SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
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Pre-Effective Amendment No.
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Post-Effective Amendment No. 12
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / /
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Amendment No. 13 / X /
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(Check appropriate box or boxes.)
AmeriPrime Advisors Trust - File Nos. 333-85083 and
(Exact Name of Registrant as Specified in Charter)
1793 Kingswood Drive, Suite 200, Southlake, Texas
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (817) 251-6700
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Kenneth Trumpfheller, AmeriPrime Advisors Trust, 1793 Kingswood Drive, Suite
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200, Southlake, Texas 76092
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(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective:
/_/ immediately upon filing pursuant to paragraph (b)
/_/on (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/_/ on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
/_/this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
MUTUALMINDS.COM DIVERSIFIED GROWTH FUND
MUTUALMINDS.COM SMALL CAP GROWTH FUND
MUTUALMINDS.COM NEW ECONOMY FUND
PROSPECTUS
_______________, 2000
300 Crescent Court, Suite 750
Dallas, TX 75201
(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.
<PAGE>
TABLE OF CONTENTS
PAGE
RISK/RETURN SUMMARY...........................................................
FEES AND EXPENSES OF INVESTING IN THE FUNDS...................................
ADDITIONAL INFORMATION ABOUT STRATEGIES AND RISKS.............................
HOW TO BUY SHARES.............................................................
HOW TO REDEEM SHARES..........................................................
DETERMINATION OF NET ASSET VALUE..............................................
DIVIDENDS, DISTRIBUTIONS AND TAXES............................................
MANAGEMENT OF THE FUNDS.......................................................
FOR MORE INFORMATION................................................BACK COVER
<PAGE>
RISK/RETURN SUMMARY
MUTUALMINDS.COM DIVERSIFIED GROWTH FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is long term capital appreciation.
PRINCIPAL STRATEGIES
The Fund seeks to provide investors with long term capital appreciation by
investing primarily in a diversified portfolio of common stock of U.S.
companies. The Fund intends to focus on growth stocks, which are those stocks
that generally trade with higher price/earnings ratios, reflecting investors'
willingness to pay a higher share price for forecasts.potentially steady or
higher earnings growth.
The Fund's adviser uses its software model (called the Interactive
Portfolio Management Model(TM)) to select the stocks the Fund will buy and sell.
The Model is based primarily on stock price forecasts submitted by the Fund's
shareholders, which the model weighs based on the historical accuracy of each
shareholder's forecasts. The Model uses settings determined by the Fund's
adviser, consistent with the Fund's objective, for factors such as risk
measurement, liquidity requirements and sector allocation. The Model applies
these settings to the weighted stock forecasts to determine the stocks (and the
appropriate amount of each stock) for the Fund's portfolio. The adviser will
then review the output of the Model, making any adjustments it believes are
necessary to the Model's settings and resultant portfolio. It is the intention
of the Fund's adviser to rely solely on the Model (and the selections of the
Fund's shareholders) to determine the stocks in the Fund's portfolio. The Fund's
portfolio will not, however, precisely mirror the shareholders' selections
because the model makes its recommendations by applying the settings determined
by the adviser to the input from the shareholder forecasts. The adviser could
also override the Model's recommendations at any time if the adviser believes
that an unforeseen or extreme market condition warrants such action.
Although the Fund will be diversified among various companies, it is
likely that the Fund could invest a significant portion of its assets in the
technology sector. In addition to common stock of U.S. companies, the Fund may
invest to a limited degree in foreign companies by purchasing American
Depositary Receipts (ADRs). An ADR is a U.S. dollar denominated certificate that
evidences ownership of shares of a foreign company. They are alternatives to the
direct purchase of the underlying foreign stock.
PRINCIPAL RISKS
MANAGEMENT RISK. The Fund's performance is in large measure dependent on the
Fund's investors who visit the Fund's web site and recommend stocks for the
Fund's portfolio. There is no guarantee that the investors will participate, or
that their participation will result in quality recommendations. This is a
principal risk because the adviser only considers companies recommended by
investors. In addition, the Fund could perform poorly if the adviser's
Interactive Portfolio Management Model(TM) does not perform. The adviser has no
prior experience as an investment adviser or using the Model.
ON-LINE INVESTING RISK. The Fund is designed specifically for on-line investors.
An interruption in on-line services could result in a delay or interruption in
your ability to access the web site, or place purchase or sale orders with the
Fund. A delay in placing an order could result in the investor paying a higher
price, or receiving a lower price, for the shares.
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.
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.
VOLATILITY RISK. Common stocks tend to be more volatile than other investment
choices. The value of an individual company can be more volatile than the market
as a whole. This volatility affects the value of the Fund's shares.
TECHNOLOGY RISK. To the extent the Fund invests in the technology sector,
weakness in this sector could result in losses to the Fund. Technology companies
may be significantly affected by falling prices and profits and intense
competition, and their products may be subject to rapid obsolescence.
FOREIGN RISK. To the extent the Fund invests in ADRs, the Fund could be subject
to greater risks because the Fund's performance may depend on issues other than
the performance of a particular company. Changes in foreign economies and
political climates are more likely to affect the Fund than a mutual fund that
invests exclusively in U.S. companies. The value of foreign securities is also
affected by the value of the local currency relative to the U.S. dollar. There
may also be less government supervision of foreign markets, resulting in
non-uniform accounting practices and less publicly available information.
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.
No Fund is a complete investment program. As with any mutual fund investment,
the Fund's returns will vary and you could lose money.
MUTUALMINDS.COM SMALL CAP GROWTH FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is long term capital appreciation.
PRINCIPAL STRATEGIES
The Fund seeks to provide investors with long term capital appreciation by
investing at least 65% of its assets in common stock of small capitalization
U.S. companies. The
Fund intends to focus on growth stocks, which are those stocks that generally
trade with higher price/earnings ratios, reflecting investors' willingness to
pay a higher share price for potentially steady or higher earnings growth. The
Fund considers a company to be small if its market capitalization, at the time
of purchase by the Fund, is within the capitalization range of the companies in
the Russell 2000 Index (as of the date of this prospectus, $__ billion to $__
billion).
The Fund's adviser uses its software model (called the Interactive
Portfolio Management Model(TM)) to select the stocks the Fund will buy and sell.
The Model is based primarily on stock price forecasts submitted by the Fund's
shareholders, which the model weighs based on the historical accuracy of each
shareholder's forecasts. The Model uses settings determined by the Fund's
adviser, consistent with the Fund's objective, for factors such as risk
measurement, liquidity requirements and sector allocation. The Model applies
these settings to the weighted stock forecasts to determine the stocks (and the
appropriate amount of each stock) for the Fund's portfolio. The adviser will
then review the output of the Model, making any adjustments it believes are
necessary to the Model's settings and resultant portfolio. It is the intention
of the Fund's adviser to rely solely on the Model (and the selections of the
Fund's shareholders) to determine the stocks in the Fund's portfolio. The Fund's
portfolio will not, however, precisely mirror the shareholders' selections
because the model makes its recommendations by applying the settings determined
by the adviser to the input from the shareholder forecasts. The adviser could
also override the Model's recommendations at any time if the adviser believes
that an unforeseen or extreme market condition warrants such action.
It is likely that the Fund could invest a significant portion of its
assets in the technology sector. In addition to common stock of U.S. companies,
the Fund may invest to a limited degree in foreign companies by purchasing
American Depositary Receipts (ADR's). An ADR is a U.S. dollar denominated
certificate that evidences ownership of shares of a foreign company. They are
alternatives to the direct purchase of the underlying foreign stock. The Fund is
non-diversified, which means that its portfolio may at times focus on a limited
number of companies.
PRINCIPAL RISKS
MANAGEMENT RISK. The Fund's performance is in large measure dependent on the
Fund's investors who visit the Fund's web site and recommend stocks for the
Fund's portfolio. There is no guarantee that investors will participate, or that
their participation will result in quality recommendations. This is a principal
risk because the adviser only considers companies recommended by investors. In
addition, the Fund could perform poorly if the adviser's Interactive Portfolio
Management Model(TM) does not perform. The adviser has no prior experience as an
investment adviser or using the Model.
ON-LINE INVESTING RISK. The Fund is designed specifically for on-line investors.
An interruption in on-line services could result in a delay or interruption in
your ability to access the web site, or place purchase or sale orders with the
Fund. A delay in placing an order could result in the investor paying a higher
price, or receiving a lower price, for the shares.
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.
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.
FOREIGN RISK. To the extent the Fund invests in ADRs, the Fund could be subject
to greater risks because the Fund's performance may depend on issues other than
the performance of a particular company. Changes in foreign economies and
political climates are more likely to affect the Fund than a mutual fund that
invests exclusively in U.S. companies. The value of foreign securities is also
affected by the value of the local currency relative to the U.S. dollar. There
may also be less government supervision of foreign markets, resulting in
non-uniform accounting practices and less publicly available information.
TECHNOLOGY RISK. To the extent the Fund invests in the technology sector,
weakness in this sector could result in losses to the Fund. Technology companies
may be significantly affected by falling prices and profits and intense
competition, and their products may be subject to rapid obsolescence.
SMALLER COMPANY RISK.
o The earnings and prospects of smaller companies are more volatile than larger
companies.
o Smaller companies may experience higher failure rates than do larger
companies.
o The trading volume of securities of smaller companies is normally less than
that of larger companies and, therefore, may disproportionately affect their
market price, tending to make them fall more in response to selling pressure
than is the case with larger companies.
o Smaller companies may have limited markets, product lines or financial
resources and may lack management experience.
VOLATILITY RISK. Common stocks tend to be more volatile than other investment
choices. The value of an individual company can be more volatile than the market
as a whole. This volatility affects the value of the Fund's shares.
NON-DIVERSIFICATION RISK. As a non-diversified fund, the Fund will be subject to
substantially more investment risk and potential for volatility than a
diversified fund because its portfolio may at times focus on a limited number of
companies. The Fund's share price could fall if the Fund is heavily invested in
a particular stock and the price of that stock falls.
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.
No Fund is a complete investment program. As with any mutual fund investment,
the Fund's returns will vary and you could lose money.
MUTUALMINDS.COM NEW ECONOMY FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is long term capital appreciation.
PRINCIPAL STRATEGIES
The Fund seeks to provide investors with long term capital appreciation by
investing at least 65% of its assets in common stock of companies that the
Fund's adviser believes will benefit from the growth and development of the new
economy technologies. These technologies include Internet and new media, digital
consumer electronics, biotechnology, broadband and fiber optics, wireless
communications and computers.
The Fund's adviser uses its software model (called the Interactive
Portfolio Management Model(TM)) to select the stocks the Fund will buy and sell.
The Model is based primarily on stock price forecasts submitted by the Fund's
shareholders, which the model weighs based on the historical accuracy of each
shareholder's forecasts. The Model uses settings determined by the Fund's
adviser, consistent with the Fund's objective, for factors such as risk
measurement, liquidity requirements and sector allocation. The Model applies
these settings to the weighted stock forecasts to determine the stocks (and the
appropriate amount of each stock) for the Fund's portfolio. The adviser will
then review the output of the Model, making any adjustments it believes are
necessary to the Model's settings and resultant portfolio. It is the intention
of the Fund's adviser to rely solely on the Model (and the selections of the
Fund's shareholders) to determine the stocks in the Fund's portfolio. The Fund's
portfolio will not, however, precisely mirror the shareholders' selections
because the model makes its recommendations by applying the settings determined
by the adviser to the input from the shareholder forecasts. The adviser could
also override the Model's recommendations at any time if the adviser believes
that an unforeseen or extreme market condition warrants such action.
In addition to common stock of U.S. companies, the Fund may invest to a
limited degree in foreign companies by purchasing American Depositary Receipts
(ADR's). An ADR is a U.S. dollar denominated certificate that evidences
ownership of shares of a foreign company. They are alternatives to the direct
purchase of the underlying foreign stock. In addition it is likely that the Fund
could invest a significant portion of its assets in smaller companies, as well
as the technology sector. The Fund is non-diversified, which means that its
portfolio may at times focus on a limited number of companies.
PRINCIPAL RISKS
MANAGEMENT RISK. The Fund's performance is in large measure dependent on the
Fund's investors who visit the Fund's web site and recommend stocks for the
Fund's portfolio. There is no guarantee that investors will participate, or that
their participation will result in quality recommendations. This is a principal
risk because the adviser only considers companies recommended by investors. In
addition, the Fund could perform poorly if the adviser's Interactive Portfolio
Management Model(TM) does not perform. The adviser has no prior experience as an
investment adviser or using the Model.
ON-LINE INVESTING RISK. The Fund is designed specifically for on-line investors.
An interruption in on-line services could result in a delay or interruption in
your ability to access the web site, or place purchase or sale orders with the
Fund. A delay in placing an order could result in the investor paying a higher
price, or receiving a lower price, for the shares.
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.
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.
TECHNOLOGY RISK. The Fund is concentrated in the technology sector and
significant weakness in this sector could result in significant losses to the
Fund. Technology companies may be significantly affected by falling prices and
profits and intense competition, and their products may be subject to rapid
obsolescence. Changes in governmental policies, such as telephone and cable
regulations and anti-trust enforcement, may have a material effect on the
products and services of these companies. In addition, the rate of technological
change often requiringrequires extensive and sustained investment in research
and development . It is likely that some of today's public companies that are
benefiting from the growth of the Internet and other new technologies will not
exist in the future. The price of many of these stocks has risen based on
projections of future earnings and company growth. If a company does not perform
as expected, the price of the stock could decline significantly. Many companies
that seek to benefit from the new economy are currently operating at a loss and
may never be profitable.
FOREIGN RISK. To the extent the Fund invests in ADRs, the Fund could be subject
to greater risks because the Fund's performance may depend on issues other than
the performance of a particular company. Changes in foreign economies and
political climates are more likely to affect the Fund than a mutual fund that
invests exclusively in U.S. companies. The value of foreign securities is also
affected by the value of the local currency relative to the U.S. dollar. There
may also be less government supervision of foreign markets, resulting in
non-uniform accounting practices and less publicly available information.
SMALLER COMPANY RISK.
o The earnings and prospects of smaller companies are more volatile than larger
companies.
o Smaller companies may experience higher failure rates than do larger
companies.
o The trading volume of securities of smaller companies is normally less than
that of larger companies and, therefore, may disproportionately affect their
market price, tending to make them fall more in response to selling pressure
than is the case with larger companies.
o Smaller companies may have limited markets, product lines or financial
resources and may lack management experience.
VOLATILITY RISK. Common stocks of technology companies tend to be more volatile
than other investment choices. Because of its narrow focus, the Fund's
performance is closely tied to any factors which may affect technology companies
and, as a result, is more likely to fluctuate than that of a fund which is
invested in a broader range of companies.
NON-DIVERSIFICATION RISK. As a non-diversified fund, the Fund will be subject to
substantially more investment risk and potential for volatility than a
diversified fund because its portfolio may at times focus on a limited number of
companies. The Fund's share price could fall if the Fund is heavily invested in
a particular stock and the price of that stock falls.
An investment in a 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.
No Fund is a complete investment program. As with any mutual fund investment,
each Fund's returns will vary and you could lose money.
HOW THE FUNDS HAVE PERFORMED
Although past performance of a fund is no guarantee of how it will perform
in the future, historical performance may give you some indication of the risk
of investing in the fund because it demonstrates how its returns have varied
over time. The Bar Chart and Performance Table that would otherwise appear in
this prospectus have been omitted because each Fund is recently organized and
has less than one year of operations.
<PAGE>
FEES AND EXPENSES OF INVESTING IN THE FUNDS
The tables describe the fees and estimated expenses that you may pay if you buy
and hold shares of the Fund.
SHAREHOLDER FEES Diversified Small Cap New Economy
Growth Fund Growth Fund Fund
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases NONE NONE NONE
Maximum Deferred Sales Charge (Load) NONE NONE NONE
Redemption Fee NONE NONE NONE
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
Management Fees 1.00% 1.00% 1.00%
Distribution (12b-1) Fees 0.00% 0.00% 0.00%
Other Expenses 1 0.00% 0.00% 0.00%
TOTAL ANNUAL FUND OPERATING EXPENSES %1.00% 1.00% 1.00%
1 Other expenses are estimated for the Funds' first fiscal year.
Example:
The example below is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example uses the
same assumptions as other mutual fund prospectuses: a $10,000 initial investment
for the time periods indicated, reinvestment of dividends and distributions, 5%
annual total return, constant operating expenses, and sale of all shares at the
end of each time period. Although your actual expenses may be different, based
on these assumptions your costs will be:
1 YEAR 3 YEARS
Diversified Growth Fund $ $
Small Cap Growth Fund $ $
New Economy Fund $ $
ADDITIONAL INFORMATION ABOUT STRATEGIES AND RISKS
PRINCIPAL STRATEGIES
THE MODEL. The Fund's adviser uses a software model called the Interactive
Portfolio Management Model(TM) to select the stocks for each Fund's portfolio.
The stock selection process begins with recommendations from the investors in
the Fund, made via the MutualMinds.com web site. One section of the web site
permits investors to suggest investment opportunities by making stock price
forecasts. The Model measures the historical accuracy of each investor's stock
price forecasts. Over several months, these measurements determine the weighting
given to each investor's forecasts. The Model uses the investors' forecasts
(with weighting given to the most accurate forecasts) to determine which stocks
should be bought and sold by the Fund. The Model's process for evaluating and
weighting the investors forecasts are explained in more detail in the Funds'
Statement of Additional Information.
The software uses the shareholder forecasts to select a group of stocks
for the Fund's portfolio. The Model includes settings determined by the Fund's
adviser, consistent with the Fund's objective, for factors such as risk
measurement, liquidity requirements and sector allocation, which the model
applies to the weighted stock forecasts to determine the appropriate amount of
each stock for the Fund's portfolio. The adviser will then review the output of
the Model, making any adjustments it believes are necessary to the Model's
settings and resultant portfolio. The adviser also considers whether a selection
would make the Fund's portfolio, in the adviser's opinion, too heavily invested
in a particular industry or company. The adviser will buy and sell stocks at
predetermined intervals (currently, on a monthly basis) and in response to cash
management needs. The Fund's investment process may result in active trading of
the portfolio.
INITIAL OPERATIONS. During the initial operations of each Fund (at least
six months), the investors' recommendations will have little impact on the
composition of each Fund's portfolio because the Fund's adviser will select the
Fund's initial investments, and a period of time (at least six months) is
necessary for weightings to be established by the Interactive Portfolio
Management Model(TM) based on the accuracy of investor's forecasts. These
initial investments will dominate the portfolio until investors recommend other
companies for the Fund's portfolio and these recommendations are selected by the
Model and by the Fund's adviser.
ON-LINE INVESTING. Since the Funds are designed specifically for on-line
investors, an interruption in transmissions over the Internet or a problem with
the www.MutualMind.com site could result in a delay or interruption in your
ability to access the web site, place purchase or sale orders with the Funds or
otherwise interact with the Funds.
NON-PRINCIPAL STRATEGIES
New Issuer
Risk. THE ADVISER BELIEVES THAT EACH FUND MAY INVEST TO A LIMITED DEGREE
IN COMMON STOCK OF NEW ISSUERS. INVESTMENTS IN RELATIVELY NEW ISSUERS, I.E.,
THOSE HAVING CONTINUOUS OPERATING HISTORIES OF LESS THAN THREE YEARS, MAY BE
MORE SPECULATIVE BECAUSE SUCH COMPANIES ARE RELATIVELY UNSEASONED. NEW ISSUERS
MAY LACK SUFFICIENT RESOURCES, MAY BE UNABLE TO GENERATE INTERNALLY THE FUNDS
NECESSARY FOR GROWTH AND MAY FIND EXTERNAL FINANCING TO BE UNAVAILABLE ON
FAVORABLE TERMS OR EVEN TOTALLY UNAVAILABLE. NEW ISSUERS WILL OFTEN BE INVOLVED
IN THE DEVELOPMENT OR MARKETING OF A NEW PRODUCT WITH NO ESTABLISHED MARKET,
WHICH COULD LEAD TO SIGNIFICANT LOSSES. NEW ISSUERS, PARTICULARLY THOSE ACQUIRED
IN AN INITIAL PUBLIC offering, may experience lower trading volumes and/or
greater price volatility than larger capitalization, established companies and
may experience higher growth rates and higher failure rates than larger
capitalization companies.
GENERAL. The investment objective of each Fund may be changed without
shareholder approval.
From time to time, each Fund may 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, a Fund may hold all or a portion of its assets in money market
instruments, money market funds or repurchase agreements. If a Fund invests in a
money market fund, the shareholders of the Fund will indirectly pay additional
management fees. As a result of engaging in these temporary measures, a Fund may
not achieve its investment objective. Each Fund may also invest in such
instruments at any time to maintain liquidity or pending selection of
investments in accordance with its policies.
Each Fund may at times actively and frequently trade stocks and, as
result, have a portfolio turnover rate that is higher than other stock funds.
Higher portfolio turnover would result in correspondingly greater brokerage
commission expenses (which will lower the Fund's total return) and may result in
the distribution to shareholders of additional capital gains for tax purposes
(which would lower the Fund's after-tax return).
HOW TO BUY SHARES
The minimum initial investment in each Fund is $1,000 and minimum
subsequent investments are in $250 To invest in the Fund, you will need to open
an account and consent to receive all shareholder information about the Funds
electronically. When you open your account you will select a password. You will
be prompted to enter your password whenever you perform a transaction so that
the Funds can be sure each purchase or sale is secure. For your protection, only
you should place orders through your Fund account. When you purchase shares, you
will be asked to: (1) confirm your consent to receive all Fund documentation
electronically, (2) provide your e-mail address and (3) confirm that you have
read the Prospectus. The Funds' current Prospectus will be readily available for
viewing and printing on the web site.
Initial Purchase
BY MAIL- To be in proper form, your initial purchase request must
include:
o a completed and signed investment application form (which accompanies
this Prospectus or can be downloaded from the www.MutualMinds.com
-------------------
web site); and
o a check (subject to the minimum amounts) made payable to the
appropriate Fund.
Mail the application and check to:
U.S. Mail: Overnight: s
MutualMinds.com Funds MutualMinds.com 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 set up your
account and obtain an account number. Then, provide your bank with the following
information for purposes of wiring your investment:
Firstar Bank, N.A.
ABA #0420-0001-3
Attn: MutualMinds.com Funds
D.D.A.#__________________
Fund Name _________________(write in fund name)
Account Name _________________(write in shareholder name)
For the Account # ______________(write in account number)
You must mail a signed application to Unified Fund Services, Inc., the
Funds' transfer agent, at the above address in order to complete your initial
wire purchase. Wire orders will be accepted only on a day on which the Funds,
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 that may occur in wiring money, including delays that
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 $250 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.
<PAGE>
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.
DISTRIBUTION PLANS
Each Fund has adopted plans under Rule 12b-1 that allow the Fund to pay
distribution fees for the sale and distribution of its shares and allows the
Fund to pay for services provided to shareholders. These fees will not increase
the Funds' expenses because InteractiveFunds.com, Inc. pursuant to the
Management Agreement, is required to pay all expenses of the Funds, including
those incurred directly or indirectly in connection with the sale or
distribution of the Funds' shares.
OTHER PURCHASE INFORMATION
The Funds intend to deliver shareholder information electronically.
However, shareholders may receive paper-based information at no extra cost upon
request. If you are not a shareholder, you may call or e-mail the Funds to
request paper-based shareholder information, but you may be charged a fee to
cover the costs of printing, shipping and handling. Shareholder information
includes prospectuses, annual and semi-annual reports, proxy materials,
confirmations and statements.
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.
The Funds have authorized certain broker-dealers and other financial
institutions (including their designated intermediaries) to accept on their
behalf purchase and sell orders. A Fund is deemed to have received an order when
the authorized person or designee accepts the order, and the order is processed
at the net asset value next calculated thereafter. It is the responsibility of
the broker-dealer or other financial institution to transmit orders promptly to
the Funds' transfer agent.
HOW TO REDEEM SHARES
Requests to sell shares are processed at the net asset value next
calculated after we receive your order in proper form. You may receive
redemption payments by check or federal wire transfer. The proceeds may be more
or less than the purchase price of your shares, depending on the market value of
the Funds' securities at the time of your redemption. [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 your Fund
account by redemption of shares.
ON-LINE - To sell Fund shares on-line go to the www.MutualMinds.com web site,
click the [Fund Sell Order] icon and follow the instructions.
BY MAIL - You may redeem any part of your account in a Fund at no charge by
mail. Your request should be addressed to:
MutualMinds.com Funds
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, IN 46204
To be in proper form, your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address, and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. The 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 the Funds' transfer agent, a shareholder, prior to
redemption, may be required to furnish additional legal documents to insure
proper authorization.
BY TELEPHONE - You may redeem any part of your account in a Fund by
calling the transfer agent at 877-___-____. 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.
ADDITIONAL INFORMATION - The Funds intend to deliver all shareholder
services, with the exception of the initial purchase, electronically. The Funds
or the transfer agent may terminate the on-line and/or 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. An interruption in transmissions over the
Internet or a problem with the www.MutualMinds.com web site could delay a
redemption request. If you are unable to reach the Funds on-line or by
telephone, you may request a redemption or exchange by mail.
If you are not certain of the requirements for a redemption please [call
the Funds' transfer agent at 877-___-____]. Redemptions specifying a certain
date or share price cannot be accepted and will be returned. You will be mailed
the proceeds on or before the fifth business day following the redemption.
However, payment for redemption made against shares purchased by check will be
made only after the check has been collected, which normally may take up to
fifteen calendar days. Also, when the New York Stock Exchange is closed (or when
trading is restricted) for any reason other than its customary weekend or
holiday closing, or under any emergency circumstances (as determined by the
Securities and Exchange Commission) the Funds may suspend redemptions or
postpone payment dates.
Because the Funds incur certain fixed costs in maintaining shareholder
accounts, each Fund may require you to redeem all of your shares in the Fund on
30 days' written notice if the value of your shares in the Fund is less than
$1,000 due to redemption, or such other minimum amount as the Fund may determine
from time to time. An involuntary redemption constitutes a sale. You should
consult your tax 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. The Fund may own securities that are traded primarily on
foreign exchanges that trade on weekends or other days the Fund does not price
its shares. As a result, the NAV of the Fund may change on days when you will
not be able to purchase or redeem your shares of the Fund.
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. Each Fund expects that its distributions will consist primarily of
capital gains.
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. You may want to avoid making
a substantial investment when a Fund is about to make a long term capital gains
distribution because you would be responsible for any taxes on the distribution
regardless of how long you have owned your shares.
Early each year, the 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
InteractiveFunds Investment Advisory Services LLC, 14180 Dallas Parkway,
Suite 200, Dallas, Texas 75240, serves as investment adviser to the Funds. The
adviser is wholly owned by InteractiveFunds.com, Inc. and was established in
2000 in order to serve as the investment adviser to the Funds. The adviser
determines the securities to be partnerships.purchased for each Fund, the
portfolio securities to be held or sold by each Fund and the portion of each
Fund's assets to be held uninvested, subject always to the Fund's investment
objective, policies and restrictions, and the policies and instructions as the
Trust's Board of Trustees may from time to time establish. Each Fund is
authorized to pay the adviser a fee equal to 1.00% of its average daily net
assets.
The adviser pays all of the operating expenses of each Fund except
brokerage, taxes, borrowing costs (such as interest and dividend expense of
securities sold short), 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 each Fund's expenses,
except those specified above, are paid by the adviser. The adviser (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.
<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 (888) [ ] 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>
MUTUALMINDS.COM DIVERSIFIED GROWTH FUND
MUTUALMINDS.COM SMALL CAP GROWTH FUND
MUTUALMINDS.COM NEW ECONOMY FUND
STATEMENT OF ADDITIONAL INFORMATION
_______________, 2000
This Statement of Additional Information ("SAI") is not a prospectus. It should
be read in conjunction with the Prospectus of MutualMinds.com Funds dated
____________, 2000. A free copy of the Prospectus can be obtained by writing the
Funds' transfer agent at 431 North Pennsylvania Street, Indianapolis, Indiana
46204, or by calling 1-800-___-____.
TABLE OF CONTENTS PAGE
DESCRIPTION OF THE TRUST AND THE FUNDS..........................................
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS.................................................................
INVESTMENT LIMITATIONS..........................................................
........................................................
TRUSTEES AND OFFICERS...........................................................
INVESTMENT ADVISER..............................................................
ADDITIONAL INFORMATION ABOUT THE INTERACTIVE PORTFOLIO
MANAGEMENT MODEL...............................................................
DISTRIBUTION PLANS .............................................................
PORTFOLIO TRANSACTIONS AND BROKERAGE............................................
DETERMINATION OF SHARE PRICE...................................................
INVESTMENT PERFORMANCE..........................................................
CUSTODIAN......................................................................
TRANSFER AGENT.................................................................
ACCOUNTANTS....................................................................
.....................................................................
ADMINISTRATOR...................................................................
DISTRIBUTOR...................................................
<PAGE>
DESCRIPTION OF THE TRUST AND THE FUNDS
The MutualMinds.com Diversified Growth Fund, MutualMinds.com Small Cap
Growth Fund and MutualMinds.com New Economy Fund (each a "Fund" or collectively,
the "Funds") were organized as series of AmeriPrime Advisors Trust (the "Trust")
on ____________, 2000. The MutualMind.com Diversified Growth Fund is a
diversified fund. The MutualMinds.com Small Cap Growth Fund and MutualMinds.com
New Economy Fund are non-diversified funds. 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 adviser to each Fund is
Smith Asset Management Group, L.P. (the "Adviser").
The Funds do not issue share certificates. All shares are held in
non-certificate form registered on the books of the Funds and the Funds'
transfer agent for the account of the Shareholder. 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.
As of July __, 2000, [_______________], [insert address] owned [____%] of
each MutualMinds.com Fund. As the controlling shareholder,
[______________________]. 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 Adviser. After the
public offering commences, it is anticipated that [_______________________] 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 and this Statement of Additional Information.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a discussion of some of the investments the Funds may make
and some of the techniques they may use.
A. Equity Securities. Equity securities consist of common stock, convertible
preferred stock, convertible bonds, rights and warrants. Common stocks, the most
familiar type, represent an equity (ownership) interest in a corporation.
Convertible stocks and bonds are securities that can be converted into common
stock pursuant to their terms. Warrants are options to purchase equity
securities at a specified price for a specific time period. Rights are similar
to warrants, but normally have a short duration and are distributed by the
issuer to its shareholders. Although equity securities have a history of long
term growth in value, their prices fluctuate based on changes in a company's
financial condition and on overall market and economic conditions. No Fund may
invest more than 5% of its net assets in either convertible preferred stocks or
convertible bonds. The Adviser will limit the Fund's investment in convertible
securities to investment grade (those rated BBB or better by Moodys Investors
Service, Inc. or Standard & Poor's Rating Group) or, if unrated, of comparable
quality in the opinion of the Adviser.
Equity securities include S&P Depositary Receipts ("SPDRs") and other
similar instruments. SPDRs are shares of a publicly traded unit investment trust
which owns the stock included in the S&P 500 Index, and changes in the price of
the SPDRs track the movement of the Index relatively closely. Similar
instruments may track the movement of other stock indexes.
Each Fund may invest in foreign equity securities by purchasing American
Depositary Receipts (ADRs). ADRs are certificates evidencing ownership of shares
of a foreign-based issuer held in trust by a bank or similar financial
institution. They are alternatives to the direct purchase of the underlying
securities in their national markets and currencies. To the extent that a Fund
does invest in ADRs, such investments may be subject to special risks. For
example, there may be less information publicly available about a foreign
company than 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.
Investments in equity securities are subject to inherent market risks and
fluctuations in value due to earnings, economic conditions and other factors
beyond the control of the Adviser. As a result, the return and net asset value
of each Fund will fluctuate. Securities in each Fund's portfolio may decrease in
value or not increase as much as the market as a whole. Although profits in some
Fund holdings may be realized quickly, it is not expected that most investments
will appreciate rapidly.
At times, a portion of each Fund may be invested in companies with
short operating histories ("new issuers") and in initial public offerings
("IPOs"), and such investments could be considered speculative. New issuers are
relatively unseasoned and may lack sufficient resources, may be unable to
generate internally the funds necessary for growth and may find external
financing to be unavailable on favorable terms or even totally unavailable. New
issuers will often be involved in the development or marketing of a new product
with no established market, which could lead to significant losses. To the
extent a Fund invests in smaller capitalization companies, the Fund will also be
subject to the risks associated with such companies. Smaller capitalization
companies, IPOs and new issuers may experience lower trading volumes than larger
capitalization, established companies and may experience higher growth rates and
higher failure rates than larger capitalization companies. Smaller
capitalization companies, IPOs and new issuers also may have limited product
lines, markets or financial resources and may lack management depth.
B. Hedging Transactions. Each Fund may utilize various other investment
strategies as described below to hedge various markets. Such strategies are
generally accepted by modern portfolio managers and are regularly utilized by
many mutual funds and other institutional investors. Techniques and instruments
may change over time as new instruments and strategies are developed or
regulatory changes occur.
In the course of pursuing these investment strategies, each Fund may
purchase and sell exchange-listed and over-the-counter put and call options on
securities, equity and fixed-income indices and other financial instruments, and
purchase and sell financial futures contracts and options thereon (collectively,
all the above are called "Hedging Transactions"). Hedging Transactions may be
used to attempt to protect against possible changes in the market value of
securities held in or to be purchased for a Fund's portfolio resulting from
securities markets fluctuations, to protect the Fund's unrealized gains in the
value of its portfolio securities, to facilitate the sale of such securities for
investment purposes, or to establish a position in the derivatives markets as a
temporary substitute for purchasing or selling particular securities. No more
than 5% of a Fund's assets will be committed to Hedging Transactions entered
into for non-hedging purposes. Any or all of these investment techniques may be
used at any time and there is no particular strategy that dictates the use of
one technique rather than another, as use of any Hedging Transaction is a
function of numerous variables including market conditions. The ability of the
Funds to utilize these Hedging Transactions successfully will depend on the
Adviser's ability to predict pertinent market movements, which cannot be
assured. Each Fund will comply with applicable regulatory requirements when
implementing these strategies, techniques and instruments. Hedging Transactions
involving financial futures and options thereon will be purchased, sold or
entered into only for bona fide hedging, risk management or portfolio management
purposes and not for speculative purposes.
Hedging Transactions have risks associated with them, including possible
default by the other party to the transaction, illiquidity and, to the extent
the Adviser's view as to certain market movements is incorrect, the risk that
the use of such Hedging Transactions would result in losses greater than if they
had not been used. Use of put and call options may result in losses to a Fund,
force the sale or purchase of portfolio securities at inopportune times or for
prices higher than (in the case of put options) or lower than (in the case of
call options) current market values, limit the amount of appreciation the Fund
can realize on its investments or cause the Fund to hold a security it might
otherwise sell. The use of options and futures transactions entails certain
other risks. In particular, the variable degree of correlation between price
movements of futures contracts and price movements in the related portfolio
position of a Fund creates the possibility that losses on the hedging instrument
may be greater than gains in the value of the Fund's position. In addition,
futures and options markets may not be liquid in all circumstances and certain
over-the-counter options may have no markets. As a result, in certain markets, a
Fund might not be able to close out a transaction without incurring substantial
losses, if at all. Although the use of futures and options transactions for
hedging should tend to minimize the risk of loss due to a decline in the value
of the hedged position, at the same time it tends to limit any potential gain
which might result from an increase in value of such position. Finally, the
daily variation margin requirements for futures contracts would create a greater
ongoing potential financial risk than would purchases of options, where the
exposure is limited to the cost of the initial premium. Losses resulting from
the use of Hedging Transactions would reduce net asset value, and possibly
income, and such losses can be greater than if the Hedging Transactions had not
been utilized.
GENERAL CHARACTERISTICS OF OPTIONS
Put options and call options typically have similar structural
characteristics and operational mechanics regardless of the underlying
instrument on which they are purchased or sold. Thus, the following general
discussion relates to each of the particular types of options discussed in
greater detail below. In addition, many Hedging Transactions involving options
require segregation of Fund assets in special accounts, as described below under
"Use of Segregated and Other Special Accounts."
A put option gives the purchaser of the option, upon payment of a premium,
the right to sell, and the writer the obligation to buy, the underlying
security, commodity, index, or other instrument at the exercise price. For
example, a Fund's purchase of a put option on a security might be designed to
protect its holdings in the underlying instrument (or, in some cases, a similar
instrument) against a substantial decline in the market value by giving the Fund
the right to sell such instrument at the option exercise price. A call option,
upon payment of a premium, gives the purchaser of the option the right to buy,
and the seller the obligation to sell, the underlying instrument at the exercise
price. A Fund's purchase of a call option on a security, financial future,
index, or other instrument might be intended to protect the Fund against an
increase in the price of the underlying instrument that it intends to purchase
in the future by fixing the price at which it may purchase such instrument. The
Funds are authorized to purchase and sell exchange-listed options and
over-the-counter options ("OTC options"). Exchange-listed options are issued by
a regulated intermediary such as the Options Clearing Corporation ("OCC"), which
guarantees the performance of the obligations of the parties to such options.
A Fund's ability to close out its position as a purchaser or seller of an
OCC or exchange-listed put or call option is dependent, in part, upon the
liquidity of the option market. Among the possible reasons for the absence of a
liquid option market on an exchange are: (i) insufficient trading interest in
certain options; (ii) restrictions on transactions imposed by an exchange; (iii)
trading halts, suspensions or other restrictions imposed with respect to
particular classes or series of options or underlying securities including
reaching daily price limits; (iv) interruption of the normal operations of the
OCC or an exchange; (v) inadequacy of the facilities of an exchange or OCC to
handle current trading volume; or (vi) a decision by one or more exchanges to
discontinue the trading of options (or a particular class or series of options),
in which event the relevant market for that option on that exchange would cease
to exist, although outstanding options on that exchange would generally continue
to be exercisable in accordance with their terms.
The hours of trading for listed options may not coincide with the hours
during which the underlying financial instruments are traded. To the extent that
the option markets close before the markets for the underlying financial
instruments, significant price and rate movements can take place in the
underlying markets that cannot be reflected in the option markets.
OTC options are purchased from or sold to securities dealers, financial
institutions or other parties ("Counterparties") through direct bilateral
agreement with the Counterparty. In contrast to exchange-listed options, which
generally have standardized terms and performance mechanics, all the terms of an
OTC option, including such terms as method of settlement, term, exercise price,
premium, guarantees and security, are set by negotiation of the parties. Each
Fund will only sell OTC options (other than OTC currency options) that are
subject to a buy-back provision permitting the Fund to require the Counterparty
to sell the option back to the Fund at a formula price within seven days. The
Fund expects generally to enter into OTC options that have cash settlement
provisions, although it is not required to do so.
Unless the parties provide for it, there is no central clearing or
guaranty function in an OTC option. As a result, if the Counterparty fails to
make or take delivery of the security or other instrument underlying an OTC
option it has entered into with a Fund or fails to make a cash settlement
payment due in accordance with the terms of that option, the Fund will lose any
premium it paid for the option as well as any anticipated benefit of the
transaction. Accordingly, the Adviser must assess the creditworthiness of each
such Counterparty or any guarantor or credit enhancement of the Counterparty's
credit to determine the likelihood that the terms of the OTC option will be
satisfied. While this type of arrangement allows a Fund greater flexibility to
tailor an option to its need, OTC options generally involve greater credit risk
than exchange-traded options, which are guaranteed by the clearing organization
of the exchanges where they are traded. The risk of illiquidity also is greater
with OTC options, since these options generally can be closed out only by
negotiation with the other party to the option.
If a Fund sells a call option, the premium that it receives may serve as a
partial hedge, to the extent of the option premium, against a decrease in the
value of the underlying securities or instruments in its portfolio or will
increase the Fund's income. The sale of put options can also provide income.
Each Fund may purchase and sell call options on securities, including U.S.
Treasury and agency securities, mortgage-backed securities, corporate debt
securities, equity securities (including convertible securities) and on
securities indices and futures contracts. All calls sold by the Fund must be
"covered" (i.e., the Fund must own the securities or futures contract subject to
the call) or must meet the asset segregation requirements described below as
long as the call is outstanding. Even though a Fund will receive the option
premium to help protect it against loss, a call sold by a Fund exposes the Fund
during the term of the option to possible loss of opportunity to realize
appreciation in the market price of the underlying security or instrument and
may require the Fund to hold a security or instrument which it might otherwise
have sold.
Each Fund may purchase and sell put options on securities including U.S.
Treasury and agency securities, mortgage-backed securities, corporate debt
securities, equity securities (including convertible securities) and on
securities indices and futures contracts other than futures on individual
corporate debt and individual equity securities. No Fund will sell put options
if, as a result, more than 50% of the Fund's assets would be required to be
segregated to cover its potential obligations under such put options other than
those with respect to futures and options thereon. In selling put options, there
is a risk that the Fund may be required to buy the underlying security at a
disadvantageous price above the market price.
GENERAL CHARACTERISTICS OF FUTURES
Each Fund may enter into financial futures contracts or purchase or sell
put and call options on such futures, as a hedge against anticipated interest
rate or equity market changes, and for risk management purposes. Futures are
generally bought and sold on the commodities exchanges where they are listed
with payment of initial and variation margin as described below. The sale of a
futures contract creates a firm obligation by a Fund, as seller, to deliver to
the buyer the specific type of financial instrument called for in the contract
at a specific future time for a specified price (or, with respect to index
futures, the net cash amount). Options on futures contracts are similar to
options on securities except that an option on a futures contract gives the
purchaser the right, in return for the premium paid, to assume a position in a
futures contract and obligates the seller to deliver such option.
Each Fund's use of financial futures and options thereon will in all cases
be consistent with applicable regulatory requirements and in particular the
rules and regulations of the Commodity Futures Trading Commission and will be
entered into only for bona fide hedging, risk or other portfolio management
purposes. Typically, maintaining a futures contract or selling an option thereon
requires the Fund to deposit with a financial intermediary as security for its
obligations an amount of cash or other specified assets (initial margin) which
initially is typically 1% to 10% of the face amount of the contract (but may be
higher in some circumstances). Additional cash or assets (variation margin) may
be required to be deposited thereafter on a daily basis as the mark-to-market
value of the contract fluctuates. The purchase of an option on financial futures
involves payment of a premium for the option without any further obligation on
the part of the Fund. If the Fund exercises an option on a futures contract, it
will be obligated to post initial margin (and potential subsequent variation
margin) for the resulting futures position just as it would for any position.
Futures contracts and options thereon are generally settled by entering into an
offsetting transaction, but there can be no assurance that the position can be
offset prior to settlement at an advantageous price nor that delivery will
occur. The segregation requirements with respect to futures contracts and
options thereon are described below.
OPTIONS ON SECURITIES INDICES AND OTHER FINANCIAL INDICES
Each Fund also may purchase and sell call and put options on securities
indices and other financial indices and in so doing can achieve many of the same
objectives it would achieve through the sale or purchase of options on
individual securities or other instruments. Options on securities indices and
other financial indices are similar to options on a security or other instrument
except that, rather than settling by physical delivery of the underlying
instrument, they settle by cash settlement, i.e., an option on an index gives
the holder the right to receive, upon exercise of the option, an amount of cash
if the closing level of the index upon which the option is based exceeds, in the
case of a call, or is less than, in the case of a put, the exercise price of the
option (except if, in the case of an OTC option, physical delivery is
specified). This amount of cash is equal to the excess of the closing price of
the index over the exercise price of the option, which also may be multiplied by
a formula value. The seller of the option is obligated, in return for the
premium received, to make delivery of this amount. The gain or loss of an option
on an index depends on price movements in the instruments making up the market,
market segment, industry or other composite on which the underlying index is
based, rather than price movements in individual securities, as is the case with
respect to options on securities.
USE OF SEGREGATED AND OTHER SPECIAL ACCOUNTS
Many Hedging Transactions, in addition to other requirements, require that
the Fund that has entered into the transaction segregate liquid high-grade
assets with its Custodian to the extent that Fund's obligations are not
otherwise "covered" through ownership of the underlying security or financial
instrument. In general, either the full amount of any obligation by the Fund to
pay or deliver securities or assets must be covered at all times by the
securities, instruments or currency required to be delivered, or, subject to any
regulatory restriction, an amount of cash or liquid high grade securities at
least equal to the current amount of the obligation must be segregated with the
Custodian. The segregated assets cannot be sold or transferred unless equivalent
assets are substituted in their place or it is no longer necessary to segregate
them. For example, a call option written by a Fund will require the Fund to hold
the securities subject to the call (or securities convertible into the needed
securities without additional consideration) or to segregate liquid high grade
securities sufficient to purchase and deliver the securities if the call is
exercised. A call option sold by a Fund on an index will require the Fund to own
portfolio securities which correlate with the index or to segregate liquid high
grade assets equal to the excess of the index value over the exercise price on a
current basis. A put option written by a Fund requires the Fund to segregate
liquid, high-grade assets equal to the exercise price.
OTC options entered into by a Fund, including those on securities,
financial instruments or indices and OCC-issued and exchange-listed index
options will generally provide for cash settlement. As a result, when a Fund
sells these instruments it will only segregate an amount of assets equal to its
accrued net obligations, as there is no requirement for payment or delivery of
amounts in excess of the net amount. These amounts will equal 100% of the
exercise price in the case of a non-cash settled put, the same as an
OCC-guaranteed listed option sold by the Fund, or the in-the-money amount plus
any sell-back formula amount in the case of a cash-settled put or call. In
addition, when a Fund sells a call option on an index at a time when the
in-the-money amount exceeds the exercise price, the Fund will segregate, until
the option expires or is closed out, cash or cash equivalents equal in value to
such excess. OCC-issued and exchange-listed options sold by a Fund other than
those above generally settle with physical delivery, or with an election of
either physical delivery or cash settlement, and the Fund will segregate an
amount of assets equal to the full value of the option. OTC options settling
with physical delivery, or with an election of either physical delivery or cash
settlement, will be treated the same as other options settling with physical
delivery.
In the case of a futures contract or an option thereon, a Fund must
deposit initial margin and possible daily variation margin in addition to
segregating assets sufficient to meet its obligation to purchase or provide
securities or currencies, or to pay the amount owed at the expiration of an
index-based futures contract. Such assets may consist of cash, cash equivalents,
liquid debt or equity securities or other acceptable assets.
Hedging Transactions may be covered by other means when consistent with
applicable regulatory policies. Each Fund may also enter into offsetting
transactions so that its combined position, coupled with any segregated assets,
equals its net outstanding obligation in related options and Hedging
Transactions. For example, a Fund could purchase a put option if the strike
price of that option is the same or higher than the strike price of a put option
sold by the Fund. Moreover, instead of segregating assets if the Fund held a
futures or forward contract, it could purchase a put option on the same futures
or forward contract with a strike price as high or higher than the price of the
contract held. Other Hedging Transactions may also be offset in combinations. If
the offsetting transaction terminates at the time of or after the primary
transaction no segregation is required, but if it terminates prior to such time,
assets equal to any remaining obligation would need to be segregated.
C. Short Sales. Each Fund may sell a security short in anticipation of a
decline in the market value of the security. When a Fund engages in a short
sale, it sells a security that 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.
Positions in shorted securities are more risky than long positions
(purchases) in securities because the maximum sustainable loss on a security
purchased is limited to the amount paid for the security plus the transaction
costs, whereas there is no maximum attainable price of the shorted security.
Therefore, in theory, securities sold short have unlimited risk and either Fund
could suffer significant losses. In addition, the strategy may result in
increased transaction costs and taxes that reduce the Fund's return.
In connection with its short sales, each 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 Funds also will incur transaction costs in effecting short
sales.
D. Repurchase Agreements. A repurchase agreement is a short-term
investment in which the purchaser (i.e., the Fund) acquires ownership of an
obligation issued by the U.S. Government or by an agency of the U.S. Government
("U.S. Government Obligations") (which may be of any maturity) and the seller
agrees to repurchase the obligation at a future time at a set price, thereby
determining the yield during the purchaser's holding period (usually not more
than seven days from the date of purchase). Any repurchase transaction in which
a Fund engages will require full collateralization of the seller's obligation
during the entire term of the repurchase agreement. In the event of a bankruptcy
or other default of the seller, a Fund could experience both delays in
liquidating the underlying security and losses in value. However, each Fund
intends to enter into repurchase agreements only with the Custodian, other banks
with assets of $1 billion or more and registered securities dealers determined
by the Adviser (subject to review by the Board of Trustees) to be creditworthy.
The Adviser monitors the creditworthiness of the banks and securities dealers
with which a Fund engages in repurchase transactions.
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 except that MutualMinds.com New Economy Fund will invest at
least 25% of the value of its total assets in securities of companies considered
by the Fund's adviser to rely significantly on technological developments or
advances in their product development, production or operations, except when
investing for temporary defensive purposes. 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.
6. Short Sales. The Funds will not effect short sales of securities except
as described in the Funds' Prospectus or Statement of Additional Information.
<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>
<CAPTION>
=====================================================================================
NAME, AGE AND ADDRESS POSITION PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
<S> <C> <C>
*Kenneth D. Trumpfheller President, President, Treasurer and Secretary of
1793 Kingswood Drive Secretary AmeriPrime Financial Services, Inc., the
Suite 200 and Trustee Fund's administrator, and AmeriPrime Financial
Southlake, Texas 76092 Securities, Inc., the Fund's distributor,
Year of Birth: 1958 since 1994. President, Secretary and Trustee
of AmeriPrime Funds and AmeriPrime
Insurance Trust. Prior to December, 1994, a
senior client executive with SEI Financial
Services.
-------------------------------------------------------------------------------------
*Robert A. Chopyak Treasurer Manager of AmeriPrime Financial Services,
1793 Kingswood Drive and Chief Inc., the Fund's administrator, from February
Suite 200 Financial 2000 to present. Self-employed, performing
Southlake, Texas 76092 Officer Y2K testing, January 1999 to January 2000.
Year of Birth: 1968 Vice President of Fund Accounting, American
Data Services, Inc., a mutual fund services
company, October 1992 to December 1998.
-------------------------------------------------------------------------------------
Mark W. Muller Trustee Account Manager for Clarion Technologies, a
175 Westwood Drive manufacturer of automotive, heavy truck, and
Suite 300 consumer goods, from 1996 to present. From
Southlake, Texas 76092 1986 to 1996, an engineer for Sicor, a
Year of Birth: 1964 telecommunication hardware company.
-------------------------------------------------------------------------------------
Richard J. Wright, Jr. Trustee Various positions with Texas Instruments, a
8505 Forest Lane technology company, since 1995, including the
MS 8672 following: Program Manager for Semi-Conductor
Dallas, Texas 75243 Business Opportunity Management System, 1998
Year of Birth: 1962 to present; Development Manager for web-based
interface, 1999 to present; Systems Manager
for Semi-Conductor Business Opportunity
Management System, 1997 to 1998;
Development Manager for Acquisition
Manager, 1996-1997; Operations Manager for
Procurement Systems, 1994-1997.
=====================================================================================
</TABLE>
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. The Trust is not in a fund complex.
<PAGE>
==================================================================
AGGREGATE TOTAL COMPENSATION
NAME COMPENSATION FROM THE TRUST (THE
FROM TRUST 1 TRUST IS NOT IN A
FUND COMPLEX)
------------------------------------------------------------------
Kenneth D. Trumpfheller 0 0
------------------------------------------------------------------
Mark W. Muller $_____ $_____
------------------------------------------------------------------
Richard J. Wright $_____ $_____
==================================================================
INVESTMENT ADVISER
The Funds' investment adviser is InteractiveFunds Investment Advisory
Services LLC, 14180 Dallas Parkway, Suite 200, Dallas, Texas 75240 (the
"Adviser"). The Adviser is a wholly owned subsidiary of InteractiveFunds.com,
Inc.
Under the terms of the management agreement (the "Agreement"), the Adviser
manages each Fund's investments subject to approval of the Board of Trustees. As
compensation for its management services and agreement to pay the Funds'
expenses (except for brokerage fees and commissions, taxes, borrowing costs
(such as dividend expense on securities sold short and interest), fees and
expenses of the non-interested person trustees and extraordinary expenses) each
Fund is obligated to pay the Adviser a fee computed and accrued daily and paid
monthly at an annual rate of 1.00% of the average daily net assets of the Fund.
The Adviser may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. If a bank
or other financial institution were prohibited from continuing to perform all or
a part of such services, management of the Fund believes that there would be no
material impact on the Fund or its shareholders. Banks and other financial
institutions may charge their customers fees for offering these services to the
extent permitted by applicable regulatory authorities, and the overall return to
those shareholders availing themselves of the bank services will be lower than
to those shareholders who do not. The Fund may from time to time purchase
securities issued by banks and other financial institutions that provide such
services; however, in selecting investments for the Fund, no preference will be
shown for such securities.
The Adviser retains the right to use the name "MutualMinds.com" in
connection with another investment company or business enterprise with which the
adviser is or may become associated. The Trust's right to use the name
"MutualMinds.com" automatically ceases ninety days after termination of its
agreement with the Adviser and may be withdrawn by the Adviser on ninety days
written notice.
The Trust and the Adviser have each adopted a Code of Ethics under Rule
17j-1 of the Investment Company Act of 1940. The Code significantly restricts
the personal investing activities of all employees of the Adviser. The Code
requires that all employees of the Adviser preclear any personal securities
investment. The preclearance requirement and associated procedures are designed
to identify any substantive prohibition or limitation applicable to the proposed
investment. In addition, no employee may purchase or sell any security which at
the time is being purchased or sold, or to the knowledge of the employee is
being considered for purchase or sale, by the Fund. The substantive restrictions
also include a ban on acquiring any securities in an initial public offering and
provides for trading "blackout periods" which prohibit trading by portfolio
managers of the Fund within periods of trading by the Fund in the same (or
equivalent) security. The restrictions and prohibitions apply to most securities
transactions by employees of the Adviser, with limited exceptions for some
securities (such as securities that have a market capitalization and average
daily trading volume above certain minimums).
ADDITIONAL INFORMATION ABOUT THE INTERACTIVE PORTFOLIO MANAGEMENT MODEL
INTERACTIVE PORTFOLIO MANAGEMENT MODEL OVERVIEW
The Interactive Portfolio Management Model(TM) (IPMM) is the core engine that
supports the MutualMinds.com Funds. The model includes the calculations and
processes necessary to:
o Collect and score forecasts of investors in the fund
o Aggregate the forecasts and weight them by the historical scores of the
forecasters
o Determine the implied return of each security based on those forecasts
o Estimate the volatility of the underlying security's returns
o Risk adjust the implied return of the securities, based on the volatility
estimates
o Preferentially rank the securities based on the risk adjusted returns
o Screen securities based on market capitalization and a series of
fundamental screens
o Estimate the covariance of the screened securities (the covariance is the
estimate of how each security moves in relationship to other securities in
the market and is used to make sure that the portfolio is well
diversified)
o Select a portfolio from those securities based on a series of optimizer
settings, as described below
o Track the portfolio and cash component of the fund on an ongoing basis
o Recommend rebalancing and or adjustments based on deviations in the cash
component and/or optimal portfolio and predefined deviation limits
o Introduce new securities to the IPMM process at each rebalancing/adjustment
period
IMPLEMENTATION OF THE IPMM FOR THE MUTUALMINDS.COM FUNDS
The Interactive Portfolio Management Model is designed to provide investor input
for use in management of an equity portfolio, but as mentioned above does
require certain initial and ongoing inputs from the Adviser to maintain
consistency with the prospectus and investment policies of the fund. For
example, the growth funds will use a market capitalization screen and various
fundamental valuation screens, such as price to earnings growth. In addition,
other screening is utilized to ensure that the securities selected for the
portfolio have reasonable levels of market liquidity so that market impact
transaction costs are minimized. These settings may require minor adjustments
over time but, in general, are fixed over the life of the fund.
An optimizer (utilizing quadratic and non-linear programming) is used to select
the portfolio and requires inputs to ensure that the overall portfolio
diversification and risk level is consistent with the prospectus and that the
execution of the portfolio will be cost effective. These optimizer settings
include the adviser's selection of the benchmark for the portfolio, the
selection of the beta level versus the benchmark, deviations from the
benchmark's sector allocation, the selection of the maximum level of turnover
per rebalancing period, constraints on round-lot trading, etc. These settings
will require adjustments over time by the Adviser in order to maximize the
effectiveness of the selection and adjustment process and ensure compliance with
the fund's investment objectives. Finally, the sector allocation will remain
extremely flexible so that the overall investors' securities preferences are
reflected in the selected portfolio.
The rebalancing and introduction of new securities is triggered by one of three
events: a substantial change in the cash component, a substantial change in the
weighting of the portfolio (due to changes in market value) and a periodic
reevaluation of the portfolio. All of these settings will be changed on a
regular basis by the Adviser based on market conditions.
ROLE OF THE INVESTMENT ADVISER
The Adviser plays a critical and ongoing role in the management of the
MutualMinds.com Funds. The Adviser establishes and modifies as necessary the
IPMM settings so that the Fund's portfolio is consistent with the prospectus.
Prior to the execution of any trades for the portfolio, the Adviser will approve
the output of the IPMM, making any adjustments deemed necessary to the IPMM
settings and resultant portfolio. The Adviser will supplement the model's stock
selection in the event that securities forecasted by investors (that meet the
required stock screens) are insufficient, in the Adviser's opinion, to construct
a well-diversified portfolio.
The Adviser will be most actively engaged in adjusting sector allocation
limits, establishing the appropriate cash level, modifying rebalancing settings
and monitoring the portfolio on an ongoing basis. In addition to these
activities, the Adviser will monitor external market forces and, at the
Adviser's discretion, execute hedging strategies to achieve certain levels of
market exposure.
DISTRIBUTION PLANS
Each Fund has adopted a plan pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (a "Plan"), that permits the Fund to pay for certain
distribution and promotion expenses related to marketing its shares. As the
Adviser is responsible for paying all Fund expenses (with limited exceptions),
including distribution related expenses, to the extent any payments by a Fund to
the Adviser are deemed to be payments for the financing of any activity
primarily intended to result in the sale of shares of the Fund, then such
payments are deemed to have been made pursuant to the Plan.
Under the Plans, the Trust may engage in any activities related to the
distribution of Fund shares, including without limitation the following: (a)
payments, including incentive compensation, to securities dealers or other
financial intermediaries, financial institutions, investment advisors and others
that are engaged in the sale of Shares, or that may be advising shareholders of
the Trust regarding the purchase, sale or retention of Shares, or that hold
Shares for shareholders in omnibus accounts or as shareholders of record or
provide shareholder support or administrative services to the Fund and its
shareholders, or for rendering shareholder support services, including allocated
overhead, office space and equipment, telephone facilities and expenses,
answering routine inquiries regarding the Trust, processing shareholder
transactions, and providing such other shareholder services as the Trust may
request; (b) expenses of maintaining personnel (including personnel of
organizations with which the Trust has entered into agreements related to this
Plan) who engage in or support distribution of Shares; (c) costs of preparing,
printing and distributing Fund prospectuses and statements of additional
information and reports for recipients other than existing Fund shareholders;
(d) costs of formulating and implementing marketing and promotional activities,
including sales seminars, direct mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (e) costs of preparing,
printing and distributing sales literature; (f) costs of obtaining such
information, analyses and reports with respect to marketing and promotional
activities as the Trust may deem advisable; and (g) costs of implementing and
operating the Plans. The Fund does not participate in any joint distribution
activities with other mutual funds.
The Plans have been approved by the Fund's Board of Trustees, including a
majority of the Trustees who are not "interested persons" of the Fund and who
have no direct or indirect financial interest in the Plans or any related
agreement, by a vote cast in person. Continuation of the Plans and the related
agreements must be approved by the Trustees annually, in the same manner, and a
Plan or any related agreement may be terminated at any time without penalty by a
majority of such independent Trustees or by a majority of the outstanding shares
of the applicable class. Any amendment increasing the maximum percentage payable
under a Plan or other material change must be approved by a majority of the
outstanding shares of the applicable class, and all other material amendments to
a Plan or any related agreement must be approved by a majority of the
independent Trustees.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust, the
Adviser is responsible for each Fund's portfolio decisions and the placing of
each Fund's portfolio transactions. In placing portfolio transactions, the
Adviser 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 Adviser generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received. Consistent with
the Rules of Fair Practice of the National Association of Securities Dealers,
Inc., and subject to its obligation of seeking best qualitative execution, the
Adviser may give consideration to sales of shares of the Trust as a factor in
the selection of brokers and dealers to execute portfolio transactions.
The Adviser is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Funds and/or the other
accounts over which the Adviser exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Adviser determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Adviser's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and economic
analyses, statistical services and information with respect to the availability
of securities or purchasers or sellers of securities and analyses of reports
concerning performance of accounts. The research services and other information
furnished by brokers through whom the 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 Adviser 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 Adviser that the
review and study of the research and other information will not reduce the
overall cost to the Adviser of performing its duties to the 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.
To the extent that the Trust and another of the Adviser's clients seek to
acquire the same security at about the same time, the Trust may not be able to
acquire as large a position in such security as it desires or it may have to pay
a higher price for the security. Similarly, the Trust may not be able to obtain
as large an execution of an order to sell or as high a price for any particular
portfolio security if the other client desires to sell the same portfolio
security at the same time. On the other hand, if the same securities are bought
or sold at the same time by more than one client, the resulting participation in
volume transactions could produce better executions for the Trust. In the event
that more than one client wants to purchase or sell the same security on a given
date, the purchases and sales will normally be made by [random client
selection.]
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.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Adviser's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Adviser determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Adviser believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by the Adviser,
subject to review of the Board of Trustees. Short term investments in fixed
income securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
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 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.
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 each Funds' investments. The custodian acts as each Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
TRANSFER AGENT
Unified Fund Services, Inc. ("Unified"), 431 North Pennsylvania Street,
Indianapolis, Indiana 46204, acts as each Funds' transfer agent and, in such
capacity, maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of each Funds' shares, acts as dividend and distribution disbursing
agent and performs other transfer agency and shareholder service functions. For
its services as transfer agent, Unified receives a monthly fee from the Adviser
of $1.20 per shareholder (subject to a minimum monthly fee of $900). In
addition, Unified provides each Funds with fund accounting services, which
include certain monthly reports, record-keeping and other management-related
services. For its services as fund accountant, Unified receives an annual fee
from the Adviser equal to 0.0275% of each Fund's assets up to $100 million,
0.0250% of each Fund's assets from $100 million to $300 million, and 0.0200% of
each Fund's assets over $300 million (subject to various monthly minimum fees,
the maximum being $2,100 per month for assets of $20 to $100 million).
ACCOUNTANTS
The firm of McCurdy & Associates CPA's, Inc., 27955 Clemens Road,
Westlake, Ohio 44145, has been selected as independent public accountants for
the Funds for the first fiscal year. McCurdy & Associates performs an annual
audit of each Fund's financial statements and provides financial, tax and
accounting consulting services as requested.
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 Adviser equal to
an annual average rate of 0.10% of each Fund's average daily net assets up to
fifty million dollars, 0.075% of each Fund's average daily net assets from fifty
to one hundred million dollars and 0.050% of each fund's average daily net
assets over one hundred million dollars. The Administrator, the Distributor, and
Unified Fund Services, Inc. (the Fund's transfer agent) are controlled by
Unified Financial Services, Inc.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092 (the "Distributor"), is the exclusive agent for
distribution of shares of the Funds. Kenneth D. Trumpfheller, a Trustee and
officer of the Trust, is an affiliate of the Distributor. The Distributor is
obligated to sell the shares of the 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.
<PAGE>
PART C. OTHER INFORMATION
-----------------
Item 23. Exhibits
(a) Articles of Incorporation.
(i) Registrant's Agreement and Declaration of Trust, which was filed as an
Exhibit to Registrant's Registration Statement, is hereby incorporated by
reference.
(ii) Copy of Amendment No. 1 to Registrant's Declaration of Trust which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 4, is hereby
incorporated by reference.
(iii) Copy of Amendment No. 2 to Registrant's Declaration of Trust which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 4, is hereby
incorporated by reference.
(iv) Copies of Amendments No. 3-5 to Registrant's Declaration of Trust are
filed herewith.
(b) By-laws. Registrant's By-laws, which were filed as an Exhibit to
Registrant's Registration Statement, are hereby incorporated by reference.
(c) Instruments Defining Rights of Security Holder. None (other than in
the Declaration of Trust and By-laws of the Registrant).
(d) Investment Advisory Contracts.
(i) Registrant's Management Agreement with Stoneridge Investment Partners,
LLC for the Stoneridge Equity Fund, which was filed as an Exhibit to
Registrant's Pre-Effective Amendment No. 1, is hereby incorporated by
reference.
(ii) Registrant's Management Agreement with Stoneridge Investment Partners,
LLC for the Stoneridge Small Cap Equity Fund, which was filed as an Exhibit
to Registrant's Pre-Effective Amendment No. 1, is hereby incorporated by
reference.
(iii) Registrant's Management Agreement with Stoneridge Investment Partners,
LLC for the Stoneridge Bond Fund, which was filed as an Exhibit to
Registrant's Pre-Effective Amendment No. 1, is hereby incorporated by
reference.
(iv) Registrant's Management Agreement with Nashville Capital Corporation
for the Monteagle Opportunity Growth Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 3, is hereby incorporated by
reference.
(v) Registrant's Management Agreement with Nashville Capital Corporation
for the Monteagle Value Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 3, is hereby incorporated by reference.
(vi) Registrant's Management Agreement with Nashville Capital Corporation
for the Monteagle Large Cap Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 3, is hereby incorporated by
reference.
(vii) Registrant's Management Agreement with Nashville Capital Corporation
for the Monteagle Fixed Income Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 3, is hereby incorporated by
reference.
(viii) Advisory Agreement for the Monteagle Opportunity Growth Fund,
which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 3,
is hereby incorporated by reference.
(ix) Advisory Agreement for the Monteagle Value Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 3, is hereby
incorporated by reference.
(x) Advisory Agreement for the Monteagle Large Cap Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 3, is hereby
incorporated by reference.
(xi) Advisory Agreement for the Monteagle Fixed Income Fund, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 3, is hereby
incorporated by reference.
(xii) Registrant's Management Agreement withAExpert Advisory, Inc. for the
Enhans Master Investor Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 9, is hereby incorporated by reference.
(xiii) Registrant's Management Agreement withAExpert Advisory, Inc. for
the Enhans RT 500 Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 9, is hereby incorporated by reference.
(xiv) Registrant's Management Agreement with Cloud, Neff & Associates, Inc. for
the Cloud, Neff Capital Appreciation Fund is filed herewith.
(xv) Registrant's Management Agreement with Paragon Capital Management, Inc.
for the Paragon Strategic Accent Fund (formerly the Paragon Dynamic Hedge
Fund) is filed herewith.
(iv) Registrant's Proposed Management Agreement with Paragon Capital
Management, Inc. for the Paragon Dynamic
(xvi) Fortress Fund (formerly the Paragon Uncorrelated Return Fund) is filed
herewith.
(xvii) Registrant's Management Agreement with Riccardi Group LLC for the Master
High Yield Income Fund is filed herewith.
(xviii) Registrant's Proposed Management Agreement with InteractiveFunds
Investment Advisory Services LLC for the MutualMinds.com Diversified Growth Fund
is filed herewith.
(xix) Registrant's Proposed Management Agreement with InteractiveFunds
Investment Advisory Services LLC for the MutualMinds.com Small Cap Growth Fund
is filed herewith.
(xx) Registrant's Proposed Management Agreement with InteractiveFunds Investment
Advisory Services LLC for the MutualMinds.com New Economy Fund is filed
herewith.
(e) Underwriting Contracts.
(i) Registrant's Underwriting Agreement with AmeriPrime Financial
Securities, Inc., which was filed as an Exhibit to Registrant's Pre-Effective
Amendment No. 1, is hereby incorporated by reference.
(ii) Registrant's form of Dealer Agreement, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 6, is hereby incorporated by
reference.
(iii) Amended Exhibit A to Underwriting Agreement is filed herewith.
(f) Bonus or Profit Sharing Contracts. None.
(g) Custodian Agreements.
(i) Registrant's Custodian Agreement with Firstar Bank, N.A., which was
filed as an Exhibit to Registrant's Pre-Effective Amendment No. 1, is hereby
incorporated by reference.
(ii) Amended Appendix B to Custodian Agreement is filed herewith.
(h) Other Material Contracts. None.
(i) Legal Opinion.
(i) Opinion of Brown, Cummins & Brown Co., L.P.A., which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 10, is hereby
incorporated by reference.
(ii) Consent of Brown, Cummins & Brown Co., L.P.A. is filed herewith.
(j) Other Opinions. Consent of McCurdy & Associates CPA's, Inc. is filed
herewith.
(k) Omitted Financial Statements. None.
(l) Initial Capital Agreements. Letter of Initial Stockholder, which was
filed as an Exhibit to Registrant's Pre-Effective Amendment No. 1, is hereby
incorporated by reference.
(m) Rule 12b-1 Plan.
(i) Form of Registrant's Rule 12b-1 Service Agreement for the Enhans RT Funds,
which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 5, is
hereby incorporated by reference.
(ii) Form of Registrant's Rule 12b-1 Distribution Plan for the Enhans RT Funds,
which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 5, is
hereby incorporated by reference.
(iii) Form of Rule 12b-1 Distribution Plan for the MutualMinds.com Funds is
filed herewith.
(n) Rule 18f-3 Plan. None.
(o) Reserved.
(p) Codes of Ethics. Copy of Registrant's Code of Ethics is filed herewith.
(q) Powers of Attorney.
(i) Power of Attorney for Registrant and Certificate with respect thereto,
which were filed as an Exhibit to Registrant's Pre-Effective Amendment No. 1,
are hereby incorporated by reference.
(ii) Powers of Attorney for the Trustees, which were filed as an Exhibit to
Registrant's Pre-Effective Amendment No. 1, are hereby incorporated by
reference.
(iii) Power of Attorney for the President, Secretary and Trustee, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 6, is hereby
incorporated by reference.
(iv) Power of Attorney for the Treasurer is filed herewith.
Item 24. Persons Controlled by or Under Common Control with the Funds
-------- ------------------------------------------------------------
As of August 16, 2000, First Union National Bank, Trustee, owned 43.00% of the
StoneRidge Small-Cap Equity Fund, 73.34% of the StoneRidge Equity Fund and
99.54% of the StoneRidge Bond Fund. As a result, the StoneRidge Small-Cap Equity
Fund, the StoneRidge Equity Fund and the StoneRidge Bond Fund may be deemed to
be under common control.
As of August 16, 2000, First Farmers and Merchant National Bank, Trustee, owned
100% of the Monteagle Large Cap Fund, the Monteagle Value and the Monteagle
Fixed Income Fund and 99.96% of the Monteagle Opportunity Growth Fund. As a
result, the Monteagle Funds may be deemed to be under common control.
Item 25. Indemnification
(a) Article VI of the Registrant's Declaration of Trust provides for
indemnification of officers and Trustees as follows:
Section 6.4 Indemnification of Trustees, Officers, etc. Subject to and except as
otherwise provided in the Securities Act of 1933, as amended, and the 1940 Act,
the Trust shall indemnify each of its Trustees and officers (including persons
who serve at the Trust's request as directors, officers or trustees of another
organization in which the Trust has any interest as a shareholder, creditor or
otherwise (hereinafter referred to as a "Covered Person") against all
liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, director or trustee, and except that no Covered
Person shall be indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
Section 6.5 Advances of Expenses. The Trust shall advance attorneys' fees or
other expenses incurred by a Covered Person in defending a proceeding to the
full extent permitted by the Securities Act of 1933, as amended, the 1940 Act,
and Ohio Revised Code Chapter 1707, as amended. In the event any of these laws
conflict with Ohio Revised Code Section 1701.13(E), as amended, these laws, and
not Ohio Revised Code Section 1701.13(E), shall govern.
Section 6.6 Indemnification Not Exclusive, etc. The right of indemnification
provided by this Article VI shall not be exclusive of or affect any other rights
to which any such Covered Person may be entitled. As used in this Article VI,
"Covered Person" shall include such person's heirs, executors and
administrators. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
The Registrant may not pay for insurance which protects the Trustees and
officers against liabilities rising from action involving willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of their offices.
(b) The Registrant may maintain a standard mutual fund and investment advisory
professional and directors and officers liability policy. The policy, if
maintained, would provide coverage to the Registrant, its Trustees and officers,
and could cover its Advisors, among others. Coverage under the policy would
include losses by reason of any act, error, omission, misstatement, misleading
statement, neglect or breach of duty.
(c) Pursuant to the Underwriting Agreement, the Trust shall indemnify
Underwriter and each of Underwriter's Employees (hereinafter referred to as a
"Covered Person") against all liabilities, including but not limited to amounts
paid in satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise or with which such person may be or
may have been threatened, while serving as the underwriter for the Trust or as
one of Underwriter's Employees, or thereafter, by reason of being or having been
the underwriter for the Trust or one of Underwriter's Employees, including but
not limited to liabilities arising due to any misrepresentation or misstatement
in the Trust's prospectus, other regulatory filings, and amendments thereto, or
in other documents originating from the Trust. In no case shall a Covered Person
be indemnified against any liability to which such Covered Person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties of such Covered Person.
(d) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
Registrant pursuant to the provisions of Ohio law and the Agreement and
Declaration of the Registrant or the By-Laws of the Registrant, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Trust in the successful defense of any action, suit or proceeding)
is asserted by such trustee, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser
(a) Stoneridge Investment Partners, LLC ("Stoneridge"), 7 Great Valley Parkway,
Suite 290, Malvern, PA 19355, adviser to the Stoneridge Equity Fund, Stoneridge
Small Cap Equity Fund and Stoneridge Bond Fund, is a registered investment
adviser.
(i) Stoneridge has engaged in no other business during the past two fiscal
years. (ii) Information with respect to each officer and member of Stoneridge is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-56755).
(b) Nashville Capital Corporation ("NCC"), 209 10th Avenue South, Suite 332,
Nashville, TN 37203, investment manager to the Monteagle Opportunity Growth
Fund, Monteagle Value Fund, Monteagle Large Cap Fund, Monteagle Fixed Income
Fund, is a registered investment adviser.
(i) NCC has e engaged in investment banking and general management consulting in
the health care industry since 1992 and has engaged in market investment
advising to institutional investors since 1993.
(ii) Information with respect to each officer and member of NCC is incorporated
by reference to Schedule D of Form ADV filed by it under the Investment Advisors
Act (File No. 801-32593).
(c) Robinson Investment Group, Inc. ("Robinson"), 5301 Virginia Way, Suite
150, Brentwood, Tennessee 37027, adviser to the Monteagle Value Fund is a
registered investment adviser.
(i) Robinson has engaged in no other business during the past two fiscal years.
(ii) Information with respect to each officer and director of Robinson is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisors Act (File No. 801-51450)
(d) Howe and Rusling, Inc. ("Howe and Rusling"), 120 East Avenue,
Rochester, New York 14604, adviser to Monteagle Large Cap Fund and Monteagle
Fixed Income Fund is a registered investment adviser.
(i) Howe and Rusling has engaged in no other business during the past two fiscal
years. (ii) Information with respect to each officer and director of Howe and
Rusling is incorporated by reference to Schedule D of Form ADV filed by it under
the Investment Advisors Act (File No. 801-294).
(e) T.H. Fitzgerald, Jr. ("Fitzgerald"), 180 Church Street, Naugatuck,
Connecticut 06770, adviser for the Monteagle Opportunity Growth Fund, is a
registered investment adviser.
(i) Fitzgerald has engaged in no other business during the past two fiscal
years. (ii) Information with respect to each principal of Fitzgerald is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisors Act (File No. 801-12196)
(f) AExpert Advisory, Inc. ("AExpert"), 25 West King Street, Lancaster,
Pennsylvania 17603, adviser to Enhans Master Investor Fund and Enhans RT 500
Fund, is a registered investment adviser.
(i) AExpert has engaged in no other business during the past two fiscal years.
(ii) Information with respect to each officer and director of AExpert is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-43349).
(g) Cloud, Neff & Associates, Inc. ("Cloud, Neff"), 606 Park Tower, 5314
South Yale, Tulsa, Oklahoma 74135, adviser to the Cloud, Neff Capital
Appreciation Fund, is a registered investment adviser.
(i) Cloud, Neff has engaged in no other business during the past two fiscal
years. (ii) Information with respect to each officer and director of Cloud, Neff
is incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-43639).
(h) Paragon Capital Management, Inc. ("Paragon"), 3651 N. 100
E., Suite 275, Provo, Utah 84604, adviser to the Paragon Dynamic Hedge Fund
and the Paragon Uncorrelated Return Fund, is a registered investment
adviser.
(i) Paragon has engaged in no other business during the past two fiscal years.
(ii) Information with respect to each officer and director of Paragon is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-45326).
(i) Riccardi Group LLC ("Riccardi"), 340 Sunset Dr., Ft. Lauderdale,
Florida 33301, adviser to the Master High Yield Income Fund, is a registered
investment adviser.
(i) Riccardi has engaged in no other business during the past two fiscal years.
(ii) Information with respect to each officer and member of Paragon is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-56024).
(j) InteractiveFunds Investment Advisory Services LLC ("Interactive"), 14180
Dallas Parkway, Suite 200, Dallas, Texas 75057, adviser to the MutualMinds.com
Investors Diversified Growth Fund, MutualMinds.com Small Cap Growth Fund and
MutualMinds.com New Economy Fund, will be a registered investment adviser.
(i) Interactive has engaged in no other business during the past two fiscal
years.
(ii) Information with respect to each officer and director of
isInteractive will be incorporated by reference to Schedule D of Form ADV filed
by it under the Investment Advisers Act.
Item 27. Principal Underwriters
(a) AmeriPrime Financial Securities, Inc. is the Registrant's principal
underwriter. Kenneth D. Trumpfheller, 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the President, Secretary and Treasurer of the
Underwriter and the President and a Trustee of the Registrant. AmeriPrime
Financial Services, Inc. is also the underwriter for the AmeriPrime Funds,
AmeriPrime Insurance Trust, the Kenwood Funds, the Rockland Funds Trust and the
TANAKA Funds, Inc.
(b) Information with respect to each director and officer of AmeriPrime
Financial Securities, Inc. is incorporated by reference to Schedule A of Form
BD filed by it under the Securities Exchange Act of 1934 (File No. 8-48143).
(c) Not applicable.
Item 28. Location of Accounts and Records
Accounts, books and other documents required to be maintained by Section 31(a)
of the Investment Company Act of 1940 and the Rules promulgated thereunder will
be maintained by the Registrant at 1793 Kingswood Drive, Suite 200, Southlake,
Texas 76092 and/or by the Registrant's Custodian, Firstar Bank, N.A., 425 Walnut
Street, Cincinnati, Ohio 45202, and/or by the Registrant's Transfer Agent,
Unified Fund Services, Inc., 431 North Pennsylvania Street, Indianapolis,
Indiana 46204.
Item 29. Management Services Not Discussed in Parts A or B
-------- -------------------------------------------------
None.
Item 30. Undertakings
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio on the 22 day of August,
2000.
AmeriPrime Advisors Trust
By: /s/
---------------------------------
Donald S. Mendelsohn
Attorney-in Fact
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
*By: /s/
--------------------------------
Kenneth D. Trumpfheller,* Donald S. Mendelsohn
President and Trustee
Attorney-in-Fact
Richard Wright,* August 22, 2000
Trustee
Mark Muller,*
Trustee
Robert A. Chopyak*
Treasurer and Chief Financial Officer
EXHIBIT INDEX
1. Amendment Nos. 3-5 to Declaration of Trust ...................EX-99.23.a
2. Management Agreement with Cloud, Neff & Associates, Inc.......EX-99.23.d.1
3. Management Agreement with Paragon Capital Management, Inc. for the Paragon
Strategic Accent Fund.........................................EX-99.23.d.2
4. Management Agreement with Paragon Capital Management, Inc. for the Paragon
Dynamic Fortress Fund.........................................EX-99.23.d.3
5. Management Agreement with Riccardi Group LLC..................EX-99.23.d.4
6. Proposed Management Agreement with InteractiveFunds Investment Advisory
Services LLC for the MutualMinds.com Diversified Growth Fund..EX-99.23.d.5
7. Proposed Management Agreement with InteractiveFunds Investment Advisory
Services LLC for the MutualMinds.com Small Cap Growth Fund....EX-99.23.d.6
8. Proposed Management Agreement with InteractiveFunds Investment Advisory
Services for the MutualMinds.com New Economy Fund.............EX-99.23.d.7
9. Consent of Counsel............................................EX-99.23.i
10. Consent of Accountant.........................................EX-99.23.j
11. Form of Rule 12b-1 Distribution Plan for the
MutualMinds.com Funds.........................................EX-99.23.m
12. Code of Ethics................................................EX-99.23.p
13. Power of Attorney for the Treasurer...........................EX-99.23.q
