As filed with the Securities and Exchange Commission on February 12, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Centurion T.A.A. Fund, Inc.
(File No. 2-73955): Post-Effective Amendment
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
[X]
Centurion T.A.A. Fund, Inc.
(File No. 811-3257): Post-Effective Amendment
CENTURION T.A.A. FUND, INC.
(Exact Name of Registrant as Specified in Charter)
11545 W. Bernardo Court, Suite 100, San Diego, California 92127
(Address of Principal Executive Offices) (Zip Code)
(619) 673-8536
(Registrant's Telephone Number, including Area Code)
Jack K. Heilbron
11545 W. Bernardo Court, Suite 100, San Diego, California 92127
(Name and Address of Agent for Service)
Copy to:
Bruce J. Rushall, Esq.
Rushall & McGeever
2111 Palomar Airport Road, Suite 200
Carlsbad, California 92009
It is proposed that this filing will become effective immediately upon
filing pursuant to Paragraph (a)(2)of Rule 485. The Registrant has
registered an indefinite number or amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2 under the Investment
Company Act of 1940. A Rule 24f-2 Notice for the Registrant's most
recent fiscal year was filed with the Securities and Exchange
Commission on December 2, 1998.
CROSS REFERENCE SHEET FOR ITEMS REQUIRED BY FORM N-1A
Item No.
of Form N-1A Caption in Prospectus
1 Cover Page
2 "Summary of Contents"; "Expense Synopsis"
3 "Financial Highlights"; "Performance Data"
4 "Summary of Contents"; "Investment Objective and
Policies of the Fund"; "Investments the Fund
Will Not Make; Restrictions on Investments";
"Other Information"; "Appendix A"
5 "Summary of Contents"; "Management"; "Other Information"
6 "Investment Income"; "Taxes"; "Other Information"
7 "Multiple Pricing System"; "Valuing Shares";"Buying Shares";
"Sales Charge"; "Plans of Distribution"; "Reinvestments";
"Shareholder Services/Transfers"
8 "Redeeming Shares"; "Shareholder Services/Transfers"
9 Not Applicable
Caption in Statement of Additional Information
10 Cover Page
11 "Table of Contents"
12 "Additional Information"
13 Investment Restrictions; See also "Investment Objectives
and Policies of the Fund"; "Investments the Fund Will Not Make;
Restrictions on Investments" in Prospectus
14 "Fund Management"
15 "Ownership of Shares"
16 "Centurion Counsel, Inc., Centurion Group, Inc. and Centurion
Institutional Services, Inc."; "Custodian; General Counsel;
Auditors"
17 "Brokerage"
18 See "Multiple Class Share Plan", "Investmen Income"
and "Other Information" in Prospectus
19 "Additional Purchase and Redemption Information"; See
"Buying Shares"; "Sales Charge"; "Redeeming Shares" and
"Shareholder Services/Transfers" in the Prospectus
20 "Taxes"
20 "Centurion Counsel, Inc., Centurion Group, Inc. and
Centurion Institutional Services, Inc."
22 "Calculation of Performance Data"
23 "Financial Statements"
PROSPECTUS
CENTURION GROWTH FUND, INC.
Centurion Counsel Growth Fund (the "Fund") is a mutual fund that
continuously offers its shares for sale. The Fund's objective is long-term
capital appreciation and current income through investment of at least 65%
of its total assets in financially sound companies that have consistently
paid dividends. Normally, the Fund will invest in common stock, securities
convertible into common stock, or rights or warrants to subscribe for or
purchase common stock. The Fund will not borrow funds to finance its
investments (that is the Fund will not leverage its investments or invest
on margin). There is no assurance that the Fund will achieve its investment
objectives.
The Fund is a diversified series of Centurion T.A.A. Fund, Inc., d.b.a.
Centurion Counsel Funds, Inc. ("Centurion Counsel Funds"), an open-end
investment company, commonly called a mutual fund. Centurion Counsel Funds
was organized as a Minnesota corporation on August 27, 1981, and is a
registered investment company under the 1940 Act. The Fund offers four
classes of common shares: Class A, Class B, Class C and Class D. The
shares are offered under a multiple pricing system. Additional series or
classes of shares may be offered in the future.
This Prospectus sets forth concisely the information about the Fund
that you should know before investing. You should read it to decide if
an investment in the Fund is right for you. Please keep it with your
investment records for future reference. The Fund has filed a Statement
of Additional Information (dated as of the date of this Prospectus) with
the Securities and Exchange Commission. The Statement of Additional
Information is available free of charge from the Fund at the mailing
address and telephone number below, and is incorporated by reference
into this Prospectus in accordance with the Commission's rules.
To invest, you may fill out the application that accompanies this
Prospectus, or simply contact Centurion Institutional Services, Inc. or
one of the broker-dealers that have sales agreements with Centurion
Institutional Services, Inc. For more information or assistance in
opening an account, please contact:
CENTURION INSTITUTIONAL SERVICES, INC.
11545 W. Bernardo Court, Suite 100
San Diego, California 92127
(619) 673-8536
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSIONS NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSIONS
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK OR OTHER FINANCIAL INSTITUTION, AND THE SHARES ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR
ANY OTHER FEDERAL OR STATE AGENCY.
The Date of This Prospectus is , 1998
No dealer, sales representative or other person has been authorized to
give any information or to make any representations other than those
contained in this Prospectus (and/or in the Statement of Additional
Information referred to on the cover page of this Prospectus), and, if
given or made, such information or representations must not be relied
upon as having been authorized by the Fund or Centurion Institutional
Services, Inc. This Prospectus does not constitute an offer or
solicitation by anyone in the state in which such offer or solicitation
is not authorized, or in which the person making such offer or solicitation
is not qualified to do so, or to any person to whom it is unlawful to
make such offer or solicitation.
SUMMARY OF CONTENTS
This summary describes some important facts concerning an investment
in the Fund. It also tells you where a more detailed discussion may be
found in the text of this Prospectus or the Fund's Statement of Additional
Information.
The Fund is an open-end, diversified management investment company
that only issues shares of common stock. By purchasing shares in the
Fund, you and the other investors in the Fund are pooling your money to
acquire a diversified portfolio of securities and other assets.
Objective Prospectus, page 1
The investment objective of the Fund is set forth in the cover
page of this Prospectus.
Valuing Shares Prospectus, page 14-15
Generally the value of a share of the Fund is determined each day.
Such values may fluctuate from day to day as the values of the Fund's
investments fluctuate.
Dividends; Investment Income; Reinvestments Prospectus, page 20-21
The Fund intends to pay out substantially all of its net investment
income on at least an annual basis and net realized capital gains, if
any, prior to the end of each fiscal year (December 31). Income
dividends and capital gains distributions may be reinvested.
Buying Shares Prospectus, page 15-16
You can start your investment in the Fund with $500. Just fill
out the application that accompanies this Prospectus or call a sales
representative of Centurion Institutional Services, Inc. ("CISI") at
(619) 673-8536. You can also buy shares through other broker-dealers
that have sales agreements with CISI.
Once you have made your initial investment, you can make
additional investments of $25 or more at any time.
Risk Considerations Prospectus, pages 13-14
Appendix A
Your investment in the Fund involves several risk considerations,
including:
The Fund's small size and limited investment portfolio size.
The level of the Fund's expenses before waivers of expense
reimbursements and fees.
The limited experience of the Fund's investment advisor,
Centurion Counsel, Inc. ("Centurion Counsel"), in managing
registered investment companies.
The Fund's investment policies, which include unleveraged,
short-term investments in put and call options, index
futures and index options.
Fluctuations in the market price of the Fund's securities.
The Fund may invest in smaller companies which may lack
depth of management, be unable to internally generate
funds necessary for growth or potential development or
to generate such funds through external financing on
favorable terms.
The possibility of a general market decline in any country
where the Fund invests, causing a decrease in the value
of what the Fund owns and thus, the Fund's share price.
The possibility that the Fund's foreign holdings will be
adversely affected by fluctuations in currency or by
economic or political uncertainties.
Centurion Counsel, Inc.; and Prospectus, pages 27-28
Centurion Institutional
Services, Inc. Statement of Additional Information, page B-9
Your investment is professionally managed. Centurion Counsel is
the Fund's investment Advisor (the "Advisor"). The Fund pays Centurion
Counsel a fee based on a percentage of its net asset value. The total
fees (expressed as a percentage of average daily net assets) payable by
the Fund for these services equal 0.75% (annualized) of the first
$200-million of the Fund's average daily net assets and thereafter
declines as a percentage of average daily net assets as the size of
the Fund increases.
CISI is the principal underwriter (the "Distributor") of the
Fund's shares.
The address and phone number of Centurion Counsel and CISI is
the same as the Fund's, which are on the cover page of this Prospectus.
Multiple Pricing System Prospectus, page 8
Statement of Additional Information, page B-6
The Fund offers four classes of shares. Class A shares, Class B
shares and Class C shares are offered to the general public and each has
its own sales charge structure. Each of these classes of shares has
distinct advantages and disadvantages for different investors, and
investors may choose the class of shares that best suits their
circumstances and objectives. Each class of shares represents an
interest in the same portfolio of investments of the Fund. The per
share dividends on Class B and Class C shares will be lower than the
per share dividends on Class A shares. In addition, the Fund offers
Class D shares to investors who qualify as an Advisor Professionals,
Eligible Employees, or Eligible Account. There are no sales charges
with respect to Class D shares.
Class A Shares. These shares are offered at their net asset
value per share plus a maximum initial sales charge ("front-end charge")
of 4.75% of the offering price. Class A Shares are charged an annual
Rule 12b-1 fee of 0.25% of its average daily net assets attributable
to Class A shares.
Class B Shares. These shares are offered at their net asset
value per share and are subject to a maximum contingent deferred sales
charge of up to 4% of redemption proceeds during the first year,
declining each year thereafter to 0% after the fifth year. Class B
Shares are charged an annual Rule 12b-1 fee of 1.0% of its average
daily net assets attributable to Class B shares. The Class B shares
convert automatically to Class A shares eight years after the end of
the calendar month in which the shareholder's purchase of the Class B
Share was accepted.
Class C Shares. These Shares are offered at their net
asset value per share. No front-end charge or deferred sales charge
will be charged by the Fund with respect to the Class C shares. Class
C Shares are charged an annual Rule 12b-1 fee of 1.0% of its average
daily net assets attributable to Class C shares.
Class D Shares. These shares are offered at their net asset
value per share only to Advisor Professionals, Eligible Employees, and
Eligible Accounts, as defined under "Purchase of Shares - Class D Shares"
herein. No front-end charge or deferred sales charge will be charged by
the Fund with respect to Class D shares. The Fund will not charge Rule
12b-1 fees with respect to Class D Shares.
Sales Charge Prospectus, pages 7 and 8 and pages 17-19
There is no front-end sales charge on Class B, Class C or Class D
shares. The Fund charges a front-end sales charge of 4.75% of the
Offering Price on Class A shares. A maximum contingent deferred
sales charge of 4.0% is charged on Class B shares during the first
year, which amount declines each year thereafter to 0% after the
fifth year.
Sales Expenses Prospectus, page 7 and pages 17-19
The Fund charges Class A shares an annual 12b-1 fee equal to
0.25% of the Fund's average daily net assets of Class A shares,
charges Class B shares 1.0% of the Fund's average daily net assets
attributable to the Class B shares and charges Class C shares 1.0%
of the Fund's average daily net assets attributable to the Class C
shares, respectively. No Rule 12b-1 expenses are charged with respect
to the Class D shares.
Fund Brokerage Statement of Additional Information, page B-15
The Fund's investment advisor may consider sales of shares of
the Fund and of any other funds the advisor may advise as a factor
in the selection of the broker-dealers to execute the Fund's
portfolio transactions. The Fund expects to use affiliates of
Centurion Counsel (including CISI and PIM Financial Services, Inc.)
as brokers of its portfolio securities but only if the provisions
of Section 17(e) of the Investment Company Act of 1940 (and the
rules thereunder) are complied with and only when, in the judgment
of Centurion Counsel, such firm will be able to obtain a price and
execution at least as favorable as other qualified brokers, and the
transactions effected by such firm, including the frequency thereof,
the receipt of commissions payable in connection therewith and the
selection of such firm, are not unfair or unreasonable to the
shareholders of the Fund.
Taxes Prospectus, pages 21-22
The Fund intends to meet the requirements for regulated
investment companies under Subchapter M of the Internal Revenue
Code, and, if so qualified, the Fund will not be taxed on the
income or capital gains it distributes. Each shareholder must
report his or her own income dividends and any capital gains
distributions, whether received in cash or additional shares.
Retirement Accounts
Statement of Additional Information, page B-16
Given the Fund's objectives, an investment in the Fund
may be appropriate for Individual Retirement Accounts ("IRAs"),
Keogh Plans, Tax-Deferred Investment Plans and other similar plans.
For information about the available IRAs or about any other of such
plans, contact the Fund.
Redeeming Shares Prospectus, pages 23-24
Shareholders of the Fund can redeem their shares at any
time by mailing a request to the Fund in the care of Centurion
Counsel, or by having a broker-dealer that has a sales agreement
with CISI telephone or telegraph the redemption request to the Fund.
Shareholder Services/Exchanges Prospectus, pages 25-26
Shareholders may make systematic investments automatically on
a monthly, quarterly or semiannual basis. This type of arrangement
helps the shareholder put money aside regularly. The Fund also
offers a plan for redeeming your investment in regular installments.
Shareholders selecting the periodic pay-out plan must reinvest any
dividends and capital gains distributions. Shareholders may exchange
all or a portion of their investment from the Fund for an investment
in another Centurion fund and/or Cash Equivalent Fund - Money Market
Portfolio, a money market fund offered through CISI, without incurring
a sales charge.
EXPENSE SYNOPSIS
The following Tables are intended to assist investors in
understanding the expenses applicable to each Class of the Fund's
Shares.
/table/
Class A Class B Class C Class D
Shares Shares Shares Shares
Shareholder Transaction
Expenses
Maximum Sales Charge
Imposed on Purchases
(as a Percentage of
Offering Price) 4.75% None None None
Sales charge imposed
on dividend reinvestment None None None None
Deferred Sales Charge (as
a percentage of original
purchase price on
redemption proceeds,
whichever is lower) None 4% during the None None
first & second
year, 3% during
the third year,2.5%
during the fourth
year,1.5% during the
fifth year, and 0%
after the fifth year(a)
Exchange Fee (b) $7.50 $7.50 $7.50 $7.50
Annual Fund Operating
Expenses (as a
percentage of Average
net Assets)
Management(Advisory)Fee 0.75% 0.75% 0.75% 0.75%
12b-1 Fees (c) 0.25% 1.0% 1.0% None
Other Expenses 1.15% 1.15% 1.15% 1.15%
Total Fund Operatin
Expenses 2.15% 2.90% 2.90% 1.90%
Cumulative Expenses Paid for Period of:
1 Year 3 Years 5 Years 10 Years
Example:
An investor would pay the following
expenses on a $1,000 investment including,
for Class A shares, the maximum $47.50
front-end sales charge and for Class B,
a contingent deferred sales charge,
assuming (1) on operating expense ratio
of 2.15% for Class A shares, 2.90% for
Class B shares, 2.90% for Class C shares,
and 1.90% for Class D shares; (2) a 5%
annual return throughout the period and
(3) redemption at the end of the period:
Class A $69.00 $114.00 $161.00 $291.00
Class B $80.00 $123.00 $173.00 $261.00
Class C $30.00 $ 93.00 $158.00 $332.00
Class D $20.00 $ 62.00 $106.00 $229.00
An investor would pay the following
expenses on the same $1,000 investment
assuming no redemption at the end of
the period:
Class A $69.00 $114.00 $161.00 $291.00
Class B $30.00 $ 93.00 $158.00 $261.00
Class C $30.00 $ 93.00 $158.00 $332.00
Class D $20.00 $ 62.00 $106.00 $229.00
Based on conversion to Class A shares after eight years.
(i) See "Purchase of Shares - Class B Shares".
(ii) There is a $7.50 transfer agent's fee per exchange.
(iii) Up to 0.25% for Class A Shares and 1.0% for Class B
and Class C Shares.
The purpose of the above table is to assist the investor in
understanding the various costs and expenses that investors in the
Fund will bear directly or indirectly. The above example should
not be considered a representation of past or future expenses of
the Fund; actual expenses may be greater or less than those shown.
At least through December 1998, the Fund's Advisor has agreed to
waive reimbursement of its expenses by the Fund to the extent such
reimbursements would result in the Fund's expenses, including the
management fee (investment advisory fee), but excluding 12b-1 fees,
interest expense, taxes, brokerage fees and commissions, to exceed
2.625% of the first $200-million of its average daily net assets
on an annual basis. The amounts in the above example may increase
if waivers of expense reimbursements and fees are reduced or
eliminated. The Fund does not charge shareholders a front-end
sales charge on Class B, C and D shares. However, because the
Fund will pay continuing 12b-1 fees at an annualized rate of up to
1.0% of the Fund's average daily net assets attributable to Class B
Shares and Class C shares placed, long-term shareholders may pay more
with respect to Class B shares and Class C shares than the economic
equivalent of the current maximum front-end sales charges or the
maximum front-end sales charges permitted by the Conduct Rules of the
National Association of Security Dealers (the "NASD").
PERFORMANCE DATA
The Fund is newly formed and has no operating history. The table
below summarizes the performance history of a 401k plan investment
portfolio (the "Plan") which has been exclusively managed since its
inception by Mr. Jack K. Heilbron, Chairman of Centurion Counsel and
portfolio manager to the Fund. The investment objectives, policies and
strategies of the Plan are, and at all times have been, identical to those
of the Fund. The Plan is the only other account that has been managed by
Centurion Counsel or Mr. Heilbron with such identical investment objectives,
policies and strategies. The information on which the table is compiled
has been audited by ________________. For presentation in the table, the
Plan's actual net income during the periods presented has been adjusted
during each period to reflect maximum expenses which would have been
incurred had the Plan paid the advisory fees and other expenses under
the arrangements of the Fund for such services and expenses. THE
RESULTS PRESENTED IN THE TABLE SHOULD NOT BE CONSIDERED INDICATIVE OF
THE FUTURE OPERATING RESULTS OF THE FUND.
LEAVE SPACE FOR TABLE
Future advertisements and other sales literature for the Fund
may refer to the Fund's "average annual total return" and "cumulative
total return." All such quotations are based upon historical earnings
and are not intended to indicate future performance. The investment
return on and principal value of an investment in the Fund will
fluctuate, so that the investor's shares when redeemed may be worth
more or less than their original cost. In addition to advertising
average annual total return and cumulative total return, comparative
performance information may be used from time-to-time in advertising
the Fund's shares, including data from Lipper Analytical Services, Inc.,
the Dow Jones Industrial Average, the Standard & Poor's 500 Stock Index
and other industry publications.
"Average annual total return" is the average annual compounded rate
of return on a hypothetical $1,000 investment made at the beginning of
the advertised period. In calculating average annual total return, the
maximum sales charge is deducted from the hypothetical investment and all
dividends and distributions are assumed to be reinvested.
"Cumulative total return" is calculated by subtracting a hypothetical
$1,000 payment to the Fund from the ending redeemable value of such payment
(at the end of the relevant advertised period), dividing such difference by
$1,000 and multiplying the quotient by 100. In calculating ending redeemable
value, all income and capital gain distributions are assumed to be reinvested
in additional Fund shares and the maximum sales load is deducted.
For more information regarding how the Fund's average annual total
return and cumulative total return will be calculated, see "Calculation
of Performance Data" in the Statement of Additional Information.
MULTIPLE PRICING SYSTEM
The Fund's Multiple Pricing System permits an investor to
choose the method of purchasing shares. This is most beneficial for
that investor's circumstances, including the amount to be purchased and
the length of time the investor expects to hold the shares.
Class A Shares. Class A shares are sold at net asset value
plus a maximum front-end sales charge of 4.75% of the offering price.
Class A shares are subject to an ongoing service fee (shareholder
services fee) at an annual rate of up to 0.25% of the Fund's aggregate
average daily net assets attributable to the Class A shares. See
"Purchase of Shares--Class A Shares".
Class B Shares. Class B shares are sold at net asset value
and are subject to a deferred sales charge if they are redeemed within
five years of purchase. Class B shares are subject to an ongoing service
fee at an annual rate of up to 0.25% of the Fund's aggregate average
daily net assets attributable to the Class B shares and an ongoing
distribution fee at an annual rate of up to 0.75% of the Fund's
aggregate average daily net assets attributable to the Class B shares.
Class B shares enjoy the benefit of permitting all of the investor's
dollars to work from the time the investment is made. The ongoing
distribution fee paid by Class B shares will cause such shares to
have a higher expense ratio and to pay lower dividends than those
related to Class A shares. See "Purchase of Shares--Class B Shares."
Class B shares will automatically convert to Class A shares eight years
after the end of the calendar month in which the shareholder's order
to purchase was accepted. See "Conversion Feature" below for discussion
on applicability of the conversion feature to Class B shares.
Class C Shares. Class C shares are sold at net asset value
and are not subject to a front-end or a deferred sales charge. Class C
shares are subject to an ongoing service fee at an annual rate of up to
0.25% of the Fund's aggregate average daily net assets attributable to
the Class C shares and an ongoing distribution fee at an annual rate of
up to 0.75% of the Fund's aggregate average daily net assets attributable
to the Class C shares. Class C shares enjoy the benefit of permitting
all of the investor's dollars to work from the time the investment is
made. The ongoing distribution fee paid by Class C shares will cause
such shares to have a higher expense ratio and to pay lower dividends
than those related to Class A shares. See "Purchase of Shares--Class
C Shares."
Class D Shares. Class D shares are sold at net asset value
only to persons who qualify as an Advisor Professional, Eligible
Employee, or Eligible Account, each of which is defined in "Purchase
of Shares - Class D Shares. No front-end charge, deferred sales charge,
service fees or distribution fees will be paid by the Fund with respect
to the Class D shares. Class D shares are offered at net asset value
to such persons because of anticipated economies in sales efforts and
sales-related expenses.
Conversion Feature. Class B shares will automatically
convert to Class A shares eight years after the end of the calendar
month in which they were purchased and, as a Class A share, will no
longer be subject to the distribution fee. Such conversion will be on
the basis of the relative net asset value per share, without the
imposition of any sales load, fee or other charge. The purpose of
the conversion feature is to relieve the holders of Class B shares
that have been outstanding for a period of time sufficient for the
Distributor to have been substantially compensated for distribution
expenses related to the Class B shares from most of the burden of the
ongoing distribution fee.
For the purpose of conversion to Class A, Class B shares purchased
through the reinvestment of dividends and distributions paid on Class B
shares in a shareholder's Fund account will be considered to be held in
a separate sub-account. Each time any Class B shares in the shareholder's
Fund account (other than those in the sub-account) convert to Class A,
an equal pro rata portion of the Class B shares in the sub-account will
also convert to Class A.
The conversion of Class B shares to Class A shares is subject to
the continuing availability of an opinion of counsel to the effect that
(i) the assessment of the distribution fee and any higher transfer agency
costs with respect to Class B shares does not result in the Fund's
dividends or distributions constituting "preferential dividends" under
the Internal Revenue Code, as amended (the "Code"), and (ii) the
conversion of shares does not constitute a taxable event under federal
income tax law. The conversions of Class B shares may be suspended if
such an opinion is no longer available. In that event, no further
conversions of Class B shares would occur, and such Class B shares might
continue to be subject to the distribution fee for an indefinite period
which may extend beyond the period ending eight years after the end of
the calendar month in which the shareholder's order to purchase was accepted.
Factors for Consideration. In deciding which class of shares to
purchase, investors should take into consideration their investment goals,
amounts of present and anticipated investments and their individual
investment time horizon and temperaments. Investors should consider
whether, during the anticipated life of their investment in the Fund the
accumulated distribution fees and contingent deferred sales charges on
Class B shares prior to conversion would be less than the initial sales
charge on Class A shares purchased at the same time and to what extent
such differential would be offset by the higher dividends per share on
Class A shares. To assist investors in making this determination, the
table under the caption "Expense Synopsis" sets forth examples of the
charges applicable to each class of shares.
Class A shares are not subject to an ongoing distribution fee and,
accordingly, receive correspondingly higher dividends per share. However,
because initial sales charges are deducted at the time of purchase,
investors in Class A shares do not have all their funds invested
initially and, therefore, initially own fewer shares. Other investors
might determine that it is more advantageous to purchase either Class B
shares or Class C shares and have all their funds invested initially,
although remaining subject to ongoing distribution fees and, for a five
year period, being subject to a contingent deferred sales charge. Ongoing
distribution fees on Class B shares and Class C shares will be offset to
the extent of the additional funds originally invested (resulting from
the non-payment of an initial sales charge) and any return realized on
those funds. However, there can be no assurance as to the return, if any,
which will be realized on such additional funds. For investments held for
ten years or more, the relative value upon liquidation of the three classes
tends to favor Class A or Class B shares, rather than Class C shares.
Class A shares may be appropriate for investors who prefer to pay
the sales charge up front, wish to maximize their current income from the
start, prefer not to pay redemption charges and/or have a longer-term
investment horizon. Class C shares may be appropriate for investors who
wish to avoid a front-end sales charge, put 100% of their investment
dollars to work immediately, and have a shorter-term investment horizon.
Under most circumstances, investments originally made in Class C
shares will tend to have a slightly higher value upon liquidation than
investments originally made in either Class A or Class B Shares, if
liquidated within the first six (6) years after the date of the original
investment due to the front-end sales charge on Class A Shares and the
contingent deferred sales charges on Class B Shares. Under most
circumstances, investment originally made in Class A Shares will tend
to have a slightly higher value upon liquidation than investments
originally made in Class C Shares, if held for and liquidated, after
approximately seven (7) years after the date of original investment because
of higher Rule 12b-1 expenses charged to Class C Shares. This would also
tend to be true for investments originally made in Class B Shares which are
liquidated after eight years when they convert to Class A Shares. However,
this will not be true in all cases and in the event the Fund experiences
inconsistently negative widely fluctuating total returns, may differ.
The distribution expenses incurred by the Distributor in connection
with the sale of the shares will be reimbursed, in the case of Class A shares,
from the proceeds of the initial sales charge and, in the case of Class B
shares, from the proceeds of the ongoing distribution fee and any contingent
deferred sales charge incurred upon redemption within five years of purchase.
In the case of Class C shares, such distribution expenses will be reimbursed
from the proceeds of the ongoing distribution fee. Sales personnel of
broker-dealers distributing the Fund's shares and other persons entitled
to receive compensation for selling such shares may receive differing
compensation for selling Class A, Class B or Class C shares. Investors
should understand that the purpose and function of the contingent
deferred sales charge and ongoing distribution fee with respect to
Class B shares and the ongoing distribution fee with respect to Class C
shares are the same as those of the initial sales charge with respect to
Class A shares. See "Distribution Plans". Class D shares will be more
beneficial to the investor who qualifies for the purchase thereof.
General. Dividends paid by the Fund with respect to Class A,
Class B, Class C and Class D shares will be calculated in the same manner
at the same time on the same day, except that the ongoing service fees,
distribution fees and/or any incremental transfer agency costs relating
to Class A, Class B or Class C shares will be borne by the respective
class. Shares of the Fund may be exchanged, subject to certain
limitations, for shares of the same class or other mutual funds advised
by the Advisor. See "Shareholder Services/Transfers - Exchange Privilege."
The Directors of the Fund have determined that currently no conflict
of interest exists between the classes of shares. On an ongoing basis,
the Directors of the Fund, pursuant to their fiduciary duties under the
Investment Company Act of 1940 (the "1940 Act") and state laws, will seek
to ensure that no such conflict arises.
INVESTMENT OBJECTIVE AND POLICIES OF THE FUND
To help you decide whether a growth Fund is appropriate for you,
this section takes a closer look at the investment programs of the Fund and
the markets in which it invests.
The Fund's Investment Objective
The Fund's investment objective is long-term capital appreciation.
The objective is a fundamental policy of the Fund and may not be changed
without shareholder approval. Preservation of capital, while not
an objective, is also an important consideration. Incidental to seeking
its investment objective of long-term capital appreciation, the Fund seeks
current income. Of course, there is no assurance that the Fund's objective
will be achieved.
Types Of Securities In Which The Fund May Invest
The Fund seeks to achieve its investment objective by investing at
least 65% of its total assets in financially sound companies that have paid
dividends (as described below) based on Centurion Counsel's investment
philosophy that the securities of such companies, because of their dividend
record, have a strong potential to increase in value. Normally, the Fund's
investments are in common stocks, securities convertible into common stocks,
or rights or warrants to subscribe for or purchase common stock.
As a fundamental policy, under normal market conditions at least 65% of
the Fund's portfolio is invested in the securities of companies (i) that
have consistently paid dividends in the past and/or (ii) whose management
have publically announced a current policy of consistently paying dividends.
Centurion Counsel believes that a focus on companies which consistently
pay dividends will help the Fund attain its objective of long-term capital
appreciation. In addition, because capital preservation is an important
consideration, Centurion Counsel also reviews a company's stability and the
strength of its balance sheet in selecting among eligible growth companies
generally. Centurion Counsel also considers other factors, such as return
on shareholder's equity, rate of earnings growth and anticipated price/earnings
ratios, in selecting investments for the Fund.
Following these policies, the Fund will invest predominantly in equity
securities issued by U.S. companies. These may include Large-cap, Mid-cap,
Small-cap and/or Micro-cap companies. Large-cap companies are those which
have a market capitalization of $5 billion or more; Mid-cap companies
generally have a market capitalization of $1 billion up to $5 billion;
Small-cap companies generally have a market capitalization of up to
$1 billion; and Micro-cap companies generally have a market capitalization
of less than $200 million. The Fund may also invest, to a lesser degree,
in smaller capitalization companies, which may be subject to different and
greater risks. See "RISK CONSIDERATION."
Foreign Securities. The Fund may invest in foreign securities,
generally by purchasing sponsored or unsponsored American Depositary
Receipts ("ADRs"), Global Depositary Receipts ("GDRs") and European
Depositary Receipts ("EDRs"). ADRs evidence ownership of, and represent
the right to receive, securities of a foreign issuer deposited in a U.S.
bank or a correspondent bank, while GDRs and EDRs are typically issued by
foreign banks or trust companies and evidence ownership of underlying
securities issued by either a foreign or a U.S. corporation. The Fund
may also purchase the securities of foreign issuers directly in foreign
markets. The Fund currently intends to limit its foreign investments to
no more than 10% of its net assets. Foreign securities have risks that
U.S. securities do not have. For more information about foreign securities
and their risks, please see "RISK CONSIDERATIONS."
Other Investment Policies Of The Fund
In any period of stock market weakness or of uncertain market or
economic conditions as determined by Centurion Counsel, the Fund may
establish a defensive position to preserve capital by temporarily having
all or a part of its assets invested in short-term, fixed-income
securities or retained in cash or cash equivalents. These investments
would include U.S. government securities, bank certificate of deposit,
bankers' acceptances and high-quality commercial paper issued by
domestic corporations.
Options. The Fund may from time to time invest up to 50% of its
assets in investments in options contracts. The Fund will purchase and
sell call and put options in its efforts to enhance performance and/or
to hedge the Funds risk exposure. The Fund will invest in options at
such time and from time to time as Centurion Counsel determines to be
appropriate and consistent with the investment objective of the Fund.
In addition to purchasing such options written by others, the Fund may
also write (sell) covered call and secured put options with respect to
certain of its portfolio securities. A covered call option means that
the Fund owns the underlying securities on which the option is written.
By writing a call option the Fund may become obligated during the term
of the option to deliver the securities underlying the option at the
exercise price if the option is exercised. A secured put option means
that the Fund has and maintains on deposit with its custodian bank cash
or U.S. Government securities having a value equal to the exercise value
of the option. By writing a put option, the Fund may become obligated
during the term of the option to purchase the securities underlying the
option at the exercise price. Options written by the Fund will be
conducted on recognized securities exchanges.
Options contracts are considered derivative securities ("Derivatives").
In general, a Derivative is a security whose value is liked to or derived
from an underlying security or index. The Fund may make such investments
either for hedging purposes or non-hedging purposes. A hedge, for example,
would be where the Fund sells a stock index future for protection against a
future decline in the stock market so if the market drops, the value of the
futures position would rise, thereby offsetting the decline in value of the
Fund's stock holdings. A non-hedge investment would be where the Fund
purchased a stock index future in order to profit by reason of an increase
in the market. In such event, if the market declined, the Fund would realize
a loss from the stock index future and incur a decline in value of its stock
holdings. Investments in Derivatives for non-hedging purposes can subject
the Fund to substantial risks, including, but not limited to, imperfect
correlation between the change in market value of the underlying stocks or
bonds held by the Fund and the prices of futures, contracts and options,
and possible lack of a liquid secondary market for the Derivative security
resulting in the Fund's inability to close a position in a Derivative security
prior to its maturity or expiration date. The Fund will attempt to diminish
the risk of imperfect market correlation by investing in contracts whose price
fluctuations are expected to resemble those of the Fund's underlying
securities. Risks of illiquidity of Derivative investments will be
minimized by entering into transactions on national exchanges with an active
and liquid secondary market. Also, risks in the Fund's acquisition of
Derivative investments will not include the risk of leverage inasmuch as
the Fund may not and will not purchase Derivative investments on credit or
with borrowed funds.
Illiquid Investments. The Fund's policy is not to invest more than 10%
of its net assets in illiquid securities. Illiquid securities are generally
securities that cannot be sold within seven days in the normal course of
business at approximately the amount at which the Fund has valued them.
Loans of Portfolio Securities. Consistent with procedures approved
by the Board, the Fund may lend its portfolio securities to qualified
securities dealers or other institutional investors. Although permitted
to lend up to 30% of its total assets, the Fund currently intends to
limit its lending of securities to no more than 5% of its total assets.
For a description of the Fund's securities lending procedures, please
see the SAI.
Percentage Restrictions. If a percentage restriction noted above
is adhered to at the time of investment, a later increase or decrease
in the percentage resulting from a change in the value of portfolio
securities or the amount of net assets will not be considered a
violation of any of the foregoing policies.
Other Policies and Restrictions. The Fund has a number of
additional investment restrictions that limit its activities to some
extent. Some of these restrictions may only be changed with shareholder
approval. For a list of these restrictions and more information about
the Fund's investment policies, please see "Investment Restrictions" in
the SAI.
Short-Term Trading
The Fund purchases securities both for investment and for
short-term profits. If the Fund feels it is wise to sell a position
in a security, it will not hesitate even if it has had the security
just a short time. Turnover of the Fund's assets will affect brokerage
costs and may affect the taxes you pay. The Fund calculates its
portfolio turnover as the ratio of the lesser of annual purchases or
sales of portfolio securities to average monthly portfolio value (not
including short-term securities, if any). If the Fund had a 100%
turnover rate, it would mean that the Fund replaced all of its
portfolio securities within a year. As a result of the portfolio
turnover rate, the Fund will generally incur greater brokerage
commissions which could also affect federal and state income taxes.
Shorter term investment strategies will also increase the likelihood
that the Fund will incur short-term capital gains and losses.
Guarantees
The Fund makes no guarantees because any investment involves risks.
RISK CONSIDERATIONS
The value of your shares will increase as the value of the
securities owned by the Fund increases and will decrease as the value
of the Fund's investments decrease. In this way, you participate in
any change in the value of the securities owned by the Fund. In
addition to the factors that affect the value of any particular
security that the Fund owns, the value of Fund shares may also
change with movements in the stock market as a whole.
Market Risk. If there is a general market decline in any country
where the Fund is invested, the value of what the Fund owns, and thus the
Fund's share price, may also decline. The value of worldwide stock
markets has increased and decreased in the past. These changes are
unpredictable and may happen again in the future.
Depository Receipts. Investments in Depository Receipts reduce but
do not eliminate all the risk associated with foreign investments. To
the extent that the Fund acquires Depository Receipts through banks which
do not have a contractual relationship with the foreign issuer of the
security underlying the Depository Receipt to issue and service such
Depository Receipts, there may be an increased possibility that the Fund
would not become aware of and be able to respond to corporate actions such
as stock splits or rights offerings involving the foreign issuer in a
timely manner. Please see "Foreign Securities" in the SAI for more
information.
Foreign Securities. Foreign investing involves special risks,
including currency fluctuations and economic and political uncertainties.
The Fund's current foreign investment strategy is to focus on purchasing
ADRs, GDRs and EDRs. Investments in Depositary Receipts reduce but do
not eliminate all the risk associated with foreign investments. To the
extent that the Fund acquires Depositary Receipts through banks which do
not have a contractual relationship with the foreign issuer of the
security underlying the Depositary Receipt to issue and service such
Depositary Receipts, there may be an increased possibility that the Fund
would not become aware of and be able to respond to corporate actions
such as stock splits or rights offerings involving the foreign issuer
in a timely manner.
Micro-cap Companies. The Fund may invest in Micro-cap companies
which have relatively small revenues and limited product lines. Small
companies may lack depth of management, they may be unable to internally
generate funds necessary for growth or potential development or to
generate such funds through external financing on favorable terms. Due
to these and other factors, small companies may suffer significant
losses, as well as realize substantial growth.
Historically, small capitalization stocks have been more volatile
than larger capitalizations stocks and are therefore more speculative
than investments in larger companies. Among the reasons for the greater
price volatility are the less certain growth prospects of smaller firms,
the lower degree of liquidity in the markets for such stocks, and the
greater sensitivity of small companies to changing economic conditions.
Besides exhibiting greater volatility, small company stocks may, to a
degree, fluctuate independently of larger company stocks. Micro-cap
company stocks may decline in price as large company stocks rise, or rise
in price as large company stocks decline.
VALUING SHARES
Shares are offered at the next determined net asset value per
share, plus a front-end or contingent deferred sales charge depending
on the class of shares chosen by the investor, as shown in the tables
herein. The net asset value per share for each class of shares is
determined by dividing the value of the Fund's securities, cash and
other assets (including accrued interest) attributable to such class,
less all liabilities (including accrued expenses) attributable to such
class, by the total number of shares of the class outstanding. Net
asset value per share is determined once daily, Monday through Friday,
as of 1:00 p.m., Pacific Standard Time (the close of primary trading on
the New York Stock Exchange), except on (i) days on which changes in the
value of the Fund's portfolio securities will not materially affect the
current net asset value of the Fund's shares, (ii) days during which no
shares of the Fund are tendered for redemption and no order to purchase
or sell shares of the Fund is received by the Fund or (iii) customary
national business holidays on which the New York Stock Exchange is
closed for trading (as of the date of this Prospectus, New Year's Day,
Washington's Birthday, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day). The Fund will value
its portfolio securities and other assets as follows:
The Fund will value bonds and any stocks, convertible debentures
and bonds, warrants and options traded on major exchanges each day at their
last quoted sales price on their primary exchange as of the close of the
New York Stock Exchange. If a particular security has not been traded on
a certain day, the Fund takes the average price between the last offer to
buy and the last offer to sell. The Fund will value short-term securities
maturing more than 60 days from the valuation date at the readily available
market price or, if unavailable, an approximate market value based on
current interest rates. The board of directors of the Fund has determined
that the determination of value using this method will result in a fair
value of the security is an appropriate means of valuing such securities.
The Fund will value short-term securities maturing in 60 days or less
but which originally had maturities of more than 60 days at the .
acquisition date on an amortized cost basis using the market value on
the 61st day before maturity, and the Fund will value short-term
securities maturing in 60 days or less at the acquisition date at
amortized cost unless the board of directors of the Fund determines
that, under the circumstances, the amortized cost method does not
represent fair value. (Amortized cost is an approximation of market
value determined by systematically increasing the carrying value of
a security if acquired at a discount, or systematically reducing the
carrying value if acquired at a premium, so that the carrying value is
equal to maturity value on the maturity date.) The Fund will value
any foreign securities in its portfolio which are traded on major
exchanges at their last quoted sales price (or, if it has not been
traded on a certain day, the average between the last offer to buy and
the last offer to sell) on their primary exchange as of the close of
the New York Stock Exchange. The Fund will value any foreign securities
which are not listed on a major exchange but have readily available
market quotations at the average between the last bid and asked price
at the time of the close of the New York Stock Exchange. Any foreign
securities held by the Fund will be valued in United States dollars.
The Fund will value securities for which market quotations or pricing
service valuations are not readily available at fair value as determined
in good faith by the Fund's Board of Directors. In valuing such
securities, the Fund's directors are responsible for selecting methods
that they believe represent the fair value. The Fund will take into
consideration yield, quality, coupon, maturity, type of issue, trading
characteristics and other market data in determining valuations for
such securities.
BUYING SHARES
General
The Fund offers Class A, Class B and Class C shares to the general
public and Class D shares only to Advisor Professionals, Eligible
Employees and Eligible Accounts, as defined. Class A shares are sold
with a front-end sales charge; Class B shares are sold without a
front-end sales charge and are subject to a contingent deferred sales
charge upon certain redemptions. Class C and Class D shares are sold
without either a front-end sales charge or a deferred sales charge.
Generally, the net asset values per share of Class A, Class B,
Class C and Class D shares are expected to be substantially the same.
Under certain circumstances, however, the per share net asset values
of Class A, Class B, Class C and Class D shares may differ from one
another, reflecting the daily expense accruals of the service fees
payable with respect to Class A, Class B and Class C shares and the
distribution fees applicable with respect to the Class B and Class C
shares and the differential in the dividends paid on the classes of
shares. The price paid for shares purchased is based on the next
calculation of net asset value plus applicable Class A front-end sales
charges after an order is received by a dealer, provided such order is
transmitted to the Distributor prior to 4:00 p.m. Eastern Standard Time
on such day. Orders received by dealers after the close of the Exchange
are priced based on the next close, provided they are received by the
Distributor prior to the Distributor's close of business on such day.
It is the responsibility of dealers to transmit orders received by them
to the Distributor so they will be received prior to such time.
You can start your investment in the Fund with a $500 investment.
You can make additional investments at any time of $25 or more. The
Fund may waive the foregoing minimums for sales to a group of investors
with a single agent, such as a corporation acting on behalf of
participating employees, for sales involving spousal IRAs and for
shares being purchased through the Fund's periodic payment plan. For
your initial investment you can complete the Application delivered
with this Prospectus yourself and mail it to CISI, at the address on
the cover page of this Prospectus, along with a check in the amount
of your investment, or, if you desire, you can contact CISI who will
see that the investment is made for you. You can make additional
investments by sending a check in the amount of your investment along
with a letter identifying your account number (or one of the payment
stubs provided to shareholders) to CISI, or you can make additional
investments by telephoning CISI. When purchasing shares, you must
specify whether your purchase is for Class A, Class B, Class C or
Class D shares. Orders to purchase Class D shares must be accompanied
by verification of eligibility for purchase satisfactory to CISI.
In addition to buying shares through CISI, you can also invest in the
Fund through certain other broker-dealers which are members of the
National Association of Securities Dealers, Inc. and which have sales
agreements with CISI. Once you have decided to invest in the Fund,
and your purchase order is accepted, the Fund will then compute the
number of shares you will receive by dividing the offering price of
one share into your investment. The Fund will use the offering price
at the close of business on the day the Fund accepts your order.
The Fund's close of business is the closing time of the New York
Stock Exchange on that day. The Fund reserves the right to reject
any purchase order. The Fund will accept or reject your purchase
order on the day your purchase order, containing all required
information, is received by the Fund. The offering price of one
share of the Fund is the net asset value of such share rounded to
the nearest whole cent. The net asset value is the total value of
all the Fund's assets minus any outstanding liabilities. The net
assets are divided by the number of shares of the Fund outstanding
before any shareholder transactions, such as purchases or redemptions,
for that day, to determine the net asset value per share of the Fund.
Each class of shares represents an interest in the same portfolio
of investments of the Fund, has the same rights and is identical in all
respects, except that (i) Class B shares bear the expenses of the deferred
sales arrangement and any expenses (including the distribution fee and any
incremental transfer agency costs) resulting from such sales arrangement,
(ii) each class has exclusive voting rights with respect to approvals of
the Rule 12b-1 distribution plan pursuant to which its distribution fee
and/or service fee is paid which relates to a specific class, and
(iii) Class B shares are subject to a conversion feature. Each class
has different exchange privileges and certain different shareholder
service options available. See "Distribution Plans" and "Shareholder
Services/Transfers - Exchange Privilege." The net income attributable
to Class B and Class C shares and the dividends payable on Class B and
Class C shares will be reduced by the amount of the distribution fee
and incremental expenses associated with such distribution fee. Sales
personnel of broker-dealers distributing the Fund's shares and other
persons entitled to receive compensation for selling such shares may
receive differing compensation for selling Class A, Class B or
Class C shares.
Class A Shares
The public offering price of Class A shares is the next determined
net asset value plus a sales charge, as set forth below.
Front End Sales Charge Table
Reallowed to
Dealers (as a
As % of Net Amount As % of Offering % of Offering
Invested Price Price)
4.99% 4.75% 4.00%
In addition to the reallowances from the applicable public offering
price described above, the Distributor may, from time to time, pay or
allow additional reallowances or promotional incentives, in the form of
cash or other compensation, to dealers that sell shares of the Fund.
The distributor may pay dealers through whom purchases are made an
amount equal to 0.40% of the amount invested. Dealers which are
reallowed ninety percent (90%) or more of the sales charges may be
deemed to be underwriters for purposes of the Securities Act of 1933.
The Distributor may also pay broker-dealers, registered investment
advisors, financial institutions (which may include banks) and other
financial industry professionals that provide services to facilitate
transactions in shares of the Fund for their clients a transaction fee
up to the level of the reallowance allowable to dealers described herein.
Such financial institutions, other industry professionals and dealers are
hereinafter referred to as "Service Organizations." Banks are currently
prohibited under the Glass-Steagall Act from providing certain underwriting
or distribution services. If banking firms were further prohibited from
acting in any capacity or providing any of the described services, the
Distributor would consider what action, if any, would be appropriate.
The Distributor does not believe that termination of a relationship with
a bank would result in any material adverse consequences to the Fund.
State securities laws regarding registration of banks and other financial
institutions may differ from the interpretations of federal law expressed
herein, and banks and other financial institutions may be required to
register as dealers pursuant to certain state laws.
Class B Shares
Class B shares are offered at the next determined net asset value.
Class B shares which are redeemed within five years of purchase are subject
to a contingent deferred sales charge at the rates set forth in the
following table charged as a percentage of the dollar amount subject
thereto. The charge is assessed on an amount equal to the lesser of
the then current market value or the cost of the shares being redeemed.
No sales charge is imposed on increases in net asset value above the
initial purchase price or on Class B shares derived from reinvestment
of dividends on capital gains distributions, other than Rule 12b-1 fees.
The amount of the contingent deferred sales charge, if any, varies
depending on the number of years from the time of payment for the purchase
of Class B shares until the time of redemption of such shares. Solely for
purposes of determining the number of years from the time of any payment
for the purchase of shares, all payments during a month are aggregated
and deemed to have been made on the last day of the month.
Contingent Deferred Sales Charge Table
Contingent Deferred Sales Charge
as a Percentage of
Year Since Purchase Dollar Amount Subject to Charge
First 5%
Second 4%
Third 3%
Fourth 2.5%
Fifth 1.5%
Sixth None
In determining whether a contingent deferred sales charge is
applicable to a redemption, the calculation is determined in the manner
that results in the lowest possible rate being charged. Therefore, it
is assumed that the redemption is first of any shares in the
shareholder's Fund account that are not subject to a contingent
deferred sales charge, second, of shares held for over five years
or shares acquired pursuant to reinvestment of dividends or
distributions and third, of shares held longest during the
five-year period.
To provide an example, assume an investor purchased 100 shares
at $10 per share (at a cost of $1,000) and in the second year after
purchase, the net asset value per share is $12 and, during such time,
the investor has acquired 10 additional shares upon divided reinvestment.
If at such time the investor makes his or her first redemption of 50
shares (proceeds of $600), 10 shares will not be subject to charge
because of dividend reinvestment. With respect to the remaining 40
shares, the charge is applied only to the original cost of $10 per
share and not to the increase in net asset value of $2 per share.
Therefore, $400 of the $600 redemption proceeds is subject to a
deferred sales charge at a rate of 4% (the applicable rate in the
second year after purchase).
The contingent deferred sales charge is waived on redemptions
of Class B shares (i) following the death or disability (as defined
in the Code) of a shareholder, (ii) in connection with certain
distributions from an IRA or other retirement plan, (iii) pursuant
to the Fund's systematic withdrawal plan but limited to 12% annually
of the initial value of the account, and (iv) effected pursuant to
the right of the Fund to liquidate a shareholder's account as
described herein under "Redemption of Shares."
A commission or transaction fee of 4% of the purchase amount
will be paid by the Distributor to broker-dealers and other Service
Organizations at the time of purchase. Additionally, the Distributor
may, from time to time, pay additional promotional incentives in the
form of cash or other compensation, to Service Organizations that sell
Class B shares of the Fund.
Class C Shares
Class C shares are offered at the next determined net asset
value. Other than Rule 12b-1 fees, no front-end, deferred, or other
sales charge is charged with respect to Class C shares.
Class D Shares
The Class D shares are sold at net asset value only to persons
who are Advisor Professionals or Eligible Employees. No front-end,
deferred or other sales charge or Rule 12b-1 fees will be charged by
the Fund with respect to the Class D shares. The Advisor Professionals
will include investment advisors, trust companies and bank trust
departments exercising discretionary investment authority with respect
to the money to be invested in the Fund. Eligible Employees include
(a) current or retired directors of the Funds, current or retired
employees of Centurion Counsel and any of its affiliated companies,
spouses, minor children and grandchildren of the above persons, and
parents of employees and parents of spouses of employees of Centurion
Counsel and any of its affiliated companies; (b) employees and
registered representatives of Service Organizations with selling
group agreements with the Distributor, employees of financial
institutions that have arrangements with Service Organizations
having selling group agreements with the Distributor, and spouses
and minor children of such persons and (c) any trust, pension, profit
sharing or other benefit plan for such persons. Class D Shares are
also offered at net asset value to Eligible Accounts. Eligible
Accounts are accounts opened for shareholders by dealers where
the amounts invested represent the redemption proceeds from
investment companies distributed by an entity other than the
Distributor if such redemption has occurred no more than 15
days prior to the purchase of shares of the Fund and the
shareholder paid an initial sales charge and was not subject
to a deferred sales charge on the redeemed account.
DISTRIBUTION PLANS
Rule 12b-1, adopted by the SEC under the 1940 Act, permits an
investment company to directly or indirectly pay expenses associated
with the distribution of its shares ("distribution expenses") and
servicing its shareholders in accordance with a plan adopted by the
investment company's board of directors and approved by its shareholders.
Pursuant to such Rule, the Directors of the Fund have adopted the
Distribution Plan for their class of shares, hereinafter referred to,
respectively, as the "Class A Plan," the "Class B Plan" and the
"Class C Plan." No Rule 12b-1 Distribution Plan has been adopted
with respect to the Class D shares. Each of the Class A Plan and
the Class B Plan was adopted by the Advisor, as the initial holder
of the Class A shares and Class B shares, respectively, on the date
of this Prospectus pursuant to a shareholder meeting duly held on
such date.
Each Distribution Plan is in compliance with NASD Conduct
Rules (formerly the rules of fair practice). The NASD Rules limit the
annual distribution costs and service fees that a mutual fund may
impose on a class of shares. The NASD Rules limit the annual
distribution costs and service fees that a mutual fund may impose on
a class of shares. The NASD Rules also limit the aggregate amount
which the Fund may pay for such distribution costs. Under the Class A
Plan, the Fund pays a shareholder service fee (service fee) to the
Distributor at an annual rate of up to 0.25% of the Fund's aggregate
average daily net assets attributable to the Class A shares. Such
payments to the Distributor under the Class A Plan are based on an
annual percentage of the value of Class A shares held in shareholder
accounts for which the Distributor and other Service Organizations
are responsible at the rate of 0.25% annually with respect to such
Class A shares. Under the Class B Plan and the Class C Plan, the
Fund pays a service fee to the Distributor at an annual rate of up
to 0.25% and a distribution fee at an annual rate of up to 0.75% of
the Fund's aggregate average daily net assets attributable to the
Class B or Class C shares. These fees compensate the Distributor
for service fees paid by it to Service Organizations and for its
distribution costs and service costs.
The Distributor uses the Class A, Class B and Class C service
fees to compensate Service Organizations for personal service and/or
the maintenance of shareholder accounts of the respective share
classes. Under the Class B Plan, the Distributor receives additional
payments from the Fund in the form of a distribution fee at the
annual rate of up to 0.75% of the Fund's aggregate average daily
net assets attributable to the Class B shares as reimbursement for
(i) up-front commissions and transaction fees of up to 4% of the
purchase price for Class B shares purchased by the clients of
broker-dealers and other Service Organizations and (ii) other
distribution expenses such as advertising and promotional costs.
Under the Class C Plan, the Distributor receives additional payments
from the Fund in the form of a distribution fee at the annual rate
of up to 0.75% of the net assets of the Class C shares as
reimbursement for other distribution expenses as described above.
In adopting each of the Class A Plan, Class B Plan and Class C
Plan, the Directors of the Fund determined that there was a reasonable
likelihood that such Plans would benefit the Fund and its shareholders.
Information with respect to distribution and service revenues and
expenses is presented to the Directors each year for their
consideration in connection with their deliberations as to the
continuance of each of these Distribution Plans. In their review
of the Distribution Plans, the Directors are asked to take into
consideration expenses incurred in connection with the distribution
and servicing of each class of shares separately. The sales charge
and distribution fee, if any, of a particular class will not be used
to subsidize the sale of shares of the other classes.
Service expenses accrued by the Distributor in one fiscal year
may not be paid from the Class A service fees received from the Fund
in subsequent fiscal years. Thus, if the Class A Plan were terminated
or not continued, no amounts (other than current amounts accrued but
not yet paid) would be owed by the Fund to the Distributor.
The respective higher Rule 12b-1 fees attributable to Class B and
Class C shares are designed to permit an investor to purchase such
shares without the assessment of a front-end sales load and at the
same time permit the Distributor to compensate the Distributor and
other Service Organizations with respect to such shares. In this
regard, the purpose and function of the combined contingent deferred
sales charge and distribution fee in the case of Class B shares and
the distribution fee in the case of Class C shares are the same as
those of the initial sales charge with respect to the Class A shares
in that in each case such charges provide for the financing of the
distribution of the Fund's shares.
INVESTMENT INCOME
Dividends and Interest
Once a year the Fund will distribute substantially all its
investment income, if any, minus its operating expenses. Such
distributions will be payable to shareholders who owned the shares
on the date of record. Investment income includes dividends on
stocks and interest on bonds or other securities the Fund holds.
Although dividends and interest on some of the Fund's investments
may be fairly regular, the Fund cannot guarantee any investment income.
Capital Gains
A capital gain is made by selling a security or other capital
asset for more than its cost. Because capital gains are realized
only when an asset is sold, these gains are quite unpredictable.
Before the end of December 31 of each year, the Fund intends to
distribute at least 98% of its net capital gains, if any, for the
twelve-month period ending October 31 of the calendar year.
REINVESTMENTS
Your income dividends and capital gains distributions will be
reinvested in additional shares unless you instruct the Fund to do
otherwise. This allows you to accumulate additional shares of the
Fund without paying a front-end or deferred sales charge. The price
you pay is the net asset value of such Fund's shares, and the dividends
and capital gains distributions are reinvested on the first business
day following the dividend record date.
If you prefer to take your income distributions and capital gains
in cash, you have two other options: You can accept any income dividends
in cash and any capital gains in additional shares at the net asset value
of the Fund's shares, or you can accept any income dividends and capital
gains in cash. Cash distributions will be paid seven to fourteen days
following the dividend record date. Dividend checks which are returned
to the Fund marked "unable to forward" by the postal service will be
placed in the Cash Equivalent Fund until further instructions from
the shareholders.
Indicate your option on the Application delivered with this Prospectus.
You can cancel or change your authorization any time if you notify the Fund
in writing. Any change in your option is effective when it reaches the Fund
in care of Centurion Group, Inc. Only dividends and distributions declared
after your changed authorization has arrived can be reinvested. A
confirmation of the reinvestment will be mailed to you.
TAXES
General. Since its inception, the Fund has met, and the Fund intends
to continue to meet, the requirements for regulated investment companies
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"), and, if it meets these requirements, the Fund will not be liable
for federal income taxes to the extent it distributes its taxable income to
its shareholders. Following is a brief summary of the material federal
tax considerations regarding an investment in the Fund. Each shareholder
is encouraged to consult a tax advisor with respect to these matters.
For further information see "Taxes" in the Statement of Additional
Information.
Taxes on Distributions. Unless a shareholder is exempt from income
taxes, he or she must include all dividends and other distributions in
taxable income for federal, state and local income tax purposes.
Dividends and other distributions are taxable whether they are received
in cash or automatically reinvested in shares of the Fund or another
fund in the Centurion group.
Shareholders also may realize capital gains or losses when they sell
their Fund shares at more or less than the price originally paid. Capital
gain on shares held for more than one year will be long-term capital gain,
in which event it will be subject to federal income tax at the rates
indicated below.
Net realized capital gains of the Fund are classified as short-term
and long-term gains depending upon how long the Fund held the security that
gave rise to the gains. Short-term capital gains are included in income
from dividends and interest as ordinary income and are taxed at the
taxpayer's marginal tax rate. The Taxpayer Relief act of 1997 (the
"Tax Act"), enacted in August 1997, changed the taxation of long-term
capital gains for individuals by applying different capital gains rates
depending on the taxpayer's holding period and marginal rate of federal
income tax. Long-term gains realized on the sale of securities held for
more than one year but not for more than 18 months are taxable at a rate
of 28%. This category of long-term gains is often referred to as "mid-term"
gains but is technically termed "28% rate gains." Long-term gains realized
on the sale of securities held for more than 18 months are taxable at a rate
of 20%. The Fund will provide shareholders with information regarding the
tax status of dividends and other distributions at the end of each year.
Shareholders should consult their tax advisors as to the effect of the
Tax Act on distributions by the Funds of Net Capital Gain.
Income Withholding. The Fund may be subject to withholding of
foreign taxes on dividends or interest it receives on foreign securities.
Foreign taxes withhold will be treated as an expense of the Fund.
Individuals and certain other non-corporate shareholders may be subject
to backup withholding of 31% on dividends, capital gain and other
distributions and redemption proceeds. Unless you are subject to backup
withholding for other reasons, you can avoid backup withholding on your
Fund account by ensuring that we have a correct, certified tax
identification number.
Distributions to Retirement Plans. Fund distributions received
by a shareholder's qualified retirement plan, such as a Section 401(k)
or IRA, are generally tax-deferred; this means that such shareholder is
not required to report Fund distributions on his or her income tax
return when paid to their plan, but, rather, when their plan makes
payments to them.
Tax Treatment of Individual Retirement Accounts Under the
Taxpayer Relief Act of 1997. The Taxpayer Relief Act of 1997
creates two new IRAs which will be available to Fund shareholders
beginning on January 1, 1998. These new IRAs are subject to special
rules and conditions that must be reviewed by the shareholder
when opening a new account.
The new "Roth IRA" will permit tax free distributions of account
balances if the assets have been invested for five years or more, and
the distributions meet certain qualifying restrictions. Shareholders
filing as single taxpayers who have adjusted gross incomes of $95,000
or more, and shareholders filing as joint taxpayers with adjusted
gross incomes of $150,000 or more may find their participation in
this IRA to be restricted.
The new education IRA is intended to help parents fund their
children's post-secondary school education. Parents or others
may contribute up to $500 annually to an education IRA on behalf
of any child under age 18. This IRA is subject to the same
adjusted gross income limits as the Roth IRA above, and there are
other contribution restrictions that may apply. The education
IRA earnings accumulate tax free, and assets that have
accumulated in the IRA may be distributed tax free when used
to pay qualified higher education expenses.
REDEEMING SHARES
As a shareholder in the Fund, you have a right to redeem
your shares any time. The Fund will redeem your shares at their
net asset value, as of the time net asset value is next determined
after receipt of your redemption request by the Fund in care of
Centurion Group, Inc. See "Valuing Shares." The value of the
redeemed shares may be more or less than what you invested. IF
SHARES OF THE FUND ARE REDEEMED IMMEDIATELY AFTER THEY HAVE BEEN
PURCHASED BY NON-GUARANTEED FUNDS (SUCH AS A PERSONAL CHECK), THE
FUND WILL DELAY MAILING THE REDEMPTION CHECK UNTIL THE FUND HAS
VERIFIED YOUR CHECK HAS CLEARED, WHICH MAY TAKE UP TO 15 DAYS
FROM THE DATE OF PURCHASE. If the value of shares of the Fund
in your account falls below $500 because of a redemption and not
because of a decrease in market value, the Fund reserves the
right to redeem its shares in your account on 60 days' written
notice to you and pay the proceeds to you, unless you make
additional investments to bring the account value above $500
within 30 days of the written notice. Therefore, shareholders
who invest only $500 (the minimum investment), and who redeem
any amount in excess of any market appreciation, may have the
remaining shares redeemed by the Fund.
As described herein under "Purchase of Shares," redemptions
of Class B shares are subject to a contingent deferred sales charge.
The contingent deferred sales charge incurred upon redemption is
paid to the Distributor in reimbursement for its distribution-related
expenses. See "Purchase of Shares." A custodian of a retirement
plan account may charge fees based on the custodian's independent
fee schedule.
You may redeem your shares in writing. A written redemption
request must include a specific request to redeem part or all of
your shares. Any written request must be signed by each registered
owner. All signatures on the redemption request must be guaranteed
by one of the following: a bank or trust company; a broker-dealer; or
credit union, a national securities exchange, registered securities
association or clearing agency, a savings and loan association or a
federal savings bank. Occasionally the Fund, or Centurion Group,
Inc., as its agent, may ask for additional proof of identification
and authority to redeem. Such a request is more likely to happen
if the shareholder is a corporate, partnership or fiduciary account
or if redemption is requested by someone who is not the registered
owner. If you have a certificate for shares you want to redeem, it
must accompany your redemption request.
The Fund will accept redemption requests in writing or
facsimile from broker-dealers which have sales agreements with CISI
for the Fund's shares. The Fund will employ reasonable procedures
to confirm that instructions communicated to the Fund by telephone
with respect to redemptions are genuine; if the Fund fails to do so,
it may be liable for any losses due to unauthorized or fraudulent
transactions. Your broker-dealer may require certain documentation
from you before executing a redemption request on your behalf, and
may charge a fee for handling the redemption request for you.
Payment for your redeemed shares will be sent to you within
seven days after receipt of your request in proper form, except
that the Fund may delay the mailing of the redemption check, or a
portion thereof, until the check used to purchase Fund shares has
cleared, which may take up to 15 days from the date of purchase.
Although the use of a certified or cashier's check will generally
reduce this delay, shares purchased with these checks will also be
held pending clearance. Shares purchased by federal funds wire are
available for immediate redemption. In addition, the right of
redemption may be suspended or the date of payment postponed if the
Exchange is closed (other than customary closing) or upon the
determination of the SEC that trading on the Exchange is
restricted or an emergency exists, or if the SEC permits it by
order for the protection of shareholders. Of course, the amount
you receive may be more or less than your investment, depending
on fluctuations in the market value of securities owned by the
Fund. Certain large redemptions may be paid in kind. See
"Redemptions" in the Statement of Additional Information.
Should the Fund stop selling shares, the directors of the
Fund may, after notification to shareholders, make a deduction
from the value of the assets it holds to cover the cost of future
liquidations of its assets so as to distribute fairly these costs
among all shareholders.
A redemption is considered a taxable transaction by the
Internal Revenue Service. If there is a gain, it may be taxable.
If there is a loss, and shares are reacquired 30 days or less
after redemption, some or all of the loss may be disallowed as a
deduction depending on the number of shares reacquired.
SHAREHOLDER SERVICES/TRANSFERS
For each shareholder, Centurion Group, Inc. establishes an
account to which is credited purchases and dividends and from which
is deducted all redemptions. This procedure makes additional
purchases and redemptions more convenient and makes the issuance
of share certificates unnecessary.
Periodic Payment Plan
After you make your first cash investment, you may arrange to
make additional payments of $25 or more on a regular basis. You
decide how often you want to make them: monthly, quarterly or
semi-annually. You are not obligated to make these payments, so if
you cannot make a payment, you can skip it or you can drop the plan
altogether. The Fund can also change its plan or end it anytime on
five days' notice.
You may arrange to have the regular payments described above
automatically invested in the Fund. If you authorize Centurion
Counsel to do so, Centurion Counsel will prepare a check at the
time each periodic payment is to be made, drawn on your account,
and payable to its order. This payment will be used to purchase
the Fund's shares in the same way as if you had written a check
and mailed it to Centurion Counsel, only you do not have to write
the check out and mail it. After each automatic investment, you
will receive a confirmation, and the canceled check will be
returned to you in your regular checking account statement.
For information on establishing an automatic investment plan, you
should communicate with your sales representative or contact the
Fund.
The periodic payment plan works as follows: When your payment
is received, all the shares of the Fund which your money can buy will
be purchased at the public offering price. This includes fractions
of a share. Your regular investment amount will purchase more shares
when the net asset value per share decreases, and fewer shares when
the net asset value per share increases.
A plan is not an option or an absolute right to buy shares. Each
purchase is a separate transaction. After each purchase the Fund will
add your new shares to your account. You will receive a confirmation
of shares purchased and total number of shares held.
Shares of the Fund bought through the periodic payment plan are
exactly the same as any other shares of the Fund. They may be redeemed
anytime after the check clears.
If you are interested in this plan, remember the plan itself cannot
assure there will be a profit. Neither can it protect against a loss
in a declining market. If you decide to discontinue the plan and
redeem your shares when their net asset value is less than what you
paid for them, you will suffer a loss. For this reason, you should
think about your ability to continue the plan even during "down"
periods in markets.
Pay-Out Plan
As a shareholder in the Fund, you may use a pay-out plan to redeem
your investment in regular installments at no extra cost to you and
regardless of the size of your investment. All you have to do is make a
written request to Centurion Counsel at least five days before the date
you want your payments to begin and state the amount of the payment
(minimum of $150) and the frequency thereof (monthly, quarterly,
semi-annually or annually). Once your request is received, the Fund
will pay out a fixed amount that you decide on as frequently as you
have requested by redeeming whatever number of shares are necessary
to make the payment at the times requested. The Fund will make
regular installments until the account is closed or you terminate
the plan. You can change or cancel your request by giving the Fund
five days' notice in care of Centurion Counsel. To the extent payments
made under this plan exceed the amount of dividend income and capital
gains income that you have reinvested in shares, such payments will
constitute a return of the capital that you invested.
Exchange Privilege
Centurion offers a wide variety of funds. If you would like,
you can move your investment from your Fund account to an existing
or new account in another Centurion fund or the Cash Equivalent
Fund - Money Market Portfolio ("CEF") (an "exchange"). Because
it is technically a sale and a purchase of shares, an exchange
is a taxable transaction.
Before making an exchange, please read the prospectus of
the fund you are interested in. This will help you learn about
the fund, its investment objective and policies, and its rules
and requirements for exchanges. For example, some Centurion
funds do not accept exchanges and others may have different
investment minimums.
METHOD STEPS TO FOLLOW
By Mail
1. Send us written instructions signed
by all account owners.
2. Include any outstanding share
certificates for the shares
you're exchanging.
By Phone Call Shareholder Services
If you do not want the ability to exchange
by phone, please let us know.
Through Your Dealer Call your investment representative
We will not impose a contingent deferred sales charge when
you exchange Class B shares. However, any shares subject to the
contingent deferred sales charge at the time of exchange will
remain so in the new fund.
Centurion Counsel also serves as the advisor to Centurion
Counsel Market Neutral Fund.
CEF is managed by Kemper Financial Services, Inc. and is
offered through Centurion Institutional Services, Inc. If a
shareholder wishes to exchange shares of the Fund for shares of
Centurion Counsel Market Neutral Fund or CEF, the shareholder
should first contact CISI and obtain and read the prospectus of
Centurion Counsel Market Neutral Fund or CEF.
The Fund may elect a three business day settlement period for
all exchanges before shares may be re-exchanged. Such exchange is
considered a taxable transaction, and gain or loss will be recognized.
The Fund's transfer agent charges a nominal fee of $7.50 per exchange
for this service. The exchange must satisfy the minimum dollar amount
necessary for new purchases. You need not pay any front-end sales
charge for the exchange.
This exchange privilege is available only in states where shares
of the Fund being acquired may legally be offered and sold and may be
modified or terminated at any time by the Fund. Broker-dealers which
have sales agreements with CISI may charge a fee for processing exchange
orders on behalf of their customers.
Sales Charges
You generally will not pay a front-end sales charge on exchanges.
If you have held your Class A or Class B shares less than six months,
however, you will pay the percentage difference between the sales
charges you previously paid and the applicable sales charge of the
new fund.
Telephone Exchanges
By becoming a shareholder of the Fund you will have the privilege
of instructing Centurion Group by telephone to exchange your shares
between any funds managed by Centurion Counsel (but not to purchase
additional shares or redeem shares). Under this Telephone Exchange
privilege, Centurion Group will accept telephone instructions from you
and those persons representing you for the exchange of your share
subject to the conditions described under "Exchange Privilege" above.
Centurion Group and the Fund will employ procedures they consider
reasonable to confirm that instructions communicated by or for you
by telephone are genuine. These procedures may include requiring
certain personal identification information prior to acting upon
telephonic instructions, tape recording telephone communications
and providing written confirmation of telephonic instructions.
If reasonable procedures are employed, neither Centurion Group
nor the Fund will be liable for following telephonic instructions
which they reasonably believe to be genuine. Centurion Counsel
and the Fund may be liable for any losses due to unauthorized or
fraudulent instructions if reasonable procedures are not followed.
You may decline or terminate the Telephone Exchange privilege by
written election to the Centurion Group.
MANAGEMENT
Centurion Counsel, Centurion Group, Inc. and Centurion Institutional
Services, Inc. are each wholly owned subsidiaries of C I Holding Group,
Inc. ("C I Holding"), a California corporation that is engaged through
its subsidiaries in various aspects of the financial services industry.
C I Holding's primary business activities include investment advisory,
securities brokerage services, investment banking services and due
diligence research and analysis services provided to other financial
services firms on a contract basis. Approximately 40% of C I Holding's
common shares, on a fully diluted basis, are owned by officers and
directors of C I Holding.
Centurion Counsel has been the investment advisor to the Fund
since its inception. The Fund pays Centurion Counsel a fee for
investment advice based on a percentage of the Fund's net assets.
Jack Heilbron is the portfolio manager for the Fund and has been
since its inception. Since 1989, Mr. Heilbron has served as Chairman
and Chief Executive Officer of CI Holding Group, Inc. and certain of
its affiliates, including CISI. He also serves as Chairman and Chief
Investment Officer of Centurion Counsel. Under the Fund's Investment
Advisory Agreement, the fee for these services equals 0.75%
(annualized) of the first $200-million of the Fund's average daily
net assets and thereafter declines as a percentage of average daily
net assets as the size of the Fund increases. The fees paid by the
Fund for these services are higher than the fees most other mutual
funds pay to investment advisors.
In addition to the investment advisory fees paid to the Fund's
investment advisor, the Fund pays all of its expenses not assumed by
its investment advisor or its distributor, including certain expenses
incurred in the operation of the Fund and the public offering of its
shares.
The Fund has adopted Plans of Distribution pursuant to Rule
l2b-1 under the Investment Company Act of 1940, as described above,
which authorize the plan to pay up to a total of 12b-1 fees. See
"Distribution Plans" above. CISI will receive, as compensation for
share distribution-related services it performs under its Distribution
Agreement with the Fund, a fee from the Fund equal to 0.75 of 1% per
year of the Fund's average daily net assets attributable to the Class B
and Class C shares. In addition, CISI will receive as compensation for
shareholder services it performs under its Shareholder Services Agent
Agreement with the Fund a fee from the Fund equal to 0.25 of 1% of the
Fund's average daily net assets attributable to the Class A, Class B
and Class C shares. These services include receiving and responding
to shareholder inquires and requests for information regarding the Fund.
CISI may, at its own expense, provide additional compensation to dealers
in connection with sales of Fund shares and servicing of Fund shareholders.
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45201-1118
acts as custodian of the Fund's assets.
Centurion Group, Inc. acts as the Fund's accounting services agent
pursuant to an Accounting Services Agreement with the Fund. As
compensation for these services, the Fund pays CGI a monthly fee equal
to an annual rate of .15% of the Fund's average net assets, provided,
however, the Fund has agreed to pay an annual minimum accounting services
fee of $18,000.
CGI also acts as the Fund's administration agent pursuant to an
Administration Agreement with the Fund. As such, CGI acts as the Fund's
transfer agent, disburses Fund distributions and maintains the Fund's
shareholder records. As compensation for these services, the Fund pays
CGI a separate fee per service provided as follows: $0.75 per account
maintenance per month; $7.50 per dealer confirmation; $10.00 per wire
transfer; and $50.00 per 1,000 customer statements. Additionally, the
Fund reimburses CGI for all out-of-pocket expenses incurred by CGI in
connection with the rendering of services under the Administration
Agreement.
Both the accounting services fee and the administrative services
fee paid by the Fund to CGI is in addition to the Fund's investment
advisory fee.
In February 1994, PIM Financial Services ("PIM"), formerly
Planners' Independent Management, Inc., was named as co-defendant in a
legal action in the State of Oklahoma. Also named as co-defendants were
Mr. Heilbron, Ms. Limoges, a former agent of PIM and two of PIM's clearing
broker-dealer firms. In these actions, the claimants allege damages of
$6,372,000 plus costs against the defendants by reason of alleged
excessive mark-ups in connection with purchases and sales of U.S.
Government securities made by the defendants to the Oklahoma State
Treasurer's office during 1991 and 1992. PIM, Mr. Heilbron and Ms.
Limoges deny any wrongdoing and are vigorously defending this litigation.
The liability of these defendants, if any, is not yet determinable.
Management believes that the resolution of these claims will not result
in any material adverse effect on CIC, CGI or CISI or interfere in a
material way with the capacity of these companies to perform under
their respective contracts with the Fund.
OTHER INFORMATION
Shares
All shares issued have a par value of $0.01 a share. They are
fully paid, nonassessable and can be transferred. All shares of the
Fund have equal voting rights, except that only shareholders of a class
may vote on matters affecting only that class. They can be issued as
full shares or in fractions. A fraction of a share has the same kind
of rights and privileges a full share has. The shares do not have
cumulative voting or preemptive rights.
The bylaws of the Fund provide that annual shareholder meetings
are not required and that meetings need be held only with such frequency
as required by Minnesota Law or the Investment Company Act of 1940. The
Fund's Articles of Incorporation limit the liability of its directors to
the fullest extent permitted by law.
Financial Reports
As required by the Investment Company Act of 1940, the Fund will
mail annual and semi-annual reports to each of its shareholders. The
Fund's financial statements at the close of its fiscal year (December 31)
will be audited by Squire & Company, independent public accountants.
Stock Certificates
The Fund will maintain a permanent record of all accounts so that
the issuance of stock certificates is generally not necessary. However,
the Fund will issue you a certificate if so requested in writing.
Incorporation and Headquarters
The Fund is a diversified series of Centurion T.A.A. Fund, Inc.
Centurion was incorporated on August 27, 1981 in Minnesota. The
business and affairs of the Fund are managed under the direction of
the Fund's Board of Directors. The Fund's headquarters are located
at the address set forth on the cover page of this Prospectus.
Shareholder inquiries may be made to the Fund at this address.
APPENDIX A
Options
A call option is a contract which gives a buyer of the option
the right to buy a security at a set price for the length of the
contract. The writer of a call option agrees to sell the security
when the buyer wants to exercise his or her option to buy the security
at the set price no matter what the market price of the security is at
that time. In a covered call option, the writer or seller owns the
underlying security required to be sold by the option contract.
A put option is a contract which gives the buyer of the option the
right to sell a security at a set price for the length of the contract.
The writer of a put option agrees to purchase the security when the buyer
wants to exercise his or her option to sell the security at the set price
no matter what the market price of the security is at that time.
When an option contract is made it is agreed that the underlying
security will be sold, in the case of a call option, or purchased, in
the case of a put option, at the set price no matter what the market
price of the security is at the time the option is exercised. For
undertaking the obligation to sell or purchase the security, a writer
receives a cash payment (premium) at the time the option is written.
The premium is retained by the writer whether or not the option is
exercised. However, a writer of a call option gives up the opportunity
for profit when an increase in the market price of the security exceeds
the option premium, and the writer of a put option incurs the risk of
loss when a decrease in the market price of the security exceeds the option
premium.
Writing Covered Call Options. As an example of writing a covered
call option, assume the Fund owned 200 shares of Alpha Corp. When the
stock was selling at $25 per share, the Fund wrote a call option agreeing
to sell those shares at a price of $25 at any time for the next six months.
The buyer paid $200 for thecall option (plus commission, if any). Should
Alpha Corp. stock decline to $20 per share during the time covered by the
call option, the option would not be exercised. The Fund would have
realized a short-term capital gain of about $200. On the other hand,
should Alpha Corp. stock rise to $35 per share, the call option is likely
to be exercised. The Fund would sell the stock at $25 and not at $35.
It would not realize the $2,000 gain but only retain the premium it
received at the time it wrote the call option. To some extent, the
risk of not realizing a gain if the price of the security should go up
can be reduced. To do this, the Fund would enter into a "closing purchase
transaction" prior to the end of the call option, by purchasing a call
option with the same terms as the one it wrote, if one is available.
The cost to close the option and terminate the Fund's obligation to sell
the stock may be more or less than the premium received when it
originally wrote the call option. This would result in a short-term
capital gain or loss. If the Fund would not enter into a closing
purchase transaction, it may be required to hold a security that it may
otherwise have sold to protect against depreciation. The Fund's
portfolio turnover may increase through the exercise of the option if
the market price of the underlying securities goes up and the Fund has
not entered into a closing purchase transaction. The brokerage
commissions associated with the buying and selling of call options
are normally proportionately higher than those associated with general
securities transactions.
Writing a covered call option can serve various purposes. For
example, it can be an alternate method of selling securities because
the Fund, in effect, sets the price in advance at which it intends to
sell securities in its portfolio. It may provide some additional funds
which in turn may provide some additional investment opportunities.
The Fund will write covered call options when it is appropriate and
will follow these guidelines.
Underlying securities will continue to be bought or sold
solely on the basis of investment considerations consistent with the
Fund's objective.
All equity options written by the Fund will be "covered."
In other words, the Fund will own the securities required to be sold
by the call option. If a decision is made to sell the security, the
Fund will attempt to terminate the option contract through a closing
purchase transaction.
The Fund intends to deal only in standard option contracts
traded on national securities exchanges. The Fund will only write
options as permitted under federal or state laws or regulations.
For example, some state regulations limit the amount of total assets
subject to options. While no limit has been set by the Fund, it
will conform to the requirements of those states. When a covered
call option is written, the custodian segregates the underlying securities
and issues a receipt. There are certain rules regarding banks
issuing such receipts which may restrict the amount of covered call
options written. Besides these limitations, net premiums on call
options which are closed or premiums on lapsed call options are
treated as short-term capital gain. Since the Fund will be taxed
as a regulated investment company under the Internal Revenue Code, any
gains on options and other securities held less than three months
must be limited to less than 30% of annual gross gains.
Purchase of Options Written by Others. The purchase of put and
call options written by others may be used as a trading technique
to facilitate buying and selling securities, or for investment
purposes if, as a result, no more than 5% of the Fund's net assets
would be invested in options. When the option is bought, the Fund
pays a premium and a commission. It then pays a second commission on
the purchase or sale of the underlying stock when the option is exercised.
For record keeping and tax purposes, the price obtained on the purchase
or sale of the underlying security will be the combination of the exercise
price, the premium and both of the commissions.
The purchase of put and call options as a trading technique would
involve the sale of a call option or the purchase of a put option with
the expectation that the option would be exercised immediately and would
be used to take advantage of any disparity which might exist between the
price of the underlying stock on the stock market and its price on the
options market. It is anticipated that the proposed trading technique
will be utilized to effect a stock transaction when the price of the
security plus the option price will be as good or better than the price
at which the stock could be bought or sold directly. Options purchased
as a trading technique will not be included as a separate security for
the purpose of portfolio valuation.
When the Fund purchases a call option for investment purposes, it
will realize a profit (loss) if and to the extent the market price of
the underlying security at the time of exercise of the option is greater
than (less than) the fixed exercise price plus the option premium and
commissions paid. When the Fund purchases a put option for investment
purposes, it will realize a profit (loss) if and to the extent the
market price of the underlying security at the time of exercise of the
option is less than (greater than) the fixed exercise price minus
the option premium and commissions paid. When the Fund fails to
exercise an option it has purchased, the Fund will realize a loss in
the amount of the premium and commission it has paid. The purchase of
put and call options written by others may involve risks not encountered
with investments in other securities. Such risks include the possibility
that a liquid secondary market might not exist at a particular time, in
which event it might not be possible to close an option position when it
is desirable to do so. Dealing in options could result in increases in
the Fund's portfolio turnover rate, especially during periods when market
prices of the underlying securities are fluctuating. Purchasing options
also limits the use of monies which might otherwise be available for
long-term investments. Options purchased for investment purposes will
be valued in the Fund's portfolio like any other security. See
"Valuing Shares."
Futures Contracts on Indexes and Options Thereupon
In furtherance of its investment objectives, the Fund may sell
stock index futures contracts on indexes (index futures contracts),
write call options, and/or purchase put options on stock index futures
contracts. An index futures contract obligates the seller to deliver
(and the purchaser to take) an amount of cash equal to a specific dollar
amount times the difference between the value of a specific index at
the close of the last trading day of the contract and the price at which
the agreement is made. No physical delivery of the underlying securities
instruments in the index is made. In general, the fund intends to invest
in stock index futures contracts but may invest in futures contracts or
interest rate indexes for hedging purposes. The Fund will endeavor to
purchase and sell futures contracts on the Indexes for which the Fund
can obtain the best value with consideration also given to liquidity.
The loss from investing in futures transactions is potentially
unlimited. The Fund will engage in transactions on stock index futures
contracts and options thereon only to the extent its activities would
exclude it from the definition of "commodity pool operator" under the
requirements of Section 4.5 of the regulations under the Commodity
Exchange Act promulgated by the Commodity Futures Trading Commission
(the "CFTC" Regulations"). Under Section 4.5 of the CFTC Regulations,
the Fund may engage in futures transactions, either for "bona fide
hedging" purposes, as this term is defined in the CFTC Regulations, or
for non-hedging purposes to the extent that the aggregate initial
margins and premiums required to establish such non-hedging positions
do not exceed 5% of the liquidation value of the Fund's portfolio.
In the case of an option on futures contracts that is "in-the-money"
at the time of purchase (i.e., the amount by which the exercise price
of the put option exceeds the current market value of the underlying
security), the in-the-money amount may be excluded in calculating
this 5% limitation.
However, when buying or selling a stock index futures contract,
or selling an option on a stock index futures contract, the Fund will
cover its position. To cover its position, the Fund may maintain with
its custodian bank (and mark-to market on a daily basis) a segregated
account consisting of cash or U.S. Government securities or repurchase
agreements secured by U.S. Government securities that, when added to
any amounts deposited with a futures commission merchant as margin, are
equal to the market value of the futures contract or otherwise "cover"
its position. The Fund may cover its short position in a futures contract
by owning the instruments underlying the futures contract (or instruments
the prices of which are expected to move relatively consistently with the
instruments underlying the futures contract). The Fund may cover its sale
of a call option on a futures contract by taking a long position on the
underlying futures contract at a price no higher than the strike price of
the call option or, if lower, the Fund maintains in a segregated account
cash or liquid high-grade debt securities equal in value to the difference
between the two strike prices.
There are a number of risks associated with the use of futures
contracts and options. Although the Fund intends to sell futures
contracts, no assurance can be given that a liquid market will exist
for any particular contract any particular time. Many futures exchanges
and boards of trade limit the amount of fluctuation permitted in futures
contract prices during a single trading day. Once the daily limit has been
reached in a particular contract, no trades may be made that day at a
price beyond that limit or trading may be suspended for specified periods
during the day. Futures contract prices could move to the limit for
several consecutive trading days with little or no trading, thereby
preventing prompt liquidation of futures positions an potentially
subjecting the Fund to substantial losses. The risk that the Fund
will be unable to close out a futures position will be minimized by
entering into such transactions on a national exchange with an active
and liquid secondary market. Also, the effect of certain of these
risks will be reduced as the Fund will not engage in these transactions
on margin and thus will not be required to make daily cash payments of
variation margin.
Index Options Transactions. The Fund may purchase put and call
options on index futures contracts, which options give the Fund the right
to sell or purchase the underlying futures contract for a specified price
upon exercise at any time during the option period. The Fund also may
write (sell) put and call options on index futures contracts. The Fund
receives a premium in return for granting to the purchaser of the option
the right to sell to or buy from the Fund the underlying futures contract
for a specified price upon exercise at any time during the option period.
The Fund may engage in related closing transactions with respect to
options on index futures. The Fund will purchase or write options only
on futures contracts that are traded on a United States exchange or board
of trade. Whether the Fund realizes a gain or loss from futures activities
depends generally upon movements in the level of stock prices in the stock
market and the advisor's ability to predict correctly the direction of
stock prices, interest rates, and other economic factors. In contrast
to a long position, where the Fund's loss from the position cannot
exceed the cost of that position, the extent of the Fund's loss
from investing in futures transactions is potentially unlimited.
The Fund also may purchase and write put and call options on
indexes listed on national securities exchanges or traded in the
over-the-counter market as an investment vehicle for the purpose of
realizing the Fund's investment objective or for the purpose of hedging
the Fund's portfolio. A stock index fluctuates with changes in the
market values of the stocks included in the index. Options on
indexes give the holder the right to receive an amount of cash upon
exercise of the option. Receipt of this cash amount will depend
upon the closing level of the index upon which the option is based
being greater than (in the case of a call) or less than (in the case
of a put) the exercise price of the option. The amount of cash
received will be the difference between the closing price of the
index and the exercise price of the option, multiplied by a
specified dollar multiple. The writer (seller) of the option is
obligated, in return for the premiums received, to make delivery
of this amount. Unlike the options on securities discussed above,
all settlements are in cash. The Fund will, in general, invest or
write index options which one traded in a national exchange. Over-
the-counter index options, purchased over-the-counter options, and
the cover for written over-the-counter options will be subject
to the Fund's 5% limitation on investment in illiquid investments.
Each of the Exchanges has established limitations governing
the maximum number of call or put options on the same index which
may be bought or written (sold) by a single investor, whether
acting alone or in concert with others (regardless of whether
such options are written on the same or different Exchanges or
are held or written on one or more accounts or through one or more
brokers). Option positions of all investment companies advised by
the same investment advisor are combined for purposes of these limits.
An Exchange may order the liquidation of positions and may impose other
sanctions or restrictions. These position limits may restrict the
number of listed options which the Fund may buy or sell; however,
the Centurion Counsel intends to comply with all limitations.
Index options are subject to substantial risks, including the
index and the risk that there might not be a liquid secondary market
for the option. The Fund will not enter into an option position that
exposes the Fund to an obligation to another party, unless the Fund
either (i) owns an offsetting position in securities or other options
and/or (ii) maintains with its custodian bank (and marks-to-market on
a daily basis) a segregated account consisting of cash, U.S. Government
securities, or other liquid high-grade debt securities that, when added
to the premiums deposited with respect to the option, are equal to the
market value of the underlying stock index not otherwise covered.
Centurion Counsel intends to utilize index options as a technique
to leverage the Fund's portfolio. If Centurion Counsel is correct in
its assessment of the future direction of stock prices, the Fund share
price will be enhanced. If the Fund takes a position in options and
stock prices move in a direction contrary to Centurion Counsel's forecast,
however, the Fund would incur greater loss than the Fund would have
incurred without the options position.
The fund will engage in transactions on stock index futures
contracts (and/or options thereupon) only to the extent its activities
would exclude it from the definition of "commodity pool operator" under
the requirements of Section 4.5 of the regulations under the Commodity
Exchange Act promulgated by the Commodity Futures Trading Commission
(the "CFTC Regulations"). Under Section 4.5 of the CFTC Regulations,
the Fund may engage in futures transactions, either for "bona fide
hedging" purposes, as this term is defined in the CFTC Regulations,
or for non-hedging purposes to the extent that the aggregate initial
margins and premiums required to establish such non-hedging positions
do not exceed 5% of the liquidation value of the Fund's portfolio.
In the case of an option on futures contracts that is "in-the-money" at
the time of purchase (i.e., the amount by which the exercise price of
the put option exceeds the current market value of the underlying
security), the in-the-money amount may be excluded in calculating this
5% limitation.
Futures contracts on stock indexes and options thereupon and
Derivative Securities involve substantial risks. See the discussion
of Derivatives under Options above.
Short Sales
In seeking its investment objective, the Fund may make short sales.
A short sale of a security is a transaction in which the Fund sells a
security it does not own. To complete such a transaction, the Fund must
own the security so as to make delivery to the buyer. The Fund will
not borrow the security which it sells short.
Until the Fund closes its short position, the Fund will:
(a) maintain a segregated account containing the securities sold short,
or cash or liquid high-grade debt securities at such a level that
(i) the amount deposited in the account equal the current value of
the security sold short and (ii) the amount deposited in the segregated
account will not be less than the market value of the security at the
time it was sold short; or (b) otherwise cover its short position.
For example, through the purchase of a put option for the security
sold short.
PART B -- INFORMATION REQUIRED IN A STATEMENT
OF ADDITIONAL INFORMATION
The Statement of Additional Information included in Part B of Post
Effective Amendment No. 27 filed on Form N-1A of Centurion T.A.A. Fund,
Inc. filed with the Securities and Exchange Commission on May 1, 1998 is
hereby incorporated herein by reference.
PART C --- OTHER INFORMTION
Item 24. Financial Statements and Exhibits
(a) Financial Statements: Financial statements if the Registrant are
included in the Registrant's combined Statement of Additional
Information filed as Part B of this Registration Statement.
(b) Exhibits.
1 Articles of Incorporation of IRI Stock Fund, Inc.(1)
Articles of Amendment of IRI Stock Fund, Inc.(3)
Articles of Amendment of IRI Stock FUnd, Inc. to change name to "Excel
Value Fund, Inc."(5)
Articles of Amdendment of Excel Value Fund, Inc. to change name to
"Centurion T.A.A. Fund, Inc."(7)
1.1 Articles of Amendment of Centurion T.A.A. Fund authorizing multiple
classes of shares.(10)
2 Restated Bylaws of Centurion T.A.A. Fund, Inc.(5)
2.1 Multiple Class Share Plan.(10)
3 Not applicable.
4 Specimen copy of share certificate of Centurion T.A.A. Fund, Inc.(7)
5 Form of Investment Advisory Agreement of Centurion T.A.A. Fund, Inc.(8)
6 Form of Distribution Agreement of Centurion T.A.A. Fund, Inc.(10)
7 Not applicable.
8 Custodian Agreement.(10)
9(a) Form of Administration Agreement of Centurion T.A.A. Fund, Inc.(7)
9(b) Form of Accounting Services Agreement of Centurion T.A.A. Fund, Inc.(7)
9(c) Form of Shareholder Services Agent Agreement of Centurion T.A.A. Fund,
Inc.(10)
10 Opinion and Consent with respect to Centurion T.A.A. Fund, Inc.(2)
11 Consent of Squire & Company.(9)
12 Not applicable.
13 Letter of Investment Intent with respect to Centurion T.A.A. Fund,
Inc.(1)
14 Forms of Tax-Sheltered Retirement Plans.(2)
15.1 Form of Rule 12b-1 Plan of Distribution (Class C Share Plan).(10)
15.2 Form of Rule 12b-1 Plan of Distribution for Class A Shares.(10)
15.3 Form of Rule 12b-1 Plan of Distribution for Class B Shares.(10)
16 Calculations of Total returns of Centurion T.A.A. Fund, Inc.(3)
- ----------------------------------------
(1) Incorporated herein by reference to Registration Statement on Form N-1A
of IRI Stock Fund, Inc. filed with the Securities and Exchange Commission
on September 4, 1981.
(2) Incorporated herein by reference to Pre-Effective Amendment No. 1 to the
Registration Statement of Form N-1A of IRI Stock Fund, Inc. filed with
the Securities and Exchange Commission on January 6, 1982.
(3) Incorporated by reference to Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A of IRI Stock Fund, Inc. and Post-
Effective Amendment No. 8 to the Registration Statement on Form N-1A of
Midas Gold Shares and Bullion, Inc. filed with the Securities and
Exchange Commission on May 2, 1988.
(4) Incorporated by reference to Post-Effective Amendment No. 11 to the
Registration Statement on Form N-1A of IRI Stock Fund, Inc. and Post-
Effective Amendment No. 9 to the Registration Statement on Form N-1A of
Midas Gold Shares & Bullion, Inc. filed with the Securities and Exchange
Commission on March 30, 1989.
(5) Incorporated by reference to Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A of Excel Value Fund, Inc. and Post-
Effective Amendment No. 10 to the Registration Statement on Form N-1A of
Excel Midas Gold Shares, Inc. filed with the Securities and Exchange
Commission on May 1, 1990.
(6) Incorporated by reference to Post-Effective Amendment No. 14 to the
Registration Statement on Form N-1A of Excel Value Fund, Inc. filed with
the Securities and Exchange Commission on May 1, 1992.
(7) Incorporated by reference to Post-Effective Amendment No. 17 to the
Registration Statement on Form N-1A of Centurion T.A.A. Fund, Inc. filed
with the Securities and Exchange Commission on February 2, 1995.
(8) Incoporated by reference to Post-Effective Amendment No. 20 to the
Registration Statement on Form N-1A of Centurion T.A.A. Fund, Inc. filed
with the Securities and Exchange Commission on April 27, 1995.
(9) Incorporated by reference to Post-Effective Amendment No. 22 to the
Registration Statement on Form N-1A of Centurion T.A.A. Fund, Inc. filed
with the Securities and Exchange Commission on April 9, 1996.
(10) Incorporated by reference to Post-Effective Amendment No. 23 to the
Registration Statement on Form N-1A of Centurion T.A.A. Fund, Inc. filed
with the Securities and Exchange Commission on August 27, 1996.
(11) Incorporated by reference to Post-Effective Amendment No. 27 to the
Registration Statement filled on Form N-1A of Centurion T.A.A. Fund,
Inc. filed withe the Securities and Exchange Commission on May 1, 1998.
Item 25. Persons Controlled by or Under Common Control with Registrant.
Not applicable.
Item 26. The following table sets forth the number of holders of shares of
Centurion Counsel Growth Fund as of February 10, 1999.
Fund Title of Class Number of Record Holders
Centurion T.A.A. Fund Common Stock, par
value $0.01 333
Centurion Counsel Growth Common Stock, par
Fund value $0.01 None
Item 27. Indemnification
Indemnification. Article 7(d) of the Registrant's Articles of Incorporation
and Article VIII of its Bylaws provide that the Registrant shall indemnify such
persons, for such expenses and liabilities, in such manner, under such
circumstances, and to such extent as permitted by Section 302A.521 of the
Minnesota Statutes, as now enacted or hereafter amended; provided, however,
that no such indeminification may be made if it would be in violation of
Section 17(h) of the Investment Company Act of 1940, as now enacted or
hereinafter amended, and any rules, regulations or releases premulgated
thereunder.
The Registrant may indemnify its officers and directors and other "persons"
acting in an "official capacity" (as such terms are defined in Section
302A.521) pursuant to a determination by the board of directors or shareholders
of the Registrant as set forth in Section 302A.521, by special legal counsel
selected by the obard or a committee thereof for the purpose of making such
a determination, or by a Minnesota court upon application of the person
seeking indemnification. If a director is seeking indemnification for conduct
in the capacity of director or officer of the Registrant, then such director
generally may not be counted for the purpose of determining iether the
presence of a quorum or such director's eligibility to be indemnified.
In any case, indemnification is proper only if the eligibility doby decides
that the person seeking indemnification:
(a) has not received indemnification for the same conduct from any other
party or organization;
(b) acted in good faith;
(c) received no improper personal benefit;
(d) in the case of criminal proceedings, has no reasonable cause to believe
the conduct was unlawful;
(e) reasonable believed that the conduct was in the best interest of the
Registrant, or in certain contexts, was not opposed to the best interest
of the Registrant; and
(f) had not otherwise engaged in conduct which precludes indemnification
under either Minnesota or Federal law (including, without limitation,
conduct constituting willful misfeasance, bad faith, gross negligence,
or reckless disregard of duties as set forth in Section 17(h) and (i) of
the Investment Company Act of 1940.
Advances. If a person is made or threatened to be made a party to a
proceeding, the person is entitled, upon written request to the Registrant, to
payment or reimbursement by the Registrant of reasonable expenses, including
attorneys' fees and disbursements, incurred by the person in advance of the
final disposition of the proceeding, (a) upon receipt by the Registrant of a
written affirmation by the person of good faith belief that the criteria for
indemnification set forth in Section 302A.521 have been satisfied and a written
undertaking by the person to repay all amounts so paid or reimbursed by the
Registrant if it is ultimately determined that the criteria for indemnification
have not been satisfied, and (b) after a preclude indemnification under Section
302A.521. The written undertaking required by clause (a) is an unlimited
general obligation of the person making it, but need not be secured and shall
be accepted without reference to financial ability to make the repayment.
Undertaking. The Registrant undertakes that insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless, in the opinion of its counsel, the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
Other. Reference is made to Section 9 of the Distribution Agreement filed
as Exhibit (6) to this Registration Statement.
Item 28. Business and Other Connections of Investment Advisor
Information on the business of the Registrant's investment advisor is
described in the section of the Statement of Additional Information entitled
"Centurion Counsel, Inc., Centurion Group, Inc. and Centurion Institutional
Services, Inc." filed as part of this Registration Statement.
The following table includes a listing of the name and principal business
address of each director and executive officer of Centurion Counsel, Inc.,
the Registrant's investment advisory, the position(s) held with Centurion
Counsel, Inc. and any other business, profession, vocation or employment of a
substantial nature in which such persons currently engage or have engaged (in
the capacity of director, officer, employee, partner or trustee) during the
past two years.
<TABLE>
<CAPTION>
Name and Principle Position(s) with Other Occupations
Business Address Centurion Counsel, Inc. During Past Two Years
<C> <C> <C>
Jack K. Heilbron Chairman of the Board and Chairman of the Board and Chief
11545 W. Bernardo Court Chief Investment Officer Executive Officer of the Registrant.
Suite 100 Chairman of the Board of Directors of
San Diego, CA 92127 CI Holding Group, Inc. ("CI Holding"),
the parent corporation of Centurion
Counsel, Inc. Mr. Heilbron also serves
as the Chairman and a Director of other
operating subsidiaries of CI Holding.
Kenneth W. Elsberry President, Chief Financial President, Chief Financial Officer and
11545 W. Bernardo Court, Officer and Director Treasurer of the Registrant. Chief
Suite 100 Financial Officer and Director of C I
San Diego, CA 92127 Holding and other of its operating
subsidiaries.
Mary R. Limoges Executive Vice President, Secretary of Registrant. Executive Vice
11545 W. Bernardo Court, Secretary and Director President, Secretary and Director of C I
Suite 100 Holding and serves as Executive Officer of
San Diego, CA 92127 of other of its operating subsidiaries.
</TABLE>
Item 29. Principle Underwriters
The following table sets forth the name and principle adress of
each director and officer of Centurion Institutional Services, Inc., the
Registrant's principle underwriter, and the positions, if any, such
persons hold with Centurion T.A.A. Fund, Inc.
Position(s) and Office(s)
Name and Principle with Centurion Institutional Positions and Offices
Business Address Services, Inc. with the Registrant
Mary R. Limoges President, Chief Executive Secretary
11545 W. Bernard Court Officer and Director
Suite 100
San Diego, CA 92127
Kenneth W. Elsberry Chief Financial Officer and President, Chief
11545 W. Bernardo Court Director Executive Officer,
Suite 100 Treasurer, Chief
San Diego, CA 92127 Financial Officer
Item 30. Location of Accounts and Records
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio, 45202-1118,
acts as the custodian of the Registrant's portfolio securities and cash.
Centurion Group, Inc., 11545 W. Beranrdo Court, Suite 100, San Diego,
California 92127, acts as Registrant's transfer agent, dividend disbursing
agent, administrative services agent and accounting services agent. Star
Bank, N.A. and Centurion Group, Inc. will maintain certain books and records
in connection with their respective duties. All other records, including
the Registrant's minute books, will be kept by the Registrant.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this Post-Effective Amendment to
the Registration Statement pursuant to Rule 485(a) under the Securities Act
of 1933 and has duly caused this Post-Effective Amendment to the
Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of San Diego, State of California,
on the 10th day of February 1999.
CENTURION T.A.A. FUND, INC.
By: /s/
Kenneth W. Elsberry
Chief Executive Officer and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on hte dates indicated.
Signature Title Date
/s/ Chairman of the Board of February 10, 1999
Jack K. Heilbron the Registrant.
/s/ President, Chief Executive February 10, 1999
Kenneth W. Elsberry Officer, Chief Financial
Officer.
/s/ Director of the Registrant February 10, 1999
Carol Ann Freeland
/s/ Director of the Registrant February 10, 1999
Richard E. Hall
/s/ Director of the Registrant February 10, 1999
Russell W. Ketron
/s/ Director of the Registrant February 10, 1999
Douglas Werner
Centurion Counsel Growth Fund
APPLICATION AND INSTRUCTIONS
Opening Your Account
You may purchase shares of Centurion Counsel GrowthFund,
Inc. (the "Fund") with an initial investment of $500 or more.
Once you are a shareholder in the Fund you can make additional
investments of $25 or more by mail.
To Invest By Mail
Complete this application and mail it with your check payable
to the Fund at the address set forth on the cover page of the prospectus.
If you are currently a shareholder, you may mail additional investments
at any time. Please enclose one of the payment stubs that is provided to
shareholders or enclose a brief note indicating your account number.
To Invest By Phone
If you are already a shareholder, you may purchase additional
shares by telephone and receive that day's closing public offering price.
Simply call Centurion Institutional Services, Inc. prior to the close of
the New York Stock Exchange (normally 4:00 p.m. Eastern Standard Time)
at (619) 673-8536 or call the broker through whom you made your
original investment. Payments must be received within five days of your
order.
Withdrawals
You have a right to redeem your shares at any time in writing
through your broker. All written requests for withdrawals must be
signed by each shareholder, and all signatures on requests for
withdrawals must be guaranteed by a national bank or state chartered
commercial bank or trust company (except a savings bank) or a member of
the New York or American Stock Exchange, the National Association of
Securities Dealers, Inc. or any regional stock exchange.
The Fund will require certain legal documents from corporations
or other organizations, executors, and trustees, or if anyone other than
the shareholder of record requests redemption. If you have any questions
concerning a redemption, telephone the Fund's transfer agent, Centurion
Group, Inc. at (619) 673-8536.
The Fund also offers a systematic withdrawal plan whereby you
can authorize periodic automatic redemptions. Contact the broker through
whom you made your original investment or the Fund for further
information.
Exchange With Other Fund
You may exchange some or all of your shares of the Fund for
shares of Cash Equivalent Fund Money Market Portfolio. You need not pay
any front-end sales charge for the exchange. There is a service charge
of $7.50 each time you use the exchange privilege. To be able to use
the exchange feature over the telephone you will need to complete the
Telephone Exchange Authorization Form included with the application.
APPLICATION Mail to: CENTURION GROUP, INC.
Shareholder Services
11545 W. Bernardo, Suite 100
San Diego, CA 92127
1. Type of Account (Check one only)
[]Individual
First Name ________________________________________________
Middle Initial
Last Name
Social Security No.
Birthdate
[]Joint Tenant
First Name ________________________________________________
Middle Initial
Last Name
Social Security
No.Birthdate
[]Gifts/Transfer to Minors _____________ as custodian ______________________
Name of Custodian (One Only) Name of Minor (One Only)
under the _____________
State
Uniform Gifts to Minors__________________________ ________________
Minor's Social Security No. Minor's Birthdate
[]Corporation __________________________________________________________
Partnership, Exact Name of Corporation, Partnership, other Organization
Trust or Other _________________________
Organization Tax Identification Number
_________________________________________________________
Trustee Accounts Only: Name of all Trustees required by
trust agreement to sell/purchase shares
_______________________ _____________ ________________
Date of Trust Agreement Name of Trust Tax Identification #
[] Under penalty of perjury I/we certify that the Taxpayer Indentification
Number (Social Sercurity Number or Employer Indentification Number)
contained herein in true, correct, and complete and I (we) am (are) not
subject to backup withholding under the provision of Section 3406(a)(1)(c)
of the Internal Revenue Code.
[] Check here if you are subject to backup withholding
2. Mailing Address
______________ ______________ ________________
Street Home Telephone Office Telephone
______________ Citizen of: ___ U.S. ___ Other
City State ZIP (please specify)
3.I (We) apply to invest $ ____________(payment attached) in common
shares of CENTURION COUNSEL FUND, INC. ($500 Minimum)
CLASS OF SHARES (Must select one only)
[]CLASS A Shares (front-end sales charge)
[]CLASS B Shares (contingent deferred sales charge)
[]CLASS C Shares (no sales charge)
[]CLASS D Shares (eligible purchasers only)
[]CASH EQUIVALENT FUND MONEY MARKET PORTFOLIO ($500 Minimum)
(Prior to investing in Cash Equivalent Fund, you must acquire the
Fund's prospectus from Centurion Institutional Services, Inc. and read
such prospectus.)
(Please make checks payable to the appropriate Fund.)
This is my (our) initial investment: ___ Yes ___ No
Additional Investments can be made at any time. Please see
instructions on the reverse side of this application.
4.Distribution Options
(Check one only-If no option is selected, all distributions will be
reinvested into the Fund that pays them.)
[]Reinvest all dividends and capital gains into the Fund that pays them.
[]Pay all dividends and reinvest capital gains.
or
[]Pay all dividends and capital gains.
(If either pay option is selected,
complete Information at right.)
5.Investment Professional
Broker/Dealer Name Investment Professional name
Branch Office Address Investment Professional Rep. Number
City State Zip Code
Investment Professional's Phone Authorized Signature of Broker/Dealer
6.Account Options
For account options, please complete the rest of this application.
Accounts options are:
*Pre-Authorization Check Plan (PAC) *Telephone Exchange
*Interested Party Mail *Systematic Exchange
*Dividend Mail *Systematic Withdrawal
7.Purchase Options
Pre-Authorization Check Plan (PAC)-Automatic Monthly Investing
Fund Name Fund Name Fund Name
Amount $____________, to start ____________ of ___________, __________
Minimum $25 Day Month Year
8.Additional Options
Telephone Exchange-If accepted, accounts must have the same account
information, options and class of shares.
[]I decline telephone exchange, and do not want this privilege.
(See Telephone Transaction Authorization section for procedures.)
Systematic Withdrawal Plan
[] I wish to automatically withdraw $________ from this account.
[]Monthly []Quarterly []Semi-Annually []Annually
I request this distribution be: (check one)
[] Sent to the address lisbed in Section 2. To begin ______of____.
(Will occur about the 21st of the month.)
[] Sent to the special payee listed below. To begin ______of_____.
Name
Street Address
[] Directly deposited in my bank account.(Please attach a voided check
to section 10.)
To begin _______ of _______, ____.
day month year
9.Interest Party Mail/Dividend
[]I wish to have my distributions sent to the address listed below.
Name
Street Address City State Zip Code
[]I wish to have duplicate confirmation statements sent to the interested
party listed below.
Name
Street Address City State Zip Code
10.Signatures
I have read the prospectus and application for the Fund in which I am
investing and agree to their terms. I am also aware that a Telephone
Exchange Privilege exists and that this privilege is automatically
available unless affirmatively declined. I also understand that if the
Fund fails to follow the procedures outlined in the prospectus and in the
Telephone Transaction Authorization hereto, it may be liable for any losses
due to unauthorized or fraudulent instructions. See Telephone Transaction
Authorization section for procedures. I am of legal age. Sign below
exactly as printed in registration. For joint registration, both must
sign. Under penalty of perjury, I certify with my signature below that
the number shown in section one is my correct taxpayer indentification
number. Also, I have not been notified by the Internal Revenue Service
that I am currently subject to backup withholding unless otherwise
indicated.
__________________________
Signature
__________________________
Signature
For corporations, Trusts, or partnerships: We hereby certify that each
of the persons listed below has been duly elected, and is now legally
holding the office set forth opposite his/her name and has the authority
to make this authorization. Please print titles below if signing on
behalf of a business or trust to establish this account.
__________________________________________________
President, Trustee, General Partner or Title
__________________________________________________
Co-owner,Secretary of Corporation, Co-trustee, etc.
TELEPHONE TRANSACTION AUTHORIZATION
Authorization and Agreement
The registrant hereby authorizes Centurion Counsel Growth Fund, Inc. to accept
and act conclusively upon telephone instructions from me, anyone other than me
representing himself to be me, or any person purporting to represent me in
effecting exchanges of shares of one (or more) Centurion Group, Inc. managed
fund(s) (the "Fund" or "Fund(s)" or "Funds") for which such an exchange is
available. Centurion Group Inc. and it subsidiaries, and the Fund employ
procedures consideration by them to be reasonable to confirm that
instructions communicated by telephone are genuine. Such procedures may
include requiring certain personal indentification information prior to
acting upon telephone instructions, tape recording telephone communications
or providing written confirmation of instructions communicated by telephone.
If reasonable procedures are employed, neither Centurion Group Inc. nor the
Fund will be liable for following telephone instructions which it reasonably
believes to be genuine. Centurion Group Inc. may be liable for any losses
due to unauthorized or fraudulent instructions if reasonable procedures are
not followed. I understand and agree to indemnify and hold harmless Centurion
Group, Inc. and the Funds from any liability (including attorney's fees)
arising directly or indirectly from any act or omission to act hereunder not
occasioned by their gross negligence or willful misconduct. I understand that
the exchange privilege may be modified or terminated at any time. I also
understand that these privileges are subject to the conditions and provisiions
set forth herein and in the currect prospectuses of the Funds. For each
exchange, I will ahve received and perused a copy fo the then current
prospectus fo the Fund being purchased. In the case of a registrant other
than an individual, I certify that the organization has the authority to
tranact telephone exchanges. I will notify Centurion T.A.A. Fund of any
changes in such authority. Telephone exchanges may be executed on
individual, joint tenant and Uniform Gifts to Minors or Uniform Transfer
to Minors accounts (with the custodian acting) only.
This Authorization shall be effective upon receipt by Centurion
Group, Inc. It shall in all respects be interpreted, enforced and
governed under the laws of the State of California. Any suit, claim
or action hereunder against Centurion group, Inc. and the Funds shall
have as it sole venue the County of San Diego, State of California.
If any provision fo the Authorization is declared by and court
to illegal or invalid, the validity of the remaining parts shall not be
affected thereby.
Conditions
1. Telephone exchange instruction received before the pricing of the
Fund on any day on which tbe New York Stock Exchange is open for
business (a "Business Day"), but no later then 1:00p.m. Pacific
time, will be processed at the day's closing net asset value.
For each exchange my account shall be charged an exchange fee
noted in the then current prospectus.
2. Telephone exchange instructions should be made by dialing
1-800-878-8536.
3. A waiting period as described in each Fund's prospectus may apply to
exchanges. Exchanges will not be requested prior to the expiration
of any waiting period or in violation of any of the terms and
conditions of any of the Fund's prospectus and I agree to indemnify
Centurion Group, Inc. and the Fund against any harm occasioned by
their compliance with an improper order under any of the Fund's
prospectus.
4. If the exchange involves the establishment of a new account, the
dollar amount being exchanged must at least equal the minimum
investment requirement of the Fund being acquired.
5. Any new account established throught the exchange privilege will
have the same account information and options except as stated in
the currect prospectus and be subject to this authorization.
6. Certificated shares cannot be redeemed or exchanged by telephone
but must be forwarded to Centurion Group, Inc. and deposited into
the customer's account before any transaction may be processed.
7. Shares may not be exchanged and/or redeemed unless an exchange and/
or redemption privilege is offered pursuant to each Fund's current
prospectus.
8. I agree that my ability to exchange under this authorization may be
cancelled, modified or restricted at any time indiscriminately at
the sole discretion of Centurion Group, Inc. or by the Fund(s).
Dealer Agreement
Under these plans, the dealer signing the application acts as principal
in all purchases of Fund shares and appoints Centurion Group, Inc. as its
agent to execute the purchases and to confirm each purchase to the
investor. The dealer hereby guarantees the genuineness of the
signature(s) on the application and represents that he is a duly licensed
dealer and may lawfully sell Fund shares in the state designated by the
investor's mailing address, and that he has entered into a Selling Group
Agreement with the Distributor with respect to the sale of Fund shares.
The dealer signature on the Application, signifies acceptance of the
concession terms, and acceptance of responsibility for obtaining
additional sales charges if specified purchases are not completed.
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