SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. 3 [X]
Post-Effective Amendment No. __ [ ]
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1940 [X]
Amendment No. 3 [ ]
File Nos. 333-20637; 811-8035
AFBA FIVE STAR FUND, INC.
(Exact Name of Registrant as Specified in Charter)
2440 Pershing Road, Suite G-15, Kansas City, MO 64108
(Address of Principal Executive Office)
Registrant's Telephone Number, including Area Code (816) 471-5200
Larry D. Armel, AFBA Five Star Fund, Inc.
2440 Pershing Road, Suite G-15, Kansas City, MO 64108
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after
the effective date of this Registration Statement.
Please address inquiries and communications to:
John G. Dyer, Esq.
Jones & Babson, Inc.
2440 Pershing Road, Suite G-15
Kansas City, MO 64108
Telephone: (816) 471-5200
and a carbon copy of all communications to:
Mark H. Plafker, Esq.
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
Telephone: (215) 564-8000
Registrant hereby elects to register an indefinite number of its shares
pursuant to Rule 24f-2 under the Investment Company Act of 1940. Registrant
hereby amends this Registration Statement on such dates as may be necessary to
delay its effective date until the Registrant shall file a further amendment
which specifically states that this Registration Statement shall thereafter
become effective in accordance with Section 8(a) of the Securities Act of 1933
or until this Registration Statement shall become effective on such date as the
Commission, acting pursuant to such Section 8(a), may determine.
Total Pages 15
Exhibit Index Page 14
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AFBA FIVE STAR FUND, INC.
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Form N-1A Item Number Location in Prospectus
<S> <C>
Part A
Item 1. Cover Page..............................................Cover Page
Item 2. Synopsis................................................Not Applicable
Item 3. Condensed Financial Information.........................Per Share Capital and Income
Changes
Item 4. General Description of Registrant.......................Investment Objective and Portfolio
Management Policy
Item 5. Management of the Fund..................................Officers and Directors;
Management and Investment
Counsel
Item 6. Capital Stock and Other Securities......................How to Purchase Shares; How to
Redeem Shares; How Share Price
is Determined; General
Information and History;
Dividends, Distributions and
Their Taxation
Item 7. Purchase of Securities..................................Cover Page; How to Purchase
being Offered Shares;
Shareholder Services
Item 8. Redemption or Repurchase................................How to Redeem Shares
Item 9. Pending Legal Proceedings...............................Not Applicable
Form N-1A Item Number Location in Statement
of Additional
Information
Part B
Item 10. Cover Page..............................................Cover Page
Item 11. Table of Contents.......................................Cover Page
Item 12. General Information and History.........................Investment Objectives and
Policies; Management and
Investment Counsel
Item 13. Investment Objectives and Policies......................Investment Objectives and
Policies; Investment Restrictions
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Item 14. Management of the Fund..................................Management and Investment
Counsel
Item 15. Control Persons and Principal...........................Management and Investment
Holders of Securities Counsel; Officers and Directors
Item 16. Investment Advisory and Other...........................Management and Investment
Services Counsel
Item 17. Brokerage Allocation....................................Portfolio Transactions
Item 18. Capital Stock and Other Securities......................General Information and History
(Prospectus); Financial Statements
Item 19. Purchase, Redemption and Pricing........................How Share Purchases are
of Securities Being Offered Handled; Redemption of Shares;
Financial Statements
Item 20. Tax Status..............................................Dividends, Distributions and
Their Taxation (Prospectus)
Item 21. Underwriters............................................How the Fund's Shares are
Distributed
Item 22. Calculation of Yield Quotations.........................Not Applicable
of Money Market Fund
Item 23. Financial Statements....................................Financial Statements
</TABLE>
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AFBA FIVE STAR FUND, INC.
PART A
Prospectus
Incorporated by Reference to pre-effective
amendment #2 to N-1A File Nos. 333-20637; 811-8035
filed with the Commission on May 23, 1997
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AFBA FIVE START FUND, INC.
PART B
Statement of Additional Information
Incorporated by Reference to pre-effective amendment #2
to N-1A File Nos. 333-20637; 811-8035 filed with the
Commission on May 23, 1997
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Report of Independent Auditors
The Shareholders and Board of Directors
AFBA Five Star Fund, Inc.
We have audited the accompanying statements of net assets of AFBA Five Star
Fund, Inc. (comprised of the following series: Five Star Balanced Fund, Five
Star Equity Fund, Five Star USA Global Fund and Five Star High Yield Fund)
(collectively referred to herein as the Company) as of May 16, 1997. These
statements of net assets are the responsibility of the Company's management. Our
responsibility is to express an opinion on these statements of net assets based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statements of net assets are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statements of net assets. Our procedures
included confirmation of cash as of May 16, 1997, by correspondence with the
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
statements of net assets presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the statements of net assets referred to above present fairly,
in all material respects, the financial position of the Company at May 16, 1997,
in conformity with generally accepted accounting principles.
Ernst & Young LLP
Kansas City, Missouri
May 16, 1997
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AFBA Five Star Fund, Inc.
Statements of Net Assets
May 16, 1997
<TABLE>
<CAPTION>
Five Star Five Star Five Star Five Star
Balanced Equity USA Global High Yield
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Cash $100,000 $100,000 $100,000 $100,000
------------------------------------------------------------------------
Net assets applicable to outstanding
shares $100,000 $100,000 $100,000 $100,000
========================================================================
Capital shares, $1.00 par value
Authorized $10,000,000 $10,000,000 $10,000,000 $10,000,000
========================================================================
Outstanding
10,000 10,000 10,000 10,000
========================================================================
Net asset value par share
$ 10.00 $ 10.00 $ 10.00 $ 10.00
========================================================================
</TABLE>
Note - Significant Accounting Policies:
Organization - AFBA Five Star Fund, Inc. (the Company) was organized as a
Maryland corporation on January 9, 1997 and is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company with the following series: Five Star Balanced Fund, Five Star
Equity Fund, Five Star USA Global Fund and Five Star High Yield Fund. Shares
outstanding for each series on May 16, 1997 were issued to AFBA Investment
Management Company, the Company's investment manager (Manager). The costs of
organization will be paid by the Manager and Jones & Babson, Inc., the Company's
administrator and distributor.
Management Fees - the Manager will charge each series a fee based on an annual
rate of one percent (1.00%) of average daily net assets of the particular series
from which the Manager pays Kornitzer Capital Management, Inc., which serves as
investment counsel, (the Adviser) a fee of one-third of one percent (0.33%) of
average daily net assets and Jones & Babson an administrative services fee of
one-third of one percent (0.33%) of average daily net assets. The Manager of
Jones & Babson will pay all other operating expenses of the series except the
cost of acquiring and disposing of portfolio securities, the taxes, if any,
imposed directly on the Company and the shares of its series and the cost of
qualifying the series' shares for sale in any jurisdiction. Certain officers and
directors of the Company are also officers or directors or both of the Manager,
Jones & Babson or the Adviser.
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PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements
Included in Part B
(b) (1) (a) Registrant's Articles of Incorporation*
(b) Articles Supplementary*
(2) Form of Registrant's By-laws*
(3) Not applicable, because there is no voting trust agreement.
(4) Specimen copy of each security to be issued by the
registrant.*
(5) (a) Form of Management Agreement between AFBA Investment*
Management Company and the Registrant
(b) Form of Investment Counsel Agreement between AFBA*
Investment Management Company and Kornitzer Capital
Management, Inc.
(6) Form of principal Underwriting Agreement between Jones &
Babson,* Inc. and the Registrant
(7) Not applicable, because there are no pension, bonus or other
agreement for the benefit of directors and officers.
(8) Form of Custodian Agreement between Registrant and UMB
Bank,* n.a.
(9) Form of Transfer Agency Agreement between AFBA Investment*
Management Company and Jones & Babson, Inc.
(10) Opinion and consent of counsel as to the legality of the
Registrant's securities being registered.* (To be filed
annually with Rule 24f-2 notice.)
(11) (a) Powers of Attorney*
(b) Auditors Consent
(12) Not applicable.
(13) Form of letter from contributors of initial capital to the
Registrant that purchase was made for investment purposes
without any present intention of redeeming or selling.*
(14) Not applicable.
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(15) Not applicable.
(16) Schedule for computation of performance quotations. (To be
supplied by further amendment.)
* Incorporated by reference to Registrant's Registration on N-1A.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL OF THE REGISTRANT.
NONE
Item 26. NUMBER OF HOLDERS OF SECURITIES.
The number of record holders of each series of securities of the
Registrant as of May 23, 1997, is as follows:
(1)
Title of Class
Common Stock (2)
$1.00 par value Number of Record Holders
AFBA Five Star Balanced Fund one
AFBA Five Star Equity Fund one
AFBA Five Star USA Global Fund one
AFBA Five Star High Yield Fund one
Item 27. INDEMNIFICATION.
Under the terms of the Maryland General Corporation Law and the
Company's Bylaws, the Company shall indemnify any person who was or is
a director, officer or employee of the Company to the maximum extent
permitted by the Maryland General Corporation Law; provided however,
that any such indemnification (unless ordered by a court) shall be
made by the Company only as authorized in the specific case upon a
determination that indemnification of such persons is proper in the
circumstances. Such determination shall be made:
(i) by the Board of Directors by a majority vote of a quorum which
consists of the directors who are neither "interested persons" of the
Company as defined in Section 2(a)(19) of the 1940 Act, nor parties to
the proceedings, or
(ii) if the required quorum is not obtainable or if a quorum of such
directors so directs, by independent legal counsel in a written
opinion.
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No indemnification will be provided by the Company to any director or
officer of the Company for any liability to the company or
shareholders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless
disregard of duty.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR.
AFBA Investment Management Company is a wholly-owned subsidiary of
Armed Forces Benefit Services, Inc. ("AFBSI"), which serves as
investment manager to the Registrant. AFBSI is a for-profit services
entity which is wholly-owned by Armed Forces Benefit Association, a
voluntary employee benefit association.
The principal business of Kornitzer Capital Management, Inc. is to
provide investment counsel and advice to a wide variety of clients.
Kornitzer Capital Management, Inc. has $1.2 billion under management.
The information required by this Item 28 with respect to each
director, officer, or partner of the Manager and the Investment
Adviser of the Registrant is incorporated by reference to the Form
ADV, as filed and amended, by the Manager and Investment Adviser,
respectively, with the SEC:
AFBA Investment Management Company
SEC File No. 801-54247
Kornitzer Capital Management, Inc.
SEC File No. 801-34933
Item 29. PRINCIPAL UNDERWRITERS.
(a) Jones & Babson, Inc., the only principal underwriter of the
Registrant, also acts as principal underwriter for the David L.
Babson Growth Fund, Inc., D.L. Babson Money Market Fund, Inc.,
D.L. Babson Tax-Free Income Fund, Inc., D.L. Babson Bond Trust,
Babson Value Fund, Inc., Shadow Stock Fund, Inc., Babson-Stewart
Ivory International Fund, Inc., Scout Stock Fund, Inc., Scout
Bond Fund, Inc., Scout Money Market Fund, Inc, Scout Tax-Free
Money Market Fund, Inc., Scout Regional Fund, Inc., Scout
WorldWide Fund, Inc., Scout Balanced Fund, Inc., Buffalo Balanced
Fund, Inc., Buffalo High Yield Fund, Inc., Buffalo Equity Fund,
Inc. and Buffalo USA Global Fund, Inc.
(b) Herewith is the information required by the following table with
respect to each director, officer or partner of the only
underwriter named in answer to Item 21 of Part B:
Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
Stephen S. Soden Chairman and Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
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Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
Larry D. Armel President and Director Director
2440 Pershing Road, G-15
Kansas City, MO 64108
Giorgio Balzer Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
Robert T. Rakich Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
Edward S. Ritter Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
Robert N. Sawyer Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
Vernon W. Voorhees Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
P. Bradley Adams Vice President and Vice President and
2440 Pershing Road, G-15 Treasurer Chief Financial
Kansas City, MO 64108 Officer
Michael A. Brummel Vice President None
Three Crown Center
2440 Pershing Road, G-15
Kansas City, MO 64108
Martin A. Cramer Vice President and Secretary
Three Crown Center Secretary
2440 Pershing Road, G-15
Kansas City, MO 64108
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(c) The principal underwriter does not receive any remuneration or
compensation for the duties or services rendered to the
Registrant pursuant to the principal Underwriting Agreement.
Item 30. LOCATION OF ACCOUNTS AND RECORDS.
Each account, book or other document required to be maintained by
Section 31(a) of the 1940 Act and the Rules (17 CFR 270.31a-1 to
31a-3) promulgated thereunder is in the physical possession of Jones &
Babson, Inc., at Three Crown Center, 2440 Pershing Road, Suite G-15,
Kansas City, Missouri 64108.
Item 31. MANAGEMENT SERVICES
All management services are covered in the Management Agreement
between the Registrant and AFBA Investment Management Company which
are discussed in Parts A and B.
Item 32. UNDERTAKINGS
Registrant undertakes to file a post-effective amendment, using
financial statements which need not be certified, within four to six
months from the effective date of Registrant's 1933 Act Registration
Statement.
Registrant undertakes to call a meeting of shareholders, if requested
to do so by the holders of at least 10% of the registrant's
outstanding shares, for the purpose of voting upon the question of
removal of a director or directors and to assist in communications
with other shareholders.
Insofar as indemnification for liability arising under the Securities
Act of 1993 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this amendment to
the registration statement to be signed on its behalf by the undersigned,
thereunto authorized, in the City of Alexandria, and State of Virginia on the
29th day of May, 1997.
AFBA FIVE STAR FUND, INC.
(Registrant)
By /s/John A. Johnson
John A. Johnson, President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
/s/John A. Johnson President, Principal Executive May 29, 1997
John A. Johnson Officer, and Director
/s/C.C. Blanton Director May 29, 1997
C.C. Blanton
/s/Monroe W. Hatch, Jr.* Director May 29, 1997
Monroe W. Hatch, Jr.
/s/Louis C. Wagner, Jr.* Director May 29, 1997
Louis C. Wagner, Jr.
/s/Henry J. Sechler* Director May 29, 1997
Henry J. Sechler
/s/John C. Kornitzer* Director May 29, 1997
John C. Kornitzer
/s/Larry Armel Director May 29, 1997
Larry Armel
/s/P. Bradley Adams Vice President and Principal May 29, 1997
P. Bradley Adams Financial and Accounting
Officer
*Signed pursuant to Power of
Attorney
By /s/C.C. Blanton
C.C. Blanton
Attorney-in-Fact
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EXHIBIT INDEX
Item 24.(b) Page
(11)(b) Auditors Consent 15
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Exhibit 11(b)
Consent of Independent Auditors
We consent to the references to our firm under the caption "Independent
Auditors" and to the use of our report dated May 16, 1997 in the Registration
Statement (Form N-1A) and related Prospectus of AFBA Five Star Fund, Inc. filed
with the Securities and Exchange Commission in this Pre-Effective Amendment No.
3 to the Registration Statement under the Securities Act of 1933 and Amendment
No. 3 to the Registration Statement under the Investment Company Act of 1940.
/s/Ernst & Young LLP
Kansas City, Missouri
May 28, 1997
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