As filed with the Securities and Exchange Commission on November 30, 1998
Securities Act Registration No. 333-39133
Investment Company Act Registration No. 811-8461
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 2 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 4 [X]
GRAND PRIX FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
Wilton Executive Campus
15 River Road, Suite 220
Wilton, Connecticut 06897
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code:
(203) 761-9600
Robert Zuccaro
Target Investors, Inc.
Wilton Executive Campus
15 River Road, Suite 220
Wilton, Connecticut 06897
(Name and Address of Agent for Service)
Copies to:
Carol A. Gehl
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202
It is proposed that this filing will become
effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on November 30, 1998 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new
effective date for a previously filed post-effective
amendment.
<PAGE>
CROSS REFERENCE SHEET
(Pursuant to Rule 481 showing the location in the
Prospectus and the Statement of Additional Information
of the responses to the Items of Parts A and B of Form
N-1A).
Caption or Subheading in
Prospectus or Statement
Item No. on Form N-1A of Additional Information
PART A - INFORMATION REQUIRED IN PROSPECTUS
1. Cover Page Cover Page
2. Synopsis Investor Expenses;
Highlights
3. Condensed Financial Financial Highlights
Information
4. General Description of Investment Strategy;
Registran Implementation of
Policies and Risks; Investment
Objective and Restrictions;
Fund Organization and
Management
5. Management of the Fund Fund Organization and
Management
5A. Management's Discussion
of Fund Performance *
6. Capital Stock and Other Highlights; Fund
Securities Organization and
Management; Dividends, Capital
Gain Distributions and
Tax Treatment
7. Purchase of Securities Fund Organization and
Being Offered Management; Your Account;
Determination of Net Asset
Value; Distribution and
Shareholder Servicing Plan
8. Redemption or Repurchase Your Account;
Determination of Net Asset
Value
9. Pending Legal Proceedings *
PART B - INFORMATION REQUIRED IN STATEMENT OF
ADDITIONAL INFORMATION
10. Cover Page Cover Page
<PAGE>
11. Table of Contents Table of Contents
<PAGE>
12. General Information *
and History
13. Investment Investment Objective and
Objectives and Policies Restrictions; Investment
Policies and Techniques; Fund
Transactions and Brokerage
14. Management of the Directors and Officers;
Fund Investment Advisor
15. Control Persons and Principal Shareholders;
Principal Holders of Directors and Officers
Securities
16. Investment Advisory Investment Advisor; Fund
and Other Services Organization and Management
(in Prospectus); Plan of
Distribution; Custodian,
Transfer Agent and Dividend-
Disbursing Agent; Independent
Auditors
17. Brokerage Allocation Fund Transactions and
and Other Practices Brokerage
18. Capital Stock and Included in Prospectus
Other Securities under the heading Fund
Organization and Management
19. Purchase, Redemption and Included in Prospectus
Pricing of Securities Being under the headings Your
Offered Account; Determination of Net
Asset Value; and in the
Statement of Additional
Information under the headings
Plan of Distribution and
Redemption in Kind
20. Tax Status Included in Prospectus
under the heading
Dividends, Capital Gain
Distributions and Tax
Treatment; and in the
Statement of Additional
Information under the heading
Taxes
21. Underwriters Distributor
22. Calculations of Performance
Performance Data Information
23. Financial Statements Financial Statements
________________________
* Answer negative or inapplicable.
<PAGE>
PROSPECTUS
November 30, 1998
[Logo]
GRAND PRIX FUNDS, INC.
Grand Prix Fund
Wilton Executive Campus
15 River Road, Suite 220
Wilton, Connecticut 06897
Telephone: 1-800-432-4741
Website: www.grandprixfund.com
Grand Prix Funds, Inc. ("Corporation") is an open-
end, management investment company, commonly referred
to as a mutual fund. The Corporation currently
comprises one non-diversified portfolio: the Grand Prix
Fund ("Fund"). The Fund's investment objective is
capital appreciation. The Fund seeks to achieve its
investment objective by investing primarily in common
stocks of companies that exhibit fast earnings growth
and are rising in price. Target Holdings Corporation,
doing business as Target Investors, Inc. (the
"Advisor"), believes that the use of this momentum
strategy has the potential for higher returns than
other investment strategies. Under federal securities
laws, the Fund is "not diversified." As a result, it
may be more vulnerable than a "diversified" fund to
fluctuations in the value of the companies in the
Fund's portfolio.
You may invest in the Fund by purchasing shares at
a price equal to their net asset value plus an initial
sales charge imposed at the time of purchase. Certain
purchasers of Fund shares may have the initial sales
charge waived. Fund shares are also subject to a Rule
12b-1 plan pursuant to which an aggregate annual fee of
0.25% is charged on the average net assets of the Fund.
This Prospectus contains information you should
consider before you invest in the Fund. Please read it
carefully and keep it for future reference. A
Statement of Additional Information ("SAI") for the
Fund, dated November 30, 1998, contains further
information, is incorporated by reference into this
Prospectus, and has been filed with the Securities and
Exchange Commission ("SEC"). The SAI, which may be
revised from time to time, is available without charge
upon request to the Fund at the above-noted address or
telephone number.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
HIGHLIGHTS 3
INVESTOR EXPENSES 5
FINANCIAL HIGHLIGHTS 6
INVESTMENT STRATEGY 6
IMPLEMENTATION OF POLICIES AND RISKS 7
INVESTMENT OBJECTIVE AND RESTRICTIONS 9
FUND ORGANIZATION AND MANAGEMENT 10
YOUR ACCOUNT 11
DETERMINATION OF NET ASSET VALUE 18
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN 18
INDIVIDUAL RETIREMENT ACCOUNTS 19
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAX TREATMENT 20
YEAR 2000 ISSUE 21
FUND PERFORMANCE 21
ADDITIONAL INFORMATION 22
No person has been authorized to give any
information or to make any representations other than
those contained in this Prospectus and the SAI, and if
given or made, such information or representations may
not be relied upon as having been authorized by the
Fund. This Prospectus does not constitute an offer to
sell securities in any state or jurisdiction in which
such offering may not lawfully be made.
<PAGE>
HIGHLIGHTS
What is the objective of the Fund?
The Fund's investment objective is capital
appreciation. The Fund seeks to achieve its investment
objective by investing primarily in common stocks of
companies that the Advisor believes have the potential
for revenue and earnings growth superior to that of
companies with similar market or business
characteristics. The Advisor will not consider
dividend or interest income in the selection of
investments. See "Investment Strategy" and "Investment
Objective and Restrictions."
In what types of companies/securities will the Fund
invest?
The Advisor intends to invest primarily in common
stocks of companies which the Advisor characterizes as
"growth" companies. The Fund's securities selections
will be made without regard to an issuer's market
capitalization; however, the Advisor anticipates that
most investments will be made in companies that have a
small-to-medium market capitalization. In the
Advisor's opinion, a growth company is a company that
is likely to experience positive sales and earnings
growth at above average rates.
Under normal circumstances, the Fund will be fully
invested in common stocks, except that a small portion
of the Fund's assets may be held in short-term money
market securities and cash to pay redemption requests
and Fund expenses and pending investment. Under
unusual circumstances, as a defensive technique, the
Fund may invest up to 35% of its total assets in cash
and/or money market instruments deemed by the Advisor
to be consistent with a temporary defensive posture.
The Fund may but does not intend to leverage its assets
or invest in options, futures, derivative contracts,
initial public offerings or other exotic securities or
arrangements. See "Implementation of Policies and
Risks."
In an effort to increase returns, the Fund expects
to trade actively. The annual portfolio turnover rate
could range from 300 to 500%, but generally will not
exceed 800%. Higher portfolio turnover rates usually
generate additional brokerage commissions and expenses
and the short-term gains realized from these
transactions are taxable to shareholders as ordinary
income. See "Financial Highlights" and
"Implementation of Policies and Risks."
What are the potential risks of investing in the Fund?
Equity securities fluctuate in value, often based
on factors unrelated to the value of the issuer of the
securities, and such fluctuations can be pronounced.
Changes in the value of the Fund's investments will
result in changes in the value of its shares and thus
the Fund's total return to investors. In addition,
because the Fund has elected not to be subject to the
diversification rules of the Investment Company Act of
1940, as amended ("1940 Act"), a relatively larger
percentage of the Fund's assets may be invested in
relatively fewer companies than is typical of other
mutual funds. This non-diversification may increase
volatility. See "Implementation of Policies and
Risks."
Is an investment in the Fund appropriate for me?
The Fund is suitable for long-term investors only.
It is not a short-term investment vehicle. An
investment in the Fund may be appropriate if you seek
capital appreciation; seek a mutual fund for the
aggressive equity portion of your portfolio; have no
immediate financial requirements for this investment;
and are willing to accept a high degree of volatility.
The Fund is designed for investors who have the
financial ability to undertake greater risk in exchange
for the opportunity to realize greater financial gains
in the future. See "Investment Objective and
Restrictions."
<PAGE>
Who will manage my investment?
Target Investors, Inc. ("Advisor") serves as
investment advisor to the Fund. As of October 31,
1998, the Advisor managed approximately $600 million
for individual and institutional clients. See "Fund
Organization and Management."
How can I purchase or redeem Fund shares?
Fund shares are offered at the Fund's net asset
value plus a maximum initial sales charge of 5.25% of
the offering price. Persons who were shareholders of
the Fund as of November 30, 1998 are not subject to
this front-end sales load on additional purchases of
Fund shares. Certain other exceptions may also apply.
In addition, the Fund has adopted a distribution and
shareholder servicing plan under Rule 12b-1 of the 1940
Act, which authorizes the Fund to pay a yearly
distribution and/or shareholder servicing fee of up to
0.25% of the average daily net assets of the Fund. See
"Your Account" and "Distribution and Shareholder
Servicing Plan."
You may request redemption of your Fund shares at
any time. There are no redemption charges. For
redemptions by wire, however, there is a $10 fee. When
a redemption request is received in good order, the
Fund will redeem the shares at the Fund's next net
asset value determined after receipt of the request.
See "Your Account."
The minimum initial investment is $5,000.
Subsequent investments must be at least $1,000. These
minimums may be changed or waived at any time by the
Fund. See "Your Account."
What is the Fund's policy regarding dividends and other
distributions?
You should not expect income from the Fund.
However, as required by law, to avoid double taxation,
the Fund will distribute substantially all of its net
realized capital gains and net investment income, if
any, to shareholders annually in the form of a
distribution and/or dividend, taxable to you as capital
gain or ordinary income. In the absence of specific
instructions to the contrary, distributions and
dividends will be reinvested in additional Fund shares
and will not be available for the payment of taxes.
See "Implementation of Policies and Risks" and
"Dividends, Capital Gain Distributions and Tax
Treatment."
Who should I contact if I have questions?
General inquiries regarding the Fund can be
addressed to either your investment professional or the
Fund at the address or telephone number listed on the
cover page of this Prospectus.
<PAGE>
INVESTOR EXPENSES
The following information is provided to help you
understand the various costs and expenses that you, as
an investor in the Fund, will bear directly or
indirectly.
Shareholder Transaction Expenses(1)
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 5.25% (2)
Maximum Sales Load Imposed on Reinvested
Dividends None
Deferred Sales Load None
Redemption Fees None
Exchange Fees None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees 1.00%
Rule 12b-1 Fees(3) 0.25%
Other Expenses (after waivers or
reimbursements)(4) 0.40%
Total Operating Expenses (after
waivers or reimbursements)(4) 1.65%
____________
(1) There are certain charges associated with
certain special shareholder services offered by the
Fund, including a $23 fee for returned checks or
electronic funds transfers and a $10 fee for wire
redemptions. For additional information, see "Your
Account."
(2) This sales load is the maximum rate applicable
to purchases of Fund shares by new shareholders on
or after December 1, 1998. Existing shareholders as
of November 30, 1998, as well as certain other
investors are exempt from having to pay this sales
load, as described more fully under "Your Account."
(3) See "Distribution and Shareholder Servicing
Plan" for detailed information relating to the Rule
12b-1 distribution and shareholder servicing plan
("Plan"). Consistent with the National Association
of Securities Dealers, Inc.'s ("NASD") rules, Rule
12b-1 fees could cause long-term investors in the
Fund to pay more than the economic equivalent of the
maximum front-end sales charges permitted under
those rules.
(4) The Advisor has agreed to limit the total
operating expenses of the Fund (excluding interest,
taxes, brokerage and extraordinary expenses) to an
annual rate of 1.65% of the Fund's average net
assets until December 31, 1998. After such date,
the expense limitation may be terminated or revised
at any time. Absent this limitation, other expenses
and total operating expenses of the Fund would have
been 14.60% and 15.85%, respectively. For
additional information, see "Fund Organization and
Management."
Example
You would pay the following expenses on a $1,000
investment, assuming a 5% annual return and redemption
at the end of each time period.
1 year $ 68
3 years $102
The Example is based on the above-described "Total
Operating Expenses." In addition, the maximum front-
end sales load is reflected in the Example. The
amounts in the Example may increase absent the expense
limitation. REMEMBER THAT THE EXAMPLE SHOULD NOT BE
CONSIDERED AS REPRESENTATIVE OF PAST
<PAGE>
OR FUTURE EXPENSES
AND THAT ACTUAL EXPENSES MAY BE HIGHER OR LOWER THAN
THOSE SHOWN. The assumption in the Example of a 5%
annual return is required by SEC regulations. The
assumed 5% annual return is not a prediction of, and
does not represent, the projected or actual performance
of the Fund's shares.
FINANCIAL HIGHLIGHTS
The following table of financial information
relating to the shares of the Fund for the period from
January 1, 1998 (commencement of operations) to April
30, 1998 has been derived from financial records of the
Fund which are unaudited. The table should be read in
conjunction with the financial statements and related
notes included in the Fund's Semi-Annual Report to
Shareholders, which is available without charge by
calling or writing to the Fund. The Semi-Annual Report
for the period ended April 30, 1998 is incorporated by
reference into the Fund's SAI.
Per Share Data:
Net asset value, beginning of period $ 10.00
Income (loss) from investment operations:
Net investment loss (1) (0.04)
Net realized and unrealized
gains on investments 2.01
Total from investment operations 1.97
Net asset value, end of period $11.97
Total Return (2) 19.70%
Supplemental data and ratios:
Net assets, end of period $1,214,746
Ratio of net operating expenses
to average net assets (3)(4) 1.65%
Ratio of net investment loss to
average net assets (3)(4) (1.24)%
Portfolio turnover rate 295.6%
______________________
(1) Net investment loss per share represents
net investment loss divided by the monthly
average shares of beneficial interest
outstanding.
(2) Not annualized.
(3) Annualized.
(4) Net of expense reimbursements and waivers.
Without expense reimbursements and waivers, the
ratio of operating expenses to average net
assets would have been 17.05%, and the ratio of
net investment loss to average net assets would
have been (16.64)%.
INVESTMENT STRATEGY
The Fund seeks to invest in the equity securities
of companies, regardless of size, which, in the opinion
of the Advisor, will experience positive earnings
growth at an above average rate. Although the Advisor
may invest in companies of all sizes, the Advisor
expects that most investments will be made in companies
with small to medium market capitalizations. The
Advisor focuses on companies which exhibit fast
earnings growth and are rising in price. The Advisor's
general strategy is to be fully invested with at least
95% of the Fund's assets invested in equity securities.
Although the Advisor's investment strategy is based on
company fundamentals, companies considered by the
Advisor
<PAGE>
to be "growth" companies are often in the same
or related market sectors. Thus, the Fund may be
heavily invested in a single sector. One sector,
however, like technology, may include various
industries, like networking, telecommunications,
software, semiconductors or voice-processing. The Fund
may be concentrated in one sector, while being
diversified among several industries. The Fund may
take relatively large positions in a single issuer. To
the extent the Fund is concentrated, it will be
susceptible to adverse economic, political, regulatory
or market developments affecting a single sector,
industry or issuer. Additionally, the Fund will invest
in a limited number of companies. This may increase
the volatility of investment performance. Furthermore,
as a means to increase returns, the Fund expects to
trade actively. The annual portfolio turnover rate
could range from 300 to 500%, but generally will not
exceed 800%. See "Implementation of Policies and Risks
Portfolio Turnover."
When making purchase decisions for the Fund, the
Advisor uses a "buy discipline" that involves three key
components: research, fundamentals, and valuation.
The Advisor develops its own research. Using a
computer-driven model, the Advisor screens for certain
fundamental attributes that it believes a "buy"
candidate should possess, including (i) projected sales
growth of 20% or more; (ii) projected earnings growth
of 20% or more; and (iii) unexpected good earnings.
The Advisor then assigns scores to the securities based
on such factors and ranks the securities accordingly.
Pursuant to that ranking, the Advisor constructs a list
of securities for the Fund and purchases the highest
ranking securities for its portfolio. Companies are
rescored and the portfolio is rebalanced weekly for
variations from expectations.
The Advisor makes sell decisions for the Fund
based on two primary factors: significant deterioration
in the price of the securities or better relative value
in other securities.
IMPLEMENTATION OF POLICIES AND RISKS
In implementing its investment strategy, the Fund
may use the following securities and investment
techniques. Some of these securities and investment
techniques involve special risks, which are described
below, elsewhere in this Prospectus or in the Fund's
SAI.
Common Stocks and Other Equity Securities
The Fund will invest in common stocks and other
equity securities. Other equity securities may include
depository receipts and warrants and other securities
convertible or exchangeable into common stock. Common
stocks and other equity securities generally increase
or decrease in value based on the earnings of a company
and on general industry and market conditions. A fund
that invests a significant amount of its assets in
common stocks and other equity securities is likely to
have greater fluctuations in share price than a fund
that invests a significant portion of its assets in
fixed-income securities.
Small and Medium Market Capitalization Companies
The Fund may invest a substantial portion of its
assets in small and medium-sized companies. While
small and medium-sized companies generally have
potential for rapid growth, investments in such
companies often involve greater risks than investments
in larger, more established companies because small and
medium-sized companies may lack the management
experience, financial resources, product
diversification, and competitive strengths of larger
companies. In addition, in many instances the
securities of small and medium-sized companies are
traded only over-the-counter or on a regional
securities exchange, and the frequency and volume of
their trading is substantially less than is typical of
larger companies. Therefore, the securities of small
and medium-sized companies may be subject to greater
and more abrupt price fluctuations. When making large
sales, the Fund may have to sell portfolio holdings at
discounts from quoted prices or may have to make a
series of small sales over an extended period of time
due to the trading volume of small and medium-sized
company securities. Investors should be aware that,
based on the foregoing factors, an investment in the
Fund may be subject to greater price fluctuations than
an investment in a fund that invests primarily in
larger, more established companies. The Advisor's
research efforts may also play a greater role in
selecting securities for the Fund than in a fund that
invests in larger, more established companies.
<PAGE>
Unseasoned Companies
The Fund may invest in securities of unseasoned
companies. These are companies that have been in
operation less than three years, including the
operations of any of their predecessors. The
securities of such companies may have limited liquidity
and the prices of such securities may be volatile. The
Fund currently intends to invest no more than 10% of
its total assets in securities of unseasoned companies.
The Fund may only invest up to 5% of its net assets in
illiquid securities.
Non-Diversification and Sector Concentration
As a "non-diversified" fund, the Fund is permitted
to invest its assets in a more limited number of
issuers than other investment companies. Under the
Internal Revenue Code of 1986 (the "Code"), however,
for income tax purposes, the Fund (i) may not invest
more than 25% of its total assets in the securities of
any one company or in the securities of any two or more
companies controlled by the Fund which, pursuant to
regulations under the Code, may be deemed to be engaged
in the same, similar, or related trades or businesses
and (ii) with respect to 50% of its total assets, may
not invest more than 5% of its total assets in the
securities of any one company and may not own more than
10% of the outstanding voting securities of a single
company. Thus, as a "non-diversified" fund under the
1940 Act, the Fund may invest (i) up to 50% of its
total assets in the securities of as few as two
companies, up to 25% each, so long as the Fund does not
control the two companies or so long as the two
companies are engaged in different businesses and (ii)
up to 50% of its total assets in the securities of as
few as ten companies, up to 5% each, provided that, in
any event, the Fund does not own in excess of 10% of
any company's outstanding voting stock. This practice
involves an increased risk of loss to the Fund if the
market value of a security should decline or its issuer
were otherwise unable to meet its obligations.
The Fund may invest more than 25% of its total
assets in securities of companies in one or more market
sectors, such as the technology or health care sector.
A market sector may be made up of companies in a number
of different industries. The Fund will only
concentrate its investments in a particular market
sector if the Advisor believes that the potential
investment return justifies the additional risk
associated with concentration in that sector.
The Fund may invest its assets in fewer than 25
companies. This strategy may increase the volatility
of investment performance and the Fund could incur
greater losses than funds that invest in a greater
number of issuers.
Portfolio Turnover
A change in the investments held by the Fund is
known as "portfolio turnover." The Fund's historical
portfolio turnover rate is listed under "Financial
Highlights." The annual portfolio turnover rate for
the Fund is expected to be between 300 and 500%, but
generally will not exceed 800%. High portfolio
turnover generally involves above-average expenses to
the Fund, including brokerage commissions or dealer
mark-ups and other transaction costs on the sale of
securities and reinvestment in other securities. In
addition, the short-term gains realized from these
transactions are taxable to shareholders as ordinary
income. In fact, it is possible that 100% of all
capital gains and losses in any fiscal year may qualify
as short-term.
Temporary Strategies
Prior to investing the proceeds from sales of Fund
shares, to meet ordinary daily cash needs, and to
retain the flexibility to respond promptly to changes
in market and economic conditions, the Advisor may hold
cash and/or invest up to 35% of the Fund's total assets
in short-term fixed-income securities issued by private
and governmental institutions. It is impossible to
predict when or for how long the Advisor may employ
such strategies. Short-term fixed income securities
must be rated at least A or higher by Standard & Poor's
("S&P"), Moody's Investors Service, Inc. ("Moody's") or
Fitch Investors Service, Inc. ("Fitch") or A- or higher
by Duff & Phelps, Inc. ("D&P"), and include without
limitation the following securities, each of which has
a stated maturity of one year or less from the date of
purchase unless otherwise indicated, or securities
which the Advisor deems to be of comparable quality to
rated securities: U.S. government securities,
including bills, notes and bonds, differing as to
maturity and rate of interest, which are either issued
or guaranteed by the U.S. Treasury or by U.S.
governmental agencies or instrumentalities;
certificates of deposit issued against funds deposited
in a U.S. bank or savings and loan association; bank
time deposits,
<PAGE>
which are monies kept on deposit with
U.S. banks or savings and loan associations for a
stated period of time at a fixed rate of interest;
bankers' acceptances which are short-term credit
instruments used to finance commercial transactions;
commercial paper and commercial paper master notes
(which are demand instruments without a fixed maturity
bearing interest at rates which are fixed to known
lending rates and automatically adjusted when such
lending rates change) rated A-1 or better by S&P, Prime-
1 or better by Moody's, Duff 2 or higher by D&P, or
Fitch 2 or higher by Fitch; and repurchase agreements
entered into only with respect to obligations of the
U.S. government, its agencies or instrumentalities.
Repurchase agreements could involve certain risks in
the event of default or insolvency of the other party
to the agreement, including possible delays or
restrictions upon the Fund's ability to dispose of the
underlying securities. Additionally, the Fund may
invest in short-term investment vehicles of a custodian
bank.
ADRs
The Fund may invest up to 20% of its net assets in
American Depositary Receipts ("ADRs") or other foreign
instruments denominated in U.S. dollars. ADRs are
receipts typically issued by a U.S. bank or trust
company evidencing ownership of the underlying foreign
security and denominated in U.S. dollars. Some
institutions issuing ADRs may not be sponsored by the
issuer. A non-sponsored depository may not provide the
same shareholder information that a sponsored
depository is required to provide under the contractual
arrangements with the issuer, including reliable
financial statements.
Investments in securities of foreign issuers
involve risks which are in addition to the usual risks
inherent in domestic investments. In many countries
there is less publicly available information about
issuers than is available in the reports and ratings
published about companies in the United States.
Additionally, foreign countries are not subject to
uniform accounting, auditing and financial reporting
standards. Other risks inherent in foreign investments
include expropriation; confiscatory taxation;
withholding taxes on dividends and interest; less
extensive regulation of foreign brokers, securities
markets and issuers; costs incurred in conversions
between currencies; the possibility of delays in
settlement in foreign securities markets; limitations
on the use or transfer of assets (including suspension
of the ability to transfer currency from a given
country); the difficulty of enforcing obligations in
other countries; diplomatic developments; and political
or social instability. Foreign economies may differ
favorably or unfavorably from the U.S. economy in
various respects, and many foreign securities are less
liquid and their prices are more volatile than
comparable U.S. securities. From time to time, foreign
securities may be difficult to liquidate rapidly
without adverse price effects. Certain costs
attributable to foreign investing, such as custody
charges and brokerage costs, are higher than those
attributable to domestic investing. Although the
Fund's investments will be denominated in U.S. dollars,
the underlying foreign securities will be denominated
in foreign currency. Accordingly, the value of the
Fund's assets will increase or decrease in response to
fluctuations in the value of those foreign currencies.
Investment OBJECTIVE AND Restrictions
The Fund's investment objective is capital
appreciation. This investment objective is fundamental
and cannot be changed without shareholder approval.
Under normal market conditions, the Fund will attempt
to achieve this objective by investing at least 65% of
its total assets in common stocks of companies which
the Advisor characterizes as "growth" companies. There
can be no assurance that the Fund will achieve its
investment objective or that shares in the Fund will be
worth more at redemption than at acquisition. The Fund
may also hold cash and money market instruments to
provide the Fund with liquidity and flexibility.
In addition, the Fund has adopted certain
fundamental investment restrictions that, like the
Fund's investment objective, may not be changed without
shareholder approval.
Limitation on Borrowing: The Fund may (i) borrow
money from banks for temporary or emergency purposes
(but not for leverage or the purchase of investments)
and (ii) make other investments or engage in other
transactions permissible under the 1940 Act, provided
that the combination of (i) and (ii) shall not exceed
33-1/3% of the value of the Fund's total assets
(including the amount borrowed), less the Fund's
<PAGE>
liabilities (other than borrowings). The Fund may also
borrow money from other persons to the extent permitted
by applicable law.
Limitation on Lending: The Fund may not make
loans if, as a result, more than 33-1/3% of the Fund's
total assets would be lent to other persons, except
through purchases of debt securities or other debt
instruments or engaging in repurchase agreements.
Limitation on "Senior Securities": The Fund may
not issue senior securities, except as permitted under
the 1940 Act.
All of the Fund's fundamental investment
restrictions are described in the Fund's SAI.
FUND ORGANIZATION AND MANAGEMENT
Organization
The Fund is a series of common stock of a
corporation, Grand Prix Funds, Inc. ("Corporation"), a
Maryland company incorporated on October 30, 1997. The
Corporation is authorized to issue shares of common
stock in series and classes. Each share of common
stock is entitled to one vote, and each share is
entitled to participate equally in dividends and
capital gains distributions. No certificates will be
issued for shares held in your account. You will,
however, have full shareholder rights. Generally, the
Fund will not hold annual shareholders' meetings unless
required by the 1940 Act or Maryland Law. As of
October 31, 1998, Target Capital Management, Ltd., an
affiliate of the Advisor, and Robert Zuccaro as
custodian for the benefit of Marc Zuccaro UTMA owned a
controlling interest in the Fund.
Management
Under the laws of the State of Maryland, the Board
of Directors of the Corporation is responsible for
managing its business and affairs. The Corporation has
entered into an Investment Advisory Agreement with the
Advisor under which the Advisor manages the Fund's
investments and business affairs, subject to the
supervision of the Corporation's Board of Directors.
Advisor
The Advisor is a Florida corporation organized in
February 1992 and has been serving clients since 1983.
The Advisor is controlled by Robert Zuccaro who owns
80% of the Advisor. Under the Investment Advisory
Agreement, the Corporation pays the Advisor an annual
management fee of 1.00% of the Fund's average daily net
assets. The advisory fee is accrued daily and paid
monthly. For the year ending December 31, 1998, the
Advisor has agreed to waive its management fee and/or
reimburse the Fund's operating expenses to the extent
necessary to ensure that the Fund's total operating
expenses do not exceed 1.65% of the Fund's average
daily net assets. After such date, the Advisor may
voluntarily waive all or a portion of its management
fee and/or absorb certain Fund expenses without further
notification of the commencement or termination of such
waiver or absorption. Any waivers or absorptions will
have the effect of temporarily lowering the Fund's
overall expense ratio and increasing the Fund's overall
return to investors. Under the Investment Advisory
Agreement, not only is the Advisor responsible for
management of the Fund's assets, but also for portfolio
transactions and brokerage.
Portfolio Manager
President of the Advisor, Robert Zuccaro received
a Bachelor's Degree from the University of Bridgeport
in 1965 and a Master's in Business Administration from
Pace University in 1968. Prior to founding Advisor in
1983, Mr. Zuccaro spent six years with Axe-Houghton,
where he was President and Director of Axe-Houghton
Stock Fund and Vice President and Director of portfolio
management of E.W. Axe & Co. Mr. Zuccaro is a
Chartered Financial Analyst.
<PAGE>
Custodian and Transfer Agent
Fifth Third Bank ("Fifth Third") acts as custodian
of the Fund's assets ("Custodian"). Sunstone Investor
Services, LLC, 207 East Buffalo Street, Suite 315,
Milwaukee, Wisconsin 53202-5712, serves as transfer
agent for the Fund ("Transfer Agent").
Administrator
Pursuant to an Administration and Fund Accounting
Agreement, Sunstone Financial Group, Inc.
("Administrator") performs certain administrative and
tax reporting functions for the Fund, including
preparing and filing federal and state tax returns,
preparing and filing securities registration compliance
filings with various states, compiling data for and
preparing notices to the SEC, preparing financial
statements for the annual and semi-annual reports to
the SEC and current investors, monitoring the Fund's
expense accruals and performing securities valuations
and, from time to time, monitoring the Fund's
compliance with the Fund's investment policies and
restrictions. For these services, the Administrator
receives from the Fund a fee, computed daily and
payable monthly, based on the Fund's average net assets
at an annual rate beginning at 0.20% and decreasing as
the assets of the Fund reach certain levels, subject to
an annual minimum of $65,000, plus out-of-pocket
expenses.
Distributor
AmeriPrime Financial Securities, Inc., 1793
Kingswood Drive, Suite 200, Southlake, Texas 76092, a
registered broker-dealer and member of the NASD, acts
as distributor of the Fund's shares ("Distributor").
As compensation for its services, the Distributor may
retain a portion of (i) the initial sales charge from
purchases of Fund shares, and (ii) the Rule 12b-1 fees.
The Distributor may pay all or a portion of its fee to
registered dealers who sell Fund shares, pursuant to a
written dealer agreement. Distributor and Advisor, at
their own expense, may also periodically sponsor
programs that offer additional compensation in
connection with the sale of Fund shares. In some
circumstances, this compensation may be made available
only to certain dealers whose representatives have sold
or are expected to sell significant amounts of Fund
shares.
Fund Expenses
The Fund is responsible for its own expenses,
including interest charges; taxes; brokerage
commissions; organizational expenses; expenses of
qualifying shares for sale with the states and the SEC;
expenses of issue, sale, repurchase, or redemption of
shares; expenses of printing and distributing reports
and prospectuses to existing shareholders; charges of
custodians; expenses for accounting, administrative,
audit, and legal services; fees for outside directors;
expenses of fidelity bond coverage and other insurance;
expenses of indemnification; extraordinary expenses;
and costs of shareholder and director meetings.
YOUR ACCOUNT
Purchasing Shares
In General. Shares of the Fund may be purchased
through any dealer which has entered into a sales
agreement with the Distributor, or through the
Distributor directly. The Transfer Agent may also
accept purchase applications.
Shares of the Fund are offered and sold on a
continual basis at the next offering price (the
"Offering Price"), which is the sum of the net asset
value per share (next computed following receipt of a
purchase request in good order by a dealer, the
Distributor or the Transfer Agent, as the case may be)
and the sales charge as set forth below. See
"Determination of Net Asset Value." The sales charge
imposed on purchases of Fund shares is as follows:
<PAGE>
Total Sales Charge
As a As a Portion of
Your Investment Percentage Percentage Offering Price
of Offering of Your Retained by
Price Investment Dealers *
Less than $50,000 5.25% 5.54% 5.00%
$50,000-$100,000 4.50% 4.71% 4.50%
$100,001-$250,000 3.50% 3.63% 3.50%
$250,001-$500,000 2.50% 2.56% 2.50%
$500,001-$1,000,000 2.00% 2.04% 2.00%
$1,000,001 or more None None None
_____________________
*All sales charges may at times be paid to the
dealer involved in the trade, if any. A dealer
that is paid all or substantially all of the
sales charge may be deemed an "underwriter"
under the Securities Act of 1933, as amended.
Certain investors, as described below under "Sales
Charge Waivers," may purchase Fund shares without the
imposition of a sales charge. In addition, no sales
charge is imposed on the reinvestment of dividends and
capital gains.
In addition to the sales charge described above,
Fund shares are also subject to Rule 12b-1 fees in an
aggregate amount of 0.25% of the average daily net
assets of the Fund. See "Distribution and Shareholder
Servicing Plan."
Sales Charge Waivers. The following investors may
purchase shares of the Fund at net asset value without
the imposition of any sales charge:
certain retirement plans, such as profit-sharing,
pension, 401(k) and simplified employee pension plans
(SEPs and SIMPLEs), subject to minimum requirements
with respect to the amount of purchase (minimum of at
least $100,000);
beneficial owners of wrap accounts who are clients
of registered broker-dealers having a selling or
service agreement with the Distributor;
persons who roll-over their individual retirement
accounts ("IRAs"), subject to minimum requirements with
respect to the amount of purchase (minimum of at least
$20,000);
registered investment advisors or certified
financial planners who have entered into an agreement
with the Distributor for clients participating in
comprehensive fee programs;
clients of fee only financial planners;
owners of private accounts managed by the Advisor
who completely liquidate their private accounts and
purchase Fund shares within 90 days of the liquidation;
any person who purchases shares of the Fund with
redemption proceeds from a registered investment
company other than the Fund and on which the investor
paid a contingent deferred sales charge, provided that
the proceeds are invested in the Fund within 10 days of
the redemption;
directors, officers and full-time employees of the
Fund, the Distributor, the Administrator and affiliates
of such companies (including the Advisor) and spouses
and family members of such persons;
<PAGE>
persons who have taken a distribution from a
retirement plan invested in Fund shares, to the extent
of the distribution, provided that the distribution is
reinvested within 90 days of the payment date;
government entities that are prohibited from
paying mutual fund sales charges;
registered broker-dealers who have entered into a
selling or service agreement with the Distributor for
their investment account only, and registered personnel
and employees of such broker-dealers and the spouses
and family members of such persons, in accordance with
the internal policies and procedures of the broker-
dealer;
service providers of the Fund, including marketing
firms, and their employees;
trust companies investing $1 million or more for
common trust or collective investment funds; and
registered investment companies.
Please call the Fund at 1-800-432-4741 for more
information on purchases of Fund shares at net asset
value.
Minimum Investment. Required minimum investments
are as follows:
ADDITIONAL
INITIAL MINIMUM
TYPE OF ACCOUNT MINIMUM INVESTMENT
INVESTMENT
Regular $5,000 $1,000
Automatic Investment Plan $5,000 $1,000
Gift to Minors $5,000 $1,000
IRAs $5,000 $1,000
The Fund reserves the right to reject any order
for the purchase of its shares or to limit or suspend,
without prior notice, the offering of its shares. The
required minimum investments may be waived in the case
of qualified retirement plans. The Fund will not
accept your account if you are investing for another
person as attorney-in-fact. The Fund also will not
accept accounts with a "Power of Attorney" or "POA" in
the registration section of the Purchase Application.
Opening an Account by Mail. Please complete the
Purchase Application. You may duplicate any
application or you can obtain additional copies of the
Purchase Application from the Fund by calling
1-800-432-4741.
Your completed Purchase Application should be
mailed directly to:
Grand Prix Funds, Inc.
P.O. Box 1177
Milwaukee, WI 53201-1177
To purchase shares by overnight or express mail,
please use the following street address:
Grand Prix Funds, Inc.
c/o Sunstone Investor Services, LLC
207 East Buffalo Street, Suite 315
Milwaukee, WI 53202-5712
<PAGE>
All applications must be accompanied by payment in
the form of a check made payable to "Grand Prix Funds."
All purchases must be made in U.S. dollars and checks
must be drawn on U.S. banks. No cash, credit cards or
third party checks will be accepted. Payment may be
delayed for up to 10 calendar days on redemption
requests for recent purchases made by check in order to
ensure that the check has cleared. If you contemplate
redeeming your investment shortly after purchase, you
should purchase the shares by wire as discussed below.
Opening an Account by Wire. You may make
purchases by direct wire transfers. To ensure proper
credit to your account, you must call the Fund at
1-800-432-4741 for instructions and to obtain an
investor account number prior to wiring funds. Funds
should be wired through the Federal Reserve System as
follows:
Fifth Third Bank
A.B.A. Number: 042000314
For credit to: Grand Prix Funds
Account Number: 729-00729
For further credit to:
(investor account number)
(name or account registration)
(Social Security or Taxpayer Identification Number)
A Purchase Application must be received by the
Fund to establish privileges and to verify your account
information. Payment of redemption proceeds may be
delayed and taxes may be withheld unless the Fund
receives a properly completed and executed purchase
application. The Fund reserves the right to refuse a
telephone transaction if it believes it advisable to do
so. If you have any questions, please call the Fund at
1-800-432-4741.
Adding to an Account by Mail. When adding to an
account by mail, you should send your check to the
Fund, together with a subsequent investment slip from a
recent statement. If this investment slip is
unavailable, you should send a signed note giving the
full name of the account and the account number. See
"Additional Purchase Information" for more information
regarding purchases made by check or electronic funds
transfer.
Adding to an Account by Electronic Funds Transfer.
You may also make additional investments by telephone
or in writing through electronic funds transfers if you
have previously selected this service. By selecting
this service, you authorize the Fund to draw on your
preauthorized bank account as shown on the records of
the Fund and receive the proceeds by electronic funds
transfer. Electronic funds transfers may be made
commencing 10 business days after receipt by the Fund
of your request to adopt this service. This time
period allows the Fund to verify your bank information.
Investments made by electronic funds transfer in any
one account must be in an amount of at least $1,000 and
will be effective at the net asset value next computed
after receipt by the Fund of the proceeds from your
bank account. See "Additional Purchase Information"
for more information. Changes to bank information must
be made in writing and signed by all registered holders
of the account with the signatures guaranteed by a
commercial bank or trust company in the United States,
a member firm of the NASD or other eligible guarantor
institution. A Notary Public is not an acceptable
guarantor. This service may be selected by calling the
Fund at 1-800-432-4741 for the necessary form and
instructions.
Adding to an Account by Wire. For additional
investments made by wire transfer, you should use the
wiring instructions listed previously. Be sure to
include your account number. Wired funds are
considered received in good order on the day they reach
the Fund's bank account by the Fund's cut-off time for
purchases and all required information is provided in
the wire instructions. The wire instructions will
determine the terms of the purchase transaction.
Automatic Investment Plan. You may make purchases
of shares of the Fund automatically on a regular basis
($1,000 minimum per transaction). You must meet the
Fund's minimum initial investment of $5,000 before the
Automatic Investment Plan ("AIP") may be established.
Under the AIP, your designated bank or other financial
institution debits a preauthorized amount on your
account each designated period and applies the amount
to the purchase of Fund shares. The Fund requires 10
business days after receipt of your request to initiate
the AIP to
<PAGE>
verify your account information. Generally,
the AIP will begin on the next transaction date
scheduled by the Fund for the AIP following this 10
business day period. AIP transactions are scheduled
for the fifth, tenth, fifteenth, twentieth, twenty-
fifth and/or the last day of every month. AIP
transactions also may be scheduled monthly, quarterly
or annually. The AIP can be implemented with any
financial institution that is a member of the Automated
Clearing House. No service fee is currently charged by
the Fund for participation in the AIP. You will
receive a statement on a quarterly basis showing the
purchases made under the AIP. A $23 fee will be
imposed by the Fund if for any reason the transaction
cannot be completed. You will also be responsible for
any losses suffered by the Fund as a result. When a
purchase is made pursuant to the AIP, and a redemption
of such shares is requested shortly thereafter, the
Fund may delay payment of the redemption proceeds until
the Fund verifies that the proceeds used to purchase
the shares were properly debited from your designated
bank or other financial institution. You may adopt the
AIP at the time an account is opened by completing the
appropriate section of the Purchase Application. You
may obtain an application to establish the AIP after an
account is opened by calling the Fund at 1-800-432-
4741. A signature guarantee is required. Under
certain circumstances (such as discontinuation of the
AIP before the Fund's minimum initial investment is
reached), the Fund reserves the right to redeem your
Fund account. Prior to closing any account for failure
to reach the minimum initial investment, the Fund will
give you written notice and 60 days in which to
reinstate the AIP or otherwise reach the minimum
initial investment. Closing of an account may occur in
periods of declining share prices. Changes to bank
information must be made in writing and signed by all
registered holders of the account with the signatures
guaranteed by a commercial bank or trust company in the
United States, a member firm of the NASD or other
eligible guarantor institution. A Notary Public is not
an acceptable guarantor.
Purchasing Shares Through Other Broker-Dealers.
If the securities dealer you have chosen to purchase
Fund shares through has not entered into a sales
agreement with the Distributor, such dealer may,
nevertheless, offer to place your order for the
purchase of Fund shares. Purchases made through such
dealers will be affected at the applicable Offering
Price. Such dealers may also charge a transaction fee,
as determined by the dealer. That fee will be in
addition to the sales charge payable by you upon
purchase of such shares and may be avoided if shares
are purchased through a dealer who has entered into a
sales agreement with the Distributor or through the
Transfer Agent.
Additional Purchase Information. When a purchase
is made by check and a redemption is requested shortly
thereafter, payment may be delayed for up to 10
calendar days on redemption requests for recent
purchases made by check in order to ensure that the
check has cleared. This delay allows the Fund to
verify that proceeds used to purchase Fund shares will
not be returned due to insufficient funds and is
intended to protect the remaining investors from loss.
The Fund will charge a $23 service fee against your
account for any check or electronic funds transfer that
is returned unpaid and your purchase will be canceled.
You will also be responsible for any losses suffered by
the Fund as a result.
New shareholders of the Fund are automatically
provided with the privilege to initiate telephone
inquiries and redemptions unless expressly waived by
the shareholder. Consequently, Purchase Applications
provide that investors automatically authorize the
telephone privileges unless they check the appropriate
box on the Purchase Application to waive the privilege.
If you have any questions as to how to waive this
privilege, or how to add or delete a privilege after an
account is established, please call the Fund at
1-800-432-4741. Generally, after the account has been
established, a request to authorize, waive, add or
delete a privilege must be in writing and signed by
each registered holder of the account with signatures
guaranteed by a commercial bank or trust company in the
United States, a member of the NASD or other eligible
guarantor institution. A Notary Public is not an
acceptable guarantor. For a more detailed discussion
of the rights, responsibilities and risks of telephone
transactions, please refer to "Redeeming by Telephone."
In order to relieve you of responsibility for the
safekeeping and delivery of stock certificates, the
Fund does not issue certificates.
<PAGE>
Redeeming Shares
In General. You may redeem shares of the Fund at
any time. The price at which the shares will be
redeemed is the net asset value per share next
determined after proper redemption instructions are
received by the Fund. See "Determination of Net Asset
Value." There are no sales charges for the redemption
of shares except that a fee of $10 is charged for each
wire redemption. Depending upon the redemption price
you receive, you may realize a capital gain or loss for
federal income tax purposes.
Redeeming by Mail. To redeem shares by mail,
simply send an unconditional written request to the
Fund specifying the number of shares or dollar amount
to be redeemed, the name(s) on the account registration
and the account number. If the dollar amount requested
to be redeemed is greater than the current account
value as determined by the net asset value on the
effective date of the redemption, the entire account
balance will be redeemed. A request for redemption
must be signed exactly as the shares are registered.
If the amount requested is greater than $10,000, the
proceeds are to be sent to a person other than the
shareholder(s) of record, to a location other than the
address of record or is made within 30 days of an
address change, each signature must be guaranteed by a
commercial bank or trust company in the United States,
a member firm of the NASD or other eligible guarantor
institution. A Notary Public is not an acceptable
guarantor. Additional documentation may be required
for the redemption of shares held in corporate,
partnership or fiduciary accounts. See "Additional
Redemption Information" for instructions on redeeming
shares in corporate accounts. Additional documentation
is required for the redemption of shares held by
persons acting pursuant to a Power of Attorney.
The Fund will mail payment for redemption proceeds
within seven days after it receives proper instructions
for redemption. However, the Fund may delay payment on
redemptions of recent purchases made by check until the
Fund verifies that the check used to purchase Fund
shares will not be returned due to insufficient funds.
This is intended to protect the remaining investors
from loss.
Redeeming by Telephone. Shares may be redeemed,
in an amount up to $10,000, by calling the Fund at
1-800-432-4741. Proceeds redeemed by telephone will be
mailed to your address, or wired or transmitted by
electronic funds transfer to your preauthorized bank
account as shown on the records of the Fund. A
redemption request in excess of $10,000 must be made in
writing and signed by each registered holder of the
account with signatures guaranteed by a commercial bank
or trust company in the United States, a member firm of
the NASD or other eligible guarantor institution. A
Notary Public is not an acceptable guarantor. For
telephone redemption requests received within 30
calendar days after an address change, proceeds may be
retained for up to 30 days or until a written request
with signatures guaranteed is received. A redemption
request within that 30 day time period must be in
writing and signed by each registered holder of the
account with signatures guaranteed. A Notary Public is
not an acceptable guarantor. Telephone redemptions
must be in amounts of $1,000 or more.
Payment of the redemption proceeds for Fund shares
redeemed by telephone when you request wire payment
will normally be made in federal funds on the next
business day. There is currently a $10 fee for each
wire redemption. It will be deducted from your
redemption proceeds. Electronically transferred funds
will ordinarily arrive at your bank within two to three
banking days after transmission. To change the
designated account, send a written request with the
signature(s) guaranteed to the Fund. Once the funds
are transmitted, the time of receipt and the
availability of the funds are not within the Fund's
control. The Fund reserves the right to delay payment
for a period of up to seven days after receipt of the
redemption request.
The Fund reserves the right to refuse a telephone
redemption request if it believes it is advisable to do
so. Procedures for redeeming shares of the Fund by
telephone may be modified or terminated by the Fund at
any time. In an effort to prevent unauthorized or
fraudulent redemption requests by telephone, the Fund
has implemented procedures designed to reasonably
assure that telephone instructions are genuine. These
procedures include: requesting verification of certain
personal information; recording telephone transactions;
confirming transactions in writing; and restricting
transmittal of redemption proceeds to preauthorized
designations. Other procedures may be implemented from
time to time. If reasonable procedures are not
implemented, the Fund may be liable for any loss
<PAGE>
due to
unauthorized or fraudulent transactions. In all other
cases, you are liable for any loss for unauthorized
transactions.
You should be aware that during periods of
substantial economic or market change, telephone or
wire redemptions may be difficult to implement. If
you are unable to contact the Fund by telephone, you
may also redeem shares by delivering or mailing the
redemption request to: Grand Prix Funds, Inc., P.O. Box
1177, Milwaukee, WI 53201-1177. If you wish to send
the information via overnight delivery, you may send it
to: Grand Prix Funds, Inc., c/o Sunstone Investor
Services, LLC, 207 East Buffalo Street, Suite 315,
Milwaukee, WI 53202-5712. Redemption requests made via
fax will not be accepted by the Fund.
Redeeming Shares Through Other Broker-Dealers.
Investors may be charged a fee if they redeem shares of
the Fund through a broker or dealer.
Additional Redemption Information. When a
purchase is made by check and a redemption is requested
shortly thereafter, payment may be delayed on
redemption requests for recent purchases made by check
until the Fund verifies that proceeds used to purchase
Fund shares will not be returned due to insufficient
funds. This is intended to protect the remaining
investors from loss.
New shareholders of the Fund are automatically
provided with the privilege to initiate telephone
inquiries and redemptions unless expressly waived by
the shareholder. Consequently, Purchase Applications
provide that investors automatically authorize the
telephone privileges unless they check the appropriate
box on the Purchase Application to waive the privilege.
If you have any questions as to how to waive this
privilege, or how to add or delete a privilege after an
account is established, please call the Fund at
1-800-432-4741. Generally, after the account has been
established, a request to authorize, waive, add or
delete a privilege must be in writing and signed by
each registered holder of the account with signatures
guaranteed by a commercial bank or trust company in the
United States, a member of the NASD or other eligible
guarantor institution. A Notary Public is not an
acceptable guarantor. For a more detailed discussion
of the rights, responsibilities and risks of telephone
transactions, please refer to "Redeeming by Telephone."
Any redemption or transfer of ownership request
for corporate accounts will require the following
written documentation:
1. A written letter of instruction signed by the
required number of authorized officers, along
with their respective positions. For
redemption requests in excess of $10,000, the
written request must be signature guaranteed.
A signature guarantee may be obtained from a
commercial bank or trust company in the United
States, a member firm of the NASD or other
guarantor and "Signature Guaranteed" must
appear with the signature. A Notary Public is
not an acceptable guarantor.
2. A certified Corporate Resolution that states
the date the Resolution was adopted and who is
empowered to act, transfer or sell assets on
behalf of the corporation.
3. If the Corporate Resolution is more than 60
days old from the date of the transaction
request, a Certificate of Incumbency from the
Corporate Secretary which specifically states
that the officer or officers named in the
resolution have the authority to act on the
account. The Certificate of Incumbency must be
dated within 60 days of the requested
transaction. If the Corporate Resolution
confers authority on officers by title and not
by name, the Certificate of Incumbency must
name the officer(s) and their title(s).
The Fund reserves the right to suspend or postpone
redemptions during any period when: trading on the
Exchange is restricted, as determined by the SEC, or
the Exchange is closed for other than customary weekend
and holiday closing; the SEC has by order permitted
such suspension; or an emergency, as determined by the
SEC, exists, making disposal of portfolio securities or
valuation of net assets of the Fund not reasonably
practicable.
<PAGE>
Due to the relatively high cost of maintaining
small accounts, if your account balance falls below the
$5,000 minimum as a result of a redemption, you may be
given a 60-day notice to reestablish the minimum
balance. If this requirement is not met, your account
may be closed and the proceeds sent to you.
Shareholder Reports And Information
The Fund will provide the following statements and
reports:
Confirmation Statements. Except for AIP
transactions, after each transaction that affects the
account balance or account registration, you will
receive a confirmation statement. Participants in the
AIP will receive quarterly confirmations of all
automatic transactions.
Account Statements. All shareholders will receive
quarterly account statements. If you need additional
copies of previous statements, you may order statements
for the current and preceding year at no charge.
Statements for earlier years are available for $5 each.
Call 1-800-432-4741 to order past statements. If you
need information on your account with the Fund or if
you wish to submit any applications, redemption
requests, inquiries or notifications, you should
contact: Grand Prix Funds, Inc., P.O. Box 1177,
Milwaukee, WI 53201-1177 or call 1-800-432-4741. If
you wish to send the information via overnight
delivery, you may send it to: Grand Prix Funds, Inc.,
c/o Sunstone Investor Services, LLC, 207 East Buffalo
Street, Suite 315, Milwaukee, WI 53202-5712.
Financial Reports. Financial reports are provided
to shareholders semi-annually. Annual reports will
include audited financial statements. To reduce Fund
expenses, one copy of each report will be mailed to
each Taxpayer Identification Number even though the
investor may have more than one account in the Fund.
DETERMINATION OF NET ASSET VALUE
The net asset value per share is determined as of
the close of trading (generally 4:00 p.m. Eastern Time)
on each day the Exchange is open for business.
Purchase orders and redemption requests received in
good order on a day the Exchange is open for trading,
prior to the close of trading on that day, will be
valued as of the close of trading on that day.
Applications for purchase of shares and requests for
redemption of shares received after the close of
trading on the Exchange will be valued as of the close
of trading on the next day the Exchange is open. The
Fund is not required to calculate its net asset value
on days during which the Fund receives no orders to
purchase or redeem shares. Net asset value per share
is calculated by taking the fair value of the Fund's
total assets, including interest or dividends accrued,
but not yet collected, less all liabilities, and
dividing by the total number of shares outstanding.
The result, rounded to the nearest cent, is the net
asset value per share.
In determining net asset value, expenses are
accrued and applied daily and securities and other
assets for which market quotations are available are
valued at fair value. Common stocks and other equity-
type securities are valued at the last sales price on
the national securities exchange or Nasdaq on which
such securities are primarily traded; however,
securities traded on a national securities exchange or
Nasdaq for which there were no transactions on a given
day, and securities not listed on a national securities
exchange or Nasdaq, are valued at the average of the
most recent bid and asked prices. Any securities or
other assets for which market quotations are not
readily available are valued at fair value as
determined in good faith by the Board of Directors of
the Corporation or its delegate. The Board of
Directors may approve the use of pricing services to
assist the Fund in the determination of net asset
value. All money market instruments with maturities
less than 60 days will be valued on an amortized cost
basis.
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN
The Fund has adopted a plan pursuant to Rule 12b-1
under the 1940 Act (the "12b-1 Plan"), which authorizes
it to pay the Distributor a distribution and
shareholder servicing fee of up to 0.25% of the average
daily net assets. All
<PAGE>
or a portion of the fee may be
used by the Distributor to finance activities primarily
intended to result in the sale of Fund shares. The
Distributor is authorized to, in turn, pay all or a
portion of these fees to any registered securities
dealer, financial institution, or other person
("Recipient") who renders assistance in distributing or
promoting the sale of Fund shares, or who provides
certain shareholder services to Fund shareholders,
pursuant to a written agreement ("Rule 12b-1 Related
Agreement"). The 12b-1 Plan is a "reimbursement" plan,
which means that the fees paid by the Fund under the
Plan are intended as reimbursement for services
rendered and commission fees borne up to the maximum
allowable distribution and shareholder servicing fees.
If more money for services rendered and commission fees
is due than is immediately payable because of the
expense limitation under the Plan, the unpaid amount is
carried forward from period to period while the Plan is
in effect until such time as it may be paid. No
interest, carrying, or other finance charges will be
borne by the Fund with respect to unpaid amounts
carried forward. Payment of the distribution and
servicing fees is to be made quarterly, within 30 days
after the close of the quarter for which the fee is
payable.
The 12b-1 Plan, including a form of the 12b-1
Related Agreement, has been unanimously approved by the
Board of Directors of the Corporation, including all of
the members of the Board who are not "interested
persons" of the Corporation as defined in the 1940 Act
and who have no direct or indirect financial interest
in the operation of the 12b-1 Plan or any related
agreements ("Disinterested Directors") voting
separately.
The 12b-1 Plan, and any Rule 12b-1 Related
Agreement which is entered into, will continue in
effect for a period of more than one year only so long
as its continuance is specifically approved at least
annually by a vote of a majority of the Corporation's
Board of Directors, and of the Disinterested Directors,
cast in person at a meeting called for the purpose of
voting on the 12b-1 Plan, or the Rule 12b-1 Related
Agreement, as applicable. In addition, the 12b-1 Plan,
and any Rule 12b-1 Related Agreement, may be terminated
without penalty, by vote of a majority of the Fund's
outstanding voting securities, or by vote of a majority
of Disinterested Directors (on not more than sixty (60)
days' written notice in the case of the Rule 12b-1
Related Agreement only).
INDIVIDUAL RETIREMENT ACCOUNTS
Individuals may establish their own tax-sheltered
IRAs. The Fund offers two types of IRAs, a Traditional
IRA and a Roth IRA.
Traditional IRA
In a Traditional IRA, amounts contributed to the
IRA may be tax deductible at the time of contribution
depending on whether the investor is an "active
participant" in an employer-sponsored retirement plan
and the investor's income. Distributions from a
Traditional IRA will be taxed at distribution except to
the extent that the distribution represents a return of
the investor's own contributions for which the investor
did not claim (or was not eligible to claim) a
deduction. Distributions prior to age 59-1/2 may be
subject to an additional 10% tax applicable to certain
premature distributions. Distributions must commence
by April 1 following the calendar year in which the
investor attains age 70-1/2. Failure to begin
distributions by this date (or distributions that do
not equal certain minimum thresholds) may result in
adverse tax consequences.
Roth IRA
In a Roth IRA, amounts contributed to the IRA are
taxed at the time of contribution, but distributions
from the IRA are not subject to tax if the investor has
held the IRA for at least five years and the
distributions are on account of one of four specified
events, i.e., attainment of age 59-1/2, disability, the
purchase of a first home or death. Investors whose
income exceeds certain limits are ineligible to
contribute to a Roth IRA. Distributions that do not
satisfy the requirements for tax-free withdrawal are
subject to income taxes (and possibly penalty taxes) to
the extent that the distribution exceeds the investor's
contributions to the IRA. The minimum distribution
rules applicable to Traditional IRAs do not apply
during the lifetime of the investor. Following the
death of the investor, certain minimum distribution
rules apply.
<PAGE>
For Traditional and Roth IRAs, the maximum annual
contribution generally is equal to the lesser of $2,000
or 100% of the investor's compensation (earned income).
An individual may also contribute to a Traditional IRA
or Roth IRA on behalf of his or her spouse provided
that the individual has sufficient compensation (earned
income). Contributions to a Traditional IRA reduce the
allowable contributions under a Roth IRA, and
contributions to a Roth IRA reduce the allowable
contribution to a Traditional IRA.
Under current IRS regulations, all IRA applicants
must be furnished a disclosure statement containing
information specified by the IRS. Applicants generally
have the right to revoke their account within seven
days after receiving the disclosure statement and
obtain a full refund of their contributions. The
custodian may, in its discretion, hold the initial
contributions uninvested until the expiration of the
seven-day revocation period. The custodian does not
anticipate that it will exercise its discretion but
reserves the right to do so.
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAX TREATMENT
The Fund intends to qualify for treatment as a
"Regulated Investment Company" under Subchapter M of
the Code and, if so qualified, will not be liable for
federal income taxes to the extent earnings are
distributed to shareholders on a timely basis.
However, for federal income tax purposes, all dividends
and distributions of net realized short-term capital
gains you receive from the Fund are taxable as ordinary
income, whether reinvested in additional shares or
received in cash, unless you are exempt from taxation
or entitled to a tax deferral. Distributions of net
realized long-term capital gains you receive from the
Fund, whether reinvested in additional shares or
received in cash, are taxable as a capital gain. The
capital gain holding period is determined by the length
of time the Fund has held the security and not the
length of time you have held shares in the Fund. You
will be informed annually as to the amount and nature
of all dividends and capital gains paid during the
prior year. Such capital gains and dividends may also
be subject to state or local taxes. If you are not
required to pay taxes on your income, you are generally
not required to pay federal income taxes on the amounts
distributed to you.
The Fund intends to pay dividends from net
investment income annually and to distribute all net
realized capital gains at least annually. In addition,
the Fund may make additional distributions if necessary
to avoid imposition of a 4% excise tax or other tax on
undistributed income and gains. Please note, however,
that the objective of the Fund is capital appreciation,
not the production of distributions. You should
measure the success of your investment by the value of
your investment at any given time and not by the
distributions you receive.
When a dividend or capital gain is distributed,
the Fund's net asset value decreases by the amount of
the payment. If you purchase shares shortly before a
distribution, you will be subject to income taxes on
the distribution, even though the value of your
investment (plus cash received, if any) remains the
same. All dividends and capital gain distributions
will automatically be reinvested in additional Fund
shares at the then prevailing net asset value unless
you specifically request that dividends or capital
gains or both be paid in cash. The election to receive
dividends or reinvest them may be changed by writing to
the Fund at Grand Prix Funds, Inc., P.O. Box 1177,
Milwaukee, WI 53201-1177. The election is effective
for distributions with a dividend record date on or
after the date on which the Fund receives notice of the
election.
If you do not furnish the Fund with your correct
social security number or taxpayer identification
number, the Fund is required by current federal law to
withhold federal income tax from your distributions
(including applicable Fund share reinvestments) and
redemption proceeds at a rate of 31%.
This section is not intended to be a full
discussion of federal income tax laws and the effect of
such laws on you. There may be other federal, state,
or local tax considerations applicable to a particular
investor. You are urged to consult your own tax
advisor.
<PAGE>
YEAR 2000 ISSUE
The Fund's operations depend on the seamless
functioning of computer systems in the financial
service industry, including those of the Advisor,
Custodian and Transfer Agent. Many computer systems in
use today cannot properly process date-related
information after December 31, 1999 because of the
method by which dates are encoded and calculated. This
failure, commonly referred to as the "Year 2000 Issue,"
could adversely affect the handling of security trades,
pricing and account servicing for the Fund.
The Advisor has made compliance with the Year 2000
Issue a high priority and is taking steps that it
believes are reasonably designed to address the Year
2000 Issue with respect to its computer systems. The
Advisor has also been informed that comparable steps
are being taken by the Fund's other major service
providers. The Advisor does not currently anticipate
that the Year 2000 Issue will have a material impact on
its ability to continue to fulfill its duties as
investment advisor to the Fund.
FUND PERFORMANCE
The Fund may from time to time compare its
investment results to various passive indices or other
mutual funds and cite such comparisons in reports to
shareholders, sales literature, and advertisements.
The results may be calculated on several bases,
including average annual total return, total return and
cumulative total return.
Average annual total return and total return
figures measure both the net investment income
generated by, and the effect of any realized and
unrealized appreciation or depreciation of, the
underlying investments in the Fund over a specified
period of time, assuming the reinvestment of all
dividends and distributions. Average annual total
return figures are annualized and therefore represent
the average annual percentage change over the specified
period. Total return figures are not annualized and
represent the aggregate percentage or dollar value
change over the period. Cumulative total return simply
reflects performance over a stated period of time.
<PAGE>
ADDITIONAL INFORMATION
DIRECTORS
Robert Zuccaro
Phillipp Villhauer
Mary Jane Boyle
Edward F. Ronan, Jr.
Dennis K. Waldman
OFFICERS
Robert Zuccaro, President
Phillipp Villhauer, Vice-President and Secretary
Mary Jane Boyle, Vice-President and Treasurer
Andrea Romstad, Vice-President
INVESTMENT ADVISOR
Target Holdings Corporation,
d.b.a. Target Investors, Inc.
15 River Road, Suite 220
Wilton, Connecticut 06897
CUSTODIAN
Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
ADMINISTRATOR
Sunstone Financial Group, Inc.
207 East Buffalo Street, Suite 400
Milwaukee, Wisconsin 53202
TRANSFER AGENT
Sunstone Investor Services, LLC
For overnight deliveries, use: For regular mail deliveries, use:
Grand Prix Funds, Inc. Grand Prix Funds, Inc.
c/o Sunstone Investor Services, LLC P.O. Box 1177
207 East Buffalo Street, Suite 315 Milwaukee, WI 53201-1177
Milwaukee, Wisconsin 53202-5712
INDEPENDENT AUDITORS
Ernst & Young LLP
111 East Kilbourn Avenue
Milwaukee, Wisconsin 53202
<PAGE>
DISTRIBUTOR
AmeriPrime Financial Securities, Inc.
1793 Kingswood Drive, Suite 200
Southlake, Texas 76092
LEGAL COUNSEL
Godfrey & Kahn, S.C.
780 N. Water Street
Milwaukee, Wisconsin 53202
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
GRAND PRIX FUNDS, INC.
GRAND PRIX FUND
Wilton Executive Campus
15 River Road, Suite 220
Wilton, Connecticut 06897
Telephone: 1-800-432-4741
Website: www.grandprixfund.com
This Statement of Additional Information is not a
prospectus and should be read in conjunction with the
Prospectus of the Grand Prix Fund ("Fund"), dated
November 30, 1998. The Prospectus, which may be
revised from time to time, is available without charge
upon request to the above-noted address, telephone
number or website.
This Statement of Additional Information is dated
November 30, 1998.
<PAGE>
TABLE OF CONTENTS
INVESTMENT OBJECTIVE AND RESTRICTIONS 3
INVESTMENT POLICIES AND TECHNIQUES 4
DIRECTORS AND OFFICERS 6
PRINCIPAL SHAREHOLDERS 7
INVESTMENT ADVISOR 8
DISTRIBUTOR 9
FUND TRANSACTIONS AND BROKERAGE 9
CUSTODIAN, TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT 10
PLAN OF DISTRIBUTION 10
TAXES 11
DETERMINATION OF NET ASSET VALUE 11
REDEMPTION IN KIND 11
SHAREHOLDER MEETINGS 11
PERFORMANCE INFORMATION 12
INDEPENDENT AUDITORS 13
FINANCIAL STATEMENTS 13
No person has been authorized to give any
information or to make any representations other than
those contained in this Statement of Additional
Information ("SAI") and the Prospectus dated November
30, 1998, and if given or made, such information or
representations may not be relied upon as having been
authorized by the Fund. This SAI does not constitute
an offer to sell securities in any state or
jurisdiction in which such offering may not lawfully be
made.
<PAGE>
INVESTMENT OBJECTIVE AND RESTRICTIONS
The Fund's investment objective is capital
appreciation. The Fund's investment objective and
policies are described in detail in the Prospectus
under the captions "Investment Objective and
Restrictions" and "Implementation of Policies and
Risks." The following are the Fund's fundamental
investment restrictions which cannot be changed without
shareholder approval.
The Fund:
1. May not issue senior securities, except as
permitted under the Investment Company Act of
1940, as amended (the "1940 Act");
2. May not act as an underwriter of another company's
securities, except to the extent that the Fund may
be deemed to be an underwriter within the meaning
of the Securities Act of 1933, as amended, in
connection with the purchase and sale of portfolio
securities;
3. May not purchase or sell physical commodities
unless acquired as a result of ownership of
securities or other instruments (but this shall
not prevent the Fund from purchasing or selling
options, futures contracts, or other derivative
instruments, or from investing in securities or
other instruments backed by physical commodities);
4. May not make loans if, as a result, more than 33
1/3% of the Fund's total assets would be lent to
other persons, except through purchases of debt
securities or other debt instruments or engaging
in repurchase agreements;
5. May not invest more than 25% of its total assets
in securities of companies in any one industry;
6. May not purchase or sell real estate unless
acquired as a result of ownership of securities or
other instruments (but this shall not prohibit the
Fund from purchasing or selling securities or
other instruments backed by real estate or of
issuers engaged in real estate activities);
7. May (i) borrow money from banks for temporary or
emergency purposes (but not for leverage or the
purchase of investments), and (ii) make other
investments or engage in other transactions
permissible under the 1940 Act, which may involve
a borrowing, provided that the combination of (i)
and (ii) shall not exceed 33 1/3% of the value of
the Fund's total assets (including the amount
borrowed), less the Fund's liabilities (other than
borrowings). The Fund may also borrow money from
other persons to the extent permitted by
applicable law;
8. Notwithstanding any other fundamental investment
policy or restriction, may invest all of its
assets in the securities of a single open-end
management investment company with substantially
the same fundamental investment objective,
policies, and restrictions.
The following non-fundamental operating policies
may be changed by the Board of Directors without
shareholder approval.
The Fund may not:
1. Sell securities short, unless the Fund owns or has
the right to obtain securities equivalent in kind
and amount to the securities sold short, or unless
it covers such short sale as required by the
current rules and positions of the Securities and
Exchange Commission ("SEC") or its staff, and
provided that transactions in options, futures
contracts, options on futures contracts, or other
derivative instruments are not deemed to
constitute selling securities short.
2. Purchase securities on margin, except that the
Fund may obtain such short-term credits as are
necessary for the clearance of transactions; and
provided that margin deposits in connection with
futures contracts, options on futures contracts,
or other derivative instruments shall not
constitute purchasing securities on margin.
3. Invest in illiquid securities if, as a result of
such investment, more than 5% of its net assets
would be invested in illiquid securities.
<PAGE>
4. Purchase securities of other investment companies
except in compliance with the 1940 Act.
5. Engage in futures or options on futures
transactions which are impermissible pursuant to
Rule 4.5 under the Commodity Exchange Act ("CEA")
and, in accordance with Rule 4.5, will use futures
or options on futures transactions solely for bona
fide hedging transactions (within the meaning of
the CEA); provided, however, that the Fund may,
in addition to bona fide hedging transactions, use
futures and options on futures transactions if the
aggregate initial margin and premiums required to
establish such positions, less the amount by which
any such options positions are in the money
(within the meaning of the CEA), do not exceed 5%
of the Fund's net assets.
6. Make any loans other than loans of portfolio
securities, except through purchases of debt
securities or other debt instruments or engaging
in repurchase agreements with respect to portfolio
securities.
7. Borrow money except from banks or through reverse
repurchase agreements or mortgage dollar rolls,
and will not purchase securities when bank
borrowings exceed 5% of its total assets.
Except for the fundamental investment restrictions
listed above and the Fund's investment objective, the
other investment policies described in the Prospectus
and this SAI are not fundamental and may be changed
with approval of the Fund's Board of Directors. Unless
noted otherwise, if a percentage restriction is adhered
to at the time of investment, a later increase or
decrease in percentage resulting from a change in the
Fund's assets (i.e., due to cash inflows or
redemptions) or in market value of the investment or
the Fund's assets will not constitute a violation of
that restriction.
INVESTMENT POLICIES AND TECHNIQUES
The following information supplements the
discussion of the Fund's investment objective,
strategy, and policies that are described in the
Prospectus under the captions "Investment Strategy,"
"Implementation of Policies and Risks," and "Investment
Objective and Restrictions."
Depositary Receipts
The Fund may invest in foreign securities by
purchasing depositary receipts, including American
Depositary Receipts ("ADRs") and European Depositary
Receipts ("EDRs") or other securities convertible into
securities of companies based in foreign countries.
These securities may not necessarily be denominated in
the same currency as the securities into which they may
be converted. Generally, ADRs, in registered form, are
denominated in U.S. dollars and are designed for use in
the U.S. securities markets, while EDRs, in bearer
form, may be denominated in other currencies and are
designed for use in European securities markets. ADRs
are receipts typically issued by a U.S. bank or trust
company evidencing ownership of the underlying
securities. EDRs are European receipts evidencing a
similar arrangement. For purposes of the Fund's
investment policies, ADRs and EDRs are deemed to have
the same classification as the underlying securities
they represent. Thus, an ADR or EDR representing
ownership of common stock will be treated as common
stock.
ADR facilities may be established as either
"unsponsored" or "sponsored." While ADRs issued under
these two types of facilities are in some respects
similar, there are distinctions between them relating
to the rights and obligations of ADR holders and the
practices of market participants. For example, a non-
sponsored depositary may not provide the same
shareholder information that a sponsored depositary is
required to provide under its contractual arrangements
with the issuer, including reliable financial
statements. Under the terms of most sponsored
arrangements, depositaries agree to distribute notices
of shareholder meetings and voting instructions, and to
provide shareholder communications and other
information to the ADR holders at the request of the
issuer of the deposited securities.
<PAGE>
Convertible Securities
The Fund may invest in convertible securities,
which are bonds, debentures, notes, preferred stocks,
or other securities that may be converted into or
exchanged for a specified amount of common stock or
warrants of the same or a different company within a
particular period of time at a specified price or
formula. A convertible security entitles the holder to
receive interest normally paid or accrued on debt or
the dividend paid on preferred stock until the
convertible security matures or is redeemed, converted,
or exchanged. Convertible securities have unique
investment characteristics in that they generally (i)
have higher yields than common stocks, but lower yields
than comparable non-convertible securities, (ii) are
less subject to fluctuation in value than the
underlying stock (or warrant) since they have fixed
income characteristics, and (iii) provide the potential
for capital appreciation if the market price of the
underlying common stock (or warrant) increases. A
convertible security may be subject to redemption at
the option of the issuer at a price established in the
convertible security's governing instrument. If a
convertible security held by the Fund is called for
redemption, the Fund will be required to permit the
issuer to redeem the security, convert it into the
underlying common stock (or warrant), or sell it to a
third party.
Non-diversification and Sector Concentration
While the Fund is "non-diversified," which means
that it is permitted to invest its assets in a more
limited number of issuers than other investment
companies, the Fund intends to diversify its assets to
qualify for tax treatment as a regulated investment
company under the Internal Revenue Code of 1986, as
amended ("Code"). To so qualify (i) not more than 25%
of the total value of the Fund's assets may be invested
in securities of any one issuer (other than U.S.
Government securities and the securities of other
regulated investment companies) or of any two or more
issuers controlled by the Fund, which, pursuant to the
regulations under the Code, may be deemed to be engaged
in the same, similar, or related trades or businesses,
and (ii) with respect to 50% of the total value of the
Fund's assets (a) not more than 5% of its total assets
may be invested in the securities of any one issuer
(other than U.S. Government securities and the
securities of other regulated investment companies) and
(b) the Fund may not own more than 10% of the
outstanding voting securities of any one issuer (other
than U.S. Government securities and the securities of
other regulated investment companies).
In addition, the Fund has adopted a fundamental
investment restriction which prohibits the Fund from
investing more than 25% of its total assets in
securities of companies in any one industry. An
industry is defined as a business-line subsector of a
stock-market sector. While the Fund may be heavily
invested in one single market sector like technology or
health care, for example, it will not invest more than
25% of its total assets in securities of companies in
any one industry. To the extent that a relatively high
percentage of the Fund's assets may be invested in the
securities of a limited number of companies, the Fund's
portfolio securities may be more susceptible to any
single economic, political, or regulatory occurrence
than the portfolio securities of a diversified
investment company.
Temporary Strategies
As described in the Prospectus under the heading
"Implementation of Policies and Risks," prior to
investing proceeds from sales of Fund shares, to meet
ordinary daily cash needs, and to retain the
flexibility to respond promptly to changes in market
and economic conditions, the Fund may hold cash and/or
invest up to 35% of its total assets in money market
instruments. The money market instruments which the
Fund may purchase include U.S. Government securities,
bank obligations, obligations of savings institutions,
fully insured certificates of deposit, commercial
paper, and securities issued by registered investment
companies holding themselves out as money market funds.
Such securities include:
U.S. Government Securities. Obligations issued or
guaranteed as to principal and interest by the United
States or its agencies (such as the Export-Import Bank
of the United States, Federal Housing Administration
and Government National Mortgage Association) or its
instrumentalities (such as the Federal Home Loan Bank),
including Treasury bills, notes, and bonds;
Bank Obligations. Obligations (including
certificates of deposit, bankers' acceptances,
commercial paper (see below) and other debt
obligations) of banks subject to regulation by the U.S.
Government and having total assets of $1 billion or
more, and instruments secured by such obligations, not
including obligations of foreign branches of domestic
banks;
<PAGE>
Obligations of Savings Institutions. Certificates
of deposit of savings banks and savings and loan
associations, having total assets of $1 billion or
more;
Fully Insured Certificates of Deposit.
Certificates of deposit of banks and savings
institutions, having total assets of less than $1
billion, if the principal amount of the obligation is
insured by the Bank Insurance Fund or the Savings
Association Insurance Fund (each of which is
administered by the Federal Deposit Insurance
Corporation), limited to $100,000 principal amount per
certificate and to 5% or less of the Fund's total
assets in all such obligations and in all illiquid
assets, in the aggregate;
Commercial Paper. Commercial paper rated Prime-1
or better by Moody's Investors Service, Inc.
("Moody's"), A-1 or better by Standard & Poor's
Corporation ("S&P"), Duff 2 or higher by Duff & Phelps,
Inc. ("D&P"), or Fitch 2 or higher by Fitch Investor
Services, Inc. ("Fitch"); and
Money Market Funds. Securities issued by
registered investment companies holding themselves out
as money market funds which attempt to maintain a
stable net asset value of $1.00 per share.
DIRECTORS AND OFFICERS
The directors and officers of Grand Prix Funds,
Inc. ("Corporation"), of which the Fund is a series,
together with information as to their principal
business occupations during the last five years, and
other information, are shown below. Each director who
is deemed an "interested person" as defined in the 1940
Act is indicated by an asterisk. Mr. Zuccaro has
served as a director and officer of the Corporation
since its inception on October 30, 1997. The other
directors and officers have served as such since
December 10, 1997.
*Robert Zuccaro, President and a Director of the
Corporation.
Mr. Zuccaro, 56 years old, received a Bachelor's
Degree from the University of Bridgeport in 1965 and a
Master's Degree in Business Administration from Pace
University in 1968. Prior to founding what is now
Target Holdings Corporation, doing business as Target
Investors, Inc. ("Advisor") in 1983, Mr. Zuccaro spent
six years with Axe-Houghton, where he was President and
Director of Axe-Houghton Stock Fund and Vice President
and Director of portfolio management of E.W. Axe & Co.
Mr. Zuccaro is a Chartered Financial Analyst.
Mr. Zuccaro's address is 15 River Road, Suite 220,
Wilton, Connecticut 06897.
*Phillipp Villhauer, Vice-President, Secretary and
a Director of the Corporation.
Mr. Villhauer, 33 years old, earned a Master's
Degree in Business Administration from Fordham
University in 1994. Prior to joining Advisor as a
portfolio manager/analyst in 1993, Mr. Villhauer was a
trader at Brown Brothers Harriman & Company and an
Assistant Vice-President Trader/Analyst at Gabelli &
Company, Inc.
Mr. Villhauer's address is 15 River Road, Suite
220, Wilton, Connecticut 06897.
*Mary Jane Boyle, Vice-President, Treasurer and a
Director of the Corporation.
Ms. Boyle, 53 years old, earned a Master's Degree
from the University of Bridgeport in 1971. Prior to co-
founding Advisor in 1983, where she serves as Vice-
President, Client Service, Ms. Boyle was a Regional
Sales Director with Mondessa Enterprises, Inc.
Ms. Boyle's address is 15 River Road, Suite 220,
Wilton, Connecticut 06897.
Edward F. Ronan, Jr., a Director of the Corporation.
Mr. Ronan, 46 years old, earned a B.S. in
accounting from the University of Bridgeport in 1977.
Mr. Ronan is a C.P.A. and a member of Actis-Grande,
Ronan, Carbone & Company, LLC, a certified public
accounting firm and has
<PAGE>
been with the firm since 1984.
Mr. Ronan served as a director of Q.E.P. Co., Inc., a
flooring tool manufacturer and distributor, from 1993
to 1998.
Mr. Ronan's address is 30 Main Street, Danbury,
Connecticut 06810.
Dennis K. Waldman, a Director of the Corporation.
Mr. Waldman, 44 years old, graduated from the
Massachusetts Institute of Technology in 1976 with a
Bachelor's of Science degree in aeronautical and
astronautical engineering and in electrical engineering
and in 1978 with a Master's of Science degree in
aeronautical and astronautical engineering. Since
1994, Mr. Waldman has served as Vice-President of Sales
for Strategic Information Associates, prior to which
time, Mr. Waldman worked at ITS as Vice-President of
Sales. From 1992 to 1994, Mr. Waldman was a sales
representative at Tartan where he was involved in
engineering sales.
Mr. Waldman's address is 62 Windsor Road, Waban,
Massachusetts 02168.
As of October 31, 1998, officers and directors of
the Corporation beneficially owned 52,723.65 shares of
common stock of the Fund's then outstanding shares.
Directors and officers of the Corporation who are also
officers, directors, employees, or shareholders of
Advisor do not receive any remuneration from the Fund
for serving as directors or officers. Accordingly,
Messrs. Zuccaro and Villhauer and Ms. Boyle do not
receive any remuneration from the Fund for their
services as directors and/or officers. The following
table provides information relating to compensation
paid to directors of the Corporation for their services
as such for fiscal 1998 (10 months):
Name Cash Other Total
Compensation Compensation
Edward F. Ronan, Jr. $250 $0 $250
Dennis K. Waldman $250 $0 $250
Each director who is not deemed an "interested
person" of the Fund, as defined in the 1940 Act,
receives $125 per meeting and reimbursement of
reasonable expenses. The Board held two meetings
during fiscal 1998 (10 months). Disinterested
directors may elect to receive their compensation in
the form of cash, shares of the Fund, or both.
PRINCIPAL SHAREHOLDERS
As of October 31, 1998, the following persons
owned of record or are known by the Fund to own of
record or beneficially 5% or more of the outstanding
shares of the Fund:
Name and Address No. Shares Percentage
Target Capital Management, Ltd. 50,000 45.2%
15 River Road, Suite 220
Wilton, Connecticut 06897
Robert Zuccaro, Custodian 50,000 45.2%
f/b/o Marc Zuccaro UTMA
38 Hunting Ridge
Wilton, Connecticut 06897
Based on the foregoing, as of October 31, 1998,
Target Capital Management, Ltd. and Robert Zuccaro,
Custodian for the benefit of Marc Zuccaro UTMA owned a
controlling interest in the Fund. Shareholders with a
controlling interest could effect the outcome of proxy
voting or the direction of management of the Fund.
<PAGE>
INVESTMENT ADVISOR
Target Holdings Corporation, d.b.a. Target
Investors, Inc. ("Advisor") is the investment advisor
to the Fund. The Advisor is controlled by Robert
Zuccaro who owns 80% of the Advisor.
The investment advisory agreement between the
Corporation and the Advisor dated as of December 31,
1997 ("Advisory Agreement") has an initial term of two
years and thereafter is required to be approved
annually by the Board of Directors of the Corporation
or by vote of a majority of the Fund's outstanding
voting securities (as defined in the 1940 Act). Each
annual renewal must also be approved by the vote of a
majority of the Corporation's directors who are not
parties to the Advisory Agreement or interested persons
of any such party, cast in person at a meeting called
for the purpose of voting on such approval. The
Advisory Agreement was approved by the Board of
Directors, including a majority of the disinterested
directors on December 10, 1997, and by the initial
shareholder on December 23, 1997. The Advisory
Agreement is terminable without penalty on 60 days'
written notice by the Board of Directors, by vote of a
majority of the Fund's outstanding voting securities,
or by the Advisor, and will terminate automatically in
the event of its assignment.
Under the terms of the Advisory Agreement, the
Advisor manages the Fund's investments and business
affairs, subject to the supervision of the Board of
Directors. At its expense, the Advisor provides office
space and all necessary office facilities, equipment,
and personnel for managing the investments of the Fund.
As compensation for its services, the Corporation pays
the Advisor an annual management fee of 1.00% of the
Fund's average daily net assets. The advisory fee is
accrued daily and paid monthly. The organizational
expenses of the Fund were advanced by the Advisor and
will be reimbursed by the Fund over a period of not
more than 60 months. The organizational expenses were
$79,558.
The Advisor has agreed to limit the total
operating expenses of the Fund (excluding interest,
taxes, brokerage and extraordinary expenses) to an
annual rate of 1.65% of the Fund's average net assets
until December 31, 1998. After such date, the Advisor
may from time to time voluntarily (but is not required
or obligated to) waive all or a portion of its fee
and/or absorb certain Fund expenses. Any waiver of
fees or absorption of expenses will be made on a
monthly basis and, with respect to the latter, will be
paid to the Fund by reduction of Advisor's fee. For
the fiscal period ended October 31, 1998, the Fund did
not pay an advisory fee to the Advisor because the
Advisor waived its entire advisory fee. If the Advisor
had not agreed to waive the advisory fee, the Advisor
would have received $10,435 for its investment advisory
services.
DISTRIBUTOR
Under a Distribution Agreement dated November 30,
1998, (the "Distribution Agreement"), AmeriPrime
Financial Securities, Inc. acts as the principal
distributor of the Fund's shares ("Distributor"). The
Distribution Agreement provides that the Distributor
will use its best efforts to distribute the Fund's
shares. The Fund's shares are offered for sale
continuously at net asset value per share plus a
maximum initial sales charge of 5.25% of the offering
price. Existing shareholders as of November 30, 1998,
are not subject to the sales charge on additional
purchases of Fund shares. In addition, no sales charge
is imposed on the reinvestment of dividends or capital
gains. Certain other exceptions to the imposition of
the sales charge apply, as discussed more fully in the
Prospectus under the caption "Your Account." These
exceptions are made available because minimal or no
sales effort is required with respect to the categories
of investors so excepted. The Distribution Agreement
is subject to the same termination and renewal
provisions as are described above with respect to the
Advisory Agreement, except that the Distribution
Agreement need not be approved by the Fund's
shareholders.
FUND TRANSACTIONS AND BROKERAGE
Under the Advisory Agreement, Advisor, in its
capacity as portfolio manager, is responsible for
decisions to buy and sell securities for the Fund and
for the placement of the Fund's securities business,
the negotiation of the commissions to be paid on such
transactions, and the allocation of portfolio brokerage
business. The Fund has no obligation to deal with any
particular broker or dealer; in executing transactions,
the Advisor seeks to obtain the best execution at the
best security price available with respect to each
transaction. The best price to the Fund means the best
net price without regard to the mix between purchase or
sale price and commission, if any. While the Advisor
seeks
<PAGE>
reasonably competitive commission rates, the Fund
does not necessarily pay the lowest available
commission. Brokerage may be allocated based on the
sale of the Fund's shares.
Section 28(e) of the Securities Exchange Act of
1934, as amended ("Section 28(e)"), permits an
investment advisor, under certain circumstances, to
cause an account to pay a broker or dealer who supplies
brokerage and research services a commission for
effecting a transaction in excess of the amount of
commission another broker or dealer would have charged
for effecting the transaction. Brokerage and research
services include (a) furnishing advice as to the value
of securities, the advisability of investing,
purchasing, or selling securities, and the availability
of securities or purchasers or sellers of securities;
(b) furnishing analyses and reports concerning issuers,
industries, sectors, securities, economic factors and
trends, portfolio strategy, and the performance of
accounts; and (c) effecting securities transactions and
performing functions incidental thereto (such as
clearance, settlement, and custody).
In selecting brokers or dealers, Advisor considers
investment and market information and other research,
such as economic, securities, and performance
measurement research provided by such brokers or
dealers and the quality and reliability of brokerage
services, including execution capability, performance,
and financial responsibility. Accordingly, the
commissions charged by any such broker or dealer may be
greater than the amount another firm might charge if
Advisor determines in good faith that the amount of
such commissions is reasonable in relation to the value
of the research information and brokerage services
provided by such broker or dealer to the Fund. Advisor
believes that the research information received in this
manner provides the Fund with benefits by supplementing
the research otherwise available to the Fund. Such
higher commissions will not be paid by the Fund unless
(a) Advisor determines in good faith that the amount is
reasonable in relation to the services in terms of the
particular transaction or in terms of Advisor's overall
responsibilities with respect to the accounts,
including the Fund, as to which it exercises investment
discretion; (b) such payment is made in compliance with
the provisions of Section 28(e) and other applicable
state and federal laws; and (c) in the opinion of
Advisor, the total commissions paid by the Fund will be
reasonable in relation to the benefits to the Fund over
the long term. The aggregate amount of brokerage
commissions paid by the Fund for the fiscal period
ended October 31, 1998 was $10,048.
Advisor places portfolio transactions for other
advisory accounts in addition to the Fund. Research
services furnished by firms through which the Fund
effects its securities transactions may be used by
Advisor in servicing all of its accounts; not all of
such services may be used by Advisor in connection with
the Fund. Advisor believes it is not possible to
measure separately the benefits from research services
to each of the accounts (including the Fund) managed by
it. Because the volume and nature of the trading
activities of the accounts are not uniform, the amount
of commissions in excess of those charged by another
broker or dealer paid by each account for brokerage and
research services will vary. However, Advisor believes
such costs to the Fund will not be disproportionate to
the benefits received by the Fund on a continuing
basis. Advisor seeks to allocate portfolio
transactions equitably whenever concurrent decisions
are made to purchase or sell securities by the Fund and
another advisory account. In some cases, this
procedure could have an adverse effect on the price or
the amount of securities available to the Fund. There
can be no assurance that a particular purchase or sale
opportunity will be allocated to the Fund. In making
such allocations between the Fund and other advisory
accounts, certain factors considered by Advisor are the
respective investment objectives, the relative size of
portfolio holdings of the same or comparable
securities, the availability of cash for investment,
and the size of investment commitments generally held.
The Fund's portfolio turnover rate for the fiscal
period ended October 31, 1998 was 573.8%. The Fund
anticipates that its annual portfolio turnover rate
will be between 300 and 500% but generally will not
exceed 800%. The annual portfolio turnover rate
indicates changes in the Fund's securities holdings;
for instance, a rate of 100% would result if all the
securities in a portfolio (excluding securities whose
maturities at acquisition were one year or less) at the
beginning of an annual period had been replaced by the
end of the period. The turnover rate may vary from
year to year, as well as within a year, and may be
affected by portfolio sales necessary to meet cash
requirements for redemptions of the Fund's shares.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT
As custodian of the Fund's assets, Fifth Third
Bank ("Fifth Third"), 38 Fountain Square Plaza,
Cincinnati, Ohio 45263, has custody of all securities
and cash of the Fund, delivers and receives payment for
portfolio securities sold, receives and pays for
portfolio securities purchased, collects income from
investments, if any, and performs other duties, all as
directed by the officers of the Corporation. Sunstone
Investor Services, LLC ("Sunstone"), 207 East
<PAGE>
Buffalo
Street, Suite 315, Milwaukee, Wisconsin 53202-5712,
acts as transfer agent and dividend-disbursing agent
for the Fund.
PLAN OF DISTRIBUTION
Distribution and Shareholder Servicing Plan
As described more fully in the Prospectus under
the heading "Distribution and Shareholder Servicing
Plan," the Fund has adopted a plan pursuant to Rule 12b-
1 under the 1940 Act ("Plan") with respect to which
certain distribution and shareholder servicing fees may
be paid to registered securities dealers, financial
institutions, or other persons ("Recipients") who
render assistance in distributing or promoting the sale
of Fund shares, or who provide certain shareholder
services to Fund shareholders, pursuant to a written
agreement ("Rule 12b-1 Related Agreement"). Under the
terms of the Plan, the Fund may be required to pay the
Recipients a fee of up to 0.25% of the average daily
net assets to finance activities primarily intended to
result in the sale of Fund shares. The Plan is a
"reimbursement" plan, which means that the fees paid by
the Fund under the Plan are intended as reimbursement
for services rendered and commission fees borne up to
the maximum allowable distribution and shareholder
servicing fees. If more money for services rendered
and commission fees is due than is immediately payable
because of the expense limitation under the Plan, the
unpaid amount is carried forward from period to period
while the Plan is in effect until such time as it may
be paid. No interest, carrying, or other finance
charges will be borne by the Fund with respect to
unpaid amounts carried forward.
Anticipated Benefits to the Fund
The Board of Directors of the Corporation
considered various factors in connection with its
decision to continue the Plan, including: (a) the
nature and causes of the circumstances which make
continuation of the Plan necessary and appropriate; (b)
the way in which the Plan would address those
circumstances, including the nature and potential
amount of expenditures; (c) the nature of the
anticipated benefits; (d) the merits of possible
alternative plans or pricing structures; and (e) the
possible benefits of the Plan to any other person
relative to those of the Fund.
Based upon its review of the foregoing factors and
the material presented to it, and in light of its
fiduciary duties under relevant state law and the 1940
Act, the Board of Directors determined, in the exercise
of its business judgment, that the Plan was reasonably
likely to benefit the Fund and its shareholders in at
least one or several potential ways. Specifically, the
Board concluded that any Recipients operating under
Rule 12b-1 Related Agreements would have little or no
incentive to incur promotional expenses on behalf of
the Fund if a Rule 12b-1 plan were not in place to
reimburse them, thus making the adoption of the Plan
important to the initial success and thereafter,
continued viability of the Fund. In addition, the
Board determined that the payment of Rule 12b-1 fees to
these persons should motivate them to provide an
enhanced level of service to Fund shareholders, which
would, of course, benefit such shareholders. Finally,
the adoption of the Plan would help to increase net
assets under management in a relatively short amount of
time, given the marketing efforts on the part of the
Recipients to sell Fund shares, which should result in
certain economies of scale.
While there is no assurance that the expenditure
of Fund assets to finance distribution of Fund shares
will have the anticipated results, the Board of
Directors believes there is a reasonable likelihood
that one or more of such benefits will result, and
since the Board will be in a position to monitor the
distribution and shareholder servicing expenses of the
Fund, it will be able to evaluate the benefit of such
expenditures in deciding whether to continue the Plan.
Amounts Expensed Under the Plan
For the fiscal period ended October 31, 1998, the
Fund incurred $2,609 under the Plan, all of which was
spent on printing and mailing prospectuses to other
than current shareholders.
<PAGE>
TAXES
As indicated under "Dividends, Capital Gain
Distributions and Tax Treatment" in the Prospectus, the
Fund intends to qualify annually as a "regulated
investment company" under the Code. This qualification
does not require government supervision of the Fund's
management practices or policies.
A dividend or capital gains distribution received
shortly after the purchase of shares reduces the net
asset value of shares by the amount of the dividend or
distribution and, although in effect a return of
capital, will be subject to income taxes. Net gains on
sales of securities when realized and distributed are
taxable as capital gains. If the net asset value of
shares were reduced below a shareholder's cost by
distribution of gains realized on sales of securities,
such distribution would be a return of investment
although taxable as indicated above.
DETERMINATION OF NET ASSET VALUE
As set forth in the Prospectus under the same
heading, the Fund's net asset value will be determined
as of the close of trading on each day the New York
Stock Exchange ("NYSE") is open for trading. The Fund
does not determine net asset value on days the NYSE is
closed and at other times described in the Prospectus.
The NYSE is closed on New Year's Day, Martin Luther
King, Jr. Day, President's Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day. Additionally, if any of these holidays
falls on a Saturday, the NYSE will not be open for
trading on the preceding Friday and when such holiday
falls on a Sunday, the NYSE will not be open for
trading on the succeeding Monday, unless unusual
business conditions exist, such as the ending of a
monthly or the yearly accounting period.
REDEMPTION IN KIND
The Fund has filed a Notification under Rule 18f-1
under the 1940 Act, pursuant to which it has undertaken
to pay in cash all requests for redemption by any
shareholder of record, limited in amount with respect
to each shareholder during any 90-day period to the
lesser amount of (i) $250,000, or (ii) 1% of the Fund's
net asset value being redeemed, valued at the beginning
of such election period. The Fund intends to also pay
redemption proceeds in excess of such lesser amount in
cash, but reserves the right to pay such excess amount
in kind, if it is deemed to be in the best interest of
the Fund to do so. Investors receiving an in kind
distribution are advised that they will likely incur a
brokerage charge on the disposition of such securities
through a securities dealer.
SHAREHOLDER MEETINGS
Maryland law permits registered investment
companies, such as the Corporation, to operate without
an annual meeting of shareholders under specified
circumstances if an annual meeting is not required by
the 1940 Act. The Corporation has adopted the
appropriate provisions in its Bylaws and may, at its
discretion, not hold an annual meeting in any year in
which the election of directors is not required to be
acted on by shareholders under the 1940 Act.
PERFORMANCE INFORMATION
As described in the "Fund Performance" section of
the Fund's Prospectus, the Fund's historical
performance or return may be shown in the form of
various performance figures. The Fund's performance
figures are based upon historical results and are not
necessarily representative of future performance.
Factors affecting the Fund's performance include
general market conditions, operating expenses, and
investment management.
Total Return
The average annual total return of the Fund is
computed by finding the average annual compounded rates
of return over the periods that would equate the
initial amount invested to the ending redeemable value,
according to the following formula:
<PAGE>
P(1+T)n = ERV
P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a
hypothetical $1,000 payment made at
the beginning of the stated periods at
the end of the stated periods.
Performance for a specific period is calculated by
first taking an investment (assumed to be $1,000)
("initial investment") on the first day of the period
and computing the "ending value" of that investment at
the end of the period. The total return percentage is
then determined by subtracting the initial investment
from the ending value and dividing the remainder by the
initial investment and expressing the result as a
percentage. The calculation assumes that all income
and capital gains dividends paid by the Fund have been
reinvested at the Fund's net asset value on the
reinvestment dates during the period. Total return may
also be shown as the increased dollar value of the
hypothetical investment over the period.
Cumulative total return represents the simple
change in value of an investment over a stated period
and may be quoted as a percentage or as a dollar
amount. Total returns may be broken down into their
components of income and capital (including capital
gains and changes in share price) in order to
illustrate the relationship between these factors and
their contributions to total return.
Comparisons
From time to time, in marketing and other Fund
literature, the Fund's performance may be compared to
the performance of other mutual funds in general or to
the performance of particular types of mutual funds
with similar investment goals, as tracked by
independent organizations. Among these organizations,
Lipper Analytical Services, Inc. ("Lipper"), a widely
used independent research firm which ranks mutual funds
by overall performance, investment objectives, and
assets, may be cited. Lipper performance figures are
based on changes in net asset value, with all income
and capital gains dividends reinvested. Such
calculations do not include the effect of any sales
charges imposed by other mutual funds. The Fund will
be compared to Lipper's appropriate fund category, that
is, by fund objective and portfolio holdings.
The Fund's performance may also be compared to the
performance of other mutual funds by Morningstar, Inc.
("Morningstar"), which ranks funds on the basis of
historical risk and total return. Morningstar's
rankings range from five stars (highest) to one star
(lowest) and represent Morningstar's assessment of the
historical risk level and total return of a fund as a
weighted average for 3, 5, and 10 year periods.
Rankings are not absolute or necessarily predictive of
future performance.
Evaluations of the Fund's performance made by
independent sources may also be used in advertisements
concerning the Fund, including reprints of or
selections from, editorials or articles about the Fund.
Sources for Fund performance and articles about the
Fund may include publications such as Money, Forbes,
Kiplinger's, Financial World, Business Week, U.S. News
and World Report, the Wall Street Journal, Barron's,
and a variety of investment newsletters.
The Fund may compare its performance to a wide
variety of indices and measures of inflation. There
are differences and similarities between the
investments that the Fund may purchase and the
investments measured by these indices.
Investors may want to compare the Fund's
performance to that of certificates of deposit offered
by banks and other depository institutions.
Certificates of deposit may offer fixed or variable
interest rates and principal is guaranteed and may be
insured. Withdrawal of the deposits prior to maturity
normally will be subject to a penalty. Rates offered
by banks and other depository institutions are subject
to change at any time specified by the issuing
institution.
<PAGE>
Investors may also want to compare the Fund's
performance to that of money market funds. Money
market fund yields will fluctuate and shares are not
insured, but share values usually remain stable.
INDEPENDENT AUDITORS
Ernst & Young LLP, 111 East Kilbourn Avenue,
Milwaukee, Wisconsin 53202, independent auditors for
the Fund, audit and report on the Fund's financial
statements.
FINANCIAL STATEMENTS
The following audited financial statements of the
Fund are contained herein:
(a) Report of Independent Auditors dated
December 23, 1997.
(b) Statement of Assets and Liabilities dated
December 23, 1997.
(c) Notes to Statement of Assets and Liabilities dated
December 23, 1997.
In addition, the unaudited financial
statements and related notes contained in the
Corporation's Semi-Annual Report for the period
ended April 30, 1998, which may be obtained
without charge by calling or writing to the Fund,
are incorporated herein by reference.
<PAGE>
Report of Independent Auditors
To the Shareholder and
Board of Directors of
Grand Prix Funds, Inc.
We have audited the accompanying statement of assets
and liabilities of the Grand Prix Fund, comprising the
Grand Prix Funds, Inc. (the "Fund"), as of December 23,
1997. This statement of assets and liabilities is the
responsibility of the Fund's management. Our
responsibility is to express an opinion on this
statement of assets and liabilities based on our audit.
We conducted our audit in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the statement of assets and
liabilities is free of material misstatement. An audit
includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement
of assets and liabilities. An audit also includes
assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall statement of assets and
liabilities presentation. We believe that our audit of
the statement of assets and liabilities provides a
reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities
referred to above presents fairly, in all material
respects, the financial position of the Grand Prix Fund
at December 23, 1997, in conformity with generally
accepted accounting principles.
/s/ ERNST & YOUNG LLP
Milwaukee, Wisconsin
December 23, 1997
<PAGE>
Grand Prix Funds, Inc.
Grand Prix Fund
Statement of Assets and Liabilities
December 23, 1997
Assets:
Cash $100,000
Unamortized organization costs 80,750
Total assets 180,750
Liabilities:
Accrued organization costs $40,500
Payable to adviser 40,250
Total liabilities $80,750
Net assets $100,000
Represented by:
Capital stock, $0.01 par value (500,000,000 shares
authorized and 10,000 shares outstanding) $100
Additional paid-in capital 99,900
Net Assets $100,000
Offering price, redemption price and
net asset value per share (based
on 10,000 shares of capital stock) $10.00
See accompanying notes to Statement of Assets and Liabilities.
<PAGE>
Grand Prix Funds, Inc.
Notes to Statement of Assets and Liabilities
December 23, 1997
(1) Organization
Grand Prix Funds, Inc. ("Grand Prix") was organized
on October 29, 1997 as a Maryland Corporation and
is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end
investment company issuing its shares in series,
each series representing a distinct portfolio with
its own investment objectives and policies. The
only series presently authorized is the Grand Prix
Fund (the "Fund"). The Fund has had no operations
other than those relating to organizational
matters, including the sale of 10,000 shares to
capitalize the Fund for cash in the amount of
$100,000.
(2)Significant Accounting Policies
(a)Organization Costs
Costs incurred by the Fund in connection with
its organization, registration and the initial
public offering of shares have been deferred
and will be amortized over the period of
benefit, but not to exceed five years from the
date upon which the Fund commenced its
investment activities. If any of the original
shares of the Fund purchased by the initial
shareholder are redeemed by any holder thereof
prior to the end of the amortization period,
the redemption proceeds will be reduced by the
pro rata share of the unamortized costs as of
the date of redemption. The pro rata share by
which the proceeds are reduced will be derived
by dividing the number of original shares of
the Fund being redeemed by the total number of
original shares outstanding at the time of
redemption.
(b)Federal Income Taxes
The Fund intends to comply with the
requirements of the Internal Revenue Code
necessary to qualify as a regulated investment
company and to make the requisite distributions
of income to its shareholders which will be
sufficient to relieve it from all or
substantially all federal income taxes.
<PAGE>
(3) Investment Adviser
The Fund has an agreement with Target Holdings
Corporation d/b/a Target Investors (the "Adviser")
to furnish investment advisory services to the
Fund. Under the terms of this agreement, the
Adviser is compensated at 1.00% of average daily
net assets of the Fund. The Adviser has agreed to
reduce its fees and/or reimburse the Fund's
expenses (exclusive of brokerage, interest, taxes
and extraordinary expenses) that exceed the annual
expense limitation of 1.65% of average daily net
assets until December 31, 1998.
(4)Administrator
Sunstone Financial Group, Inc. (the
"Administrator") acts as Administrator for the
Fund. As compensation for its administrative
services and the assumption of certain
administrative expenses, the Administrator is
entitled to a fee computed daily and payable
monthly, at an annual rate of 0.20% and decreasing
as the assets of the Fund reach certain levels,
subject to an annual minimum of $65,000, plus out-
of-pocket expenses. The minimum annual fee is
subject to an automatic annual escalation of 6%.
The Administrator may periodically volunteer to
reduce all or a portion of its administrative fee
with respect to the Fund. These waivers may be
terminated at any time at the Administrator's
discretion. The Administrator may not seek
reimbursement of such voluntarily reduced fees at a
later date. The reduction of such fee will cause
the yield of the Fund to be higher than it would be
in the absence of such reduction.
(5)Capital Stock
Grand Prix is authorized to issue Five Hundred
Million (500,000,000) shares of common stock with a
par value of one cent ($0.01). The Board of
Directors is empowered to issue other series of
Grand Prix shares without shareholder approval.
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements (included or
incorporated by reference in Parts A and B)
Report of Independent Auditors dated
December 23, 1997.
Statement of Assets and Liabilities
dated December 23, 1997.
Notes to Statement of Assets and
Liabilities dated December 23, 1997.
Schedule of Investments as of April 30,
1998 (unaudited).
Statement of Assets and Liabilities
dated April 30, 1998 (unaudited).
Statement of Operations for the period
ended April 30, 1998 (unaudited).
Statement of Change in Net Assets for
the period ended April 30, 1998 (unaudited).
Financial Highlights for the period
ended April 30, 1998 (unaudited).
Notes to the Financial Statements for
the period ended April 30, 1998.
(b) Exhibits
(1.1) Registrant's Articles of Incorporation (1)
(1.2) Amendment to Registrant's Articles
of Incorporation (2)
(2) Registrant's By-Laws (1)
(3) None
(4) None
(5) Investment Advisory Agreement (2)
(6.1) Distribution Agreement
(6.2) Form of Dealer Agreement
(7) None
(8) Custodian Agreement (2)
(9.1) Transfer Agency Agreement (2)
(9.2) Administration and Fund Accounting Agreement (2)
(10) Opinion and Consent of Godfrey & Kahn, S.C. (2)
(11) Consent of Ernst & Young LLP
<PAGE>
(12) None
(13) Subscription Agreement (3)
(14.1) Individual Retirement Custodial
Account - Traditional
(14.2) Individual Retirement Custodial
Account - Roth
(15.1) Rule 12b-1 Distribution and
Shareholder Servicing Plan (2)
(15.2) Form of 12b-1 Related Agreement (2)
(15.3) Rule 12b-1 Distribution and
Shareholder Servicing Plan, as amended
November 1, 1998
(15.4) Form of Rule 12b-1 Related
Agreement, as amended
(16) None
(17) Financial Data Schedule (4)
(18) None
(19) Powers of Attorney for Directors and
Officers (see signature page)
__________________
(1) Incorporated by reference to Registrant's Form
N-1A as filed with the Commission on October 31,
1997.
(2) Incorporated by reference to Registrant's Pre-
Effective Amendment No. 1 as filed with the
Commission on December 23, 1997.
(3) Incorporated by reference to Registrant's Pre-
Effective Amendment No. 2 as filed with the
Commission on December 30, 1997.
(4) Incorporated by reference to Registrant's Semi-
Annual Report for the period ended April 30, 1998,
as filed with the Commission on June 26, 1998.
Item 25. Persons Controlled by or under Common Control
with Registrant
Registrant neither controls any person nor is
under common control with any other person.
Item 26. Number of Holders of Securities
Number of Record Holders
Title of Securities as of October 31, 1998
Common Stock, $.01 par value 15
Item 27. Indemnification
Article 6.4 of Registrant's Articles of
Incorporation provides as follows:
The Corporation shall indemnify (a) its Directors
and officers, whether serving the Corporation or at its
request any other entity, to the full extent required
by (i) Maryland law now or hereafter in force,
including the advance of expenses under the procedures
and to the full extent permitted by law, and (ii) the
Investment Company Act of 1940, as amended, and (b)
other employees and agents to such extent as shall be
authorized by the Board of Directors and be permitted
by law. The foregoing rights of indemnification shall
not be exclusive of any other rights to which those
seeking indemnification may be entitled. The Board of
Directors may take such action as is necessary to carry
out these
<PAGE>
indemnification provisions and is expressly
empowered to adopt, approve and amend from time to time
such resolutions or contracts implementing such
provisions or such further indemnification arrangements
as may be permitted by law.
Item 28. Business and Other Connections of Investment
Advisor
Besides serving as investment advisor to private
accounts, the Advisor is not currently and has not
during the past two fiscal years engaged in any other
business, profession, vocation, or employment of a
substantial nature. Information regarding the
business, profession, vocation, or employment of a
substantial nature of Advisor's directors and officers
is hereby incorporated by reference from the
information contained under "Fund Organization and
Management - Management" in the Prospectus.
Item 29. Principal Underwriters
(a) The Distributor also acts as distributor for
The Rockland Funds Trust, The Kenwood Funds
and AmeriPrime Funds.
(b) The principal business address of AmeriPrime
Financial Securities, Inc., the Registrant's
principal underwriter, is 1793 Kingswood
Drive, Suite 200, Southlake, Texas 76092.
The following information relates to each
officer and director of the Distributor:
Positions and Offices Position and
with Offices
Name Underwriter with
Registrant
Ken Trumpfheller President None
(c) None.
Item 30. Location of Accounts and Records
All accounts, books or other documents required to
be maintained by Section 31(a) of the Investment
Company Act of 1940, as amended, and the rules
promulgated thereunder are in the possession of Target
Holdings Corporation, doing business as Target
Investors, Inc., Registrant's investment advisor, at
Registrant's corporate offices, except (1) records held
and maintained by Fifth Third Bank, 38 Fountain Square
Plaza, Cincinnati, Ohio 45263, relating to its function
as custodian, (2) records held and maintained by
Sunstone Investor Services, LLC, 207 East Buffalo
Street, Suite 315, Milwaukee, Wisconsin 53202-5712,
relating to its function as transfer agent, and (3)
records held and maintained by Sunstone Financial
Group, Inc., 207 East Buffalo Street, Suite 400,
Milwaukee, Wisconsin 53202, relating to its function as
administrator and fund accountant.
Item 31. Management Services
All management-related service contracts entered
into by Registrant are discussed in Parts A and B of
this Registration Statement.
Item 32. Undertakings.
Registrant undertakes to call a meeting of
shareholders, if requested to do so by the holders of
at least 10% of the Registrant's outstanding shares,
for the purpose of voting upon the question of removal
of a director or directors. Registrant also undertakes
to assist in communications with other shareholders as
required by Section 16(c) of the 1940 Act.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act
of 1933 and the Investment Company Act of 1940, the
Registrant has duly caused this Post-Effective
Amendment No. 2 to the Registration Statement on Form N-
1A to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Wilton and
State of Connecticut on the 25th day of November, 1998.
GRAND PRIX FUNDS, INC.
(Registrant)
By:/s/ Robert Zuccaro
---------------------
Robert Zuccaro
President
Each person whose signature appears below
constitutes and appoints Robert Zuccaro, his true and
lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to
sign any and all post-effective amendments to this
Registration Statement and to file the same, with all
exhibits thereto, and any other documents in connection
therewith, with the Securities and Exchange Commission
and any other regulatory body, granting unto said
attorney-in-fact and agent, full power and authority to
do and perform each and every act and thing requisite
and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact
and agent, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act
of 1933, this Post-Effective Amendment No. 2 to the
Registration Statement on Form N-1A has been signed
below by the following persons in the capacities and on
the date(s) indicated.
Name Title Date
/s/ Robert Zuccaro President and a November 25, 1998
- ------------------- Director
Robert Zuccaro
/s/ Phillipp Villhauer Vice President, November 25, 1998
- ---------------------- Secretary and a
Phillipp Villhauer Director
/s/ Mary Jane Boyle Vice President, November 25, 1998
- --------------------- Treasurer and a
Mary Jane Boyle Director
/s/ Edward F. Ronan, Jr. Director November 20, 1998
- -----------------------
Edward F. Ronan, Jr.
- ----------------------- Director
Dennis K. Waldman
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
(1.1) Registrant's Articles of Incorporation
(previously filed as Exhibit 1 to Registrant's
Form N-1A)
(1.2) Amendment to Registrant's Articles
of Incorporation (previously filed as Exhibit
1.2 to Registrant's Pre-Effective Amendment
No. 1 to Registrant's Form N-1A, File Nos.
333-39133 and 811-8461)
(2) Registrant's By-Laws (previously filed as
Exhibit 2 to Registrant's Form N-1A)
(3) None
(4) None
(5) Investment Advisory Agreement
(previously filed as Exhibit 5 to
Registrant's Pre-Effective Amendment No. 1 to
Registrant's Form N-1A, File Nos. 333-39133
and 811-8461)
(6.1) Distribution Agreement
(6.2) Form of Dealer Agreement
(7) None
(8) Custodian Agreement (previously filed as
Exhibit 8 to Registrant's Pre-Effective
Amendment No. 1 to Registrant's Form N-1A,
File Nos. 333-39133 and 811-8461)
(9.1) Transfer Agency Agreement
(previously filed as Exhibit 9.1 to
Registrant's Pre-Effective Amendment No. 1 to
Registrant's Form N-1A, File Nos. 333-39133
and 811-8461)
(9.2) Administration and Fund Accounting
Agreement (previously filed as Exhibit 9.2 to
Registrant's Pre-Effective Amendment No. 1 to
Registrant's Form N-1A, File Nos. 333-39133
and 811-8461)
(10) Opinion and Consent of Godfrey & Kahn,
S.C. (previously filed as Exhibit 10 to
Registrant's Pre-Effective Amendment No. 1 to
Registrant's Form N-1A, File Nos. 333-39133
and 811-8461)
(11) Consent of Ernst & Young LLP
(12) None
(13) Subscription Agreement (previously filed
as Exhibit 13 to Registrant's Pre-Effective
Amendment No. 2 to Registrant's Form N-1A,
File Nos. 333-39133 and 811-8461)
(14.1) Individual Retirement Custodial Account -
Traditional
(14.2) Individual Retirement Custodial Account -
Roth
(15.1) Rule 12b-1 Distribution and
Shareholder Servicing Plan (previously filed
as Exhibit 15.1 to Registrant's Pre-Effective
Amendment No. 1 to Registrant's Form N-1A,
File Nos. 333-39133 and 811-8461)
(15.2) Form of 12b-1 Related Agreement
(previously filed as Exhibit 15.2 to
Registrant's Pre-Effective Amendment No. 1 to
Registrant's Form N-1A, File Nos. 333-39133
and 811-8461)
<PAGE>
(15.3) Rule 12b-1 Distribution and Shareholder
Servicing Plan, as amended November 1, 1998
(15.4) Form of Rule 12b-1 Related Agreement, as
amended
(16) None
(17) Financial Data Schedule (previously
filed as Exhibit 27 to Registrant's Semi-
Annual Report for the period ended April 30,
1998, File Nos. 333-39133 and 811-8461)
(18) None
(19) Powers of Attorney for Directors and Officers
(see signature page)
GRAND PRIX FUNDS, INC.
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (the "Agreement") is
made as of the 30th day of
November, 1998 by and among Grand Prix Funds, Inc. (the
"Fund"), a Maryland corporation, Target Holdings
Corporation, doing business as Target Investors (the
"Adviser"), a Florida corporation, and AmeriPrime
Financial Securities, Inc. (the "Distributor"), a Texas
corporation.
WITNESSETH THAT:
WHEREAS, the Fund is registered as an open-end
management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act") and
has registered its shares of common stock (the
"Shares") under the Securities Act of 1933, as amended
(the "1933 Act") in one or more distinct series of
Shares (the "Portfolio" or "Portfolios");
WHEREAS, the Adviser has been appointed investment
adviser to the Fund;
WHEREAS, the Distributor is a broker-dealer
registered with the U.S. Securities and Exchange
Commission (the "SEC") and a member in good standing of
the National Association of Securities Dealers, Inc.
(the "NASD");
WHEREAS, the Fund has adopted a plan of
distribution (the "Distribution Plan") pursuant to Rule
12b-1 under the 1940 Act relating to the payment by the
Fund of distribution expenses; and
WHEREAS, the Fund, the Adviser and the Distributor
desire to enter into this Agreement pursuant to which
the Distributor will provide distribution services to
the Portfolios of the Fund identified on Schedule A, as
may be amended from time to time, on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises
and mutual covenants contained in this Agreement, the
Fund, the Adviser and the Distributor, intending to be
legally bound hereby, agree as follows:
1. APPOINTMENT OF DISTRIBUTOR. The Fund hereby
appoints the Distributor as its exclusive agent for the
distribution of the Shares, and the Distributor hereby
accepts such appointment under the terms of this
Agreement. The Fund shall not sell any Shares to any
person except to fill orders for the Shares received
through the Distributor; provided, however, that the
foregoing exclusive right shall not apply: (i) to
Shares issued or sold in connection with the merger or
consolidation of any other investment company with the
Fund or the acquisition by purchase or otherwise of all
or substantially all of the assets of any investment
company or substantially all of the outstanding shares
of any such company by the Fund; (ii) to Shares which
may be offered by the Fund to its shareholders for
reinvestment of cash distributed from capital gains
or net investment income of the Fund; or (iii) to
Shares which may be issued to shareholders of other
funds who exercise any exchange privilege set forth in
the Fund's Prospectus, or (iv) to Shares which may be
sold to persons purchasing Shares directly from the
Fund or the Fund's Transfer Agent. Notwithstanding any
other provision hereof, the Fund may terminate,
suspend, or withdraw the offering of the Shares
whenever, in its sole discretion, it deems such action
to be desirable, and the Distributor shall process no
further orders for Shares after it receives notice of
such termination, suspension or withdrawal.
2. FUND DOCUMENTS. The Fund has provided the
Distributor with properly certified or authenticated
copies of the following Fund related documents in
effect on the date hereof: the Fund's organizational
documents, including Articles of Incorporation and By-
Laws; the Fund's Registration Statement on Form N-1A,
including all exhibits thereto; the Fund's most current
Prospectus and Statement of Additional Information; and
resolutions of the Fund's Board of Directors
authorizing the appointment of the Distributor and
approving this Agreement. The Fund shall promptly
provide to the Distributor copies, properly certified
or authenticated, of all amendments or supplements to
the foregoing. The Fund shall provide to the
Distributor copies of all other information which the
Distributor may reasonably request for use in
connection with the distribution of Shares, including,
but not limited to, a certified copy of all financial
statements prepared for the Fund by its independent
public accountants. The Fund shall also supply the
Distributor with such number of copies of the current
Prospectus, Statement of Additional Information and
shareholder reports as the Distributor shall reasonably
request.
3. DISTRIBUTION SERVICES. The Distributor shall
sell and repurchase Shares as set forth below, subject
to the registration requirements of the 1933 Act and
the rules and regulations thereunder, and the laws
governing the sale of securities in the various states
("Blue Sky Laws"):
a. The Distributor, as agent for the Fund,
shall sell Shares to the public against orders therefor
at the public offering price, which shall be the net
asset value of the Shares then in effect plus any
applicable sales loads.
b. The net asset value of the Shares shall be
determined in the manner provided in the then current
Prospectus and Statement of Additional Information.
The net asset value of the Shares shall be calculated
by the Fund or by another entity on behalf of the Fund.
The Distributor shall have no duty to inquire into or
liability for the accuracy of the net asset value per
Share as calculated.
c. Upon receipt of purchase instructions, the
Distributor shall transmit such instructions to the
Fund or its transfer agent for registration of the
Shares purchased.
d. The Distributor, in light of Fund policies,
procedures and disclosure documents, shall also have
the right to take, as agent for the Fund, all actions
which, in the Distributor's judgment, are necessary to
effect the distribution of Shares.
e. Nothing in this Agreement shall prevent the
Distributor or any "affiliated person" from buying,
selling or trading any securities for its or their own
account or for the accounts of others for whom it or
they may be acting; provided, however, that the
Distributor expressly agrees that it shall not for its
own account purchase any Shares of the Fund except for
investment purposes and that it shall not for its own
account sell any such Shares except for redemption of
such Shares by the Fund, and that it shall not
undertake activities which, in its judgment, would
adversely affect the performance of its obligations to
the Fund under this Agreement.
f. The Distributor, as agent for the Fund,
shall repurchase Shares at such prices and upon such
terms and conditions as shall be specified in the
Prospectus.
4. DISTRIBUTION SUPPORT SERVICES. In addition to
the sale and repurchase of Shares, the Distributor
shall perform the distribution support services set
forth on Schedule B attached hereto, as may be amended
from time to time. Such distribution support services
shall include: Review of sales and marketing literature
and submission to the NASD; NASD record keeping; and
quarterly reports to the Fund's Board of Directors.
Such distribution support services may also include:
fulfillment services, including telemarketing,
printing, mailing and follow-up tracking of sales
leads; and licensing Adviser or Fund personnel as
registered representatives of the Distributor and
related supervisory activities.
5. REASONABLE EFFORTS. The Distributor shall use
all reasonable efforts in connection with the
distribution of Shares. The Distributor shall have no
obligation to sell any specific number of Shares and
shall only sell Shares against orders received
therefor. The Fund shall retain the right to refuse at
any time to sell any of its Shares for any reason
deemed adequate by it.
6. COMPLIANCE. In furtherance of the distribution
services being provided hereunder, the Distributor and
the Fund agree as follows:
a. The Distributor shall comply with the
Rules of Fair Practice of the NASD and the securities
laws of any jurisdiction in which it sells, directly or
indirectly, Shares.
b. The Distributor shall require each
dealer with whom the Distributor has a selling
agreement to conform to the applicable provisions of
the Fund's most current Prospectus and Statement of
Additional Information, with respect to the public
offering price of the Shares.
c. The Fund agrees to furnish to the
Distributor sufficient copies of any agreements, plans,
communications with the public or other materials it
intends to use in connection with any sales of Shares
in a timely manner in order to allow the Distributor to
review, approve and file such materials with the
appropriate regulatory authorities and obtain clearance
for use. The Fund agrees not to use any such materials
until so filed and cleared for use by appropriate
authorities and the Distributor.
d. The Distributor, at its own expense,
shall qualify as a broker or dealer, or otherwise,
under all applicable Federal or state laws required to
permit the sale of Shares in such states as shall be
mutually agreed upon by the parties.
e. The Distributor shall not, in
connection with any sale or solicitation of a sale of
the Shares, or make or authorize any representative,
service organization, broker or dealer to make, any
representations concerning the Shares except those
contained in the Fund's most current Prospectus
covering the Shares and in communications with the
public or sales materials approved by the Distributor
as information supplemental to such Prospectus.
7. EXPENSES. Expenses shall be allocated as
follows:
a. The Fund shall bear the following
expenses: preparation, setting in type, and printing of
sufficient copies of the Prospectus and Statement of
Additional Information for distribution to existing
shareholders; preparation and printing of reports and
other communications to existing shareholders;
distribution of copies of the Prospectus, Statement of
Additional Information and all other communications to
existing shareholders; registration of the Shares under
the Federal securities laws; qualification of the
Shares for sale in the jurisdictions mutually agreed
upon by the Fund and the Distributor; transfer
agent/shareholder servicing agent services;
supplying information, prices and other data to be
furnished by the Fund under this Agreement; any
original issue taxes or transfer taxes applicable to
the sale or delivery of the Shares or certificates
therefor; and items covered by the Distribution Plan.
b. To the extent not covered by the
Distribution Plan, the Adviser shall pay all other
expenses incident to the sale and distribution of the
Shares sold hereunder, including, without limitation:
printing and distributing copies of the Prospectus,
Statement of Additional Information and reports
prepared for use in connection with the offering of
Shares for sale to the public; advertising in
connection with such offering, including public
relations services, sales presentations, media charges,
preparation, printing and mailing of advertising and
sales literature; data processing necessary to
support a distribution effort; distribution and
shareholder servicing activities of broker-dealers
and other financial institutions; filing fees required
by regulatory authorities for sales literature and
advertising materials; any additional out-of-
pocket expenses incurred in connection with the
foregoing and any other costs of distribution.
8. COMPENSATION. For the distribution and
distribution support services provided by the
Distributor pursuant to the terms of the Agreement, the
Fund shall, pursuant to the Distribution Plan, pay to
the Distributor the compensation set forth in Schedule
A attached hereto; which schedule may be amended from
time to time. In addition, the Distributor may retain
any portion of any sales load which is imposed on the
sale of Shares and not reallocated by the Distributor
to a dealer and any fee relating to such Shares paid
under the Distribution Plan, as set forth in the
Prospectus and subject to applicable NASD rules. Any
amounts so retained shall first be offset against the
amount payable to the Distributor pursuant to Schedule
A. The Distributor is entitled to retain any sales
load or fee in excess of the amount set forth on
Schedule A. To the extent not covered by the
Distribution Plan, the Adviser shall pay to the
Distributor the compensation set forth in Schedule A
and shall also reimburse the Distributor for its out-of-
pocket expenses related to the performance of its
duties hereunder, including, without limitation,
telecommunications charges, postage and delivery
charges, record retention costs, reproduction charges
and traveling and lodging expenses incurred by officers
and employees of the Distributor. If this Agreement
becomes effective subsequent to the first day of the
month or terminates before the last day of the month,
the Fund shall pay to the Distributor a distribution
fee that is prorated for that part of the month in
which this Agreement is in effect. All rights of
compensation and reimbursement under this Agreement for
services performed by the Distributor, as of the
termination date shall survive the termination of this
Agreement.
9. USE OF DISTRIBUTOR'S NAME. The Fund shall
not use the name of the Distributor or any of its
affiliates in the Prospectus, Statement of Additional
Information, sales literature or other material
relating to the Fund in a manner not approved prior
thereto in writing by the Distributor; provided,
however, that the Distributor shall approve all uses of
its and its affiliates' names that merely refer in
accurate terms to their appointments or that are
required by the Securities and Exchange Commission
(the "SEC") or any state securities commission; and
further provided, that in no event shall such
approval be unreasonably withheld.
10. USE OF FUND'S NAME. Neither the Distributor
nor any of its affiliates shall use the name of the
Fund or material relating to the Fund on any forms
(including any checks, bank drafts or bank statements)
for other than internal use in a manner not approved
prior thereto in writing by the Fund; provided,
however, that the Fund shall approve all uses of its
name that merely refer in accurate terms to the
appointment of the Distributor hereunder or that are
required by the SEC or any state securities commission;
and further provided, that in no event shall such
approval be unreasonably withheld.
11. LIABILITY OF DISTRIBUTOR. The duties of the
Distributor shall be limited to those expressly set
forth herein, and no implied duties, except the duty to
act in good faith, are, assumed by or may be asserted
against the Distributor hereunder. The Distributor may,
in connection with this Agreement employ agents or
attorneys in fact, and shall not be liable for any loss
arising out of or in connection with its actions under
this Agreement, so long as it acts in good faith and
with due diligence, and is not negligent or guilty of
any willful misfeasance, bad faith or gross negligence,
or reckless disregard of its obligations and duties
under this Agreement. As used in this Section 11 and
in Section 12 (except the second paragraph of Section
12), the term "Distributor" shall include directors,
officers, employees and other agents of the
Distributor.
12. INDEMNIFICATION OF DISTRIBUTOR. Any director,
officer, employee, shareholder or agent of the
Distributor who may be or become an officer, director,
employee or agent of the Fund, shall be deemed, when
rendering services to the Fund or acting on any
business of the Fund (other than services or business
in connection with the Distributor's duties hereunder),
to be rendering such services to or acting solely for
the Fund and not as a director, officer, employee,
shareholder or agent, or one under the control or
direction of the Distributor, even though receiving
a salary from the Distributor.
The Fund agrees to indemnify and hold harmless the
Distributor, and each person, who controls the
Distributor within the meaning of Section 15 of the
1933 Act, or Section 20 of the Securities Exchange Act
of 1934, as amended ("1934 Act"), against any and all
liabilities, losses, damages, claims and expenses,
joint or several (including, without limitation,
reasonable attorneys' fees and disbursements and
investigation expenses incident thereto) to which they,
or any of them, may become subject under the 1933 Act,
the 1934 Act, the 1940 Act or other Federal or state
laws or regulations, at common law or otherwise,
insofar as such liabilities, losses, damages, claims
and expenses (or actions, suits or proceedings in
respect thereof) arise out of or relate to any untrue
statement or alleged untrue statement of a material
fact contained in a Prospectus, Statement of
Additional Information, supplement thereto, sales
literature or other written information prepared by the
Fund and provided by the Fund to the Distributor for
the Distributor's use hereunder, or arise out of or
relate to any omission or alleged omission to state
therein a material fact required to be stated therein
or necessary to make the statements therein not
misleading. The Distributor (or any person controlling
the Distributor) shall not be entitled to indemnity
hereunder for any liabilities, losses, damages, claims
or expenses (or actions, suits or proceedings in
respect thereof) resulting from (i) an untrue statement
or omission or alleged untrue statement or omission
made in the Prospectus, Statement of Additional
Information, or supplement, sales or other literature,
in reliance upon and in conformity with information
furnished in writing to the Fund by the Distributor
specifically for use therein or (ii) the Distributor's
own willful misfeasance, bad faith, gross negligence
or reckless disregard of its duties and
obligations in the performance of this Agreement.
The Distributor agrees to indemnify and hold
harmless the Fund, and each person who controls the
Fund within the meaning of Section 15 of the 1933 Act,
or Section 20 of the 1934 Act, against any and all
liabilities, losses, damages, claims and expenses,
joint or several (including, without limitation
reasonable attorneys' fees and disbursements and
investigation expenses incident thereto) to which they,
or any of them, may become subject under the 1933 Act,
the 1934 Act, the 1940 Act or other Federal or state
laws, at common law or otherwise, insofar as such
liabilities, losses, damages, claims or expenses arise
out of or relate to any untrue statement or alleged
untrue statement of a material fact contained in the
Prospectus or Statement of Additional Information
or any supplement thereto, sales literature or other
written material, or arise out of or relate to actions
or oral representations of Distributor's associated
persons and to any omission or alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein
not misleading, if based upon information furnished
in writing to the Fund by the Distributor specifically
for use therein.
A party seeking indemnification hereunder (the
"Indemnitee") shall give prompt written notice to the
party from whom indemnification is sought
("Indemnitor") of a written assertion or claim of any
threatened or pending legal proceeding which may be
subject to indemnity under this Section; provided,
however, that failure to notify the Indemnitor of such
written assertion or claim shall not relieve the
Indemnitor of any liability arising from this Section.
The Indemnitor shall be entitled, if it so elects, to
assume the defense of any suit brought to enforce a
claim subject to this Agreement and such defense shall
be conducted by counsel chosen by the Indemnitor and
satisfactory to the Indemnitee; provided, however, that
if the defendants include both the Indemnitee and the
Indemnitor, and the Indemnitee shall have reasonably
concluded that there may be one or more legal defenses
available to it which are different from or additional
to those available to the Indemnitor ("conflict of
interest"), the Indemnitor shall not have the right
to elect to defend such claim on behalf of the
Indemnitee, and the Indemnitee shall have the right to
select separate counsel to defend such claim on
behalf of the Indemnitee. In the event that the
Indemnitor elects to assume the defense of any suit
pursuant to the preceding sentence and retains counsel
satisfactory to the Indemnitee, the Indemnitee shall
bear the fees and expenses of additional counsel
retained by it except for reasonable investigation
costs which shall be borne by the Indemnitor. If the
Indemnitor (i) does not elect to assume the defense of
a claim, (ii) elects to assume the defense of a claim
but chooses counsel that is not satisfactory to the
Indemnitee or (iii) has no right to assume the defense
of a claim because of a conflict of interest, the
Indemnitor shall advance or reimburse the Indemnitee,
at the election of the Indemnitee, reasonable fees and
disbursements of any counsel retained by Indemnitee,
including reasonable investigation costs.
13. ADVISER PERSONNEL. The Adviser agrees that
only its employees who are registered representatives
of the Distributor ("dual employees") or registered
representatives of another NASD member firm shall offer
or sell Shares of the Portfolios. The Adviser further
agrees that the activities of any such employees as
registered representatives of the Distributor shall be
limited to offering and selling Shares. If there are
dual employees, one employee of the Adviser shall
register as a principal of the Distributor and assist
the Distributor in monitoring the marketing and sales
activities of the dual employees. The Adviser shall
maintain errors and omissions and fidelity bond
insurance policies providing reasonable coverage for
its employee's activities and shall provide copies of
such policies to the Distributor. The Adviser shall
indemnify and hold harmless the Distributor against any
and all liabilities, losses, damages, claims and
expenses (including reasonable attorneys' fees and
disbursements and investigation costs incident thereto)
arising from or related to the Adviser's employees'
activities as registered representatives, including,
without limitation, any and all such liabilities,
losses, damages, claims and expenses arising from or
related to the breach by such employees of any rules or
regulations of the NASD or SEC.
14. FORCE MAJEURE. The Distributor shall not be
liable for any delays or errors occurring by reason of
circumstances not reasonably foreseeable and beyond its
control, including, but not limited, to acts of civil
or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God,
insurrection, war, riot or failure of communication or
power supply. In the event of equipment breakdowns
which are beyond the reasonable control of the
Distributor and not primarily attributable to the
failure of the Distributor to reasonably maintain or
provide for the maintenance of such equipment, the
Distributor shall, at no additional expense to the
Fund, take reasonable steps in good faith to minimize
service interruptions, but shall have no liability with
respect thereto.
15. SCOPE OF DUTIES. The Distributor and the Fund
shall regularly consult with each other regarding the
Distributor's performance of its obligations and its
compensation under the foregoing provisions. In
connection therewith, the Fund shall submit to the
Distributor at a reasonable time prior to or at the
same time as filing with the SEC copies of any amended
or supplemented Registration Statement of the Fund
(including exhibits) under the 1940 Act and the 1933
Act, and at a reasonable time in advance of their
proposed use, copies of any amended or supplemented
forms relating to any plan, program or service offered
by the Fund. Any change in such materials that would
require any change in the Distributor's obligations
under the foregoing provisions shall be subject to the
Distributor's approval. In the event that a change in
such documents or in the procedures contained therein
increases the cost or burden to the Distributor of
performing its obligations hereunder, the Distributor
shall be entitled to receive reasonable compensation
therefore.
16. DURATION. This Agreement shall become
effective as of the date first above written, and shall
continue in force for two years from that date and
thereafter from year to year, provided continuance is
approved at least annually by (i) either the vote of a
majority of the Directors of the Fund, or by the vote
of a majority of the outstanding voting securities of
each Portfolio, and (ii) the vote of a majority of
those Directors of the Fund who are not interested
persons of the Fund, and who are not parties to this
Agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of
voting on the approval.
17. TERMINATION. This Agreement shall terminate as
follows:
a. This Agreement shall terminate
automatically in the event of its assignment.
b. This Agreement shall terminate upon the
failure to approve the continuance of the Agreement
after the initial two-year term as set forth in Section
16 above.
c. This Agreement shall terminate at any time
upon a vote of the majority of the Directors who are
not interested persons of the Fund or by a vote of the
majority of the outstanding voting securities of each
Portfolio, upon not less than 60 days prior written
notice to the Distributor.
d. The Distributor may terminate this
Agreement upon not less than 60 days prior written
notice to the Fund.
Upon the termination of this Agreement, the Fund
shall pay to the Distributor such compensation and out-
of-pocket expenses as may be payable for the period
prior to the effective date of such termination. In
the event that the Fund designates a successor to any
of the Distributor's obligations hereunder, the
Distributor shall, at the expense and direction of the
Fund, transfer to such successor all relevant books,
records and other data established or maintained by the
Distributor pursuant to the foregoing provisions.
Sections 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17,
20, 21, 22, 23, 24, 25, 26 and 27 shall survive any
termination of this Agreement.
18. AMENDMENT. The terms of this Agreement
shall not be waived, altered, modified, amended or
supplemented in any manner whatsoever except by a
written instrument signed by the Distributor and the
Fund and shall not become effective unless its terms
have been approved by the majority of the Directors of
the Fund or by a "vote of majority of the outstanding
voting securities" of each Portfolio and by a majority
of those Directors who are not "interested persons" of
the Fund or any party to this Agreement.
19. NON-EXCLUSIVE SERVICES. The services of the
Distributor rendered to the Fund are not exclusive.
The Distributor may render such services to any other
investment company.
20. DEFINITIONS. As used in this Agreement, the
terms "vote of a majority of the outstanding voting
securities," "assignment," "interested person" and
"affiliated person" shall have the respective meanings
specified in the 1940 Act and the rules enacted
thereunder as now in effect or hereafter amended.
21. CONFIDENTIALITY. The Distributor shall treat
confidentially and as proprietary information of the
Fund all records and other information relating to the
Fund and prior, present or potential shareholders and
shall not use such records and information for any
purpose other than performance of its responsibilities
and duties hereunder, except as may be required by
administrative or judicial tribunals or as requested by
the Fund.
22. NOTICE. Any notices and other communications
required or permitted hereunder shall be in writing and
shall be effective upon delivery by hand or upon
receipt if sent by certified or registered mail
(postage prepaid and return receipt requested) or by a
nationally recognized overnight courier service
(appropriately marked for overnight delivery) or upon
transmission if sent by telex or facsimile (with
request for immediate confirmation of receipt in a
manner customary for communications of such respective
type and with physical delivery of the communication
being made by one or the other means specified in this
Section 22 as promptly as practicable thereafter).
Notices shall be addressed as follows:
(a) if to the Fund:
Grand Prix Funds, Inc.
P.O. Box 1177
Milwaukee, WI 53201
Attn: Robert Zuccaro, President
(b) if to the Adviser:
Target Investors
Wilton Executive Campus
15 River Road
Suite 220
Wilton, CT 06897
Attn: Robert Zuccaro, President
(c) if to the Distributor:
AmeriPrime Financial Securities, Inc.
1793 Kingswood Drive, Suite 200
Southlake, TX 76092
Attn: Kenneth D. Trumpfheller, President
or to such other respective addresses as the parties
shall designate by like notice, provided that notice
of a change of address shall be effective only upon
receipt thereof.
23. SEVERABILITY. If any provision of this
Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
24. GOVERNING LAW. This Agreement shall be
administered, construed and enforced in accordance with
the laws of the State of Texas to the extent that such
laws are not preempted by the provisions of any law of
the United States heretofore or hereafter enacted, as
the same may be amended from time to time.
25. ENTIRE AGREEMENT. This Agreement (including
the Exhibits attached hereto) contains the entire
agreement and understanding of the parties with respect
to the subject matter hereof and supersedes all prior
written or oral agreements and understandings with
respect thereto.
26. MISCELLANEOUS. Each party agrees to perform
such further acts and execute such further documents as
are necessary to effectuate the purposes hereof. The
captions in this Agreement are included for convenience
of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their
construction. This Agreement may be executed in three
counterparts, each of which taken together shall
constitute one and the same instrument.
27. LIMITATION OF LIABILITY. The term "Grand Prix
Funds, Inc." includes the directors from time to time
serving under the Articles of Incorporation of the Fund
dated October 29, 1997, as the same may subsequently
thereto have been, or subsequently hereto be, amended.
It is expressly agreed that obligations of the Fund
hereunder shall not be binding upon any Director,
Shareholder, nominees, officers, agents or employees of
the Fund, personally, but bind only the assets and
property of the Fund, as provided in the Articles of
Incorporation. The execution and delivery of this
Agreement have been authorized by the Directors and
signed by an authorized officer of the Fund, acting as
such, and neither such authorization nor such execution
and delivery shall be deemed to have been made by any
of them individually or to impose any liability on any
of them personally, but shall bind only the assets and
property of the Fund as provided in the Articles of
Incorporation. The Articles of Incorporation are on
file with the Secretary of the State of Maryland.
IN WITNESS WHEREOF, the parties have duly executed
this Agreement as of the day and year first above
written.
GRAND PRIX FUNDS, INC.
By: /s/ Robert Zuccaro
--------------------------
Robert Zuccaro, President
AMERIPRIME FINANCIAL SECURITIES, INC.
By: /s/ Kenneth Trumpfheller
---------------------------
Kenneth Trumpfheller, President
TARGET INVESTORS, INC.
By: /s/ Robert Zuccaro
----------------------------
Robert Zuccaro, President
SCHEDULE A
GRAND PRIX FUNDS, INC.
Portfolio and Fee Schedule
Portfolios covered by Distribution Agreement:
Grand Prix Fund
Fees for distribution and distribution support services
on behalf of the Portfolio:
Annual Fee $18,000.00
SCHEDULE B
GRAND PRIX FUNDS, INC.
Distribution Support Services
1. Review and submit for approval all advertising and
promotional materials.
2. Maintain all books and records required by the
NASD.
3. Monitor Distribution Plan(s) and report to Board
of Directors.
4. Prepare quarterly reports to Board of Directors
relating to distribution activities.
5. Subject to approval of Distributor, license
personnel as registered representatives of the
Distributor.
6. Telemarketing services (additional fees to be
negotiated).
7. Fund fulfillment services, including sampling
prospective shareholders inquiries and related mailings
(additional fees to be negotiated).
GRAND PRIX FUNDS, INC.
DEALER'S AGREEMENT
AmeriPrime Financial Securities, Inc. (the
"Distributor") invites you, as a selected dealer, to
participate as principal in the distribution of shares
(the "Shares") of the mutual funds set forth on
Schedule A to this Agreement (the "Funds"), of which it
is the exclusive Distributor. Distributor agrees to
sell to you, subject to any limitations imposed by the
Funds, Shares issued by the Funds and to promptly
confirm each sale to you. All sales will be made
according to the following terms:
1. All offerings of any of the Shares by you
must be made at the public offering prices, and shall
be subject to the conditions of offering, set forth in
the then current Prospectus of the applicable Fund and
to the terms and conditions herein set forth, and you
agree to comply with all requirements applicable to you
of all applicable laws, including federal and state
securities laws, the rules and regulations of the
Securities and Exchange Commission, and the Rules of
Fair Practice of the National Association of Securities
Dealers, Inc. (the "NASD"), including Section 24 of the
Rules of Fair Practice of the NASD. You will not offer
the Shares for sale in any state or other jurisdiction
where they are not qualified for sale under the Blue
Sky Laws and regulations of such state or jurisdiction,
or where you are not qualified to act as a dealer.
Upon request to Distributor, Distributor will inform
you as to the states or other jurisdictions in which
Distributor believes the Shares may legally be sold.
2. (a) You will receive a discount from the
public offering price ("concession") on all Shares
purchased by you from Distributor as indicated on
Schedule A, as it may be amended by Distributor from
time to time.
(b) In all transactions in open accounts in
which you are designated as Dealer of Record, you will
receive the concessions as set forth on Schedule A.
You hereby authorize Distributor to act as your agent
in connection with all transactions in open accounts in
which you are designated as Dealer of Record. All
designations as Dealer of Record, and all
authorizations of Distributor to act as your agent
pursuant thereto, shall cease upon the termination of
this Agreement or upon the investor's instructions to
transfer his open account to another Dealer of Record.
No dealer concessions will be allowed on purchases
generating less than $1.00 in dealer concessions.
(c) As the exclusive Distributor of the
Shares, Distributor reserves the privilege of revising
the discounts specified on Schedule A at any time by
written notice.
3. Concessions will be paid to you at the
address of your principal office, as indicated below in
your acceptance of this Agreement.
4. Distributor reserves the right to cancel this
Agreement at any time without notice if any Shares
shall be offered for sale by you at less than the then
current public offering prices determined by, or for,
the Funds.
5. All orders are subject to acceptance or
rejection by Distributor in its sole discretion. We
reserve the right, in our discretion, without notice,
to suspend sales or withdraw the offering of Shares
entirely.
6. Payment shall be made to the Funds and shall
be received by its Transfer Agent within three (3)
business days after the acceptance of your order or
such shorter time as may be required by law. With
respect to all Shares ordered by you for which payment
has not been received, you hereby assign and pledge to
Distributor all of your right, title and interest in
such Shares to secure payment therefor. You appoint
Distributor as your agent to execute and deliver all
documents necessary to effectuate any of the
transactions described in this paragraph. If such
payment is not received within the required time
period, Distributor reserves the right, without notice,
and at its option, forthwith (a) to cancel the sale,
(b) to sell the Shares ordered by you back to the
Funds, or (c) to assign your payment obligation,
accompanied by all pledged Shares, to any person. You
agree that Distributor may hold you responsible for any
loss, including loss of profit, suffered by the Funds,
its Transfer Agent or Distributor, resulting from your
failure to make payment within the required time
period.
7. No person is authorized to make any
representations concerning Shares of the Funds except
those contained in the current applicable Prospectus
and Statement of Additional Information and in sales
literature issued and furnished by Distributor
supplemental to such Prospectus. Distributor will
furnish additional copies of the current Prospectus and
Statement of Additional Information and such sales
literature and other releases and information issued by
Distributor in reasonable quantities upon request.
8. Under this Agreement, you act as principal
and are not employed by Distributor as broker, agent or
employee. You are not authorized to act for
Distributor nor make any representation on its behalf;
and in purchasing or selling Shares hereunder, you rely
only upon the current Prospectus and Statement of
Additional Information furnished to you by Distributor
from time to time and upon such written representations
as may hereafter be made by Distributor to you over its
signature.
9. You appoint the Transfer Agent for the Funds
as your agent to execute the purchase transactions of
Shares in accordance with the terms and provisions of
any account, program, plan or service established or
used by your customers and to confirm each purchase to
your customers on your behalf, and you guarantee the
legal capacity of your customers so purchasing such
Shares and any co-owners of such Shares.
10. You will (a) maintain all records required by
law relating to transactions in the Shares, and upon
the request of Distributor, or the request of the
Funds, promptly make such of these records available to
Distributor or to the Funds as are requested, and (b)
promptly notify Distributor if you experience any
difficulty in maintaining the records required in the
foregoing clause in an accurate and complete manner.
In addition, you will establish appropriate procedures
and reporting forms and schedules, approved by
Distributor and by the Funds, to enable the parties
hereto and the Funds to identify all accounts opened
and maintained by your customers.
11. Each party hereto represents that it is at
present, and at all times during the term of this
Agreement will be, a member in good standing of the
NASD and agrees to abide by all its Rules of Fair
Practice including, but not limited to, the following
provisions:
(a) You shall not withhold placing
customers' orders for any Shares so as to
profit yourself as a result of such
withholding. You shall not purchase any
Shares from Distributor other than for
investment, except for the purpose of
covering purchase orders already received.
(b) All conditional orders received by
Distributor must be at a specified definite
price.
(c) If any Shares purchased by you are
repurchased by the Funds (or by Distributor
for the account of the Funds) or are tendered
for redemption within seven business days
after confirmation of the original sale of
such Shares (1) you agree to forthwith refund
to Distributor the full concession allowed to
you on the original sale, such refund to be
paid by Distributor to the Funds, and (2)
Distributor shall forthwith pay to the Funds
that part of the discount retained by
Distributor on the original sale. Notice
will be given to you of any such repurchase
or redemption within ten days of the date on
which the repurchase or redemption request is
made.
(d) Neither Distributor, as exclusive
Distributor for the Funds, nor you as
principal, shall purchase any Shares from a
record holder at a price lower than the net
asset value then quoted by, or for, the
Funds. Nothing in this sub-paragraph shall
prevent you from selling Shares for the
account of a record holder to Distributor or
the Funds at the net asset value currently
quoted by, or for, the Funds and charging the
investor a fair commission for handling the
transaction.
(e) You warrant on behalf of yourself
and your registered representatives and
employees that any purchase of Shares at net
asset value by the same pursuant to the terms
of the Prospectus of the applicable Fund is
for investment purposes only and not for
purposes of resale. Shares so purchased may
be resold only to the Fund which issued them.
12. You agree that you will indemnify
Distributor, each Fund, each Fund's Transfer Agent,
each Fund's Investment Adviser, and each Fund's
Custodian and hold such persons harmless from any
claims or assertions relating to the lawfulness of your
company's participation in this Agreement and the
transactions contemplated hereby or relating to any
activities of any persons or entities affiliated with
your company which are performed in connection with the
discharge of your responsibilities under this
Agreement. If any claims are asserted, the indemnified
parties shall have the right to engage in their own
defense, including the selection and engagement of
legal counsel of their choosing, and all costs of such
defense shall be borne by you.
13. This Agreement will automatically terminate
in the event of its assignment. Either party hereto
may cancel this Agreement without penalty upon ten
days' written notice. This Agreement may also be
terminated as to any Fund at any time without penalty
by the vote of a majority of the members of the Board
of Directors of the terminating Fund who are not
"interested persons" (as such term is defined in the
Investment Company Act of 1940) or by a vote of a
majority of the outstanding voting securities of the
terminating Fund on ten days' written notice.
14. All communications to Distributor should be
sent to AmeriPrime Financial Securities, Inc., 1793
Kingswood Drive, Suite 200, Southlake, Texas 76092, or
at such other address as Distributor may designate in
writing. Any notice to you shall be duly given if
mailed or telegraphed to you at the address of your
principal office, as indicated below in your acceptance
of this Agreement.
15. This Agreement supersedes any other agreement
with you relating to the offer and sale of the Shares,
and relating to any other matter discussed herein.
16. This Agreement shall be binding (i) upon
placing your first order with Distributor for the
purchase of Shares, or (ii) upon receipt by Distributor
in Southlake, Texas of a counterpart of this Agreement
duly accepted and signed by you, whichever shall occur
first. This Agreement shall be construed in accordance
with the laws of the State of Texas.
17. The undersigned, executing this Agreement on
behalf of Dealer, hereby warrants and represents that
he is duly authorized to so execute this Agreement on
behalf of Dealer.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return
to us one copy of this Agreement.
AmeriPrime Financial Securities, Inc.
By: _____________________________________
Kenneth D. Trumpfheller, President
ACCEPTED BY DEALER:
_________________________________________
Firm Name
By: _____________________________________ ________________________
Authorized Signature, Position Type or Print Name
ADDRESS (Principal Office):
_________________________________________
_________________________________________
_________________________________________
Date: ___________________________________
SCHEDULE A
GRAND PRIX FUNDS, INC.
Grand Prix Fund
Dollar Amount of Purchase Total Sales Dealer
(At Offering Price) Charge* Concession
Less than $50,000 5.25% 5.00 %
$50,000 - $100,000 4.50% 4.50%
$100,001 - $250,000 3.50% 3.50%
$250,001 - $500,000 2.50% 2.50%
$500,001 - $1,000,000 2.00% 2.00%
$1,000,001 or more No sales No sales
charge charge
* As a percentage of offering price.
Brokers may invest for their own account at NAV.
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the
caption "Independent Auditors" and to the use of our
report dated December 23, 1997 in the Registration
Statement (Form N-1A) and related Prospectus of Grand
Prix Funds, Inc. filed with the Securities and Exchange
Commission in this Post-Effective Amendment No. 2 to
the Registration Statement under the Securities Act of
1933 (File No. 333-39133) and in this Amendment No. 4
to the Registration Statement under the Investment
Company Act of 1940 (File No. 811-8461).
/s/ Ernst & Young LLP
Milwaukee, Wisconsin
November 25, 1998
Traditional IRA Disclosure Statement
and Custodial Account
agreement
Grand Prix Funds, Inc.
P.O. Box 1177
Milwaukee, Wisconsin 53201-1177
Telephone: 1-800-432-4741
For Fund information, prices,
literature, account balances and other information
about your Grand Prix Funds account, call 1-800-432-
4741.
Please note that the Custodial Account, model IRS
Form 5305-A (Rev. January 1998), has not been updated
yet to reflect recent changes in the law due to the
Internal Revenue Service Restructuring and Reform Act
of 1998 (the "1998 Act"), which was enacted on July 22,
1998. However, the Disclosure Statement has been
updated to reflect those provisions of the 1998 Act
that affect Traditional IRAs.
Grand Prix Funds Prospectus
Contents
Disclosure Statement 1
Power to Revoke 1
Legal Requirements with Respect to Your Traditional IRA
1
Tax Treatment of Contributions to Your Traditional IRA
2
Tax Treatment of Distributions from Your Traditional
IRA 4
Tax Status of Your Traditional IRA 4
Limits on Contributions to Your Traditional IRA 4
Spousal IRA 4
Simplified Employee Pension ("SEP") Plan 5
Rollover 5
Rollover Contributions and Tax-Free Transfers 5
Excess Contributions 6
Use of Your Custodial Account as Security for a Loan
7
Prohibited Transactions 7
Effect of Divorce or Legal Separation 8
Withdrawals Prior to Age 59 1/2 8
Minimum Distributions Required Starting at Age 70 1/2
9
Excise Tax for Failure to Meet Minimum Distribution
Requirements 9
Designation of a Beneficiary or Beneficiaries 9
Distributions Following Death of Depositor 10
Custodian to Assume Depositor is Calendar Year Taxpayer
Unless Otherwise Informed 10
Custodian Not Legal Adviser or Tax Counselor _
Depositor Should Consult Own Adviser 10
Investment of Custodial Account 11
Financial Guarantees and Projections 11
Custodian Not Liable 11
Termination of This Custodial Account 11
Duty to File Tax Returns 11
Internal Revenue Service Approval 12
Additional Information 12
Ministerial Agent 12
Annual Schedule of Fees 12
Custodial Account 13
Article I 13
Article II 13
Article III 13
Article IV 14
Article V 16
Article VI 16
Article VII 16
Article VIII 16
Section 1 - Investment of Custodial Account 16
Section 2 - Beneficiary Designations 18
Section 3 - Miscellaneous 20
Grand Prix Funds, Inc.
Traditional IRA Disclosure Statement
Power to Revoke
For a period of seven (7) days following the date
on which you enter into an IRA Custodial Agreement with
UMB Bank, n.a. ("UMB"), you have the right to revoke
the custodial account. To effect revocation, please
write or call Grand Prix Funds, Inc., P.O. Box 1177,
Milwaukee, WI 53201-1177 or 1-800-432-4741. In the
event notice is mailed, the postmark date (or date of
certification or registration, if sent by certified or
registered mail) will be deemed the date of delivery,
provided that normal mailing procedures are followed.
If you revoke your custodial account, you are entitled
to a return of the entire amount deposited to your
custodial account without reduction for any fees,
expenses or commissions and without any adjustment for
any investment gain or loss.
Legal Requirements with Respect to Your Traditional IRA
Current tax law requires that your Custodial
Agreement be in writing and that it contain the
following provisions.
1. All contributions must be in the form of cash and
cannot be in excess of the lesser of your compensation
or $2,000 per year, unless the contribution is a
rollover contribution as defined in the Internal
Revenue Code. Employer contributions to a Simplified
Employee Pension plan may exceed the limitations
applicable to individuals.
2. The Custodian must be a bank such as UMB, or other
institution (or person) that has satisfied the
Secretary of the Treasury that it is able to administer
your custodial account in accordance with tax laws.
3. None of the funds of your custodial account may be
invested in life insurance contracts.
4. Your interest in the balance of the custodial
account cannot be forfeited.
5. With the exception of investments in a common trust
fund or common investment fund such as a mutual fund,
none of your custodial account assets may be
commingled.
6. Distribution of your interest in the custodial
account must begin no later than the April 1 next
following the year in which you attain age 70 1/2. Any
balance in the custodial account at that time must be
distributed to you in a lump sum or commence to be paid
in a series of payments which do not exceed your life
expectancy or the joint and survivor life expectancies
of yourself and your designated beneficiary. However,
you may increase withdrawals. If you should die prior
to receiving the entire custodial account, the balance
must be distributed to your beneficiary in accordance
with Treasury Department regulations (unless the
beneficiary is your spouse and elects to treat the
custodial account as his or her own IRA).
7. You may not invest the assets of your IRA in
collectibles (within the meaning of IRC Section
408(m)). A collectible is defined as any work of art,
rug or antique, metal or gem, stamp or coin, alcoholic
beverage or other tangible personal property specified
by the Internal Revenue Service ("IRS"). However,
specially minted United States gold and silver bullion
coins and certain state-issued coins are permissible
investments. Beginning January 1, 1998, platinum coins
and certain gold, silver, platinum or palladium bullion
(as described in IRC Section 408(m)(3)) are also
permitted as IRA investments.
Tax Treatment of Contributions to Your Traditional IRA
Without regard to qualifying rollover
contributions or to contributions made by your employer
to a Simplified Employee Pension plan, under present
tax law, you are permitted to make an annual
contribution to your custodial account in any amount up
to the lesser of your compensation or $2,000
("applicable limit"). Such annual contributions may be
made anytime during the year (and up to your tax return
due date for the taxable year, not including
extensions).
Eligible taxpayers who are not covered by an
employer-sponsored retirement plan can continue to
deduct the entire contribution up to the applicable
limit. However, for an individual who is an active
participant in an employer-sponsored retirement plan,
the contributions may be totally deductible, partially
deductible, or not deductible depending on the
taxpayer's adjusted gross income ("AGI"). If your AGI
is lower than the bottom of the range in the chart
below, you may deduct your entire contribution, up to
the applicable limit. When your AGI falls within the
range, you must calculate the deductible portion of
your contribution. When your AGI exceeds the top of
the range, none of your contribution is deductible.
See examples below.
Limitations on Allowable Deductions by AGI
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Married Filing
Jointly: Individual Married Filing
Single Filer: is Nonactive but Jointly: Individual Married
Tax Single Filer: Active Spouse is Active is Active Filing
Year Nonactive Participant Participant Participant Separately
1997 No AGI $25-$35,000 $ 40-$ 50,000 $40-$ 50,000 $0-$10,000
1998 Limitation $30-$40,000 $150-$160,000 $50-$ 60,000
1999 $31-$41,000 $51-$ 61,000
2000 $32-$42,000 $52-$ 62,000
2001 $33-$43,000 $53-$ 63,000
2002 $34-$44,000 $54-$ 64,000
2003 $40-$50,000 $60-$ 70,000
2004 $45-$55,000 $65-$ 75,000
2005 $50-$60,000 $70-$ 80,000
2006 $50-$60,000 $80-$100,000
2007 $50-$60,000 $80-$100,000
</TABLE>
on
The deductible portion of your IRA contribution is
calculated using the
following formula:
For single filer active participant:
(Highest number in the range of AGI bracket - Adjusted
Gross Income) x $2,000
$10,000
Example: Assume your AGI is $35,000 for 1998. Your
maximum deductible contribution is $1,000. This is
calculated as follows: $40,000 less $35,000 which
equals $5,000. $5,000 divided by $10,000 equals 50%.
50% times $2,000 is the deductible amount allowed.
For joint filer active participant:
(Highest number in the range of AGI bracket - Adjusted
Gross Income) x $2,000
$10,000
($20,000 in the case of a joint return for a taxable
year beginning after December 31, 2006.)
Example: Assume your AGI is $56,000 for 1998. Your
maximum deductible contribution is $800. This is
calculated as follows: $60,000 less $56,000 which
equals $4,000. $4,000 divided by $10,000 equals 40%.
40% times $2,000 is $800.
The examples are for illustration only. Please consult
your tax advisor for calculating your deductible
amount.
Tax Treatment of Distributions from Your Traditional
IRA
Amounts distributed to you from the custodial
account (except for refunds of certain excess
contributions and non-deductible contributions which
are discussed below) will be taxable as ordinary income
in the year received. The benefits of capital gain
treatment and 5-year and 10-year
forward averaging (now being phased out) which may
apply to distributions from your employer's qualified
retirement plan, are not available
with respect to distributions from your custodial
account. Distributions
of non-deductible contributions are not taxable. If you
have made non-deductible contributions to an IRA, then
distributions from the IRA will be excluded from tax in
the proportion that all non-deductible contributions to
your IRAs bear to the aggregate balances of all your
IRAs at the end of the year of distribution. All
distributions are subject to federal income tax
withholding requirements unless the recipient elects
not to have withholding apply by written notice to the
Custodian at the time such distribution is requested.
Tax Status of Your Traditional IRA
The funds in your IRA are not subject to income
tax until distributed to you. The earnings accumulate
on a tax-deferred basis to compound the growth of your
custodial account.
Limits on Contributions to Your Traditional IRA
Except in the case of a rollover contribution,
during any year the maximum contribution you can make
is $2,000 or 100% of your compensation, whichever is
less. For purposes of determining the amount of your
contributions, "compensation" means wages, commissions,
salaries, tips, professional fees, bonuses and other
amounts you receive for providing personal services.
Alimony is also treated as compensation which you may
contribute to your IRA. No contributions can be made in
the year that you attain age 70 1/2 or subsequent
years.
Spousal IRA
If your spouse is employed, he or she can
establish his or her own IRA subject to the same rules
that apply to your IRA. If you file a joint return with
a spouse whose compensation for the taxable year is
less than yours, the maximum contribution amount is the
lesser of $4,000 or 100% of the total compensation of
you and your spouse for the year. In such case the
amount contributed can be divided between your IRA and
the spousal IRA in any manner you desire, provided that
no more than $2,000 can be contributed to either IRA.
No contributions may be made to a spousal IRA during or
after the year in which the spouse reaches age 70 1/2.
However, if you are ineligible to make contributions to
your own IRA because of age, you may (if you have
sufficient compensation) nevertheless make
contributions of up to $2,000 to an IRA for your spouse
if he or she has not reached age 70 1/2.
Simplified Employee Pension ("SEP") Plan
An IRA may also be used in connection with a SEP
plan established by your employer (or by you if you are
self-employed). Under a SEP plan, your employer may
make a contribution to your IRA, and an IRA for all
other eligible employees, of up to 15% of compensation
up to $160,000 (as indexed for inflation) or $30,000,
whichever is less, for 1998. Refer to IRS Publications
560 and 590 or IRS Form 5305-SEP. It is your
responsibility and that of your employer to see that
contributions are made under and in accordance with a
valid SEP plan. Specific limit amounts can be found in
the instructions for Form 5305-SEP.
Rollover
If your custodial account represents a rollover
from a pension or profit-sharing plan qualified under
IRC Section 401(a), you should not make non-rollover
additional contributions to the same account if you
desire to preserve its eligibility for future rollover
to another qualified
plan. Similarly, if your custodial account represents a
rollover from an IRC Section 403(b) annuity or
custodial account, you should not make non-rollover
additional contributions to the same account if you
desire to preserve its eligibility for future rollover
to another IRC Section 403(b) annuity or custodial
account. A rollover IRA is eligible to accept future
rollover contributions. In addition, you may establish
another IRA to which non-rollover annual cash
contributions may be made.
Rollover Contributions and Tax-Free Transfers
A rollover contribution is a contribution to your
IRA of cash and/or property other than cash which you
received as a distribution from another IRA or as a
qualified distribution from an IRC Section 403(b)
annuity, or a qualified employer-sponsored retirement
plan, such as a profit-sharing plan, 401(k) plan, or
ESOP, etc. In the case of a tax-free transfer,
the transfer is made directly between the fiduciaries,
that is, the trustees, custodians etc., of the IRAs
and/or the qualified plan, as the case may be.
If you receive a distribution from another IRA you may
make a tax-free rollover contribution of all or part of
the assets you receive to your IRA, provided that you
complete the rollover within 60 days of the date you
receive the distribution. You may make only one such
rollover during any 12-month period. A direct transfer
from the trustee or custodian of another IRA to your
IRA may be made without regard to the 12-month
limitation applicable to IRA rollovers.
If you receive a distribution from your employer's
qualified retirement plan, or an IRC Section 403(b)
annuity or custodial account, you may be eligible to
make a rollover contribution to your IRA of all or part
of the distribution, less the amount of any non-
deductible contributions to the plan. Most
distributions, with the notable exceptions of
installments paid over
a ten or more year period, minimum distribution amounts
received after age 70 1/2, and hardship distributions
made after December 31, 1998 from Section 401(k) plans
or Section 403(b) annuities or custodial accounts, are
eligible for rollover. The rollover contribution must
be made within 60 days of the date you receive the
distribution. If the distribution included property
other than cash, the property itself (or the proceeds
from its sale) must be included in the rollover
contribution to the extent possible, before any cash
received in the distribution may be included.
In order to avoid 20% federal income tax
withholding on the amount distributed from the
qualified retirement plan or IRC Section 403(b) annuity
or custodial account, you should direct that the
distribution be transferred to your IRA in a "direct
rollover." You should receive information about the
"direct rollover" option from your plan administrator
prior to distribution of your account.
Excess Contributions
An excess contribution is any contribution amount
which exceeds your contribution limit, excluding
rollover and direct transfer amounts. In addition, any
contributions that are made to an IRA for the year in
which the IRA owner reaches age 70 1/2, or for any
later year, are considered excess contributions. If
excess contributions are made to your account in any
year and the excess (including income attributed to
that excess) is withdrawn prior to the due date for
your tax return for that year (including extensions),
no excise tax will be imposed on the amount
contributed. Income attributed to such excess
contributions refunded is taxable, and may be subject
to a 10% additional income tax.
If the withdrawal of excess contributions occurs
after the due date for your tax return (including
extensions), a 6% cumulative excise tax will be imposed
on the excess. Excess contributions left in the
account and applied to a later tax year's contributions
are still subject to the 6% excise tax and will
continue to remain so until the excess has been
corrected. A further 10% additional income tax will be
imposed upon the withdrawn excess amount if a deduction
was allowed for the excess contribution and the total
contributions for the year exceeded the maximum
deductible amount, unless you have reached age
59 1/2 or are disabled by the time of the withdrawal.
Use of Your Custodial Account as Security for a Loan
You may not pledge any part of your custodial
account as security for a loan. If you use all or any
part of your custodial account as security for a loan,
the portion used for that purpose is treated as though
it were distributed to you and you must include that
amount in your gross income for the year in which that
transaction takes place. If the pledge occurs prior to
your attaining age 59 1/2, an additional income tax
equal to 10% of the amount included in your taxable
income is added to your tax liability.
Prohibited Transactions
Tax laws also prohibit certain other transactions
between a "Disqualified Person" and your custodial
account. A "Disqualified Person" includes UMB, you, a
beneficiary of your custodial account, members of your
family or of a beneficiary's family or any business or
trust in which a controlling interest is held by any of
these individuals. The prohibited transactions are as
follows:
1. Sale or exchange or leasing of property between your
custodial account and a Disqualified Person;
2. Lending of money or other extension of credit
between your custodial account and a Disqualified
Person;
3. Furnishing of goods, services or facilities between
your custodial account and a Disqualified Person;
4. Transfer to or use by or for the benefit of a
Disqualified Person of the income or assets of your
custodial account;
5. Any act by a Disqualified Person who is a fiduciary
whereby he or she deals with the income or assets of
your custodial account in his or her own interest or
for his or her own account; or
6. Receipt of any consideration for his or her own
personal account by any Disqualified Person who is a
fiduciary from any party dealing with your custodial
account in connection with a transaction involving the
income or assets of the account.
If either you or your beneficiary engages in a
prohibited transaction, your IRA will lose its tax
exemption, and its full value will be added to your
other taxable income for the year in which the
transaction takes place. If any of these transactions
occurs prior to your attaining age 59 1/2, an
additional income tax equal to 10% of the amount
included in your taxable income is added to your tax
liability.
Effect of Divorce or Legal Separation
The general rule is that the Depositor will be
liable for income tax and any penalties on any amount
distributed from his or her IRA to meet the obligation
specified in a divorce decree or legal separation
agreement. However, the transfer may be structured so
as to avoid taxation to the Depositor if the
requirements of IRC Section 408(d)(6) are met. Those
requirements are:
1. A written court order clearly specifying the amount
to be transferred into an IRA of the spouse or former
spouse; and
2. (a) A direct transfer of the funds to the IRA of the
spouse or former spouse;
(b) Changing the name on the IRA from your name to
the name of your spouse or former spouse; or
(c) Making a rollover of IRA assets from your IRA to
the IRA of your spouse or former spouse.
Withdrawals Prior to Age 59 1/2
You may make withdrawals from your IRA at any
time. However, amounts withdrawn (except for the return
of non-deductible contributions) are includible in your
taxable income for the year of withdrawal. If you have
not yet reached age 59 1/2 when a withdrawal is made, a
10% additional income tax must be paid on the amount
withdrawn, unless one of the exceptions described below
applies. After age 59 1/2, you may make such
withdrawals as you wish, free of any additional income
tax. Until you reach age 70 1/2 you are not required to
make a withdrawal. A withdrawal from your IRA before
you reach age 59 1/2 will not be subject to the
additional income tax if it is made on account of your
permanent and total disability, death, a qualifying
rollover, a direct transfer, the timely withdrawal of
an excess contribution, to pay for medical expenses
incurred by you, your spouse or your dependent to the
extent that the medical expenses exceed 7.5% of your
adjusted gross income, in certain situations, to pay
for medical insurance premiums if you are unemployed,
or if the distribution is a part of a series of
substantially equal periodic payments made (at least
annually) over your life (or life expectancy) or the
joint lives (or joint life expectancies) of you and
your beneficiary. For tax years beginning after
December 31, 1997, the exception from the early
withdrawal penalty is expanded to apply to withdrawals
for qualifying post-secondary education expenses for
yourself, your spouse, your (or your spouse's) children
or grandchildren, as well as for a qualifying first
home purchase for yourself, your spouse, your (or your
spouse's) children or grandchildren, or your (or your
spouse's) parents (limited to a lifetime maximum of
$10,000). Also, the early withdrawal penalty does not
apply to distributions made from your IRA after
December 31, 1999 on account of an IRS levy.
Minimum Distributions Required Starting at Age 70 1/2
You must begin withdrawals from your IRA by the
April 1 of the year next following the year in which
you reach age 70 1/2. With respect to the
year during which you reach age 70 1/2, and each
subsequent year, you must withdraw at least an amount
sufficient to cause the entire balance of your IRA to
be distributed over your remaining life expectancy or
the joint life expectancies of you and your designated
beneficiary, determined by actuarial tables. If you
elect to receive your first required distribution
between January 1 and April 1 following the year in
which you reach age 70 1/2, you must receive a second
required distribution prior to the end of that year.
You may choose (within the limits set forth in the
IRS distribution rules) how you want your required
minimum distributions structured. You must make your
payment election no later than the April 1 of the year
next following the year in which you reach age 70 1/2.
If you name someone other than your spouse as your
beneficiary, and your beneficiary is more than ten
years younger than you, your required minimum
distributions must also satisfy the Minimum
Distribution Incidental Benefit rule (which calculates
your distributions as if your beneficiary were exactly
ten years younger than you).
Excise Tax for Failure to Meet Minimum Distribution
Requirements
If the amount distributed to you with respect to
any year in which you are at least age 70 1/2 is less
than the minimum required distribution, an excise tax
of 50% of the difference between the actual
distribution and the minimum required distribution will
be imposed upon the payee of such distribution.
Designation of a Beneficiary or Beneficiaries
You have the right to designate one or more
beneficiaries to whom your custodial account, or any
undistributed portion thereof, is to be paid in the
event of your death. You may also at any time revoke a
prior beneficiary designation and, if desired,
designate different individuals as beneficiaries.
You may designate your beneficiary(ies) on the IRA
Application, or on a form acceptable to the Custodian.
Write or call Grand Prix Funds, Inc., P.O. Box 1177,
Milwaukee, WI 53201-1177 or 1-800-432-4741.
In the absence of a valid beneficiary designation,
the Custodian will make distribution of any death
benefit to your surviving lawful spouse; but, if none,
then to your surviving natural and adoptive children in
equal shares; but, if none, then to the personal
representative of your estate. Notwithstanding the
foregoing sentence, the Custodian may, in any case
where reasonable doubt exists as to the proper course
of action, request instructions from a court of
competent jurisdiction. All costs and expenses
(including time expended by the Custodian) in such
cases will be charged against your custodial account.
Distributions Following Death of Depositor
As a general rule, the entire balance of the IRA
must be distributed to beneficiaries by December 31 of
the year in which the 5th anniversary of the
Depositor's death occurs. If this rule is violated, an
excise tax equal to 50% of the undistributed balance
will be imposed. There are three exceptions to the
general rule: (1) If the Depositor's designated
beneficiary is
the surviving spouse of the Depositor, such spouse may
elect to treat the Depositor's IRA as his or her own
IRA, and in that case, the five-year limitation will
not apply; (2) Where installment payments have
commenced over the life expectancies of the Depositor
and designated beneficiary before the Depositor's
death, then payments will continue to the surviving
beneficiary at a rate at least as rapidly as in effect
at the time of the Depositor's death, and the five-year
limitation will not apply. In such case, the surviving
beneficiary has the same right to designate
beneficiaries as the Depositor had while living. (The
five-year limitation will apply to distributions to any
such second-level beneficiaries.) (3) If the Depositor
dies before his or her required beginning date (that
is, the April 1 of the year next following the year in
which he or she reaches age 70 1/2) and the designated
beneficiary elects that the account balance be
distributed in substantially equal payments over his or
her life expectancy, the beneficiary must make this
election and commence distributions by December 31 of
the year following the year of the Depositor's death
(distributions need not commence for a surviving spouse
beneficiary until December 31 of the year the Depositor
would have attained age 70 1/2).
Custodian to Assume Depositor is Calendar Year Taxpayer
Unless Otherwise Informed
Unless and until specifically notified that you
file your federal income tax returns on another basis,
the Custodian will assume for all purposes, including
the preparation and furnishing of accounting
statements, reports, etc., that such tax returns are
filed on a calendar year basis.
Custodian Not Legal Adviser or Tax Counselor _
Depositor Should Consult Own Adviser
UMB and its ministerial agent expressly disclaim
any right, duty, authority or responsibility to furnish
legal or tax advice respecting any matter or matters
concerning or relating to your custodial account
including, but not limited to, present or future
federal income tax consequences to you or others which
may arise or result from the establishment or
maintenance of your custodial account, the selection of
payment options, beneficiaries and any other matter
whatsoever. You are advised and encouraged to consult
with professional counsel of your own selection
respecting all such matters.
Investment of Custodial Account
Your custodial account may be invested only in
accordance with your direction in the Grand Prix Funds
or any other mutual fund designated by Grand Prix as a
permissible investment alternative. None of the funds
held in your custodial account may be used to purchase
life insurance.
Financial Guarantees and Projections
The value of your custodial account at any point
in time will, of course, depend upon the then current
market value of the investments, retained investment
earnings, if any, etc. No guarantees or projections of
any nature concerning earnings rates or future security
values are made.
Custodian Not Liable
The Custodian and its ministerial agent have no
responsibility or liability for any losses or expenses
relating to any investment or to the sale or exchange
of any asset of your custodial account.
Termination of this Custodial Account
The Custodian may resign at any time upon 60 days'
written notice to you, and may be removed by you at any
time upon 60 days' written notice. In either such event
you must appoint a qualified successor trustee or
qualified custodian to whom the Custodian, upon receipt
of written acceptance of the appointment, shall
transfer the assets (less any amounts deemed necessary
for payment of fees, costs or expenses) and records of
your custodial account.
Duty to File Tax Returns
In any year in which you incur liability for an
excise tax or additional income tax by reason of making
excess contributions, by making early withdrawals
(premature distributions), or by failure to withdraw
the minimum amount from your custodial account, you are
obligated to file Internal Revenue Service Form 5329,
"Return for Individual Retirement Arrangement Taxes"
with your Form 1040 at the time it is filed. Deductible
contributions in any year are reported on your Form
1040. Non-deductible contributions must be reported on
Form 8606.
Internal Revenue Service Approval
The Individual Retirement Custodial Agreement is
comprised of eight articles. The first seven articles
constitute Internal Revenue Service Form 5305-A (REV.
January, 1998) "Individual Retirement Custodial
Account." Under Treasury Department regulations,
custodial accounts which use the provisions of this
Form are considered to meet the requirements of the
Internal Revenue Code. The addition of Article VIII by
UMB does not negate the approved status of the model
form. The Individual Retirement Custodial Agreement, on
IRS Form 5305-A, has been approved as to form by the
Internal Revenue Service. However, in approving the
form, the IRS does not consider the investment merits
of the program.
Additional Information
Additional information about individual retirement
accounts is contained in IRS Publication 590, which can
be obtained from the office of the District Director of
Internal Revenue.
Ministerial Agent
If the Custodian is UMB Bank, n.a., Sunstone
Investor Services, LLC shall be the ministerial agent
for the Custodian in the performance of any ministerial
duties delegated to it by the Custodian. If any other
bank or entity is the Custodian, then Sunstone Investor
Services, LLC shall not be the ministerial agent for
any duties of the Custodian unless it agrees to in
writing with the other Custodian.
Annual Schedule of Fees
The Custodian will charge the following fees for
servicing your
IRA account:
Annual maintenance fee $15
Distribution (including rollover or direct transfers)
$15
Refund of excess contribution $15
Any outgoing wire transfer $10
The annual maintenance fee will be deducted from
your custodial account unless otherwise paid by you.
The charge for refund of excess contributions will be
deducted from your custodial account at the time
of the refund. These fees are subject to change.
Traditional IRA Custodial Account
This Agreement is made between UMB Bank, n.a., as
Custodian or its successor (hereinafter referred to as
"Custodian") and the individual whose name appears on
the IRA Application or other Adoption Agreement
(hereinafter referred to as "Depositor"). If the
Depositor has previously adopted this Individual
Retirement Custodial Account ("IRA") in any earlier
form, by signature to the IRA Application, he or she
adopts the amended IRA in the form as hereby restated.
The Depositor is establishing (or adopting an
amendment to) an individual retirement account (under
Section 408(a) of the Internal Revenue Code) to provide
for his or her retirement, and for the support of his
or her beneficiaries after death. The Custodian has
given the Depositor the disclosure statement required
under Regulations Section 1.408-6. Unless this
Agreement is adopted for an existing IRA, the Depositor
has made an initial cash contribution to the IRA
concurrently with the execution of the IRA Application
or other Adoption Agreement. The Depositor and
Custodian make the following agreement:
Article I
The Custodian may accept additional cash
contributions on behalf of the Depositor for a tax year
of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the
contribution is a rollover contribution described in
Section 402(c), 403(a)(4), 403(b)(8), 408(d)(3),
or an employer contribution to a simplified employee
pension plan as described in Section 408(k).
Article II
The Depositor's interest in the balance of the
custodial account
is nonforfeitable.
Article III
1. No part of the custodial funds may be invested in
life insurance contracts, nor may the assets of the
custodial account be commingled with other property
except in a common trust fund or common investment fund
(within the meaning of Section 408(a)(5)).
2. No part of the custodial funds may be invested in
collectibles (within the meaning of Section 408(m)),
except as otherwise permitted by Section 408(m)(3),
which provides an exception for certain gold, silver,
and platinum coins, coins issued under the laws of any
state, and certain bullion.
Article IV
1. Notwithstanding any provision of this agreement to
the contrary, the distribution of the Depositor's
interest in the custodial account shall be made in
accordance with the following requirements and shall
otherwise comply with Section 408(a)(6) and Proposed
Regulations Section 1.408-8, including the incidental
death benefit provisions of Proposed Regulations
Section 1.401(a)(9)-2, the provisions of which are
incorporated by reference.
2. Unless otherwise elected by the time distributions
are required to begin to the Depositor under paragraph
3, or to the surviving spouse under paragraph 4, other
than in the case of a life annuity, life expectancies
shall be recalculated annually. Such election shall be
irrevocable as to the Depositor and the surviving
spouse and shall apply to all subsequent years. The
life expectancy of a nonspouse beneficiary may not be
recalculated.
3. The Depositor's entire interest in the custodial
account must be, or begin to be, distributed by the
Depositor's required beginning date, April 1
following the calendar year end in which the Depositor
reaches age 70 1/2.
By that date, the Depositor may elect, in a manner
acceptable to the Custodian, to have the balance in the
custodial account distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal or
substantially equal monthly, quarterly, or annual
payments over the life of the Depositor.
(c) An annuity contract that provides equal or
substantially equal monthly, quarterly, or annual
payments over the joint and last survivor lives of the
Depositor and his or her designated beneficiary.
(d) Equal or substantially equal annual payments
over a specified period that may not be longer than the
Depositor's life expectancy.
(e) Equal or substantially equal annual payments
over a specified period that may not be longer than the
joint life and last survivor expectancy of the
Depositor and his or her designated beneficiary.
4. If the Depositor dies before his or her entire
interest is distributed to him or her, the entire
remaining interest will be distributed as follows:
(a) If the Depositor dies on or after distribution
of his or her interest has begun, distribution must
continue to be made in accordance with paragraph 3.
(b) If the Depositor dies before distribution of his
or her interest has begun, the entire remaining
interest will, at the election of the Depositor or, if
the Depositor has not so elected, at the election of
the beneficiary or beneficiaries, either
(i) Be distributed by the December 31 of the year
containing the fifth anniversary of the Depositor's
death, or
(ii) Be distributed in equal or substantially
equal payments over the life or life expectancy of the
designated beneficiary or beneficiaries starting by
December 31 of the year following the year of the
Depositor's death. If, however, the beneficiary is the
Depositor's surviving spouse, then this distribution is
not required to begin before December 31 of the year in
which the Depositor would have reached
age 70 1/2.
(c) Except where distribution in the form of an
annuity meeting the requirements of Section 408(b)(3)
and its related regulations has irrevocably commenced,
distributions are treated as having begun on the
Depositor's required beginning date, even though
payments may actually have been made before that date.
(d) If the Depositor dies before his or her entire
interest has been distributed and if the beneficiary is
other than the surviving spouse, no additional cash
contributions or rollover contributions may be accepted
in the account.
5. In the case of a distribution over life expectancy
in equal or substantially equal annual payments, to
determine the minimum annual payment for each year,
divide the Depositor's entire interest in the custodial
account as of the close of business on December 31 of
the preceding year by the life expectancy of the
Depositor (or the joint life and last survivor
expectancy of the Depositor and the Depositor's
designated beneficiary, or the life expectancy of the
designated beneficiary, whichever applies). In the case
of distributions under paragraph 3, determine the
initial life expectancy (or joint life and last
survivor expectancy) using the attained ages of the
Depositor and designated beneficiary as of their
birthdays in the year the Depositor reaches age 70 1/2.
In the case of distribution in accordance with
paragraph 4(b)(ii), determine life expectancy using the
attained age of the designated beneficiary as of the
beneficiary's birthday in the year distributions are
required to commence.
6. The owner of two or more individual retirement
accounts may use the "alternative method" described in
Notice 88-38, 1988-1 C.B. 524, to satisfy the minimum
distribution requirements described above. This method
permits an individual to satisfy these requirements by
taking from one individual retirement account the
amount required to satisfy the requirement for another.
Article V
1. The Depositor agrees to provide the Custodian with
information necessary for the Custodian to prepare any
reports required under Section 408(i) and Regulations
Sections 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the
Internal Revenue Service and the Depositor as
prescribed by the Internal Revenue Service.
Article VI
Notwithstanding any other articles which may be
added or incorporated, the provisions of Articles I
through III and this sentence will be controlling. Any
additional articles that are not consistent with
Section 408(a) and the related regulations will be
invalid.
Article VII
This Agreement will be amended from time to time
to comply with the provisions of the Code and related
regulations. Other amendments may be made with the
consent of the persons whose signatures appear below.
Article VIII
Section 1 - Investment of Custodial Account
1. The Depositor has the sole authority and discretion,
fully and completely, to select and to direct the
investment of all assets in the
custodial account, but only in the Grand Prix Funds
portfolios or any other mutual fund designated by Grand
Prix Funds as a permissible investment alternative.
2. Subject to the right and duty of the Depositor to
direct the investments of his or her custodial account,
the Custodian shall have full authority and power:
(a) To invest and reinvest the custodial account in
such mutual funds
as described in paragraph 1 of this Article VIII;
(b) To sell, assign, exchange, convey, or otherwise
transfer any part or
all of the securities or other property of the
custodial account, upon such terms and conditions as
the Depositor shall direct, and no person dealing with
the Custodian shall be bound to see to the application
of the purchase money or inquire into the validity,
expediency, or propriety of such transactions;
(c) To sue or defend any suit or legal proceeding by
or against the custodial account and to compromise,
settle, submit to arbitration, or adjust any suit or
legal proceeding, claim, debt, damage, or undertaking
due or owing from or to the custodial account, but the
Custodian shall not be obligated to take any action
which would subject it to expense or liability unless
it be first indemnified in an amount and manner
satisfactory to it or be furnished with funds
sufficient, in its sole judgment, to cover the same;
(d) To acquire and hold any securities or other
property of the custodial account without disclosing
its fiduciary capacity, or in the name of any other
person, with or without a power of attorney for
transfer thereto attached;
(e) To employ attorneys, accountants, and others as
it may deem advisable for the best interest of the
custodial account, and to pay their reasonable expenses
and compensation out of the custodial account; and
(f) To make, execute and deliver, as Custodian, any
and all instruments in writing necessary or proper for
the effective exercise of any of the Custodian's powers
as stated herein or otherwise necessary to accomplish
the purpose of the custodial account.
3. The following shall constitute charges upon the
custodial account and shall be paid by the Custodian
out of the custodial account unless, and to the extent,
paid by the Depositor:
(a) All taxes of whatever kind or character that may
be imposed, levied or assessed under existing or future
laws upon or in respect of the custodial account, or
upon the Custodian in its capacity as such, or upon the
assets or income of the custodial account;
(b) All expenses incurred by the Custodian in the
performance of its duties hereunder, including the fees
of attorneys, accountants and other persons engaged by
the Custodian for services in connection with the
custodial account; and
(c) The fees and other compensation of the Custodian
for its services hereunder in the amounts agreed upon
from time to time by the Depositor and Custodian.
4. The Depositor shall not borrow any money from the
custodial account nor pledge any part thereof as
security for a loan. Furthermore, neither the Depositor
nor the Custodian shall engage, either directly or
indirectly, in any of the following transactions:
(a) The sale or exchange, or leasing, of any
property between the custodial account and a
Disqualified Person;
(b) The lending of money or other extension of
credit between the custodial account and a Disqualified
Person;
(c) The furnishings of goods, services or facilities
between the custodial account and a Disqualified
Person;
(d) The transfer to, or use by or for the benefit
of, a Disqualified Person of the income or assets of
the custodial account;
(e) An act by a Disqualified Person who is a
fiduciary whereby he or she deals with the income or
assets of the custodial account in his or her own
interest or for his or her own account; or
(f) Receipt of any consideration for his or her own
personal account by any Disqualified Person who is a
fiduciary from any party dealing with the custodial
account in connection with a transaction involving the
income or assets of the custodial account.
For purposes of this paragraph, "Disqualified
Person" shall have the meaning ascribed to that term
under Section 4975(e)(2) of the Code.
Section 2 - Beneficiary Designations
1. At any time and from time to time the Depositor
shall have the right to designate one or more
beneficiaries to whom distribution of his or her
custodial account, or the previously undistributed
portion thereof, shall be made in the event of his or
her death prior to the complete distribution of his or
her custodial account. This right shall extend to the
Depositor's surviving spouse in the event he or she
dies while receiving distributions under the provisions
of Sections 3(e) or 4(b) of Article IV. Any such
beneficiary designation shall be deemed legally valid
only when submitted fully complete, duly executed, and
on a form provided by or acceptable to the Custodian.
Subject to the foregoing sentence,
any such beneficiary designation shall be effective
upon receipt by the Custodian. Any such beneficiary
designation may be revoked by the Depositor at any
time, and shall be automatically revoked upon receipt
by the Custodian of a subsequent beneficiary
designation or beneficiary designations in valid form
bearing a later execution date.
2. In the absence of a valid beneficiary designation on
file with the Custodian at the time of the Depositor's
death, the Custodian shall, upon receipt of notice of
the death of the Depositor supported by a certified
copy of the death certificate or other appropriate
evidence of the fact of death satisfactory to the
Custodian, make distribution of the Depositor's
custodial account to the beneficiary or beneficiaries
of the Depositor in the following order of preference:
(a) To the Depositor's surviving lawful spouse; but
if no such spouse shall survive the Depositor, then to
(b) The surviving natural and adoptive children of
the Depositor in equal shares per capita and not per
stirpes; but if there shall be no such surviving child
or children, then to
(c) The personal representative of the Depositor's
estate, provided, however, that the Custodian shall
have no duty, obligation, or responsibility to make any
inquiry or conduct any investigation concerning the
identification, address, or legal status of any
individual or individuals alleging the status of
beneficiary (designated or otherwise) nor to make
inquiry or investigation concerning the possible
existence of any beneficiary not reported to the
Custodian within a reasonable period after the
notification of the Depositor's death (or that of his
or her surviving spouse) and previous to the
distribution of the custodial account. The Custodian
may conclusively rely upon the veracity and accuracy of
all matters reported to it by any source ordinarily
presumed to be knowledgeable respecting the matters so
reported. With respect to any distribution made by
reason of the death of the Depositor (or his or her
surviving spouse) the Custodian shall have no higher
duty than the exercise of good faith, shall incur no
liability by reason of any action taken in reliance
upon erroneous, inaccurate or fraudulent information
reported by any source assumed to be reliable, or by
reason of incomplete information in its possession at
the time of such distribution. Upon full and complete
distribution of the custodial account pursuant to the
provisions of this Section, the Custodian shall be
fully and forever discharged from all liability
respecting such custodial account.
3. Any distribution pursuant to the provisions of this
Section may be made in cash or in kind or partly in
both, at the sole discretion of the Custodian, and
shall be made within 30 days following receipt by the
Custodian of information deemed by it sufficient upon
which to base such distribution; provided, however,
that the Custodian shall incur no liability respecting
fluctuations in the value of the custodial account in
the event of a delay occasioned by the Custodian's good
faith decision to await additional evidence or
information bearing on the beneficiary or
beneficiaries.
4. Whenever any distribution hereunder is payable to a
minor or to a person known by the Custodian to be under
a legal disability, the Custodian in its absolute
discretion may make all or any part of such
distribution
to (a) a legal guardian or conservator for such person,
(b) a custodian under the Uniform Transfers to Minors
Act, (c) a parent of such person, or (d) such person
directly.
5. Anything to the contrary herein notwithstanding, in
the event of reasonable doubt respecting the proper
course of action to be taken, the Custodian may in its
sole and absolute discretion resolve such doubt
by judicial determination which shall be binding on all
parties claiming any interest in the custodial account.
In such event all court costs,
legal expenses, reasonable compensation for the time
expended by the Custodian in the performance of its
duties, and other appropriate and pertinent expenses
and costs, shall be collected by the Custodian from the
custodial account.
Section 3 - Miscellaneous
1. The Custodian may make further amendments to this
Agreement, in order to make said Agreement acceptable
in form to the Secretary of the Treasury and the
Secretary of Labor, or for any other purpose. Any such
amendments shall be effective without the signature of
the Depositor to a new Adoption Agreement or IRA
Application and shall, if for the purpose of initially
qualifying the custodial account pursuant to the Code,
be retroactively effective to the date of the captioned
Agreement. The Custodian will mail a copy of any such
amendment to the Depositor.
2. The Custodian shall deliver, or cause to be executed
and delivered, to the Depositor all proxies,
prospectuses and notices pertaining to securities held
in the account. The Custodian shall not vote any such
securities except pursuant to written instructions from
the Depositor. Any notice sent from the Custodian to
the Depositor shall be effective, if sent by mail to
the Depositor's last address of record.
3. The Custodian, within 30 days after the close of
each calendar year, shall provide the Depositor a
record of activity in the custodial account during such
year, including the date and the dollar amount of
contributions, any earnings on such contributions, the
date and dollar amount of any distributions, a
beginning balance and an ending balance. The Custodian
may meet its recordkeeping and reporting requirements
by adopting the records of any investment facility
permitted by this Agreement, and it may delegate
ministerial duties of keeping such records to such
facilities or their managers.
4. Confirmation of transactions and records or
statements of activity in the Depositor's custodial
account shall be conclusive if the Depositor does not
object within 30 days after mailing to the Depositor.
In such case, the Custodian and its officers and
employees shall be forever released and discharged from
any liability with respect to any claim arising out of
any action or omission reflected on such confirmation
or record.
5. The Custodian does not guarantee the custodial
account from loss or depreciation. The liability of the
Custodian to make any payment from the custodial
account at any time is limited to the then available
assets of the custodial account.
6. Subject to the limitations contained in paragraph 1
of Section 1 of this Article VIII, the Depositor shall
have the sole power, right and duty to direct the
Custodian from time to time with respect to the
investment and reinvestment of the assets of the
custodial account. The Custodian shall comply promptly
with all such directions, providing such directions are
clearly stated in writing executed by the Depositor,
and in form acceptable to the Custodian. The Custodian
shall not have any duty to inquire into the propriety
of any such direction nor into its effect upon the
custodial account or the beneficiary or beneficiaries
thereof, nor to apply to a court for instructions
notwithstanding the fact that the Custodian has, or
with reasonable inquiry should have, actual or
constructive notice that any action taken or omitted
pursuant to, or as a result of, the exercise of such
directive power constitutes, or may constitute, a
breach of the terms of the custodial account or a
violation of any law applicable to the investment of
the funds held hereunder. Any such direction so given
the Custodian shall be deemed to be continuing until
revoked or modified by a subsequent direction in
writing, notwithstanding the occurrence of any event or
other development of which the Custodian has or should
have knowledge. The Custodian shall not be liable or
responsible for any loss resulting to the custodial
account or to any present or future beneficiary thereof
by reason of:
(a) Any sale or investment made or other action
taken pursuant to and in accordance with the direction
of the Depositor; or
(b) The retention of any asset, including cash, the
acquisition or retention of which has been directed by
the Depositor.
7. This Agreement shall be binding upon all persons
entitled to benefits under the custodial account, their
respective heirs and legal representatives, and upon
the Custodian and its successors.
8. Words used in the masculine shall apply to the
feminine where applicable, and wherever the context of
the Agreement dictates, the plural shall be read as the
singular and the singular as the plural.
9. As the context requires, the term "Depositor" shall
be deemed to include any beneficiary of this Account
following the death of the Depositor.
10. All questions arising with respect to the
provisions of this Agreement shall be determined by
application of the laws of the State of Missouri except
to the extent federal law supersedes Missouri law. To
the extent permitted by law, none of the creditors of
the Depositor or any beneficiary shall have any power
to execute any levy, lien, assignment, garnishment,
alienation, attachment, or other voluntary or
involuntary transfer on any of the assets of the IRA;
and all sums payable to the Depositor or any
beneficiary shall be free and clear of all liabilities
for debts, levies, attachments and proceedings of any
kind, at law or in equity.
11. The Custodian shall receive reasonable annual
compensation as may be agreed upon from time to time
between the Depositor and Custodian. The Custodian
shall pay all expenses reasonably incurred by it in its
administration from the custodial account unless the
Depositor pays the expenses.
12. The Custodian may resign at any time for any
reason, upon 60 days' notice in writing to the
Depositor and may be removed by the Depositor at any
time upon 60 days' notice in writing to the Custodian.
Upon resignation, Grand Prix Funds, Inc. will appoint a
successor Custodian. The Depositor or Grand Prix
Funds, Inc. may terminate
this Agreement at any time by giving 60 days' notice
filed in a form acceptable to the Custodian. The
notice must include designation of a successor
Custodian. The successor Custodian shall satisfy the
requirements of Section 408(h) of the Code. The
Custodian shall not be liable for any actions or
failures to act on the part of any successor Custodian
nor for any tax consequences the Depositor may incur
that result from the transfer or distribution of his or
her assets pursuant to this Section. If this Agreement
is terminated, the Custodian may hold back from the IRA
a reasonable amount of money that it believes is
necessary to cover any one or more of the following:
Any fees, expenses or taxes chargeable against the
IRA;
Any penalties associated with the early withdrawal
of any savings instrument or other investment in the
IRA.
If the Custodian is merged with another
organization (or comes under the control of any Federal
or State agency) or if the Custodian (or any portion
which includes the IRA) is bought by another
organization, that organization (or agency) shall
automatically become the custodian or trustee
of the IRA, but only if it is the type of organization
authorized to serve as an IRA custodian or trustee. If
the Custodian is required to comply with Regulations
Section 1.401-12(n) and it fails to do so, or the
Custodian is not keeping the records, making the
returns or sending the statements as are required by
forms or regulations, the IRS may, after notifying the
Depositor, require the Depositor to substitute another
custodian.
13. The Custodian shall not be responsible for
determining the permissible amount of contributions to
the custodial account, or for the amount
or timing of distributions from the custodial account,
or for any other actions taken at the request of the
Depositor. The Depositor shall indemnify and hold the
Custodian harmless from any and all liability, claims
and expenses arising from any actions taken at the
Depositor's request or in connection with this
Agreement, except for any liability, claims, or
expenses caused by the negligence of the Custodian.
14. The Depositor agrees to pay to the Custodian fees
for services performed under this Agreement in an
amount specified from time to time by the Custodian.
Such fees may include, but are not limited to, a fee to
establish the custodial account and such account's
annual maintenance fee. The Custodian shall have the
right to change such fees at any time without prior
written notice to the Depositor. As soon as practicable
after any change in fees, the Custodian shall make
available to the Depositor a new fee schedule. All fees
may be billed to the Depositor or deducted from the
custodial account, at the discretion of the Depositor.
The Custodian shall also be entitled to reimbursement
for all reasonable and necessary costs, expenses and
disbursements incurred by it in the performance of
services in its capacity as Custodian of the custodial
account. Such fees and reimbursement shall be paid from
the custodial account if not paid directly by the
Depositor and shall constitute a lien upon the
custodial account until paid.
15. If the Custodian is UMB Bank, n.a., Sunstone
Investor Services, LLC shall be the ministerial agent
for the Custodian in the performance of any ministerial
duties delegated to it by the Custodian. If any other
bank or entity is the Custodian, then Sunstone Investor
Services, LLC shall not be the ministerial agent for
any duties of the Custodian unless it agrees in writing
with the other Custodian.
16. The Depositor must begin taking required minimum
distributions from the custodial account, under Article
IV, on or before the Depositor's required beginning
date (April 1 immediately following the end of the
calendar year in which the Depositor reaches age 70
1/2). Such distributions will be made only upon the
request of the Depositor (or the Depositor's authorized
agent, beneficiary, executor or administrator), in such
form and manner as is acceptable to the Custodian. For
such distributions, life expectancy and joint-life and
last-survivor expectancy are calculated based on
information provided by the Depositor (or the
Depositor's authorized agent, beneficiary, executor or
administrator) using the expected return multiples
under Treasury Regulations Section 1.72-9. The
Custodian will not be liable for errors in such
calculations resulting from its reliance on such
information. If any assets held on the Depositor's
behalf in a custodial account are transferred directly
to a custodian or trustee of another individual
retirement account described in IRC Section 408(a)
established for the Depositor, it shall be the
Depositor's responsibility to ensure that any required
minimum distribution required by Article IV is made
prior to giving the Custodian such transfer
instructions.
Grand Prix Funds, Inc.
P.O. Box 1177
Milwaukee, Wisconsin 53201-1177
Telephone: 1-800-432-4741
Roth IRA Disclosure Statement
and Custodial account agreement
For Fund information, prices,
literature, account balances and other information
about your Grand Prix Funds account, call 1-800-432-
4741.
Please note that the Custodial Account, model IRS
Form 5305-RA (Rev. January 1998), has not been updated
yet to reflect recent changes in the law due to the
Internal Revenue Service Restructuring and Reform Act
of 1998 (the "1998 Act"), which was enacted on July 22,
1998. However, the Disclosure Statement has been
updated to reflect those provisions of the 1998 Act
that affect Roth IRAs.
Grand Prix Funds Prospectus
Contents
Disclosure Statement 1
Right to Revoke Your Roth IRA 1
Requirements of a Roth IRA 1
Income Tax Consequences of
Establishing a Roth IRA 3
Limitations and Restrictions 6
Federal Tax Penalties 7
Other 8
Miscellaneous 8
Custodial Account 10
Article I 10
Article II 10
Article III 10
Article IV 11
Article V 11
Article VI 12
Article VII 12
Article VIII 12
Article IX 12
Instructions 19
Purpose of Form 19
Definitions 20
Specific Instructions 20
Article I 20
Article IX 20
Grand Prix Funds, Inc.
Roth IRA Disclosure Statement
Right to Revoke your Roth IRA
If you receive this Disclosure Statement at the time
you establish your Roth IRA, you have the right to
revoke your Roth IRA within seven (7) days of its
establishment. If revoked, you are entitled to a full
return of the contribution you made to your Roth IRA.
The amount returned to you would not include an
adjustment for such items as sales commissions,
administrative expenses, or fluctuation in market
value. You may make this revocation only by mailing or
delivering a written notice to Grand Prix Funds, Inc.
at P.O. Box 1177, Milwaukee, WI 53201-1177, or by
calling 1-800-432-4741.
If you send your notice by first-class mail, your
revocation will be deemed mailed as of the date of the
postmark.
If you have any questions about the procedure for
revoking your
Roth IRA, please call Grand Prix Funds at 1-800-432-
4741.
Requirements of a Roth IRA
A. Cash Contributions - Your contribution must be in
cash, unless it is a qualified rollover contribution.
B. Maximum Contribution - The total amount you may
contribute to a Roth IRA for any taxable year cannot
exceed the lesser of $2,000 or 100 percent of your
compensation. If you also maintain a Traditional IRA
(i.e., an IRA subject to the limits of Internal Revenue
Code (IRC) Section 408(a) or 408(b)) the maximum
contribution to your Roth IRA is reduced by any
contributions you make to your Traditional IRA, but is
not reduced by any contributions you make to a
Simplified Employee Pension Plan (SEP IRA) or a SIMPLE
IRA. Your total annual contribution to all Traditional
IRAs and Roth IRAs cannot exceed the lesser of $2,000
or 100 percent of your compensation.
Your Roth IRA contribution is further limited if
your adjusted gross income (AGI) exceeds $150,000 and
you are a married individual filing jointly ($95,000
for single taxpayers). Married individuals filing
jointly with AGI which exceeds $160,000 may not fund a
Roth IRA. Married individuals filing separately with
AGI exceeding $10,000 may not fund a Roth IRA. Single
individuals with AGI exceeding $110,000 may not fund a
Roth IRA. For these purposes, AGI is calculated without
taking into account any deductions for contributions to
a Traditional IRA or the amount of any conversions from
a Traditional IRA to a Roth IRA.
If you are married filing jointly and your AGI is
between $150,000 and $160,000, your maximum Roth IRA
contribution is determined as follows:
(1) Subtract your AGI from $160,000; (2) divide the
difference by $10,000; and (3) multiply the result in
step (2) by $2,000. For example, if your AGI is
$155,000, your maximum Roth IRA contribution is $1,000.
This amount is determined as follows: [($160,000 minus
$155,000) divided by $10,000] multiplied by $2,000.
If you are single and your AGI is between $95,000
and $110,000, your maximum Roth IRA contribution is
determined as follows: (1) Subtract your AGI from
$110,000; (2) divide the difference by $15,000; and (3)
multiply the result in step (2) by $2,000. For example,
if your AGI is $98,000, your maximum Roth IRA
contribution is $1,600. This amount is determined as
follows: [($110,000 minus $98,000) divided by $15,000]
multiplied by $2,000.
Your Roth IRA contribution is not limited by your
participation in a retirement plan other than a
Traditional IRA, as discussed above. In addition,
unlike Traditional IRAs, you may continue to fund a
Roth IRA after age 70 1/2 so long as you have earned
income and your AGI is below the maximum thresholds
discussed above.
C. Nonforfeitability - Your interest in your Roth IRA
is nonforfeitable.
D. Eligible Custodians - The Custodian of your Roth IRA
must be a bank, savings and loan association, credit
union, or a person approved by the Secretary of the
Treasury.
E. Commingling Assets - The assets of your Roth IRA
cannot be commingled with other property except in a
common trust fund or common investment fund.
F. Life Insurance - No portion of your Roth IRA may be
invested in life insurance contracts.
G. Collectibles - You may not invest the assets of your
Roth IRA in collectibles (within the meaning of IRC
Section 408(m)). A collectible is defined as any work
of art, rug or antique, metal or gem, stamp or coin,
alcoholic beverage, or other tangible personal property
specified by the Internal Revenue Service. However,
specially minted United States gold and silver bullion
coins and certain state-issued coins are permissible
investments. Platinum coins and certain gold, silver,
platinum or palladium bullion (as described in IRC
Section 408(m)(3)) are also permitted as Roth IRA
investments.
H. Beneficiary Payouts - If your surviving spouse is
your sole beneficiary, your spouse may treat your Roth
IRA as his or her own Roth IRA and would not be subject
to the required minimum distribution rules. Your
surviving spouse will also be entitled to such
additional beneficiary
payment options as are permitted under the law or
related regulations. If the beneficiary or
beneficiaries include anyone other than your surviving
spouse, the entire amount remaining in your account
will, at the election of your beneficiary or
beneficiaries, either
(a) be distributed by December 31 of the year
containing the fifth anniversary of your death, or
(b) be distributed in equal or substantially equal
payments over the life or life expectancy of your
designated beneficiary or beneficiaries.
A nonspouse beneficiary or beneficiaries must
elect either option (a) or (b) by December 31 of the
year following the year of your death. If no election
is made, distribution will be made in accordance with
option (a).
Income Tax Consequences of Establishing a Roth IRA
A. Contributions Not Deducted - No deduction is
allowed for Roth IRA contributions, including transfers
and rollover contributions.
B. Tax-Deferred Earnings - The investment earnings of
your Roth IRA are not subject to federal income tax as
they accumulate in your Roth IRA. In addition,
distributions of your Roth IRA earnings will be free
from federal income tax if you take a qualified
distribution, as discussed below.
C. Taxation of Distributions - The taxation of a
distribution from your Roth IRA depends on whether the
distribution is a qualified distribution or a
nonqualified distribution. In addition, if your
withdrawal is attributable to amounts converted from a
Traditional IRA to a Roth IRA, taxation may be
accelerated depending upon the length of time which has
passed since the conversion occurred.
1. Qualified Distributions - Qualified
distributions from your Roth IRA (both the
contributions and earnings) are excluded from gross
income. A qualified distribution is a distribution
which is made after the five-year period beginning with
the first year for which you made any contribution to a
Roth IRA (including a conversion from a Traditional
IRA) and is made on account of one of the following
events:
attainment of age 59 1/2,
disability,
the purchase of a first home, or
death.
For example, if you make a contribution to your
Roth IRA for 1998, the five-year requirement for
determining whether a distribution is a qualified
distribution will be satisfied as of January 1, 2003.
2. Nonqualified Distributions - If you do not meet
the requirements for a qualified distribution, any
earnings you withdraw from your Roth IRA will be
included in your gross income and, if you are under age
59 1/2, may be subject to an early distribution
penalty. However, when you take a distribution, the
amounts you contributed annually to any Roth IRA
account will be deemed to be removed first, followed by
conversion contributions made to any Roth IRA on a
first-in, first-out basis. Therefore, your nonqualified
distributions will not be taxable to you until your
withdrawals exceed the amount of your annual
contributions and your conversion contributions. These
"ordering rules" are complex. If you have any questions
regarding the taxation of distributions from your Roth
IRA, please see a competent tax advisor.
D. No Required Minimum Distributions Before Death -
You are not required to take lifetime distributions
from your Roth IRA at age 70 1/2 (as required for
Traditional and SIMPLE IRAs). However, distributions
from your Roth IRA must be made, or begin to be made,
within a certain period after you die.
E. Rollovers and Conversions - Your Roth IRA may be
rolled over to another Roth IRA of yours, or may
receive rollover contributions, provided that all of
the applicable rollover rules are followed. Rollover is
a term used to describe a tax-free movement of cash or
other property to your Roth IRA from any of your Roth
or Traditional IRAs. The rollover rules are generally
summarized below. These transactions are often complex.
If you have any questions regarding a rollover, please
see a competent tax advisor.
1. Roth IRA to Roth IRA Rollovers - Funds
distributed from your Roth IRA may be rolled over to a
Roth IRA of yours if the requirements of IRC Section
408(d)(3) are met. A proper Roth IRA to Roth IRA
rollover is completed if all or part of the
distribution is rolled over not later than 60 days
after the distribution is received. You may not have
completed another Roth IRA to Roth IRA rollover from
the distributing Roth IRA during the 12 months
preceding the date you receive the distribution.
Further, you may roll the same dollars or assets only
once every 12 months. Roth IRA assets may not be rolled
over to other types of IRAs (e.g., Traditional IRA, SEP
IRA, SIMPLE IRA).
2. Traditional IRA to Roth IRA Conversions -
Unless your AGI is more than $100,000, or you are
married filing a separate tax return, you are eligible
to convert all or any portion of your existing
Traditional IRA(s) into your Roth IRA(s). Your AGI for
the taxable year in which the distribution(s) are made
from your Traditional IRA(s), rather than your AGI for
the taxable year in which the distribution(s) are
contributed
to your Roth IRA(s), determines your eligibility for
Traditional IRA to Roth IRA conversions.
The amount of any conversion from your
Traditional IRA to your Roth IRA will be treated as a
distribution for income tax purposes and is includible
in your gross income (except for any nondeductible
contributions). Although the conversion amount is
generally included in income, the 10 percent early
distribution penalty will not apply to conversions from
a Traditional IRA to a Roth IRA, regardless of whether
you qualify for an exception to the 10 percent penalty.
If you convert assets from your Traditional IRA
to your Roth IRA prior to January 1, 1999, you must
generally include the taxable amount of the
distribution in your gross income ratably over a four-
year period beginning with 1998. However, you may make
an irrevocable election on or before your 1998 tax
return due date (including extensions) to include the
entire taxable amount of the conversion in your 1998
income. If you choose to include your 1998 conversion
contributions in income ratably over a four-year
period, the amount included in income each year will be
increased by the amount of any distributions you take
from your Roth IRA between 1998 and 2000 which
represent taxable conversion contributions. If you die
prior to the end of the four-year period, the remaining
amount of your 1998 conversion which has not been
included in income will generally be taxable in the
year of your death. However, if your spouse is your
sole beneficiary, he or she may elect to include the
remaining conversion amounts in his or her income over
the remaining portion of the original four-year period.
The irrevocable election must be made on or before your
spouse's tax return due date (including extensions) for
the year in which you die.
3. Written Election - At the time you make a
proper rollover to a Roth IRA, you must designate to
the Custodian, in writing, your election to treat that
contribution as a rollover. Once made, the rollover
election is irrevocable.
4. No Rollovers from Employer Plans - You may not
roll over distributions from your employer's qualified
retirement plan or 403(b) arrangement into your Roth
IRA.
F. Carryback Contributions - A contribution is deemed
to have been made on the last day of the preceding
taxable year if you make a contribution by the deadline
for filing your income tax return (not including
extensions), and you designate that contribution as a
contribution for the preceding taxable year. For
example, if you are a calendar year taxpayer and you
make your Roth IRA contribution on or before April 15,
your contribution is considered to have been made for
the previous tax year if you designate it as such.
Limitations and Restrictions
A. Spousal Roth IRA - If you are married, you may
make payments to a Roth IRA established for the benefit
of your spouse. You must file a joint tax return for
the year for which the contribution is made.
The amount you may contribute to your Roth IRA and
your spouse's Roth IRA is the lesser of $4,000 or 100
percent of your combined compensation. However, you may
not contribute more than $2,000 to any one Roth IRA.
Your contribution may be further limited if your AGI
exceeds the levels discussed in the section titled
Maximum Contribution.
B. Estate Tax Exclusion - The $100,000 federal estate
tax exclusion previously available has been repealed
for individuals dying after December 31, 1984. No
exclusion will be allowed for individuals dying after
that date. Transfers of your Roth IRA assets to a named
beneficiary made during your life and at your request
or because of your failure to instruct otherwise, may
be subject to federal gift tax under IRC Section 2501
if made after October 22, 1986.
C. Special Tax Treatment - Capital gains treatment
and the favorable five-
or ten-year forward averaging tax authorized by IRC
Section 402 do not apply to Roth IRA distributions.
D. Income Tax Treatment - Any nonqualified
distribution of earnings from your Roth IRA is subject
to federal income tax withholding. You may, however,
elect not to have withholding apply to your Roth IRA
distribution. If withholding is applied to your
distribution, not less than 10 percent of the amount
distributed must be withheld.
E. Prohibited Transactions - If you or your
beneficiary engage in a prohibited transaction with
your Roth IRA, as described in IRC Section 4975, your
Roth IRA will lose its tax-exempt status and you must
generally include the value of the earnings in your
account in your gross income for that taxable year.
F. Pledging - If you pledge any portion of your Roth
IRA as collateral for
a loan, the amount so pledged will be treated as a
distribution and
may be included in your gross income for that year to
the extent it represents earnings.
Federal Tax Penalties
A. Early Distribution Penalty - If you are under age
59 1/2 and receive a nonqualified Roth IRA
distribution, or if you receive a distribution of
conversion amounts within the five-year period
beginning with the year in which the conversion
occurred, an additional tax of 10 percent will
generally apply to the amount includible in income in
the year of the distribution or conversion, unless the
distribution is made on account of death, disability, a
qualifying rollover, a transfer, the timely withdrawal
of an excess contribution; or if the distribution is
part of a series of substantially equal periodic
payments (at least annual payments) made over your life
expectancy or the joint life expectancy of you and your
beneficiary. Payments made to pay medical expenses
which exceed 7.5 percent of your adjusted gross income
and distributions to pay for health insurance by an
individual who has separated from employment and who
has received unemployment compensation under a federal
or state program for at least 12 weeks are also exempt
from the 10 percent tax. Payments to cover certain
qualified education expenses and distributions for
first-home purchases (up to a life-time maximum of
$10,000) are exempt from the 10 percent tax. Beginning
January 1, 2000, distributions to satisfy a levy issued
by the Internal Revenue Service will also be exempt
from the 10 percent tax.
B. Excess Contribution Penalty - An excise tax of 6
percent is imposed upon any excess contribution you
make to your Roth IRA. This tax will apply each year in
which an excess remains in your Roth IRA. An excess
contribution is any contribution amount which exceeds
your contribution limit, excluding rollover and direct
transfer amounts. Your contribution limit is the lesser
of $2,000 or 100 percent of your compensation for the
taxable year. Your contribution may be further limited
if your AGI exceeds the levels discussed in the section
titled Maximum Contribution.
C. Excess Accumulation Penalty - When you die, the
entire amount of your Roth IRA must generally be
distributed within 5 years after your death, unless it
is distributed over the life expectancy of your
designated beneficiary beginning before the end of the
calendar year following the year of your death. If your
surviving spouse is your sole beneficiary, he or she
may delay distributions until the date you would have
reached age 70 1/2, had you lived, or may treat your
Roth IRA as his or her own Roth IRA.
An additional tax of 50 percent is imposed on the
amount of the required minimum distribution which
should have been taken but
was not. This tax is referred to as an excess
accumulation penalty tax.
D. Penalty Reporting - You must file Form 5329 with
the IRS to report and remit any penalties or excise
taxes.
Other
A. IRS Plan Approval - The Agreement used to
establish this Roth IRA has been approved by the IRS.
The IRS approval is a determination only as to form. It
is not an endorsement of the plan in operation or of
the investments offered.
B. Additional Information - You may obtain further
information on Roth
IRAs from your District Office of the IRS. In
particular, you may wish to obtain IRS Publication 590,
Individual Retirement Arrangements (IRAs).
Miscellaneous
A. Ministerial Agent - If the Custodian is UMB Bank,
n.a., Sunstone Investor Services, LLC shall be
ministerial agent for the Custodian in the performance
of any ministerial duties delegated to it by the
Custodian. If any other bank or entity is the
Custodian, then Sunstone Investor Services, LLC shall
not be the ministerial agent for any duties of the
Custodian unless it agrees to be in writing with the
other Custodian.
B. Fees - The Custodian will charge the following
fees for servicing your Roth IRA account:
Annual maintenance fee $15
Distribution (including rollover or direct rollover) $15
Refund of excess contribution $15
Any outgoing wire transfer $10
The annual maintenance fee will be deducted from
your account unless otherwise paid by you. The charge
for refund of excess contribution will be deducted from
your account at the time of the refund. These fees are
subject to change.
C. Financial Guarantees and Projections - You may
direct the investment
of your funds within this Roth IRA into any investment
instrument offered by or through Grand Prix Funds.
Grand Prix Funds will not
exercise any investment discretion regarding your Roth
IRA, as this
is solely your responsibility.
The value of your Roth IRA will be solely
dependent upon the performance of any investment
instrument chosen by you to fund your Roth IRA.
Therefore, no projection of the growth of your Roth IRA
can reasonably be shown or guaranteed.
You choose the investment which will fund your
Roth IRA. Your investment choices are limited to
investments we offer directly.
D. Termination - The Custodian may resign at any time
upon sixty (60) days' notice in writing to you and
Grand Prix Funds. Upon resignation, Grand Prix Funds
will appoint a successor custodian. You or Grand Prix
Funds may terminate this agreement at any time by
giving sixty (60) days' written notice filed in a form
acceptable to us. The notice must designate a successor
custodian that satisfies the requirement of IRC Section
408(h).
Roth IRA Custodial Account
Form 5305-RA under Section 408A of the
Internal Revenue Code FORM (REV.JAN.1998)
The Depositor whose name appears on the
Application is establishing a Roth Individual
Retirement Account under section 408A to provide for
his or her retirement and for the support of his or her
beneficiaries after death.
The Custodian named on the Application has
given the Depositor the disclosure statement required
under Regulations section 1.408-6.
The Depositor has assigned the Custodial
account the sum indicated on the Application.
The Depositor and the Custodian make the
following agreement:
Article I
1. If this Roth IRA is not designated as a Roth
Conversion IRA, then, except in the case of a rollover
contribution described in section 408A(e), the
Custodian will accept only cash contributions and only
up to a maximum amount of $2,000 for any tax year of
the Depositor.
2. If this Roth IRA is designated as a Roth
Conversion IRA, no contributions other than IRA
Conversion Contributions made during the same tax year
will be accepted.
Article II
The $2,000 limit described in Article I is
gradually reduced to $0 between certain levels of
adjusted gross income (AGI). For a single depositor,
the $2,000 annual contribution is phased out between
AGI of $95,000 and $110,000; for a married depositor
who files jointly, between AGI of $150,000 and
$160,000; and for a married depositor who files
separately, between $0 and $10,000. In the case of a
conversion, the Custodian will not accept IRA
Conversion Contributions in a tax year if the
Depositor's AGI for that tax year exceeds $100,000 or
if the Depositor is married and files a separate
return. Adjusted gross income is defined in section
408A(c)(3) and does not include IRA Conversion
Contributions.
Article III
The Depositor's interest in the balance in
the Custodial account
is nonforfeitable.
Article IV
1. No part of the Custodial funds may be invested in
life insurance contracts, nor may the assets of the
Custodial account be commingled with other property
except in a common trust fund or common investment fund
(within the meaning of section 408(a)(5)).
2. No part of the Custodial funds may be invested in
collectibles (within the meaning of section 408(m))
except as otherwise permitted by
section 408(m)(3), which provides an exception for
certain gold, silver, and platinum coins, coins issued
under the laws of any state, and
certain bullion.
Article V
1. If the Depositor dies before his or her entire
interest is distributed to him or her and the
Depositor's surviving spouse is not the sole
beneficiary, the entire remaining interest will, at the
election of the Depositor or, if the Depositor has not
so elected, at the election of the beneficiary or
beneficiaries, either:
(a) Be distributed by December 31 of the year
containing the fifth anniversary of the Depositor's
death, or
(b) Be distributed over the life expectancy of the
designated beneficiary starting no later than December
31 of the year following the year of the Depositor's
death.
If distributions do not begin by the date
described in (b), distribution method (a) will apply.
2. In the case of distribution method 1.(b) above, to
determine the minimum annual payment for each year,
divide the Depositor's entire interest in the custodial
account as of the close of business on December 31 of
the preceding year by the life expectancy of the
designated beneficiary using the attained age of the
designated beneficiary as of the beneficiary's birthday
in the year distributions are required to commence and
subtract 1 for each subsequent year.
3. If the Depositor's spouse is the sole beneficiary
on the Depositor's date of death, such spouse will then
be treated as the Depositor.
Article VI
1. The Depositor agrees to provide the Custodian with
information necessary for the Custodian to prepare any
reports required under sections 408(i) and
408A(d)(3)(E), Regulations sections 1.408-5 and 1.408-
6, and under guidance published by the Internal Revenue
Service.
2. The Custodian agrees to submit reports to the
Internal Revenue Service and the Depositor as
prescribed by the Internal Revenue Service.
Article VII
Notwithstanding any other articles which may
be added or incorporated, the provisions of Articles I
through IV and this sentence will be controlling. Any
additional articles that are not consistent with
section 408A, the related regulations, and other
published guidance will be invalid.
Article VIII
This agreement will be amended from time to
time to comply with the provisions of the Code, related
regulations, and other published guidance. Other
amendments may be made with the consent of the persons
whose signatures appear below.
Article IX
9.01 Definitions: In this part of this Agreement
(Article IX), the words "you" and "your" mean the
Depositor, the words "we," "us," and "our" mean the
Custodian and "Code" means the Internal Revenue Code.
9.02 Notices and Change of Address: Any required
notice regarding this Roth IRA will be considered
effective when we mail it to the last address of the
intended recipient which we have in our records. Any
notice to be given to us will be considered effective
when we actually receive it. You must notify us of any
change of address.
9.03 Representations and Responsibilities: You
represent and warrant to us that any information you
have given or will give us with respect to this
Agreement is complete and accurate. Further, you agree
that any directions you give us, or action you take
will be proper under this Agreement and that we are
entitled to rely upon any such information or
directions. We shall not be responsible for losses of
any kind that may result from your directions to us or
your actions or failures to act and you agree to
reimburse us for any loss we may incur as a result of
such directions, actions or failures to act. We shall
not be responsible for any penalties, taxes, judgments
or expenses you incur in connection with your Roth IRA.
We have no duty to determine whether your contributions
or distributions comply with the Code, regulations,
rulings or this Agreement.
9.04 Service Fees: We have the right to charge an
annual service fee or other designated fees (for
example, a transfer, rollover or termination fee) for
maintaining your Roth IRA. In addition, we have the
right to be reimbursed for all reasonable expenses we
incur in connection with the administration of your
Roth IRA. We may charge you separately for any fees or
expenses or we may deduct the amount of the fees or
expenses from the assets in your Roth IRA at our
discretion. We reserve the right to charge any
additional fee upon 30 days' notice to you that the fee
will be effective.
Any brokerage commissions attributable
to the assets in your Roth IRA will be charged to your
Roth IRA. You cannot reimburse your Roth IRA for those
commissions.
9.05 Investment of Amounts in the Roth IRA:
(a) Direction of Investment - You have
exclusive responsibility for and control over the
investment of the assets of your Roth IRA. You shall
direct all investment transactions, including earnings
and the proceeds from securities sales. Your selection
of investments, however, shall be limited to Grand Prix
Funds or any other mutual fund designated by Grand Prix
Funds as a permissible investment alternative.
All transactions shall be subject
to any and all applicable Federal and State laws and
regulations and the rules, regulations, customs and
usages of any exchange, market or clearing house where
the transaction is executed and to our policies and
practices.
After your death, your
beneficiary(ies) shall have the right to direct the
investment of your Roth IRA assets, subject to the same
conditions that applied to you during your lifetime
under this Agreement (including, without limitation,
section 9.03).
(b) Our Investment Powers and Duties -
We shall have no discretion to direct any investment in
your Roth IRA. We assume no responsibility for
rendering investment advice with respect to your
Roth IRA, nor will we offer any opinion or judgment to
you on matters concerning the value or suitability of
any investment or proposed investment for your Roth
IRA. We shall not be responsible for determining the
permissible amount of contributions
to the account, or for the amount or timing of
distributions
from the account, or for any other actions taken at
your request.
(c) Delegation of Investment
Responsibility - We may, but are not required to,
permit you to delegate your investment responsibility
for your Roth IRA to another party acceptable to us by
giving written notice of your delegation in a format we
prescribe. We shall follow the direction of any such
party who is properly appointed and we shall be under
no duty to review or question, nor shall we be
responsible for, any of that party's directions,
actions or failures to act.
9.06 Beneficiaries: If you die before you receive
all of the amounts in your Roth IRA, payments from your
Roth IRA will be made to your beneficiaries.
You may designate one or more persons or
entities as beneficiary of your Roth IRA. This designation
can only be made on a form prescribed by us and it will only
be effective when it is filed with us during your lifetime.
Each beneficiary designation you file with us will cancel all
previous ones. The consent of a beneficiary shall not
be required for you to revoke a beneficiary designation.
If your surviving spouse is your sole
beneficiary, your spouse may treat your Roth IRA as his
or her own Roth IRA and would not be subject to the required
minimum distribution rules. Your surviving spouse will
also be entitled to such additional beneficiary payment
options as are permitted under the law or related regulations.
If the beneficiary or beneficiaries include anyone other than
your surviving spouse, distributions must commence in
accordance with Article V.
In the absence of a valid beneficiary
designation on file with us at the time of your death,
we shall, upon receipt of notice of your death
supported by a certified copy of the death certificate
or other appropriate evidence of the fact of death
satisfactory to us, make distributions of your Roth IRA
account to your beneficiary or beneficiaries in the
following order of preference:
(a) to your legal spouse; but if no
such legal spouse shall survive you; then
(b) to your surviving natural and
adoptive children in equal shares per capita and not
per stirpes; but if there shall be no such surviving
child or children; then
(c) to your personal representative,
provided however, that we shall have no duty,
obligation, or responsibility to make any inquiry or
conduct any investigation concerning the
identification, address, or legal status of any
individual or individuals alleging the status of
beneficiary (designated or otherwise) nor to make
inquiry or investigation concerning the possible
existence of any beneficiary not reported to us within
a reasonable period after the notification period after
your death (or that of your surviving spouse) and
previous to the distribution of the Roth IRA account.
We may conclusively rely upon the veracity and accuracy
of all matters reported to it by any source ordinarily
presumed to be knowledgeable respecting the matters so
reported. With respect to any distribution made by
reason of your death (or your surviving spouse) we
shall have no reliance upon erroneous, inaccurate or
fraudulent information reported by any source assumed
to be reliable, or by reason of incomplete information
in its possession at the time of such distribution.
Upon full and complete distribution of the Roth IRA
account pursuant to the provisions of this section, we
shall be fully and forever discharged from all
liability respecting such Custodial account.
9.07 Termination: We may resign at any time upon
60 days' notice in writing to you and Grand Prix Funds.
Upon resignation, Grand Prix Funds will notify you and
appoint a successor custodian.
You may terminate this Agreement at any
time by giving 60 days' written notice filed in a form
acceptable to us. The notice must include designation
of a successor custodian and removal shall be effective
upon written acceptance by the successor custodian of
its appointment. The successor custodian shall satisfy
the requirements of IRC Section 408(h).
Grand Prix Funds may terminate this
Agreement at any time by
giving 60 days' written notice to you and the
Custodian. The notice must include designation of a
successor custodian that satisfies the requirements of
IRC Section 408(h).
We shall not be liable for any actions
or failures to act on the part of any successor
custodian or trustee nor for any tax consequences you
may incur that result from the transfer or distribution
of your assets pursuant to this section.
If this Agreement is terminated, we may
hold back from your Roth IRA a reasonable amount of
money that we believe is necessary to cover any one or
more of the following:
any fees, expenses or taxes chargeable
against your Roth IRA;
any penalties associated with the early
withdrawal of any savings instrument or other
investment in your Roth IRA;
any payment of liability constituting a
charge against the assets and where necessary to
liquidate shares for such payments.
The Custodian is authorized to reserve
money for payments and shall pay remaining amounts over
to the successor custodian.
If our organization is merged with
another organization (or comes under the control of any
Federal or State agency) or if our entire organization
(or any portion which includes your Roth IRA) is bought
by another organization, that organization (or agency)
shall automatically become the trustee or custodian of
your Roth IRA, but only if it is the type of
organization authorized to serve as a Roth IRA trustee
or custodian.
If we are required to comply with
section 1.408-2(e) of the Treasury Regulations and we
fail to do so, or we are not keeping the records,
making the returns or sending the statements as are
required by forms or regulations, the IRS may, after
notifying you, require you to substitute another
trustee or custodian.
9.08 Amendments: We have the right to amend this
Agreement at any time without your consent. We may make
further amendments to this Agreement in order to make
said Agreement acceptable in form to the Secretary of
Labor, or for any other purpose. Any such amendment
shall be effective without your signature to a new
Adoption Agreement or Roth IRA Application and shall,
if for the purpose of initially qualifying the
Custodial account pursuant to the Code, be
retroactively effective to the date of the captioned
Agreement. We will notify you of any such amendment,
and you will be deemed to have consented to any other
amendment, if you fail to object to it within 30 days
from the date the notice is mailed. The Custodian will
mail a copy of any such amendment to you.
9.09 Withdrawals: All requests for withdrawal
shall be in writing on a form provided by or acceptable
to us. The method of distribution must be specified in
writing. The tax identification number of the recipient
must be provided to us before we are obligated to make
a distribution.
Any withdrawals shall be subject to all
applicable tax and other laws and regulations including
possible early withdrawal penalties and withholding
requirements.
You are not required to take a
distribution from your Roth IRA at age 70 1/2. At your
death, however, your beneficiaries must begin taking
distributions in accordance with Article V and section
9.06 of this Agreement. We will make no payouts to you
from your Roth IRA until you provide us with a written
request for a distribution on a form provided by or
approved by us.
9.10 Transfers from Other Plans: We can receive
amounts transferred or rolled over to this Roth IRA
from the trustee or custodian of another Roth IRA as
permitted by statute or applicable regulations.
However, if this Custodial account is
designated as a Roth Conversion IRA, no contributions
other than IRA Conversion Contributions made during the
same tax year will be accepted.
9.11 Liquidation of Assets: We have the right to
liquidate assets in your Roth IRA if necessary to make
distributions or to pay fees, expenses or taxes
properly chargeable against your Roth IRA. If you fail
to direct us as to which assets to liquidate, we will
decide in our complete and sole discretion and you
agree not to hold us liable for any adverse
consequences that result from our decision.
9.12 Restrictions on the Fund: Neither you nor
any beneficiary may sell, transfer or pledge any
interest in your Roth IRA in any manner whatsoever,
except as provided by law or this Agreement.
The assets in your Roth IRA shall not be
responsible for the debts, contracts or torts of any
person entitled to distributions under
this Agreement.
9.13 What Law Applies: This Agreement is subject
to all applicable Federal and State laws and
regulations. If it is necessary to apply any State law
to interpret and administer this Agreement, the law of
our domicile shall govern.
If any part of this Agreement is held to
be illegal or invalid, the remaining parts shall not be
affected. Neither your nor our failure to enforce
at any time or for any period of time any of the
provisions of this Agreement shall be construed as a
waiver of such provisions, or your right or our right
thereafter to enforce each and every such provision.
All questions arising with respect to
the provisions of the Agreement shall be determined by
application of the laws of the State of Missouri except
to the extent federal statutes supersede Missouri law.
To the extent permitted by law, none of your creditors
or any beneficiary shall have any power to execute any
levy, lien, assignment, garnishment, alienation,
attachment, or other voluntary or involuntary transfer
on any of the assets of the Roth IRA; and all sums
payable to you or any beneficiary shall be free and
clear of all liabilities for debts, levies, attachments
and proceedings
of any kind, at law or in equity.
9.14 Ministerial Agent: If the Custodian is UMB
Bank, n.a., Sunstone Investor Services shall be the
ministerial agent for the Custodian
in the performance of any ministerial duties delegated
to it by the Custodian. If any other bank or entity is the
Custodian, then Sunstone Investor Services, LLC shall
not be the ministerial agent for any duties of the Custodian
unless it agrees to be in writing with the other Custodian.
9.15 Guarantees: The Custodian does not guarantee
the custodial account from loss or depreciation. The
liability of the Custodian to make any payment from the
custodial account at any time is limited to the then
available assets of the custodial account.
9.16 By signing the Application form, you
represent and certify that if you are contributing to a
Roth Conversion Account, including the initial rollover
contribution to a Roth Conversion Account, that (i)
your AGI does not exceed the amount in Article II, (ii)
if married you are filing
a joint return, and (iii) you comply with all such
contributions permitted under the Code.
9.17 The Custodian will deliver to you all
proxies, prospectuses and notices pertaining to
securities held in the account. The Custodian shall not
vote any such securities. Any notice sent from the
Custodian to the Depositor will be effective if sent by
mail to your last address of record.
9.18 Confirmation of transactions and records or
statements of activity in the Depositor's custodial
account shall be conclusive if the Depositor does not
object within 30 days after mailing to the Depositor.
In such case, the Custodian and its officers and
employees shall forever be released and discharged from
any liability with respect to any claim arising out of
any action or omission reflected on such confirmation
or record.
(Section references are to the Internal
Revenue Code unless otherwise noted.)
Purpose of Form
Form 5305-RA is a model custodial account
agreement that meets the requirements of section 408A
and has been automatically approved by the IRS. A Roth
individual retirement account (Roth IRA) is established
after the form is fully executed by both the individual
(Depositor) and the Custodian. This account must be
created in the United States for the exclusive benefit
of the Depositor or his or her beneficiaries.
Do not file Form 5305-RA with the IRS.
Instead, keep it for your records.
Unlike contributions to Traditional
individual retirement arrangements, contributions to a
Roth IRA are not deductible from the Depositor's gross
income; and distributions after 5 years that are made
when the Depositor is 59 1/2 years of age or older or on
account of death, disability,
or the purchase of a home by a first-time homebuyer
(limited to $10,000), are not includible in gross
income. For more information on Roth IRAs, including
the required disclosure the Depositor can get from the
Custodian, get Pub. 590, Individual Retirement
Arrangements (IRAs).
This Roth IRA can be used by a Depositor to
hold: (1) IRA Conversion Contributions, amounts rolled
over or transferred from another Roth IRA, and annual
cash contributions of up to $2,000 from the Depositor;
or
(2) if designated as a Roth Conversion IRA (by checking
the box on the Application), only IRA Conversion
Contributions for the same tax year.
To simplify the identification of funds
distributed from Roth IRAs, Depositors are encouraged
to maintain IRA Conversion Contributions for each tax
year in a separate Roth IRA.
Definitions
Roth Conversion IRA: A Roth Conversion IRA
is a Roth IRA that accepts only IRA Conversion
Contributions made during the same tax year.
IRA Conversion Contributions: IRA Conversion
Contributions are amounts rolled over, transferred, or
considered transferred from a nonRoth IRA to a Roth
IRA. A nonRoth IRA is an individual retirement account
or annuity described in section 408(a) or 408(b), other
than a Roth IRA.
Custodian: The Custodian must be a bank or
savings and loan association, as defined in section
408(n), or any person who has the approval of the IRS
to act as Custodian.
Depositor: The Depositor is the person who
establishes the
custodial account.
Article I: The Depositor may be subject to a
6-percent tax on excess contributions if (1)
contributions to other individual retirement
arrangements of the Depositor have been made for the
same tax year, (2) the Depositor's adjusted gross
income exceeds the applicable limits in Article II for
the tax year, or (3) the Depositor's and spouse's
compensation does not exceed the amount contributed for
them for the tax year. The Depositor should see the
Disclosure Statement or Pub. 590 for more information.
Article IX: Article IX and any that follow
it may incorporate additional provisions that are
agreed to by the Depositor and Custodian to complete
the agreement. They may include, for example,
definitions, investment powers, voting rights,
exculpatory provisions, amendment and termination,
removal of the Custodian, Custodian's fees, state law
requirements, beginning date of distributions,
accepting only cash, treatment of excess contributions,
prohibited transactions with the Depositor, etc. Use
additional pages if necessary and attach them to this
form.
NOTE: Form 5305-RA may be reproduced and reduced in
size for adaption to passbook purposes.
GRAND PRIX FUNDS, INC.
GRAND PRIX FUND
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN, AS AMENDED
ON NOVEMBER 1, 1998
The following Distribution and Shareholder
Servicing Plan, as amended (the "Plan") has been
adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended (the "Act"), by Grand
Prix Funds, Inc. (the "Corporation"), a Maryland
corporation, on behalf of the Grand Prix Fund (the
"Fund"), a series of the Corporation. The Plan has
been approved by a majority of the Corporation's Board
of Directors, including a majority of the directors who
are not interested persons of the Corporation and who
have no direct or indirect financial interest in the
operation of the Plan or in any Rule 12b-1 related
agreement (as defined below) (the "Disinterested
Directors"), cast in person at a meeting called for the
purpose of voting on such plan.
In considering whether the Corporation should
amend the Plan, the Board of Directors evaluated such
information as it deemed necessary and determined that
there was a reasonable likelihood that the amendment of
the Plan would benefit the Fund and its shareholders.
The provisions of the Plan are as follows:
1. PAYMENTS BY THE FUND TO PROMOTE THE SALE OF FUND
SHARES
(a) The Corporation, on behalf of the Fund,
will pay AmeriPrime Financial Securities, Inc.
(the "Distributor"), as principal underwriter of
the Fund's shares, a distribution and shareholder
servicing fee which will not exceed 0.25% of the
average daily net assets of the Fund in connection
with the promotion and distribution of Fund shares
and the provision of personal services to
shareholders. The Distributor may pay all or a
portion of these fees to any registered securities
dealer, financial institution or any other person
(the "Recipient") who renders assistance in
distributing or promoting the sale of shares, or
who provides certain shareholder services,
pursuant to a written agreement (the "Rule 12b-1
Related Agreement"), a form of which is attached
hereto as Appendix A. Payment of these fees shall
be made promptly following the close of the
quarter for which the fee is payable, upon the
Distributor forwarding to the Corporation's Board
of Directors the written report required by
Section 2 of this Plan; provided that the
aggregate payments under the Plan to the
Distributor and all Recipients shall not exceed
0.25% (on an annualized basis) of the average
daily net assets for that quarter; and provided
further that no fees shall be paid in excess of
the distribution and shareholder servicing
expenses verified in a written report and
submitted by the Distributor to the Corporation's
Board of Directors as required under Section 2 of
this Plan.
(b) No Rule 12b-1 Related Agreement shall be
entered into, and no payments shall be made
pursuant to any Rule 12b-1 Related Agreement,
unless such Rule 12b-1 Related Agreement is in
writing and has first been delivered to and
approved by a vote of a majority of the
Corporation's Board of Directors, and of a
majority of the Disinterested Directors, cast in
person at a meeting called for the purpose of
voting on such Rule 12b-1 Related Agreement. The
form of Rule 12b-1 Related Agreement attached
hereto as Appendix A has been approved by the
Corporation's Board of Directors as specified
above.
(c) Any Rule 12b-1 Related Agreement shall
describe the services to be performed by the
Recipient and shall specify the amount of, or the
method for determining, the compensation to the
Recipient.
(d) No Rule 12b-1 Related Agreement may be
entered into unless it provides (i) that it may be
terminated at any time, without the payment of any
penalty, by vote of a majority of the Fund's
shareholders, or by vote of a majority of the
Disinterested Directors, on not more than 60 days'
written notice to the other party to the Rule
12b-1 Related Agreement, and (ii) that it shall
automatically terminate in the event of its
assignment.
(e) The Rule 12b-1 Related Agreement shall
continue in effect for a period of more than one
year from the date of its execution only if such
continuance is specifically approved at least
annually by a vote of a majority of the Board of
Directors, and of the Disinterested Directors,
cast in person at a meeting called for the purpose
of voting on such Rule 12b-1 Related Agreement.
2. QUARTERLY REPORTS
The Distributor shall provide to the Board of
Directors, and the Directors shall review, at
least quarterly, a written report of all amounts
expended pursuant to the Plan. This report shall
include the identity of the Recipient of each
payment and the purpose for which the amounts were
expended and such other information as the Board
of Directors may reasonably request.
3. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective immediately
upon approval by the vote of a majority of the
Board of Directors, and of the Disinterested
Directors, cast in person at a meeting called for
the purpose of voting on the approval of the Plan.
The Plan shall continue in effect for a period of
one year from its effective date unless terminated
pursuant to its terms. Thereafter, the Plan shall
continue from year to year, provided that such
continuance is approved at least annually by a
vote of a majority of the Board of Directors, and
of the Disinterested Directors, cast in person at
a meeting called for the purpose of voting on such
continuance. The Plan may be terminated at any
time, without the payment of any penalty, by a
majority vote of the Fund's shareholders, or by
vote of a majority of the Disinterested Directors.
4. SELECTION OF DISINTERESTED DIRECTORS
During the period in which the Plan is
effective, the selection and nomination of those
Directors who are Disinterested Directors of the
Corporation shall be committed to the discretion
of the Disinterested Directors.
5. AMENDMENTS
All material amendments of the Plan shall be
in writing and shall be approved by a vote of a
majority of the Board of Directors, and of the
Disinterested Directors, cast in person at a
meeting called for the purpose of voting on such
amendment. In addition, the Plan may not be
amended to increase materially the amount to be
expended by the Corporation on behalf of the Fund
without the approval by a majority vote of the
Fund's shareholders.
6. RECORDKEEPING
The Corporation shall preserve copies of the
Plan, any Rule 12b-1 Related Agreement and all
reports made pursuant to Section 2 for a period of
not less than six years from the date of this
Plan, the first two years in an easily accessible
place.
APPENDIX A
Rule 12b-1 Related Agreement, as Amended
AmeriPrime Financial Securities, Inc.
1793 Kingswood Drive
Suite 200
Southlake, Texas 76092
____________, 1998
[Recipient's Name and Address]
Ladies and Gentlemen:
This letter will confirm our understanding and
agreement with respect to payments to be made to you
pursuant to a Distribution and Shareholder Servicing
Plan, as amended, (the "Plan") adopted by Grand Prix
Funds, Inc. (the "Corporation"), on behalf of the Grand
Prix Fund (the "Fund"), pursuant to Rule 12b-1 under
the Investment Company Act of 1940, as amended (the
"Act"). The Plan and this Related Agreement (the "Rule
12b-1 Related Agreement") have been approved by a
majority of the Board of Directors of the Corporation,
including a majority of the Board of Directors who are
not "interested persons" of the Corporation, as defined
in the Act, and who have no direct or indirect
financial interest in the operation of the Plan or in
this or any other Rule 12b-1 Related Agreement (the
"Disinterested Directors"), cast in person at a meeting
called for the purpose of voting thereon. Such
approval included a determination by the Board of
Directors that there was a reasonable likelihood that
the Plan would benefit the Fund's shareholders.
1. To the extent you provide distribution and
marketing services in the promotion of the Fund's
shares, including furnishing services and assistance to
your customers who invest in and own shares, including,
but not limited to, answering routine inquiries
regarding the Fund and assisting in changing account
designations and addresses, we shall pay you a fee of
up to 0.25% of the average daily net assets of the
Fund's shares (computed on an annual basis) which are
owned of record by your firm as nominee for your
customers or which are owned by those customers of your
firm whose records, as maintained by the Corporation or
its agent, designate your firm as the customer's dealer
or service provider of record. We reserve the right to
increase, decrease or discontinue the fee at any time
in our sole discretion upon written notice to you.
We shall make the determination of the Fund's net
asset value, which determination shall be made in the
manner specified in the Fund's current Prospectus, and
pay to you, on the basis of such determination, the fee
specified above, to the extent permitted under the
Plan. Payment of such fee shall be made promptly after
the close of each quarter for which such fees are
payable. No such fee will be paid to you with respect
to shares purchased by you and redeemed or repurchased
by the Fund, its agent or us within seven (7) business
days after the date of our confirmation of such
purchase. In addition, no such fee will be paid to you
with respect to any of your customers if the amount of
such fee based upon the value of such customer's shares
will be less than $25.00.
2. You shall furnish us with such information as
shall reasonably be requested by the Board of
Directors, on behalf of the Fund, with respect to the
fees paid to you pursuant to this Rule 12b-1 Related
Agreement.
3. We shall furnish to the Board of Directors,
for its review, on a quarterly basis, a written report
of the amounts expended under the Plan by us and the
purposes for which such expenditures were made.
4. This Rule 12b-1 Related Agreement may be
terminated by the vote of (a) a majority vote of the
Fund's shareholders, (b) a majority of the
Disinterested Directors, on sixty (60) days' written
notice, without payment of any penalty or (c) by any
act which terminates the Plan. In addition, this Rule
12b-1 Related Agreement shall terminate immediately in
the event of its assignment. This Rule 12b-1 Related
Agreement may be amended by us upon written notice to
you, and you shall be deemed to have consented to such
amendment upon effecting any purchases of shares for
your own account or on behalf of any of your customer's
accounts following your receipt of such notice.
5. This Rule 12b-1 Related Agreement shall
become effective on the date accepted by you and shall
continue in full force and effect so long as the
continuance of the Plan and this Rule 12b-1 Related
Agreement are approved at least annually by a vote of
the Board of Directors of the Corporation and of the
Disinterested Directors, cast in person at a meeting
called for the purpose of voting thereon. All
communications to us should be sent to the above
address. Any notice to you shall be duly given if
mailed to you at the address specified by you below.
This Rule 12b-1 Related Agreement shall be construed
under the laws of the State of Maryland.
AMERIPRIME FINANCIAL SECURITIES,
INC.
on behalf of Grand Prix Fund
By:__________________________________
Kenneth D. Trumpfheller, President
Accepted:
_________________________________
(Dealer or Service Provider Name)
_________________________________
(Street Address)
_________________________________
(City) (State) (ZIP)
_________________________________
(Telephone No.)
_________________________________
(Facsimile No.)
By:______________________________
(Name and Title
