As filed with the Securities and Exchange Commission on September 30, 1998
Securities Act Registration No. 333-39133
Investment Company Act Registration No. 811-8461
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 1 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 [X]
Amendment No. 3 [X]
GRAND PRIX FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
Wilton Executive Campus
15 River Road, Suite 220
Wilton, Connecticut 06897
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code:
(203) 761-9600
Robert Zuccaro
Target Investors, Inc.
Wilton Executive Campus
15 River Road, Suite 220
Wilton, Connecticut 06897
(Name and Address of Agent for Service)
Copies to:
Carol A. Gehl
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202
It is proposed that this filing will become
effective (check appropriate box)
[ ] immediately upon filing pursuant to
paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[X] 60 days after filing pursuant to
paragraph (a)(1)
[ ] on (date) pursuant to paragraph
(a)(1)
[ ] 75 days after filing pursuant to
paragraph (a)(2)
[ ] on (date) pursuant to paragraph
(a)(2) of rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment
designates a new effective date for a
previously filed post-effective
amendment.
<PAGE>
CROSS REFERENCE SHEET
(Pursuant to Rule 481 showing the location in the
Prospectus and the Statement of Additional Information
of the responses to the Items of Parts A and B of Form
N-1A).
Caption or Subheading in
Prospectus or Statement
Item No. on Form N-1A of Additional Information
PART A - INFORMATION REQUIRED IN PROSPECTUS
1. Cover Page Cover Page
2. Synopsis Investor Expenses;
Highlights
3. Condensed Financial Financial Highlights
Information
4. General Description of Investment Strategy;
Registrant Implementation of
Policies and Risks; Investment
Objective and Restrictions;
Fund Organization and
Management
5. Management of the Fund Fund Organization and
Management
5A. Management's Discussion *
of Fund Performance
6. Capital Stock and Other Highlights; Fund
Securities Organization and
Management; Dividends, Capital
Gain Distributions and
Tax Treatment
7. Purchase of Securities Fund Organization and
Being Offered Management; Your Account;
Determination of Net Asset
Value; Distribution and
Shareholder Servicing Plan
8. Redemption or Repurchase Your Account;
Determination of Net Asset
Value
9. Pending Legal Proceedings *
PART B - INFORMATION REQUIRED IN STATEMENT OF
ADDITIONAL INFORMATION
10. Cover Page Cover Page
11. Table of Contents Table of Contents
<PAGE>
12. General Information *
and History
13. Investment Investment Objective and
Objectives and Policies Restrictions; Investment
Policies and Techniques; Fund
Transactions and Brokerage
14. Management of the Directors and Officers;
Fund Investment Advisor
15. Control Persons and Principal Shareholders;
Principal Holders of Directors and Officers
Securities
16. Investment Advisory Investment Advisor; Fund
and Other Services Organization and Management
(in Prospectus); Plan of
Distribution; Custodian,
Transfer Agent and Dividend-
Disbursing Agent; Independent
Auditors
17. Brokerage Allocation Fund Transactions and
and Other Practices Brokerage
18. Capital Stock and Included in Prospectus
Other Securities under the heading Fund
Organization and Management
19. Purchase, Redemption and Included in Prospectus
Pricing of Securities Being under the headings Your
Offered Account; Determination of Net
Asset Value; and in the
Statement of Additional
Information under the headings
Plan of Distribution and
Redemption in Kind
20. Tax Status Included in Prospectus
under the heading
Dividends, Capital Gain
Distributions and Tax
Treatment; and in the
Statement of Additional
Information under the heading
Taxes
21. Underwriters Distributor
22. Calculations of Performance
Performance Data Information
23. Financial Financial Statements
Statements
________________________
* Answer negative or inapplicable.
<PAGE>
PROSPECTUS
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 3
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 12
DETERMINATION OF NET ASSET VALUE 19
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN 20
INDIVIDUAL RETIREMENT ACCOUNTS 20
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAX TREATMENT 21
YEAR 2000 ISSUE 22
FUND PERFORMANCE 22
ADDITIONAL INFORMATION 23
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 $____ billion
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 5.25% (2)
(as a percentage of offering price)
Maximum Sales Load Imposed on Reinvested None
Dividends
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 0.40%
reimbursements)(4)
Total Operating Expenses (after waivers 1.65%
or reimbursements)(4)
____________
(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 are
estimated to be _____% and _____%, 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 $____
3 years $____
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 1.65%
to average net assets (3)(4)
Ratio of net investment (loss) (1.24)%
to average net assets (3)(4)
Portfolio turnover rate 295.56%
______________________
(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%.
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.
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
liabilities (other than borrowings). The Fund may also
borrow money from other persons to the extent permitted
by applicable law.
<PAGE>
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, ___________________ 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. 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.
The following tables set forth certain information
regarding rankings of the Advisor and the Fund by
investment industry groups.
As compared to all investment advisory firms by
CDA Investment Technologies (now know as Thomson
Financial Services CDA), the Advisor ranked as follows
for the periods indicated:
<PAGE>
Period Advisor's Advisor's
Return Ranking
1982 - 4th Quarter 37.2% 1
1983 - 12 months ending March 31 75.8% 4
1983 - 12 months ending June 30 115.5% 2
1983 - 12 months ending Sept. 30 75.3% 7
1986 - 1st Quarter 23.2% 7
1991 - 1st Quarter 50.0% 1
1991 - 2nd Quarter 11.2% 2
1991 - 9 months ending Sept. 30 79.3% 1
1991 - 12 months ending Dec. 31 110.5% 2
1992 - 12 months ending Sept. 30 33.6% 2
1992 - 12 months ending Dec. 31 42.8% 4
1993 - 3 years ending March 31 150.9% 2
1993 - 3 years ending June 30 138.2% 2
1993 - 3 years ending Sept. 30 354.7% 1
1993 - 5 years ending Sept. 30 313.7% 1
1995 - 5 years ending Sept. 30 410.0% 1
As compared to all investment advisory firms in
the Pension Group East as determined by Effron &
Associates, the Advisor ranked as follows for the
period indicated:
Period Advisor's Advisor's
Return Ranking
1979 40.6% 1
As compared to all investment advisory firms
classified as Indata Public Funds by Indata Corp., the
Advisor ranked as follows for the period indicated:
Period Advisor's Advisor's
Return Ranking
1992 23.8% 1
As compared to other mutual funds by Lipper
Analytical Services, Inc., the Fund ranked as follows
for the period indicated:
Period Advisor's Advisor's
Return Ranking
1998 - 2nd Quarter 21.8% 2
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.
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").
<PAGE>
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 more None None None
_____________________
*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:
INITIAL ADDITIONAL
TYPE OF ACCOUNT MINIMUM MINIMUM
INVESTMENT INVESTMENT
Regular $5,000 $1,000
Automatic Investment Plan $5,000 $1,000
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 and/or twentieth 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 and a $15 fee is charged when redeeming
shares in an IRA. Refer to the IRA Disclosure
Statement and Custodial Agreement for additional
information on IRA accounts and fees. 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
<PAGE>
implemented from
time to time. If reasonable procedures are not
implemented, the Fund may be liable for any loss 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.
<PAGE>
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 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 made 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
<PAGE>
to Traditional IRAs do not apply
during the lifetime of the investor. Following the
death of the investor, certain minimum distribution
rules apply.
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
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
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
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
This Statement of Additional Information is not a
prospectus and should be read in conjunction with the
Prospectus of the Grand Prix Fund ("Fund"), dated
November 30, 1998. The Prospectus, which may be
revised from time to time, is available without charge
upon request to the above-noted address, telephone
number or website.
This Statement of Additional Information is dated
November 30, 1998.
<PAGE>
TABLE OF CONTENTS
INVESTMENT OBJECTIVE AND RESTRICTIONS 3
INVESTMENT POLICIES AND TECHNIQUES 4
DIRECTORS AND OFFICERS 6
PRINCIPAL SHAREHOLDERS 7
INVESTMENT ADVISOR 7
DISTRIBUTOR 8
FUND TRANSACTIONS AND BROKERAGE 8
CUSTODIAN, TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT 9
PLAN OF DISTRIBUTION 10
TAXES 10
DETERMINATION OF NET ASSET VALUE 11
REDEMPTION IN KIND 11
SHAREHOLDER MEETINGS 11
PERFORMANCE INFORMATION 11
INDEPENDENT AUDITORS 13
FINANCIAL STATEMENTS 13
No person has been authorized to give any
information or to make any representations other than
those contained in this Statement of Additional
Information ("SAI") and the Prospectus dated November
30, 1998, and if given or made, such information or
representations may not be relied upon as having been
authorized by the Fund. This SAI does not constitute
an offer to sell securities in any state or
jurisdiction in which such offering may not lawfully be
made.
<PAGE>
INVESTMENT OBJECTIVE AND RESTRICTIONS
The Fund's investment objective is capital
appreciation. The Fund's investment objective and
policies are described in detail in the Prospectus
under the captions "Investment Objective and
Restrictions" and "Implementation of Policies and
Risks." The following are the Fund's fundamental
investment restrictions which cannot be changed without
shareholder approval.
The Fund:
1. May not issue senior securities, except as
permitted under the Investment Company Act of
1940, as amended (the "1940 Act");
2. May not act as an underwriter of another company's
securities, except to the extent that the Fund may
be deemed to be an underwriter within the meaning
of the Securities Act of 1933, as amended, in
connection with the purchase and sale of portfolio
securities;
3. May not purchase or sell physical commodities
unless acquired as a result of ownership of
securities or other instruments (but this shall
not prevent the Fund from purchasing or selling
options, futures contracts, or other derivative
instruments, or from investing in securities or
other instruments backed by physical commodities);
4. 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;
5. May not invest more than 25% of its total assets
in securities of companies in any one industry;
6. May not purchase or sell real estate unless
acquired as a result of ownership of securities or
other instruments (but this shall not prohibit the
Fund from purchasing or selling securities or
other instruments backed by real estate or of
issuers engaged in real estate activities);
7. 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, which may involve
a borrowing, 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 liabilities (other than
borrowings). The Fund may also borrow money from
other persons to the extent permitted by
applicable law;
8. Notwithstanding any other fundamental investment
policy or restriction, may invest all of its
assets in the securities of a single open-end
management investment company with substantially
the same fundamental investment objective,
policies, and restrictions.
The following non-fundamental operating policies
may be changed by the Board of Directors without
shareholder approval.
The Fund may not:
1. Sell securities short, unless the Fund owns or has
the right to obtain securities equivalent in kind
and amount to the securities sold short, or unless
it covers such short sale as required by the
current rules and positions of the Securities and
Exchange Commission ("SEC") or its staff, and
provided that transactions in options, futures
contracts, options on futures contracts, or other
derivative instruments are not deemed to
constitute selling securities short.
2. Purchase securities on margin, except that the
Fund may obtain such short-term credits as are
necessary for the clearance of transactions; and
provided that margin deposits in connection with
futures contracts, options on futures contracts,
or other derivative instruments shall not
constitute purchasing securities on margin.
3. Invest in illiquid securities if, as a result of
such investment, more than 5% of its net assets
would be invested in illiquid securities.
<PAGE>
4. Purchase securities of other investment companies
except in compliance with the 1940 Act.
5. Engage in futures or options on futures
transactions which are impermissible pursuant to
Rule 4.5 under the Commodity Exchange Act ("CEA")
and, in accordance with Rule 4.5, will use futures
or options on futures transactions solely for bona
fide hedging transactions (within the meaning of
the CEA); provided, however, that the Fund may,
in addition to bona fide hedging transactions, use
futures and options on futures transactions if the
aggregate initial margin and premiums required to
establish such positions, less the amount by which
any such options positions are in the money
(within the meaning of the CEA), do not exceed 5%
of the Fund's net assets.
6. Make any loans other than loans of portfolio
securities, except through purchases of debt
securities or other debt instruments or engaging
in repurchase agreements with respect to portfolio
securities.
7. Borrow money except from banks or through reverse
repurchase agreements or mortgage dollar rolls,
and will not purchase securities when bank
borrowings exceed 5% of its total assets.
Except for the fundamental investment restrictions
listed above and the Fund's investment objective, the
other investment policies described in the Prospectus
and this SAI are not fundamental and may be changed
with approval of the Fund's Board of Directors. Unless
noted otherwise, if a percentage restriction is adhered
to at the time of investment, a later increase or
decrease in percentage resulting from a change in the
Fund's assets (i.e., due to cash inflows or
redemptions) or in market value of the investment or
the Fund's assets will not constitute a violation of
that restriction.
INVESTMENT POLICIES AND TECHNIQUES
The following information supplements the
discussion of the Fund's investment objective,
strategy, and policies that are described in the
Prospectus under the captions "Investment Strategy,"
"Implementation of Policies and Risks," and "Investment
Objective and Restrictions."
Depositary Receipts
The Fund may invest in foreign securities by
purchasing depositary receipts, including American
Depositary Receipts ("ADRs") and European Depositary
Receipts ("EDRs") or other securities convertible into
securities of companies based in foreign countries.
These securities may not necessarily be denominated in
the same currency as the securities into which they may
be converted. Generally, ADRs, in registered form, are
denominated in U.S. dollars and are designed for use in
the U.S. securities markets, while EDRs, in bearer
form, may be denominated in other currencies and are
designed for use in European securities markets. ADRs
are receipts typically issued by a U.S. bank or trust
company evidencing ownership of the underlying
securities. EDRs are European receipts evidencing a
similar arrangement. For purposes of the Fund's
investment policies, ADRs and EDRs are deemed to have
the same classification as the underlying securities
they represent. Thus, an ADR or EDR representing
ownership of common stock will be treated as common
stock.
ADR facilities may be established as either
"unsponsored" or "sponsored." While ADRs issued under
these two types of facilities are in some respects
similar, there are distinctions between them relating
to the rights and obligations of ADR holders and the
practices of market participants. For example, a non-
sponsored depositary may not provide the same
shareholder information that a sponsored depositary is
required to provide under its contractual arrangements
with the issuer, including reliable financial
statements. Under the terms of most sponsored
arrangements, depositaries agree to distribute notices
of shareholder meetings and voting instructions, and to
provide shareholder communications and other
information to the ADR holders at the request of the
issuer of the deposited securities.
<PAGE>
Convertible Securities
The Fund may invest in convertible securities,
which are bonds, debentures, notes, preferred stocks,
or other securities that may be converted into or
exchanged for a specified amount of common stock or
warrants of the same or a different company within a
particular period of time at a specified price or
formula. A convertible security entitles the holder to
receive interest normally paid or accrued on debt or
the dividend paid on preferred stock until the
convertible security matures or is redeemed, converted,
or exchanged. Convertible securities have unique
investment characteristics in that they generally (i)
have higher yields than common stocks, but lower yields
than comparable non-convertible securities, (ii) are
less subject to fluctuation in value than the
underlying stock (or warrant) since they have fixed
income characteristics, and (iii) provide the potential
for capital appreciation if the market price of the
underlying common stock (or warrant) increases. A
convertible security may be subject to redemption at
the option of the issuer at a price established in the
convertible security's governing instrument. If a
convertible security held by the Fund is called for
redemption, the Fund will be required to permit the
issuer to redeem the security, convert it into the
underlying common stock (or warrant), or sell it to a
third party.
Non-diversification and Sector Concentration
While the Fund is "non-diversified," which means
that it is permitted to invest its assets in a more
limited number of issuers than other investment
companies, the Fund intends to diversify its assets to
qualify for tax treatment as a regulated investment
company under the Internal Revenue Code of 1986, as
amended ("Code"). To so qualify (i) not more than 25%
of the total value of the Fund's assets may be invested
in securities of any one issuer (other than U.S.
Government securities and the securities of other
regulated investment companies) or of any two or more
issuers controlled by the Fund, which, pursuant to the
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 the total value of the
Fund's assets (a) not more than 5% of its total assets
may be invested in the securities of any one issuer
(other than U.S. Government securities and the
securities of other regulated investment companies) and
(b) the Fund may not own more than 10% of the
outstanding voting securities of any one issuer (other
than U.S. Government securities and the securities of
other regulated investment companies).
In addition, the Fund has adopted a fundamental
investment restriction which prohibits the Fund from
investing more than 25% of its total assets in
securities of companies in any one industry. An
industry is defined as a business-line subsector of a
stock-market sector. While the Fund may be heavily
invested in one single market sector like technology or
health care, for example, it will not invest more than
25% of its total assets in securities of companies in
any one industry. To the extent that a relatively high
percentage of the Fund's assets may be invested in the
securities of a limited number of companies, the Fund's
portfolio securities may be more susceptible to any
single economic, political, or regulatory occurrence
than the portfolio securities of a diversified
investment company.
Temporary Strategies
As described in the Prospectus under the heading
"Implementation of Policies and Risks," prior to
investing 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 Fund may hold cash and/or
invest up to 35% of its total assets in money market
instruments. The money market instruments which the
Fund may purchase include U.S. Government securities,
bank obligations, obligations of savings institutions,
fully insured certificates of deposit, commercial
paper, and securities issued by registered investment
companies holding themselves out as money market funds.
Such securities include:
U.S. Government Securities. Obligations issued or
guaranteed as to principal and interest by the United
States or its agencies (such as the Export-Import Bank
of the United States, Federal Housing Administration
and Government National Mortgage Association) or its
instrumentalities (such as the Federal Home Loan Bank),
including Treasury bills, notes, and bonds;
Bank Obligations. Obligations (including
certificates of deposit, bankers' acceptances,
commercial paper (see below) and other debt
obligations) of banks subject to regulation by the U.S.
Government and having total assets of $1 billion or
more, and instruments secured by such obligations, not
including obligations of foreign branches of domestic
banks;
<PAGE>
Obligations of Savings Institutions. Certificates
of deposit of savings banks and savings and loan
associations, having total assets of $1 billion or
more;
Fully Insured Certificates of Deposit.
Certificates of deposit of banks and savings
institutions, having total assets of less than $1
billion, if the principal amount of the obligation is
insured by the Bank Insurance Fund or the Savings
Association Insurance Fund (each of which is
administered by the Federal Deposit Insurance
Corporation), limited to $100,000 principal amount per
certificate and to 5% or less of the Fund's total
assets in all such obligations and in all illiquid
assets, in the aggregate;
Commercial Paper. Commercial paper rated Prime-1
or better by Moody's Investors Service, Inc.
("Moody's"), A-1 or better by Standard & Poor's
Corporation ("S&P"), Duff 2 or higher by Duff & Phelps,
Inc. ("D&P"), or Fitch 2 or higher by Fitch Investor
Services, Inc. ("Fitch"); and
Money Market Funds. Securities issued by
registered investment companies holding themselves out
as money market funds which attempt to maintain a
stable net asset value of $1.00 per share.
DIRECTORS AND OFFICERS
The directors and officers of Grand Prix Funds,
Inc. ("Corporation"), of which the Fund is a series,
together with information as to their principal
business occupations during the last five years, and
other information, are shown below. Each director and
officer who is deemed an "interested person" as defined
in the 1940 Act is indicated by an asterisk. Mr.
Zuccaro has served as a director and officer of the
Corporation since its inception on October 30, 1997.
The other directors and officers have served as such
since December 10, 1997.
*Robert Zuccaro, President and a Director of the
Corporation.
Mr. Zuccaro, 56 years old, received a Bachelor's
Degree from the University of Bridgeport in 1965 and a
Master's Degree in Business Administration from Pace
University in 1968. Prior to founding what is now
Target Holdings Corporation, doing business as Target
Investors, Inc. ("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.
Mr. Zuccaro's address is 15 River Road, Suite 220,
Wilton, Connecticut 06897.
*Phillipp Villhauer, Vice-President, Secretary and
a Director of the Corporation.
Mr. Villhauer, 33 years old, earned a Master's
Degree in Business Administration from Fordham
University in 1994. Prior to joining Advisor as a
portfolio manager/analyst in 1993, Mr. Villhauer was a
trader at Brown Brothers Harriman & Company and an
Assistant Vice-President Trader/Analyst at Gabelli &
Company, Inc.
Mr. Villhauer's address is 15 River Road, Suite
220, Wilton, Connecticut 06897.
*Mary Jane Boyle, Vice-President, Treasurer and a
Director of the Corporation.
Ms. Boyle, 53 years old, earned a Master's Degree
from the University of Bridgeport in 1971. Prior to co-
founding Advisor in 1983, where she serves as Vice-
President, Client Service, Ms. Boyle was a Regional
Sales Director with Mondessa Enterprises, Inc.
Ms. Boyle's address is 15 River Road, Suite 220,
Wilton, Connecticut 06897.
Edward F. Ronan, Jr., a Director of the Corporation.
Mr. Ronan, 46 years old, earned a B.S. in
accounting from the University of Bridgeport in 1977.
Mr. Ronan is a C.P.A. and a member of Actis-Grande,
Ronan, Carbone & Company, LLC, a certified public
accounting firm and has
<PAGE>
been with the firm since 1984.
Mr. Ronan served as a director of Q.E.P. Co., Inc., a
flooring tool manufacturer and distributor, from 1993
to 1998.
Mr. Ronan's address is 30 Main Street, Danbury,
Connecticut 06810.
Dennis K. Waldman, a Director of the Corporation.
Mr. Waldman, 44 years old, graduated from the
Massachusetts Institute of Technology in 1976 with a
Bachelor's of Science degree in aeronautical and
astronautical engineering and in electrical engineering
and in 1978 with a Master's of Science degree in
aeronautical and astronautical engineering. Since
1994, Mr. Waldman has served as Vice-President of Sales
for Strategic Information Associates, prior to which
time, Mr. Waldman worked at ITS as Vice-President of
Sales. From 1992 to 1994, Mr. Waldman was a sales
representative at Tartan where he was involved in
engineering sales.
Mr. Waldman's address is 62 Windsor Road, Waban,
Massachusetts 02168.
As of October 31, 1998, officers and directors of
the Corporation beneficially owned shares of
common stock of the Fund's then outstanding shares.
Directors and officers of the Corporation who are also
officers, directors, employees, or shareholders of
Advisor do not receive any remuneration from the Fund
for serving as directors or officers. Accordingly,
neither Messrs. Zuccaro and Villhauer nor Ms. Boyle
receive any remuneration from the Fund for their
services as directors and/or officers. The following
table provides information relating to compensation
paid to directors of the Corporation for their
services as such for fiscal 1998 (10 months):
Name Cash Other Total
Compensation Compensation
Edward F. Ronan, Jr. $____ $0 $____
Dennis K. Waldman $____ $0 $____
Each director who is not deemed an "interested
person" of the Fund, as defined in the 1940 Act,
receives $125 per meeting and reimbursement of
reasonable expenses. The Board held ___ meetings
during fiscal 1998 (10 months). Disinterested
directors may elect to receive their compensation in
the form of cash, shares of the Fund, or both.
PRINCIPAL SHAREHOLDERS
As of October 31, 1998, the following persons
owned of record or are known by the Fund to own of
record or beneficially 5% or more of the outstanding
shares of the Fund:
Name and Address No. Shares Percentage
[To Be Updated]
Based on the foregoing, as of October 31, 1998,
owned a controlling interest in the Fund. Shareholders
with a controlling interest could effect the outcome of
proxy voting or the direction of management of the
Fund.
INVESTMENT ADVISOR
Target Holdings Corporation, d.b.a. Target
Investors, Inc. ("Advisor") is the investment advisor
to the Fund. The Advisor is controlled by Robert
Zuccaro who owns 80% of the Advisor.
<PAGE>
The investment advisory agreement between the
Corporation and the Advisor dated as of December 31,
1997 ("Advisory Agreement") has an initial term of two
years and thereafter is required to be approved
annually by the Board of Directors of the Corporation
or by vote of a majority of the Fund's outstanding
voting securities (as defined in the 1940 Act). Each
annual renewal must also be approved by the vote of a
majority of the Corporation's directors who are not
parties to the Advisory Agreement or interested persons
of any such party, cast in person at a meeting called
for the purpose of voting on such approval. The
Advisory Agreement was approved by the Board of
Directors, including a majority of the disinterested
directors on December 10, 1997, and by the initial
shareholder on December 23, 1997. The Advisory
Agreement is terminable without penalty on 60 days'
written notice by the Board of Directors, by vote of a
majority of the Fund's outstanding voting securities,
or by the Advisor, and will terminate automatically in
the event of its assignment.
Under the terms of the Advisory Agreement, the
Advisor manages the Fund's investments and business
affairs, subject to the supervision of the Board of
Directors. At its expense, the Advisor provides office
space and all necessary office facilities, equipment,
and personnel for managing the investments of the Fund.
As compensation for its services, 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. The organizational
expenses of the Fund were advanced by the Advisor and
will be reimbursed by the Fund over a period of not
more than 60 months. The organizational expenses were
approximately $80,750.
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 Advisor
may from time to time voluntarily (but is not required
or obligated to) waive all or a portion of its fee
and/or absorb certain Fund expenses. Any waiver of
fees or absorption of expenses will be made on a
monthly basis and, with respect to the latter, will be
paid to the Fund by reduction of Advisor's fee. For
the fiscal period ended October 31, 1998, the Fund did
not pay an advisory fee to the Advisor because the
Advisor waived its entire advisory fee. If the
Advisor had not agreed to waive the advisory fee, the
Advisor would have received $ _______ for its
investment advisory services.
DISTRIBUTOR
Under a Distribution Agreement dated
, 1998, (the "Distribution Agreement"), AmeriPrime
Financial Securities, Inc. acts as the principal
distributor of the Fund's shares ("Distributor"). The
Distribution Agreement provides that the Distributor
will use its best efforts to distribute the Fund's
shares. The Fund's shares are offered for sale
continuously at net asset value per share plus a
maximum initial sales charge of 5.25% of the offering
price. Existing shareholders as of November 30, 1998,
are not subject to the sales charge on additional
purchases of Fund shares. In addition, no sales charge
is imposed on the reinvestment of dividends or capital
gains. Certain other exceptions to the imposition of
the sales charge apply, as discussed more fully in the
Prospectus under the caption "Your Account." These
exceptions are made available because minimal or no
sales effort is required with respect to the categories
of investors so excepted. The Distribution Agreement
is subject to the same termination and renewal
provisions as are described above with respect to the
Advisory Agreement, except that the Distribution
Agreement need not be approved by the Fund's
shareholders.
FUND TRANSACTIONS AND BROKERAGE
Under the Advisory Agreement, Advisor, in its
capacity as portfolio manager, is responsible for
decisions to buy and sell securities for the Fund and
for the placement of the Fund's securities business,
the negotiation of the commissions to be paid on such
transactions, and the allocation of portfolio brokerage
business. The Fund has no obligation to deal with any
particular broker or dealer; in executing transactions,
the Advisor seeks to obtain the best execution at the
best security price available with respect to each
transaction. The best price to the Fund means the best
net price without regard to the mix between purchase or
sale price and commission, if any. While the Advisor
seeks reasonably competitive commission rates, the Fund
does not necessarily pay the lowest available
commission. Brokerage may be allocated based on the
sale of the Fund's shares.
Section 28(e) of the Securities Exchange Act of
1934, as amended ("Section 28(e)"), permits an
investment advisor, under certain circumstances, to
cause an account to pay a broker or dealer who supplies
brokerage and research services a commission for
effecting a transaction in excess of the amount of
commission another broker or dealer would
<PAGE>
have charged
for effecting the transaction. Brokerage and research
services include (a) furnishing advice as to the value
of securities, the advisability of investing,
purchasing, or selling securities, and the availability
of securities or purchasers or sellers of securities;
(b) furnishing analyses and reports concerning issuers,
industries, sectors, securities, economic factors and
trends, portfolio strategy, and the performance of
accounts; and (c) effecting securities transactions and
performing functions incidental thereto (such as
clearance, settlement, and custody).
In selecting brokers or dealers, Advisor considers
investment and market information and other research,
such as economic, securities, and performance
measurement research provided by such brokers or
dealers and the quality and reliability of brokerage
services, including execution capability, performance,
and financial responsibility. Accordingly, the
commissions charged by any such broker or dealer may be
greater than the amount another firm might charge if
Advisor determines in good faith that the amount of
such commissions is reasonable in relation to the value
of the research information and brokerage services
provided by such broker or dealer to the Fund. Advisor
believes that the research information received in this
manner provides the Fund with benefits by supplementing
the research otherwise available to the Fund. Such
higher commissions will not be paid by the Fund unless
(a) Advisor determines in good faith that the amount is
reasonable in relation to the services in terms of the
particular transaction or in terms of Advisor's overall
responsibilities with respect to the accounts,
including the Fund, as to which it exercises investment
discretion; (b) such payment is made in compliance with
the provisions of Section 28(e) and other applicable
state and federal laws; and (c) in the opinion of
Advisor, the total commissions paid by the Fund will be
reasonable in relation to the benefits to the Fund over
the long term. The aggregate amount of brokerage
commissions paid by the Fund for the fiscal period
ended October 31, 1998 was $_________.
Advisor places portfolio transactions for other
advisory accounts in addition to the Fund. Research
services furnished by firms through which the Fund
effects its securities transactions may be used by
Advisor in servicing all of its accounts; not all of
such services may be used by Advisor in connection with
the Fund. Advisor believes it is not possible to
measure separately the benefits from research services
to each of the accounts (including the Fund) managed by
it. Because the volume and nature of the trading
activities of the accounts are not uniform, the amount
of commissions in excess of those charged by another
broker or dealer paid by each account for brokerage and
research services will vary. However, Advisor believes
such costs to the Fund will not be disproportionate to
the benefits received by the Fund on a continuing
basis. Advisor seeks to allocate portfolio
transactions equitably whenever concurrent decisions
are made to purchase or sell securities by the Fund and
another advisory account. In some cases, this
procedure could have an adverse effect on the price or
the amount of securities available to the Fund. There
can be no assurance that a particular purchase or sale
opportunity will be allocated to the Fund. In making
such allocations between the Fund and other advisory
accounts, certain factors considered by Advisor are the
respective investment objectives, the relative size of
portfolio holdings of the same or comparable
securities, the availability of cash for investment,
and the size of investment commitments generally held.
The Fund's portfolio turnover rate for the fiscal
period ended October 31, 1998 was _____%. The Fund
anticipates that its annual portfolio turnover rate
will be between 300 and 500% but generally will not
exceed 800%. The annual portfolio turnover rate
indicates changes in the Fund's securities holdings;
for instance, a rate of 100% would result if all the
securities in a portfolio (excluding securities whose
maturities at acquisition were one year or less) at the
beginning of an annual period had been replaced by the
end of the period. The turnover rate may vary from
year to year, as well as within a year, and may be
affected by portfolio sales necessary to meet cash
requirements for redemptions of the Fund's shares.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT
As custodian of the Fund's assets, Fifth Third
Bank ("Fifth Third"), 38 Fountain Square Plaza,
Cincinnati, Ohio 45263, has custody of all securities
and cash of the Fund, delivers and receives payment for
portfolio securities sold, receives and pays for
portfolio securities purchased, collects income from
investments, if any, and performs other duties, all as
directed by the officers of the Corporation. Sunstone
Investor Services, LLC ("Sunstone"), 207 East Buffalo
Street, Suite 315, Milwaukee, Wisconsin 53202-5712,
acts as transfer agent and dividend-disbursing agent
for the Fund.
<PAGE>
PLAN OF DISTRIBUTION
Distribution and Shareholder Servicing Plan
As described more fully in the Prospectus under
the heading "Distribution and Shareholder Servicing
Plan," the Fund has adopted a plan pursuant to Rule 12b-
1 under the 1940 Act ("Plan") with respect to which
certain distribution and shareholder servicing fees may
be paid to registered securities dealers, financial
institutions, or other persons ("Recipients") who
render assistance in distributing or promoting the sale
of Fund shares, or who provide certain shareholder
services to Fund shareholders, pursuant to a written
agreement ("Rule 12b-1 Related Agreement"). Under the
terms of the Plan, the Fund may be required to pay the
Recipients a fee of up to 0.25% of the average daily
net assets to finance activities primarily intended to
result in the sale of Fund shares. The 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.
Anticipated Benefits to the Fund
The Board of Directors of the Corporation
considered various factors in connection with its
decision to continue the Plan, including: (a) the
nature and causes of the circumstances which make
continuation of the Plan necessary and appropriate; (b)
the way in which the Plan would address those
circumstances, including the nature and potential
amount of expenditures; (c) the nature of the
anticipated benefits; (d) the merits of possible
alternative plans or pricing structures; and (e) the
possible benefits of the Plan to any other person
relative to those of the Fund.
Based upon its review of the foregoing factors and
the material presented to it, and in light of its
fiduciary duties under relevant state law and the 1940
Act, the Board of Directors determined, in the exercise
of its business judgment, that the Plan was reasonably
likely to benefit the Fund and its shareholders in at
least one or several potential ways. Specifically, the
Board concluded that any Recipients operating under
Rule 12b-1 Related Agreements would have little or no
incentive to incur promotional expenses on behalf of
the Fund if a Rule 12b-1 plan were not in place to
reimburse them, thus making the adoption of the Plan
important to the initial success and thereafter,
continued viability of the Fund. In addition, the
Board determined that the payment of Rule 12b-1 fees to
these persons should motivate them to provide an
enhanced level of service to Fund shareholders, which
would, of course, benefit such shareholders. Finally,
the adoption of the Plan would help to increase net
assets under management in a relatively short amount of
time, given the marketing efforts on the part of the
Recipients to sell Fund shares, which should result in
certain economies of scale.
While there is no assurance that the expenditure
of Fund assets to finance distribution of Fund shares
will have the anticipated results, the Board of
Directors believes there is a reasonable likelihood
that one or more of such benefits will result, and
since the Board will be in a position to monitor the
distribution and shareholder servicing expenses of the
Fund, it will be able to evaluate the benefit of such
expenditures in deciding whether to continue the Plan.
Amounts Expensed Under the Plan
For the fiscal period ended October 31, 1998, the
Fund paid out $ under the Plan. $
was spent on printing and mailing prospectuses to other
than current shareholders, $ was spent on
advertising and $ was spent on dealer
compensation.
TAXES
As indicated under "Dividends, Capital Gain
Distributions and Tax Treatment" in the Prospectus, the
Fund intends to qualify annually as a "regulated
investment company" under the Code. This qualification
does not require government supervision of the Fund's
management practices or policies.
<PAGE>
A dividend or capital gains distribution received
shortly after the purchase of shares reduces the net
asset value of shares by the amount of the dividend or
distribution and, although in effect a return of
capital, will be subject to income taxes. Net gains on
sales of securities when realized and distributed are
taxable as capital gains. If the net asset value of
shares were reduced below a shareholder's cost by
distribution of gains realized on sales of securities,
such distribution would be a return of investment
although taxable as indicated above.
DETERMINATION OF NET ASSET VALUE
As set forth in the Prospectus under the same
heading, the Fund's net asset value will be determined
as of the close of trading on each day the New York
Stock Exchange ("NYSE") is open for trading. The Fund
does not determine net asset value on days the NYSE is
closed and at other times described in the Prospectus.
The NYSE is closed on New Year's Day, Martin Luther
King, Jr. Day, President's Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day. Additionally, if any of these holidays
falls on a Saturday, the NYSE will not be open for
trading on the preceding Friday and when such holiday
falls on a Sunday, the NYSE will not be open for
trading on the succeeding Monday, unless unusual
business conditions exist, such as the ending of a
monthly or the yearly accounting period.
REDEMPTION IN KIND
The Fund has filed a Notification under Rule 18f-1
under the 1940 Act, pursuant to which it has undertaken
to pay in cash all requests for redemption by any
shareholder of record, limited in amount with respect
to each shareholder during any 90-day period to the
lesser amount of (i) $250,000, or (ii) 1% of the Fund's
net asset value being redeemed, valued at the beginning
of such election period. The Fund intends to also pay
redemption proceeds in excess of such lesser amount in
cash, but reserves the right to pay such excess amount
in kind, if it is deemed to be in the best interest of
the Fund to do so. Investors receiving an in kind
distribution are advised that they will likely incur a
brokerage charge on the disposition of such securities
through a securities dealer.
SHAREHOLDER MEETINGS
Maryland law permits registered investment
companies, such as the Corporation, to operate without
an annual meeting of shareholders under specified
circumstances if an annual meeting is not required by
the 1940 Act. The Corporation has adopted the
appropriate provisions in its Bylaws and may, at its
discretion, not hold an annual meeting in any year in
which the election of directors is not required to be
acted on by shareholders under the 1940 Act.
PERFORMANCE INFORMATION
As described in the "Fund Performance" section of
the Fund's Prospectus, the Fund's historical
performance or return may be shown in the form of
various performance figures. The Fund's performance
figures are based upon historical results and are not
necessarily representative of future performance.
Factors affecting the Fund's performance include
general market conditions, operating expenses, and
investment management.
Total Return
The average annual total return of the Fund is
computed by finding the average annual compounded rates
of return over the periods that would equate the
initial amount invested to the ending redeemable value,
according to the following formula:
P(1+T)n = ERV
P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a
hypothetical $1,000 payment made at
the beginning of the stated periods at
the end of the stated periods.
<PAGE>
Performance for a specific period is calculated by
first taking an investment (assumed to be $1,000)
("initial investment") on the first day of the period
and computing the "ending value" of that investment at
the end of the period. The total return percentage is
then determined by subtracting the initial investment
from the ending value and dividing the remainder by the
initial investment and expressing the result as a
percentage. The calculation assumes that all income
and capital gains dividends paid by the Fund have been
reinvested at the Fund's net asset value on the
reinvestment dates during the period. Total return may
also be shown as the increased dollar value of the
hypothetical investment over the period.
Cumulative total return represents the simple
change in value of an investment over a stated period
and may be quoted as a percentage or as a dollar
amount. Total returns may be broken down into their
components of income and capital (including capital
gains and changes in share price) in order to
illustrate the relationship between these factors and
their contributions to total return.
Comparisons
From time to time, in marketing and other Fund
literature, the Fund's performance may be compared to
the performance of other mutual funds in general or to
the performance of particular types of mutual funds
with similar investment goals, as tracked by
independent organizations. Among these organizations,
Lipper Analytical Services, Inc. ("Lipper"), a widely
used independent research firm which ranks mutual funds
by overall performance, investment objectives, and
assets, may be cited. Lipper performance figures are
based on changes in net asset value, with all income
and capital gains dividends reinvested. Such
calculations do not include the effect of any sales
charges imposed by other mutual funds. The Fund will
be compared to Lipper's appropriate fund category, that
is, by fund objective and portfolio holdings.
The Fund's performance may also be compared to the
performance of other mutual funds by Morningstar, Inc.
("Morningstar"), which ranks funds on the basis of
historical risk and total return. Morningstar's
rankings range from five stars (highest) to one star
(lowest) and represent Morningstar's assessment of the
historical risk level and total return of a fund as a
weighted average for 3, 5, and 10 year periods.
Rankings are not absolute or necessarily predictive of
future performance.
Evaluations of the Fund's performance made by
independent sources may also be used in advertisements
concerning the Fund, including reprints of or
selections from, editorials or articles about the Fund.
Sources for Fund performance and articles about the
Fund may include publications such as Money, Forbes,
Kiplinger's, Financial World, Business Week, U.S. News
and World Report, the Wall Street Journal, Barron's,
and a variety of investment newsletters.
The Fund may compare its performance to a wide
variety of indices and measures of inflation. There
are differences and similarities between the
investments that the Fund may purchase and the
investments measured by these indices.
Investors may want to compare the Fund's
performance to that of certificates of deposit offered
by banks and other depository institutions.
Certificates of deposit may offer fixed or variable
interest rates and principal is guaranteed and may be
insured. Withdrawal of the deposits prior to maturity
normally will be subject to a penalty. Rates offered
by banks and other depository institutions are subject
to change at any time specified by the issuing
institution.
Investors may also want to compare the Fund's
performance to that of money market funds. Money
market fund yields will fluctuate and shares are not
insured, but share values usually remain stable.
<PAGE>
INDEPENDENT AUDITORS
Ernst & Young LLP, 111 East Kilbourn Avenue,
Milwaukee, Wisconsin 53202, independent auditors for
the Fund, audit and report on the Fund's financial
statements.
FINANCIAL STATEMENTS
The following audited financial statements of the
Fund are contained herein:
(a) Report of Independent Auditors dated
December 23, 1997.
(b) Statement of Assets and Liabilities
dated December 23, 1997.
(c) Notes to Statement of Assets and
Liabilities dated December 23, 1997.
In addition, the unaudited financial statements
and related notes contained in the Corporation's
Semi- Annual Report for the period ended April 30,
1998, which may be obtained without charge by
calling or writing to the Fund, are incorporated
herein by reference.
<PAGE>
Report of Independent Auditors
To the Shareholder and
Board of Directors of
Grand Prix Funds, Inc.
We have audited the accompanying statement of assets
and liabilities of the Grand Prix Fund, comprising the
Grand Prix Funds, Inc. (the "Fund"), as of December 23,
1997. This statement of assets and liabilities is the
responsibility of the Fund's management. Our
responsibility is to express an opinion on this
statement of assets and liabilities 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 statement of assets and
liabilities is free of material misstatement. An audit
includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement
of assets and liabilities. An audit also includes
assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall statement of assets and
liabilities presentation. We believe that our audit of
the statement of assets and liabilities provides a
reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities
referred to above presents fairly, in all material
respects, the financial position of the Grand Prix Fund
at December 23, 1997, in conformity with generally
accepted accounting principles.
/s/
ERNST & YOUNG LLP
Milwaukee, Wisconsin
December 23, 1997
<PAGE>
Grand Prix Funds, Inc.
Grand Prix Fund
Statement of Assets and Liabilities
December 23, 1997
Assets:
Cash $100,000
Unamortized organization costs 80,750
Total assets 180,750
Liabilities:
Accrued organization costs $40,500
Payable to adviser 40,250
Total liabilities $80,750
Net assets $100,000
Represented by:
Capital stock, $0.01 par value $100
(500,000,000 shares authorized
and 10,000 shares outstanding)
Additional paid-in capital 99,900
Net Assets $100,000
Offering price, redemption price and $10.00
net asset value per share (based
on 10,000 shares of capital stock)
See accompanying notes to Statement of Assets and
Liabilities.
<PAGE>
Grand Prix Funds, Inc.
Notes to Statement of Assets and Liabilities
December 23, 1997
(1) Organization
Grand Prix Funds, Inc. ("Grand Prix") was organized
on October 29, 1997 as a Maryland Corporation and
is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end
investment company issuing its shares in series,
each series representing a distinct portfolio with
its own investment objectives and policies. The
only series presently authorized is the Grand Prix
Fund (the "Fund"). The Fund has had no operations
other than those relating to organizational
matters, including the sale of 10,000 shares to
capitalize the Fund for cash in the amount of
$100,000.
(2)Significant Accounting Policies
(a)Organization Costs
Costs incurred by the Fund in connection with
its organization, registration and the initial
public offering of shares have been deferred
and will be amortized over the period of
benefit, but not to exceed five years from the
date upon which the Fund commenced its
investment activities. If any of the original
shares of the Fund purchased by the initial
shareholder are redeemed by any holder thereof
prior to the end of the amortization period,
the redemption proceeds will be reduced by the
pro rata share of the unamortized costs as of
the date of redemption. The pro rata share by
which the proceeds are reduced will be derived
by dividing the number of original shares of
the Fund being redeemed by the total number of
original shares outstanding at the time of
redemption.
(b)Federal Income Taxes
The Fund intends to comply with the
requirements of the Internal Revenue Code
necessary to qualify as a regulated investment
company and to make the requisite distributions
of income to its shareholders which will be
sufficient to relieve it from all or
substantially all federal income taxes.
<PAGE>
(3)Investment Adviser
The Fund has an agreement with Target Holdings
Corporation d/b/a Target Investors (the "Adviser")
to furnish investment advisory services to the
Fund. Under the terms of this agreement, the
Adviser is compensated at 1.00% of average daily
net assets of the Fund. The Adviser has agreed to
reduce its fees and/or reimburse the Fund's
expenses (exclusive of brokerage, interest, taxes
and extraordinary expenses) that exceed the annual
expense limitation of 1.65% of average daily net
assets until December 31, 1998.
(4)Administrator
Sunstone Financial Group, Inc. (the
"Administrator") acts as Administrator for the
Fund. As compensation for its administrative
services and the assumption of certain
administrative expenses, the Administrator is
entitled to a fee computed daily and payable
monthly, at an annual rate of 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. The minimum annual fee is
subject to an automatic annual escalation of 6%.
The Administrator may periodically volunteer to
reduce all or a portion of its administrative fee
with respect to the Fund. These waivers may be
terminated at any time at the Administrator's
discretion. The Administrator may not seek
reimbursement of such voluntarily reduced fees at a
later date. The reduction of such fee will cause
the yield of the Fund to be higher than it would be
in the absence of such reduction.
(5)Capital Stock
Grand Prix is authorized to issue Five Hundred
Million (500,000,000) shares of common stock with a
par value of one cent ($0.01). The Board of
Directors is empowered to issue other series of
Grand Prix shares without shareholder approval.
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements (included or incorporated by reference
in Parts A and B)
Report of Independent Auditors dated December 23, 1997.
Statement of Assets and Liabilities dated
December 23, 1997.
Notes to Statement of Assets and Liabilities dated
December 23, 1997.
Schedule of Investments as of April 30, 1998 (unaudited).
Statement of Assets and Liabilities dated
April 30, 1998 (unaudited).
Statement of Operations for the period ended
April 30, 1998 (unaudited).
Statement of Change in Net Assets for the period ended
April 30, 1998 (unaudited).
Financial Highlights for the period ended
April 30, 1998 (unaudited).
Notes to the Financial Statements for the period ended
April 30, 1998.
(b) Exhibits
(1.1) Registrant's Articles of Incorporation (1)
(1.2) Amendment to Registrant's Articles of Incorporation (2)
(2) Registrant's By-Laws (1)
(3) None
(4) None
(5) Investment Advisory Agreement (2)
(6.1) Distribution Agreement (5)
(6.2) Form of Dealer Agreement (5)
(7) None
(8) Custodian Agreement (2)
(9.1) Transfer Agency Agreement (2)
(9.2) Administration and Fund Accounting Agreement (2)
(10) Opinion and Consent of Godfrey & Kahn, S.C. (2)
(11) Consent of Ernst & Young LLP
<PAGE>
(12) None
(13) Subscription Agreement (3)
(14) (a) Individual Retirement Custodial
Account - Traditional (5)
(b) Individual Retirement Custodial
Account - Roth (5)
(15.1) Rule 12b-1 Distribution and
Shareholder Servicing Plan (2)
(15.2) Form of 12b-1 Related Agreement (2)
(15.3) Rule 12b-1 Distribution and
Shareholder Servicing Plan, as amended
, 1998 (5)
(15.4) Form of Rule 12b-1 Related
Agreement, as amended (5)
(16) None
(17) Financial Data Schedule (4)
(18) None
(19) Powers of Attorney for Directors and
Officers (see signature page)
__________________
(1) Incorporated by reference to Registrant's Form
N-1A as filed with the Commission on October 31,
1997.
(2) Incorporated by reference to Registrant's Pre-
Effective Amendment No. 1 as filed with the
Commission on December 23, 1997.
(3) Incorporated by reference to Registrant's Pre-
Effective Amendment No. 2 as filed with the
Commission on December 30, 1997.
(4) Incorporated by reference to Registrant's Semi-
Annual Report for the period ended April 30, 1998,
as filed with the Commission on June 26, 1998.
(5) To be filed by Amendment.
Item 25. Persons Controlled by or under Common Control
with Registrant
Registrant neither controls any person nor is
under common control with any other person.
Item 26. Number of Holders of Securities
Number of Record Holders
Title of Securities as of October 31, 1998
Common Stock, ____________
$.01 par value
Item 27. Indemnification
Article 6.4 of Registrant's Articles of
Incorporation provides as follows:
The Corporation shall indemnify (a) its Directors
and officers, whether serving the Corporation or at its
request any other entity, to the full extent required
by (i) Maryland law now or hereafter in force,
including the advance of expenses under the procedures
and to the full extent permitted by law, and (ii) the
Investment Company Act of 1940, as amended, and (b)
other employees and agents to such extent as shall be
authorized by the Board of Directors and be
<PAGE>
permitted
by law. The foregoing rights of indemnification shall
not be exclusive of any other rights to which those
seeking indemnification may be entitled. The Board of
Directors may take such action as is necessary to carry
out these indemnification provisions and is expressly
empowered to adopt, approve and amend from time to time
such resolutions or contracts implementing such
provisions or such further indemnification arrangements
as may be permitted by law.
Item 28. Business and Other Connections of Investment
Advisor
Besides serving as investment advisor to private
accounts, the Advisor is not currently and has not
during the past two fiscal years engaged in any other
business, profession, vocation, or employment of a
substantial nature. Information regarding the
business, profession, vocation, or employment of a
substantial nature of Advisor's directors and officers
is hereby incorporated by reference from the
information contained under "Fund Organization and
Management - Management" in the Prospectus.
Item 29. Principal Underwriters
(a) The Distributor also acts as distributor for
The Rockland Funds Trust, [name other investment
companies].
(b) The principal business address of AmeriPrime
Financial Securities, Inc., the Registrant's
principal underwriter, is 1793 Kingswood
Drive, Suite 200, Southlake, Texas 76092.
The following information relates to each
officer and director of the Distributor:
Positions and Offices Position and
with Offices with
Name Underwriter Registrant
Ken Trumpfheller President None
(c) None.
Item 30. Location of Accounts and Records
All accounts, books or other documents required to
be maintained by Section 31(a) of the Investment
Company Act of 1940, as amended, and the rules
promulgated thereunder are in the possession of Target
Holdings Corporation, doing business as Target
Investors, Inc., Registrant's investment advisor, at
Registrant's corporate offices, except (1) records held
and maintained by Fifth Third Bank, 38 Fountain Square
Plaza, Cincinnati, Ohio 45263, relating to its function
as custodian, (2) records held and maintained by
Sunstone Investor Services, LLC, 207 East Buffalo
Street, Suite 315, Milwaukee, Wisconsin 53202-5712,
relating to its function as transfer agent, and (3)
records held and maintained by Sunstone Financial
Group, Inc., 207 East Buffalo Street, Suite 400,
Milwaukee, Wisconsin 53202, relating to its function as
administrator and fund accountant.
Item 31. Management Services
All management-related service contracts entered
into by Registrant are discussed in Parts A and B of
this Registration Statement.
Item 32. Undertakings.
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. Registrant also undertakes
to assist in communications with other shareholders as
required by Section 16(c) of the 1940 Act.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act
of 1933 and the Investment Company Act of 1940, the
Registrant has duly caused this Post-Effective
Amendment No. 1 to the Registration Statement on Form N-
1A to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Wilton and
State of Connecticut on the 24th day of September,
1998.
GRAND PRIX FUNDS, INC.
(Registrant)
By:/s/ Robert Zuccaro
-----------------------
Robert Zuccaro
President
Each person whose signature appears below
constitutes and appoints Robert Zuccaro, his true and
lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to
sign any and all post-effective amendments to this
Registration Statement and to file the same, with all
exhibits thereto, and any other documents in connection
therewith, with the Securities and Exchange Commission
and any other regulatory body, granting unto said
attorney-in-fact and agent, full power and authority to
do and perform each and every act and thing requisite
and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact
and agent, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act
of 1933, this Post-Effective Amendment No. 1 to the
Registration Statement on Form N-1A has been signed
below by the following persons in the capacities and on
the date(s) indicated.
Name Title Date
/s/ Robert Zuccaro President and a September 24, 1998
- ------------------ Director
Robert Zuccaro
/s/ Phillipp Villhauer Vice President, September 24, 1998
- ---------------------- Secretary and a
Villhauer Director
Phillipp Villhauer
/s/ Mary Jane Boyle Vice President, September 24, 1998
- --------------------- Treasurer and a
Mary Jane Boyle Director
/s/ Edward F. Ronan, Jr. Director September 24, 1998
- -----------------------
Edward F. Ronan, Jr.
- ----------------------- Director
Dennis K. Waldman
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
(1.1) Registrant's Articles of Incorporation
(previously filed as Exhibit 1 to Registrant's
Form N-1A)
(1.2) Amendment to Registrant's Articles
of Incorporation (previously filed as Exhibit
1.2 to Registrant's Pre-Effective Amendment
No. 1 to Registrant's Form N-1A, File Nos.
333-39133 and 811-8461)
(2) Registrant's By-Laws (previously filed as
Exhibit 2 to Registrant's Form N-1A)
(3) None
(4) None
(5) Investment Advisory Agreement
(previously filed as Exhibit 5 to
Registrant's Pre-Effective Amendment No. 1 to
Registrant's Form N-1A, File Nos. 333-39133
and 811-8461)
(6.1) Distribution Agreement (1)
(6.2) Form of Dealer Agreement (1)
(7) None
(8) Custodian Agreement (previously filed as
Exhibit 8 to Registrant's Pre-Effective
Amendment No. 1 to Registrant's Form N-1A,
File Nos. 333-39133 and 811-8461)
(9.1) Transfer Agency Agreement
(previously filed as Exhibit 9.1 to
Registrant's Pre-Effective Amendment No. 1 to
Registrant's Form N-1A, File Nos. 333-39133
and 811-8461)
(9.2) Administration and Fund Accounting
Agreement (previously filed as Exhibit 9.2 to
Registrant's Pre-Effective Amendment No. 1 to
Registrant's Form N-1A, File Nos. 333-39133
and 811-8461)
(10) Opinion and Consent of Godfrey & Kahn,
S.C. (previously filed as Exhibit 10 to
Registrant's Pre-Effective Amendment No. 1 to
Registrant's Form N-1A, File Nos. 333-39133
and 811-8461)
(11) Consent of Ernst & Young LLP
(12) None
(13) Subscription Agreement (previously filed
as Exhibit 13 to Registrant's Pre-Effective
Amendment No. 2 to Registrant's Form N-1A,
File Nos. 333-39133 and 811-8461)
(14) (a) Individual Retirement Custodial Account
- Traditional (1)
(b) Individual Retirement Custodial Account
- Roth (1)
(15.1) Rule 12b-1 Distribution and
Shareholder Servicing Plan (previously filed
as Exhibit 15.1 to Registrant's Pre-Effective
Amendment No. 1 to Registrant's Form N-1A,
File Nos. 333-39133 and 811-8461)
(15.2) Form of 12b-1 Related Agreement
(previously filed as Exhibit 15.2 to
Registrant's Pre-Effective Amendment No. 1 to
Registrant's Form N-1A, File Nos. 333-39133
and 811-8461)
<PAGE>
(15.3) Rule 12b-1 Distribution and Shareholder
Servicing Plan, as amended , 1998 (1)
(15.4) Form of Rule 12b-1 Related Agreement, as
amended (1)
(16) None
(17) Financial Data Schedule (previously
filed as Exhibit 27 to Registrant's Semi-
Annual Report for the period ended April 30,
1998, File Nos. 333-39133 and 811-8461)
(18) None
(19) Powers of Attorney for Directors and Officers
(see signature page)
___________________
(1) To be filed by Amendment.
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the
caption "Independent Auditors" and to the use of our
report dated December 23, 1997 in the Registration
Statement (Form N-1A) and related Prospectus of Grand
Prix Funds, Inc. filed with the Securities and Exchange
Commission in this Post-Effective Amendment No. 1 to
the Registration Statement under the Securities Act of
1933 (File No. 333-39133) and in this Amendment No. 3
to the Registration Statement under the Investment
Company Act of 1940 (File No. 811-8461).
/s/ Ernst & Young LLP
Milwaukee, Wisconsin
September 30, 1998
