes, Eurodollar convertible securities, convertible securities of foreign
issuers, stock index notes, or a combination of the features of these
securities. Prior to conversion, convertible securities have the same general
characteristics as non-convertible debt securities and provide a stable stream
of income with generally higher yields than those of equity securities of the
same or similar issuers. When the market price of a common stock underlying a
convertible security increases, the price of the convertible security
increasingly reflects the value of the underlying common stock and may rise
accordingly. As the market price of the underlying common stock declines,
convertible securities tend to trade increasingly on a yield basis and thus may
not depreciate to the same extent as the underlying common stock. Convertible
securities are ranked senior to common stock on an issuer's capital structure
and they are usually of higher quality and normally entail less risk than the
issuer's common stock, although the extent to which risk is reduced depends in
large measure to the degree to which convertible securities sell above their
value as fixed income securities.
HIGH YIELD DEBT SECURITIES
High yield debt securities in which the Fund may invest (rated Ba or B)
are commonly referred to as "junk bonds." The economy and interest rates affect
junk bonds differently from other securities. The prices of junk bonds have been
found to be more sensitive to interest rate changes than higher-rated
investments, and more sensitive to adverse economic changes or individual
corporate developments. Also, during an economic downturn or substantial period
of rising interest rates, highly leveraged issuers may experience financial
stress which would adversely affect their ability to service their principal and
interest payment obligations to meet projected business goals, and to obtain
additional financing. If the issuer of a security defaulted, the Fund may incur
additional expenses to seek recovery. In addition, periods of economic
uncertainty and changes can be expected to result in increased volatility of
market prices of junk bonds and the Fund's net asset value. To the extent that
there is no established retail secondary market, there may be thin trading of
junk bonds, and this may have an impact on the advisor's ability to accurately
value junk bonds and on the Fund's ability to dispose of the securities. Adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of junk bonds, especially in a
thinly traded market.
There are risks involved in applying credit ratings as a method for
evaluating junk bonds. For example, credit ratings evaluate the safety of
principal and interest payments, not market value of junk bonds. Also, since
credit rating agencies may fail to timely change the credit ratings to reflect
subsequent events, the advisor will continuously monitor the issuers of junk
bonds in the Fund to determine if the issuers will have sufficient cash flow and
profits to meet required principal and interest payments, and to assure the
securities' liquidity.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table below includes audited information for
the fiscal year ended December 31, 1999. The information is derived from the
audited financial statements of the Fund included in the Fund's Annual Report,
which is available upon request and without charge. The table also includes
audited information of the Lexington Convertible Securities Fund (the Fund's
predecessor) for the fiscal years ended December 31, 1994 through 1998, which
were audited by the predecessor fund's independent auditors. The Fund's annual
report for the most recent fiscal year includes a discussion of the Fund's
performance (including the performance of the predecessor fund). It is available
from the Fund upon request and without charge.
YEARS ENDED
DECEMBER 31,
<TABLE>
<S> <C> <C> <C> <C> <C>
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1999 1998 1997 1996 1995
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SELECTED PER SHARE DATA
Net asset value, beginning of period $ 15.36 $ 15.08 $ 13.66 $ 13.66 $ 11.84
-------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.11) -- 0.11 0.11 0.15
Net realized and unrealized gain (loss)
on investments 14.49 0.31 1.68 0.55 2.04
-------------------------------------------------------------------------
Total from investment operations 14.38 0.31 1.79 0.66 2.19
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Less distributions:
Distributions from net investment income -- -- (0.11) (0.11) (0.15)
Distributions from net realized gains (4.74) (0.03) (0.26) (0.55) (0.22)
-------------------------------------------------------------------------
Total distributions (4.74) (0.03) (0.37) (0.66) (0.37)
-------------------------------------------------------------------------
Net asset value, end of period $ 25.00 $ 15.36 $ 15.08 $ 13.66 $ 13.66
=========================================================================
TOTAL RETURN 94.61% 2.09% 13.16% 4.89% 18.63%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000) $15,960 $10,385 $10,345 $11,208 $11,641
Ratio of expenses to average net assets 2.10% 2.32% 2.38% 2.39% 2.52%
Ratio of expenses to average net assets
before reimbursement 2.10% 2.32% 2.38% 2.39% 2.52%
Ratio of net investment income (loss) to
average net assets (0.59)% (0.13)% 0.79% 0.77% 1.24%
Ratio of net investment income (loss) to
average net assets before reimbursement (0.59)% (0.13)% 0.79% 0.77% 1.24%
Portfolio turnover rate 32.89% 27.79% 30.47% 18.45% 11.23%
</TABLE>
<PAGE>
FOR MORE INFORMATION
Several additional sources of information are available to you. The
Statement of Additional Information (SAI), incorporated into this prospectus by
reference, contains detailed information on Fund policies and operations. Annual
and semi-annual reports contain management's discussion of market conditions,
investment strategies and performance results as of the Fund's latest
semi-annual or annual fiscal year end.
Call the Fund at 888-387-2273 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>
ARISTON CONVERTIBLE SECURITIES FUND
STATEMENT OF ADDITIONAL INFORMATION
March __, 2000
This Statement of Additional Information ("SAI") is not a prospectus.
It should be read in conjunction with the Prospectus of Ariston Convertible
Securities Fund dated March __, 2000. This SAI incorporates by reference the
Fund's Annual Report to Shareholders for the fiscal year ended December 31, 1999
("Annual Report"). 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 1-888-387-2273.
TABLE OF CONTENTS
PAGE
DESCRIPTION OF THE TRUST AND FUND..............................................2
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS................................................................3
INVESTMENT LIMITATIONS.........................................................6
THE INVESTMENT ADVISOR.........................................................7
DISTRIBUTION PLAN..............................................................8
TRUSTEES AND OFFICERS..........................................................9
PORTFOLIO TRANSACTIONS AND BROKERAGE..........................................10
DETERMINATION OF SHARE PRICE..................................................11
INVESTMENT PERFORMANCE........................................................12
CUSTODIAN.....................................................................13
TRANSFER AGENT................................................................13
ACCOUNTANTS...................................................................13
DISTRIBUTOR...................................................................13
ADMINISTRATOR.................................................................13
FINANCIAL STATEMENTS..........................................................14
<PAGE>
DESCRIPTION OF THE TRUST AND FUND
The Ariston Convertible Securities Fund (the "Fund") was organized as a
series of AmeriPrime Funds (the "Trust") February 24, 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.
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 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.
Any Trustee of the Trust may be removed by vote of the shareholders
holding not less than two-thirds of the outstanding shares of the Trust. The
Trust does not hold an annual meeting of shareholders. When matters are
submitted to shareholders for a vote, each shareholder is entitled to one vote
for each whole share he owns and fractional votes for fractional shares he owns.
All shares of the Fund have equal voting rights and liquidation rights. The
Declaration of Trust can be amended by the Trustees, except that any amendment
that adversely effects the rights of shareholders must be approved by the
shareholders affected. Each share of the Fund is subject to redemption at any
time if the Board of Trustees determines in its sole discretion that failure to
so redeem may have materially adverse consequences to all or any of the Fund's
shareholders.
As of February 29, 2000, the following persons may be deemed to
beneficially own or hold of record five percent (5%) or more of the Fund:
Charles Schwab & Co., Inc., . ("Schwab"), 101 Montgomery Street, San Francisco,
CA, 28.64%; Joseph B. Mohr, 2157 LaPaz Way, Palm Springs, CA, 11.20%.
As of February 29, 2000, the officers and trustees as a group own less
than one percent of the Fund.
For information concerning the purchase and redemption of shares of the
Fund, see "How to Buy Shares" and "How to Redeem Shares" in the Fund's
Prospectus. For a description of the methods used to determine the share price
and value of the Fund's assets, see "Determination of Net Asset Value" in the
Fund's Prospectus and this Statement of Additional Information.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS
AND RISK CONSIDERATIONS
This section contains a 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. HIGH YIELD DEBT SECURITIES ("JUNK BONDS"). The widespread expansion
of government, consumer and corporate debt within our economy has made the
corporate sector, especially cyclically sensitive industries, more vulnerable to
economic downturns or increased interest rates. An economic downturn could
severely disrupt the market for high yield securities and adversely affect the
value of outstanding securities and the ability of the issuers to repay
principal and interest.
The prices of high yield securities have been found to be more
sensitive to interest rate changes than higher-rated investments, and more
sensitive to adverse economic changes or individual corporate developments.
Also, during an economic downturn or substantial period of rising interest
rates, highly leveraged issuers may experience financial stress which would
adversely affect their ability to service their principal and interest payment
obligations, to meet projected business goals, and to obtain additional
financing. If the issuer of a security owned by the Fund defaulted, the Fund
could incur additional expenses to seek recovery. In addition, periods of
economic uncertainty and changes can be expected to result in increased
volatility of market prices of high yield securities and the Fund's net asset
value. Furthermore, in the case of high yield securities structured as zero
coupon or pay-in-kind securities, their market prices are affected to a greater
extent by interest rate changes and thereby tend to be more volatile than
securities which pay interest periodically and in cash. High yield securities
also present risks based on payment expectations. For example, high yield
securities may contain redemption of call provisions. If an issuer exercises
these provisions in a declining interest rate market, the Fund would have to
replace the security with a lower yielding security, resulting in a decreased
return for investors. Conversely, a high yield securities value will decrease in
a rising interest rate market, as will the value of the Fund's assets. If the
Fund experiences unexpected net redemption, this may force it to sell its high
yield securities without regard to their investment merits, thereby decreasing
the asset based upon which the Fun's expenses can be spread and possibly
reducing the Fund's rate of return.
In addition, to the extent that there is no established retail
secondary market, there may be thin trading of high yield securities, and this
may have an impact on the Fund's ability to accurately value high yield
securities and the Fund's assets and on the Fund's ability to dispose of the
securities. Adverse publicity and investor perception, whether or not based on
fundamental analysis, may decrease the values and liquidity of high yield
securities especially in a thinly traded market.
New laws and proposed new laws may have an impact on the market for
high yield securities. For example, new legislation requiring federally-insured
savings and loan associations to divest their investments in high yield
securities and pending proposals designed to limit the use, or tax and other
advantages of high yield securities which, if enacted, could have a material
effect on the Fund's net asset value and investment practices.
There are also special tax considerations associated with investing in
high yield securities structured as zero coupon or pay-in-kind securities. For
example, the Fund reports the interest on these securities as income even though
it receives no cash interest until the security's maturity or payment date.
Also, the shareholders are taxed on this interest event if the Fund does not
distribute cash to them. Therefore, in order to pay taxes on this interest,
shareholders may have to redeem some of their shares to pay the tax or the Fund
may sell some of its assets to distribute cash to shareholders. These actions
are likely to reduce the Fund's assets and may thereby increase its expense
ratio and decrease its rate of return.
Finally, there are risks involved in applying credit ratings as method
for evaluating high yield securities. For example, credit ratings evaluate the
safety of principal and interest payments, not market value risk of high yield
securities. Also, since credit rating agencies may fail to timely change the
credit ratings to reflect subsequent events, the Fund (in conjunction with its
investment advisor) will continuously monitor the issuers of high yield
securities to determine if the issuers will have sufficient cash flow and
profits to meet required principal and interest payments, and to assure the
securities liquidity so the Fund can meet redemption requests.
A description of the rating categories is contained in the Appendix.
B. WARRANTS. The Portfolio may invest up to 5% of its total assets at
the time of purchase in warrants (not including those acquired in units or
attached to other securities). A warrant is a right to purchase common stock at
a specific price during a specified period of time. The value of a warrant does
not necessarily change with the value of the underlying security. Warrants do
not represent any rights to the assets of the issuing company. A warrant becomes
worthless unless it is exercised or sold before expiration. Warrants have no
voting rights and pay no dividends.
C. OPTIONS TRANSACTIONS. The Fund may write (sell) covered call options
and may purchase put and call options on individual securities and securities
indices. A covered call option on a security is an agreement to sell a
particular portfolio security if the option is exercised at a specified price,
or before a set date. Options are sold (written) on securities and market
indices. The purchaser of an option on a security pays the seller (the writer) a
premium for the right granted but is not obligated to buy or sell the underlying
security. The purchaser of an option on a market index pays the seller a premium
for the right granted, and in return the seller of such an option is obligated
to make the payment. A writer of an option may terminate the obligation prior to
the expiration of the option by making an offsetting purchase of an identical
option. Options on securities which the Fund sells (writes) will be covered or
secured, which means that it will own the underlying security (for a call
option) or (for an option on a stock index) will hold a portfolio of securities
substantially replicating the movement of the index (or, to the extent it does
not hold such a portfolio, will maintain a segregated account with the Custodian
of high quality liquid debt obligations equal to the market value of the option,
marked to market daily). When the Fund writes options, it may be required to
maintain a margin account, to pledge the underlying security or to deposit
liquid high quality debt obligations in a separate account with the Custodian.
When a Fund writes an option, the Fund profits from the sale of the option, but
gives up the opportunity to profit from any increase in the price of the stock
above the option price, and may incur a loss if the stock price falls. Risks
associated with writing covered call options include the possible inability to
effect closing transactions at favorable prices and an appreciation limit on the
securities set aside for settlement. When the Fund writes a covered call option,
it will receive a premium, but will assume the risk of loss should the price of
the underlying security fall below the exercise price.
D. COLLATERALIZED SHORT SALESThe Fund may make short sales of common
stocks, provided they are "against the box," i.e., the Fund owns an equal amount
of such securities or owns securities that are convertible or exchangeable
without payment of further consideration into an equal or greater amount of such
common stock. The Fund may make a short sale when the Fund manager believes the
price of the stock may decline and for tax or other reasons, the Fund manager
does not want to sell currently the stock or convertible security it owns. In
such case, any decline in the value of the Portfolio would be reduced by a gain
in the short sale transaction. Conversely, any increase in the value of the
portfolio would be reduced by a loss in the short sale transaction. The Fund may
not make short sales or maintain a short position unless at all times when a
short position is open, not more than 10% of its total assets (taken at current
value) is held as collateral for such sales at any one time. Short sales against
the box are used to defer recognition of capital gains and losses, although the
short-term or long-term nature of such gains or losses could be altered by
certain provisions of the Internal Revenue Code.
E. U.S. GOVERNMENT SECURITIES The Fund may invest in securities issued or
guaranteed by the U.S. Government, its agencies and instrumentalities (U.S.
Government Securities"). 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.
F. REPURCHASE AGREEMENTS The Fund may invest in repurchase agreements
fully collateralized by U.S. Government obligations. A repurchase agreement is a
short-term investment in which the purchaser (i.e., the Fund) acquires ownership
of 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
the Fund engages will require full collateralization of the seller's obligation
during the entire term of the repurchase agreement. In the event of a bankruptcy
or other default of the seller, the Fund could experience both delays in
liquidating the underlying security and losses in value. However, the Fund
intends to enter into repurchase agreements only with Star Bank, N.A. (the
Fund's Custodian), other banks with assets of $1 billion or more and registered
securities dealers determined by the Advisor (subject to review by the Board of
Trustees) to be creditworthy. The Advisor monitors the creditworthiness of the
banks and securities dealers with which the Fund engages in repurchase
transactions.
H. ILLIQUID SECURITIES. The portfolio of the Fund may contain illiquid
securities. Illiquid securities generally include securities which cannot be
disposed of promptly and in the ordinary course of business without taking a
reduced price. Securities may be illiquid due to contractual or legal
restrictions on resale or lack of a ready market. The following securities are
considered to be illiquid: repurchase agreements maturing in more than seven
days, nonpublicly offered securities and restricted securities. Restricted
securities are securities the resale of which is subject to legal or contractual
restrictions. Restricted securities may be sold only in privately negotiated
transactions, in a public offering with respect to which a registration
statement is in effect under the Securities Act of 1933 or pursuant to Rule 144
or Rule 144A promulgated under such Act. Where registration is required, the
Fund may be obligated to pay all or part of the registration expense, and a
considerable period may elapse between the time of the decision to sell and the
time such security may be sold under an effective registration statement. If
during such a period adverse market conditions were to develop, the Fund might
obtain a less favorable price than the price it could have obtained when it
decided to sell. The Fund will not invest more than 10% of its net assets in
illiquid securities.
INVESTMENT LIMITATIONS
FUNDAMENTAL. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), I.E., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
this Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").
1. BORROWING MONEY. The Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. SENIOR SECURITIES. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is consistent with or permitted by the Investment
Company Act of 1940, as amended, the rules and regulations promulgated
thereunder or interpretations of the Securities and Exchange Commission or its
staff.
3. UNDERWRITING. The Fund will not act as underwriter of securities issued
by other persons. This limitation is not applicable to the extent that, in
connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. REAL ESTATE. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. COMMODITIES. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. LOANS. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. CONCENTRATION. The Fund will not invest 25% or more of its total assets
in a particular industry. This limitation is not applicable to investments in
obligations issued or guaranteed by the U.S. government, its agencies and
instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
NON-FUNDAMENTAL. The following limitations have been adopted
by the Trust with respect to the Fund and are Non-Fundamental (see "Investment
Restrictions" above).
1. PLEDGING. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
2. BORROWING. The Fund will not engage in borrowing.
3. MARGIN PURCHASES. The Fund will not purchase securities or evidences of
interest thereon on "margin." This limitation is not applicable to short term
credit obtained by the Fund for the clearance of purchases and sales or
redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
4. SHORT SALES. The Fund will not effect short sales of securities except
as described in the Prospectus or Statement of Additional Information.
5. OPTIONS. The Fund will not purchase or sell puts, calls, options or
straddles except as described in the Prospectus or Statement of Additional
Information.
6. ILLIQUID INVESTMENTS. The Fund will not invest more than 10% of its
total assets in securities for which there are legal or contractual restrictions
on resale and other illiquid securities.
7. LOANS OF PORTFOLIO SECURITIES. The Fund will not make loans of portfolio
securities.
THE INVESTMENT ADVISOR
The Fund's investment advisor is Ariston Capital Management Corporation
(the "Advisor"), 40 Lake Bellevue Drive, Suite 220, Bellevue, Washington 98005.
As sole shareholder of the Advisor, Richard B. Russell may be deemed to be a
controlling person of the Advisor.
Under the terms of the management agreement (the "Agreement"), the
Advisor manages the Fund's investments subject to approval of the Board of
Trustees. As compensation for its management services, the Fund is obligated to
pay the Advisor a fee computed and accrued daily and paid monthly at an annual
rate of 2.25% of the average daily net assets of the Fund less the amount of the
Fund's 12b-1 expenses and fees and expenses of the non-interested person
trustees. For the period May 1, 1999 (commencement of operations) through
December 31, 1999, the Fund paid advisory fees of $_________.
The Advisor retains the right to use the name "Ariston" 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 "Ariston"
automatically ceases ninety days after termination of the Agreement and may be
withdrawn by the Advisor on ninety days written notice.
The Advisor may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Fund believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Fund believes that there would be no material impact on the Fund or its
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
The Trust and the Adviser have each adopted a Code of Ethics under Rule
17j-1 of the Investment Company Act of 1940. The Code significantly restricts
the personal investing activities of all employees of the Adviser. The Code
requires that all employees of the Adviser preclear any personal securities
investment. The preclearance requirement and associated procedures are designed
to identify any substantive prohibition or limitation applicable to the proposed
investment. In addition, no employee may purchase or sell any security which at
the time is being purchased or sold, or to the knowledge of the employee is
being considered for purchase or sale, by the Fund. The substantive restrictions
also include a ban on acquiring any securities in an initial public offering and
provides for trading "blackout periods" which prohibit trading by portfolio
managers of the Fund within periods of trading by the Fund in the same (or
equivalent) security. The restrictions and prohibitions apply to most securities
transactions by employees of the Adviser, with limited exceptions for some
securities (such as securities which have a market capitalization and average
daily trading volume above certain minimums).
DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under
the 1940 Act (the "Plan"). The Plan permits the Fund to pay directly, or
reimburse the Advisor and Distributor, for distribution expenses in amount not
to exceed 0.25% of the average daily net assets of the Fund. The Trustees expect
that the Plan will significantly enhance the Fund's ability to distribute its
shares. Under the Plan, the Trust may engage in any activities related to the
distribution of Fund shares, including without limitation the following: (a)
payments, including incentive compensation, to securities dealers or other
financial intermediaries, financial institutions, investment advisors and others
that are engaged in the sale of shares, or that may be advising shareholders of
the Trust regarding the purchase, sale or retention of shares, or that hold
shares for shareholders in omnibus accounts or as shareholders of record or
provide shareholder support or administrative services to the Fund and its
shareholders; (b) expenses of maintaining personnel who engage in or support
distribution of shares or who render shareholder support services, including,
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; (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, including,
sales seminars, direct mail promotions and television, radio, newspaper,
magazine and other mass media advertising; (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 deem advisable; and (g) costs of implementing and operating the Plan.
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 must be approved by a majority of the outstanding shares of the
Fund, and all other material amendments to the Plan or any related agreement
must be approved by a majority of the independent Trustees. As an executive
officer of the Fund's Distributor, Kenneth Trumpfheller, a Trustee of the Trust,
may benefit indirectly from payments received by the Fund's Distributor.
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, President, Treasurer and Secretary of AmeriPrime Financial Services,
1793 Kingswood Drive Secretary, Inc., the Fund's administrator, and AmeriPrime Financial Securities,
Suite 200 Treasurer, and Inc., the Fund's distributor, since 1994; President and Trustee of
Southlake, Texas 76092 Trustee AmeriPrime Advisors Trust and AmeriPrime Insurance Trust; prior to
Year of Birth: 1958 December, 1994, a senior client executive with SEI Financial
Services.
- ---------------------------------------------------------------------------------------------------------------------------------
Steve L. Cobb Trustee President of chandler Engineering Company, L.L.C.,
2001 N. Indianwood Avenue oil and gas services company; various positions with
Broken Arrow, OK 74012 Carbo Ceramics, Inc., oil field manufacturing/ supply
company, from 1984 to 1997, most recently Vice President
Year of Birth: 1657 of Marketing
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Gary E. Hippenstiel Trustee Director, Vice President and Chief Investment Officer
600 Jefferson Street of Legacy Trust Company since 1992; President
Suite 350 and Director of Heritage Trust Company from 1994-1996.
Houston, TX 77002
Year of Birth: 1947
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The compensation paid to the Trustees of the Trust for the Fund's
fiscal year ended December 31, 1999 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>
====================================== ========================== =======================================
NAME AGGREGATE TOTAL COMPENSATION
COMPENSATION FROM TRUST (THE TRUST IS
FROM TRUST NOT IN A FUND COMPLEX)
- -------------------------------------- -------------------------- ---------------------------------------
Kenneth D. Trumpfheller 0 0
- -------------------------------------- -------------------------- ---------------------------------------
Steve L. Cobb $_____ $_____
- -------------------------------------- -------------------------- ---------------------------------------
Gary E. Hippenstiel $_____ $_____
====================================== ========================== =======================================
</TABLE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Advisor is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In placing portfolio transactions, the
Advisor seeks the best qualitative execution for the Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Advisor generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received. Consistent with
the Rules of Fair Practice of the National Association of Securities Dealers,
Inc., and subject to its obligation of seeking best qualitative execution, the
Fund's 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 Fund and/or the other
accounts over which the Advisor exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Advisor determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Advisor's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Fund effects securities
transactions may also be used by the Advisor in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Advisor in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Advisor, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Advisor that the review and study of the research and other information will not
reduce the overall cost to the Advisor of performing its duties to the Fund
under the Agreement.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
When the 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 Fund because of the increased volume of the
transaction. If the entire blocked order is not filled, the 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, the 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 adjustment is reasonable. For the period May 1, 1999
(commencement of operations) through December 31, 1999, the Fund paid brokerage
fees of $_____.
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 each Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day, Martin
Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas. For a description of the methods
used to determine the net asset value (share price), see "Determination of Net
Asset Value" in the Prospectus.
Common stocks which are traded on any exchange are valued at the last
quoted sale price. Lacking a last sale price, a security is valued at the mean
between the last bid and ask price except when, in the Advisor's opinion, the
mean price does not accurately reflect the current value of the security. When
market quotations are not readily available, when the Advisor determines the
mean price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Advisor, subject to review and oversight of the Board of Trustees
of the Trust.
All other securities generally are valued at the mean between the last
bid and ask price, 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. Convertible securities are valued at the
greater of the value determined as described in the preceding sentence and the
value of the shares of common stock into which the securities are convertible
(determined as described in the preceding paragraph). When market quotations are
not readily available, when prices are not readily available from a pricing
service, or when restricted or illiquid securities are being valued, securities
are valued at fair value as determined in good faith by the Advisor, subject to
review and oversight of the Board of Trustees. Short term investments in fixed
income securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
INVESTMENT PERFORMANCE
The Fund may periodically advertise "average annual total returns".
"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.
In addition to providing average annual total return, the Fund may also
provide non-standardized quotations of total return for differing periods and
may provide 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.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue. For the one, five and
ten year periods ended December 31, 1999, the Fund's average annual total
returns were 94.61%, 22.84% and 16.92%, respectively.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the 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. 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.
<PAGE>
CUSTODIAN
Firstar Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is
custodian of the Fund's investments. The custodian acts as the Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
TRANSFER AGENT
Unified Fund Services, Inc. ("Unified"), 431 North Pennsylvania Street,
Indianapolis, Indiana 46204, acts as the Fund's transfer agent and, in such
capacity, maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution disbursing
agent and performs other transfer agency and shareholder service functions. For
its services as transfer agent, Unified receives a monthly fee from the Advisor
of $1.20 per shareholder (subject to a minimum monthly fee of $750). In
addition, Unified provides the Fund with fund accounting services, which
includes certain monthly reports, record-keeping and other management-related
services. For its services as fund accountant, Unified receives an annual fee
from the Advisor equal to 0.0275% of the Fund's assets up to $100 million, and
0.0250% of the Fund's assets from $100 million to $300 million, and 0.200% of
the Fund's assets over $300 million (subject to various monthly minimum fees,
the maximum being $2,000 per month for assets of $20 to $100 million). For the
period May 1, 1999 (commencement of operations) through December 31, 1999,
Unified received $_____ from the Advisor (not the Fund) for these fund
accounting services.
ACCOUNTANTS
The firm of McCurdy & Associates CPA's Inc., 27955 Clemens Road,
Westlake, Ohio 44145, has been selected as independent public accountants for
the Fund for the fiscal year ending December 31, 2000. McCurdy & Associates
performs an annual audit of the Fund's financial statements and provides
financial, tax and accounting consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc. (the "Distributor"), 1793
Kingswood Drive, Suite 200, Southlake, Texas 76092, is the exclusive agent for
distribution of shares of the Fund. Kenneth D. Trumpfheller, a Trustee and
officer of the Trust, is an affiliate of the Distributor. The Distributor is
obligated to sell the shares of the Fund on a best efforts basis only against
purchase orders for the shares. Shares of the Fund are offered to the public on
a continuous basis.
ADMINISTRATOR
The Fund retains AmeriPrime Financial Services, Inc., 1793 Kingswood
Drive, Suite 200, Southlake, TX 76092, (the "Administrator") to manage the
Fund's business affairs and provide the Fund with administrative services,
including all regulatory reporting and necessary office equipment, personnel and
facilities. The Administrator receives a monthly fee from the Advisor equal to
an annual rate of 0.10% of the Fund's assets under $50 million, 0.075% of the
Fund's assets from $50 million to $100 million, and 0.050% of the Fund's assets
over $100 million (subject to a minimum fee of $2,500 per month). For the period
May 1, 1999 (commencement of operations) through December 31, 1999, the
Administrator received $20,000 from the Advisor (not the Fund) for these
services. The Administrator, the Distributor and Unified (the Fund's transfer
agent) 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 incorporated herein
by reference to the Fund's Annual Report to Shareholders for the period ended
December 31, 1999. The Trust will provide the Annual Report without charge by
calling the Fund at 1-888-387-2273.
<PAGE>
APPENDIX A
DESCRIPTION OF CORPORATE BOND RATINGS
STANDARD & POOR'S RATINGS SERVICES
The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable. Standard
& Poor's does not perform any audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended or withdrawn as a result of changes in, or unavailability of, such
information or for other circumstances.
The ratings are based, in varying degrees, on the following
considerations:
I. Likelihood of default-capacity and willingness of the obliger as to the
timely payment of interest and repayment of principal in accordance with the
terms of the obligation.
II. Nature and provisions of the obligation.
III. Protection afforded by, and relative position of the obligation in the
event of bankruptcy, reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.
AAA - Debt rated "AAA" has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.
AA - Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A - Debt rated "A" has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
BBB - Debt rated "BBB" is regarded as having an 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.
BB, B, CCC, CC, C - Debt rated "BB", "B", "CCC", "CC", and "C" is regarded,
on balance, as predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the obligation.
"BB" indicates the lowest degree of speculation and "C" the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
BB - Debt rate "BB" has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The "BB"
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied "BBB" rating.
B - Debt rated "B" has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The "B" rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
"BB" or "BB-" rating.
CCC - Debt rated "CCC" has a currently identifiable vulnerability to
default, and is dependent upon favorable business, financial and economic
conditions to meet timely payment of interest and repayment of principal. In the
event of adverse business, financial or economic conditions, it is not likely to
have the capacity to pay interest and repay principal. The "CCC" rating category
is also used for debt subordinated to senior debt that is assigned an actual or
implied "B" or "B-" rating.
CC - The rating "CC" is typically applied to debt subordinated to senior
debt that is assigned an actual or implied "CCC" rating.
C - The rating "C" is typically applied to debt subordinated to senior debt
which is assigned an actual or implied "CCC-" debt rating. The "C" rating may be
used to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued.
C1 - The rating "C1" is reserved for income bonds on which no interest is
being paid.
D - Debt rated "D" is in payment default. The "D" rating category is used
when interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The "D"
rating also will be used upon the filing of a bankruptcy petition if debt
service payments are jeopardized.
Plus (+) or Minus (-): The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
categories.
MOODY'S INVESTORS SERVICE, INC.
Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, fluctuation of protective
elements may be of greater amplitude, or there may be other elements present
which make the long-term risk appear somewhat greater than the Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment some time in the future.
Baa - Bonds which are rated Baa are considered as 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. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba - Bonds which are rated Ba are judged to have speculative elements:
their future cannot be considered as well-assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca - Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C - Bonds which are rated C are the lowest rated class of bonds, and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Moody's applies numerical modifiers: 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category, the modifier 2 indicates a mid-range ranking, and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
<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.
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 is filed
herewith.
(b) By-Laws. Copy of Registrant's By-Laws, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 11, is hereby incorporated by
reference.
(c) Instruments Defining Rights of Security Holders. - None other than in the
Declaration of Trust, as amended, and By-Laws of the Registrant.
(d) Investment Advisory Contracts.
(i) Copy of Registrant's Management Agreement with Carl Domino Associates, L.P.,
Adviser to Carl Domino Equity Income Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 11, is hereby incorporated by
reference.
(ii) Copy of Registrant's Management Agreement with Jenswold, King & Associates,
Adviser to Fountainhead Special Value Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 8, is hereby incorporated by
reference.
(iii) Copy of Registrant's Management Agreement with GLOBALT, Inc., Adviser to
GLOBALT Growth Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 11, is hereby incorporated by reference.
(iv) Copy of Registrant's Management Agreement with IMS Capital Management,
Inc., Adviser to the IMS Capital Value Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 2, is hereby incorporated by
reference.
(v) Copy of Registrant's Management Agreement with Commonwealth Advisors, Inc.,
Adviser to Florida Street Bond Fund and Florida Street Growth Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 8, is hereby
incorporated by reference.
(vi) Copy of Registrant's Management Agreement with Corbin & Company, Adviser to
Corbin Small-Cap Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 8, is hereby incorporated by reference.
(vii) Copy of Registrant's Management Agreement with Burroughs & Hutchinson,
Inc., Advisor to the Marathon Value Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 15, is hereby incorporated by
reference.
(viii) Copy of Registrant's Management Agreement with The Jumper Group, Inc.,
Adviser to the Jumper Strategic Advantage Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 23, is hereby incorporated by
reference.
(ix) Copy of Registrant's Management Agreement with Appalachian Asset
Management, Inc., Advisor to the AAM Equity Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 17, is hereby incorporated by
reference.
(x) Copy of Registrant's Management Agreement with Martin Capital Advisors,
L.L.P., Advisor to the Austin Opportunity Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 23, is hereby incorporated by
reference.
(xi) Copy of Registrant's proposed Management Agreement with Paul B. Martin, Jr.
d/b/a Martin Capital Advisors, Advisor to the Texas Opportunity Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 17, is hereby
incorporated by reference.
(xii) Copy of Registrant's Management Agreement with Martin Capital Advisors
L.L.P., Advisor to the U.S. Opportunity Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 29, is hereby incorporated by
reference.
(xiii) Copy of Registrant's Management Agreement with Gamble, Jones, Morphy &
Bent, Advisor to the GJMB Growth Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 23, is hereby incorporated by
reference.
(xiv) Copy of Registrant's Management Agreement with Cornerstone Investment
Management, Advisor to the Cornerstone MVP Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 29, is hereby incorporated by
reference.
(xv) Copy of Registrant's Management Agreement with Carl Domino Associates,
L.P., Advisor to the Carl Domino Growth Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 23, is hereby incorporated by
reference.
(xvi) Copy of Registrant's Management Agreement with Carl Domino Associates,
L.P., Advisor to the Carl Domino Global Equity Income Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby
incorporated by reference.
(xvii) Copy of Registrant's Management Agreement with Dobson Capital Management,
Inc,. Advisor to the Dobson Covered Call Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 25, is hereby incorporated by
reference.
(xviii) Registrant's Management Agreement with Auxier Asset Management, LLC,
Advisor to the Auxier Focus Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 31, is hereby incorporated by reference.
(xix) Copy of Registrant's Management Agreement with Cornerstone Capital
Management, Inc., Advisor to the Shepherd Values Market Neutral Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 27, is hereby
incorporated by reference.
(xx) Copy of Registrant's Management Agreement with Cornerstone Capital
Management, Inc., Advisor to the Shepherd Values Growth Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 27, is hereby
incorporated by reference.
(xxi) Copy of Registrant's Management Agreement with Columbia Partners, L.L.C.,
Investment Management, Advisor to the Columbia Partners Equity Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby
incorporated by reference.
(xxii) Registrant's Management Agreement with Cash Management Systems , Inc.
("CMS"), Adviser to The Cash Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 31, is hereby incorporated by reference.
(xxiii) Copy of Sub-Advisory Agreement between Cash Management Systems, Inc. and
Milestone Capital Management, L.P., Sub-Advisor to The Cash Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 30, is hereby
incorporated by reference.
(xxiv) Copy of Registrant's Management Agreement with Ariston Capital Management
Corporation, Advisor to the Ariston Convertible Securities Fund, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 27, is hereby
incorporated by reference.
(xxv) Copy of Registrant's Management Agreement with Leader Capital Corp.,
Advisor to the Leader Converted Mutual Bank Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 29, is hereby incorporated by
reference.
(xxvi) Registrant's Management Agreement with Shepherd Advisory Services, Inc.,
Advisor to the Shepherd Values VIF Equity Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 31, is hereby incorporated by
reference.
(xxvii) Registrant's Management Agreement with Shepherd Advisory Services, Inc.,
Advisor to the Shepherd Values Small-Cap Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 31, is hereby incorporated by
reference.
(xxviii) Registrant's Management Agreement with Shepherd Advisory Services,
Inc., Advisor to the Shepherd Values International Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby incorporated
by reference.
(xxix) Registrant's Management Agreement with Shepherd Advisory Services, Inc.,
Advisor to the Shepherd Values Fixed Income Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 31, is hereby incorporated by
reference.
(xxx) Sub-Advisory Agreement between Shepherd Advisory Services, Inc. and
Cornerstone Capital Management, Inc., Sub-Advisor to the Shepherd Values VIF
Equity Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 34, is hereby incorporated by reference.
(xxxi) Sub-Advisory Agreement between Shepherd Advisory Services, Inc. and
Templeton Portfolio Advisory, Sub-Advisor to the Shepherd Values International
Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No.
34, is hereby incorporated by reference.
(xxxii) Sub-Advisory Agreement between Shepherd Advisory Services, Inc. and
Nicholas-Applegate Capital Management, Sub-Advisor to the Shepherd Values
Small-Cap Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 34, is hereby incorporated by reference.
(xxxiii) Sub-Advisory Agreement between Shepherd Advisory Services, Inc. and
Potomac Asset Management Company, Inc., Sub-Advisor to the Shepherd Values Fixed
Income Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 34, is hereby incorporated by reference.
(xxxiv) Copy of Registrant's Management Agreement with Aegis Asset Management,
Inc., Advisor to the Westcott Nothing But Net Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 39, is hereby incorporated
by reference.
(xxxv) Copy of Registrant's Management Agreement with Aegis Asset Management,
Inc., Advisor to the Westcott Large-Cap Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 39, is hereby incorporated by
reference.
(xxxvi) Copy of Registrant's Management Agreement with Aegis Asset Management,
Inc., Advisor to the Westcott Fixed Income Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 39, is hereby incorporated by
reference.
(xxxvii) Copy of Registrant's Management Agreement with Jenswold, King &
Associates, Adviser to the Fountainhead Kaleidoscope Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 38, is hereby incorporated
by reference.
(xxxviii) Copy of Registrant's Management Agreement with Ariston Capital
Management Corporation, Adviser to the Ariston Internet Convertible Fund - to be
supplied.
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 is filed herewith.
(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.
Copy of Registrant's Appendix B to the Agreement with the Custodian, Firstar
Bank, N.A., is filed herewith.
(iii) Copy of Registrant's Agreement with UMB Bank, N.A., Custodian to the
Dobson Covered Call Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 28, is hereby incorporated by reference.
(h) Other Material Contracts. Copy of Registrant's Agreement with the
Administrator, AmeriPrime Financial Services, Inc., which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby incorporated
by reference.
(i) Legal Opinion.
(i) Opinion of Brown, Cummins & Brown Co., L.P.A., which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 9, is hereby incorporated by
reference.
(ii) Opinion of Brown, Cummins & Brown Co., L.P.A., which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 29, is hereby incorporated
by reference.
(iii) Consent of Brown, Cummins & Brown Co., L.P.A is filed herewith.
(j) Other Opinions.
(i) Consent of McCurdy & Associates CPA's, Inc. is filed herewith.
(k) Omitted Financial Statements.- None.
(l) Initial Capital Agreements. Copy of Letter of Initial Stockholders, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is
hereby incorporated by reference.
(m) Rule 12b-1 Plan.
(i) Form of Registrant's Rule 12b-1 Service Agreement which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 1, is hereby incorporated
by reference.
(ii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Austin
Opportunity Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 17, is hereby incorporated by reference.
(iii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Texas
Opportunity Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 17, is hereby incorporated by reference.
(iv) Copy of Registrant's Rule 12b-1 Distribution Plan for the U.S. Opportunity
Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No.
17, is hereby incorporated by reference.
(v) Copy of Registrant's Rule 12b-1 Distribution Plan for the Jumper Strategic
Advantage Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 24, is hereby incorporated by reference.
(vi) Copy of Registrant's Rule 12b-1 Distribution Plan for the Dobson Covered
Call Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 24, is hereby incorporated by reference.
(vii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Ariston
Convertible Securities Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 27, is hereby incorporated by reference.
(viii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Leader
Converted Mutual Bank Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 27, is hereby incorporated by reference.
(ix) Copy of Registrant's Rule 12b-1 Distribution Plan for the Westcott Nothing
But Net Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 28, is hereby incorporated by reference.
(x) Copy of Registrant's Rule 12b-1 Distribution Plan for the Westcott Large-Cap
Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No.
28, is hereby incorporated by reference.
(xi) Copy of Registrant's Rule 12b-1 Distribution Plan for the Westcott Fixed
Income Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 28, is hereby incorporated by reference.
(xii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Ariston Internet
Convertible Fund - to be supplied.
(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 - to be supplied.
(o) Reserved.
(p) Codes of Ethics.
(i) Copy of Registrant's Code of Ethics is filed herewith.
(ii) Copy of Registrant's Code of Ethics Type J is filed herewith.
(iii) Copy of Registrant's Code of Ethics Type D is filed herewith.
(q) Powers of Attorney
(i) Power of Attorney for Registrant and Certificate with respect thereto, which
were filed as an Exhibit to Registrant's Post-Effective Amendment No. 5, are
hereby incorporated by reference.
(ii) Powers of Attorney for Trustees of the Trust, which were filed as an
Exhibit to Registrant's Post-Effective Amendment No. 5, are hereby incorporated
by reference.
(iii) Power of Attorney for the Treasurer and President (and a Trustee) of the
Trust, which was filed as an Exhibit to Registrant's Post-Effective Amendment
No. 35, is hereby incorporated by reference.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE REGISTRANT (AS
OF FEBRUARY 29, 2000)
(a) Carl Domino may be deemed to control the Carl Domino Equity Income Fund as
a result of his beneficial ownership of the Fund (26.46%). Each of Carl
Domino and Carl Domino Associates, L.P., may be deemed to control the
Domino Global Equity Income Fund as a result of their respective beneficial
ownership of the Fund (62.1% and 37.9% respectively). Carl Domino may be
deemed to control the Domino Growth Fund as a result of his beneficial
ownership of the Fund (66.36%). Carl Domino controls Carl Domino
Associates, L. P. (a Florida limited partnership) because he controls the
general partner. As a result, Carl Domino Associates, L.P., the Domino
Equity Income Fund, the Domino Growth Fund and the Domino Global Equity
Income Fund may be deemed to be under the common control of Carl Domino.
(b) Charles L. Dobson, may be deemed to control the Dobson Covered Call Fund as
a result of his beneficial ownership of the Fund (58.54%). Charles L.
Dobson controls Dobson Capital Management, Inc. (a California corporation)
because he owns 100% of its shares. As a result, Dobson Capital Management,
Inc. and the Fund may be deemed to be under the common control of Charles
L. Dobson.
(c) J. Jeffrey Auxier may be deemed to control the Auxier Focus Fund as a
result of his beneficial ownership of the Fund (57.92%). J. Jeffrey Auxier
controls Auxier Asset Management, LLC (an Oregon limited liability company)
because he owns a majority of its shares. As a result, Auxier Asset
Management, LLC and the Fund may be deemed to be under the common control
of J. Jeffrey Auxier.
(d) Roger E. King may be deemed to control the Fountainhead Kaleidoscope Fund
as a result of his beneficial ownership of the Fund (47.28%). Roger E. King
controls King Investment Advisors, Inc. (a Texas corporation) because he
owns a majority of its shares. As a result, King Investment Advisors, Inc.
and the Fund may be deemed to be under the common control of Roger E. King.
ITEM 25. INDEMNIFICATION
(a) Article VI of the Registrant's Declaration of Trust provides for
indemnification of officers and Trustees as follows:
SECTION 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. Subject to and
except as otherwise provided in the Securities Act of 1933, as amended, and the
1940 Act, the Trust shall indemnify each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise (hereinafter referred to as a "Covered Person") against
all liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, director or trustee, and except that no Covered
Person shall be indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
SECTION 6.5 ADVANCES OF EXPENSES. The Trust shall advance attorneys'
fees or other expenses incurred by a Covered Person in defending a proceeding to
the full extent permitted by the Securities Act of 1933, as amended, the 1940
Act, and Ohio Revised Code Chapter 1707, as amended. In the event any of these
laws conflict with Ohio Revised Code Section 1701.13(E), as amended, these laws,
and not Ohio Revised Code Section 1701.13(E), shall govern.
SECTION 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
The Registrant may not pay for insurance which protects the Trustees
and officers against liabilities rising from action involving willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of their offices.
(b) The Registrant may maintain a standard mutual fund and investment advisory
professional and directors and officers liability policy. The policy, if
maintained, would provide coverage to the Registrant, its Trustees and officers,
and could cover its Advisers, among others. Coverage under the policy would
include losses by reason of any act, error, omission, misstatement, misleading
statement, neglect or breach of duty.
(c) Pursuant to the Underwriting Agreememnt, the Trust shall indemnify
Underwriter and each of Underwriter's Employees (hereinafter referred to as a
"Covered Person") against all liabilities, including but not limited to amounts
paid in satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise or with which such person may be or
may have been threatened, while serving as the underwriter for the Trust or as
one of Underwriter's Employees, or thereafter, by reason of being or having been
the underwriter for the Trust or one of Underwriter's Employees, including but
not limited to liabilities arising due to any misrepresentation or misstatement
in the Trust's prospectus, other regulatory filings, and amendments thereto, or
in other documents originating from the Trust. In no case shall a Covered Person
be indemnified against any liability to which such Covered Person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties of such Covered Person.
(d) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
Registrant pursuant to the provisions of Ohio law and the Agreement and
Declaration of the Registrant or the By-Laws of the Registrant, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Trust in the successful defense of any action, suit or proceeding)
is asserted by such trustee, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
A. Carl Domino Associates, L.P., 580 Village Boulevard, Suite 225, West Palm
Beach, Florida 33409, ("CDA"), adviser to the Carl Domino Equity Income
Fund, the Carl Domino Growth Fund and the Carl Domino International Global
Equity Income Fund, is a registered investment adviser.
(1) CDA has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
partners and officers of CDA during the past two years.
(a) Lawrence Katz, a partner in CDA, is an orthopedic surgeon in private
practice.
(b) Saltzman Partners, a partner in CDA, is a limited partnership that invests
in companies and businesses.
(c) Cango Inversiones, SA, a partner in CDA, is a foreign business entity that
invests in U.S. companies and businesses.
B. King Investment Advisors Inc., 1980 Post Oak Boulevard, Suite 2400,
Houston, Texas 77056-3898 ("King King"), adviser to the Fountainhead
Special Value Fund and the Fountainhead Kaleidoscope Fund, is a registered
investment adviser.
(1) King has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of King during the past two years.
(a) John Servis, a director of JKA King, is a licensed real estate broker.
C. GLOBALT, Inc., 3060 Peachtree Road, N.W., One Buckhead Plaza, Suite 225,
Atlanta, Georgia 30305 ("GLOBALT"), adviser to GLOBALT Growth Fund, is a
registered investment adviser.
(1) GLOBALT has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
officers and directors of GLOBALT during the past two years.
(a) Gregory S. Paulette, an officer of GLOBALT, is the president of GLOBALT
Capital Management, a division of GLOBALT.
D. IMS Capital Management, Inc., 10159 S.E. Sunnyside Road, Suite 330,
Portland, Oregon 97015, ("IMS"), Adviser to the IMS Capital Value Fund, is
a registered investment adviser.
(1) IMS has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of IMS during the past two years - None.
E. CommonWealth Advisors, Inc., 929 Government Street, Baton Rouge, Louisiana
70802, ("CommonWealth"), Adviser to the Florida Street Bond Fund and the
Florida Street Growth Fund, is a registered investment adviser.
(1) CommonWealth has engaged in no other business during the past two fiscal
years.
(2) The following list sets forth other substantial business activities of the
directors and officers of CommonWealth during the past two years.
(a) Walter A. Morales, President/Chief Investment Officer of CommonWealth was
the Director of an insurance/broadcasting corporation, Guaranty Corporation, 929
Government Street, Baton Rouge, Louisiana 70802 from August 1994 to February
1996. From September 1994 through the present, a registered representative of a
Broker/Dealer company, Securities Service Network, 2225 Peters Road, Knoxville,
Tennessee 37923. Beginning August 1995 through the present, an instructor at the
University of Southwestern Louisiana in Lafayette, Louisiana.
F. Corbin & Company, 1320 S. University Drive, Suite 406, Fort Worth, Texas
76107, ("Corbin"), Adviser to the Corbin Small-Cap Value Fund, is a
registered investment adviser.
(1) Corbin has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of Corbin during the past two years - None.
G. Burroughs & Hutchinson, Inc., 702 West Idaho Street, Suite 810, Boise,
Idaho ("B&H"), advisor to Marathon Value Fund, is a registered investment
adviser.
(1) B&H has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of B&H during the past two years.
Mark R. Matsko, Vice President and Director of B&H, was broker with D.A.
Davidson & Co., a broker/dealer in Boise, Idaho, from 1994 to 1996.
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) The following list set forth other substantial business activities of the
directors and officers of Jumper during the past two years - None.
I. Appalachian Asset Management, Inc., 1018 Kanawha Blvd., East, Suite 209,
Charleston, WV 25301 ("AAM"), advisor to AAM Equity Fund, is a registered
investment advisor.
(1) AAM has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of AAM during the past two years - None.
J. Martin Capital Advisors, L.L.P. ("Martin"), 816 Congress Ave., Suite 1540,
Austin, TX 78701 ("Martin"), advisor to Austin Opportunity Fund, Texas
Opportunity Fund, and U.S. Opportunity Fund, is a registered investment
advisor.
(1) Martin has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of GJMB during the past two years - None.
K. Gamble, Jones, Morphy & Bent, Inc., 301 East Colorado Boulevard, Suite 802,
Pasadena, California 91101 ("GJMB"), Advisor to the GJMB Fund, is a
registered investment advisor.
(1) GJMB has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of GJMB during the past two years - None.
L. Cornerstone Investment Management, L.L.C. 132 West Main Street, Aspen,
Colorado 81611 ("Cornerstone"), Advisor to the Cornerstone MVP Fund, is a
registered investment advisor.
(1) Cornerstone has engaged in no other business during the past two fiscal
years.
(2) The following list sets forth other substantial business activities of the
directors and officers of Cornerstone during the past two years:
Christopher Shawn Ryan, managing member of Cornerstone, was Vice
President-Portfolio Manager at NationsBank in Dallas, Texas from January 1994 to
October 1997.
M. Dobson Capital Management, Inc., 1422 Van Ness Street., Santa Ana, CA 92707
("Dobson"), Advisor to the Dobson Covered Call Fund, is a registered
investment advisor.
(1) Dobson has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of Dobson during the past two years: Charles L. Dobson,
President of Dobson, was the Director of Trading with Analytic/TSA Global Asset
Management, 700 S. Flower Street, Suite 2400, Los Angeles CA, from 1996 to 1998.
N. Auxier Asset Management, LLC, 8050 S.W. Warm Springs, Suite 130, Tualatin,
OR 97062 ("Auxier"), Advisor to the Auxier Focus Fund, is registered
investment advisor.
(1) Auxier has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of Auxier during the past two years: Jeffrey Auxier,
Managing Member of Auxier, was a Senior Portfolio Management Director with Smith
Barney, Inc. until 1998.
O. Cornerstone Capital Management, Inc., 6760 Corporate Drive, Suite 230,
Colorado Springs, CO 80919 ("CCM"), Adviser to the Shepherd Value Market
Fund and the Shepherd Value Growth Fund, is a registered investment
advisor.
(1) CCM has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of CCM during the past two years:
a) Darrel Uselton, Director of CCM, is the Chairman of The National Capital
Companies, an investment banking firm.
b) Joseph Cerbone, Director of CCM, is the President of The National Capital
Companies, an investment banking firm.
c) Jason D. Huntley, Director of CCM, was Director of Institutional Services
with First Affirmative/Walnut Street Advisers, Colorado Springs, CO, an
investment advisory firm, from 1996 to 1997.
d) Colleen Helm, Director of CCM, was a portfolio manager with Angell Financial,
an investment adviser, from January 1998 to November 1999. Prior to that, she
was a portfolio manager with Pinnacle Financial Advisory Group, an investment
adviser.
e) Donald Ellsworth, Director of CCM, was the President of Ellsworth Advisory
Group, Inc., an investment counseling firm, from June 1987 until June 1999.
P. Columbia Partners, L.L.C., Investment Management, 1775 Pennsylvania Avenue,
N.W., Washington, DC 20006 ("Columbia"), Advisor to the Columbia Partners
Equity Fund, is a registered investment advisor.
(1) Columbia has engaged in no other business during the past two fiscal years.
(2) The following list sets forth other substantial business activities of the
directors and officers of Columbia during the past two years:
Rhys H. Williams, a principal of Columbia, has been a portfolio manager at
Columbia since late 1997. Prior to that time, Mr. Williams was the Senior Vice
President at Prudential Securities in Philadelphia, PA since 1987.
Q. Legacy Investment Group, LLC, d/b/a Cash Management Systems, 290 Turnpike
Road, #338, Westborogh, Massachusetts ("CMS), Advisor to The Cash Fund, is
a registered investment advisor.
1. CMS has engaged in no other business during the past two years.
2. The following list sets forth other substantial business activities of the
directors and officers of CMS during the past two years:
David W. Reavill, Member of CMS, was a Vice President with Fixed Income Discount
Advisory Corp., Shrewsbury, MA, a money market firm, from 1997 to 1998 and a
Vice President of Reich & Tang, LLC, Westlake Village, CA, a money market firm,
from 1996 to 1997.
R. Ariston Capital Management Corporation, 40 Lake Bellevue Drive, Suite 220,
Bellevue, Washington 98005 ("Ariston"), Advisor to the Ariston Convertible
Securities Fund and the Ariston Internet Convertible Fund, is a registered
investment advisor.
1. Ariston has engaged in no other business during the past two years.
2. The following list sets forth other substantial business activities of the
directors and officers of Ariston during the past two years: None.
S. Leader Capital Corp., 121 S.W. Morrison St., Ste. 450, Portland, OR 97204
("Leader"), Adviser to the Leader Converted Mutual Bank Fund, is a
registered investment advisor.
1. Leader has engaged in no other business during the past two fiscal years.
2. The following list sets forth other substantial business activities of the
directors and officers of Leader during the past two years:
(a) John Lekas, President of Leader, was a registered representative with Smith
Barney from July 1993 to November 1997.
(b) Jason McMillen, Vice President of Leader, was a research assistant with
Smith Barney from December 1996 to December 1997.
(c) Carey Guenther, Secretary of Leader, was a customer account representative
with Columbia Funds from July 1997 to January, 1998.
T. Aegis Asset Management, Inc. ("Aegis"), 230 Westcott, Suite 1, Houston,
Texas 77007, Adviser to Westcott Nothing But Net Fund, Westcott Large-Cap
Fund and Westcott Fixed Income Fund, is a registered investment adviser.
1. Aegis has engaged in no other business during the past two fiscal years.
2. The following list sets forth other substantial business activities of the
directors and officers of Aegis during the past two years:
(a) Thomas Layng Guerriero, President of Aegis, has been the President of
Westcott Securities, L.L.C., a broker/dealer, from April 1998 to the present.
ITEM 27. PRINCIPAL UNDERWRITERS
A. AmeriPrime Financial Securities, Inc., is the Registrant's principal
underwriter. Kenneth D. Trumpfheller, 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the President, Secretary and Treasurer of the
underwriter and the President, Treasurer and Secretary and a Trustee of the
Registrant. It is also the underwriter for the AmeriPrime Insurance Trust,
the Kenwood Funds, the Rockland Funds Trust and the TANAKA Funds, Inc.
B. Information with respect to each director and officer of AmeriPrime
Financial Securities, Inc. is incorporated by reference to Schedule A of
Form BD filed by it under the Securities Exchange Act of 1934 (File No.
8-48143).
C. Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder will be maintained by the Registrant at 1793 Kingswood Drive, Suite
200, Southlake, Texas 76092 and/or by the Registrant's Custodians, Firstar Bank,
N.A., 425 Walnut Street, Cincinnati, Ohio 45202, Bank of New York, 1 Wall
Street, New York, NY 10286, and UMB Bank, N.A., Securities Administration Dept.,
928 Grand Blvd., 10th Floor, Kansas City, MO 64106, and/or transfer and
shareholder service agents, American Data Services, Inc., Hauppauge Corporate
Center, 150 Motor Parkway, Hauppauge, New York 11760 and Unified Fund Services,
Inc., 431 Pennsylvania Street, Indianapolis, IN 46204.
ITEM 29. MANAGEMENT SERVICES NOT DISCUSSED IN PARTS A OR B
- -------- -------------------------------------------------
None.
ITEM 30. UNDERTAKINGS
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement under Rule
458(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 6th day of March, 2000.
AmeriPrime Funds
By: ____/s/_____________________________
Donald S. Mendelsohn,
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Kenneth D. Trumpfheller,*
President, Treasurer and Trustee
*By: ____/s/___________________________
Donald S. Mendelsohn,
Gary E. Hippensteil,* Trustee Attorney-in-Fact
Steve L. Cobb,* Trustee March 6, 2000
<PAGE>
EXHIBIT INDEX
1. Amendment No. 20 to Agreement and Declaration of Trust...........EX-99.23.a
2. Exhibit A to Underwriting Agreement..............................EX-99.23.e
3. Appendix B to Custody Agreement..................................EX-99.23.g
4. Consent of Counsel...............................................EX-99.23.i
5. Consent of Auditors..............................................EX-99.23.j
6. Code of Ethics.................................................EX-99.23.p.i
7. Code of Ethics Type J.........................................EX-99.23.p.ii
8. Code of Ethics Type D........................................EX-99.23.p.iii
AMERIPRIME FUNDS AMENDMENT NO. 20
AGREEMENT AND DECLARATION OF TRUST
1........Pursuant to Sections 4.1 and 7.3 of the Agreement and
Declaration of Trust of AmeriPrime Funds, and effective upon the execution of
this document, the undersigned, being a majority of the trustees of AmeriPrime
Funds, hereby:
(a) establish a new series of shares of the Trust and designate such
series as the "Ariston Internet Convertible Fund" with two classes of shares,
designated the "Premier Class" and the "Elite Class,"
(b) abolish the series designated as the MAI Enhanced Equity Benchmark
Fund, MAI Enhanced Growth & Income Fund, MAI Enhanced Aggressive Growth Fund,
MAI Enhanced Income Fund, MAI Enhanced Capital Appreciation Fund, MAI Enhanced
Global Fund and the Worthington Theme Fund.
(c) change the designation of the series of shares designated as the
"Marathon Value Fund" to the "Marathon Value Portfolio."
(d) the relative rights and preferences of each designated series shall
be those rights and preferences set forth in Section 4.2 of the Agreement and
Declaration of Trust of AmeriPrime Funds.
2........This document shall have the status of an Amendment to said
Agreement and Declaration of Trust, and may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
/S/
---------------------
Steve L. Cobb
/S/
---------------------
Gary E. Hippenstiel
/S/
---------------------
Kenneth D. Trumpfheller
Dated: February 29, 2000
EXHIBIT A
UNDERWRITING AGREEMENT DATED MARCH 5, 1996
Amended 2/29/00
o AAM Equity Fund
o Ariston Convertible Securities Fund
o Ariston Internet Convertible Fund
o Auxier Focus Fund
o Carl Domino Equity Income Fund
o Carl Domino Global Equity Income Fund
o Carl Domino Growth Fund
o Columbia Partners Equity Fund
o Corbin Small-Cap Value Fund
o Cornerstone MVP Fund
o Dobson Covered Call Fund
o Florida Street Bond Fund
o Florida Street Growth Fund
o Fountainhead Kaleidoscope Fund
o Fountainhead Special Value Fund
o GLOBALT Growth Fund
o GJMB Growth Fund
o IMS Capital Value Fund
o Jumper Strategic Advantage Fund
o Marathon Value Fund
o Martin Capital Austin Opportunity Fund
o Martin Capital Texas Opportunity Fund
o Martin Capital U.S. Opportunity Fund
o Shepherd Values Fixed Income Fund
o Shepherd Values Growth Fund
o Shepherd Values International Fund
o Shepherd Values Market Neutral Fund
o Shepherd Values Small-Cap Fund
o Shepherd Values VIF Equity Fund
o The Cash Fund
o Westcott Nothing But Net Fund
o Westcott Large-Cap Fund
o Westcott Fixed Income Fund
CUSTODY AGREEMENT APPENDIX B
Amended 2/29/00
AAM Equity Fund
Ariston Convertible Securities Fund
Ariston Internet Convertible Fund
Auxier Focus Fund
Carl Domino Equity Income Fund
Carl Domino Global Equity Income Fund
Carl Domino Growth Fund
Columbia Partners Equity Fund
Corbin Small-Cap Value Fund
Cornerstone MVP Fund
Fountainhead Kaleidoscope Fund
Fountainhead Special Value Fund
GLOBALT Growth Fund
GJMB Growth Fund
IMS Capital Value Fund
Jumper Strategic Advantage Fund
Marathon Value Fund
Martin Capital Austin Opportunity Fund
Martin Capital Texas Opportunity Fund
Martin Capital U.S. Opportunity Fund
Shepherd Values Fixed Income Fund
Shepherd Values Growth Fund
Shepherd Values International Fund
Shepherd Values Market Neutral Fund
Shepherd Values Small-Cap Fund
Shepherd Values VIF Equity Fund
Westcott Nothing But Net Fund
Westcott Large-Cap Fund
Westcott Fixed Income Fund
BROWN, CUMMINS & BROWN CO., L.P.A.
ATTORNEYS AND COUNSELORS AT LAW
3500 CAREW TOWER
J. W. BROWN (1911-1995) 441 VINE STREET JOANN M. STRASSER
JAMES R. CUMMINS CINCINNATI, OHIO 45202 AARON A. VANDERLAAN
ROBERT S BROWN TELEPHONE (513) 381-2121
DONALD S. MENDELSOHN TELECOPIER (513) 381-2125 OF COUNSEL
LYNNE SKILKEN GILBERT BETTMAN
AMY G. APPLEGATE
KATHRYN KNUE PRZYWARA
MELANIE S. CORWIN
March 6, 2000
AmeriPrime Funds
1793 Kingswood Drive
Southlake, Texas 76092
RE: AMERIPRIME FUNDS, FILE NOS. 33-96826 AND 811-9096
Gentlemen:
Legal opinions that we prepared were filed with Post-Effective
Amendment No. 9 and Post-Effective Amendment No. 29 (the "Legal Opinions") to
the Registration Statement. We hereby give you our consent to incorporate by
reference the Legal Opinions into Post-Effective Amendment No. 40 to your
Registration Statement (the "Amendment"), and consent to all references to us in
the Amendment.
Very truly yours,
______/s/________________________
Brown, Cummins & Brown Co., L.P.A.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated January 20, 2000, for the Ariston Convertible Securities Fund and to all
references to our firm included in or made a part of this Post-Effective
Amendment No. 40 to AmeriPrime Fund's Registration Statement on Form N-1A (file
No. 33-96826), including the references to our firm under the heading "Financial
Highlights" in the Prospectus and heading "Accountants" in the Statement of
Additional Information.
______/s/_______________________
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
March 6, 2000
AMERIPRIME FUNDS
CODE OF ETHICS
STATEMENT OF PRINCIPLES
AmeriPrime Funds (the "Trust") has adopted this Code of Ethics to
govern personal securities investment activities of persons affiliated with the
investment advisers listed on Schedule A of this Code, and the officers and
trustees of the Trust (collectively, "AmeriPrime Personnel"). Although this Code
contains a number of specific standards and policies, there are three key
principles embodied throughout the Code.
THE INTERESTS OF TRUST SHAREHOLDERS MUST ALWAYS BE PARAMOUNT
AmeriPrime Personnel have a legal, fiduciary duty to place the
interests of clients first. In any decision relating to their personal
investments, AmeriPrime Personnel must scrupulously avoid serving their own
interests ahead of those of any client.
AMERIPRIME PERSONNEL MAY NOT TAKE INAPPROPRIATE ADVANTAGE OF THEIR
RELATIONSHIP TO OUR SHAREHOLDERS
AmeriPrime Personnel should avoid any situation (unusual investment
opportunities, perquisites, accepting gifts of more than token value from
persons seeking to do business with the Advisers or the Trust) that might
compromise, or call into question, the exercise of their fully independent
judgement in the interests of trust shareholders.
ALL PERSONAL SECURITIES TRANSACTIONS SHOULD AVOID ANY ACTUAL, POTENTIAL
OR APPARENT CONFLICTS OF INTEREST
Although all personal securities transactions by AmeriPrime Personnel
must be conducted in a manner consistent with this Code, the Code itself is
based upon the premise that AmeriPrime Personnel owe a fiduciary duty to
clients, and should avoid any activity that creates an actual, potential or
apparent conflict of interest. This includes executing transactions through or
for the benefit of a third party when the transaction is not in keeping with the
general principles of this Code.
AMERIPRIME PERSONNEL MUST ADHERE TO THESE GENERAL PRINCIPLES AS WELL AS
COMPLY WITH THE SPECIFIC PROVISIONS OF THIS CODE. TECHNICAL COMPLIANCE WITH THE
CODE AND ITS PROCEDURES WILL NOT AUTOMATICALLY PREVENT SCRUTINY OF TRADES THAT
SHOW A PATTERN OF ABUSE OF AN INDIVIDUAL'S FIDUCIARY DUTIES OF CLIENTS.
DEFINITIONS
"ACT" means the Investment Company Act of 1940.
"ADVISERS" means the Advisers listed on Schedule A to this Code. ("Schedule A"
shall mean such schedule as it may be amended from time to time.)
5389
<PAGE>
"AFFILIATED FUNDS" means, for Adviser Personnel, the Fund for which such Adviser
serves as investment adviser, and for Trust Personnel, all Funds.
"ADVISER PERSONNEL" means all employees, whether full-time or part-time, of the
Advisers. Any provisions of this Code that apply directly to Adviser Personnel
apply equally to accounts in the names of other persons in which Adviser
Personnel have Beneficial Ownership.
"BENEFICIAL OWNERSHIP" means the opportunity, directly or indirectly, to profit
or share in any profit derived from the purchase or sale of the subject
Securities. "Beneficial Ownership" includes, but is not limited to, ownership of
Securities held by members of the family. For these purposes, a person's family
includes the spouse, minor children, any person living in the home and any
relative to whose support the person directly or indirectly contributes.
"CONTROL" means the power to exercise a controlling influence over the
management or policies of the Trust, unless such power is solely the result of
an official position with a Trust. Any person who beneficially owns, either
directly or through one or more controlled companies, more than 25 percent of
the voting securities of any present Fund of a Trust shall be presumed to
control such Fund. Any such presumption may be rebutted by evidence, in
accordance with Section 2(a)(9) of the Act.
"COMPLIANCE OFFICER" means, for Adviser Personnel, the person designated as the
Compliance Officer by such Adviser, and for Trust Personnel, all Compliance
Officers.
"FUND" means any of the Funds listed on Schedule A to this Code.
"PORTFOLIO MANAGERS" means those Adviser Personnel entrusted with the direct
responsibility and authority to make investment decisions affecting any Fund. A
list of Fund Portfolio Managers is attached as Schedule A to this Code. Any
provisions of this Code that apply directly to Personal Securities Transactions
by a Fund Portfolio Manager apply equally to transactions in accounts in the
names of other persons in which the Fund Portfolio Manager has Beneficial
Ownership.
"PERSONAL SECURITIES TRANSACTION(S)" means transactions in Securities for the
account(s) in the names of AmeriPrime Personnel, or for accounts in which
AmeriPrime Personnel have Beneficial Ownership.
"TRUST" means AmeriPrime Funds.
"TRUST PERSONNEL" means any officer or Trustee of the Trust.
"SECURITY" means any note, stock, treasury stock, bond, debenture, evidence of
indebtedness, certificate of interest or participation in any profit-sharing
agreement, collateral-trust certificate, pre-organization certificate or
subscription, transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest in oil, gas
or other mineral rights, or, in general, any interest or instrument commonly
known as "security," or any certificate or interest or participation in
temporary or interim certificate for, receipt for, guarantee of, or warrant or
right to subscribe to or purchase (including options) any of the foregoing.
The term "Security" shall not include the following securities (the
"Excluded Securities"): (i) shares of registered open-end investment companies;
(ii) securities issued by the United States government; (iii) short term debt
securities which are government securities within the meaning of Section
2(a)(16) of the Act; (iv) bankers' acceptances; (v) bank certificates of
deposit; (vi) commercial paper and (vii) such other money market instruments as
may be designated by the Trust's Board of Trustees.
"PURCHASE OR SALE OF A SECURITY" includes the writing of an option to purchase
or sell a Security. A Security shall be deemed "BEING CONSIDERED FOR PURCHASE OR
SALE" by a Fund when a recommendation to purchase or sell has been made and
communicated and, with respect to the person making the recommendation, when
such person seriously considers making such a recommendation. A Security shall
not be deemed to be one which is "being considered for Purchase or Sale" by a
Fund if such Security is reviewed as part of a general industrial survey or
other broad monitoring of the securities market.
PROHIBITED PURCHASES AND SALES OF SECURITIES
In a Personal Securities Transaction, Portfolio Managers may not:
o Purchase or Sell a Security within three calendar days before
and one calendar day after the execution of a trade in the
same Security or an equivalent Security by the Affiliated
Fund. If a Fund is engaged in a trading program extending over
several trading days, the prohibition on trading by Mutual
Fund Portfolio Managers begins three trading days prior to the
first Fund transaction in that program, and ends one trading
day after the last transaction in that program.
In a Personal Securities Transaction, Adviser Personnel may not:
o Acquire any Security in an initial public offering;
o Acquire any Security in a private placement without prior
written authorization of the acquisition by the Compliance
Officer of the Adviser with whom the person is affiliated. Any
decision by a Fund to invest in such Securities must be
approved solely by Adviser Personnel with no investment in the
issuer;
o In any calendar year, receive a gift or anything else (for
example, air fare, hotel accommodations, etc.) with a value of
more than $100 from any single person or entity that does
business with or on behalf of the Trust;
o Serve on the board of directors of a publicly traded company
without prior authorization from the Board of Trustees of the
Trust based upon a determination that such service would be
consistent with the interests of the Trust and its
shareholders. Adviser Personnel that serve on such boards of
directors are not permitted to participate in any investment
decisions made by the Trust involving Securities of a company
on whose board they serve;
o Execute a Personal Securities Transaction without the prior
written authorization of the Compliance Officer.
Adviser Personnel and Trust Personnel may not:
o Execute a Personal Securities Transaction on a day during
which the Affiliated Fund has a pending "buy" or "sell" order
in that Security or an equivalent Security, until the
Affiliated Fund's order is executed or withdrawn. In the case
of "good until canceled" orders placed by a Fund, this
provision applies only if the market price is within 2 points
or 10% of the "good until canceled" price; or
o Execute a Personal Securities Transaction in a Security or an
equivalent Security that is being considered for Purchase or
Sale by an Affiliated Fund;
provided, however, that for Trust Personnel, these prohibitions shall only apply
with respect to Personal Securities Transactions if the Trust Personnel knew or,
in the ordinary course of fulfilling his or her duties as an officer or Trustee
of the Trust, should have known, that during the fifteen day period immediately
preceding or after the date of the Personal Security Transaction in the Security
by the officer or Trustee such Security is or was purchased or sold by a Fund or
such purchase or sale by a Fund is or was considered by a Fund or the Adviser.
EXEMPTED TRANSACTIONS
The provisions described above under the heading PROHIBITED PURCHASES
AND SALES OF SECURITIES and the preclearance procedures under the heading
PRECLEARANCE OF PERSONAL SECURITIES TRANSACTIONS do not apply to:
o Purchases or Sales of Excluded Securities;
o Purchases or Sales of Securities involving less than 2,000
shares of any Security included in the Standard & Poor's 500
Index;
o Purchases or Sales of Securities involving less than 2,000
shares of a Security of a company with a market capitalization
in excess of $200 million and average daily trading volume in
excess of 50,000 shares for the past ten trading days;
o Purchases or Sales of options contracts on a broad-based
market index;
o Purchases or Sales of Securities effected in any account
in which AmeriPrime Personnel have no Beneficial Ownership;
o Purchases or Sales of Securities which are non-volitional on
the part of either AmeriPrime Personnel or a Fund (for
example, the receipt of stock dividends);
o Purchases of Securities made as part of automatic dividend
reinvestment plans;
o Purchases of Securities made as part of an employee benefit
plan involving the periodic purchase of company stock or
mutual funds; and
o Purchases of Securities effected upon the exercise of rights
issued by an issuer pro rata to all holders of a class of its
securities, to the extent such rights were acquired from such
issuer, and sale of such rights so acquired.
PRECLEARANCE OF PERSONAL SECURITIES TRANSACTIONS.
All Adviser Personnel wishing to engage in Personal Securities
Transaction, must obtain prior written authorization of any such Personal
Securities Transaction from the Compliance Officer or such person or persons
that such Compliance Officer may from time to time designate to make such
written authorizations. Personal Securities Transactions by a Compliance Officer
shall require prior written authorization of the President of the Adviser with
whom the Compliance Officer is affiliated, or his designate, who shall perform
the review and approval functions relating to reports and trading by the Chief
Compliance Officer. The Adviser shall adopt the appropriate forms and procedures
for implementing this Code of Ethics.
Any authorization so provided is effective until the close of business
on the fifth trading day after the authorization is granted. In the event that
an order for the Personal Securities Transaction is not placed within that time
period, a new authorization must be obtained. If the order for the transaction
is placed but not executed within that time period, no new authorization is
required unless the person placing the original order amends the order in any
manner. Authorization for "good until canceled" orders are effective until the
order conflicts with a Fund order.
If a person wishing to affect a Personal Securities Transaction learns,
while the order is pending that the same Security is being considered for
Purchase or Sale by the Fund, such person shall cancel the trade.
NOTIFICATION OF FUND TRADING ACTIVITY
In addition to placing Purchase or Sale Orders for the Funds, the
Mutual Fund Portfolio Managers, or their designates, shall notify, their
respective Compliance Officers of daily purchases and sales and of Securities
being considered for Purchase or Sale by the Affiliated Fund (other than
anticipated transactions in Excluded Securities).
TRANSACTION AND ACCOUNT POSITION REPORTING REQUIREMENTS
DISCLOSURE OF PERSONAL BROKERAGE ACCOUNTS
At the commencement of employment with an Adviser, all Adviser
Personnel are required to submit to the Compliance Officer, the names and
account numbers of all of their personal brokerage accounts, brokerage accounts
of members of their immediate families, and any brokerage accounts which they
control or in which they or an immediate family member has Beneficial Ownership.
Each of these accounts is required to furnish duplicate confirmations
and statements to the Adviser with whom the person is affiliated.
ANNUAL REPORTING REQUIREMENTS
All Adviser Personnel are required to disclose all personal Securities
holdings upon commencement of employment, and thereafter on an annual basis. At
the commencement of employment and, thereafter, at the beginning of the first
quarter of each fiscal year, all Adviser Personnel are required to certify that
they have read and understand this Code and that they have complied with its
requirements throughout the prior fiscal year.
QUARTERLY REPORTING REQUIREMENTS
All Adviser Personnel, shall report to the Compliance Officer of the
Adviser with whom the person is affiliated the following information with
respect to transactions in any Security in which such person has, or by reason
of such transaction acquires, any direct or indirect Beneficial Ownership in the
Security:
o The date of the transaction, the title and the number of
shares, and the principal amount of each Security involved;
o The nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
o The price at which the transaction was effected; and
o The name of the broker, dealer or bank with or through
whom the transaction was effected.
Trust Personnel who knew or, in the ordinary course of fulfilling his
or her duties as an officer or Trustee of the Trust, should have known, that
during the fifteen day period immediately preceding or after the date of a
Personal Security Transaction in a Security by the officer or Trustee such
Security is or was purchased or sold by a Fund or such purchase or sale by a
Fund is or was considered by a Fund or the Adviser, shall make the above
disclosures to the Board of Trustees, but only with respect to the applicable
Personnel Security Transactions.
Reports pursuant to this section of this Code shall be made no later
than 10 days after the end of the calendar quarter in which the transaction to
which the report relates was effected, and shall include a certification that
the reporting person has reported all Personal Securities Transactions required
to be disclosed or reported pursuant to the requirements of this Code. Any such
report may contain a statement that the report shall not be construed as an
admission by the person making such report that he or she has any direct or
indirect Beneficial Ownership in the Security to which the report relates.
Adviser Personnel and Trust Personnel need not make such a report with respect
to transactions effected for any account in which they may have Beneficial
Ownership, but over which they do not have any direct or indirect influence or
control (for example, a blind trust).
ENFORCEMENT AND PENALTIES
The Compliance Officers of the Advisers shall review the transaction
information supplied by their employees, whether full-time or part-time. The
Board of Trustees will review the transaction information supplied by the Trust
Personnel. If a transaction appears to be in violation of this Code of Ethics,
the transaction will be reported to the Adviser with whom the person is
affiliated as well as the Board of Trustees of the Trust.
Upon being informed of a violation of this Code of Ethics, the Adviser
may impose such sanctions at it deems appropriate, including but not limited to,
a letter of censure or suspension, termination of the employment of the violator
or a request for disgorgement of any profits received from a securities
transaction effected in violation of this Code of Ethics. The Adviser shall
impose sanctions in accordance with the principle that no AmeriPrime Personnel
may profit at the expense of the shareholders of the Trust. Any sanctions
imposed with respect thereto shall be reported periodically to the Board of
Trustees of the Trust.
DUTIES AND POWERS OF THE BOARD OF TRUSTEES
Each Adviser shall submit to the Board of Trustees of the Trust at each
regular meeting of the Board, a report on Personal Securities Transactions by
Adviser Personnel. Such reports shall be reviewed by the Board of Trustees in
order to determine whether any violation of this Code or any section of the Act
or the regulations promulgated thereunder has occurred.
Annually, each Adviser shall submit to the Board of Trustees a report
that:
o Summarizes existing procedures concerning Personal
Securities investing and any changes in the
procedures made during the prior year;
o Identifies any violations of this Code and any significant
remedial action taken during the prior year; and
o Identifies any recommended changes in existing restrictions or
procedures based upon the experience under the Code, evolving
industry practices or developments in applicable laws and
regulations.
The Board of Trustees of the Trust may, in their discretion, take any
actions and impose any penalty it deems appropriate upon any person that has
violated the Code of Ethics of the Trust or engaged in a course of conduct
which, although in technical compliance with this Code, shows a pattern of abuse
by that person of his or her fiduciary duties to the Trust.
The above actions of the Board of Trustees may be in addition to any
action taken by the applicable Adviser against the person or persons involved.
<PAGE>
<TABLE>
<S> <C> <C>
SCHEDULE A - ADVISERS AND PORTFOLIO MANAGERS
=============================================== ======================================= ======================================
FUND ADVISER PORTFOLIO MANAGERS
- ----------------------------------------------- --------------------------------------- --------------------------------------
- ----------------------------------------------- --------------------------------------- --------------------------------------
AIT Vision U.S. Equity Portfolio LBS Capital Management, Inc. Douglas W. Case, Dean S. Barr
- ----------------------------------------------- --------------------------------------- --------------------------------------
- ----------------------------------------------- --------------------------------------- --------------------------------------
Fountainhead Value Fund Jenswold, King & Associates, Inc. Roger E. King
Fountainhead Kaleidoscope Fund King Investment Advisors, Inc.
- ----------------------------------------------- --------------------------------------- --------------------------------------
- ----------------------------------------------- --------------------------------------- --------------------------------------
GLOBALT Growth Fund GLOBALT, Inc. Samuel E. Allen, Gary E. Fullam,
Gregory S. Paulette, Angela Z. Allen
- ----------------------------------------------- --------------------------------------- --------------------------------------
- ----------------------------------------------- --------------------------------------- --------------------------------------
MAXIM Contrarian Newport Investment Advisors, Inc. Kenneth Holeski
- ----------------------------------------------- --------------------------------------- --------------------------------------
- ----------------------------------------------- --------------------------------------- --------------------------------------
IMS Capital Value Fund IMS Capital Management, Inc. Carl Marker
- ----------------------------------------------- --------------------------------------- --------------------------------------
- ----------------------------------------------- --------------------------------------- --------------------------------------
Corbin Small-Cap Value Fund Corbin & Company David A. Corbin
- ----------------------------------------------- --------------------------------------- --------------------------------------
- ----------------------------------------------- --------------------------------------- --------------------------------------
Florida Street Bond Fund CommonWealth Advisors, Inc. Walter A. Morales
Florida Street Growth Fund
- ----------------------------------------------- --------------------------------------- --------------------------------------
- ----------------------------------------------- --------------------------------------- --------------------------------------
Worthington Fund CWH Associates, Inc. Andrew Abrams, Cliff Henry
- ----------------------------------------------- --------------------------------------- --------------------------------------
- ----------------------------------------------- --------------------------------------- --------------------------------------
Marathon Value Fund Burroughs & Hutchinson, Inc. Mark Matsko
- ----------------------------------------------- --------------------------------------- --------------------------------------
- ----------------------------------------------- --------------------------------------- --------------------------------------
AAM Equity Fund Appalachian Asset Management, Inc. Knox Fuqua
- ----------------------------------------------- --------------------------------------- --------------------------------------
- ----------------------------------------------- --------------------------------------- --------------------------------------
Austin Opportunity Fund Paul B. Martin, Jr. d/b/a/ Paul B. Martin
Texas Opportunity Fund Martin Capital Advisors
U.S. Opportunity Fund
- ----------------------------------------------- ---------------------------------------- ---------------------------------------
- ----------------------------------------------- ---------------------------------------- ---------------------------------------
GJMB Fund Gamble, Jones Murphy & Bent, Inc. Committee
- ----------------------------------------------- ---------------------------------------- -------------------------------------
- ----------------------------------------------- ---------------------------------------- -------------------------------------
Cornerstone MVP Fund Cornerstone Investment Christopher S. Ryan
Management, L.L.C.
- ----------------------------------------------- ---------------------------------------- -------------------------------------
- ----------------------------------------------- ---------------------------------------- -------------------------------------
Dobson Covered Call Fund Dobson Capital Management, Inc. Charles L. Dobson
- ----------------------------------------------- ---------------------------------------- -------------------------------------
- ----------------------------------------------- ---------------------------------------- -------------------------------------
Auxier Equity Fund Auxier Investment, Inc., L.L.C. J. Jeffrey Auxier
- ----------------------------------------------- ---------------------------------------- -------------------------------------
- ----------------------------------------------- ---------------------------------------- -------------------------------------
Shepherd Value Market Fund Cornerstone Capital Management, Inc. Jason Huntley
Shepherd Value Growth Fund Shepherd Advisory Services, Inc.
Shepherd Value Fixed Income Fund
Shepherd Value International Fund
Shepherd Value Small-Cap Fund
Shepherd Value VIF Equity Fund
- ----------------------------------------------- ---------------------------------------- -------------------------------------
- ----------------------------------------------- ---------------------------------------- -------------------------------------
10K SmartTrust Fund Monument Investments, Inc. Paul Hamilton
- ----------------------------------------------- ---------------------------------------- -------------------------------------
- ----------------------------------------------- ---------------------------------------- -------------------------------------
Columbia Partners Equity Fund Columbia Partners. L.C.C., Robert A. von Pentz, Gary Dickinson,
Investment Management Rhys H. Williams
- ----------------------------------------------- ---------------------------------------- --------------------------------------
- ----------------------------------------------- ---------------------------------------- --------------------------------------
The Cash Fund Cash Management Systems, Inc.
- ----------------------------------------------- ---------------------------------------- --------------------------------------
- ----------------------------------------------- ---------------------------------------- --------------------------------------
The Ariston Convertible Securities Fund Ariston Capital Management Corporation
- ----------------------------------------------- ---------------------------------------- --------------------------------------
- ----------------------------------------------- ---------------------------------------- --------------------------------------
Leader Converted Mutual Bank Fund Leader Capital Corp.
- ----------------------------------------------- ---------------------------------------- --------------------------------------
- ----------------------------------------------- ---------------------------------------- --------------------------------------
Westcott Nothing But Net Fund Aegis Asset Management, Inc.
Westcott Multi-National Large-Cap Fund
Westcott Fixed Income Fund
- ----------------------------------------------- ---------------------------------------- --------------------------------------
</TABLE>
Schedule Revised on: September 22, 1999
AMERIPIME FUNDS
CODE OF ETHICS - TYPE J
STATEMENT OF PRINCIPLES
AmeriPrime Funds (the "Trust") has adopted this Code of Ethics to
govern personal securities investment activities of persons affiliated with the
investment advisers listed on Schedule A of this Code, and the officers and
trustees of the Trust (collectively, "AmeriPrime Personnel"). Although this Code
contains a number of specific standards and policies, there are three key
principles embodied throughout the Code.
THE INTERESTS OF TRUST SHAREHOLDERS MUST ALWAYS BE PARAMOUNT
AmeriPrime Personnel have a legal, fiduciary duty to place the
interests of clients first. In any decision relating to their personal
investments, AmeriPrime Personnel must scrupulously avoid serving their own
interests ahead of those of any client.
AMERIPRIME PERSONNEL MAY NOT TAKE INAPPROPRIATE ADVANTAGE OF THEIR RELATIONSHIP
TO OUR SHAREHOLDERS
AmeriPrime Personnel should avoid any situation (unusual investment
opportunities, perquisites, accepting gifts of more than token value from
persons seeking to do business with the Advisers or the Trust) that might
compromise, or call into question, the exercise of their fully independent
judgement in the interests of trust shareholders.
ALL PERSONAL SECURITIES TRANSACTIONS SHOULD AVOID ANY ACTUAL, POTENTIAL
OR APPARENT CONFLICTS OF INTEREST
Although all personal securities transactions by AmeriPrime Personnel
must be conducted in a manner consistent with this Code, the Code itself is
based upon the premise that AmeriPrime Personnel owe a fiduciary duty to
clients, and should avoid any activity that creates an actual, potential or
apparent conflict of interest. This includes executing transactions through or
for the benefit of a third party when the transaction is not in keeping with the
general principles of this Code.
AMERIPRIME PERSONNEL MUST ADHERE TO THESE GENERAL PRINCIPLES AS WELL AS
COMPLY WITH THE SPECIFIC PROVISIONS OF THIS CODE. TECHNICAL COMPLIANCE WITH THE
CODE AND ITS PROCEDURES WILL NOT AUTOMATICALLY PREVENT SCRUTINY OF TRADES THAT
SHOW A PATTERN OF ABUSE OF AN INDIVIDUAL'S FIDUCIARY DUTIES OF CLIENTS.
ASA02F74-101298-2
<PAGE>
DEFINITIONS
"ACT" means the Investment Company Act of 1940.
"ADVISERS" means the Advisers listed on Schedule A to this Code. ("Schedule A"
shall mean such schedule as it may be amended from time to time.)
"AFFILIATED FUNDS" means, for Adviser Personnel, the Fund for which such Adviser
serves as investment adviser, and for Trust Personnel, all Funds.
"ADVISER PERSONNEL" means all employees, whether full-time or part-time who
directly participate in the provision of advisory or other services to a Fund,
and any director, officer or general partner of the Adviser. Any provisions of
this Code that apply directly to Adviser Personnel apply equally to accounts in
the names of other persons in which Adviser Personnel have Beneficial Ownership.
"BENEFICIAL OWNERSHIP" means the opportunity, directly or indirectly, to profit
or share in any profit derived from the purchase or sale of the subject
Securities. "Beneficial Ownership" includes, but is not limited to, ownership of
Securities held by members of the family. For these purposes, a person's family
includes the spouse, minor children, any person living in the home and any
relative to whose support the person directly or indirectly contributes.
"CONTROL" means the power to exercise a controlling influence over the
management or policies of the Trust, unless such power is solely the result of
an official position with a Trust. Any person who beneficially owns, either
directly or through one or more controlled companies, more than 25 percent of
the voting securities of any present Fund of a Trust shall be presumed to
control such Fund. Any such presumption may be rebutted by evidence, in
accordance with Section 2(a)(9) of the Act.
"COMPLIANCE OFFICER" means, for Adviser Personnel, the person designated as the
Compliance Officer by such Adviser, and for Trust Personnel, all Compliance
Officers.
"FUND" means any of the Funds listed on Schedule A to this Code.
"PORTFOLIO MANAGERS" means those Adviser Personnel entrusted with the direct
responsibility and authority to make investment decisions affecting any Fund. A
list of Fund Portfolio Managers is attached as Schedule A to this Code. Any
provisions of this Code that apply directly to Personal Securities Transactions
by a Fund Portfolio Manager apply equally to transactions in accounts in the
names of other persons in which the Fund Portfolio Manager has Beneficial
Ownership.
"PERSONAL SECURITIES TRANSACTION(S)" means transactions in Securities for the
account(s) in the names of AmeriPrime Personnel, or for accounts in which
AmeriPrime Personnel have Beneficial Ownership.
"TRUST" means AmeriPrime Funds.
"TRUST PERSONNEL" means any officer or Trustee of the Trust.
"SECURITY" means any note, stock, treasury stock, bond, debenture, evidence of
indebtedness, certificate of interest or participation in any profit-sharing
agreement, collateral-trust certificate, pre-organization certificate or
subscription, transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest in oil, gas
or other mineral rights, or, in general, any interest or instrument commonly
known as "security," or any certificate or interest or participation in
temporary or interim certificate for, receipt for, guarantee of, or warrant or
right to subscribe to or purchase (including options) any of the foregoing.
The term "Security" shall not include the following securities (the
"Excluded Securities"): (i) shares of registered open-end investment companies;
(ii) securities issued by the United States government; (iii) short term debt
securities which are government securities within the meaning of Section
2(a)(16) of the Act; (iv) bankers' acceptances; (v) bank certificates of
deposit; (vi) commercial paper and (vii) such other money market instruments as
may be designated by the Trust's Board of Trustees.
"PURCHASE OR SALE OF A SECURITY" includes the writing of an option to purchase
or sell a Security. A Security shall be deemed "BEING CONSIDERED FOR PURCHASE OR
SALE" by a Fund when a recommendation to purchase or sell has been made and
communicated and, with respect to the person making the recommendation, when
such person seriously considers making such a recommendation. A Security shall
not be deemed to be one which is "being considered for Purchase or Sale" by a
Fund if such Security is reviewed as part of a general industrial survey or
other broad monitoring of the securities market.
PROHIBITED PURCHASES AND SALES OF SECURITIES
In a Personal Securities Transaction, Portfolio Managers may not:
o Purchase or Sell a Security within three calendar days before
and one calendar day after the execution of a trade in the
same Security or an equivalent Security by the Affiliated
Fund. If a Fund is engaged in a trading program extending over
several trading days, the prohibition on trading by Mutual
Fund Portfolio Managers begins three trading days prior to the
first Fund transaction in that program, and ends one trading
day after the last transaction in that program.
In a Personal Securities Transaction, Adviser Personnel may not:
o Acquire any Security in an initial public offering;
o Acquire any Security in a private placement without prior
written authorization of the acquisition by the Compliance
Officer of the Adviser with whom the person is affiliated. Any
decision by a Fund to invest in such Securities must be
approved solely by Adviser Personnel with no investment in the
issuer;
o In any calendar year, receive a gift or anything else (for
example, air fare, hotel accommodations, etc.) with a value of
more than $100 from any single person or entity that does
business with or on behalf of the Trust;
o Serve on the board of directors of a publicly traded company
without prior authorization from the Board of Trustees of the
Trust based upon a determination that such service would be
consistent with the interests of the Trust and its
shareholders. Adviser Personnel that serve on such boards of
directors are not permitted to participate in any investment
decisions made by the Trust involving Securities of a company
on whose board they serve;
o Execute a Personal Securities Transaction without the prior
written authorization of the Compliance Officer if the
transaction involves the purchase or sale of more than 5,000
shares of any Security.
Adviser Personnel and Trust Personnel may not:
o Execute a Personal Securities Transaction on a day during
which the Affiliated Fund has a pending "buy" or "sell" order
in that Security or an equivalent Security, until the
Affiliated Fund's order is executed or withdrawn. In the case
of "good until canceled" orders placed by a Fund, this
provision applies only if the market price is within 2 points
or 10% of the "good until canceled" price; or
o Execute a Personal Securities Transaction in a Security or an
equivalent Security that is being considered for Purchase or
Sale by an Affiliated Fund;
provided, however, that for Trust Personnel, these prohibitions shall only apply
with respect to a Personal Securities Transaction if the Trust Personnel knew
or, in the ordinary course of fulfilling his or her duties as an officer or
Trustee of the Trust, should have known, that during the fifteen day period
immediately preceding or after the date of the Personal Security Transaction in
the Security by the officer or Trustee such Security is or was purchased or sold
by a Fund or such purchase of sale by a Fund is or was considered by a Fund or
the Adviser.
EXEMPTED TRANSACTIONS
The provisions described above under the heading PROHIBITED PURCHASES
AND SALES OF SECURITIES and the preclearance procedures under the heading
PRECLEARANCE OF PERSONAL SECURITIES TRANSACTIONS do not apply to:
o Purchases or Sales of Excluded Securities;
o Purchases or Sales of Securities involving less than 5,000
shares of any Security included in the Standard & Poor's 500
Index;
o Purchases or Sales of Securities involving less than 5,000
shares of a Security of a company with a market capitalization
in excess of $200 million and average daily trading volume in
excess of 50,000 shares for the past ten trading days;
o Purchases or Sales of options contracts on a broad-based
market index;
o Purchases or Sales of Securities effected in any account
in which AmeriPrime Personnel have no Beneficial Ownership;
o Purchases or Sales of Securities which are non-volitional on
the part of either AmeriPrime Personnel or a Fund;
o Purchases of Securities made as part of automatic dividend
reinvestment plans;
o Purchases of Securities made as part of an employee benefit
plan involving the periodic purchase of company stock or
mutual funds; and
o Purchases of Securities effected upon the exercise of rights
issued by an issuer pro rata to all holders of a class of its
securities, to the extent such rights were acquired from such
issuer, and sale of such rights so acquired.
PRECLEARANCE OF PERSONAL SECURITIES TRANSACTIONS.
All Adviser Personnel wishing to engage in a Personal Securities
Transaction involving the purchase or sale of more than 5,000 shares of any
Security, must obtain prior written authorization of any such Personal
Securities Transaction from the Compliance Officer or such person or persons
that such Compliance Officer may from time to time designate to make such
written authorizations. Such Personal Securities Transactions by a Compliance
Officer shall require prior written authorization of the General Partner of the
Adviser with whom the Compliance Officer is affiliated, or his designate, who
shall perform the review and approval functions relating to reports and trading
by the Chief Compliance Officer. The Adviser shall adopt the appropriate forms
and procedures for implementing this Code of Ethics.
Any authorization so provided is effective until the close of business
on the fifth trading day after the authorization is granted. In the event that
an order for the Personal Securities Transaction is not placed within that time
period, a new authorization must be obtained. If the order for the transaction
is placed but not executed within that time period, no new authorization is
required unless the person placing the original order amends the order in any
manner. Authorization for "good until canceled" orders are effective until the
order conflicts with a Fund order.
If a person wishing to affect a Personal Securities Transaction learns,
while the order is pending that the same Security is being considered for
Purchase or Sale by the Fund, such person shall cancel the trade.
NOTIFICATION OF FUND TRADING ACTIVITY
In addition to placing Purchase or Sale Orders for the Funds, the
Mutual Fund Portfolio Managers, or their designates, shall notify, their
respective Compliance Officers of daily purchases and sales and of Securities
being considered for Purchase or Sale by the Affiliated Fund (other than
anticipated transactions in Excluded Securities). In the alternative, a
Compliance Officer must consult with their respective Portfolio Manager prior to
authorizing a Personal Securities Transaction.
TRANSACTION AND ACCOUNT POSITION REPORTING REQUIREMENTS
DISCLOSURE OF PERSONAL BROKERAGE ACCOUNTS
At the commencement of employment with an Adviser, all Adviser
Personnel are required to submit to the Compliance Officer, the names and
account numbers of all of their personal brokerage accounts, brokerage accounts
of members of their immediate families, and any brokerage accounts which they
control or in which they or an immediate family member has Beneficial Ownership.
Any new such accounts established subsequent to the commencement of employment
must be likewise disclosed.
ANNUAL REPORTING REQUIREMENTS
All Adviser Personnel are required to disclose all personal Securities
holdings upon commencement of employment, and thereafter on an annual basis. At
the commencement of employment and, thereafter, at the beginning of the first
quarter of each fiscal year, all Adviser Personnel are required to certify that
they have read and understand this Code and that they have complied with its
requirements throughout the prior fiscal year.
QUARTERLY REPORTING REQUIREMENTS
All Adviser Personnel, shall report to the Compliance Officer of the
Adviser with whom the person is affiliated the following information with
respect to transactions in any Security in which such person has, or by reason
of such transaction acquires, any direct or indirect Beneficial Ownership in the
Security:
o The date of the transaction, the title and the number of
shares, and the principal amount of each Security involved;
o The nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
o The price at which the transaction was effected; and
o The name of the broker, dealer or bank with or through
whom the transaction was effected.
Trust Personnel who knew or, in the ordinary course of fulfilling his
or her duties as an officer or Trustee of the Trust, should have known, that
during the fifteen day period immediately preceding or after the date of a
Personal Security Transaction in a Security by the officer or Trustee such
Security is or was purchased or sold by a Fund or such purchase or sale by a
Fund is or was considered by a Fund or the Adviser, shall make the above
disclosures to the Board of Trustees, but only with respect to the applicable
Personnel Security Transactions.
Reports pursuant to this section of this Code shall be made no later
than 10 days after the end of the calendar quarter in which the transaction to
which the report relates was effected, and shall include a certification that
the reporting person has reported all Personal Securities Transactions required
to be disclosed or reported pursuant to the requirements of this Code. Any such
report may contain a statement that the report shall not be construed as an
admission by the person making such report that he or she has any direct or
indirect Beneficial Ownership in the Security to which the report relates.
Adviser Personnel and Trust Personnel need not make such a report with respect
to transactions effected for any account in which they may have Beneficial
Ownership, but over which they do not have any direct or indirect influence or
control (for example, a blind trust).
ENFORCEMENT AND PENALTIES
The Compliance Officers of the Advisers shall review the transaction
information supplied by their employees, whether full-time or part-time. The
Board of Trustees will review any transaction information supplied by the Trust
Personnel. If a transaction appears to be in violation of this Code of Ethics,
the transaction will be reported to the Adviser with whom the person is
affiliated as well as the Board of Trustees of the Trust.
Upon being informed of a violation of this Code of Ethics, the Adviser
may impose such sanctions at it deems appropriate, including but not limited to,
a letter of censure or suspension, termination of the employment of the violator
or a request for disgorgement of any profits received from a securities
transaction effected in violation of this Code of Ethics. The Adviser shall
impose sanctions in accordance with the principle that no AmeriPrime Personnel
may profit at the expense of the shareholders of the Trust. Any sanctions
imposed with respect thereto shall be reported periodically to the Board of
Trustees of the Trust.
DUTIES AND POWERS OF THE BOARD OF TRUSTEES
Each Adviser shall submit to the Board of Trustees of the Trust at each
regular meeting of the Board, a report on Personal Securities Transactions by
Adviser Personnel. Such reports shall be reviewed by the Board of Trustees in
order to determine whether any violation of this Code or any section of the Act
or the regulations promulgated thereunder has occurred.
Annually, each Adviser shall submit to the Board of Trustees a report
that:
o Summarizes existing procedures concerning Personal Securities
investing and any changes in the procedures made during the
prior year;
o Identifies any violations of this Code and any significant
remedial action taken during the prior year; and
o Identifies any recommended changes in existing restrictions or
procedures based upon the experience under the Code, evolving
industry practices or developments in applicable laws and
regulations.
The Board of Trustees of the Trust shall report to the Adviser of the
Fund in question any violations by Adviser Personnel of the Code of Ethics of
the Trust or a course of conduct, which although in technical compliance with
this Code, shows a pattern of abuse by that person of his or her fiduciary
duties to the Trust. If the Adviser does not take corrective or disciplinary
action satisfactory to the Trustees, the Trustees may remove the Adviser from
its position as Adviser to the Fund.
<PAGE>
SCHEDULE A - ADVISERS AND PORTFOLIO MANAGERS
<TABLE>
<S> <C> <C>
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FUND ADVISER PORTFOLIO MANAGERS
- ---------------------------------------------- ------------------------------------ ----------------------------------------
Fountainhead Special Jenswold, King & Roger E. King
Value Fund Associates, Inc.
============================================== ==================================== ========================================
</TABLE>
AMERIPRIME FUNDS
CODE OF ETHICS - TYPE D
STATEMENT OF PRINCIPLES
AmeriPrime Funds (the "Trust") has adopted this Code of Ethics to
govern personal securities investment activities of persons affiliated with Carl
Domino Associates, L.P., and the officers and trustees of the Trust
(collectively, "AmeriPrime Personnel"). Although this Code contains a number of
specific standards and policies, there are three key principles embodied
throughout the Code.
THE INTERESTS OF TRUST SHAREHOLDERS MUST ALWAYS BE PARAMOUNT
AmeriPrime Personnel have a legal, fiduciary duty to place the
interests of clients first. In any decision relating to their personal
investments, AmeriPrime Personnel must scrupulously avoid serving their own
interests ahead of those of any client.
AMERIPRIME PERSONNEL MAY NOT TAKE INAPPROPRIATE ADVANTAGE OF THEIR
RELATIONSHIP TO OUR SHAREHOLDERS
AmeriPrime Personnel should avoid any situation (unusual investment
opportunities, perquisites, accepting gifts of more than token value from
persons seeking to do business with the Advisers or the Trust) that might
compromise, or call into question, the exercise of their fully independent
judgement in the interests of trust shareholders.
ALL PERSONAL SECURITIES TRANSACTIONS SHOULD AVOID ANY ACTUAL, POTENTIAL
OR APPARENT CONFLICTS OF INTEREST
Although all personal securities transactions by AmeriPrime Personnel
must be conducted in a manner consistent with this Code, the Code itself is
based upon the premise that AmeriPrime Personnel owe a fiduciary duty to
clients, and should avoid any activity that creates an actual, potential or
apparent conflict of interest. This includes executing transactions through or
for the benefit of a third party when the transaction is not in keeping with the
general principles of this Code.
AMERIPRIME PERSONNEL MUST ADHERE TO THESE GENERAL PRINCIPLES AS WELL AS
COMPLY WITH THE SPECIFIC PROVISIONS OF THIS CODE. TECHNICAL COMPLIANCE WITH THE
CODE AND ITS PROCEDURES WILL NOT AUTOMATICALLY PREVENT SCRUTINY OF TRADES THAT
SHOW A PATTERN OF ABUSE OF AN INDIVIDUAL'S FIDUCIARY DUTIES OF CLIENTS.
DEFINITIONS
"ACT" means the Investment Company Act of 1940.
"ADVISERS" means Carl Domino Associates, L.P.
"AFFILIATED FUNDS" means, for Adviser Personnel, the Fund for which such Adviser
serves as investment adviser, and for Trust Personnel, all Funds.
ASA02F71-101298-2
<PAGE>
"ADVISER PERSONNEL" means all employees, whether full-time or part-time, of Carl
Domino Associates, L.P. Any provisions of this Code that apply directly to
Adviser Personnel apply equally to accounts in the names of other persons in
which Adviser Personnel have Beneficial Ownership.
"BENEFICIAL OWNERSHIP" means the opportunity, directly or indirectly, to profit
or share in any profit derived from the purchase or sale of the subject
Securities. "Beneficial Ownership" includes, but is not limited to, ownership of
Securities held by members of the family. For these purposes, a person's family
includes the spouse, minor children, any person living in the home and any
relative to whose support the person directly or indirectly contributes.
"CONTROL" means the power to exercise a controlling influence over the
management or policies of the Trust, unless such power is solely the result of
an official position with a Trust. Any person who beneficially owns, either
directly or through one or more controlled companies, more than 25 percent of
the voting securities of any present Fund of a Trust shall be presumed to
control such Fund. Any such presumption may be rebutted by evidence, in
accordance with Section 2(a)(9) of the Act.
"COMPLIANCE OFFICER" means, for Adviser Personnel, the person designated as the
Compliance Officer by such Adviser, and for Trust Personnel, all Compliance
Officers.
"FUND" means any of the Funds listed on Schedule A to this Code.
"PORTFOLIO MANAGERS" means those Adviser Personnel entrusted with the direct
responsibility and authority to make investment decisions affecting any Fund. A
list of Fund Portfolio Managers is attached as Schedule A to this Code. Any
provisions of this Code that apply directly to Personal Securities Transactions
by a Fund Portfolio Manager apply equally to transactions in accounts in the
names of other persons in which the Fund Portfolio Manager has Beneficial
Ownership.
"PERSONAL SECURITIES TRANSACTION(S)" means transactions in Securities for the
account(s) in the names of AmeriPrime Personnel, or for accounts in which
AmeriPrime Personnel have Beneficial Ownership.
"TRUST" means AmeriPrime Funds.
"TRUST PERSONNEL" means any officer or Trustee of the Trust.
"SECURITY" means any note, stock, treasury stock, bond, debenture, evidence of
indebtedness, certificate of interest or participation in any profit-sharing
agreement, collateral-trust certificate, pre-organization certificate or
subscription, transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest in oil, gas
or other mineral rights, or, in general, any interest or instrument commonly
known as "security," or any certificate or interest or participation in
temporary or interim certificate for, receipt for, guarantee of, or warrant or
right to subscribe to or purchase (including options) any of the foregoing.
The term "Security" shall not include the following securities (the
"Excluded Securities"): (i) shares of registered open-end investment companies;
(ii) securities issued by the United States government; (iii) short term debt
securities which are government securities within the meaning of Section
2(a)(16) of the Act; (iv) bankers' acceptances; (v) bank certificates of
deposit; (vi) commercial paper and (vii) such other money market instruments as
may be designated by the Trust's Board of Trustees.
"PURCHASE OR SALE OF A SECURITY" includes the writing of an option to purchase
or sell a Security. A Security shall be deemed "BEING CONSIDERED FOR PURCHASE OR
SALE" by a Fund when a recommendation to purchase or sell has been made and
communicated and, with respect to the person making the recommendation, when
such person seriously considers making such a recommendation. A Security shall
not be deemed to be one which is "being considered for Purchase or Sale" by a
Fund if such Security is reviewed as part of a general industrial survey or
other broad monitoring of the securities market.
"YIELD HURDLE RATE" means the dividend payment rate that a security must satisfy
to qualify as a security eligible for purchase for clients of the Adviser. The
Yield Hurdle Rate is adjusted periodically by the Adviser and when used in this
Code, means the Yield Hurdle Rate in effect at the time of a Personal Securities
Transaction.
PROHIBITED PURCHASES AND SALES OF SECURITIES
In a Personal Securities Transaction, Portfolio Managers may not:
o Purchase or Sell a Security within three calendar days before
and one calendar day after the execution of a trade in the
same Security or an equivalent Security by the Affiliated
Fund. If a Fund is engaged in a trading program extending over
several trading days, the prohibition on trading by Mutual
Fund Portfolio Managers begins three trading days prior to the
first Fund transaction in that program, and ends one trading
day after the last transaction in that program.
In a Personal Securities Transaction, Adviser Personnel may not:
o Acquire any Security in an initial public offering;
o Acquire any Security in a private placement without prior
written authorization of the acquisition by the Compliance
Officer of the Adviser with whom the person is affiliated. Any
decision by a Fund to invest in such Securities must be
approved solely by Adviser Personnel with no investment in the
issuer;
o In any calendar year, receive a gift or anything else (for
example, air fare, hotel accommodations, etc.) with a value of
more than $100 from any single person or entity that does
business with or on behalf of the Trust;
o Serve on the board of directors of a publicly traded company
without prior authorization from the Board of Trustees of the
Trust based upon a determination that such service would be
consistent with the interests of the Trust and its
shareholders. Adviser Personnel that serve on such boards of
directors are not permitted to participate in any investment
decisions made by the Trust involving Securities of a company
on whose board they serve;
o Execute a Personal Securities Transaction without the prior
written authorization of the Compliance Officer if the
transaction involves the purchase or sale of more than 5,000
shares of any Security, and with regard to purchases, if, at
the time of purchase, paying a dividend equal to or greater
than the Yield Hurdle Rate.
Adviser Personnel and Trust Personnel may not:
o Execute a Personal Securities Transaction on a day during
which the Affiliated Fund has a pending "buy" or "sell" order
in that Security or an equivalent Security, until the
Affiliated Fund's order is executed or withdrawn. In the case
of "good until canceled" orders placed by a Fund, this
provision applies only if the market price is within 2 points
or 10% of the "good until canceled" price; or
o Execute a Personal Securities Transaction in a Security or an
equivalent Security that is being considered for Purchase or
Sale by an Affiliated Fund;
provided, however, that for Trust Personnel, these prohibitions shall only apply
with respect to a Personal Securities Transaction if the Trust Personnel knew
or, in the ordinary course of fulfilling his or her duties as an officer or
Trustee of the Trust, should have known, that during the fifteen day period
immediately preceding or after the date of the Personal Security Transaction in
the Security by the officer or Trustee such Security is or was purchased or sold
by a Fund or such purchase or sale by a Fund is or was considered by a Fund or
the Adviser.
EXEMPTED TRANSACTIONS
The provisions described above under the heading PROHIBITED PURCHASES
AND SALES OF SECURITIES and the preclearance procedures under the heading
PRECLEARANCE OF PERSONAL SECURITIES TRANSACTIONS do not apply to:
o Purchases or Sales of Excluded Securities;
o Purchases or Sales of Securities involving less than 5,000
shares of any Security included in the Standard & Poor's 500
Index;
o Purchases or Sales of Securities involving less than 5,000
shares of a Security of a company with a market capitalization
in excess of $200 million and average daily trading volume in
excess of 50,000 shares for the past ten trading days;
o Purchases or Sales of options contracts on a broad-based
market index;
o Purchases or Sales of Securities effected in any account
in which AmeriPrime Personnel have no Beneficial Ownership;
o Purchases or Sales of Securities which are non-volitional on
the part of either AmeriPrime Personnel or a Fund (for
example, the receipt of stock dividends or non-market type
transactions initiated by the Securities issuer or a third
party (for example, tender offers or Dutch Auction share
repurchases);
o Purchases of Securities made as part of automatic dividend
reinvestment plans;
o Purchases of Securities made as part of an employee benefit
plan involving the periodic purchase of company stock or
mutual funds; and
o Purchases of Securities effected upon the exercise of rights
issued by an issuer pro rata to all holders of a class of its
securities, to the extent such rights were acquired from such
issuer, and sale of such rights so acquired.
PRECLEARANCE OF PERSONAL SECURITIES TRANSACTIONS.
All Adviser Personnel wishing to engage in a Personal Securities
Transaction involving the purchase or sale of more than 5,000 shares of any
Security, and with regard to purchases, is, at the time of purchase, paying a
dividend equal to or greater than the yield hurdle rate, must obtain prior
written authorization of any such Personal Securities Transaction from the
Compliance Officer or such person or persons that such Compliance Officer may
from time to time designate to make such written authorizations. Such Personal
Securities Transactions by a Compliance Officer shall require prior written
authorization of the General Partner of the Adviser with whom the Compliance
Officer is affiliated, or his designate, who shall perform the review and
approval functions relating to reports and trading by the Chief Compliance
Officer. The Adviser shall adopt the appropriate forms and procedures for
implementing this Code of Ethics.
Any authorization so provided is effective until the close of business
on the fifth trading day after the authorization is granted. In the event that
an order for the Personal Securities Transaction is not placed within that time
period, a new authorization must be obtained. If the order for the transaction
is placed but not executed within that time period, no new authorization is
required unless the person placing the original order amends the order in any
manner. Authorization for "good until canceled" orders are effective until the
order conflicts with a Fund order.
If a person wishing to affect a Personal Securities Transaction learns,
while the order is pending that the same Security is being considered for
Purchase or Sale by the Fund, such person shall cancel the trade.
NOTIFICATION OF FUND TRADING ACTIVITY
In addition to placing Purchase or Sale Orders for the Funds, the
Mutual Fund Portfolio Managers, or their designates, shall notify, their
respective Compliance Officers of daily purchases and sales and of Securities
being considered for Purchase or Sale by the Affiliated Fund (other than
anticipated transactions in Excluded Securities).
TRANSACTION AND ACCOUNT POSITION REPORTING REQUIREMENTS
DISCLOSURE OF PERSONAL BROKERAGE ACCOUNTS
At the commencement of employment with an Adviser, all Adviser
Personnel are required to submit to the Compliance Officer, the names and
account numbers of all of their personal brokerage accounts, brokerage accounts
of members of their immediate families, and any brokerage accounts which they
control or in which they or an immediate family member has Beneficial Ownership.
Each of these accounts is required to furnish duplicate confirmations
and statements to the Adviser with whom the person is affiliated.
ANNUAL REPORTING REQUIREMENTS
All Adviser Personnel are required to disclose all personal Securities
holdings upon commencement of employment, and thereafter on an annual basis. At
the commencement of employment and, thereafter, at the beginning of the first
quarter of each fiscal year, all Adviser Personnel are required to certify that
they have read and understand this Code and that they have complied with its
requirements throughout the prior fiscal year.
QUARTERLY REPORTING REQUIREMENTS
All Adviser Personnel, shall report to the Compliance Officer of the
Adviser with whom the person is affiliated the following information with
respect to transactions in any Security in which such person has, or by reason
of such transaction acquires, any direct or indirect Beneficial Ownership in the
Security:
o The date of the transaction, the title and the number of
shares, and the principal amount of each Security involved;
o The nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
o The price at which the transaction was effected; and
o The name of the broker, dealer or bank with or through whom
the transaction was effected.
Trust Personnel who knew or, in the ordinary course of fulfilling his
or her duties as an officer or Trustee of the Trust, should have known, that
during the fifteen day period immediately preceding or after the date of a
Personal Security Transaction in a Security by the officer or Trustee such
Security is or was purchased or sold by a Fund or such purchase or sale by a
Fund is or was considered by a Fund or the Adviser, shall make the above
disclosures to the Board of Trustees, but only with respect to the applicable
Personnel Security Transactions.
Reports pursuant to this section of this Code shall be made no later
than 10 days after the end of the calendar quarter in which the transaction to
which the report relates was effected, and shall include a certification that
the reporting person has reported all Personal Securities Transactions required
to be disclosed or reported pursuant to the requirements of this Code. Any such
report may contain a statement that the report shall not be construed as an
admission by the person making such report that he or she has any direct or
indirect Beneficial Ownership in the Security to which the report relates.
Adviser Personnel and Trust Personnel need not make such a report with respect
to transactions effected for any account in which they may have Beneficial
Ownership, but over which they do not have any direct or indirect influence or
control (for example, a blind trust).
ENFORCEMENT AND PENALTIES
The Compliance Officers of the Advisers shall review the transaction
information supplied by their employees, whether full-time or part-time. The
Board of Trustees will review the transaction information supplied by the Trust
Personnel. If a transaction appears to be in violation of this Code of Ethics,
the transaction will be reported to the Adviser with whom the person is
affiliated as well as the Board of Trustees of the Trust.
Upon being informed of a violation of this Code of Ethics, the Adviser
may impose such sanctions at it deems appropriate, including but not limited to,
a letter of censure or suspension, termination of the employment of the violator
or a request for disgorgement of any profits received from a securities
transaction effected in violation of this Code of Ethics. The Adviser shall
impose sanctions in accordance with the principle that no AmeriPrime Personnel
may profit at the expense of the shareholders of the Trust. Any sanctions
imposed with respect thereto shall be reported periodically to the Board of
Trustees of the Trust.
DUTIES AND POWERS OF THE BOARD OF TRUSTEES
Each Adviser shall submit to the Board of Trustees of the Trust at each
regular meeting of the Board, a report on Personal Securities Transactions by
Adviser Personnel. Such reports shall be reviewed by the Board of Trustees in
order to determine whether any violation of this Code or any section of the Act
or the regulations promulgated thereunder has occurred.
Annually, each Adviser shall submit to the Board of Trustees a report
that:
o Summarizes existing procedures concerning Personal Securities
investing and any changes in the procedures made during the
prior year;
o Identifies any violations of this Code and any significant
remedial action taken during the prior year; and
o Identifies any recommended changes in existing restrictions or
procedures based upon the experience under the Code, evolving
industry practices or developments in applicable laws and
regulations.
The Board of Trustees of the Trust shall report to the Adviser of the
Fund in question any violations by Adviser Personnel of the Code of Ethics of
the Trust or a course of conduct, which although in technical compliance with
this Code, shows a pattern of abuse by that person of his or her fiduciary
duties to the Trust. If the Adviser does not take corrective or disciplinary
action satisfactory to the Trustees, the Trustees may remove the Adviser from
its position as Adviser to the Fund.
<PAGE>
SCHEDULE A - ADVISERS AND PORTFOLIO MANAGERS
<TABLE>
<S> <C> <C>
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FUND ADVISER PORTFOLIO MANAGERS
- ---------------------------------------------- ------------------------------------ ----------------------------------------
Carl Domino Equity Carl Domino Carl J. Domino
Income Fund Associates, L.P.
============================================== ==================================== ========================================
</TABLE>
