Filed Pursuant to Rule 497(c)
Registration Nos: 333-39133
PROSPECTUS 811-8461
November 30, 1998
[Logo]
GRAND PRIX FUNDS, INC.
Grand Prix Fund
Wilton Executive Campus
15 River Road, Suite 220
Wilton, Connecticut 06897
Telephone: 1-800-432-4741
Website: www.grandprixfund.com
Grand Prix Funds, Inc. ("Corporation") is an open-
end, management investment company, commonly referred
to as a mutual fund. The Corporation currently
comprises one non-diversified portfolio: the Grand Prix
Fund ("Fund"). The Fund's investment objective is
capital appreciation. The Fund seeks to achieve its
investment objective by investing primarily in common
stocks of companies that exhibit fast earnings growth
and are rising in price. Target Holdings Corporation,
doing business as Target Investors, Inc. (the
"Advisor"), believes that the use of this momentum
strategy has the potential for higher returns than
other investment strategies. Under federal securities
laws, the Fund is "not diversified." As a result, it
may be more vulnerable than a "diversified" fund to
fluctuations in the value of the companies in the
Fund's portfolio.
You may invest in the Fund by purchasing shares at
a price equal to their net asset value plus an initial
sales charge imposed at the time of purchase. Certain
purchasers of Fund shares may have the initial sales
charge waived. Fund shares are also subject to a Rule
12b-1 plan pursuant to which an aggregate annual fee of
0.25% is charged on the average net assets of the Fund.
This Prospectus contains information you should
consider before you invest in the Fund. Please read it
carefully and keep it for future reference. A
Statement of Additional Information ("SAI") for the
Fund, dated November 30, 1998, contains further
information, is incorporated by reference into this
Prospectus, and has been filed with the Securities and
Exchange Commission ("SEC"). The SAI, which may be
revised from time to time, is available without charge
upon request to the Fund at the above-noted address or
telephone number.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
HIGHLIGHTS 4
INVESTOR EXPENSES 5
FINANCIAL HIGHLIGHTS 6
INVESTMENT STRATEGY 6
IMPLEMENTATION OF POLICIES AND RISKS 7
INVESTMENT OBJECTIVE AND RESTRICTIONS 9
FUND ORGANIZATION AND MANAGEMENT 10
YOUR ACCOUNT 11
DETERMINATION OF NET ASSET VALUE 18
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN 18
INDIVIDUAL RETIREMENT ACCOUNTS 19
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAX TREATMENT 20
YEAR 2000 ISSUE 21
FUND PERFORMANCE 21
ADDITIONAL INFORMATION 22
No person has been authorized to give any
information or to make any representations other than
those contained in this Prospectus and the SAI, and if
given or made, such information or representations may
not be relied upon as having been authorized by the
Fund. This Prospectus does not constitute an offer to
sell securities in any state or jurisdiction in which
such offering may not lawfully be made.
<PAGE>
HIGHLIGHTS
What is the objective of the Fund?
The Fund's investment objective is capital
appreciation. The Fund seeks to achieve its investment
objective by investing primarily in common stocks of
companies that the Advisor believes have the potential
for revenue and earnings growth superior to that of
companies with similar market or business
characteristics. The Advisor will not consider
dividend or interest income in the selection of
investments. See "Investment Strategy" and "Investment
Objective and Restrictions."
In what types of companies/securities will the Fund
invest?
The Advisor intends to invest primarily in common
stocks of companies which the Advisor characterizes as
"growth" companies. The Fund's securities selections
will be made without regard to an issuer's market
capitalization; however, the Advisor anticipates that
most investments will be made in companies that have a
small-to-medium market capitalization. In the
Advisor's opinion, a growth company is a company that
is likely to experience positive sales and earnings
growth at above average rates.
Under normal circumstances, the Fund will be fully
invested in common stocks, except that a small portion
of the Fund's assets may be held in short-term money
market securities and cash to pay redemption requests
and Fund expenses and pending investment. Under
unusual circumstances, as a defensive technique, the
Fund may invest up to 35% of its total assets in cash
and/or money market instruments deemed by the Advisor
to be consistent with a temporary defensive posture.
The Fund may but does not intend to leverage its assets
or invest in options, futures, derivative contracts,
initial public offerings or other exotic securities or
arrangements. See "Implementation of Policies and
Risks."
In an effort to increase returns, the Fund expects
to trade actively. The annual portfolio turnover rate
could range from 300 to 500%, but generally will not
exceed 800%. Higher portfolio turnover rates usually
generate additional brokerage commissions and expenses
and the short-term gains realized from these
transactions are taxable to shareholders as ordinary
income. See "Financial Highlights" and
"Implementation of Policies and Risks."
What are the potential risks of investing in the Fund?
Equity securities fluctuate in value, often based
on factors unrelated to the value of the issuer of the
securities, and such fluctuations can be pronounced.
Changes in the value of the Fund's investments will
result in changes in the value of its shares and thus
the Fund's total return to investors. In addition,
because the Fund has elected not to be subject to the
diversification rules of the Investment Company Act of
1940, as amended ("1940 Act"), a relatively larger
percentage of the Fund's assets may be invested in
relatively fewer companies than is typical of other
mutual funds. This non-diversification may increase
volatility. See "Implementation of Policies and
Risks."
Is an investment in the Fund appropriate for me?
The Fund is suitable for long-term investors only.
It is not a short-term investment vehicle. An
investment in the Fund may be appropriate if you seek
capital appreciation; seek a mutual fund for the
aggressive equity portion of your portfolio; have no
immediate financial requirements for this investment;
and are willing to accept a high degree of volatility.
The Fund is designed for investors who have the
financial ability to undertake greater risk in exchange
for the opportunity to realize greater financial gains
in the future. See "Investment Objective and
Restrictions."
<PAGE>
Who will manage my investment?
Target Investors, Inc. ("Advisor") serves as
investment advisor to the Fund. As of October 31,
1998, the Advisor managed approximately $600 million
for individual and institutional clients. See "Fund
Organization and Management."
How can I purchase or redeem Fund shares?
Fund shares are offered at the Fund's net asset
value plus a maximum initial sales charge of 5.25% of
the offering price. Persons who were shareholders of
the Fund as of November 30, 1998 are not subject to
this front-end sales load on additional purchases of
Fund shares. Certain other exceptions may also apply.
In addition, the Fund has adopted a distribution and
shareholder servicing plan under Rule 12b-1 of the 1940
Act, which authorizes the Fund to pay a yearly
distribution and/or shareholder servicing fee of up to
0.25% of the average daily net assets of the Fund. See
"Your Account" and "Distribution and Shareholder
Servicing Plan."
You may request redemption of your Fund shares at
any time. There are no redemption charges. For
redemptions by wire, however, there is a $10 fee. When
a redemption request is received in good order, the
Fund will redeem the shares at the Fund's next net
asset value determined after receipt of the request.
See "Your Account."
The minimum initial investment is $5,000.
Subsequent investments must be at least $1,000. These
minimums may be changed or waived at any time by the
Fund. See "Your Account."
What is the Fund's policy regarding dividends and other
distributions?
You should not expect income from the Fund.
However, as required by law, to avoid double taxation,
the Fund will distribute substantially all of its net
realized capital gains and net investment income, if
any, to shareholders annually in the form of a
distribution and/or dividend, taxable to you as capital
gain or ordinary income. In the absence of specific
instructions to the contrary, distributions and
dividends will be reinvested in additional Fund shares
and will not be available for the payment of taxes.
See "Implementation of Policies and Risks" and
"Dividends, Capital Gain Distributions and Tax
Treatment."
Who should I contact if I have questions?
General inquiries regarding the Fund can be
addressed to either your investment professional or the
Fund at the address or telephone number listed on the
cover page of this Prospectus.
<PAGE>
INVESTOR EXPENSES
The following information is provided to help you
understand the various costs and expenses that you, as
an investor in the Fund, will bear directly or
indirectly.
Shareholder Transaction Expenses(1)
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 5.25% (2)
Maximum Sales Load Imposed on
Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None
Exchange Fees None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees 1.00%
Rule 12b-1 Fees(3) 0.25%
Other Expenses (after waivers
or reimbursements)(4) 0.40%
Total Operating Expenses
(after waivers or reimbursements)(4) 1.65%
____________
(1) There are certain charges associated with
certain special shareholder services offered by the
Fund, including a $23 fee for returned checks or
electronic funds transfers and a $10 fee for wire
redemptions. For additional information, see "Your
Account."
(2) This sales load is the maximum rate applicable
to purchases of Fund shares by new shareholders on
or after December 1, 1998. Existing shareholders as
of November 30, 1998, as well as certain other
investors are exempt from having to pay this sales
load, as described more fully under "Your Account."
(3) See "Distribution and Shareholder Servicing
Plan" for detailed information relating to the Rule
12b-1 distribution and shareholder servicing plan
("Plan"). Consistent with the National Association
of Securities Dealers, Inc.'s ("NASD") rules, Rule
12b-1 fees could cause long-term investors in the
Fund to pay more than the economic equivalent of the
maximum front-end sales charges permitted under
those rules.
(4) The Advisor has agreed to limit the total
operating expenses of the Fund (excluding interest,
taxes, brokerage and extraordinary expenses) to an
annual rate of 1.65% of the Fund's average net
assets until December 31, 1998. After such date,
the expense limitation may be terminated or revised
at any time. Absent this limitation, other expenses
and total operating expenses of the Fund would have
been 14.60% and 15.93%, respectively. For
additional information, see "Fund Organization and
Management."
Example
You would pay the following expenses on a $1,000
investment, assuming a 5% annual return and redemption
at the end of each time period.
1 year $ 68
3 years $102
The Example is based on the above-described "Total
Operating Expenses." In addition, the maximum front-
end sales load is reflected in the Example. The
amounts in the Example may increase absent the expense
limitation. REMEMBER THAT THE EXAMPLE SHOULD NOT BE
CONSIDERED AS REPRESENTATIVE OF PAST
<PAGE>
OR FUTURE EXPENSES
AND THAT ACTUAL EXPENSES MAY BE HIGHER OR LOWER THAN
THOSE SHOWN. The assumption in the Example of a 5%
annual return is required by SEC regulations. The
assumed 5% annual return is not a prediction of, and
does not represent, the projected or actual performance
of the Fund's shares.
FINANCIAL HIGHLIGHTS
The following table of financial information
relating to the shares of the Fund for the period from
January 1, 1998 (commencement of operations) to April
30, 1998 has been derived from financial records of the
Fund which are unaudited. The table should be read in
conjunction with the financial statements and related
notes included in the Fund's Semi-Annual Report to
Shareholders, which is available without charge by
calling or writing to the Fund. The Semi-Annual Report
for the period ended April 30, 1998 is incorporated by
reference into the Fund's SAI.
Per Share Data:
Net asset value, beginning of period $ 10.00
Income (loss) from investment operations:
Net investment loss (1) (0.04)
Net realized and unrealized gains on investments 2.01
Total from investment operations 1.97
Net asset value, end of period $ 11.97
Total Return (2) 19.70%
Supplemental data and ratios:
Net assets, end of period $1,214,746
Ratio of net operating expenses
to average net assets (3)(4) 1.65%
Ratio of net investment loss to
average net assets (3)(4) (1.24)%
Portfolio turnover rate 295.6%
______________________
(1) Net investment loss per share represents
net investment loss divided by the monthly
average shares of beneficial interest
outstanding.
(2) Not annualized.
(3) Annualized.
(4) Net of expense reimbursements and waivers.
Without expense reimbursements and waivers, the
ratio of operating expenses to average net
assets would have been 17.05%, and the ratio of
net investment loss to average net assets would
have been (16.64)%.
INVESTMENT STRATEGY
The Fund seeks to invest in the equity securities
of companies, regardless of size, which, in the opinion
of the Advisor, will experience positive earnings
growth at an above average rate. Although the Advisor
may invest in companies of all sizes, the Advisor
expects that most investments will be made in companies
with small to medium market capitalizations. The
Advisor focuses on companies which exhibit fast
earnings growth and are rising in price. The Advisor's
general strategy is to be fully invested with at least
95% of the Fund's assets invested in equity securities.
Although the Advisor's investment strategy is based on
company fundamentals, companies considered by the
Advisor
<PAGE>
to be "growth" companies are often in the same
or related market sectors. Thus, the Fund may be
heavily invested in a single sector. One sector,
however, like technology, may include various
industries, like networking, telecommunications,
software, semiconductors or voice-processing. The Fund
may be concentrated in one sector, while being
diversified among several industries. The Fund may
take relatively large positions in a single issuer. To
the extent the Fund is concentrated, it will be
susceptible to adverse economic, political, regulatory
or market developments affecting a single sector,
industry or issuer. Additionally, the Fund will invest
in a limited number of companies. This may increase
the volatility of investment performance. Furthermore,
as a means to increase returns, the Fund expects to
trade actively. The annual portfolio turnover rate
could range from 300 to 500%, but generally will not
exceed 800%. See "Implementation of Policies and Risks
Portfolio Turnover."
When making purchase decisions for the Fund, the
Advisor uses a "buy discipline" that involves three key
components: research, fundamentals, and valuation.
The Advisor develops its own research. Using a
computer-driven model, the Advisor screens for certain
fundamental attributes that it believes a "buy"
candidate should possess, including (i) projected sales
growth of 20% or more; (ii) projected earnings growth
of 20% or more; and (iii) unexpected good earnings.
The Advisor then assigns scores to the securities based
on such factors and ranks the securities accordingly.
Pursuant to that ranking, the Advisor constructs a list
of securities for the Fund and purchases the highest
ranking securities for its portfolio. Companies are
rescored and the portfolio is rebalanced weekly for
variations from expectations.
The Advisor makes sell decisions for the Fund
based on two primary factors: significant deterioration
in the price of the securities or better relative value
in other securities.
IMPLEMENTATION OF POLICIES AND RISKS
In implementing its investment strategy, the Fund
may use the following securities and investment
techniques. Some of these securities and investment
techniques involve special risks, which are described
below, elsewhere in this Prospectus or in the Fund's
SAI.
Common Stocks and Other Equity Securities
The Fund will invest in common stocks and other
equity securities. Other equity securities may include
depository receipts and warrants and other securities
convertible or exchangeable into common stock. Common
stocks and other equity securities generally increase
or decrease in value based on the earnings of a company
and on general industry and market conditions. A fund
that invests a significant amount of its assets in
common stocks and other equity securities is likely to
have greater fluctuations in share price than a fund
that invests a significant portion of its assets in
fixed-income securities.
Small and Medium Market Capitalization Companies
The Fund may invest a substantial portion of its
assets in small and medium-sized companies. While
small and medium-sized companies generally have
potential for rapid growth, investments in such
companies often involve greater risks than investments
in larger, more established companies because small and
medium-sized companies may lack the management
experience, financial resources, product
diversification, and competitive strengths of larger
companies. In addition, in many instances the
securities of small and medium-sized companies are
traded only over-the-counter or on a regional
securities exchange, and the frequency and volume of
their trading is substantially less than is typical of
larger companies. Therefore, the securities of small
and medium-sized companies may be subject to greater
and more abrupt price fluctuations. When making large
sales, the Fund may have to sell portfolio holdings at
discounts from quoted prices or may have to make a
series of small sales over an extended period of time
due to the trading volume of small and medium-sized
company securities. Investors should be aware that,
based on the foregoing factors, an investment in the
Fund may be subject to greater price fluctuations than
an investment in a fund that invests primarily in
larger, more established companies. The Advisor's
research efforts may also play a greater role in
selecting securities for the Fund than in a fund that
invests in larger, more established companies.
<PAGE>
Unseasoned Companies
The Fund may invest in securities of unseasoned
companies. These are companies that have been in
operation less than three years, including the
operations of any of their predecessors. The
securities of such companies may have limited liquidity
and the prices of such securities may be volatile. The
Fund currently intends to invest no more than 10% of
its total assets in securities of unseasoned companies.
The Fund may only invest up to 5% of its net assets in
illiquid securities.
Non-Diversification and Sector Concentration
As a "non-diversified" fund, the Fund is permitted
to invest its assets in a more limited number of
issuers than other investment companies. Under the
Internal Revenue Code of 1986 (the "Code"), however,
for income tax purposes, the Fund (i) may not invest
more than 25% of its total assets in the securities of
any one company or in the securities of any two or more
companies controlled by the Fund which, pursuant to
regulations under the Code, may be deemed to be engaged
in the same, similar, or related trades or businesses
and (ii) with respect to 50% of its total assets, may
not invest more than 5% of its total assets in the
securities of any one company and may not own more than
10% of the outstanding voting securities of a single
company. Thus, as a "non-diversified" fund under the
1940 Act, the Fund may invest (i) up to 50% of its
total assets in the securities of as few as two
companies, up to 25% each, so long as the Fund does not
control the two companies or so long as the two
companies are engaged in different businesses and (ii)
up to 50% of its total assets in the securities of as
few as ten companies, up to 5% each, provided that, in
any event, the Fund does not own in excess of 10% of
any company's outstanding voting stock. This practice
involves an increased risk of loss to the Fund if the
market value of a security should decline or its issuer
were otherwise unable to meet its obligations.
The Fund may invest more than 25% of its total
assets in securities of companies in one or more market
sectors, such as the technology or health care sector.
A market sector may be made up of companies in a number
of different industries. The Fund will only
concentrate its investments in a particular market
sector if the Advisor believes that the potential
investment return justifies the additional risk
associated with concentration in that sector.
The Fund may invest its assets in fewer than 25
companies. This strategy may increase the volatility
of investment performance and the Fund could incur
greater losses than funds that invest in a greater
number of issuers.
Portfolio Turnover
A change in the investments held by the Fund is
known as "portfolio turnover." The Fund's historical
portfolio turnover rate is listed under "Financial
Highlights." The annual portfolio turnover rate for
the Fund is expected to be between 300 and 500%, but
generally will not exceed 800%. High portfolio
turnover generally involves above-average expenses to
the Fund, including brokerage commissions or dealer
mark-ups and other transaction costs on the sale of
securities and reinvestment in other securities. In
addition, the short-term gains realized from these
transactions are taxable to shareholders as ordinary
income. In fact, it is possible that 100% of all
capital gains and losses in any fiscal year may qualify
as short-term.
Temporary Strategies
Prior to investing the proceeds from sales of Fund
shares, to meet ordinary daily cash needs, and to
retain the flexibility to respond promptly to changes
in market and economic conditions, the Advisor may hold
cash and/or invest up to 35% of the Fund's total assets
in short-term fixed-income securities issued by private
and governmental institutions. It is impossible to
predict when or for how long the Advisor may employ
such strategies. Short-term fixed income securities
must be rated at least A or higher by Standard & Poor's
("S&P"), Moody's Investors Service, Inc. ("Moody's") or
Fitch Investors Service, Inc. ("Fitch") or A- or higher
by Duff & Phelps, Inc. ("D&P"), and include without
limitation the following securities, each of which has
a stated maturity of one year or less from the date of
purchase unless otherwise indicated, or securities
which the Advisor deems to be of comparable quality to
rated securities: U.S. government securities,
including bills, notes and bonds, differing as to
maturity and rate of interest, which are either issued
or guaranteed by the U.S. Treasury or by U.S.
governmental agencies or instrumentalities;
certificates of deposit issued against funds deposited
in a U.S. bank or savings and loan association; bank
time deposits,
<PAGE>
which are monies kept on deposit with
U.S. banks or savings and loan associations for a
stated period of time at a fixed rate of interest;
bankers' acceptances which are short-term credit
instruments used to finance commercial transactions;
commercial paper and commercial paper master notes
(which are demand instruments without a fixed maturity
bearing interest at rates which are fixed to known
lending rates and automatically adjusted when such
lending rates change) rated A-1 or better by S&P, Prime-
1 or better by Moody's, Duff 2 or higher by D&P, or
Fitch 2 or higher by Fitch; and repurchase agreements
entered into only with respect to obligations of the
U.S. government, its agencies or instrumentalities.
Repurchase agreements could involve certain risks in
the event of default or insolvency of the other party
to the agreement, including possible delays or
restrictions upon the Fund's ability to dispose of the
underlying securities. Additionally, the Fund may
invest in short-term investment vehicles of a custodian
bank.
ADRs
The Fund may invest up to 20% of its net assets in
American Depositary Receipts ("ADRs") or other foreign
instruments denominated in U.S. dollars. ADRs are
receipts typically issued by a U.S. bank or trust
company evidencing ownership of the underlying foreign
security and denominated in U.S. dollars. Some
institutions issuing ADRs may not be sponsored by the
issuer. A non-sponsored depository may not provide the
same shareholder information that a sponsored
depository is required to provide under the contractual
arrangements with the issuer, including reliable
financial statements.
Investments in securities of foreign issuers
involve risks which are in addition to the usual risks
inherent in domestic investments. In many countries
there is less publicly available information about
issuers than is available in the reports and ratings
published about companies in the United States.
Additionally, foreign countries are not subject to
uniform accounting, auditing and financial reporting
standards. Other risks inherent in foreign investments
include expropriation; confiscatory taxation;
withholding taxes on dividends and interest; less
extensive regulation of foreign brokers, securities
markets and issuers; costs incurred in conversions
between currencies; the possibility of delays in
settlement in foreign securities markets; limitations
on the use or transfer of assets (including suspension
of the ability to transfer currency from a given
country); the difficulty of enforcing obligations in
other countries; diplomatic developments; and political
or social instability. Foreign economies may differ
favorably or unfavorably from the U.S. economy in
various respects, and many foreign securities are less
liquid and their prices are more volatile than
comparable U.S. securities. From time to time, foreign
securities may be difficult to liquidate rapidly
without adverse price effects. Certain costs
attributable to foreign investing, such as custody
charges and brokerage costs, are higher than those
attributable to domestic investing. Although the
Fund's investments will be denominated in U.S. dollars,
the underlying foreign securities will be denominated
in foreign currency. Accordingly, the value of the
Fund's assets will increase or decrease in response to
fluctuations in the value of those foreign currencies.
Investment OBJECTIVE AND Restrictions
The Fund's investment objective is capital
appreciation. This investment objective is fundamental
and cannot be changed without shareholder approval.
Under normal market conditions, the Fund will attempt
to achieve this objective by investing at least 65% of
its total assets in common stocks of companies which
the Advisor characterizes as "growth" companies. There
can be no assurance that the Fund will achieve its
investment objective or that shares in the Fund will be
worth more at redemption than at acquisition. The Fund
may also hold cash and money market instruments to
provide the Fund with liquidity and flexibility.
In addition, the Fund has adopted certain
fundamental investment restrictions that, like the
Fund's investment objective, may not be changed without
shareholder approval.
Limitation on Borrowing: The Fund may (i) borrow
money from banks for temporary or emergency purposes
(but not for leverage or the purchase of investments)
and (ii) make other investments or engage in other
transactions permissible under the 1940 Act, provided
that the combination of (i) and (ii) shall not exceed
33-1/3% of the value of the Fund's total assets
(including the amount borrowed), less the Fund's
<PAGE>
liabilities (other than borrowings). The Fund may also
borrow money from other persons to the extent permitted
by applicable law.
Limitation on Lending: The Fund may not make
loans if, as a result, more than 33-1/3% of the Fund's
total assets would be lent to other persons, except
through purchases of debt securities or other debt
instruments or engaging in repurchase agreements.
Limitation on "Senior Securities": The Fund may
not issue senior securities, except as permitted under
the 1940 Act.
All of the Fund's fundamental investment
restrictions are described in the Fund's SAI.
FUND ORGANIZATION AND MANAGEMENT
Organization
The Fund is a series of common stock of a
corporation, Grand Prix Funds, Inc. ("Corporation"), a
Maryland company incorporated on October 30, 1997. The
Corporation is authorized to issue shares of common
stock in series and classes. Each share of common
stock is entitled to one vote, and each share is
entitled to participate equally in dividends and
capital gains distributions. No certificates will be
issued for shares held in your account. You will,
however, have full shareholder rights. Generally, the
Fund will not hold annual shareholders' meetings unless
required by the 1940 Act or Maryland Law. As of
October 31, 1998, Target Capital Management, Ltd., an
affiliate of the Advisor, and Robert Zuccaro as
custodian for the benefit of Marc Zuccaro UTMA owned a
controlling interest in the Fund.
Management
Under the laws of the State of Maryland, the Board
of Directors of the Corporation is responsible for
managing its business and affairs. The Corporation has
entered into an Investment Advisory Agreement with the
Advisor under which the Advisor manages the Fund's
investments and business affairs, subject to the
supervision of the Corporation's Board of Directors.
Advisor
The Advisor is a Florida corporation organized in
February 1992 and has been serving clients since 1983.
The Advisor is controlled by Robert Zuccaro who owns
80% of the Advisor. Under the Investment Advisory
Agreement, the Corporation pays the Advisor an annual
management fee of 1.00% of the Fund's average daily net
assets. The advisory fee is accrued daily and paid
monthly. For the year ending December 31, 1998, the
Advisor has agreed to waive its management fee and/or
reimburse the Fund's operating expenses to the extent
necessary to ensure that the Fund's total operating
expenses do not exceed 1.65% of the Fund's average
daily net assets. After such date, the Advisor may
voluntarily waive all or a portion of its management
fee and/or absorb certain Fund expenses without further
notification of the commencement or termination of such
waiver or absorption. Any waivers or absorptions will
have the effect of temporarily lowering the Fund's
overall expense ratio and increasing the Fund's overall
return to investors. Under the Investment Advisory
Agreement, not only is the Advisor responsible for
management of the Fund's assets, but also for portfolio
transactions and brokerage.
Portfolio Manager
President of the Advisor, Robert Zuccaro received
a Bachelor's Degree from the University of Bridgeport
in 1965 and a Master's in Business Administration from
Pace University in 1968. Prior to founding Advisor in
1983, Mr. Zuccaro spent six years with Axe-Houghton,
where he was President and Director of Axe-Houghton
Stock Fund and Vice President and Director of portfolio
management of E.W. Axe & Co. Mr. Zuccaro is a
Chartered Financial Analyst.
<PAGE>
Custodian and Transfer Agent
Fifth Third Bank ("Fifth Third") acts as custodian
of the Fund's assets ("Custodian"). Sunstone Investor
Services, LLC, 207 East Buffalo Street, Suite 315,
Milwaukee, Wisconsin 53202-5712, serves as transfer
agent for the Fund ("Transfer Agent").
Administrator
Pursuant to an Administration and Fund Accounting
Agreement, Sunstone Financial Group, Inc.
("Administrator") performs certain administrative and
tax reporting functions for the Fund, including
preparing and filing federal and state tax returns,
preparing and filing securities registration compliance
filings with various states, compiling data for and
preparing notices to the SEC, preparing financial
statements for the annual and semi-annual reports to
the SEC and current investors, monitoring the Fund's
expense accruals and performing securities valuations
and, from time to time, monitoring the Fund's
compliance with the Fund's investment policies and
restrictions. For these services, the Administrator
receives from the Fund a fee, computed daily and
payable monthly, based on the Fund's average net assets
at an annual rate beginning at 0.20% and decreasing as
the assets of the Fund reach certain levels, subject to
an annual minimum of $65,000, plus out-of-pocket
expenses.
Distributor
AmeriPrime Financial Securities, Inc., 1793
Kingswood Drive, Suite 200, Southlake, Texas 76092, a
registered broker-dealer and member of the NASD, acts
as distributor of the Fund's shares ("Distributor").
As compensation for its services, the Distributor may
retain a portion of (i) the initial sales charge from
purchases of Fund shares, and (ii) the Rule 12b-1 fees.
The Distributor may pay all or a portion of its fee to
registered dealers who sell Fund shares, pursuant to a
written dealer agreement. Distributor and Advisor, at
their own expense, may also periodically sponsor
programs that offer additional compensation in
connection with the sale of Fund shares. In some
circumstances, this compensation may be made available
only to certain dealers whose representatives have sold
or are expected to sell significant amounts of Fund
shares.
Fund Expenses
The Fund is responsible for its own expenses,
including interest charges; taxes; brokerage
commissions; organizational expenses; expenses of
qualifying shares for sale with the states and the SEC;
expenses of issue, sale, repurchase, or redemption of
shares; expenses of printing and distributing reports
and prospectuses to existing shareholders; charges of
custodians; expenses for accounting, administrative,
audit, and legal services; fees for outside directors;
expenses of fidelity bond coverage and other insurance;
expenses of indemnification; extraordinary expenses;
and costs of shareholder and director meetings.
YOUR ACCOUNT
Purchasing Shares
In General. Shares of the Fund may be purchased
through any dealer which has entered into a sales
agreement with the Distributor, or through the
Distributor directly. The Transfer Agent may also
accept purchase applications.
Shares of the Fund are offered and sold on a
continual basis at the next offering price (the
"Offering Price"), which is the sum of the net asset
value per share (next computed following receipt of a
purchase request in good order by a dealer, the
Distributor or the Transfer Agent, as the case may be)
and the sales charge as set forth below. See
"Determination of Net Asset Value." The sales charge
imposed on purchases of Fund shares is as follows:
<PAGE>
Total Sales Charge
As a As a Portion of
Your Investment Percentage Percentage Offering Price
of Offering of Your Retained by
Price Investment Dealers *
Less than $50,000 5.25% 5.54% 5.00%
$50,000-$100,000 4.50% 4.71% 4.50%
$100,001-$250,000 3.50% 3.63% 3.50%
$250,001-$500,000 2.50% 2.56% 2.50%
$500,001-$1,000,000 2.00% 2.04% 2.00%
$1,000,001 or None None None
more
_____________________
*All sales charges may at times be paid to the
dealer involved in the trade, if any. A dealer
that is paid all or substantially all of the
sales charge may be deemed an "underwriter"
under the Securities Act of 1933, as amended.
Certain investors, as described below under "Sales
Charge Waivers," may purchase Fund shares without the
imposition of a sales charge. In addition, no sales
charge is imposed on the reinvestment of dividends and
capital gains.
In addition to the sales charge described above,
Fund shares are also subject to Rule 12b-1 fees in an
aggregate amount of 0.25% of the average daily net
assets of the Fund. See "Distribution and Shareholder
Servicing Plan."
Sales Charge Waivers. The following investors may
purchase shares of the Fund at net asset value without
the imposition of any sales charge:
certain retirement plans, such as profit-sharing,
pension, 401(k) and simplified employee pension plans
(SEPs and SIMPLEs), subject to minimum requirements
with respect to the amount of purchase (minimum of at
least $100,000);
beneficial owners of wrap accounts who are clients
of registered broker-dealers having a selling or
service agreement with the Distributor;
persons who roll-over their individual retirement
accounts ("IRAs"), subject to minimum requirements with
respect to the amount of purchase (minimum of at least
$20,000);
registered investment advisors or certified
financial planners who have entered into an agreement
with the Distributor for clients participating in
comprehensive fee programs;
clients of fee only financial planners;
owners of private accounts managed by the Advisor
who completely liquidate their private accounts and
purchase Fund shares within 90 days of the liquidation;
any person who purchases shares of the Fund with
redemption proceeds from a registered investment
company other than the Fund and on which the investor
paid a contingent deferred sales charge, provided that
the proceeds are invested in the Fund within 10 days of
the redemption;
directors, officers and full-time employees of the
Fund, the Distributor, the Administrator and affiliates
of such companies (including the Advisor) and spouses
and family members of such persons;
<PAGE>
persons who have taken a distribution from a
retirement plan invested in Fund shares, to the extent
of the distribution, provided that the distribution is
reinvested within 90 days of the payment date;
government entities that are prohibited from
paying mutual fund sales charges;
registered broker-dealers who have entered into a
selling or service agreement with the Distributor for
their investment account only, and registered personnel
and employees of such broker-dealers and the spouses
and family members of such persons, in accordance with
the internal policies and procedures of the broker-
dealer;
service providers of the Fund, including marketing
firms, and their employees;
trust companies investing $1 million or more for
common trust or collective investment funds; and
registered investment companies.
Please call the Fund at 1-800-432-4741 for more
information on purchases of Fund shares at net asset
value.
Minimum Investment. Required minimum investments
are as follows:
ADDITIONAL
INITIAL MINIMUM
TYPE OF ACCOUNT MINIMUM INVESTMENT
INVESTMENT
Regular $5,000 $1,000
Automatic Investment $5,000 $1,000
Plan
Gift to Minors $5,000 $1,000
IRAs $5,000 $1,000
The Fund reserves the right to reject any order
for the purchase of its shares or to limit or suspend,
without prior notice, the offering of its shares. The
required minimum investments may be waived in the case
of qualified retirement plans. The Fund will not
accept your account if you are investing for another
person as attorney-in-fact. The Fund also will not
accept accounts with a "Power of Attorney" or "POA" in
the registration section of the Purchase Application.
Opening an Account by Mail. Please complete the
Purchase Application. You may duplicate any
application or you can obtain additional copies of the
Purchase Application from the Fund by calling
1-800-432-4741.
Your completed Purchase Application should be
mailed directly to:
Grand Prix Funds, Inc.
P.O. Box 1177
Milwaukee, WI 53201-1177
To purchase shares by overnight or express mail,
please use the following street address:
Grand Prix Funds, Inc.
c/o Sunstone Investor Services, LLC
207 East Buffalo Street, Suite 315
Milwaukee, WI 53202-5712
<PAGE>
All applications must be accompanied by payment in
the form of a check made payable to "Grand Prix Funds."
All purchases must be made in U.S. dollars and checks
must be drawn on U.S. banks. No cash, credit cards or
third party checks will be accepted. Payment may be
delayed for up to 10 calendar days on redemption
requests for recent purchases made by check in order to
ensure that the check has cleared. If you contemplate
redeeming your investment shortly after purchase, you
should purchase the shares by wire as discussed below.
Opening an Account by Wire. You may make
purchases by direct wire transfers. To ensure proper
credit to your account, you must call the Fund at
1-800-432-4741 for instructions and to obtain an
investor account number prior to wiring funds. Funds
should be wired through the Federal Reserve System as
follows:
Fifth Third Bank
A.B.A. Number: 042000314
For credit to: Grand Prix Funds
Account Number: 729-00729
For further credit to:
(investor account number)
(name or account registration)
(Social Security or Taxpayer Identification
Number)
A Purchase Application must be received by the
Fund to establish privileges and to verify your account
information. Payment of redemption proceeds may be
delayed and taxes may be withheld unless the Fund
receives a properly completed and executed purchase
application. The Fund reserves the right to refuse a
telephone transaction if it believes it advisable to do
so. If you have any questions, please call the Fund at
1-800-432-4741.
Adding to an Account by Mail. When adding to an
account by mail, you should send your check to the
Fund, together with a subsequent investment slip from a
recent statement. If this investment slip is
unavailable, you should send a signed note giving the
full name of the account and the account number. See
"Additional Purchase Information" for more information
regarding purchases made by check or electronic funds
transfer.
Adding to an Account by Electronic Funds Transfer.
You may also make additional investments by telephone
or in writing through electronic funds transfers if you
have previously selected this service. By selecting
this service, you authorize the Fund to draw on your
preauthorized bank account as shown on the records of
the Fund and receive the proceeds by electronic funds
transfer. Electronic funds transfers may be made
commencing 10 business days after receipt by the Fund
of your request to adopt this service. This time
period allows the Fund to verify your bank information.
Investments made by electronic funds transfer in any
one account must be in an amount of at least $1,000 and
will be effective at the net asset value next computed
after receipt by the Fund of the proceeds from your
bank account. See "Additional Purchase Information"
for more information. Changes to bank information must
be made in writing and signed by all registered holders
of the account with the signatures guaranteed by a
commercial bank or trust company in the United States,
a member firm of the NASD or other eligible guarantor
institution. A Notary Public is not an acceptable
guarantor. This service may be selected by calling the
Fund at 1-800-432-4741 for the necessary form and
instructions.
Adding to an Account by Wire. For additional
investments made by wire transfer, you should use the
wiring instructions listed previously. Be sure to
include your account number. Wired funds are
considered received in good order on the day they reach
the Fund's bank account by the Fund's cut-off time for
purchases and all required information is provided in
the wire instructions. The wire instructions will
determine the terms of the purchase transaction.
Automatic Investment Plan. You may make purchases
of shares of the Fund automatically on a regular basis
($1,000 minimum per transaction). You must meet the
Fund's minimum initial investment of $5,000 before the
Automatic Investment Plan ("AIP") may be established.
Under the AIP, your designated bank or other financial
institution debits a preauthorized amount on your
account each designated period and applies the amount
to the purchase of Fund shares. The Fund requires 10
business days after receipt of your request to initiate
the AIP to
<PAGE>
verify your account information. Generally,
the AIP will begin on the next transaction date
scheduled by the Fund for the AIP following this 10
business day period. AIP transactions are scheduled
for the fifth, tenth, fifteenth, twentieth, twenty-
fifth and/or the last day of every month. AIP
transactions also may be scheduled monthly, quarterly
or annually. The AIP can be implemented with any
financial institution that is a member of the Automated
Clearing House. No service fee is currently charged by
the Fund for participation in the AIP. You will
receive a statement on a quarterly basis showing the
purchases made under the AIP. A $23 fee will be
imposed by the Fund if for any reason the transaction
cannot be completed. You will also be responsible for
any losses suffered by the Fund as a result. When a
purchase is made pursuant to the AIP, and a redemption
of such shares is requested shortly thereafter, the
Fund may delay payment of the redemption proceeds until
the Fund verifies that the proceeds used to purchase
the shares were properly debited from your designated
bank or other financial institution. You may adopt the
AIP at the time an account is opened by completing the
appropriate section of the Purchase Application. You
may obtain an application to establish the AIP after an
account is opened by calling the Fund at 1-800-432-
4741. A signature guarantee is required. Under
certain circumstances (such as discontinuation of the
AIP before the Fund's minimum initial investment is
reached), the Fund reserves the right to redeem your
Fund account. Prior to closing any account for failure
to reach the minimum initial investment, the Fund will
give you written notice and 60 days in which to
reinstate the AIP or otherwise reach the minimum
initial investment. Closing of an account may occur in
periods of declining share prices. Changes to bank
information must be made in writing and signed by all
registered holders of the account with the signatures
guaranteed by a commercial bank or trust company in the
United States, a member firm of the NASD or other
eligible guarantor institution. A Notary Public is not
an acceptable guarantor.
Purchasing Shares Through Other Broker-Dealers.
If the securities dealer you have chosen to purchase
Fund shares through has not entered into a sales
agreement with the Distributor, such dealer may,
nevertheless, offer to place your order for the
purchase of Fund shares. Purchases made through such
dealers will be affected at the applicable Offering
Price. Such dealers may also charge a transaction fee,
as determined by the dealer. That fee will be in
addition to the sales charge payable by you upon
purchase of such shares and may be avoided if shares
are purchased through a dealer who has entered into a
sales agreement with the Distributor or through the
Transfer Agent.
Additional Purchase Information. When a purchase
is made by check and a redemption is requested shortly
thereafter, payment may be delayed for up to 10
calendar days on redemption requests for recent
purchases made by check in order to ensure that the
check has cleared. This delay allows the Fund to
verify that proceeds used to purchase Fund shares will
not be returned due to insufficient funds and is
intended to protect the remaining investors from loss.
The Fund will charge a $23 service fee against your
account for any check or electronic funds transfer that
is returned unpaid and your purchase will be canceled.
You will also be responsible for any losses suffered by
the Fund as a result.
New shareholders of the Fund are automatically
provided with the privilege to initiate telephone
inquiries and redemptions unless expressly waived by
the shareholder. Consequently, Purchase Applications
provide that investors automatically authorize the
telephone privileges unless they check the appropriate
box on the Purchase Application to waive the privilege.
If you have any questions as to how to waive this
privilege, or how to add or delete a privilege after an
account is established, please call the Fund at
1-800-432-4741. Generally, after the account has been
established, a request to authorize, waive, add or
delete a privilege must be in writing and signed by
each registered holder of the account with signatures
guaranteed by a commercial bank or trust company in the
United States, a member of the NASD or other eligible
guarantor institution. A Notary Public is not an
acceptable guarantor. For a more detailed discussion
of the rights, responsibilities and risks of telephone
transactions, please refer to "Redeeming by Telephone."
In order to relieve you of responsibility for the
safekeeping and delivery of stock certificates, the
Fund does not issue certificates.
<PAGE>
Redeeming Shares
In General. You may redeem shares of the Fund at
any time. The price at which the shares will be
redeemed is the net asset value per share next
determined after proper redemption instructions are
received by the Fund. See "Determination of Net Asset
Value." There are no sales charges for the redemption
of shares except that a fee of $10 is charged for each
wire redemption. Depending upon the redemption price
you receive, you may realize a capital gain or loss for
federal income tax purposes.
Redeeming by Mail. To redeem shares by mail,
simply send an unconditional written request to the
Fund specifying the number of shares or dollar amount
to be redeemed, the name(s) on the account registration
and the account number. If the dollar amount requested
to be redeemed is greater than the current account
value as determined by the net asset value on the
effective date of the redemption, the entire account
balance will be redeemed. A request for redemption
must be signed exactly as the shares are registered.
If the amount requested is greater than $10,000, the
proceeds are to be sent to a person other than the
shareholder(s) of record, to a location other than the
address of record or is made within 30 days of an
address change, each signature must be guaranteed by a
commercial bank or trust company in the United States,
a member firm of the NASD or other eligible guarantor
institution. A Notary Public is not an acceptable
guarantor. Additional documentation may be required
for the redemption of shares held in corporate,
partnership or fiduciary accounts. See "Additional
Redemption Information" for instructions on redeeming
shares in corporate accounts. Additional documentation
is required for the redemption of shares held by
persons acting pursuant to a Power of Attorney.
The Fund will mail payment for redemption proceeds
within seven days after it receives proper instructions
for redemption. However, the Fund may delay payment on
redemptions of recent purchases made by check until the
Fund verifies that the check used to purchase Fund
shares will not be returned due to insufficient funds.
This is intended to protect the remaining investors
from loss.
Redeeming by Telephone. Shares may be redeemed,
in an amount up to $10,000, by calling the Fund at
1-800-432-4741. Proceeds redeemed by telephone will be
mailed to your address, or wired or transmitted by
electronic funds transfer to your preauthorized bank
account as shown on the records of the Fund. A
redemption request in excess of $10,000 must be made in
writing and signed by each registered holder of the
account with signatures guaranteed by a commercial bank
or trust company in the United States, a member firm of
the NASD or other eligible guarantor institution. A
Notary Public is not an acceptable guarantor. For
telephone redemption requests received within 30
calendar days after an address change, proceeds may be
retained for up to 30 days or until a written request
with signatures guaranteed is received. A redemption
request within that 30 day time period must be in
writing and signed by each registered holder of the
account with signatures guaranteed. A Notary Public is
not an acceptable guarantor. Telephone redemptions
must be in amounts of $1,000 or more.
Payment of the redemption proceeds for Fund shares
redeemed by telephone when you request wire payment
will normally be made in federal funds on the next
business day. There is currently a $10 fee for each
wire redemption. It will be deducted from your
redemption proceeds. Electronically transferred funds
will ordinarily arrive at your bank within two to three
banking days after transmission. To change the
designated account, send a written request with the
signature(s) guaranteed to the Fund. Once the funds
are transmitted, the time of receipt and the
availability of the funds are not within the Fund's
control. The Fund reserves the right to delay payment
for a period of up to seven days after receipt of the
redemption request.
The Fund reserves the right to refuse a telephone
redemption request if it believes it is advisable to do
so. Procedures for redeeming shares of the Fund by
telephone may be modified or terminated by the Fund at
any time. In an effort to prevent unauthorized or
fraudulent redemption requests by telephone, the Fund
has implemented procedures designed to reasonably
assure that telephone instructions are genuine. These
procedures include: requesting verification of certain
personal information; recording telephone transactions;
confirming transactions in writing; and restricting
transmittal of redemption proceeds to preauthorized
designations. Other procedures may be implemented from
time to time. If reasonable procedures are not
implemented, the Fund may be liable for any loss
<PAGE>
due to
unauthorized or fraudulent transactions. In all other
cases, you are liable for any loss for unauthorized
transactions.
You should be aware that during periods of
substantial economic or market change, telephone or
wire redemptions may be difficult to implement. If
you are unable to contact the Fund by telephone, you
may also redeem shares by delivering or mailing the
redemption request to: Grand Prix Funds, Inc., P.O. Box
1177, Milwaukee, WI 53201-1177. If you wish to send
the information via overnight delivery, you may send it
to: Grand Prix Funds, Inc., c/o Sunstone Investor
Services, LLC, 207 East Buffalo Street, Suite 315,
Milwaukee, WI 53202-5712. Redemption requests made via
fax will not be accepted by the Fund.
Redeeming Shares Through Other Broker-Dealers.
Investors may be charged a fee if they redeem shares of
the Fund through a broker or dealer.
Additional Redemption Information. When a
purchase is made by check and a redemption is requested
shortly thereafter, payment may be delayed on
redemption requests for recent purchases made by check
until the Fund verifies that proceeds used to purchase
Fund shares will not be returned due to insufficient
funds. This is intended to protect the remaining
investors from loss.
New shareholders of the Fund are automatically
provided with the privilege to initiate telephone
inquiries and redemptions unless expressly waived by
the shareholder. Consequently, Purchase Applications
provide that investors automatically authorize the
telephone privileges unless they check the appropriate
box on the Purchase Application to waive the privilege.
If you have any questions as to how to waive this
privilege, or how to add or delete a privilege after an
account is established, please call the Fund at
1-800-432-4741. Generally, after the account has been
established, a request to authorize, waive, add or
delete a privilege must be in writing and signed by
each registered holder of the account with signatures
guaranteed by a commercial bank or trust company in the
United States, a member of the NASD or other eligible
guarantor institution. A Notary Public is not an
acceptable guarantor. For a more detailed discussion
of the rights, responsibilities and risks of telephone
transactions, please refer to "Redeeming by Telephone."
Any redemption or transfer of ownership request
for corporate accounts will require the following
written documentation:
1. A written letter of instruction signed by the
required number of authorized officers, along
with their respective positions. For
redemption requests in excess of $10,000, the
written request must be signature guaranteed.
A signature guarantee may be obtained from a
commercial bank or trust company in the United
States, a member firm of the NASD or other
guarantor and "Signature Guaranteed" must
appear with the signature. A Notary Public is
not an acceptable guarantor.
2. A certified Corporate Resolution that states
the date the Resolution was adopted and who is
empowered to act, transfer or sell assets on
behalf of the corporation.
3. If the Corporate Resolution is more than 60
days old from the date of the transaction
request, a Certificate of Incumbency from the
Corporate Secretary which specifically states
that the officer or officers named in the
resolution have the authority to act on the
account. The Certificate of Incumbency must be
dated within 60 days of the requested
transaction. If the Corporate Resolution
confers authority on officers by title and not
by name, the Certificate of Incumbency must
name the officer(s) and their title(s).
The Fund reserves the right to suspend or postpone
redemptions during any period when: trading on the
Exchange is restricted, as determined by the SEC, or
the Exchange is closed for other than customary weekend
and holiday closing; the SEC has by order permitted
such suspension; or an emergency, as determined by the
SEC, exists, making disposal of portfolio securities or
valuation of net assets of the Fund not reasonably
practicable.
<PAGE>
Due to the relatively high cost of maintaining
small accounts, if your account balance falls below the
$5,000 minimum as a result of a redemption, you may be
given a 60-day notice to reestablish the minimum
balance. If this requirement is not met, your account
may be closed and the proceeds sent to you.
Shareholder Reports And Information
The Fund will provide the following statements and
reports:
Confirmation Statements. Except for AIP
transactions, after each transaction that affects the
account balance or account registration, you will
receive a confirmation statement. Participants in the
AIP will receive quarterly confirmations of all
automatic transactions.
Account Statements. All shareholders will receive
quarterly account statements. If you need additional
copies of previous statements, you may order statements
for the current and preceding year at no charge.
Statements for earlier years are available for $5 each.
Call 1-800-432-4741 to order past statements. If you
need information on your account with the Fund or if
you wish to submit any applications, redemption
requests, inquiries or notifications, you should
contact: Grand Prix Funds, Inc., P.O. Box 1177,
Milwaukee, WI 53201-1177 or call 1-800-432-4741. If
you wish to send the information via overnight
delivery, you may send it to: Grand Prix Funds, Inc.,
c/o Sunstone Investor Services, LLC, 207 East Buffalo
Street, Suite 315, Milwaukee, WI 53202-5712.
Financial Reports. Financial reports are provided
to shareholders semi-annually. Annual reports will
include audited financial statements. To reduce Fund
expenses, one copy of each report will be mailed to
each Taxpayer Identification Number even though the
investor may have more than one account in the Fund.
DETERMINATION OF NET ASSET VALUE
The net asset value per share is determined as of
the close of trading (generally 4:00 p.m. Eastern Time)
on each day the Exchange is open for business.
Purchase orders and redemption requests received in
good order on a day the Exchange is open for trading,
prior to the close of trading on that day, will be
valued as of the close of trading on that day.
Applications for purchase of shares and requests for
redemption of shares received after the close of
trading on the Exchange will be valued as of the close
of trading on the next day the Exchange is open. The
Fund is not required to calculate its net asset value
on days during which the Fund receives no orders to
purchase or redeem shares. Net asset value per share
is calculated by taking the fair value of the Fund's
total assets, including interest or dividends accrued,
but not yet collected, less all liabilities, and
dividing by the total number of shares outstanding.
The result, rounded to the nearest cent, is the net
asset value per share.
In determining net asset value, expenses are
accrued and applied daily and securities and other
assets for which market quotations are available are
valued at fair value. Common stocks and other equity-
type securities are valued at the last sales price on
the national securities exchange or Nasdaq on which
such securities are primarily traded; however,
securities traded on a national securities exchange or
Nasdaq for which there were no transactions on a given
day, and securities not listed on a national securities
exchange or Nasdaq, are valued at the average of the
most recent bid and asked prices. Any securities or
other assets for which market quotations are not
readily available are valued at fair value as
determined in good faith by the Board of Directors of
the Corporation or its delegate. The Board of
Directors may approve the use of pricing services to
assist the Fund in the determination of net asset
value. All money market instruments with maturities
less than 60 days will be valued on an amortized cost
basis.
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN
The Fund has adopted a plan pursuant to Rule 12b-1
under the 1940 Act (the "12b-1 Plan"), which authorizes
it to pay the Distributor a distribution and
shareholder servicing fee of up to 0.25% of the average
daily net assets. All
<PAGE>
or a portion of the fee may be
used by the Distributor to finance activities primarily
intended to result in the sale of Fund shares. The
Distributor is authorized to, in turn, pay all or a
portion of these fees to any registered securities
dealer, financial institution, or other person
("Recipient") who renders assistance in distributing or
promoting the sale of Fund shares, or who provides
certain shareholder services to Fund shareholders,
pursuant to a written agreement ("Rule 12b-1 Related
Agreement"). The 12b-1 Plan is a "reimbursement" plan,
which means that the fees paid by the Fund under the
Plan are intended as reimbursement for services
rendered and commission fees borne up to the maximum
allowable distribution and shareholder servicing fees.
If more money for services rendered and commission fees
is due than is immediately payable because of the
expense limitation under the Plan, the unpaid amount is
carried forward from period to period while the Plan is
in effect until such time as it may be paid. No
interest, carrying, or other finance charges will be
borne by the Fund with respect to unpaid amounts
carried forward. Payment of the distribution and
servicing fees is to be made quarterly, within 30 days
after the close of the quarter for which the fee is
payable.
The 12b-1 Plan, including a form of the 12b-1
Related Agreement, has been unanimously approved by the
Board of Directors of the Corporation, including all of
the members of the Board who are not "interested
persons" of the Corporation as defined in the 1940 Act
and who have no direct or indirect financial interest
in the operation of the 12b-1 Plan or any related
agreements ("Disinterested Directors") voting
separately.
The 12b-1 Plan, and any Rule 12b-1 Related
Agreement which is entered into, will continue in
effect for a period of more than one year only so long
as its continuance is specifically approved at least
annually by a vote of a majority of the Corporation's
Board of Directors, and of the Disinterested Directors,
cast in person at a meeting called for the purpose of
voting on the 12b-1 Plan, or the Rule 12b-1 Related
Agreement, as applicable. In addition, the 12b-1 Plan,
and any Rule 12b-1 Related Agreement, may be terminated
without penalty, by vote of a majority of the Fund's
outstanding voting securities, or by vote of a majority
of Disinterested Directors (on not more than sixty (60)
days' written notice in the case of the Rule 12b-1
Related Agreement only).
INDIVIDUAL RETIREMENT ACCOUNTS
Individuals may establish their own tax-sheltered
IRAs. The Fund offers two types of IRAs, a Traditional
IRA and a Roth IRA.
Traditional IRA
In a Traditional IRA, amounts contributed to the
IRA may be tax deductible at the time of contribution
depending on whether the investor is an "active
participant" in an employer-sponsored retirement plan
and the investor's income. Distributions from a
Traditional IRA will be taxed at distribution except to
the extent that the distribution represents a return of
the investor's own contributions for which the investor
did not claim (or was not eligible to claim) a
deduction. Distributions prior to age 59-1/2 may be
subject to an additional 10% tax applicable to certain
premature distributions. Distributions must commence
by April 1 following the calendar year in which the
investor attains age 70-1/2. Failure to begin
distributions by this date (or distributions that do
not equal certain minimum thresholds) may result in
adverse tax consequences.
Roth IRA
In a Roth IRA, amounts contributed to the IRA are
taxed at the time of contribution, but distributions
from the IRA are not subject to tax if the investor has
held the IRA for at least five years and the
distributions are on account of one of four specified
events, i.e., attainment of age 59-1/2, disability, the
purchase of a first home or death. Investors whose
income exceeds certain limits are ineligible to
contribute to a Roth IRA. Distributions that do not
satisfy the requirements for tax-free withdrawal are
subject to income taxes (and possibly penalty taxes) to
the extent that the distribution exceeds the investor's
contributions to the IRA. The minimum distribution
rules applicable to Traditional IRAs do not apply
during the lifetime of the investor. Following the
death of the investor, certain minimum distribution
rules apply.
<PAGE>
For Traditional and Roth IRAs, the maximum annual
contribution generally is equal to the lesser of $2,000
or 100% of the investor's compensation (earned income).
An individual may also contribute to a Traditional IRA
or Roth IRA on behalf of his or her spouse provided
that the individual has sufficient compensation (earned
income). Contributions to a Traditional IRA reduce the
allowable contributions under a Roth IRA, and
contributions to a Roth IRA reduce the allowable
contribution to a Traditional IRA.
Under current IRS regulations, all IRA applicants
must be furnished a disclosure statement containing
information specified by the IRS. Applicants generally
have the right to revoke their account within seven
days after receiving the disclosure statement and
obtain a full refund of their contributions. The
custodian may, in its discretion, hold the initial
contributions uninvested until the expiration of the
seven-day revocation period. The custodian does not
anticipate that it will exercise its discretion but
reserves the right to do so.
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAX TREATMENT
The Fund intends to qualify for treatment as a
"Regulated Investment Company" under Subchapter M of
the Code and, if so qualified, will not be liable for
federal income taxes to the extent earnings are
distributed to shareholders on a timely basis.
However, for federal income tax purposes, all dividends
and distributions of net realized short-term capital
gains you receive from the Fund are taxable as ordinary
income, whether reinvested in additional shares or
received in cash, unless you are exempt from taxation
or entitled to a tax deferral. Distributions of net
realized long-term capital gains you receive from the
Fund, whether reinvested in additional shares or
received in cash, are taxable as a capital gain. The
capital gain holding period is determined by the length
of time the Fund has held the security and not the
length of time you have held shares in the Fund. You
will be informed annually as to the amount and nature
of all dividends and capital gains paid during the
prior year. Such capital gains and dividends may also
be subject to state or local taxes. If you are not
required to pay taxes on your income, you are generally
not required to pay federal income taxes on the amounts
distributed to you.
The Fund intends to pay dividends from net
investment income annually and to distribute all net
realized capital gains at least annually. In addition,
the Fund may make additional distributions if necessary
to avoid imposition of a 4% excise tax or other tax on
undistributed income and gains. Please note, however,
that the objective of the Fund is capital appreciation,
not the production of distributions. You should
measure the success of your investment by the value of
your investment at any given time and not by the
distributions you receive.
When a dividend or capital gain is distributed,
the Fund's net asset value decreases by the amount of
the payment. If you purchase shares shortly before a
distribution, you will be subject to income taxes on
the distribution, even though the value of your
investment (plus cash received, if any) remains the
same. All dividends and capital gain distributions
will automatically be reinvested in additional Fund
shares at the then prevailing net asset value unless
you specifically request that dividends or capital
gains or both be paid in cash. The election to receive
dividends or reinvest them may be changed by writing to
the Fund at Grand Prix Funds, Inc., P.O. Box 1177,
Milwaukee, WI 53201-1177. The election is effective
for distributions with a dividend record date on or
after the date on which the Fund receives notice of the
election.
If you do not furnish the Fund with your correct
social security number or taxpayer identification
number, the Fund is required by current federal law to
withhold federal income tax from your distributions
(including applicable Fund share reinvestments) and
redemption proceeds at a rate of 31%.
This section is not intended to be a full
discussion of federal income tax laws and the effect of
such laws on you. There may be other federal, state,
or local tax considerations applicable to a particular
investor. You are urged to consult your own tax
advisor.
<PAGE>
YEAR 2000 ISSUE
The Fund's operations depend on the seamless
functioning of computer systems in the financial
service industry, including those of the Advisor,
Custodian and Transfer Agent. Many computer systems in
use today cannot properly process date-related
information after December 31, 1999 because of the
method by which dates are encoded and calculated. This
failure, commonly referred to as the "Year 2000 Issue,"
could adversely affect the handling of security trades,
pricing and account servicing for the Fund.
The Advisor has made compliance with the Year 2000
Issue a high priority and is taking steps that it
believes are reasonably designed to address the Year
2000 Issue with respect to its computer systems. The
Advisor has also been informed that comparable steps
are being taken by the Fund's other major service
providers. The Advisor does not currently anticipate
that the Year 2000 Issue will have a material impact on
its ability to continue to fulfill its duties as
investment advisor to the Fund.
FUND PERFORMANCE
The Fund may from time to time compare its
investment results to various passive indices or other
mutual funds and cite such comparisons in reports to
shareholders, sales literature, and advertisements.
The results may be calculated on several bases,
including average annual total return, total return and
cumulative total return.
Average annual total return and total return
figures measure both the net investment income
generated by, and the effect of any realized and
unrealized appreciation or depreciation of, the
underlying investments in the Fund over a specified
period of time, assuming the reinvestment of all
dividends and distributions. Average annual total
return figures are annualized and therefore represent
the average annual percentage change over the specified
period. Total return figures are not annualized and
represent the aggregate percentage or dollar value
change over the period. Cumulative total return simply
reflects performance over a stated period of time.
<PAGE>
ADDITIONAL INFORMATION
DIRECTORS
Robert Zuccaro
Phillipp Villhauer
Mary Jane Boyle
Edward F. Ronan, Jr.
Dennis K. Waldman
OFFICERS
Robert Zuccaro, President
Phillipp Villhauer, Vice-President and Secretary
Mary Jane Boyle, Vice-President and Treasurer
Andrea Romstad, Vice-President
INVESTMENT ADVISOR
Target Holdings Corporation, d.b.a. Target
Investors, Inc.
15 River Road, Suite 220
Wilton, Connecticut 06897
CUSTODIAN
Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
ADMINISTRATOR
Sunstone Financial Group, Inc.
207 East Buffalo Street, Suite 400
Milwaukee, Wisconsin 53202
TRANSFER AGENT
Sunstone Investor Services, LLC
For overnight deliveries, use: For regular mail deliveries, use:
Grand Prix Funds, Inc. Grand Prix Funds, Inc.
c/o Sunstone Investor Services, LLC P.O. Box 1177
207 East Buffalo Street, Suite 315 Milwaukee, WI 53201-1177
Milwaukee, Wisconsin 53202-5712
INDEPENDENT AUDITORS
Ernst & Young LLP
111 East Kilbourn Avenue
Milwaukee, Wisconsin 53202
<PAGE>
DISTRIBUTOR
AmeriPrime Financial Securities, Inc.
1793 Kingswood Drive, Suite 200
Southlake, Texas 76092
LEGAL COUNSEL
Godfrey & Kahn, S.C.
780 N. Water Street
Milwaukee, Wisconsin 53202
