MONTEAGLE FUNDS
PROSPECTUS DATED NOVEMBER 20, 1999
MONTEAGLE OPPORTUNITY GROWTH FUND
MONTEAGLE VALUE FUND
MONTEAGLE LARGE CAP FUND
MONTEAGLE FIXED INCOME FUND
209 10th Ave. South, Suite 332
Nashville, Tennesse 37203
(800) ___-____
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
PAGE
MONTEAGLE OPPORTUNITY GROWTH FUND..............................................1
MONTEAGLE VALUE FUND...........................................................2
MONTEAGLE LARGE CAP FUND.......................................................3
MONTEAGLE FIXED INCOME FUND....................................................4
FEES AND EXPENSES OF INVESTING IN THE FUND.....................................5
HOW TO BUY SHARES..............................................................6
HOW TO REDEEM SHARES...........................................................7
DETERMINATION OF NET ASSET VALUE...............................................8
DIVIDENDS, DISTRIBUTIONS AND TAXES.............................................8
MANAGEMENT OF THE FUNDS........................................................9
YEAR 2000 ISSUE................................................................9
FOR MORE INFORMATION..................................................BACK COVER
<PAGE>
MONTEAGLE OPPORTUNITY GROWTH FUND
INVESTMENT OBJECTIVE
The investment objective of the Monteagle Opportunity Growth Fund is long
term growth of capital.
PRINCIPAL STRATEGIES
The Fund seeks to achieve its objective by investing in "growth stocks."
These are stocks that the Fund's adviser believes demonstrate accelerating cash
flows, profit margins and/or revenues. The adviser emphasizes companies where
management and/or large outside investors (such as banks, insurance companies
and mutual funds) are buyers or owners of the stock or where the company itself
is repurchasing its own shares on the open market. These are the "Informed
Investors."
Common sense suggests that the Informed Investors of the corporate world
are far closer to the day-to-day activities of the companies they own or manage
and are often in a much more informed position to gauge the long term effects
certain publicly disclosed information or developments may have on the future
price of their company's stock. Similar factors determine when a security is
sold. For example, a stock may be sold if there are changes in trading activity
by Informed Investors or changes in the company's fundamentals, such as
decelerating earnings or material changes in the debt-equity ratio of the
company.
The Fund invests primarily in common stocks of medium and large
capitalization U.S. companies (those with market capitalizations, at the time of
purchase, of $1 billion or more). Although the Fund will not concentrate in any
one industry, it is anticipated that the Fund's portfolio will focus on a small,
select group of industries ("growth industries") which the Fund's adviser
believes offer superior growth opportunities based on overall economic trends.
The Fund is a non-diversified fund, which means that the Fund may take larger
positions in a small number of companies than a diversified fund. The Fund may
also have a high level of portfolio turnover.
PRINCIPAL RISKS OF INVESTING IN THE FUND
o MANAGEMENT RISK. The strategy used by the Fund's adviser may fail to
produce the intended results.
o COMPANY RISK. The value of the Fund may decrease in response to the
activities and financial prospects of an individual company in the Fund's
portfolio. The value of an individual company can be more volatile than the
market as a whole.
o MARKET RISK. Overall stock market risks may also affect the value of the
Fund. Factors such as domestic economic growth and market conditions,
interest rate levels, and political events affect the securities markets.
o VOLATILITY RISK. Common stocks tend to be more volatile than other
investment choices. Because the Fund will emphasize various growth
industries, the value of your shares is likely to be more volatile than a
fund that invests in a broader range of industries.
o NON-DIVERSIFICATION RISK. As a non-diversified fund, the Fund's portfolio
may at times focus on a limited number of companies and will be subject to
substantially more investment risk and potential for volatility than a
diversified fund.
o TURNOVER RISK. The Fund's investment strategy may result in a high
portfolio turnover rate. A high portfolio turnover would result in
correspondingly greater brokerage commission expenses (which would lower
the Fund's total return) and may result in the distribution to shareholders
of additional capital gains for tax purposes.
o The Fund has no operating history and the Fund's investment manager has no
prior experience managing the assets of a mutual fund.
o AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF ANY BANK AND IS NOT INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY.
o The Fund is not a complete investment program.
o As with any mutual fund investment, the Fund's returns will vary and you
could lose money.
IS THE FUND RIGHT FOR YOU? The Fund may be a suitable investment for:
o long term investors seeking a Fund with a growth investment strategy
o investors who can tolerate the greater risks associated with common stock
investments
o investors willing to accept greater price fluctuations than typically found
with a common stock mutual fund
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MONTEAGLE VALUE FUND
INVESTMENT OBJECTIVE
The investment objective of the Monteagle Value Fund is long term growth
of capital.
PRINCIPAL STRATEGIES
As a value oriented manager, the Fund's adviser takes a long term (or
"buy and hold") approach to managing the Fund's portfolio. The Fund invests
primarily in common stocks of medium and large capitalization U.S. companies
(those with market capitalizations of $1 billion or more) that the Fund's
adviser believes are undervalued based on value characteristics such as lower
relative price valuations, above average earnings per share growth and higher
dividend yields compared to the S&P 500 Index. The adviser will sell a stock
when it believes that the stock is no longer undervalued or when the
fundamentals of the company that affect revenue and profitability have changed
significantly, either in a positive or negative direction.
PRINCIPAL RISKS OF INVESTING IN THE FUND
o MANAGEMENT RISK. The adviser's value-oriented approach may fail to produce
the intended results.
o COMPANY RISK. The value of the Fund may decrease in response to the
activities and financial prospects of an individual company in the Fund's
portfolio. The value of an individual company can be more volatile than the
market as a whole.
o MARKET RISK. Overall stock market risks may also affect the value of the
Fund. Factors such as domestic economic growth and market conditions,
interest rate levels, and political events affect the securities markets.
o VOLATILITY RISK. Common stocks tend to be more volatile than other
investment choices.
o AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF ANY BANK AND IS NOT INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY.
o The Fund has no operating history and neither the Fund's investment manager
nor the Fund's adviser has prior experience managing the assets of a mutual
fund.
o The Fund is not a complete investment program.
o As with any mutual fund investment, the Fund's returns will vary and you
could lose money.
IS THE FUND RIGHT FOR YOU? The Fund may be suitable for:
o long-term investors seeking a fund with a value investment strategy
o investors willing to accept price fluctuations in their investment
o investors who can tolerate the greater risks associated with common stock
investments
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MONTEAGLE LARGE CAP FUND
INVESTMENT OBJECTIVE
The investment objective of the Large Cap Fund is long term growth of
capital.
PRINCIPAL STRATEGIES
The Fund will invest at least 65% of its assets in common stocks of large
capitalization U.S. companies (those with market capitalizations above $15
billion) that the Fund's adviser believes exhibit a history of increasing
earnings. The adviser first analyzes various industrial sectors to select the
industry groups in which the Fund will focus its investments. The adviser
considers such factors as economic trends and earnings growth prospects when
selecting the industries in which the Fund will focus. The adviser then ranks
individual stocks in each industrial group based on certain factors, such as:
(1) expected earnings growth;
(2) analysts' earnings estimates for the next fiscal year;
(3) return on equity;
(4) stability of earnings growth in the past 5 years; and
(5) relative price-to-earnings multiple.
The Fund will invest at least 65% of its assets in large capitalization
companies.
The Fund may sell a stock if, in the adviser's opinion:
o stock appreciation has caused the stock to become too large a position in
the portfolio;
o the fundamental price objective has been achieved;
o the company has experienced a negative change in fundamentals (such as its
earnings growth rate or competitive position in its industry group); or
o some or all of the factors used to rank the company have declined, combined
with relative underperformance of the stock compared to the S&P 500 Index
or the company's industry group.
PRINCIPAL RISKS OF INVESTING IN THE FUND
o MANAGEMENT RISK. The strategy used by the Fund's adviser may fail to
produce the intended results.
o COMPANY RISK is the risk that the Fund might decrease in value in response
to the activities and financial prospects of an individual company.
o MARKET RISK is the risk that the Fund might decrease in value in response
to general market and economic conditions.
o VOLATILITY RISK means that common stocks tend to be more volatile than
other investment choices.
o The Fund has no operating history and neither the Fund's investment manager
nor the Fund's adviser has prior experience managing the assets of a mutual
fund.
o AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF ANY BANK AND IS NOT INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY.
o The Fund is not a complete investment program.
o As with any mutual fund investment, the Fund's returns will vary and you
could lose money.
IS THE FUND RIGHT FOR YOU? The Fund may be a suitable investment for:
o long term investors seeking a Fund with a growth investment strategy
o investors willing to accept the price fluctuations in their investment
o investors who can tolerate the greater risks associated with common stock
investments
<PAGE>
MONTEAGLE FIXED INCOME FUND
INVESTMENT OBJECTIVE
The investment objective of the Monteagle Fixed Income Fund is total
return.
PRINCIPAL STRATEGIES
The Fund invests primarily in investment grade intermediate term fixed
income securities. These include U.S. Government securities, securities issued
by agencies of the U.S Government and taxable municipal bonds. The Fund may also
invest in corporate debt securities rated at least A-3 by Moody's or A- by
Standard & Poor's if, in the judgement of the Fund's adviser, the incremental
expected return is sufficient to outweigh the additional risk compared to U.S.
Government securities.
The Fund seeks to achieve its objective of total return through capital
appreciation on the bonds and other securities held and income on those
securities held. The adviser will actively manage the portfolio and, based on
its assessment of market conditions, either lengthen or shorten the average
maturity of the portfolio and/or switch between bonds of different sectors, with
the view of maximizing the total return for the types of obligations purchased.
The Fund may achieve capital appreciation by owning bonds of longer duration
when interest rates are declining, protecting against large depreciation, and by
owning bonds of shorter duration when interest rates are rising. In addition,
the Fund may achieve capital appreciation if the credit quality of corporate and
municipal bonds improve and there is a rating upgrade. For this purpose, the
adviser will use its proprietary "Bond Market Watch" model to evaluate
macroeconomic indicators and based on this evaluation, attempt to anticipate
interest rate changes. The Fund's adviser seeks to reduce interest rate risk by
maintaining an average maturity of the bonds and notes (on a dollar weighted
basis) of between three and eight years. The Fund will invest at least 65% of
its assets in fixed income securities.
The Fund may sell a security if, in the advisor's opinion:
o an interest rate change is expected to occur and the Fund's advisor seeks to
lengthen or shorten the duration of the Fund o a sector of the market has become
less attractive for total return compared to another sector o a security
receives a rating downgrade which could increase credit risk and negatively
impact the market value of the security
o a security receives a rating upgrade that positively impacts the market
value of the security and the Fund's advisor wishes to capture the
appreciation
PRINCIPAL RISKS OF INVESTING IN THE FUNDS
o MANAGEMENT RISK. The strategy used by the Fund's adviser may fail to
produce the intended results.
o INTEREST RATE RISK. The value of your investment may decrease when interest
rates rise. To the extent the Fund invests in fixed income securities with
longer maturities, the Fund will be more greatly affected by changes in
interest rates, and will be more volatile, than a fund that invests in
securities with shorter maturities.
o DURATION RISK. Prices of fixed income securities with longer effective
maturities are more sensitive to interest rate changes than those with
shorter effective maturities.
o CREDIT RISK. The issuer of the fixed income security may not be able to
make interest and principal payments when due. Generally, the lower the
credit rating of a security, the greater the risk that the issuer will
default on its obligation.
o GOVERNMENT RISK. It is possible that the U.S. Government would not provide
financial support to its agencies if it is not required to do so by law. If
a U.S. Government agency in which the Fund invests defaults and the U.S.
Government does not stand behind the obligation, the Fund's share price or
yield could fall.
o The U. S. Government's guarantee of ultimate payment of principal and
timely payment of interest on the U. S. Government securities owned by the
Fund does not imply that the Fund's shares are guaranteed or that the price
of the Fund's shares will not fluctuate.
o AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF ANY BANK AND IS NOT INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY.
o The Fund has no operating history and neither the Fund's investment manager
nor the Fund's adviser has prior experience managing the assets of a mutual
fund.
o The Fund is not a complete investment program.
o As with any mutual fund investment, the Fund's returns will vary and you
could lose money.
IS THIS FUND RIGHT FOR YOU?
The Fund may be a suitable investment for:
o long term investors seeking a fund with an income and capital appreciation
strategy
o investors seeking to diversify their holdings with bonds and other fixed
income securities
o investors seeking higher potential returns than a money market fund.
o investors willing to accept price fluctuations in their investments.
GENERAL
EACH FUND may from time to time take temporary defensive positions that
are inconsistent with the Fund's principal investment strategies in attempting
to respond to adverse market, economic, political, or other conditions. For
example, any Fund may hold all or a portion of its assets in money market
instruments, securities of no-load mutual funds or repurchase agreements. If a
Fund invests in shares of another mutual fund, the shareholders of the Fund
generally will be subject to duplicative management fees. As a result of
engaging in these temporary measures, the Funds may not achieve their investment
objectives.
The investment objective and strategies of any Fund may be changed without
shareholder approval.
PAST PERFORMANCE
Although past performance of a fund is no guarantee of how it will perform in
the future, historical performance may give you some indication of the risk of
investing in the fund because it demonstrates how its returns have varied over
time. The Bar Chart and Performance Table that would otherwise appear in this
prospectus have been omitted because each Fund is recently organized and has a
limited performance history.
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FEES AND EXPENSES OF THE FUNDS
The tables describe the fees and estimated expenses that you may pay if you buy
and hold shares of a Fund.
<TABLE>
<S> <C> <C> <C> <C>
OPPORTUNITY LARGE CAP FIXED INCOME
SHAREHOLDER FEES FUND VALUE FUND FUND FUND
(fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases NONE NONE NONE NONE
Maximum Deferred Sales Charge (Load) NONE NONE NONE NONE
Redemption Fee NONE NONE NONE NONE
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
Management Fee 1.33% 1.35% 1.23% 1.14%
Distribution and/or Service (12b-1) Fees None None None None
Other Expenses1 0.00% 0.00% 0.00% 0.00%
Total Annual Fund Operating Expenses 1.33% 1.35% 1.23% 1.14%
</TABLE>
1 "Other Expenses" are based on estimated amounts for the current fiscal year.
Example:
This Example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated, reinvest dividends
and distributions, and then redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year
and that the Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:
Opportunity Value Large Cap Fixed Income
Fund Fund Fund Fund
1 Year $136 $138 $126 $117
3 Year $424 $430 $393 $364
HOW TO BUY SHARES
INITIAL PURCHASE
The minimum initial investment in each Fund is $25,000 ($1,500 for
qualified retirement accounts and medical savings accounts. Investors choosing
to purchase or redeem their shares through a broker/dealer or other institution
may be charged a fee by that institution. To the extent investments of
individual investors are aggregated into an omnibus account established by an
investment adviser, broker or other intermediary, the account minimums apply to
the omnibus account, not to the account of the individual investor.
BY MAIL - To be in proper form, your initial purchase request must include:
o a completed and signed investment application form (which accompanies this
Prospectus);
o a check made payable to the appropriate Fund;
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Mail the application and check to:
U.S. Mail: Overnight:
Monteagle Funds Monteagle Funds
c/o Unified Fund Services, Inc. c/o Unified Fund Services, Inc.
P.O. Box 6110 431 North Pennsylvania Street
Indianapolis, Indiana 46206-6110 Indianapolis, Indiana 46204
BY WIRE
You may also purchase shares of a Fund by wiring federal funds from your bank,
which may charge you a fee for doing so. To wire money, you must call Unified
Fund Services, Inc., the Funds' transfer agent, at (800)-___-____to set up your
account and obtain an account number. You should be prepared at that time to
provide the information on the application. Then, provide your bank with the
following information for purposes of wiring your investment:
Firstar Bank, N.A.
ABA #0420-0001-3
Attn: Ameriprime Advisors Trust
D.D.A.# _________________
Account Name _________________ (write in shareholder name)
For the Account # ______________ (write in account number)
You must mail a signed application to Firstar Bank, N.A., the Funds'
custodian, at the above address in order to complete your initial wire purchase.
Wire orders will be accepted only on a day on which the Fund, custodian and
transfer agent are open for business. A wire purchase will not be considered
made until the wired money is received and the purchase is accepted by the Fund.
Any delays which may occur in wiring money, including delays which may occur in
processing by the banks, are not the responsibility of the Fund or the Transfer
agent. There is presently no fee for the receipt of wired funds, but the Fund
may charge shareholders for this service in the future.
ADDITIONAL INVESTMENTS
You may purchase additional shares of any Fund (subject to a $500 minimum)
by mail, wire, or automatic investment. Each additional mail purchase request
must contain:
o your name
o the name of your account(s),
o your account number(s),
o the name of the Fund
o a check made payable to the Fund
Send your purchase request to the address listed above. A bank wire should
be sent as outlined above.
AUTOMATIC INVESTMENT PLAN
You may make regular investments in a Fund with an Automatic Investment
Plan by completing the appropriate section of the account application and
attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting $250 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time.
TAX SHELTERED RETIREMENT PLANS
Since the Funds are oriented to longer term investments, shares of the
Funds may be an appropriate investment medium for tax sheltered retirement
plans, including: individual retirement plans (IRAs); simplified employee
pensions (SEPs); SIMPLE plans; 401(k) plans; qualified corporate pension and
profit sharing plans (for employees); tax deferred investment plans (for
employees of public school systems and certain types of charitable
organizations); and other qualified retirement plans. Contact the Transfer agent
for the procedure to open an IRA or SEP plan and more specific information
regarding these retirement plan options. Please consult with your attorney or
tax adviser regarding these plans. You must pay custodial fees for your IRA by
redemption of sufficient shares of the Fund from the IRA unless you pay the fees
directly to the IRA custodian. Call the Transfer agent about the IRA custodial
fees.
HOW TO EXCHANGE SHARES
As a shareholder in any Fund, you may exchange shares valued at $25,000
or more for shares of any other Monteagle Fund. You may call the transfer agent
at (800) ___-____ to exchange shares. An exchange may also be made by written
request signed by all registered owners of the account mailed to the address
listed above. Requests for exchanges received prior to close of trading on the
New York Stock Exchange (4:00 p.m. Eastern Time) will be processed at the next
determined net asset value (NAV) as of the close of business on the same day.
An exchange is made by selling shares of one Fund and using the proceeds
to buy shares of another Fund, with the NAV for the sale and the purchase
calculated on the same day. An exchange results in a sale of shares for federal
income tax purposes. If you make use of the exchange privilege, you may realize
either a long term or short term capital gain or loss on the shares sold.
Before making an exchange, you should consider the investment objective of
the Fund to be purchased. If your exchange creates a new account, you must
satisfy the requirements of the Fund in which shares are being purchased. You
may make an exchange to a new account or an existing account; however, the
account ownership must be identical. Exchanges may be made only in states where
an exchange may legally be made. The Funds reserve the right to terminate or
modify the exchange privilege at any time.
OTHER PURCHASE INFORMATION
Each Fund may limit the amount of purchases and refuse to sell to any
person. If your check or wire does not clear, you will be responsible for any
loss incurred by the Funds. If you are already a shareholder, the Funds can
redeem shares from any identically registered account in the Funds as
reimbursement for any loss incurred. You may be prohibited or restricted from
making future purchases in the Funds.
HOW TO REDEEM SHARES
You may receive redemption payments in the form of a check or federal
wire transfer. Presently there is no charge for wire redemptions; however, the
Funds may charge for this service in the future. Any charges for wire
redemptions will be deducted from the shareholder's Fund account by redemption
of shares. If you redeem your shares through a broker/dealer or other
institution, you may be charged a fee by that institution.
BY MAIL - You may redeem any part of your account in a Fund at no charge by
mail. Your request should be addressed to:
Ameriprime Advisors Trust
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, Indiana 46206-6110
"Proper order" means your request for a redemption must include:
o the Fund name and account number,
o account name(s) and address,
o the dollar amount or number of shares you wish to redeem.
Requests to sell shares are processed at the net asset value next
calculated after we receive your order in proper form. To be in proper order,
your request must be signed by all registered share owner(s) in the exact
name(s) and any special capacity in which they are registered. The Funds may
require that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Funds or Unified Fund Services, Inc., you
may be required to furnish additional legal documents to insure proper
authorization.
BY TELEPHONE - You may redeem any part of your account in a Fund by
calling the transfer agent at (800) ___-____. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the transfer agent and the custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The Funds may terminate the telephone redemption procedures at any
time. During periods of extreme market activity it is possible that shareholders
may encounter some difficulty in telephoning the Funds, although neither the
Funds nor the transfer agent has ever experienced difficulties in receiving and
in a timely fashion responding to telephone requests for redemptions or
exchanges. If you are unable to reach the Funds by telephone, you may request a
redemption or exchange by mail.
ADDITIONAL INFORMATION - If you are not certain of the requirements for
a redemption please call the transfer agent at (800) ___-____. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen calendar days. Also, when the New York Stock
Exchange is closed (or when trading is restricted) for any reason other than its
customary weekend or holiday closing or under any emergency circumstances, as
determined by the Securities and Exchange Commission, the Funds may suspend
redemptions or postpone payment dates.
Because the Funds incur certain fixed costs in maintaining shareholder
accounts, each Fund may require you to redeem all of your shares in the Fund on
30 days' written notice if the value of your shares in the Fund is less than
$25,000 due to redemption, or such other minimum amount as the Fund may
determine from time to time. An involuntary redemption constitutes a sale. You
should consult your tax adviser concerning the tax consequences of involuntary
redemptions. You may increase the value of your shares in the Fund to the
minimum amount within the 30 day period. Your shares are subject to redemption
at any time if the Board of Trustees determines in its sole discretion that
failure to so redeem may have materially adverse consequences to all or any of
the shareholders of the Funds.
DETERMINATION OF NET ASSET VALUE
The price you pay for your shares is based on the applicable Fund's net
asset value per share (NAV). The NAV is calculated at the close of trading
(normally 4:00 p.m. Eastern time) on each day the New York Stock Exchange is
open for business (the Stock Exchange is closed on weekends, Federal holidays
and Good Friday). The NAV is calculated by dividing the value of the Fund's
total assets (including interest and dividends accrued but not yet received)
minus liabilities (including accrued expenses) by the total number of shares
outstanding.
The Funds' assets are generally valued at their market value. If market
prices are not available, or if an event occurs after the close of the trading
market that materially affects the values, assets may be valued by the Funds'
adviser at their fair value, according to procedures approved by the Funds'
board of trustees.
Requests to purchase and sell shares are processed at the NAV next
calculated after we receive your order in proper form.
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
Each Fund typically distributes substantially all of its net investment
income in the form of dividends and taxable capital gains to its shareholders.
These distributions are automatically reinvested in the applicable Fund unless
you request cash distributions on your application or through a written request
to the Fund. Dividends paid by the Funds may be eligible in part for the
dividends received deduction for corporations.
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TAXES
In general, selling or exchanging shares of a Fund and receiving
distributions (whether reinvested or taken in cash) are taxable events.
Depending on the purchase price and the sale price, you may have a gain or a
loss on any shares sold. Any tax liabilities generated by your transactions or
by receiving distributions are your responsibility. Because distributions of
long term capital gains are subject to capital gains taxes, regardless of how
long you have owned your shares, you may want to avoid making a substantial
investment when a Fund is about to make a long term capital gains distribution.
Early each year, the Funds will mail to you a statement setting forth
the federal income tax information for all distributions made during the
previous year. If you do not provide your taxpayer identification number, your
account will be subject to backup withholding.
The tax considerations described in this section do not apply to
tax-deferred accounts or other non-taxable entities. Because each investor's tax
circumstances are unique, please consult with your tax adviser about your
investment.
MANAGEMENT OF THE FUNDS
Nashville Capital Corporation, 209 10th Avenue South, Suite 332,
Nashville TN 37203, serves as investment manager to the Funds. In this capacity,
Nashville Capital advises and assists the officers of the Trust in conducting
the business of the Fund and is responsible for providing general investment
advice and guidance to the Funds, although the investment manager has delegated
responsibility for the selection and ongoing monitoring of the securities in
each Fund's investment portfolio to the Fund's respective adviser set forth
below. Nashville Capital was formed in 1986 and, as of September 30, 1999,
managed assets of approximately $98 million for financial institutions.
Each Fund is authorized to pay the investment manager a fee equal to an
annual average rate as follows:
<TABLE>
<S> <C> <C> <C> <C>
=========================== ======================== ======================== ======================== ========================
Fund Size Opportunity Value Fixed Income Large Cap
=========================== ======================== ======================== ======================== ========================
=========================== ======================== ======================== ======================== ========================
$1-25 million 1.35% 1.35% 1.15% 1.25%
=========================== ======================== ======================== ======================== ========================
=========================== ======================== ======================== ======================== ========================
$25-50 million 1.30% 1.25% 1.10% 1.13%
=========================== ======================== ======================== ======================== ========================
=========================== ======================== ======================== ======================== ========================
$50-100 million 1.18% 1.10% 0.97% 1.00%
=========================== ======================== ======================== ======================== ========================
=========================== ======================== ======================== ======================== ========================
$100 million 1.10% 1.00% 0.90% 0.95%
=========================== ======================== ======================== ======================== ========================
</TABLE>
The investment manager pays all of the operating expenses of each Fund
except brokerage, taxes, borrowing costs, 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 Fund's expenses, except those specified above, are paid by the investment
manager. The investment manager (not the Funds) may pay certain financial
institutions (which may include banks, brokers, securities dealers and other
industry professionals) a fee for providing distribution related services and/or
for performing certain administrative servicing functions for Fund shareholders
to the extent these institutions are allowed to do so by applicable statute,
rule or regulation.
Opportunity Growth Fund. The investment manager has retained T.H. Fitzgerald,
Jr. (d/b/a T.H. Fitzgerald & Co.), 180 Church Street, Naugatuck, CT 06770,
to serve as the adviser to the Opportunity Growth Fund. The firm has been
owner-managed since its founding in 1959. In 1982, Mr. Fitzgerald accepted
his first institutional investment management account, a Fortune 500
corporate pension plan. Since then, he has directed the firm's resources
exclusively to the management of large institutional accounts and, as of
June 30, 1999, managed nearly $220 million. T.H. Fitzgerald accepts no
individual or private accounts, regardless of size. The Monteagle
Opportunity Growth Fund offers the individual investor with access to the
firms proprietary "Informed Investors" strategy. Mr. Fitzgerald is
primarily responsible for the day to day management of the Fund. Nashville
Capital has agreed to pay T.H. Fitzgerald & Co. an annual advisory fee
equal to 0.70% of net assets up to $25 million, 0.60% of net assets from
$25% million up to $50 million, 0.45% of net assets from $50 million up to
$100 million, and 0.40% of net assets of $100 million and greater.
ValueFund. The investment manager has retained Robinson Investment Group, Inc.,
5301 Virginia Way, Suite 150, Brentwood, TN 37027, to serve as the adviser
to the Value Fund. The firm was founded in 1996 by Russell L. Robinson. Mr.
Robinson and his firm currently manage assets of approximately $140 million
for individuals, financial institutions, pension plans, corporations and
other business entities. Mr. Russell has been the President of Robinson
Investment Group since 1996. He was the Director of Investment Strategy of
the investment manager, Nashville Capital Corporation, from 1990 to 1996.
Mr. Russell is primarily responsible for the day-to-day management of the
Value Fund. Nashville Capital has agreed to pay Russell Investment Group an
annual advisory fee of 0.60% of net assets up to $25 million, 0.45% of net
assets from $25% million up to $50 million, 0.35% of net assets from $50
million up to $100 million, and 0.30% of net assets of $100 million and
greater.
LargeCap Fund and Fixed Income Fund. The investment manager has retained Howe
and Rusling, Inc., 120 East Avenue, Rochester, NY 14604, to serve as the
adviser to the Large Cap Fund and the Fixed Income Fund. The firm was
established in 1930 and, as of September 30, 1999, had approximately $734
million in assets under management. The firm serves primarily individual,
retirement plan, corporate and non-profit endowment clients. The Howe and
Rusling Investment Committee is primarily responsible for the day-to-day
management of the Funds. Nashville Capital has agreed to pay Howe and
Rusling an annual advisory fee for the Large Cap Fund of 0.40% of net
assets up to $25 million, 0.30% of net assets from $25% million up to $50
million, and 0.25% of net assets of $50 million and greater. Nashville
Capital has agreed to pay Howe and Rusling an annual advisory fee for the
Fixed Income Fund of 0.30% of net assets up to $25 million, 0.25% of net
assets from $25% million up to $50 million, and 0.20% of net assets of $50
million and greater.
YEAR 2000 ISSUE
Like other mutual funds, financial and business organizations and
individuals around the world, the Funds could be adversely affected if the
computer systems used by the Funds' investment manager or the Funds' various
service providers do not properly process and calculate date-related information
and data from and after January 1, 2000. This is commonly known as the "Year
2000 Issue."
The Funds' investment manager has taken steps that it believes are
reasonably designed to address the Year 2000 Issue with respect its computer
systems. The Funds' administrator has obtained assurances from each of the
Funds' major service providers, including the advisers, that it has taken steps
that it believes are reasonably designed to address the Year 2000 Issue with
respect to the computer systems used to service the Funds. At this time,
however, there can be no assurance that these steps will be sufficient to avoid
any adverse impact on the Funds. In addition, the Funds' investment manager
cannot make any assurances that the Year 2000 Issue will not affect the
companies in which the Funds invest or worldwide markets and economies.
<PAGE>
FOR MORE INFORMATION
Several additional sources of information are available to you. The
Statement of Additional Information (SAI), incorporated into this prospectus by
reference, contains detailed information on Fund policies and operations. Annual
and semi-annual reports contain management's discussion of market conditions,
investment strategies and performance results as of the Funds' latest
semi-annual or annual fiscal year end.
Call the Funds at 800 __-____ to request free copies of the SAI and the
Funds' annual and semi-annual reports, to request other information about the
Funds and to make shareholder inquiries.
You may review and copy information about the Funds (including the SAI
and other reports) at the Securities and Exchange Commission (SEC) Public
Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090 for room hours
and operation. You may also obtain reports and other information about the Funds
on the EDGAR Database on the SEC's Internet site at http.//www.sec.gov, and
copies of this information may be obtained, after paying a duplicating fee, by
electronic request at the following e-mail address: [email protected], or by
writing the SEC's Public Reference Section of the SEC, Washington, D.C.
20549-0102.
Investment Company Act #811-09541
<PAGE>
AmeriPrime Advisors Trust
Monteagle Opportunity Growth Fund
Monteagle Value Fund
Monteagle Large Cap Fund
Monteagle Fixed Income Fund
STATEMENT OF ADDITIONAL INFORMATION
November 20, 1999
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of AmeriPrime Advisors Trust dated
November 20, 1999. A free copy of the Prospectus can be obtained by writing the
Transfer Agent at 431 North Pennsylvania Street, Indianapolis, Indiana 46204, or
by calling 1-800-441-6978.
TABLE OF CONTENTS PAGE
DESCRIPTION OF THE TRUST AND THE FUND...........................................
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS..................................................................
INVESTMENT LIMITATIONS..........................................................
THE INVESTMENT MANAGER AND ADVISERS ............................................
TRUSTEES AND OFFICERS...........................................................
PORTFOLIO TRANSACTIONS AND BROKERAGE............................................
DETERMINATION OF SHARE PRICE....................................................
INVESTMENT PERFORMANCE..........................................................
CUSTODIAN.......................................................................
TRANSFER AGENT..................................................................
ACCOUNTANTS.....................................................................
DISTRIBUTOR.....................................................................
ADMINISTRATOR...................................................................
DESCRIPTION OF THE TRUST AND THE FUND
The Monteagle Opportunity Growth Fund, Monteagle Value Fund, Monteagle
Large Cap Fund, and the Monteagle Fixed Income Fund (each a "Fund" or
collectively, the "Funds") were organized as series of AmeriPrime Advisors Trust
(the "Trust") on August 3, 1999. The Monteagle Value Fund and the Monteagle
Large Cap Fund are diversified. The Monteagle Opportunity Growth Fund is
non-diversified. The Trust is an open-end investment company established under
the laws of Ohio by an Agreement and Declaration of Trust dated August 3, 1999
(the "Trust Agreement"). The Trust Agreement permits the Trustees to issue an
unlimited number of shares of beneficial interest of separate series without par
value. Each Fund is one of a series of funds currently authorized by the
Trustees. The investment manager to each Fund is Nashville Capital Corporation
(the "Manager").
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
and will been titled to receive as a class a distribution out of the assets, net
of the liabilities, belonging to that series. Expenses attributable to any
series are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his or her express consent.
Prior to the public offering of the Funds AmeriPrime Financial
Securities, Inc1793 Kingswood Drive, Suite 200, Southlake, Texas 76092,
purchased all of the outstanding shares of the Funds and may be deemed to
control the Funds. As the controlling shareholder, AmeriPrime Financial
Securities, Inc, could control the outcome of any proposal submitted to the
shareholders for approval, including changes to a Fund's fundamental policies or
the terms of the management agreement with the Manager. After the public
offering commences, it is anticipated that AmeriPrime Financial Securities, Inc.
will no longer control the Funds.
For information concerning the purchase and redemption of shares of the
Funds, see "How to Buy Shares" and "How to Redeem Shares" in the Funds'
Prospectus. For a description of the methods used to determine the share price
and value of each Fund's assets, see "Determination of Net Asset Value" in the
Funds' Prospectus.
<PAGE>
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a more detailed discussion of some of the investments the
Funds may make and some of the techniques they may use.
A. Equity Securities. Each Fund (except the Fixed Income Fund) invests
in equity securities. Equity securities are common stocks, preferred stocks,
convertible preferred stocks, convertible debentures, American Depositary
Receipts ("ADR's"), rights and warrants. Convertible preferred stock is
preferred stock that can be converted into common stock pursuant to its terms.
Convertible debentures are debt instruments that can be converted into common
stock pursuant to their terms. Warrants are options to purchase equity
securities at a specified price valid for a specific time period. Rights are
similar to warrants, but normally have shorter durations. A Fund may not invest
more than 5% of its net assets at the time of purchase in rights and warrants.
B. Corporate Debt Securities. Each Fund may invest in corporate debt
securities. These are bonds or notes issued by corporations and other business
organizations, including business trusts, in order to finance their credit
needs. Corporate debt securities include commercial paper which consists of
short term (usually from one to two hundred seventy days) unsecured promissory
notes issued by corporations in order to finance their current operations. The
Manager (and each adviser) considers corporate debt securities to be of
investment grade quality if they are rated A- or higher by Standard & Poor's
Corporation ("S&P"), A-3 or higher by Moody's Investors Services, Inc.
("Moody's"), or if unrated, determined by the Fund's adviser to be of comparable
quality. Investment grade debt securities generally have adequate to strong
protection of principal and interest payments. In the lower end of this
category, credit quality may be more susceptible to potential future changes in
circumstances and the securities have speculative elements. The Funds will not
invest in securities rated below investment grade. If the rating of a security
by S&P or Moody's drops below investment grade, the Fund's adviser will dispose
of the security as soon as practicable (depending on market conditions) unless
the Fund's adviser determines based on its own credit analysis that the security
provides the opportunity of meeting the Fund's objective without presenting
excessive risk.
C. Municipal Securities. The Fixed Income may invest in municipal
securities. These are long and short term debt obligations issued by or on
behalf of states, territories and possessions of the United States, the District
of Columbia and their political subdivisions, agencies, instrumentalities and
authorities, as well as other qualifying issuers (including the U.S. Virgin
Islands, Puerto Rico and Guam), the income from which is exempt from regular
federal income tax and exempt from state tax in the state of issuance. Municipal
securities are issued to obtain funds to construct, repair or improve various
public facilities such as airports, bridges, highways, hospitals, housing,
schools, streets and water and sewer works, to pay general operating expenses or
to refinance outstanding debts. They also may be issued to finance various
private activities, including the lending of funds to public or private
institutions for construction of housing, educational or medical facilities or
the financing of privately owned or operated facilities. Municipal securities
consist of tax exempt bonds, tax exempt notes and tax exempt commercial paper.
Municipal notes, which are generally used to provide short term capital needs
and have maturities of one year of less, include tax anticipation notes, revenue
anticipation notes, bond anticipation notes and construction loan notes. Tax
exempt commercial paper typically represents short term, unsecured, negotiable
promissory notes. The Fund may invest in other municipal securities such as
variable rate demand instruments.
The two principal classifications of municipal securities are
"general obligation" and "revenue" bonds. General obligation bonds are backed by
the issuer's full credit and taxing power. Revenue bonds are backed by the
revenues of a specific project, facility or tax. Industrial development revenue
bonds are a specific type of revenue bond backed by the credit of the private
issuer of the facility, and therefore investments in these bonds have more
potential risk that the issuer will not be able to meet scheduled payments of
principal and interest.
The Fund considers municipal securities to be of investment
grade quality if they are rated BBB or higher by S&P, Baa or higher by Moody's,
or if unrated, determined by the Manager (or the Fund's adviser) to be of
comparable quality. Investment grade debt securities generally have adequate to
strong protection of principal and interest payments. In the lower end of this
category, credit quality may be more susceptible to potential future changes in
circumstances and the securities have speculative elements. The Fund will not
invest in securities rated below investment grade. If the rating of a security
by S&P or Moody's drops below investment grade, the Manager will dispose of the
security as soon as practicable (depending on market conditions) unless the
Manager determines based on its own credit analysis that the security provides
the opportunity of meeting the Fund's objective without presenting excessive
risk.
D. U.S. Government Securities. Each Fund may invest in U.S. government
securities. These securities may be backed by the credit of the government as a
whole or only by the issuing agency. U.S. Treasury bonds, notes, and bills and
some agency securities, such as those issued by the Federal Housing
Administration and the Government National Mortgage Association (GNMA), are
backed by the full faith and credit of the U.S. government as to payment of
principal and interest and are the highest quality government securities. Other
securities issued by U.S. government agencies or instrumentalities, such as
securities issued by the Federal Home Loan Banks and the Federal Home Loan
Mortgage Corporation, are supported only by the credit of the agency that issued
them, and not by the U.S. government. Securities issued by the Federal Farm
Credit System, the Federal Land Banks, and the Federal National Mortgage
Association (FNMA) are supported by the agency's right to borrow money from the
U.S. Treasury under certain circumstances, but are not backed by the full faith
and credit of the U.S. government.
E. Mortgage-Backed Securities. The Fixed Income Fund may invest in
mortgage-backed securities. These securities represent an interest in a pool of
mortgages. These securities, including securities issued by FNMA and GNMA,
provide investors with payments consisting of both interest and principal as the
mortgages in the underlying mortgage pools are repaid. Unscheduled or early
payments on the underlying mortgages may shorten the securities' effective
maturities. The average life of securities representing interests in pools of
mortgage loans is likely to be substantially less than the original maturity of
the mortgage pools as a result of prepayments or foreclosures of such mortgages.
Prepayments are passed through to the registered holder with the regular monthly
payments of principal and interest, and have the effect of reducing future
payments. To the extent the mortgages underlying a security representing an
interest in a pool of mortgages are prepaid, the Fixed Income Fund may
experience a loss (if the price at which the respective security was acquired by
the Fund was at a premium over par, which represents the price at which the
security will be sold upon prepayment). In addition, prepayments of such
securities held by the Fixed Income Fund will reduce the share price of the Fund
to the extent the market value of the securities at the time of prepayment
exceeds their par value. Furthermore, the prices of mortgage-backed securities
can be significantly affected by changes in interest rates. Prepayments may
occur with greater frequency in periods of declining mortgage rates because,
among other reasons, it may be possible for mortgagors to refinance their
outstanding mortgages at lower interest rates. In such periods, it is likely
that any prepayment proceeds would be reinvested by the Fixed Income Fund at
lower rates of return.
F. Collateralized Mortgage Obligations (CMOs). The Fixed Income Fund
may invest in CMOs. CMOs are securities Collateralized by mortgages or
mortgage-backed securities. CMOs are issued with a variety of classes or series,
which have different maturities and are often retired in sequence. CMOs may be
issued by governmental or non-governmental entities such as banks and other
mortgage lenders. Non-government securities may offer a higher yield but also
may be subject to greater price fluctuation than government securities.
Investments in CMOs are subject to the same risks as direct investments in the
underlying mortgage and mortgage-backed securities. In addition, in the event of
a bankruptcy or other default of an entity who issued the CMO held by a Fund,
the Fund could experience both delays in liquidating its position and losses.
G. Zero Coupon and Pay in Kind Bonds. Corporate debt securities and
municipal obligations include so-called "zero coupon" bonds and "pay-in-kind"
bonds. Zero coupon bonds do not make regular interest payments. Instead they are
sold at a deep discount from their face value. Each Fund will accrue income on
such bonds for tax and accounting purposes, in accordance with applicable law.
This income will be distributed to shareholders. Because no cash is received at
the time such income is accrued, the Fund may be required to liquidate other
portfolio securities to satisfy its distribution obligations. Because a zero
coupon bond does not pay current income, its price can be very volatile when
interest rates change. In calculating its dividend, the Funds take into account
as income a portion of the difference between a zero coupon bond's purchase
price and its face value. Certain types of CMOs pay no interest for a period of
time and therefore present risks similar to zero coupon bonds.
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. A broker-dealer creates a derivative zero by depositing a
Treasury security with a custodian for safekeeping and then selling the coupon
payments and principal payment that will be generated by this security
separately. Examples are Certificates of Accrual on Treasury Securities (CATs),
Treasury Investment Growth Receipts (TIGRs) and generic Treasury Receipts (TRs).
These derivative zero coupon obligations are not considered to be government
securities unless they are part of the STRIPS program. Original issue zeros are
zero coupon securities issued directly by the U.S. government, a government
agency, or by a corporation.
Pay-in-kind bonds allow the issuer, at its option, to make current
interest payments on the bonds either in cash or in additional bonds. The value
of zero coupon bonds and pay-in-kind bonds is subject to greater fluctuation in
response to changes in market interest rates than bonds which make regular
payments of interest. Both of these types of bonds allow an issuer to avoid the
need to generate cash to meet current interest payments. Accordingly, such bonds
may involve greater credit risks than bonds which make regular payment of
interest. Even though zero coupon bonds and pay-in-kind bonds do not pay current
interest in cash, the applicable Fund is required to accrue interest income on
such investments and to distribute such amounts at least annually to
shareholders. Thus, a Fund could be required at times to liquidate other
investments in order to satisfy its dividend requirements. No Fund will invest
more than 5% of its net assets in pay-in-kind bonds.
H. Financial Service Industry Obligations. Financial service industry
obligations include among others, the following:
(1) Certificates 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. Time Deposits are considered
to be illiquid prior to their maturity.
(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.
I. Asset-Backed and Receivable-Backed Securities. The Fixed Income Fund
may invest in asset-backed securities. These securities are undivided fractional
interests in pools of consumer loans (unrelated to mortgage loans) held in a
trust. Payments of principal and interest are passed through to certificate
holders and are typically supported by some form of credit enhancement, such as
a letter of credit, surety bond, limited guaranty, or senior/subordination. The
degree of credit enhancement varies, but generally amounts to only a fraction of
the asset-backed or receivable-backed security's par value until exhausted. If
the credit enhancement is exhausted, certificate holders may experience losses
or delays in payment if the required payments of principal and interest are not
made to the trust with respect to the underlying loans. The value of these
securities also may change because of changes in the market's perception of the
creditworthiness of the servicing agent for the loan pool, the originator of the
loans or the financial institution providing the credit enhancement.
Asset-backed and receivable-backed securities are ultimately dependent upon
payment of consumer loans by individuals, and the certificate holder generally
has no recourse against the entity that originated the loans. The underlying
loans are subject to prepayments which shorten the securities' weighted average
life and may lower their return. As prepayments flow through at par, total
returns would be affected by the prepayments: if a security were trading at a
premium, its total return would be lowered by prepayments, and if a security
were trading at a discount, its total return would be increased by prepayments.
The Fixed Income Fund will invest more than 5% of its net assets in asset-backed
or receivable-backed securities.
J. Loans of Portfolio Securities. Each Fund may make short and long
term loans of its portfolio securities. Under the lending policy authorized by
the Board of Trustees and implemented by the Manager in response to requests of
broker-dealers or institutional investors which the Manager deems qualified, the
borrower must agree to maintain collateral, in the form of cash or U.S.
government obligations, with the Fund on a daily mark-to-market basis in an
amount at least equal to 100% of the value of the loaned securities. The Fund
will continue to receive dividends or interest on the loaned securities and may
terminate such loans at any time or reacquire such securities in time to vote on
any matter which the Board of Trustees determines to be serious. With respect to
loans of securities, there is the risk that the borrower may fail to return the
loaned securities or that the borrower may not be able to provide additional
collateral. No loan of securities will be made if, as a result, the aggregate
amount of such loans would exceed 5% of the value of the Fund's net assets.
K. Foreign Securities. The Value Fund and Large Cap Fund may invest in
foreign equity securities through the purchase of American Depository Receipts.
American Depository Receipts are certificates of ownership issued by a U.S. bank
as a convenience to the investors in lieu of the underlying shares which it
holds in custody. The Value Fund may also invest directly in foreign equity
securities. The Fixed Income Fund may invest in dollar denominated foreign
fixed-income securities issued by foreign companies, foreign governments or
international organizations and determined by the Fund's adviser to be
comparable in quality to investment grade domestic securities. No Fund will
invest in a foreign security if, immediately after a purchase and as a result of
the purchase, the total value of foreign securities owned by the Fund would
exceed 10% of the value of the total assets of the Fund. To the extent that a
Fund does invest in foreign securities, such investments may be subject to
special risks.
Foreign government obligations generally consist of debt securities
supported by national, state or provincial governments or similar political
units or governmental agencies. Such obligations may or may not be backed by the
national government's full faith and credit and general taxing powers.
Investments in foreign securities also include obligations issued by
international organizations. International organizations include entities
designated or supported by governmental entities to promote economic
reconstruction or development as well as international banking institutions and
related government agencies. Examples are the International Bank for
Reconstruction and Development (the World Bank), the European Coal and Steel
Community, the Asian Development Bank and the InterAmerican Development Bank. In
addition, investments in foreign securities may include debt securities
denominated in multinational currency units of an issuer (including
international issuers). An example of a multinational currency unit is the
European Currency Unit. A European Currency Unit represents specified amounts of
the currencies of certain member states of the European Economic Community, more
commonly known as the Common Market.
Purchases of foreign securities are usually made in foreign currencies
and, as a result, a Fund may incur currency conversion costs and may be affected
favorably or unfavorably by changes in the value of foreign currencies against
the U.S. dollar. In addition, there may be less information publicly available
about a foreign company then about a U.S. company, and foreign companies are not
generally subject to accounting, auditing and financial reporting standards and
practices comparable to those in the U.S. Other risks associated with
investments in foreign securities include changes in restrictions on foreign
currency transactions and rates of exchanges, changes in the administrations or
economic and monetary policies of foreign governments, the imposition of
exchange control regulations, the possibility of expropriation decrees and other
adverse foreign governmental action, the imposition of foreign taxes, less
liquid markets, less government supervision of exchanges, brokers and issuers,
difficulty in enforcing contractual obligations, delays in settlement of
securities transactions and greater price volatility. In addition, investing in
foreign securities will generally result in higher commissions than investing in
similar domestic securities.
L. Repurchase Agreements. Each Fund may invest in repurchase agreements
fully collateralized by obligations issued by the U.S. Government or by agencies
of the U.S. governmnet ("U.S. Government obligations"). A repurchase agreement
is a short term investment in which the purchaser (i.e., a 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 a Fund engages will require full collateralization of the seller's
obligation during the entire term of the repurchase agreement. In the event of a
bankruptcy or other default of the seller, a Fund could experience both delays
in liquidating the underlying security and losses in value. However, the Funds
intend to enter into repurchase agreements only with the Trust's custodian,
other banks with assets of $1 billion or more and registered securities dealers
determined by the Fund's adviser to be creditworthy.
M. Option Transactions. Each Fund may engage in option transactions
involving individual stocks and bonds as well as stock and bond indexes. An
option involves either (a) the right or the obligation to buy or sell a specific
instrument at a specific price until the expiration date of the option, or (b)
the right to receive payments or the obligation to make payments representing
the difference between the closing price of a market index and the exercise
price of the option expressed in dollars times a specified multiple until the
expiration date of the option. Options are sold (written) on securities and
market indexes. The purchaser of an option on a security pays the seller (the
writer) a premium for the right granted but is not obligated to buy or sell the
underlying security. The purchaser of an option on a market index pays the
seller a premium for the right granted, and in return the seller of such an
option is obligated to make the payment. A writer of an option may terminate the
obligation prior to expiration of the option by making an offsetting purchase of
an identical option. Options are traded on organized exchanges and in the
over-the-counter market. Call options on securities which the Funds sell (write)
will be covered or secured, which means that the Fund will own the underlying
security in the case of a call option. The Funds will sell (write) put options
only if the Fund is selling an equivalent amount of the same security short.
When the Funds write options, they may be required to maintain a margin account,
to pledge the underlying securities or U.S. government obligations or to deposit
assets in escrow with the Custodian. The Funds may also utilize spreads and
straddle strategies. A spread is the difference in price resulting from a
combination of put and call options within the same class on the same underlying
security. A straddle strategy consists of an equal number of put and call
options on the same underlying stock, stock index, or commodity future at the
same strike price and maturity date.
The purchase and writing of options involves certain risks. The
purchase of options limits a Fund's potential loss to the amount of the premium
paid and can afford a Fund the opportunity to profit from favorable movements in
the price of an underlying security to a greater extent than if transactions
were effected in the security directly. However, the purchase of an option could
result in a Fund losing a greater percentage of its investment than if the
transaction were effected directly. When a Fund writes a covered call option, it
will receive a premium, but it will give up the opportunity to profit from a
price increase in the underlying security above the exercise price as long as
its obligation as a writer continues, and it will retain the risk of loss should
the price of the security decline. When a Fund writes a put option, it will
assume the risk that the price of the underlying security or instrument will
fall below the exercise price, in which case the Fund may be required to
purchase the security or instrument at a higher price than the market price of
the security or instrument. In addition, there can be no assurance that a Fund
can effect a closing transaction on a particular option it has written. Further,
the total premium paid for any option may be lost if the Fund does not exercise
the option or, in the case of over-the-counter options, the writer does not
perform its obligations.
N. Short Sales. The Value Fund may sell a security short in
anticipation of a decline in the market value of the security. When the Fund
engages in a short sale, it sells a security which it does not own. To complete
the transaction, the Fund must borrow the security in order to deliver it to the
buyer. The Fund must replace the borrowed security by purchasing it at the
market price at the time of replacement, which may be more or less than the
price at which the Fund sold the security. The Fund will incur a loss as a
result of the short sale if the price of the security increases between the date
of the short sale and the date on which the Fund replaces the borrowed security.
The Fund will realize a profit if the security declines in price between those
dates.
In connection with its short sales, the Fund will be required to
maintain a segregated account with its Custodian of cash or high grade liquid
assets equal to the market value of the securities sold less any collateral
deposited with its broker. The Fund will limit its short sales so that no more
than 5% 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.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to each Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of each Fund. As used in the Prospectus and
the Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").
1. Borrowing Money. The Funds will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Funds; 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 each Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Funds from entering
into reverse repurchase transactions, provided that the Funds have an asset
coverage of 300% for all borrowings and repurchase commitments of the Funds
pursuant to reverse repurchase transactions.
2. Senior Securities. The Funds will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is consistent with or permitted by the Investment
Company Act of 1940, as amended, the rules and regulations promulgated
thereunder or interpretations of the Securities and Exchange Commission or its
staff.
3. Underwriting. The Funds will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. Real Estate. The Funds will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Funds from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. Commodities. The Funds will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Funds from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. Loans. The Funds will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. No Fund will 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 Fund and are Non-Fundamental (see "Investment Restrictions"
above).
1. Pledging. The Funds will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Funds except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
2. Borrowing. No Fund will purchase any security while borrowings
(including reverse repurchase agreements) representing more than one third of
its total assets are outstanding.
3. Margin Purchases. No Fund will purchase securities or evidences of
interest thereon on "margin." This limitation is not applicable to short term
credit obtained by a Fund for the clearance of purchases and sales or redemption
of securities, or to arrangements with respect to transactions involving
options, futures contracts, short sales and other permitted investments and
techniques.
4. Options. The Funds will not purchase or sell puts, calls, options or
straddles, except as described in the Funds' Prospectus or Statement of
Additional Information.
5. Illiquid Investments. The Funds will not invest in securities for
which there are legal or contractual restrictions on resale and other illiquid
securities.
THE MANAGER AND ADVISERS
The Manager. The investment manager to the Funds is Nashville Capital
209 10th Avenue South, Nashville, TN 37203 (the "Manager"). Sydney and Larry
Catlett are the controlling shareholders of the Manager.
Under the terms of the management agreement (the "Agreement"), the
Manager manages each Fund's investments subject to approval of the Board of
Trustees and pays all of the expenses of each Fund except brokerage, taxes,
borrowing cost (such as (a) interest and (b) dividend expense on securities sold
short), fees and expenses of the non-interested person trustees, 12b-1 expenses
and extraordinary expenses. As compensation for its management services and
agreement to pay each Fund's expenses, each Fund is obligated to pay the Manager
a fee (based on average daily net assets) computed and accrued daily and paid
monthly at the following annual rates:
<TABLE>
<S> <C> <C> <C> <C>
=========================== ======================== ======================== ======================== ========================
FUND SIZE OPPORTUNITY VALUE FIXED INCOME LARGE CAP
=========================== ======================== ======================== ======================== ========================
=========================== ======================== ======================== ======================== ========================
$1-25 million 1.35% 1.35% 1.15% 1.25%
=========================== ======================== ======================== ======================== ========================
=========================== ======================== ======================== ======================== ========================
$25-50 million 1.30% 1.25% 1.10% 1.13%
=========================== ======================== ======================== ======================== ========================
=========================== ======================== ======================== ======================== ========================
$50-100 million 1.18% 1.13% 1.03% 1.08%
=========================== ======================== ======================== ======================== ========================
=========================== ======================== ======================== ======================== ========================
$100 million 1.12% 1.07% 0.97% 0.92%
=========================== ======================== ======================== ======================== ========================
</TABLE>
The Manager retains the right to use the name "Monteagle" in connection
with another investment company or business enterprise with which the Manager is
or may become associated. The Trust's right to use the name "Monteagle"
automatically ceases ninety days after termination of the Agreement and may be
withdrawn by the Manager on ninety days written notice.
The Manager will pay First Farmers & Merchants National Bank of
Columbia, Tennessee ("First Farmers") a fee for assisting the Manager in
providing certain supportive administrative services to the Funds. The fee for
each Fund will be at an annual rate of 0.10% of the Fund's assets up to $50
million, 0.085% of such assets from $50 million up to $100 million, and 0.075%
of such assets in excess of $100 million.
The Manager may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Manager will pay First Farmers a shareholder servicing fee equal to 0.05% of the
assets in each Fund to which First Farmers provides such services. 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 each Fund believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of each
Fund believes that there would be no material impact on each Fund or its
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Funds may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
The Advisers. T.H. Fitzgerald, Jr. (d/b/a T.H. Fitzgerald & Co.
("Fitzgerald") is the adviser to the Opportunity Growth Fund. Under the terms of
the advisory agreement, Fitgerald receives a fee from the Manager computed and
accrued daily and paid monthly equal to 0.70% of net assets up to $25 million,
0.60% of net assets from $25% million up to $50 million, 0.45% of net assets
from $50 million up to $100 million, and 0.40% of net assets of $100 million and
greater. Robinson Investment Group, Inc. ("Robinson") is the adviser to the
Value Fund. Under the advisory agreement, Robinson receives a fee from the
Manager computed and accrued daily and paid monthly at an annual rate of 0.60%
of net assets up to $25 million, 0.45% of net assets from $25% million up to $50
million, 0.35% of net assets from $50 million up to $100 million, and 0.30% of
net assets of $100 million and greater. Howe and Rushling, Inc. ("H&R") is the
adviser to the Large Cap Fund and the Fixed Income Fund. Under the terms of the
advisory agreement, H&R receives a fee from the Manager for the Large Cap Fund
computed and accrued daily and paid monthly at an annual rate of 0.40% of net
assets up to $25 million, 0.30% of net assets from $25% million up to $50
million, and 0.25% of net assets of $50 million and greater. H&R receives a fee
from the Manager for the Fixed Income Fund computed and accrued daily and paid
monthly at an annual rate of 0.30% of net assets up to $25 million, 0.25% of net
assets from $25% million up to $50 million, and 0.20% of net assets of $50
million and greater.
Subject always to the control of the Board of Trustees, each adviser,
at its expense, furnishes continuously an investment program for the Fund or
Funds for which it acts as adviser Each adviser must use its best judgement to
make investment decisions, place all orders for the purchase and sale of
portfolio securities and execute all agreements related thereto. Each adviser
makes its officers and employees available to the Manager from time to time at
reasonable times to review investment policies and to consult with the Manager
regarding the investment affairs of the applicable Fund. Each adviser maintains
books and records with respect to the securities transactions and renders to the
Manager such periodic and special reports as the Manager or the Trustees may
request. Each adviser pays all expenses incurred by it in connection with its
activities under the advisery agreement other than the cost (including taxes and
brokerage commissions, if any) of securities and investments purchased for a
Fund.
<PAGE>
TRUSTEES AND OFFICERS
The Board of Trustees supervises the business activities of the Trust.
The names of the Trustees and executive officers of the Trust are shown below.
Each Trustee who is an "interested person" of the Trust, as defined in the
Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<S> <C> <C>
==================================== ---------------- ======================================================================
NAME, AGE AND ADDRESS POSITION PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
==================================== ---------------- ======================================================================
==================================== ---------------- ======================================================================
*Kenneth D. Trumpfheller President and President, Treasurer and Secretary of AmeriPrime Financial Services,
Age: 41 and Trustee Financial Services, Inc., the Fund's administrator, and AmeriPrime
1793 Kingswood Drive Financial Securities, Inc., the Fund's distributor, since 1994.
Suite 200 President and Trustee of AmeriPrime Funds and AmeriPrime Insurance
Southlake, Texas 76092 Trust. Prior to December, 1994, a senior client executive with SEI
Financial Services
==================================== ---------------- ======================================================================
==================================== ---------------- ======================================================================
Paul Bellany Secretary, Secretary, Treasurer and Chief Financial Officer of AmeriPrime
Age: 40 and Treasurer Financial Services, Inc. and AmeriPrime Financial Securities, Inc.;
1793 Kingswood Drive Treasurer and Secretary of AmeriPrime Funds and AmeriPrime Insurance
Suite 200 Trust. Various positions with Fidelity Investments from 1987 to 1998;
Southlake, Texas 76092 most recently Fund Reporting Unit Manager
==================================== ---------------- ======================================================================
==================================== ---------------- ======================================================================
Mark W. Muller Trustee Account Manager for Clarion Technologies, a manufacturer of
Age: 35 manufacturer of automotive, heavy truck, and consumer
175 Westwood Drive goods, from 1996 to present. From 1986 to 1996, an
Suite 300 engineer for Sicor, a telecommunication hardware
Southlake, Texas 76092 company.
==================================== ---------------- ======================================================================
==================================== ================ ======================================================================
Richard J. Wright, Jr. Trustee Various positions (most recently Program Manager) with Texas
Age 37 Texas Instruments, a technology company, from 1985 to
8505 Forest Lane present.
MS 8672
Dallas, Texas 75243
==================================== ================ ======================================================================
</TABLE>
<PAGE>
The following table estimates the Trustees' compensation for the first
full fiscal year. Trustee fees are Trust expenses and each series of the Trust
pays a portion of the Trustee fees.
<TABLE>
<S> <C> <C>
==================================== ----------------------- ==================================
AGGREGATE TOTAL COMPENSATION
==================================== ----------------------- ==================================
==================================== ----------------------- ==================================
Kenneth D. Trumpfheller 0 0
==================================== ----------------------- ==================================
==================================== ----------------------- ==================================
Mark W. Muller $6,000 $6,000
==================================== ----------------------- ==================================
==================================== ======================= ==================================
Richard J. Wright $6,000 $6,000
==================================== ======================= ==================================
</TABLE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Manager is responsible for each Fund's portfolio decisions and the placing
of each Fund's portfolio transactions. In placing portfolio transactions, the
Manager seeks the best qualitative execution for each Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Manager generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received. Consistent with
the Rules of Fair Practice of the National Association of Securities Dealers,
Inc., and subject to its obligation of seeking best qualitative execution, the
Manager may give consideration to sales of shares of the Trust as a factor in
the selection of brokers and dealers to execute portfolio transactions.
The Manager is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Funds and/or the other
accounts over which the Manager 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 Manager 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 Manager's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Funds effect securities
transactions may also be used by the Advisr in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Manager in connection with its services to the
Funds. Although research services and other information are useful to the Funds
and the , 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 Manager
that the review and study of the research and other information will not reduce
the overall cost to the Manager of performing its duties to the Funds 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.
While each Fund contemplates no ongoing arrangements with any other
brokerage firms, brokerage business may be given from time to time to other
firms. StoneRidge Investment Partners, L.L.C. will not receive reciprocal
brokerage business as a result of the brokerage business placed by the Funds
with others.
When a Fund and another of the Manager 's clients seek to purchase or
sell the same security at or about the same time, the Manager 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 Manager, taking into account such
factors as the size of the individual orders and transaction costs, when the
Manager believes an adjustment is reasonable.
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of each Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in each Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day, Martin
Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas. For a description of the methods
used to determine the net asset value (share price), see "Share Price
Calculation" in the Prospectus.
<PAGE>
INVESTMENT PERFORMANCE
Each Fund may periodically advertise "average annual total return."
"Average annual total return," as defined by the Securities and Exchange
Commission, is computed by finding the average annual compounded rates of return
for the period indicated that would equate the initial amount invested to the
ending redeemable value, according to the following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates that the maximum sales load is
deducted from the initial $1,000 and that a complete redemption occurs at the
end of the applicable period. If each Fund has been in existence less than one,
five or ten years, the time period since the date of the initial public offering
of shares will be substituted for the periods stated.
A Fund's "yield" is determined in accordance with the method defined by
the Securities and Exchange Commission. A yield quotation is based on a 30 day
(or one month) period and is computed by dividing the net investment income per
share earned during the period by the maximum offering price per share on the
last day of the period, according to the following formula:
Yield = 2[(a-b/cd+1)6-1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period
that were entitled to receive dividends
d = the maximum offering price per share on the last day of the period
Solely for the purpose of computing yield, dividend income recognized
by accruing 1/360 of the stated dividend rate of the security each day that the
Fund owns the security. Generally, interest earned (for the purpose of "a"
above) on debt obligations is computed by reference to the yield to maturity of
each obligation held based on the market value of the obligation (including
actual accrued interest) at the close of business on the last business day prior
to the start of the 30-day (or one month) period for which yield is being
calculated, or, with respect to obligations purchased during the month, the
purchase price (plus actual accrued interest). With respect to the treatment of
discount and premium on mortgage or other receivable-backed obligations which
are expected to be subject to monthly paydowns of principal and interest, gain
or loss attributable to actual monthly paydowns is accounted for as an increase
or decrease to interest income during the period and discount or premium on the
remaining security is not amortized.
Each Fund may also advertise performance information (a
"non-standardized quotation") which is calculated differently from average
annual total return. A non-standardized quotation of total return may be a
cumulative return which measures the percentage change in the value of an
account between the beginning and end of a period, assuming no activity in the
account other than reinvestment of dividends and capital gains distributions. A
non-standardized quotation may also be an average annual compounded rate of
return over a specified period, which may be a period different from those
specified for average annual total return. In addition, a non-standardized
quotation may be an indication of the value of a $10,000 investment (made on the
date of the initial public offering of the Fund's shares) as of the end of a
specified period. These non-standardized quotations do not include the effect of
the applicable sales load which, if included, would reduce the quoted
performance. A non-standardized quotation of total return will always be
accompanied by the Fund's average annual total return as described above.
Each Fund's investment performance will vary depending upon market
conditions, the composition of that Fund's portfolio and operating expenses of
that Fund. These factors and possible differences in the methods and time
periods used in calculating non-standardized investment performance should be
considered when comparing each Fund's performance to those of other investment
companies or investment vehicles. The risks associated with each Fund's
investment objective, policies and techniques should also be considered. At any
time in the future, investment performance may be higher or lower than past
performance, and there can be no assurance that any performance will continue.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of any of the
Funds may be compared to indices of broad groups of unmanaged securities
considered to be representative of or similar to the portfolio holdings of the
Funds or considered to be representative of the stock market in general. These
may include the Standard & Poor's 500 Stock Index, the NASDAQ Composite Index or
the Dow Jones Industrial Average.
In addition, the performance of any of the Funds may be compared to
other groups of mutual funds tracked by any widely used independent research
firm which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of any of the Funds. Performance rankings and
ratings reported periodically in national financial publications such as
Barron's and Fortune also may be used.
CUSTODIAN
Firstar Bank, N.A., 425 Walnut Street M.L 6118, Cincinnati, Ohio 45202,
is Custodian of the Funds' investments. The Custodian acts as the Funds'
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Funds' request and
maintains records in connection with its duties.
TRANSFER AGENT
Unified Fund Services, Inc. ("Unified"), 431 North Pennsylvania Street,
Indianapolis, Indiana 46204, acts as the Funds' transfer agent and, in such
capacity, maintains the records of each shareholder's account, answers
shareholders' Inquiries concerning their accounts, processes purchases and
redemptions of the Funds' shares, acts as dividend and distribution disbursing
agent and performs other accounting and shareholder service functions. In
addition, Unified provides the Funds with fund accounting services, which
includes certain monthly reports, record-keeping and other management-related
services. For its services as fund accountant, Unified receives an annual fee
from the equal to 0.0275% of each Fund's assets up to $100 million (subject to
various monthly minimum fees, the maximum being $2,100 per month for assets of
$20 to $100 million).
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 first fiscal year. McCurdy & Associates performs an annual audit of the
Funds' financial statements and provides financial, tax and accounting
consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the exclusive agent for distribution of shares of the
Funds. The Distributor is obligated to sell the shares of the Funds on a best
efforts basis only against purchase orders for the shares. Shares of the Funds
are offered to the public on a continuous basis.
ADMINISTRATOR
The Funds retain AmeriPrime Financial Services, Inc., 1793
Kingswood Drive, Suite 200, Southlake, TX 76092, (the "Administrator") to manage
the Funds' business affairs and provide the Funds with administrative services,
including all regulatory reporting and necessary office equipment, personnel and
facilities. The Administrator receives a monthly fee from the Manager equal to
an annual average rate of 01.0% 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.
