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. / /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT / X /
OF 1940
Amendment No. / /
(Check appropriate box or boxes.)
AmeriPrime Insurance Trust - File Nos. 333- and 811-
(Exact Name of Registrant as Specified in Charter)
1793 Kingswood Drive, Suite 200, Southlake, TX 76092
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (817) 431-2197
Kenneth Trumpfheller, 1793 Kingswood Drive, Suite 200, Southlake, TX 76092
(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Approximate Date of Proposed Public Offering: December 1, 1998
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b) / / on pursuant to
paragraph (b) / / 60 days after filing pursuant to paragraph (a)(1) / / on
(date) pursuant to paragraph (a)(1) / / 75 days after filing pursuant to
paragraph (a)(2) / / on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.
ASA0325D-093098-3
<PAGE>
AmeriPrime Insurance Trust
CROSS REFERENCE SHEET
FORM N-1A
SHEPHERD VALUES GROWTH FUND
SHEPHERD VALUES AGGRESSIVE GROWTH FUND
SHEPHERD VALUES INTERNATIONAL FUND
SHEPHERD VALUES FIXED INCOME FUND
ITEM SECTION IN PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Performance Information
4.............................. The Funds, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Funds,General Information
5.............................. Operation of the Funds
5A............................. None
6.............................. Cover Page, Dividends and Distributions,
Taxes, General Information
7.............................. Cover Page, The Funds, Purchase and
Redemption of Shares, Valuation of Shares,
Operation of the Funds
8.............................. Purchase and Redemption of Shares
9.............................. None
13.............................. Investment Policies and Techniques and
Risk Considerations
15.............................. General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Portfolio
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. None
16.............................. The Investment Advisor, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. None
PROSPECTUS _______________, 1998
SHEPHERD VALUES ANNUITY FUNDS
Shepherd Values Growth Portfolio
Shepherd Values Aggressive Growth Portfolio
Shepherd Values International Portfolio
Shepherd Values Fixed Income Portfolio
Shepherd Values Annuity Funds (the "Funds") is a diversified open-end
management investment company. The Fund is intended exclusively as an investment
vehicle for variable annuity or variable life insurance contracts offered by the
separate accounts of various insurance companies. The Fund offers four distinct
Portfolios (collectively, the "Portfolios" and, individually, a "portfolio").
Shepherd Values Growth Portfolio ("Growth Portfolio"). The investment objective
of the Growth Portfolio is long-term capital appreciation. The Growth Portfolio
seeks to achieve this objective by investing, under normal circumstances, at
least 65% of its total assets in equity securities of United States issuers.
Shepherd Values Aggressive Growth Portfolio ("Aggressive Growth Portfolio"). The
investment objective of the Aggressive Growth Portfolio is long-term capital
appreciation. The Aggressive Growth Portfolio seeks to achieve this objective by
investing, under normal circumstances, at least 65% of its total assets in
equity securities of United States issuers that are considered to be "emerging
growth companies". These companies may not have significant operating histories
and may be carry higher risks than more established companies.
Shepherd Values International Portfolio. ("International Portfolio"). The
investment objective of the International Portfolio is long-term capital
appreciation. The International Portfolio seeks to achieve this objective by
investing, under normal circumstances, at least 65% of its total assets in
equity securities of foreign issuers.
Shepherd Values Fixed Income Portfolio ("Fixed Income Portfolio"). The Fixed
Income Portfolio's investment objective is maximum total return and the
preservation of capital. The Fixed Income Portfolio seeks to achieve it
objective by investing under normal conditions, at least 65% of its total assets
in fixed income securities of government and government-related issuers.
Each Portfolio shall seek to achieve its objectives through values-based
investing. The process of values-based investing differs from traditional
investing by way of the application of personal or organizational values as a
filter on the assets in creating an investment portfolio in harmony with
beliefs. It requires a substantial amount of additional research and information
resources above and beyond traditional financial analysis. Screening a portfolio
for values-based criteria typically occurred as the final step to implementing a
portfolio. The Advisor will first identify their list of investments, while then
screening this list to eliminate any companies not consistent with the
pre-stated set of client specific values.Shares of the Portfolios are sold
exclusively to separate accounts of insurance companies that offer variable
annuity or variable life insurance contracts. To open an account and purchase
shares of a Portfolio, please see the prospectus for the insurance company
separate account governing the variable annuity or variable life insurance
contract.
This Prospectus provides the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information dated ______________ has been filed with the
Securities and Exchange Commission (the "SEC"), is incorporated herein by
reference, and can be obtained without charge by calling the Fund at the phone
number listed above or by calling the insurance company sponsoring the variable
life insurance or variable annuity contract The SEC maintains a Web Site
(http://www.sec.gov) that contains the Statement of Additional Information,
material incorporated by reference, and other information regarding registrants
that file electronically with the SEC. For a free copy of the Statement of
Additional Information write to the Funds at 431 North Pennsylvania Street,
Indianapolis, Indiana 46204 or call 1-800-___-____. 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
SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund. The expense information is based on estimated amounts for the current
fiscal year. The expenses are expressed as a percentage of average net assets.
The Example should not be considered a representation of future Fund performance
or expenses, both of which may vary.
<TABLE>
<CAPTION>
Annual Fund Operating Expenses (as a percentage of average net assets)1
<S> <C> <C> <C> <C>
Growth Fund Aggressive International Fixed Income Fund
Growth Fund Fund
Management Fees 1.00% 1.25% 1.50% 0.75%
Other Expenses3 0.00% 0.00% 0.00% 0.00%
Total Fund Operating Expenses 1.00% 1.25% 1.50% 0.75%
</TABLE>
The tables above are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund.
Example
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at
the end of each time period:
<TABLE>
<S> <C> <C>
Portfolio 1 Year 3 Years
--------- ------ -------
Growth Fund $ $
Aggressive Growth Fund
International Fund
Fixed Income Fund
</TABLE>
<PAGE>
THE FUNDS
The Shepherd Values Annuity Funds were organized as series of the AmeriPrime
Insurance Trust, an Ohio business trust on September 29, 1998. This prospectus
offers shares of the Portfolios and each share represents an undivided,
proportionate interest in the Portfolios. The investment advisor to the funds is
Cornerstone Capital Management ("the Advisor"). The Funds consist of four
series, or separate investment portfolios, which offer shares for investment by
the Separate Accounts of various insurance companies. This Prospectus describes
only the Portfolios.
A particular portfolio of the Fund may not be available under the Policy or
Annuity Contract you have chosen or may not be available in your state due to
certain state insurance law considerations. The prospectus or disclosure
document for the particular Policy or Annuity Contract you have chosen will
indicate the portfolios which are generally available under the applicable
Policy or Annuity Contract and should be read in conjunction with this
Prospectus.
There can be, of course, no assurance that the Portfolios will achieve their
investment objectives. The Portfolios' investment objectives and, unless
otherwise noted, their investment policies and techniques, may be changed by the
Board of Trustees of the Fund without shareholder or Policyholder approval. A
change in the investment objectives or policies of the Portfolios may result in
the Portfolios having investment objectives or policies different from those
that a Policyholder deemed appropriate at the time of investment.
INVESTMENT OBJECTIVE AND STRATEGIES
Shepherd Values Growth Portfolio:
The investment objective of the Growth Portfolio is long-term capital
appreciation. The Growth Portfolio seeks to achieve this objective by investing,
under normal circumstances, at least 65% of its total assets in equity
securities of United States issuers. The Advisor selects common stocks which
they believe have the potential for long-term growth based on the issuer's
financial strength, quality of management and earnings power. The final
selection criteria employed by the Advisor is the "values-based investing"
approach. The process of values-based investing differs from traditional
investing due to the application of personal or organizational values as a
filter on the assets in creating an investment portfolio in harmony with the
investors' beliefs. This technique requires a substantial amount of additional
research and information resources above and beyond traditional financial
analysis. Screening a portfolio for values-based criteria typically occurs as
the final step in portfolio strategy. The Advisor will first identify their list
of investments, and then screen the list to eliminate any companies not
consistent with the pre-stated set of client specific values.Shepherd Values
Aggressive Growth Portfolio:
The investment objective of the Aggressive Growth Portfolio is
long-term capital appreciation. The Aggressive Growth Portfolio seeks to achieve
this objective by investing, under normal circumstances, at least 65% of its
total assets in equity securities of United States issuers that are considered
to be "emerging growth companies". These companies may not have significant
operating histories and may be carry higher risks than more established
companies. The Advisor selects common stocks which they believe have the
potential for long-term growth based on the issuer's financial strength, quality
of management and earnings power. The final selection criteria employed by the
Advisor is the "values-based investing" approach. The process of values-based
investing differs from traditional investing due to the application of personal
or organizational values as a filter on the assets in creating an investment
portfolio in harmony with the investors beliefs. This technique requires a
substantial amount of additional research and information resources above and
beyond traditional financial analysis. Screening a portfolio for values-based
criteria typically occurs as the final step in portfolio strategy. The Advisor
will first identify their list of investments, and then screening the list to
eliminate any companies not consistent with the pre-stated set of client
specific values.
Shepherd Values International Fund. ("International Fund").
The investment objective of the International Portfolio is long-term
capital appreciation. The International Portfolio seeks to achieve this
objective by investing, under normal circumstances, at least 65% of its total
assets in equity securities of foreign issuers. The Advisor selects common
stocks which they believe have the potential for long-term growth based on the
issuer's financial strength, quality of management and earnings power. The final
selection criteria employed by the Advisor is the "values-based investing"
approach. The process of values-based investing differs from traditional
investing due to the application of personal or organizational values as a
filter on the assets in creating an investment portfolio in harmony with the
investors beliefs. This technique requires a substantial amount of additional
research and information resources above and beyond traditional financial
analysis. Screening a portfolio for values-based criteria typically occurs as
the final step in portfolio strategy. The Advisor will first identify their list
of investments, and then screening the list to eliminate any companies not
consistent with the pre-stated set of client specific values.
Shepherd Values Fixed Income Fund ("Fixed Income Fund").
The Fixed Income Portfolio's investment objective is maximum total
return and the preservation of capital. The Fixed Income Portfolio seeks to
achieve it objective by investing under normal conditions, at least 65% of its
total assets in fixed income securities of government and government-related
issuers. This Portfolio's investment objective is high total return by investing
primarily in fixed income securities of government and government-related
issuers. The Portfolio shall seek to achieve its objectives through values-based
investing. The process of values-based investing differs from traditional
investing by way of the application of personal or organizational values as a
filter on the assets in creating an investment portfolio in harmony with
beliefs. It requires a substantial amount of additional research and information
resources above and beyond traditional financial analysis. Screening a portfolio
for values-based criteria typically occurred as the final step to implementing a
portfolio. The Advisor will first identify their list of investments, while then
screening this list to eliminate any companies not consistent with the
pre-stated set of client specific values.DIVIDENDS AND OTHER DISTRIBUTIONS The
Portfolios intend to distribute substantially all of their net investment
income, if any. Dividends, if any, from investment income normally are declared
and paid annually in additional shares of the Portfolios at net asset value.
Distributions of net realized capital gains from security transactions and net
gains from foreign currency transactions, if any, normally are declared and paid
in additional shares of the Portfolios at the end of the fiscal year.
TAXES
Each Portfolio intends to qualify and expects to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended ("Code"). As such, a Portfolio is not subject to Federal income
tax on that part of its investment company taxable income (consisting generally
of net investment income, net gains from certain foreign currency transactions,
and net short-term capital gain, if any) and any net capital gain (the excess of
net long-term capital gain over net short-term capital loss) that it distributes
to its shareholders. It is the Portfolios' intention to distribute all such
income and gains.
Portfolio shares are offered only to the Separate Accounts (which are insurance
company separate accounts that fund the Policies and the Annuity Contracts).
Under the Code, no tax is imposed on an insurance company with respect to income
of a qualifying separate account properly allocable to the value of eligible
variable annuity or variable life insurance contracts. For a discussion of the
taxation of life insurance companies and the Separate Accounts, as well as the
tax treatment of the Policies and Annuity Contracts and the holders thereof, see
"Federal Tax Matters" included in the respective prospectuses for the Policies
and the Annuity Contracts.
Each Portfolio intends to comply with the diversification requirements imposed
by section 817(h) of the Code and the regulations thereunder. These requirements
are in addition to the diversification requirements imposed on the Portfolios by
Subchapter M and the 1940 Act. These requirements place certain limitations on
the assets of each separate account that may be invested in securities of a
single issuer, and, because section 817(h) and the regulations thereunder treat
each Portfolio's assets as assets of the related separate account, these
limitations also apply to each Portfolio's assets that may be invested in
securities of a single issuer. Specifically, the regulations provide that,
except as permitted by the "safe harbor" described below, as of the end of each
calendar quarter, or within 30 days thereafter, no more than 55% of each of the
Portfolio's total assets may be represented by any one investment, no more than
70% by any two investments, no more than 80% by any three investments, and no
more than 90% by any four investments.
Section 817(h) provides, as a safe harbor, that a separate account will be
treated as being adequately diversified if the diversification requirements
under Subchapter M are satisfied and no more than 55% of the value of the
account's total assets are cash and cash items, government securities, and
securities of other regulated investment companies. For purposes of section
817(h), all securities of the same issuer, all interests in the same real
property project, and all interests in the same commodity are treated as a
single investment. In addition, each U.S. Government agency or instrumentality
is treated as a separate issuer, while the securities of a particular foreign
government and its agencies, instrumentalities, and political subdivisions all
will be considered securities issued by the same issuer. Failure of the
Portfolios to satisfy the section 817(h) requirements would result in taxation
of the Separate Accounts, the insurance companies, the Policies, and the Annuity
Contracts, and tax consequences to the holders thereof, other than as described
in the respective prospectuses for the Policies and the Annuity Contracts.
The foregoing is only a summary of some of the important Federal income tax
considerations generally affecting the Portfolios and their shareholders; see
the SAI for a more detailed discussion. Prospective investors are urged to
consult their tax advisors.
PURCHASE AND REDEMPTION OF SHARES
Shares of the Portfolios are sold and redeemed at their net asset value next
determined after receipt of a purchase order or notice of redemption in proper
form. Shares are sold and redeemed without the imposition of any sales
commission or redemption charge. However, certain sales and other charges may
apply to the Policies and the Annuity Contracts. Such charges are described in
the respective prospectuses for the Policies and the Annuity Contracts.
VALUATION OF SHARESEach Portfolio's net asset value per share is ordinarily
determined, once daily, as of the close of the regular session of business on
the New York Stock Exchange ("Exchange") (usually 4:00 p.m., Eastern Standard
time), on each day the Exchange is open. Net asset value of each Portfolio's
shares is computed by dividing the value of the net assets of the Portfolio by
the total number of Portfolio shares outstanding.
Except for money market instruments maturing in 60 days or less, securities held
by the Portfolios are valued at market value. Securities for which market values
are not readily available are valued at fair value as determined in good faith
by the Investment Adviser and Co-Sub-Advisers under the supervision of the
Fund's Board of Directors. Money market instruments maturing in 60 days or less
are valued on the amortized cost basis.
Securities which are traded on any exchange or on the NASDAQ over-the-counter
market are valued at the last quoted sale price. Lacking a last sale price, a
security is valued at its last bid price except when, in the Advisor's opinion,
the last bid price does not accurately reflect the current value of the
security. All other securities for which over-the-counter market quotations are
readily available are valued at their last bid price. When market quotations are
not readily available, when the Advisor determines the last bid price does not
accurately reflect the current value or when restricted securities are being
valued, such securities are valued as determined in good faith by the Advisor,
subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Advisor believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Advisor, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within 60 days of maturity, are valued
by using the amortized cost method of valuation, which the Board has determined
will represent fair value.
OPERATION OF THE FUNDS
Each Portfolio is a diversified series of AmeriPrime Insurance Trust,
an open-end management investment company organized as an Ohio business trust on
September 30, 1998. The Board of Trustees supervises the business activities of
the Funds. The Funds retains various organizations to perform specialized
services. The Fund retains Cornerstone Capital Management, Inc. (the "Advisor")
to manage the assets of each Portfolio. The Advisor, a Colorado Corporation has
approximately $50 million in assets under management. The Adviser was founded by
Messrs. Jason D. Huntley and Craig D. Van Hulzen, both Managing Directors and
senior officers with the firm in 1996, as portfolio managers and analysts for a
leading provider of "socially responsible" investment management. Portfolios are
managed primarily through separate accounts, although the Advisor is the
managing general partner for the Cornerstone Alpha Fund, L.P., a hedged equity
investment limited partnership. Clients consist of individuals and institutions
including private foundations, endowments, and corporate operating funds. In
aggregate, the portfolio management team has nearly 10 years managing assets in
a values-based manner. Messrs. Huntley and VanHulzen felt the need to build an
asset management operation for values-based investors. Similar (but different)
to socially responsible investing, values based investing empowers investors to
align their personal or organizational beliefs with the financial objectives of
their investment assets in attaining the "double bottom line." The two have set
out to prove that one does not have to sacrifice return to invest in such a
manner. Messrs. Huntley and VanHulzen are responsible for the day to day
management of the Portfolios.
The Portfolios are authorized to pay the Advisor a fee equal to an
annual average rate of 1.00%, 1.25%, 1.50% and 0.75% for the Growth Portfolio,
the Aggressive Growth Portfolio, the International Portfolio and the Fixed
Income Portfolio, respectively. The Advisor pays all of the operating expenses
of the Fund except brokerage, taxes, interest, fees and expenses of
non-interested person trustees and extraordinary expenses. In this regard, it
should be noted that most investment companies pay their own operating expenses
directly, while the Portfolio's expenses, except those specified above, are paid
by the Advisor.
The Fund retains AmeriPrime Financial Services, Inc. (the
"Administrator") to manage the Fund's business affairs and provide the Fund with
administrative services, including all regulatory reporting and necessary office
equipment, personnel and facilities. The Administrator receives a monthly fee
from the Advisor equal to an annual average rate of 0.10% of each Fund's average
daily net assets up to fifty million dollars, 0.075% of each Fund's average
daily net assets from fifty to one hundred million dollars and 0.050% of each
Fund's average daily net assets over one hundred million dollars (subject to a
minimum annual payment of $25,000). The Fund retains Unified Fund Services,
Inc., 431 North Pennsylvania Street, Indianapolis, Indiana 46204 (the "Transfer
Agent") to serve as transfer agent, dividend paying agent and shareholder
service agent. The Transfer Agent maintains a record of shareholder ownership
and sends confirmations and statements of account. Shareholder inquires may be
made in writing to 431 North Pennsylvania Street, Indianpolis, Indiana 46204, or
by calling 1-800-___-____. The Trust retains AmeriPrime Financial Securities,
Inc., 1793 Kingswood Drive, Suite 200, Southlake, Texas 76092 (the
"Distributor") to act as the principal distributor of the Fund's shares. Kenneth
D. Trumpfheller, officer and sole shareholder of the Administrator and the
Distributor, is an officer and trustee of the Trust. The services of the
Administrator, Transfer Agent and Distributor are operating expenses paid by the
Advisor.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Advisor may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute
portfolio transactions. The Advisor (not the Fund) may pay certain financial
institutions (which may include banks, brokers, securities dealers and other
industry professionals) a "servicing fee" for performing certain administrative
functions for Fund shareholders to the extent these institutions are allowed to
do so by applicable statute, rule or regulation.
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS
This section contains general information about various types of
securities and investment techniques that the Funds may purchase or employ. The
Statement of Additional Information provides more information.
Equity Securities. Equity securities consist of common stock, convertible
preferred stock, convertible bonds, rights and warrants. Common stocks, the most
familiar type, represent an equity (ownership) interest in a corporation.
Warrants are options to purchase equity securities at a specified price for a
specific time period. Rights are similar to warrants, but normally have a short
duration and are distributed by the issuer to its shareholders. Although equity
securities have a history of long-term growth in value, their prices fluctuate
based on changes in a company's financial condition and on overall market and
economic conditions. The Funds may in convertible preferred stocks or
convertible bonds.
The Funds may invest in foreign equity securities by purchasing
American Depository Receipts ("ADRs"). ADRs are certificates evidencing
ownership of shares of a foreign- based issuer held in trust by a bank or
similar financial institution. They are alternatives to the direct purchase of
the underlying securities in their national markets and currencies. To the
extent that the Fund does invest ADRs, such investments may be subject to
special risks, such as changes in restrictions on foreign currency transactions
and rates of exchange, and changes in the administrations or economic and
monetary policies of foreign governments.
Equity securities also include common stocks and common stock
equivalents of domestic real estate investment trusts ("REITS") and other
companies which operate as real estate corporations or which have a significant
portion of their assets in real estate. The Funds will not acquire any direct
ownership of real estate.
Investments in equity securities are subject to inherent market risks
and fluctuations in value due to earnings, economic conditions and other factors
beyond the control of the Adviser. As a result, the return and net asset value
of the Fund will fluctuate. Securities in the Funds portfolios may not increase
as much as the market as a whole and some undervalued securities may continue to
be undervalued for long periods of time. Although profits in some Fund holdings
may be realized quickly, it is not expected that most investments will
appreciate rapidly.
Foreign Securities. Foreign debt and equity securities, and securities
denominated in or indexed to foreign currencies may be affected by the strength
of those currencies relative to the U.S. dollar, or by political or economic
developments in foreign countries. These developments could include restrictions
on foreign currency transactions and rules of exchange, or changes in
administrations or monetary policies of foreign governments. Foreign securities
purchased using foreign currencies may incur currency conversion costs. Foreign
issuers and brokers may not be subject to accounting standards or governmental
supervision comparable to U.S. issuers and brokers, and there may be less public
information about their operations. In addition, foreign markets may be less
liquid or more volatile than U.S. markets, and may offer less protection to
investors.
The Funds may enter into forward contracts (agreements to exchange one
currency for another at a future date) to manage currency risks and to
facilitate transactions in foreign securities. Although currency forward
contracts can be used to protect the Fund from adverse exchange rate changes,
the Fund may incur a loss if the Advisor incorrectly predicts foreign currency
values.
There is no limitation on the amount of the Fund's assets that may be
invested in foreign securities or in any one country or currency, except that no
more than 35% of the Fund's assets may be invested in companies operating
exclusively in one foreign country.
. The Funds may invest in short term fixed income securities. The Funds will
limit its investment in fixed income securities to corporate debt securities and
U.S. government securities. Fixed income securities are generally considered to
be interest rate sensitive, which means that their value will generally decrease
when interest rates rise and increase when interest rates fall. Securities with
shorter maturities, while offering lower yields, generally provide greater price
stability than longer term securities and are less affected by changes in
interest rates.
- Corporate debt securities are long and short-term debt obligations issued by
companies (such as publicly issued and privately placed bonds, notes and
commercial paper).
- U.S. government obligations may be backed by the credit of the government as
a whole or only by the issuing agency. U.S. Treasury bonds, notes, and bills and
some agency securities, such as those issued by the Federal Housing
Administration and the Government National Mortgage Association (GNMA), are
backed by the full faith and credit of the U.S. government as to payment of
principal and interest and are the highest quality government securities. Other
securities issued by U.S. government agencies or instrumentalities, such as
securities issued by the Federal Home Loan Banks and the Federal Home Loan
Mortgage Corporation, are supported only by the credit of the agency that issued
them, and not by the U.S. government. Securities issued by the Federal Farm
Credit System, the Federal Land Banks, and the Federal National Mortgage
Association (FNMA) are supported by the agency's right to borrow money from the
U.S. Treasury under certain circumstances, but are not backed by the full faith
and credit of the U.S. government.
Zero Coupon Securities. Each Fund may invest in zero coupon securities which are
debt securities issued or sold at a discount from their face value which do not
entitle the holder to any periodic payment of interest prior to maturity or a
specified redemption date (or cash payment date). These involve risks that are
similar to those of other debt securities, although they may be more volatile,
and certain zero coupon securities move in the same direction as interest rates.
The amount of the discount varies depending on the time remaining until maturity
or cash payment date, prevailing interest rates, liquidity of the security and
perceived credit quality of the issuer. Zero coupon securities also may take the
form of debt securities that have been stripped of their unmatured interest
coupons, the coupons themselves and receipts or certificates representing
interests in such stripped debt obligations and coupons. The market prices of
zero coupon securities generally are more volatile than the market prices of
interest-bearing securities and are likely to respond to a greater degree to
changes in interest rates than interest-bearing securities having similar
maturities and credit qualities.
STRIPS. The Federal Reserve creates STRIPS (Separate Trading of Registered
Interest and Principal of Securities) by separating the coupon payments and the
principal payment from an outstanding Treasury security and selling them as
individual securities. To the extent a Fund purchases the principal portion of
the STRIP, the Fund will not receive regular interest payments. Instead they are
sold at a deep discount from their face value. A Fund will accrue income on such
STRIPS for tax and accounting purposes, in accordance with applicable law, which
income is distributable to shareholders. Because no cash is received at the time
such income is accrued, a Fund may be required to liquidate other Fund
securities to satisfy its distribution obligations. Because the principal
portion of the STRIP does not pay current income, its price can be very volatile
when interest rates change. In calculating its dividend, a Fund takes into
account as income a portion of the difference between the principal portion of
the STRIP's purchase price and its face value.
Floating Rate Bonds may have interest rates that move in tandem with a
benchmark, helping to stabilize their prices.
When-Issued and Delayed Delivery Securities. Each Fund may purchase securities
on a when-issued or delayed delivery basis. Delivery of and payment for these
securities may take place as long as a month or more after the date of the
purchase commitment. The value of these securities is subject to market
fluctuation during this period and no income accrues to the Fund until
settlement takes place. The Fund maintains with the Custodian a segregated
account containing high grade liquid securities in an amount at least equal to
these commitments.
Repurchase Agreements. The Fund may invest in repurchase agreements fully
collateralized by U.S. Government obligations. A repurchase agreement is a
short-term investment in which the purchaser (i.e., the Fund) acquires ownership
of a U.S. Government obligation (which may be of any maturity) and the seller
agrees to repurchase the obligation at a future time at a set price, thereby
determining the yield during the purchaser's holding period (usually not more
than seven days from the date of purchase). Any repurchase transaction in which
the Fund engages will require full collateralization of the seller's obligation
during the entire term of the repurchase agreement. In the event of a bankruptcy
or other default of the seller, the Fund could experience both delays in
liquidating the underlying security and losses in value. However, the Fund
intends to enter into repurchase agreements only with Star Bank, N.A. (the
Fund's Custodian), other banks with assets of $1 billion or more and registered
securities dealers determined by the Advisor (subject to review by the Board of
Trustees) to be creditworthy. The Advisor monitors the creditworthiness of the
banks and securities dealers with which the Fund engages in repurchase
transactions.
Reverse Repurchase Agreements. In a reverse repurchase agreement, a Fund
temporarily transfers possession of a Fund instrument to another party in return
for cash. This could increase the risk of fluctuation in the Fund's yield or in
the market value of its assets. A reverse repurchase agreement is a form of
borrowing and will be counted towards each Fund's borrowing restrictions.
Investment Companies. With respect to certain countries in which capital markets
are either less developed or not easily accessed, investments by each Fund may
be made through investment in other registered investment companies that in turn
are authorized to invest in the securities of such countries. Investment in
other investment companies is limited in amount by the 1940 Act, will involve
the indirect payment of a portion of the expenses, including advisory fees, of
such other investment companies and may result in a duplication of fees and
expenses.
Short-Term Instruments. Each Fund intends to stay invested in the securities
described above to the extent practical in light of its objective and long-term
investment perspective. However, a Fund's assets may be invested in high quality
short-term investments with remaining maturities of 397 days or less to meet
anticipated redemptions and expenses for day-to-day operating purposes and when,
in the Advisor's opinion, it is advisable to adopt a temporary defensive
position because of unusual and adverse conditions affecting the respective
markets.
Short Sales. If the Fund anticipates that the price of a security will decline,
it may sell the security short. When the Fund engages in a short sale, it sells
a security it does not own and, to complete the sale, borrows the same security
from a broker or other institution. The Fund must replace the borrowed security
by purchasing it at the market price at the time the Fund chooses to close the
short sale, or at the time it is required to do so by the lender, whichever is
earlier. The Fund may make a profit or loss depending upon whether the market
price of the security decreases or increases between the date of the short sale
and the date on which the Fund must replace the borrowed security.
In connection with its short sales, the Fund will be required to
maintain a segregated account with its custodian of cash or U.S. Government
Securities or other high grade liquid debt securities equal to the market value
of the securities sold less any collateral deposited with its broker. The Fund
will limit its short sales so that no more than 25% of its net assets (less all
its liabilities other than obligations under the short sales) will be deposited
as collateral and allocated to the segregated account. However, the segregated
account and deposits will not necessarily limit the Fund's potential loss on a
short sale, which is unlimited. The Fund limits short sales of any one issuer's
securities to 2% of the Fund's total assets and to 2% of any one class of the
issuer's securities.
Leverage. Each Fund may each borrow up to one-third of the value of its total
assets, from banks or through the use of reverse repurchase agreements, to
increase its holdings of Fund securities. Under the 1940 Act, each Fund is
required to maintain continuous asset coverage of 300% with respect to such
borrowings and to sell (within three days) sufficient Fund holdings to restore
such coverage if it should decline to less than 300% due to market fluctuations
or otherwise, even if such liquidations of a Fund's holdings may be
disadvantageous from an investment standpoint.
Leveraging by means of borrowing may exaggerate the effect of any increase or
decrease in the value of each Fund's securities and the corresponding Fund's net
asset value and money borrowed by a Fund will be subject to interest and other
costs (which may include commitment fees and/or the cost of maintaining minimum
average balances) which may or may not exceed the income received from the
securities purchased with borrowed funds.
Floating Rate, Inverse Floating Rate, and Index Obligations. Each Fund may
invest in debt securities with interest payments or maturity values that are not
fixed, but float in conjunction with (or inversely to) an underlying index or
price. These securities may be backed by U.S. Government or corporate issuers,
or by collateral such as mortgages. The indices and prices upon which such
securities can be based include interest rates, currency rates and commodities
prices. However, the Fund will not invest in any instrument whose value is
computed based on a multiple of the change in price or value of an asset or an
index of or relating to assets in which the Fund cannot or will not invest.
Floating rate securities pay interest according to a coupon which is reset
periodically. The reset mechanism may be formula based, or reflect the passing
through of floating interest payments on an underlying collateral pool. Inverse
floating rate securities are similar to floating rate securities except that
their coupon payments vary inversely with an underlying index by use of a
formula. Inverse floating rate securities tend to exhibit greater price
volatility than other floating rate securities. The Fund will not invest more
than 5% of its total assets in inverse floating rate securities. Floating rate
obligations generally exhibit a low price volatility for a given stated maturity
or average life because their coupons adjust with changes in interest rates.
Interest rate risk and price volatility on inverse floating rate obligations can
be high, especially if leverage is used in the formula. Index securities pay a
fixed rate of interest, but have a maturity value that varies by formula, so
that when the obligation matures a gain or loss may be realized. The risk of
index obligations depends on the volatility of the underlying index, the coupon
payment and the maturity of the obligation.
Investment In Relatively New Issues. Each Fund intends to invest occasionally in
the common stock of selected new issuers. If the Fund is to invest in credit
instruments of relatively new issuers, it will only be in those issues where the
Advisor believes there are strong covenant protections for the holder. If
issuers meet the investment criteria discussed above, the Fund may invest in
securities without respect to the age of the issuer. Investments in relatively
new issuers, i.e., those having continuous operating histories of less than
three years, may carry special risks and may be more speculative because such
companies are relatively unseasoned. Such companies may also lack sufficient
resources, may be unable to generate internally the funds necessary for growth
and may find external financing to be unavailable on favorable terms or even
totally unavailable. Those companies will often be involved in the development
or marketing of a new product with no established market, which could lead to
significant losses.
Spiders.
Derivatives. Each Fund may invest in various instruments that are commonly known
as derivatives. Generally, a derivative is a financial arrangement, the value of
which is based on, or "derived" from, a traditional security, asset, or market
index. Some "derivatives" such as mortgage-related and other asset-backed
securities are in many respects like any other investment, although they may be
more volatile or less liquid than more traditional debt securities. There are,
in fact, many different types of derivatives and many different ways to use
them. There are a range of risks associated with those uses. Futures and options
are commonly used for traditional hedging purposes to attempt to protect a fund
from exposure to changing interest rates, securities prices, or currency
exchange rates and as a low cost method of gaining exposure to a particular
securities market without investing directly in those securities. However, some
derivatives are used for leverage, which tends to magnify the effects of an
instrument's price changes as market conditions change. Leverage involves the
use of a small amount of money to control a large amount of financial assets,
and can in some circumstances, lead to significant losses. the Advisor will use
derivatives only in circumstances where they offer the most efficient means of
improving the risk/reward profile of a Fund and when consistent with a Fund's
investment objective and policies. The use of derivatives for non-hedging
purposes may be considered speculative.
Options on Stocks or Bonds. Each Fund may write and purchase options on stocks
or bonds. A call option gives the purchaser of the option the right to buy, and
obligates the writer to sell, the underlying security at the exercise price at
any time during the option period. Similarly, a put option gives the purchaser
of the option the right to sell, and obligates the writer to buy the underlying
security at the exercise price at any time during the option period. A covered
call option with respect to which a Fund owns the underlying security sold by
the Fund exposes the Fund during the term of the option to possible loss of
opportunity to realize appreciation in the market price of the underlying
security or to possible continued holding of a security which might otherwise
have been sold to protect against depreciation in the market price of the
security. A covered put option sold by a Fund exposes the Fund during the term
of the option to a decline in price of the underlying security.
Options on Stock and Bond Indices. Each Fund may purchase and write put and call
options on stock or bond indices listed on domestic and foreign stock exchanges,
in lieu of direct investment in the underlying securities or for hedging
purposes. A stock or bond index fluctuates with changes in the market values of
the securities included in the index. Options on securities indices are
generally similar to options on stocks except that the delivery requirements are
different. Instead of giving the right to take or make delivery of securities at
a specified price, an option on a stock or bond index gives the holders the
right to receive a cash "exercise settlement amount" equal to (a) the amount, if
any, by which the fixed exercise price of the option exceeds (in the case of a
put) or is less than (in the case of a call) the closing value of the underlying
index on the date of the exercise, multiplied by (b) a fixed "index multiplier."
Successful use by a Fund of options on security indices will be subject to the
Advisor's ability to predict correctly movement in the direction of the security
market generally or of a particular industry. This requires different skills and
techniques than predicting changes in the price of individual securities.
Futures Contracts on Stock and Bond Indices. Each Fund may enter into contracts
providing for the making and acceptance of a cash settlement based upon changes
in the value of an index of domestic or foreign securities ("Futures
Contracts"). This investment technique may be used as a low-cost method of
gaining exposure to a particular securities market without investing directly in
those securities or to hedge against anticipated future changes in general
market prices which otherwise might either adversely affect the value of
securities held by the Fund or adversely affect the prices of securities which
are intended to be purchased at a later date for the Fund. A Futures Contract
may also be entered into to close out or offset an existing futures position.
When used for hedging purposes, each transaction in Futures Contracts
involves the establishment of a position which will move in a direction opposite
to that of the investment being hedged. If these hedging transactions are
successful, the futures position taken for the Fund will rise in value by an
amount which approximately offsets the decline in value of the portion of the
Fund's investments that is being hedged. Should general market prices move in an
unexpected manner, the full anticipated benefits of Futures Contracts may not be
achieved or a loss may be realized. The risks of Futures Contracts also include
a potential lack of liquidity in the secondary market and incorrect assessments
of market. Brokerage costs will be incurred and "margin" will be required to be
posted and maintained as a good faith deposit against performance of obligations
under Futures Contracts written for a Fund. A Fund may not purchase or sell a
Futures Contract if immediately thereafter its margin deposits on its
outstanding Futures Contracts, other than Futures Contracts used for hedging
purposes, would exceed 5% of the market value of the Fund's total assets.
General. The Funds may invest up to 5% of its net assets in
Mortgage-Backed Securities, Zero Coupon Municipal Securities, Floating Rate
Bonds, Foreign Currency Exchange Transactions, Options on Foreign
Currencies and Illiquid Securities. The Fund may also invest up to 5% of
its net assets in securities sold under Rule 144A (unregistered securities
that can be resold to institutions only under SEC Rule 144A).
GENERAL INFORMATION
Fundamental Policies. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. The investment objective of the Portfolios may be changed without the
affirmative vote of a majority of the outstanding shares of the Portfolios. Any
such change may result in the Portfolios having an investment objective
different from the objective which the shareholders considered appropriate at
the time of investment in the Portfolios.
Portfolio Turnover. The Portfolios does not intend to purchase or sell
securities for short term trading purposes. However, if the objectives of the
Portfolios would be better served, short-term profits or losses may be realized
from time to time. It is anticipated that the Portfolios will hold most
securities from 1 to 5 years at a time and that portfolio turnover will not
exceed 50% annually.
Shareholder Rights. Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. When
matters are submitted to shareholders for a vote, each shareholder is entitled
to one vote for each whole share he owns and fractional votes for fractional
shares he owns. All shares of the Fund have equal voting rights and liquidation
rights. Prior to the offering made by this Prospectus, Will Carter purchased for
investment all of the outstanding shares of the Fund and may be deemed to
control the Fund.
PERFORMANCE INFORMATION
The Portfolios may periodically advertise "average annual total
return." The "average annual total return" of the Portfolios refers to the
average annual compounded rate of return over the stated period that would
equate an initial amount invested at the beginning of a stated period to the
ending redeemable value of the investment. The calculation of "average annual
total return" assumes the reinvestment of all dividends and distributions.
The Portfolios may also advertise performance information (a
"non-standardized quotation") which is calculated differently from "average
annual total return." A non-standardized quotation of total return may be a
cumulative return which measures the percentage change in the value of an
account between the beginning and end of a period, assuming no activity in the
account other than reinvestment of dividends and capital gains distributions. A
non-standardized quotation may also be an average annual compounded rate of
return over a specified period, which may be a period different from those
specified for "average annual total return." In addition, a non-standardized
quotation may be an indication of the value of a $10,000 investment (made on the
date of the initial public offering of the Portfolio's shares) as of the end of
a specified period. A non-standardized quotation will always be accompanied by
the Portfolio's "average annual total return" as described above.
The Fund may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including the Standard &
Poor's (S&P) 500 Index and the Dow Jones Industrial Average.
The advertised performance data of the Portfolio is based on historical
performance and is not intended to indicate future performance. Rates of total
return quoted by the Portfolios may be higher or lower than past quotations, and
there can be no assurance that any rate of total return will be maintained. The
principal value of an investment in the Portfolio will fluctuate so that a
shareholder's shares, when redeemed, may be worth more or less than the
shareholder's original investment.
Investment Advisor
Cornerstone Capital Management, Inc.6760 Corporate Drive, Suite 230
Colorado Springs, CO 80919
Sub-Investment Advisor Administrator
_______________________ AmeriPrime Financial Services, Inc.
______________________ 1793 Kingswood Drive, Suite 200
______________________ Southlake, Texas 76092
Custodian Distributor
Star Bank, N.A. AmeriPrime Financial Securities, Inc.
425 Walnut Street, M.L. 6118 1793 Kingswood Drive, Suite 200
Cincinnati, Ohio 45202 Southlake, Texas 76092
Transfer Agent (all purchases and Independent Auditors
all redemption requests) McCurdy & Associates CPA's, Inc.
Unified Fund Services, Inc. 27955 Clemens Road
431 North Pennsylvania Street Westlake, Ohio 44145
Indianapolis, Indiana 46204
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Portfolios. This Prospectus does not constitute an offer by the Portfolios
to sell its shares in any state to any person to whom it is unlawful to make
such offer in such state.
Page
SUMMARY OF FUND EXPENSES
Shareholder Transaction Expenses
Annual Fund Operating Expenses
THE FUND
INVESTMENT OBJECTIVE AND STRATEGIES
HOW TO INVEST IN THE FUND
Initial Purchase
Additional Investments
Automatic Investment Plan
Tax Sheltered Retirement Plans
Other Purchase Information
HOW TO REDEEM SHARES
By Mail
By Telephone
Additional Information
SHARE PRICE CALCULATION
DIVIDENDS AND DISTRIBUTIONS
TAXES
OPERATION OF THE FUND
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS
GENERAL INFORMATION
Fundamental Policies
Portfolio Turnover
Shareholder Rights
<PAGE>
SHEPHERD VALUES ANNUITY FUNDS
STATEMENT OF ADDITIONAL INFORMATION
________________, 1998
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of Shepherd Values Annuity Funds
dated ___________, 1998. A copy of the Prospectus can be obtained by writing the
Transfer Agent at Unified Fund Services, 431 N. Pennsylvania Street,
Indianapolis, IN 46204.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
PAGE
DESCRIPTION OF THE TRUST..................................................... 3
ADDITIONAL INFORMATION ABOUT PORTFOLIO INVESTMENTS AND RISK
CONSIDERATIONS............................................................. 3
INVESTMENT LIMITATIONS...................................................... 6
THE INVESTMENT ADVISOR...................................................... 6
TRUSTEES AND OFFICERS....................................................... 8
PORTFOLIO TRANSACTIONS AND BROKERAGE........................................ 9
DETERMINATION OF SHARE PRICE................................................ 10
INVESTMENT PERFORMANCE...................................................... 10
CUSTODIAN.................................................................. 11
TRANSFER AGENT.............................................................. 11
ACCOUNTANTS................................................................. 11
DISTRIBUTOR................................................................. 11
<PAGE>
-9-
DESCRIPTION OF THE TRUST
Shepherd Values Annuity Funds (the "Fund") is an open-end diversified
investment company. The Fund is intended exclusively as an investment vehicle
for variable annuity or variable life insurance contracts offered by the
separate accounts of various insurance companies. The Fund offers four distinct
Portfolios (collectively, the "Portfolios" and, individually, a "portfolio").
The portfolios were organized as series of AmeriPrime Insurance Trust (the
"Trust"). The Trust is an open-end investment company established under the laws
of Ohio by an Agreement and Declaration of Trust dated September 30, 1998 (the
"Trust Agreement"). The Trust Agreement permits the Trustees to issue an
unlimited number of shares of beneficial interest of separate series without par
value. Each Portfolio is one of a series of portfolio currently authorized by
the Trustees.
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series with each other share of
that series and is entitled to such dividends and distributions out of income
belonging to the series as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will be entitled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his or her express consent.
For information concerning the purchase and redemption of shares of the
Portfolios, see "The Funds" and "Purchase and Redemption of Shares" in the
Funds' Prospectus. For a description of the methods used to determine the share
price and value of the Portfolio's assets, see "Valuation of Shares" in the
Funds' Prospectus.
ADDITIONAL INFORMATION ABOUT PORTFOLIO INVESTMENTS AND RISK CONSIDERATIONS
This section contains a more detailed discussion of some of the
investments each Portfolio may make and some of the techniques it may use, as
described in the Prospectus (see "Investment Objectives and Strategies", "Risk
Considerations" and "Investment Policies and Techniques").
Inverse Floating Rate Obligations. Each portfolio may invest in debt securities
with interest payments or maturity values that are not fixed, but float
inversely to an underlying index or price.
These securities may be backed by U.S. Government or corporate issuers,
or by collateral such as mortgages. In certain cases, a change in the underlying
index or price may have a leveraging effect on the periodic coupon payments,
creating larger possible swings in the prices of such securities than would be
expected when taking into account their maturities alone. The indices and prices
upon which such securities can be based include interest rates, currency rates
and commodities prices. However, the portfolio will not invest in any instrument
whose value is computed based on a multiple of the change in price or value of
an asset or an index of or relating to assets in which the Portfolio cannot
invest.
Floating rate securities pay interest according to a coupon which is
reset periodically. The reset mechanism may be formula based, or reflect the
passing through of floating interest payments on an underlying collateral pool.
The coupon is usually reset daily, weekly, monthly, quarterly or semi-annually,
but other schedules are possible. Floating rate obligations generally exhibit a
low price volatility for a given stated maturity or average life because their
coupons adjust with changes in interest rates. If their underlying index is not
an interest rate, or the reset mechanism lags the movement of rates in the
current market, greater price volatility may be experienced.
Inverse floating rate securities are similar to floating rate
securities except that their coupon payments vary inversely with an underlying
index by use of a formula. Inverse floating rate securities tend to exhibit
greater price volatility than other floating rate securities. Because the
changes in the coupon are usually negatively correlated with changes in overall
interest rates, interest rate risk and price volatility on inverse floating rate
obligations can be high, especially if leverage is used in the formula. Index
securities pay a fixed rate of interest, but have a maturity value that varies
by formula, so that when the obligation matures, a gain or loss is realized. The
risk of index obligations depends on the volatility of the underlying index, the
coupon payment and the maturity of the obligation.
Options on Securities Indices. Each Portfolio may purchase and write (sell) call
and put options on securities indices. Such options give the holder the right to
receive a cash settlement during the term of the option based upon the
difference between the exercise price and the value of the index.
A Portfolio may terminate its obligation as the writer of a call or put
option by purchasing an option with the same exercise price and expiration date
as the option previously written. This transaction is called a "closing purchase
transaction." The Portfolio will realize a profit or loss for a closing purchase
transaction if the amount paid to purchase an option is less or more, as the
case may be, than the amount received from the sale thereof. To close out a
position as a purchaser of an option, the Portfolio may make a `closing sale
transaction' which involves liquidating the Portfolio's position by selling the
option previously purchased.
When a Portfolio writes an option, an amount equal to the net premium
received by the Portfolio is included in the liability section of the
Portfolio's Statement of Assets and Liabilities as a deferred credit. The amount
of the deferred credit will be subsequently marked to market to reflect the
current market value of the option written. The current market value of a traded
option is the last sale price or, in the absence of a sale, the mean between the
closing bid and asked price. If an option expires on its stipulated expiration
date or if the Portfolio enters into a closing purchase transaction, the
Portfolio will realize a gain (or loss if the cost of a closing purchase
transaction exceeds the premium received when the option was sold), and the
deferred credit related to such option will be eliminated. If a call option is
exercised, the Portfolio will realize a gain or loss from the sale of the
underlying security and the proceeds of the sale will be increased by the
premium originally received. The writing of covered call options may be deemed
to involve the pledge of the securities against which the option is being
written. Securities against which call options are written will be segregated on
the books of the Custodian for the Portfolio.
Options on securities indices entail risks in addition to the risks of
options on securities. The absence of a liquid secondary market to close out
options positions on securities indices is more likely to occur, although the
Portfolio generally will only purchase or write such an option if the Advisor
believes the option can be closed out.
Use of options on securities indices also entails the risk that trading
in such options may be interrupted if trading in certain securities included in
the index is interrupted. The Portfolio will not purchase such options unless
the Advisor believes the market is sufficiently developed such that the risk of
trading in such options is no greater than the risk of trading in options on
securities.
Price movements in a Portfolio's holdings may not correlate precisely
with movements in the level of an index and, therefore, the use of options on
indices cannot serve as a complete hedge. Because options on securities indices
require settlement in cash, the Advisor may be forced to liquidate Portfolio
securities to meet settlement obligations.
Foreign Securities. Each Portfolio may invest in foreign equity securities
including common stock, preferred stock and common stock equivalents issued by
foreign companies, and foreign fixed income securities. Foreign fixed income
securities include corporate debt obligations issued by foreign companies and
debt obligations of foreign governments or international organizations. This
category may include floating rate obligations, variable rate obligations,
Yankee dollar obligations (U.S. dollar denominated obligations issued by foreign
companies and traded on U.S. markets) and Eurodollar obligations (U.S. dollar
denominated obligations issued by foreign companies and traded on foreign
markets).
Foreign government obligations generally consist of debt
securities supported by national, state or provincial governments or similar
political units or governmental agencies. Such obligations may or may not be
backed by the national government's full faith and credit and general taxing
powers. Investments in foreign securities also include obligations issued by
international organizations. International organizations include entities
designated or supported by governmental entities to promote economic
reconstruction or development as well as international banking institutions and
related government agencies. Examples are the International Bank for
Reconstruction and Development (the World Bank), the European Coal and Steel
Community, the Asian Development Bank and the InterAmerican Development Bank. In
addition, investments in foreign securities may include debt securities
denominated in multinational currency units of an issuer (including
international issuers). An example of a multinational currency unit is the
European Currency Unit. A European Currency Unit represents specified amounts of
the currencies of certain member states of the European Economic Community, more
commonly known as the Common Market.
Purchases of foreign securities are usually made in foreign
currencies and, as a result, a Portfolio may incur currency conversion costs and
may be affected favorably or unfavorably by changes in the value of foreign
currencies against the U.S. dollar. In addition, there may be less information
publicly available about a foreign company then about a U.S. company, and
foreign companies are not generally subject to accounting, auditing and
financial reporting standards and practices comparable to those in the U.S.
Other risks associated with investments in foreign securities include changes in
restrictions on foreign currency transactions and rates of exchanges, changes in
the administrations or economic and monetary policies of foreign governments,
the imposition of exchange control regulations, the possibility of expropriation
decrees and other adverse foreign governmental action, the imposition of foreign
taxes, less liquid markets, less government supervision of exchanges, brokers
and issuers, difficulty in enforcing contractual obligations, delays in
settlement of securities transactions and greater price volatility. In addition,
investing in foreign securities will generally result in higher commissions than
investing in similar domestic securities.
Financial Services Industry Obligations. Each Portfolio may invest up to 5%
of its net assets in each of the following obligations of the financial services
industry:
(1) Certificate of Deposit. Certificates of deposit are
negotiable certificates evidencing the indebtedness of a commercial
bank or a savings and loan association to repay funds deposited with it
for a definite period of time (usually from fourteen days to one year)
at a stated or variable interest rate.
(2) Time Deposits. Time deposits are non-negotiable deposits
maintained in a banking institution or a savings and loan association
for a specified period of time at a stated interest rate.
(3) Bankers' Acceptances. Bankers' acceptances are credit
instruments evidencing the obligation of a bank to pay a draft which
has been drawn on it by a customer, which instruments reflect the
obligation both of the bank and of the drawer to pay the face amount of
the instrument upon maturity.
Repurchase Agreements. A repurchase agreement is a short-term investment in
which the purchaser (i.e., a Portfolio) acquires ownership of a U.S. Government
obligation (which may be of any maturity) and the seller agrees to repurchase
the obligation at a future time at a set price, thereby determining the yield
during the purchaser's holding period (usually not more than seven days from the
date of purchase). Any repurchase transaction in which a Portfolio engages will
require full collateralization of the seller's obligation during the entire term
of the repurchase agreement. In the event of a bankruptcy or other default of
the seller, a Portfolio could experience both delays in liquidating the
underlying security and losses in value. However, each Portfolio intends to
enter into repurchase agreements only with the Custodian, other banks with
assets of $1 billion or more and registered securities dealers determined by the
Advisor (subject to review by the Board of Trustees) to be creditworthy. The
Advisor monitors the creditworthiness of the banks and securities dealers with
which a Portfolio engages in repurchase transactions.
Leveraging. Leveraging a Portfolio creates an opportunity for increased net
income but, at the same time, creates special risk considerations. For example,
leveraging may exaggerate changes in the net asset value of Portfolio shares and
in the yield on a Portfolio's Fund. Although the principal of such borrowings
will be fixed, a Portfolio's assets may change in value during the time the
borrowing is outstanding. Leveraging will create interest expenses for the
Portfolio which can exceed the income from the assets retained. To the extent
the income derived from securities purchased with borrowed funds exceeds the
interest the Portfolio will have to pay, the Portfolio's net income will be
greater than if leveraging were not used. Conversely, if the income from the
assets retained with borrowed funds is not sufficient to cover the cost of
leveraging, the net income of the Portfolio will be less than if leveraging were
not used, and therefore the amount available for distribution to shareholders
will be reduced.
Securities Lending. Each Portfolio may lend securities to parties such as
broker-dealers, banks, or institutional investors. Securities lending allows a
Portfolio to retain ownership of the securities loaned and, at the same time, to
earn additional income. Since there may be delays in the recovery of loaned
securities, or even a loss of rights in collateral supplied, should the borrower
fail financially, loans will be made only to parties whose creditworthiness has
been reviewed and deemed satisfactory by the Advisor. Furthermore, they will
only be made if, in the judgment of the Advisor, the consideration to be earned
from such loans would justify the risk.
The Advisor understands that it is the current view of the staff of the
Securities and Exchange Commission ("SEC") that a Portfolio may engage in loan
transactions only under the following conditions: (1) a Portfolio must receive
100% collateral in the form of cash, cash equivalents (e.g., U.S. Treasury bills
or notes) or other high grade liquid debt instruments from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of the
collateral; (3) after giving notice, the Portfolio must be able to terminate the
loan at any time; (4) the Portfolio must receive reasonable interest on the loan
or a flat fee from the borrower, as well as amounts equivalent to any dividends,
interest, or other distributions on the securities loaned and to any increase in
market value; (5) the Portfolio may pay only reasonable custodian fees in
connection with the loan; and (6) the Board of Trustees must be able to vote
proxies on the securities loaned, either by terminating the loan or by entering
into an alternative arrangement with the borrower.
Cash received through loan transactions may be invested in any security
in which the Portfolio is authorized to invest. Investing this cash subjects
that investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to each Portfolio and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Portfolio. As used in the Prospectus
and this Statement of Additional Information, the term "majority" of the
outstanding shares of the Portfolio means the lesser of (1) 67% or more of the
outstanding shares of the Portfolio present at a meeting, if the holders of more
than 50% of the outstanding shares of the Portfolio are present or represented
at such meeting; or (2) more than 50% of the outstanding shares of the
Portfolio. Other investment practices which may be changed by the Board of
Trustees without the approval of shareholders to the extent permitted by
applicable law, regulation or regulatory policy are considered non-fundamental
("Non-Fundamental").
1. Borrowing Money. The Portfolios will not borrow money, except (a)
from a bank, provided that immediately after such borrowing there is an asset
coverage of 300% for all borrowings of the Portfolio; or (b) from a bank or
other persons for temporary purposes only, provided that such temporary
borrowings are in an amount not exceeding 5% of the Portfolio's total assets at
the time when the borrowing is made. This limitation does not preclude the
Portfolio from entering into reverse repurchase transactions, provided that the
Portfolio has an asset coverage of 300% for all borrowings and repurchase
commitments of the Portfolio pursuant to reverse repurchase transactions.
2. Senior Securities. The Portfolios will not issue senior securities.
This limitation is not applicable to activities that may be deemed to involve
the issuance or sale of a senior security by the Portfolio, provided that the
Portfolio's engagement in such activities is (a) consistent with or permitted by
the Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder or interpretations of the Securities and Exchange
Commission or its staff and (b) as described in the Prospectus and this
Statement of Additional Information.
3. Underwriting. The Portfolios will not act as underwriter of
securities issued by other persons. This limitation is not applicable to the
extent that, in connection with the disposition of Portfolio securities
(including restricted securities), a Portfolio may be deemed an underwriter
under certain federal securities laws.
4. Real Estate. The Portfolios will not purchase or sell real estate.
This limitation is not applicable to investments in marketable securities which
are secured by or represent interests in real estate. This limitation does not
preclude a Portfolio from investing in mortgage-related securities or investing
in companies engaged in the real estate business or that have a significant
portion of their assets in real estate (including real estate investment
trusts).
5. Commodities. The Portfolios will not purchase or sell commodities
unless acquired as a result of ownership of securities or other investments.
This limitation does not preclude a Portfolio from purchasing or selling options
or futures contracts, from investing in securities or other instruments backed
by commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. Loans. The Portfolios will not make loans to other persons, except
(a) by loaning Portfolio securities, (b) by engaging in repurchase agreements,
or (c) by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. Each Portfolio will not invest 25% or more of its
total assets in a particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
Non-Fundamental. The following limitations have been adopted by the Trust
with respect to each Portfolio and are Non-Fundamental (see "Investment
Restrictions" above).
1. Pledging. The Portfolios will not mortgage, pledge, hypothecate or
in any manner transfer, as security for indebtedness, any assets of a Portfolio
except as may be necessary in connection with borrowings described in limitation
(1) above. Margin deposits, security interests, liens and collateral
arrangements with respect to transactions involving options, futures contracts,
short sales and other permitted investments and techniques are not deemed to be
a mortgage, pledge or hypothecation of assets for purposes of this limitation.
2. Borrowing. Each Portfolio will not purchase any security while
borrowings (including reverse repurchase agreements) representing more than 5%
of its total assets are outstanding.
3. Margin Purchases. The Portfolios will not purchase securities or
evidences of interest thereon on "margin." This limitation is not applicable to
short term credit obtained by a Portfolio for the clearance of purchases and
sales or redemption of securities, or to arrangements with respect to
transactions involving options, futures contracts, short sales and other
permitted investments and techniques.
4. Options. The Portfolios will not purchase or sell puts, calls,
options or straddles except as described in the Prospectus and this Statement of
Additional Information.
5. Illiquid Securities. No Portfolio will invest more than 15% of its net
assets in illiquid securities.
THE INVESTMENT ADVISOR
The Funds' investment advisor is Cornerstone Capital Management, Inc.,
6760 Corporate Drive, Suite 230, Colorado Springs, Colorado 80919 (the
"Advisor"). The Advisor is jointly controlled by Jason Huntley and Craig Van
Hulzen.
Under the terms of the management agreement (the "Agreement"), the
Advisor manages each Portfolio's investments subject to approval of the Board of
Trustees and pays all of the expenses of each Portfolio except brokerage, taxes,
interest, fees and expenses of the non-interested person trustees and
extraordinary expenses. As compensation for its management services and
agreement to pay the Portfolios' expenses, the Portfolios are obligated to pay
the Advisor a fee computed and accrued daily and paid monthly at an annual rate
of ______% of the average daily net assets of the Shepherd Values Growth Fund
and Shepherd Values Aggressive Growth Fund, 1.__% of the average daily net
assets of the Shepherd Values International Fund, 0.__% of the average daily net
assets of the Shepherd Values Fixed Income. The Advisor may waive all or part of
its fee, at any time, and at its sole discretion, but such action shall not
obligate the Advisor to waive any fees in the future.
The Advisor retains the right to use the name "Shepherd Values" in
connection with another investment company or business enterprise with which the
Advisor is or may become associated. The Trust's right to use the name "Shepherd
Values" automatically ceases ninety days after termination of the Agreement and
may be withdrawn by the Advisor on ninety days written notice.
The Advisor may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Funds believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Funds believes that there would be no material impact on a Fund or its
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. Each Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for a Fund, no preference will be shown for such
securities.
<PAGE>
TRUSTEES AND OFFICERS
The names of the Trustees and executive officers of the Trust are shown
below. Each Trustee who is an "interested person" of the Trust, a defined in the
Investment Company Act of 1940, is indicated by an asterisk.
<PAGE>
<TABLE>
<S> <C> <C>
Name, Age and Address Position Principal Occupations During
Past 5 Years
* Kenneth D. Trumpfheller President and Trustee President, Treasurer and Secretary of AmeriPrime
Age: 40 Financial Services, Inc., the Funds'
1793 Kingswood Drive administrator, and AmeriPrime Financial
Suite 200 Securities, Inc., the Funds' distributor. Prior
Southlake, Texas 76092 to December, 1994, a senior client executive with
SEI Financial Services.
<PAGE>
Julie A. Feleo Secretary, Treasurer Secretary, Treasurer and Chief Financial Officer
Age: 32 of AmeriPrime Financial Services, Inc. and
1793 Kingswood Drive AmeriPrime Financial Securities, Inc.; Fund
Suite 200 Reporting Analyst at Fidelity Investments from
Southlake, Texas 76092 1993 to 1997; Fund Accounting Analyst at Fidelity
Investments in 1993. Prior to 1993, Accounting
Manager at Windows Presentation Manager
Association.
</TABLE>
[To be completed by amendment]
<TABLE>
<S> <C> <C> <C>
Aggregate Compensation Total Compensation from Trust
Name from Trust/+/ and Other AmeriPrime Funds/*/
</TABLE>
[TO BE COMPLETED BY AMENDMENT]
/*/ The "other AmeriPrime funds" are ___________________.
/+/ Estimated compensation for the fiscal year ending _______, 1998.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Advisor is responsible for each Portfolio's investment decisions and the
placing of each Portfolio's portfolio transactions. In placing portfolio
transactions, the Advisor seeks the best qualitative execution for each
Portfolio, taking into account such factors as price (including the applicable
brokerage commission or dealer spread), the execution capability, financial
responsibility and responsiveness of the broker or dealer and the brokerage and
research services provided by the broker or dealer. The Advisor generally seeks
favorable prices and commission rates that are reasonable in relation to the
benefits received.
The Advisor is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Portfolios and/or the other
accounts over which the Advisor exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Advisor determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Advisor's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom a Portfolio effects securities
transactions may also be used by the Advisor in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Advisor in connection with its services to the
Portfolios. Although research services and other information are useful to the
Portfolios and the Advisor, it is not possible to place a dollar value on the
research and other information received. It is the opinion of the Board of
Trustees and the Advisor that the review and study of the research and other
information will not reduce the overall cost to the Advisor of performing its
duties to the Portfolios under the Agreement.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
When a Portfolio and another of the Advisor's clients seek to purchase
or sell the same security at or about the same time, the Advisor may execute the
transaction on a combined ("blocked") basis. Blocked transactions can produce
better execution for the Portfolios because of the increased volume of the
transaction. If the entire blocked order is not filled, the Portfolio may not be
able to acquire as large a position in such security as it desires or it may
have to pay a higher price for the security. Similarly, the Portfolio may not be
able to obtain as large an execution of an order to sell or as high a price for
any particular portfolio security if the other client desires to sell the same
portfolio security at the same time. In the event that the entire blocked order
is not filled, the purchase or sale will normally be allocated on a pro rata
basis. The allocation may be adjusted by the Advisor, taking into account such
factors as the size of the individual orders and transaction costs, when the
Advisor believes an adjustment is reasonable.
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of each Portfolio is
determined as of 4:00 p.m., Eastern time on each day the Trust is open for
business and on any other day on which there is sufficient trading in each
Portfolio's securities to materially affect the net asset value. The Trust is
open for business on every day except Saturdays, Sundays and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, President's Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.
For a description of the methods used to determine the net asset value (share
price), see "Valuation of Shares" in the Prospectus.
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return for the period indicated that would equate the initial amount invested
to the ending redeemable value, according to the following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are
reinvested at the net asset value on the reinvestment dates and that a complete
redemption occurs at the end of the applicable period.
Each Portfolio's investment performance will vary depending upon market
conditions, the composition of each Portfolio's Fund and operating expenses of
each Portfolio. These factors and possible differences in the methods and time
periods used in calculating non-standardized investment performance should be
considered when comparing a Portfolio's performance to those of other investment
companies or investment vehicles. The risks associated with each Portfolio's
investment objective, policies and techniques should also be considered. At any
time in the future, investment performance may be higher or lower than past
performance, and there can be no assurance that any performance will continue.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of each
Portfolio may be compared to indices of broad groups of unmanaged securities
considered to be representative of or similar to the Portfolio holdings of the
Portfolio or considered to be representative of the market in general.
In addition, the performance of each Portfolio may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of the Portfolio. Performance rankings and ratings
reported periodically in national financial publications such as Barron's and
Fortune also may be used.
CUSTODIAN
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is
Custodian of each Portfolios investments. The Custodian acts as each Portfolio's
depository, safekeeps its Portfolio securities, collects all income and other
payments with respect thereto, disburses funds at a Portfolio's request and
maintains records in connection with its duties.
TRANSFER AGENT
Unified Fund Services, Inc. 431 North Pennsylvania Street, Indianapolis, Indiana
acts as each Portfolio's transfer agent and, in such capacity, maintains the
records of each shareholder's account, answers shareholders' inquiries
concerning their accounts, processes purchases and redemptions of each
Portfolio's shares, acts as dividend and distribution disbursing agent and
performs other accounting and shareholder service functions. In addition,
American Data Services, Inc. provides each Portfolio with certain monthly
reports, record-keeping and other management-related services.
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent public accountants for the Trust
for the fiscal year ending December 31, 1999. McCurdy & Associates performs an
annual audit of each Portfolio's financial statements and provides financial,
tax and accounting consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas is the agent for distribution of shares of each Portfolio. The
distributor is obligated to sell the shares of each Portfilio on a best efforts
basis only against purchase orders for the shares. Shares of each Portfolio are
offered to the public on a continuous basis.
<PAGE>
AmeriPrime Insurance Trust
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Included in Part A: None
Included in Part B: None
(b) Exhibits
(1) Copy of Registrant's Agreement and
Declaration of Trust is filed herewith.
(2) Copy of Registrant's By-Laws is filed herewith.
(3) Voting Trust Agreements - None.
(4) Specimen of Share Certificates - None.
(5) Copy of Registrant's Management Agreement with
its Adviser (to be supplied).
(6) Copy of Registrant's Underwriting or
Distribution Contracts and Agreements with
Principal Underwriters and Distributors
(to be supplied).
(7) Bonus, Profit Sharing, Pension or Similar
Contracts for the benefit of Directors or
Officers - None.
(8) Copy of Registrant's Agreement with the Custodian
(to be supplied).
(9) Other Material Contracts - None.
(10) Opinion and Consent of Brown, Cummins &
Brown Co., L.P.A. is filed herewith.
(11) Consent of independent public accountants -
None.
(12) Financial Statements Omitted from Item 23 -
None.
(13) Copy of Letter of Initial Stockholders (to be
supplied).
(14) Model Plan used in Establishment of any
Retirement Plan - None.
(15) 12b-1 Distribution Expense Plan - None.
(16) Schedule for Computation of Each Performance
Quotation - None.
(17) Financial Data Schedule - None.
(18) Rule 18f-3 Plan - None.
Item 25. Persons Controlled by or Under Common Control with the
Registrant
None.
Item 26. Number of Holders of Securities (as of September 15, 1998)
- -------- ----------------------------------------------------------
Title of Class Number of Record Holders
Shepherd Values Growth Fund 0
Shepherd Values Aggressive Growth Fund 0
Shepherd Values International Fund 0
Shepherd Values Fixed Income Fund 0
Item 27. Indemnification
(a) Article VI of the Registrant's Declaration of Trust
provides for indemnification of officers and Trustees as follows:
Section 6.4 Indemnification of
Trustees, Officers, etc. Subject to and
except as otherwise provided in the
Securities Act of 1933, as amended, and the
1940 Act, the Trust shall indemnify each of
its Trustees and officers (including persons
who serve at the Trust's request as
directors, officers or trustees of another
organization in which the Trust has any
interest as a shareholder, creditor or
otherwise (hereinafter referred to as a
"Covered Person") against all liabilities,
including but not limited to amounts paid in
satisfaction of judgments, in compromise or
as fines and penalties, and expenses,
including reasonable accountants' and
counsel fees, incurred by any Covered Person
in connection with the defense or
disposition of any action, suit or other
proceeding, whether civil or criminal,
before any court or administrative or
legislative body, in which such Covered
Person may be or may have been involved as a
party or otherwise or with which such person
may be or may have been threatened, while in
office or thereafter, by reason of being or
having been such a Trustee or officer,
director or trustee, and except that no
Covered Person shall be indemnified against
any liability to the Trust or its
Shareholders to which such Covered Person
would otherwise be subject by reason of
willful misfeasance, bad faith, gross
negligence or reckless disregard of the
duties involved in the conduct of such
Covered Person's office.
Section 6.5 Advances of Expenses. The Trust shall advance attorneys' fees
or other expenses incurred by a Covered Person in defending a proceeding to the
full extent permitted by the Securities Act of 1933, as amended, the 1940 Act,
and Ohio Revised Code Chapter 1707, as amended. In the event any of these laws
conflict with Ohio Revised Code Section 1701.13(E), as amended, these laws, and
not Ohio Revised Code Section 1701.13(E), shall govern.
Section 6.6 Indemnification Not Exclusive, etc. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
The Registrant may not pay for insurance which
protects the Trustees and officers against liabilities rising from action
involving willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of their offices.
(b) The Registrant may maintain a standard mutual fund
and investment advisory professional and directors
and officers liability policy. The policy, if
maintained, would provide coverage to the Registrant,
its Trustees and officers, and could cover its
Advisers, among others. Coverage under the policy
would include losses by reason of any act, error,
omission, misstatement, misleading statement,
neglect or breach of duty.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
trustees, officers and controlling persons of the
Registrant pursuant to the provisions of Ohio law and
the Agreement and Declaration of the Registrant or
the By-Laws of the Registrant, or otherwise, the
Registrant has been advised that in the opinion of
the Securities and Exchange Commission such
indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the Registrant
of expenses incurred or paid by a trustee, officer or
controlling person of the Trust in the successful
defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling
person in connection with the securities being
registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as
expressed in the Act and will be governed by the
final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
A. Cornerstone Capital Management, Inc., 6760 Corporate
Drive, Suite 230, Colorado Springs, CO 80919
("Cornerstone"), adviser to Shepherd Values Growth
Fund, Shepherd Values Aggressive Growth Fund,
Shepherd Values International Fund, and Shepherd
Values Fixed Income Fund, is a registered investment
adviser.
(1) Cornerstone has engaged in no other business
during the past two fiscal years.
(2) The following list sets forth other substantial
business activities of the officers and
directors of Cornerstone:
(a) Ted Ehrlichman, Managing Director of
Cornerstone, was a founder and principal
with SunTek, Inc., a Pension Consultant in
Colorado Springs, Colorado from 1995 to 1997.
Prior to that he Mr. Erlichman was Vice-Presi-
dent of Marketing for Current, Inc. a consumer
products firm.
(b) Frank Franiak, Managing Director of Cornerstone
is president of Monroe Capital, Inc., a
Consultant in Chicago, Illinois since 1992.
(c) Jason Huntley, Managing Director of Cornerstone
was a director of of Institutional Services and
a registered representative for Walnut Street
Advisors from 1996 to 1997. Mr. Huntley was
Director of client services for Durham & Assoc.
Investment Counsel from 1994 to 1996. Prior to
that he was a registered representative for
Olde Discount Brokersand The Equitable in 1994.
Prior to that he was a research assistant for
Financial Network Investment Corp.
(d) Craig Van Hulzen, Managing Director of
Cornerstone was a director of of Research for
Walnut Street Advisors From 1995 to 1997.Prior
to that he was a research assistant for
Financial Network Investment Corp.
Item 29. Principal Underwriters
AmeriPrime Financial Securities, Inc., is the Registrant's
principal underwriter. Kenneth D. Trumpfheller,
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092,
is the President, Secretary and Treasurer of the underwriter
and the President and a Trustee of the Registrant.
Item 30. Location of Accounts and Records
Accounts, books and other documents required to be maintained
by Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder will be maintained by the Registrant at 1793 Kingswood Drive, Suite
200, Southlake, Texas 76092 and/or by the Registrant's Custodian, Star Bank,
N.A., 425 Walnut Street, Cincinnati, Ohio 45202, and/or transfer and shareholder
service agent, Unified Fund Services, 431 N. Pennsylvania Street, Indianapolis,
IN 46204.
Item 31. Management Services Not Discussed in Parts A or B
None.
Item 32. Undertakings
(a) Not Applicable.
(b) The Registrant hereby undertakes to furnish each
person to whom a prospectus is delivered with a copy
of the Registrant's latest annual report to
shareholders, upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Southlake, State of Texas, on the 29th day of
September, 1998.
AmeriPrime Insurance Trust
By:/s/
Kenneth D. Trumpfheller
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
/s/
Kenneth D. Trumpfheller, President and Trustee
September 29, 1998
- 1 -
<PAGE>
EXHIBIT INDEX
PAGE
1. Agreement and Declaration of Trust.............................EX-99.B1
2. By-laws .......................................................EX-99.B2
3. Opinion and Consent of Brown, Cummins & Brown Co., L.P.A......EX-99.B10
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AGREEMENT AND DECLARATION OF TRUST
AmeriPrime Insurance Trust
September 29, 1998
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AMERIPRIME INSURANCE TRUST
AGREEMENT AND DECLARATION OF TRUST
TABLE OF CONTENTS
ARTICLE I - NAME AND DEFINITIONS............................................. 1
Section 1.1 Name and Principal Office.................... 1
Section 1.2 Definitions.................................. 1
(a) The "Trust"....................................... 1
(b) "Trustees"........................................ 1
(c) "Shares".......................................... 1
(d) "Series"......................................... 1
(e) "Class".......................................... 2
(f) "Shareholder".................................... 2
(g) The "1940 Act".................................... 2
(h) "Commission"...................................... 2
(i) "Declaration of Trust"............................ 2
(j) "By-Laws"......................................... 2
ARTICLE II - PURPOSE OF TRUST................................................ 2
ARTICLE III - THE TRUSTEES................................................... 2
Section 3.1 Number, Designation, Election, Term, etc..... 2
(a) Initial Trustees................................. 2
(b) Number............................................ 2
(c) Term.............................................. 2
(d) Resignation and Retirement....................... 3
(e) Removal.......................................... 3
(f) Vacancies........................................ 3
(g) Effect of Death, Resignation, etc................ 3
(h) No Accounting.................................... 3
Section 3.2 Powers of Trustees........................... 4
(a) Investments...................................... 4
(b) Disposition of Assets............................ 4
(c) Ownership Powers................................. 4
(d) Subscription..................................... 5
(e) Form of Holding.................................. 5
(f) Reorganization, etc.............................. 5
(g) Voting Trusts, etc............................... 5
(h) Compromise....................................... 5
(i) Partnerships, etc................................ 5
(j) Borrowing and Security........................... 5
(k) Guarantees, etc.................................. 5
(l) Insurance........................................ 5
(m) Pensions, etc.................................... 6
Section 3.3 Certain Contracts............................ 6
(a) Advisory......................................... 6
(b) Administration................................... 7
(c) Distribution..................................... 7
(d) Custodian and Depository......................... 7
(e) Transfer and Dividend Disbursing Agency.......... 7
(f) Shareholder Servicing............................ 7
(g) Accounting....................................... 7
Section 3.4 Payment of Trust Expenses and Compensation of
Trustees....................................... 8
Section 3.5 Ownership of Assets of the Trust............. 8
ARTICLE IV - SHARES......................................................... 8
Section 4.1 Description of Shares........................ 8
Section 4.2 Establishment and Designation of Series...... 10
(a) Assets Belonging to Series....................... 10
(b) Liabilities Belonging to Series.................. 10
(c) Dividends........................................ 11
(d) Liquidation...................................... 12
(e) Voting........................................... 12
(f) Redemption by Shareholder........................ 12
(g) Redemption by Trust.............................. 12
(h) Net Asset Value.................................. 13
(i) Transfer..........................................13
(j) Equality......................................... 13
(k) Fractions........................................ 14
(l) Conversion Rights................................ 14
Section 4.3 Ownership of Shares.......................... 14
Section 4.4 Investments in the Trust..................... 14
Section 4.5 No Preemptive Rights......................... 14
Section 4.6 Status of Shares and Limitation of Personal
Liability.................................... 14
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ARTICLE V - SHAREHOLDERS' VOTING POWERS AND MEETINGS........................ 15
Section 5.1 Voting Powers................................ 15
Section 5.2 Meetings..................................... 15
Section 5.3 Record Dates................................. 15
Section 5.4 Quorum and Required Vote..................... 16
Section 5.5 Action by Written Consent.................... 16
Section 5.6 Inspection of Records........................ 16
Section 5.7 Additional Provisions........................ 16
ARTICLE VI - LIMITATION OF LIABILITY; INDEMNIFICATION....................... 16
Section 6.1 Trustees, Shareholders, etc. Not Personally
Liable; Notice............................... 16
Section 6.2 Trustee's Good Faith Action; Expert Advice;
No Bond or Surety............................ 17
Section 6.3 Indemnification of Shareholders.............. 17
Section 6.4 Indemnification of Trustees, Officers, etc... 18
Section 6.5 Advances of Expenses......................... 18
Section 6.6 Indemnification Not Exclusive, etc............18
Section 6.7 Liability of Third Persons Dealing with
Trustees..................................... 18
ARTICLE VII - MISCELLANEOUS................................................. 18
Section 7.1 Duration and Termination of Trust............ 18
Section 7.2 Reorganization............................... 19
Section 7.3 Amendments................................... 19
Section 7.4 Filing of Copies; References; Headings....... 20
Section 7.5 Applicable Law............................... 20
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AMERIPRIME INSURANCE TRUST
AGREEMENT AND DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST made this 29 day of September,
1998 by the Trustees hereunder, and by the holders of Shares of beneficial
interest to be issued hereunder as hereinafter provided.
WITNESSETH:
WHEREAS, this Trust is being formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into
their hands as trustees of an Ohio business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets which they may from time to time acquire in
any manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the benefit of the holders from time to
time of shares of beneficial interest in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1 Name and Principal Office. This Trust shall
be known as the "AmeriPrime Insurance Trust"
and the Trustees shall conduct the business
of the Trust under that name or any other
name as they may from time to time
determine. The principal office of the
Trust shall be located at Southlake, Texas
or any other place as determined from time
to time by the Trustees and reported to the
Secretary of the State of Ohio.
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Section 1.2 Definitions. Whenever used herein, unless
otherwise required by the context or
specifically provided:
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(a) The "Trust" refers to the Ohio business trust established by this
Agreement and Declaration of Trust, as amended from time to time;
(b) "Trustees" refers to the Trustees of the Trust named herein or
elected in accordance with Article III;
(c) "Shares" refers to the transferable units of interest into
which the beneficial interest in the Trust, shall be divided from time to time,
including the shares of any and all Series or Classes which may be established
by the Trustees, and includes fractions of Shares as well as whole Shares;
(d) "Series" refers to Series of Shares established and designated
under or in accordance with the provisions of Article IV;
(e) "Class" refers to a class or sub-series of any Series of
Shares established and designated under and in accordance with the provisions of
Article IV;
(f) "Shareholder" means a record owner of Shares;
(g) The "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations thereunder, all as amended from time to time;
(h) "Commission" shall have the meaning given it in the 1940 Act;
(i) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust as amended or restated from time to time; and
(j) "By-Laws" shall mean the By-Laws of the Trust as amended from time
to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of the Trust is to operate as an investment company, to
offer Shareholders one or more investment programs primarily in securities and
debt instruments and to engage in any and all lawful acts or activities for
which business trusts may be formed under Chapter 1746 of the Ohio Revised Code.
ARTICLE III
THE TRUSTEES
Section 3.1 Number, Designation, Election, Term, etc.
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(a) Initial Trustees. Upon his execution of this Declaration of
Trust or a counterpart hereof or some other writing in which he accepts
such Trusteeship and agrees to the provisions hereof, Kenneth D. Trumpfheller
shall become Trustee hereof.
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(b) Number. The Trustees serving as such, whether named above or
hereafter becoming a Trustee, may increase or decrease the number of Trustees
to a number other than the number theretofore determined. No decrease in the
number of Trustees shall have the effect of removing any Trustee from office
prior to the expiration of his term, but the number of Trustees may be decreased
in conjunction with the removal of a Trustee pursuant to subsection (e) of this
Section 3.1.
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(c) Term. Each Trustee shall serve as a Trustee during the
lifetime of the Trust and until its termination as hereinafter provided or until
such Trustee sooner dies, resigns, retires or is removed. The Trustees may
elect their own successors and may, pursuant to Section 3.1(f) hereof, appoint
Trustees to fill vacancies; provided that, immediately after filling a vacancy,
at least two-thirds of the Trustees then holding office shall have been elected
to such office by the Shareholders at an annual or special meeting. If at any
time less than a majority of the Trustees then holding office were so elected,
the Trustees shall forthwith cause to be held as promptly as possible, and in
any event within 60 days, a meeting of Shareholders for the purpose of electing
Trustees to fill any existing vacancies.
(d) Resignation and Retirement. Any Trustee may resign his trust
or retire as a Trustee, by written instrument signed by him and delivered to
the other Trustees or to any officer of the Trust, and such resignation or
retirement shall take effect upon such delivery or upon such later date as is
specified in such instrument.
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(e) Removal. Any Trustee may be removed with or without cause at
any time: (i) by written instrument, signed by at least two-thirds of the
number of Trustees prior to such removal, specifying the date upon which such
removal shall become effective, (ii) by vote of the Shareholders holding not
less than two-thirds of the Shares then outstanding, cast in person or by proxy
at any meeting called for the purpose, or (iii) by a declaration in writing
signed by Shareholders holding not less than two-thirds of the Shares then
outstanding and filed with the Trust's Custodian.
(f) Vacancies. Any vacancy or anticipated vacancy resulting from
any reason, including without limitation the death,
resignation, retirement, removal or incapacity of any of the
Trustees, or resulting from an increase in the number of
Trustees by the Trustees may (but so long as there are at
least three remaining Trustees, need not unless required by
the 1940 Act) be filled either by a majority of the remaining
Trustees through the appointment in writing of such other
person as such remaining Trustees in their discretion shall
determine (unless a shareholder election is required by the
1940 Act) or by the election by the Shareholders, at a meeting
called for the purpose, of a person to fill such vacancy, and
such appointment or election shall be effective upon the
written acceptance of the person named therein to serve as a
Trustee and agreement by such person to be bound by the
provisions of this Declaration of Trust, except that any such
appointment or election in anticipation of a vacancy to occur
by reason of retirement, resignation, or increase in number of
Trustees to be effective at a later date shall become
effective only at or after the effective date of said
retirement, resignation, or increase in number of Trustees. As
soon as any Trustee so appointed or elected shall have
accepted such appointment or election and shall have agreed in
writing to be bound by this Declaration of Trust and the
appointment or election is effective, the Trust estate shall
vest in the new Trustee, together with the continuing
Trustees, without any further act or conveyance.
(g) Effect of Death, Resignation, etc. The death, resignation,
retirement, removal, or incapacity of the Trustees, or any one of them, shall
not operate to annul or terminate the Trust or to revoke or terminate any
existing agency or contract created or entered into pursuant to the terms of
this Declaration of Trust.
(h) No Accounting. Except to the extent required by the 1940 Act or under
circumstances which would justify his removal for cause, no person ceasing to be
a Trustee as a result of his death, resignation, retirement, removal or
incapacity (nor the estate of any such person) shall be required to make an
accounting to the Shareholders or remaining Trustees upon such cessation.
Section 3.2 Powers of Trustees. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient to carry out
that responsibility and the purpose of the Trust. Without limiting the
foregoing, the Trustees may adopt By-Laws not inconsistent with this Declaration
of Trust providing for the conduct of the business and affairs of the Trust and
may amend and repeal them to the extent that such By-Laws do not reserve that
right to the Shareholders; they may as they consider appropriate elect and
remove officers and appoint and terminate agents and consultants and hire and
terminate employees, any one or more of the foregoing of whom may be a Trustee,
and may provide for the compensation of all of the foregoing; they may appoint
from their own number, and terminate, any one or more committees consisting of
two or more Trustees, including without implied limitation an executive
committee, which may, when the Trustees are not in session and subject to the
1940 Act, exercise some or all of the power and authority of the Trustees as the
Trustees may determine; in accordance with Section 3.3 they may employ one or
more Advisers, Administrators, Depositories and Custodians and may authorize any
Depository or Custodian to employ subcustodians or agents and to deposit all or
any part of such assets in a system or systems for the central handling of
securities and debt instruments, retain transfer, dividend, accounting or
Shareholder servicing agents or any of the foregoing, provide for the
distribution of Shares by the Trust through one or more distributors, principal
underwriters or otherwise, set record dates or times for the determination of
Shareholders or certain of them with respect to various matters; they may
compensate or provide for the compensation of the Trustees, officers, advisers,
administrators, custodians, other agents, consultants and employees of the Trust
or the Trustees on such terms as they deem appropriate; and in general they may
delegate to any officer of the Trust, to any committee of the Trustees and to
any employee, adviser, administrator, distributor, principal underwriter,
depository, custodian, transfer and dividend disbursing agent, or any other
agent or consultant of the Trust such authority, powers, functions and duties as
they consider desirable or appropriate for the conduct of the business and
affairs of the Trust, including without implied limitation the power and
authority to act in the name of the Trust and of the Trustees, to sign documents
and to act as attorney-in-fact for the Trustees.
Without limiting the foregoing and to the extent not inconsistent with
the 1940 Act or other applicable law, the Trustees shall have power and
authority:
(a) Investments. To invest and reinvest cash and other property,
and to hold cash or other property uninvested without in any event being bound
or limited by any present or future law or custom in regard to investments by
trustees;
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(b) Disposition of Assets. To sell, exchange, lend, pledge,
mortgage, hypothecate, write options on and lease any or all of the assets of
the Trust;
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(c) Ownership Powers. To vote or give assent, or exercise any
rights of ownership, with respect to stock or other securities, debt instruments
or property; and to execute and deliver proxies or powers of attorney to such
person or persons as the Trustees shall deem proper, granting to such person or
persons such power and discretion with relation to securities, debt instruments
or property as the Trustees shall deem proper;
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(d) Subscription. To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of securities or debt
instruments;
(e) Form of Holding. To hold any security, debt instrument or
property in a form not indicating any trust, whether in bearer, unregistered or
other negotiable form, or in the name of the Trustees or of the Trust or in the
name of a custodian, subcustodian or other depository or a nominee or nominees
or otherwise;
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(f) Reorganization, etc. To consent to or participate in any plan
for the reorganization, consolidation or merger of any corporation or issuer,
any security or debt instrument of which is or was held in the Trust; to consent
to any contract, lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with respect to
any security or debt instrument held in the Trust;
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(g) Voting Trusts, etc. To join with other holders of any
securities or debt instruments in acting through a committee, depository,
voting trustee or otherwise, and in that connection to deposit any security or
debt instrument with, or transfer any security or debt instrument to, any such
committee, depository or trustee, and to delegate to them such power and
authority with relation to any security or debt instrument (whether or not so
deposited or transferred) as the Trustees shall deem
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proper, and to agree to pay, and to pay, such portion of the
expenses and compensation of such committee, depository or trustee as the
Trustees shall deem proper;
(h) Compromise. To compromise, arbitrate or otherwise
adjust claims in favor of or against the Trust or any matter in controversy,
including but not limited to claims for taxes;
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(i) Partnerships, etc. To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(j) Borrowing and Security. To borrow funds and to mortgage and
pledge the assets of the Trust or any part thereof to secure obligations
arising in connection with such borrowing;
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(k) Guarantees, etc. To endorse or guarantee the payment of any
notes or other obligations of any person; to make contracts of guaranty or
suretyship, or otherwise assume liability for payment thereof; and to mortgage
and pledge the Trust property or any part thereof to secure any of or all such
obligations;
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(l) Insurance. To purchase and pay for entirely out of Trust
property such insurance as they may deem necessary or
appropriate for the conduct of the business, including,
without limitation, insurance policies insuring the assets of
the Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the
Shareholders, Trustees, officers, employees, agents,
consultants, investment advisers, managers, administrators,
distributors, principal underwriters, or independent
contractors, or any thereof (or any person connected
therewith), of the Trust individually against all claims and
liabilities of every nature arising by reason of holding,
being or having held any such office or position, or by reason
of any action alleged to have been taken or omitted by any
such person in any such capacity, including any action taken
or omitted that may be determined to constitute negligence;
provided, however, that insurance which protects the Trustees
and officers against liabilities rising from action involving
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of their
offices may not be purchased; and
(m) Pensions, etc. To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry out pension,
profit-sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions, including the
purchasing of life insurance and annuity contracts as a means of providing such
retirement and other benefits, for any or all of the Trustees, officers,
employees and agents of the Trust.
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Except as otherwise provided by the 1940 Act or other applicable law,
this Declaration of Trust or the By-Laws, any action to be taken by the Trustees
may be taken by a majority of the Trustees present at a meeting of Trustees (a
quorum, consisting of at least a majority of the Trustees then in office, being
present), within or without Ohio, including any meeting held by means of a
conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting, or
by written consents of a majority of the Trustees then in office (or such larger
or different number as may be required by the 1940 Act or other applicable law).
Section 3.3 Certain Contracts. Subject to compliance with the
provisions of the 1940 Act, but notwithstanding any limitations of present and
future law or custom in regard to delegation of powers by trustees generally,
the Trustees may, at any time and from time to time and without limiting the
generality of their powers and authority otherwise set forth herein, enter into
one or more contracts with any one or more corporations, trusts, associations,
partnerships, limited partnerships, other type of organizations, or individuals
("Contracting Party") to provide for the performance and assumption of some or
all of the following services, duties and responsibilities to, for or of the
Trust and/or the Trustees, and to provide for the performance and assumption of
such other services, duties and responsibilities in addition to those set forth
below as the Trustees may determine appropriate:
(a) Advisory. Subject to the general supervision of the Trustees
and in conformity with the stated policy of the Trustees with respect to the
investments of the Trust or of the assets belonging to any Series of Shares of
the Trust (as that phrase is defined in subsection (a) of Section 4.2),
to manage such investments and assets, make investment decisions with respect
thereto, and to place purchase and sale orders for portfolio transactions
relating to such investments and assets;
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(b) Administration. Subject to the general supervision of the
Trustees and in conformity with any policies of the Trustees with respect to
the operations of the Trust, to supervise all or any part of the operations of
the Trust, and to provide all or any part of the administrative and clerical
personnel, office space and office equipment and services appropriate for the
efficient administration and operations of the Trust;
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(c) Distribution. To distribute the Shares of the Trust, to be
principal underwriter of such Shares, and/or to act as agent of the Trust in the
sale of Shares and the acceptance or rejection of orders for the purchase of
Shares;
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(d) Custodian and Depository. To act as depository for and to
maintain custody of the property of the Trust and accounting records in
connection therewith;
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(e) Transfer and Dividend Disbursing Agency. To maintain records
of the ownership of outstanding Shares, the issuance and redemption and the
transfer thereof, and to disburse any dividends declared by the Trustees and
in accordance with the policies of the Trustees and/or the instructions of any
particular Shareholder to reinvest any such dividends;
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(f) Shareholder Servicing. To provide service with respect to the
relationship of the Trust and its Shareholders, records with respect to
Shareholders and their Shares, and similar matters; and
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(g) Accounting. To handle all or any part of the accounting
responsibilities, whether with respect to the Trust's properties, Shareholders
or otherwise.
The same person may be the Contracting Party for some or all of the services,
duties and responsibilities to, for and of the Trust and/or the Trustees, and
the contracts with respect thereto may contain such terms interpretive of or in
addition to the delineation of the services, duties and responsibilities
provided for, including provisions that are not inconsistent with the 1940 Act
relating to the standard of duty of and the rights to indemnification of the
Contracting Party and others, as the Trustees may determine. Nothing herein
shall preclude, prevent or limit the Trust or a Contracting Party from entering
into subcontractual arrangements relative to any of the matters referred to in
Sections 3.3(a) through (g) hereof.
Subject to the provisions of the 1940 Act, the fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager, adviser,
principal underwriter or distributor or agent of or for any Contracting Party,
or of or for any parent or affiliate of any Contracting Party or that the
Contracting Party or any parent or affiliate thereof is a Shareholder or has an
interest in the Trust, or that
(ii) any Contracting Party may have a contract providing for the rendering
of any similar services to one or more other corporations, trusts, associations,
partnerships, limited partnerships or other organizations, or has other business
or interests,
shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust and/or the
Trustees or disqualify any Shareholder, Trustee or officer of the Trust from
voting upon or executing the same or create any liability or accountability to
the Trust or its Shareholders, provided that in the case of any relationship or
interest referred to in the preceding clause (i) on the part of any Trustee or
officer of the Trust either (l) the material facts as to such relationship or
interest have been disclosed to or are known by the Trustees not having any such
relationship or interest and the contract involved is approved in good faith
reasonably justified by such facts by a majority of such Trustees not having any
such relationship or interest (even though such unrelated or disinterested
Trustees are less than a quorum of all of the Trustees), (2) the material facts
as to such relationship or interest and as to the contract have been disclosed
to or are known by the Shareholders not having such relationship or interest and
who are entitled to vote thereon and the contract involved is specifically
approved in good faith by majority vote of such Shareholders, or (3) the
specific contract involved is fair to the Trust as of the time it is authorized,
approved or ratified by the Trustees or by such Shareholders.
Section 3.4 Payment of Trust Expenses and Compensation of Trustees. The
Trustees are authorized to pay or to cause to be paid out of the principal or
income of the Trust, or partly out of principal and partly out of income, and to
charge or allocate the same to, between or among such one or more of the Series
and Classes that may be established and designated pursuant to Article IV, as
the Trustees deem fair, all expenses, fees, charges, taxes and liabilities
incurred or arising in connection with the Trust, or in connection with the
management thereof, including, but not limited to, the Trustees' compensation
and such expenses and charges for the services of the Trust's officers,
employees, investment adviser, administrator, distributor, principal
underwriter, auditor, counsel, depository, custodian, transfer agent, dividend
disbursing agent, accounting agent, Shareholder servicing agent, and such other
agents, consultants, and independent contractors and such other expenses and
charges as the Trustees may deem necessary or proper to incur. Without limiting
the generality of any other provision hereof, the Trustees shall be entitled to
reasonable compensation from the Trust for their services as Trustees and may
fix the amount of such compensation.
Section 3.5 Ownership of Assets of the Trust.
Title to all of the assets of the Trust shall
at all times be considered as vested in the
Trustees.
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ARTICLE IV
SHARES
Section 4.1 Description of Shares. The beneficial interest in the Trust
shall be divided into Shares, all without par value. The Trustees shall have the
authority from time to time to issue or reissue Shares in one or more Series of
Shares (including without limitation the Series specifically established and
designated in Section 4.2), as they deem necessary or desirable, to establish
and designate such Series, and to fix and determine the relative rights and
preferences as between the different Series of Shares as to right of redemption
and the price, terms and manner of redemption, special and relative rights as to
dividends and other distributions and on liquidation, sinking or purchase fund
provisions, conversion rights, and conditions under which the several Series
shall have separate voting rights or no voting rights.
The Shares of each Series may be issued or reissued from time to time
in one or more Classes, as determined by the Board of Trustees pursuant to
resolution. Each Class shall be appropriately designated, prior to the issuance
of any shares thereof, by some distinguishing letter, number or title. All
Shares within a Class shall be alike in every particular. All Shares of each
Series shall be of equal rank and have the same powers, preferences and rights,
and shall be subject to the same qualifications, limitations and restrictions
without distinction between the shares of different Classes thereof, except with
respect to such differences among such Classes, as the Board of Trustees shall
from time to time determine to be necessary or desirable, including without
limitation differences in expenses, in voting rights and in the rate or rates of
dividends or distributions. The Board of Trustees may from time to time increase
the number of Shares allocated to any Class already created by providing that
any unissued Shares of the applicable Series shall constitute part of such
Class, or may decrease the number of Shares allocated to any Class already
created by providing that any unissued Shares previously assigned to such Class
shall no longer constitute part thereof. The Board of Trustees is hereby
empowered to classify or reclassify from time to time any unissued Shares of
each Series by fixing or altering the terms thereof and by assigning such
unissued shares to an existing or newly created Class. Notwithstanding anything
to the contrary in this paragraph the Board of Trustees is hereby empowered (i)
to redesignate any issued Shares of any Series by assigning a distinguishing
letter, number or title to such shares and (ii) to reclassify all or any part of
the issued Shares of any Series to make them part of an existing or newly
created Class.
The number of authorized Shares and the number of Shares of each Series
and Class that may be issued is unlimited, and the Trustees may issue Shares of
any Series or Class for such consideration and on such terms as they may
determine (or for no consideration if pursuant to a Share dividend or split-up),
all without action or approval of the Shareholders. All Shares when so issued on
the terms determined by the Trustees shall be fully paid and non-assessable (but
may be subject to mandatory contribution back to the Trust as provided in
subsection (h) of Section 4.2). The Trustees may classify or reclassify any
unissued Shares or any Shares previously issued and reacquired of any Series or
Class into one or more Series or Classes that may be established and designated
from time to time. The Trustees may hold as treasury Shares (of the same or some
other Series), reissue for such consideration and on such terms as they may
determine, or cancel, at their discretion from time to time, any Shares of any
Series or Class reacquired by the Trust.
The Trustees may from time to time close the transfer books or
establish record dates and times for the purposes of determining the holders of
Shares entitled to be treated as such, to the extent provided or referred to in
Section 5.3.
The establishment and designation of any Series or Class of Shares in
addition to those established and designated in Section 4.2 shall be effective
upon the execution by a majority of the then Trustees of an instrument setting
forth such establishment and designation and the relative rights and preferences
of such Series or Class, or as otherwise provided in such instrument. At any
time that there are no Shares outstanding of any particular Series or Class
previously established and designated the Trustees may by an instrument executed
by a majority of their number abolish that Series or Class and the establishment
and designation thereof. Each instrument referred to in this paragraph shall
have the status of an amendment to this Declaration of Trust.
Any Trustee, officer or other agent of the Trust, and any organization
in which any such person is interested may acquire, own, hold and dispose of
Shares to the same extent as if such person were not a Trustee, officer or other
agent of the Trust; and the Trust may issue and sell or cause to be issued and
sold and may purchase Shares from any such person or any such organization
subject only to the general limitations, restrictions or other provisions
applicable to the sale or purchase of Shares generally.
Section 4.2 Establishment and Designation of Series or
Classes. Without limiting the authority of
the Trustees set forth in Section 4.1 to
establish and designate any further Series,
the Trustees hereby establish and designate
four Series of Shares: the "Shepherd Values
Growth Fund", the "Shepherd Values Aggressive
Growth Fund", the "Shepherd Values
International Fund" and the "Shepherd Values
Fixed Income Fund". The Shares of these
Series and any Shares of any further Series
or Class that may from time to time be
established and designated by the Trustees
shall (unless the Trustees otherwise
determine with respect to some further Series
or Class at the time of establishing and
designating the same) have the following
relative rights and preferences:
(a) Assets Belonging to Series. All consideration received by the
Trust for the issuance or sale of Shares of a particular
Series or Class, together with all assets in which such
consideration is invested or reinvested, all income, earnings,
profits, and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably
belong to that Series or Class for all purposes, subject only
to the rights of creditors, and shall be so recorded upon the
books of account of the Trust. Such consideration, assets,
income, earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived from any
reinvestment of such proceeds, in whatever form the same may
be, together with any General Items allocated to that Series
or Class as provided in the following sentence, are herein
referred to as "assets belonging to" that Series or Class. In
the event that there are any assets, income, earnings,
profits, and proceeds thereof, funds, or payments which are
not readily identifiable as belonging to any particular Series
or Class (collectively "General Items"), the Trustees shall
allocate such General Items to and among any one or more of
the Series or Classes established and designated from time to
time in such manner and on such basis as they, in their sole
discretion, deem fair and equitable; and any General Items so
allocated to a particular Series or Class shall belong to that
Series or Class. Each such allocation by the Trustees shall be
conclusive and binding upon the Shareholders of all Series and
Classes for all purposes.
The Trustees shall have full discretion, to the extent not
inconsistent with the 1940 Act, to determine which items shall be treated as
income and which items as capital; and each such determination and allocation
shall be conclusive and binding upon the Shareholders.
(b) Liabilities Belonging to Series. The assets belonging to each
particular Series and Class thereof shall be charged with the
liabilities of the Trust in respect of that Series or Class
and all expenses, costs, charges and reserves attributable to
that Series or Class, and any general liabilities, expenses,
costs, charges or reserves of the Trust which are not readily
identifiable as belonging to any particular Series or Class
shall be allocated and charged by the Trustees to and among
any one or more of the Series and Classes established and
designated from time to time in such manner and on such basis
as the Trustees in their sole discretion deem fair and
equitable. The liabilities, expenses, costs, charges and
reserves allocated and so charged to a Series or Class are
herein referred to as "liabilities belonging to" that Series
or Class. Each allocation of liabilities, expenses, costs,
charges and reserves by the Trustees shall be conclusive and
binding upon the Shareholders of all Series for all purposes.
(c) Dividends. Dividends and distributions on Shares of a
particular Series may be paid with such frequency as the
Trustees may determine, which may be daily or otherwise
pursuant to a standing resolution or resolutions adopted only
once or with such frequency as the Trustees may determine, to
the holders of Shares of that Series, from such of the
estimated income and capital gains, accrued or realized, from
the assets belonging to that Series, as the Trustees may
determine, after providing for actual and accrued liabilities
belonging to that Series. All dividends and distributions on
Shares of a particular Series shall be distributed pro rata to
the holders of that Series in proportion to the number of
Shares of that Series held by such holders at the date and
time of record established for the payment of such dividends
or distributions, except that in connection with any dividend
or distribution program or procedure the Trustees may
determine that no dividend or distribution shall be payable on
Shares as to which the Shareholder's purchase order and/or
payment have not been received by the time or times
established by the Trustees under such program or procedure,
and except that if Classes have been established for any
Series, the rate of dividends or distributions may vary among
such Class pursuant to resolution, which may be a standing
resolution, of the Board of Trustees. Such dividends and
distributions may be made in cash or Shares or a combination
thereof as determined by the Trustees or pursuant to any
program that the Trustees may have in effect at the time for
the election by each Shareholder of the mode of the making of
such dividend or distribution to that Shareholder. Any such
dividend or distribution paid in Shares will be paid at the
net asset value thereof as determined in accordance with
subsection (h) of Section 4.2.
The Trust intends to qualify each Series as a "regulated
investment company" under the Internal Revenue Code of 1954,
as amended, or any successor or comparable statute thereto,
and regulations promulgated thereunder. Inasmuch as the
computation of net income and gains for federal income tax
purposes may vary from the computation thereof on the books of
the Trust, the Board of Trustees shall have the power, in its
sole discretion, to distribute in any fiscal year as
dividends, including dividends designated in whole or in part
as capital gains distributions, amounts sufficient, in the
opinion of the Board of Trustees, to enable each Series to
qualify as a regulated investment company and to avoid
liability of the Series for federal income tax in respect of
that year. However, nothing in the foregoing shall limit the
authority of the Board of Trustees to make distributions
greater than or less than the amount necessary to qualify as a
regulated investment company and to avoid liability of each
Series for such tax.
(d) Liquidation. In event of the liquidation or dissolution of the Trust,
the Shareholders of each Series or Class that has been established and
designated shall be entitled to receive, as a Series or Class, when and as
declared by the Trustees, the excess of the assets belonging to that Series or
Class over the liabilities belonging to that Series or Class. The assets so
distributable to the Shareholders of any particular Series or Class shall be
distributed among such Shareholders in proportion to the number of Shares of
that Series or Class held by them and recorded on the books of the Trust. The
liquidation of any particular Series or Class may be authorized by vote of a
majority of the Trustees then in office subject to the approval of a majority of
the outstanding voting Shares of that Series or Class, as defined in the 1940
Act.
(e) Voting. All Shares shall have "equal voting rights" as such term is
defined in the Investment Company Act of 1940 and except as otherwise provided
by that Act or rules, regulations or orders promulgated thereunder. On each
matter submitted to a vote of the Shareholders, each Series shall vote as a
separate series except (i) as to any matter with respect to which a vote of all
Series voting as a single series is required by the 1940 Act or rules and
regulations promulgated thereunder, ------ or would be required under the Ohio
General Corporation Law if the Trust were an Ohio corporation; and (ii) as to
any matter which the Trustees have determined affects only the interests of one
or more Series or Classes, only the holders of Shares of the one or more
affected Series or Classes shall be entitled to vote thereon.
(f) Redemption by Shareholder. Each holder of Shares of a particular Series
or Class shall have the right at such times as may be permitted by the Trust,
but no less frequently than once each week, to require the Trust to redeem all
or any part of his Shares of that Series or Class at a redemption price equal to
the net asset value per Share of that Series or Class next determined in
accordance with subsection (h) of this Section 4.2 after the Shares are properly
tendered for redemption. Payment of the redemption price shall be in cash;
provided, however, that if the Trustees determine, which determination shall be
conclusive, that conditions exist which make payment wholly in cash unwise or
undesirable, the Trust may make payment wholly or partly in securities or other
assets belonging to the Series or Class of which the Shares being redeemed are
part at the value of such securities or assets used in such determination of net
asset value. Notwithstanding the foregoing, the Trust may postpone payment of
the redemption price and may suspend the right of the holders of Shares of any
Series to require the Trust to redeem Shares of that Series during any period or
at any time when and to the extent permissible under the 1940 Act, and such
redemption is conditioned upon the Trust having funds or property legally
available therefor.
(g) Redemption by Trust. Each Share of each Series or Class that has been
established and designated is subject to redemption by the Trust at the
redemption price which would be applicable if such Share was then being redeemed
by the Shareholder pursuant to subsection (f) of this Section 4.2:(a) at any
time, if the Trustees determine in their sole discretion that failure to so
redeem may have materially adverse consequences to all or any of the holders of
the Shares, or any Series or Class thereof, of the Trust, or (b) upon such other
conditions as may from time to time be determined by the Trustees and set forth
in the then current Prospectus of the Trust with respect to maintenance of
Shareholder accounts of a minimum amount. Upon such redemption the holders of
the Shares so redeemed shall have no further right with respect thereto other
than to receive payment of such redemption price.
(h) Net Asset Value. The net asset value per Share of any Series or Class
shall be the quotient obtained by dividing the value of the net assets of that
Series or Class (being the value of the assets belonging to that Series or Class
less the liabilities belonging to that Series or Class) by the total number of
Shares of that Series or Class outstanding, all determined in accordance with
the methods and procedures, including without limitation those with respect to
rounding, established by the Trustees from time to time. Net asset value shall
be determined separately for each Class of a Series. The Trustees may determine
to maintain the net asset value per Share of any Series or Class at a designated
constant dollar amount and in connection therewith may adopt procedures not
inconsistent with the 1940 Act for the continuing declarations of income
attributable to that Series or Class as dividends payable in additional Shares
of that Series or Class at the designated constant dollar amount and for the
handling of any losses attributable to that Series or Class . Such procedures
may provide that in the event of any loss each Shareholder shall be deemed to
have contributed to the capital of the Trust attributable to that Series or
Class his pro rata portion of the total number of Shares required to be canceled
in order to permit the net asset value per Share of that Series or Class to be
maintained, after reflecting such loss, at the designated constant dollar
amount. Each Shareholder of the Trust shall be deemed to have agreed, by his
investment in any Series with respect to which the Trustees shall have adopted
any such procedure, to make the contribution referred to in the preceding
sentence in the event of any such loss.
(i) Transfer. All Shares of each particular Series or Class shall be
transferable, but transfers of Shares of a particular Series or Class will be
recorded on the Share transfer records of the Trust applicable to that Series or
Class only at such times as Shareholders shall have the right to require the
Trust to redeem Shares of that Series or Class and at such other times as may be
permitted by the Trustees.
(j) Equality. All Shares of each particular Series shall represent an equal
proportionate interest in the assets belonging to that Series (subject to the
liabilities belonging to that Series), and each Share of any particular Series
shall be equal to each other Share of that Series; but the provisions of this
sentence shall not restrict any distinctions permissible under this Section 4.2
that may exist with respect to a Class of the same Series. The Trustees may from
time to time divide or combine the Shares of any particular Series or Class into
a greater or lesser number of Shares of that Series or Class without thereby
changing the proportionate beneficial interest in the assets belonging to that
Series or Class or in any way affecting the rights of Shares of any other Series
or Class.
(k) Fractions. Any fractional Share of any Series or Class, if any such
fractional Share is outstanding, shall carry proportionately all the rights and
obligations of a whole Share of that Series or Class, including with respect to
voting, receipt of dividends and distributions, redemption of Shares, and
liquidation of the Trust.
(l) Conversion Rights. Subject to compliance with the requirements of the
1940 Act, the Trustees shall have the authority to provide that holders of
Shares of any Series or Class shall have the right to convert said Shares into
Shares of one or more other Series or Classes in accordance with such
requirements and procedures as may be established by the Trustees.
Section 4.3 Ownership of Shares. The ownership of Shares shall be recorded
on the books of the Trust or of a transfer or similar agent for the Trust, which
books shall be maintained separately for the Shares of each Series and Class
that has been established and designated. No certificates certifying the
ownership of Shares need be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the use of facsimile
signatures, the transfer of Shares and similar matters. The record books of the
Trust as kept by the Trust or any transfer or similar agent, as the case may be,
shall be conclusive as to who are the Shareholders and as to the number of
Shares of each Series and Class held from time to time by each such Shareholder.
Section 4.4 Investments in the Trust. The Trustees may accept investments
in the Trust from such persons and on such terms and for such consideration, not
inconsistent with the provisions of the 1940 Act, as they from time to time
authorize. The Trustees may authorize any distributor, principal underwriter,
custodian, transfer agent or other person to accept orders for the purchase of
Shares that conform to such authorized terms and to reject any purchase orders
for Shares whether or not conforming to such authorized terms.
Section 4.5 No Preemptive Rights. Shareholders shall have no preemptive or
other right to subscribe to any additional Shares or other securities issued by
the Trust.
Section 4.6 Status of Shares and Limitation of Personal Liability.
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death of a Shareholder during the continuance of
the Trust shall not operate to terminate the Trust nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to the
rights of said decedent under this Trust. Ownership of Shares shall not entitle
the Shareholder to any title in or to the whole or any part of the Trust
property or right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or agent
of the Trust shall have any power to bind personally any Shareholder, nor except
as specifically provided herein to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the Shareholder may
at any time personally agree to pay.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 5.1 Voting Powers. The Shareholders shall have power to vote
only (i) for the election or removal of Trustees as provided in Section 3.1,
(ii) with respect to any contract with a Contracting Party as provided in
Section 3.3 as to which Shareholder approval is required by the 1940 Act, (iii)
with respect to any termination or reorganization of the Trust or any Series to
the extent and as provided in Sections 7.1 and 7.2, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in Section
7.3, (v) to the same extent as the stockholders of an Ohio business corporation
as to whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, and (vi) with respect to such additional matters relating
to the Trust as may be required by the 1940 Act, this Declaration of Trust, the
By-Laws or any registration of the Trust with the Commission (or any successor
agency) or any state, or as the Trustees may consider necessary or desirable.
There shall be no cumulative voting in the election of any Trustee or Trustees.
Shares may be voted in person or by proxy. A proxy with respect to Shares held
in the name of two or more persons shall be valid if executed by any one of them
unless at or prior to exercise of the proxy the Trust receives a specific
written notice to the contrary from any one of them. A proxy purporting to be
executed by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of proving invalidity
shall rest on the challenger. Until Shares are then issued and outstanding, the
Trustees may exercise all rights of Shareholders and may take any action
required by law, this Declaration of Trust or the By-Laws to be taken by
Shareholders.
Section 5.2 Meetings. Meetings (including meetings involving only the
holders of Shares of one or more but less than all Series or Classes) of
Shareholders may be called by the Trustees from time to time for the purpose of
taking action upon any matter requiring the vote or authority of the
Shareholders as herein provided or upon any other matter deemed by the Trustees
to be necessary or desirable. Written notice of any meeting of Shareholders
shall be given or caused to be given by the Trustees by mailing such notice at
least seven days before such meeting, postage prepaid, stating the time, place
and purpose of the meeting, to each Shareholder at the Shareholder's address as
it appears on the records of the Trust. If the Trustees shall fail to call or
give notice of any meeting of Shareholders (including a meeting involving only
the holders of Shares of one or more but less than all Series or Classes) for a
period of 30 days after written application by Shareholders holding at least 25%
of the Shares then outstanding requesting a meeting be called for any other
purpose requiring action by the Shareholders as provided herein or in the
By-Laws, then Shareholders holding at least 25% of the Shares then outstanding
may call and give notice of such meeting, and thereupon the meeting shall be
held in the manner provided for herein in case of call thereof by the Trustees.
Section 5.3 Record Dates. For the purpose of determining the
Shareholders who are entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to participate in any dividend or distribution, or
for the purpose of any other action, the Trustees may from time to time close
the transfer books for such period, not exceeding 30 days (except at or in
connection with the termination of the Trust), as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date and time not more
than 60 days prior to the date of any meeting of Shareholders or other action as
the date and time of record for the determination of Shareholders entitled to
vote at such meeting or any adjournment thereof or to be treated as Shareholders
of record for purposes of such other action, and any Shareholder who was a
Shareholder at the date and time so fixed shall be entitled to vote at such
meeting or any adjournment thereof or (subject to any provisions permissible
under subsection (c) of Section 4.2 with respect to dividends or distributions
on Shares that have not been ordered and/or paid for by the time or times
established by the Trustees under the applicable dividend or distribution
program or procedure then in effect) to be treated as a Shareholder of record
for purposes of such other action, even though he has since that date and time
disposed of his Shares, and no Shareholder becoming such after that date and
time shall be so entitled to vote at such meeting or any adjournment thereof or
to be treated as a Shareholder of record for purposes of such other action.
Section 5.4 Quorum and Required Vote. A majority of Shares entitled to
vote shall be a quorum for the transaction of business at a Shareholders'
meeting, except that where any provision of law or of this Declaration of Trust
permits or requires that holders of any Series or Class thereof shall vote as a
Series or Class, then a majority of the aggregate number of Shares of that
Series or Class thereof entitled to vote shall be necessary to constitute a
quorum for the transaction of business by that Series or Class. Any lesser
number shall be sufficient for adjournments. Any adjourned session or sessions
may be held, within a reasonable time after the date set for the original
meeting, without the necessity of further notice. Except when a larger vote is
required by any provision of this Declaration of Trust or the By-Laws, a
majority of the Shares voted, at a meeting at which a quorum is present, shall
decide any questions and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or requires that
the holders of any Series or Class shall vote as a Series or Class, then a
majority of the Shares of that Series or Class voted on the matter shall decide
that matter insofar as that Series or Class is concerned.
Section 5.5 Action by Written Consent. Subject to the provisions of the
1940 Act and other applicable law, any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote on the matter
(or such other proportion thereof as shall be required by the 1940 Act or by any
express provision of this Declaration of Trust or the By-Laws) consent to the
action in writing and such written consents are filed with the records of the
meetings of Shareholders. Such consent shall be treated for all purposes as a
vote taken at a meeting of Shareholders.
Section 5.6 Inspection of Records. The records of the Trust shall be open
to inspection by Shareholders to the same extent as is permitted stockholders of
an Ohio corporation under the Ohio General Corporation Law.
Section 5.7 Additional Provisions. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
ARTICLE VI
LIMITATION OF LIABILITY; INDEMNIFICATION
Section 6.1 Trustees, Shareholders, etc. Not Personally Liable; Notice.
All persons extending credit to, contracting with or having any claim against
any Series of the Trust (or the Trust on behalf of any Series) shall look only
to the assets of that Series for payment under such credit, contract or claim;
and neither the Shareholders nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be personally liable
therefor. Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only by or for the Trust or
the Trustees and not personally. Nothing in this Declaration of Trust shall
protect any Trustee or officer against any liability to the Trust or the
Shareholders to which such Trustee or officer would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of Trustee or of such
officer.
Every note, bond, contract, instrument, certificate or undertaking made
or issued by the Trustees or by any officers or officer shall give notice that
this Declaration of Trust is on file with the Secretary of the State of Ohio and
shall recite to the effect that the same was executed or made by or on behalf of
the Trust or by them as Trustees or Trustee or as officers or officer and not
individually and that the obligations of such instrument are not binding upon
any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, but the omission thereof shall not operate to
bind any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually.
Section 6.2 Trustee's Good Faith Action; Expert Advice; No Bond or
Surety. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. A Trustee shall be liable for his own
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee, and for nothing else,
and shall not be liable for errors of judgment or mistakes of fact or law.
Subject to the foregoing, (a) the Trustees shall not be responsible or liable in
any event for any neglect or wrongdoing of any officer, agent, employee,
consultant, adviser, administrator, distributor or principal underwriter,
custodian or transfer, dividend disbursing, Shareholder servicing or accounting
agent of the Trust, nor shall any Trustee be responsible for the act or omission
of any other Trustee; (b) the Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust
and their duties as Trustees, and shall be under no liability for any act or
omission in accordance with such advice or for failing to follow such advice;
and (c) in discharging their duties, the Trustees, when acting in good faith,
shall be entitled to rely upon the books of account of the Trust and upon
written reports made to the Trustees by any officer appointed by them, any
independent public accountant, and (with respect to the subject matter of the
contract involved) any officer, partner or responsible employee of a Contracting
Party appointed by the Trustees pursuant to Section 3.3. The Trustees as such
shall not be required to give any bond or surety or any other security for the
performance of their duties. Nothing stated herein is intended to detract from
the protection accorded to Trustees by Ohio Revised Code Sections 1746.08 and
1701.59, as amended from time to time.
Section 6.3 Indemnification of Shareholders. In case any Shareholder or
former Shareholder shall be charged or held to be personally liable for any
obligation or liability of the Trust solely by reason of being or having been a
Shareholder and not because of such Shareholder's acts or omissions or for some
other reason, the Trust (upon proper and timely request by the Shareholder)
shall assume the defense against such charge and satisfy any judgment thereon,
and the Shareholder or former Shareholder (or his heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled out of
the assets of the Trust estate to be held harmless from and indemnified against
all loss and expense arising from such liability; provided that, in the event
the Trust shall consist of more than one Series, Shareholders of a particular
Series who are faced with claims or liabilities solely by reason of their status
as Shareholders of that Series shall be limited to the assets of that Series for
recovery of such loss and related expenses. The rights accruing to a Shareholder
under this Section 6.3 shall not exclude any other right to which such
Shareholder may be lawfully entitled, nor shall anything herein contained
restrict the right of the Trust to indemnify or reimburse a Shareholder in any
appropriate situation even though not specifically provided herein.
Section 6.4 Indemnification of Trustees, Officers, etc. Subject to and
except as otherwise provided in the Securities Act of 1933, as amended, and the
1940 Act, the Trust shall indemnify each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise (hereinafter referred to as a "Covered Person") against
all liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, director or trustee, and except that no Covered
Person shall be indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
Section 6.5 Advances of Expenses. The Trust shall advance attorneys' fees
or other expenses incurred by a Covered Person in defending a proceeding to the
full extent permitted by the Securities Act of 1933, as amended, the 1940 Act,
and Ohio Revised Code Chapter 1707, as amended. In the event any of these laws
conflict with Ohio Revised Code Section 1701.13(E), as amended, these laws, and
not Ohio Revised Code Section 1701.13(E), shall govern.
Section 6.6 Indemnification Not Exclusive, etc. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
Section 6.7 Liability of Third Persons Dealing with Trustees. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Duration and Termination of Trust. Unless terminated as
provided herein, the Trust shall continue without limitation of time. The Trust
may be terminated at any time by a majority of the Trustees then in office
subject to a favorable vote of a majority of the outstanding voting Shares, as
defined in the 1940 Act, of each Series voting separately by Series.
Upon termination, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or anticipated as may be
determined by the Trustees, the Trust shall in accordance with such procedures
as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash, securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with the
provisions of subsection (d) of Section 4.2.
Section 7.2 Reorganization. The Trustees may sell, convey and transfer
the assets of the Trust, or the assets belonging to any one or more Series, to
another trust, partnership, association or corporation organized under the laws
of any state of the United States, or to the Trust to be held as assets
belonging to another Series of the Trust, in exchange for cash, shares or other
securities (including, in the case of a transfer to another Series of the Trust,
Shares of such other Series) with such transfer being made subject to, or with
the assumption by the transferee of, the liabilities belonging to each Series
the assets of which are so transferred; provided, however, that if shareholder
approval is required by the 1940 Act, no assets belonging to any particular
Series shall be so transferred unless the terms of such transfer shall have
first been approved at a meeting called for the purpose by the affirmative vote
of the holders of a majority of the outstanding voting Shares, as defined in the
1940 Act, of that Series. Following such transfer, the Trustees shall distribute
such cash, shares or other securities (giving due effect to the assets and
liabilities belonging to and any other differences among the various Series the
assets belonging to which have so been transferred) among the Shareholders of
the Series the assets belonging to which have been so transferred; and if all of
the assets of the Trust have been so transferred, the Trust shall be terminated.
Section 7.3 Amendments. All rights granted to the Shareholders under
this Declaration of Trust are granted subject to the reservation of the right to
amend this Declaration of Trust as herein provided, except that no amendment
shall repeal the limitations on personal liability of any Shareholder or Trustee
or repeal the prohibition of assessment upon the Shareholders without the
express consent of each Shareholder or Trustee involved. Subject to the
foregoing, the provisions of this Declaration of Trust (whether or not related
to the rights of Shareholders) may be amended at any time so long as such
amendment does not adversely affect the rights of any Shareholder with respect
to which such amendment is or purports to be applicable and so long as such
amendment is not in contravention of applicable law, including the 1940 Act, by
an instrument in writing signed by a majority of the then Trustees (or by an
officer of the Trust pursuant to the vote of a majority of such Trustees).
Except as provided in the first sentence of this Section 7, any amendment to
this Declaration of Trust that adversely affects the rights of Shareholders may
be adopted at any time by an instrument signed in writing by a majority of the
then Trustees (or by an officer of the Trust pursuant to the vote of a majority
of such Trustees) when authorized to do so by the vote in accordance with
subsection (e) of Section 4.2 of Shareholders holding a majority of the Shares
entitled to vote; (a "Majority Shareholder Vote"); provided, however, than an
amendment that shall affect the Shareholders of one or more Series (or of one or
more Classes), but not the Shareholders of all outstanding Series (or Classes),
shall be authorized by a Majority Shareholder Vote of each Series (or Class, as
the case may be) affected, and no vote of a Series (or Class) not affected shall
be required. Subject to the foregoing, any such amendment shall be effective as
provided in the instrument containing the terms of such amendment or, if there
is no provision therein with respect to effectiveness, upon the execution of
such instrument and of a certificate (which may be a part of such instrument)
executed by a Trustee or officer to the effect that such amendment has been duly
adopted. Copies of the amendment to this Declaration of Trust shall be filed as
specified in Section 7.4. A restated Declaration of Trust, integrating into a
single instrument all of the provisions of the Declaration of Trust which are
then in effect and operative, may be executed from time to time by a majority of
the then Trustees (or by an officer of the Trust pursuant to the vote of a
majority of such Trustees) and shall be effective upon filing as specified in
Section 7.4.
Section 7.4 Filing of Copies; References; Headings. The original or a
copy of this instrument and of each amendment hereto shall be kept at the office
of the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the Trust with the
Secretary of the State of Ohio, as well as any other governmental office where
such filing may from time to time be required, but the failure to make any such
filing shall not impair the effectiveness of this instrument or any such
amendment. Anyone dealing with the Trust may rely on a certificate by an officer
of the Trust as to whether or not any such amendments have been made, as to the
identities of the Trustees and officers, and as to any matters in connection
with the Trust hereunder; and, with the same effect as if it were the original,
may rely on a copy certified by an officer of the Trust to be a copy of this
instrument or of any such amendments. In this instrument and in any such
amendment, references to this instrument, and all expressions like "herein",
"hereof" and "hereunder" shall be deemed to refer to this instrument as a whole
as the same may be amended or affected by any such amendments. The masculine
gender shall include the feminine and neuter genders. Headings are placed herein
for convenience of reference only and shall not be taken as a part hereof or
control or affect the meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts each of which shall be
deemed an original.
Section 7.5 Applicable Law. This Trust is an Ohio business trust, and
it is created under and is to be governed by and construed and administered
according to the laws of said State, including the Ohio General Corporation Law
as the same may be amended from time to time, but the reference to said
Corporation Law is not intended to give the Trust, the Trustees, the
Shareholders or any other person any right, power, authority or responsibility
available only to or in connection with an entity organized in corporate form.
The Trust shall be of the type referred to in Section 1746.01 of the Ohio
Revised Code, and without limiting the provisions hereof, the Trust may exercise
all powers which are ordinarily exercised by such a trust.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand for
himself and his assigns, as of the day and year first above written.
/s/
KENNETH D. TRUMPFHELLER
- 1 -
<PAGE>
STATE OF TEXAS )
) ss:
COUNTY OF TARRANT )
Before me, a Notary Public in and for said county and state, personally
appeared the above named KENNETH D. TRUMPFHELLER, who acknowledged that he did
sign the foregoing instrument and that the same is his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal on this 29 day of September, 1998.
/s/
Patricia L. Taber
Notary Public
My Commission Expires: September 19, 2001
- 2 -
<PAGE>
ACCEPTANCE OF TRUST
As contemplated in Section 3.1 of the Agreement and Declaration of
Trust of AmeriPrime Insurance Trust, the undersigned accepts his designation as
a Trustee of said Trust and agrees to the provisions of said Agreement and
Declaration of Trust.
IN WITNESS WHEREOF, the undersigned has set his hand on the date set
opposite his signature.
Date: September 29, 1998 /s/
KENNETH D. TRUMPFHELLER
STATE OF TEXAS )
) ss:
COUNTY OF TARRANT )
Before me, a Notary Public in and for said county and state, personally
appeared the above named KENNETH D. TRUMPFHELLER, who acknowledged that he did
sign the foregoing instrument and that the same is his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal on this 29 day of September, 1998.
/s/
Patricia L. Taber
Notary Public
My Commission Expires:Sepember 19, 2001
- 3 -
<PAGE>
By-Laws
of
AmeriPrime Insurance Trust
ARTICLE 1
Agreement and Declaration of Trust and Offices
1.1 Agreement and Declaration of Trust. These By-Laws shall be subject
to the Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of AmeriPrime Insurance Trust, the Ohio business trust
established by the Declaration of Trust (the "Trust").
1.2 Offices. The Trust may maintain one or more other offices,
including its principal office, in or outside of Ohio, in such cities as the
Trustees may determine from time to time. Unless the Trustees otherwise
determine, the principal office of the Trust shall be located in Southlake,
Texas.
ARTICLE 2
Meetings of Trustees
2.1 Regular Meetings. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees. A regular
meeting of the Trustees may be held without call or notice immediately after and
at the same place as any meeting of the shareholders.
2.2 Special Meetings. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meeting when called by
the President or the Treasurer or by two or more Trustees, sufficient notice
thereof being given to each Trustee by the Secretary or an Assistant Secretary
or by the officer or the Trustees calling the meeting.
2.3 Notice. It shall be sufficient notice to a Trustee of a special
meeting to send notice by mail at least forty-eight hours or by telegram at
least twenty-four hours before the meeting addressed to the Trustee at his or
her usual or last known business or residence address or to give notice to him
or her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice to him or
her. Neither notice of a meeting nor a waiver of a notice need specify the
purposes of the meeting.
ASA03261-093098-01
<PAGE>
2.4 Quorum. At any meeting of the Trustees a majority of the Trustees
then in office shall constitute a quorum. Any meeting may be adjourned from time
to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
2.5 Participation by Telephone. One or more of the Trustees or of any
committee of the Trustees may participate in a meeting thereof by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting except as
otherwise provided by the Investment Company Act of 1940.
2.6 Action by Consent. Any action required or permitted to be taken at
any meeting of the Trustees or any committee thereof may be taken without a
meeting, if a written consent of such action is signed by a majority of the
Trustees then in office or a majority of the members of such committee, as the
case may be, and such written consent is filed with the minutes of the
proceedings of the Trustees or such committee.
ARTICLE 3
Officers
3.1 Enumeration and Qualification. The officers of the Trust shall be a
President, a Treasurer, a Secretary and such other officers, including Vice
Presidents, if any, as the Trustees from time to time may in their discretion
elect. The Trust may also have such agents as the Trustees from time to time may
in their discretion appoint. Any officer may be but none need be a Trustee or
shareholder. Any two or more offices may be held by the same person.
3.2 Election. The President, the Treasurer and the Secretary shall be
elected annually by the Trustees. Other officers, if any, may be elected or
appointed by the Trustees at any time.
Vacancies in any office may be filled at any time.
3.3 Tenure. The President, the Treasurer and the Secretary shall hold
office for one year and until their respective successors are chosen and
qualified, or in each case until he or she sooner dies, resigns, is removed or
becomes disqualified. Each other officer shall hold office and each agent shall
retain authority at the pleasure of the Trustees.
3.4 Powers. Subject to the other provisions of these By-Laws, each
officer shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly incident
to the office occupied by him or her as if the Trust were organized as an Ohio
business corporation and such other duties and powers as the Trustees may from
time to time designate.
3.5 President. Unless the Trustees otherwise provide, the President, or
in the absence of the President, any Trustee chosen by the Trustees, shall
preside at all meetings of the shareholders and of the Trustees. The President
shall be the chief executive officer.
<PAGE>
3.6 Treasurer. The Treasurer shall be the chief financial and
accounting officer of the Trust, and shall, subject to the provisions of the
Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager, or transfer, shareholder servicing or
similar agent, be in charge of the valuable papers, books of account and
accounting records of the Trust, and shall have such other duties and powers as
may be designated from time to time by the Trustees or by the President.
3.7 Secretary. The Secretary shall record all proceedings of the
shareholders and the Trustees in books to be kept therefor, which books or a
copy thereof shall be kept at the principal office of the Trust. In the absence
of the Secretary from any meeting of the shareholders or Trustees, an assistant
secretary, or if there be none or if he or she is absent, a temporary secretary
chosen at such meeting shall record the proceedings thereof in the aforesaid
books.
3.8 Resignations and Removals. Any Trustee or officer may resign at any
time by written instrument signed by him or her and delivered to the President
or the Secretary or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other time. The
Trustees may remove any officer elected by them with or without cause. Except to
the extent expressly provided in a written agreement with the Trust, no Trustee
or officer resigning and no officer removed shall have any right to any
compensation for any period following his or her resignation or removal, or any
right to damages on account of such removal.
ARTICLE 4
Committees
4.1 General. The Trustees, by vote of a majority of the Trustees then
in office, may elect from their number an Executive Committee or other
committees and may delegate thereto some or all of their powers except those
which by law, by the Declaration of Trust, or by these By-Laws may not be
delegated. Except as the Trustees may otherwise determine, any such committee
may make rules for the conduct of its business, but unless otherwise provided by
the Trustees or in such rules, its business shall be conducted so far as
possible in the same manner as is provided by these By-Laws for the Trustees
themselves. All members of such committees shall hold such offices at the
pleasure of the Trustees. The Trustees may abolish any such committee at any
time. Any committee to which the Trustees delegate any of their powers or duties
shall keep records of its meetings and shall report its action to the Trustees.
The Trustees shall have power to rescind any action of any committee, but no
such rescission shall have retroactive effect.
ARTICLE 5
Reports
5.1 General. The Trustees and officers shall render reports at the time
and in the manner required by the Declaration of Trust or any applicable law.
Officers and Committees shall render such additional reports as they may deem
desirable or as may from time to time be required by the Trustees.
<PAGE>
ARTICLE 6
Fiscal Year
6.1 General. The fiscal year of the Trust shall be fixed by, and shall
be subject to change by, the Trustees.
ARTICLE 7
Seal
7.1 General. If required by applicable law, the seal of the Trust shall
consist of a flat-faced die with the word "Ohio", together with the name of the
Trust and the year of its organization cut or engraved thereon, but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.
ARTICLE 8
Execution of Papers
8.1 General. Except as the Trustees may generally or in particular
cases authorize the execution thereof in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees shall be signed by
the President, any Vice President, or by the Treasurer and need not bear the
seal of the Trust, but shall state the substance of or make reference to the
provisions of Section 7.1 of the Declaration of Trust.
ARTICLE 9
Issuance of Share Certificates
9.1 Share Certificates. In lieu of issuing certificates for shares, the
Trustees or the transfer agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
The Trustees may at any time authorize the issuance of share
certificates. In that event, each shareholder shall be entitled to a certificate
stating the number of shares owned by him, in such form as shall be prescribed
from time to time by the Trustees. Such certificate shall be signed by the
President or a Vice-President and by the Treasurer or Assistant Treasurer. Such
signatures may be facsimiles if the certificate is signed by a transfer agent,
or by a registrar, other than a Trustee, officer or employee of the Trust. In
case any officer who has signed or whose facsimile signature has been placed on
such certificate shall cease to be such officer before such certificate is
issued, it may be issued by the Trust with the same effect as if he were such
officer at the time of its issue.
9.2 Loss of Certificates. In case of the alleged loss or destruction or
the mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees shall prescribe.
<PAGE>
9.3 Issuance of New Certificate to Pledgee. In the event certificates
have been issued, a pledgee of shares transferred as collateral security shall
be entitled to a new certificate if the instrument of transfer substantially
describes the debt or duty that is intended to be secured thereby. Such new
certificate shall express on its face that it is held as collateral security,
and the name of the pledgor shall be stated thereon, who alone shall be liable
as a shareholder, and entitled to vote thereon.
9.4 Discontinuance of Issuance of Certificates. The Trustees may at any
time discontinue the issuance of share certificates and may, by written notice
to each shareholder, require the surrender of share certificates to the Trust
for cancellation. Such surrender and cancellation shall not affect the ownership
of shares in the Trust.
ARTICLE 10
Custodian
10.1 General. The Trust shall at all times employ a bank or trust
company having a capital, surplus and undivided profits of at least Five Hundred
Thousand ($500,000) Dollars as Custodian of the capital assets of the Trust. The
Custodian shall be compensated for its services by the Trust and upon such basis
as shall be agreed upon from time to time between the Trust and the Custodian.
ARTICLE 11
Dealings with Trustees and Officers
11.1 General. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of shares of the Trust to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may accept subscriptions to
shares or repurchase shares from any firm or company in which he is interested.
ARTICLE 12
Shareholders
12.1 Meetings. A meeting of the shareholders of the Trust shall be held
whenever called by the Trustees, whenever election of a Trustee or Trustees by
shareholders is required by the provisions of Section 16(a) of the Investment
Company Act of 1940 for that purpose or whenever otherwise required pursuant to
the Declaration of Trust. Any meeting shall be held on such day and at such time
as the President or the Trustees may fix in the notice of the meeting.
12.2 Record Dates. For the purpose of determining the shareholders who
are entitled to vote or act at any meeting or any adjournment thereof, or who
are entitled to receive payment of any dividend or of any other distribution,
the Trustees may from time to time fix a time, which shall be not more than 60
days before the date of any meeting of shareholders or the date for the payment
of any dividend or of any other distribution, as the record date for determining
the shareholders having the right to notice of and to vote at such meeting and
any adjournment thereof or the right to receive such dividend or distribution,
and in such case only shareholders
<PAGE>
of record on such record date shall have such right, notwithstanding any
transfer of shares on the books of the Trust after the record date; or without
fixing such record date the Trustees may for any such purposes close the
register or transfer books for all or any part of such period.
ARTICLE 13
Amendments to the By-Laws
13.1 General. These By-Laws may be amended or repealed, in whole or in
part, by a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.
BROWN, CUMMINS & BROWN CO., L.P.A.
ATTORNEYS AND COUNSELORS AT LAW
3500 CAREW TOWER
J.W. BROWN (1911-1995) 441 VINE STREET
JAMES R. CUMMINS CINCINNATI, OHIO 45202
ROBERT S BROWN TELEPHONE (513) 381-2121
DONALD S. MENDELSOHN TELECOPIER (513) 381-2125 OF COUNSEL
LYNNE SKILKEN GILBERT BETTMAN
AMY G. APPLEGATE
MELANIE S. CORWIN
JOANN M. STRASSER
PAMELA L. KOGUT
September 29, 1998
AmeriPrime Insurance Trust
1793 Kingswood Drive, Suite 200
Southlake, TX 76092
Gentlemen:
This letter is in response to your request for our opinion in
connection with the filing of the Registration Statement of AmeriPrime Insurance
Trust (the "Trust").
We have examined a copy of the Trust's Agreement and Declaration of
Trust, the Trust's By-Laws, the Trust's record of the various actions by the
Trustees thereof, and all such agreements, certificates of public officials,
certificates of officers and representatives of the Trust and others, and such
other documents, papers, statutes and authorities as we deem necessary to form
the basis of the opinion hereinafter expressed. We have assumed the genuineness
of the signatures and the conformity to original documents of the copies of such
documents supplied to us as original or photostat copies.
Based upon the foregoing, we are of the opinion that, after
registration is effective for purposes of federal and applicable state
securities laws, the shares of each series of the Trust, if issued in accordance
with the then current Prospectus and Statement of Additional Information of the
Trust, will be legally issued, fully paid and non-assessable.
We herewith give you our permission to file this opinion with the
Securities and Exchange Commission as an exhibit to the Registration Statement.
Very truly yours,
BROWN, CUMMINS & BROWN CO., L.P.A.
BCB:kem
