-----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, SfTqQampcZKTPWmdqYEZTJ8GNRitfu8gPXg0f9RxDZLnsM8PYYD/mjlkWB6RYfy/ g250kg5DCJkEAJ3Ez9FQTw== 0001035449-02-000160.txt : 20020415 0001035449-02-000160.hdr.sgml : 20020415 ACCESSION NUMBER: 0001035449-02-000160 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20020403 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERIPRIME FUNDS CENTRAL INDEX KEY: 0001000579 IRS NUMBER: 752616671 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 033-96826 FILM NUMBER: 02601016 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 497 1 apr497.txt DEFINITIVE PROSPECTUS & SAI WESTCOTT TECHNOLOGY FUND PROSPECTUS April 1, 2002 230 Westcott, Suite 1 Houston, Texas 77007 (800) 998-6658 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. 353404 TABLE OF CONTENTS Page Risk/Return Summary............................................................3 How the Fund Has Performed.....................................................4 Fees and Expenses of the Fund..................................................5 How To Buy Shares..............................................................6 Distribution Plans.............................................................9 Additional Purchase Information................................................9 How to Redeem Shares..........................................................11 How to Exchange Shares........................................................12 Determination of Net Asset Value..............................................14 Dividends, Distributions and Taxes............................................14 Management of the Fund........................................................15 Other Information About Investments...........................................15 Financial Highlights..........................................................17 Privacy Policy................................................................19 For More Information .................................................Back Cover RISK/RETURN SUMMARY Investment Objective The investment objective of the Fund is long term growth of capital. Principal Strategies Under normal circumstances, the Fund will invest at least 80% of its assets in common stocks of U.S. companies that rely extensively on technology in their product development and/or operations or will derive a substantial portion of their sales from technology and technology-related products or services. These companies are in fields such as Internet services and development, computer software and hardware, telecommunication services and equipment, electronics, data management and storage, networking, information technology (IT) services and consulting, biotechnology, robotics and video technologies. Any ordinary income received from portfolio securities is entirely incidental to the Fund's principal strategy. While the Fund invests in technology companies generally, the Fund will, under normal circumstances, invest at least 25% of its assets in Internet companies. These companies are in Internet services and development fields such as Internet retailing, Internet infrastructure, Internet software development, online advertising, Internet business development consulting and Internet business development incubators. The Fund may sell a stock if the Fund's sub-adviser believes the company's long term growth prospects have deteriorated. Growth prospects may be measured by earnings, revenue growth, stock price performance, market dominance or technological innovation. Principal Risks of Investing in the Fund o Management Risk. The sub-adviser's strategy may fail to produce the intended results. Additionally, the Fund's sub-adviser has no prior experience managing the assets of a mutual fund. o Company risk is the risk that the Fund might decrease in value in response to the activities and financial prospects of an individual company. o Market risk is the risk that the Fund might decrease in value in response to general market and economic conditions. o Technology sector risk is the risk that because the Fund is concentrated in the technology sector, significant weakness in this sector could result in significant losses to the Fund. Technology companies may be significantly affected by falling prices and profits and intense competition, and their products may be subject to rapid obsolescence. Changes in governmental policies, such as telephone and cable regulations and anti-trust enforcement, may have a material effect on the products and services of technology companies, including Internet companies. In addition, the rate of technological change often requires extensive and sustained investment in research and development. o Internet concentration risk means that your investment in the Fund is subject to special risks because the Fund invests at least 25% of its assets in Internet companies. Significant weakness in Internet companies could result in significant losses to the Fund. Internet companies are subject to competitive pressures and changing demands that may have a significant effect on the financial condition of Internet companies. It is likely that some of today's public Internet companies will not exist in the future. The price of many Internet stocks has risen based on projections of future earnings and company growth. If a company does not perform as expected, the price of the stock could decline significantly. Many Internet companies are currently operating at a loss and may never be profitable. o Volatility risk means that common stocks of technology companies, including Internet companies, tend to be more volatile than other investment choices. Because of its narrow focus, the Fund's performance is closely tied to any factors which may affect technology companies, including Internet companies, and, as a result, is more likely to fluctuate than that of a fund which is invested in a broader range of companies. o Smaller company risk means that the stocks of smaller sized companies are subject to certain risks, including: possible dependence on a limited product line, market, financial resources or management group, less frequent trading and trading with smaller volume than larger stocks, which may make it difficult for the Fund to buy or sell the stocks, and greater fluctuation in value than larger, more established company stocks. o Portfolio turnover risk. The Fund does not intend to purchase or sell securities for short term trading purposes. However, if the objective of the Fund would be better served, short term profits or losses may be realized from time to time. To the extent the Fund has high portfolio turnover, it will generally incur additional costs due to greater brokerage commission expenses than those incurred by a fund with a lower portfolio turnover rate. The higher portfolio turnover rate may result in the realization for federal income tax purposes of additional net capital gains, which also may result in substantial ordinary income to shareholders. These factors may negatively affect the Fund's performance. o The Fund is not a complete investment program. o As with any mutual fund investment, the Fund's returns will vary and you could lose money. Is this Fund Right for You? The Fund may be a suitable investment for: o long term investors seeking to diversify into technology securities o investors willing to accept significant price fluctuations in their investment o investors who can tolerate the greater risks associated with technology investments HOW THE FUND HAS PERFORMED The bar chart and performance table below show the variability of the returns of the Fund, which is one indicator of the risks of investing in the Fund. The bar chart shows changes in the returns of the Fund's Institutional class since inception. Sales loads are not reflected in the bar chart; if they were, returns would be less than shown. The performance table shows how the Fund's average annual total returns compare over time to those of a broad-based securities market index. Of course, the Fund's past performance is not necessarily an indication of its future performance. [GRAPHIC REFLECTS YEAR-BY-YEAR TOTAL RETURNS FOR 2000, -31.15%] *The Fund's Institutional class year-to-date return through March 31, 2001 was 8.00%. During the period shown, the highest return for a quarter for Institutional shares was 9.65% (4th quarter, 2001); and the lowest return was -40.31% (4th quarter, 2000). Average Annual Total Returns for the periods ended 12/31/01: One Year Since Inception1 Class A Shares2 -31.15% -49.95% Institutional Shares -27.54% -48.88% NASDAQ 100 Index -32.62% -50.11% The Street.Com Internet Index -35.82% -81.83% 1December 9, 1999 2These returns are net of the Class A sales load of 5.0%. FEES AND EXPENSES OF 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) Class A Class B Institutional ------- ------- ------------- Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) 5.00% NONE NONE Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less)1 NONE2 5.00% NONE Annual Fund Operating Expenses (expenses that are deducted from Fund assets) Class A Class B Institutional ------- ------- ------------- Management Fees 1.70% 1.70% 1.70% Distribution and/or Service (12b-1) Fees 0.25% 1.00% None Other Expenses 0.29% 0.29%3 0.28% --------- ----- ----- Total Annual Fund Operating Expenses 2.24%4 2.99% 1.98%4
1.A wire transfer fee of $15.00 is charged to defray custodial charges for redemptions paid by wire transfer. This fee is subject to change. 2 If you purchase $1 million or more of Class A shares of the Fund, the purchase may be made without an initial sales load. However, those shares are subject to a CDSC if redeemed within one year of the date of purchase. See "How To Buy Shares." 3 "Other Expenses" are based on estimated amounts for the current fiscal year. 4 For the fiscal year ended September 30, 2001, the Fund's total annual fund operating expenses for Class A shares and Institutional shares were 1.95% and 1.70%, respectively, after expense reimbursement by the Fund's adviser. These expense reimbursements are voluntary and can end at any time. Example: This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated, reinvest dividends and distributions, and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: 1 year 3 years 5 years 10 years ------ ------- ------- -------- Class A $723 $1,188 $1,678 $3,020 Class B $814 $1,459 $2,129 $3,916 Institutional $208 $642 $1,102 $2,375 For Class B shares, you would pay the following expenses if you did not redeem your shares: 1 year 3 years ------ ------- Class B $314 $1,008 HOW TO BUY SHARES Initial Purchase The minimum initial investment in the Fund is $1,000 ($200 for qualified retirement accounts and medical savings accounts). The minimum initial investment in the Fund is $50 for shareholders participating in the continuing automatic investment plan. You may open an account and make an initial investment through securities dealers who have a sales agreement with Unified Financial Securities, Inc., the Fund's distributor. Your securities dealer may charge you additional fees. To the extent investments of individual investors are aggregated into an omnibus account established by an investment adviser, broker or other intermediary, the account minimums apply to the omnibus account, not to the account of the individual investor. By Mail You may also make a direct initial investment by following these steps: o complete and sign the investment application form which accompanies this Prospectus; o draft a check made payable to the Fund; o identify on the check and the application the Class in which you would like to invest; o mail the application and check to: U.S. Mail: Westcott Funds Overnight: Westcott Funds Unified Fund Services, Inc. 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 (800) 998-6658 to obtain instructions on how to set up your account and to obtain an account number. Then, provide your bank with the following information for purposes of wiring your investment: U.S. Bank, N.A. ABA #0420-0001-3 Attn: Westcott Funds Fund Name: Westcott Technology Fund Class Name: ____________________________ (write in class name) Account Name: __________________________ (write in shareholder name) For the Account # ________________________ (write in account number) D.D.A.# 821-637634 You must provide a signed application to Unified Fund Services, Inc. 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. Sales Loads o Class A Shares Shares of the Fund are purchased at the public offering price. The public offering price for Class A shares of the Fund is the next determined NAV plus a sales load as shown in the following table. ======================================== ================================================ ================================ Sales Load as of % of: Public Net Dealer Reallowance as % of Amount of Investment Offering Amount Public Offering Price Price Invested ======================================== ================================================ ================================ Less than $25,000 5.00% 5.26% 5.00% $25,000 but less than $50,000 4.75% 4.99% 4.75% $50,000 but less than $100,000 4.50% 4.71% 4.50% $100,000 but less than $200,000 3.75% 3.90% 3.75% $200,000 but less than $500,000 3.25% 3.36% 3.25% $500,000 but less than $1million 2.00% 2.04% 2.00% $1 million or more None* None* NONE ======================================== ================================================ ================================
*If you purchase $1 million or more of Class A shares of the Fund, the purchase may be made without an initial sales load; however, the dealer receives a 1% fee from the Fund's underwriter and those shares are subject to a contingent deferred sales charge ("CDSC") if redeemed within one year of the date of purchase. The CDSC is 1.00%, based on the lower of the original purchase price or net asset value at the time of the redemption. Reinvested dividends and distributions from Class A shares are not subject to the CDSC. The Fund's underwriter receives the entire amount of the CDSC to defray its expense in providing certain distribution-related services to the Fund, including payment of a sales commission to selling dealers or qualifying financial institutions, as described above. o Class B Shares You can purchase Class B shares at NAV. However, when you redeem them, you may pay a contingent deferred sales change ("CDSC") in the following percentages: YEAR SINCE PURCHASE DATE ------------------------ First 5% Second 4% Third 3% Fourth 3% Fifth 2% Sixth 1% Seventh and following None The Class B shares convert to Class A shares after the eighth year. o Institutional Shares Institutional shares are available for purchase by registered investment advisers, bank trust departments, financial planners and other financial intermediaries on behalf of their clients. Institutional shareholders pay no sales load or 12b-1 fees. DISTRIBUTION PLANS The Fund has adopted a plan under Rule 12b-1 that allows Class A shares and Class B shares of the Fund to pay distribution fees for the sale and distribution of its shares. The distribution plan for Class B shares also allows the class to pay for services provided to shareholders. Class A shares pay annual 12b-1 expenses of 0.25% and Class B shares pay annual 12b-1 expenses of 1.00% (of which 0.75% is an asset based sales charge and 0.25% is a service fee). 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. ADDITIONAL PURCHASE INFORMATION Additional Purchases You may purchase additional shares of the Fund (subject to the minimum investment of $50) by mail, wire or automatic investment. If you purchase additional Class A shares, you will pay a sales load unless the purchase is made by reinvesting a dividend or capital gains distribution. If your securities dealer received concessions for selling shares of the Fund to you, such securities dealer will receive the concessions described above with respect to additional investments. Each additional mail purchase request must contain: o your name o the name of your account(s), o your account number(s), o the name of the Fund o a check Send your purchase request to the address listed above. A bank wire should be sent as outlined above. Automatic Investment Plan You may make regular investments in 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. Reduced Sales Load You may use the Right of Accumulation to combine the cost or current net asset value (whichever is higher) of your shares of the Fund with the amount of your current purchases in order to take advantage of the reduced sales loads set forth in the table above. Purchases made pursuant to a Letter of Intent may also be eligible for the reduced sales loads. The minimum initial investment under a Letter of Intent is $50,000. Shareholders should contact the transfer agent for information about the Right of Accumulation and Letter of Intent. Purchases at Net Asset Value Purchases of Class A shares may be effected at net asset value for the benefit of the clients of brokers-dealers and registered investment advisers affiliated with a broker-dealer, if such broker-dealer or investment adviser has entered into an agreement with the Fund's distributor providing specifically for the purchase of Fund shares in connection with special investment products, such as wrap accounts or similar fee based programs. Trustees, directors, officers and employees of the Trust, the adviser, the sub-adviser and service providers to the Trust, including members of the immediate family of such individuals and employee benefit plans established by such entities, may also purchase shares of the Fund at net asset value. Additional Information For purposes of determining the applicable sales load, a purchaser includes an individual, his spouse and their children under the age of 21, purchasing shares for his or their own account; or a trustee or other fiduciary purchasing shares for a single fiduciary account although more than one beneficiary is involved; or employees of a common employer, provided that economies of scale are realized through remittances from a single source and quarterly confirmation of such purchases; or an organized group, provided that the purchases are made through a central administration, or a single dealer or by other means which result in economy of sales effort or expense. Tax Sheltered Retirement Plans Since the Fund is oriented to longer term investments, shares of the Fund may be an appropriate investment medium for tax sheltered retirement plans, including: individual retirement plans ("IRAs"); simplified employee pensions ("SEPs"); SIMPLE plans; 401(k) plans; qualified corporate pension and profit sharing plans (for employees); tax deferred investment plans (for employees of public school systems and certain types of charitable organizations); and other qualified retirement plans. Contact the transfer agent for the procedure to open an IRA or SEP plan and more specific information regarding these retirement plan options. Please consult with your attorney or tax adviser regarding these plans. You must pay custodial fees for your IRA by redemption of sufficient shares of the Fund from the IRA unless you pay the fees directly to the IRA custodian. Call the transfer agent about the IRA custodial fees. Other Purchase Information The Fund may limit the amount of purchases and refuse to sell to any person. If your check or wire does not clear, you will be responsible for any loss incurred by the Fund. If you are already a shareholder, the Fund can redeem shares from any identically registered account in the Fund as reimbursement for any loss incurred. You may be prohibited or restricted from making future purchases in the Fund. Checks must be made payable to the Fund; the Fund does not accept third party checks. HOW TO REDEEM SHARES All redemptions will be made at the net asset value determined after the redemption request has been received by the transfer agent in proper form, less any applicable CDSC. You may receive redemption payments in the form of a check or federal wire transfer. A wire transfer fee of $15.00 is charged to defray custodial charges for redemptions paid by wire transfer. This fee is subject to change. Any charges for wire redemptions will be deducted from the shareholder's Fund account by redemption of shares. If you redeem your shares through a broker-dealer or other institution, you may be charged a fee by that institution. By Mail - You may redeem any part of your account in the Fund at no charge by mail. Your request should be addressed to: U.S. Mail: Westcott Funds Overnight: Westcott Funds Unified Fund Services, Inc. Unified Fund Services, Inc. P.O. Box 6110 431 North Pennsylvania Street Indianapolis, Indiana 46206-6110 Indianapolis, Indiana 46204
"Proper form" means 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 requires that signatures be guaranteed if you request the redemption check made payable to any person other than the shareholder(s) of record or mailed to an address other than the address of record, or if the mailing address has been changed within 30 days of the redemption request. The Fund may also require that signatures be guaranteed for redemptions of $25,000 or more. Signature guarantees are for the protection of shareholders. You can obtain a signature guarantee from most banks and securities dealers, but not from a notary public. For joint accounts, both signatures must be guaranteed. Please call the transfer agent at (800) 998-6658 if you have questions. At the discretion of the Fund or Unified Fund Services, Inc., you may be required to furnish additional legal documents to insure proper authorization. By Telephone - You may redeem any part of your account in the Fund by calling the transfer agent (800) 998-6658. 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 to the extent that they reasonably believe the telephone instructions to be genuine. However, if they do not employ reasonable procedures to confirm that telephone instructions are genuine, they may be liable for any losses due to unauthorized or fraudulent instructions. Procedures employed may include recording telephone instructions and requiring a form of personal identification from the caller. The Fund may terminate the telephone redemption and exchange procedures at any time. During periods of extreme market activity it is possible that shareholders may encounter some difficulty in telephoning the Fund, although neither the Fund nor the transfer agent has ever experienced difficulties in receiving and in a timely fashion responding to telephone requests for redemptions or exchanges. If you are unable to reach the Fund by telephone, you may request a redemption or exchange by mail. Additional Information - If you are not certain of the requirements for a redemption please call the transfer agent at (800) 998-6658. 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. You may increase the value of your shares in the Fund to the minimum amount within the 30 day period. All shares of the Fund are also subject to involuntary redemption if the Board of Trustees determines to liquidate the Fund. An involuntary redemption will create a capital gain or a capital loss, which may have tax consequences about which you should consult your tax adviser. HOW TO EXCHANGE SHARES You may exchange any or all of your shares in the Fund for shares of another Westcott Fund or the Liquid Green Money Market Fund, a separately managed money market fund. The exchange is made without charge unless you exchange Class A shares of the Westcott Fixed Income Fund for Class A shares of another Westcott Fund with a higher sales load. In that case, you would pay the incremental amount of the sales load. For exchanges between Westcott Funds, shares of a particular class may be exchanged only for shares of the same class. You may request the exchange by telephoning the transfer agent at (800) 998-6658 or writing the transfer agent at P.O. Box 6110, Indianapolis, Indiana 46206-6110. Shares of the fund selected must be registered for sale in your state of residence. The exchange privilege with the Liquid Green Money Market Fund does not constitute an offering or a recommendation of the Liquid Green Money Market Fund by the Fund. It is your responsibility to obtain and read a prospectus of the Liquid Green Money Market Fund before you make an exchange. o You may make up to one exchange out of each fund during a calendar month and four exchanges out of each fund during a calendar year. This limit helps keep each fund's net asset base stable and reduces the fund's administrative expenses. o If you exchange shares into or out of a fund, the exchange is made at the net asset value per share of each fund next determined after the exchange request is received, plus any applicable sales load. o If you exchange Class B shares of a fund for the Liquid Green Money Market Fund, the time you own the Liquid Green Money Market Fund shares will not be included when the holding period for the CDSC is calculated. o If you exchange Class B shares of a Westcott Fund for another Westcott Fund (or Class A shares of a Westcott Fund that were subject to a CDSC because of a sales load waiver), the holding periods are combined, however the highest applicable CDSC will be charged if the shares are redeemed. o If you exchange only a portion of your Class B shares, shares not subject to a CDSC are exchanged first. o If you redeem shares from the Liquid Green Money Market Fund that were previously Class B shares of a Westcott Fund (or Class A shares of a Westcott Fund that were subject to a CDSC because of a sales load waiver), the redemption is made at the net asset value per share next determined after the redemption request is received, less any CDSC that applied to the Westcott Fund shares. In times of extreme economic or market conditions, exchanging Westcott Fund or the Liquid Green Money Market Fund shares by telephone may be difficult. To receive a specific day's price, your letter or call must be received before that day's close of the New York Stock Exchange. A day or more delay may be experienced prior to the investment of the redemption proceeds into the Liquid Green Money Market Fund. Each exchange represents the sale of shares from one fund and the purchase of shares in another, which may produce a gain or loss for federal income tax purposes. All exchanges out of a Westcott Fund into the Liquid Green Money Market Fund are subject to the minimum and subsequent investment requirements of the Liquid Green Money Market Fund. No exchange will be accepted unless the registration of the two accounts is identical. Neither the Westcott Funds, the Liquid Green Money Market Fund, nor the transfer agent are liable for following 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. 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, most 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 at their fair value. 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. Dividends paid by the Fund may be eligible in part for the dividends received deduction for corporations. 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. Because distributions of long term capital gains are subject to capital gains taxes, regardless of how long you have owned your shares, you may want to avoid making a substantial investment when the Fund is about to make a taxable distribution. Early each year, the Fund will mail to you a statement setting forth the federal income tax information for all distributions made during the previous year. If you do not provide your taxpayer identification number, your account will be subject to backup withholding. The tax considerations described in this section do not apply to tax-deferred accounts or other non-taxable entities. Because each investor's tax circumstances are unique, please consult with your tax adviser about your investment. MANAGEMENT OF THE FUND Aegis Asset Management, Inc., 230 Westcott St., Suite 1, Houston, Texas 77007, serves as investment adviser to the Fund. The adviser was organized as a Texas corporation in 1993. The adviser manages large capitalization equity, medium capitalization equity, balanced and fixed income portfolios for a variety of tax-exempt and taxable clients. For the fiscal year ended September 30, 2001, the adviser received a fee equal to 1.70% of the Fund's average daily net assets. The adviser 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. The Fund's adviser has entered into a sub-advisory agreement with Oxford Capital Management, Inc. ("Oxford Capital"), 606 Baltimore Avenue, Suite 300, Towson, Maryland to serve as the sub-adviser of the Fund and manage the composition of the portfolio of securities and other investments belonging to the Fund. As of January 1, 2002, Oxford Capital managed approximately $130 million in assets for a broad range of clients, including trusts, foundations, municipalities, qualified plans and individuals. The investment decisions of the Fund are made by a team of Oxford Capital investment professionals who are primarily responsible for the day-to-day management of the Fund. The adviser has agreed to pay Oxford Capital a sub-advisory fee, based on the average daily net assets of the Fund, equal to an annual rate of 0.50%. OTHER INFORMATION ABOUT INVESTMENTS The Fund invests at least 25% of its assets in Internet companies. The Internet is a global network of computers that allows users to quickly and easily share information and conduct business. Users of the Internet include commercial and professional organizations, educational institutions, government agencies and consumers; they use the Internet to communicate electronically, access and share information and conduct business. Internet and Internet related companies include Internet access providers; companies that develop software tools to access the Internet and facilitate secure Internet transactions; companies that manufacture personal computers and other hardware used in conjunction with the Internet; companies that manufacture software and other technologies used in conjunction with the Internet; companies engaging in electronic commerce; companies publishing information about the Internet; companies that develop or provide communication systems or other infrastructure for the Internet; companies that supply information, such as games, music and video, on the Internet; companies that consult on the design and implementation of Internet strategies; and other Internet and intranet related businesses and technologies. The types of companies that are considered "Internet" and "Internet related" companies will change as technology and applications change. The Fund is expected under normal circumstances to invest no more than 15% of its net assets in American Depositary Receipts ("ADRs"). An ADR is a certificate of ownership issued by an U.S. bank as a convenience to investors instead of the underlying foreign security, which the bank holds in custody. In general, foreign investments involve higher risks than U.S. investments. Foreign markets tend to be more volatile than those of the U.S. and bring increased exposure to foreign economic, political and other events that can have a negative effect on the value of issuers in a particular foreign country. The Fund may from time to time take temporary defensive positions that are inconsistent with the Fund's principal investment strategies in attempting to respond to adverse market, economic, political or other conditions. For example, the Fund may hold all or a portion of its assets in money market instruments, securities of 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. The investment objectives and strategies of the Fund may be changed without shareholder approval. FINANCIAL HIGHLIGHTS The following tables are intended to help you better understand the Fund's financial performance since its inception. Certain information reflects financial results for a single Fund share. Total return represents the rate you would have earned (or lost) on an investment in the Fund, assuming reinvestment of all dividends and distributions. This information has been audited by McCurdy & Associates CPA's, Inc., whose report, along with the Fund's financial statements, are included in the Fund's annual report, which is available upon request. Class A Year Ended Period ended September 30, 2001 September 30, 2000 (a) -------------------------------------------------------------------- Selected Per Share Data Net asset value, beginning of period $ $ 5.83 10.00 -------------------------------------------------------------------- Income (loss) from investment operations Net investment income (loss) (0.03) (0.10) Net realized and unrealized gain (loss) (3.50) (4.07) -------------------------------------------------------------------- Total from investment operations (3.53) (4.17) -------------------------------------------------------------------- Less distributions: Distributions from net investment income 0.00 0.00 Distributions from net realized gains 0.00 0.00 -------------------------------------------------------------------- Total distributions 0.00 0.00 -------------------------------------------------------------------- Net asset value, end of period $ $ 2.30 5.83 ==================================================================== Total Return (60.55)% (41.70)%(b) Ratios and Supplemental Data Net assets, end of period (000) $60 $169 Ratio of expenses to average net assets 1.95% 1.97%(c) Ratio of expenses to average net assets before reimbursement 2.24% 2.09%(c) Ratio of net investment income (loss) to average net assets (0.90)% (1.61)%(c) Ratio of net investment income (loss) to average net assets before reimbursement (1.19)% (1.73)%(c) Portfolio turnover rate 48.57% 190.14%(c) (a) For the period December 9, 1999 (Commencement of Operations) to September 30, 2000 (b) For periods of less than a full year, total return is not annualized (c) Annualized Institutional Class Year Ended Period ended September 30, 2001 September 30, 2000 (a) Selected Per Share Data Net asset value, beginning of period $ $ 5.77 10.00 ---------------------------------------------------------- Income (loss) from investment operations Net investment income (loss) (0.02) (0.08) Net realized and unrealized gain (loss) (3.47) (4.15) ---------------------------------------------------------- Total from investment operations (3.49) (4.23) ---------------------------------------------------------- Less distributions: Distributions from net investment income 0.00 0.00 Distributions from net realized gains 0.00 0.00 ---------------------------------------------------------- Total distributions 0.00 0.00 ---------------------------------------------------------- Net asset value, end of period $ $ 2.28 5.77 ========================================================== Total Return (60.49)% (42.30)%(b) Ratios and Supplemental Data Net assets, end of period (000) $517 $1,395 Ratio of expenses to average net assets 1.70% 1.72%(c) Ratio of expenses to average net assets before reimbursement 1.98% 1.86%(c) Ratio of net investment income (loss) to average net assets (0.64)% (1.32)%(c) Ratio of net investment income (loss) to average net assets before reimbursement (0.93)% (1.46)%(c) Portfolio turnover rate 48.57% 190.14%(c)
(a) For the period December 9, 1999 (Commencement of Operations) to September 30, 2000 (b) For periods of less than a full year, total return is not annualized (c) Annualized PRIVACY POLICY The following is a description of the Fund's policies regarding disclosure of nonpublic personal information that you provide to the Fund or that the Fund collects from other sources. In the event that you hold shares of the Fund through a broker-dealer or other financial intermediary, the privacy policy of your financial intermediary would govern how your nonpublic personal information would be shared with unaffiliated third parties. Categories of Information the Fund Collects. The Fund collects the following nonpublic personal information about you: o Information the Fund receives from you on or in applications or other forms, correspondence, or conversations (such as your name, address, phone number, social security number, assets, income and date of birth); and o Information about your transactions with the Fund, its affiliates, or others (such as your account number and balance, payment history, parties to transactions, cost basis information, and other financial information). Categories of Information the Fund Discloses. The Fund does not disclose any nonpublic personal information about its current or former shareholders to unaffiliated third parties, except as required or permitted by law. The Fund is permitted by law to disclose all of the information it collects, as described above, to its service providers (such as the Fund's custodian, administrator and transfer agent) to process your transactions and otherwise provide services to you. Confidentiality and Security. The Fund restricts access to your nonpublic personal information to those persons who require such information to provide products or services to you. The Fund maintains physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information. 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 and investment strategies that significantly affected the Fund's performance results as of the Fund's latest semi-annual or annual fiscal year end. Call the Fund at (800) 998-6658 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 email address: publicinfo@sec.gov, or by writing the SEC's Public Reference Section, Washington, D.C. 20549-0102. Investment Company Act #811-9096 WESTCOTT TECHNOLOGY FUND STATEMENT OF ADDITIONAL INFORMATION April 1, 2002 This Statement of Additional Information is not a prospectus. It should be read in conjunction with the Prospectus of the Westcott Technology Fund dated April 1, 2002. 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 (800) 998-6658. TABLE OF CONTENTS PAGE DESCRIPTION OF THE TRUST AND THE FUND..........................................2 ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS..............................................................3 INVESTMENT LIMITATIONS.........................................................3 THE ADVISER AND SUB-ADVISER....................................................6 TRUSTEES AND OFFICERS..........................................................7 PORTFOLIO TRANSACTIONS AND BROKERAGE...........................................8 DISTRIBUTION PLANS............................................................10 DETERMINATION OF SHARE PRICE..................................................12 INVESTMENT PERFORMANCE........................................................12 CUSTODIAN.....................................................................14 FUND SERVICES.................................................................14 ACCOUNTANTS...................................................................15 DISTRIBUTOR...................................................................15 FINANCIAL STATEMENTS..........................................................15 353519 DESCRIPTION OF THE TRUST AND THE FUND The Westcott Technology Fund (the "Fund") was organized as a diversified series of AmeriPrime Funds (the "Trust") on September 29, 1999 and commenced operations on December 9, 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 Board of 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 Board of Trustees. The Board of Trustees has authorized three classes of shares of the Fund: Class A shares, Class B shares and Institutional shares. Each class is subject to different expenses and a different sales charge structure. The investment adviser to the Fund is Aegis Asset Management, Inc. (the "Adviser"). The Fund does not issue share certificates. All shares are held in non-certificate form registered on the books of the Fund'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. As of February 4, 2002, Donaldson Lufkin Jenrette Securities Corporation, P.O. Box 2052, Jersey City, NJ 07303-9998, was the record owner of 97.24% of the Class A shares of the Fund and 97.61% of the Institutional shares of the Fund. As of February 4, 2002, the Adviser shared with certain of its advisory clients the power to vote, and investment discretion with respect to, 100% of the outstanding shares of the Institutional shares, or 95.98% of the outstanding shares of the Fund. As a result, the Adviser may be deemed to beneficially own these shares and may be deemed to control the Institutional class and the Fund. As the controlling shareholder, it would control the outcome of any proposal submitted to the shareholders of the Institutional Class or the Fund for approval, including changes to the Fund's fundamental policies or the terms of the management agreement with the Adviser. As of February 4, 2002, the Trustees and officers as a group owned 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 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 Prospectus and "Determination of Share Price" in 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 Objective," "Principal Strategies" and "Principal Risks of Investing in the Fund"). A. American Depositary Receipts. American Depositary Receipts ("ADRs") are subject to risks similar to those associated with direct investment in foreign securities. For example, there may be less information publicly available about a foreign company then about a U.S. company, and foreign companies are not generally subject to accounting, auditing and financial reporting standards and practices comparable to those in the U.S. Other risks associated with investments in foreign securities include changes in restrictions on foreign currency transactions and rates of exchanges, changes in the administrations or economic and monetary policies of foreign governments, the imposition of exchange control regulations, the possibility of expropriation decrees and other adverse foreign governmental action, the imposition of foreign taxes, less liquid markets, less government supervision of exchanges, brokers and issuers, difficulty in enforcing contractual obligations, delays in settlement of securities transactions and greater price volatility. In addition, investing in foreign securities will generally result in higher commissions than investing in similar domestic securities. The Fund has no present intention to invest in unsponsored ADRs. B. Repurchase Agreements. The Fund may invest in repurchase agreements fully collateralized by obligations issued by the United States government or by agencies of the United States government ("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 7 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 the custodian, other banks with assets of $1 billion or more and registered securities dealers determined by the Fund's sub-adviser to be creditworthy. The Fund's sub-adviser monitors the creditworthiness of the banks and securities dealers with which the Fund engages in repurchase transactions. INVESTMENT LIMITATIONS Fundamental. The investment limitations described below have been adopted by the Trust with respect to the Fund and are fundamental ("Fundamental"), i.e., they may not be changed without the affirmative vote of a majority of the outstanding shares of the Fund. As used in the Prospectus and the Statement of Additional Information, the term "majority" of the outstanding shares of the Fund means the lesser of: (1) 67% or more of the outstanding shares of the Fund present at a meeting, if the holders of more than 50% of the outstanding shares of the Fund are present or represented at such meeting; or (2) more than 50% of the outstanding shares of the Fund. Other investment practices which may be changed by the Board of Trustees without the approval of shareholders to the extent permitted by applicable law, regulation or regulatory policy are considered non-fundamental ("Non-Fundamental"). 1. Borrowing Money. The Fund will not borrow money, except: (a) from a bank, provided that immediately after such borrowing there is an asset coverage of 300% for all borrowings of the Fund; or (b) from a bank or other persons for temporary purposes only, provided that such temporary borrowings are in an amount not exceeding 5% of the Fund's total assets at the time when the borrowing is made. This limitation does not preclude the Fund from entering into reverse repurchase transactions, provided that the Fund 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, other than the Internet 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 Limitations - Fundamental" above). 1. Pledging. The Fund will not mortgage, pledge, hypothecate or in any manner transfer, as security for indebtedness, any assets of the Fund except as may be necessary in connection with borrowings described in limitation (1) above. Margin deposits, security interests, liens and collateral arrangements with respect to transactions involving options, futures contracts, short sales and other permitted investments and techniques are not deemed to be a mortgage, pledge or hypothecation of assets for purposes of this limitation. 2. Borrowing. The Fund will not purchase any security while borrowings (including reverse repurchase agreements) representing more than one third of its total assets are outstanding. 3. Margin Purchases. The Fund will not purchase securities or evidences of interest thereon on "margin." This limitation is not applicable to short term credit obtained by the Fund for the clearance of purchases and sales or redemption of securities, or to arrangements with respect to transactions involving options, futures contracts, short sales and other permitted investments and techniques. 4. Options. The Fund will not purchase or sell puts, calls, options or straddles. 5. Illiquid Investments. The Fund will not invest in securities for which there are legal or contractual restrictions on resale and other illiquid securities. 6. Loans of Portfolio Securities. The Fund will not make loans of portfolio securities. 7. 80% Investment Policy. Under normal circumstances, at least 80% of the Fund's assets (defined as net assets plus the amount of any borrowing for investment purposes) will be invested in common stocks of U.S. companies that rely extensively on technology in their product development and/or operations or will derive a substantial portion of their sales from technology and technology-related products or services. The Fund will not change this policy unless the Fund's shareholders are provided with at least 60 days prior written notice. The notice will be provided in a separate written document, containing the following, or similar, statement, in bold-face type: "Important Notice Regarding Change in Investment Policy." The statement will also appear on the envelope in which the notice is delivered unless the notice is delivered separate from any other communications to the Fund's shareholders. THE ADVISER AND SUB-ADVISER The Adviser. The investment adviser to the Fund is Aegis Asset Management, Inc., 230 Westcott, Suite 1, Houston, Texas 77007 (the "Adviser"). William S. Kilroy, Jr. is the controlling shareholder of the Adviser. Under the terms of the management agreement (the "Agreement"), the Adviser manages the Fund's investments subject to approval of the Board of Trustees and pays all of the expenses of the Fund except brokerage fees and commissions, taxes, borrowing costs (such as (a) interest and (b) dividend expenses on securities sold short), 12b-1 expenses, fees and expenses of the non-interested person Trustees and extraordinary expenses. As compensation for its management services and agreement to pay the Fund's expenses, the Fund is obligated to pay the Adviser a fee computed and accrued daily and paid monthly at the annual rate of 1.70% of the average daily net assets of the Fund. For the period December 9, 1999 (commencement of operations) through September 30, 2000, and for the fiscal year ended September 30, 2001, the Fund paid advisory fees of $24,480 and $12,686, respectively, to the Adviser. The Adviser retains the right to use the name "Westcott" in connection with another investment company or business enterprise with which the Adviser is or may become associated. The Trust's right to use the name "Westcott" automatically ceases ninety days after termination of the Agreement and may be withdrawn by the Adviser on ninety days written notice. The Adviser may delegate any or all of the responsibilities, rights or duties under the Agreement to a sub-adviser, provided the agreement is approved and ratified by the Board, including a majority of the trustees who are not interested persons of the Adviser, the sub-adviser or the Trust, and (if required under interpretations of the 1940 Act, by the Securities and Exchange Commission or its staff) by vote of the holders of a majority of the outstanding voting securities of the Fund. The Adviser may make payments to banks or other financial institutions that provide shareholder services and administer shareholder accounts. 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 that provide such services; however, in selecting investments for the Fund, no preference will be shown for such securities. The Sub-Adviser. The Adviser has entered into a Sub-Advisory Agreement with Oxford Capital Management, Inc. (the "Sub-Adviser"), 606 Baltimore Avenue, Suite 300, Towson, Maryland to serve as the sub-adviser of the Fund and manage the Fund's investments. John G. Danz and Harry W. Oldfield are the controlling shareholders of the Sub-Adviser. The Adviser has agreed to pay the Sub-Adviser a sub-advisory fee, based on the average daily net assets of the Fund, equal to an annual rate of 0.50%. Subject always to the control of the Board of Trustees, the Sub-Adviser, at its expense, furnishes continuously an investment program for the Fund. The Sub-Adviser must use its best judgment to make investment decisions, place all orders for the purchase and sale of portfolio securities and execute all agreements related thereto. The Sub-Adviser makes its officers and employees available to the Adviser from time to time at reasonable times to review investment policies and to consult with the Adviser regarding the investment affairs of the Fund. The Sub-Adviser maintains books and records with respect to the securities transactions and renders to the Adviser such periodic and special reports as the Adviser or the Trustees may request. The Sub-Adviser pays all expenses incurred by it in connection with its activities under the sub-advisory agreement other than the cost (including taxes and brokerage commissions, if any) of securities and investments purchased for the Fund. 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 and Managing Director of Unified Fund Services, Inc., the 1725 E. Southlake Blvd. Secretary and Fund's transfer agent, fund accountant and administrator, since Suite 200 Trustee October 2000. President, Treasurer and Secretary of AmeriPrime Southlake, Texas 76092 Financial Services, Inc., a fund administrator, (which merged with Year of Birth: 1958 Unified Fund Services, Inc.) from 1994 through October 2000. President, Treasurer and Secretary of AmeriPrime Financial Securities, Inc., the Fund's distributor, from 1994 through November 2000; President and Trustee of AmeriPrime Advisors Trust and AmeriPrime Insurance Trust. - ------------------------------------ ---------------- ---------------------------------------------------------------------- *Robert A. Chopyak Treasurer and Assistant Vice-President of Financial Administration of Unified Fund 1725 E. Southlake Blvd. Chief Services, Inc., the Fund's transfer agent, fund accountant and Suite 200 Financial administrator, since August 2000. Manager of AmeriPrime Financial Southlake, Texas 76092 Officer Services, Inc. from February 2000 to August 2000. Self-employed, Year of Birth: 1968 performing Y2K testing, January 1999 to January 2000. Vice President of Fund Accounting, American Data Services, Inc., a mutual fund services company, October 1992 to December 1998. - ------------------------------------ ---------------- ---------------------------------------------------------------------- Steve L. Cobb Trustee President of Chandler Engineering Company, L.L.C., oil and gas 2001 N. Indianwood Avenue services company since 1997; various positions with Carbo Ceramics, Broken Arrow, OK 74012 Inc., oil field manufacturing/supply company, from 1984 to 1997, Year of Birth: 1957 most recently Vice President of Marketing. - ------------------------------------ ---------------- ---------------------------------------------------------------------- Gary E. Hippenstiel Trustee Director, Vice President and Chief Investment Officer of Legacy 600 Jefferson Street Trust Company since 1992; President and Director of Heritage Trust Suite 350 Company from 1994-1996; Vice President and Manager of Investments of Houston, TX 77002 Kanaly Trust Company from 1988 to 1992. Year of Birth: 1947 ==================================== ================ ====================================================================== The compensation paid to the Trustees of the Trust for the fiscal year ended September 30, 2001 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. ==================================== ======================= ================================== Total Compensation from the Aggregate Trust and AmeriPrime Advisors Compensation Trust Name from Trust - ------------------------------------ ----------------------- ---------------------------------- Kenneth D. Trumpfheller 0 0 - ------------------------------------ ----------------------- ---------------------------------- Steve L. Cobb $20,375 $20,375 - ------------------------------------ ----------------------- ---------------------------------- Gary E. Hippenstiel $20,375 $20,375 ==================================== ======================= ==================================
PORTFOLIO TRANSACTIONS AND BROKERAGE Subject to policies established by the Board of Trustees, the Adviser is responsible for the Fund's portfolio decisions and the placing of the Fund's portfolio transactions; however, the Adviser has delegated this responsibility to the Sub-Adviser. The brokerage policies and procedures described in this section apply to the Adviser and the Sub-Adviser, and references in this section to the "Sub-Adviser" include the Adviser when applicable. In placing portfolio transactions, the Sub-Adviser seeks the best qualitative execution for the Fund, taking into account such factors as price (including the applicable brokerage commission or dealer spread), the execution capability, financial responsibility and responsiveness of the broker or dealer and the brokerage and research services provided by the broker or dealer. The Sub-Adviser generally seeks favorable prices and commission rates that are reasonable in relation to the benefits received. Consistent with the Rules of Fair Practice of the National Association of Securities Dealers, Inc., and subject to its obligation of seeking best qualitative execution, the Sub-Adviser may give consideration to sales of shares of the Trust as a factor in the selection of brokers and dealers to execute portfolio transactions. The Sub-Adviser is specifically authorized to select brokers or dealers who also provide brokerage and research services to the Fund and/or the other accounts over which the Sub-Adviser exercises investment discretion and to pay such brokers or dealers a commission in excess of the commission another broker or dealer would charge if the Sub-Adviser determines in good faith that the commission is reasonable in relation to the value of the brokerage and research services provided. The determination may be viewed in terms of a particular transaction or the Sub-Adviser's overall responsibilities with respect to the Trust and to other accounts over which it exercises investment discretion. Research services include supplemental research, securities and economic analyses, statistical services and information with respect to the availability of securities or purchasers or sellers of securities and analyses of reports concerning performance of accounts. The research services and other information furnished by brokers through whom the Fund effects securities transactions may also be used by the Sub-Adviser in servicing all of its accounts. Similarly, research and information provided by brokers or dealers serving other clients may be useful to the Sub-Adviser in connection with its services to the Fund. Although research services and other information are useful to the Fund and the Sub-Adviser, it is not possible to place a dollar value on the research and other information received. It is the opinion of the Board of Trustees and the Sub-Adviser that the review and study of the research and other information will not reduce the overall cost to the Adviser of performing its duties to the Fund under the sub-advisory agreement. While the Fund does not deem it practicable and in its best interests to solicit competitive bids for commission rates on each transaction, consideration is regularly given to posted commission rates as well as other information concerning the level of commissions charged on comparable transactions by qualified brokers. The Fund has no obligation to deal with any broker or dealer in the execution of its transactions. However, it is contemplated that Westcott Securities, L.L.C., in its capacity as a registered broker-dealer, will effect substantially all securities transactions which are executed on a national securities exchange and over-the-counter transactions conducted on an agency basis. Such transactions will be executed at competitive commission rates through Pershing(R). 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. Under the Investment Company Act of 1940, persons affiliated with an affiliate of the Adviser (such as Westcott Securities, L.L.C.) or Sub-Adviser may be prohibited from dealing with the Fund as a principal in the purchase and sale of securities. Therefore, Westcott Securities, L.L.C. will not serve as the Fund's dealer in connection with over-the-counter transactions. However, Westcott Securities, L.L.C. may serve as the Fund's broker in over-the-counter transactions conducted on an agency basis and will receive brokerage commissions in connection with such transactions. Such agency transactions will be executed through Pershing(R). The Fund will not effect any brokerage transactions in its portfolio securities with Westcott Securities, L.L.C. if such transactions would be unfair or unreasonable to Fund shareholders, and the commissions will be paid solely for the execution of trades and not for any other services. The Agreement provides that affiliates of affiliates of the Adviser may receive brokerage commissions in connection with effecting such transactions for the Fund. In determining the commissions to be paid to Westcott Securities, L.L.C., it is the policy of the Fund that such commissions will, in the judgment of the Board of Trustees, be: (a) at least as favorable to the Fund as those which would be charged by other qualified brokers having comparable execution capability; and (b) at least as favorable to the Fund as commissions contemporaneously charged by Westcott Securities, L.L.C. on comparable transactions for its most favored unaffiliated customers, except for customers of Westcott Securities, L.L.C. considered by a majority of the Trust's disinterested Trustees not to be comparable to the Fund. The disinterested Trustees from time to time review, among other things, information relating to the commissions charged by Westcott Securities, L.L.C. to the Fund and its other customers, and rates and other information concerning the commissions charged by other qualified brokers. The Agreement does not provide for a reduction of the Adviser's fee by the amount of any profits earned by Westcott Securities, L.L.C. from brokerage commissions generated from portfolio transactions of the Fund. While the Fund contemplates no ongoing arrangements with any other brokerage firms, brokerage business may be given from time to time to other firms. Westcott Securities, L.L.C. will not receive reciprocal brokerage business as a result of the brokerage business placed by the Fund with others. When the Fund and another of the Sub-Adviser's clients seek to purchase or sell the same security at or about the same time, the Sub-Adviser may execute the transaction on a combined ("blocked") basis. Blocked transactions can produce better execution for the Fund because of the increased volume of the transaction. If the entire blocked order is not filled, the Fund may not be able to acquire as large a position in such security as it desires or it may have to pay a higher price for the security. Similarly, the Fund may not be able to obtain as large an execution of an order to sell or as high a price for any particular portfolio security if the other client desires to sell the same portfolio security at the same time. In the event that the entire blocked order is not filled, the purchase or sale will normally be allocated on a pro rata basis. The allocation may be adjusted by the Sub-Adviser, taking into account such factors as the size of the individual orders and transaction costs, when the Sub-Adviser believes an adjustment is reasonable. For the period from December 9, 1999 (commencement of operations) through September 30, 2000, and for the fiscal year ended September 30, 2001, the Fund paid brokerage commissions of $30,288 and $2,705, respectively. For the period from December 9, 1999 (commencement of operations) through September 30, 2000, Westcott Securities, L.L.C. was paid $30,287 or 100% of the total brokerage commissions for effecting 100% of the Fund's commission transactions. For the fiscal year ended September 30, 2001, Westcott Securities, L.L.C. was paid $0 or 0% of the total brokerage commissions for effecting 0% of the Fund's commission transactions. The Trust, the Adviser, the Sub-Adviser and the Fund's distributor have each adopted a Code of Ethics (the "Code") under Rule 17j-1 of the Investment Company Act of 1940. The personnel subject to the Code are permitted to invest in securities, including securities that may be purchased or held by the Fund. You may obtain copies of the Code from the Securities and Exchange Commission. DISTRIBUTION PLANS The Fund has adopted separate Distribution Plans for the Class A and Class B shares of the Fund pursuant to Rule 12b-1 under the 1940 Act (the "Plans"). Each Plan permits the Fund to 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 advisers and others that are engaged in the sale of Fund shares, or that may be advising shareholders of the Fund regarding the purchase, sale or retention of Fund shares, or that hold Fund 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 (including personnel of organizations with which the Fund has entered into agreements related to the Plan) who engage in or support distribution of Fund shares; (c) costs of preparing, printing and distributing prospectuses and statements of additional information and reports of the Fund for recipients other than existing shareholders of the Fund; (d) costs of formulating and implementing marketing and promotional activities, including, but not limited to, sales seminars, direct mail promotions and television, radio, newspaper, magazine and other mass media advertising; (e) costs of preparing, printing and distributing sales literature; (f) costs of obtaining such information, analyses and reports with respect to marketing and promotional activities as the Fund may, from time to time, deem advisable; and (g) costs of implementing and operating the Plan. The Trust is authorized to engage in the activities listed above, and in any other activities related to the distribution of Fund shares, either directly or through other persons with which the Trust has entered into agreements related to the Plan. The Fund pays the Adviser an annual fee for the Adviser's services in connection with the sales and promotion of the Fund, including its expenses in connection therewith. The annual fee paid to the Adviser under the Plans for these services is 0.25% of the average daily net assets of the Class A Shares of the Fund and 0.75% of the average daily net assets of the Class B Shares of the Fund. In addition , the Fund pays the Adviser an annual fee at the rate of 0.25% of the average daily net assets of the Class B Shares of the Fund for payments made to securities dealers or other financial intermediaries, financial institutions, investment advisers and others that: (a) hold Class B Shares for shareholders in omnibus accounts or as shareholders of record or provide shareholder support or administrative services to the Fund and its shareholders; or (b) render shareholder support services not otherwise provided by the Trust's transfer agent, including, but not limited to, 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. The Trustees expect that the Plans may significantly enhance the Fund's ability to distribute its shares. Each Plan has been approved by the 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 each Plan and the related agreements must be approved by the Trustees annually, in the same manner, and each Plan or any related agreement may be terminated at any time without penalty by a majority of such independent Trustees or by a majority of the outstanding shares of the applicable class of the Fund. Any amendment increasing the maximum percentage payable under a Plan must be approved by a majority of the outstanding shares of the applicable class of the Fund, and all material amendments to the Plan or any related agreement must be approved by the Board of Trustees. For the fiscal year ended September 30, 2001, the Adviser received $230 from Class A and $0 from Class B, pursuant to their respective Distribution Plans. Each amount may be more or less than the expenses incurred by the Adviser for the Fund's distribution related activities relating to the applicable class. DETERMINATION OF SHARE PRICE The price (net asset value) of the shares of the Fund is determined as of 4:00 p.m., Eastern time on each day the Trust is open for business and on any other day on which there is sufficient trading in the Fund's securities to materially affect the net asset value. The Trust is open for business on every day except Saturdays, Sundays and the following holidays: New Year's Day, Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. Securities that are traded on any exchange or on the NASDAQ over-the-counter market are valued at the last quoted sale price. Lacking a last sale price, a security is valued at its last bid price except when, in the Sub-Adviser's opinion, the last bid price does not accurately reflect the current value of the security. All other securities for which over-the-counter market quotations are readily available are valued at their last bid price. When market quotations are not readily available, when the Sub-Adviser determines the last bid price does not accurately reflect the current value, or when restricted securities are being valued, such securities are valued as determined in good faith by the Sub-Adviser, in conformity with guidelines adopted by and subject to review of the Board of Trustees. Fixed income securities generally are valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the Sub-Adviser believes such prices accurately reflect the fair market value of such securities. A pricing service utilizes electronic data processing techniques based on yield spreads relating to securities with similar characteristics to determine prices for normal institutional-size trading units of debt securities without regard to sale or bid prices. If the Sub-Adviser decides that a price provided by the pricing service does not accurately reflect the fair market value of the securities, 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 Sub-Adviser, in conformity with guidelines adopted by and subject to review of the Board of Trustees. Short term investments in fixed income securities with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued by using the amortized cost method of valuation, which the Board of Trustees has determined will represent fair value. INVESTMENT PERFORMANCE The Fund may periodically advertise "average annual total return." "Average annual total return," as defined by the Securities and Exchange Commission, is computed by finding the average annual compounded rates of return for the period indicated that would equate the initial amount invested to the ending redeemable value, according to the following formula: P(1+T)n=ERV Where: P = a hypothetical $1,000 initial investment T = average annual total return n = number of years ERV = ending redeemable value at the end of the applicable period of the hypothetical $1,000 investment made at the beginning of the applicable period The computation assumes that all dividends and distributions are reinvested at the net asset value on the reinvestment dates that the maximum sales load is deducted from the initial $1,000 and that a complete redemption occurs at the end of the applicable period. If the Fund has been in existence less than one, five or ten years, the time period since the date of the initial public offering of shares will be substituted for the periods stated. The Fund may also advertise performance information (a "non-standardized quotation") which is calculated differently from average annual total return. A non-standardized quotation of total return may be a cumulative return which measures the percentage change in the value of an account between the beginning and end of a period, assuming no activity in the account other than reinvestment of dividends and capital gains distributions. A non-standardized quotation may also be an average annual compounded rate of return over a specified period, which may be a period different from those specified for average annual total return. In addition, a non-standardized quotation may be an indication of the value of a $10,000 investment (made on the date of the initial public offering of the Fund's shares) as of the end of a specified period. These non-standardized quotations do not include the effect of any applicable sales load, which, if included, would reduce the quoted performance. A non-standardized quotation of total return will always be accompanied by the Fund's average annual total return as described above. The Fund's investment performance will vary depending upon market conditions, the composition of the Fund's portfolio and operating expenses of 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 year period ended September 30, 2001, and for the period from December 9, 1999 (commencement of operations) through September 30, 2001, the Fund's Class A shares average annual total return was -60.55% and -33.91%, respectively. For the one year period ended September 30, 2001, and for the period from December 9, 1999 (commencement of operations) through September 30, 2001, the Fund's Class I shares average annual total return was -60.55% and -33.91%, 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 indexes such as the S&P 500 Stock Index, the NASDAQ Composite Index, the NASDAQ 100 Index or other appropriate indexes. 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 U.S. Bank, N.A., 425 Walnut Street, M.L 6118, Cincinnati, Ohio 45202, is the custodian (the "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. FUND SERVICES Unified Fund Services, Inc. ("Unified"), 431 North Pennsylvania Street, Indianapolis, Indiana 46204, acts as the Fund's transfer agent. A Trustee and the officers of the Trust are members of management and/or employees of Unified. Unified maintains the records of each shareholder's account, answers shareholders' inquiries concerning their accounts, processes purchases and redemptions of the Funds' shares, acts as dividend and distribution disbursing agent and performs other transfer agent and shareholder service functions. Unified receives a monthly fee from the Adviser of $1.20 per shareholder (subject to a minimum monthly fee of $900) for these transfer agency services. In addition, Unified provides the Fund with fund accounting services, which includes certain monthly reports, record-keeping and other management-related services. For its services as fund accountant, Unified receives an annual fee from the Adviser equal to 0.0275% of the Fund's assets up to $100 million, 0.0250% of the Fund's assets from $100 million to $300 million, and 0.0200% 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 from December 9, 1999 (commencement of operations) through September 30, 2000, and for the fiscal year ended September 30, 2001, Unified received $14,524 and $19,665, respectively, from the Adviser on behalf of the Fund for these accounting services. Unified also provides the Fund with administrative services, including all regulatory reporting and necessary office equipment, personnel and facilities. Unified receives a monthly fee from the Adviser 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 from December 9, 1999 (commencement of operations) through September 30, 2000, and for the fiscal year ended September 30, 2001, Unified received $24,390 and $2,424, respectively, from the Adviser on behalf of the Fund for these administrative services (prior to October 12, 2000, these fees were paid to AmeriPrime Financial Services, Inc. which merged with Unified on that date). ACCOUNTANTS The firm of McCurdy & Associates CPA's, Inc., 27955 Clemens Road, Westlake, Ohio 44145, has been selected as independent public accountants for the Trust for the fiscal year ending September 30, 2002. McCurdy & Associates performs an annual audit of the Fund's financial statements and provides financial, tax and accounting consulting services as requested. DISTRIBUTOR Unified Financial Securities, Inc., 431 North Pennsylvania Street, Indianapolis, Indiana 46204 (the "Distributor"), is the exclusive agent for distribution of shares of the Fund. Kenneth D. Trumpfheller, a Trustee and officer of the Trust, is a registered principal of, and may be deemed to be 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. The Distributor and Unified are controlled by Unified Financial Services, Inc. FINANCIAL STATEMENTS The financial statements and independent auditors' report required to be included in this Statement of Additional Information are hereby incorporated by reference to the annual report of the Westcott Technology Fund (formerly the Westcott Nothing But Net Fund) for the period ended September 30, 2001. The Trust will provide the annual report without charge by calling the Fund at (800) 998-6658. -----END PRIVACY-ENHANCED MESSAGE-----