AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION
ON 08/16/00
FILE NOS: 811-08228
33-73248
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [11]
and
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X ]
Amendment No. [12]
(Check appropriate box or boxes.)
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Approximate Date of Proposed Public Offering: As soon as practicable following
effective date.
It is proposed that this filing will become effective (check appropriate box):
/ / immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/X/ on October 1, 2000 pursuant to paragraph (a)(3)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on ___________ pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a previously filed post-effective amendment.
Registrant declares hereby that an indefinite number or amount of its securities has been registered by this Registration Statement.
A Rule 24f-2 Notice for the year ended December 31, 1999 was filed on March 29, 2000.
TOTAL NUMBER OF PAGES _____
EXHIBIT INDEX BEGINS
ON PAGE _____
THE TIMOTHY PLAN
(the "Trust")
PROSPECTUS
October 1, 2000
This Prospectus offers the following Series ("Funds") of the Trust:
THE TIMOTHY PLAN AGGRESSIVE GROWTH FUND
THE TIMOTHY PLAN LARGE/MID-CAP GROWTH FUND
THE TIMOTHY PLAN SMALL-CAP VALUE FUND
THE TIMOTHY PLAN LARGE/MID-CAP VALUE FUND
THE TIMOTHY PLAN FIXED-INCOME FUND
THE TIMOTHY PLAN MONEY MARKET FUND
And the following Series that invest in the Funds (each a "Portfolio")
THE TIMOTHY PLAN STRATEGIC GROWTH PORTFOLIO
THE TIMOTHY PLAN CONSERVATIVE GROWTH PORTFOLIO
The Timothy Plan was established to provide an investment alternative for people who want to invest according to certain ethical standards. Each Fund invests in a different market segment, and each Fund has its own investment objectives. However, all the Funds have one thing in common. They do not invest in any company that is involved in the business of alcohol production, tobacco production or casino gambling, or which are involved, either directly or indirectly, in pornography or abortion.
The Funds are distributed through Timothy Partners, Ltd.
1304 West Fairbanks Avenue, Winter Park, Florida 32789.
TABLE OF CONTENTS
RISK/RETURN SUMMARY
The Timothy Plan Aggressive Growth Fund
The Timothy Plan Large/mid-cap Growth Fund
The Timothy Plan Small-cap Value Fund
The Timothy Plan Large/mid-cap Value Fund
The Timothy Plan Fixed Income Fund
The Timothy Plan Money Market Fund
The Timothy Plan Strategic Growth Portfolio
The Timothy Plan Conservative Growth Portfolio
FEES AND EXPENSES
INVESTING IN THE FUNDS
Class A Shares
Class B Shares
Opening and Adding to Your Account
HOW TO SELL (REDEEM) SHARES
DIVIDENDS AND DISTRIBUTIONS
THE ADVISER & INVESTMENT MANAGERS
Investment Adviser
Investment Managers
For the Aggressive Growth Fund
For the Large/mid-cap Growth Fund
For the Small-cap Value Fund
For the Large/mid-cap Value Fund
For the Fixed Income and Money Market Funds
PRINCIPAL UNDERWRITER
FEDERAL TAXES
GENERAL INFORMATION
FINANCIAL HIGHLIGHTS
FOR MORE INFORMATION
Because none of our Funds will invest in Excluded Securities, the pool of securities from which each Fund may choose may be limited to a certain degree. Although TPL believes that each Fund can achieve its investment objective within the parameters of ethical investing, eliminating Excluded Securities as investments may have an adverse effect on a Fund's performance. However, "Total Return" is more than just numbers. It is also investing in a way that supports and reflects your beliefs and ideals. Each of our Funds strives to maximize both kinds of total return.
INVESTMENT OBJECTIVE: long-term growth of capital. Current income is not a
significant investment consideration and any such
income realized will be considered incidental to the
Fund's investment objective.
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PRIMARY INVESTMENT o normally investing at least 65% of the Fund's total
STRATEGIES: assets in US common stocks;
o investing in common stocks of companies without regard
to market capitalizations;
o investing its assets in a limited number of equity
securities of companies which the Fund's Adviser
believes show a high probability for superior growth;
o investing up to 25% of its total assets in "special
situation" securities when the Fund's Adviser believes
such investments will benefit the Fund. A special
situation arises when, in the Adviser's opinion, the
securities of a company will experience an unusual gain
or loss solely by reason of a development particularly
or uniquely applicable to that company. Such situations
include but are not limited to: spin-offs, corporate
restructurings, liquidations, reorganizations,
recapitalizations or mergers, material litigation,
technological breakthroughs and new management or
management policies;
o seeking a balance between investments in "special
situation" investments and investments in large to
mid-capitalization equities (in excess of $3 billion in
market capitalization) with high or accelerating
profitability; and
o utilizing a strategy of short selling securities to
reduce volatility and enhance potential investment
gain. The Fund limits short sales to not more than 25%
of the Fund's total assets. The Fund may engage in two
types of short sales. Securities may be sold " against
the box" or outright. A short sale "against the box"
means that securities the Fund already owns are sold,
but not delivered. Instead, these securities are
segregated and pledged against the short position. When
the short sale is closed out, the securities owned are
released. Outright short selling involves the sale of
securities not presently owned by the Fund. If the Fund
does not purchase that security on the same day as the
sale, the security must be borrowed. At the time an
outright short sale is effected, the Fund incurs an
obligation to replace the security borrowed at whatever
its price may be at the time the Fund purchases the
security for delivery to the lender. Any gain or loss
on the transaction is taxable as a short term capital
gain or loss.
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PRIMARY RISKS: o GENERAL RISK- As with most other mutual funds, you can
lose money by investing in this Fund. Share prices
fluctuate from day to day, and when you sell your
shares, they may be worth less than you paid for them.
o STOCK MARKET RISK- The Fund is an equity fund, so it is
subject to the risks inherent in the stock market in
general. The stock market is cyclical, with prices
generally rising and falling over periods of time. Some
of these price cycles can be pronounced and last for a
long time.
o SMALL-CAP STOCK RISK- The Fund invests in smaller
companies. Smaller companies are particularly
susceptible to price swings, because, due to their
size, they often do not have the resources available to
them that are available to larger companies.
o EXCLUDED SECURITY RISK- Because the Fund does not
invest in Excluded Securities, the Fund may be riskier
than other Funds that invest in a broader array of
securities.
o SHORT SELLING RISKS- The Fund engages in short selling,
which involves special risks and requires special
investment expertise. Short selling involves special
risks, and the Fund could at any time suffer a loss if
the security sold short should increase in value. Funds
that maintain short positions are generally riskier
than funds that do not engage in short sales. When the
Fund engages in short sales, the securities underlying
the transaction are repriced daily, and if the value of
the underlying securities is not sufficient to fully
cover the short, the Fund will have to put up
additional cash or securities to make up any
difference. This requirement may result in additional
loss to the Fund.
o SPECIAL SITUATION RISKS-The Fund invests in "special
situation" securities, a practice which involves
special risks and requires special investment
expertise. Special situations often involve much
greater risk than is found in the normal course of
investing. These risks result from the subjective
nature of determining what a special situation is.
Liquidations, reorganizations, recapitalizations,
material litigation, technological breakthroughs and
new management or management policies may not have the
effect on a company's price that the Fund's Advisor
expects, which could negatively impact the Fund. To
minimize these risks, the Fund will not invest in
special situations unless the target company has at
least three years of continuous operations (including
predecessors) or unless the aggregate value of such
investments is not greater than 25% of the Fund's total
net assets (valued at the time of investment).
o GROWTH RISKS- The Fund invests in companies that appear
to be growth-oriented companies. If the Fund's
perceptions of a company's growth potential are wrong,
the securities purchased may not perform as expected,
reducing the Fund's return.
o TEMPORARY DEFENSIVE POSITIONS- Under abnormal market or
economic conditions, the Fund's Adviser may adopt a
temporary defensive investment position in the market.
When the Adviser assumes such a position, cash reserves
may be a significant percentage (up to 100%) of the
Fund's total net assets. During times when the Fund
holds a significant portion of its net assets in cash,
it will not be investing according to its investment
objectives and the Fund's performance may be negatively
affected as a result.
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WHO SHOULD BUY The Fund is appropriate for investors who understand
THIS FUND? the risks of investing in the stock market and who are
willing to accept moderate to high amounts of
volatility and risk.
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PAST PERFORMANCE
INVESTMENT OBJECTIVE: long-term growth of capital. Current income is not a
significant investment consideration and any such
income realized will be considered incidental to the
Fund's investment objective.
PRIMARY INVESTMENT o normally investing at least 65% of the Fund's total
STRATEGIES: assets in US common stocks;
o primarily investing in equity securities with market
capitalizations in excess of $5 billion;
o investing in a portfolio of securities which includes a
broadly diversified number of U.S. equity securities
which the Fund's Adviser believes show a high
probability of superior prospects for above average
growth. The Adviser chooses these securities using a
"bottoms up" approach of extensively analyzing the
financial, management and overall economic conditions
of each potential investment.
Larger companies, because of their increased management
depth, broader market affiliations, and capital
resources, offer the potential for long-term growth
with reduced risk.
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PRIMARY RISKS: o GENERAL RISK- As with most other mutual funds, you can
lose money by investing in this Fund. Share prices
fluctuate from day to day, and when you sell your
shares, they may be worth less than you paid for them.
o STOCK MARKET RISK- The Fund is an equity fund, so it is
subject to the risks inherent in the stock market in
general. The stock market is cyclical, with prices
generally rising and falling over periods of time. Some
of these price cycles can be pronounced and last for a
long time.
o EXCLUDED SECURITY RISK- Because the Fund does not
invest in Excluded Securities, the Fund may be riskier
than other Funds that invest in a broader array of
securities.
o GROWTH RISKS- The Fund invests in companies that appear
to be growth-oriented companies. If the Fund's
perceptions of a company's growth potential are wrong,
the securities purchased may not perform as expected,
reducing the Fund's return.
o TEMPORARY DEFENSIVE POSITIONS- Under abnormal market or
economic conditions, the Fund's Adviser may adopt a
temporary defensive investment position in the market.
When the Adviser assumes such a position, cash reserves
may be a significant percentage (up to 100%) of the
Fund's total net assets. During times when the Fund
holds a significant portion of its net assets in cash,
it will not be investing according to its investment
objectives and the Fund's performance may be negatively
affected as a result.
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WHO SHOULD BUY The Fund is appropriate for investors who understand
THIS FUND? the risks of investing in the stock market and who are
willing to accept moderate amounts of volatility and
risk.
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PAST PERFORMANCE
THIS FUND IS BEING OFFERED FOR THE FIRST TIME VIA THIS PROSPECTUS. ACCORDINGLY, PERFORMANCE INFORMATION ABOUT THE FUND IS NOT YET AVAILABLE.
INVESTMENT OBJECTIVE Long-term capital growth, with a secondary objective of
current income.
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PRIMARY INVESTMENT The Fund seeks to achieve its objectives by primarily
STRATEGIES investing in US small-cap stocks and American
Depository Receipts ("ADRs"). Small-Cap stocks is a
reference to the common stock of smaller companies-
companies whose total market capitalization is
generally less than $1Billion. ADRs are certificates
issued by United States banks to evidence an ownership
interest in an underlying non-USA company's stock. ADRs
generally trade on United States Stock Exchanges in the
same way that American common stock trades.
Small-Cap stocks, although more susceptible to price
movements, also enjoy growth potential that is often
not available for larger companies. As a result,
prudent investing in smaller companies can result in
greater capital growth than investing in larger
companies.
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PRIMARY RISKS o GENERAL RISK- As with most other mutual funds, you can
lose money by investing in this Fund. Share prices
fluctuate from day to day, and when you sell your
shares, they may be worth less than you paid for them.
o STOCK MARKET RISK- The Fund is an equity fund, so it is
subject to the risks inherent in the stock market in
general. The stock market is cyclical, with prices
generally rising and falling over periods of time. Some
of these price cycles can be pronounced and last for a
long time.
o SMALL-CAP STOCK RISK- The Fund invests in smaller
companies. Smaller companies are particularly
susceptible to price swings, because, due to their
size, they often do not have the resources available to
them that are available to larger companies.
o EXCLUDED SECURITY RISK- Because the Fund does not
invest in Excluded Securities, the Fund may be riskier
than other Funds that invest in a broader array of
securities.
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WHO SHOULD BUY THIS The Fund is appropriate for investors who understand
FUND? the risks of investing in the stock market and who are
willing to accept moderate amounts of volatility and
risk.
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PAST PERFORMANCE
The bar chart and table below help show the returns and risks of investing in the Fund by showing changes in the Fund's yearly performance over the lifetime of the Fund. They also compare the Fund's performance to the performance of the Russell 2000 Index** during each period. You should be aware that the Fund's past performance may not be an indication of how the Fund will perform in the future.
Performance Bar
Chart and Table
YEAR-BY-YEAR TOTAL RETURNS FOR CLASS A SHARES FOR CALENDAR YEARS ENDING ON
12/31(1)
25% 21.35%
20% ------
15% 12.59% ------ 12.58%
10% 7.93% ------ ------ ------
05% ------ ------ ------ ------
================================================================================
00% ------- --------
-05% (2.84%) --------
-10% --------
-15% (10.50)%
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1994(1) 1995 1996 1997 1998 1999
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Best Quarter: 2nd Qtr 1999 19.88%
Worst Quarter: 3rd Qtr 1998 (23.18)%
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING ON DECEMBER 31, 1999 (1)
CLASS A(1) CLASS B(2) RUSSELL 2000 INDEX**
One Year 12.58% 11.03% 19.62% Inception 6.56%(3) 6.67%(4) 15.15%(5)
THE TIMOTHY PLAN LARGE/MID-CAP VALUE FUND
INVESTMENT OBJECTIVE Long-term capital growth, with a secondary objective of
current income.
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PRIMARY INVESTMENT The Fund seeks to achieve its objectives by primarily
STRATEGIES investing in US common stocks and ADRs. The Fund will
normally invest in companies whose total market
capitalization exceeds $1 billion.
Larger companies, because of their increased management
depth, broader market affiliations, and capital
resources, offer the potential for long-term growth
with reduced risk.
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PRIMARY RISKS o GENERAL RISK- Like with most other mutual funds, you
can lose money by investing in this Fund. Share prices
fluctuate from day to day, and when you sell your
shares, they may be worth less than you paid for them.
o STOCK MARKET RISK- The Fund is an equity fund, so it is
subject to the risks inherent in the stock market in
general. The stock market is cyclical, with prices
generally rising and falling over periods of time. Some
of these price cycles can be pronounced and last for a
long time.
o MID-CAP STOCK RISK- Although the Fund invests in
companies with greater market capitalization than the
Small-Cap Value Fund, it does invest in smaller
companies. Smaller companies are particularly
susceptible to price swings, because, due to their
size, they often do not have the resources available to
them that are available to larger companies.
o EXCLUDED SECURITY RISK- Because the Fund does not
invest in Excluded Securities, the Fund may be riskier
than other Funds that invest in a broader array of
securities.
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WHO SHOULD BUY THIS The Fund is appropriate for investors who understand
FUND? the risks of investing in the stock market and who are
willing to accept moderate amounts of volatility and
risk.
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PAST PERFORMANCE
This Fund commenced investment operations on July 14, 1999. Because it has not yet achieved one full calendar year of investment performance, a bar chart and table are not available.
INVESTMENT OBJECTIVE To generate a high level of current income consistent
with prudent investment risk.
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PRIMARY INVESTMENT To achieve its goal, the Fund normally invests in a
STRATEGIES diversified portfolio of debt securities. These include
corporate bonds, U.S. Government and agency securities
and preferred securities. The Fund will only purchase
securities for the Fund that are investment grade, a
rating of at least "BBB" as rated by Standard & Poors
or a comparable rating by another nationally recognized
rating agency. The Fund may also invest in debt
securities that have not been rated by one of the major
rating agencies, so long as the Fund's investment
manager has determined that the security is of
comparable credit quality to similar rated securities.
In managing its portfolio, the Fund' s investment
manager concentrates on sector analysis, industry
allocation and securities selection: deciding which
types of bonds and industries to emphasize at a given
time, and then which individual bonds to buy. The Fund
attempts to anticipate shifts in the business cycle in
determining types of bonds and industry sectors to
target. In choosing individual securities, the Fund
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PRIMARY RISKS o GENERAL RISK- Like with most other mutual funds, you
can lose money by investing in this Fund. Share prices
fluctuate from day to day, and when you sell your
shares, they may be worth less than you paid for them.
o INTEREST RATE RISK- When interest rates rise, bond
prices fall; the higher the Fund's duration ( a
calculation reflecting time risk, taking into account
both the average maturity of the Fund's portfolio and
its average coupon return), the more sensitive the Fund
is to interest rate risk.
o CREDIT RISK- The Fund could lose money if any bonds it
owns are downgraded in credit rating or go into
default. For this reason, the Fund will only invest in
investment grade bonds.
o SECTOR RISK- If certain industry sectors or types of
securities don't perform as well as the Fund expects,
the Fund's performance could suffer.
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WHO SHOULD BUY THIS This Fund is appropriate for investors who want a high
FUND? level of current income and are willing to accept a
minor degree of volatility and risk.
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PAST PERFORMANCE
INVESTMENT OBJECTIVE The Fund seeks a high level of current income
consistent with the preservation of capital. The Fund
also attempts to maintain a stable net asset value of
$1.00.
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PRIMARY INVESTMENT The Fund invests primarily in short-term debt
STRATEGIES instruments, such as obligations of the U.S. Government
and its agencies, certificates of deposit, bankers
acceptances, commercial paper, and short-term corporate
notes. The Fund may also invest in repurchase
agreements. Under normal circumstances, the Fund will
not invest in any security with a maturity in excess of
397 days.
The Fund will only purchase securities for the Fund
that are investment grade. This means that the security
has a rating of at least "AA" as rated by Standard &
Poors or a comparable rating by another nationally
recognized rating agency. The Fund may also invest in
debt securities that have not been rated by one of the
major rating agencies, so long as the Fund's investment
manager has determined that the security is of
comparable credit quality to similar rated securities
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PRIMARY RISKS MONEY MARKET RISK- An investment in the Fund is not
insured or guaranteed by the Federal Deposit Insurance
Corporation or any other governmental agency. Although
the Fund seeks to preserve the value of your investment
at $1.00 per share, it is possible to lose money by
investing in the Fund.
INTEREST RATE RISK- When interest rates rise, bond
prices fall; the higher the Fund's duration ( a
calculation reflecting time risk, taking into account
both the average maturity of the Fund's portfolio and
its average coupon return), the more sensitive the Fund
is to interest rate risk.
CREDIT RISK- The Fund could lose money if its holdings
are downgraded in credit rating or go into default.
Accordingly, the Fund will only invest in investment
grade bonds.
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WHO SHOULD BUY THIS The Fund is appropriate for investors who are seeking a
FUND? high level of current income and preservation of
capital.
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PAST PERFORMANCE
This Fund commenced investment operations on July 14, 1999. Because it has not yet achieved one full calendar year of investment performance, a bar chart and table are not available.
INVESTMENT OBJECTIVE Medium to high levels of long term capital growth.
Current income is a consideration only to the extent
that the Funds in which the Portfolio invests seek
current income.
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PRIMARY INVESTMENT o Normally investing at least 75% of its net assets in
STRATEGIES certain of the Timothy Plan Funds:
o Normally allocating its investments among the Funds as
follows: 20% of net assets in the Timothy Plan
Small-Cap Value Fund; 25% of its net assets in the
Large/Mid-Cap Value Fund; 35% of its net assets in the
Large/Mid-Cap Growth Fund; and 20% in the Timothy Plan
Aggressive Growth Fund;
o Normally maintaining the allocation of its assets as
described above on a continuing basis as new money is
added to the Fund, and reallocating its investments to
maintain the allocations at the end of each fiscal
quarter, as need;
o Investing up to 25% of its assets in the Timothy Plan
Money Market and or Fixed Income Funds; and
o Investing its remaining cash, if any, in short term US
Government Securities, Money Market Securities,
Repurchase Agreements and other unaffiliated mutual
funds.
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PRIMARY RISKS o GENERAL RISK- As with most other mutual funds, you can
lose money by investing in the Portfolio. Share prices
fluctuate from day to day, and when you sell your
shares, they may be worth less than you paid for them.
o PORTFOLIO RISK- The Portfolio is subject to all of the
risks that are inherent in the Timothy Plan Funds in
which the Fund invests.
o INTEREST RATE RISK- To the extent that the Fund invests
in fixed income securities, the Fund will be exposed to
interest rate risk. When interest rates rise, bond
prices fall; the higher the Fund's duration ( a
calculation reflecting time risk, taking into account
both the average maturity of the Fund's portfolio and
its average coupon return), the more sensitive the Fund
is to interest rate risk.
o CREDIT RISK- To the extent that the Fund invests in
fixed income securities, the Fund will be exposed to
credit risk. The Fund could lose money if any bonds it
owns are downgraded in credit rating or go into
default. For this reason, the Fund will only invest in
investment grade bonds.
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WHO SHOULD BUY THIS The Portfolio is appropriate for investors who
understand the risks of investing in moderately to very
aggressive equity funds, and who wish to allocate their
investments among multiple funds with a single
investment.
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PAST PERFORMANCE
This Fund is being offered for the first time via this Prospectus. Accordingly, performance information about the Fund is not yet available.
INVESTMENT OBJECTIVE Moderate levels of long term capital growth. Current
income is a secondary objective.
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PRIMARY INVESTMENT o Normally investing at least 75% of its net assets in
STRATEGIES certain of the Timothy Plan Funds:
o Normally allocating its investments among the Funds as
follows: 15% of net assets in the Timothy Plan
Small-Cap Value Fund; 25% of its net assets in the
Large/Mid-Cap Value Fund; 25% of its net assets in the
Large/Mid-Cap Growth Fund; and 25% in the Timothy Plan
Fixed Income Fund;
o Normally maintaining the allocation of its assets as
described above on a continuing basis as new money is
added to the Fund, and reallocating its investments to
maintain the allocations at the end of each fiscal
quarter, as need;
o Investing up to 25% of its assets in the Timothy Plan
Money Market Fund; and
o Investing its remaining cash, if any, in short term US
Government Securities, Money Market Securities,
Repurchase Agreements and other unaffiliated mutual
funds.
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PRIMARY RISKS o GENERAL RISK- As with most other mutual funds, you can
lose money by investing in the Portfolio. Share prices
fluctuate from day to day, and when you sell your
shares, they may be worth less than you paid for them.
o PORTFOLIO RISK- The Portfolio is subject to all of the
risks that are inherent in the Timothy Plan Funds in
which the Fund invests.
o INTEREST RATE RISK- To the extent that the Fund invests
in the Fixed Income Fund and other fixed income
securities, the Fund will be exposed to interest rate
risk. When interest rates rise, bond prices fall; the
higher the Fund's duration ( a calculation reflecting
time risk, taking into account both the average
maturity of the Fund's portfolio and its average coupon
return), the more sensitive the Fund is to interest
rate risk.
o CREDIT RISK- To the extent that the Fund invests in the
Fixed Income Fund and other fixed income securities,
the Fund will be exposed to credit risk. The Fund could
lose money if any bonds it owns are downgraded in
credit rating or go into default. For this reason, the
Fund will only invest in investment grade bonds.
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WHO SHOULD BUY THIS The Portfolio is appropriate for investors who
FUND? understand the risks of investing in moderately to very
aggressive equity funds, and who wish to allocate their
investments among multiple funds with a single
investment.
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PAST PERFORMANCE
This Fund is being offered for the first time via this Prospectus. Accordingly, performance information about the Fund is not yet available.
ADDITIONAL INVESTMENT INFORMATION
Each Fund and Portfolio may, for temporary defensive purposes, invest up to 100% of its assets in obligations of the United States Government, its agencies and instrumentalities, commercial paper, and certificates of deposit and bankers acceptances. When a Fund takes a temporary defensive position, it will not be investing according to its investment objective, and at such times, the performance of the Fund will be different that if it had invested strictly according to its objectives.
In order to achieve its investment objective, each Portfolio typically allocates its assets, within predetermined percentage ranges, among certain of the Funds. Even so, the Portfolios may temporarily exceed one or more of the applicable percentage limits for short periods. The percentages reflect the extent to which each Portfolio will normally invest in the particular market segment represented by each underlying Fund, and the varying degrees of potential investment risk and reward represented by each Portfolio's investments in those market segments and their corresponding Funds. The Adviser may alter these percentage ranges when it deems appropriate. The assets of each Portfolio will be allocated among the Funds in accordance with its investment objective, the Adviser's outlook for the economy and the financial markets, and the relative market valuations of the Funds.
In addition, in order to meet liquidity needs or for temporary defensive purposes, each Portfolio may invest, without limit, directly in stocks, bonds and the following short-term instruments:
-- commercial paper, including master notes; -- bank obligations, including negotiable certificates of deposit, time deposits and bankers' acceptances; and
-- repurchase agreements.
At the time a Portfolio invests in any commercial paper, bank obligations or repurchase agreements, the issuer must have outstanding debt rated A or higher by Moody's or S & P; the issuer's parent corporation, if any, must have outstanding commercial paper rated Prime-1 by Moody's or A-1 by S & P; or, if no such ratings are available, the investment must be of comparable quality in the opinion of the Advisor. In addition to purchasing shares of the Funds, a Portfolio may use futures contracts and options in order to remain effectively fully invested in proportions consistent with the Advisor's current asset allocation strategy for the Portfolio. Specifically, each Portfolio may enter into futures contracts and options thereon, provided that the aggregate deposits required on these contracts do not exceed 5% of the Portfolio's total assets. A Portfolio may also use futures contracts and options for bona fide hedging transactions. Futures contracts and options may also be used to reallocate the Portfolio's assets among asset categories while minimizing transaction costs, to maintain cash reserves while simulating full investment, to facilitate trading, to seek higher investment returns, or to simulate full investment when a futures contract is priced attractively or is otherwise considered more advantageous than the underlying security or index. As a fundamental policy, which may not be changed without shareholder vote, each Portfolio will concentrate its investments in shares of the Funds.
ADDITIONAL EXPENSE AND TAX IMPLICATIONS-
Investing in the Portfolios involves certain additional expenses and tax results
that would not be present in a direct investment in the Funds. See "Dividends
and Distributions" and "Federal Taxes" in this prospectus.
This table describes the fees and expenses you may pay if you buy and hold shares of the Timothy Plan Small-Cap Value Fund ("Small"), Timothy Plan Large/Mid-cap Value Fund ("Mid"), Timothy Plan Aggressive Growth Fund ("Aggressive"), Timothy Plan Large/Mid-cap Growth Fund ("Large"), Timothy Plan Fixed-Income Fund ("Fixed"), Timothy Plan Strategic Growth Portfolio ("Strategic"), and Timothy Plan Conservative Growth Portfolio ("Conservative").
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CLASS A
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SHAREHOLDER TRANSACTION
EXPENSES SMALL MID AGGRESSIVE LARGE FIXED STRATEGIC CONSERVATIVE
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MAXIMUM SALES CHARGE
ON PURCHASES
(as percentage of 5.50% 5.50% 5.50% 5.50% 4.25% 5.50% 5.50%
offering price)
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MAXIMUM DEFERRED
SALES CHARGE
(as percentage of the None None None None None None None
lesser of original
purchase price or
redemption proceeds)
-------------------------------------------------------------------------------------------------------------
REDEMPTION FEES* None None None None None None None
-------------------------------------------------------------------------------------------------------------
EXCHANGE FEES None None None None None None None
-------------------------------------------------------------------------------------------------------------
|
-------------------------------------------------------------------------------------------------------------
CLASS B
-------------------------------------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION
EXPENSES SMALL MID AGGRESSIVE LARGE FIXED STRATEGIC CONSERVATIVE
-------------------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE
ON PURCHASES
(as percentage of None None None None None None None
offering price)
-------------------------------------------------------------------------------------------------------------
MAXIMUM DEFERRED
SALES CHARGE
(as percentage of the 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
lesser of original
purchase price or
redemption proceeds)
-------------------------------------------------------------------------------------------------------------
REDEMPTION FEES* None None None None None None None
-------------------------------------------------------------------------------------------------------------
EXCHANGE FEES None None None None None None None
-------------------------------------------------------------------------------------------------------------
* Firstar Bank, N.A., the Trust's custodian, charges a fee of $9 on
redemptions paid by wire transfer.
16
|
-------------------------------------------------------------------------------------------------------------
CLASS A
-------------------------------------------------------------------------------------------------------------
ANNUAL FUND
OPERATING EXPENSES
(expenses that are
deducted from Fund SMALL MID AGGRESSIVE LARGE FIXED STRATEGIC CONSERVATIVE
assets)
-------------------------------------------------------------------------------------------------------------
MANAGEMENT FEES 0.85% 1.35% 1.35% 1.35% 0.95% 0.15% 0.15
-------------------------------------------------------------------------------------------------------------
SERVICE &
DISTRIBUTION (12B-1) 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
FEES
-------------------------------------------------------------------------------------------------------------
OTHER EXPENSES(1) 1.12% 3.09% 0.75% 0.75% 12.72% 0.69% 0.63%
------ ------ ------ ------ ------ ------ ------
-------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND
OPERATING EXPENSES
(Before Reimbursement 2.22% 4.69% 2.35% 2.35% 13.92% 1.09% 1.03%
====== ====== ====== ====== ====== ====== ======
by Adviser)
-------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND
OPERATING EXPENSES
(After Reimbursement 1.60% 1.60% 2.35% 2.35% 1.35% 1.09%(3) 1.03%(3)
====== ====== ====== ====== ====== ====== ======
by Adviser)
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
CLASS B
-------------------------------------------------------------------------------------------------------------
ANNUAL FUND
OPERATING EXPENSES
(expenses that are
deducted from Fund SMALL MID AGGRESSIVE LARGE FIXED STRATEGIC CONSERVATIVE
assets)
-------------------------------------------------------------------------------------------------------------
MANAGEMENT FEES 0.85% 1.35% 1.35% 1.35% 0.95% 0.15% 0.15
-------------------------------------------------------------------------------------------------------------
SERVICE &
DISTRIBUTION (12B-1) 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
FEES
-------------------------------------------------------------------------------------------------------------
OTHER EXPENSES(1) 0.87% 3.52% 0.75% 0.75% 12.78% 0.70% 0.63%
------ ------ ------ ------ ------ ------ ------
-------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND
OPERATING EXPENSES
(Before Reimbursement 2.72% 5.87% 3.10% 3.10% 14.73% 1.85% 1.78%
====== ====== ====== ====== ====== ====== ======
by Adviser)
-------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND
OPERATING EXPENSES
(After Reimbursement 2.35% 2.35% 3.10% 3.10% 2.10% 1.85%(3) 1.78%(3)
====== ====== ====== ====== ====== ====== ======
by Adviser)
-------------------------------------------------------------------------------------------------------------
|
(1) The Large/Mid-Cap Value Fund and the Fixed Income Fund commenced offering
Class A shares on July 14, 1999. The Large/Mid-Cap and Fixed Income Funds
commenced offering Class B shares on July 15, 1999 and August 5, 1999,
respectively. "Other Expenses" represents administrative and other expenses
incurred by these Funds during their start-up period. The Aggressive Growth
Fund, Large/Mid-Cap Growth Fund, Strategic Growth Portfolio and
Conservative Growth Portfolio are being offered for the first time via this
prospectus. Accordingly, these fees are estimated.
(2) TPL has agreed to waive receipt of its fees and/or assume certain expenses
of the Funds, to the extent possible, to insure that total annual operating
expenses do not exceed 1.35% annually for Class A shares of the Fixed
Income Fund. TPL has also agreed to waive receipt of its fees and/or assume
certain expenses of
the Funds, to the extent possible, to insure that total annual operating
expenses do not exceed 2.10% annually for Class B shares of the Fixed
Income Fund. TPL may terminate its agreement at any time, and will notify
you if it does so.
(3) Does not include underlying Fund expenses that the Portfolios bear
indirectly.
THIS TABLE DESCRIBES THE FEES AND EXPENSES YOU MAY PAY IF YOU BUY AND HOLD SHARES OF THE TIMOTHY PLAN MONEY MARKET FUND ("MONEY MARKET"). THE MONEY MARKET FUND OFFERS ONLY NO-LOAD SHARES.
(as a percentage of the lesser of SERVICE & DISTRIBUTION (12B-1) FEES.
original purchase price or 0.25%
redemption proceeds) OTHER EXPENSES(1) 4.90%
REDEMPTION FEES NONE* -----
(as a percentage of amount redeemed) TOTAL FUND OPERATING EXPENSES.(2)
EXCHANGE Fees NONE 5.75%
-----
(Before Expense Reimbursements)
|
(1) The Money Market Fund commenced offering its shares on July 9, 1999. "Other
Expenses" represents administrative and other expenses incurred by these
Funds during their start-up period.
(2) TPL has agreed to waive receipt of its fees and/or assume certain expenses
of the Fund, to the extent possible, to insure that the Fund's total
expenses do not exceed 0.85%. TPL may terminate its agreement at any time,
and will notify you if it does so.
------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES NO-LOAD
------------------------------------------------------------------------------------------------------------------------
MONEY
SMALL MID AGGRESSIVE LARGE FIXED STRATEGIC CONSERVATIVE MARKET
------------------------------------------------------------------------------------------------------------------------
One Yr $ 704 $ 704 $ 776 $ 776 $ 680 $ 655 $ 649 $ 87
------------------------------------------------------------------------------------------------------------------------
Three Yr $ 1,029 $ 1,029 $ 1,245 $ 1,245 $ 955 $ 878 $ 860 $ 272
------------------------------------------------------------------------------------------------------------------------
Five Yr $ 1,376 $ 1,376 $ 1,740 $ 1,740 $ 1,251 $ 1,122 $ 1,091 $ 473
------------------------------------------------------------------------------------------------------------------------
Ten Yr $ 2,355 $ 2,355 $ 3,099 $ 3,099 $ 2,093 $ 1,806 $ 1,740 $ 1,055
------------------------------------------------------------------------------------------------------------------------
|
The $9 fee that you would have to pay if you redeemed your shares by wire transfer is not included in these figures. A maximum sales charge of 4.25% for the Fixed-Income Fund , and 5.50% for the other Funds and Portfolios (except the Money Market Fund), is included in the expense calculations. The example does not include underlying Fund expenses that the Portfolios bear indirectly.
------------------------------------------------------------------------------------------------------------
CLASS B SHARES (WITH REDEMPTION)
------------------------------------------------------------------------------------------------------------
SMALL MID AGGRESSIVE LARGE FIXED STRATEGIC CONSERVATIVE
------------------------------------------------------------------------------------------------------------
1 Year $ 741 $ 741 $ 816 $ 816 $ 716 $ 655 $ 649
------------------------------------------------------------------------------------------------------------
3 Years $ 1,053 $ 1,053 $ 1,272 $ 1,272 $ 979 $ 878 $ 860
------------------------------------------------------------------------------------------------------------
5 Years $ 1,371 $ 1,371 $ 1,739 $ 1,739 $ 1,246 $ 1,122 $ 1,091
------------------------------------------------------------------------------------------------------------
10 Years $ 2,697 $ 2,697 $ 3,423 $ 3,423 $ 2,442 $ 1,806 $ 1,740
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
CLASS B SHARES (WITHOUT REDEMPTION)
------------------------------------------------------------------------------------------------------------
SMALL MID AGGRESSIVE LARGE FIXED STRATEGIC CONSERVATIVE
------------------------------------------------------------------------------------------------------------
1 Year $ 239 $ 239 $ 314 $ 314 $ 214 $ 655 $ 649
------------------------------------------------------------------------------------------------------------
3 Years $ 736 $ 736 $ 960 $ 960 $ 660 $ 878 $ 860
------------------------------------------------------------------------------------------------------------
5 Years $ 1,260 $ 1,260 $ 1,631 $ 1,631 $ 1,133 $ 1,122 $ 1,091
------------------------------------------------------------------------------------------------------------
10 Years $ 2,697 $ 2,697 $ 3,423 $ 3,423 $ 2,442 $ 1,806 $ 1,740
------------------------------------------------------------------------------------------------------------
|
The $9 fee that you would have to pay if you redeemed your shares by wire transfer is not included in these figures. The maximum contingent deferred sales charge for each period is included in the figures showing redemption expenses. The example does not include underlying Fund expenses that the Portfolios bear indirectly.
The following tables set forth the estimated aggregate expenses of the portfolios, including expenses of the underlying funds in which they invest, based upon the expense tables for the Funds set out above. These estimates assume a constant allocation by each Portfolio of its assets in the Funds as described in the Risk/Return Summary. Actual Portfolio expenses may be higher or lower than this example. Based on the assumptions previously stated, you would pay the following combined expenses on a $10,000 investment assuming a 5% annual return and redemption at the end of each period.
--------------------------------------------------------------------------------
Total
Annual
CLASS A SHARES Combined
Operating 1Year 3 Years 5 Years 10 Years
Expenses
--------------------------------------------------------------------------------
Strategic Growth 1.93% $ 735 $1,123 $1,540 $2,680
Portfolio
--------------------------------------------------------------------------------
Conservative Growth 1.80% $ 723 $1,085 $1,477 $2,549
Portfolio
--------------------------------------------------------------------------------
Total
CLASS B SHARES Annual
(with Redemption) Combined
Operating 1Year 3 Years 5 Years 10 Years
Expenses
--------------------------------------------------------------------------------
Strategic Growth 2.69% $ 772 $1,135 $1,531 $2,835
Portfolio
--------------------------------------------------------------------------------
Conservative Growth 2.55% $ 758 $1,093 $1,462 $2,698
Portfolio
--------------------------------------------------------------------------------
19
|
--------------------------------------------------------------------------------
Total
CLASS B SHARES Annual
(without Redemption) Combined
Operating 1Year 3 Years 5 Years 10 Years
Expenses
--------------------------------------------------------------------------------
Strategic Growth 2.69% $ 735 $1,123 $1,540 $2,680
Portfolio
--------------------------------------------------------------------------------
Conservative Growth 2.55% $ 723 $1,085 $1,477 $2,549
Portfolio
--------------------------------------------------------------------------------
|
INVESTING IN THE FUNDS
DETERMINING SHARE PRICES
Shares of each Share Class of each Fund and Portfolio are offered at the public
offering price ("POP") for each share Class. The public offering price is each
share's next calculated net asset value ("NAV"), plus the applicable sales
charge, if any. NAV per share is calculated by adding the value of Fund or
Portfolio investments, cash and other assets, subtracting Fund/Portfolio
liabilities, and then dividing the result by the number of shares outstanding.
Each Fund/Portfolio generally determines the total value of its shares by using
market prices for the securities comprising its portfolio. Securities for which
quotations are not available and any other assets are valued at fair market
value as determined in good faith by each Fund or Portfolio's Adviser, subject
to the review and supervision of the Board of Trustee. Each Fund/Portfolio's per
share NAV and public offering price is computed on all days on which the New
York Stock Exchange ("NYSE") is open for business, at the close of regular
trading hours on the Exchange, currently 4:00 p.m. Eastern time. In the event
that the NYSE closes early, the share price will be determined as of the time of
closing.
The Timothy Plan Money Market Fund will use the amortized cost method to compute its net asset value. This means that securities purchased by the Fund are not marked to market. Instead, any premium paid or discount realized will be amortized or accrued over the life of the security and credited/debited daily against the total assets of the Fund. This also means that, under most circumstances, the Fund will not sell securities prior to maturity date except to satisfy redemption requests.
CHOOSING THE CLASS OF SHARES THAT IS BEST FOR YOU
Except for the Money Market Fund, which offers only No-Load Shares, Each Fund
and Portfolio offers you a choice of two different share classes in which to
invest. The main differences between each share Class are sales charges and
ongoing fees. Both Classes of shares in any Fund or Portfolio represent
interests in the same portfolio of investments in that Fund or Portfolio. When
deciding which Class of shares to purchase, you should consider your investment
goals, present and future amounts you may invest in the Fund(s) or Portfolio(s),
and the length of time you intend to hold your shares. You should consider,
given the length of time you may hold your shares, whether the ongoing expenses
of Class B shares will be greater than the front-end sales charge of Class A
shares, and to what extent such differences may be offset by the higher
dividends on Class A shares. To help you make a determination as to which class
of shares to buy, please refer back to the examples of Fund expenses over time
in the "Fees And Expenses" Section.
CLASS A SHARES.
Class A shares are offered at their public offering price ("POP"), which is net asset value per share plus the applicable sales charge. The sales charge varies, depending on which Fund or Portfolio you choose and how much you invest. There are no sales charges on reinvested distributions. For all Funds and Portfolios except the Fixed Income Fund and the Money Market Fund, the following sales charges apply:
AS A % OF AS A % OF DEALER CONCESSION AS A
AMOUNT INVESTED OFFERING PRICE AMOUNT INVESTED PERCENTAGE OF OFFERING PRICE
--------------- -------------- --------------- ----------------------------
$1000 to 24,999 5.50% 5.82% 5.25%
25,000 to 49,999 4.25% 4.44% 4.00%
50,000 to 99,999 3.00% 3.09% 2.75%
100,000 to 249,999 2.00% 2.04% 1.75%
250,000 to 499,999 1.00% 1.01% 0.75%
500,000 and up 0.00% 0.00% 0.00%
The following sales charges apply to the Fixed Income Fund:
AS A % OF AS A % OF DEALER CONCESSION AS A
AMOUNT INVESTED OFFERING PRICE AMOUNT INVESTED PERCENTAGE OF OFFERING PRICE
--------------- -------------- --------------- ----------------------------
$1000 to 24,999 4.25% 4.44% 4.00%
25,000 to 49,999 3.25% 3.36% 3.00%
50,000 to 99,999 2.25% 2.30% 2.00%
100,000 to 249,999 1.25% 1.27% 1.00%
250,000 to 499,999 0.75% 0.76% 0.50%
500,000 and up 0.00% 0.00% 0.00%
|
The Trust's distributor will pay the appropriate dealer concession to those selected dealers who have entered into an agreement with the distributor to sell shares of the Funds and Portfolios. The dealer's concession may be changed from time to time. The distributor may from time to time offer incentive compensation to dealers who sell shares of the Funds and Portfolios subject to sales charges, allowing such dealers to retain an additional portion of the sales load. A dealer who receives 90% or more of the sales load may be deemed to be an "underwriter" under the Securities Act of 1933, as amended.
EXEMPTIONS FROM SALES CHARGES
Class A shareholders who purchased their shares on or before September 22, 1997
are not subject to sales charges on future purchases of Class A shares of any
Timothy Plan Fund or Portfolio, including exchanges. Also, the Trust will waive
sales charges on purchases of Class A Shares of any Timothy Plan Fund or
Portfolio by:
1. fee-based registered investment advisers for their clients,
2. broker/dealers with wrap fee accounts,
3. registered investment advisers or brokers for their own accounts,
4. directors, officers, agents employees and employee related accounts of any
entity which provides services to the Timothy Plan pursuant to a written
agreement for such services approved by the Board of Trustees of the
Timothy Plan, and
5. for an organization's retirement plan that places either (i) 200 or more
participants or (ii) $300,000 or more of combined participant initial
assets into the Funds.
The Trust may also, at its sole discretion, waive sales charges on purchases of Class A Shares by:
1. religious organizations for themselves or their members,
2. religiously-based charitable organizations and foundations for themselves
or their members, and/or
3. at times and under circumstances deemed appropriate by the Trust.
For purchasers that qualify for fee waivers, shares will be purchased at net asset value.
REDUCED SALES CHARGES
You may qualify for a reduced sales charge by aggregating the net asset value of
all your load shares previously purchased in any Fund with the dollar amount of
shares to be purchased. For example, if you already owned Class A or Class B
shares in one or more of the Funds with an aggregate net asset value of
$450,000, and you decided to purchase an additional $60,000 of Class A shares of
any Fund, there would be no sales charge on that purchase because you had
accumulated more than $500,000 in all Funds of the Trust.
LETTER OF INTENT
You can immediately qualify for a reduced or eliminated sales charge by signing
a non-binding letter of intent stating your intention to buy an amount of shares
in the Fund(s) during the next thirteen (13) months sufficient to qualify for
the reduction. Your letter will not apply to purchases made more than 90 days
prior to the letter. During the term of your letter of intent, the transfer
agent will hold in escrow shares representing the highest applicable sales load
for the Fund(s) in which you have purchased shares, each time you make a
purchase. Any shares you redeem during that period will count against your
commitment. If, by the end of your commitment term, you have purchased all the
shares you committed to purchase, the escrowed shares will be released to you.
If you have not purchased the full amount of your commitment, your escrowed
shares will be redeemed in an amount equal to the sales charge that would apply
if you had purchased the actual amount in your account(s) all at once. Any
escrowed shares not needed to satisfy that charge would be released to you.
CLASS B SHARES
Unlike Class A shares, Class B shares are sold at net asset value, without an
initial sales charge. Instead, a Contingent Deferred Sales Charge ("CDSC") is
imposed on certain redemptions of Class B shares. This means that all of your
initial investment is invested in the Fund(s) or Portfolio(s)of your choice, and
you will only incur a sales charge if you redeem shares within five years. In
that case, a CDSC may be imposed on your redemption. If a CDSC is imposed, it
will be an amount equal to the lesser of the current market value or the cost of
the shares redeemed. What this means is that no sales charge is imposed on
increases in the net asset value of your shares above their original purchase
price. Also, no charge is assessed on shares derived from reinvestment of
dividend or capital gains distributions.
The amount of the CDSC, if any, varies depending on the number of years you have held your shares. To determine that time period, all purchases made in any month are aggregated together and deemed to have been made on the last day of the month. For Class B shares of the each Fund and Portfolio, except the Money Market Fund, which does not offer Class B shares, the following CDSC charges apply:
REDEMPTION WITHIN CDSC PERCENTAGE First Year .................................. 5.00% Second Year ................................. 4.00% Third Year .................................. 3.00% Fourth Year ................................. 2.00% Fifth Year .................................. 1.00% Sixth Year and Thereafter ................... None |
When you send a redemption request to the Trust, shares not subject to the CDSC are redeemed first, then shares that have been held the longest, and so on. That way, you will be subject to the smallest charge possible.
CDSC WAIVERS
The CDSC is waived on redemptions of Class B shares (i) following the death or
disability (as defined in the Code) of a shareholder (ii) in connection with
certain distributions from an IRA or other retirement plan (iii) pursuant to the
Trust's Systematic Cash Withdrawal Plan, limited to 10% of the initial value of
the account, (iv) pursuant to the right of a Fund to liquidate a shareholder's
account.
CONVERSION FEATURE
Class B shares automatically convert to Class A shares once the economic
equivalent of a 5.50% sales charge is recovered by the Fund or Portfolio for
each investment account. The sales charge is recoverable by the Fund or
Portfolio through the distribution fees paid under each Fund/Portfolio's Plan of
Distribution for its Class B shares. Class B shares converting to Class A shares
are not subject to additional sales charges.
DISTRIBUTION FEES
The Trust has adopted distribution and shareholder servicing plans (the
"Distribution Plans"), pursuant to Rule 12b-1 under The Investment Company Act
of 1940, as amended (the "1940 Act"), by Class of Shares, for each Fund and
Portfolio. The Distribution Plans provide for fees to be deducted from the
average net assets of the Funds and Portfolios in order to compensate TPL or
others for expenses relating to the promotion and sale of shares of each Fund
and Portfolio.
Under the Class A Plan, the Class A shares of each Fund/Portfolio compensate TPL and others for distribution expenses at a maximum annual rate of 0.25% (of which, the full amount may be service fees), payable on a monthly basis, of each Fund's average daily net assets attributable to Class A shares.
Under the Class B Plan, the Class B Shares of the Fund/Portfolio compensate TPL and others for distribution and service fees at an annual rate of 1.00% (0.25% of which is a service fee) payable on a monthly basis, of each Fund/Portfolio's average daily net assets attributable to Class B shares. Amounts paid under the Class B Plan are paid to TPL and others to compensate them for services provided and expenses incurred in the distribution of Class B shares, including the paying of commissions for sales of Class B shares. The Class B Plan is designed to allow investors to purchase Class B shares without incurring a front-end sales load and to permit the distributor to compensate authorized dealers for selling such shares. Accordingly, the Class B Plan combined with the CDSC for Class B shares is to provide for the financing of the distribution of Class B shares. 12b-1 service fees payable on Class B shares will be paid to TPL for the first thirteen months after the shares are purchased.
OPENING AND ADDING TO YOUR ACCOUNT
You can invest directly in each Fund/Portfolio by mail, by wire transfer, or
through broker-dealers or other financial organizations. Simply choose the one
that is most convenient for you. You may also invest in the Fund/Portfolios
through an automatic payment plan. Any questions you may have can be answered by
calling 1-800-662-0201.
Payments for Fund/Portfolio shares should be in U.S. dollars, and in order to avoid fees and delays, should be drawn on a U.S. bank. Please remember that the Trust reserves the right to reject any purchase order for Fund/Portfolio shares. The minimum initial investment amount for each Fund/Portfolio, in any Class of shares, is $1,000.00 for regular accounts. There is no minimum purchase requirement for additional purchases, and there is no minimum purchase requirement for qualified retirement plans.
TO OPEN AN ACCOUNT BY MAIL
To make your initial investment in the Fund/Portfolios, simply complete the
Account Registration Form included with this Prospectus, make a check payable to
the Fund or Portfolio of your choice, and mail the Form and check to:
The Timothy Plan c/o Unified Fund Services, Inc. 431 North Pennsylvania Street Indianapolis, Indiana 46204
To make subsequent purchases, simply make a check payable to the Fund or Portfolio of your choice and mail the check to the above-mentioned address. Be sure to note your account number on the check.
Your purchase order, if accompanied by payment, will be processed upon receipt by Unified Fund Services, Inc., the Fund's Transfer Agent. If the Transfer Agent receives your order and payment by the close of regular trading on the NYSE (currently 4:00 p.m. Eastern time), your shares will be purchased at the Fund/Portfolio's POP calculated at the close of regular trading on that day. Otherwise, your shares will be purchased at the POP determined as of the close of regular trading on the next business day.
PURCHASING SHARES BY WIRE TRANSFER
To make an initial purchase of shares by wire transfer, you need to take the
following steps:
1. Fill out and mail or fax (317-266-8756 fax #) an Account Application to the
Transfer Agent
2. Call 1-800-662-0201 to inform us that a wire is being sent.
3. Obtain an account number from the Transfer Agent.
4. Ask your bank to wire funds to the account of:
Firstar Bank, N.A.
Cinti/Trust, ABA # 0420-0001-3
Credit: The Timothy Plan
Acct. # 488889866 (Small-Cap Value Fund)
821602174 (Large/Mid-Cap Value Fund
821602182 (Fixed Income Fund)
821602208 (Money Market Fund)
821602--- (Aggressive Growth Fund)
821602--- (Large/Mid-Cap Growth Fund)
821602---- (Strategic Growth Portfolio)
821602---- (Conservative Growth Portfolio)
For further credit to (Your Name and Account #)
Include your name(s), address and taxpayer identification number or Social Security number on the wire transfer instructions. The wire should state that you are opening a new Fund account.
The Trust allows investors to fax an application to the Transfer Agent as a convenience for the investor. However, if you fax your application to the Transfer Agent, you must also mail the original to the Transfer Agent for the Trust's permanent files.
To make subsequent purchases by wire, ask your bank to wire funds using the instructions listed above, and be sure to include your account number on the wire transfer instructions.
If you purchase Fund/Portfolio shares by wire, you must complete and file an Account Registration Form with the Transfer Agent before any of the shares purchased can be redeemed. Either fill out and mail the Application Form included with this prospectus, or call the transfer agent and they will send you an application. You should contact your bank (which will need to be a commercial bank that is a member of the Federal Reserve System) for information on sending funds by wire, including any charges that your bank may make for these services.
PURCHASES THROUGH FINANCIAL SERVICE ORGANIZATIONS
You may purchase shares of the Fund/Portfolios through participating brokers,
dealers, and other financial professionals. Simply call your investment
professional to make your purchase. If you are a client of a securities broker
or other financial organization, such organizations may charge a separate fee
for administrative services in connection with investments in Fund/Portfolio
shares and may impose account minimums and other requirements. These fees and
requirements would be in addition to those imposed by the Fund/Portfolio. If you
are investing through a securities broker or other financial organization, please refer to its program materials for any additional special provisions or conditions that may be different from those described in this Prospectus (for example, some or all of the services and privileges described may not be available to you). Securities brokers and other financial organizations have the responsibility of transmitting purchase orders and funds, and of crediting their customers' accounts following redemptions, in a timely manner in accordance with their customer agreements and this Prospectus.
PURCHASING SHARES BY AUTOMATIC INVESTMENT PLAN
You may purchase shares of the Fund/Portfolios through an Automatic Investment
Plan ("Plan"). The Plan provides a convenient way for you to have money deducted
directly from your checking, savings, or other accounts for investment in shares
of the Fund/Portfolios. You can take advantage of the Plan by filling out the
Automatic Investment Plan application, included with this Prospectus. You may
only select this option if you have an account maintained at a domestic
financial institution which is an Automated Clearing House member for automatic
withdrawals under the Plan. The Trust may alter, modify, amend or terminate the
Plan at any time, and will notify you at least 30 days in advance if it does so.
For more information, call the Transfer Agent at 1-800-662-0201.
RETIREMENT PLANS
Retirement plans may provide you with a method of investing for your retirement
by allowing you to exclude from your taxable income, subject to certain
limitations, the initial and subsequent investments in your plan and also
allowing such investments to grow without the burden of current income tax until
moneys are withdrawn from the plan. Contact your investment professional or call
the Trust at 1-800 TIM-PLAN to receive information concerning your options.
OTHER PURCHASE INFORMATION
Federal regulations require that you provide a certified taxpayer identification
number whenever you open or reopen an account. Congress has mandated that if any
shareholder fails to provide and certify to the accuracy of the shareholder's
social security number or other taxpayer identification number, the Company will
be required to withhold a percentage, currently 31%, of all dividends,
distributions and payments, including redemption proceeds, to such shareholder
as a backup withholding procedure.
For economy and convenience, share certificates will not be issued.
The Timothy Plan wants you to be kept current regarding the status of your account in our Fund/Portfolio(s). To assist you, the following statements and reports will be sent to you:
Confirmation Statements After every transaction that affects your
account balance or your account registration.
Account Statements Quarterly.
Financial Reports Semi-annually -- to reduce Fund expenses, only one copy
of the Fund report will be mailed to each taxpayer
identification number even if you have more than one
account in the Fund.
|
HOW TO SELL (REDEEM) YOUR SHARES
You may sell (redeem) your shares at any time. You may request the sale of your shares either by mail, by telephone or by wire.
BY MAIL
Sale requests should be mailed via U.S. mail or overnight courier service to:
The Timothy Plan c/o Unified Fund Services, Inc. 431 North Pennsylvania Street Indianapolis, Indiana 46204
The selling price for No-Load and Class A shares being redeemed will be the Fund/Portfolio's per share net asset value next calculated after receipt of all required documents in Good Order. The selling price for Class B shares being redeemed will be the Fund/Portfolio's per share net asset value next calculated after receipt of all required documents in Good Order, less any applicable CDSC. Payment of redemption proceeds will be made no later than the third business day after the valuation date unless otherwise expressly agreed by the parties at the time of the transaction.
Good Order means that the request must include:
1. Your account number.
2. The number of shares to be sold (redeemed) or the dollar value of the
amount to be redeemed.
3. The signatures of all account owners exactly as they are registered on the
account.
4. Any required signature guarantees.
5. Any supporting legal documentation that is required in the case of estates,
trusts, corporations or partnerships and certain other types of accounts.
SIGNATURE GUARANTEES --
A signature guarantee of each owner is required to redeem shares in the
following situations, for all size transactions:
(i) if you change the ownership on your account;
(ii) when you want the redemption proceeds sent to a different address than is
registered on the account;
(iii)if the proceeds are to be made payable to someone other than the account's
owner(s);
(iv) any redemption transmitted by federal wire transfer to your bank; and
(v) if a change of address request has been received by the Trust or Unified
Fund Services Inc. within 15 days previous to the request for redemption.
In addition, signature guarantees are required for all redemptions of $25,000 or more from any Fund/Portfolio shareholder account. A redemption will not be processed until the signature guarantee, if required, is received in Good Order.
Signature guarantees are designed to protect both you and the Trust from fraud. To obtain a signature guarantee, you should visit a bank, trust company, member of a national securities exchange or other broker-dealer, or other eligible guarantor institution. (Notaries public cannot provide signature guarantees.) Guarantees must be signed by an authorized person at one of these institutions, and be accompanied by the words "Signature Guarantee."
BY TELEPHONE
You may redeem your shares in the Fund/Portfolio(s) by calling the Transfer
Agent at 1-800-662-0201 if you elected to use telephone redemption on your
account application when you initially purchased shares. Redemption proceeds
must be transmitted directly to you or to your pre-designated account at a
domestic bank.
Shares purchased by check for which a redemption request has been received will not be redeemed until the check or payment received for investment has cleared.
BY AUTOMATED CLEARING HOUSE ("ACH")
You may request the redemption proceeds be transferred to your designated bank
if it is a member bank or a
correspondent of a member bank of the ACH system. There is no fee charged by the Trust. ACH redemption requests must be received by the transfer agent before 4:00p.m. New York time to receive that day's closing net assets value. ACH redemptions will be sent on the day following your redemption request. ACH redemption funds are normally available two days after the redemption has been processed.
REDEMPTION AT THE OPTION OF THE TRUST
If the value of the shares in your account falls to less than $1000, the Trust
may notify you that, unless your account is increased to $1000 in value, it will
redeem all your shares and close the account by paying you the redemption
proceeds and any dividends and distributions declared and unpaid at the date of
redemption. You will have sixty days after notice to bring the account up to
$1000 before any action is taken. This minimum balance requirement does not
apply to IRAs and other tax-sheltered investment accounts. This right of
redemption shall not apply if the value of your account drops below $1000 as the
result of market action. The Trust reserves this right because of the expense to
the Fund of maintaining very small accounts.
DIVIDENDS AND DISTRIBUTIONS
Dividends paid by each Fund/Portfolios are derived from its net investment income. Net investment income will be distributed at least annually. The Fund's net investment income is made up of dividends received from the stocks it holds, as well as interest accrued and paid on any other obligations that might be held in its portfolio.
Each Fund realizes capital gains when it sells a security for more than it paid for it. The Fund may make distributions of its net realized capital gains (after any reductions for capital loss carry forwards), generally, once a year.
Unless you elect to have your distributions paid in cash, your distributions will be reinvested in additional shares of the Fund. You may change the manner in which your dividends are paid at any time by writing to The Timothy Plan, c/o Unified Fund Services, Inc., 431 North Pennsylvania Street, Indianapolis, Indiana 46204.
THE INVESTMENT ADVISER & INVESTMENT MANAGERS
INVESTMENT ADVISER
Timothy Partners Ltd., (" TPL"), 1304 West Fairbanks Avenue, Winter Park, Florida, 32789, is a Florida limited partnership organized on December 6, 1993 and is registered with the Securities and Exchange Commission as an investment adviser. TPL supervises the investment of the assets of each Fund in accordance with the objectives, policies and restrictions of the Trust. TPL approves the portfolio of securities selected by the investment managers. To determine which securities are Excluded Securities, TPL conducts its own research and consults a number of Christian ministries on these issues. TPL retains the right to change the sources from whom it acquires its information, at its discretion. TPL has been the Adviser to the Funds since their inceptions.
Covenant Funds, Inc., a Florida corporation ("CFI"), is the managing general partner of TPL. Arthur D. Ally is President, Chairman and Trustee of the Trust, as well as President and 70% shareholder of CFI. Mr. Ally has over eighteen years experience in the investment industry prior to founding TPL, having worked for Prudential Bache, Shearson Lehman Brothers and Investment Management & Research. Some or all of these firms may be utilized by an investment manager to execute portfolio trades for a Fund. Neither Mr. Ally nor any affiliated person of the Trust will receive any benefit from such transactions.
For its services, TPL is paid an annual fee equal to 0.85% on the Small-Cap Value Fund, 1.35% on the Large/Mid-Cap Value Fund, 1.35% on the Aggressive Growth Fund, 1.35% on the Large/Mid-Cap Growth Fund, 0.95% on the Fixed-Income Fund, 0.60% on the Money Market Fund, and 0.15% on the Strategic Growth Portfolio and Conservative Growth Portfolio.
TPL, with the Trust's consent, has engaged the services of the following entities to provide day-to-day investment advisory services to certain of the Funds. TPL pays all fees charged by the investment managers for such services.
INVESTMENT MANAGERS
AGGRESSIVE GROWTH FUND
Rittenhouse Financial Services, Inc. ("Rittenhouse"), One Radnor Corporate
Center, Radnor, PA 19087, serves as investment manager to the Aggressive Growth
Fund under a written agreement with TPL. Rittenhouse selects the investments for
the Fund's portfolio, subject to the investment restrictions of the Trust and
under the supervision of TPL.
Rittenhouse has served as investment adviser to certain of the Nuveen Funds, and currently manages assets in excess of $____ billion. Rittenhouse has been providing investment services to mutual funds and other clients since -------.
LARGE/MID-CAP GROWTH FUND
Provident Investment Counselors, Inc. ("Provident"), 123 Any Street, Los
Angeles, CA 11111, serves as investment manager to the Large/Mid-Cap Growth Fund
under a written agreement with TPL. Provident selects the investments for the
Fund's portfolio, subject to the investment restrictions of the Trust and under
the supervision of TPL.
Provident has served as investment adviser to certain of the __________ Funds, and currently manages assets in excess of $____ billion. Provident has been providing investment services to mutual funds and other clients since -------.
SMALL-CAP VALUE FUND
Awad Asset Management, Inc. ("Awad"), a wholly-owned subsidiary of Raymond James
Financial, Inc., a diversified financial services firm traded on the New York
Stock Exchange, is the investment manager for the Small-Cap Value Fund. Awad has
offices at 250 Park Avenue, New York, New York 10177. Awad selects the
investments for the Small-Cap Value Fund's portfolio, subject to the investment
restrictions of the Trust and under the supervision of TPL.
James D. Awad, Dan Veru and Carol Egan make up the team responsible for managing the day-to-day investments for the Fund. James Awad is the Senior Investment Officer of the investment manager. Prior to forming Awad Asset Management, Inc., Mr. Awad was founder and president of BMI Capital. He also managed assets at Neuberger & Berman, Channing Management and First Investment Corp. Mr. Awad has been involved either full or part-time in the investment business since 1965.
Awad & Associates has served as investment manager to the Fund since January 1,
1997. It also serves as investment co-adviser to two other investment companies:
Heritage Small-Cap Stock Fund and Calvert New Vision Small-Cap Fund. As of
December 31, 1999, Awad & Associates managed in excess of $1 billion in assets.
In choosing the securities in which to invest, the Awad uses extensive fundamental analysis to develop earnings forecasts and to identify attractive investment opportunities relative to market valuation. Individual companies are scrutinized concerning their individual growth prospects and their competitive positions within their respective industries. Individual company analysis focuses upon the outlook for sales, profit margins, returns on capital, cash flow and earnings per share.
LARGE/MID-CAP VALUE FUND
Fox Asset Management, Inc. ("Fox"), 44 Sycamore Avenue, Little Silver, NJ 07739,
is responsible for the investment and reinvestment of the Mid-Cap Value Fund's
assets. Mr. J. Peter Skirkanich, President and majority shareholder of Fox, is
responsible for the day-to-day recommendations regarding the investment of the
Fund's portfolio. Fox was founded in 1987 and offers investment advice and
services to individuals, institutions, trusts, charities and regulated
investment companies. As of December 31, 1999, Fox managed approximately $2.2
billion in assets.
Mr. Skirkanich is the founder of the firm, serves as chairman of the firm's investment committee, and is the firm's controlling shareholder, with an approximate holding of 73% of the firm's outstanding stock. Mr. Skirkanich was formerly Managing Director of Dreman Value Management, Inc., an investment counseling firm. Prior to that, he was a Vice President of Investments at Kidder, Peabody & Company and Shearson/American Express, where he managed individual and corporate accounts for twelve years. He began his investment career as an analyst with Prudential Bache Securities.
Prior to embarking on his investment career, Mr. Skirkanich served three years with the U.S. State Department and two years with Ernst & Whinney in both the tax and audit areas. Mr. Skirkanich is a graduate of the Wharton School, University of Pennsylvania. Currently he serves as a trustee on the Board of Overseers for the School of Engineering and Applied Sciences at the University. By gubernatorial appointment, he also serves as a member of the State Investment Council for the State of New Jersey.
FIXED-INCOME FUND AND MONEY MARKET FUND
Carr & Associates, Inc.("Carr"), 150 Broadway, Suite 509, New York, New York,
serves as investment manager to the Fixed Income and Money Market Funds. Carr
was founded by Michael F. Carr in 1989 and has provided investment advisory
services to institutional and individual investors since that time. Each of the
Firm's co-principals is a Chartered Financial Analyst with over 38 years of
investment industry experience.
Michael F. Carr, President and Chief Investment Officer for the Firm, is responsible for the day to day recommendations regarding the investment of the Funds' portfolios. Mr. Carr has spent his entire 40 year career in the investment industry. Immediately prior to founding the firm, Mr. Carr was a Senior Vice President of Shearson Lehman Hutton. Mr. Carr is a Chartered Financial Analyst and a member of the Association for Investment Management and Research and the New York Society of Security Analysts. A graduate of the University of Notre Dame, Mr. Carr received his Masters of Business Administration degree from New York University.
PRINCIPAL UNDERWRITER
Timothy Partners Ltd.. ("TPL") acts as principal underwriter for the Trust. The purpose of acting as an underwriter is to facilitate the registration of the Funds' shares under state securities laws and to assist in the sale of shares. TPL also acts as Investment Adviser to the Trust. TPL is not compensated for providing underwriting services to the Trust.
FEDERAL TAXES
The Trust intends to qualify and maintain its qualification as a "regulated investment company" under the Internal Revenue Code (hereafter the "Code"), meaning that to the extent a fund's earnings are passed on to shareholders as required by the Code, the Trust itself is not required to pay federal income taxes on the earnings. Accordingly, each Fund will pay dividends and make such distributions as are necessary to maintain its qualification as a regulated investment company under the Code.
Before you purchase shares of any Fund, you should consider the effect of both dividends and capital gain distributions that are expected to be declared or that have been declared but not yet paid. When the Fund makes these payments, its share price will be reduced by the amount of the payment, so that you will in effect have paid full price for the shares and then received a portion of your price back as a taxable dividend distribution.
The Trust will notify you annually as to the tax status of dividend and capital gains distributions paid by the Funds. Such dividends and capital gains may also be subject to state and local taxes.
You may realize a taxable gain or loss when redeeming shares of a Fund depending on the difference in the prices at which you purchased and sold the shares.
Because your state and local taxes may be different than the federal taxes described above, you should see your tax adviser regarding these taxes.
GENERAL INFORMATION
Total return for the Funds may be calculated on an average annual total return basis or an aggregate total return basis. Average annual total return reflects the average annual percentage change in value of an investment over the measuring period. Aggregate total return reflects the total percentage change in value of an investment over the measuring period. Both measures assume the reinvestment of dividends and distributions.
Total return of each Fund or Portfolio may be compared to those of mutual funds with similar investment objectives and to bond, stock or other relevant indices or to rankings prepared by independent services or other financial or industry publications that monitor mutual fund performance.
FINANCIAL HIGHLIGHTS
The financial highlights tables and performance graphs presented below are intended to help you understand each Fund's financial performance since it commenced investment operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in a Fund, and for a particular share class of a Fund (assuming reinvestment of all dividends and distributions) for the time periods indicated. This information has been audited By Tait, Weller & Baker, whose report, along with each Fund's financial statements, are included in the Trust's annual report, dated December 31, 1999, which is available without charge upon request.
SMALL-CAP VALUE FUND, CLASS A SHARES
--------------------------------------------------------------------------------------
PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD
PER SHARE OPERATING ENDED ENDED ENDED ENDED ENDED ENDED
PERFORMANCE 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94*
--------------------------------------------------------------------------------------
NET ASSET VALUE
BEGINNING OF PERIOD $10.89 $12.25 $11.24 $10.07 $ 9.66 $10.00
--------------------------------------------------------------------------------------
Income from Investment Operations
Net Investment Income (0.02) 0.01 0.02 0.10 0.11 0.06
Net Gains (losses) on
Securities (Realized
& Unrealized) 1.39 (1.30) 2.37 1.17 0.66 (0.34)
--------------------------------------------------------------------------------------
Total from Investment 1.37 (1.29) 2.39 1.27 0.77 (0.28)
---- ----- ---- ---- ---- -----
Operations
--------------------------------------------------------------------------------------
Less Distributions
From Net Investment
Income 0.00 (0.07) 0.00 (0.10) (0.11) (0.06)
From Net Capital Gains 0.00 0.00) (1.38) 0.00 (0.25) 0.00
------ ------ ------ ------ ------ ------
Total Distributions 0.00 (0.07) (1.38) (0.10) (0.36) (0.06)
--------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $12.26 $10.89 $12.25 $11.24 $10.07 $ 9.66
--------------------------------------------------------------------------------------
TOTAL RETURN (A) 12.58% (10.50)% 21.35% 12.59% 7.93% (2.84)%
--------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------
Net Assets, End of Period
(in 000s) $13,377 $13,287 $11,208 $7,760 $6,133 $2,217
--------------------------------------------------------------------------------------
30
|
--------------------------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets
Before Expense
Reimbursements 2.22% 2.09% 2.75% 3.70% 5.84% 6.44%(B)
After Expense
Reimbursements 1.60% 1.60% 1.60% 1.60% 1.60% 1.60%(B)
--------------------------------------------------------------------------------------
Ratio of Net Investment
Income (loss) to Average
Net Assets
Before Expense
Reimbursements (0.82)% (1.15)% (0.90)% (1.05)% (2.96)% 15.49%(B)
After Expense
Reimbursements (0.20)% (0.66)% 0.25% 1.05% 1.28% 1.53%(B)
--------------------------------------------------------------------------------------
Portfolio Turnover Rate 78.79% 69.42% 136.36% 93.08% 34.12% 8.31%
--------------------------------------------------------------------------------------
|
* Class A Shares commenced investment operations on March 21, 1994. (A) Total Return Calculation does not reflect Sales Load. (B) Annualized.
SMALL-CAP VALUE FUND, CLASS B SHARES
--------------------------------------------------------------------------------
PERIOD PERIOD PERIOD PERIOD PERIOD
PER SHARE OPERATING ENDED ENDED ENDED ENDED ENDED
PERFORMANCE 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
--------------------------------------------------------------------------------
NET ASSET VALUE
BEGINNING OF PERIOD $10.70 $12.13 $11.22 $10.08 $10.49
--------------------------------------------------------------------------------
Income from Investment
Operations
Net Investment Income (0.11) (0.07) (0.03) 0.07 0.11
Net Gains (losses) on
Securities (Realized &
Unrealized) 1.29 (1.29) 2.32 1.14 (0.16)
--------------------------------------------------------------------------------
Total from Investment
Operations 1.18 (1.36) 2.29 1.21 (0.05)
--------------------------------------------------------------------------------
Less Distributions
From Net Investment Income 0.00 (0.07) (1.38) 0.00 (0.25)
From Net Capital Gains 0.00 0.00 0.00 (0.07) (0.11)
------ ------ ------ ------ ------
Total Distributions 0.00 (0.07) (1.38) (0.07) (0.36)
------ ------ ------ ------ ------
--------------------------------------------------------------------------------
NET ASSET VALUE, END
OF PERIOD $11.88 $10.70 $12.13 $11.22 $10.08
--------------------------------------------------------------------------------
TOTAL RETURN (A) 11.03% (11.18)% 20.50% 11.98% (0.46)%
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period
(in 000s) $14,351 $14,114 $11,389 $3,929 $ 620
--------------------------------------------------------------------------------
Ratio of Expenses to Average
Net Assets
Before Expense
Reimbursements 2.72% 2.84% 3.41% 4.30% 6.44%B
After Expense
Reimbursements 2.35% 2.35% 2.26% 2.20% 2.20%B
--------------------------------------------------------------------------------
Ratio of Net Investment Income
(loss) to Average Net Assets
Before Expense
Reimbursements (1.34)% (1.90)% (1.56)% 1.65% 3.56%B
After Expense
Reimbursements (0.97)% (1.41)% (0.41)% 0.45% 0.68%B
--------------------------------------------------------------------------------
Portfolio Turnover Rate 78.79% 69.42% 136.36% 93.08% 34.12%
--------------------------------------------------------------------------------
|
* Class B Shares commenced investment operations on August 25, 1995. (A) Total return calculation does not include redemption fee. (B) Annualized
LARGE/MID-CAP VALUE FUND
PERIOD ENDING 12/31/99
--------------------------------------------------------------------------------
CLASS A CLASS B
PER SHARE OPERATING PERFORMANCE SHARES (1) SHARES (2)
--------------------------------------------------------------------------------
NET ASSET VALUE
BEGINNING OF PERIOD $ 10.00 $ 10.00
--------------------------------------------------------------------------------
Income from Investment
Operations
Net Investment Income 0.02 0.02
Net Gains (losses) on
Securities (Realized
& Unrealized) (0.30) (0.62)
--------------------------------------------------------------------------------
Total from Investment
Operations (0.28) 0.60)
--------------------------------------------------------------------------------
Less Distributions
From Net Investment Income (0.02) (0.02)
From Net Capital Gains (0.02) (0.02)
Total Distributions (0.04) (0.04)
--------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.68 $ 9.36
--------------------------------------------------------------------------------
TOTAL RETURN (3.28)%(3) (4.78)%(4)
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period $ 845,879 $ 524,605
--------------------------------------------------------------------------------
Ratio of Expenses to Average
Net Assets
Before Expense
Reimbursements(5) 4.69% 5.87%
After Expense
Reimbursements(5) 1.60% 2.35%
--------------------------------------------------------------------------------
Ratio of Net Investment Income
(loss) to Average Net Assets
Before Expense
Reimbursements(5) (2.34)% (2.34)%
After Expense
Reimbursements(5) 0.75% 1.15%
--------------------------------------------------------------------------------
Portfolio Turnover Rate 8.02% 8.02%
--------------------------------------------------------------------------------
|
(1) For the Period July 14, 1999 (Commencement of Operations) through December
31, 1999.
(2) For the Period July 15, 1999 (Commencement of Operations) through December
31, 1999.
(3) Does not reflect sales charge.
(4) Does not reflect redemption fees.
(5) Annualized.
FIXED INCOME FUND
PERIOD ENDING 12/31/99
--------------------------------------------------------------------------------
CLASS A CLASS B
PER SHARE OPERATING PERFORMANCE SHARES (1) SHARES (2)
--------------------------------------------------------------------------------
NET ASSET VALUE BEGINNING OF PERIOD $ 10.00 $ 10.00
--------------------------------------------------------------------------------
Income from Investment
Operations
Net Investment Income 0.12 0.15
Net Gains (losses) on Securities
(Realized & Unrealized) (0.18) (0.22)
--------------------------------------------------------------------------------
Total from Investment Operations (0.06) (0.07)
------------ ------------
--------------------------------------------------------------------------------
Less Distributions
From Net Investment Income 0.00 0.00
From Net Capital Gains (0.13) (0.13)
------------ ------------
Total Distributions (0.13) (0.13)
--------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.81 $ 9.80
--------------------------------------------------------------------------------
TOTAL RETURN (0.42)%(3) (0.92)%(4)
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period $ 124,062 $ 243,086
--------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets
Before Expense Reimbursements(5) 13.92% 14.73%
After Expense Reimbursements(5) 1.35% 2.10%
--------------------------------------------------------------------------------
Ratio of Net Investment Income
(loss) to Average Net Assets
Before Expense Reimbursements(5) (9.88)% (2.20)%
After Expense Reimbursements(5) 2.70% 10.42%
--------------------------------------------------------------------------------
Portfolio Turnover Rate 21.25% 21.25%
--------------------------------------------------------------------------------
|
(1) For the Period July 14, 1999 (Commencement of Operations) through December 31, 1999.
(2) For the Period August 5, 1999 (Commencement of Operations) through December 31, 1999.
(3) Does not reflect sales charge.
(4) Does not reflect redemption fees.
(5) Annualized.
MONEY MARKET FUND
PERIOD ENDING 12/31/99
--------------------------------------------------------------------------------
NO-LOAD
PER SHARE OPERATING PERFORMANCE SHARES (1)
--------------------------------------------------------------------------------
NET ASSET VALUE BEGINNING OF PERIOD $ 1.00
--------------------------------------------------------------------------------
Income from Investment Operations
Net Investment Income 0.02
Net Gains (losses) on Securities
(Realized & Unrealized) 0.00
--------------------------------------------------------------------------------
Total from Investment Operations 0.02
------------
--------------------------------------------------------------------------------
Less Distributions
From Net Investment Income 0.00
From Net Capital Gains (0.02)
------------
Total Distributions (0.02)
--------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 1.00
--------------------------------------------------------------------------------
TOTAL RETURN (2) 1.78%
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period $ 760,184
--------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets
Before Expense Reimbursements(3) 5.75%
After Expense Reimbursements(3) 0.85%
--------------------------------------------------------------------------------
Ratio of Net Investment Income (loss)
to Average Net Assets
Before Expense Reimbursements(3) (0.73)%
After Expense Reimbursements(3) 4.17%
--------------------------------------------------------------------------------
|
(1) For the Period July 9, 1999 (Commencement of Operations) through December 31, 1999.
(2) Not Annualized.
(3) Annualized.
FOR MORE INFORMATION
Additional information about the Trust is available in the Trust's annual report to shareholders, dated December 31, 1999 and its semi-annual report to shareholders, dated June 31, 1999. In the Trust's annual and semi-annual reports, you will find a discussion of the market conditions and investment strategies that significantly affected the Trust's performance during its last year of operations.
STATEMENT OF ADDITIONAL BY MAIL:
INFORMATION (SAI)
The Timothy Plan.
The SAI contains more detailed c/o Unified Fund Services, Inc.
Information on all aspects of the 431 North Pennsylvania Street
Trust. A current SAI, dated May 1, Indianapolis, Indiana 46204
2000, has been filed with the SEC
and is incorporated by reference BY PHONE: 1-800-626-0201
into this prospectus.
ON THE INTERNET:
www.timothyplan.com
|
A copy of your requested document(s) will be mailed to you within three days of your request.
Information about the Fund (including the SAI) can also be reviewed and copied at the SEC's Public Reference Room in Washington, DC, and information concerning the operation of the Public Reference Room may be obtained by calling the SEC at 1-202-942-8090. Information about the Fund is also available on the SEC's EDGAR database at the SEC's web site (www.sec.gov ). Copies of this information can be obtained, after paying a duplicating fee, by electronic request (publicinfo@sec.gov), or by writing the SEC's Public Reference Section, Washington, DC 20549-0102.
The Timothy Plan Investment Company Act No.
811-08228
STATEMENT OF ADDITIONAL INFORMATION
THE TIMOTHY PLAN
A Delaware Business Trust and registered investment management company offering the following series:
THE TIMOTHY PLAN AGGRESSIVE GROWTH FUND
THE TIMOTHY PLAN LARGE/MID-CAP GROWTH FUND
THE TIMOTHY PLAN SMALL-CAP VALUE FUND
THE TIMOTHY PLAN LARGE/MID-CAP VALUE FUND
THE TIMOTHY PLAN FIXED-INCOME FUND
THE TIMOTHY PLAN MONEY MARKET FUND
AND
THE TIMOTHY PLAN STRATEGIC GROWTH PORTFOLIO
THE TIMOTHY PLAN CONSERVATIVE GROWTH PORTFOLIO
OCTOBER 1, 2000
This Statement of Additional Information is in addition to and supplements the current Prospectus of The Timothy Plan (the "Trust"), dated October 1, 2000, which prospectus offers eight separate investment series, The Timothy Plan Aggressive Growth Fund, The Timothy Plan Large/Mid-Cap Growth Fund, The Timothy Plan Small-Cap Value Fund, The Timothy Plan Large/Mid-Cap Value Fund, The Timothy Plan Fixed-Income Fund, the Timothy Plan Money Market Fund, The Timothy Plan Strategic Growth Portfolio, and The Timothy Plan Conservative Growth Portfolio.
THE TIMOTHY PLAN (the "Trust") is registered with the Securities and Exchange Commission as an open-end management investment company, and currently has registered and offers eleven separate series of shares to the public:
The Timothy Plan Aggressive Growth Fund, The Timothy Plan Large/Mid-Cap Growth Fund, The Timothy Plan Small-Cap Value Fund, The Timothy Plan Large/Mid-Cap Value Fund, and The Timothy Plan Fixed-Income Fund (referred to herein as the "Timothy Funds") currently each offers two classes of shares: Class A, and Class B.
The Timothy Plan Strategic Growth Portfolio, and The Timothy Plan Conservative Growth Portfolio (referred to herein as the "Portfolios") currently each offers two classes of shares: Class A, and Class B.
The Timothy Plan Money Market Fund (referred to herein as the "Money Market Fund") offers a single class of shares of the Trust without any sales charges.
This statement of additional information is not a prospectus but supplements and should be read in conjunction with the Timothy Plan, dated October 1, 2000. Copies of the prospectuses may be obtained from the Trust without charge by writing the Trust at 1304 West Fairbanks Avenue, Winter Park, Florida 32789 or by calling the Trust at (800) 846-7526. Retain this statement of additional information for future reference.
TABLE OF CONTENTS
THE TIMOTHY PLAN......................................................
THE TIMOTHY PLAN - INVESTMENTS........................................
INVESTMENT RESTRICTIONS...............................................
INVESTMENT ADVISER....................................................
INVESTMENT MANAGERS...................................................
PRINCIPAL
UNDERWRITER...........................................................
ADMINISTRATOR.........................................................
ALLOCATION OF PORTFOLIO BROKERAGE.....................................
PURCHASE OF SHARES....................................................
Tax-Deferred Retirement Plans....................................
REDEMPTIONS...........................................................
OFFICERS AND TRUSTEES OF THE TRUST....................................
DISTRIBUTION PLANS....................................................
TAXATION..............................................................
GENERAL INFORMATION...................................................
Audits and Reports...............................................
Miscellaneous....................................................
PERFORMANCE...........................................................
Comparisons and Advertisements...................................
FINANCIAL STATEMENTS..................................................
THE TIMOTHY PLAN
The Timothy Plan ("Trust") was organized as a Delaware business trust, and is a mutual fund company of the type known as an open-end management investment company. It is authorized to create an unlimited number of series of shares (each a "Fund" or "Portfolio") and an unlimited number of share classes within each series. A mutual fund permits an investor to pool his or her assets with those of others in order to achieve economies of scale, take advantage of professional money managers and enjoy other advantages traditionally reserved for large investors. The Trust currently offers eleven series: The Timothy Plan Aggressive Growth Fund, The Timothy Plan Large/Mid-Cap Growth Fund, The Timothy Plan Small-Cap Value Fund, The Timothy Plan Large/Mid-Cap Value Fund, The Timothy Plan Fixed-Income Fund, the Timothy Plan Money Market Fund, The Timothy Plan Strategic Growth Portfolio, The Timothy Plan Conservative Growth Portfolio, Timothy Plan Small-Cap Variable Series, the Timothy Plan Large/Mid-Cap Variable Series, and The Timothy Plan Fixed-Income Variable Series. The shares of each series are fully paid and non-assessable. They are entitled to such dividends and distributions as may be paid with respect to the shares and shall be entitled to such sums on liquidation of the Fund or Portfolio as shall be determined. Other than these rights, they have no preference as to conversion, exchange, dividends, retirement or other features and have no preemption rights. There are three Classes of shares offered by the Trust; Class A shares are offered with a front-end sales charge and ongoing service/distribution fees; Class B shares are offered with a contingent deferred sales charge that declines over a period of years and ongoing service and distribution fees; and; No-Load shares are offered without sales charges or ongoing service/distribution fees (Timothy Plan Money Market Fund, Timothy Plan Small-Cap Variable Series, the Timothy Plan Large/Mid-Cap Variable Series, and The Timothy Plan Fixed-Income Variable Series only).
Shareholder meetings will not be held unless required by Federal or State law or in connection with an undertaking given by the Fund (See Statement of Additional Information).
THE TIMOTHY PLAN - INVESTMENTS
Each Fund/Portfolio seeks to achieve its objectives by making investments selected in accordance with that Fund/Portfolio's investment restrictions and policies. Each Fund/Portfolio will vary its investment strategy as described in the Prospectus to achieve its objectives. This Statement of Additional Information contains further information concerning the techniques and operations of the Fund/Portfolios, the securities in which they will invest, and the policies they will follow.
THE TIMOTHY FUNDS issue two classes of shares (Class A and Class B) that invest in the same portfolio of securities. Class A and Class B shares differ with respect to sales structure and 12b-1 Plan expenses.
THE TIMOTHY MONEY MARKET FUND offers a single class of shares, the No-load class.
Each Fund has its own investment objectives and policies, and each invests in its own portfolio of securities. Each Fund seeks to achieve its stated objectives by investing in securities issued by companies which, in the opinion of the Funds' Adviser, conduct business in accordance with the stated philosophy and principles of the Funds. The following information supplements the information provided in each Fund's Prospectus.
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 Funds invest.
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 Funds 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 Funds 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 Funds with opportunities which are consistent with the Funds' investment objectives and policies.
WARRANTS 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 ("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 Funds 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 Funds do 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 each 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 that 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 any of the Funds to purchase or sell securities for short-term trading purposes, but the Funds may sell securities to recognize gains or avoid potential for loss. The Funds 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 Portfolios invest the majority of their assets in certain of the Funds, and are required to maintain certain investment ratios, which are adjusted at least quarterly. As a result, portfolio turnover for the Portfolios could be substantial and could cause the Funds to also experience additional turnover problems. The portfolio turnover rate for each Fund and Portfolio is set forth in the table below:
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FUND 1996 1997 1998 1999
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Small-Cap Value Fund 93.08% 136.36% 69.42% 78.79%
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Large/Mid Cap Value Fund N/A N/A N/A 8.02%
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Fixed Income Fund N/A N/A N/A 21.25%
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Money Market Fund N/A N/A N/A N/A
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Aggressive Growth Fund N/A N/A N/A N/A
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Large/Mid-Cap Growth N/A N/A N/A N/A
Fund
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Strategic Growth N/A N/A N/A N/A
Portfolio
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Conservative Growth N/A N/A N/A N/A
Portfolio
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The Timothy Plan Large/Mid-Cap Value Fund, the Timothy Plan Fixed-Income Fund, and The Timothy Plan Money Market Fund commenced investment operations in 1999. The Timothy Plan Aggressive Growth Fund, The Timothy Plan Large/Mid-Cap Growth Fund, The Timothy Plan Strategic Growth Portfolio and The Timothy Plan Conservative Growth Portfolio commenced investment operations on October 1, 2000.
High portfolio turnover would involve additional transaction costs (such as
brokerage commissions) which are borne by the Funds, or adverse tax effects.
(See "Dividends, Distributions and Taxes" in each Fund's Prospectus.)
INVESTMENT RESTRICTIONS
In addition to those set forth in the Funds' current Prospectuses, the Funds have adopted the Investment Restrictions set forth below, which are fundamental policies of each Fund, and which cannot be changed without the approval of a majority of the outstanding voting securities of each Fund. As provided in the Investment Company Act of 1940, as amended (the "1940 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 the Small-Cap Value Fund, the Large/Mid-Cap Value Fund, the Small-Cap Variable Series and the Large/Mid-Cap Variable Series may each 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 Small-Cap Value Fund, the Large/Mid-Cap Value Fund, the Small-Cap Variable Series and the Large/Mid-Cap Variable Series may each 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 each 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 each 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 1940 Act and the rules thereunder, as amended. But in no event may a Fund 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 a single class.
(9) as to 75% of a Fund's total assets, invest more than 5% of its 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)
(10) purchase or sell commodities or commodity futures contracts, other than those related to stock indexes.
(11) make loans of money or securities, except (I) by purchase of fixed income securities in which a Fund may invest consistent with its investment objectives and policies; or (ii) by investment in repurchase agreements.
(12) invest in securities of any company if any officer of trustee of the Funds or TPL owns more than 0.5% of the outstanding securities of such company and such officers and trustees, in the aggregate, own more than 5% of the outstanding securities of such company.
(13) borrow money, except that each Fund may borrow from banks (I) for temporary
or emergency purposes in an amount not exceeding of the Fund's assets or
(ii) to meet redemption requests that might otherwise require the untimely
disposition of portfolio securities, in an amount not to exceed 33% of the
value of the Fund's total assets (including the amount borrowed) at the
time the total assets, the Fund will not purchase securities. Interest paid
on borrowing will reduce net income.
(14) pledge, mortgage hypothecate, or otherwise encumber its assets, except in an mount up to 33% of the value of its net assets, but only to secure borrowing for temporary or emergency purposes, such as to effect redemptions, or
(15) 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 is no readily available market quotations, or in repurchase agreements maturing in more than 7 days, if all such securities would constitute more than 10% of a Fund's net assets.
So long as percentage restrictions are observed by a 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.
The investment restrictions set forth below have been adopted by the Strategic Growth Portfolio and the Conservative Growth Portfolio as fundamental policies.
Each of the Strategic Growth and Conservative Growth Portfolios May Not:
1. purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments (except this shall not prevent the Fund from purchasing or selling options or futures contracts or from investing in securities or other instruments backed by physical commodities);
2. purchase or sell real estate including limited partnership interests, although it may purchase and sell securities of companies that deal in real estate and may purchase and sell securities that are secured by interests in real estate;
3. make loans to any person, except loans of portfolio securities to the extent that no more than 33 1/3% of its total assets would be lent to other parties, but this limitation does not apply to purchases of debt securities or repurchase agreements;
4. (i) purchase more than 10% of any class of the outstanding voting securities of any issuer (except other investment companies as defined in the 1940 Act) and (ii) purchase securities of an issuer (except obligations of the U.S. Government and its agencies and instrumentalities and securities of other investment companies as defined in the 1940 Act) if as a result, with respect to 75% of its total assets, more than 5% of the Portfolio's total assets, at market value, would be invested in the securities of such issuer.
5. issue senior securities (as defined in the 1940 Act) except as permitted by rule, regulation or order of the Securities and Exchange Commission;
6. will not borrow, except from banks for temporary or emergency (not leveraging) purposes including the meeting of redemption requests that might otherwise require the untimely disposition of securities in an aggregate amount not exceeding 30% of the value of the Portfolio's total assets (including the amount borrowed) at the time the borrowing is made; and whenever borrowings by a Portfolio, including reverse repurchase agreements, exceed 5% of the value of a Portfolio's total assets, the Portfolio will not purchase any securities;
7. underwrite securities issued by others, except to the extent that the Portfolio may be considered an underwriter within the meaning of the 1933 Act in the disposition of restricted securities; and
8. write or acquire options or interests in oil, gas or other mineral exploration or development programs.
ADDITIONAL CONSIDERATIONS FOR SHAREHOLDERS OF THE PORTFOLIOS
A Portfolio will not be able to offset gains realized by one Fund in which such Portfolio invests against losses realized by another Fund in which such Portfolio invests. The Portfolio's use of a fund-of-funds structure could therefore affect the amount, timing and character of distributions to shareholders.
Depending on a Portfolio's percentage ownership in an underlying Fund both before and after a redemption, a Portfolio's redemption of shares of such Fund may cause the Portfolio to be treated as not receiving capital gain income on the amount by which the distribution exceeds the Portfolio's tax basis in the shares of the underlying Fund, but instead to be treated as receiving a dividend taxable as ordinary income on the full amounts of the distribution. This could cause shareholders of the Portfolio to recognize higher amounts of ordinary income than if the shareholders had held the shares of the underlying Funds directly.
Although a Portfolio may itself be entitled to a deduction for foreign taxes paid by the International Growth Fund, the Portfolio will not be able to pass any such credit or deduction through its own shareholders.
INVESTMENT ADVISER
The Trust has entered into an advisory agreement with Timothy Partners, Ltd.(TPL), effective January 19, 1994, as amended August 28, 1995, September 1, 1997, May 1, 1999, and October 1, 2000 for the provision of investment advisory services on behalf of the Trust to each Fund and Portfolio, subject to the supervision and direction of the Trust's Board of Trustees.
TPL further has voluntarily undertaken to waive its advisory fee and reimburse expenses on behalf of certain Funds to the extent normal operating expenses (including investment advisory fees but excluding interest, taxes, brokerage fees, commissions and extraordinary charges) exceed certain percentages for those Funds. The percentages for each Fund are set forth in the Funds' Prospectus. TPL may terminate its undertaking at any time by written notice to the Board. You will be notified if TPL exercises such a right.
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 Trust, and only if the terms of the renewal thereof have been approved by the vote of a majority of the Trustees of the Trust 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.
The table below sets forth the investment advisory fees payable to TPL for the last three years for each of the Trust's Funds and Portfolios. The table also sets forth the amounts reimbursed to each Fund by TPL pursuant to its voluntary commitment to limit Fund expenses.
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FUND 1997 1998 1999
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SMALL-CAP VALUE FUND
IA Fees Payable to TPL $142,990 $215,187 $220,068
Amount Reimbursed by TPL ($193,945) ($124,004) ($129,595)
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LARGE/MID-CAP VALUE FUND
IA Fees Payable to TPL N/A N/A $3,228
Amount Reimbursed by TPL N/A N/A ($12,527)
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FIXED INCOME FUND
IA Fees Payable to TPL N/A N/A $689
Amount Reimbursed by TPL N/A N/A ($14,206)
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MONEY MARKET FUND
IA Fees Payable to TPL N/A N/A $973
Amount Reimbursed by TPL N/A N/A ($8,025)
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AGGRESSIVE GROWTH FUND
IA Fees Payable to TPL N/A N/A N/A
Amount Reimbursed by TPL N/A N/A N/A
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LARGE/MID-CAP GROWTH FUND
IA Fees Payable to TPL N/A N/A N/A
Amount Reimbursed by TPL N/A N/A N/A
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STRATEGIC GROWTH PORTFOLIO
IA Fees Payable to TPL N/A N/A N/A
Amount Reimbursed by TPL N/A N/A N/A
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CONSERVATIVE GROWTH
PORTFOLIO N/A N/A N/A
IA Fees Payable to TPL N/A N/A N/A
Amount Reimbursed by TPL
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The Aggressive Growth Fund, Large/Mid-Cap Growth Fund, Strategic Growth Portfolio and Conservative Growth Portfolio had not commenced operations prior to December 31, 1999, so no advisory fees were payable to TPL.
INVESTMENT MANAGERS
Pursuant to an agreement between TPL, the Trust and Awad & Associates ("Awad"), dated January 1, 1997, as amended May 1, 1998 (the "Sub-Investment Advisory Agreement"), Awad provides advice and assistance to TPL in the selection of appropriate investments for Small-Cap Value Fund and the Small-Cap Variable Series, subject to the supervision and direction of the Funds' Board of Trustees. As compensation for its services, with respect to each Fund, Awad receives from TPL an annual fee at a rate equal to 0.42% of the first $10 million in assets of the Fund; 0.40% of the next $5 million in assets; 0.35% of the next $10 million in assets; and 0.25% of assets over $25 million.
Pursuant to an agreement between TPL, the Trust and Carr & Associates, Inc. ("Carr"), dated May 1, 1999 (the "Sub-Investment Advisory Agreement"), Carr provides advice and assistance to TPL in the selection of appropriate investments for Fixed-Income Fund, Money Market Fund and the Fixed-Income Variable Series, subject to the supervision and direction of the Funds' Board of Trustees. As compensation for its services, with respect to the Fixed-Income Fund and Fixed-Income Variable series, Carr receives from TPL an annual fee at a rate equal to 0.20% of the average net assets of each Fund. As compensation for its services with respect to the Money Market Fund, Carr receives from TPL an annual fee at a rate equal to 0.08% of the average net assets of the Fund.
Pursuant to an agreement between TPL, the Trust and Fox Asset Management, Inc. ("Fox"), dated May 1, 1999 (the "Sub-Investment Advisory Agreement"), Fox provides advice and assistance to TPL in the selection of appropriate investments for the Large/Mid-Cap Value Fund and the Large/Mid-Cap Variable Series, subject to the supervision and direction of the Funds' Board of Trustees. As compensation for its services, with respect to each Fund, Fox receives from TPL an annual fee at a rate equal to 0.42% of the first $10 million in assets of the Fund; 0.40% of the next $5 million in assets; 0.35% of the next $10 million in assets; and 0.25% of assets over $25 million.
Pursuant to an agreement between TPL, the Trust and Rittenhouse Financial Services, Inc. ("Rittenhouse"), dated October 1, 2000 (the "Sub-Investment Advisory Agreement"), Rittenhouse provides advice and assistance to TPL in the selection of appropriate investments for the Aggressive Growth Fund, subject to the supervision and direction of the Funds' Board of Trustees. As compensation for its services, with respect to the Fund, Rittenhouse receives from TPL an annual fee at a rate equal to 0.42% of the first $10 million in assets of the Fund; 0.40% of the next $5 million in assets; 0.35% of the next $10 million in assets; and 0.25% of assets over $25 million.
Pursuant to an agreement between TPL, the Trust and Provident Investment Counselors, Inc. ("Provident"), dated October 1, 2000 (the "Sub-Investment Advisory Agreement"), Provident provides advice and assistance to TPL in the selection of appropriate investments for the Large/Mid-Cap Growth Fund, subject to the supervision and direction of the Funds' Board of Trustees. As compensation for its services, with respect to the Fund, Provident receives from TPL an annual fee at a rate equal to 0.42% of the first $10 million in assets of the Fund; 0.40% of the next $5 million in assets; 0.35% of the next $10 million in assets; and 0.25% of assets over $25 million.
The Sub-Investment Advisory Agreements are each initially effective for two years. The Agreements may be renewed by the parties after their initial terms 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 Trust, and only if the terms of renewal thereof have been approved by the vote of a majority of the Trustees of the Trust 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 Agreements will terminate automatically in the event of their assignment.
PRINCIPAL UNDERWRITER
Effective July 1, 1997, Timothy Partners, Ltd. (TPL), 1304 West Fairbanks Avenue, Winter Park, Florida 32789, acts as an underwriter of the Timothy Funds' and the Timothy Variable Funds' shares for the purpose of
facilitating the registration of shares of the Funds 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. TPL is not compensated for providing underwriting services to the Funds.
In that regard, TPL has agreed at its own expense to qualify as a broker/dealer under all applicable federal or state laws in those states which the Funds shall from time to time identify to TPL as states in which it wishes to offer its shares for sale, in order that state registrations may be maintained by the Funds.
TPL 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.
The Funds and Portfolios 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.
ADMINISTRATOR
Unified Financial Services, Inc., 431 North Pennsylvania Street, Indianapolis, IN 46204 ("Unified"), provides Transfer Agent, Fund Accounting and certain Administrative services to the Trust pursuant to an Administrative Services Agreement dated July 1, 1999.
Under the Administrative Services Agreement, Unified: (1) coordinates with the
Custodian and performs Transfer Agent services to the Funds; (2) coordinates
with, and monitors, any third parties furnishing services to the Funds; (3)
provides the Funds 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 Funds 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 Funds required by applicable law;
(6) prepares and, after approval by the Funds, files and arranges for the
distribution of proxy materials and periodic reports to shareholders of the
Funds as required by applicable law; (7) reviews and submits to the officers of
the Funds for their approval invoices or other requests for payment of the
Funds' expenses and instructs the Custodian to issue checks in payment thereof;
and (8) takes such other action with respect to the Funds as may be necessary in
the opinion of Unified to perform its duties under the agreement.
Prior to July 1, 1999, Declaration Service Company, 555 North Lane, Suite 6160, Conshohoken, PA 19428, served as the Administrator. For the Trust's fiscal years ended December 31, 1997, 1998, and 1999, the Trust paid $ 65,386, $113,738, and $146,604 respectively, for Administration fees.
ALLOCATION OF PORTFOLIO BROKERAGE
The Adviser and/or Investment Manager, when effecting the purchases and sales of portfolio securities for the account of the Fund/Portfolios, 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/Portfolios 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/Portfolios' 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 Funds. Brokerage may also be allocated to dealers in consideration of the each Fund's share distribution but only when execution and price are comparable to that offered by other brokers.
TPL, through the Investment Managers, is responsible for making the Fund/Portfolios ' portfolio decisions subject to instructions described in the Prospectus. The Board of Trustees may however impose limitations on the allocation of portfolio brokerage.
Securities held by one Fund may also be held by another Fund or other accounts for which TPL or the Investment Manager serves as an advisor, or held by TPL or the Investment Manager for their own accounts. If purchases or sales of securities for a Fund or other entities for which they act as investment advisor or for their advisory clients arise for consideration at or about the same time, transactions in such securities will be made, insofar as feasible, for the respective entities and clients in a manner deemed equitable to all. To the extent that transactions on behalf of more than one client of TPL or Investment Manager during the same period may increase the demand for securities being purchased or the supply of securities being sold, there may be an adverse effect on price.
On occasions when TPL or an Investment Manager deems the purchase or sale of a security to be in the best interests of one Fund or more Funds or other accounts, they may to the extent permitted by applicable laws and regulations, but will not be obligated to, aggregate the securities to be sold or purchased for the Fund with those to be sold or purchased for the other Fund or accounts in order to obtain favorable execution and lower brokerage commissions. In that event, allocation of the securities purchased or sold, as well as the expenses incurred in the transaction, will be made by an Investment Manager in the manner it considers to be most equitable and consistent with its fiduciary obligations to the Funds and to such other accounts. In some cases this procedure may adversely affect the size of the position obtainable for a Fund.
The Board of Trustees of the Trust periodically reviews the brokerage placement practices of the Investment Managers on behalf of the Fund/Portfolios, and reviews the prices and commissions, if any, paid by the Fund/Portfolios to determine if they were reasonable.
PURCHASE OF SHARES
The shares of the Timothy Fund/Portfolios 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 Class A 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/Portfolios after 4 o'clock p.m. will be confirmed at the next day's price.
TAX-DEFERRED RETIREMENT PLANS
Shares of the Timothy Fund/Portfolios are available to all types of tax-deferred retirement plans such as Individual Retirement Accounts (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 Timothy Fund/Portfolios sponsor an 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 Timothy Fund/Portfolios' 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 Timothy Fund/Portfolios also sponsor 403(b)(7) Retirement Plans. The Fund/Portfolios offer a plan for use by schools, hospitals, and certain other tax-exempt organizations or associations who wish to use shares of the Timothy Fund/Portfolios 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.
The Timothy Fund/Portfolios also offer a Roth IRA. While contributions to a Roth IRA are not currently deductible, the amounts within the accounts accumulate tax-free and qualified distributions will not be included in a shareholder's taxable income. The contribution limit is $2,000 annually ($4,000 for joint returns) in aggregate with contributions to traditional IRAs. Certain income phaseouts apply.
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 Timothy Plan at (800) TIM-PLAN (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
The redemption price will be based upon the net asset value per share (subject to any applicable CDSC for Class B shares) 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. Class B shares of the Timothy Fund/Portfolios may be redeemed through certain brokers, financial institutions or service organizations, banks and bank trust departments who may charge 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 Timothy Fund/Portfolios.
Payment for shares tendered for redemption is made by check within seven days
after tender in proper form, except that the Funds reserve 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 Funds is not reasonably predictable or it is not reasonably
practicable for the Funds 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 Funds.
Pursuant to the Trust'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 Trust has elected, pursuant to Rule 18f-1 under the 1940 Act, to redeem its shares solely in cash up to the lesser of $250,000 or 1% of the net asset value of the Trust, 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 Trust. Any portfolio securities paid or distributed in-kind would be valued as described under "Determination of Net Asset Value" in the each 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 Funds.
In-kind payments need not constitute a cross-section of a Fund's' portfolio. Where a shareholder has requested redemption of all or a part of the shareholder's investment, and where a Fund completes such redemption in-kind, that 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 TRUST
The Trustees and principal executive officers and their principal occupations for the past five years are listed below.
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DATE PERSON BECAME A
TRUSTEE & TRUST PRINCIPAL OCCUPATION
NAME, ADDRESS & AGE OFFICES HELD, IF ANY DURING PAST 5 YEARS
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Arthur D. Ally (58)* Trustee since January, President and controlling
1304 West Fairbanks 1994. Currently shareholder of Covenant Funds,
Avenue serves as President of Inc.("CFI"), a holding
Winter Park, FL the Trust and Chairman company. President and general
of the Board of partner of Timothy Partners,
Trustees. Ltd.("TPL"), the investment
adviser and principal
underwriter to each Fund. CFI
is also the managing general
partner of TPL.
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Joseph E. Boatwright Trustee since April, Retired Minister. Currently
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(68) 1994. Currently Inc., a development company,
442 Raymond Avenue serves as Treasurer to since 1997. President and
Longwood, FL the Trust. controlling shareholder,
Weston, Inc., a fabric
treatment company, form
1979-1997.
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Jock M. Sneddon (51)** Trustee since January, Physician, Florida Hospital
6001 Vineland Drive 1997. Center.
Orlando, FL
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W. Thomas Fyler, Jr. Trustee since President, controlling
(42) December, 1998 shareholder of W.T. Fyler,
90 West Street, Suite Jr./Ephesus, Inc., a New York
1820 State registered investment
New York, NY 10006 advisory firm. Founding member
of the National Association of
Christian Financial Consultants.
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Randy R. Brunson (43) Trustee since June 21, Founder and Principal of
4500 Hugh Howell Rd, 2000 Brunson Financial Management,
Suite 750 Inc., a financial planning and
Tucker, GA 30084 investment advisory firm
located in Atlanta, Georgia.
Member, Institute of Certified
Financial Planners, the
Institute for Investment
Management Consulting, and the
Atlanta Health Care Alliance,
among others.
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12
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Mathew D. Staver Trustee since June 21, Attorney specializing in free
(43)** 2000 speech, appellate practice and
210 East Palmetto Ave. religious liberty
Longwood, FL 32750 constitutional law. Founder of
Liberty Counsel, a religious
civil liberties education and
legal defense organization. Host
of two radio programs devoted to
religious freedom issues. Editor
of a monthly newsletter devoted
to religious liberty topics. Mr.
Staver has argued before the
United States Supreme Court and
has published numerous legal
articles.
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Charles E. Nelson Trustee since June 21, Director of Finance, Hospice of
(65) 2000 the Comforter, Inc., a
1145 Cross Creek non-profit organization.
Altamonte Springs, FL Formerly Comptroller, Florida
United Methodist Children's Home,
Inc. Formerly Credit Specialist
with the Resolution Trust
Corporation and Senior Executive
Vice President, Barnett Bank of
Central Florida, N.A. Formerly
managing partner, Arthur
Anderson, CPA firm, Florida
branch.
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Mark A. Minnella (44) Trustee since June 21, Principal and co-founder of
1215 Fern Ridge 2000 The Financial Engineering
Parkway, Suite 110 Center, Inc. a registered
Creve Coeur, MO investment advisory firm.
Co-founder, treasurer and
director of the National
Association of Christian
Financial Consultants. Mr.
Minnella is a Registered
Investment Principal (NASD Series
24), and a registered investment
adviser (NASD Series 65). Host of
a weekly radio program in St.
Louis devoted to financial
planning. Frequent lecturer,
teacher and author of a variety
of financial software products.
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* Mr. Ally is an "interested" Trustee, as that term is defined in the 1940 Act, because of his positions with and financial interests in CFI and TPL.
** Messrs. Boatwright, Sneddon and Staver are "interested" Trustees, as that term is defined in the 1940 Act, because each has a limited partnership interest in TPL.
The officers conduct and supervise the daily business operations of the Funds, 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 Funds who are affiliated with TPL is paid by TPL, and not by the Fund. For the fiscal year ended December 31, 1999, the Timothy Funds 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 TPL for the calendar year ended December 31, 1999. As of December 31, 1999, the Timothy Variable Funds did not pay compensation to any of its trustees.
DISTRIBUTION PLANS
As noted in the Prospectus, the Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act (collectively, the "Plans") for each Share Class offered by the Fund/Portfolios whereby the Fund/Portfolios may pay up to a maximum of 0.25% for Class A shares, and up to a maximum of 1.00% for Class B shares (of which, up to 0.25% may be service fees to be paid by each respective class of shares to TPL, 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 Timothy Fund's shares. The fees are paid on a monthly basis, based on the Fund's average daily net assets attributable to such class of shares.
Pursuant to the Plans, TPL, as underwriter, is paid a fee each month (up to the maximum of 0.25% for Class A shares and 1.00% for Class B shares per annum of average net assets of each Timothy Fund/Portfolio) for expenses incurred in the distribution and promotion of the 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 Class A shares or 1.00% for Class B shares per annum will be borne by the TPL without any additional payments by the Fund/Portfolios. You should be aware that it is possible that Plan accruals will exceed the actual expenditures by TPL for eligible services. Accordingly, such fees are not strictly tied to the provision of such services.
Effective July 1, 1997, Timothy Partners, Ltd. (TPL), began serving as the Timothy Funds' sole underwriter. For the period July 1, 1997 to December 31, 1997, the Small-Cap Value Fund reimbursed TPL $58,563 for distribution-related expenses as follows: $12,917 compensation to dealers for Class A shares and $34, 074 compensation to dealers for Class B shares and $10,572 for servicing the Class B shareholder accounts. As of December 31, 1998, the Small-Cap Value Fund reimbursed TPL $63,290 for distribution-related expenses as follows: $30,886 compensation to dealers for Class A shares and $32,404 compensation to dealers for Class B shares and for servicing the Class B shareholder accounts. As of December 31, 1999, the Small-Cap Value Fund reimbursed TPL $164,988 for distribution and service-related expenses Class A shares and $2,035 compensation to dealers for Class B shares and for servicing the Class B shareholder accounts.
The Plans also provide that to the extent that the Fund/Portfolios, TPL, the Investment Managers, or other parties on behalf of the Fund/Portfolios, TPL, or the Investment Managers 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/Portfolios within the context of Rule 12b-1, such payments shall be deemed to be made pursuant to the Plans. In no event shall the payments made under the Plans, plus any other payments deemed to be made pursuant to the Plans, exceed the amount permitted to be paid pursuant to the Conduct Rules 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/Portfolios to have moneys available for the direct distribution activities of the Underwriter in promoting the sale of the Fund/Portfolios's shares, and to avoid any uncertainties as to whether other payments constitute distribution expenses on behalf of the Fund/Portfolios. 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 Plans will benefit the Fund/Portfolios and their shareholders.
The Plans have been approved by the Board of Trustees, including all of the Trustees who are non-interested persons as defined in the 1940 Act. The Plans must be renewed annually by the Board of Trustees, including a majority of the Trustees who are non-interested persons of the Fund/Portfolios and who have no direct or indirect financial interest in the operation of the Plans. 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 Plans 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 Plans 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/Portfolios' outstanding shares, and all material amendments to the Plans 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 Plans, 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 Plans should be continued.
TAXATION
The Timothy Fund/Portfolios intend 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/Portfolio 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) distribute at least 90% of its dividends, interest and certain other taxable income each year; and (iii) 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/Portfolio'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 each Fund/Portfolio 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/Portfolios' "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/Portfolios intend to make distributions sufficient to avoid imposition of the excise tax. Distributions declared by the Fund/Portfolios 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/Portfolios whether received in cash or additional shares of the Fund/Portfolios. 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 Funds 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 Trust 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 the Timothy Fund/Portfolios will share proportionately in the investment income and expenses of that Fund, except that each class will incur different distribution 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 Trust 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 Funds, including the annual audited financial statements and a list of securities owned.
As of April 14, 2000, the following person owned 5% or more of a Class of shares of a Fund or of the total outstanding shares of a Fund.
HOLDERS OF MORE THAN
5% OF EACH FUND'S SHARES
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% OWNERSHIP OF
NAME OF FUND SHARE NUMBER OF TOTAL
NAME OF IN WHICH CLASS SHARES % OWNERSHIP OUTSTANDING
SHAREHOLDER SHARES HELD OWNED OWNED OF SHARE FUND SHARES,
CLASS ALL CLASSES
-----------------------------------------------------------------------------------
Annuity Timothy Plan
Investors Life, Small-Cap No-Load
FBO annuity Variable 144,655 100% 100%
investors Series
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Liberty Timothy Plan
Counsel, Inc. Money Market No Load
FBO, Fund 116,147 10.50% 10.50%
beneficiaries
-----------------------------------------------------------------------------------
Timothy Plan
Sneddon, JM Money Market No Load
Fund 103,276 9.34% 9.34%
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Timothy Plan
Kerchner, DM Money Market No Load
Fund 88,896 8.04% 8.04%
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Donaldson, Timothy Plan
Lufkin & Small-Cap
Jenrette, FBO Value Fund Class A 61,292 5.65% 2.65%
customer accts.
-----------------------------------------------------------------------------------
Donaldson, Timothy Plan
Lufkin & Small-Cap
Jenrette, FBO Value Fund Class A 59,470 5.48% 2.57%
customer accts.
-----------------------------------------------------------------------------------
Timothy Plan
Davis, D Small-Cap
Value Fund Class A 55,823 5.14% 2.41%
-----------------------------------------------------------------------------------
Timothy Plan
Demunnick, B Small-Cap
Value Fund Class B 93,932 7.81% 4.06%
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Donaldson, Timothy Plan
Lufkin & Small-Cap
Jenrette, FBO Value Fund Class C 22,395 87.80% 0.97%
customer accts.
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16
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Timothy Plan
Wuertz, DR Large/Mid-Cap
Value Fund Class A 13,503 5.98% 3.78%
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Timothy Plan
RigidPly Large/Mid-Cap
Rafters, Inc. Value Fund Class A 65,527 29.02% 18.37%
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Timothy Plan
Mylod, R Large/Mid-Cap
Value Fund Class A 37,644 16.67% 10.55%
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Timothy Plan
Wuertz, DR Large/Mid-Cap
Value Fund Class A 13,503 5.98% 3.78%
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Timothy Plan
Zawaki, IRA Large/Mid-Cap
Value Fund Class A 12,615 5.59% 3.54%
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Timothy Plan
Kelly, E. Large/Mid-Cap
Value Fund Class A 12,152 5.38% 3.40%
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Timothy Plan
NFCS FBO Large/Mid-Cap
customer accts. Value Fund Class B 31,822 28.17% 8.92%
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Timothy Plan
Walker, DM Large/Mid-Cap
Value Fund Class B 8,081 7.15% 2.23%
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Timothy Plan
Lammers, JD Large/Mid-Cap
Value Fund Class B 6,703 5.93% 1.88%
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Timothy Plan
Murphy, CM Large/Mid-Cap
Value Fund Class B 6,302 5.58% 1.77%
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Timothy Plan
St. Josaphats Large/Mid-Cap
Value Fund Class C 1,043 5.80% 0.29%
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Timothy Plan
Bernard, RT Large/Mid-Cap
Value Fund Class C 4,034 22.44% 1.13%
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Timothy Plan
Fox Asset Large/Mid-Cap
Management, Inc. Value Fund Class C 10,044 55.87% 2.82%
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Timothy Plan
NFCS FBO Fixed Income
customer accts. Fund Class A 1,013 5.62% 1.74%
-----------------------------------------------------------------------------------
Timothy Plan
Breil, R. Fixed Income
Fund Class A 1,024 5.68% 1.76%
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Timothy Plan
Benes, B. Fixed Income
Fund Class A 3,407 18.91% 5.84%
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Timothy Plan
Kluck, MP Fixed Income
Fund Class A 1,310 7.27% 2.25%
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17
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Timothy Plan
Meekhof, D Fixed Income
Fund Class A 1,227 6.81% 2.10%
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Timothy Plan
Glasscock, J Fixed Income
Fund Class A 1,197 6.64% 2.05%
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Timothy Plan
Carrie, CH Fixed Income
Fund Class A 4,399 24.41% 7.55%
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Timothy Plan
George, C Fixed Income
Fund Class B 3,115 9.36% 5.34%
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Timothy Plan
Geier, MJ Fixed Income
Fund Class B 3,434 10.32% 5.89%
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Timothy Plan
Murphy, CM Fixed Income
Fund Class B 5,623 16.90% 9.65%
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Timothy Plan
Graybill, DM Fixed Income
Fund Class B 5,133 15.43% 8.81%
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Timothy Plan
NFCS FBO Fixed Income
customer accts. Fund Class C 5,225 74.68% 8.96%
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Timothy Plan
Jocelyne, V IRA Fixed Income
Fund Class C 908 12.98% 1.56%
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Timothy Plan
Zollman, VJ Fixed Income
Fund Class C 376 5.38% 0.64%
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PERFORMANCE
Performance information for the shares of the Timothy Fund/Portfolios 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/Portfolios 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/Portfolios may include their distribution rates in advertisements. The distribution rate is the amount of distributions per share made by a Fund over a 12-month period divided by the current maximum offering price.
U.S. Securities and Exchange Commission ("Commission") rules require the use of standardized performance quotations or, alternatively, that every non-standardized performance quotation furnished by the Fund/Portfolios be accompanied by certain standardized performance information computed as required by the Commission. Current yield and total return quotations used by the Fund/Portfolios are based on the standardized methods of computing performance mandated by the Commission. An explanation of those and other methods used by the Fund/Portfolios 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 net asset value 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 Commission formula:
P(1+T)/n/ = 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).
To help investors better evaluate how an investment in the Fund/Portfolios might satisfy their investment objective, advertisements regarding the Funds may discuss total return for the Fund/Portfolios as reported by various financial publications. Advertisements may also compare total return to 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/Portfolios may also include in sales literature and advertising (including press releases) TPL comments on current news items, organizations which violate the Funds' 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 Trust's Financial Statements, including the notes thereto, dated December 31, 1999, which have been audited by Tait, Weller & Baker, are incorporated by reference from the Timothy Plan's 1999 Annual Report to Shareholders.
PART C. OTHER INFORMATION.
(A) Agreement and Declaration of Trust is incorporated herein by reference to Post Effective Amendment No. 4, electronically filed on April 26, 1996.
(B) By-Laws of Registrant dated January 19, 1994 is incorporated herein by reference to Post Effective Amendment No. 4, electronically filed on April 26, 1996.
(C) None
(D) Investment Advisory Agreements:
(a)(i) Form of Amendment to Investment Advisory Agreement dated October 1, 2000 between the Registrant and Timothy Partners, Ltd. is filed herein as Exhibit 23D(a)(i)
(a)(ii) Form of Amendment to Investment Advisory Agreement dated May 1, 1999 between the Registrant and Timothy Partners, Ltd. is incorporated herein by reference to Post Effective Amendment No. 9, electronically filed on March 17, 1999.
(a)(iii) Form of Amendment to Investment Advisory Agreement dated May 1, 1998 between the Registrant and Timothy Partners, Ltd. is incorporated herein by reference to Post-Effective No. 8, electronically filed on April 16, 1998.
(a)(iv) Amendment dated March 12, 1997 to Investment Advisory Agreement dated January 19, 1994 between Registrant and Timothy Partners, Ltd. is incorporated herein by reference to Post-Effective No. 6, electronically filed on July 18, 1997.
(a)(v) Amendment dated August 28, 1995 to Investment Advisory Agreement dated January 19, 1994 between Registrant and Timothy Partners, Ltd. is incorporated herein by reference to Post Effective Amendment No. 4, electronically filed on April 26, 1996.
(a)(vi) Investment Advisory Agreement dated January 19, 1994 between Registrant and Timothy Partners, Ltd. is incorporated herein by reference to Post-Effective Amendment No. 4, electronically filed on April 26, 1996.
(b)(i) Sub-Investment Advisory Agreement dated May 1, 1999 between Timothy Partners, Ltd., Carr & Associates and the Registrant is incorporated herein by reference to Post Effective Amendment No. 9, electronically filed on March 17, 1999..
(b)(ii) Sub-Investment Advisory Agreement dated May 1, 1999 between Timothy Partners, Ltd., Fox Asset Management and the Registrant is incorporated herein by reference to Post Effective Amendment No. 9, electronically filed on March 17, 1999.
(b)(iii) Form of Amendment to Sub-Investment Advisory Agreement dated May 1, 1998 between Timothy Partners, Ltd., Awad & Associates and the Registrant is incorporated herein by reference to Post-Effective Amendment No. 8 as electronically filed on April 16, 1998.
(b)(iv) Sub-Investment Advisory Agreement dated January 1, 1997 among Timothy Partners, Ltd., Awad & Associates and the Registrant is incorporated by reference to Post-Effective Amendment No. 5, as electronically filed on ____________.
(b)(v) Sub-Investment Advisory Agreement dated October 1, 2000 among Timothy Partners, Ltd., Rittenhouse Financial Services, Inc. and the Registrant is filed herein as Exhibit 23(b)(v).
(b)(vi) Sub-Investment Advisory Agreement dated October 1, 2000 among Timothy Partners, Ltd., Provident Investment Counselors, Inc. and the Registrant is filed herein as Exhibit 23(b)(vi).
(E) DISTRIBUTION AGREEMENTS:
Underwriting Agreement dated July 1, 1997 between the Registrant and Timothy Partners, Ltd. is incorporated herein by reference to Post-Effective No. 6, electronically filed on July 18, 1997.
(F) None
(G) CUSTODIAN AGREEMENT
Custodian Agreement between Registrant and The Bank of New York, dated November 11, 1994 is incorporated herein by reference to Post Effective Amendment No. 5, electronically filed on ----------.
(H) OTHER MATERIAL CONTRACTS:
(a)(i). Amendment dated May 1, 1996 to Administrative Agreement dated January 19, 1994 between Registrant and Covenant Financial Management, Inc. is incorporated herein by reference to Post Effective Amendment No. 4, as electronically filed on April 26, 1996.
(a)(ii) Administrative Agreement dated January 19, 1994 between Registrant and Covenant Financial Management, Inc. is incorporated herein by reference to Post Effective Amendment No. 4, as electronically filed on April 26, 1996.
(b)(i) Form of Participation Agreement dated May 1, 1998 among the Registrant on behalf of The Timothy Plan Variable Series, Annuity Investors Life Insurance Company and Timothy Partners, Ltd. is incorporated herein by reference to Post Effective Amendment No. 9, electronically filed on March 17, 1999.
(c)(i) Mutual Fund Services Agreement among the Registrant and Unified Financial Services, Inc. is incorporated herein by reference to Post Effective Amendment No. 10, electronically filed on May 1, 2000.
(I) OPINION AND CONSENT OF COUNSEL AS TO THE LEGALITY OF THE SECURITIES TO BE ISSUED:
(a) Opinion and Consent of David Jones & Assoc., P.C., counsel to the Trust, is incorporated herein by reference to Post Effective Amendment No. 10, electronically filed on May 1, 2000.
(J) CONSENTS
(a) Consent of Tait, Weller & Baker is incorporated by reference from the Timothy Fund's 1999 Annual Report to Shareholders.
(K) None.
(L) 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 incorporated herein by reference to Post Effective Amendment No. 4, electronically filed on April 26, 1996.
(M) PLANS UNDER 12b-1:
(a) Distribution Plan dated May 1, 1999 on behalf of Class A Shares for the Large/Mid-Cap Value and Fixed-Income Funds is incorporated herein by reference to Post Effective Amendment No. 9, electronically filed on March 17, 1999.
(b) Distribution Plan dated May 1, 1999 on behalf of Class B Shares for the Large/Mid-Cap Value and Fixed-Income Funds is incorporated herein by reference to Post Effective Amendment No. 9, electronically filed on March 17, 1999
(N) Not Applicable
(O) Not Applicable
(P) Code of Ethics- Filed herein as Exhibit 23(P)
None.
Under the terms of the Delaware Business Trust Act and the Registrant's Agreement and Declaration of Trust and By-Laws, no officer or Trustee of the Fund shall have any liability to the Fund or its shareholders for damages, except to the extent such limitation of liability is precluded by Delaware law, the Agreement and Declaration of Trust, or the By-Laws.
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 Fundshall 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. ("TPL") serves as investment advisor of the Fund. The following persons serving as directors or officers of TPL have held the following positions with TPL for the past two years.
--------------------------------------------------------------------------------
Positions and Offices Positions and Offices
Name and Business Address with Timothy Partners, with the Registrant
Ltd.
--------------------------------------------------------------------------------
Arthur D. Ally President of Covenant President and Trustee
1304 West Fairbanks Funds, Inc., Managing
Avenue General Partner of
Winter Park Florida Timothy Partners, Ltd.,
32789 and Individual General
Partner of Timothy
Partners, Ltd.
--------------------------------------------------------------------------------
|
Covenant Financial Management, Inc. is a marketing/consulting firm owned by Arthur Ally that renders consulting advice to TPL 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) Timothy Partners, Ltd. (TPL) is the principal underwriter for the Registrant's securities and currently acts as underwriter for the Registrant only.
(b) The table below sets forth certain information as to the Underwriter's Directors, Officers and Control Persons:
--------------------------------------------------------------------------------
Positions and Offices Positions and Offices
Name and Business Address with the Underwriter. with the Registrant
--------------------------------------------------------------------------------
Arthur D. Ally President of Covenant President and Trustee
1304 West Fairbanks Funds, Inc., Managing
Avenue General Partner of
Winter Park Florida Timothy Partners, Ltd.,
32789 and Individual General
Partner of Timothy
Partners, Ltd.
--------------------------------------------------------------------------------
|
(c) Not applicable.
Each account, book or other document required to be maintained by Section 31(a) of the 1940 Act and Rules 17 CFR 270.31a-1 to 31a-3 promulgated thereunder, is maintained by the Fund at 1304 West Fairbanks Avenue, Winter Park, Florida 32789, except for those maintained by the Fund's Custodian, Star Bank, N.A. Cincinatti, Ohio, and the Fund's Administrator, Transfer, Redemption and Dividend Disbursing Agent and Accounting Services Agent, Unified Financial Services, Inc., 431 North Pennsylvania Street, Indianapolis, IN 46204.
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. 10 to its Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-Effective Amendment No. 10 to its Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized, in Winter Park, State of Florida, on the 15th day of August, 2000.
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. 9 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 August 15, 2000 ------------------------ ARTHUR D. ALLY /S/ JOSEPH E. BOATWRIGHT Secretary and Trustee August 15, 2000 ------------------------ JOSEPH E. BOATWRIGHT /S/ WESLEY PENNINGTON Treasurer and Trustee August 15, 2000 ------------------------ WESLEY PENNINGTON /S/ W.T. FYLER Trustee August 15, 2000 ------------------------ W.T. FYLER /S/ JOCK M. SNEDDON Trustee August 15, 2000 ------------------------ |
JOCK M. SNEDDON
EXHIBITS
23D(a)(i) Form of Amendment to Investment Advisory Agreement
23D(b)(v) Form of Sub-Advisory Agreement with Rittenhouse Financial Services, Inc.
23D(b)(v) Form of Sub-Advisory Agreement with Provident Investment Counselors, Inc.
23P Code of Ethics of Registrant and its Adviser, Investment Managers and Principal Underwriter
FORM OF AMENDMENT TO THE TIMOTHY PLAN
INVESTMENT ADVISORY AGREEMENT
This amendment, dated as of the 1st day of October, 2000, made by and between THE TIMOTHY PLAN (the "Trust"), a Delaware business trust operating as a registered investment company under the Investment Company Act of 1940, as amended, duly organized and existing under the laws of the State of Delaware and TIMOTHY PARTNERS, LTD. (the "Investment Advisor"), a Florida limited partnership and registered investment advisor under the Investment Advisers Act of 1940, as amended (collectively, the "Parties").
WITNESSETH:
WHEREAS, the Trust and Investment Advisor have entered into an agreement dated January 19, 1994 as subsequently amended (the "Investment Advisory Agreement"), wherein the Investment Advisor has agreed to serve as an advisor and provide investment management services; and
WHEREAS, the Trust is authorized to issue separate series of shares representing interests in separate investment portfolios (each referred to as a "Series" and collectively, as the "Series"); and
WHEREAS, the Trust presently issues eleven Series as follows:
The Timothy Plan Aggressive Growth Fund
The Timothy Plan Large/Mid-Cap Growth Fund
The Timothy Plan Small-Cap Value Fund (formerly the Timothy Plan)
The Timothy Plan Large/Mid-Cap Value Fund
The Timothy Plan Fixed-Income Fund
The Timothy Plan Money Market Fund
The Timothy Plan Strategic Growth Portfolio
The Timothy Plan Conservative Growth Portfolio
The Timothy Plan Small-Cap Variable Series (formerly the Timothy Plan
Variable Series)
The Timothy Plan Mid-Cap Variable Series
The Timothy Plan Fixed-Income Variable Series; and
WHEREAS, the Parties wish to amend the Investment Advisory Agreement to clarify that such Agreement governs each Series of the Trust;
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 initial introductory paragraph of the Investment Advisory Agreement to read as follows:
AGREEMENT, made by and between THE TIMOTHY PLAN, a Delaware business trust ( the "Trust") on behalf of the following series of the Trust;
The Timothy Plan Aggressive Growth Fund
The Timothy Plan Large/Mid-Cap Growth Fund
The Timothy Plan Small-Cap Value Fund (formerly the Timothy Plan)
The Timothy Plan Large/Mid-Cap Value Fund
The Timothy Plan Fixed-Income Fund
The Timothy Plan Money Market Fund
The Timothy Plan Strategic Growth Portfolio
The Timothy Plan Conservative Growth Portfolio
The Timothy Plan Small-Cap Variable Series (formerly the Timothy Plan
Variable Series)
The Timothy Plan Mid-Cap Variable Series
The Timothy Plan Fixed-Income Variable Series (the "Funds")
and TIMOTHY PARTNERS, LTD., a Florida limited partnership (the "Investment Advisor").
2. The effective date of this amendment shall be October 1, 2000.
IN WITNESS WHEREOF, the Parties hereto have caused this amendment 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: Arthur D. Ally, Chairman BY: COVENANT FUNDS, INC.
MANAGING GENERAL PARTNER
Arthur D. Ally, President
---------------------------- -------------------------------
Attest: Joseph E. Boatwright, Attest: Bonnie Ally, Secretary
Secretary
|
EX-23(D)(b)(v) Form of Sub-Advisory Agreement with Rittenhouse Financial Services, Inc.
This Agreement is made and entered into as of the 1st day of October, 2000, by and between The Timothy Plan, a Delaware business trust (the "Trust"), Timothy Partners, Ltd., a Florida Limited Partnership and Investment Adviser to the Trust (the "Adviser"), and Rittenhouse Financial Services, Inc., a Delaware corporation (the "Investment Manager").
WHEREAS, the Trust is a diversified, open-end management investment company, registered under the Investment Company Act of 1940, as amended (the "Act"), and authorized to issue an indefinite number of series of shares representing interests in separate investment portfolios (each referred to as a "Series" and collectively, as the "Series"); and
WHEREAS, the Trust presently issues eleven Series as follows:
The Timothy Plan Aggressive Growth Fund
The Timothy Plan Large/Mid-Cap Growth Fund
The Timothy Plan Small-Cap Value Fund (formerly the Timothy Plan)
The Timothy Plan Large/Mid-Cap Value Fund
The Timothy Plan Fixed-Income Fund
The Timothy Plan Money Market Fund
The Timothy Plan Strategic Growth Portfolio
The Timothy Plan Conservative Growth Portfolio
The Timothy Plan Small-Cap Variable Series (formerly the Timothy Plan
Variable Series)
The Timothy Plan Mid-Cap Variable Series
The Timothy Plan Fixed-Income Variable Series; and
WHEREAS, Adviser is registered as an investment adviser under the Investment Advisers Act of 1940, and engages in the business of asset management; and
WHEREAS, Investment Manager is registered as an investment adviser under the Investment Advisers Act of 1940, and engages in the business of asset management; and
WHEREAS, the Trust has engaged the Adviser to provide investment management services to the Trust, and
WHEREAS, the Adviser desires to retain Investment Manager to render certain investment management services to the TIMOTHY PLAN AGGRESSIVE GROWTH FUND (the "Portfolio"), and Investment Manager is willing to render such services; and
WHEREAS, the Trust consents to the engagement of Investment Manager by Adviser.
NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:
1. OBLIGATIONS OF INVESTMENT MANAGER
(A) SERVICES. Investment Manager agrees to perform the following services (the "Services") for the Portfolio:
(1) manage the investment and reinvestment of the Portfolio's assets;
(2) continuously review, supervise, and administer the investment program of the Portfolio;
(3) determine, in its discretion, the securities to be purchased, retained or sold (and implement those decisions);
(4) provide the Trust and Adviser with records concerning Investment Manager's activities which the Trust is required to maintain; and
(5) render regular reports to the Trust's and Adviser's officers and directors concerning Investment Manager's discharge of the foregoing responsibilities.
Investment Manager shall discharge the foregoing responsibilities subject to the control of the officers, directors, and trustees of the Adviser and the Trust and in compliance with such policies as the trustees may from time to time establish, and in compliance with the objectives, policies, and limitations of the Portfolios set forth in the Trust's prospectus and statement of additional information, as amended from time to time, and with all applicable laws and regulations. All Services to be furnished by Investment Manager under this Agreement may be furnished through the medium of any directors, officers or employees of Investment Manager or through such other parties as Investment Manager may determine from time to time.
Investment Manager agrees, at its own expense or at the expense of one or more of its affiliates, to render the Services and to provide the office space, furnishings, equipment and personnel as may be reasonably required in the judgment of the Board of Trustees of the Trust to perform the Services on the terms and for the compensation provided herein. Investment Manager shall authorize and permit any of its officers, directors and employees, who may be elected as directors or officers of the Trust, to serve in the capacities in which they are elected.
Except to the extent expressly assumed by Investment Manager herein and except to the extent required by law to be paid by Investment Manager, the Trust shall pay all costs and expenses in connection with its operation and organization.
(B) BOOKS AND RECORDS. All books and records prepared and maintained by Investment Manager for the Trust under this Agreement shall be the property of the Trust and, upon request therefor, Investment Manager shall surrender to the Trust such of the books and records so requested.
2. PORTFOLIO TRANSACTIONS. Investment Manager is authorized to select the brokers or dealers that will execute the purchases and sales of portfolio securities for the Portfolios and is directed to use its best efforts to obtain the best net results as described in the Trust's prospectus from time to time. Investment Manager may, in its discretion, purchase and sell portfolio securities from and to brokers and dealers who provide a Portfolio with research, analysis, advice and similar services, and Investment Manager may pay to these brokers and dealers, in return for research and analysis, a higher commission or spread than may be charged by other brokers and dealers, provided that Investment Manager determines in good faith that such commission is reasonable in terms either of that particular transaction or of the overall responsibility of Investment Manager to the Trust and its other clients and that the total commission paid by the Trust will be reasonable in relation to the benefits to the Portfolio over the long-term. Investment Manager will promptly communicate to the officers and the directors of the Adviser and Trust such information relating to portfolio transactions as they may reasonably request.
3. COMPENSATION OF INVESTMENT MANAGER. For its services rendered to the Portfolio, the Adviser will pay to Investment Manager on the last day of each month a fee at an annual rate equal to 0.40% of the daily average net asset value of the Portfolio. The fees described above shall be computed daily based upon the net asset value of the Portfolios as determined by a valuation made in accordance with the Trust's procedure for calculating Portfolio net asset value as described in the Trust's Prospectus and/or Statement of Additional Information. During any period when the determination of a Portfolio's net asset value is suspended by the trustees of the Trust, the net asset value of a share of that Portfolio as of the last business day prior to such suspension shall, for the purpose of this Paragraph 3, be deemed to be net asset value at the close of each succeeding business day until it is again determined.
4. STATUS OF INVESTMENT MANAGER. The services of Investment Manager to the Trust are not to be deemed exclusive, and Investment Manager shall be free to render similar services to others so long as it obtains the prior consent of the Trust to render such services, which consent shall not be unreasonably withheld. It shall be conclusively presumed that such consent shall be reasonably withheld in the event the trustees find that the services of the investment Manager to the Trust would be impaired by such additional services. Investment Manager shall be deemed to be an independent contractor and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Trust in any way or otherwise be deemed an agent of the Trust. Nothing in this Agreement shall limit or restrict the right of any director, officer or employee of Investment Manager, who may also be a director, officer, or employee of the Trust, to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business, whether of a similar nature or a dissimilar nature.
5. PERMISSIBLE INTERESTS. Trustees, agents, and stockholders of the Trust are or may be interested in Investment Manager (or any successor thereof) as directors, partners, officers, or stockholders, or otherwise, and directors, partners, officers, agents, and stockholders of Investment Manager are or may be interested in the Trust as trustees, stockholders or otherwise; and Adviser (or any successor) is or may be interested in the Trust as a stockholder or otherwise.
6. LIABILITY OF INVESTMENT MANAGER. Investment Manager assumes no
responsibility under this Agreement other than to render the services called for
hereunder in good faith. Investment Manager shall not be liable for any error of
judgment or for any loss suffered by the Trust in connection with the matters to
which this Agreement relates, except a loss resulting from a breach of fiduciary
duty with respect to receipt of compensation for services (in which case any
award of damages shall be limited to the period and the amount set forth in
Section 36(b)(3) of the Investment Company Act of 1940 or a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of, or from reckless disregard by it of its obligations and duties
under, this Agreement.
7. TERM. This Agreement shall remain in effect until September 30, 2002,
and from year to year thereafter provided such continuance is approved at least
annually by (1) the vote of a majority of the Board of Trustees of the Trust or
(2) a vote of a "majority" (as that term is defined in the Investment Company
Act of 1940) of the Trust's outstanding securities, provided that in either
event the continuance is also approved by the vote of a majority of the trustees
of the Trust who are not parties to this Agreement or "interested persons" (as
defined in the Act) of any such party, which vote must be cast in person at
meeting called for the purpose of voting on such approval; PROVIDED, HOWEVER,
that;
(a) the Trust or Adviser may, at any time and without the payment of any penalty, terminate this Agreement upon 60 days written notice to Investment Manager;
(b) the Agreement shall immediately terminate in the event of its assignment (within the meaning of the Act and the Rules thereunder); and
(c) Investment Manager may terminate this Agreement without payment of penalty on 60 days written notice to the Trust; and
(d) the terms of paragraph 6 of this Agreement shall survive the termination of this Agreement.
8. NOTICES. Except as otherwise provided in this Agreement, any notice or other communication required by or permitted to be given in connection with this Agreement will be in writing and will be delivered in person or sent by first class mail, postage prepaid or by prepaid overnight delivery service to the respective parties at such address as the other party may designate for the receipt of such notices.
9. AMENDMENTS. No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought, and no amendment of this Agreement shall be effective until approved by vote of the holders of a majority of the Fund's outstanding voting securities.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and the year first written above.
The Timothy Plan Timothy Partners, Ltd. Rittenhouse Financial
Services, Inc.
/S/ ARTHUR D. ALLY /S/ ARTHUR D. ALLY /S/
-------------------- -------------------- ----------------------
ARTHUR D. ALLY COVENANT FUNDS, INC. By: __________________
PRESIDENT MANAGING GENERAL Its: ________________
PARTNER, ARTHUR D.
ALLY, PRESIDENT
ATTEST: ATTEST: ATTEST:
---------------------- ---------------------- ----------------------
Secretary Secretary Secretary
[Corporate Seal] [Corporate Seal] [Corporate Seal]
|
EX-23(D)(b)(vi) Form of Sub-Advisory Agreement with Provident Investment Counselors, Inc.
This Agreement is made and entered into as of the 1st day of October, 2000, by and between The Timothy Plan, a Delaware business trust (the "Trust"), Timothy Partners, Ltd., a Florida Limited Partnership and Investment Adviser to the Trust (the "Adviser"), and Provident Investment Counselors, Inc., a California corporation (the "Investment Manager").
WHEREAS, the Trust is a diversified, open-end management investment company, registered under the Investment Company Act of 1940, as amended (the "Act"), and authorized to issue an indefinite number of series of shares representing interests in separate investment portfolios (each referred to as a "Series" and collectively, as the "Series"); and
WHEREAS, the Trust presently issues eleven Series as follows:
The Timothy Plan Aggressive Growth Fund
The Timothy Plan Large/Mid-Cap Growth Fund
The Timothy Plan Small-Cap Value Fund (formerly the Timothy Plan)
The Timothy Plan Large/Mid-Cap Value Fund
The Timothy Plan Fixed-Income Fund
The Timothy Plan Money Market Fund
The Timothy Plan Strategic Growth Portfolio
The Timothy Plan Conservative Growth Portfolio
The Timothy Plan Small-Cap Variable Series (formerly the Timothy Plan
Variable Series)
The Timothy Plan Mid-Cap Variable Series
The Timothy Plan Fixed-Income Variable Series; and
WHEREAS, Adviser is registered as an investment adviser under the Investment Advisers Act of 1940, and engages in the business of asset management; and
WHEREAS, Investment Manager is registered as an investment adviser under the Investment Advisers Act of 1940, and engages in the business of asset management; and
WHEREAS, the Trust has engaged the Adviser to provide investment management services to the Trust, and
WHEREAS, the Adviser desires to retain Investment Manager to render certain investment management services to the TIMOTHY PLAN LARGE/MID-CAP GROWTH FUND (the "Portfolio"), and Investment Manager is willing to render such services; and
WHEREAS, the Trust consents to the engagement of Investment Manager by Adviser.
NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:
1. OBLIGATIONS OF INVESTMENT MANAGER
(B) SERVICES. Investment Manager agrees to perform the following services (the "Services") for the Portfolio:
(1) manage the investment and reinvestment of the Portfolio's assets;
(6) continuously review, supervise, and administer the investment program of the Portfolio;
(7) determine, in its discretion, the securities to be purchased, retained or sold (and implement those decisions);
(8) provide the Trust and Adviser with records concerning Investment Manager's activities which the Trust is required to maintain; and
(9) render regular reports to the Trust's and Adviser's officers and directors concerning Investment Manager's discharge of the foregoing responsibilities.
Investment Manager shall discharge the foregoing responsibilities subject to the control of the officers, directors, and trustees of the Adviser and the Trust and in compliance with such policies as the trustees may from time to time establish, and in compliance with the objectives, policies, and limitations of the Portfolios set forth in the Trust's prospectus and statement of additional information, as amended from time to time, and with all applicable laws and regulations. All Services to be furnished by Investment Manager under this Agreement may be furnished through the medium of any directors, officers or employees of Investment Manager or through such other parties as Investment Manager may determine from time to time.
Investment Manager agrees, at its own expense or at the expense of one or more of its affiliates, to render the Services and to provide the office space, furnishings, equipment and personnel as may be reasonably required in the judgment of the Board of Trustees of the Trust to perform the Services on the terms and for the compensation provided herein. Investment Manager shall authorize and permit any of its officers, directors and employees, who may be elected as directors or officers of the Trust, to serve in the capacities in which they are elected.
Except to the extent expressly assumed by Investment Manager herein and except to the extent required by law to be paid by Investment Manager, the Trust shall pay all costs and expenses in connection with its operation and organization.
(B) BOOKS AND RECORDS. All books and records prepared and maintained by Investment Manager for the Trust under this Agreement shall be the property of the Trust and, upon request therefor, Investment Manager shall surrender to the Trust such of the books and records so requested.
2. PORTFOLIO TRANSACTIONS. Investment Manager is authorized to select the brokers or dealers that will execute the purchases and sales of portfolio securities for the Portfolios and is directed to use its best efforts to obtain the best net results as described in the Trust's prospectus from time to time. Investment Manager may, in its discretion, purchase and sell portfolio securities from and to brokers and dealers who provide a Portfolio with research, analysis, advice and similar services, and Investment Manager may pay to these brokers and dealers, in return for research and analysis, a higher commission or spread than may be charged by other brokers and dealers, provided that Investment Manager determines in good faith that such commission is reasonable in terms either of that particular transaction or of the overall responsibility of Investment Manager to the Trust and its other clients and that the total commission paid by the Trust will be reasonable in relation to the benefits to the Portfolio over the long-term. Investment Manager will promptly communicate to the officers and the directors of the Adviser and Trust such information relating to portfolio transactions as they may reasonably request.
3. COMPENSATION OF INVESTMENT MANAGER. For its services rendered to the Portfolio, the Adviser will pay to Investment Manager on the last day of each month a fee at an annual rate equal to 0.40% of the daily average net asset value of the Portfolio. The fees described above shall be computed daily based upon the net asset value of the Portfolios as determined by a valuation made in accordance with the Trust's procedure for calculating Portfolio net asset value as described in the Trust's Prospectus and/or Statement of Additional Information. During any period when the determination of a Portfolio's net asset value is suspended by the trustees of the Trust, the net asset value of a share of that Portfolio as of the last business day prior to such suspension shall, for the purpose of this Paragraph 3, be deemed to be net asset value at the close of each succeeding business day until it is again determined.
4. STATUS OF INVESTMENT MANAGER. The services of Investment Manager to the Trust are not to be deemed exclusive, and Investment Manager shall be free to render similar services to others so long as it obtains the prior consent of the Trust to render such services, which consent shall not be unreasonably withheld. It shall be conclusively presumed that such consent shall be reasonably withheld in the event the trustees find that the services of the investment Manager to the Trust would be impaired by such additional services. Investment Manager shall be deemed to be an independent contractor and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Trust in any way or otherwise be deemed an agent of the Trust. Nothing in this Agreement shall limit or restrict the right of any director, officer or employee of Investment Manager, who may also be a director, officer, or employee of the Trust, to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business, whether of a similar nature or a dissimilar nature.
5. PERMISSIBLE INTERESTS. Trustees, agents, and stockholders of the Trust are or may be interested in Investment Manager (or any successor thereof) as directors, partners, officers, or stockholders, or otherwise, and directors, partners, officers, agents, and stockholders of Investment Manager are or may be interested in the Trust as trustees, stockholders or otherwise; and Adviser (or any successor) is or may be interested in the Trust as a stockholder or otherwise.
6. LIABILITY OF INVESTMENT MANAGER. Investment Manager assumes no
responsibility under this Agreement other than to render the services called for
hereunder in good faith. Investment Manager shall not be liable for any error of
judgment or for any loss suffered by the Trust in connection with the matters to
which this Agreement relates, except a loss resulting from a breach of fiduciary
duty with respect to receipt of compensation for services (in which case any
award of damages shall be limited to the period and the amount set forth in
Section 36(b)(3) of the Investment Company Act of 1940 or a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of, or from reckless disregard by it of its obligations and duties
under, this Agreement.
7. TERM. This Agreement shall remain in effect until September 30, 2002,
and from year to year thereafter provided such continuance is approved at least
annually by (1) the vote of a majority of the Board of Trustees of the Trust or
(2) a vote of a "majority" (as that term is defined in the Investment Company
Act of 1940) of the Trust's outstanding securities, provided that in either
event the continuance is also approved by the vote of a majority of the trustees
of the Trust who are not parties to this Agreement or "interested persons" (as
defined in the Act) of any such party, which vote must be cast in person at
meeting called for the purpose of voting on such approval; PROVIDED, HOWEVER,
that;
(e) the Trust or Adviser may, at any time and without the payment of any penalty, terminate this Agreement upon 60 days written notice to Investment Manager;
(f) the Agreement shall immediately terminate in the event of its assignment (within the meaning of the Act and the Rules thereunder); and
(g) Investment Manager may terminate this Agreement without payment of penalty on 60 days written notice to the Trust; and
(h) the terms of paragraph 6 of this Agreement shall survive the termination of this Agreement.
8. NOTICES. Except as otherwise provided in this Agreement, any notice or other communication required by or permitted to be given in connection with this Agreement will be in writing and will be delivered in person or sent by first class mail, postage prepaid or by prepaid overnight delivery service to the respective parties at such address as the other party may designate for the receipt of such notices.
9. AMENDMENTS. No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought, and no amendment of this Agreement shall be effective until approved by vote of the holders of a majority of the Fund's outstanding voting securities.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and the year first written above.
The Timothy Plan Timothy Partners, Ltd. Provident Investment
Counselors, Inc.
/S/ ARTHUR D. ALLY /S/ ARTHUR D. ALLY /S/
-------------------- -------------------- ----------------------
ARTHUR D. ALLY COVENANT FUNDS, INC. By: __________________
PRESIDENT MANAGING GENERAL Its: ________________
PARTNER, ARTHUR D.
ALLY, PRESIDENT
ATTEST: ATTEST: ATTEST:
---------------------- ---------------------- ----------------------
Secretary Secretary Secretary
[Corporate Seal] [Corporate Seal] [Corporate Seal]
|
EXHIBIT 23P
CODE OF ETHICS
CODE OF ETHICS
OF THE TIMOTHY PLAN
I. INTRODUCTION
This Code of Ethics has been adopted by The Timothy Plan (the "Trust"), each Adviser and/or Sub-adviser to each series of the Trust (the "Advisers") and Timothy Partners, Ltd., the Trust's principal underwriter (the "Underwriter") in compliance with Rule 17j-1 (the "Rule") under the Investment Company Act of 1940, as amended (the "Act") to establish standards and procedures for the detection and prevention of activities by which persons having knowledge of the investments and investment intentions of the Trust may abuse their fiduciary duties to the Trust, and to deal with other types of conflict-of-interest situations to which the Rule is addressed.
The Rule makes it "unlawful" for certain persons who have affiliations with the Trust to engage in conduct which is deceitful, fraudulent or manipulative, or which involves false or misleading statements, in connection with the purchase or sale of securities by the Trust. This Code of Ethics is intended to establish policies and procedures designed to insure that persons subject to this Code of Ethics and the Rule do not use any information concerning the investments or investment intentions of the Trust, or his or her ability to influence such investment related information, for personal gain or in a manner detrimental to the interests of the Trust.
II. PRINCIPLES
This Code of Ethics acknowledges the general principles that persons affiliated with the Trust:
(A) owe a fiduciary obligation to the Trust;
(B) have the duty at all times to place the interests of Trust shareholders first;
(C) must conduct all of their personal securities transactions in such a manner as to avoid any actual or potential conflict of interest or abuse of such person's position of trust and responsibility; and
(D) SHOULD NOT TAKE INAPPROPRIATE ADVANTAGE OF THEIR POSITIONS IN RELATION
TO THE TRUST.
III. DEFINITIONS (AS USED HEREIN)
"Access Person" means:
(1) any director, officer, general partner or Advisory Person of the Trust or any Adviser to the Trust.
(A) If an Adviser to the Trust is primarily engaged in a business or businesses other than advising Funds or other advisory clients, the term Access Person means any director, officer, general partner or Advisory Person of the Adviser who, with respect to any Fund, makes any recommendation, participates in the determination of which recommendation will be made, or whose principal function or duties relate to the determination of which recommendation will be made, or who, in connection with his or her duties, obtains any information concerning recommendations on Covered Securities being made by the Adviser to any Fund.
(B) An Adviser is "primarily engaged in a business or businesses other than advising Funds or other advisory clients" if, for each of its most recent three fiscal years or for the period of time since its organization, whichever is less, the Adviser derived, on an unconsolidated basis, more than 50% of its income (or loss), before taxes and extraordinary items, from the other business or businesses.
(2) Any director, officer or general partner of a principal underwriter who, in the ordinary course of business, makes, participates in or obtains information regarding, the purchase or sale of Covered Securities by the Trust for which the principal underwriter acts, or whose functions or duties in the ordinary course of business relate to the making of any recommendation to the Trust, regarding the purchase or sale of Covered Securities.
"Advisory Person" means:
(1) Any employee of the Trust or an Adviser to the Trust (or of any company in a control relationship to the Trust or an investment adviser to the Trust) who, in connection with his or her regular functions or duties, makes, participates in, or obtains information regarding the purchase or sale of Covered Securities by the Trust, or whose functions relate to the making of any recommendations with respect to such purchases or sales; and
(2) Any natural person in a control relationship to the Trust or an Adviser to the Trust who obtains information concerning recommendations made to the Trust with regard to the purchase or sale of Covered Securities by the Trust.
"Affiliated Person" means:
(1) Any officer, director, copartner or employee of the Trust, Adviser and/or Underwriter;
(2) any person directly or indirectly owning, controlling or holding with power to vote, 5% or more of the outstanding voting securities of the Trust, Adviser and/or Underwriter;
(3) any person 5% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with power to vote, by the Trust, Adviser and/or Underwriter; and
(4) any person directly or indirectly controlling, controlled by, or under common control with the Trust, Adviser and/or Underwriter.
"Beneficial Interest" means:
any interest by which an Access Person or any member of his or her immediate family (relative by blood or marriage living in the same household), can directly or indirectly derive a monetary benefit from the purchase, sale (or other acquisition or disposition) or ownership of a security, except such interests as Clearing Officers shall determine to be too remote for the purpose of this Code of Ethics. (A transaction in which an Access Person acquires or disposes of a security in which he or she has or thereby acquires a direct or indirect Beneficial Interest will be referred to in this Code of Ethics as a "personal securities" transaction or as a transaction for the person's "own account").
At the written request of a person subject to this Code of Ethics, the Clearing Officers, in their sole discretion or with the advice of counsel, may from time to time issue written interpretations as to whether an Access Person has a "Beneficial Interest" in a security or a transaction, and whether a transaction is or would be considered to be a "personal securities" transaction or a transaction "for the person's own" account for purposes of the reporting requirements under this Code. Any such written interpretations shall be included in Appendix A attached to and incorporated by reference into this Code of Ethics, and may be relied upon solely by the person(s) seeking such interpretations.
"Clearing Officers" means any two officers of the Trust who are not:
(1) parties to the transaction;
(2) related by blood or marriage to a party to the transaction; and
(3) interested in or affiliated persons of the issuer of the securities at issue.
"Control" means:
the power to exercise a controlling influence over the management or policies of a company (unless such power is solely the result of an official position with such company). Any person who owns beneficially, directly or through one or more controlled companies, more than 25% of the voting securities of a company shall be presumed to control such company.
"Covered Security" means:
all stock, debt obligations and other instruments comprising the investments of the Trust, including any warrant or option to acquire or sell a security, and financial futures contracts, except that it does not include:
(1) Direct obligations of the Government of the United States;
(2) Banker's acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements, and
(3) Shares issued by open-end Funds.
References to a "Security" in this Code of Ethics shall include any warrant for, option in, or security immediately convertible into that "Security."
"Fund" means an investment company registered under the Act, and includes the Trust.
A "security held or to be acquired" by the Trust means:
any Covered Security which, within the most recent 15 calendar days: (i) is or has been held by the Trust; or (ii) is being or has been considered by an Adviser for purchase by the Trust.
A security is "being considered for purchase or sale";
from the time an order is given by or on behalf of the Trust to the order room of the Adviser until all orders with respect to that security are completed or withdrawn.
III. GENERAL PROHIBITIONS
The specific provisions and reporting requirements of the Rule and this Code of Ethics are concerned primarily with those investment activities of ACCESS PERSONS who are associated with the Trust and who thus may benefit from or interfere with the purchase or sale of portfolio securities by the Trust. However, the Rule and this Code of Ethics shall also apply to all Affiliated Persons of the Trust, the Adviser(s) and the Underwriter ("Covered Persons"), unless specifically stated otherwise.
The Rule makes it "unlawful" for Covered Persons to engage in conduct which is deceitful, fraudulent, or manipulative, or which involves false or misleading statements, in connection with the purchase or sale of securities by the Trust. Accordingly, under the Rule and this Code of Ethics, no Covered Person shall use any information concerning the investments or investment intentions of the Trust, or his or her ability to influence such investment intentions, for personal gain or in a manner detrimental to the interests of the Trust.
In addition, no Covered Person shall, directly or indirectly in connection with the purchase or sale of a "security held or to be acquired" by the Trust:
(i) employ any device, scheme or artifice to defraud the Trust; or
(ii) make to the Trust or an Adviser any untrue statement of material fact or omit to state to any of the foregoing a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading; or
(iii)engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon the Trust; or
(iv) engage in any manipulative practice with respect to the Trust.
V. PROHIBITED TRANSACTIONS
A. BLACKOUT PERIODS
Subject to any additional limiting requirements that may be set forth below, an ACCESS PERSON may not effect a personal securities transaction in Covered Securities if he or she knows or should know at the time of entering into the transaction that:
(i) the Trust has engaged in a transaction in the same security within the last 15 calendar days, or is engaging in a transaction or is going to engage in a transaction in the same security in the next 15 calendar days; or if an Adviser has within the last 15 days considered or is considering a transaction in the same security for the Trust, or within the next 15 days is considering such a transaction in the security, unless
(ii) such ACCESS PERSON (1) obtains advance written clearance of such transaction by two Clearing Officers and (2) reports to the Trust the information described in Paragraph VI of this Code of Ethics.
(iii)Any profits realized on unauthorized trades within the proscribed periods shall be disgorged.
B. INITIAL PUBLIC OFFERINGS
An ADVISORY PERSON may not acquire any security in an initial public offering, unless such ADVISORY PERSON (1) obtains advance written clearance of such transaction by two Clearing Officers and (2) reports to the Trust the information described in Paragraph VI of this Code of Ethics.
C. PRIVATE PLACEMENTS
(1) An ADVISORY PERSON may not acquire any security in a private placement, unless such ADVISORY PERSON (1) obtains advance written clearance of such transaction by two Clearing Officers and (2) reports to the Trust the information described in Paragraph VI of this Code of Ethics.
When considering whether to grant approval to the ADVISORY PERSON to engage in these transactions, the Clearing Officers shall consider, among other factors, whether the investment opportunity should be reserved for the Trust, and whether the opportunity is being offered to the ADVISORY PERSON by virtue of his or her position with the Trust. If the Clearing Officers find that the investment opportunity should be reserved to the Trust or that the opportunity is being offered to the ADVISORY PERSON by virtue of his or her position with the Trust, the Clearing Officers shall refuse permission for the ADVISORY PERSON to enter into the transaction.
(2) An ADVISORY PERSON who has been authorized to acquire securities in a private placement or an initial public offering shall be required to disclose that investment to the Trust and the appropriate Adviser whenever such ADVISORY PERSON participates, either directly or indirectly, in subsequent consideration of an investment in the issuer by any portfolio in the Trust complex.
(3) In the event that an ADVISORY PERSON has been given approval to acquire securities in a private placement or an initial public offering, any decision of the Trust to purchase securities of the issuer of such private placement or initial public offering shall be subject to prior review by the Trust's independent trustees who have no personal interest in the issuer.
D. BAN ON SHORT - TERM TRADING PROFITS
An ADVISORY PERSON may not profit from the purchase and sale, or sale and purchase, of the same (or equivalent) securities within 60 calendar days. Any profits realized on such short-term trades shall be disgorged.
F. GIFTS
ADVISORY PERSONS may not accept any gift or other thing of more than de minimis value from any person or entity that does business with or on behalf of the Trust.
G. SERVICE AS A DIRECTOR TO OTHER PUBLIC COMPANIES
ADVISORY PERSONS may not serve on the board of directors of any publicly traded company, without prior authorization of a majority of the Trust's Board of Trustees, which authorization shall be specifically based upon a determination that the board service would be consistent with the interests of the Trust and its shareholders. If and when such board service is authorized, the ADVISORY PERSON serving as a director will be isolated from other ADVISORY PERSONS who make investment decisions involving that company through "Chinese Wall" or other procedures.
VI. ADVANCE CLEARANCE REQUIREMENT
A. PROCEDURES
(1) From Whom Obtained
Persons who desire to enter into personal securities transactions in transactions requiring prior approval under paragraph V above, must obtain the written approval of any two Clearing Officers prior to entering into such transactions.
(2) Time of Clearance
Transaction clearances must be obtained not more than three (3) days prior to the transaction. If the trade is not made within three (3) days of the date of clearance, a new clearance must be obtained.
(3) Form
Persons seeking authorization to enter into transactions requiring prior clearance shall complete and sign a form approved for that purpose by the Trust, which form shall set forth the details of the proposed transaction. An example of such form is annexed hereto as Schedule A ("Clearance Forms"). Upon obtaining authorization to enter into the subject transaction, the Clearing Officers authorizing the transaction shall affix their signatures to the Clearance Form to indicate such approval.
(4) Filing
Copies of all completed Clearance Forms, with all required signatures, shall be retained by the Administrator of this Code of Ethics in accordance with the record keeping requirements set forth in Section XII of this Code of Ethics.
B. FACTORS CONSIDERED IN CLEARANCE OF PERSONAL TRANSACTIONS
Clearing Officers may refuse to grant clearance of a personal transaction in their sole discretion without being required to specify any reason for the refusal. Generally, Clearing Officers will consider the following factors in determining whether or not to authorize a proposed transaction:
(1) Whether the amount or nature of the transaction, or person entering into the transaction, is likely to affect the price or market for the Security;
(2) Whether the individual making the proposed purchase or sale is likely to benefit from purchases or sales in the same or similar security being made or being considered by the Trust; and
(3) Whether the security proposed to be purchased or sold is one that would qualify for purchase or sale by the Trust.
VII. EXEMPT TRANSACTIONS
Neither the prohibitions nor the reporting requirements of this Code of Ethics apply to:
(A) Purchases, sales or other acquisitions or dispositions of Securities for an account over which the person has no direct influence or control and does not exercise indirect influence or control;
(B) Purchases, sales or other acquisitions or dispositions of securities which are not eligible for purchase or sale by any portfolio of the Trust;
(C) Involuntary purchases or sales;
(D) Purchases which are part of an automatic dividend reinvestment plan; and
(E) Purchases or other acquisitions or dispositions resulting from the exercise of rights acquired from an issuer as part of a pro rata distribution to all holders of a class of securities of such issuer and the sale of such rights;
VIII. REPORTING OF SECURITIES TRANSACTIONS
A. Reporting Requirements of Access Persons
(1) REPORTS REQUIRED: Unless specifically excepted by other provisions of this Code of Ethics, every ACCESS PERSON of the Trust, Adviser(s) and Underwriter must provide to the Administrator of this Code of Ethics and the Adviser(s) or Underwriter, as applicable, the following reports:
(A) INITIAL HOLDINGS REPORTS- Not later than ten (10) days after a person becomes an ACCESS PERSON, such person shall complete, sign and deliver to the Trust, and the Adviser(s) or Underwriter, as applicable, an Initial Holdings Report, a form of which is attached to this Code of Ethics as Schedule B; except that
(i) Any person who qualified as an ACCESS PERSON prior to March 1, 2000 shall be exempt from filing an Initial Holdings Report.
(B) QUARTERLY TRANSACTION REPORTS- Not later than ten (10) days after the end of each calendar quarter, each ACCESS PERSON shall make a written report ("Quarterly Transaction Report"), a form of which is attached to this Code of Ethics as Schedule C, to the Administrator of this Code of Ethics and the Adviser(s) or Underwriter, as applicable, which;
(1) With respect to any transaction during the previous calendar quarter in a Covered Security in which the ACCESS PERSON had any direct or indirect Beneficial Ownership, contains the following information:
(i) The date of the transaction, the title, the interest rate and maturity date (if applicable), the number of shares and the principal amount of each Covered Security involved:
(ii) The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition);
(iii)The price of the Covered Security at which the transaction was effected;
(iv) The name of the broker, dealer or bank with or through which the transaction was effected; and
(v) The date that the report is submitted by the ACCESS PERSON.
(2) With respect to any account established by the ACCESS PERSON in which any securities were held during the previous quarter for the direct or indirect benefit or the ACCESS PERSON, contains the following information:
(ii) The name of the broker, dealer or bank with whom the ACCESS PERSON established the account;
(iii) The date the account was established; and
(iv) The date that the report is submitted by the ACCESS PERSON.
(C) ANNUAL HOLDING REPORTS- Not later than thirty (30) days after the end of the Trust's fiscal year end, each ACCESS PERSON shall make a written report, a form of which is attached to this Code of Ethics as Schedule D ("Annual Holdings Report"), to the Administrator of this Code of Ethics and the Adviser(s) or Underwriter, as applicable, which:
(1) Sets forth the title, number of shares and principal amount of each Covered Security in which the ACCESS PERSON had any direct or indirect beneficial ownership;
(2) Sets forth the name of any broker, dealer or bank with whom the ACCESS PERSON maintains an account in which any securities are held for the direct or indirect benefit of the ACCESS PERSON;
(3) Contains the date that the report is submitted by the ACCESS PERSON; and
(4) States that the information contained in the Annual Holdings Report is current as of a date not greater than thirty (30) days prior to the date the report was submitted.
B. EXEMPTIONS FROM REPORTING
(1) A person need not make an Initial Holdings Report with respect to transactions effected for, and Covered Securities held in, any account over which the person has no direct or indirect influence or control.
(2) A trustee of the Trust who is not an "interested person" of the Trust, as such term is defined in Section 2(a)(19) of the Act, and who would otherwise be required to make a report solely by reason of being a trustee of the Trust, need not make:
(a) An Initial Holdings Report or an Annual Holdings Report; and
(b) A Quarterly Transaction Report, unless the trustee knew, or in the ordinary course of fulfilling his or her official duties as a trustee should have known, that during the fifteen (15) day period immediately before or after the trustee's transaction in a Covered Security, the Trust purchased or sold the Covered Security, or the Trust or an Adviser considered purchasing or selling the Covered Security.
(3) An ACCESS PERSON of the Trust's Underwriter need not make a report to the Underwriter, if such person makes a report to the Trust and:
(a) The Underwriter is not an affiliated person of the Trust or any Adviser to the Trust; and
(b) The Underwriter has no officer, director or general partner who serves as an officer, director or general partner of the Trust or an Adviser to the Trust.
(4) An ACCESS PERSON of an Adviser need not make a report to the Adviser, if such person makes a report to the Trust and all of the information contained in such report would duplicate information required to be recorded under ss.ss. 275.204-2(a)(12) or 275.204(a)(13) of the Investment Advisers Act of 1940, as amended.
(5) An ACCESS PERSON need not make a Quarterly Transaction Report if the Report would duplicate information contained in broker trade confirmations or account statements received by the Trust with respect to the ACCESS PERSON for the applicable quarterly reporting period, but only if such broker trade confirmations or account statements contain ALL of the information required to be reported in the Quarterly Transaction Reports.
C. RESPONSIBILITY TO REPORT
The responsibility for taking the initiative to report is imposed on each individual required to make a report. Any effort by the Trust to facilitate the reporting process does not change or alter that responsibility.
D. WHERE TO FILE REPORT
All reports must be filed with the Administrator of this Code of Ethics.
IX. CONFIDENTIALITY OF TRUST TRANSACTIONS
Until disclosed in a public report to shareholders or to the SEC in the normal course of the Trust's business, all information concerning Securities "being considered for purchase or sale" by the Trust shall be kept confidential by all ACCESS PERSONS and disclosed by them only on a "need to know" basis. It shall be the responsibility of the Administrator of this Code of Ethics to report any inadequacy found by him or her to the Board of Trustees of the Trust or any committee appointed by the Board to deal with such information.
X. SANCTIONS
Any violation of this Code of Ethics shall be subject to the imposition of such sanctions by the Trust as may be deemed appropriate under the circumstances to achieve the purposes of the Rule and this Code of Ethics which may include suspension or termination of employment, a letter of censure and/or restitution of an amount equal to the difference between the price paid or received by the Trust and the more advantageous price paid or received by the offending person. Sanctions for violation of this Code of Ethics by a trustee of the Trust will be determined by a majority vote of its independent trustees.
XI. ADMINISTRATION AND CONSTRUCTION
(A) The administration of this Code of Ethics shall be the responsibility of the Secretary of the Trust who shall serve as the "Administrator" of this Code of Ethics.
(B) The duties of such Administrator shall include:
(1) Continuous maintenance of a current list of the names of all ACCESS PERSONS with an appropriate description of their title or employment;
(2) Providing each COVERED PERSON a copy of this Code of Ethics and informing them of their duties and obligations thereunder, and assuring that COVERED PERSONS who are not ACCESS PERSONS are familiar with applicable requirements of this Code of Ethics;
(3) Supervising the implementation of this Code of Ethics by the Adviser(s) and Underwriter and the enforcement of the terms hereof by the Adviser(s) and Underwriter;
(4) Maintaining or supervising the maintenance of all records and reports required by this Code of Ethics;
(5) Preparing listings of all transactions effected by any ACCESS PERSON within fifteen (15) days of the date on which the same security was held, purchased or sold by the Trust;
(6) Determining whether any particular securities transaction should be exempted pursuant to the provisions of this Code of Ethics;
(7) Issuing either personally, or with the assistance of counsel as may be appropriate, an interpretation of this Code of Ethics which may appear consistent with the objectives of the Rule of this Code of Ethics;
(8) Conducting of such inspections or investigations, including scrutiny of the listings referred to in the preceding subparagraph, as shall reasonably be required to detect and report, with his or her recommendations, any apparent violations of this Code of Ethics to the Board of Trustees of the Trust or any Committee appointed by them to deal with such information;
(9) Submitting a quarterly report to the trustees of the Trust containing a description of any violation and the sanction imposed; transactions which suggest a possibility of a violation, and any exemptions or waivers found appropriate by the Administrator; and any other significant information concerning the appropriateness of this Code of Ethics.
XII. REQUIRED RECORDS
The Administrator shall maintain or cause to be maintained in an easily accessible place, the following records:
(A) A copy of this and any other Code of Ethics adopted pursuant to the Rule which has been in effect during the past five (5) years;
(B) A record of any violation of such Codes of Ethics and of any action taken as a result of such violation;
(C) A copy of each report made by the Administrator within two (2) years from the end of the fiscal year of the Trust in which such report and interpretation is made or issued and for an additional three (3) years in a place which need not be easily accessible;
(D) A list of all persons who are, or within the past five (5) years have been, required to make reports pursuant to the Rule and this Code of Ethics; and
(E) A copy of all Initial Holdings Reports, Quarterly Transactions
Reports, and Annual Holdings Reports submitted within the last five
(5) years, the first two (2) years in an easily accessible place.
XIII. AMENDMENTS AND MODIFICATIONS
This Code of Ethics may not be amended or modified except in a written form which is specifically approved by majority vote of the Independent Trustees of the Trust.
This Code of Ethics was adopted by the Trust's Board of Trustees, including a majority of the Trust's "Independent Trustees", at a meeting held on ______________________, 2000.
Witness my Signature:
By: ________________________
Secretary to the Trust
APPENDIX A
WRITTEN INTERPRETATIONS
TO THE CODE OF ETHICS
OF
QUAKER INVESTMENT TRUST
1. WRITTEN INTERPRETATION PURSUANT TO REQUEST OF MANU DAFTARY
Manu Daftary is the principal of DG Capital Management, Inc., a Massachusetts corporation offering investment services. Mr. Daftary, being concurrently an employee of and portfolio manager for Quaker Financial Advisors, Inc., a Pennsylvania corporation providing investment advisory services to Portfolios of the Trust, recognizes that he is an "Access Person" and an "Advisory Person", as such terms are defined in the Code of Ethics (the "Code") of Quaker Investment Trust (the "Trust"). Mr. Daftary seeks an opinion from the Clearing Officers of the Trust with respect to Mr. Daftary's reporting obligations, if any, relating to accounts of and transactions undertaken by DG Capital Management for such accounts.
After reviewing the accounts and transactions as disclosed by Mr. Daftary, we are of the opinion that:
a. Mr. Daftary does not have a "Beneficial Interest", as that term is defined in the Code, in such accounts and/or transactions;
b. Such accounts are not Mr. Daftary's "own accounts", as that term is defined in the Code;
c. Transactions in such accounts are not considered to be "personal securities transactions", as that term is defined in the Code.
Accordingly, Mr. Daftary shall have no reporting requirements with respect to accounts of DG Capital Management, Inc. and transactions relating to such accounts.
Executed this ________ day of April, 2000.
__________________________ _______________________________ By: _____________________ By: __________________________ Clearing Officer Clearing Officer |
SCHEDULE A
CONFIDENTIAL TRANSACTION CLEARANCE
REQUEST FORM
Pursuant to the requirements of Section V of the Code of Ethics of Quaker Investment Trust (the "Trust"), I, ______________________, being an Access Person of the Trust, as that term is defined in the Code, hereby request that the Trust approve the following transaction in Covered Securities:
Name of Security: _________________________________________________________
Number of shares/Principal amount:____________________________________________
Nature of transaction: ___________________________________ (i.e., purchase, sale or other type of acquisition or disposition);
Yes No
___ ___ The security described above represents an investment in an initial public offering.
___ ___ The security described above represents an investment in a private placement.
By my signature below, I swear and affirm that I have not engaged in any transactions in the above-described securities in violation of the Trust's Code of Ethics, that I will invest in the above-described securities only after obtaining clearance to do so from authorized officers of the Trust, will report all such transactions in accordance with the requirements of the Trust's Code of Ethics, and if I receive clearance to engage in the above-described security, I will execute the transaction not later than three (3) days after receiving clearance or will obtain a new clearance prior to executing the transaction.
_____ After due consideration, the proposed transaction described above is
APPROVED.
_____ After due consideration, the proposed transaction is DENIED.
_____ (Check only if approving a transaction that represents an investment in an initial public offering or in a private placement). We, the undersigned, in the exercise of our obligations to the Trust under the Trust's Code of Ethics, have found that the above-described transaction is not a transaction that should be reserved to the Trust, and we further find that the transaction is not being offered to the Applicant as a result of his/her position with the Trust, Adviser or Underwriter.
__________________________________ __________________________________ Signature of Clearing Officer Date Signature of Clearing Officer Date __________________________________ __________________________________ Printed Name Printed Name |
SCHEDULE B
CONFIDENTIAL INITIAL
HOLDINGS REPORT
The following lists all holdings in Covered Securities in which I had any direct or indirect beneficial ownership as of ________________________. (If no transactions took place write "None".) Sign and return to the Secretary of the Trust not later than the 10th day after you qualify as an Access Person. Use reverse side if additional space is needed.
HOLDINGS IN COVERED SECURITIES
The following lists all accounts established by me as of _______________________ in which I had any direct or indirect beneficial ownership in any Securities. (If no accounts were established, write "None".) Sign and return to the Secretary of the Trust not later than the 10th day after you qualify as an Access Person. Use reverse side if additional space is needed.
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Name of Broker, Dealer or Bank Date Account Established
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Name:
Date: Signature:
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SCHEDULE C
QUARTERLY SECURITIES TRANSACTIONS
CONFIDENTIAL REPORT
The following lists all transactions in Covered Securities in which I had any direct or indirect beneficial ownership during the last calendar quarter. (If no transactions took place write "None".) Sign and return to the Secretary of the Trust not later than the 10th day of the month following the end of the calendar quarter. Use reverse side if additional space is needed.
PURCHASES/SALES AND OTHER DISPOSITIONS
The following lists all accounts established by me during the last calendar quarter in which I had any direct or indirect beneficial ownership in any Securities. (If no accounts were established, write "None".) Sign and return to the Secretary of the Trust not later than the 10th day of the month following the end of the calendar quarter. Use reverse side if additional space is needed.
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Name of Broker, Dealer or Bank Date Account Established
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Name:
Date: Signature:
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SCHEDULE B
CONFIDENTIAL ANNUAL
SECURITIES HOLDINGS REPORT
The following lists all holdings in Covered Securities in which I had any direct or indirect beneficial ownership as of ________________________. (If no transactions took place write "None".) Sign and return to the Secretary of the Trust not later than the 30th day after the Trust's fiscal year end. Use reverse side if additional space is needed.
HOLDINGS IN COVERED SECURITIES
The following lists all accounts established by me as of _______________________ in which I had any direct or indirect beneficial ownership in any Securities. (If no accounts were established, write "None".) Sign and return to the Secretary of the Trust not later than the 30th day after the Trust's fiscal year end. Use reverse side if additional space is needed.
I swear and affirm that the foregoing information is true and correct to the best of my information and belief, and that the information included in this report is current as of a date not later than thirty (30) days prior to the filing of this report.
Name:
Date: Signature:
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