UNITED STATES FILE NO. 33-73248
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 FILE NO. 811-8228
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. _______ [ ]
Post Effective Amendment No. 4 [X]
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 5 [X]
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THE TIMOTHY PLAN
(Exact name of Registrant as Specified in Charter)
1304 West Fairbanks Avenue
Winter Park, Florida 32789
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code 407-644-1986
Arthur D. Ally, President
The Timothy Plan
1304 West Fairbanks Avenue
Winter Park, FL 32789
(Name and Address of Agent for Service)
COPIES TO: Joseph V. Del Raso, Esq.
Stradley, Ronon, Stevens & Young
2600 One Commerce Square
Philadelphia, PA 19103-7098
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APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
AS SOON AS PRACTICAL AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
IT IS PROPOSED THAT THIS FILING BECOME EFFECTIVE:
[X] IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (B) OF RULE 485.
[ ] ON (DATE), PURSUANT TO PARAGRAPH (B).
[ ] 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(1).
[ ] ON (DATE) PURSUANT TO PARAGRAPH (A) OF RULE 485.
[ ] 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(II).
[ ] ON (DATE) PURSUANT TO PARAGRAPH (A)(II) OF RULE 485.
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
[ ] THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR A
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT.
As filed with the U.S. Securities and Exchange TOTAL PAGES: 204 Commission on April 29, 1996 INDEX TO EXHIBITS, PAGE: 76
CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
Part A
Item No. Prospectus Caption
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1. Cover Page........................ Cover Page
2. Synopsis.......................... Expenses of the Fund
3. Financial Highlights.............. Financial Highlights
4. General Description of Registrant. Prospectus Cover, Investment Objective and
Policies, Risk Factors and Investment Restrictions
5. Management of the Fund............ Board of Trustees, Investment Adviser, Investment
Manager, Underwriter, Administrator, Custodian,
Transfer Agent, Fund Accounting/Pricing Agent,
Distribution of Shares, and Expenses
6. Capital Stock and Other Securities Shares of Beneficial Interest, Dividends,
Distributions and Taxes
7. Purchase of Shares Being Offered.. Determination of Net Asset Value, How to
Purchase Shares, Retirement Plans
8. Redemption or Repurchase.......... How to Redeem Fund Shares
9. Pending Legal Proceedings......... Inapplicable
PART B STATEMENT OF ADDITIONAL
ITEM NO. INFORMATION CAPTION
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10. Cover Page........................ Cover Page
11. Table of Contents................. Table of Contents
12. General Information and History... N/A
13. Investment Objective and Policies. Cover, The Timothy Plan- Investments, Investment
Restrictions
14. Management of the Fund............ Officers an Trustees of the Fund
15. Control Persons and Principal
Holders of Securities............. Miscellaneous
16. Investment Advisory and Other
Services.......................... Investment Advisor, Investment Manager,
Underwriter and Administrator
17. Brokerage Allocation.............. Allocation of Portfolio Brokerage
18. Capital Stock and Other Securities N/A
19. Purchase, Redemption and Pricing
of Securities Being Offered....... Purchase of Shares
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20. Tax Status........................ N/A
21. Underwriters...................... Underwriters, Purchase of Shares, Distribution
Plan
22. Calculation of Performance Data... Performance Calculations
23. Financial Statements.............. Audited Financial Statements
PART C
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Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C of this Post-Effective Amendment No.4
to the Registration Statement.
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PROSPECTUS FOR
THE TIMOTHY PLAN
INSTITUTIONAL CLASS
APRIL 29, 1996
Distributed By:
Fund/Plan Broker Services
Two West Elm Street
Conshohocken, PA 19428
(800) 441-6580
The Timothy Plan (the "Fund") is an open-end diversified management investment company. It was organized as a series Delaware business trust and currently offers shares of one series, which has a specific investment objective. There is no assurance that the Fund's objective will be achieved.
The objective of the Fund is long-term capital growth and its secondary objective is current income. The Fund seeks to achieve its objective by investing in securities issued by companies which, in the opinion of the Fund's advisor, conduct business in accordance with the stated philosophy and principles of the Fund (See "Investment Objectives and Policies").
The Fund currently offers two classes of shares: Institutional Class and Retail Class. This Prospectus pertains only to the Fund's Institutional Class shares. The Institutional Class shares have no sales charge but are subject to annual 12b-1 Plan expenses. Retail Class shares have a front-end sales charge and are also subject to annual 12b-1 Plan expenses. The Retail Class is offered in a separate prospectus which can be obtained by calling (800) TIM-PLAN.
The shares of the Fund may be purchased or redeemed at any time. Purchases and redemptions will be effected at the net asset value next determined following receipt of the investor's request. (See "Determination of Net Asset Value," "How to Purchase Shares," and "How to Redeem Shares").
This Prospectus sets forth concisely the information about the Fund that a prospective investor should know before investing. Investors should read and retain this Prospectus for future reference.
More information about the Fund and classes of shares of the Fund has been filed with the Securities and Exchange Commission, and is contained in the "Statement of Additional Information," dated April 29, 1996 which is available at no charge upon request to the Fund. The Fund's Statement of Additional Information is incorporated herein by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
PAGE
Expenses of the Fund........................................... 6
Financial Highlights........................................... 7
The Fund....................................................... 8
Investment Objectives and Policies............................. 8
Risk Factors................................................... 9
Investment Restrictions........................................ 11
Shares of Beneficial Interest.................................. 12
Management of the Fund......................................... 12
Board of Trustees............................................ 12
Investment Advisor........................................... 12
Investment Manager........................................... 13
Underwriter.................................................. 14
Plan of Distribution......................................... 14
Administrator................................................ 14
Custodian, Transfer Agent and Fund Accounting/Pricing Agent.. 14
Expenses..................................................... 15
Dividends, Distributions and Taxes............................. 15
Determination of Net Asset Value............................... 16
How to Purchase Shares......................................... 16
How to Redeem Shares........................................... 18
Retirement Plans............................................... 20
Performance.................................................... 21
Investment Application......................................... 22
Automatic Investment Plan Application.......................... 24
Application to Request to Transfer to The Timothy Plan......... 26
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This Prospectus is not an offering of the securities herein described in any jurisdiction or to any person to whom it is unlawful for the Fund to make such an offer or solicitation. No sales representative, dealer, or other person is authorized to give any information or make any representation other than those contained in this Prospectus.
EXPENSES OF THE FUND
The following table illustrates all expenses and fees that a shareholder of the Fund's Institutional Class will incur.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases........................... none Maximum Sales Load Imposed on Reinvested Dividends................ none Redemption Fees................................................... none /1/ |
ANNUAL FUND OPERATING EXPENSES *
(as a percentage of average net assets)
Management and Advisory Expenses After Expense Reimbursements...... 0.00%
12b-1 Fees......................................................... 0.25% /2/
Other Expenses After Expense Reimbursements........................ 1.35%
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Total Operating Costs After Expense Reimbursements................. 1.60%
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The purpose of this table is to assist the investor in understanding the various expenses that an investor in the Fund will bear directly or indirectly. The Advisor has voluntarily agreed to waive its fees, so that the Fund's total annual operating expenses will never exceed 1.60% of the daily average net assets. Further, the Advisor has agreed to reimburse the Fund for its other expenses so that the Fund's total annual expenses will never exceed 1.60%. Absent the fee waiver and expense reimbursements, "Management and Advisory Expenses" and "Other Expenses" would have been 0.85% and 4.99%, respectively.
The following example illustrates the expenses that you would pay on a $1,000
investment over various time periods assuming (1) a 5% annual rate of return and
(2) redemption at the end of each time period. As noted in the table above, the
Fund charges no redemption fees of any kind.
1 year 3 years 5 Years 10 Years ------ ------- ------- -------- $16 $50 $87 $190 |
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
The Fund issues two classes of shares that invest in the same portfolio of securities. Shareholders of Retail Class shares are subject to a sales charge and each class is subject to a different 12b-1 Plan, therefore, expenses and performance figures will vary between the classes. Further information about Retail Class shares may be obtained by calling (800) TIM-PLAN.
/2/ The Board of Trustees has adopted a Plan of Distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940 for the Fund. With the Plan of Distribution in place, long-term shareholders may pay more than the economic equivalent of the maximum front-end sales charge consistent with rules of the National Association of Securities Dealers, Inc. Given the maximum rate permitted under the Fund's Plan of Distribution, it is anticipated that it would take a substantial number of years to reach such maximum.
* The table reflects the expenses the Fund incurred during the fiscal year ended December 31, 1995.
FINANCIAL HIGHLIGHTS
The following financial highlights were derived from the Fund's financial statements related to the Institutional Class which were audited by Tait, Weller & Baker, independent auditors, whose unqualified report thereon is incorporated by reference into the Statement of Additional Information. The Fund's Statement of Additional Information may be obtained by shareholders without charge and is incorporated by reference into this Prospectus. The table sets forth financial data for a share of capital stock outstanding throughout the period presented.
FOR THE FOR THE
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994*
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NET ASSET VALUE, BEGINNING OF PERIOD................................... $ 9.66 $ 10.00
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INCOME FROM INVESTMENT OPERATIONS
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Net investment income................................................. 0.11 0.06
Net gains (losses) on securities (both
realized and unrealized)............................................. 0.66 (0.34)
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Total from investment operations................................... 0.77 (0.28)
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LESS DISTRIBUTIONS
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Distributions from net investment income.............................. (0.11) (0.06)
Distributions from net capital gains.................................. (0.25) 0.00
Total distributions................................................ (0.36) (0.06)
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NET ASSET VALUE, END OF PERIOD......................................... $10.07 $ 9.66
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TOTAL RETURN........................................................... 7.93% (2.84)%
RATIOS/SUPPLEMENTAL DATA
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Net assets, end of period (in 000's).................................. $6,133 $ 2,217
Ratio of expenses to average net assets:
Before expense reimbursement....................................... 5.84% 18.62 % /1/
After expense reimbursement........................................... 1.60% 1.60 % /1/
Ratio of net investment income to average net assets
Before expense reimbursement....................................... (2.96%) (15.49)% /1/
After expense reimbursement........................................... 1.28% 1.53 % /1/
Portfolio turnover rate............................................... 34.12% 8.31 %
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* The Institutional Class shares commenced investment operations on March 21, 1994.
/1/ Annualized.
THE FUND
The Timothy Plan (the "Fund") is an open-end diversified management investment company commonly known as a mutual fund. The Fund was established as a series Delaware business trust on December 16, 1993. The Fund currently offers one series with two classes of shares: Institutional Class and Retail Class. This Prospectus pertains only to Institutional Class shares.
INVESTMENT OBJECTIVES AND POLICIES
Set forth below are the investment objectives and policies of the Fund. The investment objective of the Fund is a fundamental policy and may not be changed without the approval of the holders of a majority of the Fund's outstanding voting securities. There can be no assurance that the Fund will achieve its objective.
The Fund's objective is long-term capital growth, with a secondary objective of current income. The Fund shall seek to achieve its objective while abiding by ethical standards established for investments by the Fund. Those standards preclude the investment in securities of companies involved in the businesses of alcohol production, tobacco production, or casino gambling, or which are directly or indirectly involved in pornography or abortion. The securities in which the Fund shall be precluded from investing, by virtue of the Fund's ethical standards, are referred to as the "Excluded Securities."
The Fund will invest most of its assets in common stocks and American Depository Receipts ("ADRs"), although it may also invest in other types of securities including securities convertible into common stocks and common stock equivalents (including rights and warrants), preferred stocks, short-term United States Government securities, and/or other high-quality, short-term debt securities (commercial paper, repurchase agreements, bankers' acceptances, certificates of deposit and other fixed income securities (non-convertible and convertible bonds, debentures and notes issued by U.S. corporations and certain bank obligations and participations). High-quality debt securities are those that are rated Aa or better by Moody's, or AA or better by Standard & Poor's, or that are of comparable quality. See "Risk Factors" herein, and the Statement of Additional Information for information relating to these securities. While it is the Fund's policy to seek long-term investments, changes will be made whenever management believes that such changes will strengthen the Fund's investments and realization of its objectives. The Fund will pursue its objectives by investing a major portion of its assets in securities of companies which offer prospects for growth of capital in accordance with the portfolio investment techniques described below.
The Fund seeks to achieve its investment objective by investing primarily in common stocks and ADRs, while foregoing investments in the Excluded Securities. Systematic Financial Management, L.P. (the "Investment Manager") will select the investments for the Fund, but will not invest in securities which Timothy Partners, Ltd. (the "Advisor") will determine are Excluded Securities. The Advisor has instructed the Investment Manager to avoid investment in any company directly involved in the business of alcohol production, tobacco production, or casino gambling. In addition, the Advisor will compile and maintain a list of companies that it determines, by using information collected by and published by three Christian ministries, participate directly or indirectly in either pornography or abortion. The Advisor will use its best judgement in determining which companies, through their corporate practices in either of these two areas, need to be placed on the Excluded Securities list. The Advisor also reserves the right to exercise its best judgement to exclude investment in other companies whose corporate practices may not fall within the exclusions described above, but nevertheless could be found offensive to basic traditional Judeo Christian values.
The three Christian ministries that publish information that the Advisor will utilize in identifying companies directly or indirectly involved in pornography or abortion are as follows: (1) The American Family Association (to identify companies engaged in pornography); (2) Pro Vita Advisors (to identify companies that directly and indirectly participate in abortion); and (3) Life Decisions International (to identify companies that indirectly support abortion causes through corporate funding programs). The Advisor retains the right to change the ministries whose information it reviews, at its discretion.
After eliminating the Excluded Securities, the Investment Manager will construct a portfolio of investments to produce the highest possible risk-adjusted return on investment as is consistent with the Fund's objective and policies.
The Fund will invest primarily in a diversified portfolio of equity securities of companies whose market capitalizations exceed $200 million, and whose securities trade on the New York Stock Exchange, the American Stock Exchange and the NASDAQ National Market System. Since the Fund is an equity fund, the Investment Manager seeks investments that show the greatest potential for growth, with income as a secondary factor. Therefore, these companies may or may not pay dividends.
The Fund generally will select securities based on a value-oriented investment style employed by the Investment Manager. That style identifies investments in securities of companies which consistently generate Free Cash Flow (as defined by the Investment Manager), and which securities trade at reasonable multiples of the companies' long-term Free Cash Flows. The Investment Manager defines Free Cash Flow as the amount of cash available to a company for distribution to stockholders or investment in its business, after paying all expenses and providing for expenditures required to support continuing growth. Free Cash Flow is determined using a methodology developed by the Investment Manager.
Potential equity investment candidates will be analyzed to determine their ability to repay all fixed debt obligations (including certain "off balance sheet debts" such as operating lease obligations and unfunded pension liabilities) from their historical level of Free Cash Flows within a reasonable time period, generally less than five years. Securities are typically sold when an appreciation objective is met, the company experiences a full year of negative operating cash flow or Free Cash Flows decline significantly. The Fund may invest up to 30% of its assets in cash or debt securities. Although the Investment Manager does not utilize a market timing strategy, if market conditions are viewed to require that the Fund take a temporary defensive position, the Fund may invest up to 100% of its assets in (i) debt securities issued by the U.S. Government, its agencies or instrumentalities, (ii) commercial paper, (iii) certificates of deposit and bankers' acceptances or (iv) repurchase agreements with respect to any of the foregoing investments. The Fund may also invest in such securities pending the investment of the proceeds of certain sales of portfolio securities and at such other times when suitable equity securities are not available. It is impossible to predict whether, or for how long, the Fund will use any of such temporary defensive strategies.
The Advisor will attempt to monitor and respond to changes in business policies within the companies selected for investment. It is possible that securities in which the Fund has invested may become Excluded Securities. In such event, the Fund will sell its position in those securities subject to general market considerations.
RISK FACTORS
INVESTMENT RESTRICTIONS OF THE FUND The ethical standards established for investments by the Fund limit the pool of securities from which investment securities may be selected by the Investment Manager. Although the Advisor believes the Fund's investment objective of long-term capital growth can be achieved notwithstanding the effect of the Fund's ethical standards, this objective may be affected by the limitations imposed by the Advisor, in eliminating the Excluded Securities as potential investments.
ADVISOR AND INVESTMENT MANAGER The principals of the Managing General Partner of the Advisor have been engaged in various aspects of the retail brokerage and financial advisory business. The Investment Manager has advised individuals, institutional clients and employee benefit plans since 1983 and currently manages approximately $1 billion in these accounts. However, neither the Advisor nor the Investment Manager has previously served as an investment advisor to an investment company.
PORTFOLIO TURNOVER It is anticipated that the annualized portfolio turnover rate for the Fund generally will not exceed a range of 50% to 75%, and may be lower than 50%, during most periods. High portfolio turnover involves additional transaction costs (such as brokerage commissions) which are borne by the Fund, and might involve adverse tax effects. (See "Dividends, Distributions and Taxes").
RISKS OF CERTAIN FIXED INCOME SECURITIES
INTEREST BEARING DEBT INSTRUMENTS The market value of interest-bearing debt securities, if and when held by the Fund, is affected by changes in interest rates. There is normally an inverse relationship between the market value of securities sensitive to prevailing interest rates and actual changes in interest rates; i.e., a decline in interest rates produces an increase in market value, while an increase in rates produces a decrease in market value. Moreover, the longer the remaining maturity of a security, the greater the effect of interest rate changes on the market value of such a security. In addition, changes in an issuer's ability to make payments of interest and principal and in the market's perception of an issuer's creditworthiness also affect the market value of the debt securities of that issuer.
MONEY MARKET SECURITIES The Fund will select money market securities for investment when such securities offer a current market rate of return which the Fund considers reasonable in relation to the risk of the investment, and the issuer can satisfy suitable standards of credit-worthiness set by the Fund. The money market securities in which the Fund may invest are repurchase agreements, certificates of deposit, U.S. Government securities, commercial paper and securities of money market mutual funds.
Although the Fund intends to invest primarily in common stocks, common stock equivalents, and ADRs, the Fund may invest up to 30% of its assets directly in money market securities whenever deemed appropriate to achieve the Fund's investment objective. It may invest without limitation in such securities on a temporary basis for defensive purposes.
Securities issued or guaranteed as to principal and interest by the U. S. Government ("Government Securities") include a variety of Treasury securities, which differ in their interest rates, maturities and date of issue. Treasury bills have a maturity of one year or less; Treasury notes have maturities of one to ten years; Treasury bonds generally have a maturity of greater than five years. The Fund will only acquire Government Securities which are supported by the "full faith and credit" of the United States. Securities which are backed by the full faith and credit of the United States include Treasury bills, Treasury notes, Treasury bonds and obligations of: the Government National Mortgage Association, the Farmers Home Administration and the Export-Import Bank. The Fund's direct investments in money market securities will generally favor securities with shorter maturities (maturities of less than 60 days) which are less affected by price fluctuations than are those with longer maturities.
Certificates of deposit are certificates issued against funds deposited in a commercial bank or a savings and loan association for a definite period of time and earning a specified return. Bankers' acceptances are negotiable drafts or bills of exchange, normally drawn by an importer or exporter to pay for specific merchandise, which are "accepted" by a bank, meaning, in effect, that the bank unconditionally agrees to pay the face value of the instrument on maturity. Investments in bank certificates of deposit and bankers' acceptances are generally limited to domestic banks and savings and loan associations that are members of the Federal Deposit Insurance Corporation or Federal Savings and Loan Insurance Corporation having a net worth of at least $100 million dollars ("Domestic Banks") and domestic branches of foreign banks (limited to institutions having total assets not less than $1 billion or its equivalent).
Investments in prime commercial paper may be made in notes, drafts, or similar instruments payable on demand or having a maturity at the time of issuance not exceeding nine months, exclusive of days of grace, or any renewal thereof payable on demand or having a maturity likewise limited.
REPURCHASE AGREEMENTS Under a repurchase agreement the Fund acquires a debt instrument for a relatively short period (usually not more than one week) subject to the obligation of the seller to repurchase and the Fund to resell such debt instrument at a fixed price. The Fund will enter into repurchase agreements only with banks which are members of the Federal Reserve System, or securities dealers who are members of a national securities exchange or are market makers in government securities and report to the Market Reports Division of the Federal Reserve Bank of New York and, in either case, only where the debt instrument collateralizing the repurchase agreement is a U.S. Treasury or agency obligation supported by the full faith and credit of the United States. A repurchase agreement may also be viewed as the loan of money by the Fund to the seller. The resale price specified is normally in excess of the purchase price, reflecting an agreed upon interest rate. The rate is effective for the period of time the Fund is invested in the agreement and may not be related to the coupon rate on the underlying security. The term of these repurchase agreements will
usually be short (from overnight to one week). At no time will the Fund invest in repurchase agreements of more than sixty days. The securities which are collateral for the repurchase agreements, however, may have maturity dates in excess of sixty days from the effective date of the repurchase agreement. The Fund will always receive, as collateral, securities whose market value, including accrued interest, will at least equal 102% of the dollar amount to be paid to the Fund under each agreement at its maturity, and the Fund will make payment for such securities only upon physical delivery or evidence of book entry transfer to the account of the Custodian. If the seller defaults, the Fund might incur a loss if the value of the collateral securing the repurchase agreement declines, and might incur disposition costs in connection with liquidation of the collateral. In addition, if bankruptcy proceedings are commenced with respect to the seller of the security, collection of the collateral by the Fund may be delayed or limited. The Fund also may not be able to substantiate its interests in the underlying securities. While management of the Fund acknowledges these risks, it is expected that such risks can be controlled through stringent security selection and careful monitoring procedures. The Fund may not enter into a repurchase agreement with more than seven days to maturity if, as a result, more than 10% of the market value of the Fund's net assets would be invested in such repurchase agreements and any other illiquid assets. For purposes of the diversification test for qualification as a regulated investment company under the Internal Revenue Code, Repurchase Agreements are not counted as cash, cash items or receivables, but rather as securities issued by the counter-party to the Repurchase Agreements.
INVESTMENT RESTRICTIONS
The investment restrictions set forth below have been adopted by the Fund as fundamental policies, to limit certain risks that may result from investment in specific types of securities or from engaging in certain kinds of transactions addressed by such restrictions. They may not be changed without the affirmative vote of the holders of a majority of the outstanding voting securities of the Fund. Certain of these policies are detailed below, while other policies are set forth in the Statement of Additional Information. Changes in values of particular Fund assets or the assets of the Fund as a whole will not cause a violation of the investment restrictions so long as percentage restrictions are observed by the Fund at the time it purchases any security.
The investment restrictions specifically provide that the Fund will not:
(a) as to 75% of the Fund's total assets, invest more than 5% of its total assets in the securities of any one issuer. (This limitation does not apply to cash and cash items, or obligations issued or guaranteed by the United States Government, its agencies or instrumentalities);
(b) purchase more than 10% of the voting securities, or more than 10% of any class of securities, of another investment company. For purposes of this restriction, all outstanding fixed income securities of an issuer are considered as one class;
(c) purchase or sell commodities or commodity futures contracts, other than those related to stock indexes as previously outlined in "Investment Objectives and Policies;"
(d) purchase or sell real estate or interests therein, although it may purchase securities of issuers which engage in real estate operations;
(e) make loans of money or securities, except (i) by the purchase of fixed income obligations in which the Fund may invest consistent with its investment objective and policies; or (ii) by investment in repurchase agreements (see "Investment Objectives and Policies");
(f) invest in securities of any company if, any officer or trustee of the Fund or the Advisor owns more than 0.5% of the outstanding securities of such company and such officers and trustees (who own more than 0.5%) in the aggregate own more than 5% of the outstanding securities of such company;
(g) borrow money, except the Fund may borrow from banks (i) for temporary or emergency purposes
in an amount not exceeding 5% of the Fund's assets or (ii) to meet redemption requests that might otherwise require the untimely disposition of portfolio securities, in an amount up to 33-1/3% of the value of the Fund's total assets (including the amount borrowed) valued at market less liabilities (not including the amount borrowed) at the time the borrowing was made. While borrowing exceeds 5% of the value of the Fund's total assets, the Fund will not purchase securities. Interest paid on borrowing will reduce net income ;
(h) pledge, hypothecate, mortgage or otherwise encumber its assets, except in an amount up to 33-1/3% of the value of its net assets but only to secure borrowing for temporary or emergency purposes, such as to effect redemptions; or
(i) purchase the securities of any issuer, if, as a result, more than 10% of the value of a Fund's net assets would be invested in securities that are subject to legal or contractual restrictions on resale ("restricted securities"), in securities for which there are no readily available market quotations, or in repurchase agreements maturing in more than seven days, if all such securities would constitute more than 10% of the Fund's net assets.
SHARES OF BENEFICIAL INTEREST
The beneficial interest of the Fund is divided into an unlimited number of shares ("Shares") with a par value of $0.001 each. Each Share has equal dividend, voting, liquidation and redemption rights. If a matter to be voted on does not affect the interests of all classes, then only the shareholders of the affected class shall be entitled to vote on the matter. There are no conversion or preemptive rights. Shares, when issued, will be fully paid and nonassessable. Fractional shares have proportional voting rights. Shares of the Fund do not have cumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of trustees can elect all of the trustees if they choose to do so and, in such event, the holders of the remaining shares will not be able to elect any person to the Board of Trustees.
MANAGEMENT OF THE FUND
The members of the Fund's Board of Trustees are fiduciaries for the Fund's shareholders and are governed by the laws of the State of Delaware in this regard. They establish policy for the operation of the Fund and appoint the officers who conduct the daily business of the Fund. The Statement of Additional Information contains more information regarding Officers and Trustees.
Timothy Partners, Ltd. (the "Advisor") is a Florida limited partnership organized on December 6, 1993. The Advisor supervises the investment of the assets of the Fund in accordance with the objective, policies and restrictions of the Fund. The Advisor approves the portfolio of securities selected by the Investment Manager (See "Investment Manager" below). To determine which securities are Excluded Securities with respect to abortion and pornography, the Advisor consults with three Christian ministries on these issues: The American Family Association (pornography), Pro Vita Advisors (direct and indirect participation and involvement in abortion) and Life Decisions International (indirect participation in abortion through corporate funding programs). The Advisor retains the right to change the ministries whose information it reviews, at its discretion.
For its services, the Advisor is paid an annual fee equal to 0.85% of the Fund's average daily net assets. This fee is subject to reductions reflecting certain reductions in the fee of the Advisor pursuant to state expense limitations and other voluntary reductions in fees paid by the Fund. The fee paid to the Advisor includes the compensation that the Advisor pays to the Investment Manager for its services to the Fund, and the compensation that the Advisor pays to
Covenant Financial Management, Inc. ("CFM") for its services to the Fund. In addition, this fee also covers the cost of postage, materials and handling of the fulfillment function of processing Prospectus requests as well as other sundry marketing and general administration expenses. The fee payable to and services provided by the Investment Manager are described under the heading "Investment Manager" below. The fee payable to and services provided by CFM are described at the end of this section. The Advisor's fee is higher than that charged by other funds, but is comparable to fees charged by funds with similar investment objectives. The Advisor has offices located at 1304 West Fairbanks Avenue, Winter Park, FL 32789.
Arthur D. Ally, the President, Chairman and Trustee of the Fund, is President and a 70% shareholder of Covenant Funds, Inc. ("Covenant"), which is the managing general partner of the Advisor. Mr. Ally is also an individual general partner of the Advisor. Neither the Advisor nor its managing general partners previously has served as an advisor to a registered investment company. Mr. Ally, however, has had extensive securities industry experience having served as financial consultant and branch manager for three securities firms over the past seventeen years: Prudential Bache, Shearson Lehman Brothers and Investment Management & Research. Some or all of these firms may be used by the Investment Manager to execute portfolio trades for the Fund. Neither Mr. Ally nor any affiliated person to the Fund will receive any benefit from any of these transactions.
The Advisor and CFM have entered into an agreement dated February 23, 1994 whereby the Advisor pays CFM for certain overhead expenses related to the daily operations of the Fund that CFM carries out. These expenses include: salary of administrative personnel, cost of preparation of shareholder fulfillment kits, cost of phone lines and office space, and cost of postage and supplies. The annual fee that the Advisor pays on a monthly basis for CFM's services is designed to only cover CFM's costs in providing its services. The Advisor pays to CFM, on a monthly basis, a minimum fee of $20,000 but in no event to exceed actual costs incurred by CFM. Both parties have agreed that no profits will accrue to CFM as a result of this agreement.
Arthur D. Ally is President and 100% shareholder of CFM.
Systematic Financial Management, L.P. (the "Investment Manager") is a Delaware limited partnership, which succeeded Systematic Financial Management, Inc., a New Jersey corporation established in 1983. The Investment Manager has been retained by the Advisor pursuant to a sub-advisory agreement to assist in the selection and management of the Fund's investment securities. The Investment Manager will prepare the portfolio of securities of selected issuers with business practices that meet the objective and policies of the Fund. The Advisor will review the portfolio to ensure compliance with the Fund's ethical standards.
The Investment Manager's investment policy committee, comprised of Kenneth S. Hackel, Charles J. Mohr, Jeffrey M. Moses and Jason I. Wallach is responsible for the day-to-day management of the Fund's portfolio. For more than the past five (5) years, Mr. Hackel has served as President and Chief Investment Officer of the Investment Manager. The Investment Manager currently manages approximately $1.1 billion for clients on a separate account basis utilizing the same investment methodology that it will employ for the Fund.
The Investment Manager places portfolio transactions for the Fund. In this regard, the Investment Manager will be governed by the policies set forth under "Investment Objectives and Policies."
For its services, the Investment Manager is paid an annual fee by the Advisor equal to 0.50% of the first $100 million in average net assets of the Fund, 0.40% of the next $100 million in average net assets, 0.30% of the next $100 million
in average net assets and 0.25% of average net assets over $300 million.The Investment Manager has offices located at Two Executive Drive, Fort Lee, NJ 07024. The Investment Manager has not previously served as an investment advisor to an investment company.
Fund/Plan Broker Services, Inc. ("FPBS"), Two West Elm Street, Conshohocken, PA 19428-0874, was engaged pursuant to an agreement dated January 19, 1994, as amended February 23, 1996. The purpose of acting as underwriter is to facilitate the registration of shares of the Fund under state securities laws and to assist in the sale of shares. The fee for such services is borne by the Advisor.
The Fund has adopted a plan pursuant to Rule 12b-1 (the "12b-1 Plan") under the Investment Company Act of 1940, as amended, whereby it may reimburse FPBS or others for expenses actually incurred by FPBS or others in the promotion and distribution of the Fund's Institutional Class shares. These expenses include, but are not limited to, the printing of prospectuses and reports used for sales purposes, the preparation of sales literature and related expenses, advertisements, and other distribution-related expenses, including payments to securities dealers and others participating in the sale and servicing of Institutional Class shares, including payment for providing personal services and/or maintaining shareholder accounts. The maximum amount which the Fund may pay to FPBS and others (and which FPBS may re-allow to securities dealers and others participating in the sale of shares) for such distribution expenses is 0.25% per annum of the Fund's average daily net assets payable on a monthly basis. All expenses of distribution and marketing in excess of 0.25% per annum will be borne by the Advisor. The 12b-1 Plan also covers any payments made by the Fund, the Advisor, the Investment Manager, FPBS, or other parties on behalf of the Fund, the Advisor, the Investment Manager, or FPBS, to the extent such payments are deemed to be for the financing of any activity primarily intended to result in the sale of shares issued by the Fund within the context of Rule 12b-1.
Fund/Plan Services, Inc. ("Fund/Plan"), Two West Elm Street, Conshohocken, PA 19428-0874, is the Fund's administrator pursuant to an Administration Services Agreement (the "Agreement") with the Fund dated January 19, 1994, as amended February 23, 1996. Under the Agreement, Fund/Plan receives a fee at the annual rate of 0.15% of the first $50 million in average net assets of the Fund, 0.10% of the next $50 million in average net assets and 0.05% of average net assets over $100 million. There is a minimum fee of $50,000 per year for the initial series/class issued by the Fund and $12,000 per year for each additional series or class of shares.
The services Fund/Plan provides to the Fund include: considering and monitoring of any third parties furnishing services to the Fund; providing the necessary office space, equipment and personnel to perform administrative and clerical functions for the Fund; preparing, filing and distributing proxy materials, periodic reports to shareholders, registration statements, and other documents; and responding to shareholder inquiries.
The Bank of New York, 48 Wall Street, New York, New York 10286, is custodian for the securities and cash of the Fund.
Fund/Plan serves as the Fund's transfer agent. As transfer agent, it maintains the records of each shareholder's account, answers shareholder inquiries concerning accounts, processes purchases and redemptions of the Fund's shares, acts as dividend and distribution disbursing agent, and performs other shareholder service functions. Shareholder inquiries should be directed to the transfer agent at (800) 662-0201.
Fund/Plan also performs certain accounting and pricing services for the Fund. This includes the daily calculation of the Fund's net asset value.
Except as indicated above, the Fund is responsible for the payment of its expenses, other than those borne by the Advisor. These expenses may include, but are not limited to: (a) management fees; (b) the charges and expenses of the Fund's legal counsel and independent accountants; (c) brokers' commissions, mark-ups and mark-downs and any issue or transfer taxes chargeable to the Fund in connection with its securities transactions; (d) all taxes and corporate fees payable by the Fund to governmental agencies; (e) the fees of any trade association of which the Fund is a member; (f) the cost of stock certificates, if any, representing shares of the Fund; (g) amortization and reimbursements of the organization expenses of the Fund and the fees and expenses involved in registering and maintaining registration of the Fund and its shares with the Securities and Exchange Commission, and the preparation and printing of the Fund's registration statements and prospectuses for such purposes; (h) allocable communications expenses with respect to investor services and all expenses of shareholders and trustee meetings and of preparing, printing and mailing prospectuses and reports to shareholders; (i) litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund's business; and (j) compensation for employees of the Fund.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund will declare and pay annual dividends to its shareholders of substantially all of its net investment income, if any, earned during the year from its investments, and the Fund will distribute net realized capital gains, if any, once with respect to each year. Expenses of the Fund, including the advisory fee, are accrued each day. Reinvestments of dividends and distributions in additional shares of the Fund will be made at the net asset value determined on the ex date of the dividend or distribution unless the shareholder has elected in writing to receive dividends or distributions in cash. An election may be changed by notifying Fund/Plan in writing thirty days prior to record date.
Dividends paid by the Fund with respect to its Institutional Class and Retail Class shares are calculated in the same manner and at the same time. Both Institutional Class and Retail Class shares of the Fund will share proportionately in the investment income and expenses of the Fund, except that the per share dividends of Retail Class shares will differ from the per share dividends of Institutional Class shares as a result of additional distribution expenses charged to Retail Class shares.
As the sole series of The Timothy Plan, the Fund has qualified, and intends to continue to qualify, as a regulated investment company under Subchapter M of the Internal Revenue Code (the "Code"). As such, the Fund will not be subject to federal income tax, or to any excise tax, to the extent its earnings are distributed in accordance with the timing requirements imposed by the Code and by meeting certain other requirements relating to the sources of its income and diversification of its assets.
The Fund intends to distribute substantially all of its net investment income and net capital gains. Dividends from net investment income or net short-term capital gains will be taxable to you as ordinary income, whether received in cash or in additional shares. Dividends from net investment income will generally qualify, in part, for the 70% corporate dividends received deduction, subject to certain holding period and debt financing restrictions imposed under the Code on the corporate investor claiming the deduction. The portion of the dividends so qualified depends on the aggregate qualifying dividend income received by the Fund from domestic (U.S.) sources.
Distributions paid by the Fund from long-term capital gains, whether received in cash or in additional shares, are taxable to those investors who are subject to income tax as long-term capital gains, regardless of the length of time an investor has owned shares in the Fund. The Fund does not seek to realize any particular amount of capital gains during a year; rather, realized gains are a byproduct of Fund management activities. Consequently, capital gains distributions may be expected to vary considerably from year to year. Also, for those investors subject to tax, if purchases of shares in the Fund are made shortly before the record date for a dividend or capital gains distribution, a portion of the investment will be returned as a taxable distribution.
Dividends which are declared in October, November or December to shareholders of record in such a month but which, for operational reasons, may not be paid to the shareholder until the following January, will be treated for tax purposes
as if paid by the Fund and received by the shareholder on December 31 of the calendar year in which they are declared.
The sale of shares of the Fund is a taxable event and may result in a capital gain or loss to shareholders subject to tax. Capital gain or loss may be realized from an ordinary redemption of shares or an exchange of shares between two mutual funds (or two series of a mutual fund). Any loss incurred on sale or exchange of the Fund's shares, held for six months or less, will be treated as a long-term capital loss to the extent of capital gain dividends received with respect to such shares.
In addition to federal taxes, shareholders may be subject to state and local taxes on distributions. Each year, the Fund will mail you information on the tax status of the Fund's dividends and distributions. Of course, shareholders who are not subject to tax on their income would not be required to pay tax on amounts distributed to them by the Fund.
The Fund is required to withhold 31% of taxable dividends, capital gains distributions, and redemptions paid to shareholders who have not complied with IRS taxpayer identification regulations. You may avoid this withholding requirement by certifying on your Account Registration Form your proper Taxpayer Identification Number and by certifying that you are not subject to backup withholding.
The tax discussion set forth above is included for general information only. Prospective investors should consult their own tax advisers concerning the federal, state, local or foreign tax consequences of an investment in the Fund.
DETERMINATION OF NET ASSET VALUE
The net asset value per Fund share is determined by the Fund as of the close of regular trading on each day that the New York Stock Exchange (the "NYSE") is open for unrestricted trading from Monday through Friday and on which there is a purchase or redemption of the Fund's share. The net asset value is determined by the Fund by dividing the value of the Fund's securities, plus any cash and other assets, less all liabilities, by the number of shares outstanding. Expenses and fees of the Fund, including the advisory and the distributor fees, are accrued daily and taken into account for the purpose of determining the net asset value.
Fund securities listed or traded on a securities exchange for which representative market quotations are available will be valued at the last quoted sales price on the security's principal exchange on that day. Listed securities not traded on an exchange that day, and other securities which are traded in the over-the-counter market, will be valued at the last reported bid price in the market on that day, if any. Securities for which market quotations are not readily available and all other assets will be valued at their respective fair market value as determined in good faith by, or under procedures established by, the Board of Trustees. In determining fair value, the Trustees may employ an independent pricing service.
Money market securities with less than sixty days remaining to maturity when acquired by the Fund will be valued on an amortized cost basis by the Fund, excluding unrealized gains or losses thereon from the valuation. This is accomplished by valuing the security at cost and then assuming a constant amortization to maturity of any premium or discount. If the Fund acquires a money market security with more than sixty days remaining to its maturity, it will be valued at current market value until the 60th day prior to maturity, and will then be valued on an amortized cost basis based upon the value on such date unless the Trustees determine during such 60 day period that this amortized cost value does not represent fair market value.
Net asset value is calculated separately for each class of the Fund based on expenses applicable to the particular class. Although the methodology and procedures for determining net asset value are identical for the Fund's classes, the net asset value of the classes may differ because of the different fees and expenses charged to each class.
HOW TO PURCHASE SHARES
Shares of the Fund may be purchased directly from the Fund at the net asset value next determined after receipt of the order in proper form by the transfer agent. There is no sales load in connection with the purchase of shares. The Fund
reserves the right to reject any purchase order and to suspend the offering of shares of the Fund. The minimum initial investment is $25,000, with no minimum subsequent investment. The Fund reserves the right to vary the initial investment minimum and minimums for additional investments at any time. There is no minimum investment requirement for qualified retirement plans.
At the discretion of the Fund, investors may be permitted to purchase Fund shares by transferring securities to the Fund that meet the Fund's investment objectives and policies. Securities transferred to the Fund will be valued in accordance with the same procedures used to determine the Fund's net asset value at the time of the next determination of net asset value after such acceptance. Shares issued by the Fund in exchange for securities will be issued at net asset value determined as of the same time. All dividends, interest, subscription, or other rights pertaining to such securities shall become the property of the Fund and must be delivered to the Fund by the investor upon receipt from the issuer. Investors who are permitted to transfer such securities will be required to recognize a gain or loss on such transfer, and pay tax thereon, if applicable, measured by the difference between the fair market value of the securities and the investors' basis therein. Securities will not be accepted in exchange for shares of the Fund unless: (l) such securities are, at the time of the exchange, eligible to be included in the Fund and current market quotations are readily available for such securities; (2) the investor represents and warrants that all securities offered to be exchanged are not subject to any restrictions upon their sale by the Fund under the Securities Act of 1933 or under the laws of the country in which the principal market for such securities exists, or otherwise and (3) the value of any such security (except U.S. Government securities) being exchanged together with other securities of the same issuer owned by the Fund, will not exceed 5% of the Fund's net assets immediately after the transaction.
Purchase orders for shares of the Fund which are received by the transfer agent in proper form prior to the close of regular trading hours on the NYSE (currently 4:00 p.m. Eastern time) on any day that the Fund calculates its net asset value, are priced according to the net asset value determined on that day. Purchase orders for shares of the Fund received after the close of the NYSE on a particular day are priced as of the time the net asset value per share is next determined.
Purchases may be made in one of the following ways:
PURCHASES BY MAIL
Shares may be purchased initially by completing the Investment Application on pages XX and XX of this Prospectus and mailing it to the transfer agent, together with a check payable to The Timothy Plan, c/o Fund/Plan Services, Inc., Two West Elm Street, P.O. Box 874, Conshohocken, PA 19428-0874. All checks for purchase of shares must be drawn on U.S. banks and payable in U.S. dollars.
Subsequent investments in an existing account in the Fund may be made at any time by sending a check payable to The Timothy Plan, c/o United Missouri Bank KC, NA, P.O. Box 412797, Kansas City, MO 64141-2797. Please enclose the stub of your account statement along with the amount of the investment and the name of the account for which the investment is to be made and the account number. Please note: A $20 fee will be charged to your account for any payment check returned to the custodian.
The Fund may accept telephone orders from broker-dealers or service organizations which have been previously approved by the Fund. It is the responsibility of such broker-dealers or service organizations to promptly forward purchase orders and payments for the same to the Fund. Shares of the Fund may be purchased through broker-dealers, banks and bank trust departments who may charge the investor a transaction fee or other fee for their services at the time of purchase. Such fees would not otherwise be charged if the shares were purchased directly from the Fund.
PURCHASES BY WIRE
To order shares for purchase by wiring federal funds, the transfer agent must first be notified by calling (800) 662-0201 to request an account number and furnish the Fund with your tax identification number. Following notification to the transfer agent, federal funds and registration instructions should be wired through the Federal Reserve System to:
UNITED MISSOURI BANK KC NA
ABA #10-10-00695
FOR: FUND/PLAN SERVICES, INC.
A/C 98-7037-071-9
FBO "THE TIMOTHY PLAN - INSTITUTIONAL CLASS"
ACCOUNT OF (exact name(s) of account registration)
SHAREHOLDER ACCOUNT # _______________
A completed application with signature(s) of registrant(s) must be filed with the transfer agent immediately subsequent to the initial wire. Investors should be aware that some banks may impose a wire service fee. Shareholders may be subject to 31% withholding if original application is not received.
AUTOMATIC INVESTMENT PLAN
Shares of the Fund may be purchased through an Automatic Investment Plan (the
"Plan"). The Plan provides a convenient method by which investors may have
monies deducted directly from their checking, savings or bank money market
accounts for investment in the Fund. The minimum investment pursuant to this
Plan is $100 per month. If you desire to take advantage of this Plan simply
complete and remit the Automatic Investment Plan application on pages XX and XX.
The account designated will be debited in the specified amount, on the date
indicated, and Fund shares will be purchased. Only an account maintained at a
domestic financial institution which is an ACH member may be so designated. The
Fund may alter, modify or terminate this Plan at any time. For information
about participating in the Automatic Investment Plan, call Fund/Plan at
(800) 662-0201.
HOW TO REDEEM SHARES
Shareholders may redeem their shares of the Fund without charge on any business day that the NYSE is open (see "Determination of Net Asset Value"). Redemptions will be effective at the net asset value per share next determined after the receipt by the transfer agent of a redemption request meeting the requirements described below. The Fund normally sends redemption proceeds on the next business day, but in any event redemption proceeds are sent within seven calendar days of receipt of a redemption request in proper form. Payment may also be made by wire directly to any bank previously designated by the shareholder in a shareholder account application. There is a $9.00 charge for redemptions by wire. Please note that the shareholder's bank also may impose a fee for wire service. The Fund will honor redemption requests of shareholders who recently purchased shares by check, but will not mail the proceeds until it is reasonably satisfied that the purchase check has cleared, which may take up to fifteen days from the purchase date, at which time the redemption proceeds will be mailed to the shareholder. To avoid delays of this kind, you may wish to purchase by wire if you are planning on redeeming your shares in the near future.
Except as noted below, redemption requests received in proper form by the transfer agent prior to the close of regular trading hours on the NYSE on any business day that the Fund calculates its per share net asset value are effective that day.
Redemption requests received after the close of the NYSE are effective as of the time the net asset value per share is next determined.
The Fund will satisfy redemption requests in cash to the fullest extent feasible, so long as such payments would not, in the opinion of the Advisor or the Board of Trustees, result in the necessity of the Fund selling assets under disadvantageous conditions and to the detriment of the remaining shareholders of the Fund.
Pursuant to the Fund's Agreement and Declaration of Trust, payment for shares redeemed may be made either in cash or in-kind, or partly in cash and partly in- kind. However, the Fund has elected, pursuant to Rule 18f-1 under the Act, to redeem its shares solely in cash up to the lesser of $250,000 or 1% of the net asset value of the Fund, during any 90 day period for any one shareholder. Payments in excess of this limit will also be made wholly in cash unless the Board of Trustees believes that economic conditions exist which would make such a practice detrimental to the best interests of the Fund. Any portfolio securities paid or distributed in-kind would be valued as described under "Determination of Net Asset Value." In the event that an in-kind distribution is made, a shareholder may incur additional expenses, such as the payment of brokerage commissions, on the sale or other disposition of the securities received from the Fund. In-kind payments need not constitute a cross-section of the Fund's portfolio. Where a shareholder has requested redemption of all or a part of the shareholder's investment, and where the Fund completes such redemption in-kind, the Fund will not recognize gain or loss for federal tax purposes, on the securities used to complete the redemption but the shareholder will recognize gain or loss equal to the difference between the fair market value of the securities received and the shareholder's basis in the Fund shares redeemed. Shares may be redeemed in one of the following ways:
REDEMPTION BY MAIL
Shares may be redeemed by submitting a written request for redemption to the transfer agent at Two West Elm Street, P.O. Box 874, Conshohocken, PA 19428- 0874.
A written redemption request to the transfer agent must: (i) identify the shareholder's account number, (ii) state the number of shares or dollars to be redeemed and (iii) be signed by each registered owner exactly as the shares are registered. A redemption request for amounts above $25,000, or redemption requests for which proceeds are to be mailed somewhere other than the address of record, must be accompanied by signature guarantees. Signatures must be guaranteed by an "eligible guarantor institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations. Broker-dealers guaranteeing signatures must be members of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. Signature guarantees will be accepted from any eligible guarantor institution
which participates in a signature guarantee program. The transfer agent may require additional supporting documents for redemptions made by corporations, executors, administrators, trustees and guardians.
A redemption request will not be deemed to be properly received until the transfer agent receives all required documents in proper form. Questions with respect to the proper form for redemption requests should be directed to the transfer agent at (800) 662-0201.
REDEMPTION BY TELEPHONE
Shareholders who have so indicated on the application, or have subsequently arranged in writing to do so, may redeem shares by instructing the transfer agent by telephone. In order to arrange for redemption by wire or telephone after an account has been opened, or to change the bank or account designated to receive redemption proceeds, a written request must be sent to the transfer agent at the address listed above.
Neither the Fund nor any of its service contractors will be liable for any loss or expense in acting upon any telephone instructions that are reasonably believed to be genuine. In attempting to confirm that telephone instructions are genuine, the Fund will use such procedures as are considered reasonable, including requesting a shareholder to correctly state his or her Fund account number, the name in which his or her account is registered, his or her banking institution, bank account number and the name in which his or her bank account is registered. To the extent that the Fund fails to use reasonable procedures to verify the genuineness of telephone instructions, it and/or its service contractors may be liable for any such instructions that prove to be fraudulent or unauthorized.
The Fund reserves the right to refuse a wire or telephone redemption if it is believed advisable to do so. Procedures for redeeming Fund shares by wire or telephone may be modified or terminated at any time by the Fund.
SYSTEMATIC CASH WITHDRAWAL PLAN
The Fund offers a Systematic Cash Withdrawal Plan as another option which may be utilized by an investor who wishes to withdraw funds from his or her account on a regular basis. To participate in this option, an investor must either own or purchase shares having a value of $25,000 or more. Automatic payments by check will be mailed to the investor on either a monthly, quarterly, semi-annual or annual basis in amounts of $100 or more. All withdrawals are processed on the 25th of the month or, if such day is not a business day, on the next business day and paid promptly thereafter. Please complete the appropriate section on the Investment Application enclosed within this Prospectus, indicating the amount of the distribution and the desired frequency.
ADDITIONAL INFORMATION
The Fund also reserves the right to involuntarily redeem an investor's account where the account is worth less than the minimum initial investment required when the account is established, presently $25,000. (Any redemption of shares from an inactive account established with a minimum investment may reduce the account below the minimum initial investment, and could subject the account to redemption initiated by the Fund.) The Fund will advise the shareholder of such intention in writing at least sixty (60) days prior to effecting such redemption, during which time the shareholder may purchase additional shares in any amount necessary to bring the account back to $25,000.
If the Trustees determine that it would be detrimental to the best interest of the remaining shareholders of the Fund to make payment in cash, the Fund may pay the redemption price in whole or in part by distribution in kind of readily marketable securities, from the Fund, within certain limits prescribed by the United States Securities and Exchange Commission. Such securities will be valued on the basis of the procedures used to determine the net asset value at the time of the redemption. If shares are redeemed in kind, the redeeming shareholder will incur brokerage costs in converting the assets into cash.
RETIREMENT PLANS
The Fund offers its shares for use in certain Tax Deferred (such as IRA, defined contribution, 401(k) and 403(b)(7) plans) Retirement Plans. The Fund sponsors IRA and 403(b)(7) plans. Information on these Plans is available from Fund/Plan or by reviewing the Statement of Additional Information.
PERFORMANCE
Total return data may from time to time be included in advertisements about the Fund. The Fund's total return may be calculated on an annualized and aggregate basis for various periods (which periods will be stated in the advertisement). Average annual return reflects the average percentage change per year in value of an investment in the Fund. Aggregate total return reflects the total percentage change over the stated period.
The Fund may compare its investment performance with appropriate market indices such as the S&P Index and to appropriate mutual fund indices; and the Fund may advertise its ranking compared to other similar mutual funds as reported by industry analysts such as Lipper Analytical Services, Inc.
All data will be based on the Fund's past investment results and does not predict future performance. Investment performance, which will vary, is based on many factors, including market conditions, the composition of the investments in the Fund, and the Fund's operating expenses. Investment performance also often reflects the risk associated with the Fund's investment objective and policies. These factors should be considered when comparing the Fund to other mutual funds and other investment vehicles.
The performance of the Institutional Class shares will normally be higher than the Retail Class shares because of the sales charge (when applicable) and additional distribution expenses charged to the Retail Class shares.
Further information about the performance of the Fund is included in the Fund's Annual Report, dated December 31, 1995, which may be obtained without charge by contacting the Fund at (800) TIM-PLAN.
BROKER DEALER: _________________________________________ REGISTERED REP: _________________________________________ BRANCH #: __________________ REP #: __________________ BRANCH NAME: ____________________________________________ BRANCH ADDRESS: _________________________________________ PHONE NUMBER: ( ) - Ext:
THE TIMOTHY PLAN(R)
RETAIL CLASS
INVESTMENT APPLICATION
MAIL TO:
Fund/Plan Services, Inc., P.O. Box 874, Conshohocken, PA 19428-0874
1. INITIAL INVESTMENT ($1,000 minimum)
FORM OF PAYMENT
[ ] Check for $__________________ enclosed (make payable to "The Timothy Plan")
[ ] By Wire*/1/ An initial purchase of $______________ was wired on ______ _______ _________ by
Date
_________________________________________________________________ to account # ________________________________
Name of your Bank or Broker Number assigned by F/P/S
2. REGISTRATION (Please Print) No certificate will be issued unless requested in writing.
INDIVIDUAL Must complete items 1, 3, 4 and 8 (you may choose options 5, 6 or 7).
--------------------------------------------------------------------------------------- ------------------------------------
First Name Middle Name Last Name Social Security Number
--------------------------------------------------------------------------------------- ------------------------------------
Joint Owner First Name*2 Middle Name Last Name Social Security Number
Citizen of: [ ] United States [ ] Other (Please Indicate) ____________________________________
GIFT TO MINORS Must complete items 1, 3, 4 and 8 (you may choose options 5, 6, or 7).
________________________________________________________________________________________________________________________________
Name of Custodian (Name one only) As Custodian For (Name one only)
Under the ____________________________ Uniform Gift to Minors Act _______________________________________
State Security Number
CORPORATIONS, PARTNERSHIPS, TRUSTS AND OTHERS Must complete items 1, 3, 4, 9 and 10 (you may choose options 5, 6, or 7).
________________________________________________________________________________________________________________________________
Name of Corporation, Partnership, Trust or Other
__________________________________ _________________________________________________________ _________________________________
Tax ID # Name of Trustee(s) Date of Trust
3. MAILING ADDRESS OF RECORD AND TELEPHONE NUMBER(S)
--------------------------------------------------------------------------------------------------------------------------------
Street Address and Apartment Number
----------------------------------------------------------------------------------- ----------------------- -----------------
City State Zip Code Zip Extend
------------ --------------------------- --------------- -----------------------------
(Area Code) Daytime Telephone Number (Area Code) Evening Telephone Number
4. DISTRIBUTION OPTIONS (Please indicate one) See page 11 of the Prospectus for more detail.
Income Dividends (check one box/line only) [ ] reinvested [ ] paid in cash
Capital Gains Distributions (check one box/line only) [ ] reinvested [ ] paid in cash
*1 Before making an initial investment by wire, you must be assigned an account number by calling (800) 662-0201.
Then have your local bank wire your funds to: United Missouri Bank, N.A., ABA # 10-10-00695 for credit to Fund/Plan
AC # 98-7037-071-9 (The Timothy Plan). Be sure to include your name and account number on the wire.
*2 (Joint ownership with rights of survivorship unless otherwise noted).
|
5. SYSTEMATIC WITHDRAWAL PLAN ($10,000 minimum necessary) See page 17 of the Prospectus for more detail.
A check in the amount of $______________________ (minimum $100.00) will be sent to you at your address of record unless
otherwise noted.
Please select desired frequency: [ ] Monthly
[ ] Quarterly, in the months of __________, __________, __________, and __________.
[ ] Semi-Annual or Annual, in the month(s) of __________, __________, or __________.
6. TELEPHONE PRIVILEGES See page 17 of the Prospectus for more detail.
[ ] REDEEM SHARES BY TELEPHONE
I (we) authorize Fund/Plan Services to honor telephone instructions for my (our) account which I (we) understand the proceeds
of which will be mailed only to the address of record or wired to the bank specified below. Neither the Fund nor Fund/Plan
Services will be liable for properly acting upon telephone instructions believed to be genuine. Please attach a voided check
on your account if the bank option is chosen.
--------------------------------------------------------------------------------------------------------------------------------
Name of Bank City State
-------------------- -------------------------------------------------------------------
Bank Routing Number Account Number [ ] Checking [ ] Savings
7. AUTOMATIC INVESTMENT PLAN (For this option - please complete and send in form on pages 21 and 22 of the Prospectus).
8. SIGNATURE AND CERTIFICATION (This Section must be completed by INDIVIDUAL, JOINT and CUSTODIAL accounts).
The following is required by Federal tax law to avoid 31% backup withholding; "By signing below, I certify under penalties of
perjury that the social security or taxpayer identification number entered above is correct (or I am waiting for a number to
be issued to me), and that I have not been notified by the IRS that I am subject to backup withholding unless I have checked
the box." If you have been notified by the IRS that you are subject to backup withholding, check box [ ].
Receipt of current prospectus is hereby acknowledged.
----------------------------------------------------------------------------------------------- ---------------------------
Signature [ ] Owner [ ] Custodian [ ] Trustee Date
----------------------------------------------------------------------------------------------- ---------------------------
Signature of Joint Owner (if applicable) Date
9. RESOLUTIONS (This Section must be completed by CORPORATIONS, PARTNERSHIPS, TRUSTS and OTHER ORGANIZATIONS).
RESOLVED: That this corporation or organization become a shareholder of the Timothy Plan (the "Fund) and
that _______________________________________________________________________________ is (are) authorized to complete and
execute the Application on behalf of the corporation or organization and take any action for it as may be necessary or
appropriate with respect to its shareholders account(s) with the Fund, and it is
FURTHER RESOLVED: That any one of the above noted officers is authorized to sign any documents necessary or appropriate to
appoint Fund/Plan Services, Inc. as redemption agent of the corporation for shares of the Fund, to establish or acknowledge
terms and conditions governing the redemption of said shares or to otherwise implement the privileges elected on the
application.
10. CERTIFICATE (This Section must be completed by CORPORATIONS, PARTNERSHIPS, TRUSTS and OTHER ORGANIZATIONS).
I hereby certify that the foregoing resolutions are in conformity with the Charter and By-Laws or other empowering documents
of the:
_______________________________________________________________________ incorporated or formed under the laws of _______________
(Name of Corporation) (State)
and were adopted at a meeting of the Board of Directors or Trustees of the organization or corporation duly called and held
on ________________ at which a quorum was preset and acting throughout, and that the same are now in full force and effect.
I further certify that the following is (are) the duly elected officer(s) of the corporation or organization, authorized to
act in accordance with the foregoing resolutions.
NAME TITLE
____________________________________________________________________________ ________________________________________________
____________________________________________________________________________ ________________________________________________
____________________________________________________________________________ ________________________________________________
Witness my hand and the seal of the corporation or organization this ___________ day of _______________________, 19 ______.
________________________________________________________________________ ___________________________________________________
*Secretary-Clerk Other Authorized Officer (if required)
* If the Secretary or other recording officer is authorized to act by the above resolutions, this certificate must also be
signed by another officer.
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AUTOMATIC INVESTMENT PLAN APPLICATION
1. Fund/Plan Services, Inc., through our bank, United Missouri Bank KC NA, draws an automatic clearing house (ACH) debit electronically against your personal checking account each month, according to your instructions.
2. Choose any amount ($100 or more) that you would like to invest regularly and your debit for this amount will be processed by Fund/Plan Services, Inc. as if you had written a check yourself.
3. Shares will be purchased and a confirmation sent to you.
HOW DO I SET IT UP?
1. Complete the forms and the Fund Application Form if you do not already have an existing account.
2. Mark one of your personal checks or deposit slips VOID, attach it to the forms below and mail to Fund/Plan Services, Inc., P.O. Box 874, Conshohocken, PA 19428-0874.
3. As soon as your bank accepts your authorization, debits will be generated and your Automatic Investment Plan started. In order for you to have ACH debits from your account, your bank must be able to accept ACH transactions and/or be a member of an ACH association. Your branch manager should be able to tell you your bank's capabilities. We cannot guarantee acceptance by your bank.
4. Please allow one month for processing of your Automatic Investment Plan before the first debit occurs.
AUTOMATIC INVESTMENT PLAN APPLICATION
TO: Fund/Plan Services, Inc.
P.O. Box 874
Conshohocken, PA 19428-0874
Please start an Automatic Investment Plan for me and invest ___________________.
($100 or more)
on the [ ] 10th [ ] 15th [ ] 20th of each month, in shares of THE TIMOTHY
PLAN - INSTITUTIONAL CLASS.
Check one:
[ ] I am in the process of establishing an account.
or
[ ] My account number is: ____________________________________________________
I understand that my ACH debit will be dated on the day of each month as indicated above or as specified by written request. I agree that if such debit is not honored upon presentation, Fund/Plan Services, Inc. may discontinue this service and any share purchase made upon deposit of such debit may be canceled. I further agree that if the net asset value of the shares purchased with such debit is less when said purchase is canceled than when the purchase was made, Fund/Plan Services, Inc. shall be authorized to liquidate other shares or fractions thereof held in my account to make up the deficiency. This Automatic Investment Plan may be discontinued by Fund/Plan Services, Inc. upon 30-days written notice or at any time by the investor by written notice to Fund/Plan Services, Inc. which is received not later than 5 business days prior to the above designed investment date.
Signature(s): _________________________________________________
BANK REQUEST AND AUTHORIZATION
TO: _________________________ _______________________________ Name of Your Bank Bank Checking Account Number
As a convenience to me, please honor ACH debits on my account drawn by Fund/Plan Services, Inc., United Missouri Bank KC NA and payable to "THE TIMOTHY PLAN".
I agree that your rights with respect to such debit shall be the same as if it were a check drawn upon you and signed personally by me. This authority shall remain in effect until you receive written notice from me changing its terms or revoking it, and until you actually receive such notice, I agree that you shall be fully protected in honoring such debit.
I further agree that if any debit is dishonored, whether with or without cause or whether intentionally or inadvertently, you shall be under no liability whatsoever.
DEPOSITOR'S __________________________________________________________________
Signature of Bank Depositor(s) as shown on bank records.
NOTE: Your bank must be able to accept ACH transactions and/or be a member of an ACH association in order for you to use this service.
INDEMNIFICATION AGREEMENT
TO: The bank named above
So that you may comply with your Depositor's request and authorization, THE TIMOTHY PLAN agrees as follows:
1. To indemnify and hold you harmless from any loss you may suffer arising from or in connection with the payment by you of a debit drawn by Fund/Plan Services, Inc. to the order of THE TIMOTHY PLAN designated on the account of your depositor(s) executing the authorization including any costs or expenses reasonably incurred in connection with such loss. THE TIMOTHY PLAN will not, however, indemnify you against any loss due to your payment of any debit generated against insufficient funds.
2. To refund to you any amount erroneously paid by you to Fund/Plan Services, Inc. on any such debit if claim for the amount of such erroneous payment is made by you within 3 months of the date of such debit on which erroneous payment was made.
BROKER DEALER: __________________________ REGISTERED REP: __________________________ BRANCH #:______________ REP #: __________ BRANCH NAME: _____________________________ BRANCH ADDRESS: __________________________ PHONE NUMBER: ( ) - Ext:
THE TIMOTHY PLAN(R)
INSTITUTIONAL CLASS
REQUEST FOR TRANSFER
MAIL TO:
Fund/Plan Services, Inc., P.O. Box 874, Conshohocken, PA 19428-0874
1. INVESTOR INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
First Name Middle Initial Last Name
- ------------------------------------------------------------------------------------------------------------------------------------
Street Address
- ----------------------------------------------------------- -------------- -------------------- -----------------
City State Zip Code Zip Extend
- ---------------------------- ------------------ --------- -------------------------- -------- -------------------------
Social Security Number Date of Birth (Area Code) Residence Telephone Number (Area Code) Business Telephone Number
2. PREVIOUS INVESTMENT FIRM
- ------------------------------------------------------------------------------------------------------------------------------------
Name of Previous Firm
- ------------------------------------------------------------------------------------------------------------------------------------
Address
- ------------------------------------------------------------------------------------ -----------------------------------------
Investor's Name Account Number
Type of Account: [ ] Individual [ ] Joint [ ] UGMA [ ] Trust
Type of Assets: [ ] Mutual Fund [ ] Money Market [ ] CD (Immediately/At Maturity) [ ] Securities
3. AMOUNT TO BE TRANSFERRED TO THE TIMOTHY PLAN
[ ] Liquidate all assets from the above account and transfer the proceeds.
[ ] Liquidate $_____________________________________ from the above account and transfer the proceeds
4. TRANSFER INSTRUCTIONS
Make check payable to: The Timothy Plan
Mail to: Post Office Box 874, Conshohocken, PA 19428-0874
5. INVESTOR'S AUTHORIZATION
- --------------------------------------------- ------------------------- -----------------------------------------------
Signature of Participant Date Signature Guarantee
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INVESTMENT ADVISOR
Timothy Partners, Ltd.
1304 West Fairbanks Avenue
Winter Park, FL 32789
INVESTMENT MANAGER
Systematic Financial Management, L.P.
Two Executive Drive
Fort Lee, NJ 07024
UNDERWRITER
Fund/Plan Broker Services, Inc.
Two West Elm Street
Conshohocken, PA 19428
SHAREHOLDER SERVICES
Fund/Plan Services, Inc.
Two West Elm Street
Conshohocken, PA 19428
CUSTODIAN
The Bank of New York
48 Wall Street
New York, NY 10286
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
AUDITORS
Tait, Weller & Baker
Two Penn Center
Suite 700
Philadelphia, PA 19102-1707
For Additional Information About The Timothy Plan, Please Call:
(800) TIM-PLAN
PROSPECTUS FOR
THE TIMOTHY PLAN
RETAIL CLASS
APRIL 29, 1996
Distributed By:
Fund/Plan Broker Services
Two West Elm Street
Conshohocken, PA 19428
(800) 441-6580
The Timothy Plan (the "Fund") is a low level load, open-end diversified management investment company. It was organized as a series Delaware business trust and currently offers shares of one series, which has a specific investment objective. There is no assurance that the Fund's objective will be achieved.
The objective of the Fund is long-term capital growth and its secondary objective is current income. The Fund seeks to achieve its objective by investing in securities issued by companies which, in the opinion of the Fund's advisor, conduct business in accordance with the stated philosophy and principles of the Fund (See "Investment Objectives and Policies").
The Fund currently offers two classes of shares: Institutional Class and Retail Class. This Prospectus pertains only to the Fund's Retail Class shares which have a front-end sales charge and are subject to annual 12b-1 Plan expenses. Shareholders, who purchase larger amounts than the initial investment requirement, may qualify for a reduced sales charge at the time of purchase. (See "How to Purchase Shares"). The Institutional Class is offered in a separate prospectus which can be obtained by calling (800) TIM-PLAN.
The shares of the Fund may be purchased or redeemed at any time. Purchases will be effected at the net asset value, plus the applicable sales charge, next determined following receipt of the investor's request. (See "Determination of Net Asset Value," "How to Purchase Shares," and "How to Redeem Shares").
This Prospectus sets forth concisely the information about the Fund that a prospective investor should know before investing. Investors should read and retain this Prospectus for future reference.
More information about the Fund and classes of shares of the Fund has been filed with the Securities and Exchange Commission, and is contained in the "Statement of Additional Information," dated April 29, 1996 which is available at no charge upon request to the Fund. The Fund's Statement of Additional Information is incorporated herein by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
PAGE
Expenses of the Fund........................................... 31
Financial Highlights........................................... 32
The Fund....................................................... 33
Investment Objectives and Policies............................. 33
Risk Factors................................................... 34
Investment Restrictions........................................ 36
Shares of Beneficial Interest.................................. 37
Management of the Fund......................................... 37
Board of Trustees............................................ 37
Investment Advisor........................................... 37
Investment Manager........................................... 38
Underwriter.................................................. 39
Plan of Distribution......................................... 39
Administrator................................................ 39
Custodian, Transfer Agent and Fund Accounting/Pricing Agent.. 40
Expenses..................................................... 40
Dividends, Distributions and Taxes............................. 40
Determination of Net Asset Value............................... 41
How to Purchase Shares......................................... 42
How to Redeem Shares........................................... 45
Retirement Plans............................................... 47
Performance.................................................... 47
Investment Application......................................... 48
Automatic Investment Plan Application.......................... 50
Application to Request to Transfer to The Timothy Plan......... 52
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This Prospectus is not an offering of the securities herein described in any jurisdiction or to any person to whom it is unlawful for the Fund to make such an offer or solicitation. No sales representative, dealer, or other person is authorized to give any information or make any representation other than those contained in this Prospectus.
EXPENSES OF THE FUND
The following table illustrates all estimated expenses and fees that a shareholder of the Fund's Retail Class will incur.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)................................. 1.75%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)................................. none
Redemption Fees...................................................... none/1/
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management and Advisory Expenses After Expense Reimbursements........ 0.00%
12b-1 Fees........................................................... 0.85%/2/
Other Expenses After Expense Reimbursements.......................... 1.35%
----
Total Operating Costs After Expense Reimbursements................... 2.20%
====
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The purpose of this table is to assist the investor in understanding the various expenses that an investor in the Fund will bear directly or indirectly. The Fund's Retail Class had not commenced operations until August 25, 1995, therefore, for the purpose of the table above, "Other Expenses" is based on estimated amounts for the current fiscal year. The Advisor has voluntarily agreed to waive its fees, so that the Fund's total annual operating expenses will never exceed 2.20% of the daily average net assets. Further, the Advisor has agreed to reimburse the Fund for its other expenses so that the Fund's total annual expenses will never exceed 2.20%. Absent the fee waiver and expense reimbursements, "Management and Advisory Expenses After Expense Reimbursements" would have been 0.85% and "Other Expenses After Expense Reimbursements" would have been estimated at 5.59%, for the fiscal year ended December 31, 1995.
The following example illustrates the expenses that you would pay on a $1,000
investment over various time periods assuming (1) a 5% annual rate of return and
(2) redemption at the end of each time period. As noted in the table above, the
Fund charges no redemption fees of any kind.
1 year 3 years 5 years 10 years ------ ------- ------- -------- $39 $85 $133 $266 |
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
The Fund issues two classes of shares that invest in the same portfolio of securities. Shareholders of Retail Class shares are subject to a sales charge and each class is subject to a different 12b-1 Plan, therefore, expenses and performance figures will vary between the classes. The information set forth in the foregoing tables and example relates only to the Retail Class shares. The rules of the U.S. Securities and Exchange Commission require that the maximum sales charge be reflected in the above table. However, certain investors may qualify for a reduced sales charge. See "How to Purchase Shares." Further information about Institutional Class shares may be obtained by calling (800) TIM-PLAN.
/2/ For purposes of this table, "12b-1 Fees" are comprised of an asset-based 12b-1 fee up to a maximum of 0.85% of average daily net assets, of which, up to 0.25% may be service fees to be paid to Fund/Plan Broker Services, Inc., dealers and others, for providing personal service and/or maintaining shareholder accounts. Long-term holders of Retail Class shares may eventually pay more than the economic equivalent of the maximum front-end sales charges otherwise permitted by the Rules of Fair Practice of the National Association of Securities Dealers, Inc.
FINANCIAL HIGHLIGHTS
The following financial highlights for the fiscal period ended December 31, 1995 were derived from the Fund's Retail Class financial statements dated December 31, 1995, which were audited by Tait, Weller & Baker, independent auditors, whose unqualified report thereon is incorporated by reference into the Statement of Additional Information. The Fund's Statement of Additional Information may be obtained by shareholders without charge and is incorporated by reference into this Prospectus. The table sets forth financial data for a share of capital stock outstanding throughout the period presented.
FOR THE
PERIOD ENDED
DECEMBER 31, 1995*
------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.49
------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................................ 0.11
------
Net gains (losses) on securities (both
realized and unrealized)............................ (0.16)
------
Total from investment operations.................. (0.05)
------
LESS DISTRIBUTIONS
Distributions from net investment income............. (0.11)
------
Distributions from net capital gains................. (0.25)
------
Total distributions............................... (0.36)
------
NET ASSET VALUE, END OF PERIOD........................ $10.08
------
TOTAL RETURN.......................................... (0.46%)/1/
------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)................. $ 620
======
Ratio of expenses to average net assets:
Before expense reimbursement..................... 6.44%/2/
======
After expense reimbursement...................... 2.20%/2/
======
Ratio of net investment income to average net assets
Before expense reimbursement..................... (3.56)%/2/
======
After expense reimbursement..................... 0.68%/2/
======
Portfolio turnover rate.............................. 34.12%
======
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/1/ Total return calculation does not reflect sales load. /2/ Annualized.
THE FUND
The Timothy Plan (the "Fund") is a low level load, open-end, diversified management investment company commonly known as a mutual fund. The Fund was established as a series Delaware business trust on December 16, 1993. The Fund currently offers one series with two classes of shares: Institutional Class and Retail Class. This Prospectus pertains only to Retail Class shares.
INVESTMENT OBJECTIVES AND POLICIES
Set forth below are the investment objectives and policies of the Fund. The investment objective of the Fund is a fundamental policy and may not be changed without the approval of the holders of a majority of the Fund's outstanding voting securities. There can be no assurance that the Fund will achieve its objective.
The Fund's objective is long-term capital growth, with a secondary objective of current income. The Fund shall seek to achieve its objective while abiding by ethical standards established for investments by the Fund. Those standards preclude the investment in securities of companies involved in the businesses of alcohol production, tobacco production, or casino gambling, or which are directly or indirectly involved in pornography or abortion. The securities in which the Fund shall be precluded from investing, by virtue of the Fund's ethical standards, are referred to as the "Excluded Securities."
The Fund will invest most of its assets in common stocks and American Depository Receipts ("ADRs"), although it may also invest in other types of securities including securities convertible into common stocks and common stock equivalents (including rights and warrants), preferred stocks, short-term United States Government securities, and/or other high-quality, short-term debt securities (commercial paper, repurchase agreements, bankers' acceptances, certificates of deposit and other fixed income securities (non-convertible and convertible bonds, debentures and notes issued by U.S. corporations and certain bank obligations and participations). High-quality debt securities are those that are rated Aa or better by Moody's, or AA or better by Standard & Poor's, or that are of comparable quality. See "Risk Factors" herein, and the Statement of Additional Information for information relating to these securities. While it is the Fund's policy to seek long-term investments, changes will be made whenever management believes that such changes will strengthen the Fund's investments and realization of its objectives. The Fund will pursue its objectives by investing a major portion of its assets in securities of companies which offer prospects for growth of capital in accordance with the portfolio investment techniques described below.
The Fund seeks to achieve its investment objective by investing primarily in common stocks and ADRs, while foregoing investments in the Excluded Securities. Systematic Financial Management, L.P. (the "Investment Manager") will select the investments for the Fund, but will not invest in securities which Timothy Partners, Ltd. (the "Advisor") will determine are Excluded Securities. The Advisor has instructed the Investment Manager to avoid investment in any company directly involved in the business of alcohol production, tobacco production, or casino gambling. In addition, the Advisor will compile and maintain a list of companies that it determines, by using information collected by and published by three Christian ministries, participate directly or indirectly in either pornography or abortion. The Advisor will use its best judgement in determining which companies, through their corporate practices in either of these two areas, need to be placed on the Excluded Securities list. The Advisor also reserves the right to exercise its best judgement to exclude investment in other companies whose corporate practices may not fall within the exclusions described above, but nevertheless could be found offensive to basic traditional Judeo Christian values.
The three Christian ministries that publish information that the Advisor will utilize in identifying companies directly or indirectly involved in pornography or abortion are as follows: (1) The American Family Association (to identify companies engaged in pornography); (2) Pro Vita Advisors (to identify companies that directly and indirectly participate in abortion); and (3) Life Decisions International (to identify companies that indirectly support abortion causes through corporate funding programs). The Advisor retains the right to change the ministries whose information it reviews, at its discretion.
After eliminating the Excluded Securities, the Investment Manager will construct a portfolio of investments to produce the highest possible risk-adjusted return on investment as is consistent with the Fund's objective and policies.
The Fund will invest primarily in a diversified portfolio of equity securities of companies whose market capitalizations exceed $200 million, and whose securities trade on the New York Stock Exchange, the American Stock Exchange and the NASDAQ National Market System. Since the Fund is an equity fund, the Investment Manager seeks investments that show the greatest potential for growth, with income as a secondary factor. Therefore, these companies may or may not pay dividends.
The Fund generally will select securities based on a value-oriented investment style employed by the Investment Manager. That style identifies investments in securities of companies which consistently generate Free Cash Flow (as defined by the Investment Manager), and which securities trade at reasonable multiples of the companies' long-term Free Cash Flows. The Investment Manager defines Free Cash Flow as the amount of cash available to a company for distribution to stockholders or investment in its business, after paying all expenses and providing for expenditures required to support continuing growth. Free Cash Flow is determined using a methodology developed by the Investment Manager.
Potential equity investment candidates will be analyzed to determine their ability to repay all fixed debt obligations (including certain "off balance sheet debts" such as operating lease obligations and unfunded pension liabilities) from their historical level of Free Cash Flows within a reasonable time period, generally less than five years. Securities are typically sold when an appreciation objective is met, the company experiences a full year of negative operating cash flow or Free Cash Flows decline significantly. The Fund may invest up to 30% of its assets in cash or debt securities. Although the Investment Manager does not utilize a market timing strategy, if market conditions are viewed to require that the Fund take a temporary defensive position, the Fund may invest up to 100% of its assets in (i) debt securities issued by the U.S. Government, its agencies or instrumentalities, (ii) commercial paper, (iii) certificates of deposit and bankers' acceptances or (iv) repurchase agreements with respect to any of the foregoing investments. The Fund may also invest in such securities pending the investment of the proceeds of certain sales of portfolio securities and at such other times when suitable equity securities are not available. It is impossible to predict whether, or for how long, the Fund will use any of such temporary defensive strategies.
The Advisor will attempt to monitor and respond to changes in business policies within the companies selected for investment. It is possible that securities in which the Fund has invested may become Excluded Securities. In such event, the Fund will sell its position in those securities subject to general market considerations.
RISK FACTORS
INVESTMENT RESTRICTIONS OF THE FUND The ethical standards established for investments by the Fund limit the pool of securities from which investment securities may be selected by the Investment Manager. Although the Advisor believes the Fund's investment objective of long-term capital growth can be achieved notwithstanding the effect of the Fund's ethical standards, this objective may be affected by the limitations imposed by the Advisor, in eliminating the Excluded Securities as potential investments.
ADVISOR AND INVESTMENT MANAGER The principals of the Managing General Partner of the Advisor have been engaged in various aspects of the retail brokerage and financial advisory business. The Investment Manager has advised individuals, institutional clients and employee benefit plans since 1983 and currently manages approximately $1 billion in these accounts. However, neither the Advisor nor the Investment Manager has previously served as an investment advisor to an investment company.
PORTFOLIO TURNOVER It is anticipated that the annualized portfolio turnover rate for the Fund generally will not exceed a range of 50% to 75%, and may be lower than 50%, during most periods. High portfolio turnover involves additional transaction costs (such as brokerage commissions) which are borne by the Fund, and might involve adverse tax effects. (See "Dividends, Distributions and Taxes").
RISKS OF CERTAIN FIXED INCOME SECURITIES
INTEREST BEARING DEBT INSTRUMENTS The market value of interest-bearing debt securities, if and when held by the Fund, is affected by changes in interest rates. There is normally an inverse relationship between the market value of securities sensitive to prevailing interest rates and actual changes in interest rates; i.e., a decline in interest rates produces an increase in market value, while an increase in rates produces a decrease in market value. Moreover, the longer the remaining maturity of a security, the greater the effect of interest rate changes on the market value of such a security. In addition, changes in an issuer's ability to make payments of interest and principal and in the market's perception of an issuer's creditworthiness also affect the market value of the debt securities of that issuer.
MONEY MARKET SECURITIES The Fund will select money market securities for investment when such securities offer a current market rate of return which the Fund considers reasonable in relation to the risk of the investment, and the issuer can satisfy suitable standards of credit-worthiness set by the Fund. The money market securities in which the Fund may invest are repurchase agreements, certificates of deposit, U.S. Government securities, commercial paper and securities of money market mutual funds.
Although the Fund intends to invest primarily in common stocks, common stock equivalents, and ADRs, the Fund may invest up to 30% of its assets directly in money market securities whenever deemed appropriate to achieve the Fund's investment objective. It may invest without limitation in such securities on a temporary basis for defensive purposes.
Securities issued or guaranteed as to principal and interest by the U.S. Government ("Government Securities") include a variety of Treasury securities, which differ in their interest rates, maturities and date of issue. Treasury bills have a maturity of one year or less; Treasury notes have maturities of one to ten years; Treasury bonds generally have a maturity of greater than five years. The Fund will only acquire Government Securities which are supported by the "full faith and credit" of the United States. Securities which are backed by the full faith and credit of the United States include Treasury bills, Treasury notes, Treasury bonds and obligations of: the Government National Mortgage Association, the Farmers Home Administration and the Export-Import Bank. The Fund's direct investments in money market securities will generally favor securities with shorter maturities (maturities of less than 60 days) which are less affected by price fluctuations than are those with longer maturities.
Certificates of deposit are certificates issued against funds deposited in a commercial bank or a savings and loan association for a definite period of time and earning a specified return. Bankers' acceptances are negotiable drafts or bills of exchange, normally drawn by an importer or exporter to pay for specific merchandise, which are "accepted" by a bank, meaning, in effect, that the bank unconditionally agrees to pay the face value of the instrument on maturity. Investments in bank certificates of deposit and bankers' acceptances are generally limited to domestic banks and savings and loan associations that are members of the Federal Deposit Insurance Corporation or Federal Savings and Loan Insurance Corporation having a net worth of at least $100 million dollars ("Domestic Banks") and domestic branches of foreign banks (limited to institutions having total assets not less than $1 billion or its equivalent).
Investments in prime commercial paper may be made in notes, drafts, or similar instruments payable on demand or having a maturity at the time of issuance not exceeding nine months, exclusive of days of grace, or any renewal thereof payable on demand or having a maturity likewise limited.
REPURCHASE AGREEMENTS Under a repurchase agreement the Fund acquires a debt instrument for a relatively short period (usually not more than one week) subject to the obligation of the seller to repurchase and the Fund to resell such debt instrument at a fixed price. The Fund will enter into repurchase agreements only with banks which are members of the Federal Reserve System, or securities dealers who are members of a national securities exchange or are market makers in government securities and report to the Market Reports Division of the Federal Reserve Bank of New York and, in either case, only where the debt instrument collateralizing the repurchase agreement is a U.S. Treasury or agency obligation supported by the full faith and credit of the United States. A repurchase agreement may also be viewed as the loan of money by the Fund to the seller. The resale price specified is normally in excess of the purchase price, reflecting an agreed upon interest rate. The rate is effective for the period of time the Fund is invested in the agreement and may not be related to the coupon rate on the underlying security. The term of these repurchase agreements will
usually be short (from overnight to one week). At no time will the Fund invest in repurchase agreements of more than sixty days. The securities which are collateral for the repurchase agreements, however, may have maturity dates in excess of sixty days from the effective date of the repurchase agreement. The Fund will always receive, as collateral, securities whose market value, including accrued interest, will at least equal 102% of the dollar amount to be paid to the Fund under each agreement at its maturity, and the Fund will make payment for such securities only upon physical delivery or evidence of book entry transfer to the account of the Custodian. If the seller defaults, the Fund might incur a loss if the value of the collateral securing the repurchase agreement declines, and might incur disposition costs in connection with liquidation of the collateral. In addition, if bankruptcy proceedings are commenced with respect to the seller of the security, collection of the collateral by the Fund may be delayed or limited. The Fund also may not be able to substantiate its interests in the underlying securities. While management of the Fund acknowledges these risks, it is expected that such risks can be controlled through stringent security selection and careful monitoring procedures. The Fund may not enter into a repurchase agreement with more than seven days to maturity if, as a result, more than 10% of the market value of the Fund's net assets would be invested in such repurchase agreements and any other illiquid assets. For purposes of the diversification test for qualification as a regulated investment company under the Internal Revenue Code, Repurchase Agreements are not counted as cash, cash items or receivables, but rather as securities issued by the counter-party to the Repurchase Agreements.
INVESTMENT RESTRICTIONS
The investment restrictions set forth below have been adopted by the Fund as fundamental policies, to limit certain risks that may result from investment in specific types of securities or from engaging in certain kinds of transactions addressed by such restrictions. They may not be changed without the affirmative vote of the holders of a majority of the outstanding voting securities of the Fund. Certain of these policies are detailed below, while other policies are set forth in the Statement of Additional Information. Changes in values of particular Fund assets or the assets of the Fund as a whole will not cause a violation of the investment restrictions so long as percentage restrictions are observed by the Fund at the time it purchases any security.
The investment restrictions specifically provide that the Fund will not:
(a) as to 75% of the Fund's total assets, invest more than 5% of its total assets in the securities of any one issuer. (This limitation does not apply to cash and cash items, or obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities);
(b) purchase more than 10% of the voting securities, or more than 10% of any class of securities, of another investment company. For purposes of this restriction, all outstanding fixed income securities of an issuer are considered as one class;
(c) purchase or sell commodities or commodity futures contracts, other than those related to stock indexes as previously outlined in "Investment Objectives and Policies;"
(d) purchase or sell real estate or interests therein, although it may purchase securities of issuers which engage in real estate operations;
(e) make loans of money or securities, except (i) by the purchase of fixed income obligations in which the Fund may invest consistent with its investment objective and policies; or (ii) by investment in repurchase agreements (see "Investment Objectives and Policies");
(f) invest in securities of any company if, any officer or trustee of the Fund or the Advisor owns more than 0.5% of the outstanding securities of such company and such officers and trustees (who own more than 0.5%) in the aggregate own more than 5% of the outstanding securities of such company;
(g) borrow money, except the Fund may borrow from banks (i) for temporary or emergency purposes
in an amount not exceeding 5% of the Fund's assets or (ii) to meet redemption requests that might otherwise require the untimely disposition of portfolio securities, in an amount up to 33-1/3% of the value of the Fund's total assets (including the amount borrowed) valued at market less liabilities (not including the amount borrowed) at the time the borrowing was made. While borrowing exceeds 5% of the value of the Fund's total assets, the Fund will not purchase securities. Interest paid on borrowing will reduce net income;
(h) pledge, hypothecate, mortgage or otherwise encumber its assets, except in an amount up to 33-1/3% of the value of its net assets but only to secure borrowing for temporary or emergency purposes, such as to effect redemptions; or
(i) purchase the securities of any issuer, if, as a result, more than 10% of the value of a Fund's net assets would be invested in securities that are subject to legal or contractual restrictions on resale ("restricted securities"), in securities for which there are no readily available market quotations, or in repurchase agreements maturing in more than seven days, if all such securities would constitute more than 10% of the Fund's net assets.
SHARES OF BENEFICIAL INTEREST
The beneficial interest of the Fund is divided into an unlimited number of shares ("Shares") with a par value of $0.001 each. Each Share has equal dividend, voting, liquidation and redemption rights. If a matter to be voted on does not affect the interests of all classes, then only the shareholders of the affected class shall be entitled to vote on the matter. There are no conversion or preemptive rights. Shares, when issued, will be fully paid and nonassessable. Fractional shares have proportional voting rights. Shares of the Fund do not have cumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of trustees can elect all of the trustees if they choose to do so and, in such event, the holders of the remaining shares will not be able to elect any person to the Board of Trustees. Currently, there are two classes of shares issued by the Fund.
MANAGEMENT OF THE FUND
The members of the Fund's Board of Trustees are fiduciaries for the Fund's shareholders and are governed by the laws of the State of Delaware in this regard. They establish policy for the operation of the Fund and appoint the officers who conduct the daily business of the Fund. The Statement of Additional Information contains more information regarding Officers and Trustees.
Timothy Partners, Ltd. (the "Advisor") is a Florida limited partnership organized on December 6, 1993. The Advisor supervises the investment of the assets of the Fund in accordance with the objective, policies and restrictions of the Fund. The Advisor approves the portfolio of securities selected by the Investment Manager (See "Investment Manager" below). To determine which securities are Excluded Securities with respect to abortion and pornography, the Advisor consults with three Christian ministries on these issues: The American Family Association (pornography), Pro Vita Advisors (direct and indirect participation and involvement in abortion) and Life Decisions International (indirect participation in abortion through corporate funding programs). The Advisor retains the right to change the ministries whose information it reviews, at its discretion.
For its services, the Advisor is paid an annual fee equal to 0.85% of the Fund's average daily net assets. This fee is subject to reductions reflecting certain reductions in the fee of the Advisor pursuant to state expense limitations and other voluntary reductions in fees paid by the Fund. The fee paid to the Advisor includes the compensation that the Advisor pays to the Investment Manager for its services to the Fund, and the compensation that the Advisor pays to Covenant Financial Management, Inc. ("CFM") for its services to the Fund. In addition, this fee also covers the cost
of postage, materials and handling of the fulfillment function of processing Prospectus requests as well as other sundry marketing and general administration expenses. The fee payable to and services provided by the Investment Manager are described under the heading "Investment Manager" below. The fee payable to and services provided by CFM are described at the end of this section. The Advisor's fee is higher than that charged by other funds, but is comparable to fees charged by funds with similar investment objectives. The Advisor has offices located at 1304 West Fairbanks Avenue, Winter Park, FL 32789.
Arthur D. Ally, the President, Chairman and Trustee of the Fund, is President and a 70% shareholder of Covenant Funds, Inc. ("Covenant"), which is the managing general partner of the Advisor. Mr. Ally is also an individual general partner of the Advisor. Neither the Advisor nor its managing general partners previously has served as an advisor to a registered investment company. Mr. Ally, however, has had extensive securities industry experience having served as financial consultant and branch manager for three securities firms over the past seventeen years: Prudential Bache, Shearson Lehman Brothers and Investment Management & Research. Some or all of these firms may be used by the Investment Manager to execute portfolio trades for the Fund. Neither Mr. Ally nor any affiliated person to the Fund will receive any benefit from any of these transactions.
The Advisor and CFM have entered into an agreement dated February 23, 1994 whereby the Advisor pays CFM for certain overhead expenses related to the daily operations of the Fund that CFM carries out. These expenses include: salary of administrative personnel, cost of preparation of shareholder fulfillment kits, cost of phone lines and office space, and cost of postage and supplies. The annual fee that the Advisor pays on a monthly basis for CFM's services is designed to only cover CFM's costs in providing its services. The Advisor pays to CFM, on a monthly basis, a minimum fee of $20,000 but in no event to exceed actual costs incurred by CFM. Both parties have agreed that no profits will accrue to CFM as a result of this agreement.
Arthur D. Ally is President and 100% shareholder of CFM.
Systematic Financial Management, L.P. (the "Investment Manager") is a Delaware limited partnership, which succeeded Systematic Financial Management, Inc., a New Jersey corporation established in 1983. The Investment Manager has been retained by the Advisor pursuant to a sub-advisory agreement to assist in the selection and management of the Fund's investment securities. The Investment Manager will prepare the portfolio of securities of selected issuers with business practices that meet the objective and policies of the Fund. The Advisor will review the portfolio to ensure compliance with the Fund's ethical standards.
The Investment Manager's investment policy committee, comprised of Kenneth S. Hackel, Charles J. Mohr, Jeffrey M. Moses and Jason I. Wallach is responsible for the day-to-day management of the Fund's portfolio. For more than the past five (5) years, Mr. Hackel has served as President and Chief Investment Officer of the Investment Manager. The Investment Manager currently manages approximately $1.1 billion for clients on a separate account basis utilizing the same investment methodology that it will employ for the Fund.
The Investment Manager places portfolio transactions for the Fund. In this regard, the Investment Manager will be governed by the policies set forth under "Investment Objectives and Policies."
For its services, the Investment Manager is paid an annual fee by the Advisor equal to 0.50% of the first $100 million in average net assets of the Fund, 0.40% of the next $100 million in average net assets, 0.30% of the next $100 million in average net assets and 0.25% of average net assets over $300 million. The Investment Manager has offices located
at Two Executive Drive, Fort Lee, NJ 07024. The Investment Manager has not previously served as an investment advisor to an investment company.
Fund/Plan Broker Services, Inc. ("FPBS"), Two West Elm Street, Conshohocken, PA 19428-0874, was engaged pursuant to an agreement dated January 19, 1994, as amended February 23, 1996. The purpose of acting as underwriter is to facilitate the registration of shares of the Fund under state securities laws and to assist in the sale of shares. The fee for such services is borne by the Advisor.
The Fund has adopted a plan pursuant to Rule 12b-1 (the "12b-1 Plan") under the Investment Company Act of 1940, as amended, whereby it may reimburse FPBS or others for expenses actually incurred by FPBS or others in the promotion and distribution of the Fund's Retail Class shares. These expenses include, but are not limited to, the printing of prospectuses and reports used for sales purposes, the preparation of sales literature and related expenses, advertisements, and other distribution-related expenses, including payments to securities dealers and others participating in the sale and servicing of Retail Class shares. The maximum amount which the Fund may pay to FPBS and others (and which FPBS may re-allow to securities dealers and others participating in the sale of shares) for such distribution expenses is 0.85% per annum of the Fund's average daily net assets, of which, up to 0.25% may be service fees to be paid to FPBS, dealers and others, for providing personal services and/or maintaining shareholder accounts, payable on a monthly basis. All expenses of distribution and marketing in excess of 0.85% per annum will be borne by the Advisor and any amounts paid for the above services will be paid pursuant to a servicing or other agreement. The 12b-1 Plan also covers any payments made by the Fund, the Advisor, the Investment Manager, FPBS, or other parties on behalf of the Fund, the Advisor, the Investment Manager, or FPBS, to the extent such payments are deemed to be for the financing of any activity primarily intended to result in the sale of shares issued by the Fund within the context of Rule 12b-1.
[Text moved to previous paragraph.]
Fund/Plan Services, Inc. ("Fund/Plan"), Two West Elm Street, Conshohocken, PA 19428-0874, is the Fund's administrator pursuant to an Administration Services Agreement (the "Agreement") with the Fund dated January 19, 1994, as amended February 23, 1996. Under the Agreement, Fund/Plan receives a fee at the annual rate of 0.15% of the first $50 million in average net assets of the Fund, 0.10% of the next $50 million in average net assets and 0.05% of average net assets over $100 million. There is a minimum fee of $50,000 per year for the initial series/class issued by the Fund and $12,000 per year for each additional series or class of shares.
The services Fund/Plan provides to the Fund include: considering and monitoring of any third parties furnishing services to the Fund; providing the necessary office space, equipment and personnel to perform administrative and clerical functions for the Fund; preparing, filing and distributing proxy materials, periodic reports to shareholders, registration statements, and other documents; and responding to shareholder inquiries.
The Bank of New York, 48 Wall Street, New York, New York 10286, is custodian for the securities and cash of the Fund.
Fund/Plan serves as the Fund's transfer agent. As transfer agent, it maintains the records of each shareholder's account, answers shareholder inquiries concerning accounts, processes purchases and redemptions of the Fund's shares, acts as dividend and distribution disbursing agent, and performs other shareholder service functions. Shareholder inquiries should be directed to the transfer agent at (800) 662-0201.
Fund/Plan also performs certain accounting and pricing services for the Fund. This includes the daily calculation of the Fund's net asset value.
Except as indicated above, the Fund is responsible for the payment of its expenses, other than those borne by the Advisor. These expenses may include, but are not limited to: (a) management fees; (b) the charges and expenses of the Fund's legal counsel and independent accountants; (c) brokers' commissions, mark-ups and mark-downs and any issue or transfer taxes chargeable to the Fund in connection with its securities transactions; (d) all taxes and corporate fees payable by the Fund to governmental agencies; (e) the fees of any trade association of which the Fund is a member; (f) the cost of stock certificates, if any, representing shares of the Fund; (g) amortization and reimbursements of the organization expenses of the Fund and the fees and expenses involved in registering and maintaining registration of the Fund and its shares with the Securities and Exchange Commission, and the preparation and printing of the Fund's registration statements and prospectuses for such purposes; (h) allocable communications expenses with respect to investor services and all expenses of shareholders and trustee meetings and of preparing, printing and mailing prospectuses and reports to shareholders; (i) litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund's business; and (j) compensation for employees of the Fund.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund will declare and pay annual dividends to its shareholders of substantially all of its net investment income, if any, earned during the year from its investments, and the Fund will distribute net realized capital gains, if any, once with respect to each year. Expenses of the Fund, including the advisory fee, are accrued each day. Reinvestments of dividends and distributions in additional shares of the Fund will be made at the net asset value determined on the ex date of the dividend or distribution unless the shareholder has elected in writing to receive dividends or distributions in cash. An election may be changed by notifying Fund/Plan in writing thirty days prior to record date.
Dividends paid by the Fund with respect to its Institutional Class and Retail Class shares are calculated in the same manner and at the same time. Both Institutional Class and Retail Class shares of the Fund will share proportionately in the investment income and expenses of the Fund, except that the per share dividends of Retail Class shares will differ from the per share dividends of Institutional Class shares as a result of additional distribution expenses charged to Retail Class shares.
As the sole series of The Timothy Plan, the Fund has qualified, and intends to continue to qualify, as a regulated investment company under Subchapter M of the Internal Revenue Code (the "Code"). As such, the Fund will not be subject to federal income tax, or to any excise tax, to the extent its earnings are distributed in accordance with the timing requirements imposed by the Code and by meeting certain other requirements relating to the sources of its income and diversification of its assets.
The Fund intends to distribute substantially all of its net investment income and net capital gains. Dividends from net investment income or net short-term capital gains will be taxable to you as ordinary income, whether received in cash or in additional shares. Dividends from net investment income will generally qualify, in part, for the 70% corporate dividends received deduction, subject to certain holding period and debt financing restrictions imposed under the Code
on the corporate investor claiming the deduction. The portion of the dividends so qualified depends on the aggregate qualifying dividend income received by the Fund from domestic (U.S.) sources.
Distributions paid by the Fund from long-term capital gains, whether received in cash or in additional shares, are taxable to those investors who are subject to income tax as long-term capital gains, regardless of the length of time an investor has owned shares in the Fund. The Fund does not seek to realize any particular amount of capital gains during a year; rather, realized gains are a byproduct of Fund management activities. Consequently, capital gains distributions may be expected to vary considerably from year to year. Also, for those investors subject to tax, if purchases of shares in the Fund are made shortly before the record date for a dividend or capital gains distribution, a portion of the investment will be returned as a taxable distribution.
Dividends which are declared in October, November or December to shareholders of record in such a month but which, for operational reasons, may not be paid to the shareholder until the following January, will be treated for tax purposes as if paid by the Fund and received by the shareholder on December 31 of the calendar year in which they are declared.
The sale of shares of the Fund is a taxable event and may result in a capital gain or loss to shareholders subject to tax. Capital gain or loss may be realized from an ordinary redemption of shares or an exchange of shares between two mutual funds (or two series of a mutual fund). Any loss incurred on sale or exchange of the Fund's shares, held for six months or less, will be treated as a long-term capital loss to the extent of capital gain dividends received with respect to such shares. All or a portion of the sales charge incurred in purchasing the Fund's shares will not be included in the federal tax basis of any of such shares sold or exchanged within ninety (90) days of their purchase (for purposes of determining gain or loss upon sale of such shares) if the sale proceeds are reinvested in the Fund or in another fund and a sales charge that would otherwise apply to the reinvestment is reduced or eliminated. Any portion of such sales charge excluded from the tax basis of the shares sold will be added to the tax basis of the shares acquired in the reinvestment.
In addition to federal taxes, shareholders may be subject to state and local taxes on distributions. Each year, the Fund will mail you information on the tax status of the Fund's dividends and distributions. Of course, shareholders who are not subject to tax on their income would not be required to pay tax on amounts distributed to them by the Fund.
The Fund is required to withhold 31% of taxable dividends, capital gains distributions, and redemptions paid to shareholders who have not complied with IRS taxpayer identification regulations. You may avoid this withholding requirement by certifying on your Account Registration Form your proper Taxpayer Identification Number and by certifying that you are not subject to backup withholding.
The tax discussion set forth above is included for general information only. Prospective investors should consult their own tax advisers concerning the federal, state, local or foreign tax consequences of an investment in the Fund.
DETERMINATION OF NET ASSET VALUE
The net asset value per Fund share is determined by the Fund as of the close of regular trading on each day that the New York Stock Exchange (NYSE) is open for unrestricted trading from Monday through Friday and on which there is a purchase or redemption of the Fund's share. The net asset value is determined by the Fund by dividing the value of the Fund's securities, plus any cash and other assets, less all liabilities, by the number of shares outstanding. Expenses and fees of the Fund, including the advisory and the distributor fees, are accrued daily and taken into account for the purpose of determining the net asset value.
Fund securities listed or traded on a securities exchange for which representative market quotations are available will be valued at the last quoted sales price on the security's principal exchange on that day. Listed securities not traded on an exchange that day, and other securities which are traded in the over-the-counter market, will be valued at the last reported bid price in the market on that day, if any. Securities for which market quotations are not readily available and all other assets will be valued at their respective fair market value as determined in good faith by, or under procedures established by, the Board of Trustees. In determining fair value, the Trustees may employ an independent pricing service.
Money market securities with less than sixty days remaining to maturity when acquired by the Fund will be valued on an amortized cost basis by the Fund, excluding unrealized gains or losses thereon from the valuation. This is accomplished by valuing the security at cost and then assuming a constant amortization to maturity of any premium or discount. If the Fund acquires a money market security with more than sixty days remaining to its maturity, it will be valued at current market value until the 60th day prior to maturity, and will then be valued on an amortized cost basis based upon the value on such date unless the Trustees determine during such 60 day period that this amortized cost value does not represent fair market value.
Net asset value is calculated separately for each class of the Fund based on expenses applicable to the particular class. Although the methodology and procedures for determining net asset value are identical for the Fund's classes, the net asset value of the classes may differ because of the different fees and expenses charged to each class.
HOW TO PURCHASE SHARES
Shares of the Fund may be purchased directly from the Fund at the net asset value per share, plus the applicable sales load, next determined after receipt of the order in proper form by the transfer agent. There is a sales load in connection with the purchase of shares which is reduced on purchases involving large amounts and which may be eliminated in certain circumstances described under "Reduced Sales Charges". The Fund reserves the right to reject any purchase order and to suspend the offering of shares of the Fund. The minimum initial investment is $1,000, with no minimum subsequent investment. The Fund reserves the right to vary the initial investment minimum and minimums for additional investments at any time. There is no minimum investment requirement for qualified retirement plans.
At the discretion of the Fund, investors may be permitted to purchase Fund shares by transferring securities to the Fund that meet the Fund's investment objectives and policies. Securities transferred to the Fund will be valued in accordance with the same procedures used to determine the Fund's net asset value at the time of the next determination of net asset value after such acceptance. Shares issued by the Fund in exchange for securities will be issued at net asset value determined as of the same time. All dividends, interest, subscription, or other rights pertaining to such securities shall become the property of the Fund and must be delivered to the Fund by the investor upon receipt from the issuer. Investors who are permitted to transfer such securities will be required to recognize a gain or loss on such transfer, and pay tax thereon, if applicable, measured by the difference between the fair market value of the securities and the investors' basis therein. Securities will not be accepted in exchange for shares of the Fund unless: (l) such securities are, at the time of the exchange, eligible to be included in the Fund and current market quotations are readily available for such securities; (2) the investor represents and warrants that all securities offered to be exchanged are not subject to any restrictions upon their sale by the Fund under the Securities Act of 1933 or under the laws of the country in which the principal market for such securities exists, or otherwise and (3) the value of any such security (except U.S. Government securities) being exchanged together with other securities of the same issuer owned by the Fund, will not exceed 5% of the Fund's net assets immediately after the transaction.
Purchase orders for shares of the Fund which are received by the transfer agent in proper form prior to the close of regular trading hours on the NYSE (currently 4:00 p.m. Eastern time) on any day that the Fund calculates its net asset value, are priced according to the net asset value determined on that day. Purchase orders for shares of the Fund received after the close of the NYSE on a particular day are priced as of the time the net asset value per share is next determined.
Purchases may be made in one of the following ways:
PURCHASES BY MAIL
Shares may be purchased initially by completing the Investment Application on pages 49 and 50 of this Prospectus and mailing it to the transfer agent, together with a check payable to The Timothy Plan, c/o Fund/Plan Services, Inc., Two West Elm Street, P.O. Box 874, Conshohocken, PA 19428-0874. All checks for purchase of shares must be drawn on U.S. banks and payable in U.S. dollars.
Subsequent investments in an existing account in the Fund may be made at any time by sending a check payable to The Timothy Plan, c/o United Missouri Bank KC, NA, P.O. Box 412797, Kansas City, MO 64141-2797. Please enclose the stub of your account statement along with the amount of the investment and the name of the account for which the investment is to be made and the account number. Please note: A $20 fee will be charged to your account for any payment check returned to the custodian.
PURCHASES THROUGH BROKER/DEALERS
The Fund may accept telephone orders from broker-dealers or service organizations which have been previously approved by the Fund. It is the responsibility of such broker-dealers or service organizations to promptly forward purchase orders and payments for the same to the Fund. Shares of the Fund may be purchased through broker-dealers, banks and bank trust departments who may charge the investor a transaction fee or other fee for their services at the time of purchase.
Wire orders for shares of the Fund received by Fund/Plan prior to 4:00 p.m., Eastern time, are confirmed at that day's public offering price. Orders received by dealers after 4:00 p.m., Eastern time, are confirmed at the public offering price on the following business day.
APPLICABLE SALES CHARGES
Shares of the Fund are offered at the public offering price which is the net asset value per share, plus any applicable sales charge. The sales charge is a variable percentage of the offering price depending upon the amount of the sale. No sales charge will be assessed on the reinvestment of distributions. The sales charge will be assessed as follows:
TOTAL SALES CHARGE
AS A % OF AS A % OF DEALER CONCESSION
OFFERING NET AMOUNT AS A PERCENTAGE OF
AMOUNT OF YOUR INVESTMENT PRICE INVESTED OFFERING PRICE
- ------------------------------- ----------- ------------------- ---------------
$1,000 but under $10,000.... 1.75% 1.78% 1.50%
$10,000 but under $25,000... 1.50% 1.52% 1.25%
$25,000 but under $50,000... 1.25% 1.27% 1.00%
$50,000 but under $100,000.. 1.00% 1.01% 0.75%
$100,000 or over............ 0.00% 0.00% 0.00%
- --------------------------------------------------------------------------------
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Shares of the Fund may be purchased at the net asset value per share next determined after receipt of the order without a sales charge by 403(b)(7) participants. At the discretion of the Fund, investors may be permitted to purchase Fund shares without a sales charge by transferring securities to the Fund that meet the Fund's investment objectives and policies.
The distributor will pay the appropriate dealer concession to those selected dealers who have entered into an agreement with the distributor. The dealer's concession may be changed from time to time. The distributor may from time to time offer incentive compensation to dealers (which sell shares of the Fund subject to sales charges) allowing such dealers to retain an additional portion of the sales load. A dealer who receives all of the sales load may be considered an "underwriter" under the Securities Act of 1933, as amended. All such sales charges are paid to the securities dealer involved in the trade, if any. The foregoing schedule of sales charges applies to single purchases and to purchases made under a Letter of Intent and pursuant to the Rights of Accumulation, both of which are described below.
REDUCED SALES CHARGES
The sales charge for purchases of shares of the Fund may be reduced through Rights of Accumulation or Letter of Intent.
To qualify for a reduced sales charge, an investor must so notify his or her distributor at the time of each purchase of shares which qualifies for the reduction.
RIGHTS OF ACCUMULATION
A shareholder may qualify for a reduced sales charge by aggregating the net asset values of shares requiring the payment of an initial sales charge, previously purchased and currently owned with the dollar amount of shares to be purchased.
LETTER OF INTENT
An investor may qualify for a reduced sales charge immediately by signing a non- binding Letter of Intent stating the investor's intention to invest during the next 13 months a specified amount which, if made at one time, would qualify for a reduced sales charge. The first investment cannot be made more than 90 days prior to the date of the Letter of Intent. Any redemptions made during the 13 month period will be subtracted from the amount of purchases in determining whether the Letter of Intent has been completed. During the term of a Letter of Intent, the transfer agent will hold shares representing 1.75% of the indicated amount in escrow for payment of a higher sales load if the full amount indicated in the Letter of Intent is not purchased. The escrowed shares will be released when the full amount indicated has been purchased. If the full amount indicated is not purchased within the 13 month period, an investor's escrowed shares will be redeemed in an amount equal to the difference in the dollar amount of sales charge actually paid and the amount of sales charge the investor would have had to pay on his or her aggregate purchases if the total of such purchases had been made at a single time.
PURCHASES BY WIRE
To order shares for purchase by wiring federal funds, the transfer agent must first be notified by calling (800) 662-0201 to request an account number and furnish the Fund with your tax identification number. Following notification to the transfer agent, federal funds and registration instructions should be wired through the Federal Reserve System to:
A completed application with signature(s) of registrant(s) must be filed with the transfer agent immediately subsequent to the initial wire. Investors should be aware that some banks may impose a wire service fee. Shareholders may be subject to 31% withholding if original application is not received.
AUTOMATIC INVESTMENT PLAN
Shares of the Fund may be purchased through an Automatic Investment Plan (the "Plan"). The Plan provides a convenient method by which investors may have monies deducted directly from their checking, savings or bank money market accounts for investment in the Fund. The minimum investment pursuant to this Plan is $100 per month. If you desire to take advantage of this Plan simply complete and remit the Automatic Investment Plan Application on pages XX and XX. The account designated will be debited in the specified amount, on the date indicated, and Fund shares will be purchased. Only an account maintained at a domestic financial institution which is an ACH member may be so designated. The Fund may alter, modify or terminate this Plan at any time. For information about participating in the Automatic Investment Plan, call Fund/Plan Services, Inc. at (800) 662-0201.
HOW TO REDEEM SHARES
Shareholders may redeem their shares of the Fund without charge on any business day that the NYSE is open (see "Determination of Net Asset Value"). Redemptions will be effective at the net asset value per share next determined after the receipt by the transfer agent of a redemption request meeting the requirements described below. The Fund normally sends redemption proceeds on the next business day, but in any event redemption proceeds are sent within seven calendar days of receipt of a redemption request in proper form. Payment may also be made by wire directly to any bank previously designated by the shareholder in a shareholder account application. There is a $9.00 charge for redemptions by wire. Please note that the shareholder's bank also may impose a fee for wire service. The Fund will honor redemption requests of shareholders who recently purchased shares by check, but will not mail the proceeds until it is reasonably satisfied that the purchase check has cleared, which may take up to fifteen days from the purchase date, at which time the redemption proceeds will be mailed to the shareholder. To avoid delays of this kind, you may wish to purchase by wire if you are planning on redeeming your shares in the near future.
Except as noted below, redemption requests received in proper form by the transfer agent prior to the close of regular trading hours on the NYSE on any business day that the Fund calculates its per share net asset value are effective that day.
Redemption requests received after the close of the NYSE are effective as of the time the net asset value per share is next determined.
Retail Class shares of the Fund may be redeemed through certain brokers, financial institutions or service organizations, banks and bank trust departments who may charge the investor a transaction fee or other fee for their services at the time of redemption. Such fees would not otherwise be charged if the shares were directly redeemed from the Fund.
The Fund will satisfy redemption requests in cash to the fullest extent feasible, so long as such payments would not, in the opinion of the Advisor or the Board of Trustees, result in the necessity of the Fund selling assets under disadvantageous conditions and to the detriment of the remaining shareholders of the Fund.
Pursuant to the Fund's Agreement and Declaration of Trust, payment for shares redeemed may be made either in cash or in-kind, or partly in cash and partly in- kind. However, the Fund has elected, pursuant to Rule 18f-1 under the Act, to redeem its shares solely in cash up to the lesser of $250,000 or 1% of the net asset value of the Fund, during any 90 day period for any one shareholder. Payments in excess of this limit will also be made wholly in cash unless the Board of Trustees believes that economic conditions exist which would make such a practice detrimental to the best interests
of the Fund. Any portfolio securities paid or distributed in-kind would be valued as described under "Determination of Net Asset Value." In the event that an in-kind distribution is made, a shareholder may incur additional expenses, such as the payment of brokerage commissions, on the sale or other disposition of the securities received from the Fund. In-kind payments need not constitute a cross-section of the Fund's portfolio. Where a shareholder has requested redemption of all or a part of the shareholder's investment, and where the Fund completes such redemption in-kind, the Fund will not recognize gain or loss for federal tax purposes, on the securities used to complete the redemption but the shareholder will recognize gain or loss equal to the difference between the fair market value of the securities received and the shareholder's basis in the Fund shares redeemed. Shares may be redeemed in one of the following ways:
REDEMPTION BY MAIL
Shares may be redeemed by submitting a written request for redemption to the transfer agent at Two West Elm Street, P.O. Box 874, Conshohocken, PA 19428- 0874.
A written redemption request to the transfer agent must: (i) identify the shareholder's account number, (ii) state the number of shares or dollars to be redeemed and (iii) be signed by each registered owner exactly as the shares are registered. A redemption request for amounts above $25,000, or redemption requests for which proceeds are to be mailed somewhere other than the address of record, must be accompanied by signature guarantees. Signatures must be guaranteed by an "eligible guarantor institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations. Broker-dealers guaranteeing signatures must be members of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. Signature guarantees will be accepted from any eligible guarantor institution which participates in a signature guarantee program. The transfer agent may require additional supporting documents for redemptions made by corporations, executors, administrators, trustees and guardians.
A redemption request will not be deemed to be properly received until the transfer agent receives all required documents in proper form. Questions with respect to the proper form for redemption requests should be directed to the transfer agent at (800) 662-0201.
REDEMPTION BY TELEPHONE
Shareholders who have so indicated on the application, or have subsequently arranged in writing to do so, may redeem shares by instructing the transfer agent by telephone. In order to arrange for redemption by wire or telephone after an account has been opened, or to change the bank or account designated to receive redemption proceeds, a written request must be sent to the transfer agent at the address listed above.
Neither the Fund nor any of its service contractors will be liable for any loss or expense in acting upon any telephone instructions that are reasonably believed to be genuine. In attempting to confirm that telephone instructions are genuine, the Fund will use such procedures as are considered reasonable, including requesting a shareholder to correctly state his or her Fund account number, the name in which his or her account is registered, his or her banking institution, bank account number and the name in which his or her bank account is registered. To the extent that the Fund fails to use reasonable procedures to verify the genuineness of telephone instructions, it and/or its service contractors may be liable for any such instructions that prove to be fraudulent or unauthorized.
The Fund reserves the right to refuse a wire or telephone redemption if it is believed advisable to do so. Procedures for redeeming Fund shares by wire or telephone may be modified or terminated at any time by the Fund.
SYSTEMATIC CASH WITHDRAWAL PLAN
The Fund offers a Systematic Cash Withdrawal Plan as another option which may be utilized by an investor who wishes to withdraw funds from his or her account on a regular basis. To participate in this option, an investor must either own or purchase shares having a value of $10,000 or more. Automatic payments by check will be mailed to the investor on
either a monthly, quarterly, semi-annual or annual basis in amounts of $100 or more. All withdrawals are processed on the 25th of the month or, if such day is not a business day, on the next business day and paid promptly thereafter. Please complete the appropriate section on the Investment Application enclosed within this Prospectus, indicating the amount of the distribution and the desired frequency.
ADDITIONAL INFORMATION
The Fund also reserves the right to involuntarily redeem an investor's account where the account is worth less than the minimum initial investment required when the account is established, presently $1,000. (Any redemption of shares from an inactive account established with a minimum investment may reduce the account below the minimum initial investment, and could subject the account to redemption initiated by the Fund.) The Fund will advise the shareholder of such intention in writing at least sixty (60) days prior to effecting such redemption, during which time the shareholder may purchase additional shares in any amount necessary to bring the account back to $1,000.
If the Trustees determine that it would be detrimental to the best interest of the remaining shareholders of the Fund to make payment in cash, the Fund may pay the redemption price in whole or in part by distribution in kind of readily marketable securities, from the Fund, within certain limits prescribed by the U.S. Securities and Exchange Commission. Such securities will be valued on the basis of the procedures used to determine the net asset value at the time of the redemption. If shares are redeemed in kind, the redeeming shareholder will incur brokerage costs in converting the assets into cash.
RETIREMENT PLANS
The Fund offers its shares for use in certain Tax Deferred (such as IRA, defined contribution, 401(k) and 403(b)(7) plans) Retirement Plans. The Fund sponsors IRA and 403(b)(7) plans. Information on these Plans is available from Fund/Plan or by reviewing the Statement of Additional Information.
PERFORMANCE
Total return data may from time to time be included in advertisements about the Fund. The Fund's total return may be calculated on an annualized and aggregate basis for various periods (which periods will be stated in the advertisement). Average annual return reflects the average percentage change per year in value of an investment in the Fund. Aggregate total return reflects the total percentage change over the stated period. Any fees charged by banks or their institutional investors directly to their customer accounts in connections with investments in the Retail Class shares of the Fund will not be included in the Fund's calculations of total returns.
The Fund may compare its investment performance with appropriate market indices such as the S&P Index and to appropriate mutual fund indices; and the Fund may advertise its ranking compared to other similar mutual funds as reported by industry analysts such as Lipper Analytical Services, Inc.
All data will be based on the Fund's past investment results and does not predict future performance. Investment performance, which will vary, is based on many factors, including market conditions, the composition of the investments in the Fund, and the Fund's operating expenses. Investment performance also often reflects the risk associated with the Fund's investment objective and policies. These factors should be considered when comparing the Fund to other mutual funds and other investment vehicles.
The performance of the Institutional Class shares will normally be higher than the Retail Class shares because of the sales charge (when applicable) and additional distribution expenses charged to the Retail Class shares. Shareholders may obtain current performance information about the Fund by calling (800) TIM-PLAN.
Further information about the performance of the Fund is included in the Fund's Annual Report, dated December 31, 1995, which may be obtained without charge by contacting the Fund at (800) TIM-PLAN.
BROKER DEALER: _________________________________________ REGISTERED REP: _________________________________________ BRANCH #: __________________ REP #: __________________ BRANCH NAME: ____________________________________________ BRANCH ADDRESS: _________________________________________ PHONE NUMBER: ( ) - Ext:
THE TIMOTHY PLAN(R)
RETAIL CLASS
INVESTMENT APPLICATION
MAIL TO:
Fund/Plan Services, Inc., P.O. Box 874, Conshohocken, PA 19428-0874
1. INITIAL INVESTMENT ($1,000 minimum)
FORM OF PAYMENT
[ ] Check for $__________________ enclosed (make payable to "The Timothy Plan")
[ ] By Wire*/1/ An initial purchase of $______________ was wired on ______ _______ _________ by
Date
_________________________________________________________________ to account # ________________________________
Name of your Bank or Broker Number assigned by F/P/S
2. REGISTRATION (Please Print) No certificate will be issued unless requested in writing.
INDIVIDUAL Must complete items 1, 3, 4 and 8 (you may choose options 5, 6 or 7).
--------------------------------------------------------------------------------------- ------------------------------------
First Name Middle Name Last Name Social Security Number
--------------------------------------------------------------------------------------- ------------------------------------
Joint Owner First Name*2 Middle Name Last Name Social Security Number
Citizen of: [ ] United States [ ] Other (Please Indicate) ____________________________________
GIFT TO MINORS Must complete items 1, 3, 4 and 8 (you may choose options 5, 6, or 7).
________________________________________________________________________________________________________________________________
Name of Custodian (Name one only) As Custodian For (Name one only)
Under the ____________________________ Uniform Gift to Minors Act _______________________________________
State Security Number
CORPORATIONS, PARTNERSHIPS, TRUSTS AND OTHERS Must complete items 1, 3, 4, 9 and 10 (you may choose options 5, 6, or 7).
________________________________________________________________________________________________________________________________
Name of Corporation, Partnership, Trust or Other
__________________________________ _________________________________________________________ _________________________________
Tax ID # Name of Trustee(s) Date of Trust
3. MAILING ADDRESS OF RECORD AND TELEPHONE NUMBER(S)
--------------------------------------------------------------------------------------------------------------------------------
Street Address and Apartment Number
----------------------------------------------------------------------------------- ----------------------- -----------------
City State Zip Code Zip Extend
------------ --------------------------- --------------- -----------------------------
(Area Code) Daytime Telephone Number (Area Code) Evening Telephone Number
4. DISTRIBUTION OPTIONS (Please indicate one) See page 11 of the Prospectus for more detail.
Income Dividends (check one box/line only) [ ] reinvested [ ] paid in cash
Capital Gains Distributions (check one box/line only) [ ] reinvested [ ] paid in cash
*1 Before making an initial investment by wire, you must be assigned an account number by calling (800) 662-0201.
Then have your local bank wire your funds to: United Missouri Bank, N.A., ABA # 10-10-00695 for credit to Fund/Plan
AC # 98-7037-071-9 (The Timothy Plan). Be sure to include your name and account number on the wire.
*2 (Joint ownership with rights of survivorship unless otherwise noted).
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5. SYSTEMATIC WITHDRAWAL PLAN ($10,000 minimum necessary) See page 17 of the Prospectus for more detail.
A check in the amount of $______________________ (minimum $100.00) will be sent to you at your address of record unless
otherwise noted.
Please select desired frequency: [ ] Monthly
[ ] Quarterly, in the months of __________, __________, __________, and __________.
[ ] Semi-Annual or Annual, in the month(s) of __________, __________, or __________.
6. TELEPHONE PRIVILEGES See page 17 of the Prospectus for more detail.
[ ] REDEEM SHARES BY TELEPHONE
I (we) authorize Fund/Plan Services to honor telephone instructions for my (our) account which I (we) understand the proceeds
of which will be mailed only to the address of record or wired to the bank specified below. Neither the Fund nor Fund/Plan
Services will be liable for properly acting upon telephone instructions believed to be genuine. Please attach a voided check
on your account if the bank option is chosen.
--------------------------------------------------------------------------------------------------------------------------------
Name of Bank City State
-------------------- -------------------------------------------------------------------
Bank Routing Number Account Number [ ] Checking [ ] Savings
7. AUTOMATIC INVESTMENT PLAN (For this option - please complete and send in form on pages 21 and 22 of the Prospectus).
8. SIGNATURE AND CERTIFICATION (This Section must be completed by INDIVIDUAL, JOINT and CUSTODIAL accounts).
The following is required by Federal tax law to avoid 31% backup withholding; "By signing below, I certify under penalties of
perjury that the social security or taxpayer identification number entered above is correct (or I am waiting for a number to
be issued to me), and that I have not been notified by the IRS that I am subject to backup withholding unless I have checked
the box." If you have been notified by the IRS that you are subject to backup withholding, check box [ ].
Receipt of current prospectus is hereby acknowledged.
----------------------------------------------------------------------------------------------- ---------------------------
Signature [ ] Owner [ ] Custodian [ ] Trustee Date
----------------------------------------------------------------------------------------------- ---------------------------
Signature of Joint Owner (if applicable) Date
9. RESOLUTIONS (This Section must be completed by CORPORATIONS, PARTNERSHIPS, TRUSTS and OTHER ORGANIZATIONS).
RESOLVED: That this corporation or organization become a shareholder of the Timothy Plan (the "Fund) and
that _______________________________________________________________________________ is (are) authorized to complete and
execute the Application on behalf of the corporation or organization and take any action for it as may be necessary or
appropriate with respect to its shareholders account(s) with the Fund, and it is
FURTHER RESOLVED: That any one of the above noted officers is authorized to sign any documents necessary or appropriate to
appoint Fund/Plan Services, Inc. as redemption agent of the corporation for shares of the Fund, to establish or acknowledge
terms and conditions governing the redemption of said shares or to otherwise implement the privileges elected on the
application.
10. CERTIFICATE (This Section must be completed by CORPORATIONS, PARTNERSHIPS, TRUSTS and OTHER ORGANIZATIONS).
I hereby certify that the foregoing resolutions are in conformity with the Charter and By-Laws or other empowering documents
of the:
_______________________________________________________________________ incorporated or formed under the laws of _______________
(Name of Corporation) (State)
and were adopted at a meeting of the Board of Directors or Trustees of the organization or corporation duly called and held
on ________________ at which a quorum was preset and acting throughout, and that the same are now in full force and effect.
I further certify that the following is (are) the duly elected officer(s) of the corporation or organization, authorized to
act in accordance with the foregoing resolutions.
NAME TITLE
____________________________________________________________________________ ________________________________________________
____________________________________________________________________________ ________________________________________________
____________________________________________________________________________ ________________________________________________
Witness my hand and the seal of the corporation or organization this ___________ day of _______________________, 19 ______.
________________________________________________________________________ ___________________________________________________
*Secretary-Clerk Other Authorized Officer (if required)
* If the Secretary or other recording officer is authorized to act by the above resolutions, this certificate must also be
signed by another officer.
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AUTOMATIC INVESTMENT PLAN APPLICATION
1. Fund/Plan Services, Inc., through our bank, United Missouri Bank KC NA, draws an automatic clearing house (ACH) debit electronically against your personal checking account each month, according to your instructions.
2. Choose any amount ($100 or more) that you would like to invest regularly and your debit for this amount will be processed by Fund/Plan Services, Inc. as if you had written a check yourself.
3. Shares will be purchased and a confirmation sent to you.
HOW DO I SET IT UP?
1. Complete the forms and the Fund Application Form if you do not already have an existing account.
2. Mark one of your personal checks or deposit slips VOID, attach it to the forms below and mail to Fund/Plan Services, Inc., P.O. Box 874, Conshohocken, PA 19428-0874.
3. As soon as your bank accepts your authorization, debits will be generated and your Automatic Investment Plan started. In order for you to have ACH debits from your account, your bank must be able to accept ACH transactions and/or be a member of an ACH association. Your branch manager should be able to tell you your bank's capabilities. We cannot guarantee acceptance by your bank.
4. Please allow one month for processing of your Automatic Investment Plan before the first debit occurs.
AUTOMATIC INVESTMENT PLAN APPLICATION
TO: Fund/Plan Services, Inc.
P.O. Box 874
Conshohocken, PA 19428-0874
Please start an Automatic Investment Plan for me and invest ___________________.
($100 or more)
on the [ ] 10th [ ] 15th [ ] 20th of each month, in shares of THE TIMOTHY
PLAN - RETAIL CLASS.
Check one:
[ ] I am in the process of establishing an account.
or
[ ] My account number is: _____________________________________________________
I understand that my ACH debit will be dated on the day of each month as indicated above or as specified by written request. I agree that if such debit is not honored upon presentation, Fund/Plan Services, Inc. may discontinue this service and any share purchase made upon deposit of such debit may be canceled. I further agree that if the net asset value of the shares purchased with such debit is less when said purchase is canceled than when the purchase was made, Fund/Plan Services, Inc. shall be authorized to liquidate other shares or fractions thereof held in my account to make up the deficiency. This Automatic Investment Plan may be discontinued by Fund/Plan Services, Inc. upon 30-days written notice or at any time by the investor by written notice to Fund/Plan Services, Inc. which is received not later than 5 business days prior to the above designed investment date.
Signature(s): _________________________________________
AUTOMATIC INVESTMENT PLAN APPLICATION
- --------------------------------------------------------------------------------
BANK REQUEST AND AUTHORIZATION
TO: _____________________________ _____________________________
Name of Your Bank Bank Checking Account Number
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As a convenience to me, please honor ACH debits on my account drawn by Fund/Plan Services, Inc., United Missouri Bank KC NA and payable to "THE TIMOTHY PLAN".
I agree that your rights with respect to such debit shall be the same as if it were a check drawn upon you and signed personally by me. This authority shall remain in effect until you receive written notice from me changing its terms or revoking it, and until you actually receive such notice, I agree that you shall be fully protected in honoring such debit.
I further agree that if any debit is dishonored, whether with or without cause or whether intentionally or inadvertently, you shall be under no liability whatsoever.
DEPOSITOR'S ____________________________________________________________________
Signature of Bank Depositor(s) as shown on bank records.
NOTE: Your bank must be able to accept ACH transactions and/or be a member of an ACH association in order for you to use this service.
INDEMNIFICATION AGREEMENT
TO: The bank named above
So that you may comply with your Depositor's request and authorization, THE TIMOTHY PLAN agrees as follows:
1. To indemnify and hold you harmless from any loss you may suffer arising from or in connection with the payment by you of a debit drawn by Fund/Plan Services, Inc. to the order of THE TIMOTHY PLAN designated on the account of your depositor(s) executing the authorization including any costs or expenses reasonably incurred in connection with such loss. THE TIMOTHY PLAN will not, however, indemnify you against any loss due to your payment of any debit generated against insufficient funds.
2. To refund to you any amount erroneously paid by you to Fund/Plan Services, Inc. on any such debit if claim for the amount of such erroneous payment is made by you within 3 months of the date of such debit on which erroneous payment was made.
BROKER DEALER: __________________________ REGISTERED REP: __________________________ BRANCH #:______________ REP #: __________ BRANCH NAME: _____________________________ BRANCH ADDRESS: __________________________ PHONE NUMBER: ( ) - Ext:
THE TIMOTHY PLAN(R)
RETAIL CLASS
REQUEST FOR TRANSFER
MAIL TO:
Fund/Plan Services, Inc., P.O. Box 874, Conshohocken, PA 19428-0874
1. INVESTOR INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
First Name Middle Initial Last Name
- ------------------------------------------------------------------------------------------------------------------------------------
Street Address
- ----------------------------------------------------------- -------------- -------------------- -----------------
City State Zip Code Zip Extend
- ---------------------------- ------------------ --------- -------------------------- -------- -------------------------
Social Security Number Date of Birth (Area Code) Residence Telephone Number (Area Code) Business Telephone Number
2. PREVIOUS INVESTMENT FIRM
- ------------------------------------------------------------------------------------------------------------------------------------
Name of Previous Firm
- ------------------------------------------------------------------------------------------------------------------------------------
Address
- ------------------------------------------------------------------------------------ -----------------------------------------
Investor's Name Account Number
Type of Account: [ ] Individual [ ] Joint [ ] UGMA [ ] Trust
Type of Assets: [ ] Mutual Fund [ ] Money Market [ ] CD (Immediately/At Maturity) [ ] Securities
3. AMOUNT TO BE TRANSFERRED TO THE TIMOTHY PLAN
[ ] Liquidate all assets from the above account and transfer the proceeds.
[ ] Liquidate $_____________________________________ from the above account and transfer the proceeds
4. TRANSFER INSTRUCTIONS
Make check payable to: The Timothy Plan
Mail to: Post Office Box 874, Conshohocken, PA 19428-0874
5. INVESTOR'S AUTHORIZATION
- --------------------------------------------- ------------------------- -----------------------------------------------
Signature of Participant Date Signature Guarantee
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INVESTMENT ADVISOR
Timothy Partners, Ltd.
1304 West Fairbanks Avenue
Winter Park, FL 32789
INVESTMENT MANAGER
Systematic Financial Management, L.P.
Two Executive Drive
Fort Lee, NJ 07024
UNDERWRITER
Fund/Plan Broker Services, Inc.
Two West Elm Street
Conshohocken, PA 19428
SHAREHOLDER SERVICES
Fund/Plan Services, Inc.
Two West Elm Street
Conshohocken, PA 19428
CUSTODIAN
The Bank of New York
48 Wall Street
New York, NY 10286
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
AUDITORS
Tait, Weller & Baker
Two Penn Center
Suite 700
Philadelphia, PA 19102-1707
For Additional Information About The Timothy Plan, Please Call:
(800) TIM-PLAN
THE TIMOTHY PLAN
STATEMENT OF ADDITIONAL INFORMATION
April 29, 1996
A copy of the Prospectus of The Timothy Plan (the "Fund") is available without charge upon request to the Fund.
The Fund is an open-end diversified investment company, currently offering one
series of shares. The series currently offers two classes of shares:
Institutional Class and Retail Class. The shares of the Fund may be purchased
or redeemed at any time. Purchases and redemptions will be effected at the net
asset value next computed after receipt of the order in proper form by the
transfer agent.
The objective of the Fund is long-term capital growth and its secondary objective is current income. The Fund will use a variety of investment strategies in an effort to balance Fund risks. There can be no assurance that the objectives of the Fund will be achieved.
TABLE OF CONTENTS
Page
----
THE TIMOTHY PLAN - INVESTMENTS........................... 56
INVESTMENT RESTRICTIONS.................................. 57
INVESTMENT ADVISOR....................................... 58
INVESTMENT MANAGER....................................... 58
UNDERWRITER.............................................. 59
ADMINISTRATOR............................................ 59
ALLOCATION OF PORTFOLIO BROKERAGE........................ 60
PURCHASE OF SHARES....................................... 60
Tax-Deferred Retirement Plans....................... 61
REDEMPTIONS.............................................. 61
OFFICERS AND TRUSTEES OF THE FUND........................ 62
DISTRIBUTION PLAN........................................ 63
TAXATION................................................. 64
GENERAL INFORMATION...................................... 65
Audits and Reports.................................. 65
Miscellaneous....................................... 65
PERFORMANCE.............................................. 66
Comparisons and Advertisements...................... 67
FINANCIAL STATEMENTS..................................... 67
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THE TIMOTHY PLAN - INVESTMENTS
The Fund seeks to achieve its objective by making investments selected in accordance with the Fund's investment restrictions and policies. The Fund will vary its investment strategy as described in the Fund's prospectus to achieve its objective. This Statement of Additional Information contains further information concerning the techniques and operations of the Fund, the securities in which it will invest, and the policies it will follow. The Fund issues two classes of shares (Institutional Class and Retail Class) that invest in the same portfolio of securities. Shareholders of Retail Class shares are subject to a sales charge and each class is subject to different 12b-1 Plan expenses.
COMMON STOCK Common stock is defined as shares of a corporation that entitle the holder to a pro rata share of the profits of the corporation, if any, without a preference over any other shareholder or class of shareholders, including holders of the corporation's preferred stock and other senior equity. Common stock usually carries with it the right to vote, and frequently, an exclusive right to do so. Holders of common stock also have the right to participate in the remaining assets of the corporation after all other claims, including those of debt securities and preferred stock, are paid.
PREFERRED STOCK Generally, preferred stock receives dividends prior to distributions on common stock and usually has a priority of claim over common stockholders if the issuer of the stock is liquidated. Unlike common stock, preferred stock does not usually have voting rights; preferred stock, in some instances, is convertible into common stock. In order to be payable, dividends on preferred stock must be declared by the issuer's Board of Trustees. Dividends on the typical preferred stock are cumulative, causing dividends to accrue even if not declared by the Board of Trustees. There is, however, no assurance that dividends will be declared by the Board of Trustees of issuers of the preferred stocks in which the Fund invests.
CONVERTIBLE SECURITIES Traditional convertible securities include corporate bonds, notes and preferred stocks that may be converted into or exchanged for common stock, and other securities that also provide an opportunity for equity participation. These securities are generally convertible either at a stated price or a stated rate (that is, for a specific number of shares of common stock or other security). As with other fixed income securities, the price of a convertible security to some extent varies inversely with interest rates. While providing a fixed-income stream (generally higher in yield than the income derivable from a common stock but lower than that afforded by a non-convertible debt security), a convertible security also affords the investor an opportunity, through its conversion feature, to participate in the capital appreciation of the common stock into which it is convertible. As the market price of the underlying common stock declines, convertible securities tend to trade increasingly on a yield basis and so may not experience market value declines to the same extent as the underlying common stock. When the market price of the underlying common stock increases, the price of a convertible security tends to rise as a reflection of the value of the underlying common stock. To obtain such a higher yield, the Fund may be required to pay for a convertible security an amount in excess of the value of the underlying common stock. Common stock acquired by the Fund upon conversion of a convertible security will generally be held for so long as the Advisor or Investment Manager anticipates such stock will provide the Fund with opportunities which are consistent with the Fund's investment objectives and policies.
WARRANTS The Fund may invest in warrants, in addition to warrants acquired in units or attached to securities. A warrant is an instrument issued by a corporation which gives the holder the right to subscribe to a specified amount of the issuer's capital stock at a set price for a specified period of time.
AMERICAN DEPOSITORY RECEIPTS The Fund may make foreign investments through the purchase and sale of sponsored or unsponsored American Depository Receipts ("ADRs"). ADRs are receipts typically issued by a U.S. bank or trust company which evidence ownership of underlying securities issued by a foreign corporation. The Fund may purchase ADRs whether they are "sponsored" or "unsponsored". "Sponsored" ADRs are issued jointly by the issuer of the underlying security and a depository. "Unsponsored" ADRs are issued without participation of the issuer of the deposited security. The Fund does not consider any ADRs
purchased to be foreign. Holders of unsponsored ADRs generally bear all the costs of such facilities. The depository of an unsponsored facility frequently is under no obligation to distribute shareholder communications received from the issuer of the deposited security or to pass through voting rights to the holders of such receipts in respect to the deposited securities. Therefore, there may not be a correlation between information concerning the issuer of the security and the market value of an unsponsored ADR. ADRs may result in a withholding tax by the foreign country of source which will have the effect of reducing the income distributable to shareholders. Because the Fund will not invest more than 50% of the value of its total assets in stock or securities issued by foreign corporations, it will be unable to pass through the foreign taxes the Fund pays (or is deemed to pay) to shareholders under the Internal Revenue Code of 1986, as amended (the "Code").
PORTFOLIO TURNOVER It is not the policy of the Fund to purchase or sell securities for short-term trading purposes, but the Fund may sell securities to recognize gains or avoid potential for loss. The Fund will, however, sell any portfolio security (without regard to the time it has been held) when the investment advisor believes that market conditions, credit-worthiness factors or general economic conditions warrant such a step. The Fund presently estimates that the annualized portfolio turnover rate generally will not exceed a range of 50% to 75%, and may be lower than 50%, during most periods. The annualized portfolio turnover rate for the period March 21, 1994 (commencement of operations) through December 31, 1994 and the portfolio turnover rate for the year ended December 31, 1995, were 8.31% and 34.12%, respectively. High portfolio turnover would involve additional transaction costs (such as brokerage commissions) which are borne by the Fund, or adverse tax effects. (See "Dividends, Distributions and Taxes" in the Prospectus.)
INVESTMENT RESTRICTIONS
In addition to those set forth in the Fund's current Prospectus, the Fund has adopted the Investment Restrictions set forth below, which are fundamental policies of the Fund, and which cannot be changed without the approval of a majority of the outstanding voting securities. As provided in the Investment Company Act of 1940, as amended (the "Act"), a "vote of a majority of the outstanding voting securities" means the affirmative vote of the lesser of (i) more than 50% of the outstanding shares, or (ii) 67% or more of the shares present at a meeting if more than 50% of the outstanding shares are represented at the meeting in person or by proxy. These investment restrictions provide that each Fund will not:
(1) issue senior securities;
(2) engage in the underwriting of securities except insofar as the Fund may be deemed an underwriter under the Securities Act of 1933 in disposing of a portfolio security;
(3) purchase or sell real estate or interests therein, although it may purchase securities of issuers which engage in real estate operations;
(4) invest for the purpose of exercising control or management of another company;
(5) purchase oil, gas or other mineral leases, rights or royalty contracts or exploration or development programs, except that the Fund may invest in the securities of companies which invest in or sponsor such programs;
(6) invest more than 25% of the value of the Fund's total assets in one particular industry, except for temporary defensive purposes;
(7) make purchases of securities on "margin", or make short sales of securities, provided that the Fund may enter into futures contracts and related options and make initial and variation margin deposits in connection therewith; and
(8) invest in securities of any open-end investment company, except that the Fund may
purchase securities of money market mutual funds, but such investments in money market mutual funds may be made only in accordance with the limitations imposed by the Act and the rules thereunder, as amended.
So long as percentage restrictions are observed by the Fund at the time it purchases any security, changes in values of particular Fund assets or the assets of the Fund as a whole will not cause a violation of any of the foregoing restrictions.
INVESTMENT ADVISOR
The Fund has entered into an advisory agreement with Timothy Partners, Ltd. (the "Advisor"), effective January 19, 1994 (the "Investment Advisory Agreement"), as amended August 28, 1995, for the provision of investment advisory services, subject to the supervision and direction of the Fund's Board of Trustees. Pursuant to the Investment Advisory Agreement, the Fund is obligated to pay the Advisor a monthly fee equal to an annual rate of 0.85% of the Fund's average daily net assets. This fee is higher than that charged by some funds, but is comparable to fees charged by funds with similar investment objectives. The Investment Advisory Agreement specifies that the advisory fee will be reduced to the extent necessary to comply with the most stringent limits prescribed by any state in which the Fund's shares are offered for sale. The most stringent current state restriction limits a fund's allowable aggregate operating expenses (excluding interest, taxes, brokerage commissions and extraordinary expenses such as litigation costs) in any fiscal year to 2.5% of the first $30 million of net assets of the Fund, 2% of the next $70 million of net assets of the Fund, and 1.5% of average annual net assets of the Fund in excess of $100 million.
The Advisor pays the Investment Manager for its services an annual fee at a rate equal to 0.50% of the first $100 million in assets of the Fund; 0.40% of the next $100 million in assets; 0.30% of the next $100 million in assets; and 0.25% of assets over $300 million. The fee is payable monthly upon receipt by the Advisor of the advisory fee paid by the Fund. For the period March 21, 1994 (commencement of operations) through December 31, 1994 and for the year ended December 31, 1995, advisory fees of $7,938 and $41,257, respectively, were paid to the Advisor and the Advisor reimbursed the Fund $135,114 and $189,534,respectively.
The Investment Advisory Agreement is initially effective for two years. The Investment Advisory Agreement may be renewed after its initial term only so long as such renewal and continuance are specifically approved at least annually by the Board of Trustees or by vote of a majority of the outstanding voting securities of the Fund, and only if the terms of the renewal thereof have been approved by the vote of a majority of the Trustees of the Fund who are not parties thereto or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. The Investment Advisory Agreement will terminate automatically in the event of its assignment.
INVESTMENT MANAGER
Pursuant to an agreement between the Advisor and Systematic Financial Management, L.P. (the "Investment Manager"), effective May 15, 1995 (the "Sub- Investment Advisory Agreement"), the Investment Manager provides advice and assistance to the Advisor in the selection of appropriate investments for the Fund, subject to the supervision and direction of the Fund's Board of Trustees. As compensation for its services, the Investment Manager receives from the Advisor an annual fee at a rate equal to 0.50% of the first $100 million in assets of the Fund; 0.40% of the next $100 million in assets; 0.30% of the next $100 million in assets; and 0.25% of assets over $300 million. For the period March 21, 1994 (commencement of operations) through December 31, 1994 and for the year ended December 31, 1995, the Advisor paid the Investment Manager sub- advisory fees of $3,969 and $20,628, respectively.
The Sub-Investment Advisory Agreement is initially effective for two years. The Agreement may be renewed by the parties after its initial term only so long as such renewal and continuance are specifically approved at least annually by the Board of Trustees or by vote of a majority of the outstanding voting
securities of the Fund, and only if the terms of renewal thereof have been approved by the vote of a majority of the Trustees of the Fund who are not parties thereto or interested persons of any such party, cast in person at the meeting called for the purpose of voting on such approval. The Sub-Investment Advisory Agreement will terminate automatically in the event of its assignment.
UNDERWRITER
Fund/Plan Broker Services, Inc. ("FPBS"), Two West Elm Street, Conshohocken, PA 19428, acts as an underwriter of the Fund shares for the purpose of facilitating the registration of shares of the Fund under state securities laws and to assist in sales of shares pursuant to an underwriting agreement (the "Underwriting Agreement") approved by the Fund's Trustees.
In that regard, FPBS has agreed at its own expense to qualify as a broker-dealer under all applicable federal or state laws in those states which the Fund shall from time to time identify to FPBS as states in which it wishes to offer its shares for sale, in order that state registrations may be maintained by the Fund.
FPBS is a broker-dealer registered with the U.S. Securities and Exchange Commission and is a member in good standing of the National Association of Securities Dealers, Inc.
For the services to be provided under the Underwriting Agreement, FPBS is entitled to receive an annual fixed fee of $15,000, for one series, plus $2,500 for each additional operational series or class, payable in advance. This fee is fixed for a one (1) year period from the date of the agreement and may be increased or decreased in future years by an amendment signed by both the Fund and FPBS. The fees for such services are borne entirely by the Advisor. The Fund does not impose any sales loads or redemption fees. The Fund shall continue to bear the expense of all filing or registration fees incurred in connection with the registration of shares under state securities laws.
The Underwriting Agreement may be terminated by either party upon 60 days prior written notice to the other party, and if so terminated, the pro-rata portion of the unearned fee will be returned to the Fund.
ADMINISTRATOR
Fund/Plan Services, Inc., Two West Elm Street, Conshohocken, PA 19428, (the "Administrator"), provides certain administrative services to the Fund pursuant to an Administrative Services Agreement.
Under the Administrative Services Agreement, the Administrator: (1) coordinates with the Custodian and Transfer Agent and monitors the services they provide to the Fund; (2) coordinates with, and monitors, any third parties furnishing services to the Fund; (3) provides the Fund with necessary office space, telephones and other communications facilities and personnel competent to perform administrative and clerical functions; (4) supervises the maintenance by third parties of such books and records of the Fund as may be required by applicable federal or state law; (5) prepares or supervises the preparation by third parties of all federal, state and local tax returns and reports of the Fund required by applicable law; (6) prepares and, after approval by the Fund, files and arranges for the distribution of proxy materials and periodic reports to shareholders of the Fund as required by applicable law; (7) prepares and, after approval by the Fund, arranges for the filing of such registration statements and other documents with the Securities and Exchange Commission and other federal and state regulatory authorities as may be required by applicable law; (8) reviews and submits to the officers of the Fund for their approval invoices or other requests for payment of the Funds expenses and instructs the Custodian to issue checks in payment thereof; and (9) takes such other action with respect to the Fund as may be necessary in the opinion of the Administrator to perform its duties under the agreement.
As compensation for services performed under the Administrative Services Agreement, the Administrator receives a fee payable monthly at an annual rate of 0.15% of the first $50 million in average net assets of the Fund; 0.10% of the next $50 million in average net assets; and 0.05% of average net assets over $100 million. There is a minimum fee of $50,000 per year for the initial series/class of shares issued by the Fund
and $12,000 per year for each additional separate series/class of shares. For the period March 21, 1994 (commencement of operations) through December 31, 1994 and for the fiscal year ended December 31, 1995, the Fund paid $39,583 and $54,297, respectively, for Administration fees.
ALLOCATION OF PORTFOLIO BROKERAGE
The Investment Manager, when effecting the purchases and sales of portfolio
securities for the account of the Fund, will seek execution of trades either (i)
at the most favorable and competitive rate of commission charged by any broker,
dealer or member of an exchange, or (ii) at a higher rate of commission charges
if reasonable in relation to brokerage and research services provided to the
Fund or the Investment Manager by such member, broker, or dealer. Such services
may include, but are not limited to, any one or more of the following:
information on the availability of securities for purchase or sale, statistical
or factual information, or opinions pertaining to investments. The Fund's
Investment Manager may use research and services provided to it by brokers and
dealers in servicing all its clients, however, not all such services will be
used by the Investment Manager in connection with the Fund. Brokerage may also
be allocated to dealers in consideration of the Fund's share distribution but
only when execution and price are comparable to that offered by other brokers.
The Fund incurred brokerage commissions of $7,631 for the period March 21, 1994
(commencement of operations) through December 31, 1994 and $13,784 for the
fiscal year ended December 31, 1995.
The Advisor, through the Investment Manager, is responsible for making the Fund's portfolio decisions subject to instructions described in the prospectus. The Board of Trustees may however impose limitations on the allocation of portfolio brokerage.
PURCHASE OF SHARES
The shares of the Fund are continuously offered by the Distributor. Orders will not be considered complete until receipt by the Distributor of a completed account application form, and receipt by the Custodian of payment for the shares purchased. Once both are received, such orders will be confirmed at the next determined net asset value per share, plus the applicable sales load for Retail Class shares (based upon valuation procedures described in the Prospectus), as of the close of business of the business day on which the completed order is received, normally 4 o'clock p.m. Eastern Time. Completed orders received by the Fund after 4 o'clock p.m. will be confirmed at the next day's price.
Shares of the Fund are available to all types of tax-deferred retirement plans such as IRA's, employer-sponsored defined contribution plans (including 401(k) plans) and tax-sheltered custodial accounts described in Section 403(b)(7) of the Internal Revenue Code. Qualified investors benefit from the tax-free compounding of income dividends and capital gains distributions. The Fund sponsors an Individual Retirement Accounts (IRA). Individuals, who are not active participants (and, when a joint return is filed, who do not have a spouse who is an active participant) in an employer maintained retirement plan are eligible to contribute on a deductible basis to an IRA account. The IRA deduction is also retained for individual taxpayers and married couples with adjusted gross incomes not in excess of certain specified limits. All individuals who have earned income may make nondeductible IRA contributions to the extent that they are not eligible for a deductible contribution. Income earned by an IRA account will continue to be tax deferred.
A special IRA program is available for employers under which the employers may establish IRA accounts for their employees in lieu of establishing tax qualified retirement plans. Known as SEP-IRA's (Simplified Employee Pension-IRA), they free the employer of many of the record keeping requirements of establishing and maintaining a tax qualified retirement plan trust.
If you are entitled to receive a distribution from a qualified retirement plan, you may rollover all or part of that distribution into the Fund's IRA. Your rollover contribution is not subject to the limits on annual IRA contributions. You can continue to defer Federal income taxes on your contribution and on any income that is earned on that contribution.
The Fund also sponsors 403(b)(7) Retirement Plans. The Fund offers a plan for use by schools, hospitals, and certain other tax-exempt organizations or associations who wish to use shares of the Fund as a funding medium for a retirement plan for their employees (the "403(b)(7) Plan"). Contributions are made to the 403(b)(7) Plan as a reduction to the employee's regular compensation. Such contributions, to the extent they do not exceed applicable limitations (including a generally applicable limitation of $9,500 per year), are excludable from the gross income of the employee for Federal Income tax purposes.
In all these Plans, distributions of net investment income and capital gains will be automatically reinvested.
All the foregoing retirement plan options require special plan documents. Please call the Fund at (800) TIM-PLAN (or (800) 846-7526) to obtain information regarding the establishment of retirement plan accounts. In the case of IRAs and 403(b)(7) Plans, Semper Trust Company acts as the plan custodian and charges $12.00 per account in connection with plan establishment and maintenance. These fees are detailed in the plan documents. You should consult with your attorney or other tax advisor for specific advice prior to establishing a plan.
REDEMPTIONS
Under normal circumstances you may redeem your shares at any time without a fee. The redemption price will be based upon the net asset value per share next determined after receipt of the redemption request, provided it has been submitted in the manner described below. The redemption price may be more or less than your cost, depending upon the net asset value per share at the time of redemption. Retail Class shares of the Fund may be redeemed through certain brokers, financial institutions or service organizations, banks and bank trust departments who may charge the investor a transaction fee or other fee for their services at the time of redemption. Such fees would not otherwise be charged if the shares were purchased directly from the Fund.
Payment for shares tendered for redemption is made by check within seven days after tender in proper form, except that the Fund reserves the right to suspend the right of redemption, or to postpone the date of payment upon redemption beyond seven days: (i) for any period during which the NYSE is restricted, (ii) for
any period during which an emergency exists as determined by the U.S. Securities and Exchange Commission as a result of which disposal of securities owned by the Fund is not reasonably predictable or it is not reasonably practicable for the Fund fairly to determine the value of its net assets, or (iii) for such other periods as the U.S Securities and Exchange Commission may by order permit for the protection of shareholders of the Fund.
Pursuant to the Fund's Agreement and Declaration of Trust, payment for shares redeemed may be made either in cash or in-kind, or partly in cash and partly in- kind. However, the Fund has elected, pursuant to Rule 18f-1 under the Act, to redeem its shares solely in cash up to the lesser of $250,000 or 1% of the net asset value of the Fund, during any 90-day period for any one shareholder. Payments in excess of this limit will also be made wholly in cash unless the Board of Trustees believes that economic conditions exist which would make such a practice detrimental to the best interests of the Fund. Any portfolio securities paid or distributed in-kind would be valued as described under "Determination of Net Asset Value" in the Fund's prospectus. In the event that an in-kind distribution is made, a shareholder may incur additional expenses, such as the payment of brokerage commissions, on the sale or other disposition of the securities received from the Fund. In-kind payments need not constitute a cross-section of the Fund's portfolio. Where a shareholder has requested redemption of all or a part of the shareholder's investment, and where the Fund completes such redemption in-kind, the Fund will not recognize gain or loss for federal tax purposes, on the securities used to complete the redemption. The shareholder will recognize gain or loss equal to the difference between the fair market value of the securities received and the shareholder's basis in the Fund shares redeemed.
OFFICERS AND TRUSTEES OF THE FUND
The trustees and principal executive officers and their principal occupations for the past five years are listed below.
POSITION AND
OFFICE WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS AGE THE FUND DURING THE PAST FIVE YEARS
- ---------------- ------- ------------- ---------------------------
Arthur D. Ally* 53 President and President, Covenant Financial Management, Inc.
1304 West Fairbanks Ave Trustee (1990-present)
Winter Park, Florida
Joseph E. Boatwright* 64 Secretary and Senior Pastor; Aloma Baptist Church, Winter
1410 Hyde Park Drive Trustee Park Fla. (1970-present)
Winter Park, Florida
Wesley W. Pennington 65 Trustee Secretary/Treasurer, American Call to
442 Raymond Ave. Greatness (publishing); President & Sole
Longwood, Florida Shareholder, Weston, Inc. (fabric treatment)
(1979-present); President & Sole Shareholder,
Designer Services Group, Inc. (furniture storage &
delivery) (1981-1991)
Mark Schweizer 63 Trustee Retired; prior thereto Architect/Engineer,
1290 Palmetto Avenue President of Schweizer, Inc.
Winter Park, Florida (1960-1996)
|
* "Interested" trustee as defined in the Act.
The officers conduct and supervise the daily business operations of the Fund, while the trustees, in addition to functions set forth under "Investment Advisor," "Investment Manager," and "Underwriter," review such actions and decide on general policy. Compensation to officers and trustees of the Fund who are affiliated with the Advisor is paid by the Advisor, and not by the Fund. For the fiscal year ended December 31, 1995, the Fund did not pay compensation to any of its trustees. In addition, no trustee served on the Board of Directors of another investment company managed by the Advisor for the calendar year ended December 31, 1995.
DISTRIBUTION PLAN
As noted in the Fund's Prospectuses, each Class of the Fund has adopted a Plan pursuant to Rule 12b-1 under the 1940 Act (the "Plan") whereby the Fund may pay up to a maximum of 0.25% for Institutional Class shares and up to a maximum of 0.85% for Retail Class shares (of which, up to 0.25% may be service fees to be paid by each respective class of shares to FPBS, dealers and others, for providing personal service and/or maintaining shareholder accounts) per annum of its average daily net assets for expenses incurred by the Underwriter in the distribution of the Fund's shares. The fees are paid on a monthly basis, based on the Fund's average daily net assets.
Pursuant to the Plan, the Underwriter is entitled to a reimbursement each month (up to the maximum of 0.25% for Institutional Class shares and 0.85% for Retail Class shares per annum of average net assets of the Fund) for the actual expenses incurred in the distribution and promotion of the Fund's shares, including but not limited to, printing of prospectuses and reports used for sales purposes, preparation and printing of sales literature and related expenses, advertisements, and other distribution-related expenses as well as any distribution or service fees paid to securities dealers or others who have executed a dealer agreement with the Underwriter. Any expense of distribution in excess of 0.25% for Institutional Class shares or 0.85% for Retail Class shares per annum will be borne by the Advisor without any reimbursement or payment by the Fund. For the year ended December 31, 1994, the Fund reimbursed the Underwriter $1,985 for distribution costs incurred by Institutional Class shares of the Fund. For the fiscal year ended December 31, 1995, the Fund reimbursed the Underwriter $11,606 for distribution costs incurred as follows: $3,266 for printing; $4,786 compensation to underwriters and distribution services, $399 compensation to dealers for the Retail Class shares; $459 compensation to dealers for Institutional Class shares; and $2,696 for other costs associated with the distribution of fund shares.
The Plan also provides that to the extent that the Fund, the Advisor, the Investment Manager, the Underwriter, or other parties on behalf of the Fund, the Advisor, the Investment Manager, or the Underwriter make payments that are deemed to be payments for the financing of any activity primarily intended to result in the sale of shares issued by the Fund within the context of Rule 12b- 1, such payments shall be deemed to be made pursuant to the Plan. In no event shall the payments made under the Plan, plus any other payments deemed to be made pursuant to the Plan, exceed the amount permitted to be paid pursuant to the Rules of Fair Practice of the National Association of Securities Dealers, Inc., Article III, Section 26(d)(4).
The Board of Trustees has determined that a consistent cash flow resulting from the sale of new shares is necessary and appropriate to meet redemptions and to take advantage of buying opportunities without having to make unwarranted liquidations of portfolio securities. The Board therefore believes that it will likely benefit the Fund to have monies available for the direct distribution activities of the Underwriter in promoting the sale of the Fund's shares, and to avoid any uncertainties as to whether other payments constitute distribution expenses on behalf of the Fund. The Board of Trustees, including the non- interested trustees, has concluded that in the exercise of their reasonable business judgment and in light of their fiduciary duties, there is a reasonable likelihood that the Plan will benefit the Fund and its shareholders. The Plan has been approved by the Fund's Board of Trustees, including all of the trustees who are non-interested persons as defined in the Act. The Plan must be renewed annually by the Fund's Board of Trustees, including a majority of the trustees who are non-interested persons of the Fund and who have no direct or indirect financial interest in the operation of the Plan. The votes must be cast in person at
a meeting called for that purpose. It is also required that the selection and
nomination of such trustees be done by the non-interested trustees. The Plan
and any related agreements may be terminated at any time, without any penalty:
1) by vote of a majority of the non-interested trustees on not more than 60
days' written notice, 2) by the Underwriter on not more than 60 days' written
notice, 3) by vote of a majority of the Fund's outstanding shares, on 60 days'
written notice, and 4) automatically by any act that terminates the Underwriting
Agreement with the Underwriter. The Underwriter or any dealer or other firm may
also terminate their respective agreements at any time upon written notice.
The Plan and any related agreement may not be amended to increase materially the amounts to be spent for distribution expenses without approval by a majority of the Fund's outstanding shares, and all material amendments to the Plan or any related agreements shall be approved by a vote of the non-interested trustees, cast in person at a meeting called for the purpose of voting on any such amendment.
The Underwriter is required to report in writing to the Board of Trustees of the Fund, at least quarterly, on the amounts and purpose of any payment made under the Plan, as well as to furnish the Board with such other information as may reasonably be requested in order to enable the Board to make an informed determination of whether the Plan should be continued.
TAXATION
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code").
In order to so qualify, a fund must, among other things (i) derive at least 90% of its gross income from dividends, interest, payments with respect to certain securities loans, gains from the sale of securities or foreign currencies, or other income (including but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities or currencies; (ii) derive less than 30% of its gross income from the sale or other disposition of stock or securities or certain futures and options thereon held for less than three months ("short-short gains"); (iii) distribute at least 90% of its dividends, interest and certain other taxable income each year; and (iv) at the end of each fiscal quarter maintain at least 50% of the value of its total assets in cash, government securities, securities of other regulated investment companies, and other securities of issuers which represent, with respect to each issuer, no more than 5% of the value of a fund's total assets and 10% of the outstanding voting securities of such issuer, and with no more than 25% of its assets invested in the securities (other than those of the government or other regulated investment companies) of any one issuer or of two or more issuers which the Fund controls and which are engaged in the same, similar or related trades and businesses.
To the extent the Fund qualifies for treatment as a regulated investment company, it will not be subject to federal income tax on income and net capital gains paid to shareholders in the form of dividends or capital gains distributions.
An excise tax at the rate of 4% will be imposed on the excess, if any, of the Fund's "required distributions" over actual distributions in any calendar year. Generally, the "required distribution" is 98% of a fund's ordinary income for the calendar year plus 98% of its capital gain net income recognized during the one-year period ending on December 31 plus undistributed amounts from prior years. The Fund intends to make distributions sufficient to avoid imposition of the excise tax. Distributions declared by the Fund during October, November or December to shareholders of record during such month and paid by January 31 of the following year will be taxable to shareholders in the calendar year in which they are declared, rather than the calendar year in which they are received.
Shareholders will be subject to federal income taxes on distributions made by
the Fund whether receivem in cash or additional shares of the Fund.
Distributions of net investment income and net short-term capital gains, if any,
will be taxable to shareholders as ordinary income. Distributions of net long-
term capital gains, if any, will be taxable to shareholders as long-term capital
gains, without regard to how long a shareholder has held shares of the Fund. A
loss on the sale of shares held for six months or less will be treated as a
long-term capital loss to the extent of any long-term capital gain dividend paid to the shareholder with respect to such shares. Dividends eligible for designation under the dividends received deduction and paid by the Fund may qualify in part for the 70% dividends received deduction for corporations provided, however, that those shares have been held for at least 45 days.
The Fund will notify shareholders each year of the amount of dividends and distributions, including the amount of any distribution of long-term capital gains, and the portion of its dividends which may qualify for the 70% deduction.
The foregoing is a general and abbreviated summary of the applicable provisions of the Code and Treasury regulations currently in effect. For the complete provisions, reference should be made to the pertinent Code sections and regulations. The Code and regulations are subject to change by legislative or administrative action at any time, and retroactively.
Each Class of shares of a Fund will share proportionately in the investment income and expenses of that Fund, except that each Fund will incur different distributions expenses.
Dividends and distributions also may be subject to state and local taxes.
Shareholders are urged to consult their tax advisors regarding specific questions as to federal, state and local taxes.
GENERAL INFORMATION
The accounts of the Fund are audited each year by Tait, Weller & Baker of Philadelphia, PA, independent certified public accountants whose selection must be ratified annually by the Board of Trustees.
Shareholders receive semi-annual and annual reports of the Fund including the annual audited financial statements and a list of securities owned.
As of April 1, 1996, the Trustees and officers of the Fund individually and as a group owned beneficially less than 1.00% of the outstanding shares of the Fund.
As of April 1, 1996, the following persons owned of record or exercised voting control over 5% of the outstanding shares of the Retail Class shares of the Fund:
Name & Address of Beneficial Owners Percentage - ----------------------------------- ---------- King Family Trust 9.12% Juno Beach, FL Semper Trust C/F, Benny J. King 7.07% Fenton, MO |
J. Darrell Shea and Ann M. Shea 7.05% Orlando, FL Semper Trust C/F David Corson 6.02% Cantonment FL |
PERFORMANCE
Performance information for the Institutional Class and Retail Class shares of the Fund will vary due to the effect of expense ratios on the performance calculations.
Current yield and total return may be quoted in advertisements, shareholder reports or other communications to shareholders. Yield is the ratio of income per share derived from the Fund's investments to a current maximum offering price expressed in terms of percent. The yield is quoted on the basis of earnings after expenses have been deducted. Total return is the total of all income and capital gains paid to shareholders, assuming reinvestment of all distributions, plus (or minus) the change in the value of the original investment, expressed as a percentage of the purchase price. Occasionally, the Fund may include its distribution rate in advertisements. The distribution rate is the amount of distributions per share made by the Fund over a 12-month period divided by the current maximum offering price.
U.S. Securities and Exchange Commission rules require the use of standardized performance quotations or, alternatively, that every non-standardized performance quotation furnished by the Fund be accompanied by certain standardized performance information computed as required by the Commission. Current yield and total return quotations used by the Fund are based on the standardized methods of computing performance mandated by the Commission. An explanation of those and other methods used by the Fund to compute or express performance follows.
As the following formula indicates, the average annual total return is determined by multiplying a hypothetical initial purchase order of $1,000 by the average annual compound rate of return (including capital appreciation/depreciation and dividends and distributions paid and reinvested) for the stated period less any fees charged to all shareholder accounts and annualizing the result. The calculation assumes the maximum sales load is deducted from the initial $1,000 purchase order and that all dividends and distributions are reinvested at the public offering price on the reinvestment dates during the period. The quotation assumes the account was completely redeemed at the end of each one, five and ten-year period and assumes the deduction of all applicable charges and fees. According to the SEC formula:
/n/
P(1+T) = ERV
where:
P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the one, five or ten-year periods, determined at the end
of the one, five or ten-year periods (or fractional portion thereof).
|
Based on the foregoing calculations, the average annual total return for Institutional Class shares, for the period March 21, 1994 (commencement of operations) through December 31, 1995, and for the fiscal year ended December 31, 1995, was 2.73% and 7.93%, respectively. The average annual total return for Retail Class Shares, for the period August 25, 1995 (commencement of operations) through
December 31, 1995 was (2.20%). This return is not annualized. Regardless of the method used, past performance is not necessarily indicative of future results, but is an indiaction of the return to shareholders only for the limited historical period used.
To help investors better evaluate how an investment in the Fund might satisfy their investment objective, advertisements regarding the Fund may discuss yield or total return for the Fund as reported by various financial publications. Advertisements may also compare yield or total return to yield or total return as reported by other investments, indices, and averages. The following publications, indices, and averages may be used:
Lipper Mutual Fund Performance Analysis;
Lipper Mutual Fund Indices;
CDA Weisenberger; and
Morningstar
From time to time, the Fund may also include in sales literature and advertising (including press releases) the Advisors comments on current news items, organizations which violate the Fund's philosophy (and are screened out as unacceptable portfolio holdings), channels of distribution and organizations which endorse the Fund as consistent with their philosophy of investment.
FINANCIAL STATEMENTS
The Fund's Financial Statements, including the notes thereto, dated December 31, 1995, which have been audited by Tait, Weller & Baker, are incorporated by reference from the Fund's 1995 Annual Report to Shareholder's.
INVESTMENT ADVISOR
Timothy Partners, Ltd.
1304 West Fairbanks Avenue
Winter Park, FL 32789
INVESTMENT MANAGER
Systematic Financial Management, L.P.
Two Executive Drive
Fort Lee, NJ 07024
UNDERWRITER
Fund/Plan Services, Inc.
Two West Elm Street
Conshohocken, PA 19428
SHAREHOLDER SERVICES
Fund/Plan Services, Inc.
Two West Elm Street
Conshohocken, PA 19428
CUSTODIAN
The Bank of New York
48 Wall Street
New York, New York 10286
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young,LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
AUDITORS
Tait, Weller & Baker
Two Penn Center
Suite 700
Philadelphia, PA 19102-1707
POST EFFECTIVE AMENDMENT NO. 4
TO REGISTRATION STATEMENT NO. 33-73248
ON FORM N-1A
PART C. OTHER INFORMATION.
(1) The Financial Highlights are included in Part A of this Registration
Statement on Form N-1A. The following audited Financial Statements are
incorporated by reference in Part B of this Registration Statement on
Form N1-A for the period ended December 31, 1995:
(i) Schedule of Investments at December 31, 1995.
(ii) Statement of Assets and Liabilities at December 31, 1995.
(iii) Statement of Operations for the period ended December 31, 1995.
(iv) Statement of Changes in Net Assets for the year ended December 31,
1995.
(v) Notes to Financial Statements.
(vi) Financial Highlights.
(vii) Report of Independent Accountants
(2) All required financial statements are included or incorporated by reference in Parts A and B hereof. All other financial statements and schedules are inapplicable.
(B) Exhibits:
(1) Agreement and Declaration of Trust Incorporated is filed herewith
electronically, previously filed as Exhibit 1 to Registrant's
Registration Statement on Form N-1A filed with the U.S. Securities and
Exchange Commission on December 21, 1993.
(2) By-Laws of Registrant dated January 19, 1994 is filed herewith
electronically, previously filed as, Exhibit No. 2 of the Fund's Pre-
Effective Amendment #1 filed on January 31, 1994.
(3) None
(4) Specimen Copy of each security to be issued by the registrant:
Registrant proposes to maintain investments as non-certificated book
entry shares.
(5) Investment Advisory Agreements:
(a)(i) Amendment dated August 28, 1995 to Investment Advisory
Agreement dated January 19, 1994 between Registrant and
Timothy Partners, LTD. is filed herewith electronically.
(a)(ii) Investment Advisory Agreement dated January 19, 1994 between
Registrant and Timothy Partners, Ltd. is filed herewith
electronically, previously filed as Exhibit No. (5) (a) (i) of
Pre-Effective Amendment No. 1 to Registrant's Registration
statement on Form N-1A filed on January 31, 1994.
(b)(ii) Sub-Investment Advisory Agreement dated May 15, 1995 between
Timothy Partners, Ltd., Systematic Financial Management L.P.
and the Fund is filed herewith electronically, previously
filed as Exhibit No. 5(a)(ii) to Post-Effective No. 3 filed on
June 28, 1995.
(6) (a) DISTRIBUTION AGREEMENTS:
(a)(i) Amendment dated February 23, 1996, to the Underwriting
Agreement dated January 19, 1994 between Registrant and
Fund/Plan Broker Services, Inc. is filed herewith
electronically.
(a)(ii) Underwriting Agreement dated January 19, 1994 between
Registrant and Fund/Plan Broker Services, Inc. is filed
herewith electronically, previously filed as Exhibit No. (6)
(a) (i) of Pre-Effective Amendment No. 1 to Registrant's
Registration Statement on Form N-1A filed on January 31, 1994.
(b) None
(7) None
(8) CUSTODIAN AGREEMENT
(a) Custodian Agreement between Registrant and The Bank of New York,
dated November 11, 1994 is incorporated herein by reference to
Exhibit No. (8) (a) of Pre-Effective Amendment No. 2 to
Registrant's Registration Statement on Form N-1A filed on April 28,
1995.
(9) OTHER MATERIAL CONTRACTS:
(a)(i) Amendment dated February 23, 1996, to Shareholder Services
Agreement dated January 19, 1994 between Registrant and Fund/Plan
Services, Inc. is filed herewith electronically.
(a)(ii) Shareholder Services Agreement dated January 19, 1994 between
Registrant and Fund/Plan Services, Inc. is filed herewith
electronically, previously filed as Exhibit No. (9)(a) of Pre-
Effective Amendment No. 1 to Registrant's Registration Statement on
Form N-1A, filed on January 31, 1994.
(b)(i) Amendment dated February 23, 1996, to Administration Agreement
dated January 19, 1994 between Registrant and Fund/Plan Services,
Inc. is filed herewith electronically.
(b)(ii) Administration Agreement dated January 19, 1994 between Registrant
and Fund/Plan Services, Inc. is filed herewith electronically,
previously filed as Exhibit No. (9)(b) of Pre-Effective Amendment
No. 1 to Registrant's Registration Statement on Form N-1A, filed on
January 31, 1994.
(c) Accounting Services Agreement dated February 23, 1996 between
Registrant and Fund/Plan Services, Inc. is filed herewith
electronically.
(d)(i) Amendment dated May 1, 1996 to Administrative Agreement dated
January 19, 1994 between Registrant and Covenant Financial
Management, Inc. is filed herewith electronically.
(d)(ii) Administrative Agreement dated January 19, 1994 between Registrant
and Covenant Financial Management, Inc. is filed herewith
electronically, previously filed as Exhibit No. (9) (d) of Pre-
Effective Amendment No. 1 to Registrants Registration Statement on
From N-1A, Filed on January 31, 1994.
(10) OPINION AND CONSENT OF COUNSEL AS TO THE LEGALITY OF THE SECURITIES TO
BE ISSUED:
(a) To be filed by the Registrant on a yearly basis along with its Rule
24f-2 Notice.
(b) Letter from Stradley, Ronon, Stevens & Young regarding the use of 485(b).
(11) CONSENTS
(a) Consent of Tait, Weller & Baker is filed herewith electronically.
(12) None.
(13) LETTERS OF UNDERSTANDING RELATING TO INITIAL CAPITAL:
(a) Investment letters between the Registrant and Phillis B. Crosby,
Michael J. Demaray, Thomas J. Snyder, William R. Cadle, Bernice I.
Cradle, Mary A. Gibson, Delbert E. Rich, Gwynn M. Reel, Charles E.
Davis, Gregory Tighe and Frank Salerno are filed herewith
electronically, previously filed as exhibit (13) of Pre-Effective
Amendment No. 1 of the Registrant's Registration Statement on Form
N-1A, filed on January 31, 1994.
(14) MODEL PLANS:
(a) Form of 403(b)(7) Retirement Plan is incorporated herein by reference
to exhibit (14)(a) of Post-Effective No. 1 of the Registrant's
Registration Statement on Form N-1A, filed on September 21, 1994.
(b) Form of Individual Retirement Account (I.R.A.) is filed herewith electronically, previously filed as exhibit (14)(b) of Post-Effective No. 1 of the Registrant's Registration Statement on Form N-1A, filed on September 21, 1994.
(15) PLANS UNDER 12b-1:
(a) Distribution Plan dated February 10, 1996, on behalf of Institutional Class shares is filed
herewith electronically.
(b) Distribution Plan dated February 10, 1996, on behalf of the Retail shares is filed herewith electronically.
(c) Shareholder Services Agreement dated January 1, 1996 between Timothy
Partners, Ltd. and Fund/Plan Broker Services, Inc. on behalf of the
Institutional Class shares is filed herewith electronically.
(d) Shareholder Services Agreement dated January 1, 1996 between Timothy
Partners, Ltd. and Fund/Plan Broker Services, Inc. on behalf of the
Retail Class shares is filed herewith electronically.
(16) Schedule of Computations of Performance Quotations is filed herewith
electronically.
(17) Financial Data Schedule is filed herewith electronically.
(18) Multiple Class plan is filed herewith electronically.
(19) Powers of Attorney are filed herewith electronically, previously filed as
Exhibit 18 of Post-Effective No. 2/3 of the Registration Statement on Form
N-1A, filed on April 28, 1995.
Number of Record Holders
TITLE OF CLASS as of April 1, 1996
--------------
Institutional Class Common Stock,
par value $0.001 per share 1200
Retail Class Common Stock,
par value $0.001 per share 205
|
The Delaware Business Trust Act, section 3817, permits a business trust to indemnify any Trustee, beneficial owner, or other person from and against any claims and demands whatsoever. Section 3803 protects a Trustee, when acting in such capacity, from liability to any person other than the business trust or beneficial owner for any act, omission, or obligation of the business trust or any Trustee thereof, except as otherwise provided in the Agreement and Declaration of Trust.
The Agreement and Declaration of Trust provides that the Trustees shall not be liable for any neglect or wrong-doing of any officer, agent, employee, manager or underwriter of the Fund, nor shall any Trustee be responsible for the act or By-Laws, the Fund may indemnify to the fullest extent each Trustee and officer of the Fund acting in such capacity, except each Trustee and officer of the Fund acting in such capacity, except as otherwise provided in the Agreement and Declaration of Trust.
The Agreement and Declaration of Trust provides that the Trustees shall not be liable for any neglect or wrong-doing of any officer, agent, employee, manager or underwriter of the Fund, nor shall any Trustee be responsible for
the act or omission of any other Trustee. Subject to the provisions of ;the By- Laws, the Fund may indemnify to the fullest extent each Trustee and officer of the Fund acting in such capacity, except that no provision in the Agreement and Declaration of Trust shall be effective to protect or purport to protect and indemnify any Trustee or officer of the Fund from or against any liability to the Fund or any shareholder to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.
The By-Laws provide indemnification for each Trustee and officer who is a party or is threatened to be made a party to any proceeding, by reason of service in such capacity, to the fullest extent, if it is determined that Trustee or officer acted in good faith and reasonably believed: (a) in the case of conduct in his official capacity as an agent of the Fund, that his conduct was in the Fund's best interests and (b) in all other cases, that his conduct was at least not opposed to the Fund's best interests and (c) in the case of a criminal proceeding, that he had no reasonable cause to believe the conduct of that person was unlawful. However, there shall be no indemnification for any liability arising by reason of willful misfeasance, bad faith, gross negligence, or the reckless disregard of the duties involved in the conduct of the Trustee's or officer's office. Further, no indemnification shall be made:
(a) In respect of any proceeding as to which any Trustee or officer of the Fund
shall have been adjudged to be liable on the basis that personal benefit
was improperly received by him, whether or not the benefit resulted from an
action taken in the person's official capacity; or
(b) In respect of any proceeding as to which any Trustee or officer of the Fund
shall have been adjudged to be liable in the performance of that person's
duty to the Fund, unless and only to the extent that the court in which
that action was brought shall determine upon application that in view of
all the relevant circumstances of the case, that person is fairly and
reasonably entitled to indemnity for the expenses which the court shall
determine; however, in such case, indemnification with respect to any
proceeding by or in the right of the Fund or in which liability shall have
been adjudged by reason of the disabling conduct set forth in the preceding
paragraph shall be limited to expenses; or
(c) Of amounts paid in settling or otherwise disposing of a proceeding, with or
without court approval, or of expenses incurred in defending a proceeding
which is settled or otherwise disposed of without court approval, unless
the required court approval set forth in the By-Laws is obtained.
In any event, the Fund shall indemnify each officer and Trustee against reasonable expenses incurred in connection with the successful defense of any proceeding to which each such officer or Trustee is a party by reason of service in such Capacity, provided that the Board of Trustees, including a majority who are disinterested, non-party Trustees, also determines that such officer or Trustee was not liable by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of his or her duties or office. The Fund shall advance to each officer and Trustee who is made a party to the proceeding by reason of service in such capacity the expenses incurred by such person in connection therewith, if (a) the officer or Trustee affirms in writing that his good faith belief that he has met the standard of conduct necessary for indemnification, and gives a written undertaking to repay the amount of advance if it is ultimately determined that he has not met those requirements, and (b) a determination that the facts then known to those making the determination would not preclude indemnification.
The Trustees and officers of the Fund are entitled and empowered under the Declaration of Trust and By-Laws, to the fullest extent permitted by law, to purchase errors and omissions liability insurance with assets of the Fund, whether or not the fund would have the power to indemnify him against such liability under the Declaration of Trust or By-Laws.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to Trustees, officers, the underwriter or control persons of the Registrant pursuant to the foregoing provisions, the Registrant has been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in that Act and is, therefore, unenforceable. See also Item 32.
Timothy Partners, Ltd. ("Advisor") serves as investment advisor of the Fund. The following persons serving as directors or officers of the Advisor have held the following positions with the Advisor for the past two years.
Position and Positions with
Name and Offices with Offices with
Business Address Timothy Partners, Ltd. the Registrant
- --------------------- ---------------------- --------------
Arthur D. Ally President of Covenant President and
Fund, Inc.; Managing Trustee
General Partner of
Timothy Partners, Ltd.
and Individual General
Partner of Timothy
Partners, Ltd.
|
Covenant Financial Management, Inc. is a marketing/ consulting firm owned by Arthur Ally that will render consulting advise to the Advisor with regard to marketing plans to be employed to target potential investor groups that might be interested in investing in the Fund because of its investment objectives and criteria.
(a) Fund/Plan Broker Services, Inc. ("FPBS"), the principal underwriter for the Registrant's securities, currently acts as principal underwriter for the following entities:
The Brinson Funds
CT&T Funds
Fairport Funds
First Mutual Funds
Focus Trust, Inc.
The HomeState PA Growth Fund
IAA Trust Mutual Funds
Matthews International
McM Funds
Smith Breeden Series Fund
Smith Breeden Short Duration U.S. Government Fund
Smith Breeden Trust
The Stratton Funds, Inc.
Stratton Growth Fund, Inc.
Stratton Monthly Dividend Shares,Inc.
The Timothy Plan
(b) The table below sets forth certain information as to the Underwriter's Directors, Officers and Control Persons:
Name and Principal Position and Offices Position and Offices Business Address with Underwriter with Registrant - ------------------------------ -------------------- -------------------- Kenneth J. Kempf Director and None Two West Elm Street President Conshohocken, PA 19428-0874 Lynne Cannon Senior Vice None Two West Elm Street President Conshohocken, PA 19428-0874 Rocco J. Cavalieri Director and None Two West Elm Street Vice President Conshohocken, PA 19428-0874 |
Gerald J. Holland Director and None Two West Elm Street Vice President Conshohocken PA 19428-0874 Joseph M. O'Donnell, Esq. Director and None Two West Elm Street Vice President Conshohocken, PA 19428-0874 Sandra L. Adams Principal None Two West Elm Street Conshohocken, PA 19428-0874 John H. Leven Treasurer None Two West Elm Street Conshohocken, PA 19428-0874 Mary P. Efstration Secretary None Two West Elm Street Conshohocken, PA 19428-0874 |
James W. Stratton may be considered a control person of the Underwriter due to his direct or indirect ownership of Fund/Plan Services, Inc., the parent of the Underwriter.
(c) Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, as amended, the Registrant hereby certifies that it meets all of the requirements for effectiveness of this Post-Effective Amendment No. 4 to its Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-Effective Amendment No. 2 to its Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized, in Winter Park, State of Florida, on the 26th day of April, 1996.
THE TIMOTHY PLAN
By: /s/ Arthur D. Ally
----------------------------------------------------
Arthur D. Ally, President & Trustee
|
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 4 to the Registrant's Registration Statement has been signed below by the following persons in the capacities indicated.
Signature Title Date - ---------------------------- --------------------- -------------- /s/ Arthur D. Ally* President and Trustee April 26, 1996 - ---------------------------- /s/ Joseph E. Boatwright* Secretary and Trustee April 26, 1996 - ---------------------------- /s/ Wesley Pennington* Trustee and Treasurer April 26, 1996 - ---------------------------- /s/ Mark Schweizer* Trustee April 26, 1996 - ---------------------------- |
*By: /s/ Gretchen B. Zepernick
-------------------------
Gretchen B. Zepernick, as Attorney-in-Fact & Agent, pursuant to Power of
Attorney
|
INDEX TO EXHIBITS ON FORM N-1A
EXHIBIT SEQUENTIAL PAGE NUMBERS 1 Agreement and Declaration of Trust 77 2 By-Laws 92 5(a)(i) Amendment to Investment Advisory Agreement 99 5(a)(ii) Investment Advisory Agreement 100 5(b)(i) Sub-Investment Advisory Agreement 103 6(a)(i) Amendment to Underwriting Agreement 106 6(a)(ii) Underwriting Agreement 110 9(a)(i) Amendment to Shareholder Services Agreement 117 9(a)(ii) Shareholder Services Agreement 120 9(b)(i) Amendment to Adminstration Agreement 129 9(b)(ii) Administration Agreement 139 9(c) Accounting Services Agreement 148 9(d)(i) Amendment to Administration Agreement with Covenant Financial Management 162 9(d)(ii) Administration Agreement with Covenant Financial Management 163 10(b) Letter from Stradley, Ronon, Stevens & Young 165 11(a) Auditors Consent 166 13(a) Letters of Understanding Relating to Initial Capital 167 14(b) Form of Individual Retirement 179 15(a) Distribution Plan on behalf of Institutional Class shares 190 15(b) Distribution Plan on behalf of Retail Class shares 192 15(c) Shareholder Services Agreement on behalf of Institutional Class shares 194 15(d) Shareholder Services Agreement on behalf of Retail Class shares 196 16 Schedule of Computations of Performance Quotations 198 18 Multiple Class Plan 199 19 Powers of Attorney 201 |
Exhibit 1
Effective as of
December 16, 1993
AGREEMENT AND DECLARATION OF TRUST
of
THE TIMOTHY PLAN
a Delaware Business Trust
Principal Place of Business:
222 West Comstock Avenue, Suite 115
Winter Park, Florida 32789
Page
ARTICLE I........................................................................... 1
Name and Definitions................................................................ 1
Section 1. Name................................................................ 1
Section 2. Definitions......................................................... 1
(a) Trust........................................................... 1
(b) Trust Property.................................................. 1
(c) Trustees........................................................ 1
(d) Shares.......................................................... 2
(e) Shareholder..................................................... 2
(f) Person.......................................................... 2
(g) 1940 Act........................................................ 2
(h) Commission and Principal Underwriter............................ 2
(i) Declaration of Trust............................................ 2
(j) By-Laws......................................................... 2
(k) Interested Person............................................... 2
(l) Investment Manager.............................................. 2
(m) Series.......................................................... 2
ARTICLE II.......................................................................... 2
Purpose of Trust................................................................ 2
ARTICLE III......................................................................... 3
Shares.......................................................................... 3
Section 1. Division of Beneficial Interest..................................... 3
Section 2. Ownership of Shares................................................. 3
Section 3. Investments in the Trust............................................ 4
Section 4. Status of Shares and Limitation of Personal Liability............... 4
Section 5. Power of Board of Trustees to Change Provisions Relating to Shares.. 4
Section 6. Establishment and Designation of Shares............................. 5
(a) Assets Held with Respect to a Particular Series................. 5
(b) Liabilities Held with Respect to a Particular Series............ 5
(c) Dividends, Distributions, Redemptions, and Repurchases.......... 6
(d) Voting.......................................................... 6
(e) Equality........................................................ 6
(f) Fractions....................................................... 7
(g) Exchange Privilege.............................................. 7
(h) Combination of Series........................................... 7
(i) Elimination of Series........................................... 7
ARTICLE IV.......................................................................... 7
The Board of Trustees.............................................................. 7
Section 1. Number, Election and Tenure......................................... 7
Section 2. Effect of Death, Resignation, etc. of a Trustee..................... 8
Section 3. Powers.............................................................. 8
Section 4. Payment of Expenses by the Trust.................................... 11
Section 5. Ownership of Assets of the Trust.................................... 12
Section 6. Service Contracts................................................... 12
ARTICLE V........................................................................... 13
Shareholders' Voting Powers and Meetings........................................... 13
Section 1. Voting Powers....................................................... 13
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Section 2. Voting Power and Meetings.......................................... 14
Section 3. Quorum and Required Vote........................................... 14
Section 4. Action by Written Consent.......................................... 14
Section 5. Record Dates....................................................... 14
ARTICLE VI......................................................................... 15
Net Asset Value, Distributions, and Redemptions................................... 15
Section 1. Determination of Net Asset Value, Net Income, and Distributions.... 15
Section 2. Redemptions and Repurchases........................................ 15
Section 3. Redemptions at the Option of the Trust............................. 16
Section 4. Transfer of Shares................................................. 16
ARTICLE VII........................................................................ 16
Compensation and Limitation of Liability.......................................... 16
Section 1. Compensation of Trustees........................................... 16
Section 2. Indemnification and Limitation of Liability........................ 16
Section 3. Trustee's Good Faith Action, Expert Advice, No Bond or Surety...... 17
Section 4. Insurance.......................................................... 17
ARTICLE VIII....................................................................... 17
Miscellaneous..................................................................... 17
Section 1. Liability of Third Persons Dealing with Trustees................... 17
Section 2. Termination of Trust or Series..................................... 18
Section 3. Merger and Consolidation........................................... 18
Section 4. Amendments......................................................... 18
Section 5. Filing of Copies, References, Headings............................. 19
Section 6. Applicable Law..................................................... 19
Section 7. Provisions in Conflict with Law or Regulations..................... 19
Section 8. Business Trust Only................................................ 20
Section 9. Use of the Name "Timothy Plan"..................................... 20
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AGREEMENT AND DECLARATION OF TRUST
OF
THE TIMOTHY PLAN
WHEREAS, this AGREEMENT AND DECLARATION OF TRUST is made and entered into as of the date set forth below by the Trustees named hereunder for the purpose of forming a Delaware business trust in accordance with the provisions hereinafter set forth,
NOW, THEREFORE, the Trustees hereby direct that a Certificate of Trust be filed with the Office of the Secretary of State of the State of Delaware and do hereby declare that the Trustees will hold IN TRUST all cash, securities and other assets which the Trust now possesses or may hereafter acquire from time to time in any manner and manage and dispose of the same upon the following terms and conditions for the pro rata benefit of the holders of Shares in this Trust.
ARTICLE I.
Name and Definitions
Section 1. Name. This trust shall be known as "THE TIMOTHY PLAN" and the
Trustees shall conduct the business of the Trust under that name or any other
name as they may from time to time determine.
Section 2. Definitions. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) The "Trust" refers to the Delaware business trust established by this
Agreement and Declaration of Trust, as amended from time to time;
(b) The "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust;
(c) "Trustees" refers to the persons who have signed this Agreement and
Declaration of Trust, so long as they continue in office in accordance with the
terms hereof, and all other persons who may from time to-time be duly elected or
appointed to serve on the Board of Trustees in accordance with the provisions
hereof, and reference herein to a Trustee or the Trustees shall refer to such
person or persons in their capacity as trustees hereunder;
(d) "Shares" means the shares of beneficial interest into which the
beneficial interest in the Trust shall be divided from time to time and includes
fractions of Shares as well as whole Shares;
(e) "Shareholder" means a record owner of outstanding Shares;
(f) "Person" means and includes individuals, corporations,
partnerships, trusts, foundations, plans, associations, joint ventures, estates
and other entities, whether or not legal entities, and governments and agencies
and political subdivisions thereof, whether domestic or foreign;
(g) The "1940 Act" refers to the Investment Company Act of 1940 and the
Rules and Regulations thereunder, all as amended from time to time. References
herein to specific sections of the 1940 Act shall be deemed to include such
Rules and Regulations as are applicable to such sections as determined by the
Trustees or their designees;
(h) The terms "Commission" and "Principal Underwriter" shall have the
respective meanings given them in Section 2(a)(7) and Section (2)(a)(29) of the
1940 Act;
(i) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust, as amended or restated from time to time;
(j) "By-Laws" shall mean the By-Laws of the Trust as amended from time to
time;
(k) The term "Interested Person" has the meaning given it in Section
2(a)(19) of the 1940 Act;
(l) "Investment Manager" or "Manager" means a party furnishing services
to the Trust pursuant to any contract described in Article IV, Section 7(a)
hereof;
(m) "Series" refers to each Series of Shares established and designated
under or in accordance with the provisions of Article III.
ARTICLE II.
Purpose of Trust
The purpose of the Trust is to conduct, operate and carry on the business of a management investment company registered under the 1940 Act through one or more Series investing primarily in securities.
ARTICLE III.
Shares
Section 1. Division of Beneficial Interest. The beneficial interest in the Trust shall at all times be divided into an unlimited number of Shares, with a par value of $ .001 per Share. The Trustees may authorize the division of Shares into separate Series and the division of Series into separate classes of Shares. The different Series shall be established and designated, and the variations in the relative rights and preferences as between the different Series shall be fixed and determined, by the Trustees. If only one Series shall be established, the Shares shall have the rights and preferences provided for herein and in Article III, Section 6 hereof to the extent relevant and not otherwise provided for herein.
Subject to the provisions of Section 6 of this Article III, each Share shall have voting rights as provided in Article V hereof, and holders of the Shares of any Series shall be entitled to receive dividends, when, if and as declared with respect thereto in the manner provided in Article VI, Section 1 hereof. No Share shall have any priority or preference over any other Share of the same Series with respect to dividends or distributions of the Trust or otherwise. All dividends and distributions shall be made ratably among all Shareholders of a Series (or class) from the assets held with respect to such Series according to the number of Shares of such Series (or class) held of record by such Shareholders on the record date for any dividend or distribution or on the date of termination of the Trust, as the case may be. Shareholders shall have no preemptive or other right to subscribe to any additional Shares or other securities issued by the Trust or any Series. The Trustees may from time to time divide or combine the Shares of a Series into a greater or lesser number of Shares of such Series without thereby materially changing the proportionate beneficial interest of such Shares in the assets held with respect to that Series or materially affecting the rights of Shares of any other Series.
Section 2. Ownership of Shares. The Ownership of Shares shall be recorded on the books of the Trust or a transfer or similar agent for the Trust, which books shall be maintained separately for the Shares of each Series. No certificates evidencing the Ownership of Shares shall be issued except as the Board of Trustees may otherwise determine from time to time. The Trustees may make such rules as they consider appropriate for the transfer of Shares of each Series (or class) and similar matters. The record books of the Trust as kept by the Trust or any transfer or similar agent, as the case may be, shall be conclusive as to the identity of the Shareholders of each Series and as to the number of Shares of each Series held from time to time by each Shareholder.
Section 3. Investments in the Trust. Investments may be accepted by the Trust from such Persons, at such times, on such terms, and for such consideration as the Trustees from time to time may authorize. Each investment shall be credited to the Shareholder's account in the form of full and fractional Shares of the Trust, in such Series (or class) as the purchaser shall select, at the net asset value per Share next determined for such Series (or class) after receipt of the investment; provided, however, that the Trustees may, in their sole discretion, impose a sales charge or reimbursement fee upon investments in the Trust.
Section 4. Status of Shares and Limitation of Personal Liability. Shares shall be deemed to be personal property giving only the rights provided in this instrument and the By-Laws of the Trust. Every Shareholder by virtue of having become a Shareholder shall be held to have expressly assented and agreed to the terms hereof. The death of a Shareholder during the existence of the Trust shall not operate to terminate the Trust, nor entitle the representative of any deceased Shareholder to an accounting or to take any action in court or elsewhere against the Trust or the Trustees, but shall entitle such representative only to the rights of said deceased Shareholder under this Declaration of Trust. Ownership of Shares shall not entitle a Shareholder to any title in or to the whole or any part of the Trust Property or right to call for a partition or division of the same or for an accounting, nor shall the Ownership of Shares constitute the Shareholders as partners or joint venturers. Neither the Trust nor the Trustees, nor any officer, employee or agent of the Trust shall have any power to bind personally any Shareholder, or to call upon any Shareholder for the payment of any sum of money or assessment whatsoever other than such as the Shareholder may at any time agree to pay.
Section 5. Power of Board of Trustees to Change Provisions Relating to Shares. Notwithstanding any other provision of this Declaration of Trust to the contrary, and without limiting the power of the Board of Trustees to amend the Declaration of Trust as provided elsewhere herein, the Board of Trustees shall have the power to amend this Declaration of Trust, at any time and from time to time, in such manner as the Board of Trustees may determine
in their sole discretion, without the need for Shareholder action, so as to add to, delete, replace or otherwise modify any provisions relating to the Shares contained in this Declaration of Trust, provided that before adopting any such amendment without Shareholder approval the Board of Trustees shall determine that it is consistent with the fair and equitable treatment of all Shareholders and that Shareholder approval is not required by the 1940 Act or other applicable law. If Shares have been issued, Shareholder approval shall be required to adopt any amendments to this Declaration of Trust which would adversely affect to a material degree the rights and preferences of the Shares of any Series (or class) or to increase or decrease the par value of the Shares of any Series (or class).
Section 6. Establishment and Designation of Shares. The establishment and designation of any Series (or class) of Shares shall be effective upon the adoption by a majority of the Trustees, of a resolution which sets forth such establishment and designation and the relative rights and preferences of such Series (or class). Each such resolution shall be incorporated herein by reference upon adoption.
Shares of each Series (or class) established pursuant to this Section 6, unless otherwise provided in the resolution establishing such Series, shall have the following relative rights and preferences:
(a) Assets Held with Respect to a Particular Series. All consideration received by the Trust for the issue or sale of Shares of a Series, including dividends and distributions paid by, and reinvested in, such Series, together with all assets in which such consideration is invested or reinvested, all income, earnings, profits, and proceeds thereof from whatever source derived, including, without limitation, any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be, shall irrevocably be held with respect to that Series for all purposes, subject only to the rights of creditors, and shall be so recorded upon the books of account of the Trust. Such consideration, assets, income, earnings, profits and proceeds thereof, from whatever source derived, including, without limitation, any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds, in whatever form the same may be, are herein referred to as "assets held with respect to" that Series. In the event that there are any assets, income, earnings, profits and proceeds thereof, funds or payments which are not readily identifiable as assets held with respect to any particular Series (collectively "General Assets"), the Trustees shall allocate such General Assets to, between or among any one or more of the Series in such manner and on such basis as the Trustees, in their sole discretion, deem fair and equitable, and any General Asset so allocated to a particular Series shall be held with respect to that Series. Each such allocation by the Trustees shall be conclusive and binding upon the Shareholders of all Series for all purposes in absence of manifest error.
(b) Liabilities Held with Respect to a Particular Series. The assets of the Trust held with respect to each Series shall be charged with the liabilities of the Trust with respect to such Series and all expenses, costs, charges and reserves attributable to such Series, and any general liabilities of the Trust which are not readily identifiable as being held in respect of a Series shall be allocated and charged by the Trustees to and among any one or more Series in such manner and on such basis as the Trustees in their sole discretion deem fair and equitable. The liabilities, expenses, costs, charges, and reserves so charged to a Series are herein referred to as "liabilities held with respect to" that Series. Each allocation of liabilities, expenses, costs, charges and reserves by the Trustees shall be conclusive and binding upon the holders of all Series for all purposes in absence of manifest error. All Persons who have extended credit which has been allocated to a particular Series, or who have a claim or contract which has been allocated to a Series, shall look exclusively to the assets held with respect to such Series for payment of such credit, claim, or contract. In the absence of an express agreement so limiting the claims of such creditors, claimants and contracting parties, each creditor, claimant and contracting party shall be deemed nevertheless to have agreed to such limitation unless an express provision to the contrary has been incorporated in the written contract or other document establishing the contractual relationship.
(c) Dividends, Distributions, Redemptions, and Repurchases. No dividend or distribution including, without limitation, any distribution paid upon termination of the Trust or of any Series (or class) with respect to, or any redemption or repurchase of, the Shares of any Series (or class) shall be effected by the Trust other than from the assets held with respect to such Series, nor shall any Shareholder of any Series otherwise have any right or claim against the assets held with respect to any other Series except to the extent that such Shareholder has such a right or claim hereunder as a Shareholder of such other Series. The Trustees shall have full discretion to determine which items shall be treated as income and which items as capital; and each such determination and allocation shall be conclusive and binding upon the Shareholders in absence of manifest error.
(d) Voting. All Shares of the Trust entitled to vote on a matter shall vote without differentiation between the
separate Series on a one-vote-per-Share basis; provided however, if a matter to be voted on affects only the interests of not all Series (or class of a Series), then only the Shareholders of such affected Series (or class) shall be entitled to vote on the matter.
(e) Equality. All the Shares of each Series shall represent an equal proportionate undivided interest in the assets held with respect to such Series (subject to the liabilities of such Series and such rights and preferences as may have been established and designated with respect to classes of Shares within such Series), and each Share of a Series shall be equal to each other Share of such Series.
(f) Fractions. Any fractional Share of a Series shall have proportionately all the rights and obligations of a whole share of such Series, including rights with respect to voting, receipt of dividends and distributions and redemption of Shares.
(g) Exchange Privilege. The Trustees shall have the authority to provide that the holders of Shares of any Series shall have the right to exchange such Shares for Shares of one or more other Series in accordance with such requirements and procedures as may be established by the Trustees.
(h) Combination of Series. The Trustees shall have the authority, without the approval of the Shareholders of any Series unless otherwise required by applicable law, to combine the assets and liabilities held with respect to any two or more Series into assets and liabilities held with respect to a single Series.
(i) Elimination of Series. At any time that there are no Shares outstanding of a Series (or class), the Trustees may abolish such Series (or class).
ARTICLE IV.
The Board of Trustees
Section 1. Number, Election and Tenure. The number of Trustees constituting the Board of Trustees shall be fixed from time to time by a written instrument signed, or by resolution approved at a duly constituted meeting, by a majority of the Board of Trustees, provided, however, that the number of Trustees shall in no event be less than one (1) nor more than fifteen (15). Subject to the requirements of Section 16(a) of the 1940 Act, the Board of Trustees, by action of a majority of the then Trustees at a duly constituted meeting, may fill vacancies in the Board of Trustees and remove Trustees with or without cause. Each Trustee shall serve during the continued lifetime of the Trust until he or she dies, resigns, is declared bankrupt or incompetent by a court of competent jurisdiction, or is removed. Any Trustee may resign at any time by written instrument signed by him and delivered to any officer of the Trust or to a meeting of the Trustees. Such resignation shall be effective upon receipt unless specified to be effective at some other time. Except to the extent expressly provided in a written agreement with the Trust, no Trustee resigning and no Trustee removed shall have any right to any compensation for any period following his or her resignation or removal, or any right to damages or other payment on account of such removal. Any Trustee may be removed at any meeting of Shareholders by a vote of two-thirds of the outstanding Shares of the Trust. A meeting of Shareholders for the purpose of electing or removing one or more Trustees may be called (i) by the Trustees upon their own vote, or (ii) upon the demand of Shareholders owning 10% or more of the Shares of the Trust in the aggregate.
Section 2. Effect of Death Resignation etc. of a Trustee. The death, declination, resignation, retirement, removal, or incapacity of one or more Trustees, or all of them, shall not operate to annul the Trust or to revoke any existing agency created pursuant to the terms of this Declaration of Trust. Whenever a vacancy in the Board of Trustees shall occur, until such vacancy is filled as provided in Article IV, Section 1, the Trustees in office, regardless of their number, shall have all the powers granted to the Trustees and shall discharge all the duties imposed upon the Trustees by this Declaration of Trust.
Section 3. Powers. Subject to the provisions of this Declaration of Trust, the business of the Trust shall be managed by the Board of Trustees, and such Board shall have all powers necessary or convenient to carry out that responsibility including the power to engage in transactions of all kinds on behalf of the Trust. Trustees, in all instances, shall act as principals and are and shall be free from the control of the Shareholders. The Trustees shall have full power and authority to do any and all acts and to make and execute any and all contracts, documents and instruments that they may consider desirable, necessary or appropriate in connection with the administration of the Trust. Without limiting the foregoing, the Trustees may: adopt, amend and repeal By- Laws not inconsistent with this Declaration of Trust providing for the regulation and management of the affairs of the Trust; elect and remove
such officers and appoint and terminate such agents as they consider appropriate; appoint from their own number and establish and terminate one or more committees consisting of two or more Trustees who may exercise the powers and authority of the Board of Trustees to the extent that the Trustees determine; employ one or more custodians of the assets of the Trust and may authorize such custodians to employ subcustodians and to deposit all or any part of such assets in a system or systems for the central handling of securities or with a Federal Reserve Bank, retain a transfer agent or a shareholder servicing agent, or both; provide for the issuance and distribution of Shares by the Trust directly or through one or more Principal Underwriters or otherwise; redeem, repurchase and transfer Shares pursuant to applicable law; set record dates for the determination of Shareholders with respect to various matters; declare and pay dividends and distributions to Shareholders of each Series from the assets of such Series; establish from time to time, in accordance with the provisions of Article III, Section 6 hereof, any Series of Shares, each such Series to operate as a separate and distinct investment medium and with separately defined investment objectives and policies and distinct investment purpose; and in general delegate such authority as they consider desirable to any officer of the Trust, to any committee of the Trustees and to any agent or employee of the Trust or to any such custodian, transfer or shareholder servicing agent, Investment Manager or Principal Underwriter. Any determination as to what is in the interests of the Trust made by the Trustees in good faith shall be conclusive. In construing the provisions of this Declaration of Trust, the presumption shall be in favor of a grant of power to the Trustees and unless otherwise specified herein or required by the 1940 Act or other applicable law, any action by the Board of Trustees shall be deemed effective if approved or taken by a majority of the Trustees then in office or a majority of any duly constituted committee of Trustees. Any action required or permitted to be taken at any meeting of the Board of Trustees, or any committee thereof, may be taken without a meeting if all members of the Board of Trustees or committee (as the case may be) consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of the Board of Trustees, or committee, except as otherwise provided in the 1940 Act.
Without limiting the foregoing, the Trust shall have power and authority:
(a) To invest and reinvest cash and cash items, to hold cash uninvested, and to subscribe for, invest in, reinvest in, purchase or otherwise acquire, own, hold, pledge, sell, assign, transfer, exchange, distribute, write options on, lend or otherwise deal in or dispose of contracts for the future acquisition or delivery of all types of securities, futures contracts and options thereon, and forward currency contracts of every nature and kind, including, without limitation, all types of bonds, debentures, stocks, preferred stocks, negotiable or non-negotiable instruments, obligations, evidences of indebtedness, certificates of deposit or indebtedness, commercial paper, repurchase agreements, bankers' acceptances, and other securities of any kind, issued, created, guaranteed, or sponsored by any and all Persons, including, without limitation, states, territories, and possessions of the United States and the District of Columbia and any political subdivision, agency, or instrumentality thereof, any foreign government or any political subdivision of the U.S. Government or any foreign government, or any international instrumentality or organization, or by any bank or savings institution, or by any corporation or organization organized under the laws of the United States or of any state, territory, or possession thereof, or by any corporation or organization organized under any foreign law, or in "when issued" contracts for any such securities, futures contracts and options thereon, and forward currency contracts, to change the investments of the assets of the Trust; and to exercise any and all rights, powers, and privileges of ownership or interest in respect of any and all such investments of every kind and description, including, without limitation, the right to consent and otherwise act with respect thereto, with power to designate one or more Persons, to exercise any of said rights, powers, and privileges in respect of any of said instruments;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, lease, or write options with respect to or otherwise deal in any property rights relating to any or all of the assets of the Trust or any Series;
(c) To vote or give assent, or exercise any rights of ownership, with respect to stock or other securities or property; and to execute and deliver proxies or powers of attorney to such person or persons as the Trustees shall deem proper, granting to such person or persons such power and discretion with relation to securities or property as the Trustees shall deem proper;
(d) To exercise powers and right of subscription or otherwise which in any manner arise out of Ownership of securities;
(e) To hold any security or property in a form not indicating that it is trust property, whether in bearer, unregistered or other negotiable form, or in its own name or in the name of a custodian or subcustodian or a nominee or nominees or otherwise or to authorize the custodian or a subcustodian or a nominee or nominees to
deposit the same in a securities depository, subject in each case to the applicable provisions of the 1940 Act;
(f) To consent to, or participate in, any plan for the reorganization, consolidation or merger of any corporation or issuer of any security which is held in the Trust; to consent to any contract, lease, mortgage, purchase or sale of property by such corporation or issuer; and to pay calls or subscriptions with respect to any security held in the Trust;
(g) To join with other security holders in acting through a committee, depositary, voting trustee or otherwise, and in that connection to deposit any security with, or transfer any security to, any such committee, depositary or trustee, and to delegate to them such power and authority with relation to any security (whether or not so deposited or transferred) as the Trustees shall deem proper, and to agree to pay, and to pay, such portion of the expenses and compensation of such committee, depositary or trustee as the Trustees shall deem proper;
(h) To litigate, compromise, arbitrate, settle or otherwise adjust claims in favor of or against the Trust or a Series, or any matter in controversy, including but not limited to claims for taxes;
(i) To enter into joint ventures, general or limited partnerships and any
other combinations or associations;
(j) To borrow funds or other property in the name of the Trust or Series
exclusively for Trust purposes;
(k) To endorse or guarantee the payment of any notes or other obligations of any Person; to make contracts of guaranty or suretyship, or otherwise assume liability for payment thereof;
(1) To purchase and pay for entirely out of Trust Property such insurance as the Trustees may deem necessary, desirable or appropriate for the conduct of the business, including, without limitation, insurance policies insuring the assets of the Trust or payment of distributions and principal on its portfolio investments, and insurance policies insuring the Shareholders, Trustees, officers, employees, agents, Investment Manager, principal underwriters, or independent contractors of the Trust, individually against all claims and liabilities of every nature arising by reason of holding Shares, holding, being or having held any such office or position, or by reason of any action alleged to have been taken or omitted by any such Person as Trustee, officer, employee, agent, Investment Manager, Principal Underwriter, or independent contractor, including any action taken or omitted that may be determined to constitute negligence, whether or not the Trust would have the power to indemnify such Person against liability; and
(m) To adopt, establish and carry out pension, profit-sharing, share bonus, share purchase, savings, thrift and other retirement, incentive and benefit plans, trusts and provisions, including the purchasing of life insurance and annuity contracts as a means of providing such retirement and other benefits, for any or all of the Trustees, officers, employees and agents of the Trust.
The Trust shall not be limited to investing in obligations maturing before the possible termination of the Trust or one or more of its Series. The Trust shall not in any way be bound or limited by any present or future law or custom in regard to investment by fiduciaries. The Trust shall not be required to obtain any court order to deal with any assets of the Trust or take any other action hereunder.
(a) The Trustees may, at any time and from time to time, contract for exclusive or nonexclusive advisory, management and/or administrative services for the Trust or for any Series with any Person; and any such contract may contain such other terms as the Trustees may determine, including without limitation, authority for the Investment Manager to determine from time to time without prior consultation with the Trustees what investments shall be purchased, held, sold or exchanged and what portion, if any, of the assets of the Trust shall be held uninvested and to make changes in the Trust's investments, and such other responsibilities as may specifically be delegated to such Person.
(b) The Trustees may also, at any time and from time to time, contract with any Persons, appointing such Persons exclusive or nonexclusive distributor or Principal Underwriter for the Shares of one or more of the Series or other securities to be issued by the Trust. Every such contract may contain such other terms as the Trustees may determine.
(c) The Trustees are also empowered, at any time and from time to time, to contract with any Persons, appointing such Person(s) to serve as custodian(s), transfer agent and/or shareholder servicing agent for the Trust or one or more of its Series. Every such contract shall comply with such terms as may be required by the Trustees.
(d) The Trustees are further empowered, at any time and from time to time, to contract with any Persons to provide such other services to the Trust or one or more of the Series, as the Trustees determine to be in the best interests of the Trust and the applicable Series.
(e) The fact that:
(i) any of the Shareholders, Trustees, or officers of the Trust is a shareholder, director, officer, partner, trustee, employee, Manager, adviser, Principal Underwriter, distributor, or affiliate or agent of or for any Person with which an advisory, management or administration contract, or Principal Underwriter's or distributor's contract, or transfer, shareholder servicing or other type of service contract may be made, or that
(ii) any Person with which an advisory, management or administration contract or Principal Underwriter's or distributor's contract, or transfer, shareholder servicing or other type of service contract may be made also has an advisory, management or administration contract, or principal underwriter's or distributor's contract, or transfer, shareholder servicing or other service contract, or has other business or interests with any other Person, shall not affect the validity of any such contract or disqualify any Shareholder, Trustee or officer of the Trust from voting upon or executing the same, or create any Liability or accountability to the Trust or its Shareholders, provided approval of each such contract is made pursuant to the applicable requirements of the 1940 Act.
ARTICLE V.
Shareholders' Voting Powers and Meetings
ARTICLE VI.
Net Asset Value, Distributions, and Redemptions
The redemption price may in any case or cases be paid in cash or wholly or partly in kind in accordance with Rule 18f-1 under the 1940 Act if the Trustees determine that such payment is advisable in the interest of the remaining Shareholders of the Series of which the Shares are being redeemed. Subject to the foregoing, the selection and quantity of securities or other property so paid or delivered as all or part of the redemption price shall be determined by or under authority of the Trustees. In no case shall the Trust be liable for any delay of any corporation or other Person in transferring securities selected for delivery as all or part of any payment in kind.
ARTICLE VII.
Compensation and Limitation of Liability
Every note, bond, contract, instrument, certificate or undertaking and every other act or thing whatsoever issued, executed or done by or on behalf of the Trust or the Trustees or any of them in connection with the Trust shall be conclusively deemed to have been issued, executed or done only in or with respect to their or his or her capacity as Trustees or Trustee, and such Trustees or Trustee shall not be personally liable thereon.
ARTICLE VIII.
Miscellaneous
Upon termination of the Trust (or any Series, as the case may be), after paying or otherwise providing for all charges, taxes, expenses and liabilities held, severally, with respect to each Series (or the applicable Series, as the case may be), whether due or accrued or anticipated as may be determined by the Trustees, the Trust shall, in accordance with such procedures as the Trustees consider appropriate, reduce the remaining assets held, severally, with respect to each Series (or the applicable Series, as the case may be), to distributable form in cash or shares or other securities, and any combination thereof, and distribute the proceeds held with respect to each Series (or the applicable Series, as the case may be), to the Shareholders of that Series, as a Series, ratably according to the number of Shares of that Series held by the several Shareholders on the date of termination.
a business trust.
(a) The provisions of the Declaration of Trust are severable, and if the Trustees shall determine, with the advice of counsel, that any of such provisions is in conflict with the 1940 Act, the regulated investment company provisions of the Internal Revenue Code or with other applicable laws and regulations, the conflicting provision shall be deemed never to have constituted a part of the Declaration of Trust; provided, however, that such determination shall not affect any of the remaining provisions of the Declaration of Trust or render invalid or improper any action taken or omitted prior to such determination.
(b) If any provision of the Declaration of Trust shall be held invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall attach only to such provision in such jurisdiction and shall not in any manner affect such provision in any other jurisdiction or any other provision of the Declaration of Trust in any jurisdiction.
IN WITNESS WHEREOF, the Trustees named below do hereby make and enter into this Declaration of Trust as of the 14th day of December, 1993.
- ---------------------- ----------------------- Arthur D. Ally Gregory F. Tighe 222 West Comstock Ave. 222 West Comstock Ave. Suite 115 Suite 115 Winter Park, FL 32789 Winter Park, FL 32789 - ---------------------- ----------------------- J.C. Mitchell Wesley W. Pennington 445 N. Wynmore Street 723 Executive Drive Suite 102 Winter Park, FL 32789 Winter Park, FL 32789 |
THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS
222 West Comstock Avenue, Suite 115 Winter Park, FL 32789
BY-LAWS OF THE TIMOTHY PLAN
EXHIBIT 2
ARTICLE I
FISCAL YEAR AND OFFICES
SECTION 1. FISCAL YEAR. Unless otherwise provided by resolution of the Board of Trustees, the fiscal year of the Trust shall begin on the 1st day of January and end on the last day of December.
SECTION 2. DELAWARE OFFICE. The Board of Trustees shall establish a registered office in the State of Delaware and shall appoint as the Trust's registered agent for service of process in the State of Delaware an individual resident of the State of Delaware or a Delaware corporation or a foreign corporation authorized to transact business in the State of Delaware; in each case the business office of such registered agent for service of process shall be identical with the registered Delaware office of the Trust.
SECTION 3. OTHER OFFICES. The Board of Trustees may at any time establish branch or subordinate offices at any place or places where the Turst intends to do business.
ARTICLE II
MEETINGS OF SHAREHOLDERS
SECTION 1. PLACE OF MEETING. Meetings of the shareholders for the election of trustees shall be held in such place as shall be fixed by resolution of the Board of Trustees and stated in the notice of the meeting.
SECTION 2. ANNUAL MEETINGS. An Annual Meeting of shareholders will not be held unless the Investment Company Act of 1940 requires the election of trustees to be acted upon.
SECTION 3. SPECIAL MEETINGS. Special Meetings of the shareholders may be called at any time by the President, or by a majority of the Board of Trustees, and shall be called by the Secretary upon written request of the holders of shares entitled to cast not less than ten percent of all the votes entitled to be cast at such meeting provided that (a) such request shall state the purposes of such meeting and the matters proposed to be acted on and (b) the shareholders requesting such meeting shall have paid to the Trust the reasonable estimated cost of preparing and mailing the notice thereof, which the Secretary shall determine and specify to such shareholders. No special meeting need be called upon the request of shareholders entitled to cast less than a majority of all votes entitled to be cast at such meeting to consider any matter which is substantially the same as a matter voted on at any meeting of the shareholders held during the preceding twelve months. The foregoing provisions of this section 3 notwithstanding, a special meeting of shareholders shall be called upon the request of the holders of at least ten percent of the shares entitled to vote for the purpose of consideration of removal of a director from office as provided in section 16(c) of the Investment Company Act of 1940.
SECTION 4. NOTICE. Not less than ten, nor more than ninety, days before
the date of every Annual or special Shareholders Meeting, the Secretary shall
cause to be mailed to each shareholder entitled to vote at such meeting at his
(her) address (as it appears on the records of the Trust at the time of
mailing) written notice stating the time and place of the meeting and, in the
case of a Special Meeting of Shareholders, shall be limited to the purposes
stated in the notice. Notice of adjournment of a shareholders meeting to
another time or place need not be given, if such time - and place are
announced at the meeting.
SECTION 5. RECORD DATE FOR MEETINGS. Subject to the provisions of the Declaration of Trust, the Board of Trustees may fix in advance a date not more than ninety, nor less than ten, days prior to the date of any annual or special meeting of the shareholders as a record date for the determination of the shareholders entitled to receive notice of, and to vote at any meeting and any adjournment thereof; and in such case such shareholders and only such shareholders as shall be shareholders of record on the date so fixed shall be entitled to receive notice of and to vote at such meeting and any adjournment thereof as the case may be, notwithstanding any transfer of any stock on the books of the Trust after any such record date fixed as aforesaid.
SECTION 6. QUORUM. At any meeting of shareholders, the presence in person or by proxy of the holders of record of a majority of the shares issued and outstanding and entitled to vote there shall constitute a quorum for the transaction of any business at the meeting, except as otherwise provided by the Investment Company Act of 1940 or in the Trust's Declaration of Trust. If, however, such quorum shall not be present or represented at any meeting of the shareholders, the holders of a majority of the shares present or in person or by proxy shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented to a date not more than 120 days after the original record date. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified.
SECTION 7. VOTING. Each shareholder shall have one vote for each full share and a fractional vote for each fractional share of stock having voting power held by such shareholder on the record date set pursuant to Section 5 on each matter submitted to a vote at a meeting of shareholders. Such vote may be made in person or by proxy. At all meetings of the shareholders, a quorum being present, all matters shall be decided by majority vote of the shares of beneficial interest entitled to vote held by shareholders present in person or by proxy, unless the question is one for which by express provision of the laws of the State of Delaware, the Investment Company Act of 1940, as from time to time amended, or the Declaration of Trust, a different vote is required, in which case such express provision shall control the decision of such question. At all meetings of shareholders, unless the voting is conducted by inspectors, all questions relating to the qualification of voters and the validity of proxies and the acceptance or rejection of votes shall be decided by the Chairman of the meeting.
SECTION 8. INSPECTORS. At any election of trustees, the Board of Trustees prior thereto may, or, if they have not so acted, the Chairman of the meeting may appoint one or more inspectors of election who shall first subscribe an oath of affirmation to execute faithfully the duties of inspectors at such election with strict impartiality and according to the best of their ability, and shall after the election make a certificate of the result of the vote taken.
SECTION 9. STOCK LEDGER AND LIST OF SHAREHOLDERS. It shall be the duty of the Secretary of Assistant Secretary of the Trust to cause an original or duplicate share ledger to be maintained at the office of the Trust's transfer agent. Such share ledger may be in written form or any other form capable of being converted into written form within a reasonable time for visual inspection.
SECTION 10. ACTION WITHOUT MEETING. Any action to be taken by shareholders may be taken without a meeting if (a) all shareholders entitled to vote on the matter consent to the action in writing, and (b) all shareholders entitled to notice of the meeting but not entitled to vote at it sign a written waiver of any right to dissent, and (c) the written consents are filed with the records of the meetings of shareholders. Such consent shall be treated for all purposes as a vote at a meeting.
ARTICLE III
TRUSTEES
SECTION 1. GENERAL POWERS. The business of the Trust shall be managed under the direction of its Board of Trustees, which may exercise all powers of the Trust, except such as are by statue, or the Declaration of Trust, or by these Bylaws conferred upon or reserved to the shareholders.
SECTION 2. NUMBER AND TERM OF OFFICE. The number of trustees which shall constitute the whole Board shall be determined from time to time by the Board of Trustees, but shall not be fewer than the minimum number permitted by applicable laws, nor more than fifteen. Each trustee elected shall hold office until his successor is elected and qualified. Trustees need not be shareholders.
SECTION 3. ELECTIONS. Provided a quorum is present, the trustees shall be elected by the vote of a plurality of the shares present in person or by proxy, except that any vacancy on the Board of Trustees may be filled by a majority vote of the Board of Trustees, although less than a quorum, subject to the requirements of Section 16(a) of the Investment Company Act of 1940.
SECTION 4. PLACE OF MEETING. Meetings of the Board of Trustees, regular or special, may be held at any place as the Board may from time to time determine.
SECTION 5. QUORUM. At all meetings of the Board of Trustees, one-third of the entire Board of Trustees shall constitute a quorum for the transaction of business provided that in no case may a quorum be less than two persons. The action of a majority of the trustees present at any meeting at which a quorum is present shall be the action of the Board of Trustees unless the concurrence of a greater proportion is required for such action by the Investment Company Act of 1940, these Bylaws or the Declaration of Trust. If a quorum shall not be present at any meeting of trustees, the trustees present thereat may by a majority vote adjourn the meeting from time to time without notice other than announcement at the meeting, until a quorum shall be present.
SECTION 6. REGULAR MEETINGS. Regular meetings of the Board of Trustees may be held without additional notice at such time and place as shall from time to time be determined by the Board of Trustees provided that notice of any change in the time or place of such meetings shall be sent promptly to each trustee not present at the meeting at which such change was made in the manner provided for notice of special meetings.
SECTION 7. SPECIAL MEETINGS. Special meetings of the Board of Trustees may be called by the President on one day's notice to each trustee; special meetings shall be called by the President or Secretary in like manner and on like notice on the written request of two trustees.
SECTION 8. TELEPHONE MEETING. Members of the Board of Trustees or a committee of the Board of Trustees may participate in a meeting by means of a conference telephone or similar communications equipment if
all persons participating in the meeting can hear each other at the same time.
SECTION 9. INFORMAL ACTIONS. Any action required or permitted to be taken at any meeting of the Board of Trustees or of any committee thereof may be taken without a meeting, if a written consent to such action is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee.
SECTION 10. COMMITTEES. The Board of Directors may by resolution passed by a majority of the entire Board appoint from among its members an Executive Committee and other committees composed of two or more directors, and may delegate to such committees, in the intervals between meetings of the Board of Trustees, any or all of the powers of the Board of trustees in the management of the business and affairs of the Trust.
SECTION 11. ACTION OF COMMITTEES. In the absence of an appropriate resolution of the Board of Trustees, each committee may adopt such rules and regulations governing its proceedings, quorum and manner of acting as it shall deem proper and desirable, provided that the quorum shall not be less than two trustees. The committees shall keep minutes of their proceedings and shall report the same to the Board of Trustees at the meeting next succeeding, and any action by the committee shall be subject to revision and alternation by the Board of Trustees, provided that no rights of third persons shall be affected by any such revision or alteration. In the absence of any member of such committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint a member of the Board of Trustees to act in the place of such absent member.
SECTION 12. COMPENSATION. Any trustee, whether or not he is a salaried officer or employee of the Trust, may be compensated for his services as trustee or as a member of a committee of trustees, or as Chairman of the Board or chairman of a committee by fixed periodic payments or by fees for attendance at meetings or by both, and in addition may be reimbursed for transportation and other expenses, all in such manner and amounts as the Board of Trustees may from time to time determine.
ARTICLE IV
NOTICES
SECTION 1. FORM. Notices to shareholders shall be in writing and delivered personally or mailed to the shareholders at their addresses appearing on the books of the Trust. Notices to trustees shall be oral or by telephone or telegram or in writing delivered personally or mailed to the trustees at their addresses appearing on the books of the Trust. Notice by mail shall be deemed to be given at the time when the same shall be mailed. Subject to the provisions of the Investment Company Act of 1940, notice to trustees need not state the purpose of a regular or special meeting.
SECTION 2. WAIVER. Whenever any notice of the time, place or purpose of any meeting of shareholders, trustees or a committee is required to be given under the provisions of the Declaration of Trust or these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to such notice and filed with the records of the meeting, whether before or after the holding thereof, or actual attendance at the meeting of shareholders in person or by proxy, or at the meeting of Trustees or a committee in person, shall be deemed equivalent to the giving of such notice to such persons.
ARTICLE V
OFFICERS
SECTION 1. EXECUTIVE OFFICERS. The officers of the Trust shall be chosen by the Board of Trustees and shall include a President, a Secretary and a Treasurer. The Board of Trustees may, from time to time, elect or appoint a Controller, one or more Vice Presidents, Assistant Secretaries and Assistant Treasurers. The Board of Trustees, at its discretion, may also appoint a director as Chairman of the Board who shall perform and execute such executive and administrative duties and powers as the Board of Trustees shall from time to time prescribe. The same person may hold two or more offices, except that no person shall be both President and Vice-President and no officer shall execute, acknowledge or verify any instrument in more than one capacity, if such instrument is required by law, the Declaration of Trust of these Bylaws to be executed, acknowledged or verified by two or more officers.
SECTION 2. ELECTION. The Board of Trustees shall choose a President, a Secretary and a Treasurer.
SECTION 3. OTHER OFFICERS. The Board of Trustees from time to time may appoint such other officers and agents as it shall deem advisable, who shall hold their offices for such terms and shall exercise powers and perform such duties as shall be determined from time to time by the Board. The Board of Trustees from time to time may delegate to one or more officers or agents the power to appoint any such subordinate officers or agents and to prescribe their respective rights, terms of office, authorities and duties.
SECTION 4. COMPENSATION. The salaries or other compensation of all officers and agents of the Trust shall be fixed by the Board of Trustees, except that the Board of Trustees may delegate to any person or group of persons the power to fix the salary or other compensation of any subordinate officers or agents appointed pursuant to Section 3 of this Article V.
SECTION 5. TENURE. The officers of the Trust shall serve at the pleasure of the Board of Trustees. Any officer or agent may be removed by the affirmative vote of a majority of the Board of Trustees whenever, in its judgment, the best interests of the Trust will be served thereby. In addition, any officer or agent appointed pursuant to Section 3 may be removed, either with or without cause, by any officer upon whom such power of removal shall have been conferred by the Board of Trustees. Any vacancy occurring in any office of the Trust by death, resignation, removal or otherwise shall be filled by the Board of Trustees, unless pursuant to Section 3 the power of appointment has been conferred by the Board of Trustees on any other officer.
SECTION 6. PRESIDENT. The President shall be the Chief Executive Officer of the Trust and shall see that all orders and resolutions of the Board are carried into effect. The President shall also be the Chief Administrative Officer of the Trust and shall perform such other duties and have such other powers as the Board of Trustees may from time to time prescribe.
SECTION 7. CHAIRMAN OF THE BOARD. The Chairman of the Board, if one shall be chosen, shall perform and execute such executive duties and administrative powers as the Board of Trustees shall from time to time prescribe.
SECTION 8. VICE-PRESIDENT. The Vice-Presidents, in order of their seniority, shall, in the absence or disability of the President, perform the duties and exercise the powers of the President and shall perform such other duties as the Board of Trustees or the President may from time to time prescribe.
SECTION 9. SECRETARY. The Secretary shall attend all meetings of the Board of Trustees and all meetings of the shareholders and record all the proceedings thereof and shall perform like duties for any committee when required. He shall give, or cause to be given, notice of meetings of the shareholders and of the Board of Trustees, shall have charge of the records of the Trust, including the stock books, and shall perform such other duties as may be prescribed by the Board of Trustees or Chief Executive Officer, under whose supervision he shall be. He shall keep in safe custody the seal of the Trust and, when authorized by the Board of Trustees, shall affix and attest the same to any instrument requiring it. The Board of Trustees may give general authority to any other officer to affix the seal of the Trust and to attest the affixing by his signature.
SECTION 10. ASSISTANT SECRETARIES. The Assistant Secretaries in order of their seniority, shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties as the Board of Trustees shall prescribe.
SECTION 11. TREASURER. The Treasurer, unless another officer has been so designated, shall be the Chief Financial Officer of the Trust. He shall have general charge of the finances and books of account of the Trust. Except as otherwise provided by the Board of Trustees, he shall have general supervision of the funds and property of the Trust and of the performance by the custodian of its duties with respect thereto. He shall render to the Board of Trustees, whenever directed by the Board, an account of the financial condition of the Trust and of all his transactions as Treasurer. He shall cause to be prepared annually a full and correct statement of the affairs of the Trust, including a balance sheet and a statement of operations for the preceding fiscal year. He shall perform all the acts incidental to the office of Treasurer, subject to the control of the Board of Trustees.
SECTION 12. ASSISTANT TREASURER. The Assistant Treasurer shall in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties as the Board of Trustees may from time to time prescribe.
ARTICLE VI
INDEMNIFICATION AND INSURANCE
SECTION 1. AGENTS, PROCEEDINGS AND EXPENSES. For the purpose of this Article, "agent" means any person who is or was a Trustee or officer of this Trust and any person who, while a trustee or officer of this Trust, is or was serving at the request of this Trust as a Trustee, director, officer, partner, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise; "Trust"includes any domestic or foreign predecessor entity of this trust in a merger, consolidation, or other transaction in which the predecessor's existence ceased upon consummation of the transaction; "proceeding" means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative; and "expenses" includes without limitation attorney's fees and any expenses of establishing a right to indemnification under this Article.
SECTION 2. ACTIONS OTHER THAN BY TRUST. This trust shall indemnify any person who was or is a
party or is threatened to be made a party to any proceeding (other than an action by or in the right of this Trust) by reason of the fact that such person is or was an agent of this Trust, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such proceeding, if it is determined that person acted in good faith and reasonably believed: (a) in the case of conduct in his official capacity as an agent of the Trust, that his conduct was in the Trust's best interests and (b) in all other cases, that his conduct was at least not opposed to the Trust's best interests and (c) in the case of a criminal proceeding, that he had no reasonable cause to believe the conduct of that person was unlawful. The termination of any proceeding by judgment, order or settlement shall not of itself create a presumption that the person did not meet the requisite standard of conduct set forth in this Section. The termination of any proceeding by conviction, or a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the person did not meet the requisite standard of conduct set forth in this Section.
SECTION 3. ACTIONS BY THE TRUST. This Trust shall indemnify any person who was or is a party or is threatened to be made a party to any proceeding by or in the right of this Trust to procure a judgement in its favor by reason of the fact that that person is or was an agent of this Trust, against expenses actually and reasonably incurred by that person in connection with the defense or settlement of that action if that person acted in good faith, in a manner that person believed to be in the best interests of this Trust and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.
SECTION 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision to the contrary contained herein, there shall be no right to indemnification for any liability arising by reason of willful misfeasance, bad faith, gross negligence, or the reckless disregard of the duties involved in the conduct of the agent's office with this Trust.
No indemnification shall be made under Sections 2 or 3 of this Article:
(a) In respect of any proceeding as to which that person shall have been
adjudged to be liable on the basis that personal benefit was improperly
received by him, whether or not the benefit resulted from an action taken
in the person's official capacity; or
(b) In respect of any proceeding as to which that person shall have been
adjudged to be liable in the performance of that person's duty to this
Trust, unless and only to the extent that the court in which that action
was brought shall determine upon application that in view of all the
relevant circumstances of the case, that person is fairly and reasonably
entitled to indemnity for the expenses which the court shall determine ;
however, in such case, indemnification with respect to any proceeding by or
in the right of the Trust or in which liability shall have been adjudged by
reason of the disabling conduct set forth in the preceding paragraph shall
be limited to expenses; or
(c) Of amounts paid in settling or otherwise disposing of a proceeding, with or
without court approval, or of expenses incurred in defending a proceeding
which is settled or otherwise disposed of without court approval unless the
required approval set forth in Section 6 of this Article is obtained.
SECTION 5. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent of this Trust has been successful, on the merits or otherwise, in the defense of any proceeding referred to in Sections 2 or 3 of this Article before the court or other body before whom the proceeding was brought, the agent shall be indemnified against expenses actually and reasonably incurred by the agent in connection therewith, provided that the Board of Trustees, including a majority who are disinterested, non-party Trustees, also determines that based upon a review of the facts, the agent was not liable by reason of the disabling conduct referred to in Section 4 of this Article.
SECTION 6. REQUIRED APPROVAL. Except as provided in Section 5 of this Article, any indemnification under this Article shall be made by this Trust only if authorized in the specific case on a determination that indemnification of the agent is proper in the circumstances because the agent has met the applicable standard of conduct set forth in Sections 2 or 3 of this Article and is not prohibited from indemnification because of the disabling conduct set forth in Section 4 of this Article, by:
(a) A majority vote of a quorum consisting of Trustees who are not parties to
the proceeding and are not interested persons of the Trust (as defined in
the Investment Company Act of 1940);
(b) A written opinion by an independent legal counsel; or
(c) The shareholders; however, shares held by agents who are parties to the
proceeding may not be voted on the subject matter under this Sub-Section.
SECTION 7. ADVANCE OF EXPENSES. Expenses incurred in defending any proceeding may be advanced by this Trust before the final disposition of the proceeding if (a) receipt of a written affirmation by the agent of his good faith belief that he has met the standard of conduct necessary for indemnification under this Article and a written undertaking by or on behalf of the agent, such undertaking being an unlimited general obligation to repay the amount of the advance if it is ultimately determined that he has not met those requirements, and (b) a determination that the facts then known to those making the determination would not preclude indemnification under this Article. Determinations and authorizations of payments under this Section must be made in the manner specified in Section 6 of this Article for determining that the indemnification is permissible.
SECTION 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article shall affect any right to indemnification to which persons other than Trustees and officers of this Trust or any subsidiary hereof may be entitled by contract or otherwise.
SECTION 9. LIMITATIONS. No indemnification or advance shall be made under this Article, except as provided in Sections 5 or 6 in any circumstances where it appears:
(a) That it would be inconsistent with a provision of the Agreement and
Declaration of Trust of the Trust, a resolution of the shareholders, or an
agreement in effect at the time of accrual of the alleged cause of action
asserted in the proceeding in which the expenses were incurred or other
amounts were paid which prohibits or otherwise limits indemnification; or
(b) That it would be inconsistent with any condition expressly imposed by a
court in approving a settlement.
SECTION 10. INSURANCE. Upon and in the event of a determination by the Board of Trustees of this Trust to purchase such insurance, this Trust shall purchase and maintain insurance on behalf of any agent or employee of this trust against any liability asserted against or incurred by the agent or employee in such capacity or arising out of the agent's or employee's status as such to the fullest extent permitted by law.
SECTION 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article does not apply to any proceeding against any Trustee, investment manager or other fiduciary of an employee benefit plan in that person's capacity as such, even though that person may also be an agent of this Trust as defined in Section 1 of this Article. Nothing contained in this Article shall limit any right to indemnification to which such a Trustee, investment manager, or other fiduciary may be entitled by contract or otherwise which shall be enforceable to the extent permitted by applicable law other than this Article.
ARTICLE VII
SHARES OF BENEFICIAL INTEREST
SECTION 1. CERTIFICATES. Each shareholder shall be entitled, upon written request, to a certificate or certificates in form approved by the Board of Trustees representing and certifying the class and the full, but not fractional number of shares of beneficial interest owned by him in the Trust. Each certificate shall be signed by facsimile signature or otherwise by the President or a Vice-President and counter-signed by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer.
SECTION 2. SIGNATURE. In case any officer who has signed any certificate ceases to be an officer of the Trust before the certificate is issued, the certificate may nevertheless be issued by the Trust with the same effect as if the officer had not ceased to be such officer as of the date of its issue.
SECTION 3. RECORDING AND TRANSFER WITHOUT CERTIFICATES. Notwithstanding the foregoing provisions of this Article VII, the Trust shall have the full power to participate in any program approved by the Board of Trustees providing for the recording and transfer of ownership of the Trust's shares by electronic or other means without the issuance of certificates.
SECTION 4. LOST CERTIFICATES. The Board of Trustees may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Trust alleged to have been stolen, lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to have been stolen, lost or destroyed, or upon other satisfactory evidence of such theft, loss or destruction and may in its discretion and as a condition precedent to the issuance thereof, require the owner of such stolen, lost or destroyed certificate or certificates, or his local representative, to give the Trust a bond with sufficient surety, to the Trust to indemnify it against any loss or claim that may be made by reason of the issuance of a new certificate.
SECTION 5. TRANSFER OF SHARES. Transfers of shares of beneficial interest of the Trust shall be made on the books of the Trust by the holder of record thereof (in person or by his attorney thereunto duly authorized by a power of attorney duly executed in writing and filed with the Secretary of the Trust) (i) if a certificate or certificates have
been issued, upon the surrender of the certificate or certificates, properly endorsed or accompanied by proper instruments of transfer, representing such shares, or (ii) as otherwise prescribed by the Board of Trustees. Every certificate exchanged, surrendered for redemption or otherwise returned to the Trust shall be marked "Canceled" with the date of cancellation.
SECTION 6. REGISTERED SHAREHOLDERS. The Trust shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by applicable law or the Declaration of Trust.
SECTION 7. TRANSFER AGENTS AND REGISTRARS. The Board of Trustees may, from time to time, appoint or remove transfer agents and or registrars of the Trust, and they may appoint the same person as both transfer agent and registrar. Upon any such appointment being made, all certificates representing shares of beneficial interest thereafter issued shall be countersigned by such transfer agent and shall not be valid unless so countersigned.
SECTION 8. STOCK LEDGER. The Trust shall maintain an original stock ledger containing the names and addresses of all shareholders and the number and class of shares held by each shareholder. Such stock ledger may be in written form or any other form capable of begin converted into written form within reasonable time for visual inspection.
ARTICLE VII
GENERAL PROVISION
SECTION 1. CUSTODIANSHIP. Except as otherwise provided by resolution of the Board of Trustees, the Trust shall place and at all times maintain in the custody of a custodian (including any sub-custodian for the custodian) all funds, securities and similar investments owned by the Trust. Subject to the approval of the Board of Trustees, the custodian may enter into arrangements with securities depositories, provided such arrangements comply with the provisions of the Investment Company Act of 1940 and the rules and regulations promulgated thereunder.
SECTION 2. EXECUTION OF INSTRUMENTS. All deeds, documents, transfers, contracts, agreements and other instruments requiring execution by the Trust shall be signed by the President or a vice President.
SECTION 3. NET ASSET VALUE. The net asset value per share shall be determined separately as to each class of the Trust's shares, by dividing the sum of the total market value of the class's investments and other assets, less any liabilities, by the total outstanding shares of such class, subject to the Investment Company Act of 1940 and any other applicable Federal securities law or rule or regulation currently in effect.
ARTICLE IX
AMENDMENTS
The Board of Trustees shall have the power to make, alter and repeal the Bylaws of the Trust.
AMENDMENT TO INVESTMENT ADVISORY AGREEMENT Exhibit 5(a)(i)
WITNESSETH:
WHEREAS, the Trust and Advisor have entered into an agreement dated January 19, 1994, wherein the Advisor has agreed to serve as an advisor and provide investment management services (the "Investment Advisory Agreement"); and
WHEREAS, the Parties wish to amend the Investment Advisory Agreement to reduce its compensation from 1.00% to 0.85% of the Trust's daily average net assets; and
WHEREAS, the Trustees upon full consideration of the proposal, has determined that in the exercise of their reasonable business judgement, and in light of their fiduciary duties, there is a reasonable likelihood that the amendment to the Investment Advisory Agreement will benefit the Trust and its shareholders.
NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereto, intending to be legally bound, do hereby agree:
1. To amend the compensation for the services to be rendered to the Trust by the Advisor under the provisions of the Investment Advisory Agreement, from 1.00% to 0.85% of the Trust's daily average net assets.
2. This Agreement's effective date shall be August 28, 1995.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement consisting of one type written page to be signed by their duly authorized officers and their corporate seals hereunto duly affixed as of the day and year first above written.
THE TIMOTHY PLAN TIMOTHY PARTNERS, LTD.
BY COVENANT FUNDS, INC.
MANAGING GENERAL PARTNER
- --------------------------------------- ---------------------------------
By: Arthur D. Ally, Chairman By: Arthur D. Ally, President
- --------------------------------------- ---------------------------------
Attest: Joseph E. Boatwright, Secretary Attest: Bonnie Ally, Secretary
|
THE TIMOTHY PLAN INVESTMENT ADVISORY AGREEMENT EXHIBIT 5(A)(II)
AGREEMENT, made by and between THE TIMOTHY PLAN, a Delaware business trust, (hereinafter called the "Trust") and TIMOTHY PARTNERS, LTD., a Florida limited partnership, (hereinafter called "Investment Adviser").
W I T N E S S E T H:
WHEREAS, the Trust has been organized and operates as an investment company registered under the Investment Company Act of 1940 (the "1940 Act") and engages in the business of investing and reinvesting its assets in securities, and the Investment Adviser is a registered Investment Adviser under the Investment Advisers Act of 1940 (the "Advisers Act") and engages in the business of providing investment management services; and
WHEREAS, the Trust has selected the Investment Adviser to serve as the
investment adviser for the Trust effective as of the date of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and each of the parties hereto intending to be legally bound, it is agreed as
follows:
1. The Trust hereby employs the Investment Adviser to manage the investment and reinvestment of the Trust's assets and to administer its affairs, subject to the direction of the Board of Trustees and officers of the Trust for the period and on the terms hereinafter set forth. The Investment Adviser hereby accepts such employment and agrees during such period to render the services and assume the obligations herein set forth for the compensation herein provided. The Investment Adviser shall for all purposes herein, be deemed to be an independent contractor, and shall, unless otherwise expressly provided and authorized, have no authority to act for or to represent the Trust in any way, or in any way be deemed an agent of the Trust. The Investment Adviser shall regularly make decisions as to what securities to purchase and sell on behalf of the Trust and shall record and implement such decisions and shall furnish the Board of Trustees of the Trust with such information and reports regarding the Trust's investments as the Investment Adviser deems appropriate or as the Trustees of the Trust may reasonably request. Subject to compliance with the requirements of the 1940 Act, the Investment Adviser may retain as a sub-adviser to the Trust, at the Investment Adviser's own expense, any investment adviser registered under the Advisers Act.
2. The Trust shall conduct its own business and affairs and shall bear the expenses and salaries necessary and incidental thereto including, but not in limitation of the foregoing, the costs incurred in: the maintenance of its corporate existence; the maintenance of its own books, records and procedures; dealing with its own shareholders; the payment of dividends; transfer of stock, including issuance, redemption and repurchase of shares; preparation of share certificates; reports and notices to shareholders; calling and holding of shareholders' meetings; miscellaneous office expenses; brokerage commissions; custodian fees; legal and accounting fees; and taxes. Partners and employees of the Investment Adviser say be trustees, officers and employees of the funds of which Timothy Partners, Ltd. is Investment Adviser. Partners and employees of the Investment Adviser who are trustees, officers and/or employees of the Trust shall not receive any compensation from the Trust for acting in such dual capacity.
In the conduct of the respective businesses of the parties hereto and in the performance of this Agreement, the Trust and Investment Adviser may share facilities common to each, with appropriate proration of expenses between them.
3.(a) The Investment Adviser shall place and execute Trust
orders for the purchase and sale of portfolio securities with broker/dealers.
Subject to the primary objective of obtaining the best available prices and
execution, the Investment Adviser will place orders for the purchase and sale of
portfolio securities for the Trust with such broker/dealers as it may select
from time to time, including brokers who provide statistical, factual and
financial information and services to the Trust, to the Investment Adviser, or
to any other fund for which the Investment Adviser provides investment advisory
services and/or with broker/dealers who sell shares of the Trust or who sell
shares of any other fund for which the Investment Adviser provides investment
advisory services. Broker/dealers who sell shares of the funds of which Timothy
Partners, Ltd. is Investment Adviser, shall only receive orders for the purchase
or sale of portfolio securities to the extent that the placing of such orders is
in compliance with the Rules of the Securities and Exchange Commission and the
National Association of Securities Dealers, Inc.
(b) Notwithstanding the provisions of subparagraph (a) above and subject to
such policies and procedures as may be adopted by the Board of Trustees and
officers of the Trust, the Investment Adviser may ask the Trust and the Trust
may agree to pay a member of an exchange, broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission another member of an exchange, broker or dealer would have charged
for effecting that transaction, in such instances where it and the Investment
Adviser have determined in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such member, broker or dealer, viewed in terms of either that
particular transaction or the Investment Adviser's overall responsibilities with
respect to the Trust and to other funds for which
the Investment Adviser exercises investment discretion.
4. As compensation for the services to be rendered to the Trust by the Investment Adviser under the provisions of this Agreement, the Trust shall pay to the Investment Adviser from the Trust's assets an annual fee equal to 1.00% of the daily average net assets of the Trust, payable on a monthly basis, subject to reduction to the extent necessary to comply with the most stringent limits prescribed by any state in which the Trust's shares are offered for sale.
If this Agreement is terminated prior to the end of any calendar month, the management fee shall be prorated for the portion of any month in which this Agreement is in effect according to the proportion which the number of calendar days, during which the Agreement is in effect, bears to the number of calendar days in the month, and shall be payable within 10 days after the date of termination.
5. The services to be rendered by the Investment Adviser to the Trust under the provisions of this Agreement are not to be deemed to be exclusive, and the Investment Adviser shall be free to render similar or different services to others so long as its ability to render the services provided for in this Agreement shall not be impaired thereby.
6. The Investment Adviser, its partners, employees, and agents may engage in other businesses, may render investment advisory services to other investment companies, or to any other corporation, association, firm or individual, and may render underwriting services to the Trust or to any other investment company, corporation, association, firm or individual.
7. In the absence of willful misfeasance, bad faith, gross negligence, or a reckless disregard of the performance of duties of the Investment Adviser to the Trust, the Investment Adviser shall not be subject to liabilities to the Trust or to any shareholder of the Trust for any action or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security, or otherwise.
8. The Trust agrees that, in the event that the Investment Adviser ceases to be the Trust's investment adviser for any reason, the Trust will (unless the Investment Adviser otherwise agrees in writing) promptly take all necessary steps to propose to the shareholders at the next regular meeting that the Trust change to a name not including the word "Timothy." The Trust agrees that the word "Timothy" in its name is derived from the name of the Investment Adviser and is the property of the Investment Adviser for copyright and all other purposes and that therefore such word may be freely used by the Investment Adviser as to other investment activities or other investment products.
9. This Agreement shall be executed and become effective as of the date written below if approved by the vote of a majority of the outstanding voting securities of the Trust. It shall continue in effect for a period of two years and may be renewed thereafter only so long as such renewal and continuance is specifically approved at least annually by the Board of Trustees or by vote of a majority of the outstanding voting securities of the Trust and only if the terms and the renewal hereof have been approved by the vote of a majority of the Trustees of the Trust who are not parties hereto or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. No amendment to this Agreement shall be effective unless the terms thereof have been approved by the vote of a majority of the outstanding voting securities of the Trust and by the vote of a majority of Trustees of the Trust who are not parties to the Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. Notwithstanding the foregoing, this Agreement may be terminated by the Trust at any time, without the payment of a penalty, on sixty days' written notice to the Investment Adviser of the Trust's intention to do so, pursuant to action by the Board of Trustees of the Trust or pursuant to a vote of a majority of the outstanding voting securities of the Trust. The Investment Adviser may terminate this Agreement at any time, without the payment of penalty on sixty days' written notice to the Trust of its intention to do so. Upon termination of this Agreement, the obligations of all the parties hereunder shall cease and terminate as of the date of such termination, except for any obligation to respond for a breach of this Agreement committed prior to such termination, and except for the obligation of the Trust to pay to the Investment Adviser the fee provided in Paragraph 4 hereof, prorated to the date of termination. This Agreement shall automatically terminate in the event of its assignment.
10. This Agreement shall extend to and bind the heirs, executors, administrators and successors of the parties hereto.
11. For the purposes of this Agreement, the terms "vote of a majority of the outstanding voting securities"; "interested persons"; and "assignment" shall have the meaning defined in the Investment Company Act of 1940.
Attest: THE TIMOTHY PLAN
________________________ By: __________________________________
Page 101
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Attest: TIMOTHY PARTNERS, LTD. By: COVENANT FUNDS, INC.
------- ------------------------------------------------
Managing General Partner
________________________ By: _________________________
Arthur D. Ally, President
|
SUB-INVESTMENT ADVISORY AGREEMENT Exhibit 5(b)(i)
between
TIMOTHY PARTNERS, LTD.
and
SYSTEMATIC FINANCIAL MANAGEMENT, L.P.
SUB-INVESTMENT ADVISORY AGREEMENT (the "Agreement") made this 15___ day of
WHEREAS, the General Partners (the "Partners") of the Investment Adviser wish to enter into a contract with the Investment Manager to render the Investment Adviser the following services:
NOW THEREFORE, in consideration of the mutual agreements herein contained, and intending to be bound, the parties agree as follows:
1. As compensation for the services enumerated above, the Investment Adviser will pay the Investment Manager an annual fee, which fee shall be payable monthly.
The amount of such fee shall equal 0.50% of the average daily net assets of the Fund with respect to the first $100 million in assets of the Fund, 0.40% of the next $100 million in assets, 0.30% of the next $100 million in assets, and 0.25% of assets over $300 million.
2. This Agreement shall become effective as of the date first above written, subject to the approval of the shareholders of the Fund in accordance with the provisions of the Investment Company Act of 1940 (the "Act").
3. This Agreement shall continue for a period ending two years from its effective date. It may be renewed thereafter by the Investment Adviser and the Investment Manager for successive periods not exceeding one year only so long as such renewal and continuance is specifically approved at least annually by the Fund's Board of Trustees or by a vote of the majority of the outstanding voting securities of the Fund as prescribed by the Act and provided further that such continuance is approved at least annually thereafter by a vote of a majority of the Fund's Trustees, who are not parties to such Agreement or interested persons of such a party, cast in person at a meeting called for the purpose of voting on such approval. This Agreement will terminate automatically without the payment of any penalty upon termination of the Investment Advisory Agreement or upon sixty days' written notice by the Fund to the Investment Manager that the Trustees or the shareholders by vote of a majority of the outstanding voting securities of the Fund, as provided by the Act, has terminated the Investment Advisory Agreement. This Agreement may also be terminated by the Investment Manager without penalty upon sixty days' written notice to the Fund.
This Agreement shall terminate automatically in the event of its assignment or the assignment of the Investment Advisory Agreement.
4. Subject to the supervision of the Board of Trustees of the Fund and the Investment Adviser, the Investment Manager will provide recommendations for a continuous investment program for the Fund, including investment research and management with respect to securities and investments, including cash and cash equivalents in the Fund. The Investment Manager will recommend to the Investment Adviser from time to time what securities and other investments should be purchased, retained or sold by the Fund. The Investment Manager will provide the
services under this Agreement in accordance with the Fund's investment objective, policies and restrictions as stated in the Prospectus. The Investment Manager further agrees that it:
a. will conform with all applicable Rules and Regulations of the SEC and will, in addition, conduct its activities under this Agreement in accordance with regulations of any other Federal or State agencies which now has or in the future will have jurisdiction over its activities;
b. will recommend placement of orders pursuant to its investment determinations for the Fund either directly with any broker or dealer, or with the issuer. In recommending placement of orders with brokers or dealers, the Investment Manager will attempt to assist the Investment Adviser to obtain the best net price and the most favorable execution of its orders. Consistent with this obligation, when the execution and price offered by two or more brokers or dealers are comparable, the Investment Manager has been advised that the Fund has authorized the Investment Adviser, in its discretion, to purchase and sell securities to and from brokers and dealers who promote the sale of Fund shares. In no instance will securities be purchased from or sold to the Investment Manager or any affiliated person of the Investment Manager as principal. Notwithstanding the foregoing sentence, the Investment Manager may arrange for the execution of brokered transactions through an affiliated broker dealer in conformity with policies and procedures for such purpose if, when, and as established by the Trustees of the Fund.
c. will provide, at its own cost, all office space and facilities necessary to furnish the foregoing services to be provided by the Investment Manager of the Fund.
5. It is expressly understood and agreed that the services to be rendered by the Investment Manager to the Investment Adviser under the provisions of this Agreement are not to be deemed to be exclusive, and the Investment Manager shall be free to render similar or different services to others so long as its ability to render the services provided for in this Agreement shall not be materially impaired thereby, and provided further that the services to be rendered by the Investment Manager to the Investment Adviser under this Agreement and the compensation provided for in Paragraph 1 hereof shall be limited solely to services with reference to the Fund.
6. The Investment Adviser agrees that it will furnish currently to the Investment Manager all information reasonably necessary to permit the Investment Manager to give the advice called for under this Agreement and such information with reference to the Fund that is reasonably necessary to permit the Investment Manager to carry out its responsibilities under this Agreement, and the parties agree that they will from time to time consult and make appropriate arrangements as to specific information that is required under this paragraph and the frequency and manner with which it shall be supplied.
7. The Investment Manager shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Investment Adviser or the Fund in connection with any matters to which this Agreement relates except that nothing herein contained shall be construed to protect the Investment Manager against any liability by reason of the Investment Manager's willful misfeasance, bad faith, or gross negligence in the performance of its duties or by reckless disregard of its obligations or duties under this Agreement.
8. In compliance with the provisions of the Investment Advisory Agreement between the Fund and the Investment Adviser, the Investment Manager agrees with the Investment Adviser that, subject to the terms and conditions of this Paragraph 9, the Fund may use the name "Timothy" in, or as a portion of, its name so long as the Investment Adviser, or any successor in interest, continues as the Investment Adviser. Should the Fund terminate the Investment Adviser or any successor in interest, or if the Investment Adviser shall give notice of termination of the Investment Advisory Agreement, then the Investment Adviser may elect to notify the Fund in writing that permission to use the name "Timothy" has been withdrawn. It is understood that the Fund has, in its Investment Advisory Agreement, expressly agreed that it, its Officers, Trustees and Shareholders upon receipt of such notice, will take all necessary action and proceed expeditiously to change the name of the Fund and not use any other name or take any action which would indicate the Fund's continued association with the Investment Adviser. If the use of the name "Timothy" is so withdrawn as aforesaid, it is understood and agreed that there shall be no limitation with respect to the future use of the name "Timothy" by the Investment Adviser or its successor in interest.
9. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without applying the principles of conflicts of law
thereunder.
10. Any notice to be given hereunder may be given by personal notification or by first class mail, postage prepaid, to the party specified at the address stated below:
1304 West Fairbanks Avenue
Winter Park, FL 32789
Attn: Arthur D. Ally
2 Executive Drive
Fort Lee, NJ 07024
Attn: Jeffrey M. Moses
Joseph V. Del Raso, Esquire Stradley, Ronon, Stevens & Young 2600 One Commerce Square Philadelphia, PA 19103-7098
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their duly authorized officers as of the day and year first above written.
ATTEST: THE TIMOTHY PLAN
________________________ By:__________________________
ATTEST: TIMOTHY PARTNERS, LTD.
By: COVENANT FUNDS, INC.
Managing General Partner
- ----------------------- By:____________________________
ATTEST: SYSTEMATIC FINANCIAL MANAGEMENT, L.P.
________________________ By:______________________________
|
AMENDMENT TO UNDERWRITING AGREEMENT EXHIBIT 6(A)(I)
WITNESSETH THAT:
WHEREAS, the Trust and FPBS have entered into an agreement dated January 19, 1994, which became effective February 23, 1994, wherein FPBS has agreed to serve as underwriter to provide certain services to the Trust ("Underwriting Agreement"); and
WHEREAS, the Parties wish to amend the Underwriting Agreement to reflect the creation of a multiple class structure for the Trust; and
WHEREAS, the fee schedule is subject to review and adjustment not to exceed 10%;
NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereto, intending to be legally bound, do hereby agree:
1. To amend Schedules "A", "B" and "C" to the Underwriting Agreement in
the form attached hereto as Schedules "A", "B" and "C".
2. This Agreement's effective date shall be February 23, 1996.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement consisting of one type written page, together with Schedules "A","B" and "C", to be signed by their duly authorized officers as of the day and year first written above.
The Timothy Plan Fund/Plan Broker Services, Inc. - ---------------- ------------------------------ - --------------------------------------- --------------------------------- By: Arthur D. Ally, President By: Kenneth J. Kempf, President - ---------------------------------------- ---------------------------------- Attest: Joseph E. Boatwright, Secretary Attest: Janet F. Davis, Secretary |
UNDERWRITER/DISTRIBUTION SERVICES
FOR
THE TIMOTHY PLAN
Fund/Plan Broker Services, Inc. (FPBS), a fully registered Broker/Dealer and member of the National Association of Securities Dealers (NASD) offers Underwriter/Sponsor and Distribution/Marketing Services to our Mutual Fund Clients.
As Underwriter/Sponsor, FPBS assumes the responsibility for distribution of Trust shares within the guidelines outlined by the Investment Company Act of 1940, as amended, of the U.S. Securities Exchange Commission as well as the NASD. This includes, but is not limited to, submission of Trust literature to the NASD as well as registration and licensing of Trust personnel.
Underwriter/Sponsor services include:
A) Preparation and execution of Underwriter and 12b-1 Plan Agreements
. Monitoring accruals
. Monitoring expenses
. Disbursements for expenses and trail commissions
B) Quarterly 12b-1 Reports to Board of Directors and/or Trustees
C) Literature review, recommendations and submission to the NASD
D) Initial NASD Licensing and Transfers of Registered Representatives
. U-4 Form and Figerprint Submission to NASD
. Supplying Series 6 and 63 written study material
. Registration for Exam Preparation classes
. Renewals and Terminations of Representatives
E) Written supervisory procedures and manuals for Registered Representatives
F) Ongoing compliance updates for Representatives regarding sales practices, written correspondence and other communications with the public.
G) NASD Continuing Education Requirement
UNDERWRITER AND DISTRIBUTION MULTIPLE CLASS FEE SCHEDULE
FOR
THE TIMOTHY PLAN
I. UNDERWRITER/SPONSOR SERVICES
A) The annual fee to Fund/Plan Broker Services, Inc. (FPBS) will be $15,000 per year, plus $2,500 for each additional operational series or class, as primary Underwriter/Distributor of the Funds and primary licensing/regulatory agent for Trust personnel. FPBS will be required to maintain the Trust's registration with FPBS as Broker/Dealer of record.
B) FPBS will maintain annual NASD and state license renewals and the monitoring required of representative activities as follows:
Up to 2 States - $1,000 per Representative per Year 3 to 30 States - $2,500 per Representative per Year 31 to 50 States - $3,000 per Representative per Year
II. OUT-OF-POCKET EXPENSES
The Timothy Plan will reimburse Fund/Plan Services, Inc. monthly for all reasonable out-of-pocket expenses, including postage, Edgar filings telecommunications (telephone and fax), special reports, record retention, special transportation costs as incurred.
IDENTIFICATION OF SERIES
Below are listed the "Series" to which services under this Agreement are to be performed as of the execution date of this Agreement:
This Schedule "C" may be amended from time to time by agreement of the Parties.
WITNESSETH THAT:
WHEREAS, the Trust is authorized by its Trust Instrument to issue separate series of shares representing interests in separate investment portfolios (the "Series"), which Series are identified on Schedule "C" attached hereto, and which Schedule "C" may be amended from time to time by mutual agreement among the Parties; and
WHEREAS, the Advisor has been appointed investment advisor to the Trust; and
WHEREAS, Fund/Plan is a broker-dealer registered with the U.S. Securities and Exchange Commission and a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Parties are desirous of entering into an agreement providing for the distribution by Fund/Plan of shares of the Series of the Trust (the "Shares"), and for the compensation of Fund/Plan by the Advisor for such services.
NOW, THEREFORE, in consideration of the promises and agreements of the Parties contained herein, the Parties agree as follows:
The Trust hereby appoints Fund/Plan as its exclusive agent for the distribution
of the Shares, and Fund/Plan hereby accepts such appointment under the terms of
this Agreement. The Trust agrees that it will not sell any shares to any person
except to fill orders for the shares received through Fund/Plan; provided,
however, that the foregoing exclusive right shall not apply: (a) to shares
issued or sold in connection with the merger or consolidation of any other
investment company with the Trust or the acquisition by purchase or otherwise of
all or substantially all of the assets of any investment company or
substantially all of the outstanding shares of any such company by the Trust;
(b) to shares which may be offered by the Trust to its stockholders for
reinvestment of cash distributed from capital gains or net investment income of
the Trust; or (c) to shares which may be issued to shareholders of other funds
who exercise any exchange privilege set forth in the Trust's Prospectus.
Notwithstanding any other provision hereof, the Trust may terminate, suspend, or
withdraw the offering of the Shares whenever, in its sole discretion, it deems
such action to be desirable.
(b)Fund/Plan will also have the right to take, as agent for the Trust, all actions which, in Fund/Plan's judgment, are necessary to carry into effect the distribution of the Shares.
(c)The public offering price shall be the net asset value of the Shares then in effect.
(d)The net asset value of the Shares shall be determined in the manner provided in the then current prospectus, and statement of additional information relating to the Shares and when determined shall be applicable to all transactions as provided in the prospectus. The net asset value of the Shares shall be calculated by the Trust or by another entity on behalf of the Trust. Fund/Plan shall have no duty to inquire into or liability for the accuracy of the net asset value per Share as calculated.
(e)On every sale, the Trust shall receive the applicable net asset value of
the Shares promptly.
(f)Upon receipt of purchase instructions, Fund/Plan will transmit such
instructions to the Trust or its transfer agent for registration of the
Shares purchased.
(g)Nothing in this Agreement shall prevent Fund/Plan or any affiliated person (as defined in the Act) of Fund/Plan from acting as underwriter or distributor for any other person, firm or corporation (including other investment companies) or in any way limit or restrict Fund/Plan or such affiliated person from buying, selling or trading any securities for its or their own account or for the accounts of others for whom it or they may be acting; provided, however, that Fund/Plan expressly agrees that it will not for its own account purchase any shares of the Trust except for investment purposes and that it will not for its own account sell any such shares except by redemption of such shares by the Trust, and that it will undertake no activities which, in its judgment, will adversely affect the performance of its obligations to the Trust
under this Agreement.
Fund/Plan does not agree to sell any specific number of Shares. Fund/Plan, as Underwriter for the Trust, undertakes to sell Shares on a best efforts basis and only against orders received therefor.
The Trust reserves the right to refuse at any time or times to sell any of its Shares for any reason deemed adequate by it.
(b)Fund/Plan will require each dealer with whom Fund/Plan has a selling agreement to conform to the applicable provisions of the Prospectus, with respect to the public offering price of the Shares, and Fund/Plan shall not cause the Trust to withhold the placing of purchase orders so as to make a profit thereby.
(c)The Trust agrees to furnish to Fund/Plan sufficient copies of any agreements, plans, communications with the public or other materials it intends to use in connection with any sales of Shares in adequate time for Fund/Plan to file and clear such materials with the proper authorities before they are put in use. In addition, the Trust agrees not to use any such materials until so filed and cleared for use by appropriate authorities and Fund/Plan.
(d)Fund/Plan, at its own expense, will qualify as a dealer or broker, or otherwise, under all applicable state or federal laws required in order that the Shares may be sold in such states as may be mutually agreed upon by the parties.
(e)Fund/Plan shall not, in connection with any sale or solicitation of a sale of the Shares, make or authorize any representative, Service Organization, broker or dealer to make, any representations concerning the Shares except those contained in the Prospectus covering the Shares and in communications with the public or sales materials approved by the Fund/Plan as information supplemental to such Prospectus. Copies of the Prospectus will be supplied by the Trust to Fund/Plan in reasonable quantities upon request.
The Trust shall furnish to Fund/Plan copies of all information, financial statements and other papers which Fund/Plan may reasonably request for use in connection with the distribution of the Shares including, but not be limited to, one certified copy of all financial statements prepared for the Trust by its independent public accountants.
For its services under this Agreement, Fund/Plan shall be entitled to compensation as set forth in Schedule A attached hereto, which schedule shall be amended from time to time. All such compensation shall be paid by the Advisor. The services provided include acting as primary underwriter/distributor of the Trust and licensing/regulatory agent for the Advisor personnel including employees who are registered as Fund/Plan
representatives. These fees will include the renewal of the NASD license and the
State Securities licenses in the representatives' home states. These fees will
also contribute to the overall expenses and personnel required to maintain the
regulatory compliance and records of Fund/Plan in connection with this
agreement.
(a) the Advisor will indemnify and hold Fund/Plan harmless for the actions of
its employees registered with the NASD as Fund/Plan representatives and
will undertake to maintain compliance with all rules and regulations
concerning any and all sales presentations made by such employees.
Such indemnity shall not, however, inure to the benefit of Fund/Plan (or
any person controlling Fund/Plan) on account of any losses, claims, damages
or liabilities (or actions, suits or proceedings in respect thereof)
arising from the sale of the shares of the Trust to any person by Fund/Plan
(i) if such untrue statement or omission or alleged untrue statement or
omission was made in the prospectus, statement of additional information,
or supplement, sales or other literature, in reliance upon and in
conformity with information furnished in writing to the Trust by Fund/Plan
specifically for use therein or (ii) if such losses, claims, damages or
liabilities arise out of or are based upon an untrue statement or omission
or alleged untrue statement or omission in the prospectus, statement of
additional information, or supplement, sales or other literature, if the
Trust shall correct the untrue statement or omission or the alleged untrue
statement or omission which is the basis of the loss, claim, damage or
liability for which indemnification is sought and a copy of the corrected
prospectus was not delivered to such person at or before the confirmation
of the sale to such person, unless such failure to deliver the corrected
prospectus was a result of noncompliance by the Trust.
(e) Fund/Plan agrees to indemnify and hold harmless the Trust, each person, if
any, who controls the Trust within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, insofar as such losses,
claims, damages or liabilities arise out of or are based upon any untrue
statement or omission or alleged untrue statement of a material fact
contained in the prospectus or statement of
additional information or any supplement thereto, or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if based upon information furnished in writing to the Trust by Fund/Plan specifically for use therein.
This Agreement shall automatically terminate in the event of its assignment. This Agreement may be terminated with respect to the Trust at any time, without payment of any penalty, by vote of a majority of the members of the Board of Trustees of the Trust who are not interested persons of the Trust or by vote of a majority of the outstanding voting securities of the Trust or by Fund/Plan on sixty (60) days' written notice to the other party.
This Agreement shall be effective on the date noted above and shall remain in
full force and effect for a period of two (2) years thereafter (unless
terminated as set forth in Paragraph 10), and from year to year thereafter, but
only so long as such continuance is specifically approved at least annually by:
(i) a majority of the outstanding voting securities of the Trust; or
(ii) a majority of the Trustees of the Trust who are not parties to this
Agreement or interested persons of any such party by vote cast in person at
a meeting called for the purpose of voting on such approval.
Fund/Plan shall prepare reports for the Board of Trustees of the Trust on a quarterly basis showing such information as from time to time shall be reasonably requested by such Board.
If any part, term or provision of this Agreement is held by any court to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term or provision held to be illegal or invalid.
This Agreement shall be governed by the laws of the Commonwealth of Pennsylvania and that the venue of any action arising under this Agreement shall be Montgomery County, Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement consisting of nine type written pages, together with Schedules "A", "B" and "C", to be signed by their duly authorized officers and their corporate seals hereunto duly affixed and attested, as of the day and year first above written.
(SEAL)
(SEAL)
Fund/Plan Broker Services, Inc. (FPBS), a fully registered Broker/Dealer and member of the National Association of Securities Dealers (NASD) offers Underwriter/Sponsor and Distribution/Marketing Services to our Mutual Fund Clients.
As Underwriter/Sponsor, FPBS assumes the responsibility for distribution of Trust shares within the guidelines outlined by the Investment Company Act of 1940 of the Securities Exchange Commission as well as the NASD. This includes, but is not limited to, submission of Trust literature to the NASD as well as registration and licensing of Trust personnel.
Underwriter/Sponsor services include:
A) Compliance and maintenance of Trust share registration limits
B) Preparation and execution of Underwriter and 12B-1 Plan Agreements
Monitoring accruals; Monitoring expenses; Dissbursements for expenses
and trail commissions
C) Quarterly Reports to Board of Directors and/or Trustees
D) Literature review, recommendations and submission to the NASD
E) All NASD required files and bookkeeping
F) Initial NASD Licensing and Transfers of Registered Representatives
This includes: U-4 Form and Fingerprint Submission to NASD; Supplying
Series 6 or 7 and 63 written study material; Renewals and
Terminations of Representatives
|
G) Written supervisory procedures and manuals for Registered Representatives
H) Ongoing training and updates for Representatives regarding disbursement of
Trust literature, written correspondence and communications with the public.
As Distributor (a term often used interchangeable with Underwriter), FPBS offers optional marketing services including, but not limited to, Inbound Telemarketing.
I. INBOUND TELEMARKETING SERVICES
A) Receive and answer directly with name of the Trust
B) Input marketing inquiries on confidential database for Fund
C) Fax to Trust daily the names and addresses of prospects requesting
literature.
C) Fax to Trust daily the names and phone numbers of prospects requesting
verbal information.
UNDERWRITER AND DISTRIBUTION FEE SCHEDULE
FOR
THE TIMOTHY PLAN
I. UNDERWRITER/SPONSOR SERVICES
A) The annual fee to Fund/Plan Broker Services (FPBS) will be $15,000 per year as primary Underwriter/Distributor of the Funds and primary licensing/regulatory agent for Trust personnel. Fund/Plan Broker Services will be required to maintain the Funds' registration with FPBS as Broker/Dealer of record.
B) FPBS will maintain annual NASD and state license renewals and the monitoring required of representative activities as follows:
Up to 2 States - $1,000 per Representative per Year 3 to 30 States - $2,000 per Representative per Year 31 to 50 States - $3,000 per Representative per Year
II. DISTRIBUTION/MARKETING SERVICES
Inbound Telemarketing Services $1.50 per call
Three Month Introductory Minimum Monthly Fee - $500
III. OUT-OF-POCKET EXPENSES
The Timothy Plan will reimburse Fund/Plan Services monthly for all out-of-pocket expenses, including postage, telecommunications (telephone and fax), special reports, record retention, special transportation costs as incurred.
IDENTIFICATION OF SERIES
Below are listed the "Series" to which services under this Agreement are to be performed as of the execution date of this Agreement:
This Schedule "C" may be amended from time to time by agreement of the Parties.
AMENDMENT TO SHAREHOLDER SERVICES AGREEMENT EXHIBIT 9(A)(I)
WITNESSETH THAT:
WHEREAS, the Trust and Fund/Plan have entered into an agreement dated January 19, 1994, which became effective February 23, 1994, wherein Fund/Plan has agreed to serve as Transfer, Redemption and Dividend Disbursing Agent to the Trust and to perform certain other functions in connection with these duties ("Shareholder Services Agreement"); and
WHEREAS, the Parties wish to amend the Shareholder Services Agreement to
reflect the creation of a multiple class structure for each Series of the Trust;
and
WHEREAS, the fee schedule is subject to review and adjustment not to exceed
10%;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Parties hereto, intending to be legally bound, do hereby
agree:
1. To amend Schedules "B" and "C" to the Shareholder Services Agreement
in the form attached hereto as Schedules "B" and "C".
2. This Amendment's Effective Date shall be February 23, 1996.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement consisting of one typewritten page, together with Schedules "B" and "C", to be signed by their duly authorized officers and their corporate seals hereunto duly affixed as of the day and year first above written.
The Timothy Plan Fund/Plan Services, Inc. - ---------------- ------------------------ _____________________________ _______________________________ By: Arthur D. Ally, President By: Kenneth J. Kempf, President ________________________________________ ________________________________ Attest: Joseph E. Boatwright, Secretary Attest: Janet F. Davis, Secretary |
MULTIPLE CLASS FEE SCHEDULE
FOR
THE TIMOTHY PLAN
(The Fee Schedule is fixed for a period of two (2) years from the effective date.)
I. SHAREHOLDER SERVICES AND TRANSFER AGENT FEES
The following is our schedule for Shareholder Services and Transfer Agent Services (1/12th payable monthly in advance based on the prior-month's average number of accounts.):
1) $10.40 per Account per Year for the Institutional Class Minimum Monthly Fee - $2,250; $27,000 per Year
$14.00 per Account per Year for the Retail Class Minimum Monthly Fee - $1,250; $15,000 per Year Reduction effective 1/1/96
(BILLED IN SEPTEMBER FOR CURRENT YEAR PROCESSING INCLUDING YEAR END. CHARGED TO
THE RESPECTIVE SHAREHOLDER ACCOUNT)
II. OUT-OF-POCKET EXPENSES
The Timothy Plan will reimburse Fund/Plan Services monthly for all out-of-pocket expenses, including postage, stationery (statements), telecommunications (telephone, fax, dedicated 800 line, on-line access), special reports, transmissions, tapes, couriers and any special travel expenses.
III. ADDITIONAL SERVICES
Activities of a non-recurring nature such as fund consolidations, mergers, or reorganizations will be subject to negotiation. To the extent the Funds should decide to issue multiple/separate classes of shares, additional fees will apply. Any enhanced services, programming requests or reports will be quoted upon request.
Below are listed the "Series" to which services under this Agreement are to be performed as of the execution date of the Agreement:
This Schedule "C" may be amended from time to time by agreement of the Parties.
SHAREHOLDER SERVICES AGREEMENT Exhibit 9(a)(ii)
WITNESSETH THAT:
WHEREAS, the Trust is authorized by its Trust Instrument to issue separate series of shares representing interests in separate investment portfolios (the "Series"), which Series are identified on Schedule "C" attached hereto and which Schedule "C" may be amended from time to time by mutual agreement of the Trust and Fund/Plan; and
WHEREAS, the Trust desires to retain Fund/Plan to perform share transfer agency, redemption and dividend disbursing services as set forth in this Agreement and in Schedule "A" attached hereto, and to perform certain other functions in connection with these duties; and
WHEREAS, Fund/Plan is registered with the Securities and Exchange Commission as a Transfer Agent as required under Section 17(A)(c) of the Securities Exchange Act of 1934, as amended; and
WHEREAS, Fund/Plan is willing to serve in such capacity and perform such functions upon the terms and conditions set forth below; NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereto, intending to be legally bound, do hereby agree as follows:
TRANSFER AGENCY SERVICES
without inquiry into adverse claims, in delaying registration for purposes of such inquiry, or in refusing registration where in its judgment an adverse claim requires such refusal.
ISSUANCE OF SHARES
Fund/Plan shall calculate daily the amount available for investment in Shares at the net asset value determined by the Series' pricing agent as of the close of regular trading on the New York Stock Exchange, the number of Shares and fractional Shares to be purchased and the net asset value to be deposited with the Custodian. Fund/Plan as agent for the Shareholders shall place a purchase order daily with the appropriate Series for the proper number of Shares and fractional Shares to be purchased and confirm such number to the Trust, in writing.
REDEMPTIONS
Records and the individual account of the Shareholder shall be properly debited.
For the purposes of redemption of Shares which have been purchased within 15 days of a redemption request, the Trust shall provide Fund/Plan, from time to time, with Written Instructions concerning the time within which such requests may be honored.
DIVIDENDS
For the purpose of determining fees payable to Fund/Plan, the value of Series' net assets shall be computed at the times and in the manner specified in Series' Prospectuses and Statement of Additional Information then in effect.
During the term of this Agreement, should the Trust seek services or functions in addition to those outlined above or in Schedule "A" attached, a written amendment to this Agreement specifying the additional services and corresponding compensation shall be executed by both Fund/Plan and the Trust.
GENERAL PROVISIONS
(a) Fund/Plan, its directors, officers, employees, shareholders and agents shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Trust, in connection with the performance of this
Agreement, except a loss resulting from willful misfeasance, bad faith, negligence or reckless disregard on the part of Fund/Plan in the performance of its obligations and duties under this Agreement.
(b) Any person, even though also a director, officer, employee, shareholder or agent of Fund/Plan, who may be or become an officer, trustee, employee, or agent of the Trust, shall be deemed, when rendering services to such entity or acting on any business of the Trust, (other than services or business in connection with Fund/Plan's duties hereunder), to be rendering such services to or acting solely for the Trust and not as a director, officer, employee, shareholder or agent of, or one under the control or direction of Fund/Plan even though that person is being paid a salary by Fund/Plan.
(c) Notwithstanding any other provision of this Agreement, the Trust shall indemnify and hold harmless Fund/Plan, its directors, officers, employees, shareholders and agents from and against any and all claims, demands, expenses and liabilities (whether with or without basis in fact or law) of any and every nature which Fund/Plan may sustain or incur or which may be asserted against Fund/Plan by any person by reason of, or as a result of (i) any action taken or omitted to be taken by Fund/Plan in good faith hereunder; (ii) any action taken or omitted to be taken by Fund/Plan in good faith in reliance upon any certificate, instrument, order, or stock certificate or other document reasonably believed by it to be genuine and to be signed, countersigned or executed by any duly authorized person, upon the Oral Instructions or Written Instructions of an authorized person of the Trust or upon the opinion of legal counsel to the Trust, or its own counsel; or (iii) any action taken or omitted to be taken by Fund/Plan in connection with its appointment under this agreement, which action or omission was taken in good faith in reliance upon any law, act, regulation or interpretation of the same even though the same may thereafter have been altered, changed, amended, or repealed. Indemnification under this subparagraph, however, shall not apply to actions or omissions of Fund/Plan or its directors, officers, employees, shareholders, or agents in cases of its or their own negligence, willful misconduct, bad faith, or reckless disregard of its or their own duties hereunder.
(d) Fund/Plan shall give written notice to the Trust within ten (10) business days of receipt by Fund/Plan of a written assertion or claim of any threatened or pending legal proceeding which may be subject to this indemnification. The failure to notify the Trust of such written assertion or claim shall not, however, operate in any manner whatsoever to relieve the Trust of any liability arising under this Section or otherwise, except to the extent that failure to give notice prejudices the Trust.
(e) For any legal proceeding giving rise to this indemnification, the Trust shall be entitled to defend or prosecute any claim in the name of Fund/Plan at its own expense and through counsel of its own choosing if it gives written notice to Fund/Plan within ten (10) business days of receiving notice of such claim. Notwithstanding the foregoing, Fund/Plan may participate in the litigation at its own expense through counsel of its own choosing. In the event the Trust chooses to defend or prosecute such claim, the parties shall cooperate in the defense or prosecution thereof and shall furnish such records and other information as are reasonably necessary.
(f) The Trust shall not settle any claim without Fund/Plan's express written consent which consent shall not be unreasonably withheld. Fund/Plan shall not settle any claim without the Trust's express written consent which likewise shall not be unreasonably withheld.
(c) The Trust or Fund/Plan may give written notice to the other of the termination of this Agreement, such termination to take effect at the time specified in the notice, not less than one hundred eighty (180) days after the giving of the notice. Upon the effective termination date, the Trust shall pay to Fund/Plan such compensation as
may be due as of the date of termination and shall likewise reimburse Fund/Plan for any out-of-pocket expenses and disbursements reasonably incurred by Fund/Plan to such date.
(d) In the event that in connection with termination of this Agreement a successor to any of Fund/Plan's duties or responsibilities under this Agreement is designated by the Trust by written notice to Fund/Plan, Fund/Plan shall, promptly upon such termination and at the expense of the Trust, transfer all Shareholder records and shall cooperate in the transfer of such duties and responsibilities.
If to The Timothy Plan: If to Fund/Plan: The Timothy Plan Fund/Plan Services, Inc. 1304 W. Fairbanks Avenue 2 West Elm Street Winter Park, FL 32729 Conshohocken, PA 19428 Attention: Arthur D. Ally Attention: Kenneth J. Kempf, President President |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement consisting in its entirety, of eleven type written pages, together with Schedules "A" , "B" and "C", to be signed by their duly authorized officers and their corporate seals hereunto duly affixed and attested, as of the day and year first above written.
____________________________________
Attest: Gregory F. Tighe, Secretary
(SEAL)
Fund/Plan Services, Inc.
------------------------
____________________________________
By: Nancy E. Kuhn,
Executive Vice President
|
(SEAL)
TRANSFER AGENT/SHAREHOLDER SERVICES FOR THE TIMOTHY PLAN
THE FOLLOWING IS A LIST OF TRANSFER AGENCY SERVICES TO BE PROVIDED:
. Opening new accounts and entering demographic data into shareholder base.
. Real-time Customer Information File (CIF) to link accounts within a Fund and across Funds. Facilitates account maintenance, lead tracking, quality control, household mailings and combined statements.
. 100% Quality Control of new accounts opened on a same-day basis, next day if
high volume.
. Account Maintenance
. Processing all investments to include:
- initial investments
- subsequent investments through lock box computer interface
- pre-authorized investments through ACH
- government allotments through ACH
. Processing tax ID certifications and Non-Resident Alien (NRA) and reporting
back-up withholding.
. Processing regular and legal transfers of accounts.
. Automated exchange processing.
. Shareholder calls are recorded and retained on tape.
. Research and respond to shareholder calls and written inquiries.
. Responding to all tax related inquiries.
. Processing reinvestment of dividends of one fund into another fund. (If
Applicable)*
. Processing sweep purchases and redemptions for brokerage, bank, or other
accounts via tape or transmission.*
. Generating account statements with copies to appropriate interested parties.
(Up to four statements.)
TRANSFER AGENT/SHAREHOLDER SERVICES
. Redemption processing to include:
- complete and partial redemptions
- selected group redemptions*
. Distribution options:
- federal wires*
- mailing checks
- ACH*
. Certificate issuance and cancellation.
. Replacement of certificates through surety bonds.*
. Process annual dividends.
. Maintain Blue Sky reporting and produce daily and monthly reports. Daily reports reflect a "warning system" that informs a Fund when it is within a certain percentage of shares registered in a state, or within a certain time period for permit renewal.
. Producing daily and monthly reports of shareholder activity.
Report Number Report Description
------------- ------------------
049 Daily Transaction Journal
024 Tax Reporting Proof
051 Cash Receipts and Disbursement Proof
053 Daily Share Proof
091 Daily Gain/Loss Report
104 Maintenance Register
044 Transfer/Certificate Register
056 Blue Sky Warning Report
501 New Account Report
Page 125
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MONTHLY REPORTS
---------------
Report Description
------------------
Blue Sky
|
Certificate Listing
State Sales and Redemption
Fund Statistical
Account Demographic Analysis
MTD Sales - Demographics by Account Group
Account Analysis by Type
TRANSFER AGENT/SHAREHOLDER SERVICES
. Producing shareholder lists, labels, ad hoc reports to management, etc. *
. Addressing, mailing, and tabulation of annual proxy cards, as necessary.
. Preparation of federal tax information forms to include 1099-DIV's, 1099-B's, 1042's, etc. to shareholders with tape to IRS.
. Microfilming and indexing in PC system of all application, correspondence and other pertinent shareholder documents to provide automated location of these records. Also, all checks presented for payment or check redemptions are microfilmed.
. System access by PC dial-up or by dedicated line. (If Applicable)*
. Retirement Plan processing.*
(Charge to Shareholder)
- Tracking current, prior year and rollover contributions
- 5498 tax reporting January and May
- Processing transfer of assets
- recall of required minimum distribution for IRA SWP's for shareholders over
59-1/2
* Separate fees will apply for these services.
FEE SCHEDULE
FOR
THE TIMOTHY PLAN
(The Fee Schedule is fixed for a period of two (2) years from the effective date of the Fund with a fee increase in the third year not to exceed 10%)
I. SHAREHOLDER SERVICES AND TRANSFER AGENT FEES
The following is our schedule for Shareholder Services and Transfer Agent Services (1/12th payable monthly in advance based on the prior-month's average number of accounts.):
1) $10.40 per Account per Year Minimum Monthly Fee - $2,250 per Portfolio; $27,000 per Year per Fund
(NOT BILLED UNTIL SEPTEMBER AND IN ADVANCE. CHARGED TO THE RESPECTIVE
SHAREHOLDER ACCOUNT)
II. OUT-OF-POCKET EXPENSES
The Timothy Plan will reimburse Fund/Plan Services monthly for all out-of-pocket expenses, including postage, stationery (statements), telecommunications (telephone, fax, dedicated 800 line, on-line access), special reports, transmissions, tapes, couriers and any special travel expenses.
III. ADDITIONAL SERVICES
Activities of a non-recurring nature such as fund consolidations, mergers, or reorganizations will be subject to negotiation. To the extent the Funds should decide to issue multiple/separate classes of shares, additional fees will apply. Any enhanced services, programming requests or reports will be quoted upon request.
Below are listed the "Series" to which services under this Agreement are to be performed as of the execution date of the Agreement:
This Schedule "C" may be amended from time to time by agreement of the Parties.
AMENDMENT TO ADMINISTRATION AGREEMENT EXHIBIT 9(B)(I)
WITNESSETH THAT:
WHEREAS, the Trust and Fund/Plan have entered into an agreement dated January 19, 1994, which became effective February 23, 1994, wherein Fund/Plan has agreed to serve as administrator to provide certain administrative services to the Trust ("Administrative Services Agreement"); and
WHEREAS, the Parties wish to amend the Administrative Services Agreement to
reflect the creation of a multiple class structure for the Trust; and
WHEREAS, the fee schedule is subject to review and adjustment not to exceed
10%;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Parties hereto, intending to be legally bound, do hereby
agree:
1. To amend Schedules "A", "B" and "C" to the Administrative Services
Agreement in the form attached hereto as Schedules "A", "B" and "C".
2. This Amendment's Effective Date shall be February 23, 1996.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement consisting of one type written page, together with Schedules "A", "B" and "C", to be signed by their duly authorized officers and their corporate seals hereunto duly affixed as of the day and year first above written.
____________________________________By:
Arthur D. Ally, President
ADMINISTRATION SERVICES
FOR
THE TIMOTHY PLAN
The Fund Administration Department was initiated in 1987. Considerable interest has developed from both existing and potential clients since this product was first offered. Fund/Plan currently provides Fund Administration to 17 management companies with 62 mutual funds with assets in excess of $4.5 billion. The services provided under Fund Administration include: Regulatory Compliance, Corporate Business and Financial Management Reporting and Foreign Investment Compliance. A brief description of these functions and an outline of services involved in domestic and foreign funds are reflected below.
The department presently consists of forty professionals with varied backgrounds in broker/dealer services, regulatory compliance, mutual fund accounting and support services. Our credentials include various brokerage licenses, CPA licenses, law and graduate level degrees.
Fund/Plan's Administration Department offers a comprehensive array of services necessary for the successful operation of a mutual fund. Our staff handles these responsibilities promptly and efficiently, enabling the Advisor to be relieved of burdensome compliance, operational and recordkeeping tasks. In maintaining the knowledge and systems necessary for proper execution of these responsibilities, we remain current with changes in Federal and State laws.
To enable The Timothy Plan to better understand the scope of these services, we have identified below some of these functions, separating them into three main categories: Regulatory Compliance, Corporate Business, Financial Management Reporting.
We are responsible for preparing and filing with the Securities and Exchange Commission all documents necessary to keep the funds in compliance with the Investment Company Act of 1940. Examples include the N-1A (prospectus), N-SAR (annual and semi-annual reports to SEC), proxy (for regular and/or special shareholder meetings), 24f-2 (federal registration of shares sold), and fidelity bond.
We oversee the operational activities of the funds. We assist the Investment Advisor in monitoring the portfolio transactions and security holdings to see that they stay within the stated investment objectives and parameters of the prospectus.
We handle the entire Board of Directors/Trustees meeting process. We prepare and distribute a complete package with all materials necessary for an effective and concise Directors'/Trustees' meeting. We ensure that all 1940 Act compliance is included at the appropriate time for Board review. Further, we arrange, prepare the agenda, attend and record minutes, relieving Fund Management and Counsel of these responsibilities.
Should a shareholder meeting be called, we will prepare, file and oversee the mailing of the proxy statement and conduct the meeting and record proceedings.
We maintain corporate records and calendars. On behalf of the fund we coordinate contract proposals from printers, insurers and others. In addition, corporate information is dispensed to the public, the financial community and the press with regard to distributions paid, corporate developments and performance records.
We prepare all mailings to shareholders, including annual and interim reports, tax letters, dividend notices and any periodic reports or letters from fund management. We respond to requests for performance figures and other corporate information. We analyze and report on shareholder activity such as trends in new accounts, retirement accounts or exchanges.
We review the reports from our Accounting and Custody Departments, including cash movements and 12b-1 accruals.
We establish and determine accrual rates and review and update these schedules monthly. We obtain authorization from Fund Management, then disburse all payments for fees and expenses.
We prepare the annual and semi-annual reports to shareholders and work with the Fund's independent auditors to ensure a smooth and efficient annual audit.
A comprehensive analytical report package is provided to management monthly, including shareholder activity, year-to-date (YTD) dividend, YTD total return/performance analyses and YTD expense analyses, aggregate sales, redemptions, and Subchapter M compliance and other reports as contracted and mutually agreed upon.
We calculate the amounts of income and capital gain for distributions to shareholders. The distribution rates are discussed with and approved by Fund Management and the Fund's independent auditors. All distributions are in compliance with the Investment Company Act of 1940 and the Internal Revenue Service.
We review the Fund's records to see that certain accounting procedures and calculations meet current GAAP requirements and that the fund remains qualified under Subchapter "M" of the Internal Revenue Code.
FUND ADMINISTRATION OUTLINE
FOR
THE TIMOTHY PLAN
ADDITIONAL TASKS
FOR MULTIPLE CLASSES
--------------------
I. REGULATORY COMPLIANCE
---------------------
A. Compliance - Federal Investment Company
Act of 1940
1. Review, report and renew
a. investment advisory contracts
b. fidelity bond
c. underwriting contracts additional liability
d. distribution (12b-1) plans separate on certain
e administration contracts classes only
f. accounting contracts
g. custody administration contracts
h. transfer agent and shareholder
services
2. Filings
a N-SAR (semi-annual report) additional reporting
required
b. N-1A (prospectus), post- will require some
effective amendments and additional reporting
supplements ("stickers") for cap stock and
financial information
c. 24f-2 indefinite registration
of shares
d. filing fidelity bond under 17g-1
e. filing shareholder reports
under 30b2-1
3. Annual up-dates of biographical information
and questionnaires for Directors/Trustees
and Officers
B. Compliance - Other
1. applicable stock exchange rules
2. applicable state tax laws
|
ADDITIONAL TASKS
FOR MULTIPLE CLASSES
--------------------
II. CORPORATE BUSINESS AND SHAREHOLDER/PUBLIC INFORMATION
-----------------------------------------------------
A. Directors/Trustees/Management
1. Preparation of meetings
a. agendas - all necessary items separate special reports
of compliance on 12b-1 income and
expenditures
b. arrange and conduct meetings
c. prepare minutes of meetings
d. keep attendance records
e. maintain corporate records/
minute book
B. Coordinate Proposals
1. Printers
2. Auditors
3. Literature fulfillment
4. Insurance
C. Maintain Corporate Calendars and Files need to be expanded
re: separate by class
D. Release Corporate Information
1. To shareholders
2. To financial and general press
3. To industry publications additional questionnaires
and/or announcements
some pertinent to only
1 class
a. distributions (dividends separate calculation for
and capital gains) each class
b. tax information
c. changes to prospectus
d. letters from management
e. funds' performance separate performance
by class
|
ADDITIONAL TASKS
FOR MULTIPLE CLASSES
--------------------
4. Respond to:
a. financial press
b. miscellaneous shareholders
inquiries
c. industry questionnaires
E. Communications to Shareholders amendments to
financial highlights
table and notes only
1. Coordinate printing and distribution
of annual, semi-annual reports,
and prospectus
III. FINANCIAL AND MANAGEMENT REPORTING
------------------------------------
A. Income and Expenses
1. Expense figures calculated and separate by class
accrual levels set
2. Monitoring of expenses and separate by class
expense caps (monthly)
3. Approve and coordinate payment of
expenses
4. Checking Account Reconciliation
(monthly) and establish Funds operating
expense checking account
5. Calculation of advisory fee, 12b-1 fee
and reimbursements to fund,
(if applicable)
6. Authorize the recording and amortization
of organizational costs and pre-paid
expenses (supplied by advisor), for
start-up funds and reorganizations
7. Calculation of average net assets
B. Distributions to Shareholders
1. Calculations of dividends and separate dividend
capital gain distributions calculations
(in conjunction with the fund
and their auditors)
ADDITIONAL TASKS
FOR MULTIPLE CLASSES
--------------------
a. compliance with income tax will require
provisions additional
calculations
b. compliance with excise tax provisions
c. compliance with Investment Company
Act of 1940
C. Financial Reporting
1. Liaison between fund management,
|
independent auditors and printers
for shareholder reports
2. Preparation of semi-annual will require additional
and annual reports to shareholders disclosure and reporting
by class
3. 60 day delivery to SEC and
shareholders
4. Preparation of semi-annual and will require additional
annual NSAR's (Financial Data) disclosure and reporting
by class
5. Preparation of Financial Statements will require additional
for required SEC Post-Effective disclosure and reporting
filings (if applicable) by class
D. Subchapter M Compliance (monthly)
1. Asset diversification test
2. Short/short test
E. Other Financial Analyses
1. Upon request from fund will have
management, other budgeting and some impact
analyses can be constructed to
meet a fund's specific needs
(additional fees may apply)
2. Sales information, portfolio turnover
(monthly)
3. Work closely with independent will have
auditors on return of capital some impact
presentation, excise tax calculation
ADDITIONAL TASKS
FOR MULTIPLE CLASSES
-------------------------------------
4. Performance (total return) separate by class
calculation (monthly)
5. 1099 Miscellaneous - prepared for Directors/
Trustees (annual)(If Applicable)
6. Analysis of interest derived from various
Government obligations (annual) (if
interest income was distributed in a calendar
year)
F. Review and Monitoring Functions (monthly)
1. Review expense and reclassification will have
entries to ensure proper update some impact
2. Perform various reviews to ensure will have
accuracy of subscription/liquidation some impact
schedules, Accounting (the monthly
expense analysis), and Custody
(review of daily bank statements
to ensure accurate money movement).
3. Review accruals and expenditures separate by class
where applicable
G. Preparation and distribution of monthly will have
|
operational reports to management by some impact
10th Business day
1. Management Statistics (Recap) will have
some impact
a. portfolio
b. book gains/losses/per share
c. net income, book income/per share
d. capital stock activity
e. distributions
2. Performance Analysis separate by class
a. total return
b. monthly, quarterly,
year to date, average annual
3. Expense Analysis separate by class
a. schedule
b. summary of due to/from advisor
c. expenses paid
d. expense cap
ADDITIONAL TASKS
FOR MULTIPLE CLASSES
--------------------
e. accrual monitoring
f. advisory fee
4. Short-Short Analysis
a. short-short income
b. gross income (components)
5. Portfolio Turnover
a. market value
b. cost of purchases
c. net proceeds of sales
d. average market value
6. Asset Diversification Test
a. gross assets
b. non-qualifying asset
7. Activity Summary separate by class
a. shares sold, redeemed and reinvested
b. change in investment
H. Provide rating agencies statistical will require
data as requested (monthly/quarterly) additional reporting
by class
I. Standard schedules for Board Package
(Quarterly)
1. Activity Summary (III-G-7 from above)
2. Expense analysis
3. Other schedules can be provided
(additional fees may apply)
|
MULTIPLE CLASS FEE SCHEDULE
FOR
THE TIMOTHY PLAN
(The Fee Schedule is fixed for a period of two (2) years from the effective date.)
I. FUND ADMINISTRATION
(1/12th payable monthly)
.0015 On the First $ 50 Million of Average Net Assets .0010 On the Next $ 50 Million of Average Net Assets .0005 Over $100 Million of Average Net Assets |
The rates stated in the above Administration fee schedule are annualized and will be applied to the aggregate total net assets of the Trust. In addition, there is a minimum fee of $50,000 per year for the initial series of shares issued by the Trust and $12,000 per year for each additional separate series of shares or multiple class portfolios issued the Trust. The minimum fees will be applied to each separate series of shares or multiple class portfolio until such time that all separate series or multiple class portfolios within the Trust exceed the minimum fees.
II. OUT-OF-POCKET EXPENSES
The Timothy Plan will reimburse Fund/Plan Services, Inc. monthly for all reasonable out-of-pocket expenses, including postage, telecommunications (telephone and fax), EDGAR filing fees (if applicable), special reports, record retention, special transportation costs as incurred. The cost of copying and sending materials to auditors for off-site audits will be an additional expense.
III. ADDITIONAL SERVICES
Activities of a non-recurring nature such as fund consolidations, mergers or reorganizations will be subject to negotiation. To the extent the Trust should decide to issue multiple/separate classes of shares, additional fees will apply. Any additional/enhanced services or reports will be quoted upon request.
IDENTIFICATION OF SERIES
Below are listed the "Series" to which services under this Agreement are to be performed as of the execution date of this Agreement:
This Schedule "C" may be amended from time to time by agreement of the Parties.
ADMINISTRATION AGREEMENT Exhibit 9(b)(ii)
WITNESSETH THAT:
WHEREAS, the Trust is authorized by its Trust Instrument to issue separate series of shares representing interests in separate investment portfolios (the "Series"), which Series are identified on Schedule "C" attached hereto, and which Schedule "C" may be amended from time to time by mutual agreement of the Trust and Fund/Plan; and
WHEREAS, the Parties desire to enter into an agreement whereby Fund/Plan will provide certain administration services to each of the Series on the terms and conditions set forth in this Agreement; and
WHEREAS, Fund/Plan is willing to serve in such capacity and perform such administrative services under the terms and conditions set forth below; and
WHEREAS, the Trust on behalf of each of the Series, will provide certain information concerning the Series to Fund/Plan as set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereto, intending to be legally bound, do hereby agree as follows:
(b) So that Fund/Plan may perform its duties under the terms of this Agreement, the Board of Trustees of the Trust shall direct the officers, advisor, distributor, legal counsel, independent accountants and custodian of the Trust to fully cooperate with Fund/Plan and to provide such information, documents and advice relating to the Series as is within the possession or knowledge of such persons. In connection with its duties, Fund/Plan shall be entitled to rely, and shall be held harmless by the Trust when acting in reasonable reliance upon the instruction, advice or any documents relating to the Series as provided by the Trust to Fund/Plan by any of the aforementioned persons. All fees charged by any such persons shall be deemed an expense of the Trust.
(c) Any activities performed by Fund/Plan under this Agreement shall conform to the requirements of:
(1)the provisions of the Securities Act of 1933, as amended, and of any rules or regulations in force thereunder;
(2)any other applicable provision of state and federal law;
(3)the provisions of the Declaration of Trust and By-Laws of the Trust as amended from time to time;
(4)any policies and determinations of the Board of Trustees of the Trust; and
(5)the fundamental policies of the Series as reflected in its registration statement under the Act.
Fund/Plan agrees that all records that it maintains for the Trust are property of the Trust and will be surrendered promptly to the Trust upon written request. Fund/Plan will preserve, for the periods prescribed under Rule 31a-2 under the Act, all such records required to be maintained under Rule 31a-1 of the Act.
(d) Nothing in this Agreement shall prevent Fund/Plan or any officer thereof from acting as administrator for or with any other person, firm or corporation. While the administrative services supplied to the Trust may be different than those supplied to other persons, firms or corporations, Fund/Plan shall provide the Trust equitable treatment in supplying services. The Trust recognizes that it will not receive preferential treatment from Fund/Plan as compared with the treatment provided to other Fund/Plan clients. Fund/Plan agrees to maintain the records and all other information of the Trust in a confidential manner and shall not use such information for any purpose other than the performance of Fund/Plan's duties under this Agreement.
(a) fees paid to the Adviser;
(b) interest and taxes;
(c) brokerage fees and commissions;
(d) insurance premiums;
(e) compensation and expenses of its Trustees who are not affiliated
persons of the Adviser;
(f) legal, accounting and audit expenses;
(g) custodian and transfer agent, or shareholder servicing agent, fees and
expenses;
(h) fees and expenses incident to the registration of the shares of the
Trust under Federal or state securities laws;
(i) expenses related to preparing, setting in type, printing and mailing
prospectuses, statements of additional information, reports and notices and
proxy material to shareholders of the Trust;
(j) all expenses incidental to holding meetings of shareholders and
Trustees of the Trust;
(k) such extraordinary expenses as may arise, including litigation,
affecting the Trust and the legal obligations which the Trust may have regarding
indemnification of its officers and trustees; and
(l) fees and out-of-pocket expenses paid on behalf of the Trust by
Fund/Plan.
For the purpose of determining fees payable to Fund/Plan, the value of Series' net assets shall be computed at the times and in the manner specified in Series' Prospectuses and Statement of Additional Information then in effect.
During the term of this Agreement, should the Trust seek services or functions in addition to those outlined above or in Schedule "A" attached, a written amendment to this Agreement specifying the additional services and corresponding compensation shall be executed by both Fund/Plan and the Trust.
(a) The execution and delivery of this contract has been duly authorized by
the Board of Trustees of the Trust and executed on behalf of the Trust by the
undersigned officer, in that officer's capacity as an officer of the Trust. The
obligations under this Agreement shall be binding upon the assets and property
of the Trust and shall not be binding upon any, officer or shareholder of the
Series individually.
(b) Fund/Plan, its directors, officers, employees, shareholders and agents
shall not be liable for any error of judgment or mistake of law or for any loss
suffered by the Trust in connection with the performance of this Agreement,
except a loss resulting from willful misfeasance, bad faith or negligence or
reckless disregard on the part of Fund/Plan in the performance of its
obligations and duties under this Agreement.
(c) Any person, even though also a director, officer, employee, shareholder
or agent of Fund/Plan, who may be or become an officer, trustee, employee or
agent of the Trust, shall be deemed when rendering services to such entity or
acting on any business of such entity (other than services or business in
connection with Fund/Plan's duties under the Agreement), to be rendering such
services to or acting solely for the Trust and not as a director, officer,
employee, shareholder or agent of, or one under the control or direction of
Fund/Plan even though such person may receive compensation from Fund/Plan.
(d) Notwithstanding any other provision of this Agreement, the Trust shall
indemnify and hold harmless Fund/Plan, its directors, officers, employees,
shareholders and agents from and against any and all claims, demands, expenses
and liabilities (whether with or without basis in fact or law) of any and every
nature which Fund/Plan may sustain or incur or which may be asserted against
Fund/Plan by any person by reason of, or as a result of (i) any action taken or
omitted to be taken by Fund/Plan in good faith, (ii) any action taken or omitted
to be taken by Fund/Plan in good faith in reliance upon any certificate,
instrument, order or stock certificate or other document reasonably believed by
Fund/Plan to be genuine and to be signed, countersigned or executed by any duly
authorized person, upon the oral instructions or written instruction of an
authorized person of the Trust or upon the opinion of legal counsel for the
Trust; or (iii) any action taken or omitted to be taken by Fund/Plan in
connection with its appointment in good faith in reliance upon any law, act,
regulation or interpretation of the same even though the same may thereafter
have been altered, changed, amended or repealed. Indemnification under this
subparagraph shall not apply, however, to actions or omissions of Fund/Plan or
its directors, officers, employees, shareholders or agents in cases of its or
their own negligence, misconduct, bad faith, or reckless disregard of its or
their own duties hereunder.
(e) Fund/Plan shall give written notice to the Trust within ten (10)
business days of receipt by Fund/Plan of a written assertion or claim of any
threatened or pending legal proceeding which may be subject to this
indemnification. The failure to notify the Trust of such written assertion or
claim shall not, however, operate in any manner whatsoever to relieve the Trust
of any liability arising under this Section or otherwise, unless such failure
prejudices the Trust.
(f) For any legal proceeding giving rise to this indemnification, the Trust
shall be entitled to defend or prosecute any claim in the name of Fund/Plan at
its own expense and through counsel of its own choosing if it gives written
notice to Fund/Plan within thirty (30) business days of receiving notice of such
claim. Notwithstanding the foregoing, Fund/Plan may participate in the
litigation at its own expense through counsel of its own choosing. If the Trust
does choose to defend or prosecute such claim, then the parties shall cooperate
in the defense or prosecution thereof and shall furnish such records and other
information as are reasonably necessary.
(g) The terms of this Section 8 shall survive the termination of this
Agreement.
If to the Trust: If to Fund/Plan: ---------------- ---------------- The Timothy Plan Fund/Plan Services, Inc. 1304 W. Fairbanks Avenue 2 West Elm Street Winter Park, FL 32729 Conshohocken, PA 19428 Attention: Arthur D. Ally, Attention: Kenneth J. Kempf, President President Section 10. Severability If any part, term or provision of this ----------- ------------ |
Agreement is held by any court to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term or provision held to be illegal or invalid.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement consisting of seven type written pages, together with Schedules "A", "B" and "C", to be signed by their duly authorized officers and their corporate seals hereunto duly affixed and attested, as of the day and year first above written.
The Timothy Plan Fund/Plan Services, Inc.
- ---------------- ------------------------
____________________________________ ____________________________________
By: Arthur D. Ally, President By: Kenneth J. Kempf, President
____________________________________ ____________________________________
Attest: Gregory F. Tighe, Secretary Attest: Janet F. Davis, Secretary
(SEAL) (SEAL)
|
FUND ADMINISTRATION SERVICES
FOR
THE TIMOTHY PLAN
I. REGULATORY COMPLIANCE
A. Compliance - Federal Investment Company Act of 1940
1. Review, report and renew
a. investment advisory contracts
b. fidelity bond
c. underwriting contracts
d. distribution (12(b)-1) plans
e. administration contracts
f. accounting contracts
g. custody contracts
h. transfer agent and shareholder services contracts
2. Filings
a. N-SAR (semi-annual report)
b. N-1A (prospectus), post effective amendments and supplements
("stickers")
c. proxy statement (when necessary)
d. 24f-2 indefinite registration of shares
e. filing fidelity bond under 17g-1
f. filing shareholder reports under 30b2-1
3. Annual up-dates of biographical information and questionnaires for Trustees and Officers
B. Compliance - State "Blue Sky"
1. Blue Sky (state registration)
a. registration shares
b. registration issuer/dealer/agent (no loads)
c. monitor sale shares over/under
d. report shares sold
e. filing of federal prospectus and contracts
f. filing annual and semi-annual reports with states
C. Compliance - Prospectus
1. Analyze and review portfolio reports from adviser re:
a. compliance with investment objectives
b. maximum investment by company/industry size
FUND ADMINISTRATION SERVICES
D. Compliance - Other
1. Proxy when necessary
2. Applicable stock exchange rules
3. Applicable state tax laws
II. CORPORATE BUSINESS AND SHAREHOLDER/PUBLIC INFORMATION
A. Trustees/Management
1. Preparation of meetings
a. agendas - all necessary items of compliance
b. arrange and conduct meetings
c. prepare minutes of same
d. keep attendance records
e. maintain corporate records/minute book
B. Coordinate Proposals
1. Printers
2. Auditors
3. Literature fulfillment
4. Insurance
5. Underwriters
C. Maintain Corporate Calendars and Files
1. General
2. Blue sky
D. Shareholder Meetings
1. Preparation of proxy
2. Conduct meeting
3. Preparation of minutes and record ballot results
E. Release Corporate Information
1. To shareholders
2. To financial and general press
3. To industry publications
a. distributions (dividends and capital gains)
b. tax information
c. changes to prospectus
d. letters from management
e. funds' performance
4. Respond to:
a. financial press
b. miscellaneous shareholders inquiries
c. industry questionnaires
FUND ADMINISTRATION SERVICES
5. Prepare, maintain and update monthly information manual
F. Communications to Shareholders
1. Coordinate printing and distribution of annual, semi-annual,
quarterly reports, and prospectus
III. FINANCIAL AND MANAGEMENT REPORTING
A. Income and Expenses
1. Preparation of budgets
2. Expense figures calculated and accrual levels set
3. Monitoring of expenses
4. Approve and authorize payment of expenses
5. Projection of Income
B. Distributions to Shareholders
1. Projections of distribution amounts
a. compliance with income tax provisions
b. compliance with excise tax provisions
c. compliance with Investment Company Act of 1940
2. Compilation and reclassification of distributions, where applicable, for year end tax reporting to shareholders
C. Financial Reporting
1. Liaison between fund management and auditors
2. Preparation of unaudited and audited reports to shareholders
3. 60 day delivery to SEC and shareholders
D. Subchapter M Compliance
1. Asset diversification test
2. Short/short test
3. Income qualification test
E. Other Financial Analyses
1. Upon request from fund management, other budgeting and analyses can
be constructed to meet a fund's specific needs
F. Review and Monitoring Functions
1. Review NAV calculations
2. Coordinate and review transfer agent, accounting and custody
functions
3. Review 12b-1, accruals, expenditures and payment trail commissions
where applicable
FUND ADMINISTRATION SERVICES
G. 1. Preparation and distribution of periodic operational and statistical reports to management.
FEE SCHEDULE
FOR
THE TIMOTHY PLAN
(The Fee Schedule is fixed for a period of two (2) years from the effective date of the Fund with a fee increase in the third year not to exceed 10%)
I. FUND ADMINISTRATION
(1/12th
payable
monthly)
.0015 On the First $ 50 Million of Average Net
Assets
.0010 On the Next $ 50 Million of Average Net
Assets
.0005 Over $100 Million of Average Net Assets
|
The rates stated in the above Administration fee schedule are annualized and will be applied to the aggregate total net assets of the Trust. In addition, there is a minimum fee of $50,000 per year for the initial series of shares issued by the Trust and $10,000 per year for each additional separate series of shares issued the Trust. The minimum fees will be applied to each separate series of shares until such time that all separate series within the Trust exceed the minimum fees.
II. OUT-OF-POCKET EXPENSES
The Timothy Plan will reimburse Fund/Plan Services monthly for all reasonable out-of-pocket expenses, including postage, telecommunications (telephone and fax), special reports, record retention, special transportation costs as incurred. The cost of copying and sending materials to auditors for off-site audits will be an additional expense.
III. ADDITIONAL SERVICES
Activities of a non-recurring nature such as fund consolidations, mergers or reorganizations will be subject to negotiation. To the extent the Fund should decide to issue multiple/separate classes of shares, additional fees will apply. Any additional/enhanced services or reports will be quoted upon request.
IDENTIFICATION OF SERIES
Below are listed the "Series" to which services under this Agreement are to be performed as of the execution date of this Agreement:
This Schedule "C" may be amended from time to time by agreement of the Parties.
ACCOUNTING SERVICES AGREEMENT Exhibit 9(c)
WITNESSETH THAT:
WHEREAS, the Trust is authorized by its Trust Instrument to issue separate series of shares representing interests in separate investment portfolios (the "Series"), which Series are identified together with any classes of shares of such Series, on Schedule "C" attached hereto and which Schedule "C" may be amended from time to time by mutual agreement of the Trust and Fund/Plan; and
WHEREAS, the Trust desires to appoint Fund/Plan as Accounting Services Agent to maintain and keep current the books, accounts, records, journals or other records of original entry relating to the business of the Trust (the "Accounts and Records") and to perform certain other functions in connection with such Accounts and Records pursuant to the terms and conditions set forth in this Agreement; and
WHEREAS, Fund/Plan is willing to serve in such capacity and perform such functions pursuant to the terms and conditions set forth in this Agreement; and
WHEREAS, the Trust will provide all necessary information concerning the Series to Fund/Plan so that Fund/Plan may appropriately execute its responsibilities hereunder;
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and in exchange of good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the Parties hereto, intending to be legally bound, do hereby agree as follows:
The Trust shall file with Fund/Plan a certified copy of each resolution of its Board of Directors authorizing execution of Written Instructions or the transmittal of Oral Instructions as provided above.
of each security.
(o) Average Daily Net assets provided on monthly basis.
The necessary information to perform the above functions and the calculation of the net asset value of the Trust as provided below, is to be furnished by Written or Oral Instructions to Fund/Plan daily (in accordance with the time frame identified in Section 8) prior to the close of regular trading on the New York Stock Exchange.
Fund/Plan will assume no liability for price changes caused by: the investment adviser(s), custodian, suppliers of security prices and corporate action and dividend information, or any party other than Fund/Plan itself.
In the event an error is made by Fund/Plan which creates a price change, consideration must be given to the effect of the price change as described below. Notwithstanding the provisions of Section 12, the following provisions govern Fund/Plan's liability for errors in calculating the net asset value ("NAV") NAV of the Series:
If the NAV should have been higher for a date or dates in the past, the error would have the effect of having given more shares to subscribers and less money to redeemers to which they were entitled. Conversely, if the NAV should have been lower, the error would have the effect of having given less shares to subscribers and overpaying redeemers.
If the error affects the prior business day's NAV only, and if Fund/Plan can rerun the prior day's work before shareholder statements and checks are mailed, the Trust hereby accepts this manner of correcting the error. If the error spans five (5) business days or less, Fund/Plan shall reprocess shareholder purchases and redemptions where redeeming shareholders have been underpaid. Fund/Plan shall assume liability to the Trust for overpayments to shareholders who have fully redeemed.
If the error spans more than five (5) business days, Fund/Plan would bear the liability to the Trust for, 1) paying for the excess shares given to shareholders if the NAV should have been higher, or, 2) funding overpayments to shareholders who have redeemed if the NAV should have been lower. The cost of any reprocessing required for shareholders who have been credited with fewer shares than appropriate, or for redeeming shareholders who are due additional amounts of money will also be borne by Fund/Plan.
reprocessing, necessary to correct any discrepancy or error. To the extent such action requires Fund/Plan to act, the Trust shall give Fund/Plan specific Written Instruction as to the action required.
(a) Fund/Plan, its directors, officers, employees, shareholders, and agents shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Trust in connection with the performance of this Agreement, except losses resulting from willful misfeasance, bad faith, negligence or reckless disregard on the part of Fund/Plan in the performance of its obligations and duties under this Agreement.
(b) Any person, even though also a director, officer, employee, shareholder or agent of Fund/Plan, who may be or become an officer, trustee, employee or agent of the Trust shall be deemed, when rendering services to the Trust or acting on any business of the Trust (other than services or business in connection with Fund/Plan's duties hereunder), to be rendering such services to or acting solely for the Trust, and not as a director, officer, employee, shareholder or agent of, or one under the control or direction of Fund/Plan even though receiving a salary from Fund/Plan.
(c) Notwithstanding any other provision of this Agreement, the Trust shall indemnify and hold harmless Fund/Plan, its directors, officers, employees, shareholders and agents from and against any and all claims, demands, expenses and liabilities (whether with or without basis in fact or law) of any and every nature which Fund/Plan may sustain or incur or which may be asserted against Fund/Plan by any person by reason of, or as a result of:
(i) any action taken or omitted to be taken by Fund/Plan except matters resulting from willful misfeasance, bad faith, negligence or reckless disregard on the part of Fund/Plan in the performance of its obligations and duties under this Agreement; or
(ii) in reliance upon any certificate, instrument, order or stock certificate or other document reasonably believed by it to be genuine and to be signed, countersigned or executed by any duly authorized person,
upon the Oral Instructions or Written Instructions of an authorized person of the Trust or upon the written opinion of legal counsel for the Trust or Fund/Plan; or
(iii) any action taken or omitted to be taken in good faith by Fund/Plan in connection with its appointment, in reliance upon any law, act, regulation or interpretation of the same even though the same may thereafter have been altered, changed, amended, or repealed. Indemnification under this subparagraph shall not apply, however, to actions or omissions of Fund/Plan or its directors, officers, employees, shareholders, or agents in cases of its or their own negligence, willful misconduct, bad faith, or reckless disregard of its or their own duties hereunder.
Fund/Plan shall give written notice to the Trust within ten (10) business days of receipt by Fund/Plan of a written assertion or claim of any threatened or pending legal proceeding which may be subject to this indemnification. The failure to so notify the Trust of such written assertion or claim shall not, however, operate in any manner whatsoever to relieve the Trust of any liability arising from this Section or otherwise, except to the extent failure to give notice prejudices the Trust.
For any legal proceeding giving rise to this indemnification, the Trust shall be entitled to defend or prosecute any claim in the name of Fund/Plan at its own expense and through counsel of its own choosing if it gives written notice to Fund/Plan within ten (10) business days of receiving notice of such claim. Notwithstanding the foregoing, Fund/Plan may participate in the litigation at its own expense through counsel of its own choosing. If the Trust chooses to defend or prosecute such claim, then the Parties shall cooperate in the defense or prosecution thereof and shall furnish such records and other information as are reasonably necessary.
(i) a combined classes' asset based fee, subject to a minimum fee, and an additional fixed fee for subsequent classes of shares for each Series of the Trust, which the Trust hereby authorizes Fund/Plan to collect by debiting the Trust's custody account for invoices which are rendered for the services performed for the applicable function. The invoices for the services performed will be sent to the Trust after such debiting with the indication that payment has been made; and
(ii) reimbursement of any reasonable out-of-pocket expenses paid by Fund/Plan on behalf of the Trust, which out-of-pocket expenses will be billed to the Trust within the first ten calendar days of the month following the month in which such out-of-pocket expenses were incurred. The Trust agrees to reimburse Fund/Plan for such expenses within ten calendar days of receipt of such bill.
For the purpose of determining fees payable to Fund/Plan, the value of the Series' net assets shall be computed at the times and in the manner specified in each Series' Prospectuses and Statement of Additional Information then in effect.
During the term of this Agreement, should the Trust seek services or functions in addition to those outlined above or in Schedule "A" attached, a written amendment to this Agreement specifying the additional services and corresponding compensation shall be executed by both Fund/Plan and the Trust.
(a) The term of this Agreement shall be for a period of three (3) years,
commencing on February 23, 1996 ("Effective Date") and shall continue thereafter
on a year to year term subject to termination by either Party as set forth in
(c) below.
(b) The fee schedule set forth in Schedule "B" attached shall be fixed for
(2) years commencing on the Effective Date of this Agreement and shall continue
thereafter subject to its review, adjustment or termination as set
forth in section (c) below.
(c) After the initial term of this Agreement, the Trust or Fund/Plan may give written notice to the other of the termination of this Agreement, such termination to take effect at the time specified in the notice, which date shall not be less than one hundred eighty (180) days after the date of receipt of such notice. Upon the effective termination date, the Trust shall pay to Fund/Plan such compensation as may be due as of the date of termination and shall likewise reimburse Fund/Plan for any out-of-pocket expenses and disbursements reasonably incurred by Fund/Plan to such date.
(d) If a successor to any of Fund/Plan's duties or responsibilities under this Agreement is designated by the Trust by written notice to Fund/Plan in connection with the termination of this Agreement, Fund/Plan shall promptly upon such termination and at the expense of the Trust, transfer all Accounts and Required Records and shall cooperate in the transfer of such duties and responsibilities.
If to The Timothy Plan: If to Fund/Plan: - ----------------------- ---------------- The Timothy Plan Fund/Plan Services, Inc. 1304 W. Fairbanks Avenue 2 West Elm Street Winter Park, FL 32729 Conshohocken, PA 19428 Attention: Arthur D. Ally, President Attention: Kenneth J. Kempf, President |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement consisting of eleven typewritten pages, together with Schedules "A", "B" and "C", to be signed by their duly authorized officers as of the day and year first above written.
The Timothy Plan Fund/Plan Services, Inc. - -------------------------------------- -------------------------------------- ______________________________________ ____________________________________ By: Arthur D. Ally, President By: Kenneth J. Kempf, President |
Fund Accounting and Portfolio Valuation Services to be performed on behalf of The Timothy Plan Daily Accounting Services
. Update the daily market value of securities held by each Series using Fund/Plan's standard agents for pricing domestic equity and bond securities. The domestic equity pricing services are Reuters, Inc., Muller Data Corp. and Interactive Data Corporation (IDC). Muller Data Corporation, Telerate, and IDC are used for bond and Money Market prices/yields.
. If necessary, enter limited number of manual prices supplied by the
Adviser.
. Prepare NAV proof sheet. Review components of change in NAV for
reasonableness.
. Review variance reporting on-line and in hard copy for price changes in individual securities using variance levels established by Timothy/Systematic. Verify US dollar security prices exceeding variance levels by notifying Timothy/Systematic and pricing sources of noted variances.
. Review for ex-dividend items indicated by pricing sources; trace to general ledger for agreement.
SERIES AND EACH CLASS
. Allocate daily unrealized appreciation/depreciation to classes based upon
value of outstanding class shares.
. Prepare NAV proof sheets. Review components of change in NAV for
reasonableness. Complete series and class control proofs.
. Communicate required pricing information (NAV) to Timothy, Fund/Plan's
Transfer Agent Unit and electronically, to NASDAQ.
. Receive previous day shareholder activity reports from Fund/Plan's Transfer Agent Unit by 8:30 AM Eastern time. Class level shareholder activity will be accumulated into the Series available cash balances.
. Fax hard copy cash availability calculations with all details to Systematic
Financial.
. Supply the Trust with 3-day cash projection report.
. Prepare and complete daily bank cash reconciliations including
documentation of any reconciling items and notify the custodian and Timothy.
SERIES AND EACH CLASS
. Class specific accruals completed such as daily accrual of 12b-1 expenses.
. Allocate series expenses to classes based upon value of outstanding class
shares.
SERIES AND EACH CLASS
. Allocate income to classes based upon value of outstanding class shares.
mergers, spinoffs, etc. and process appropriately.
SERIES LEVEL
. Monitor electronically received information from Muller Data Corporation
for all domestic securities.
. Review current daily security trades for dividend activity.
. Interface with custodian to monitor timely collection and postings of
corporate actions, dividends and interest.
SERIES AND EACH CLASS
. Allocate Series dividend income to classes based upon value of outstanding
class shares.
SERIES LEVEL
. Review system verification of trade and interest calculations.
. Verify settlement through the statements supplied by the custodian
statements.
. Maintain security ledger transaction reporting.
. Maintain tax lot holdings.
. Determine realized gains or losses on security trades.
. Provide complete broker commission reporting.
SERIES AND EACH CLASS
. Allocate all Series level realized and unrealized capital gains/losses to
classes based upon value of class outstanding shares.
SERIES AND EACH CLASS
. Prepare Series general ledger net cash proof used in NAV calculation.
. Post class specific shareholder activity and roll values into the Series.
. Allocate all Series level net cash accounts on the Series Trial Balance to
each specific class based upon value of class outstanding shares.
. Maintain allocated Trial Balance accounts on class specific Allocation
Report.
. Maintain class-specific expense accounts.
. Prepare class-specific proof/control reports to ensure accuracy of
allocations.
. Reconcile to ending cash balance accounts.
. Clear IAS subsidiary reports with settled amounts.
. Track status of past due items and failed trades handled by the custodian.
SERIES AND EACH CLASS
. Trial Balance and Class Allocation Report
. NAV calculation report
. Class specific capital share activity and expenses will also be disclosed.
SERIES AND EACH CLASS
. Payable/receivable for Series' shares; issued and redeemed
. Expense payments and accruals analysis
1) Assist and supply auditors with schedules supporting securities and shareholder transactions, income and expense accruals, etc. for the Trust and each class during the year in accordance with standard audit assistance requirements.
Accounting Services Basic Assumptions
The Accounting Fees as set forth in Schedule "B" are based on the following assumptions. To the extent these assumptions are inaccurate or requirements change, fee revisions may be necessary.
1) Compliance reporting (Sub-Chapter "M") shall be maintained by Fund/Plan Services as Fund Administrator.
2) It is assumed that the Trust's asset composition will be primarily domestic equity stocks and bonds. Trading activity is expected to be moderate with an annual turnover rate which would generally not exceed 100%.
3) The Trust has a tax year-end which coincides with its fiscal year-end. No additional accounting requirements are necessary to identify or maintain book- tax differences. Fund/Plan Services, Inc.'s Accounting Services Unit ("ASU") does not provide security tax accounting which differs from its book accounting.
To the extent tax accounting for certain securities differs from the book accounting, it will be done by Fund/Plan as Administrator or the Fund's Independent Accountant.
ASU will supply segregated Trial Balance account details to assist the Trust's Administrator in proper identification by category of all appropriate realized and unrealized gains/losses.
4) The Trust foresees no difficulty in using ASU's standard current pricing agents for domestic equity, bond, ADR and foreign securities. ASU currently uses Reuters, Inc., Muller Data Corporation or Interactive Data Corporation (IDC) for domestic equities and listed ADR's. Muller Data Corporation/Extel Financial, Telerate Systems, Inc., Bloomberg and IDC are used for bonds, money markets and foreign issues.
5) To the extent the Trust requires daily security prices (limited in number) from specific brokers for domestic or foreign securities, these manual prices will be obtained by the Trust's investment advisor and faxed to ASU by approximately 4:00 P.M. Eastern time for inclusion in the NAV calculations. Timothy will supply ASU with the appropriate pricing contacts for these manual quotes.
6) ASU will supply daily Portfolio Valuation Reports to the Trust's investment advisor identifying current security positions, original/amortized cost, security market values and changes in unrealized appreciation/depreciation.
It will be the responsibility of the Trust's investment advisor to review these reports and to promptly notify ASU of any possible problems, trade discrepancies, incorrect security prices, corporate action/capital change information or exchange rate discrepancies that could result in a misstated Trust NAV.
7) The Trust does not currently expect to invest in Futures, Swaps, Derivatives, Hedges or non-US dollar denominated securities, currency and precious metals. To the extent these investment strategies should change, additional fees will apply after the appropriate procedural discussions have taken place between ASU and Trust management. (Two weeks advance notice is required should the Trust commence trading in the above investments).
8) It is assumed for all debt issues that the investment advisor will supply ASU with critical income information such as accrual methods, interest payment frequency details, coupon payment dates, floating rate reset dates, and complete security descriptions with issue types and Sedol/cusip numbers. If applicable, for proper income accrual accounting, ASU will look to the Trust's investment advisor to supply the yield to maturity and related cash flow models for any mortgage/asset-backed securities held in the Trust.
9) The Trust shall direct the custodian to provide ASU with daily custodian statements (or on-line access to the custody system) reflecting all prior day cash activity by 8:30 A.M. Eastern time. Complete descriptions of any postings, inclusive of Sedol/CUSIP numbers, interest/dividend payment dates, capital stock details, expense authorizations, beginning/ending cash balances, etc. will be provided by the custodian's reports or system.
10) The Trust shall direct the custodian to supply the dividend and capital change information and interest rate changes to ASU in a timely manner. The investment advisor will supplement and support as appropriate.
11) The Trust shall direct the custodian to handle and report on all settlement problems, failed trades and resolve unsettled dividends/interest/paydowns and capital changes. The custodian will process all applicable capital change and foreign reclaim paperwork based upon advice from the investment advisor. ASU agrees to supply segregated Trial Balance reporting and supplemental reports to assist in this process.
12) With respect to Mortgage/Asset-Backed securities including GNMA's, FHLMC's, FNMA's, CMO's, ARM's, the Trust shall direct the custodian, or a Timothy supplied source, to provide ASU with current principal repayment factors on a timely basis in accordance with the appropriate securities' schedule. Income accrual adjustments (to the extent necessary) based upon initial estimates will be completed by ASU when actual principal/income payments are collected by the custodian and reported to ASU.
13) To the extent applicable, ASU will maintain on a daily basis US dollar denominated qualified covered call options and index options reporting on the daily Trial Balance and value the respective options and underlying positions. This agreement does not provide for tax classifications if they are required.
If the Trust commences investment in domestic options or designated hedges, two weeks advance notice is required to clarify operational procedures between ASU and the investment advisor.
14) To the extent the Trust should establish a Line of Credit in segregated accounts with the custodian for temporary administrative purposes, and/or leveraging/hedging the portfolio, it is not the responsibility under this agreement for ASU to complete the appropriate paperwork/monitoring for segregation of assets and adequacy of collateral. The Trust shall direct the investment advisor to execute such responsibilities. ASU will, however, reflect appropriate Trial Balance account entries and interest expense accrual charges on the daily Trial Balance adjusting as necessary at month-end.
15) If the Trust commences participation in Security Lending, Leveraging, open- end RIC's, or Short Sales within its portfolio, additional fees will apply. (Two weeks advance notice to ASU is required should the Trust desire to participate in the above.)
16) The Trust shall direct the investment advisor or the Trust's administrator to supply ASU with portfolio specific expense accrual procedures and monitor the expense accrual balances for adequacy based on outstanding liabilities monthly. The administrator will promptly communicate to ASU any adjustments needed.
17) Specific deadlines and complete information shall be supplied by the Trust in order to minimize any settlement problems, NAV miscalculations or income accrual adjustments.
The Trust shall direct the investment advisor to provide to ASU Trade Authorization Forms, with the appropriate officer's signature on all security trades placed by the Trust no later than 12:30 P.M. Eastern time on settlement /value date for money market and currency issues (assuming that trade date equals settlement date); and by 11:00 A.M. Eastern time on trade date plus one for non-money market securities. Receipt by ASU of trade information within these identified deadlines may be via telex, fax or on-line system access. The investment advisor will also communicate all trade information directly to Fund/Plan's custody administrator.
The Trust shall direct the investment advisor to include all information required by ASU; including CUSIP numbers and/or ticker symbols for all US dollar denominated trades and Sedol numbers for all foreign trades on the Trade Authorization, telex or on-line support. ASU will supply the investment advisor with recommended trade ticket documents to minimize receipt of incomplete information. ASU will not be responsible for NAV changes or distribution rate adjustments that result from incomplete trade information.
18) To the extent the Trust utilizes Purchases In-Kind (U.S. dollar denominated securities only) as a method for shareholder subscriptions, ASU will provide the Trust with procedures to properly handle and process securities in-kind. Should the Trust prefer procedures other than those provided by ASU, additional fees may apply. Discussions should take place in advance between ASU and the Trust to clarify the appropriate In-Kind operational procedures to be followed.
19) It is assumed that the Trust's investment advisor or administrator will complete the applicable performance and rate of return calculations as required by the SEC for the Trust.
20) It is assumed that mutually agreed upon amortization procedures and accretion requirements for debt issues held by the Trust will be established. Adjustments for financial statements regarding any issues with Original Issue Discount (OID) are not included under this Agreement. The Trust shall direct its independent auditors to complete the necessary OID adjustments for financial statements and/or tax reporting.
21) Fund/Plan Services, Inc. will provide Transfer Agency Services and Custody Administration.
Fund Accounting and Portfolio Valuation Services Fee Schedule for The Timothy Plan
This Fee Schedule is fixed for a period of two (2) years from the Effective Date as that term is defined in the Agreement.
The Accounting Fees as set forth below are stated and offered subject to the "Basic Assumptions" as set forth in Schedule "A." To the extent that those assumptions are inaccurate or requirements change, fee revisions may be necessary.
$24,000 Minimum to $ 10 Million of Combined Classes' Average Net Assets .0004 On the Next $ 40 Million of Combined Classes' Average Net Assets .0003 On the Next $ 50 Million of Combined Classes' Average Net Assets |
.0001 Over $ 100 Million of Combined Classes' Average Net Assets
The above asset based fee is calculated using the total average net assets of the Trust.
Additional Classes and separate series of shares shall be quoted upon request.
A) MULLER DATA CORPORATION (if applicable) *Based on current vendor costs, subject to change.
Government/Mortgage Backed/Corporate
Short & Long Term Quotes $ .50 per Quote per Issue
Tax-Exempt Short & Long Term Quotes $ .55 per Quote per Issue
CMOs/ARMs/ABS $1.00 per Quote per Issue
Foreign Security Quotes $ .50 per Quote per Issue
Foreign Security Supplemental
Corporation Actions, Dividends
& Capital Changes $2.00 per Issue per Month
Mortgage Backed Factors $1.00 per Issue per Month
|
Minimum Weekly File Transmission is Assumed
B) FUTURES AND FORWARD CURRENCY CONTRACTS $2.00 per Issue per Day
C) REUTERS, INC.*
*Based on current vendor costs, subject to change.
Fund/Plan does not currently pass along the charges for the domestic security prices supplied by Reuters, Inc.
D) TELERATE SYSTEMS, INC.* *Based on current vendor costs, subject to change.
E) INTERACTIVE DATA CORP.* (if applicable) *Based on current vendor costs, subject to change.
Domestic Equities and Options $ .15 per Quote per Issue Corporate/Government/Agency Bonds including Mortgage-Backed Securities (evaluated, seasoned, and/or closing) $ .50 per Quote per Issue US Municipal Bonds and Collateralized Mortgage Obligations $ .80 per Quote per Issue International Equities and Bonds $ .50 per Quote per Issue Domestic Dividends and Capitalization Changes $3.50 per Month per Holding International Dividends and Capital $4.00 per Month per Holding Changes |
Interactive Data also charges monthly transmission costs and disk storage charges.
F) KENNY S&P *Based on current vendor costs, subject to change.
High Yield Corporate Bonds $1.00 per Quote per Issue
($35/day minimum)
U.S. Municipal Bonds $ .50 per Quote per Issue
($25/day minimum)
Corporate/Government Bonds $ .25 per Quote per Issue
($35/day minimum)
CMO, ARM and ABS/Convertible $1.00 per Quote per Issue
Corporate Bonds ($35/day minimum)
Set Up Fees $ .25 per item
($1.00 if no cusip)
All Added Items $ .25 per item
($1.00 if no cusip)
|
*All prices listed in this Section are based on current vendor costs and are subject to change.
Specific costs will be identified based upon options selected by Timothy.
Provide reporting to reflect the yield calculations for non-money market funds required by the SEC (US dollar denominated securities only):
Daily Report - $3,000 per Year per Class Monthly Reporting - $1,000 per Year per Class |
The Trust will reimburse Fund/Plan Services, Inc. monthly for all reasonable out-of-pocket expenses, including postage, Edgar filings, telecommunications, special reports, record retention, special transportation costs as incurred and copying and sending materials to independent auditors.
To the extent the Trust commences using investment techniques such as Futures, Security Lending, Swaps, Short Sales, Derivatives, Leveraging, Precious Metals and/or non-US dollar denominated securities and currency, additional fees will apply. Activities of a non-recurring nature such as shareholder in-kinds, fund consolidations, mergers or reorganizations will be subject to negotiation. Any additional/enhanced services or reports will be quoted upon request.
THIS SCHEDULE MAY BE AMENDED TO REFLECT THE ADDITION OF OTHER REPORTS AND/OR
SERVICES.
Below are listed the Series and Classes of Shares to which services under this Agreement are to be performed as of the Effective Date of this Agreement:
1. "The Timothy Plan - Institutional Class"
2. "The Timothy Plan - Retail Class"
This Schedule "C" may be amended from time to time by agreement of the Parties.
AMENDMENT TO ADMINISTRATION AGREEMENT BETWEEN EXHIBIT 9(D)(I)
TIMOTHY PARTNERS, LTD. AND COVENANT FINANCIAL MANAGEMENT, INC.
WITNESSETH THAT:
WHEREAS, the Advisor and CFM have entered into an agreement dated January 19, 1994, wherein CFM has agreed to provide the Advisor with certain administrative services; and
WHEREAS, the annual fee is subject to adjustment by both parties, in writing, and such adjustment to be only for the purpose of covering CFM's costs in providing its services;
WHEREAS, the Parties propose to adjust the annual fee to cover CFM's costs in providing services;
NOW THEREFORE, in consideration of the premises and mutual covenants contained therein, the Parties hereto, intending to be legally bound, do hereby agree to:
1. To adjust the annual fee to an amount to cover CFM's costs in
providing services to the Advisor, payable by the Advisor on a monthly basis.
2. The Effective Date of this Agreement shall be May 1, 1996.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement consisting of one type written page, to be signed by their duly authorized officers and their corporate seals hereunto duly affixed as of the day and year first written above.
Timothy Partners, Ltd. Covenant Financial Management, Inc. - ---------------------------------------- ----------------------------------- By: Covenant Fund, Inc. Arthur D. Ally, President Arthur D. Ally, Managing General Partner |
AGREEMENT Exhibt 9(d)(ii)
W I T N E S S E T H :
WHEREAS, the Investment Adviser is a registered Investment Adviser under the Investment Advisers Act of 1940 and engages in the business of providing investment management services; and
WHEREAS, the Investment Adviser serves as the investment adviser for the Timothy Plan, an investment company registered under the Investment Company Act of 1940 (the "Fund") and
WHEREAS, the Investment Adviser and CFM desire to enter into an agreement whereby CFM will provide the Investment Adviser with administrative services.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and each of the parties hereto intending to be legally bound, it is agreed that:
1. The Investment Adviser hereby employs CFM, and will pay CFM for certain overhead expenses related to the daily operations of the Fund, including the salaries of administrative personnel, the preparation of shareholders fulfillment kits, the cost of phone lines and office space, and the cost of postage and supplies.
2. The annual fee that the Investment Adviser will pay on a monthly basis to CFM for its services is equal to 0.35% of the average net assets of the Fund, subject to adjustment by both parties, in writing, and such adjustment to be only for the purpose of covering CFM's costs in providing its services. A minimum of $20,000 per month will be payable by the Adviser to CFM for its services.
3. Any notice to be given hereunder may be given by personal notification or by first class mail, postage prepaid, to the party specified at the address stated below:
Timothy Partners, Ltd.
1304 West Fairbanks Avenue
Winter Park, FL 32789
Attn: Arthur D. Ally
Covenant Financial Management, Inc. 1304 West Fairbanks Avenue Winter Park, FL 32789 Attn: Arthur D. Ally
4. If any provision of this Agreement shall be held or made invalid by a court decision, statute rule
or otherwise, the remainder of the Agreement shall not be affected thereby. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Florida.
5. The Investment Adviser or CFM may give written notice to the other of the termination of this Agreement, such termination to take effect at the time specified in the notice, not less than 10 days after the giving of the notice. Upon the effective termination date, the Investment Adviser shall pay to CFM such compensation as may be due to CFM, prorated to the date of termination. This agreement shall automatically terminate in the event of its assignment.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their duly authorized officers and their corporate seals hereunto duly affixed and attested, as of the day and year first above written.
TIMOTHY PARTNERS, LTD.
By: Covenant Funds, Inc.
Managing General Partner
Attest:__________________________ By:_________________________________
(SEAL) COVENANT FINANCIAL MANAGEMENT
Attest:__________________________ By:__________________________________
(SEAL) Arthur D. Ally, President
|
Stradley Ronon Stevens & Young, LLP EXHIBIT 10(b) 2600 One Commerce Square Philadelphia, PA 19103
April 25, 1996
U.S. Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Wahington, D.C. 20549
Gentlemen:
We are counsel to The Timothy Plan (the "Fund"). As such, we have reviewed Post-Effective Amendment No. 4 to the Registration Statement of the Fund to be filed pursuant to paragraph (b) of Rule 485 promulgated under the Securities Act of 1933.
In our judgement, Post-Effective Amendment No. 4 to the Registration Statement does not contain disclosures which would render it ineligible to become effective pursuant to pragraph (b) of Rule 485.
We consent to the inclusion of this witten representation as an Exhibit to Post-Effective Amendment No. 4 to the Registration Statement of the Fund.
Very truly yours,
STRADLEY RONON STEVENS & YOUNG, LLP
/s/ Joseph V. Del Raso |
JDR/go
AUDITOR'S CONSENT EXHIBIT 11(a)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the references to our firm in Post-Effective Amendment No. 4 to the Registration Statement on Form N-1A of the Timothy Plan and to the use of our report dated January 11, 1996 on the financial statements and financial highlights. Such financial highlights are included in the Statement of Additional Information, which is a part of such Registration Statement.
/s/______________________
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
April 22, 1996
|
LETTERS OF UNDERSTANDING RELATING TO INITIAL CAPITAL EXHIBIT 13(A)
January 14, 1994
Gentlemen:
I consent to the filing of this Investment Letter as an exhibit to the form N-1A registration statement of the Fund.
Sincerely,
/s/ Gregory Tighe - --------------------------------------------------- Gregory Tighe as Custodian for Jeremy Tighe |
January 14, 1994
Gentlemen:
I consent to the filing of this Investment Letter as an exhibit to the form N-1A registration statement of the Fund.
Sincerely,
/s/ Gregory Tighe - --------------------------------------------------- Gregory Tighe as Custodian for Justin Tighe |
January 14, 1994
Gentlemen:
I consent to the filing of this Investment Letter as an exhibit to the form N-1A registration statement of the Fund.
Sincerely,
/s/ Charles E. Davis - --------------------------------------------------- Charles E. Davis |
January 14, 1994
Gentlemen:
I consent to the filing of this Investment Letter as an exhibit to the form N-1A registration statement of the Fund.
Sincerely,
/s/ Delbert E. Rich - --------------------------------------------------- Delbert E. Rich as Trustee for the Philip Crosby Trust |
January 14, 1994
Gentlemen:
I consent to the filing of this Investment Letter as an exhibit to the form N-1A registration statement of the Fund.
Sincerely,
/s/ Delbert E. Rich - --------------------------------------------------- Delbert E. Rich as Trustee for the Peggy Crosby Trust |
January 14, 1994
Gentlemen:
I consent to the filing of this Investment Letter as an exhibit to the form N-1A registration statement of the Fund.
Sincerely,
/s/ Gwynn Reel - --------------------------------------------------- Gwynn Reel as Trustee for the Gwynn Reel Trust |
January 14, 1994
Gentlemen:
I consent to the filing of this Investment Letter as an exhibit to the form N-1A registration statement of the Fund.
Sincerely,
/s/ Mary A. Gibson - --------------------------------------------------- Mary A. Gibson |
January 14, 1994
Gentlemen:
I consent to the filing of this Investment Letter as an exhibit to the form N-1A registration statement of the Fund.
Sincerely,
/s/ William R. Cadle - --------------------------------------------------- William R. Cadle /s/ Berniece I. Cadle - ---------------------------------------------------- Berniece I. Cadle |
January 14, 1994
Gentlemen:
I consent to the filing of this Investment Letter as an exhibit to the form N-1A registration statement of the Fund.
Sincerely,
/s/ Thomas J. Snyder - ----------------------------------------------------------------------- Thomas J. Snyder as Trustee for the Thomas Snyder Trust |
January 14, 1994
Gentlemen:
I consent to the filing of this Investment Letter as an exhibit to the form N-1A registration statement of the Fund.
Sincerely,
/s/ Michael J. Demaray - ------------------------------------------------------------------------- Michael J. Demaray as Trustee for the Michael J. Demaray Trust |
January 14, 1994
Gentlemen:
I consent to the filing of this Investment Letter as an exhibit to the form N-1A registration statement of the Fund.
Sincerely,
/s/ Phylis B. Crosby - ----------------------------------------- Phylis B. Crosby |
January 14, 1994
Gentlemen:
I consent to the filing of this Investment Letter as an exhibit to the form N-1A registration statement of the Fund.
Sincerely,
/s/ Frank Salerno - ----------------------------------------- Frank Salerno |
Exhibit 14(b)
INDIVIDUAL
RETIREMENT
ACCOUNT
DISCLOSURE STATEMENT
CUSTODIAL ACCOUNT AGREEMENT
DISCLOSURE STATEMENT
The following information is provided to you in accordance with the requirements of the Internal Revenue Code of 1986, as amended (the "Code''). This information should be reviewed in conjunction with both the Custodial Agreement, which is included in its entirety beginning on page 8 and the Application for your Individual Retirement Account ("IRA'') which accompanies this booklet. The words "you,'' "your,'' "Depositor'' or "Owner'' refer to the person who signs the accompanying application and for whose benefit this IRA is opened.
REVOCATION
You may revoke this account any time within seven calendar days after your funds
are invested by mailing or delivering a written request for revocation to:
Fund/Plan Services, Inc.
P.O. Box 874
Conshohocken, PA 19428.
Your written notice of revocation shall be deemed mailed on the date of the postmark, certification or registration, whichever the case may be, if it is deposited in the mail in the United States in an envelope, or other appropriate wrapper, first class postage prepaid, properly addressed.
If you choose to revoke your application, and you fulfill the requirements as stated above, you are entitled to a return of the entire amount of the consideration paid on the account without adjustment for such items as administration expenses or fluctuations in market value.
READ THE PROSPECTUS OF THE CHOSEN FUND
Carefully read current prospectus(es) of the Fund(s) you have chosen for investment in your IRA. The prospectus(es) discloses the management fees, charges and expenses, as well as the method of calculating net asset value and earnings. The net asset value of the Fund shares held in your IRA may fluctuate; it is not possible to make a projection of expected growth.
NONFORFEITABILITY
Your IRA is a custodial account created for your exclusive benefit. Your
interest in the account is nonforfeitable.
ELIGIBILITY
If NEITHER you NOR your spouse is covered by an employer sponsored retirement plan, you may deduct your entire IRA contribution up to the lesser of $2,000 or 100% of compensation, or $2,250 for a spousal IRA, regardless of income level.
CONTRIBUTIONS
If either you or your spouse is an active participant in a retirement plan:
Filing Adjusted Allowable IRA
Status Gross Income/1/ Deduction
- -------- --------------- -------------
Single Up to $24,999 Full Amount
$25,000-$34,999 Deduction reduced by
$200 for every $1,000
over $25,000
$35,000 & Above No Deduction
Married/ Up to $39,999 Full Amount
Joint /2/
$40,000-$49,999 Deduction reduced by
$200 for every $1,000
over $40,000
$50,000 & Above No Deduction
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/1/ Adjusted Gross Income is determined before reduction for any deductible contribution to an IRA.
/2/ Married/Joint -- where either spouse is an active participant.
(Note: special rules apply if you are married and file separately.)
If you or your spouse is an active participant in an employer sponsored retirement plan, the amount of your IRA contribution which you may deduct decreases as your adjusted gross income exceeds $40,000 if you are married and file a joint return, or $25,000 if you are unmarried. If your adjusted gross income exceeds $50,000 and you are married and filing a joint return, or $35,000 and unmarried, the tax deductibility of your IRA contribution is eliminated.
MOST IMPORTANTLY, if you no longer qualify for a tax deductible contribution, you may continue to make nondeductible contributions to your IRA; up to the lesser of $2,000 or 100% of compensation, or $2,250 for a spousal IRA. The benefit of making nondeductible contributions to your IRA is that earnings on these contributions will not be subject of Federal income tax until you actually start making withdrawals from your IRA.
CONTRIBUTIONS
Individual IRA. You may make annual cash contributions to an IRA in any amount up to 100% of your compensation for the year or $2,000, whichever is less. Your employer may make contributions to your account, but, except as noted below under a SEP-IRA, the total contributions from you and your employer may not exceed this limitation.
Contributions (other than rollover contributions described below) must be made in cash ''and not in kind.'' Therefore, securities or other assets already owned cannot be contributed to an IRA but can be converted to cash and then contributed.
Spousal Accounts. If you are married and file a joint tax return, and your spouse receives no compensation for a calendar year, you may make cash contributions to a ''spousal'' IRA in addition to your own IRA. The total amounts contributed to your own and to your spouse's IRA may not exceed 100% of your combined compensation for the year or $2,250, whichever is less. In no event, however, may the annual contribution to either your account or your spouse's account exceed $2,000.
Transfer. Funds may be transferred from one individual retirement account to another without the imposition of any tax. Basically, a transfer contribution allows the withdrawal of all or part of the interest from one individual retirement account and the direct reinvestment of it into another account. A transfer must take place directly between the custodian or trustee and another custodian or trustee. In order to qualify as a transfer, the participant must not take possession of the amount being transferred. There is no limit to the number of transfers effected. A tax deduction is not allowed for the amount transferred.
No withholding is imposed on an IRA Transfer.
Rollover IRA. You may make a rollover IRA contribution by rolling over all or a portion of an eligible distribution from a qualified retirement plan such as a 401(k) plan. This type of IRA is distinguished from a Transfer IRA in that there is no distribution involved in a Transfer IRA. In addition, you are only permitted one tax-free Rollover every 12 months, while there is no such limitation on Transfers.
A lump sum distribution of your active retirement plan account and certain forms of ''partial'' distributions would be eligible for a rollover. The administrator of your retirement plan is required to give you an explanation (in writing) of the rollover rules when making an eligible distribution to you. The distribution must be rolled over within 60 days of receipt of payment from the qualified retirement plan. The amount of your Rollover IRA contribution will not be included in your taxable income for the year in which you receive the qualified plan distribution.
Keep in mind that if you take possession of the proceeds of a Rollover, you will be subject to withholding of 20%. To avoid this withholding, you must rollover directly into your Rollover IRA, without taking possession of the proceeds, and the rollover must take place within 60 days of the distribution.
Simplified Employee Pension Plan Contributions ("SEP-IRA''). Your IRA may be used as part of a SEP-IRA established by your employer. Your employer may contribute to your SEP-IRA up to a maximum of 15% of your compensation or $30,000, whichever is less. You may contribute, in addition to the amount contributed by your employer to your SEP-IRA, an amount not in excess of the limits referred to under Individual IRA, as outlined above. It is your and your employer's responsibility to see that contributions in excess of normal IRA limits are made under a valid SEP-IRA plan and are, therefore, proper.
If you are a participant in a SEP-IRA your employer is required to give you a copy of the SEP-IRA documents and certain explanatory materials concerning SEP- IRAs, and to inform you each year of the amounts (if any) contributed on your behalf.
Time of Contribution. You may make contributions to your IRA any time up to April 15th of the current tax-year. You may continue to make annual contributions to your IRA up to (but not including) the calendar year in which you reach age 70 1/2. You may continue to make annual contributions to your spouse's IRA up to (but not including) the calendar year in which your spouse reaches age 701/2.
Compensation means wages, salaries, professional fees, or other amounts derived from or received for personal service actually rendered and includes the earned income of a self-employed individual, and any alimony or separate maintenance payment includable in the individual's gross income.
Adjusted gross income is determined prior to adjustments for personal exemptions and itemized deductions. For purposes of determining the maximum IRA deduction (see ''Eligibility''), adjusted gross income is computed after taking into account taxable benefits under the Social Security Act and the Railroad Retirement Act, and passive loss limitations under Code Section 469, but before the IRA deduction itself.
Excess Contributions. Contributions which exceed the allowable maximum are treated as excess contributions. A nondeductible penalty tax of 6% of the excess amount contributed will be assessed for each year in which the excess contribution remains in your account. If you make a contribution in excess of your allowable maximum for any taxable year, you may correct the excess contribution and avoid the 6% penalty tax for that year by withdrawing the excess contribution and its earnings on or before the due date, including extensions, for filing your tax return for that year.
The amount of the excess contribution withdrawn will not be considered a premature distribution or taxed as ordinary income, but the earnings withdrawn will be taxed as ordinary income to you. Alternatively, excess contributions for one year may be carried forward and reported in the next year to the extent that the excess, when aggregated with your IRA contribution (if any) for the subsequent year, does not exceed the maximum amount for that year. The 6% excise tax will be imposed on excess contributions in each year that they are neither returned nor carried forward.
DISTRIBUTIONS
General. In order to avoid tax penalties, distributions from your IRA should begin no earlier than the date you reach 59 1/2 (except in cases of your earlier disability or death) and no later than the April 1 following the year in which you reach age 70 1/2. Distributions from your account will be included in your gross income for federal income tax purposes for the year in which you receive them.
Premature Distributions. Distributions from your IRA made before you reach age 59 1/2 will be subject to a 10% nondeductible penalty tax (in addition to being taxable as ordinary income) unless the distribution is rolled over to another qualified retirement plan, or the distribution is made on account of your death or disability, or the distribution is one of a scheduled series of payments over your life or life expectancy or the joint life expectancies of you and your beneficiary. Distributions up to the amount of your nondeductible contributions are not subject to the 10% penalty tax, but this tax will be assessed against the earnings on nondeductible contributions.
Latest Time to Withdraw. You must begin receiving distributions of the assets in your account by April 1 of the calendar year following the calendar year in which you reach age 701/2.
Minimum Distributions. Once annual distributions are required to begin, they must not be less than the amount (determined by actuarial tables) which would exhaust the value of the account over the required distribution period, which is generally your life expectancy or the joint life and last survivor expectancy of you and an individual you have designated as your beneficiary. You will be subject to a 50% excise tax on the amount by which the distribution you actually received in any year falls short of the minimum distribution required for the year.
Methods of Distribution. Assets may be distributed from your account according
to one or more of the following methods selected by you:
(a) Lump sum.
(b) Substantially equal installments over a fixed period not
longer than your life expectancy.
(c) Substantially equal installments over a fixed period not longer
than the joint life expectancy of you and your beneficiary.
(See Article IV of your IRA Custodial Agreement on page 9 for a full description of these distribution methods.)
Distribution Upon Death. If you die before receiving the balance of your account, the account balance may be distributed to your beneficiary in periodic payments or in a lump sum.
Distribution of Nondeductible Contributions. To the extent that a distribution constitutes a return of your nondeductible contributions, it will not be included in your income. The amount of any distribution not includable in income is the portion that bears the same ratio to the total distribution that your aggregate nondeductible contributions bear to the balance at the end of the year (calculated after adding back distributions during the year) of your IRA. For this purpose, all of your IRAs are treated as a single IRA. Furthermore, all distributions from an IRA during a taxable year are to be treated as one distribution. The aggregate amount of distributions excludible from income for all years is not to exceed the aggregate nondeductible contributions for all calendar years. There is a 10% additional income tax assessed against premature distributions to the extent such distributions are includable in income (See Premature Distributions above).
Excess Distributions. There is a 15% excise tax assessed against annual distributions from tax-favored retirement plans, including IRAs, which exceed the greater of $150,000 or $112,500 as adjusted after 1988 to reflect cost-of- living increases. To determine whether you have distributions in excess of this limit, you must aggregate the amounts of all distributions received by you during the calendar year from all retirement plans, including IRAs. Please consult with your tax advisor for more complete information, including the effect of certain elections.
PROHIBITED TRANSACTIONS
If any of the events prohibited by Section 4975 of the Code (such as any sale, exchange or leasing of any property between you and your IRA) occurs during the existence of your IRA, your account will be disqualified and the entire balance in your account will be treated as if distributed to you as of the first day of the year in which the prohibited event occurs. This ''distribution'' would be subject to ordinary income tax and, if you were under age 59 1/2 at the time, to the 10% penalty tax on premature distributions.
If you or your beneficiary use (pledge) all or any part of your IRA as security for a loan, then the portion so pledged will be treated as if distributed to you, and will be taxable to you as ordinary income and subject to the 10% penalty during the year in which you make such a pledge.
OTHER TAX CONSIDERATIONS
Tax Withholding. Federal income tax will be withheld from distributions you
receive from an IRA unless you elect not to have tax withheld.
Internal Revenue Service Filing Requirements. Contributions to your IRA must be reported on your tax Form 1040 or 1040A for the taxable year contributed. You will be required to designate your IRA contribution as deductible or nondeductible. For any year in which you make nondeductible IRA contributions, or you receive an IRA distribution after having made nondeductible IRA contributions, you must file IRS Form 8606, even if you are not required to file a federal tax return. There is a $50 penalty for failing to file Form 8606. Other reporting will be required by you in the event that special taxes or penalties described herein are due. You must also file Treasury Form 5329 with the IRS for each taxable year in which the contribution limits are exceeded, a premature distribution takes place, or less than the required minimum amount is distributed from your IRA. The Tax Reform Act of 1986 also requires you to report the amount of all distributions you received from your IRA and the aggregate account balance of all IRAs as of the end of the calendar year if you ever made any nondeductible contributions to one or more IRAs.
This IRA custodial agreement has not been submitted to the IRS for approval because the use of IRS Form 5305-A makes such submission unnecessary.
Further information can be obtained from any district office of the IRS.
CUSTODIAN/PLAN ADMINISTRATOR
The Custodian of your IRA is identified in the Individual Retirement Account Application. If Fund/Plan Services, Inc. is not the Custodian, Fund/Plan Services, Inc. serves as the Plan Administrator, and in such capacity is responsible for all record keeping, applicable tax reporting and fee collection in connection with IRA accounts. Fund/Plan Services, Inc. is also the transfer agent for the Funds.
FEES
The custodial fee currently in effect is an annual maintenance fee of $12 per
Fund account.
Your first annual maintenance fee may be paid at the same time that you mail your IRA Application to Fund/Plan Services, Inc. Forward a separate check for $12, made payable to Fund/Plan Services, Inc.
In subsequent years, you may pay the annual maintenance fee by forwarding a check to Fund/Plan Services, Inc. If you do not forward payment for the annual maintenance fee by August 31 of each year, Fund/Plan Services, Inc. will obtain payment directly from your IRA by redeeming a sufficient number of the Fund shares held in your IRA.
The Custodial Fees may be modified upon 30 days' written notice from the Custodian of your IRA.
One or more of the mutual funds available for investment through your IRA may be subject to sales charges. Such charges, if any, are listed in the prospectus of that fund.
INDIVIDUAL RETIREMENT ACCOUNT
CUSTODIAL ACCOUNT AGREEMENT
As required under Section 408(a) of the Internal Revenue Code, the text of Articles I through VII of this Agreement are exact duplicates of provisions of IRS Form 5305-A (October, 1992).
Custodial Account Agreement, entered into on the date stated in the IRA Application attached hereto and incorporated herein by this reference (the ''IRA Application''), by and between the individual depositor identified in the IRA Application (the ''Depositor''), whose date of birth, Social Security number, and present residence address are stated in the IRA Application, and the institution identified in the IRA Application as the Custodian (the ''Custodian''), c/o Fund/Plan Services, Inc., P.O. Box 874, Conshohocken, PA 19428.
WHEREAS, the Depositor desires to provide for his or her retirement and for the support of his or her beneficiaries upon his or her death;
WHEREAS, to accomplish this purpose, the Depositor desires to establish an Individual Retirement Account as described in Section 408(a) of the Internal Revenue Code of 1986, as amended (the ''Code'');
WHEREAS, a disclosure statement has been furnished to the Depositor as required under Section 408(I) of the Code and related regulations; and WHEREAS, the Depositor has deposited with the Custodian the sum of money stated on the IRA Application, in cash;
NOW, THEREFORE, the Depositor and the Custodian hereby agree, as follows:
ARTICLE I
The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in section 402(c) (but only after December 31, 1992),
403(a)(4), 403(b)(8), 408(d)(3) or an employer contribution to a simplified
employee pension plan as described in section 408(k). Rollover contributions
before January 1, 1993, include rollovers described in section 402(a)(5),
402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer
contribution to a simplified employee pension plan as described in section
408(k).
ARTICLE II
The Depositor's interest in the balance in the custodial account is
nonforfeitable.
ARTICLE III
1. No part of the custodial funds may be invested in life insurance contracts, nor may the assets of the custodial account be commingled with other property except in a common trust fund, or common investment fund (within the meaning of section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within the meaning of section 408(m)) except as
otherwise permitted by section 408(m)(3) which provides an exception for certain gold and silver coins and coins issued under the laws of any state.
ARTICLE IV
1. Notwithstanding any provision of this agreement to the contrary, the distribution of the Depositor's interest in the custodial account shall be made in accordance with the following requirements and shall otherwise comply with section 408(a)(6) and Proposed Regulations section 1.408-8, including the incidental death benefit provisions of Proposed Regulations section 1.401(a)(9)- 2, the provisions of which are incorporated by reference.
2. Unless otherwise elected by the time distributions are required to begin to the Depositor under paragraph 3, or to the surviving spouse under paragraph 4, other than in the case of a life annuity, life expectancies shall be recalculated annually. Such election shall be irrevocable as to the Depositor and the surviving spouse and shall apply to all subsequent years. The life expectancy of a nonspouse beneficiary may not be recalculated.
3. The Depositor's entire interest in the custodial account must be, or begin to be, distributed by the Depositor's required beginning date, (April 1 following the calendar year end in which the Depositor reaches age 70 1/2). By that date, the Depositor may elect, in a manner acceptable to the Custodian, to have the balance in the custodial account distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the life of the Depositor.
(c) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the joint and last survivor lives of
the Depositor and the Depositor's designated beneficiary.
(d) Equal or substantially equal annual payments over a specified
period that may not be longer than the Depositor's life expectancy.
(e) Equal or substantially equal annual payments over a specified
period that may not be longer than the joint life and last survivor expectancy
of the Depositor and the Depositor's designated beneficiary.
4. If the Depositor dies before the Depositor's entire interest is distributed
to him or her, the entire remaining interest will be distributed as follows:
(a) If the Depositor dies on or after distribution of the Depositor's
interest has begun, distribution must continue to be made in accordance with
paragraph 3.
(b) If the Depositor dies before distribution of the Depositor's
interest has begun, the entire remaining interest will, at the election of the
Depositor or, if the Depositor has not so elected, at the election of the
beneficiary or beneficiaries, either:
(I) Be distributed by the December 31 of the year containing the fifth
anniversary of the Depositor's death, or;
(ii) Be distributed in equal or substantially equal payments over the
life or life expectancy of the designated beneficiary or beneficiaries starting
by December 31 of the year following the year of the Depositor's death. If,
however, the beneficiary is the Depositor's surviving spouse, then this
distribution is not required to begin before December 31 of the year in which
the Depositor would have turned age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of section 408(b)(3) and its related regulations has irrevocably
commenced, distributions are treated as having begun on the Depositor's required
beginning date, even though payments may actually have been made before that
date.
(d) If the Depositor dies before the Depositor's entire interest has
been distributed and if the beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in the
account.
5. In the case of a distribution over life expectancy in equal or substantially equal annual payments, to determine the minimum annual payment for each year, divide the Depositor's entire interest in the Custodial account as of the close of business on December 31 of the preceding year by the life expectancy of the Depositor (or the joint life and last survivor expectancy of the Depositor and the Depositor's designated beneficiary, or the life expectancy of the designated beneficiary, whichever applies). In the case of distributions under paragraph 3, determine the initial life expectancy (or joint life and last survivor expectancy) using the attained ages of the Depositor and designated beneficiary as of their birthdays in the year the Depositor reaches age 701/2. In the case of a distribution in accordance with paragraph 4(b)(ii),
determine life expectancy using the attained age of the designated beneficiary as of the beneficiary's birthday in the year distributions are required to commence.
6. The owner of two or more individual retirement accounts may use the ''alternative method'' described in Notice 88-38, 1988-1 C.B. 524, to satisfy the minimum distribution requirements described above. This method permits an individual to satisfy these requirements by taking from one individual retirement account the amount required to satisfy the requirement for another.
ARTICLE V
1. The Depositor agrees to provide the Custodian with information necessary for the Custodian to prepare any reports required under section 408(I) and Regulations sections 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service and the Depositor as prescribed by the Internal Revenue Service.
ARTICLE VI
Notwithstanding any other articles which may be added or incorporated, the provisions of Articles I through III and this sentence will be controlling. Any additional articles that are not consistent with section 408(a) and the related regulations will be invalid.
ARTICLE VII
This agreement will be amended from time to time to comply with the provisions of the Code and related regulations. Other amendments may be made with the consent of the persons whose signatures appear below.
ARTICLE VIII
1. Contributions. The Custodian is under no duty to compel the Depositor to make
any contributions to the Custodial Account (the ''Account''). The Depositor must
certify to the Custodian (in form satisfactory to it) that any contribution
other than a regular contribution is:
(a) A rollover contribution under Section 402(a)(5), 402(a)(7),
403(a)(4), 403(b)(8) or 408(d)(3) of the Code, or;
(b) A direct transfer from another individual retirement account (as
defined in Section 7701(a)(37) of the Code permitted under Article I of this
agreement.
2. Investments. The Depositor shall direct the Custodian with respect to the investment of all contributions. However, such direction shall be limited to the purchase of shares of the Fund or Funds. Investments received without direction may be returned or held uninvested without liability for loss of income, interest or appreciation while directions are obtained. All dividends and capital gain distributions received on shares held in the Account shall be reinvested in additional shares of the issuing Fund(s).
3. Cash Contributions. The Custodian shall not accept any contribution or direct transfer from another individual retirement account qualified under Section 408 of the Code unless it is made in cash (or its equivalent).
4. Notices and Voting. The Custodian shall deliver to the Depositor (or, in the event of the Depositor's death, the Depositor's designated beneficiary) all shareholder notices and reports, prospectuses, financial statements, proxy material and other materials as they are received from the Fund(s). The Custodian shall vote at all shareholder meetings of the Fund in accordance with written instructions of the Depositor which will be secured by the Custodian.
5. Fees and Taxes. The Custodian shall receive, and the Depositor hereby agrees to pay, such reasonable compensation for its services ("fees'') as set forth in the currently effective Disclosure Statement for the Account. The Custodian may substitute a different fee schedule at any time upon 30 days' notice in writing to the Depositor. Such fees may be paid by the Depositor; however, they shall constitute a charge upon the assets of the Account until paid. Unless otherwise paid, the Custodian shall have the right to redeem sufficient Fund shares in the Account and to apply the proceeds to the payment of its annual fees. Any income taxes or other taxes of any kind that may be levied or assessed against the Account may be similarly paid from the assets of the Account and shall not be an obligation of the Custodian.
6. Custodian's Duties and Obligations. If Fund/Plan Services, Inc. is not the Custodian, Fund/Plan Services, Inc. serves as the Plan Administrator for the Custodian and in such capacity is responsible for all record keeping, applicable tax reporting and fee collection in connection with IRA accounts. Fund/Plan Services, Inc. also serves as transfer agent for
the Fund(s). The Custodian shall be under no duty whatsoever except such duties
as are specifically set forth in this Agreement, and, notwithstanding Article IV
of this Agreement, shall be under no duty to make any distribution from the
Account in the absence of specific directions from the Depositor or, upon the
death of the Depositor, the Depositor's designated beneficiary, whether or not
the Depositor has attained age 70 1/2 or is deceased. Neither the Custodian,
the Plan Administrator, the Sponsor, the Fund(s) nor any of their respective
affiliates shall have any duty:
(a) To ascertain whether a rollover contribution described in Article
I of this Agreement or a direct transfer from another IRA is properly made in
accordance with applicable provisions of the Code or any other plan, IRA or
other retirement arrangement;
(b) To ascertain whether any distribution is sufficient for purposes
of the rules described in Article IV of this Agreement;
(c) To make distributions in the form of an annuity contract under
Article IV of this Agreement;
(d) To confirm the existence of a disability;
(e) To review or make suggestions regarding the
investment of the assets of the Account; or
(f) To invest, reinvest or dispose of any assets held in the Account
except in accordance with Section 2 or 3 of this Article VIII. Whenever the
Depositor is responsible for any direction, notice, warranty, representation, or
instruction under this Agreement, the Custodian shall be entitled to assume the
truth of any statement made, or believed to have been made, by the Depositor,
and the Custodian shall be under no duty of further inquiry and shall have no
liability with respect to any action taken in reliance upon the truth of such
statement.
7. Depositor's Warranties. The Depositor hereby agrees that it is not intended that any fiduciary duties be conferred (by implication or otherwise) upon the Custodian under this Agreement, and he or she shall look solely to the assets of his or her Account for the payment of any benefits to which he or she may become entitled under this Agreement. The Depositor hereby acknowledges his or her understanding that taxes and penalties may be imposed under the Code for:
(a) Excess contributions;
(b) Premature distributions made before the Depositor dies, becomes
disabled (as defined in Section 72(m) of the Code) or reaches age 59-1/2,
except in the case of:
(i) Rollovers or transfers to other IRAs or rollovers to eligible
retirement plans in accordance with applicable provisions of the Code and
related regulations; or
(ii) A series of substantially equal periodic payments (as defined
in Section 72(t) of the Code);
(c) Distributions which are less than the minimum amounts required
under Sections 401(a)(9), 408(a)(6) and 4974 of the Code; and
(d) Prohibited transactions under Section 4975 of the Code.
Any and all such taxes and penalties shall be paid by the Depositor.
8. Amendment. The Depositor hereby delegates to the Custodian the power to amend this Agreement, and the Depositor shall be deemed to have consented to any such amendment. The Custodian shall adopt amendments only in accordance with directions made by the Sponsor. The Depositor shall be furnished a copy of any such amendment. Notwithstanding the foregoing, the Custodian may not amend this Agreement in such manner as to permit or cause assets of the Account to be diverted to purposes other than for the exclusive benefit of the Depositor and his or her beneficiaries, except to the extent that any such amendment is necessary to conform this Agreement to any applicable law, governmental regulation or ruling or to satisfy the requirements of the Code.
9. Termination. This Agreement shall terminate upon the complete distribution of
the Account to the Depositor or his or her beneficiaries or to another IRA. The
Custodian shall have the right to terminate this Account upon 30 days' notice in
writing to the Depositor or (in the event of his or her death) to the
Depositor's beneficiaries. In such event and upon expiration of such period, the
Custodian shall distribute the Account:
(a) To such other IRA as the Depositor (or his or her beneficiaries)
shall designate;
(b) In the absence of such direction, to the Depositor; or
(c) In the event of the Depositor's death, to the beneficiaries, as
their interests shall appear.
10. Resignation. The Custodian may resign at any time, upon 30 days' notice in writing to the Depositor, and may be removed by the Depositor or the Sponsor at any time, upon 30 days' notice in writing to the Custodian. Upon such resignation or removal, the Depositor or the Sponsor (as appropriate) shall appoint a qualified successor custodian which shall be a bank, within the meaning of Section 408(n) of the Code, or another person who has satisfied the requirements of Section 408(a)(2) of the Code and related regulations.
11. Successor Custodian. Upon receipt by the Custodian of written acceptance of such appointment by the successor custodian, the Custodian shall transfer and pay over to the successor custodian the assets of the Account and all records pertaining thereto. The Custodian is authorized, however, to reserve such sum of money or assets as it may deem advisable for payment of all of its fees, compensation, costs and expenses, or for payment of any other liabilities constituting a charge on or against the assets of the Account or on or against the Custodian with respect to the Account; and any balance of such reserve remaining after the payment of all such items shall be paid over to the successor custodian. If assets are retained in accordance with this Section 11, they may be disposed of in accordance with the provisions of Section 5 of this Article VIII. The successor custodian shall hold the assets paid over to it under terms which are consistent with Section 408 of the Code and related regulations.
12. Failure of Appointment. It shall be a condition of the removal of the
Custodian that the Depositor or the Sponsor shall have appointed a qualified
successor custodian. In the event of the resignation of the Custodian and the
failure to appoint a qualified successor custodian, the Custodian may itself
appoint such successor, unless it elects to terminate this Agreement pursuant to
Section 9 of this Article VIII, and the costs of such appointment shall be
treated in the same manner as fees under Section 5 of this Article VIII.
13. Required Appointment of Successor Custodian. The Depositor may remove the Custodian and appoint a successor custodian upon notification by the Commissioner of Internal Revenue that the Custodian has failed to comply with the applicable requirements of Section 1.401-12(n) or applicable successor provisions of the Income Tax Regulations or is not keeping such records, making such returns or rendering such statements as are required by applicable Treasury Regulations or by forms prescribed by the Internal Revenue Service.
14. Beneficiaries. By separate written document attached as the Beneficiary Designation to this Agreement, the Depositor may designate a method for payment of benefits in accordance with Article IV of this Agreement and designate a beneficiary for the receipt of such benefits in the event of the Depositor's death. Should the Depositor die without an effective designation of method of distribution or beneficiary, the assets of the Account shall be distributed to the surviving spouse in such manner as the Depositor's spouse shall designate under Article IV of this Agreement. In the absence of a surviving spouse or surviving designated beneficiary, the assets of the Account shall be distributed to the Depositor's estate in a lump sum.
15. Indemnification. The Depositor agrees to indemnify and hold harmless the Custodian, the Plan Administrator (if applicable), the Sponsor, the Fund(s) and their respective affiliates, agents, employees, successors and assigns, from and against any claim or liability arising in connection with the Depositor's Account, except in the case of gross negligence or willful misconduct.
16. Governing Laws. Except to the extent preempted by the Code or other applicable federal law, this Agreement shall be governed by and construed and administered under the laws of the Commonwealth of Pennsylvania.
17. Severability. If any provision of this Agreement is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provision of this Agreement, and this Agreement shall be construed and enforced as if such provision had not been included.
18. Captions. The captions contained in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge or describe the scope or intent of this Agreement nor in any way shall affect the construction of any provision of this Agreement.
19. Definitions. For purposes of this Article VIII, "Sponsor'' means the institution identified as such in the IRA Application; and "Fund'' or "Funds'' means the regulated investment company or companies, the investment advisor to which, or the principal underwriter of which, is the Sponsor.
EXECUTION
IN WITNESS WHEREOF, The Depositor and the Custodian, to evidence their
acceptance of the terms and conditions of this Agreement, have duly executed the
IRA Application.
INSTRUCTIONS
A. GENERAL INSTRUCTIONS. This Custodial Agreement may be used by an individual who wishes to adopt an individual retirement account (IRA) pursuant to Section 408(a) of the Code. When this Custodial Agreement and the IRA Application have been fully executed by a Depositor and the Custodian not later than the time prescribed by law
for filing the federal income tax return for the Depositor's tax year (not including any extensions thereof), the Depositor will have an IRA custodial account which meets the requirements of Section 408(a) of the Code. The IRA Custodial Account must be created in the United States for the exclusive benefit of the Depositor and his or her beneficiaries.
B. DEFINITIONS. The Custodian of an IRA must be a bank or savings and loan association (as defined in Section 408(n) of the Code) or other person who has the approval of the Internal Revenue Service to act as custodian. (The Custodian named in the IRA Application is a qualified custodian.) The Depositor is the individual who established this IRA Custodial Account in accordance with this Custodial Agreement by executing the IRA Application.
C. IRA FOR NONWORKING SPOUSE. Contributions to an IRA Custodial Account for a nonworking spouse must be made to a separate IRA Custodial Account established by the nonworking spouse. This Custodial Agreement and the IRA Application may be used to establish the IRA Custodial Account for the nonworking spouse.
D. OTHER INFORMATION. The Depositor's Social Security number will serve as the identification number for his or her IRA Custodial Account. An employer identification number is only required for each participant-directed IRA (for which an IRS Form 990-T is required to be filed to report unrelated trade or business income). An employer identification number is required for a common fund created for IRA Custodial Accounts. For further information, please refer to the disclosure statement or obtain Publication 590 (Individual Retirement Arrangements (''IRAs'') from your local Internal Revenue Service office.
SPECIFIC INSTRUCTIONS
1. Article IV. Distributions made under this Article may be made in a lump sum, periodic payments or a combination of both. The distribution option should be reviewed in the year the Depositor reaches age 70 1/2 to make sure the requirements of Section 408(a)(6) of the Code have been met.
2. Article VIII. Article VIII and any that follow it may incorporate additional provisions that are agreed to by the Depositor and Custodian to complete the Agreement. They may include, for example, definitions, investment powers, voting rights, exculpatory provisions, amendment and termination, removal of the Custodian, custodial fees, state law requirements, beginning date of distributions, accepting only cash, treatment of excess contributions, prohibited transactions with the depositor, etc.
3. REQUESTING DISTRIBUTION. A request for a distribution from the IRA must be submitted in writing to:
Fund/Plan Services, Inc. Retirement Plans -- Liquidation Desk P.O. Box 874 Conshohocken, PA 19428.
If a request does not contain all necessary information, Fund/Plan Services, Inc. will notify the Depositor in writing as to its incompleteness, requesting the additional information, including signature guarantee if required by the Fund. When the distribution instructions are in proper order, only then will the shares be redeemed and the monies distributed.
DISTRIBUTION PLAN OF
THE TIMOTHY PLAN-INSTITUTIONAL CLASS Exhibit 15(a)
The following Distribution Plan (the "Plan") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by The Timothy Plan (the "Trust") for the Institutional Class shares (the "Institutional Class") of the Trust and any separate series of the Trust hereinafter organized. The Plan has been approved by a majority of the Trust's Board of Trustees, including a majority of the trustees who are not interested persons of the Trust and who have no direct or indirect financial interest in the operation of the Plan (the "non-interested trustees"), cast in person at a meeting called for the purpose of voting on such Plan.
In reviewing the Plan, the Board of Trustees determined that the adoption of the Plan would be prudent and in the best interests of the Trust and its shareholders. Such approval included a determination that in the exercise of their reasonable business judgment and in light of their fiduciary duties, there is a reasonable likelihood that the Plan will benefit the Trust and its shareholders. The Plan has also been approved by a vote of the sole initial shareholder of the Institutional Class shares of the Trust.
The Provisions of the Plan are:
1. The Institutional Class of the Trust shall reimburse the Advisor, the Distributor or others for all expenses incurred by such parties in the promotion and distribution of shares of the Institutional Class of the Trust, including but not limited to, the printing of prospectuses and reports used for sales purposes, expenses of preparation of sales literature and related expenses, advertisements, and other distribution-related expenses, as well as any distribution or service fees paid to securities dealers or others who have executed a servicing agreement with the Trust on behalf of the Institutional Class or the Distributor, which form of agreement has been approved by the Trustees, including the non-interested trustees. The monies to be paid pursuant to any such servicing agreement shall be used to pay dealers or others for, among other things, furnishing personal services and maintaining shareholder accounts, which services include, among other things, assisting in establishing and maintaining customer accounts and records; assisting with the purchase and redemption requests; arranging for bank wires; monitoring dividend payments from the Trust on behalf of customers; forwarding certain shareholder communications from the Trust to customers; receiving and answering correspondence; and aiding in maintaining the investment of their respective customers in the Institutional Class.
3. The Advisor and the Distributor shall collect and monitor the documentation of payments made under paragraph 1, and shall furnish to the Board of Trustees of the Trust, for their review, on a quarterly basis, a written report of the monies reimbursed to them and others under the Plan as to the Trust's Institutional Class, and shall furnish the Board of Trustees of the Trust with such other information as the Board may reasonably request in connection with the payments made under the Plan as to the Trust's Institutional Class in order to enable the Board to make an informed determination of whether the Plan should be continued.
4. The Plan shall continue in effect for a period of more than one year only so long as such continuance is specifically approved at least annually by the Trust's Board of Trustees, including the non-interested trustees, cast in person at a meeting called for the purpose of voting on the Plan.
5. The Plan, or any agreements entered into pursuant to this Plan, may be terminated at any time, without penalty, by vote of a majority of the outstanding voting securities of the Trust, or by vote of a majority of the non- interested Trustees, on not more than sixty (60) days' written notice, and shall terminate automatically in the event of any act that constitutes an assignment of the management agreement between the Trust and the Manager.
6. The Plan and any agreements entered into pursuant to this Plan may not be amended to increase materially the amount to be spent by the Trust's Institutional Class for distribution pursuant to Paragraph 1 hereof without approval by a majority of the Institutional Class' outstanding voting securities.
7. All material amendments to the Plan, or any agreements entered into pursuant to this Plan, shall be approved by the non-interested trustees cast in person at a meeting called for the purpose of voting on any such amendment.
8. So long as the Plan is in effect, the selection and nomination of the Trust's non-interested trustees shall be committed to the discretion of such non-interested trustees.
9. This Plan shall take effect on the 10 day of
------ -
February , 199 6 .
- ---------- ---
|
This Plan and the terms and provisions thereof are hereby accepted and agreed to by the Trust, the Advisor and the Distributor as evidenced by their execution hereof.
THE TIMOTHY PLAN
By:__________________________________________________
TIMOTHY PARTNERS, LTD.
By: COVENANT FUNDS, INC.,
Managing General Partner
By:___________________________________________________
FUND/PLAN BROKER SERVICES, INC.
By:__________________________________________________
DISTRIBUTION PLAN EXHIBIT 15(B)
OF
THE TIMOTHY PLAN - RETAIL CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by The Timothy Plan (the "Trust") for the Retail Class shares (the "Retail Class") of the Trust and any separate series of the Trust hereinafter organized. The Plan has been approved by a majority of the Trust's Board of Trustees, including a majority of the trustees who are not interested persons of the Trust and who have no direct or indirect financial interest in the operation of the Plan (the "non-interested trustees"), cast in person at a meeting called for the purpose of voting on such Plan.
In reviewing the Plan, the Board of Trustees determined that the adoption of the Plan would be prudent and in the best interests of the Trust and its shareholders. Such approval included a determination that in the exercise of their reasonable business judgment and in light of their fiduciary duties, there is a reasonable likelihood that the Plan will benefit the Trust and its shareholders. The Plan has also been approved by a vote of the sole initial shareholder of the Retail Class shares of the Trust.
The Provisions of the Plan are:
1. The Retail Class of the Trust shall reimburse the Advisor, the Distributor or others for all expenses incurred by such parties in the promotion and distribution of shares of the Retail Class of the Trust, including but not limited to, the printing of prospectuses and reports used for sales purposes, expenses of preparation of sales literature and related expenses, advertisements, and other distribution-related expenses, as well as any distribution or service fees paid to securities dealers or others who have executed a servicing agreement with the Trust on behalf of the Retail Class or the Distributor, which form of agreement has been approved by the Trustees, including the non-interested trustees. The monies to be paid pursuant to any such servicing agreement shall be used to pay dealers or others for, among other things, furnishing personal services and maintaining shareholder accounts, which services include, among other things, assisting in establishing and maintaining customer accounts and records; assisting with the purchase and redemption requests; arranging for bank wires; monitoring dividend payments from the Trust on behalf of customers; forwarding certain shareholder communications from the Trust to customers; receiving and answering correspondence; and aiding in maintaining the investment of their respective customers in the Retail Class.
3. The Advisor and the Distributor shall collect and monitor the documentation of payments made under paragraph 1, and shall furnish to the Board of Trustees of the Trust, for their review, on a quarterly basis, a written report of the monies reimbursed to them and others under the Plan as to the Trust's Retail Class, and shall furnish the Board of Trustees of the Trust with such other information as the Board may reasonably request in connection with the payments made under the Plan as to the Trust's Retail Class in order to enable the Board to make an informed determination of whether the Plan should be continued.
4. The Plan shall continue in effect for a period of more than one year only so long as such continuance is specifically approved at least annually by the Trust's Board of Trustees, including the non-interested trustees, cast in person at a meeting called for the purpose of voting on the Plan.
5. The Plan, or any agreements entered into pursuant to this Plan, may be terminated at any time, without penalty, by vote of a majority of the outstanding voting securities of the Trust, or by vote of a majority of the non- interested Trustees, on not more than sixty (60) days' written notice, and shall terminate automatically in the event of any act that constitutes an assignment of the management agreement between the Trust and the Manager.
6. The Plan and any agreements entered into pursuant to this Plan may not be amended to increase materially the amount to be spent by the Trust's Retail Class for distribution pursuant to Paragraph 1 hereof without
approval by a majority of the Retail Class' outstanding voting securities.
7. All material amendments to the Plan, or any agreements entered into pursuant to this Plan, shall be approved by the non-interested trustees cast in person at a meeting called for the purpose of voting on any such amendment.
8. So long as the Plan is in effect, the selection and nomination of the Trust's non-interested trustees shall be committed to the discretion of such non-interested trustees.
This Plan and the terms and provisions thereof are hereby accepted and agreed to by the Trust, the Advisor and the Distributor as evidenced by their execution hereof.
THE TIMOTHY PLAN
By:__________________________________________________
TIMOTHY PARTNERS, LTD.
By: COVENANT FUNDS, INC.,
Managing General Partner
By:___________________________________________________
FUND/PLAN BROKER SERVICES, INC.
By:__________________________________________________
THE TIMOTHY PLAN EXHIBIT 15(C)
SHAREHOLDER SERVICES AGREEMENT
INSTITUTIONAL CLASS
AGREEMENT made as of the 1st day of January, 1996 by FUND/PLAN BROKER SERVICES, INC. ("Fund/Plan"), on behalf of THE TIMOTHY PLAN (the "Fund"), a registered investment company, and TIMOTHY PARTNERS, LTD.("TPL").
WHEREAS, the TPL serves as investment adviser to the Fund; and
WHEREAS, Fund/Plan serves as underwriter for the Fund; and
WHEREAS, the Fund has adopted a Distribution Plan (the "Plan") pursuant to
Rule
12b-1 under the Investment Company Act of 1940 whereby the Fund may compensate
certain persons for certain services provided to the shareholders of the Fund;
and
WHEREAS, TPL has provided personal services and maintenance of shareholder
accounts for shareholders of the Institutional Class shares of the Fund; and
WHEREAS, Fund/Plan desires, on behalf of the Fund, that TPL continue to provide personal services and maintenance of shareholder accounts for shareholders of the Institutional Class shares of the Fund, and to be compensated for such services pursuant to the Plan.
NOW, THEREFORE, in consideration of the premises and mutual covenants hereinafter continued, the parties hereto agree as follows:
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written.
TIMOTHY PARTNERS, LTD.
By:Covenant Fund, Inc.,
General Partner
By:_________________________________________________________________
Arthur D. Ally,
President
FUND/PLAN BROKER SERVICES, INC.
By:___________________________________________________________________
THE TIMOTHY PLAN EXHIBIT 15(D)
SHAREHOLDER SERVICES AGREEMENT
RETAIL CLASS
AGREEMENT made as of the 1st day of January, 1996 by FUND/PLAN BROKER SERVICES, INC. ("Fund/Plan"), on behalf of THE TIMOTHY PLAN (the "Fund"), a registered investment company, and TIMOTHY PARTNERS, LTD.("TPL").
WHEREAS, the TPL serves as investment adviser to the Fund; and
WHEREAS, Fund/Plan serves as underwriter for the Fund; and
WHEREAS, the Fund has adopted a Distribution Plan (the "Plan") pursuant to
Rule 12b-1 under the Investment Company Act of 1940 whereby the Fund may
compensate certain persons for certain services provided to the shareholders of
the Fund; and
WHEREAS, TPL has provided personal services and maintenance of shareholder
accounts for shareholders of the Retail Class shares of the Fund; and
WHEREAS, Fund/Plan desires, on behalf of the Fund, that TPL continue to provide personal services and maintenance of shareholder accounts for shareholders of the Retail Class shares of the Fund, and to be compensated for such services pursuant to the Plan.
NOW, THEREFORE, in consideration of the premises and mutual covenants hereinafter continued, the parties hereto agree as follows:
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written.
TIMOTHY PARTNERS, LTD.
By:Covenant Fund, Inc.,
General Partner
By:_________________________________________________________________
Arthur D. Ally,
President
FUND/PLAN BROKER SERVICES, INC.
By:___________________________________________________________________
ERV = P(1 + T)/N/
WHERE:
P = A HYPOTHETICAL INITIAL PAYMENT OF $1,000
T = AVERAGE ANNUAL TOTAL RETURN
N = NUMBER OF YEARS
ERV = ENDING REDEEMABLE VALUE OF AT THE END OF THE PERIOD OF A HYPOTHETICAL
$1,000 PAYMENT ("P") MADE AT THE BEGINNING OF THAT PERIOD OR FRACTIONAL PORTION
THEREOF.
INSTITUTIONAL CLASS
Since inception (03/21/94) to 12/31/95 - ---------------------------------------- ERV = $1,049.14 T = 2.73% N = 1.781 years 1 Year (1/1/95 to 12/31/95) - ---------------------------------------- ERV = $1,079.30 T = 7.93% N = 1 year RETAIL CLASS Since inception (08/25/95) to 12/31/95 - -------------------------------------- ERV = $992.36 T = (2.20%) N = 0.345 years |
THE TIMOTHY PLAN MULTIPLE CLASS PLAN EXHIBIT 18
This Multiple Class Plan (the "Plan") has been adopted by a majority of the Board of Trustees, including a majority of the independent trustees, of The Timothy Plan (the "Trust"). The Board has determined that the Plan is in the best interests of each Class and the Trust as a whole. The Plan sets forth the provisions relating to the establishment of multiple classes of shares for the Trust.
1. The Trust may offer two classes of shares, the Retail Class and the Institutional Class shares.
2. Retail Class shares shall be sold with a front-end sales charge of 1.75% for an investment of $1,000 but under $10,000, 1.50% for investments over $10,000 but under $25,000, 1.25% for investments over $25,000 but under $50,000, 1.00% for investments over $50,000 but under $100,000. There is no sales load for investments over $100,000.
The Retail Class shares are subject to Rule 12b-1 charges. The Retail Class of the Trust shall reimburse Timothy Partners, Ltd. (The "Advisor"), the Distributor or others for all expenses incurred by such parties in the promotion and distribution of shares of the Retail Class of the Trust, including but not limited to, the printing of prospectuses and reports used for sales purposes, expenses of preparation of sales literature and related expenses, advertisements, and other distribution-related expenses, as well as any distribution or service fees paid to securities dealers or others who have executed a servicing agreement with the Trust on behalf of the Retail Class or the Distributor, which form of agreement has been approved by the Trustees, including the non-interested trustees. The monies to be paid pursuant to any such servicing agreement shall be used to pay dealers or others for, among other things, furnishing personal services and maintaining shareholder accounts, which services include, among other things, assisting in establishing and maintaining customer accounts and records; assisting with the purchase and redemption requests; arranging for bank wires; monitoring dividend payments from the Trust on behalf of customers; forwarding certain shareholder communications from the Trust to customers; receiving and answering correspondence; and aiding in maintaining the investment of their respective customers in the Retail Class.
3. Institutional Class shares are subject to Rule 12b-1 charges. The Institutional Class of the Trust shall reimburse the Advisor, the Distributor or others for all expenses incurred by such parties in the promotion and distribution of shares of the Institutional Class of the Trust, including but not limited to, the printing of prospectuses and reports used for sales purposes, expenses of preparation of sales literature and related expenses, advertisements, and other distribution-related expenses, as well as any distribution or service fees paid to securities dealers or others who have executed a servicing agreement with the Trust on behalf of the Institutional Class or the Distributor, which form of agreement has been approved by the Trustees, including the non-interested trustees. The monies to be paid pursuant to any such servicing agreement shall be used to pay dealers or others for, among other things, furnishing personal services and maintaining shareholder accounts, which services include, among other things, assisting in establishing and maintaining customer accounts and records; assisting with the purchase and redemption requests; arranging for bank wires; monitoring dividend payments from the Trust on behalf of customers; forwarding certain shareholder communications from the Trust to customers; receiving and answering correspondence; and aiding in maintaining the investment of their respective customers in the Institutional Class.
4. The Trust's Rule 12b-1 Plans relating to both the Retail Class and Institutional Class shares shall operate in accordance with the Rules of Fair Practice of the National Association of Securities Dealers, Inc., Article III, section 26(d).
5. The only difference in expenses as between Institutional Class and Retail Class shares shall relate to differences in the Rule 12b-1 plan expenses of each class, as described in each Class' Rule 12b-1 Plan.
6. There shall be no conversion features associated with the Institutional
Class and Retail Class shares.
7. Each Class will vote separately with respect to any Rule 12b-1 Plan related
to the Class.
8. On an ongoing basis, the trustees pursuant to their fiduciary responsibilities under the Investment Company Act of 1940, as amended, (the "Act"), and otherwise, will monitor the Trust for the existence of any material conflicts
between the interests of the classes of shares. The trustees, including a majority of the independent trustees, shall take such action as is reasonably necessary to eliminate any such conflict that may develop. The Advisor and the Distributor shall be responsible for alerting the Board to any material conflicts that arise.
9. All material amendments to this Plan must be approved by a majority of the trustees of the Trust, including a majority of the trustees who are not "interested persons" of the Trust, as defined in the Act.
Exhibit 19
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes and appoints GERRY J. HOLLAND, JOSEPH M. O'DONNELL, GRETCHEN B. ZEPERNICK AND WILLIAM J. BALTRUS and each of them, with full power to act without the other, as true and lawful attorney-in-fact and agent, with full and several power of substitution, to take any appropriate action to qualify or register all or part of the securities of The Timothy Plan (the "Fund") for sale in various states, to perform on behalf of the Fund any and all such acts as such attorneys-in-fact may deem necessary or advisable in order to comply with the applicable laws of any such state, and in connection therewith to execute and file all requisite papers and documents, including but not limited to, applications, reports, surety bonds, irrevocable consents and appointments of attorneys for service of process; granting to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act requisite and necessary to be done in connection therewith, as fully as he might or could do in person, hereby ratifying and confirming all that such attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on the
10 day of March , 1995.
- ---- -------------
/s/ Arthur D. Ally
--------------------------------------------
Arthur D. Ally
President
|
State of Florida )
-------
) ss:
County of ____________ )
|
The foregoing instrument was acknowledged before me this
10 day of March , 1995, by Arthur D. Ally, President of The
- ---------- ------------------
Timothy Plan.
- --------------------------------------------
Notary Public
|
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes and appoints GERALD J. HOLLAND, JOSEPH M. O'DONNELL, GRETCHEN B. ZEPERNICK AND WILLIAM J. BALTRUS and each of them, with full power to act without the other, as true and lawful attorney-in-fact and agent, with full and several power of substitution, to take any appropriate action to qualify or register all or part of the securities of The Timothy Plan (the "Trust") for sale in various states, to perform on behalf of the Trust any and all such acts as such attorneys-in- fact may deem necessary or advisable in order to comply with the applicable laws of any such state, and in connection therewith to execute and file all requisite papers and documents, including but not limited to, applications, reports, surety bonds, irrevocable consents and appointments of attorneys for service of process; granting to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act requisite and necessary to be done in connection therewith, as fully as he might or could do in person, hereby ratifying and confirming all that such attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on the
20th day of April , 1995.
- ----- -------
/s/ Joseph E. Boatwright
----------------------------------
Joseph E. Boatwright
Secretary
|
State of Florida )
-------
) ss:
County of _____________ )
|
The foregoing instrument was acknowledged before me this
20th day of April , 1995, by Joseph E. Boatwright, Secretary of The Timothy
- ------ -------
Plan.
- --------------------------------------------
Notary Public
|
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes and appoints GERRY J. HOLLAND, JOSEPH M. O'DONNELL, GRETCHEN B. ZEPERNICK AND WILLIAM J. BALTRUS and each of them, with full power to act without the other, as true and lawful attorney-in-fact and agent, with full and several power of substitution, to take any appropriate action to qualify or register all or part of the securities of The Timothy Plan (the "Fund") for sale in various states, to perform on behalf of the Fund any and all such acts as such attorneys-in-fact may deem necessary or advisable in order to comply with the applicable laws of any such state, and in connection therewith to execute and file all requisite papers and documents, including but not limited to, applications, reports, surety bonds, irrevocable consents and appointments of attorneys for service of process; granting to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act requisite and necessary to be done in connection therewith, as fully as he might or could do in person, hereby ratifying and confirming all that such attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on the
10 day of March, 1995.
- ------- ------
/s/ Wesley Pennington
--------------------------------------------
Wesley Pennington
Trustee
|
State of Florida )
-------
) ss:
County of _____________ )
|
The foregoing instrument was acknowledged before me this
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes and appoints GERRY J. HOLLAND, JOSEPH M. O'DONNELL, GRETCHEN B. ZEPERNICK AND WILLIAM J. BALTRUS and each of them, with full power to act without the other, as true and lawful attorney-in-fact and agent, with full and several power of substitution, to take any appropriate action to qualify or register all or part of the securities of The Timothy Plan (the "Fund") for sale in various states, to perform on behalf of the Fund any and all such acts as such attorneys-in-fact may deem necessary or advisable in order to comply with the applicable laws of any such state, and in connection therewith to execute and file all requisite papers and documents, including but not limited to, applications, reports, surety bonds, irrevocable consents and appointments of attorneys for service of process; granting to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act requisite and necessary to be done in connection therewith, as fully as he might or could do in person, hereby ratifying and confirming all that such attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on the
10 day of March , 1995.
- ------- ----------------------
/s/ Mark Schweizer
--------------------------
Mark Schweizer
Trustee
|
State of Florida )
-------
) ss:
County of _____________ )
|
The foregoing instrument was acknowledged before me this
| ARTICLE 6 |
| CIK: 0000916490 |
| NAME: THE TIMOTHY PLAN |
| SERIES: |
| NUMBER: 1 |
| NAME: INSTITUTIONAL CLASS |
| MULTIPLIER: 1 |
| PERIOD TYPE | 6 MOS |
| FISCAL YEAR END | DEC 31 1995 |
| PERIOD START | JAN 01 1995 |
| PERIOD END | DEC 31 1995 |
| INVESTMENTS AT COST | 5309870 |
| INVESTMENTS AT VALUE | 5326535 |
| RECEIVABLES | 62261 |
| ASSETS OTHER | 441 |
| OTHER ITEMS ASSETS | 1586073 |
| TOTAL ASSETS | 6975310 |
| PAYABLE FOR SECURITIES | 177033 |
| SENIOR LONG TERM DEBT | 0 |
| OTHER ITEMS LIABILITIES | 44843 |
| TOTAL LIABILITIES | 221876 |
| SENIOR EQUITY | 0 |
| PAID IN CAPITAL COMMON | 6736769 |
| SHARES COMMON STOCK | 609122 |
| SHARES COMMON PRIOR | 229452 |
| ACCUMULATED NII CURRENT | 0 |
| OVERDISTRIBUTION NII | 0 |
| ACCUMULATED NET GAINS | 0 |
| OVERDISTRIBUTION GAINS | 0 |
| ACCUM APPREC OR DEPREC | 16665 |
| NET ASSETS | 6753434 |
| DIVIDEND INCOME | 100584 |
| INTEREST INCOME | 27494 |
| OTHER INCOME | 0 |
| EXPENSES NET | 71681 |
| NET INVESTMENT INCOME | 56397 |
| REALIZED GAINS CURRENT | 157742 |
| APPREC INCREASE CURRENT | 33350 |
| NET CHANGE FROM OPS | 247489 |
| EQUALIZATION | 0 |
| DISTRIBUTIONS OF INCOME | 64056 |
| DISTRIBUTIONS OF GAINS | 143982 |
| DISTRIBUTIONS OTHER | 0 |
| NUMBER OF SHARES SOLD | 414090 |
| NUMBER OF SHARES REDEEMED | 54594 |
| SHARES REINVESTED | 20174 |
| NET CHANGE IN ASSETS | 4536540 |
| ACCUMULATED NII PRIOR | 0 |
| ACCUMULATED GAINS PRIOR | (1596) |
| OVERDISTRIB NII PRIOR | 19 |
| OVERDIST NET GAINS PRIOR | 0 |
| GROSS ADVISORY FEES | 41257 |
| INTEREST EXPENSE | 0 |
| GROSS EXPENSE | 261215 |
| AVERAGE NET ASSETS | 4403822 |
| PER SHARE NAV BEGIN | 9.66 |
| PER SHARE NII | .11 |
| PER SHARE GAIN APPREC | .66 |
| PER SHARE DIVIDEND | .11 |
| PER SHARE DISTRIBUTIONS | .25 |
| RETURNS OF CAPITAL | 0 |
| PER SHARE NAV END | 10.07 |
| EXPENSE RATIO | 1.6 |
| AVG DEBT OUTSTANDING | 0 |
| AVG DEBT PER SHARE | 0 |
| ARTICLE 6 |
| CIK: 0000916490 |
| NAME: THE TIMOTHY PLAN |
| SERIES: |
| NUMBER: 2 |
| NAME: RETAIL CLASS |
| MULTIPLIER: 1 |
| PERIOD TYPE | 6 MOS |
| FISCAL YEAR END | DEC 31 1995 |
| PERIOD START | JAN 01 1995 |
| PERIOD END | DEC 31 1995 |
| INVESTMENTS AT COST | 5309870 |
| INVESTMENTS AT VALUE | 5326535 |
| RECEIVABLES | 62261 |
| ASSETS OTHER | 441 |
| OTHER ITEMS ASSETS | 1586073 |
| TOTAL ASSETS | 6975310 |
| PAYABLE FOR SECURITIES | 177033 |
| SENIOR LONG TERM DEBT | 0 |
| OTHER ITEMS LIABILITIES | 44843 |
| TOTAL LIABILITIES | 221876 |
| SENIOR EQUITY | 0 |
| PAID IN CAPITAL COMMON | 6736769 |
| SHARES COMMON STOCK | 61522 |
| SHARES COMMON PRIOR | 0 |
| ACCUMULATED NII CURRENT | 0 |
| OVERDISTRIBUTION NII | 0 |
| ACCUMULATED NET GAINS | 0 |
| OVERDISTRIBUTION GAINS | 0 |
| ACCUM APPREC OR DEPREC | 16665 |
| NET ASSETS | 6753434 |
| DIVIDEND INCOME | 100584 |
| INTEREST INCOME | 27494 |
| OTHER INCOME | 0 |
| EXPENSES NET | 71681 |
| NET INVESTMENT INCOME | 56397 |
| REALIZED GAINS CURRENT | 157742 |
| APPREC INCREASE CURRENT | 33350 |
| NET CHANGE FROM OPS | 247489 |
| EQUALIZATION | 0 |
| DISTRIBUTIONS OF INCOME | 5675 |
| DISTRIBUTIONS OF GAINS | 12195 |
| DISTRIBUTIONS OTHER | 0 |
| NUMBER OF SHARES SOLD | 59955 |
| NUMBER OF SHARES REDEEMED | 0 |
| SHARES REINVESTED | 1567 |
| NET CHANGE IN ASSETS | 4536540 |
| ACCUMULATED NII PRIOR | 0 |
| ACCUMULATED GAINS PRIOR | (1596) |
| OVERDISTRIB NII PRIOR | 0 |
| OVERDIST NET GAINS PRIOR | 0 |
| GROSS ADVISORY FEES | 41257 |
| INTEREST EXPENSE | 0 |
| GROSS EXPENSE | 261215 |
| AVERAGE NET ASSETS | 234242 |
| PER SHARE NAV BEGIN | 10.49 |
| PER SHARE NII | .11 |
| PER SHARE GAIN APPREC | (.16) |
| PER SHARE DIVIDEND | .11 |
| PER SHARE DISTRIBUTIONS | .25 |
| RETURNS OF CAPITAL | 0 |
| PER SHARE NAV END | 10.08 |
| EXPENSE RATIO | 2.2 |
| AVG DEBT OUTSTANDING | 0 |
| AVG DEBT PER SHARE | 0 |