SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 13 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT / /
OF 1940
Amendment No. 14 / X /
(Check appropriate box or boxes.)
AmeriPrime Advisors Trust - File Nos. 333-85083 and 811-09541 (Exact Name
of Registrant as Specified in Charter)
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092 (Address of
Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (817) 251-6700
Kenneth Trumpfheller, AmeriPrime Advisors Trust, 1793 Kingswood Drive,
Suite 200, Southlake, Texas 76092 (Name and Address of Agent for Service)
With copy to: Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A. 3500
Carew Tower, Cincinnati, Ohio 45202
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective:
/_/ immediately upon filing pursuant to paragraph (b)
/_/on (date) pursuant to paragraph (b)
/_/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on (date) pursuant to paragraph (a)(1)
/X/ 75 days after filing pursuant to paragraph (a)(2)
/_/ on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
/_/this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
Chameleon Market Rotation Fund
Prospectus dated ____________, 2000
Investment objective: long term capital appreciation.
11651 Jollyville Road
Suite 200
Austin, Texas 78759
(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 FUND......................................
ADDITIONAL INFORMATION ABOUT THE FUND'S STRATEGIES AND RISKS ...................
HOW TO BUY SHARES...............................................................
HOW TO REDEEM SHARES............................................................
DETERMINATION OF NET ASSET VALUE................................................
DIVIDENDS, DISTRIBUTIONS AND TAXES..............................................
MANAGEMENT OF THE FUND..........................................................
FOR MORE INFORMATION..................................................BACK COVER
<PAGE>
RISK RETURN SUMMARY
Investment Objective
The investment objective of the Chameleon Market Rotation Fund is
long-term capital appreciation.
Principal Strategies
The Fund invests primarily in equity securities selected by the Fund's
adviser using a market rotation investment strategy. The adviser rotates the
Fund's portfolio among various sectors of the economy, geographic regions, and
investment styles that the adviser believes offer superior prospects for capital
appreciation.
Using its rotation strategy, the adviser identifies the sectors,
styles, and regions of the market that are exhibiting superior upward price
movement relative to the broader market and will allocate the Fund's investments
accordingly. For Example, the adviser will shift the Fund's investments between
value oriented and growth-oriented stocks, based on the adviser's assessment of
which style offers a better opportunity for capital appreciation. The Fund will
sell short equity securities that the Fund's adviser believes are overvalued,
and will purchase put options and sell call options on equity securities and
securities indexes, in an effort to capture gains from a decline in those
securities and as a hedge against adverse market conditions. The adviser may use
the purchase of call options or sale of put options as additional tools for
participating in upward price movements. The adviser will engage in active
trading of the Fund's portfolio securities as a result of its strategy, the
effects of which are described below under "Turnover Risk."
Equity securities in which the Fund may invest will primarily consist
of U.S. common stock, American Depositary Receipts (ADRs), closed-end mutual
funds, and exchange traded funds (ETFs). An ADR is a U.S. dollar denominated
certificate issued by an U.S. bank that evidences ownership of shares of a
foreign company. ADRs are alternatives to the direct purchase of the underlying
foreign stock. ETFs own stocks included in a particular index and changes in the
price of the ETFs track the movement of the associated index relatively closely.
While it is anticipated that the Fund will diversify its investments
across multiple strategies, certain sectors, styles and regions may to be
over-weighted compared to others because the Fund's adviser seeks the best
investment opportunity. The Fund may, for example, be over-weighted at times in
the technology, health care, energy and financial services sectors and in one or
more of the world's established foreign markets. The sectors, styles, and
regions in which the Fund may be over-weighted will vary at different points in
the economic cycle.
Principal Risks of Investing in the Fund
o Management Risk. The adviser's strategy may fail to produce the intended
results. Additionally, the Fund has no operating history and the Fund's
adviser has no prior experience managing the assets of a mutual fund.
o Company Risk. The value of the Fund may decrease in response to the
activities and financial prospects of an individual company in the Fund's
portfolio. Similarly, if the prices of securities owned by an ETF falls, so
will the value of the ETF (and the value of the Fund if it owns the ETF).
o Volatility risk. Equity securities 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.
o Market Risk. Overall stock market risks may also affect the value of the
Fund. For example, if the general level of stock prices fall, so will the
value of some ETFs because they represent an interest in a broadly
diversified stock portfolio. Factors such as domestic and foreign economic
growth and market conditions, interest rate levels, and political events
affect the securities markets and could cause the Fund's share price to
fall.
o Higher Expenses. Your cost of investing in the Fund will generally be
higher than the cost of investing in a mutual fund that invests exclusively
in common stock. By investing in the Fund, you will indirectly bear any
fees and expenses charged by the ETFs, American Depositary Receipts, and
closed-end funds in which the Fund invests in addition to the Fund's direct
fees and expenses. Therefore, the Fund will incur higher expenses, many of
which may be duplicative.
o Foreign Risk. To the extent the Fund invests in ADRs and foreign ETFs, 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 or
group of companies. 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.
o Smaller Company Risk. To the extent the Fund invests, directly or
indirectly, in smaller capitalization companies, the Fund will be subject
to additional risks. These include: 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.
o Concentration Risk. The Fund may invest in ETFs that concentrate their
investments in a particular industry. An investment in such an index
product may be subject to greater market risk than an investment in an
index product that invests in a broad range of securities.
o Liquidity Risk. Some of the ETFs in which the Fund invests are subject to
liquidity risk. Liquidity risk exists when an investment is difficult to
purchase or sell, possibly preventing the ETFs from selling the illiquid
security at an advantageous time or price. ETFs that invest in smaller
companies, foreign securities or securities with greater market risk are
more likely to be illiquid.
o Turnover Risk. The Fund's investment strategy involves active trading and
will result in a high portfolio turnover rate. A high portfolio turnover
can result in correspondingly greater brokerage commission expenses (which
would lower the Fund's total return). A high portfolio turnover may result
in the distribution to shareholders of additional capital gains for tax
purposes, some of which may be taxable at ordinary rates.
o Sector, Style, and Country Risk. If the Fund's portfolio is over weighted
in a certain industry sector, style, or country, any negative development
affecting that sector, style, or country will have a greater impact on the
Fund than a fund that is not over weighted in that sector, style, or
country or country. For example, to the extent the Fund is over weighted in
the technology sector, it will be affected by developments affecting that
sector.
o Technology companies may be significantly affected by falling prices and
profits and intense competition, and their products may be subject to rapid
obsolescence
o The health care sector is subject to government regulation and government
approval of products and services, which could have a significant effect on
price and availability.
o Financial services companies are subject to extensive government
regulation. Changes or proposed changes in these regulations may adversely
impact the industry. For example, regulatory changes may make the industry
more competitive and some companies may be negatively affected. The
profitability of companies in the financial services industries can be
significantly affected by the cost of capital, changes in interest rates,
and price competition.
o The energy sector can be significantly affected by the supply and demand
for oil and gas, the price of oil and gas, exploration and production
spending, government regulation, world events, and economic conditions.
o Closed-End Fund Risk. Closed-end funds frequently trade at a discount from
their net asset value in the secondary market. The amount of the discount
is subject to change from time to time in response to various factors and
can have a negative effect on the Fund's share price. There is no guarantee
that a closed-end fund will trade at or above its net asset value.
o Short Sale Risk. The Fund engages in short selling activities, which are
significantly different from the investment activities commonly associated
with conservative stock funds. You should be aware that selling securities
short is more risky than long positions (purchases) and be cognizant that
any strategy that includes selling securities short can suffer significant
losses. In addition, the strategy may result in increased transaction costs
and taxes that reduce the Fund's return.
o Option Risks. The Fund may terminate an option it has purchased by
selling it, allowing it to expire, or by exercising the option. If the option is
allowed to expire, the Fund will lose the entire premium it paid (plus related
transaction costs). When the Fund sells call options, it receives cash but
limits its opportunity to profit from an increase in the market value of the
underlying security or Index beyond the exercise price (plus the premium
received). When the Fund sells put options, the Fund receives the option
premium, but will lose money if a decrease in the value of the underlying
security or Index causes the Fund's costs to cover its obligations upon exercise
to increase to a level higher than the option premium the Fund received. The
Fund may also terminate a position in an option it has sold by buying it back in
the open market. The Fund will lose money if the cost to buy back the option
position are higher than the premiums originally received, due to a rise in the
price of the underlying security or index, in the case of calls, or a decline in
the price of the underlying security or index, in the case of puts. Increases in
the volatility of the underlying security can also cause the price of the
options to increase, thus increasing the Fund's cost to cover its obligation.
o Initial Public Offerings Risks. The Fund may purchase shares in initial
public offerings (IPOs). Companies going public for the first time frequently
are companies with limited operating histories, and many of these companies have
unproven business models. Primarily for these reasons, investments in IPO
offerings can introduce additional volatility and risks to the Fund. IPO shares
may be overvalued and are also frequently volatile in price. Accordingly, the
Fund may hold IPO shares for a very short period of time. This may increase the
turnover of the Fund's portfolio and may lead to increased expenses to the Fund,
such as commissions and transactions costs.
o An investment in the Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
o The Fund may not be appropriate for use as a complete investment program.
o As with any mutual fund investment, the Fund's returns will vary and you
could lose money.
How the Fund has 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 the Fund is recently organized and has
annual returns of less than one year.
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FEES AND EXPENSES OF THE FUND
The tables describe the fees and estimated expenses that you may pay if you buy
and hold shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases NONE
Maximum Deferred Sales Charge (Load) NONE
Redemption Fee NONE
Annual Fund Operating Expenses1
(expenses that are deducted from Fund assets)
Management Fee 1.95%
Distribution and/or Service (12b-1) Fees 2 0.00%
Other Expenses 0.04%
Total Annual Fund Operating Expenses 3 1.99%
1 The Fund may invest extensively in exchange traded funds and closed-end funds.
To the extent that a Fund invests in ETFs and closed-end funds, the Fund will
indirectly bear its proportionate share of any fees and expenses paid by such
products, in addition to the fees and expenses payable directly by the Fund.
Therefore, to the extent that a Fund invests in such products, the Fund will
incur higher expenses, many of which may be duplicative. These expenses will be
borne by the Fund, and are not included in the expenses reflected in the table
above or example below.
2 The Fund has adopted a 12b-1 Plan that permits the Fund to charge 12b-1 fees
of up to 0.25% annually. The Fund's expenses will not be affected by the 12b-1
Plan because the Fund's adviser does not intend to activate the Plan.3 "Other
Expenses" are based on estimated amounts for the current fiscal year and include
dividends on short sales which the adviser estimates will equal 0.04%
(annualized) of the Fund's average net assets.
Example:
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated, reinvest dividends
and distributions, and then redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year
and that the Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:
1 Year 3 Years
------ -------
$----- $------
ADDITIONAL INFORMATION ABOUT THE FUND'S STRATEGIES AND RISKS
Principal Strategies
Exchange Traded Funds - ETFs include S&P Depositary Receipts ("SPDRs"),
DIAMONDS, ishares, holders, and other ETFs. SPDRs are exchange-traded traded
shares that represent ownership in the SPDR Trust, an investment company that
was established to own the stocks included in the S&P 500 Index. The price and
dividend yield of SPDRs track the movement of the S&P 500 Index relatively
closely. DIAMONDS are similar to SPDRs, but own the securities consisting of all
of the stocks of the Dow Jones Industrial Average.
ETFs also include S&P Midcap 400 Depositary Receipts and Nasdaq-100
Shares. These products invest in smaller capitalization companies and are
subject to the risks associated with smaller companies. The earnings and
prospects of smaller companies are more volatile than larger companies. Smaller
companies may experience higher failure rates than do larger companies. 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. Smaller companies may have limited markets,
product lines or financial resources and may lack management experience.
The Fund may also invest in various sector ETFs such as the Basic
Industries Select Sector Index, Consumer Services Select Sector Index, Consumer
Staples Select Sector Index, Cyclical / Transportation Select Sector Index,
Energy Select Sector Index, Financial Select Sector Index, Industrial Select
Sector Index, Technology Select Sector Index, Utilities Select Sector Index. To
the extent the Fund invests in a sector product, the Fund is subject to the
risks associated with that sector. Additionally, the Fund will invest in new
exchange traded shares as they become available. The principal risks associated
with the ETFs include the risk that the equity securities in an index product
will decline in value due to factors affecting the issuing companies, their
industries, or the equity markets generally. They also include special risks
associated with the particular sector or countries in which the index product
invests.
The Fund may invest up to 50% of its assets in foreign companies in the
worlds developed and emerging markets by purchasing American Depositary Receipts
("ADRs") and ETFs like World Equity Benchmark Shares ("WEBS"). An ADR is a U.S.
dollar denominated certificate that evidences ownership of shares of a foreign
company. ADRs are alternatives to the direct purchase of the underlying foreign
stock. WEBS represent a broad portfolio of publicly traded stocks in a selected
country. Each WEBS Index Series seeks to generate investment results that
generally correspond to the market yield performance of a given Morgan Stanley
Capital International ("MSCI") Index. To the extent the Fund invests in ADRs or
foreign ETFs, 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.
All of the "foreign risks" described above are heightened to the extent
the Fund invests in WEBS of emerging foreign markets. There may be greater
social, economic and political uncertainty and instability; more substantial
governmental involvement in the economy; less governmental supervision and
regulation; unavailability of currency hedging techniques; risk of companies
that may be newly organized and small; and less developed legal systems.
Options - When the Fund buys a call option on a security or an index,
it has the right to any appreciation in the value of the security or index over
a fixed price (known as the exercise price) any time up to a certain date in the
future (the "expiration date"). In return for this right, the Fund pays the
current market price for the option (known as the option premium). If an
increase in the value of the security or index causes the option to increase in
value to a level that is higher than the option premium the Fund paid, the Fund
will profit on the overall position. When the Fund writes (sells) a call option,
the Fund receives the option premium, but will lose money if an increase in the
value of the security or index causes the Fund's costs to cover its obligations
upon exercise to increase to a level that is higher than the option premium the
Fund received. The Fund will sell a call option only if it has purchased a call
option to cover the Fund's potential settlement obligation, or if it holds the
underlying security in great enough quantity to cover the potential settlement
obligation, or if it maintains a level of cash or cash equivalents equal to the
market price of the underlying security less the exercise price, in order to be
capable of covering the potential settlement obligation if the option is
assigned. For example, if the Fund sells a call option with an exercise price of
$50, the Fund will hold a call option with the same or a later expiration date
and a strike price of $50 or less, or the Fund will hold shares of the stock
greater than or equal to the obligation represented by the sold option, or it
will hold cash or cash equivalents in a segregated account equal to no less than
the current market price less the exercise price of the option.
When the Fund buys a put option on a security or an index, it has the
right to receive a payment based on any depreciation in the value of the
security or index below the exercise price. The Fund will profit on the overall
position if a decrease in the value of the security or index causes the option
to increase in value to a level that is higher than the option premium the Fund
paid. When the Fund writes (sells) put options, the Fund receives the option
premium, but will lose money if a decrease in the value of the security or index
causes the Fund's costs to cover its obligations upon exercise to increase to a
level that is higher than the option premium the Fund received. The Fund will
sell a put option only if it has purchased a put option to cover the Fund's
potential settlement obligation, or if it maintains cash or cash equivalents in
a segregated account equal to the amount necessary to purchase the stock at the
strike price of the option. For example, if the Fund sells a put option with an
exercise price of $50, the Fund will hold a put option with the same or a later
expiration date and a strike price of $50 or more; or it will hold cash or cash
equivalents in a segregated account greater than or equal to the amount
necessary to purchase the stock at $50 per share.
Short Selling - Positions in shorted securities are speculative and 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 transactions costs, whereas there is no maximum attainable
price of the shorted security. Therefore, in theory, securities sold short have
unlimited risk. Depending on market conditions, the Fund may have difficulty
purchasing the security sold short, and could be forced to pay a premium for the
security. There can be no assurance that the Fund will be able to close out the
short position at any particular time or at an acceptable price. .Short selling
will also result in higher transaction costs (such as interest and dividends),
and may result in higher taxes, which reduce the Fund's return. The adviser does
not intend to use leverage with respect to its short positions; as a result, the
portfolio under normal circumstances will always include sufficient cash
equivalents (such as money market instruments, money market funds or repurchase
agreements) to cover its obligations to close its short positions.
Non-Principal Strategies
The investment objective of the Fund may be changed without shareholder
approval.
The Fund may rotate a portion of its assets to debt securities when the
adviser believes that the prospects for capital appreciation may be greater than
in equity securities.
From time to time, the Fund may take temporary defensive positions in
attempting to respond to adverse market, economic, political, or other
conditions. For example, the Fund may hold all or a portion of its assets in
money market instruments, including money market funds or repurchase agreements.
If the Fund invests in a money market fund, the shareholders of the Fund
generally will be subject to duplicative management fees. As a result of
engaging in these temporary measures, the Fund may not achieve its investment
objective. The Fund may also invest in money market instruments at any time to
maintain liquidity or pending selection of investments in accordance with its
policies.
HOW TO BUY SHARES
Initial Purchase
The minimum initial investment in the Fund is $1,000 ($500 for IRAs and
other qualified plans). Investors choosing to purchase or redeem their shares
through a broker/dealer or other institution may be charged a fee by that
institution. To the extent investments of individual investors are aggregated
into an omnibus account established by an investment adviser, broker or other
intermediary, the account minimums apply to the omnibus account, not to the
account of the individual investor. Account minimums may be waived for clients
of the Fund's adviser.
By Mail - To be in proper form, your initial purchase request must
include:
o a completed and signed investment application form (which accompanies
this Prospectus);
o a check made payable to the Fund;
<PAGE>
Mail the application and check to:
U.S. Mail: Chameleon Market Rotation Overnight:Chameleon Market Rotation
Fund Fund
c/o Unified Fund Services, Inc. c/o Unified Fund Services, Inc.
P.O. Box 6110 431 North Pennsylvania Street
Indianapolis, Indiana 46206-611 Indianapolis, Indiana 46204
By Wire - You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. To wire money,
you must call Unified Fund Services, Inc., the Fund's transfer agent, at
(800)-___-____to set up your account and obtain an account number. You should be
prepared at that time to provide the information on the application. Then,
provide your bank with the following information for purposes of wiring your
investment:
Firstar Bank, N.A.
ABA #0420-0001-3
Attn: Ameriprime Advisors Trust
D.D.A.# _________________
Account Name _________________ (write in shareholder name)
For the Account # ______________ (write in account number)
You must mail a signed application to Unified Fund Services, Inc., the
Fund's 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 Fund,
custodian and transfer agent are open for business. A wire purchase will not be
considered made until the wired money is received and the purchase is accepted
by the Fund. Any delays, which may occur in wiring money, including delays,
which may occur in processing by the banks, are not the responsibility of the
Fund or the Transfer agent. There is presently no fee for the receipt of wired
funds, but the Fund may charge shareholders for this service in the future.
Additional Investments
You may purchase additional shares of the Fund 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.
Distribution Plan
The Fund has adopted a plan under Rule 12b-1 that allows the Fund to
pay distribution fees for the sale and distribution of its shares and allows the
Fund to pay for services provided to shareholders. Shareholders of the Fund may
pay annual 12b-1 expenses of up to 0.25%. Because these fees are paid out of the
Fund's assets on an on-going basis, over time these fees will increase the cost
of your investment and may cost you more than paying other types of sales
charges.
Tax Sheltered Retirement Plans
Since the Fund is oriented to longer term investments, shares of the
Fund 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.
Other Purchase Information
The Fund may limit the amount of purchases and refuse to sell to any
person. If your check or wire does not clear, you will be responsible for any
loss incurred by the Fund. If you are already a shareholder, the Fund can redeem
shares from any identically registered account in the Fund as reimbursement for
any loss incurred. You may be prohibited or restricted from making future
purchases in the Fund.
HOW TO REDEEM SHARES
You may receive redemption payments in the form of a check or federal
wire transfer. Presently there is no charge for wire redemptions; however, the
Fund may charge for this service in the future. Any charges for wire redemptions
will be deducted from the shareholder's Fund account by redemption of shares. If
you redeem your shares through a broker/dealer or other institution, you may be
charged a fee by that institution.
By Mail - You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:
Ameriprime Advisors Trust
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, Indiana 46206-6110
"Proper order" means your request for a redemption must include:
o the Fund name and account number,
o account name(s) and address,
o the dollar amount or number of shares you wish to redeem.
Requests to sell shares are processed at the net asset value next
calculated after we receive your order in proper form. To be in proper order,
your request must be signed by all registered share owner(s) in the exact
name(s) and any special capacity in which they are registered. The Fund may
require that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Fund or Unified Fund Services, Inc., you
may be required to furnish additional legal documents to insure proper
authorization.
By Telephone - You may redeem any part of your account in the Fund by
calling the transfer agent at (800) ___-____. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the transfer agent and the custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The Fund may terminate the telephone redemption procedures at any time.
During periods of extreme market activity it is possible that shareholders may
encounter some difficulty in telephoning the Fund, although neither the Fund nor
the transfer agent has ever experienced difficulties in receiving and in a
timely fashion responding to telephone requests for redemptions or exchanges. If
you are unable to reach the Fund by telephone, you may request a redemption or
exchange by mail.
Additional Information - If you are not certain of the requirements for
a redemption please call the transfer agent at (800) ___-____. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen calendar days. Also, when the New York Stock
Exchange is closed (or when trading is restricted) for any reason other than its
customary weekend or holiday closing or under any emergency circumstances, as
determined by the Securities and Exchange Commission, the Fund may suspend
redemptions or postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund may require you to redeem all of your shares in the Fund on
30 days' written notice if the value of your shares in the Fund is less than
$1,000 due to redemption, or such other minimum amount as the Fund may determine
from time to time. An involuntary redemption constitutes a sale. You should
consult your tax 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 Fund.
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 Fund's assets are generally valued at their market value. If market
prices are not available, or if an event occurs after the close of the trading
market that materially affects the values, assets may be valued by the Fund's
adviser at their fair value, according to procedures approved by the Fund's
board of trustees. The Fund may own securities that are traded primarily on
foreign exchanges that trade on weekends or other days that 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
The Fund typically distributes substantially all of its net investment
income in the form of dividends and taxable capital gains to its shareholders.
These distributions are automatically reinvested in the Fund unless you request
cash distributions on your application or through a written request to the Fund.
The Fund expects that its distributions will consist primarily of capital gains.
Taxes
In general, selling or exchanging shares of the Fund and receiving
distributions (whether reinvested or taken in cash) are taxable events.
Depending on the purchase price and the sale price, you may have a gain or a
loss on any shares sold. Any tax liabilities generated by your transactions or
by receiving distributions are your responsibility. You may want to avoid making
a substantial investment when the 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 Fund will mail to you a statement setting forth
the federal income tax information for all distributions made during the
previous year. If you do not provide your taxpayer identification number, your
account will be subject to backup withholding.
The tax considerations described in this section do not apply to
tax-deferred accounts or other non-taxable entities. Because each investor's tax
circumstances are unique, please consult with your tax adviser about your
investment.
MANAGEMENT OF THE FUND
Capital Cities Asset Management Inc., 11651 Jollyville Road, Suite 200,
Austin, Texas 78759, serves as investment adviser to the Fund. Founded in 1993,
the adviser's clients consist primarily of high net worth individuals. As of
June 30, 2000, the adviser had approximately $102million under management. The
Adviser specializes in sector and style rotation. The Fund is authorized to pay
the adviser a fee equal to1.95% of its average daily net assets. Ronald E.
Rowland, Kenneth J. Landgraf, and David H. James have been primarily responsible
for the day- to- day management of the Fund since its inception.
Ronald E. Rowland is the President and Chief Executive Officer for CCAM. He
has held this position since February of 1995. Mr. Rowland's primary duties
include portfolio management . He is also the President of AllStarInvestor.com
and the Executive Publisher of all financial publications produced by that firm.
Mr. Rowland writes and edits the All Star Fund Trader and the All Star Asset
Allocator.
Kenneth J. Landgraf is the Vice President and Chief Operations Officer of
CCAM. He has held this position since March of 1996. His primary duties consist
of portfolio management and client relationships. From January of 1995 to March
of 1996, he was the Operations manager. Mr. Landgraf is also the editor of All
Star Alpha Timer for AllStarInvestor.com.
David H. James is the Head Equity Trader for CCAM. He has held this
position since October of 2000. Prior to October of 2000, he was a consultant to
CCAM beginning June of 2000. Mr. James was a self-employed investor since 1993
trading securities solely for his own account and the accounts of immediate
family members. Mr. James' trading experience includes purchases and short sales
of equities and options, using long-term, intermediate-term, and short-term
strategies.
The adviser pays all of the operating expenses of the Fund except
brokerage, taxes, borrowing costs (such as interest and dividend expense of
securities sold short), fees and expenses of non-interested person trustees,
extraordinary expenses and expenses incurred pursuant to Rule 12b-1 under the
Investment Company Act of 1940. In this regard, it should be noted that most
investment companies pay their own operating expenses directly, while the Fund's
expenses, except those specified above, are paid by the adviser. The adviser
(not the Fund) may pay certain financial institutions (which may include banks,
brokers, securities dealers and other industry professionals) a fee for
providing distribution related services and/or for performing certain
administrative servicing functions for Fund shareholders to the extent these
institutions are allowed to do so by applicable statute, rule or regulation.
<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 Fund at 800 __-____ to request free copies of the SAI and the
Fund's annual and semi-annual reports, to request other information about the
Fund and to make shareholder inquiries.
You may review and copy information about the Fund (including the SAI
and other reports) at the Securities and Exchange Commission (SEC) Public
Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090 for room hours
and operation. You may also obtain reports and other information about the Fund
on the EDGAR Database on the SEC's Internet site at http.//www.sec.gov, and
copies of this information may be obtained, after paying a duplicating fee, by
electronic request at the following e-mail address: [email protected], or by
writing the SEC's Public Reference Section of the SEC, Washington, D.C.
20549-0102.
Investment Company Act #811-09541
<PAGE>
Chameleon Market Rotation 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 Chameleon Market Rotation
Fund dated __________, 2000. A free copy of the Prospectus can be obtained by
writing the Transfer Agent at 431 North Pennsylvania Street, Indianapolis,
Indiana 46204, or by calling 1-800-998-6658.
TABLE OF CONTENTS PAGE
DESCRIPTION OF THE TRUST AND THE FUND...........................................
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS.................................................................
INVESTMENT LIMITATIONS..........................................................
THE INVESTMENT ADVISER .........................................................
TRUSTEES AND OFFICERS...........................................................
PORTFOLIO TRANSACTIONS AND BROKERAGE............................................
DISTRIBUTION PLAN ..............................................................
DETERMINATION OF SHARE PRICE....................................................
INVESTMENT PERFORMANCE..........................................................
CUSTODIAN.......................................................................
TRANSFER AGENT..................................................................
ACCOUNTANTS.....................................................................
DISTRIBUTOR.....................................................................
ADMINISTRATOR...................................................................
<PAGE>
DESCRIPTION OF THE TRUST AND THE FUND
The Chameleon Market Rotation (the "Fund") was organized as a
diversified series of AmeriPrime Advisors Trust (the "Trust") on __________,
2000. 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.
The Fund is one of a series of funds currently authorized by the Trustees. The
investment adviser to the Fund is Capital Cities Asset Management, Inc. (the
"Adviser").
The Fund does not issue share certificates. All shares are held in
non-certificate form registered on the books of the Fund and the Fund's transfer
agent for the account of the 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 will be entitled to receive as a class a
distribution out of the assets, net of the liabilities, belonging to that
series. Expenses attributable to any series are borne by that series. Any
general expenses of the Trust not readily identifiable as belonging to a
particular series are allocated by or under the direction of the Trustees in
such manner as the Trustees determine to be fair and equitable. No shareholder
is liable to further calls or to assessment by the Trust without his or her
express consent.
Prior to the public offering of the Fund, AmeriPrime Financial
Securities, Inc., 1793 Kingswood Drive, Suite 200, Southlake, Texas 76092,
purchased all of the outstanding shares of the Fund and may be deemed to control
the Fund. As the controlling shareholder, AmeriPrime Financial Securities, Inc.
could control the outcome of any proposal submitted to the shareholders for
approval, including changes to the Fund's fundamental policies or the terms of
the management agreement with the Adviser. After the public offering commences,
it is anticipated that AmeriPrime Financial Securities, Inc. will no longer
control the Fund.
For information concerning the purchase and redemption of shares of the
Fund, see "How to Buy Shares" and "How to Redeem Shares" in the Fund's
Prospectus. For a description of the methods used to determine the share price
and value of each Fund's assets, see "Determination of Net Asset Value" in the
Fund's Prospectus and this Statement of Additional Information.
<PAGE>
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a discussion of some of the investments the Fund may make
and some of the techniques they may use.
A. Equity Securities. The Fund may invest in equity securities, which
include common stock, preferred stock, rights and warrants to subscribe to or
purchase such securities, sponsored [or unsponsored] American Depository
Receipts ("ADRs"), European Depository Receipts ("EDR"), Global Depository
Receipts ("GDRs"), and convertible securities consisting of debt securities or
preferred stock that may be converted into common stock or that carry the right
to purchase common stock. Common stocks, the most familiar type, represent an
equity (ownership) interest in a corporation.
Preferred stock has a preference in liquidation (and, generally
dividends) over common stock but is subordinated in liquidation to debt. As a
general rule the market value of preferred stocks with fixed dividend rates and
no conversion rights varies inversely with interest rates and perceived credit
risk, with the price determined by the dividend rate. Some preferred stocks are
convertible into other securities, (for example, common stock) at a fixed price
and ratio or upon the occurrence of certain events. The market price of
convertible preferred stocks generally reflects an element of conversion value.
Because many preferred stocks lack a fixed maturity date, these securities
generally fluctuate substantially in value when interest rates change; such
fluctuations often exceed those of long-term bonds of the same issuer. Some
preferred stocks pay an adjustable dividend that may be based on an index,
formula, auction procedure or other dividend rate reset mechanism. In the
absence of credit deterioration, adjustable rate preferred stocks tend to have
more stable market values than fixed rate preferred stocks. All preferred stocks
are also subject to the same types of credit risks of the issuer as corporate
bonds. In addition, because preferred stock is junior to debt securities and
other obligations of an issuer, deterioration in the credit rating of the issuer
will cause greater changes in the value of a preferred stock than in a more
senior debt security with similar yield characteristics. The Adviser expects
that generally the preferred stocks in which the Fund invests will be rated at
least BBB by S&P or Baa by Moody's or, if unrated, of comparable quality in the
opinion of the Adviser.
Warrants are instruments that entitle the holder to buy underlying
equity securities at a specific price for a specific period of time. A warrant
tends to be more volatile than its underlying securities and ceases to have
value if it is not exercised prior to its expiration date. In addition, changes
in the value of a warrant do not necessarily correspond to changes in the value
of its underlying securities. Rights are similar to warrants, but normally have
shorter durations.
The Fund may invest in foreign companies by purchasing ADRs, EDRs, GDRs
[and index products like World Equity Benchmark Shares ("WEBS")]. ADRs, GDRs and
EDRs 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 foreign stock. [WEBS represent a broad
portfolio of publicly traded stocks in a selected country. Each WEBS Index
Series seeks to generate investment results that generally correspond to the
market yield performance of a given Morgan Stanley Capital International
("MSCI") index.] [The Fund will not invest in foreign companies located in
undeveloped or emerging markets.]
To the extent the Fund invests in ADRs, EDRs, GDRs [or foreign index
products], 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.
Equity securities also include SPDRs (known as "Spiders") and DIAMONDS.
SPDRs are Standard & Poor's Depositary Receipts based on the S&P 500 or S&P 400
Composite Stock Price Index or the NASDAQ 100 Price Index (NDX). The SPDR Trust
is a unit investment trust that holds shares of all the companies in the S&P
500, 400, or NDX and closely tracks the price performance and dividend yield of
the applicable Index. SPDRs trade on the American Stock Exchange under the
ticker symbol "SPY", "MDY", and "QQQ." DIAMONDS are similar to SPDRs, but own
the securities consisting of all of the stocks of the Dow Jones Industrial
Average . The Fund may also invest in exchange traded funds from a variety of
financial institutions such as Merrill Lynch (HOLDRs), Barclay's (iShares) and
Fidelity (Sector SPDRs).
B. U.S. Government Securities. The Fund may invest in securities issued or
guaranteed by the U.S. Government, -------------------------- its agencies and
instrumentalities (U.S. Government Securities"). U.S. Government Securities may
be backed by the credit of the government as a whole or only by the issuing
agency. U.S. Treasury bonds, notes, and bills and some agency securities, such
as those issued by the Federal Housing Administration and the Government
National Mortgage Association (GNMA), are backed by the full faith and credit of
the U.S. government as to payment of principal and interest and are the highest
quality government securities. Other securities issued by U.S. government
agencies or instrumentalities, such as securities issued by the Federal Home
Loan Banks and the Federal Home Loan Mortgage Corporation, are supported only by
the credit of the agency that issued them, and not by the U.S. government.
Securities issued by the Federal Farm Credit System, the Federal Land Banks, and
the Federal National Mortgage Association (FNMA) are supported by the agency's
right to borrow money from the U.S. Treasury under certain circumstances, but
are not backed by the full faith and credit of the U.S. government.
C. Debt Securities. The Fund may buy debt securities of all types and
qualities. Bonds and other debt instruments are used by issuers to borrow money
from investors. The issuer pays the investor a fixed or variable rate of
interest, and must repay the amount borrowed at maturity. Some debt securities,
such as zero coupon bonds, do not pay current interest, but are purchased at a
discount from their face values. Debt securities are generally interest rate
sensitive, which means that their volume will generally decrease when interest
rates rise and increase when interest rates fall. Debt securities, loans, and
other direct debt have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally more
sensitive to interest rate changes than short term bonds.
Corporate debt securities. Corporate debt securities are bonds or notes
issued by corporations and other business organizations, including business
trusts, in order to finance their credit needs. Corporate debt securities
include commercial paper which consist of short term (usually from one to two
hundred seventy days) unsecured promissory notes issued by corporations in order
to finance their current operations. Fixed rate corporate debt securities tend
to exhibit more price volatility during times of rising or falling interest
rates than securities with floating rates of interest. This is because floating
rate securities behave like short-term instruments in that the rate of interest
they pay is subject to periodic adjustments based on a designated interest rate
index. Fixed rate securities pay a fixed rate of interest and are more sensitive
to fluctuating interest rates. In periods of rising interest rates the value of
a fixed rate security is likely to fall. Fixed rate securities with short-term
characteristics are not subject to the same price volatility as fixed rate
securities without such characteristics. Therefore, they behave more like
floating rate securities with respect to price volatility.
Many corporate debt obligations permit the issuers to call the security
and thereby redeem their obligations earlier than the stated maturity dates.
Issuers are more likely to call bonds during periods of declining interest
rates. In these cases, if the Fund owns a bond which is called, the Fund will
receive its return of principal earlier than expected and would likely be
required to reinvest the proceeds at lower interest rates, thus reducing income
to the Fund.
Corporate zero coupon securities are: (i) notes or debentures which do
not pay current interest and are issued at substantial discounts from par value,
or (ii) notes or debentures that pay no current interest until a stated date one
or more years into the future, after which the issuer is obligated to pay
interest until maturity, usually at a higher rate than if interest were payable
from the date of issuance.
Variable rate securities. Variable rate demand notes are long term
corporate debt instruments that have variable or floating interest rates and
provide the Fund with the right to tender the security for repurchase at its
stated principal amount plus accrued interest. Such securities typically bear
interest at a rate that is intended to cause the securities to trade at par. The
interest rate may float or be adjusted at regular intervals (ranging from daily
to annually), and is normally based on an interest index or a stated percentage
of a prime rate or another published rate. Many variable rate demand notes allow
the Fund to demand the repurchase of the security on not more than seven days
prior notice. Other notes only permit the Fund to tender the security at the
time of each interest rate adjustment or at other fixed intervals.
Floating rate securities. Floating rate securities are debt securities
with interest payments or maturity values that are not fixed, but float
inversely to an underlying index or price. These securities may be backed by
U.S. Government or corporate issuers, or by collateral such as mortgages. In
certain cases, a change in the underlying index or price may have a leveraging
effect on the periodic coupon payments, creating larger possible swings in the
prices of such securities than would be expected when taking into account their
maturities alone. The indices and prices upon which such securities can be based
include interest rates, currency rates and commodities prices.
Floating rate securities pay interest according to a coupon which is
reset periodically. The reset mechanism may be formula based, or reflect the
passing through of floating interest payments on an underlying collateral pool.
The coupon is usually reset daily, weekly, monthly, quarterly or semi-annually,
but other schedules are possible. Floating rate obligations generally exhibit a
low price volatility for a given stated maturity or average life because their
coupons adjust with changes in interest rates. If their underlying index is not
an interest rate, or the reset mechanism lags the movement of rates in the
current market, greater price volatility may be experienced.
Inverse floating rate securities. Inverse floating rate securities are
similar to floating rate securities except that their coupon payments vary
inversely with an underlying index by use of a formula. Inverse floating rate
securities tend to exhibit greater price volatility than other floating rate
securities. Because the changes in the coupon are usually negatively correlated
with changes in overall interest rates, interest rate risk and price volatility
on inverse floating rate obligations can be high, especially if leverage is used
in the formula. Index securities pay a fixed rate of interest, but have a
maturity value that varies by formula, so that when the obligation matures, a
gain or loss is realized. The risk of index obligations depends on the
volatility of the underlying index, the coupon payment and the maturity of the
obligation.
Lower quality debt securities. Lower quality debt securities (commonly
called "junk bonds") often are considered to be speculative and involve greater
risk of default or price change due to changes in the issuer's creditworthiness
or changes in economic conditions. The market prices of these securities will
fluctuate over time, may fluctuate more than higher quality securities and may
decline significantly in periods of general economic difficulty, which may
follow periods of rising interest rates. The market for lower quality securities
may be less liquid than the market for securities of higher quality.
Furthermore, the liquidity of lower quality securities may be affected by the
market's perception of their credit quality. Therefore, judgment may at times
play a greater role in valuing these securities than in the case of higher
quality securities, and it also may be more difficult during certain adverse
market conditions to sell lower quality securities at their fair value to meet
redemption requests or to respond to changes in the market.
Lower quality securities present risks based on payment expectations.
For example, high yield bonds may contain redemption or call provisions. If an
issuer exercises the provisions in a declining interest rate market, the Fund
would have to replace the security with a lower yielding security, resulting in
a decreased return for investors. Conversely, a high yield bond's value will
decrease in a rising interest rate market, as will the value of the Fund's
assets. If the Fund experiences unexpected net redemptions, this may force it to
sell its high yield bonds, without regard to their investment merits, thereby
decreasing the asset base upon which the Fund's expenses can be spread and
possibly reducing the Fund's rate of return.
Since the risk of default is higher for lower quality securities and
sometimes increases with the age of these securities, the Advisor's research and
credit analysis are an integral part of managing any securities of this type
held by the Fund. In considering investments for the Fund, the Advisor attempts
to identify those issuers of high-yielding securities whose financial condition
is adequate to meet future obligations, has improved or is expected to improve
in the future. The Advisor's analysis focuses on relative values based on such
factors as interest or dividend coverage, asset coverage, earning prospects, and
the experience and managerial strength of the issuer.
Municipal Securities. Municipal securities are generally issued to
finance public works, such as airports, bridges, highways, housing, hospitals,
mass transportation projects, schools, streets, and water and sewer works. They
are also issued to repay outstanding obligations, to raise funds for general
operating expenses, and to make loans to other public institutions and
facilities.
The two principal classifications of municipal securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. Interest on and principal of revenue bonds, however, are
payable only from the revenue generated by the facility financed by the bond or
other specified sources of revenue. Revenue bonds do not represent a pledge of
credit or create any debt of or charge against the general revenues of a
municipality or public authority.
Municipal securities may carry fixed or floating rates of interest.
Most municipal securities pay interest in arrears on a semiannual or more
frequent basis. However, certain securities, typically known as capital
appreciation bonds or zero coupon bonds, do not provide for any interest
payments prior to maturity. Such securities are normally sold at a discount from
their stated value, or provide for periodic increases in their stated value to
reflect a compounded interest rate. The market value of these securities is also
more sensitive to changes in market interest rates than securities that provide
for current interest payments.
Municipal securities in the form of notes generally are used to provide
for short-term capital needs, in anticipation of an issuer's receipt of other
revenues or financing, and typically have maturities of up to three years. Such
instruments may include Tax Anticipation Notes, Revenue Anticipation Notes, Bond
Anticipation Notes, Tax and Revenue Anticipation Notes and Construction Loan
Notes. The obligations of an issuer of municipal notes are generally secured by
the anticipated revenues from taxes, grants or bond financing. An investment in
such instruments, however, presents a risk that the anticipated revenues will
not be received or that such revenues will be insufficient to satisfy the
issuer's payment obligations under the notes or that refinancing will be
otherwise unavailable.
Mortgage-Backed Securities. The Fund may invest in mortgage-backed
securities. These securities represent participation interests in pools of
one-to-four family residential mortgage loans originated by private mortgage
originators. Traditionally, residential mortgage-backed securities have been
issued by governmental agencies such as Fannie Mae, Freddie Mac and Ginnie Mae.
Non-governmental entities that have issued or sponsored residential
mortgage-backed securities offerings include savings and loan associations,
mortgage banks, insurance companies, investment banks and special purpose
subsidiaries of the foregoing.
While residential loans do not typically have prepayment penalties or
restrictions, they are often structured so that subordinated classes may be
locked out of prepayments for a period of time. However, in a period of
extremely rapid prepayments, during which senior classes may be retired faster
than expected, the subordinated classes may receive unscheduled payments of
principal and would have average lives that, while longer than the average lives
of the senior classes, would be shorter than originally expected. The types of
residential mortgage-backed securities which the Fund may invest in may include
the following:
Guaranteed Mortgage Pass-Through Securities. Each Fund may invest in
mortgage pass-through securities representing participation interests in pools
of residential mortgage loans originated by the U.S. government and guaranteed,
to the extent provided in such securities, by the U.S. government or one of its
agencies or instrumentalities. Such securities, which are ownership interests in
the underlying mortgage loans, differ from conventional debt securities, which
provide for periodic payment of interest in fixed amounts (usually
semi-annually) and principal payments at maturity or on specified call dates.
Mortgage pass-through securities provide for monthly payments that are a
"pass-through" of the monthly interest and principal payments (including any
prepayments) made by the individual borrowers on the pooled mortgage loans, net
of any fees paid to the guarantor of such securities and the servicer of the
underlying mortgage loans. The guaranteed mortgage pass-through securities in
which the Fund will invest are those issued or guaranteed by Ginnie Mae, Fannie
Mae and Freddie Mac.
Ginnie Mae Certificates. Ginnie Mae is a wholly-owned corporate
instrumentality of the United States Government within the Department of Housing
and Urban Development. The National Housing Act of 1934, as amended (the
"Housing Act"), authorizes Ginnie Mae to guarantee the timely payment of the
principal of and interest on certificates that are based on and backed by a pool
of mortgage loans insured by the Federal Housing Administration under the
Housing Act, or Title V of the Housing Act of 1949 ("FHA Loans"), or guaranteed
by the Veterans' Administration under the Servicemen's Readjustment Act of 1944,
as amended ("VA Loans"), or by pools of other eligible mortgage loans. The
Housing Act provides that the full faith and credit of the U.S. government is
pledged to the payment of all amounts that may be required to be paid under any
guarantee. In order to meet its obligations under such guarantee, Ginnie Mae is
authorized to borrow from the U.S. Treasury with no limitations as to amount.
The Ginnie Mae Certificates will represent a pro rata interest in one
or more pools of the following types of mortgage loans: (i) fixed rate level
payment mortgage loans; (ii) fixed rate graduated payment mortgage loans; (iii)
fixed rate growing equity mortgage loans; (iv) fixed rate mortgage loans secured
by manufactured (mobile) homes; (v) mortgage loans on multifamily residential
properties under construction; (vi) mortgage loans on completed multifamily
projects; (vii) fixed rate mortgage loans as to which escrowed funds are used to
reduce the borrower's monthly payments during the early years of the mortgage
loans ("buydown" mortgage loans); (viii) mortgage loans that provide for
adjustments in payments based on periodic changes in interest rates or in other
payment terms of the mortgage loans; and (ix) mortgage-backed serial notes. All
of these mortgage loans will be FHA Loans or VA Loans and, except as otherwise
specified above, will be fully-amortizing loans secured by first liens on
one-to-four family housing units.
Fannie Mae Certificates. Fannie Mae is a federally chartered and
privately owned corporation organized and existing under the Federal National
Mortgage Association Charter Act. Fannie Mae was originally established in 1938
as a U.S. government agency to provide supplemental liquidity to the mortgage
market and was transformed into a stockholder owned and privately managed
corporation by legislation enacted in 1968. Fannie Mae provides funds to the
mortgage market primarily by purchasing home mortgage loans from local lenders,
thereby replenishing their funds for additional lending. Fannie Mae acquires
funds to purchase home mortgage loans from many capital market investors that
may not ordinarily invest in mortgage loans directly, thereby expanding the
total amount of funds available for housing.
Each Fannie Mae Certificate entitles the registered holder thereof to
receive amounts representing such holder's pro rata interest in scheduled
principal payments and interest payments (at such Fannie Mae Certificate's
pass-through rate, which is net of any servicing and guarantee fees on the
underlying mortgage loans), and any principal prepayments on the mortgage loans
in the pool represented by such Fannie Mae Certificate and such holder's
proportionate interest in the full principal amount of any foreclosed or
otherwise finally liquidated mortgage loan. The full and timely payment of
principal of and interest on each Fannie Mae Certificate will be guaranteed by
Fannie Mae, which guarantee is not backed by the full faith and credit of the
U.S. government.
Each Fannie Mae Certificate will represent a pro rata interest in one
or more pools of FHA Loans, VA Loans or conventional mortgage loans (i.e.,
Mortgage Loans that are not insured or guaranteed by any governmental agency) of
the following types; (i) fixed rate level payment mortgage loans; (ii) fixed
rate growing equity mortgage loans; (iii) fixed rate graduated payment mortgage
loans; (iv) variable rate California mortgage loans; (v) other adjustable rate
mortgage loans; and (vi) fixed rate mortgage loans secured by multifamily
projects.
Freddie Mac Certificates. Freddie Mac is a corporate instrumentality of
the United States Government created pursuant to the Emergency Home Finance Act
of 1970, as amended (the "FHLMC Act"). Freddie Mac was established primarily for
the purpose of increasing the availability of mortgage credit for the financing
of needed housing. The principal activity of Freddie Mac currently consists of
the purchase of first lien, conventional, residential mortgage loans and
participation interests in such mortgage loans and the resale of the mortgage
loans so purchased in the form of mortgage securities, primarily Freddie Mac
Certificates.
Freddie Mac guarantees to each registered holder of a Freddie Mac
Certificate the timely payment of interest at the rate provided for by such
Freddie Mac Certificate, whether or not received. Freddie Mac also guarantees to
each registered holder of a Freddie Mac Certificate ultimate collection of all
principal of the related mortgage loans, without any offset or deduction, but
does not generally guarantee the timely payment of scheduled principal. Freddie
Mac may remit the amount due on account of its guarantee of collection of
principal at any time after default on an underlying mortgage loan, but not
later than 30 days following (i) foreclosure sale, (ii) payment of a claim by
any mortgage insurer, or (iii) the expiration of any right of redemption,
whichever occurs later, but in any event no later than one year after demand has
been made upon the mortgagor for acceleration of payment of principal. The
obligations of Freddie Mac under its guarantee are obligations solely of Freddie
Mac and are not backed by the full faith and credit of the U.S. government.
Freddie Mac Certificates represent a pro rata interest in a group of
mortgage loans (a "Freddie Mac Certificate group") purchased by Freddie Mac. The
mortgage loans underlying the Freddie Mac Certificates will consist of fixed
rate or adjustable rate mortgage loans with original terms to maturity of
between ten and thirty years, substantially all of which are secured by first
liens on one-to-four family residential properties or multifamily projects. Each
mortgage loan must meet the applicable standards set forth in the FHLMC Act. A
Freddie Mac Certificate group may include whole loans, participation interests
in whole loans and undivided interests in whole loans and participations
comprising another Freddie Mac Certificate group.
Private Mortgage Pass-Through Securities. Private mortgage pass-through
securities ("Private Pass-Throughs") are structured similarly to the Ginnie Mae,
Fannie Mae and Freddie Mac mortgage pass-through securities described above and
are issued by originators of and investors in mortgage loans, including savings
and loan associations, mortgage banks, commercial banks, investment banks and
special purpose subsidiaries of the foregoing. Private Pass-Throughs are usually
backed by a pool of conventional fixed rate or adjustable rate mortgage loans.
Since Private Pass-Throughs typically are not guaranteed by an entity
having the credit status of Ginnie Mae, Fannie Mae or Freddie Mac, such
securities generally are structured with one or more types of credit
enhancement.
Collateralized Mortgage Obligations. Collateralized mortgage
obligations or "CMOs" are debt obligations collateralized by mortgage loans or
mortgage pass-through securities. Typically, CMOs are collateralized by Ginnie
Mae, Fannie Mae or Freddie Mac Certificates, but also may be collateralized by
whole loans or Private Pass-Throughs (such collateral collectively hereinafter
referred to as "Mortgage Assets").
Stripped Mortgage-Backed Securities. Multi-class pass-through
securities are equity interests in a fund composed of Mortgage Assets. Unless
the context indicates otherwise, all references herein to CMOs include
multi-class pass-through securities. Payments of principal of and interest on
the Mortgage Assets, and any reinvestment income thereon, provide the funds to
pay debt service on the CMOs or make scheduled distributions on the multi-class
pass-through securities. CMOs may be sponsored by agencies or instrumentalities
of the U.S. Government, or by private originators of, or investors in, mortgage
loans, including savings and loan associations, mortgage banks, commercial
banks, investment banks and special purpose subsidiaries of the foregoing. Under
current law, every newly created CMO issuer must elect to be treated for federal
income tax purposes as a Real Estate Mortgage Investment Conduit (a "REMIC").
In a CMO, a series of bonds or certificates is issued in multiple
classes. Each class of CMOs, often referred to as a "tranche", is issued at a
specific fixed or floating coupon rate and has a stated maturity or final
distribution date. Principal prepayments on the Mortgage Assets may cause the
CMOs to be retired substantially earlier than their stated maturities or final
distribution dates. Interest is paid or accrues on all classes of the CMOs on a
monthly, quarterly or semi-annual basis. The principal of and interest on the
Mortgage Assets may be allocated among the several classes of a series of a CMO
in innumerable ways. In one structure, payments of principal, including any
principal prepayments, on the Mortgage Assets are applied to the classes of a
CMO in the order of their respective stated maturities or final distribution
dates, so that no payment of principal will be made on any class of CMOs until
all other classes having an earlier stated maturity or final distribution date
have been paid in full.
The Fund may also invest in, among others, parallel pay CMOs and
Planned Amortization Class CMOs ("PAC Bonds"). Parallel pay CMOs are structured
to provide payments of principal on each payment date to more than one class.
These simultaneous payments are taken into account in calculating the stated
maturity date or final distribution date of each class, which, as with other CMO
structures, must be retired by its payments of a specified amount of principal
on each payment date.
Zero Coupon Securities. The Fund may invest in zero coupon
securities which are debt securities issued or sold at a discount from their
face value which do not entitle the holder to any periodic payment of interest
prior to maturity or a specified redemption date (or cash payment date). These
involve risks that are similar to those of other debt securities, although they
may be more volatile, and certain zero coupon securities move in the same
direction as interest rates. The amount of the discount varies depending on the
time remaining until maturity or cash payment date, prevailing interest rates,
liquidity of the security and perceived credit quality of the issuer. Zero
coupon securities also may take the form of debt securities that have been
stripped of their unmatured interest coupons, the coupons themselves and
receipts or certificates representing interests in such stripped debt
obligations and coupons. The market prices of zero coupon securities generally
are more volatile than the market prices of interest-bearing securities and are
likely to respond to a greater degree to changes in interest rates than
interest-bearing securities having similar maturities and credit qualities.
STRIPS. The Fund may invest in STRIPs (Separate Trading of
Registered Interest and Principal of Securities). The Federal Reserve creates
STRIPS by separating the coupon payments and the principal payment from an
outstanding Treasury security and selling them as individual securities. To the
extent the Fund purchases the principal portion of the STRIP, the Fund will not
receive regular interest payments. Instead they are sold at a deep discount from
their face value. The Fund will accrue income on such STRIPS for tax and
accounting purposes, in accordance with applicable law, which income is
distributable to shareholders. Because no cash is received at the time such
income is accrued, the Fund may be required to liquidate other portfolio
securities to satisfy its distribution obligations. Because the principal
portion of the STRIP does not pay current income, its price can be very volatile
when interest rates change. In calculating its dividend, the Fund takes into
account as income a portion of the difference between the principal portion of
the STRIP's purchase price and its face value.
I. Financial Services Industry Obligations. The Fund may invest up to 5% of
its net assets in each of the --------------------------------------- following
obligations of the financial services industry:
(1) Certificate of Deposit. Certificates of deposit are negotiable certificates
evidencing the indebtedness of a commercial bank or a savings and loan
association to repay funds deposited with it for a definite period of time
(usually from fourteen days to one year) at a stated or variable interest
rate.
(2) Time Deposits. Time deposits are non-negotiable deposits maintained in a
banking institution or a ------------- savings and loan association for a
specified period of time at a stated interest rate.
(3) Bankers' Acceptances. Bankers' acceptances are credit instruments
evidencing the obligation of a bank to pay a draft which has been drawn on
it by a customer, which instruments reflect the obligation both of the bank
and of the drawer to pay the face amount of the instrument upon maturity.
D. Repurchase Agreements. The Fund may invest in repurchase agreements
fully collateralized by U.S. Government obligations. A repurchase agreement is a
short term investment in which the purchaser (i.e., the Fund) acquires ownership
of 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 the Fund engages will require full collateralization of the seller's
obligation during the entire term of the repurchase agreement. In the event of a
bankruptcy or other default of the seller, the Fund could experience both delays
in liquidating the underlying security and losses in value. However, the Fund
intends to enter into repurchase agreements only with Firstar, N.A. (the Fund's
Custodian), other banks with assets of $1 billion or more and registered
securities dealers determined by the Advisor to be creditworthy. The Advisor
monitors the creditworthiness of the banks and securities dealers with which the
Fund engages in repurchase transactions.
E. Illiquid Securities. The portfolio of the Fund may contain illiquid
securities. Illiquid securities generally include securities which cannot be
disposed of promptly and in the ordinary course of business without taking a
reduced price. Securities may be illiquid due to contractual or legal
restrictions on resale or lack of a ready market. The following securities are
considered to be illiquid: repurchase agreements and reverse repurchase
agreements maturing in more than seven days, nonpublicly offered securities and
some restricted securities. Restricted securities are securities the resale of
which is subject to legal or contractual restrictions. Restricted securities may
be sold only in privately negotiated transactions, in a public offering with
respect to which a registration statement is in effect under the Securities Act
of 1933 or pursuant to Rule 144 or Rule 144A promulgated under such Act. Where
registration is required, the Fund may be obligated to pay all or part of the
registration expense, and a considerable period may elapse between the time of
the decision to sell and the time such security may be sold under an effective
registration statement. If during such a period adverse market conditions were
to develop, the Fund might obtain a less favorable price than the price it could
have obtained when it decided to sell. The Fund will not invest more than 15% of
its net assets in illiquid securities.
With respect to Rule 144A securities, these restricted securities are
treated as exempt from the 15% limit on illiquid securities, provided that a
dealer or institutional trading market in such securities exists. Under the
supervision of the Board of Trustees of the Fund, the Adviser determines the
liquidity of restricted securities and, through reports from the Adviser, the
Board will monitor trading activity in restricted securities. If institutional
trading in restricted securities were to decline, the liquidity of the Fund
could be adversely affected.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
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 Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund have an asset coverage
of 300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. Senior Securities. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is consistent with or permitted by the Investment
Company Act of 1940, as amended, the rules and regulations promulgated
thereunder or interpretations of the Securities and Exchange Commission or its
staff.
3. Underwriting. The Fund will not act as underwriter of securities issued
by other persons. This ------------ limitation is not applicable to the extent
that, in connection with the disposition of portfolio securities (including
restricted securities), the Fund may be deemed an underwriter under certain
federal securities laws.
4. Real Estate. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. Commodities. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. Loans. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. The Fund will not invest 25% or more of its total assets
in a particular industry, or in ------------- any investment company that
concentrates in a particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
Non-Fundamental. The following limitations have been adopted by the
Trust with respect to the Fund and are Non-Fundamental (see "Investment
Restrictions" above).
1. Pledging. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
2. Borrowing. The Fund will not purchase any security while borrowings
(including reverse repurchase --------- agreements) representing more than one
third of its total assets are outstanding.
3. Margin Purchases. The Fund will not purchase securities or evidences
of interest thereon on "margin." This limitation is not applicable to short term
credit obtained by the Fund for the clearance of purchases and sales or
redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
4. Options. The Fund will not purchase or sell puts, calls, options or
straddles, except as described in the ------- Fund's Prospectus or Statement of
Additional Information.
5. Illiquid Investments. The Fund will not invest more than 15% of its net
assets in illiquid securities.
6. Short Sales. The Fund will not effect short sales of securities except
as described in the Fund's ----------- Prospectus or Statement of Additional
Information.
THE INVESTMENT ADVISER
The Fund's investment adviser is Capital Cities Asset Management, Inc.,
11651 Jollyville Road, Suite 200, Austin, TX 78759. Ronald E. Rowland may be
deemed to control the Adviser due to his share of the ownership of the Adviser.
Under the terms of the management agreement (the "Agreement"), the
adviser manages the Fund's investments subject to approval of the Board of
Trustees and pays all of the expenses of the Fund except brokerage, taxes,
borrowing cost (such as (a) interest and (b) dividend expense on securities sold
short), fees and expenses of the non-interested person trustees, 12b-1 expenses
and extraordinary expenses. As compensation for its management services, the
Fund is obligated to pay the Adviser a fee computed and accrued daily and paid
monthly at an annual rate of 1.95% of the average daily net assets of the Fund.
The Adviser retains the right to use the name "Chameleon" 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 "Chameleon"
automatically ceases ninety days after termination of the Agreement and may be
withdrawn by the adviser on ninety days written notice.
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 may charge their
customers fees for offering these services to the extent permitted by applicable
regulatory authorities, and the overall return to those shareholders availing
themselves of the bank services will be lower than to those shareholders who do
not. The Fund may from time to time purchase securities issued by banks which
provide such services; however, in selecting investments for the Fund, no
preference will be shown for such securities.
<PAGE>
TRUSTEES AND OFFICERS
The Board of Trustees supervises the business activities of the Trust.
The names of the Trustees and executive officers of the Trust are shown below.
Each Trustee who is an "interested person" of the Trust, as defined in the
Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<S> <C> <C>
==================================== ================ ======================================================================
Name, Age and Address Position Principal Occupations During Past 5 Years
------------------------------------ ---------------- ----------------------------------------------------------------------
*Kenneth D. Trumpfheller President, President, Treasurer and Secretary of AmeriPrime Financial Services,
1793 Kingswood Drive Secretary and Inc., the Fund's administrator, and AmeriPrime Financial Securities,
Suite 200 Trustee Inc., the Fund's distributor, since 1994. President, Secretary and
Southlake, Texas 76092 Trustee of AmeriPrime Funds and AmeriPrime Insurance Trust. Prior
Year of Birth: 1958 to December, 1994, a senior client executive with SEI Financial
Services.
------------------------------------ ---------------- ----------------------------------------------------------------------
*Robert A. Chopyak Treasurer and Manager of AmeriPrime Financial Services, Inc., the Fund's
------------------------------------ ---------------- ----------------------------------------------------------------------
Mark W. Muller Trustee Account Manager for Clarion Technologies, a manufacturer of
------------------------------------ ---------------- ----------------------------------------------------------------------
Richard J. Wright, Jr. Trustee Various positions with Texas Instruments, a technology company,
8505 Forest Lane since 1995, including the following: Program Manager for
MS 8672 Semi-Conductor Business Opportunity Management System, 1998 to
Dallas, Texas 75243 present; Development Manager for web-based interface, 1999 to
Year of Birth: 1962 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.
======================== ======================= =============================
Aggregate Total Compensation
Compensation from Trust (the Trust is
Name From Trust not in a Fund Complex)
------------------------ ----------------------- -----------------------------
Kenneth D. Trumpfheller 0 0
------------------------ ----------------------- -----------------------------
Mark W. Muller $_____ $_____
------------------------ ----------------------- -----------------------------
Richard J. Wright $_____ $_____
======================== ======================= =============================
<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Adviser is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In placing portfolio transactions, the
Adviser seeks the best qualitative execution for the Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The 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 Fund 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 Fund effects securities
transactions may also be used by the Adviser 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
Fund. Although research services and other information are useful to the Fund
and the Adviser, 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 Fund
under the Agreement.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
When the Fund and another of the Adviser's clients seek to purchase or
sell the same security at or about the same time, the Adviser may execute the
transaction on a combined ("blocked") basis. Blocked transactions can produce
better execution for the Fund because of the increased volume of the
transaction. If the entire blocked order is not filled, the Fund may not be able
to acquire as large a position in such security as it desires, or it may have to
pay a higher price for the security. Similarly, the Fund may not be able to
obtain as large an execution of an order to sell, or as high a price for any
particular portfolio security, if the other client desires to sell the same
portfolio security at the same time. In the event that the entire blocked order
is not filled, the purchase or sale will normally be allocated on a pro rata
basis. Blocked transactions may also occur between the Fund and employees of the
Adviser; however in the event that the entire blocked order is not filled, the
purchase or sale of the Fund will have priority over the purchase or sale of
employees of the Adviser.
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 require preclearance when acquiring any securities in an initial public
offering and provides for trading "blackout periods" which generally 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).
DISTRIBUTION PLAN
The Fund has adopted a plan pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the "Plan"), however the Trustees have not yet authorized
the implementation of the Plan. If implemented, the Plan will permit the Fund to
pay for certain distribution and promotion expenses related to marketing shares
of the Fund. The amount payable annually by the Fund is 0.25% of its average
daily net assets.
Under the Plan, the Trust may engage in any activities related to the
distribution of Fund shares, including without limitation the following: (a)
payments, including incentive compensation, to securities dealers or other
financial intermediaries, financial institutions, investment advisors and others
that are engaged in the sale of shares of the Fund, or that may be advising
shareholders of the Trust regarding the purchase, sale or retention of shares of
the Fund; (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 of the Fund; (c) costs of
preparing, printing and distributing prospectuses and statements of additional
information and reports of the Fund for recipients other than existing
shareholders of the Fund; (d) costs of formulating and implementing marketing
and promotional activities, including, but not limited to, 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, from time to
time, deem advisable; and (g) costs of implementing and operating this Plan. The
Fund does not participate in any joint distribution activities with other mutual
funds.
The Trustees expect that the Plan could significantly enhance the
Fund's ability to expand distribution of shares of the Fund. It is also
anticipated that an increase in the size of the Fund will facilitate more
efficient portfolio management and assist the Fund in seeking to achieve its
investment objective.
The Plan has been approved by the Fund's Board of Trustees, including a
majority of the Trustees who are not "interested persons" of the Fund and who
have no direct or indirect financial interest in the Plan or any related
agreement, by a vote cast in person. Continuation of the Plan and the related
agreements must be approved by the Trustees annually, in the same manner, and
the Plan or any related agreement may be terminated at any time without penalty
by a majority of such independent Trustees or by a majority of the outstanding
shares of the applicable class. Any amendment increasing the maximum percentage
payable under the Plan or other material change must be approved by a majority
of the outstanding shares of the Fund, and all other material amendments to the
Plan or any related agreement must be approved by a majority of the independent
Trustees.
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of the 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 the 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
The 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 the 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.
The 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.
The Fund's investment performance will vary depending upon market
conditions, the composition of the 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 the Fund's performance to those of other investment
companies or investment vehicles. The risks associated with the Fund's
investment objective, policies and techniques should also be considered. At any
time in the future, investment performance may be higher or lower than past
performance, and there can be no assurance that any performance will continue.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. 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 the Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of the Fund. Performance rankings and ratings
reported periodically in national financial publications such as Barron's and
Fortune also may be used.
CUSTODIAN
Firstar Bank, N.A., 425 Walnut Street M.L 6118, Cincinnati, Ohio 45202,
is custodian of the Fund's investments. The custodian acts as the Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
TRANSFER AGENT
Unified Fund Services, Inc. ("Unified"), 431 North Pennsylvania Street,
Indianapolis, Indiana 46204, acts as the Fund's transfer agent and, in such
capacity, maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution disbursing
agent and performs other transfer agent 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 the Fund with fund accounting services, which
includes certain monthly reports, record-keeping and other management-related
services. For its services as fund accountant, Unified receives an annual fee
from the Adviser equal to 0.0275% of the Fund's assets up to $100 million,
0.0250% of the Fund's assets from $100 million to $300 million and 0.020% of the
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 Fund for the first fiscal year. McCurdy & Associates performs an annual
audit of the Fund's financial statements and provides financial, tax and
accounting consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the exclusive agent for distribution of shares of the
Fund. Kenneth D. Trumpfheller, a Trustee and officer of the Trust, is an
affiliate of the Distributor. The Distributor is obligated to sell the shares of
the Fund on a best efforts basis only against purchase orders for the shares.
Shares of the Fund are offered to the public on a continuous basis.
ADMINISTRATOR
The Fund retains AmeriPrime Financial Services, Inc., 1793 Kingswood
Drive, Suite 200, Southlake, TX 76092, (the "Administrator") to manage the
Fund's business affairs and provide the Fund with administrative services,
including all regulatory reporting and necessary office equipment, personnel and
facilities. The Administrator receives a monthly fee from the Adviser equal to
an annual average rate of 0.10% of the Fund's average daily net assets up to
fifty million dollars, 0.075% of the Fund's average daily net assets from fifty
to one hundred million dollars and 0.050% of the Fund's average daily net assets
over one hundred million dollars. The Administrator, the Distributor, and
Unified (the Fund's transfer agent) are controlled by Unified Financial
Services, Inc.
<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,
which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 12,
is hereby incorporated by reference.
(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, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 12, is hereby incorporated by
reference.
(xv) Registrant's Management Agreement with Paragon Capital Management,
Inc. for the Paragon Strategic Accent Fund (formerly the Paragon Dynamic Hedge
Fund), which was filed as an Exhibit to Registrant's Post-Effective Amendment
No. 12, is hereby incorporated by reference.
(xvi) Registrant's Proposed Management Agreement with Paragon Capital
Management, Inc. for the Paragon Dynamic Fortress Fund (formerly the Paragon
Uncorrelated Return Fund), which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 12, is hereby incorporated by reference.
(xvii) Registrant's Management Agreement with Riccardi Group LLC for the
Master High Yield Income Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 12, is hereby incorporated by reference.
(xviii) Registrant's Proposed Management Agreement with InteractiveFunds
Investment Advisory Services LLC for the MutualMinds.com Diversified Growth
Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No.
12, is hereby incorporated by reference.
(xix) Registrant's Proposed Management Agreement with InteractiveFunds
Investment Advisory Services LLC for the MutualMinds.com Small Cap Growth Fund,
which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 12,
is hereby incorporated by reference.
(xx) Registrant's Proposed Management Agreement with InteractiveFunds Investment
Advisory Services LLC for the MutualMinds.com New Economy Fund, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 12, is hereby
incorporated by reference.
(xxi) Registrant's Proposed Management Agreement with Capital Cities Asset
Management, Inc. for the Chameleon Market Rotation 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, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 12, is hereby incorporated
by reference.
(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, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 12, is hereby incorporated
by reference.
(h) Other Material Contracts. None.
(i) Legal Opinion.
(i) Opinion and 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,
which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 12,
is hereby incorporated by reference.
(iv) Registrant's Rule 12b-1 Distribution Plan for the Chameleon Market
Rotation Fund will be supplied.
(n) Rule 18f-3 Plan. None.
(o) Reserved.
(p) Codes of Ethics. Copy of Registrant's Code of Ethics, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 12, is hereby
incorporated by reference.
(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, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 12, is hereby incorporated by
reference.
Item 24. Persons Controlled by or Under Common Control with the Funds
As of October 1, 2000, First Union National Bank, Trustee, owned 40.62% of the
StoneRidge Small-Cap Equity Fund, 38.86% of the StoneRidge Equity Fund and
82.77% 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 October 1, 2000, First Farmers and Merchant National Bank, Trustee, owned
100% of the Monteagle Large Cap Fund, the Monteagle Value Fund, and the
Monteagle Fixed Income Fund and 99.99% 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 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 ofAExpert 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, is 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 Interactive
is incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (801-59750).
(k) Capital Cities Asset Management, Inc. ("Capital Cities"), 11651
Jollyville Road, Suite 200, Austin, TX 78759, adviser to the Chameleon Market
Rotation Fund, is a registered investment adviser.
(i) Capital Cities has engaged in no other business during the past two
fiscal years.
(ii) Information with respect to each officer and director of Capital
Cities is incorporated by reference to Schedule D of Form ADV filed by it under
the Investment Advisers Act (801-45494).
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 12TH day of
______
October, 2000.
AmeriPrime Advisors Trust
By:_____/s/______________
Donald S. Mendelsoh,
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,* October 12, 2000
Trustee ________________
Mark Muller,*
Trustee
Robert A. Chopyak*
Treasurer and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
1. Proposed Management Agreement for Chameleon Market
Rotation Fund..................................................EX-99.23.d.xxi
2. Opinion and consent of Counsel.....................................EX-99.23.i
3. Consent of Accountant..............................................EX-99.23.j
