-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V8WrvW5soNbYcrZwJOT6iL+65i4d7W+v2LMMSuj9hfXoKFx6zzQZ5ZzYZMGnkihh FAy8yDPVFyEZZGeEh0jEHg== 0001000579-00-000023.txt : 20000308 0001000579-00-000023.hdr.sgml : 20000308 ACCESSION NUMBER: 0001000579-00-000023 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20000307 EFFECTIVENESS DATE: 20000307 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERIPRIME FUNDS CENTRAL INDEX KEY: 0001000579 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 752616671 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 033-96826 FILM NUMBER: 562725 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 811-09096 FILM NUMBER: 562726 BUSINESS ADDRESS: STREET 1: 1793 KINGSWOOD DR STREET 2: STE 200 CITY: SOUTHLAKE STATE: TX ZIP: 76092 BUSINESS PHONE: 8174311297 MAIL ADDRESS: STREET 1: 1793 KINGSWOOD DRIVE STREET 2: SUITE 200 CITY: SOUTHLAKE STATE: TX ZIP: 76092 485BPOS 1 PEA 40 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. 40 /X/ ------ --- and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / / --- Amendment No. 41 /X / ------ -- (Check appropriate box or boxes.) AMERIPRIME FUNDS - FILE NOS. 33-96826 AND 811-9096 1793 KINGSWOOD DRIVE, SUITE 200, SOUTHLAKE, TEXAS 76092 (Address of Principal Executive Offices) Zip Code Registrant's Telephone Number, including Area Code: (817) 431-2197 -------------- KENNETH TRUMPFHELLER, 1793 KINGSWOOD DR., SUITE 200, SOUTHLAKE, TX 76092 - ------------------------------------------------------------------------- (Name and Address of Agent for Service) With copy to: Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A. 3500 Carew Tower, Cincinnati, Ohio 45202 Approximate Date of Proposed Public Offering: It is proposed that this filing will become effective: /X/ immediately upon filing pursuant to paragraph (b) / / on ___________ pursuant to paragraph (b) / / 60 days after filing pursuant to paragraph (a)(1) / / on (date) pursuant to paragraph (a)(1) / / 75 days after filing pursuant to paragraph (a)(2) / / on (date) pursuant to paragraph (a)(2) of Rule 485 If appropriate, check the following box: / / this post-effective amendment designates a new effective date for a previously filed post-effective amendment. 7982 ARISTON CONVERTIBLE SECURITIES FUND PROSPECTUS MARCH __, 2000 INVESTMENT OBJECTIVE: Total return 40 Lake Bellevue Drive, Suite 220 Bellevue, Washington 98005 For Information, Shareholder Services and Requests: Toll Free (888)-387-2273 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. 10272 TABLE OF CONTENTS PAGE ABOUT THE FUND.................................................................. FEES AND EXPENSES OF INVESTING IN THE FUND...................................... HOW TO BUY SHARES............................................................... HOW TO REDEEM SHARES............................................................ DETERMINATION OF NET ASSET VALUE................................................ DIVIDENDS, DISTRIBUTIONS AND TAXES.............................................. MANAGEMENT OF THE FUND.......................................................... OTHER INVESTMENT INFORMATION.................................................... FINANCIAL HIGHLIGHTS............................................................ FOR MORE INFORMATION..................................................BACK COVER ABOUT THE FUND INVESTMENT OBJECTIVE The investment objective of the Ariston Convertible Securities Fund is total return. PRINCIPAL STRATEGIES Under normal circumstances, the Fund will invest at least 65% of its total assets in a diversified portfolio of convertible securities (i.e., convertible into shares of common stock). Types of convertible securities include convertible bonds, convertible preferred stocks, exchangeable bonds, zero coupon bonds and warrants. The convertible securities acquired by the Fund may include a significant amount of high yield securities (commonly known as "junk bonds") rated as low as B by Moody's Investors Service, Inc. ("Moody's") or Standard and Poor's Corporation ("S&P") or, if unrated, of comparable quality in the opinion of the advisor. Convertible securities are considered by the advisor to be an attractive investment vehicle for the Fund because they combine the benefits of higher and more stable income than the underlying common stock generally provides, with the potential of profiting from an appreciation in the value of the underlying security. While convertible securities generally offer lower interest or dividend yields than non-convertible debt securities of similar quality, they do enable the investor to benefit from the increase in the market price of the underlying common stock. The Fund's advisor selects convertible securities based on the business fundamentals (such as earnings growth and revenue growth) of the underlying company and its industry, overall portfolio diversification goals, and creditworthiness of the underlying company. Common stock received upon conversion or exchange of such securities will either be sold in an orderly manner or held by the Fund. While it is anticipated that the Fund will diversify its investments across a range of industry sectors, certain sectors are likely to be overweighted compared to others because the Fund's advisor seeks the best investment opportunities regardless of sector. The Fund may, for example, be overweighted at times in the technology sector. The sectors in which the Fund may be overweighted will vary at different points in the economic cycle. The Fund may sell a security if the Fund's advisor believes that the business fundamentals of the underlying common stock and its convertible security are deteriorating, the convertible security is called, there are more attractive alternative issues, general market conditions are adverse, or to maintain portfolio diversification. PRINCIPAL RISKS OF INVESTING IN THE FUND o MANAGEMENT RISK. The advisor's strategy may fail to produce the intended results. o COMPANY RISK. When the market price of a common stock underlying a convertible security decreases in response to the activities and financial prospects of the company, the value of the convertible security will also decrease. The value of an individual company can be more volatile than the market as a whole. o MARKET RISK. Overall stock market risks may also affect the value of the Fund. Factors such as domestic economic growth and market conditions, interest rate levels, and political events affect the securities markets and could cause the Fund's share price to fall. o SECTOR RISK. If the Fund's portfolio is overweighted in a certain sector, any negative development affecting that sector will have a greater impact on the Fund than a fund that is not overweighted in that sector. The Fund may have a greater concentration in technology companies and weakness in this sector could result in significant losses to the Fund. Technology companies may be significantly affected by falling prices and profits and intense competition, and their products may be subject to rapid obsolescence. o INTEREST RATE RISK. The value of your investment may decrease when interest rates rise. Convertible securities with longer effective maturities are more sensitive to interest rate changes than those with shorter effective maturities. o HIGH YIELD RISK. The Fund may be subject to greater levels of interest rate, credit and liquidity risk than funds that do not invest in junk bonds. Junk bonds are considered predominantly speculative with respect to the issuer's continuing ability to make principal and interest payments. An economic downturn or period of rising interest rates could adversely affect the market for junk bonds and reduce the Fund's ability to sell its junk bonds (liquidity risk). See "High Yield Debt Securities" on page 8 for a more detailed discussion of these lower rated securities. o CREDIT RISK. The issuer of the convertible security may not be able to make interest and principal payments when due. Generally, the lower the credit rating of a security, the greater the risk that the issuer will default on its obligation. o An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. o The Fund is not a complete investment program. As with any mutual fund investment, the Fund's returns will vary and you could lose money. IS THE FUND RIGHT FOR YOU? The Fund may be suitable for: o Long-term investors seeking a fund with a total return strategy o Investors who can tolerate the greater risks associated with junk bonds HOW THE FUND HAS PERFORMED On April 30, 1999, the Fund acquired the assets and liabilities of the Lexington Convertible Securities Fund in a tax-free reorganization. The Fund is a continuation of the Lexington fund and, therefore, the bar chart shows changes in the Fund's returns since the inception of the Lexington fund. The table shows how the Fund's average annual total returns (which include the Lexington fund) compare over time to those of a broad-based securities market index. Year-by-Year Performance [Bar Chart with the following data: 1990 -3.39% 1991 45.05% 1992 12.82% 1993 6.53% 1994 1.30% 1995 18.63% 1996 4.89% 1997 13.16% 1998 2.09% 1999 94.61%] During the period shown, the highest return for a quarter was 67.46% (Q4, 1999); and the lowest return was -16.04% (Q3, 1998). AVERAGE ANNUAL TOTAL RETURNS: ONE YEAR FIVE YEAR TEN YEAR The Fund 94.61% 22.84% 16.92% Russell 2000 Index 20.93% 16.62% 13.38% Lehman Brothers Government/Corp Bond Index -2.16% 7.60% 7.65% FEES AND EXPENSES OF INVESTING IN THE FUND The tables describe the fees and 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 Exchange Fee................................................................NONE ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets) 1 Management Fees1...........................................................2.22% Distribution (12b-1) Fees2.................................................0.00% Other Expenses1 ...........................................................0.03% Total Annual Fund Operating Expenses ......................................2.25% 1 Expenses have been restated to reflect current fees. Management Fees and Other Expenses are estimated for the fiscal year ending December 31, 2001. 2 12b-1 fees may not exceed 0.25% annually. EXAMPLE: The example below is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example uses the same assumptions as other mutual fund prospectuses: a $10,000 initial investment for the time periods indicated, reinvestment of dividends and distributions, 5% annual total return, constant operating expenses, and sale of all shares at the end of each time period. Although your actual expenses may be different, based on these assumptions your costs will be: 1 YEAR 3 YEARS 5 YEARS 10 YEARS $231 $711 $1217 $2607 HOW TO BUY SHARES The minimum initial investment in the Fund is $1,000 and minimum subsequent investments are $50. The Fund may waive these minimums may for accounts participating in an automatic investment program. If your investment is aggregated into an omnibus account established by an investment advisor, broker or other intermediary, the account minimums apply to the omnibus account, not to your individual investment. If you purchase or redeem shares through a broker/dealer or another intermediary, you may be charged a fee by that intermediary. INITIAL PURCHASE BY MAIL- To be in proper form, your initial purchase request must include: o a completed and signed investment application form (which accompanies this Prospectus); and o a check (subject to the minimum amounts) made payable to the Fund. Mail the application and check to: U.S. Mail: Overnight: Ariston Convertible Ariston Convertible Securities Fund Securities Fund c/o Unified Fund Services, Inc. c/o Unified Fund Services, Inc. P.O. Box 6110 431 North Pennsylvania Street Indianapolis, Indiana 46206-6110 Indianapolis, Indiana 46204 BY WIRE- You may also purchase shares of 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 888-387-2273 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: Ariston Convertible Securities Fund Account Name _________________(write in shareholder name) For the Account # ______________(write in account number) D.D.A.#821601382 You must mail a signed application to Firstar Bank, N.A, the Fund's custodian, at the above address in order to complete your initial wire purchase. Wire orders will be accepted only on a day on which the Fund, custodian and transfer agent are open for business. A wire purchase will not be considered made until the wired money is received and the purchase is accepted by the Fund. Any delays which may occur in wiring money, including delays which may occur in processing by the banks, are not the responsibility of the Fund or the transfer agent. There is presently no fee for the receipt of wired funds, but the Fund may charge shareholders for this service in the future. ADDITIONAL INVESTMENTS You may purchase additional shares of the Fund at any time (subject to minimum investment requirements) by mail, wire, or automatic investment. Each additional mail purchase request must contain: -your name -the name of your account(s) -your account number(s) -a check made payable to Ariston Convertible Securities Fund Checks should be sent to the Ariston Convertible Securities Fund at the address listed above. A bank wire should be sent as outlined above. AUTOMATIC INVESTMENT PLAN You may make regular investments in the Fund with an Automatic Investment Plan by completing the appropriate section of the account application and attaching a voided personal check. Investments may be made monthly to allow dollar-cost averaging by automatically deducting $50 or more from your bank checking account. You may change the amount of your monthly purchase at any time. 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 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, the Fund may be an appropriate investment medium for tax-sheltered retirement plans, including: individual retirement plans (IRAs); simplified employee pensions (SEPs); 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. You should contact the Fund's transfer agent for the procedure to open an IRA or SEP plan, as well as more specific information regarding these retirement plan options. Please consult with an attorney or tax advisor 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 Fund's 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. The Fund has authorized certain broker-dealers and other financial institutions (including their designated intermediaries) to accept on its behalf purchase and sell orders. The Fund is deemed to have received an order when the authorized person or designee accepts the order, and the order is processed at the net asset value next calculated thereafter. It is the responsibility of the broker-dealer or other financial institution to transmit orders promptly to the Fund's transfer agent. HOW TO REDEEM SHARES You may receive redemption payments by check or federal wire transfer. The proceeds may be more or less than the purchase price of your shares, depending on the market value of the Fund's securities at the time of your redemption. 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 your 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: U.S. Mail: Overnight: Ariston Convertible Ariston Convertible Securities Fund Securities Fund c/o Unified Fund Services, Inc. c/o Unified Fund Services, Inc. P.O. Box 6110 431 North Pennsylvania Street Indianapolis, Indiana 46206-6110 Indianapolis, Indiana 46204 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 form, your request for a redemption must include your letter of instruction, including the Fund name, account number, account name(s), the address, and the dollar amount or number of shares you wish to redeem. This request must be signed by all registered share owner(s) in the exact name(s) and any special capacity in which they are registered. The 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 the Fund's transfer agent, a shareholder, prior to redemption, may be required to furnish additional legal documents to insure proper authorization. BY TELEPHONE - You may redeem any part of your account in the Fund by calling the Fund's transfer agent at 888-387-2273. 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 or the transfer agent 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 Fund's transfer agent at 888-387-2273. 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 advisor 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 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 advisor at their fair value, according to procedures approved by the Fund's board of trustees. Requests to purchase and sell shares are processed at the NAV next calculated after we receive your order in proper form. DIVIDENDS, DISTRIBUTIONS AND TAXES DIVIDENDS AND DISTRIBUTIONS. 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. The Fund expects that its distributions will consist primarily of capital gains. TAXES. In general, selling 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 a Fund is about to make a 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 advisor about your investment. MANAGEMENT OF THE FUND Ariston Capital Management, Corporation, 40 Lake Bellevue Drive, Suite 220, Bellevue, Washington 98005 serves as investment advisor to the Fund. The advisor was founded in 1977 and provides investment management to client portfolios that include individuals, corporations, pension and profit sharing plans and other qualified retirement plan accounts, and as of December 31, 1999 manages over $45 million in assets. Richard B. Russell, President and controlling shareholder of the advisor, has been primarily responsible for the day-to-day management of the Fund's portfolio since its inception. Mr. Russell is a graduate of the School of Business at the University of Washington and has completed additional training at the New York Institute of Finance. He has spent his entire professional career as an independent money manager, dating from 1972. Before founding Ariston in 1977, he was a full-time manager of private family assets. The Fund is authorized to pay the advisor a fee equal to an annual average rate of 2.25% of its average daily net assets, less the amount of its 12b-1 expenses and fees and expenses of non-interested person trustees. The advisor (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. OTHER INVESTMENT INFORMATION GENERAL The investment objective of the Fund may be changed without shareholder approval. From time to time, the Fund may take temporary defensive positions which are inconsistent with the Fund's principal investment strategies, 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, U.S. government securities of other no-load mutual funds or repurchase agreements. If the Fund invests in shares of another mutual fund, the shareholders of the Fund generally will be subject to duplicative management fees. As a result of engaging in these temporary measures, the Fund may not achieve its investment objective. The Fund may also invest in such instruments at any time to maintain liquidity or pending selection of investments in accordance with its policies. CONVERTIBLE SECURITIES Convertible securities are securities that may be exchanged or converted into a predetermined number of the issuer's underlying common shares, the common shares of another company or that are indexed to an unmanaged market index at the option of the holder during a specified time period. Convertible securities may take the form of convertible preferred stock, convertible bonds or debentures, stock purchase warrants, zero-coupon bonds or liquid-yield option notes, Eurodollar convertible securities, convertible securities of foreign issuers, stock index notes, or a combination of the features of these securities. Prior to conversion, convertible securities have the same general characteristics as non-convertible debt securities and provide a stable stream of income with generally higher yields than those of equity securities of the same or similar issuers. When the market price of a common stock underlying a convertible security increases, the price of the convertible security increasingly reflects the value of the underlying common stock and may rise accordingly. As the market price of the underlying common stock declines, convertible securities tend to trade increasingly on a yield basis and thus may not depreciate to the same extent as the underlying common stock. Convertible securities are ranked senior to common stock on an issuer's capital structure and they are usually of higher quality and normally entail less risk than the issuer's common stock, although the extent to which risk is reduced depends in large measure to the degree to which convertible securities sell above their value as fixed income securities. HIGH YIELD DEBT SECURITIES High yield debt securities in which the Fund may invest (rated Ba or B) are commonly referred to as "junk bonds." The economy and interest rates affect junk bonds differently from other securities. The prices of junk bonds have been found to be more sensitive to interest rate changes than higher-rated investments, and more sensitive to adverse economic changes or individual corporate developments. Also, during an economic downturn or substantial period of rising interest rates, highly leveraged issuers may experience financial stress which would adversely affect their ability to service their principal and interest payment obligations to meet projected business goals, and to obtain additional financing. If the issuer of a security defaulted, the Fund may incur additional expenses to seek recovery. In addition, periods of economic uncertainty and changes can be expected to result in increased volatility of market prices of junk bonds and the Fund's net asset value. To the extent that there is no established retail secondary market, there may be thin trading of junk bonds, and this may have an impact on the advisor's ability to accurately value junk bonds and on the Fund's ability to dispose of the securities. Adverse publicity and investor perceptions, whether or not based on fundamental analysis, may decrease the values and liquidity of junk bonds, especially in a thinly traded market. There are risks involved in applying credit ratings as a method for evaluating junk bonds. For example, credit ratings evaluate the safety of principal and interest payments, not market value of junk bonds. Also, since credit rating agencies may fail to timely change the credit ratings to reflect subsequent events, the advisor will continuously monitor the issuers of junk bonds in the Fund to determine if the issuers will have sufficient cash flow and profits to meet required principal and interest payments, and to assure the securities' liquidity. FINANCIAL HIGHLIGHTS The financial highlights table below includes audited information for the fiscal year ended December 31, 1999. The information is derived from the audited financial statements of the Fund included in the Fund's Annual Report, which is available upon request and without charge. The table also includes audited information of the Lexington Convertible Securities Fund (the Fund's predecessor) for the fiscal years ended December 31, 1994 through 1998, which were audited by the predecessor fund's independent auditors. The Fund's annual report for the most recent fiscal year includes a discussion of the Fund's performance (including the performance of the predecessor fund). It is available from the Fund upon request and without charge. YEARS ENDED DECEMBER 31, ------------------------------------------------------------------------- 1999 1998 1997 1996 1995 ------------------------------------------------------------------------- SELECTED PER SHARE DATA Net asset value, beginning of period $ 15.36 $ 15.08 $ 13.66 $ 13.66 $ 11.84 ------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.11) -- 0.11 0.11 0.15 Net realized and unrealized gain (loss) on investments 14.49 0.31 1.68 0.55 2.04 ------------------------------------------------------------------------- Total from investment operations 14.38 0.31 1.79 0.66 2.19 ------------------------------------------------------------------------- Less distributions: Distributions from net investment income -- -- (0.11) (0.11) (0.15) Distributions from net realized gains (4.74) (0.03) (0.26) (0.55) (0.22) ------------------------------------------------------------------------- Total distributions (4.74) (0.03) (0.37) (0.66) (0.37) ------------------------------------------------------------------------- Net asset value, end of period $ 25.00 $ 15.36 $ 15.08 $ 13.66 $ 13.66 ========================================================================= TOTAL RETURN 94.61% 2.09% 13.16% 4.89% 18.63% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000) $15,960 $10,385 $10,345 $11,208 $11,641 Ratio of expenses to average net assets 2.10% 2.32% 2.38% 2.39% 2.52% Ratio of expenses to average net assets before reimbursement 2.10% 2.32% 2.38% 2.39% 2.52% Ratio of net investment income (loss) to average net assets (0.59)% (0.13)% 0.79% 0.77% 1.24% Ratio of net investment income (loss) to average net assets before reimbursement (0.59)% (0.13)% 0.79% 0.77% 1.24% Portfolio turnover rate 32.89% 27.79% 30.47% 18.45% 11.23%
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 Fund's latest semi-annual or annual fiscal year end. Call the Fund at 888-387-2273 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: PUBLICINFO@SEC.GOV, or by writing the SEC's Public Reference Section of the SEC, Washington, D.C. 20549-0102. Investment Company Act #811-9096 ARISTON CONVERTIBLE SECURITIES FUND STATEMENT OF ADDITIONAL INFORMATION March __, 2000 This Statement of Additional Information ("SAI") is not a prospectus. It should be read in conjunction with the Prospectus of Ariston Convertible Securities Fund dated March __, 2000. This SAI incorporates by reference the Fund's Annual Report to Shareholders for the fiscal year ended December 31, 1999 ("Annual Report"). 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 1-888-387-2273. TABLE OF CONTENTS PAGE DESCRIPTION OF THE TRUST AND FUND..............................................2 ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS................................................................3 INVESTMENT LIMITATIONS.........................................................6 THE INVESTMENT ADVISOR.........................................................7 DISTRIBUTION PLAN..............................................................8 TRUSTEES AND OFFICERS..........................................................9 PORTFOLIO TRANSACTIONS AND BROKERAGE..........................................10 DETERMINATION OF SHARE PRICE..................................................11 INVESTMENT PERFORMANCE........................................................12 CUSTODIAN.....................................................................13 TRANSFER AGENT................................................................13 ACCOUNTANTS...................................................................13 DISTRIBUTOR...................................................................13 ADMINISTRATOR.................................................................13 FINANCIAL STATEMENTS..........................................................14 DESCRIPTION OF THE TRUST AND FUND The Ariston Convertible Securities Fund (the "Fund") was organized as a series of AmeriPrime Funds (the "Trust") February 24, 1999. The Trust is an open-end investment company established under the laws of Ohio by an Agreement and Declaration of Trust dated August 8, 1995 (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 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 shareholders. 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. Any Trustee of the Trust may be removed by vote of the shareholders holding not less than two-thirds of the outstanding shares of the Trust. The Trust does not hold an annual meeting of shareholders. When matters are submitted to shareholders for a vote, each shareholder is entitled to one vote for each whole share he owns and fractional votes for fractional shares he owns. All shares of the Fund have equal voting rights and liquidation rights. The Declaration of Trust can be amended by the Trustees, except that any amendment that adversely effects the rights of shareholders must be approved by the shareholders affected. Each share of the Fund is 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 Fund's shareholders. As of February 29, 2000, the following persons may be deemed to beneficially own or hold of record five percent (5%) or more of the Fund: Charles Schwab & Co., Inc., . ("Schwab"), 101 Montgomery Street, San Francisco, CA, 28.64%; Joseph B. Mohr, 2157 LaPaz Way, Palm Springs, CA, 11.20%. As of February 29, 2000, the officers and trustees as a group own less than one percent of 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 the Fund's assets, see "Determination of Net Asset Value" in the Fund's Prospectus and this Statement of Additional Information. ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS This section contains a more detailed discussion of some of the investments the Fund may make and some of the techniques it may use, as described in the Prospectus (see "Investment Objectives and Strategies" and "Investment Policies and Techniques and Risk Considerations"). A. HIGH YIELD DEBT SECURITIES ("JUNK BONDS"). The widespread expansion of government, consumer and corporate debt within our economy has made the corporate sector, especially cyclically sensitive industries, more vulnerable to economic downturns or increased interest rates. An economic downturn could severely disrupt the market for high yield securities and adversely affect the value of outstanding securities and the ability of the issuers to repay principal and interest. The prices of high yield securities have been found to be more sensitive to interest rate changes than higher-rated investments, and more sensitive to adverse economic changes or individual corporate developments. Also, during an economic downturn or substantial period of rising interest rates, highly leveraged issuers may experience financial stress which would adversely affect their ability to service their principal and interest payment obligations, to meet projected business goals, and to obtain additional financing. If the issuer of a security owned by the Fund defaulted, the Fund could incur additional expenses to seek recovery. In addition, periods of economic uncertainty and changes can be expected to result in increased volatility of market prices of high yield securities and the Fund's net asset value. Furthermore, in the case of high yield securities structured as zero coupon or pay-in-kind securities, their market prices are affected to a greater extent by interest rate changes and thereby tend to be more volatile than securities which pay interest periodically and in cash. High yield securities also present risks based on payment expectations. For example, high yield securities may contain redemption of call provisions. If an issuer exercises these 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 securities value will decrease in a rising interest rate market, as will the value of the Fund's assets. If the Fund experiences unexpected net redemption, this may force it to sell its high yield securities without regard to their investment merits, thereby decreasing the asset based upon which the Fun's expenses can be spread and possibly reducing the Fund's rate of return. In addition, to the extent that there is no established retail secondary market, there may be thin trading of high yield securities, and this may have an impact on the Fund's ability to accurately value high yield securities and the Fund's assets and on the Fund's ability to dispose of the securities. Adverse publicity and investor perception, whether or not based on fundamental analysis, may decrease the values and liquidity of high yield securities especially in a thinly traded market. New laws and proposed new laws may have an impact on the market for high yield securities. For example, new legislation requiring federally-insured savings and loan associations to divest their investments in high yield securities and pending proposals designed to limit the use, or tax and other advantages of high yield securities which, if enacted, could have a material effect on the Fund's net asset value and investment practices. There are also special tax considerations associated with investing in high yield securities structured as zero coupon or pay-in-kind securities. For example, the Fund reports the interest on these securities as income even though it receives no cash interest until the security's maturity or payment date. Also, the shareholders are taxed on this interest event if the Fund does not distribute cash to them. Therefore, in order to pay taxes on this interest, shareholders may have to redeem some of their shares to pay the tax or the Fund may sell some of its assets to distribute cash to shareholders. These actions are likely to reduce the Fund's assets and may thereby increase its expense ratio and decrease its rate of return. Finally, there are risks involved in applying credit ratings as method for evaluating high yield securities. For example, credit ratings evaluate the safety of principal and interest payments, not market value risk of high yield securities. Also, since credit rating agencies may fail to timely change the credit ratings to reflect subsequent events, the Fund (in conjunction with its investment advisor) will continuously monitor the issuers of high yield securities to determine if the issuers will have sufficient cash flow and profits to meet required principal and interest payments, and to assure the securities liquidity so the Fund can meet redemption requests. A description of the rating categories is contained in the Appendix. B. WARRANTS. The Portfolio may invest up to 5% of its total assets at the time of purchase in warrants (not including those acquired in units or attached to other securities). A warrant is a right to purchase common stock at a specific price during a specified period of time. The value of a warrant does not necessarily change with the value of the underlying security. Warrants do not represent any rights to the assets of the issuing company. A warrant becomes worthless unless it is exercised or sold before expiration. Warrants have no voting rights and pay no dividends. C. OPTIONS TRANSACTIONS. The Fund may write (sell) covered call options and may purchase put and call options on individual securities and securities indices. A covered call option on a security is an agreement to sell a particular portfolio security if the option is exercised at a specified price, or before a set date. Options are sold (written) on securities and market indices. The purchaser of an option on a security pays the seller (the writer) a premium for the right granted but is not obligated to buy or sell the underlying security. The purchaser of an option on a market index pays the seller a premium for the right granted, and in return the seller of such an option is obligated to make the payment. A writer of an option may terminate the obligation prior to the expiration of the option by making an offsetting purchase of an identical option. Options on securities which the Fund sells (writes) will be covered or secured, which means that it will own the underlying security (for a call option) or (for an option on a stock index) will hold a portfolio of securities substantially replicating the movement of the index (or, to the extent it does not hold such a portfolio, will maintain a segregated account with the Custodian of high quality liquid debt obligations equal to the market value of the option, marked to market daily). When the Fund writes options, it may be required to maintain a margin account, to pledge the underlying security or to deposit liquid high quality debt obligations in a separate account with the Custodian. When a Fund writes an option, the Fund profits from the sale of the option, but gives up the opportunity to profit from any increase in the price of the stock above the option price, and may incur a loss if the stock price falls. Risks associated with writing covered call options include the possible inability to effect closing transactions at favorable prices and an appreciation limit on the securities set aside for settlement. When the Fund writes a covered call option, it will receive a premium, but will assume the risk of loss should the price of the underlying security fall below the exercise price. D. COLLATERALIZED SHORT SALESThe Fund may make short sales of common stocks, provided they are "against the box," i.e., the Fund owns an equal amount of such securities or owns securities that are convertible or exchangeable without payment of further consideration into an equal or greater amount of such common stock. The Fund may make a short sale when the Fund manager believes the price of the stock may decline and for tax or other reasons, the Fund manager does not want to sell currently the stock or convertible security it owns. In such case, any decline in the value of the Portfolio would be reduced by a gain in the short sale transaction. Conversely, any increase in the value of the portfolio would be reduced by a loss in the short sale transaction. The Fund may not make short sales or maintain a short position unless at all times when a short position is open, not more than 10% of its total assets (taken at current value) is held as collateral for such sales at any one time. Short sales against the box are used to defer recognition of capital gains and losses, although the short-term or long-term nature of such gains or losses could be altered by certain provisions of the Internal Revenue Code. E. 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. F. REPURCHASE AGREEMENTS The Fund may invest in repurchase agreements fully collateralized by U.S. Government obligations. A repurchase agreement is a short-term investment in which the purchaser (i.e., the Fund) acquires ownership of a U.S. Government obligation (which may be of any maturity) and the seller agrees to repurchase the obligation at a future time at a set price, thereby determining the yield during the purchaser's holding period (usually not more than seven days from the date of purchase). Any repurchase transaction in which the Fund engages will require full collateralization of the seller's obligation during the entire term of the repurchase agreement. In the event of a bankruptcy or other default of the seller, the Fund could experience both delays in liquidating the underlying security and losses in value. However, the Fund intends to enter into repurchase agreements only with Star Bank, N.A. (the Fund's Custodian), other banks with assets of $1 billion or more and registered securities dealers determined by the Advisor (subject to review by the Board of Trustees) to be creditworthy. The Advisor monitors the creditworthiness of the banks and securities dealers with which the Fund engages in repurchase transactions. H. 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 maturing in more than seven days, nonpublicly offered securities and 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 10% of its net assets in illiquid securities. 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 this 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 has 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. 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 engage in borrowing. 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. SHORT SALES. The Fund will not effect short sales of securities except as described in the Prospectus or Statement of Additional Information. 5. OPTIONS. The Fund will not purchase or sell puts, calls, options or straddles except as described in the Prospectus or Statement of Additional Information. 6. ILLIQUID INVESTMENTS. The Fund will not invest more than 10% of its total assets in securities for which there are legal or contractual restrictions on resale and other illiquid securities. 7. LOANS OF PORTFOLIO SECURITIES. The Fund will not make loans of portfolio securities. THE INVESTMENT ADVISOR The Fund's investment advisor is Ariston Capital Management Corporation (the "Advisor"), 40 Lake Bellevue Drive, Suite 220, Bellevue, Washington 98005. As sole shareholder of the Advisor, Richard B. Russell may be deemed to be a controlling person of the Advisor. Under the terms of the management agreement (the "Agreement"), the Advisor manages the Fund's investments subject to approval of the Board of Trustees. As compensation for its management services, the Fund is obligated to pay the Advisor a fee computed and accrued daily and paid monthly at an annual rate of 2.25% of the average daily net assets of the Fund less the amount of the Fund's 12b-1 expenses and fees and expenses of the non-interested person trustees. For the period May 1, 1999 (commencement of operations) through December 31, 1999, the Fund paid advisory fees of $_________. The Advisor retains the right to use the name "Ariston" in connection with another investment company or business enterprise with which the Advisor is or may become associated. The Trust's right to use the name "Ariston" automatically ceases ninety days after termination of the Agreement and may be withdrawn by the Advisor on ninety days written notice. The Advisor may make payments to banks or other financial institutions that provide shareholder services and administer shareholder accounts. The Glass-Steagall Act prohibits banks from engaging in the business of underwriting, selling or distributing securities. Although the scope of this prohibition under the Glass-Steagall Act has not been clearly defined by the courts or appropriate regulatory agencies, management of the Fund believes that the Glass-Steagall Act should not preclude a bank from providing such services. However, state securities laws on this issue may differ from the interpretations of federal law expressed herein and banks and financial institutions may be required to register as dealers pursuant to state law. If a bank were prohibited from continuing to perform all or a part of such services, management of 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. The Trust and the Adviser have each adopted a Code of Ethics under Rule 17j-1 of the Investment Company Act of 1940. The Code significantly restricts the personal investing activities of all employees of the Adviser. The Code requires that all employees of the Adviser preclear any personal securities investment. The preclearance requirement and associated procedures are designed to identify any substantive prohibition or limitation applicable to the proposed investment. In addition, no employee may purchase or sell any security which at the time is being purchased or sold, or to the knowledge of the employee is being considered for purchase or sale, by the Fund. The substantive restrictions also include a ban on acquiring any securities in an initial public offering and provides for trading "blackout periods" which prohibit trading by portfolio managers of the Fund within periods of trading by the Fund in the same (or equivalent) security. The restrictions and prohibitions apply to most securities transactions by employees of the Adviser, with limited exceptions for some securities (such as securities which have a market capitalization and average daily trading volume above certain minimums). DISTRIBUTION PLAN The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). The Plan permits the Fund to pay directly, or reimburse the Advisor and Distributor, for distribution expenses in amount not to exceed 0.25% of the average daily net assets of the Fund. The Trustees expect that the Plan will significantly enhance the Fund's ability to distribute its shares. 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, or that may be advising shareholders of the Trust regarding the purchase, sale or retention of shares, or that hold shares for shareholders in omnibus accounts or as shareholders of record or provide shareholder support or administrative services to the Fund and its shareholders; (b) expenses of maintaining personnel who engage in or support distribution of shares or who render shareholder support services, including, allocated overhead, office space and equipment, telephone facilities and expenses, answering routine inquiries regarding the Trust, processing shareholder transactions, and providing such other shareholder services as the Trust may reasonably request; (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, sales seminars, direct mail promotions and television, radio, newspaper, magazine and other mass media advertising; (e) costs of preparing, printing and distributing sales literature; (f) costs of obtaining such information, analyses and reports with respect to marketing and promotional activities as the Trust may deem advisable; and (g) costs of implementing and operating the Plan. 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 Fund. Any amendment increasing the maximum percentage payable under the Plan 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. As an executive officer of the Fund's Distributor, Kenneth Trumpfheller, a Trustee of the Trust, may benefit indirectly from payments received by the Fund's Distributor. 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. ==================================== ================ ====================================================================== 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, Inc., the Fund's administrator, and AmeriPrime Financial Securities, Suite 200 Treasurer, and Inc., the Fund's distributor, since 1994; President and Trustee of Southlake, Texas 76092 Trustee AmeriPrime Advisors Trust and AmeriPrime Insurance Trust; prior to Year of Birth: 1958 December, 1994, a senior client executive with SEI Financial Services. - --------------------------------------------------------------------------------------------------------------------------------- Steve L. Cobb Trustee President of chandler Engineering Company, L.L.C., 2001 N. Indianwood Avenue oil and gas services company; various positions with Broken Arrow, OK 74012 Carbo Ceramics, Inc., oil field manufacturing/ supply company, from 1984 to 1997, most recently Vice President Year of Birth: 1657 of Marketing - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- Gary E. Hippenstiel Trustee Director, Vice President and Chief Investment Officer 600 Jefferson Street of Legacy Trust Company since 1992; President Suite 350 and Director of Heritage Trust Company from 1994-1996. Houston, TX 77002 Year of Birth: 1947 - ---------------------------------------------------------------------------------------------------------------------------------
The compensation paid to the Trustees of the Trust for the Fund's fiscal year ended December 31, 1999 is set forth in the following table. Trustee fees are Trust expenses and each series of the Trust pays a portion of the Trustee fees. ====================================== ========================== ======================================= NAME AGGREGATE TOTAL COMPENSATION COMPENSATION FROM TRUST (THE TRUST IS FROM TRUST NOT IN A FUND COMPLEX) - -------------------------------------- -------------------------- --------------------------------------- Kenneth D. Trumpfheller 0 0 - -------------------------------------- -------------------------- --------------------------------------- Steve L. Cobb $_____ $_____ - -------------------------------------- -------------------------- --------------------------------------- Gary E. Hippenstiel $_____ $_____ ====================================== ========================== =======================================
PORTFOLIO TRANSACTIONS AND BROKERAGE Subject to policies established by the Board of Trustees of the Trust, the Advisor is responsible for the Fund's portfolio decisions and the placing of the Fund's portfolio transactions. In placing portfolio transactions, the Advisor 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 Advisor 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 Fund's advisor 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 Advisor 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 Advisor exercises investment discretion and to pay such brokers or dealers a commission in excess of the commission another broker or dealer would charge if the Advisor determines in good faith that the commission is reasonable in relation to the value of the brokerage and research services provided. The determination may be viewed in terms of a particular transaction or the Advisor's overall responsibilities with respect to the Trust and to other accounts over which it exercises investment discretion. Research services include supplemental research, securities and economic analyses, statistical services and information with respect to the availability of securities or purchasers or sellers of securities and analyses of reports concerning performance of accounts. The research services and other information furnished by brokers through whom the Fund effects securities transactions may also be used by the Advisor in servicing all of its accounts. Similarly, research and information provided by brokers or dealers serving other clients may be useful to the Advisor in connection with its services to the Fund. Although research services and other information are useful to the Fund and the Advisor, it is not possible to place a dollar value on the research and other information received. It is the opinion of the Board of Trustees and the Advisor that the review and study of the research and other information will not reduce the overall cost to the Advisor of performing its duties to the 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 Advisor's clients seek to purchase or sell the same security at or about the same time, the Advisor may execute the transaction on a combined ("blocked") basis. Blocked transactions can produce better execution for the 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. The allocation may be adjusted by the Advisor, taking into account such factors as the size of the individual orders and transaction costs, when the Advisor believes adjustment is reasonable. For the period May 1, 1999 (commencement of operations) through December 31, 1999, the Fund paid brokerage fees of $_____. DETERMINATION OF SHARE PRICE The price (net asset value) of the shares of each Fund is determined as of 4:00 p.m., Eastern time on each day the Trust is open for business and on any other day on which there is sufficient trading in each Fund's securities to materially affect the net asset value. The Trust is open for business on every day except Saturdays, Sundays and the following holidays: New Year's Day, Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. For a description of the methods used to determine the net asset value (share price), see "Determination of Net Asset Value" in the Prospectus. Common stocks which are traded on any exchange are valued at the last quoted sale price. Lacking a last sale price, a security is valued at the mean between the last bid and ask price except when, in the Advisor's opinion, the mean price does not accurately reflect the current value of the security. When market quotations are not readily available, when the Advisor determines the mean price does not accurately reflect the current value or when restricted securities are being valued, such securities are valued as determined in good faith by the Advisor, subject to review and oversight of the Board of Trustees of the Trust. All other securities generally are valued at the mean between the last bid and ask price, but may be valued on the basis of prices furnished by a pricing service when the Advisor believes such prices accurately reflect the fair market value of such securities. Convertible securities are valued at the greater of the value determined as described in the preceding sentence and the value of the shares of common stock into which the securities are convertible (determined as described in the preceding paragraph). When market quotations are not readily available, when prices are not readily available from a pricing service, or when restricted or illiquid securities are being valued, securities are valued at fair value as determined in good faith by the Advisor, subject to review and oversight 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 returns". "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. In addition to providing average annual total return, the Fund may also provide non-standardized quotations of total return for differing periods and may provide 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. The Fund's investment performance will vary depending upon market conditions, the composition of the Fund's portfolio and operating expenses of the 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. For the one, five and ten year periods ended December 31, 1999, the Fund's average annual total returns were 94.61%, 22.84% and 16.92%, respectively. 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. The Fund may use the Standard & Poor's 500 Stock 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, 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 agency and shareholder service functions. For its services as transfer agent, Unified receives a monthly fee from the Advisor of $1.20 per shareholder (subject to a minimum monthly fee of $750). 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 Advisor equal to 0.0275% of the Fund's assets up to $100 million, and 0.0250% of the Fund's assets from $100 million to $300 million, and 0.200% of the Fund's assets over $300 million (subject to various monthly minimum fees, the maximum being $2,000 per month for assets of $20 to $100 million). For the period May 1, 1999 (commencement of operations) through December 31, 1999, Unified received $_____ from the Advisor (not the Fund) for these fund accounting services. 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 fiscal year ending December 31, 2000. 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. (the "Distributor"), 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 Advisor equal to an annual rate of 0.10% of the Fund's assets under $50 million, 0.075% of the Fund's assets from $50 million to $100 million, and 0.050% of the Fund's assets over $100 million (subject to a minimum fee of $2,500 per month). For the period May 1, 1999 (commencement of operations) through December 31, 1999, the Administrator received $20,000 from the Advisor (not the Fund) for these services. The Administrator, the Distributor and Unified (the Fund's transfer agent) are controlled by Unified Financial Services, Inc. FINANCIAL STATEMENTS The financial statements and independent auditor's report required to be included in the Statement of Additional Information are incorporated herein by reference to the Fund's Annual Report to Shareholders for the period ended December 31, 1999. The Trust will provide the Annual Report without charge by calling the Fund at 1-888-387-2273. APPENDIX A DESCRIPTION OF CORPORATE BOND RATINGS STANDARD & POOR'S RATINGS SERVICES The ratings are based on current information furnished by the issuer or obtained by Standard & Poor's from other sources it considers reliable. Standard & Poor's does not perform any audit in connection with any rating and may, on occasion, rely on unaudited financial information. The ratings may be changed, suspended or withdrawn as a result of changes in, or unavailability of, such information or for other circumstances. The ratings are based, in varying degrees, on the following considerations: I. Likelihood of default-capacity and willingness of the obliger as to the timely payment of interest and repayment of principal in accordance with the terms of the obligation. II. Nature and provisions of the obligation. III. Protection afforded by, and relative position of the obligation in the event of bankruptcy, reorganization or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights. AAA - Debt rated "AAA" has the highest rating assigned by Standard & Poor's. Capacity to pay interest and repay principal is extremely strong. AA - Debt rated "AA" has a very strong capacity to pay interest and repay principal and differs from the higher rated issues only in small degree. A - Debt rated "A" has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories. BBB - Debt rated "BBB" is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher rated categories. BB, B, CCC, CC, C - Debt rated "BB", "B", "CCC", "CC", and "C" is regarded, on balance, as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. "BB" indicates the lowest degree of speculation and "C" the highest degree of speculation. While such debt will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions. BB - Debt rate "BB" has less near-term vulnerability to default than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial or economic conditions which could lead to inadequate capacity to meet timely interest and principal payments. The "BB" rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "BBB" rating. B - Debt rated "B" has a greater vulnerability to default but currently has the capacity to meet interest payments and principal repayments. Adverse business, financial or economic conditions will likely impair capacity or willingness to pay interest and repay principal. The "B" rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "BB" or "BB-" rating. CCC - Debt rated "CCC" has a currently identifiable vulnerability to default, and is dependent upon favorable business, financial and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial or economic conditions, it is not likely to have the capacity to pay interest and repay principal. The "CCC" rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "B" or "B-" rating. CC - The rating "CC" is typically applied to debt subordinated to senior debt that is assigned an actual or implied "CCC" rating. C - The rating "C" is typically applied to debt subordinated to senior debt which is assigned an actual or implied "CCC-" debt rating. The "C" rating may be used to cover a situation where a bankruptcy petition has been filed, but debt service payments are continued. C1 - The rating "C1" is reserved for income bonds on which no interest is being paid. D - Debt rated "D" is in payment default. The "D" rating category is used when interest payments or principal payments are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made during such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition if debt service payments are jeopardized. Plus (+) or Minus (-): The ratings from "AA" to "CCC" may be modified by the addition of a plus or minus sign to show relative standing within the major categories. MOODY'S INVESTORS SERVICE, INC. Aaa - Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edged." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa - Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities, fluctuation of protective elements may be of greater amplitude, or there may be other elements present which make the long-term risk appear somewhat greater than the Aaa securities. A - Bonds which are rated A possess many favorable investment attributes and are to be considered as upper-medium-grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment some time in the future. Baa - Bonds which are rated Baa are considered as medium-grade obligations (i.e., they are neither highly protected nor poorly secured). Interest payments and principal security appear adequate for the present, but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Ba - Bonds which are rated Ba are judged to have speculative elements: their future cannot be considered as well-assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B - Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Caa - Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. Ca - Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings. C - Bonds which are rated C are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing. Moody's applies numerical modifiers: 1, 2 and 3 in each generic rating classification from Aa through B in its corporate bond rating system. The modifier 1 indicates that the security ranks in the higher end of its generic rating category, the modifier 2 indicates a mid-range ranking, and the modifier 3 indicates that the issue ranks in the lower end of its generic rating category. AMERIPRIME FUNDS PART C. OTHER INFORMATION ----------------- ITEM 23. EXHIBITS (a) Articles of Incorporation. (i) Copy of Registrant's Declaration of Trust, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, 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. 11, 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. 1, is hereby incorporated by reference. (iv) Copy of Amendment No. 3 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. (v) Copy of Amendment No. 4 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. (vi) Copy of Amendment No. 5 and Amendment No. 6 to Registrant's Declaration of Trust, which were filed as an Exhibit to Registrant's Post-Effective Amendment No. 8, are hereby incorporated by reference. (viii) Copy of Amendment No. 7 to Registrant's Declaration of Trust, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby incorporated by reference. (ix) Copy of Amendment No. 8 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. (x) Copy of Amendment No. 9 to Registrant's Declaration of Trust which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 15, is hereby incorporated by reference. (xi) Copy of Amendment No. 10 to Registrant's Declaration of Trust, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 16, is hereby incorporated by reference. (xii) Copy of Amendment No. 11 to Registrant's Declaration of Trust, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 17, is hereby incorporated by reference. (xiii) Copy of Amendment No. 12 to Registrant's Declaration of Trust, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby incorporated by reference. (xiv) Copy of Amendment No. 13 to Registrant's Declaration of Trust, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby incorporated by reference. (xv) Copy of Amendments No. 14-17 to Registrant's Declaration of Trust, which were filed as Exhibits to Registrant's Post-Effective Amendment No. 27, are hereby incorporated by reference. Copy of Amendments No. 18-19 to Registrant's Declaration of Trust which were filed as Exhibits to Registrant's Post-Effective Amendment No. 30, are hereby incorporated by reference. (xvii) Copy of Amendment No. 20 to Registrant's Declaration of Trust is filed herewith. (b) By-Laws. Copy of Registrant's By-Laws, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby incorporated by reference. (c) Instruments Defining Rights of Security Holders. - None other than in the Declaration of Trust, as amended, and By-Laws of the Registrant. (d) Investment Advisory Contracts. (i) Copy of Registrant's Management Agreement with Carl Domino Associates, L.P., Adviser to Carl Domino Equity Income Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby incorporated by reference. (ii) Copy of Registrant's Management Agreement with Jenswold, King & Associates, Adviser to Fountainhead Special Value Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 8, is hereby incorporated by reference. (iii) Copy of Registrant's Management Agreement with GLOBALT, Inc., Adviser to GLOBALT Growth Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby incorporated by reference. (iv) Copy of Registrant's Management Agreement with IMS Capital Management, Inc., Adviser to the IMS Capital Value Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 2, is hereby incorporated by reference. (v) Copy of Registrant's Management Agreement with Commonwealth Advisors, Inc., Adviser to Florida Street Bond Fund and Florida Street Growth Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 8, is hereby incorporated by reference. (vi) Copy of Registrant's Management Agreement with Corbin & Company, Adviser to Corbin Small-Cap Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 8, is hereby incorporated by reference. (vii) Copy of Registrant's Management Agreement with Burroughs & Hutchinson, Inc., Advisor to the Marathon Value Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 15, is hereby incorporated by reference. (viii) Copy of Registrant's Management Agreement with The Jumper Group, Inc., Adviser to the Jumper Strategic Advantage Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby incorporated by reference. (ix) Copy of Registrant's Management Agreement with Appalachian Asset Management, Inc., Advisor to the AAM Equity Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 17, is hereby incorporated by reference. (x) Copy of Registrant's Management Agreement with Martin Capital Advisors, L.L.P., Advisor to the Austin Opportunity Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby incorporated by reference. (xi) Copy of Registrant's proposed Management Agreement with Paul B. Martin, Jr. d/b/a Martin Capital Advisors, Advisor to the Texas Opportunity Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 17, is hereby incorporated by reference. (xii) Copy of Registrant's Management Agreement with Martin Capital Advisors L.L.P., Advisor to the U.S. Opportunity Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 29, is hereby incorporated by reference. (xiii) Copy of Registrant's Management Agreement with Gamble, Jones, Morphy & Bent, Advisor to the GJMB Growth Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby incorporated by reference. (xiv) Copy of Registrant's Management Agreement with Cornerstone Investment Management, Advisor to the Cornerstone MVP Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 29, is hereby incorporated by reference. (xv) Copy of Registrant's Management Agreement with Carl Domino Associates, L.P., Advisor to the Carl Domino Growth Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby incorporated by reference. (xvi) Copy of Registrant's Management Agreement with Carl Domino Associates, L.P., Advisor to the Carl Domino Global Equity Income Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby incorporated by reference. (xvii) Copy of Registrant's Management Agreement with Dobson Capital Management, Inc,. Advisor to the Dobson Covered Call Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 25, is hereby incorporated by reference. (xviii) Registrant's Management Agreement with Auxier Asset Management, LLC, Advisor to the Auxier Focus Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby incorporated by reference. (xix) Copy of Registrant's Management Agreement with Cornerstone Capital Management, Inc., Advisor to the Shepherd Values Market Neutral Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 27, is hereby incorporated by reference. (xx) Copy of Registrant's Management Agreement with Cornerstone Capital Management, Inc., Advisor to the Shepherd Values Growth Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 27, is hereby incorporated by reference. (xxi) Copy of Registrant's Management Agreement with Columbia Partners, L.L.C., Investment Management, Advisor to the Columbia Partners Equity Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby incorporated by reference. (xxii) Registrant's Management Agreement with Cash Management Systems , Inc. ("CMS"), Adviser to The Cash Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby incorporated by reference. (xxiii) Copy of Sub-Advisory Agreement between Cash Management Systems, Inc. and Milestone Capital Management, L.P., Sub-Advisor to The Cash Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 30, is hereby incorporated by reference. (xxiv) Copy of Registrant's Management Agreement with Ariston Capital Management Corporation, Advisor to the Ariston Convertible Securities Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 27, is hereby incorporated by reference. (xxv) Copy of Registrant's Management Agreement with Leader Capital Corp., Advisor to the Leader Converted Mutual Bank Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 29, is hereby incorporated by reference. (xxvi) Registrant's Management Agreement with Shepherd Advisory Services, Inc., Advisor to the Shepherd Values VIF Equity Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby incorporated by reference. (xxvii) Registrant's Management Agreement with Shepherd Advisory Services, Inc., Advisor to the Shepherd Values Small-Cap Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby incorporated by reference. (xxviii) Registrant's Management Agreement with Shepherd Advisory Services, Inc., Advisor to the Shepherd Values International Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby incorporated by reference. (xxix) Registrant's Management Agreement with Shepherd Advisory Services, Inc., Advisor to the Shepherd Values Fixed Income Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby incorporated by reference. (xxx) Sub-Advisory Agreement between Shepherd Advisory Services, Inc. and Cornerstone Capital Management, Inc., Sub-Advisor to the Shepherd Values VIF Equity Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 34, is hereby incorporated by reference. (xxxi) Sub-Advisory Agreement between Shepherd Advisory Services, Inc. and Templeton Portfolio Advisory, Sub-Advisor to the Shepherd Values International Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 34, is hereby incorporated by reference. (xxxii) Sub-Advisory Agreement between Shepherd Advisory Services, Inc. and Nicholas-Applegate Capital Management, Sub-Advisor to the Shepherd Values Small-Cap Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 34, is hereby incorporated by reference. (xxxiii) Sub-Advisory Agreement between Shepherd Advisory Services, Inc. and Potomac Asset Management Company, Inc., Sub-Advisor to the Shepherd Values Fixed Income Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 34, is hereby incorporated by reference. (xxxiv) Copy of Registrant's Management Agreement with Aegis Asset Management, Inc., Advisor to the Westcott Nothing But Net Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 39, is hereby incorporated by reference. (xxxv) Copy of Registrant's Management Agreement with Aegis Asset Management, Inc., Advisor to the Westcott Large-Cap Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 39, is hereby incorporated by reference. (xxxvi) Copy of Registrant's Management Agreement with Aegis Asset Management, Inc., Advisor to the Westcott Fixed Income Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 39, is hereby incorporated by reference. (xxxvii) Copy of Registrant's Management Agreement with Jenswold, King & Associates, Adviser to the Fountainhead Kaleidoscope Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 38, is hereby incorporated by reference. (xxxviii) Copy of Registrant's Management Agreement with Ariston Capital Management Corporation, Adviser to the Ariston Internet Convertible Fund - to be supplied. Underwriting Contracts. (i) Copy of Registrant's Amended and Restated Underwriting Agreement with AmeriPrime Financial Securities, Inc., which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 8, is hereby incorporated by reference. (ii) Copy of Registrant's Exhibit A to the Amended and Restated Underwriting Agreement is filed herewith. (f) Bonus or Profit Sharing Contracts.- None. (g) Custodian Agreements. (i) Copy of Registrant's Agreement with the Custodian, Firstar Bank, N.A. (formerly Star Bank), which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby incorporated by reference. Copy of Registrant's Appendix B to the Agreement with the Custodian, Firstar Bank, N.A., is filed herewith. (iii) Copy of Registrant's Agreement with UMB Bank, N.A., Custodian to the Dobson Covered Call Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 28, is hereby incorporated by reference. (h) Other Material Contracts. Copy of Registrant's Agreement with the Administrator, AmeriPrime Financial Services, Inc., which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby incorporated by reference. (i) Legal Opinion. (i) Opinion of Brown, Cummins & Brown Co., L.P.A., which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 9, is hereby incorporated by reference. (ii) Opinion of Brown, Cummins & Brown Co., L.P.A., which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 29, is hereby incorporated by reference. (iii) Consent of Brown, Cummins & Brown Co., L.P.A is filed herewith. (j) Other Opinions. (i) Consent of McCurdy & Associates CPA's, Inc. is filed herewith. (k) Omitted Financial Statements.- None. (l) Initial Capital Agreements. Copy of Letter of Initial Stockholders, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby incorporated by reference. (m) Rule 12b-1 Plan. (i) Form of Registrant's Rule 12b-1 Service Agreement which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 1, is hereby incorporated by reference. (ii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Austin Opportunity Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 17, is hereby incorporated by reference. (iii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Texas Opportunity Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 17, is hereby incorporated by reference. (iv) Copy of Registrant's Rule 12b-1 Distribution Plan for the U.S. Opportunity Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 17, is hereby incorporated by reference. (v) Copy of Registrant's Rule 12b-1 Distribution Plan for the Jumper Strategic Advantage Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 24, is hereby incorporated by reference. (vi) Copy of Registrant's Rule 12b-1 Distribution Plan for the Dobson Covered Call Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 24, is hereby incorporated by reference. (vii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Ariston Convertible Securities Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 27, is hereby incorporated by reference. (viii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Leader Converted Mutual Bank Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 27, is hereby incorporated by reference. (ix) Copy of Registrant's Rule 12b-1 Distribution Plan for the Westcott Nothing But Net Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 28, is hereby incorporated by reference. (x) Copy of Registrant's Rule 12b-1 Distribution Plan for the Westcott Large-Cap Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 28, is hereby incorporated by reference. (xi) Copy of Registrant's Rule 12b-1 Distribution Plan for the Westcott Fixed Income Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 28, is hereby incorporated by reference. (xii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Ariston Internet Convertible Fund - to be supplied. (n) Rule 18f-3 Plan. (i) Rule 18f-3 Plan for the Carl Domino Equity Income Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 16, is hereby incorporated by reference. (ii) Rule 18f-3 Plan for the Jumper Strategic Advantage Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 21, is hereby incorporated by reference. (iii) Rule 18f-3 Plan for the Westcott Funds, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 28, is hereby incorporated by reference. (iv) Rule 18f-3 Plan for the Ariston Internet Convertible Fund - to be supplied. (o) Reserved. (p) Codes of Ethics. (i) Copy of Registrant's Code of Ethics is filed herewith. (ii) Copy of Registrant's Code of Ethics Type J is filed herewith. (iii) Copy of Registrant's Code of Ethics Type D is filed herewith. (q) Powers of Attorney (i) Power of Attorney for Registrant and Certificate with respect thereto, which were filed as an Exhibit to Registrant's Post-Effective Amendment No. 5, are hereby incorporated by reference. (ii) Powers of Attorney for Trustees of the Trust, which were filed as an Exhibit to Registrant's Post-Effective Amendment No. 5, are hereby incorporated by reference. (iii) Power of Attorney for the Treasurer and President (and a Trustee) of the Trust, which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 35, is hereby incorporated by reference. ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE REGISTRANT (AS OF FEBRUARY 29, 2000) (a) Carl Domino may be deemed to control the Carl Domino Equity Income Fund as a result of his beneficial ownership of the Fund (26.46%). Each of Carl Domino and Carl Domino Associates, L.P., may be deemed to control the Domino Global Equity Income Fund as a result of their respective beneficial ownership of the Fund (62.1% and 37.9% respectively). Carl Domino may be deemed to control the Domino Growth Fund as a result of his beneficial ownership of the Fund (66.36%). Carl Domino controls Carl Domino Associates, L. P. (a Florida limited partnership) because he controls the general partner. As a result, Carl Domino Associates, L.P., the Domino Equity Income Fund, the Domino Growth Fund and the Domino Global Equity Income Fund may be deemed to be under the common control of Carl Domino. (b) Charles L. Dobson, may be deemed to control the Dobson Covered Call Fund as a result of his beneficial ownership of the Fund (58.54%). Charles L. Dobson controls Dobson Capital Management, Inc. (a California corporation) because he owns 100% of its shares. As a result, Dobson Capital Management, Inc. and the Fund may be deemed to be under the common control of Charles L. Dobson. (c) J. Jeffrey Auxier may be deemed to control the Auxier Focus Fund as a result of his beneficial ownership of the Fund (57.92%). J. Jeffrey Auxier controls Auxier Asset Management, LLC (an Oregon limited liability company) because he owns a majority of its shares. As a result, Auxier Asset Management, LLC and the Fund may be deemed to be under the common control of J. Jeffrey Auxier. (d) Roger E. King may be deemed to control the Fountainhead Kaleidoscope Fund as a result of his beneficial ownership of the Fund (47.28%). Roger E. King controls King Investment Advisors, Inc. (a Texas corporation) because he owns a majority of its shares. As a result, King Investment Advisors, Inc. and the Fund may be deemed to be under the common control of Roger E. King. 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 Advisers, among others. Coverage under the policy would include losses by reason of any act, error, omission, misstatement, misleading statement, neglect or breach of duty. (c) Pursuant to the Underwriting Agreememnt, 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. Carl Domino Associates, L.P., 580 Village Boulevard, Suite 225, West Palm Beach, Florida 33409, ("CDA"), adviser to the Carl Domino Equity Income Fund, the Carl Domino Growth Fund and the Carl Domino International Global Equity Income Fund, is a registered investment adviser. (1) CDA has engaged in no other business during the past two fiscal years. (2) The following list sets forth other substantial business activities of the partners and officers of CDA during the past two years. (a) Lawrence Katz, a partner in CDA, is an orthopedic surgeon in private practice. (b) Saltzman Partners, a partner in CDA, is a limited partnership that invests in companies and businesses. (c) Cango Inversiones, SA, a partner in CDA, is a foreign business entity that invests in U.S. companies and businesses. B. King Investment Advisors Inc., 1980 Post Oak Boulevard, Suite 2400, Houston, Texas 77056-3898 ("King King"), adviser to the Fountainhead Special Value Fund and the Fountainhead Kaleidoscope Fund, is a registered investment adviser. (1) King has engaged in no other business during the past two fiscal years. (2) The following list sets forth other substantial business activities of the directors and officers of King during the past two years. (a) John Servis, a director of JKA King, is a licensed real estate broker. C. GLOBALT, Inc., 3060 Peachtree Road, N.W., One Buckhead Plaza, Suite 225, Atlanta, Georgia 30305 ("GLOBALT"), adviser to GLOBALT Growth Fund, is a registered investment adviser. (1) GLOBALT has engaged in no other business during the past two fiscal years. (2) The following list sets forth other substantial business activities of the officers and directors of GLOBALT during the past two years. (a) Gregory S. Paulette, an officer of GLOBALT, is the president of GLOBALT Capital Management, a division of GLOBALT. D. IMS Capital Management, Inc., 10159 S.E. Sunnyside Road, Suite 330, Portland, Oregon 97015, ("IMS"), Adviser to the IMS Capital Value Fund, is a registered investment adviser. (1) IMS has engaged in no other business during the past two fiscal years. (2) The following list sets forth other substantial business activities of the directors and officers of IMS during the past two years - None. E. CommonWealth Advisors, Inc., 929 Government Street, Baton Rouge, Louisiana 70802, ("CommonWealth"), Adviser to the Florida Street Bond Fund and the Florida Street Growth Fund, is a registered investment adviser. (1) CommonWealth has engaged in no other business during the past two fiscal years. (2) The following list sets forth other substantial business activities of the directors and officers of CommonWealth during the past two years. (a) Walter A. Morales, President/Chief Investment Officer of CommonWealth was the Director of an insurance/broadcasting corporation, Guaranty Corporation, 929 Government Street, Baton Rouge, Louisiana 70802 from August 1994 to February 1996. From September 1994 through the present, a registered representative of a Broker/Dealer company, Securities Service Network, 2225 Peters Road, Knoxville, Tennessee 37923. Beginning August 1995 through the present, an instructor at the University of Southwestern Louisiana in Lafayette, Louisiana. F. Corbin & Company, 1320 S. University Drive, Suite 406, Fort Worth, Texas 76107, ("Corbin"), Adviser to the Corbin Small-Cap Value Fund, is a registered investment adviser. (1) Corbin has engaged in no other business during the past two fiscal years. (2) The following list sets forth other substantial business activities of the directors and officers of Corbin during the past two years - None. G. Burroughs & Hutchinson, Inc., 702 West Idaho Street, Suite 810, Boise, Idaho ("B&H"), advisor to Marathon Value Fund, is a registered investment adviser. (1) B&H has engaged in no other business during the past two fiscal years. (2) The following list sets forth other substantial business activities of the directors and officers of B&H during the past two years. Mark R. Matsko, Vice President and Director of B&H, was broker with D.A. Davidson & Co., a broker/dealer in Boise, Idaho, from 1994 to 1996. H. The Jumper Group, Inc., 1 Union Square, Suite 505, Chattanooga, Tennessee 37402, ("Jumper"), Advisor to the Jumper Strategic Advantage Fund, is a registered investment advisor. (1) Jumper has engaged in no other business during the past two fiscal years. (2) The following list set forth other substantial business activities of the directors and officers of Jumper during the past two years - None. I. Appalachian Asset Management, Inc., 1018 Kanawha Blvd., East, Suite 209, Charleston, WV 25301 ("AAM"), advisor to AAM Equity Fund, is a registered investment advisor. (1) AAM has engaged in no other business during the past two fiscal years. (2) The following list sets forth other substantial business activities of the directors and officers of AAM during the past two years - None. J. Martin Capital Advisors, L.L.P. ("Martin"), 816 Congress Ave., Suite 1540, Austin, TX 78701 ("Martin"), advisor to Austin Opportunity Fund, Texas Opportunity Fund, and U.S. Opportunity Fund, is a registered investment advisor. (1) Martin has engaged in no other business during the past two fiscal years. (2) The following list sets forth other substantial business activities of the directors and officers of GJMB during the past two years - None. K. Gamble, Jones, Morphy & Bent, Inc., 301 East Colorado Boulevard, Suite 802, Pasadena, California 91101 ("GJMB"), Advisor to the GJMB Fund, is a registered investment advisor. (1) GJMB has engaged in no other business during the past two fiscal years. (2) The following list sets forth other substantial business activities of the directors and officers of GJMB during the past two years - None. L. Cornerstone Investment Management, L.L.C. 132 West Main Street, Aspen, Colorado 81611 ("Cornerstone"), Advisor to the Cornerstone MVP Fund, is a registered investment advisor. (1) Cornerstone has engaged in no other business during the past two fiscal years. (2) The following list sets forth other substantial business activities of the directors and officers of Cornerstone during the past two years: Christopher Shawn Ryan, managing member of Cornerstone, was Vice President-Portfolio Manager at NationsBank in Dallas, Texas from January 1994 to October 1997. M. Dobson Capital Management, Inc., 1422 Van Ness Street., Santa Ana, CA 92707 ("Dobson"), Advisor to the Dobson Covered Call Fund, is a registered investment advisor. (1) Dobson has engaged in no other business during the past two fiscal years. (2) The following list sets forth other substantial business activities of the directors and officers of Dobson during the past two years: Charles L. Dobson, President of Dobson, was the Director of Trading with Analytic/TSA Global Asset Management, 700 S. Flower Street, Suite 2400, Los Angeles CA, from 1996 to 1998. N. Auxier Asset Management, LLC, 8050 S.W. Warm Springs, Suite 130, Tualatin, OR 97062 ("Auxier"), Advisor to the Auxier Focus Fund, is registered investment advisor. (1) Auxier has engaged in no other business during the past two fiscal years. (2) The following list sets forth other substantial business activities of the directors and officers of Auxier during the past two years: Jeffrey Auxier, Managing Member of Auxier, was a Senior Portfolio Management Director with Smith Barney, Inc. until 1998. O. Cornerstone Capital Management, Inc., 6760 Corporate Drive, Suite 230, Colorado Springs, CO 80919 ("CCM"), Adviser to the Shepherd Value Market Fund and the Shepherd Value Growth Fund, is a registered investment advisor. (1) CCM has engaged in no other business during the past two fiscal years. (2) The following list sets forth other substantial business activities of the directors and officers of CCM during the past two years: a) Darrel Uselton, Director of CCM, is the Chairman of The National Capital Companies, an investment banking firm. b) Joseph Cerbone, Director of CCM, is the President of The National Capital Companies, an investment banking firm. c) Jason D. Huntley, Director of CCM, was Director of Institutional Services with First Affirmative/Walnut Street Advisers, Colorado Springs, CO, an investment advisory firm, from 1996 to 1997. d) Colleen Helm, Director of CCM, was a portfolio manager with Angell Financial, an investment adviser, from January 1998 to November 1999. Prior to that, she was a portfolio manager with Pinnacle Financial Advisory Group, an investment adviser. e) Donald Ellsworth, Director of CCM, was the President of Ellsworth Advisory Group, Inc., an investment counseling firm, from June 1987 until June 1999. P. Columbia Partners, L.L.C., Investment Management, 1775 Pennsylvania Avenue, N.W., Washington, DC 20006 ("Columbia"), Advisor to the Columbia Partners Equity Fund, is a registered investment advisor. (1) Columbia has engaged in no other business during the past two fiscal years. (2) The following list sets forth other substantial business activities of the directors and officers of Columbia during the past two years: Rhys H. Williams, a principal of Columbia, has been a portfolio manager at Columbia since late 1997. Prior to that time, Mr. Williams was the Senior Vice President at Prudential Securities in Philadelphia, PA since 1987. Q. Legacy Investment Group, LLC, d/b/a Cash Management Systems, 290 Turnpike Road, #338, Westborogh, Massachusetts ("CMS), Advisor to The Cash Fund, is a registered investment advisor. 1. CMS has engaged in no other business during the past two years. 2. The following list sets forth other substantial business activities of the directors and officers of CMS during the past two years: David W. Reavill, Member of CMS, was a Vice President with Fixed Income Discount Advisory Corp., Shrewsbury, MA, a money market firm, from 1997 to 1998 and a Vice President of Reich & Tang, LLC, Westlake Village, CA, a money market firm, from 1996 to 1997. R. Ariston Capital Management Corporation, 40 Lake Bellevue Drive, Suite 220, Bellevue, Washington 98005 ("Ariston"), Advisor to the Ariston Convertible Securities Fund and the Ariston Internet Convertible Fund, is a registered investment advisor. 1. Ariston has engaged in no other business during the past two years. 2. The following list sets forth other substantial business activities of the directors and officers of Ariston during the past two years: None. S. Leader Capital Corp., 121 S.W. Morrison St., Ste. 450, Portland, OR 97204 ("Leader"), Adviser to the Leader Converted Mutual Bank Fund, is a registered investment advisor. 1. Leader has engaged in no other business during the past two fiscal years. 2. The following list sets forth other substantial business activities of the directors and officers of Leader during the past two years: (a) John Lekas, President of Leader, was a registered representative with Smith Barney from July 1993 to November 1997. (b) Jason McMillen, Vice President of Leader, was a research assistant with Smith Barney from December 1996 to December 1997. (c) Carey Guenther, Secretary of Leader, was a customer account representative with Columbia Funds from July 1997 to January, 1998. T. Aegis Asset Management, Inc. ("Aegis"), 230 Westcott, Suite 1, Houston, Texas 77007, Adviser to Westcott Nothing But Net Fund, Westcott Large-Cap Fund and Westcott Fixed Income Fund, is a registered investment adviser. 1. Aegis has engaged in no other business during the past two fiscal years. 2. The following list sets forth other substantial business activities of the directors and officers of Aegis during the past two years: (a) Thomas Layng Guerriero, President of Aegis, has been the President of Westcott Securities, L.L.C., a broker/dealer, from April 1998 to the present. 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, Treasurer and Secretary and a Trustee of the Registrant. It is also the underwriter for the 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 Custodians, Firstar Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, Bank of New York, 1 Wall Street, New York, NY 10286, and UMB Bank, N.A., Securities Administration Dept., 928 Grand Blvd., 10th Floor, Kansas City, MO 64106, and/or transfer and shareholder service agents, American Data Services, Inc., Hauppauge Corporate Center, 150 Motor Parkway, Hauppauge, New York 11760 and Unified Fund Services, Inc., 431 Pennsylvania Street, Indianapolis, IN 46204. ITEM 29. MANAGEMENT SERVICES NOT DISCUSSED IN PARTS A OR B - -------- ------------------------------------------------- None. ITEM 30. UNDERTAKINGS None. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this Registration Statement under Rule 458(b) under the Securities Act and has duly caused this Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of Cincinnati, State of Ohio, on the 6th day of March, 2000. AmeriPrime Funds By: ____/s/_____________________________ Donald S. Mendelsohn, Attorney-in-Fact Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Kenneth D. Trumpfheller,* President, Treasurer and Trustee *By: ____/s/___________________________ Donald S. Mendelsohn, Gary E. Hippensteil,* Trustee Attorney-in-Fact Steve L. Cobb,* Trustee March 6, 2000 EXHIBIT INDEX 1. Amendment No. 20 to Agreement and Declaration of Trust...........EX-99.23.a 2. Exhibit A to Underwriting Agreement..............................EX-99.23.e 3. Appendix B to Custody Agreement..................................EX-99.23.g 4. Consent of Counsel...............................................EX-99.23.i 5. Consent of Auditors..............................................EX-99.23.j 6. Code of Ethics.................................................EX-99.23.p.i 7. Code of Ethics Type J.........................................EX-99.23.p.ii 8. Code of Ethics Type D........................................EX-99.23.p.iii EX-99.23.A 2 AGREEMENT AND DECLARATION OF TRUST AMERIPRIME FUNDS AMENDMENT NO. 20 AGREEMENT AND DECLARATION OF TRUST 1........Pursuant to Sections 4.1 and 7.3 of the Agreement and Declaration of Trust of AmeriPrime Funds, and effective upon the execution of this document, the undersigned, being a majority of the trustees of AmeriPrime Funds, hereby: (a) establish a new series of shares of the Trust and designate such series as the "Ariston Internet Convertible Fund" with two classes of shares, designated the "Premier Class" and the "Elite Class," (b) abolish the series designated as the MAI Enhanced Equity Benchmark Fund, MAI Enhanced Growth & Income Fund, MAI Enhanced Aggressive Growth Fund, MAI Enhanced Income Fund, MAI Enhanced Capital Appreciation Fund, MAI Enhanced Global Fund and the Worthington Theme Fund. (c) change the designation of the series of shares designated as the "Marathon Value Fund" to the "Marathon Value Portfolio." (d) the relative rights and preferences of each designated series shall be those rights and preferences set forth in Section 4.2 of the Agreement and Declaration of Trust of AmeriPrime Funds. 2........This document shall have the status of an Amendment to said Agreement and Declaration of Trust, and may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. /S/ --------------------- Steve L. Cobb /S/ --------------------- Gary E. Hippenstiel /S/ --------------------- Kenneth D. Trumpfheller Dated: February 29, 2000 EX-99.23.E 3 UNDERWRITING AGREEMENT EXHIBIT A UNDERWRITING AGREEMENT DATED MARCH 5, 1996 Amended 2/29/00 o AAM Equity Fund o Ariston Convertible Securities Fund o Ariston Internet Convertible Fund o Auxier Focus Fund o Carl Domino Equity Income Fund o Carl Domino Global Equity Income Fund o Carl Domino Growth Fund o Columbia Partners Equity Fund o Corbin Small-Cap Value Fund o Cornerstone MVP Fund o Dobson Covered Call Fund o Florida Street Bond Fund o Florida Street Growth Fund o Fountainhead Kaleidoscope Fund o Fountainhead Special Value Fund o GLOBALT Growth Fund o GJMB Growth Fund o IMS Capital Value Fund o Jumper Strategic Advantage Fund o Marathon Value Fund o Martin Capital Austin Opportunity Fund o Martin Capital Texas Opportunity Fund o Martin Capital U.S. Opportunity Fund o Shepherd Values Fixed Income Fund o Shepherd Values Growth Fund o Shepherd Values International Fund o Shepherd Values Market Neutral Fund o Shepherd Values Small-Cap Fund o Shepherd Values VIF Equity Fund o The Cash Fund o Westcott Nothing But Net Fund o Westcott Large-Cap Fund o Westcott Fixed Income Fund EX-99.23.G 4 APPENDIX B TO CUSTODY AGREEMENT CUSTODY AGREEMENT APPENDIX B Amended 2/29/00 AAM Equity Fund Ariston Convertible Securities Fund Ariston Internet Convertible Fund Auxier Focus Fund Carl Domino Equity Income Fund Carl Domino Global Equity Income Fund Carl Domino Growth Fund Columbia Partners Equity Fund Corbin Small-Cap Value Fund Cornerstone MVP Fund Fountainhead Kaleidoscope Fund Fountainhead Special Value Fund GLOBALT Growth Fund GJMB Growth Fund IMS Capital Value Fund Jumper Strategic Advantage Fund Marathon Value Fund Martin Capital Austin Opportunity Fund Martin Capital Texas Opportunity Fund Martin Capital U.S. Opportunity Fund Shepherd Values Fixed Income Fund Shepherd Values Growth Fund Shepherd Values International Fund Shepherd Values Market Neutral Fund Shepherd Values Small-Cap Fund Shepherd Values VIF Equity Fund Westcott Nothing But Net Fund Westcott Large-Cap Fund Westcott Fixed Income Fund EX-99.23.I 5 CONSENT OF COUNSEL BROWN, CUMMINS & BROWN CO., L.P.A. ATTORNEYS AND COUNSELORS AT LAW 3500 CAREW TOWER J. W. BROWN (1911-1995) 441 VINE STREET JOANN M. STRASSER JAMES R. CUMMINS CINCINNATI, OHIO 45202 AARON A. VANDERLAAN ROBERT S BROWN TELEPHONE (513) 381-2121 DONALD S. MENDELSOHN TELECOPIER (513) 381-2125 OF COUNSEL LYNNE SKILKEN GILBERT BETTMAN AMY G. APPLEGATE KATHRYN KNUE PRZYWARA MELANIE S. CORWIN March 6, 2000 AmeriPrime Funds 1793 Kingswood Drive Southlake, Texas 76092 RE: AMERIPRIME FUNDS, FILE NOS. 33-96826 AND 811-9096 Gentlemen: Legal opinions that we prepared were filed with Post-Effective Amendment No. 9 and Post-Effective Amendment No. 29 (the "Legal Opinions") to the Registration Statement. We hereby give you our consent to incorporate by reference the Legal Opinions into Post-Effective Amendment No. 40 to your Registration Statement (the "Amendment"), and consent to all references to us in the Amendment. Very truly yours, ______/s/________________________ Brown, Cummins & Brown Co., L.P.A. EX-99.23.J 6 CONSENT OF AUDITORS CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the use of our report dated January 20, 2000, for the Ariston Convertible Securities Fund and to all references to our firm included in or made a part of this Post-Effective Amendment No. 40 to AmeriPrime Fund's Registration Statement on Form N-1A (file No. 33-96826), including the references to our firm under the heading "Financial Highlights" in the Prospectus and heading "Accountants" in the Statement of Additional Information. ______/s/_______________________ McCurdy & Associates CPA's, Inc. Westlake, Ohio March 6, 2000 EX-99.23.P.I 7 CODE OF ETHICS AMERIPRIME FUNDS CODE OF ETHICS STATEMENT OF PRINCIPLES AmeriPrime Funds (the "Trust") has adopted this Code of Ethics to govern personal securities investment activities of persons affiliated with the investment advisers listed on Schedule A of this Code, and the officers and trustees of the Trust (collectively, "AmeriPrime Personnel"). Although this Code contains a number of specific standards and policies, there are three key principles embodied throughout the Code. THE INTERESTS OF TRUST SHAREHOLDERS MUST ALWAYS BE PARAMOUNT AmeriPrime Personnel have a legal, fiduciary duty to place the interests of clients first. In any decision relating to their personal investments, AmeriPrime Personnel must scrupulously avoid serving their own interests ahead of those of any client. AMERIPRIME PERSONNEL MAY NOT TAKE INAPPROPRIATE ADVANTAGE OF THEIR RELATIONSHIP TO OUR SHAREHOLDERS AmeriPrime Personnel should avoid any situation (unusual investment opportunities, perquisites, accepting gifts of more than token value from persons seeking to do business with the Advisers or the Trust) that might compromise, or call into question, the exercise of their fully independent judgement in the interests of trust shareholders. ALL PERSONAL SECURITIES TRANSACTIONS SHOULD AVOID ANY ACTUAL, POTENTIAL OR APPARENT CONFLICTS OF INTEREST Although all personal securities transactions by AmeriPrime Personnel must be conducted in a manner consistent with this Code, the Code itself is based upon the premise that AmeriPrime Personnel owe a fiduciary duty to clients, and should avoid any activity that creates an actual, potential or apparent conflict of interest. This includes executing transactions through or for the benefit of a third party when the transaction is not in keeping with the general principles of this Code. AMERIPRIME PERSONNEL MUST ADHERE TO THESE GENERAL PRINCIPLES AS WELL AS COMPLY WITH THE SPECIFIC PROVISIONS OF THIS CODE. TECHNICAL COMPLIANCE WITH THE CODE AND ITS PROCEDURES WILL NOT AUTOMATICALLY PREVENT SCRUTINY OF TRADES THAT SHOW A PATTERN OF ABUSE OF AN INDIVIDUAL'S FIDUCIARY DUTIES OF CLIENTS. DEFINITIONS "ACT" means the Investment Company Act of 1940. "ADVISERS" means the Advisers listed on Schedule A to this Code. ("Schedule A" shall mean such schedule as it may be amended from time to time.) 5389 "AFFILIATED FUNDS" means, for Adviser Personnel, the Fund for which such Adviser serves as investment adviser, and for Trust Personnel, all Funds. "ADVISER PERSONNEL" means all employees, whether full-time or part-time, of the Advisers. Any provisions of this Code that apply directly to Adviser Personnel apply equally to accounts in the names of other persons in which Adviser Personnel have Beneficial Ownership. "BENEFICIAL OWNERSHIP" means the opportunity, directly or indirectly, to profit or share in any profit derived from the purchase or sale of the subject Securities. "Beneficial Ownership" includes, but is not limited to, ownership of Securities held by members of the family. For these purposes, a person's family includes the spouse, minor children, any person living in the home and any relative to whose support the person directly or indirectly contributes. "CONTROL" means the power to exercise a controlling influence over the management or policies of the Trust, unless such power is solely the result of an official position with a Trust. Any person who beneficially owns, either directly or through one or more controlled companies, more than 25 percent of the voting securities of any present Fund of a Trust shall be presumed to control such Fund. Any such presumption may be rebutted by evidence, in accordance with Section 2(a)(9) of the Act. "COMPLIANCE OFFICER" means, for Adviser Personnel, the person designated as the Compliance Officer by such Adviser, and for Trust Personnel, all Compliance Officers. "FUND" means any of the Funds listed on Schedule A to this Code. "PORTFOLIO MANAGERS" means those Adviser Personnel entrusted with the direct responsibility and authority to make investment decisions affecting any Fund. A list of Fund Portfolio Managers is attached as Schedule A to this Code. Any provisions of this Code that apply directly to Personal Securities Transactions by a Fund Portfolio Manager apply equally to transactions in accounts in the names of other persons in which the Fund Portfolio Manager has Beneficial Ownership. "PERSONAL SECURITIES TRANSACTION(S)" means transactions in Securities for the account(s) in the names of AmeriPrime Personnel, or for accounts in which AmeriPrime Personnel have Beneficial Ownership. "TRUST" means AmeriPrime Funds. "TRUST PERSONNEL" means any officer or Trustee of the Trust. "SECURITY" means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, pre-organization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas or other mineral rights, or, in general, any interest or instrument commonly known as "security," or any certificate or interest or participation in temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase (including options) any of the foregoing. The term "Security" shall not include the following securities (the "Excluded Securities"): (i) shares of registered open-end investment companies; (ii) securities issued by the United States government; (iii) short term debt securities which are government securities within the meaning of Section 2(a)(16) of the Act; (iv) bankers' acceptances; (v) bank certificates of deposit; (vi) commercial paper and (vii) such other money market instruments as may be designated by the Trust's Board of Trustees. "PURCHASE OR SALE OF A SECURITY" includes the writing of an option to purchase or sell a Security. A Security shall be deemed "BEING CONSIDERED FOR PURCHASE OR SALE" by a Fund when a recommendation to purchase or sell has been made and communicated and, with respect to the person making the recommendation, when such person seriously considers making such a recommendation. A Security shall not be deemed to be one which is "being considered for Purchase or Sale" by a Fund if such Security is reviewed as part of a general industrial survey or other broad monitoring of the securities market. PROHIBITED PURCHASES AND SALES OF SECURITIES In a Personal Securities Transaction, Portfolio Managers may not: o Purchase or Sell a Security within three calendar days before and one calendar day after the execution of a trade in the same Security or an equivalent Security by the Affiliated Fund. If a Fund is engaged in a trading program extending over several trading days, the prohibition on trading by Mutual Fund Portfolio Managers begins three trading days prior to the first Fund transaction in that program, and ends one trading day after the last transaction in that program. In a Personal Securities Transaction, Adviser Personnel may not: o Acquire any Security in an initial public offering; o Acquire any Security in a private placement without prior written authorization of the acquisition by the Compliance Officer of the Adviser with whom the person is affiliated. Any decision by a Fund to invest in such Securities must be approved solely by Adviser Personnel with no investment in the issuer; o In any calendar year, receive a gift or anything else (for example, air fare, hotel accommodations, etc.) with a value of more than $100 from any single person or entity that does business with or on behalf of the Trust; o Serve on the board of directors of a publicly traded company without prior authorization from the Board of Trustees of the Trust based upon a determination that such service would be consistent with the interests of the Trust and its shareholders. Adviser Personnel that serve on such boards of directors are not permitted to participate in any investment decisions made by the Trust involving Securities of a company on whose board they serve; o Execute a Personal Securities Transaction without the prior written authorization of the Compliance Officer. Adviser Personnel and Trust Personnel may not: o Execute a Personal Securities Transaction on a day during which the Affiliated Fund has a pending "buy" or "sell" order in that Security or an equivalent Security, until the Affiliated Fund's order is executed or withdrawn. In the case of "good until canceled" orders placed by a Fund, this provision applies only if the market price is within 2 points or 10% of the "good until canceled" price; or o Execute a Personal Securities Transaction in a Security or an equivalent Security that is being considered for Purchase or Sale by an Affiliated Fund; provided, however, that for Trust Personnel, these prohibitions shall only apply with respect to Personal Securities Transactions if the Trust Personnel knew or, in the ordinary course of fulfilling his or her duties as an officer or Trustee of the Trust, should have known, that during the fifteen day period immediately preceding or after the date of the Personal Security Transaction in the Security by the officer or Trustee such Security is or was purchased or sold by a Fund or such purchase or sale by a Fund is or was considered by a Fund or the Adviser. EXEMPTED TRANSACTIONS The provisions described above under the heading PROHIBITED PURCHASES AND SALES OF SECURITIES and the preclearance procedures under the heading PRECLEARANCE OF PERSONAL SECURITIES TRANSACTIONS do not apply to: o Purchases or Sales of Excluded Securities; o Purchases or Sales of Securities involving less than 2,000 shares of any Security included in the Standard & Poor's 500 Index; o Purchases or Sales of Securities involving less than 2,000 shares of a Security of a company with a market capitalization in excess of $200 million and average daily trading volume in excess of 50,000 shares for the past ten trading days; o Purchases or Sales of options contracts on a broad-based market index; o Purchases or Sales of Securities effected in any account in which AmeriPrime Personnel have no Beneficial Ownership; o Purchases or Sales of Securities which are non-volitional on the part of either AmeriPrime Personnel or a Fund (for example, the receipt of stock dividends); o Purchases of Securities made as part of automatic dividend reinvestment plans; o Purchases of Securities made as part of an employee benefit plan involving the periodic purchase of company stock or mutual funds; and o Purchases of Securities effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sale of such rights so acquired. PRECLEARANCE OF PERSONAL SECURITIES TRANSACTIONS. All Adviser Personnel wishing to engage in Personal Securities Transaction, must obtain prior written authorization of any such Personal Securities Transaction from the Compliance Officer or such person or persons that such Compliance Officer may from time to time designate to make such written authorizations. Personal Securities Transactions by a Compliance Officer shall require prior written authorization of the President of the Adviser with whom the Compliance Officer is affiliated, or his designate, who shall perform the review and approval functions relating to reports and trading by the Chief Compliance Officer. The Adviser shall adopt the appropriate forms and procedures for implementing this Code of Ethics. Any authorization so provided is effective until the close of business on the fifth trading day after the authorization is granted. In the event that an order for the Personal Securities Transaction is not placed within that time period, a new authorization must be obtained. If the order for the transaction is placed but not executed within that time period, no new authorization is required unless the person placing the original order amends the order in any manner. Authorization for "good until canceled" orders are effective until the order conflicts with a Fund order. If a person wishing to affect a Personal Securities Transaction learns, while the order is pending that the same Security is being considered for Purchase or Sale by the Fund, such person shall cancel the trade. NOTIFICATION OF FUND TRADING ACTIVITY In addition to placing Purchase or Sale Orders for the Funds, the Mutual Fund Portfolio Managers, or their designates, shall notify, their respective Compliance Officers of daily purchases and sales and of Securities being considered for Purchase or Sale by the Affiliated Fund (other than anticipated transactions in Excluded Securities). TRANSACTION AND ACCOUNT POSITION REPORTING REQUIREMENTS DISCLOSURE OF PERSONAL BROKERAGE ACCOUNTS At the commencement of employment with an Adviser, all Adviser Personnel are required to submit to the Compliance Officer, the names and account numbers of all of their personal brokerage accounts, brokerage accounts of members of their immediate families, and any brokerage accounts which they control or in which they or an immediate family member has Beneficial Ownership. Each of these accounts is required to furnish duplicate confirmations and statements to the Adviser with whom the person is affiliated. ANNUAL REPORTING REQUIREMENTS All Adviser Personnel are required to disclose all personal Securities holdings upon commencement of employment, and thereafter on an annual basis. At the commencement of employment and, thereafter, at the beginning of the first quarter of each fiscal year, all Adviser Personnel are required to certify that they have read and understand this Code and that they have complied with its requirements throughout the prior fiscal year. QUARTERLY REPORTING REQUIREMENTS All Adviser Personnel, shall report to the Compliance Officer of the Adviser with whom the person is affiliated the following information with respect to transactions in any Security in which such person has, or by reason of such transaction acquires, any direct or indirect Beneficial Ownership in the Security: o The date of the transaction, the title and the number of shares, and the principal amount of each Security involved; o The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition); o The price at which the transaction was effected; and o The name of the broker, dealer or bank with or through whom the transaction was effected. Trust Personnel who knew or, in the ordinary course of fulfilling his or her duties as an officer or Trustee of the Trust, should have known, that during the fifteen day period immediately preceding or after the date of a Personal Security Transaction in a Security by the officer or Trustee such Security is or was purchased or sold by a Fund or such purchase or sale by a Fund is or was considered by a Fund or the Adviser, shall make the above disclosures to the Board of Trustees, but only with respect to the applicable Personnel Security Transactions. Reports pursuant to this section of this Code shall be made no later than 10 days after the end of the calendar quarter in which the transaction to which the report relates was effected, and shall include a certification that the reporting person has reported all Personal Securities Transactions required to be disclosed or reported pursuant to the requirements of this Code. Any such report may contain a statement that the report shall not be construed as an admission by the person making such report that he or she has any direct or indirect Beneficial Ownership in the Security to which the report relates. Adviser Personnel and Trust Personnel need not make such a report with respect to transactions effected for any account in which they may have Beneficial Ownership, but over which they do not have any direct or indirect influence or control (for example, a blind trust). ENFORCEMENT AND PENALTIES The Compliance Officers of the Advisers shall review the transaction information supplied by their employees, whether full-time or part-time. The Board of Trustees will review the transaction information supplied by the Trust Personnel. If a transaction appears to be in violation of this Code of Ethics, the transaction will be reported to the Adviser with whom the person is affiliated as well as the Board of Trustees of the Trust. Upon being informed of a violation of this Code of Ethics, the Adviser may impose such sanctions at it deems appropriate, including but not limited to, a letter of censure or suspension, termination of the employment of the violator or a request for disgorgement of any profits received from a securities transaction effected in violation of this Code of Ethics. The Adviser shall impose sanctions in accordance with the principle that no AmeriPrime Personnel may profit at the expense of the shareholders of the Trust. Any sanctions imposed with respect thereto shall be reported periodically to the Board of Trustees of the Trust. DUTIES AND POWERS OF THE BOARD OF TRUSTEES Each Adviser shall submit to the Board of Trustees of the Trust at each regular meeting of the Board, a report on Personal Securities Transactions by Adviser Personnel. Such reports shall be reviewed by the Board of Trustees in order to determine whether any violation of this Code or any section of the Act or the regulations promulgated thereunder has occurred. Annually, each Adviser shall submit to the Board of Trustees a report that: o Summarizes existing procedures concerning Personal Securities investing and any changes in the procedures made during the prior year; o Identifies any violations of this Code and any significant remedial action taken during the prior year; and o Identifies any recommended changes in existing restrictions or procedures based upon the experience under the Code, evolving industry practices or developments in applicable laws and regulations. The Board of Trustees of the Trust may, in their discretion, take any actions and impose any penalty it deems appropriate upon any person that has violated the Code of Ethics of the Trust or engaged in a course of conduct which, although in technical compliance with this Code, shows a pattern of abuse by that person of his or her fiduciary duties to the Trust. The above actions of the Board of Trustees may be in addition to any action taken by the applicable Adviser against the person or persons involved. SCHEDULE A - ADVISERS AND PORTFOLIO MANAGERS =============================================== ======================================= ====================================== FUND ADVISER PORTFOLIO MANAGERS - ----------------------------------------------- --------------------------------------- -------------------------------------- - ----------------------------------------------- --------------------------------------- -------------------------------------- AIT Vision U.S. Equity Portfolio LBS Capital Management, Inc. Douglas W. Case, Dean S. Barr - ----------------------------------------------- --------------------------------------- -------------------------------------- - ----------------------------------------------- --------------------------------------- -------------------------------------- Fountainhead Value Fund Jenswold, King & Associates, Inc. Roger E. King Fountainhead Kaleidoscope Fund King Investment Advisors, Inc. - ----------------------------------------------- --------------------------------------- -------------------------------------- - ----------------------------------------------- --------------------------------------- -------------------------------------- GLOBALT Growth Fund GLOBALT, Inc. Samuel E. Allen, Gary E. Fullam, Gregory S. Paulette, Angela Z. Allen - ----------------------------------------------- --------------------------------------- -------------------------------------- - ----------------------------------------------- --------------------------------------- -------------------------------------- MAXIM Contrarian Newport Investment Advisors, Inc. Kenneth Holeski - ----------------------------------------------- --------------------------------------- -------------------------------------- - ----------------------------------------------- --------------------------------------- -------------------------------------- IMS Capital Value Fund IMS Capital Management, Inc. Carl Marker - ----------------------------------------------- --------------------------------------- -------------------------------------- - ----------------------------------------------- --------------------------------------- -------------------------------------- Corbin Small-Cap Value Fund Corbin & Company David A. Corbin - ----------------------------------------------- --------------------------------------- -------------------------------------- - ----------------------------------------------- --------------------------------------- -------------------------------------- Florida Street Bond Fund CommonWealth Advisors, Inc. Walter A. Morales Florida Street Growth Fund - ----------------------------------------------- --------------------------------------- -------------------------------------- - ----------------------------------------------- --------------------------------------- -------------------------------------- Worthington Fund CWH Associates, Inc. Andrew Abrams, Cliff Henry - ----------------------------------------------- --------------------------------------- -------------------------------------- - ----------------------------------------------- --------------------------------------- -------------------------------------- Marathon Value Fund Burroughs & Hutchinson, Inc. Mark Matsko - ----------------------------------------------- --------------------------------------- -------------------------------------- - ----------------------------------------------- --------------------------------------- -------------------------------------- AAM Equity Fund Appalachian Asset Management, Inc. Knox Fuqua - ----------------------------------------------- --------------------------------------- -------------------------------------- - ----------------------------------------------- --------------------------------------- -------------------------------------- Austin Opportunity Fund Paul B. Martin, Jr. d/b/a/ Paul B. Martin Texas Opportunity Fund Martin Capital Advisors U.S. Opportunity Fund - ----------------------------------------------- ---------------------------------------- --------------------------------------- - ----------------------------------------------- ---------------------------------------- --------------------------------------- GJMB Fund Gamble, Jones Murphy & Bent, Inc. Committee - ----------------------------------------------- ---------------------------------------- ------------------------------------- - ----------------------------------------------- ---------------------------------------- ------------------------------------- Cornerstone MVP Fund Cornerstone Investment Christopher S. Ryan Management, L.L.C. - ----------------------------------------------- ---------------------------------------- ------------------------------------- - ----------------------------------------------- ---------------------------------------- ------------------------------------- Dobson Covered Call Fund Dobson Capital Management, Inc. Charles L. Dobson - ----------------------------------------------- ---------------------------------------- ------------------------------------- - ----------------------------------------------- ---------------------------------------- ------------------------------------- Auxier Equity Fund Auxier Investment, Inc., L.L.C. J. Jeffrey Auxier - ----------------------------------------------- ---------------------------------------- ------------------------------------- - ----------------------------------------------- ---------------------------------------- ------------------------------------- Shepherd Value Market Fund Cornerstone Capital Management, Inc. Jason Huntley Shepherd Value Growth Fund Shepherd Advisory Services, Inc. Shepherd Value Fixed Income Fund Shepherd Value International Fund Shepherd Value Small-Cap Fund Shepherd Value VIF Equity Fund - ----------------------------------------------- ---------------------------------------- ------------------------------------- - ----------------------------------------------- ---------------------------------------- ------------------------------------- 10K SmartTrust Fund Monument Investments, Inc. Paul Hamilton - ----------------------------------------------- ---------------------------------------- ------------------------------------- - ----------------------------------------------- ---------------------------------------- ------------------------------------- Columbia Partners Equity Fund Columbia Partners. L.C.C., Robert A. von Pentz, Gary Dickinson, Investment Management Rhys H. Williams - ----------------------------------------------- ---------------------------------------- -------------------------------------- - ----------------------------------------------- ---------------------------------------- -------------------------------------- The Cash Fund Cash Management Systems, Inc. - ----------------------------------------------- ---------------------------------------- -------------------------------------- - ----------------------------------------------- ---------------------------------------- -------------------------------------- The Ariston Convertible Securities Fund Ariston Capital Management Corporation - ----------------------------------------------- ---------------------------------------- -------------------------------------- - ----------------------------------------------- ---------------------------------------- -------------------------------------- Leader Converted Mutual Bank Fund Leader Capital Corp. - ----------------------------------------------- ---------------------------------------- -------------------------------------- - ----------------------------------------------- ---------------------------------------- -------------------------------------- Westcott Nothing But Net Fund Aegis Asset Management, Inc. Westcott Multi-National Large-Cap Fund Westcott Fixed Income Fund - ----------------------------------------------- ---------------------------------------- --------------------------------------
Schedule Revised on: September 22, 1999 EX-99.23.P.II 8 CODE OF ETHICS TYPE J AMERIPIME FUNDS CODE OF ETHICS - TYPE J STATEMENT OF PRINCIPLES AmeriPrime Funds (the "Trust") has adopted this Code of Ethics to govern personal securities investment activities of persons affiliated with the investment advisers listed on Schedule A of this Code, and the officers and trustees of the Trust (collectively, "AmeriPrime Personnel"). Although this Code contains a number of specific standards and policies, there are three key principles embodied throughout the Code. THE INTERESTS OF TRUST SHAREHOLDERS MUST ALWAYS BE PARAMOUNT AmeriPrime Personnel have a legal, fiduciary duty to place the interests of clients first. In any decision relating to their personal investments, AmeriPrime Personnel must scrupulously avoid serving their own interests ahead of those of any client. AMERIPRIME PERSONNEL MAY NOT TAKE INAPPROPRIATE ADVANTAGE OF THEIR RELATIONSHIP TO OUR SHAREHOLDERS AmeriPrime Personnel should avoid any situation (unusual investment opportunities, perquisites, accepting gifts of more than token value from persons seeking to do business with the Advisers or the Trust) that might compromise, or call into question, the exercise of their fully independent judgement in the interests of trust shareholders. ALL PERSONAL SECURITIES TRANSACTIONS SHOULD AVOID ANY ACTUAL, POTENTIAL OR APPARENT CONFLICTS OF INTEREST Although all personal securities transactions by AmeriPrime Personnel must be conducted in a manner consistent with this Code, the Code itself is based upon the premise that AmeriPrime Personnel owe a fiduciary duty to clients, and should avoid any activity that creates an actual, potential or apparent conflict of interest. This includes executing transactions through or for the benefit of a third party when the transaction is not in keeping with the general principles of this Code. AMERIPRIME PERSONNEL MUST ADHERE TO THESE GENERAL PRINCIPLES AS WELL AS COMPLY WITH THE SPECIFIC PROVISIONS OF THIS CODE. TECHNICAL COMPLIANCE WITH THE CODE AND ITS PROCEDURES WILL NOT AUTOMATICALLY PREVENT SCRUTINY OF TRADES THAT SHOW A PATTERN OF ABUSE OF AN INDIVIDUAL'S FIDUCIARY DUTIES OF CLIENTS. ASA02F74-101298-2 DEFINITIONS "ACT" means the Investment Company Act of 1940. "ADVISERS" means the Advisers listed on Schedule A to this Code. ("Schedule A" shall mean such schedule as it may be amended from time to time.) "AFFILIATED FUNDS" means, for Adviser Personnel, the Fund for which such Adviser serves as investment adviser, and for Trust Personnel, all Funds. "ADVISER PERSONNEL" means all employees, whether full-time or part-time who directly participate in the provision of advisory or other services to a Fund, and any director, officer or general partner of the Adviser. Any provisions of this Code that apply directly to Adviser Personnel apply equally to accounts in the names of other persons in which Adviser Personnel have Beneficial Ownership. "BENEFICIAL OWNERSHIP" means the opportunity, directly or indirectly, to profit or share in any profit derived from the purchase or sale of the subject Securities. "Beneficial Ownership" includes, but is not limited to, ownership of Securities held by members of the family. For these purposes, a person's family includes the spouse, minor children, any person living in the home and any relative to whose support the person directly or indirectly contributes. "CONTROL" means the power to exercise a controlling influence over the management or policies of the Trust, unless such power is solely the result of an official position with a Trust. Any person who beneficially owns, either directly or through one or more controlled companies, more than 25 percent of the voting securities of any present Fund of a Trust shall be presumed to control such Fund. Any such presumption may be rebutted by evidence, in accordance with Section 2(a)(9) of the Act. "COMPLIANCE OFFICER" means, for Adviser Personnel, the person designated as the Compliance Officer by such Adviser, and for Trust Personnel, all Compliance Officers. "FUND" means any of the Funds listed on Schedule A to this Code. "PORTFOLIO MANAGERS" means those Adviser Personnel entrusted with the direct responsibility and authority to make investment decisions affecting any Fund. A list of Fund Portfolio Managers is attached as Schedule A to this Code. Any provisions of this Code that apply directly to Personal Securities Transactions by a Fund Portfolio Manager apply equally to transactions in accounts in the names of other persons in which the Fund Portfolio Manager has Beneficial Ownership. "PERSONAL SECURITIES TRANSACTION(S)" means transactions in Securities for the account(s) in the names of AmeriPrime Personnel, or for accounts in which AmeriPrime Personnel have Beneficial Ownership. "TRUST" means AmeriPrime Funds. "TRUST PERSONNEL" means any officer or Trustee of the Trust. "SECURITY" means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, pre-organization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas or other mineral rights, or, in general, any interest or instrument commonly known as "security," or any certificate or interest or participation in temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase (including options) any of the foregoing. The term "Security" shall not include the following securities (the "Excluded Securities"): (i) shares of registered open-end investment companies; (ii) securities issued by the United States government; (iii) short term debt securities which are government securities within the meaning of Section 2(a)(16) of the Act; (iv) bankers' acceptances; (v) bank certificates of deposit; (vi) commercial paper and (vii) such other money market instruments as may be designated by the Trust's Board of Trustees. "PURCHASE OR SALE OF A SECURITY" includes the writing of an option to purchase or sell a Security. A Security shall be deemed "BEING CONSIDERED FOR PURCHASE OR SALE" by a Fund when a recommendation to purchase or sell has been made and communicated and, with respect to the person making the recommendation, when such person seriously considers making such a recommendation. A Security shall not be deemed to be one which is "being considered for Purchase or Sale" by a Fund if such Security is reviewed as part of a general industrial survey or other broad monitoring of the securities market. PROHIBITED PURCHASES AND SALES OF SECURITIES In a Personal Securities Transaction, Portfolio Managers may not: o Purchase or Sell a Security within three calendar days before and one calendar day after the execution of a trade in the same Security or an equivalent Security by the Affiliated Fund. If a Fund is engaged in a trading program extending over several trading days, the prohibition on trading by Mutual Fund Portfolio Managers begins three trading days prior to the first Fund transaction in that program, and ends one trading day after the last transaction in that program. In a Personal Securities Transaction, Adviser Personnel may not: o Acquire any Security in an initial public offering; o Acquire any Security in a private placement without prior written authorization of the acquisition by the Compliance Officer of the Adviser with whom the person is affiliated. Any decision by a Fund to invest in such Securities must be approved solely by Adviser Personnel with no investment in the issuer; o In any calendar year, receive a gift or anything else (for example, air fare, hotel accommodations, etc.) with a value of more than $100 from any single person or entity that does business with or on behalf of the Trust; o Serve on the board of directors of a publicly traded company without prior authorization from the Board of Trustees of the Trust based upon a determination that such service would be consistent with the interests of the Trust and its shareholders. Adviser Personnel that serve on such boards of directors are not permitted to participate in any investment decisions made by the Trust involving Securities of a company on whose board they serve; o Execute a Personal Securities Transaction without the prior written authorization of the Compliance Officer if the transaction involves the purchase or sale of more than 5,000 shares of any Security. Adviser Personnel and Trust Personnel may not: o Execute a Personal Securities Transaction on a day during which the Affiliated Fund has a pending "buy" or "sell" order in that Security or an equivalent Security, until the Affiliated Fund's order is executed or withdrawn. In the case of "good until canceled" orders placed by a Fund, this provision applies only if the market price is within 2 points or 10% of the "good until canceled" price; or o Execute a Personal Securities Transaction in a Security or an equivalent Security that is being considered for Purchase or Sale by an Affiliated Fund; provided, however, that for Trust Personnel, these prohibitions shall only apply with respect to a Personal Securities Transaction if the Trust Personnel knew or, in the ordinary course of fulfilling his or her duties as an officer or Trustee of the Trust, should have known, that during the fifteen day period immediately preceding or after the date of the Personal Security Transaction in the Security by the officer or Trustee such Security is or was purchased or sold by a Fund or such purchase of sale by a Fund is or was considered by a Fund or the Adviser. EXEMPTED TRANSACTIONS The provisions described above under the heading PROHIBITED PURCHASES AND SALES OF SECURITIES and the preclearance procedures under the heading PRECLEARANCE OF PERSONAL SECURITIES TRANSACTIONS do not apply to: o Purchases or Sales of Excluded Securities; o Purchases or Sales of Securities involving less than 5,000 shares of any Security included in the Standard & Poor's 500 Index; o Purchases or Sales of Securities involving less than 5,000 shares of a Security of a company with a market capitalization in excess of $200 million and average daily trading volume in excess of 50,000 shares for the past ten trading days; o Purchases or Sales of options contracts on a broad-based market index; o Purchases or Sales of Securities effected in any account in which AmeriPrime Personnel have no Beneficial Ownership; o Purchases or Sales of Securities which are non-volitional on the part of either AmeriPrime Personnel or a Fund; o Purchases of Securities made as part of automatic dividend reinvestment plans; o Purchases of Securities made as part of an employee benefit plan involving the periodic purchase of company stock or mutual funds; and o Purchases of Securities effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sale of such rights so acquired. PRECLEARANCE OF PERSONAL SECURITIES TRANSACTIONS. All Adviser Personnel wishing to engage in a Personal Securities Transaction involving the purchase or sale of more than 5,000 shares of any Security, must obtain prior written authorization of any such Personal Securities Transaction from the Compliance Officer or such person or persons that such Compliance Officer may from time to time designate to make such written authorizations. Such Personal Securities Transactions by a Compliance Officer shall require prior written authorization of the General Partner of the Adviser with whom the Compliance Officer is affiliated, or his designate, who shall perform the review and approval functions relating to reports and trading by the Chief Compliance Officer. The Adviser shall adopt the appropriate forms and procedures for implementing this Code of Ethics. Any authorization so provided is effective until the close of business on the fifth trading day after the authorization is granted. In the event that an order for the Personal Securities Transaction is not placed within that time period, a new authorization must be obtained. If the order for the transaction is placed but not executed within that time period, no new authorization is required unless the person placing the original order amends the order in any manner. Authorization for "good until canceled" orders are effective until the order conflicts with a Fund order. If a person wishing to affect a Personal Securities Transaction learns, while the order is pending that the same Security is being considered for Purchase or Sale by the Fund, such person shall cancel the trade. NOTIFICATION OF FUND TRADING ACTIVITY In addition to placing Purchase or Sale Orders for the Funds, the Mutual Fund Portfolio Managers, or their designates, shall notify, their respective Compliance Officers of daily purchases and sales and of Securities being considered for Purchase or Sale by the Affiliated Fund (other than anticipated transactions in Excluded Securities). In the alternative, a Compliance Officer must consult with their respective Portfolio Manager prior to authorizing a Personal Securities Transaction. TRANSACTION AND ACCOUNT POSITION REPORTING REQUIREMENTS DISCLOSURE OF PERSONAL BROKERAGE ACCOUNTS At the commencement of employment with an Adviser, all Adviser Personnel are required to submit to the Compliance Officer, the names and account numbers of all of their personal brokerage accounts, brokerage accounts of members of their immediate families, and any brokerage accounts which they control or in which they or an immediate family member has Beneficial Ownership. Any new such accounts established subsequent to the commencement of employment must be likewise disclosed. ANNUAL REPORTING REQUIREMENTS All Adviser Personnel are required to disclose all personal Securities holdings upon commencement of employment, and thereafter on an annual basis. At the commencement of employment and, thereafter, at the beginning of the first quarter of each fiscal year, all Adviser Personnel are required to certify that they have read and understand this Code and that they have complied with its requirements throughout the prior fiscal year. QUARTERLY REPORTING REQUIREMENTS All Adviser Personnel, shall report to the Compliance Officer of the Adviser with whom the person is affiliated the following information with respect to transactions in any Security in which such person has, or by reason of such transaction acquires, any direct or indirect Beneficial Ownership in the Security: o The date of the transaction, the title and the number of shares, and the principal amount of each Security involved; o The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition); o The price at which the transaction was effected; and o The name of the broker, dealer or bank with or through whom the transaction was effected. Trust Personnel who knew or, in the ordinary course of fulfilling his or her duties as an officer or Trustee of the Trust, should have known, that during the fifteen day period immediately preceding or after the date of a Personal Security Transaction in a Security by the officer or Trustee such Security is or was purchased or sold by a Fund or such purchase or sale by a Fund is or was considered by a Fund or the Adviser, shall make the above disclosures to the Board of Trustees, but only with respect to the applicable Personnel Security Transactions. Reports pursuant to this section of this Code shall be made no later than 10 days after the end of the calendar quarter in which the transaction to which the report relates was effected, and shall include a certification that the reporting person has reported all Personal Securities Transactions required to be disclosed or reported pursuant to the requirements of this Code. Any such report may contain a statement that the report shall not be construed as an admission by the person making such report that he or she has any direct or indirect Beneficial Ownership in the Security to which the report relates. Adviser Personnel and Trust Personnel need not make such a report with respect to transactions effected for any account in which they may have Beneficial Ownership, but over which they do not have any direct or indirect influence or control (for example, a blind trust). ENFORCEMENT AND PENALTIES The Compliance Officers of the Advisers shall review the transaction information supplied by their employees, whether full-time or part-time. The Board of Trustees will review any transaction information supplied by the Trust Personnel. If a transaction appears to be in violation of this Code of Ethics, the transaction will be reported to the Adviser with whom the person is affiliated as well as the Board of Trustees of the Trust. Upon being informed of a violation of this Code of Ethics, the Adviser may impose such sanctions at it deems appropriate, including but not limited to, a letter of censure or suspension, termination of the employment of the violator or a request for disgorgement of any profits received from a securities transaction effected in violation of this Code of Ethics. The Adviser shall impose sanctions in accordance with the principle that no AmeriPrime Personnel may profit at the expense of the shareholders of the Trust. Any sanctions imposed with respect thereto shall be reported periodically to the Board of Trustees of the Trust. DUTIES AND POWERS OF THE BOARD OF TRUSTEES Each Adviser shall submit to the Board of Trustees of the Trust at each regular meeting of the Board, a report on Personal Securities Transactions by Adviser Personnel. Such reports shall be reviewed by the Board of Trustees in order to determine whether any violation of this Code or any section of the Act or the regulations promulgated thereunder has occurred. Annually, each Adviser shall submit to the Board of Trustees a report that: o Summarizes existing procedures concerning Personal Securities investing and any changes in the procedures made during the prior year; o Identifies any violations of this Code and any significant remedial action taken during the prior year; and o Identifies any recommended changes in existing restrictions or procedures based upon the experience under the Code, evolving industry practices or developments in applicable laws and regulations. The Board of Trustees of the Trust shall report to the Adviser of the Fund in question any violations by Adviser Personnel of the Code of Ethics of the Trust or a course of conduct, which although in technical compliance with this Code, shows a pattern of abuse by that person of his or her fiduciary duties to the Trust. If the Adviser does not take corrective or disciplinary action satisfactory to the Trustees, the Trustees may remove the Adviser from its position as Adviser to the Fund. SCHEDULE A - ADVISERS AND PORTFOLIO MANAGERS ============================================== ==================================== ======================================== FUND ADVISER PORTFOLIO MANAGERS - ---------------------------------------------- ------------------------------------ ---------------------------------------- Fountainhead Special Jenswold, King & Roger E. King Value Fund Associates, Inc. ============================================== ==================================== ========================================
EX-99.23.P.III 9 CODE OF ETHICS TYPE D AMERIPRIME FUNDS CODE OF ETHICS - TYPE D STATEMENT OF PRINCIPLES AmeriPrime Funds (the "Trust") has adopted this Code of Ethics to govern personal securities investment activities of persons affiliated with Carl Domino Associates, L.P., and the officers and trustees of the Trust (collectively, "AmeriPrime Personnel"). Although this Code contains a number of specific standards and policies, there are three key principles embodied throughout the Code. THE INTERESTS OF TRUST SHAREHOLDERS MUST ALWAYS BE PARAMOUNT AmeriPrime Personnel have a legal, fiduciary duty to place the interests of clients first. In any decision relating to their personal investments, AmeriPrime Personnel must scrupulously avoid serving their own interests ahead of those of any client. AMERIPRIME PERSONNEL MAY NOT TAKE INAPPROPRIATE ADVANTAGE OF THEIR RELATIONSHIP TO OUR SHAREHOLDERS AmeriPrime Personnel should avoid any situation (unusual investment opportunities, perquisites, accepting gifts of more than token value from persons seeking to do business with the Advisers or the Trust) that might compromise, or call into question, the exercise of their fully independent judgement in the interests of trust shareholders. ALL PERSONAL SECURITIES TRANSACTIONS SHOULD AVOID ANY ACTUAL, POTENTIAL OR APPARENT CONFLICTS OF INTEREST Although all personal securities transactions by AmeriPrime Personnel must be conducted in a manner consistent with this Code, the Code itself is based upon the premise that AmeriPrime Personnel owe a fiduciary duty to clients, and should avoid any activity that creates an actual, potential or apparent conflict of interest. This includes executing transactions through or for the benefit of a third party when the transaction is not in keeping with the general principles of this Code. AMERIPRIME PERSONNEL MUST ADHERE TO THESE GENERAL PRINCIPLES AS WELL AS COMPLY WITH THE SPECIFIC PROVISIONS OF THIS CODE. TECHNICAL COMPLIANCE WITH THE CODE AND ITS PROCEDURES WILL NOT AUTOMATICALLY PREVENT SCRUTINY OF TRADES THAT SHOW A PATTERN OF ABUSE OF AN INDIVIDUAL'S FIDUCIARY DUTIES OF CLIENTS. DEFINITIONS "ACT" means the Investment Company Act of 1940. "ADVISERS" means Carl Domino Associates, L.P. "AFFILIATED FUNDS" means, for Adviser Personnel, the Fund for which such Adviser serves as investment adviser, and for Trust Personnel, all Funds. ASA02F71-101298-2 "ADVISER PERSONNEL" means all employees, whether full-time or part-time, of Carl Domino Associates, L.P. Any provisions of this Code that apply directly to Adviser Personnel apply equally to accounts in the names of other persons in which Adviser Personnel have Beneficial Ownership. "BENEFICIAL OWNERSHIP" means the opportunity, directly or indirectly, to profit or share in any profit derived from the purchase or sale of the subject Securities. "Beneficial Ownership" includes, but is not limited to, ownership of Securities held by members of the family. For these purposes, a person's family includes the spouse, minor children, any person living in the home and any relative to whose support the person directly or indirectly contributes. "CONTROL" means the power to exercise a controlling influence over the management or policies of the Trust, unless such power is solely the result of an official position with a Trust. Any person who beneficially owns, either directly or through one or more controlled companies, more than 25 percent of the voting securities of any present Fund of a Trust shall be presumed to control such Fund. Any such presumption may be rebutted by evidence, in accordance with Section 2(a)(9) of the Act. "COMPLIANCE OFFICER" means, for Adviser Personnel, the person designated as the Compliance Officer by such Adviser, and for Trust Personnel, all Compliance Officers. "FUND" means any of the Funds listed on Schedule A to this Code. "PORTFOLIO MANAGERS" means those Adviser Personnel entrusted with the direct responsibility and authority to make investment decisions affecting any Fund. A list of Fund Portfolio Managers is attached as Schedule A to this Code. Any provisions of this Code that apply directly to Personal Securities Transactions by a Fund Portfolio Manager apply equally to transactions in accounts in the names of other persons in which the Fund Portfolio Manager has Beneficial Ownership. "PERSONAL SECURITIES TRANSACTION(S)" means transactions in Securities for the account(s) in the names of AmeriPrime Personnel, or for accounts in which AmeriPrime Personnel have Beneficial Ownership. "TRUST" means AmeriPrime Funds. "TRUST PERSONNEL" means any officer or Trustee of the Trust. "SECURITY" means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, pre-organization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas or other mineral rights, or, in general, any interest or instrument commonly known as "security," or any certificate or interest or participation in temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase (including options) any of the foregoing. The term "Security" shall not include the following securities (the "Excluded Securities"): (i) shares of registered open-end investment companies; (ii) securities issued by the United States government; (iii) short term debt securities which are government securities within the meaning of Section 2(a)(16) of the Act; (iv) bankers' acceptances; (v) bank certificates of deposit; (vi) commercial paper and (vii) such other money market instruments as may be designated by the Trust's Board of Trustees. "PURCHASE OR SALE OF A SECURITY" includes the writing of an option to purchase or sell a Security. A Security shall be deemed "BEING CONSIDERED FOR PURCHASE OR SALE" by a Fund when a recommendation to purchase or sell has been made and communicated and, with respect to the person making the recommendation, when such person seriously considers making such a recommendation. A Security shall not be deemed to be one which is "being considered for Purchase or Sale" by a Fund if such Security is reviewed as part of a general industrial survey or other broad monitoring of the securities market. "YIELD HURDLE RATE" means the dividend payment rate that a security must satisfy to qualify as a security eligible for purchase for clients of the Adviser. The Yield Hurdle Rate is adjusted periodically by the Adviser and when used in this Code, means the Yield Hurdle Rate in effect at the time of a Personal Securities Transaction. PROHIBITED PURCHASES AND SALES OF SECURITIES In a Personal Securities Transaction, Portfolio Managers may not: o Purchase or Sell a Security within three calendar days before and one calendar day after the execution of a trade in the same Security or an equivalent Security by the Affiliated Fund. If a Fund is engaged in a trading program extending over several trading days, the prohibition on trading by Mutual Fund Portfolio Managers begins three trading days prior to the first Fund transaction in that program, and ends one trading day after the last transaction in that program. In a Personal Securities Transaction, Adviser Personnel may not: o Acquire any Security in an initial public offering; o Acquire any Security in a private placement without prior written authorization of the acquisition by the Compliance Officer of the Adviser with whom the person is affiliated. Any decision by a Fund to invest in such Securities must be approved solely by Adviser Personnel with no investment in the issuer; o In any calendar year, receive a gift or anything else (for example, air fare, hotel accommodations, etc.) with a value of more than $100 from any single person or entity that does business with or on behalf of the Trust; o Serve on the board of directors of a publicly traded company without prior authorization from the Board of Trustees of the Trust based upon a determination that such service would be consistent with the interests of the Trust and its shareholders. Adviser Personnel that serve on such boards of directors are not permitted to participate in any investment decisions made by the Trust involving Securities of a company on whose board they serve; o Execute a Personal Securities Transaction without the prior written authorization of the Compliance Officer if the transaction involves the purchase or sale of more than 5,000 shares of any Security, and with regard to purchases, if, at the time of purchase, paying a dividend equal to or greater than the Yield Hurdle Rate. Adviser Personnel and Trust Personnel may not: o Execute a Personal Securities Transaction on a day during which the Affiliated Fund has a pending "buy" or "sell" order in that Security or an equivalent Security, until the Affiliated Fund's order is executed or withdrawn. In the case of "good until canceled" orders placed by a Fund, this provision applies only if the market price is within 2 points or 10% of the "good until canceled" price; or o Execute a Personal Securities Transaction in a Security or an equivalent Security that is being considered for Purchase or Sale by an Affiliated Fund; provided, however, that for Trust Personnel, these prohibitions shall only apply with respect to a Personal Securities Transaction if the Trust Personnel knew or, in the ordinary course of fulfilling his or her duties as an officer or Trustee of the Trust, should have known, that during the fifteen day period immediately preceding or after the date of the Personal Security Transaction in the Security by the officer or Trustee such Security is or was purchased or sold by a Fund or such purchase or sale by a Fund is or was considered by a Fund or the Adviser. EXEMPTED TRANSACTIONS The provisions described above under the heading PROHIBITED PURCHASES AND SALES OF SECURITIES and the preclearance procedures under the heading PRECLEARANCE OF PERSONAL SECURITIES TRANSACTIONS do not apply to: o Purchases or Sales of Excluded Securities; o Purchases or Sales of Securities involving less than 5,000 shares of any Security included in the Standard & Poor's 500 Index; o Purchases or Sales of Securities involving less than 5,000 shares of a Security of a company with a market capitalization in excess of $200 million and average daily trading volume in excess of 50,000 shares for the past ten trading days; o Purchases or Sales of options contracts on a broad-based market index; o Purchases or Sales of Securities effected in any account in which AmeriPrime Personnel have no Beneficial Ownership; o Purchases or Sales of Securities which are non-volitional on the part of either AmeriPrime Personnel or a Fund (for example, the receipt of stock dividends or non-market type transactions initiated by the Securities issuer or a third party (for example, tender offers or Dutch Auction share repurchases); o Purchases of Securities made as part of automatic dividend reinvestment plans; o Purchases of Securities made as part of an employee benefit plan involving the periodic purchase of company stock or mutual funds; and o Purchases of Securities effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sale of such rights so acquired. PRECLEARANCE OF PERSONAL SECURITIES TRANSACTIONS. All Adviser Personnel wishing to engage in a Personal Securities Transaction involving the purchase or sale of more than 5,000 shares of any Security, and with regard to purchases, is, at the time of purchase, paying a dividend equal to or greater than the yield hurdle rate, must obtain prior written authorization of any such Personal Securities Transaction from the Compliance Officer or such person or persons that such Compliance Officer may from time to time designate to make such written authorizations. Such Personal Securities Transactions by a Compliance Officer shall require prior written authorization of the General Partner of the Adviser with whom the Compliance Officer is affiliated, or his designate, who shall perform the review and approval functions relating to reports and trading by the Chief Compliance Officer. The Adviser shall adopt the appropriate forms and procedures for implementing this Code of Ethics. Any authorization so provided is effective until the close of business on the fifth trading day after the authorization is granted. In the event that an order for the Personal Securities Transaction is not placed within that time period, a new authorization must be obtained. If the order for the transaction is placed but not executed within that time period, no new authorization is required unless the person placing the original order amends the order in any manner. Authorization for "good until canceled" orders are effective until the order conflicts with a Fund order. If a person wishing to affect a Personal Securities Transaction learns, while the order is pending that the same Security is being considered for Purchase or Sale by the Fund, such person shall cancel the trade. NOTIFICATION OF FUND TRADING ACTIVITY In addition to placing Purchase or Sale Orders for the Funds, the Mutual Fund Portfolio Managers, or their designates, shall notify, their respective Compliance Officers of daily purchases and sales and of Securities being considered for Purchase or Sale by the Affiliated Fund (other than anticipated transactions in Excluded Securities). TRANSACTION AND ACCOUNT POSITION REPORTING REQUIREMENTS DISCLOSURE OF PERSONAL BROKERAGE ACCOUNTS At the commencement of employment with an Adviser, all Adviser Personnel are required to submit to the Compliance Officer, the names and account numbers of all of their personal brokerage accounts, brokerage accounts of members of their immediate families, and any brokerage accounts which they control or in which they or an immediate family member has Beneficial Ownership. Each of these accounts is required to furnish duplicate confirmations and statements to the Adviser with whom the person is affiliated. ANNUAL REPORTING REQUIREMENTS All Adviser Personnel are required to disclose all personal Securities holdings upon commencement of employment, and thereafter on an annual basis. At the commencement of employment and, thereafter, at the beginning of the first quarter of each fiscal year, all Adviser Personnel are required to certify that they have read and understand this Code and that they have complied with its requirements throughout the prior fiscal year. QUARTERLY REPORTING REQUIREMENTS All Adviser Personnel, shall report to the Compliance Officer of the Adviser with whom the person is affiliated the following information with respect to transactions in any Security in which such person has, or by reason of such transaction acquires, any direct or indirect Beneficial Ownership in the Security: o The date of the transaction, the title and the number of shares, and the principal amount of each Security involved; o The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition); o The price at which the transaction was effected; and o The name of the broker, dealer or bank with or through whom the transaction was effected. Trust Personnel who knew or, in the ordinary course of fulfilling his or her duties as an officer or Trustee of the Trust, should have known, that during the fifteen day period immediately preceding or after the date of a Personal Security Transaction in a Security by the officer or Trustee such Security is or was purchased or sold by a Fund or such purchase or sale by a Fund is or was considered by a Fund or the Adviser, shall make the above disclosures to the Board of Trustees, but only with respect to the applicable Personnel Security Transactions. Reports pursuant to this section of this Code shall be made no later than 10 days after the end of the calendar quarter in which the transaction to which the report relates was effected, and shall include a certification that the reporting person has reported all Personal Securities Transactions required to be disclosed or reported pursuant to the requirements of this Code. Any such report may contain a statement that the report shall not be construed as an admission by the person making such report that he or she has any direct or indirect Beneficial Ownership in the Security to which the report relates. Adviser Personnel and Trust Personnel need not make such a report with respect to transactions effected for any account in which they may have Beneficial Ownership, but over which they do not have any direct or indirect influence or control (for example, a blind trust). ENFORCEMENT AND PENALTIES The Compliance Officers of the Advisers shall review the transaction information supplied by their employees, whether full-time or part-time. The Board of Trustees will review the transaction information supplied by the Trust Personnel. If a transaction appears to be in violation of this Code of Ethics, the transaction will be reported to the Adviser with whom the person is affiliated as well as the Board of Trustees of the Trust. Upon being informed of a violation of this Code of Ethics, the Adviser may impose such sanctions at it deems appropriate, including but not limited to, a letter of censure or suspension, termination of the employment of the violator or a request for disgorgement of any profits received from a securities transaction effected in violation of this Code of Ethics. The Adviser shall impose sanctions in accordance with the principle that no AmeriPrime Personnel may profit at the expense of the shareholders of the Trust. Any sanctions imposed with respect thereto shall be reported periodically to the Board of Trustees of the Trust. DUTIES AND POWERS OF THE BOARD OF TRUSTEES Each Adviser shall submit to the Board of Trustees of the Trust at each regular meeting of the Board, a report on Personal Securities Transactions by Adviser Personnel. Such reports shall be reviewed by the Board of Trustees in order to determine whether any violation of this Code or any section of the Act or the regulations promulgated thereunder has occurred. Annually, each Adviser shall submit to the Board of Trustees a report that: o Summarizes existing procedures concerning Personal Securities investing and any changes in the procedures made during the prior year; o Identifies any violations of this Code and any significant remedial action taken during the prior year; and o Identifies any recommended changes in existing restrictions or procedures based upon the experience under the Code, evolving industry practices or developments in applicable laws and regulations. The Board of Trustees of the Trust shall report to the Adviser of the Fund in question any violations by Adviser Personnel of the Code of Ethics of the Trust or a course of conduct, which although in technical compliance with this Code, shows a pattern of abuse by that person of his or her fiduciary duties to the Trust. If the Adviser does not take corrective or disciplinary action satisfactory to the Trustees, the Trustees may remove the Adviser from its position as Adviser to the Fund. SCHEDULE A - ADVISERS AND PORTFOLIO MANAGERS ============================================== ==================================== ======================================== FUND ADVISER PORTFOLIO MANAGERS - ---------------------------------------------- ------------------------------------ ---------------------------------------- Carl Domino Equity Carl Domino Carl J. Domino Income Fund Associates, L.P. ============================================== ==================================== ========================================
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