TIMOTHY PLAN, 485BPOS, 1996-04-30

TIMOTHY PLAN
485BPOS, 1996-04-30

Previous: LB VARIABLE INSURANCE ACCOUNT I, 485BPOS, 1996-04-30

Next: DIVERSIFIED INVESTORS VARIABLE FUNDS, 485BPOS, 1996-04-30

<PAGE>

================================================================================

UNITED STATES FILE NO. 33-73248
------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 FILE NO. 811-8228
------------------
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]

Pre-Effective Amendment No. _______ [ ]

Post Effective Amendment No. 4 [X]
------

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]

Amendment No. 5 [X]
-------

THE TIMOTHY PLAN
(Exact name of Registrant as Specified in Charter)

1304 West Fairbanks Avenue
Winter Park, Florida 32789
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code 407-644-1986

Arthur D. Ally, President
The Timothy Plan
1304 West Fairbanks Avenue
Winter Park, FL 32789
(Name and Address of Agent for Service)

COPIES TO: Joseph V. Del Raso, Esq.
Stradley, Ronon, Stevens & Young
2600 One Commerce Square
Philadelphia, PA 19103-7098

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
AS SOON AS PRACTICAL AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
IT IS PROPOSED THAT THIS FILING BECOME EFFECTIVE:

[X] IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (B) OF RULE 485.

[ ] ON (DATE), PURSUANT TO PARAGRAPH (B).

[ ] 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(1).

[ ] ON (DATE) PURSUANT TO PARAGRAPH (A) OF RULE 485.

[ ] 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(II).

[ ] ON (DATE) PURSUANT TO PARAGRAPH (A)(II) OF RULE 485.

IF APPROPRIATE, CHECK THE FOLLOWING BOX:

[ ] THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR A
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT.

Registrant has previously registered an indefinite number of shares of common
stock of The Timothy Plan under the Securities Act of 1933 pursuant to Rule 24f-
2 of the Investment Company Act of 1940, as amended. Registrant filed a Notice
pursuant to Rule 24f-2 for the fiscal year ended December 31, 1995 on February
28, 1996.
================================================================================

As filed with the U.S. Securities and Exchange TOTAL PAGES: 204
Commission on April 29, 1996 INDEX TO EXHIBITS, PAGE: 76
<PAGE>

CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
<TABLE>
<CAPTION>
Part A
Item No. Prospectus Caption
- -----------------------------------------------------------------
<S> <C>
1. Cover Page........................ Cover Page

2. Synopsis.......................... Expenses of the Fund

3. Financial Highlights.............. Financial Highlights

4. General Description of Registrant. Prospectus Cover, Investment Objective and
Policies, Risk Factors and Investment Restrictions

5. Management of the Fund............ Board of Trustees, Investment Adviser, Investment
Manager, Underwriter, Administrator, Custodian,
Transfer Agent, Fund Accounting/Pricing Agent,
Distribution of Shares, and Expenses

6. Capital Stock and Other Securities Shares of Beneficial Interest, Dividends,
Distributions and Taxes

7. Purchase of Shares Being Offered.. Determination of Net Asset Value, How to
Purchase Shares, Retirement Plans

8. Redemption or Repurchase.......... How to Redeem Fund Shares

9. Pending Legal Proceedings......... Inapplicable

PART B STATEMENT OF ADDITIONAL
ITEM NO. INFORMATION CAPTION
- ----------------------------------------------------------------------------------------------

10. Cover Page........................ Cover Page

11. Table of Contents................. Table of Contents

12. General Information and History... N/A

13. Investment Objective and Policies. Cover, The Timothy Plan- Investments, Investment
Restrictions

14. Management of the Fund............ Officers an Trustees of the Fund

15. Control Persons and Principal
Holders of Securities............. Miscellaneous

16. Investment Advisory and Other
Services.......................... Investment Advisor, Investment Manager,
Underwriter and Administrator

17. Brokerage Allocation.............. Allocation of Portfolio Brokerage

18. Capital Stock and Other Securities N/A

19. Purchase, Redemption and Pricing
of Securities Being Offered....... Purchase of Shares
</TABLE>

Page 2
<PAGE>

20. Tax Status........................ N/A

21. Underwriters...................... Underwriters, Purchase of Shares, Distribution
Plan

22. Calculation of Performance Data... Performance Calculations

23. Financial Statements.............. Audited Financial Statements

PART C
------

Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C of this Post-Effective Amendment No.4
to the Registration Statement.
</TABLE>

Page 3
<PAGE>

PROSPECTUS FOR

THE TIMOTHY PLAN

INSTITUTIONAL CLASS

APRIL 29, 1996

- --------------------------------------------------------------------------------

Distributed By:
Fund/Plan Broker Services
Two West Elm Street
Conshohocken, PA 19428
(800) 441-6580

- --------------------------------------------------------------------------------

The Timothy Plan (the "Fund") is an open-end diversified management investment
company. It was organized as a series Delaware business trust and currently
offers shares of one series, which has a specific investment objective. There
is no assurance that the Fund's objective will be achieved.

The objective of the Fund is long-term capital growth and its secondary
objective is current income. The Fund seeks to achieve its objective by
investing in securities issued by companies which, in the opinion of the Fund's
advisor, conduct business in accordance with the stated philosophy and
principles of the Fund (See "Investment Objectives and Policies").

The Fund currently offers two classes of shares: Institutional Class and Retail
Class. This Prospectus pertains only to the Fund's Institutional Class shares.
The Institutional Class shares have no sales charge but are subject to annual
12b-1 Plan expenses. Retail Class shares have a front-end sales charge and are
also subject to annual 12b-1 Plan expenses. The Retail Class is offered in a
separate prospectus which can be obtained by calling (800) TIM-PLAN.

The shares of the Fund may be purchased or redeemed at any time. Purchases and
redemptions will be effected at the net asset value next determined following
receipt of the investor's request. (See "Determination of Net Asset Value,"
"How to Purchase Shares," and "How to Redeem Shares").

This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. Investors should read and
retain this Prospectus for future reference.

More information about the Fund and classes of shares of the Fund has been filed
with the Securities and Exchange Commission, and is contained in the "Statement
of Additional Information," dated April 29, 1996 which is available at no charge
upon request to the Fund. The Fund's Statement of Additional Information is
incorporated herein by reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE>

TABLE OF CONTENTS

PAGE
<S> <C>
Expenses of the Fund........................................... 6

Financial Highlights........................................... 7

The Fund....................................................... 8

Investment Objectives and Policies............................. 8

Risk Factors................................................... 9

Investment Restrictions........................................ 11

Shares of Beneficial Interest.................................. 12

Management of the Fund......................................... 12

Board of Trustees............................................ 12
Investment Advisor........................................... 12
Investment Manager........................................... 13
Underwriter.................................................. 14
Plan of Distribution......................................... 14
Administrator................................................ 14
Custodian, Transfer Agent and Fund Accounting/Pricing Agent.. 14
Expenses..................................................... 15

Dividends, Distributions and Taxes............................. 15

Determination of Net Asset Value............................... 16

How to Purchase Shares......................................... 16

How to Redeem Shares........................................... 18

Retirement Plans............................................... 20

Performance.................................................... 21

Investment Application......................................... 22

Automatic Investment Plan Application.......................... 24

Application to Request to Transfer to The Timothy Plan......... 26
</TABLE>

This Prospectus is not an offering of the securities herein described in any
jurisdiction or to any person to whom it is unlawful for the Fund to make such
an offer or solicitation. No sales representative, dealer, or other person is
authorized to give any information or make any representation other than those
contained in this Prospectus.
<PAGE>

EXPENSES OF THE FUND

The following table illustrates all expenses and fees that a shareholder of the
Fund's Institutional Class will incur.

SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases........................... none
Maximum Sales Load Imposed on Reinvested Dividends................ none
Redemption Fees................................................... none /1/
</TABLE>

ANNUAL FUND OPERATING EXPENSES *
(as a percentage of average net assets)

<TABLE>
<S> <C>
Management and Advisory Expenses After Expense Reimbursements...... 0.00%
12b-1 Fees......................................................... 0.25% /2/
Other Expenses After Expense Reimbursements........................ 1.35%
----
Total Operating Costs After Expense Reimbursements................. 1.60%
====
</TABLE>

The purpose of this table is to assist the investor in understanding the various
expenses that an investor in the Fund will bear directly or indirectly. The
Advisor has voluntarily agreed to waive its fees, so that the Fund's total
annual operating expenses will never exceed 1.60% of the daily average net
assets. Further, the Advisor has agreed to reimburse the Fund for its other
expenses so that the Fund's total annual expenses will never exceed 1.60%.
Absent the fee waiver and expense reimbursements, "Management and Advisory
Expenses" and "Other Expenses" would have been 0.85% and 4.99%,
respectively.

The following example illustrates the expenses that you would pay on a $1,000
investment over various time periods assuming (1) a 5% annual rate of return and
(2) redemption at the end of each time period. As noted in the table above, the
Fund charges no redemption fees of any kind.

1 year 3 years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
$16 $50 $87 $190
</TABLE>

THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.

- --------------------------------------------------------------------------------
/1/ United Missouri Bank KC NA charges $9.00 per redemption for redemptions
payable by wire.

/2/ The Board of Trustees has adopted a Plan of Distribution pursuant to Rule
12b-1 under the Investment Company Act of 1940 for the Fund. With the Plan
of Distribution in place, long-term shareholders may pay more than the
economic equivalent of the maximum front-end sales charge consistent with
rules of the National Association of Securities Dealers, Inc. Given the
maximum rate permitted under the Fund's Plan of Distribution, it is
anticipated that it would take a substantial number of years to reach such
maximum.

* The table reflects the expenses the Fund incurred during the fiscal year ended
December 31, 1995.

Page 6
<PAGE>

FINANCIAL HIGHLIGHTS

The following financial highlights were derived from the Fund's financial
statements related to the Institutional Class which were audited by Tait, Weller
& Baker, independent auditors, whose unqualified report thereon is incorporated
by reference into the Statement of Additional Information. The Fund's Statement
of Additional Information may be obtained by shareholders without charge and is
incorporated by reference into this Prospectus. The table sets forth financial
data for a share of capital stock outstanding throughout the period presented.

FOR THE FOR THE
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994*
----------------- -------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................................... $ 9.66 $ 10.00
------ -------

INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------

Net investment income................................................. 0.11 0.06
Net gains (losses) on securities (both
realized and unrealized)............................................. 0.66 (0.34)
------ -------
Total from investment operations................................... 0.77 (0.28)
------ -------

LESS DISTRIBUTIONS
- ------------------

Distributions from net investment income.............................. (0.11) (0.06)
Distributions from net capital gains.................................. (0.25) 0.00
Total distributions................................................ (0.36) (0.06)
------ ------
NET ASSET VALUE, END OF PERIOD......................................... $10.07 $ 9.66
====== =======
TOTAL RETURN........................................................... 7.93% (2.84)%

RATIOS/SUPPLEMENTAL DATA
- ------------------------

Net assets, end of period (in 000's).................................. $6,133 $ 2,217
Ratio of expenses to average net assets:
Before expense reimbursement....................................... 5.84% 18.62 % /1/
After expense reimbursement........................................... 1.60% 1.60 % /1/
Ratio of net investment income to average net assets
Before expense reimbursement....................................... (2.96%) (15.49)% /1/
After expense reimbursement........................................... 1.28% 1.53 % /1/
Portfolio turnover rate............................................... 34.12% 8.31 %
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Institutional Class shares commenced investment operations on
March 21, 1994.

/1/ Annualized.

Page 7
<PAGE>

THE FUND

The Timothy Plan (the "Fund") is an open-end diversified management investment
company commonly known as a mutual fund. The Fund was established as a series
Delaware business trust on December 16, 1993. The Fund currently offers one
series with two classes of shares: Institutional Class and Retail Class. This
Prospectus pertains only to Institutional Class shares.

INVESTMENT OBJECTIVES AND POLICIES

Set forth below are the investment objectives and policies of the Fund. The
investment objective of the Fund is a fundamental policy and may not be changed
without the approval of the holders of a majority of the Fund's outstanding
voting securities. There can be no assurance that the Fund will achieve its
objective.

The Fund's objective is long-term capital growth, with a secondary objective of
current income. The Fund shall seek to achieve its objective while abiding by
ethical standards established for investments by the Fund. Those standards
preclude the investment in securities of companies involved in the businesses of
alcohol production, tobacco production, or casino gambling, or which are
directly or indirectly involved in pornography or abortion. The securities in
which the Fund shall be precluded from investing, by virtue of the Fund's
ethical standards, are referred to as the "Excluded Securities."

The Fund will invest most of its assets in common stocks and American Depository
Receipts ("ADRs"), although it may also invest in other types of securities
including securities convertible into common stocks and common stock equivalents
(including rights and warrants), preferred stocks, short-term United States
Government securities, and/or other high-quality, short-term debt securities
(commercial paper, repurchase agreements, bankers' acceptances, certificates of
deposit and other fixed income securities (non-convertible and convertible
bonds, debentures and notes issued by U.S. corporations and certain bank
obligations and participations). High-quality debt securities are those that
are rated Aa or better by Moody's, or AA or better by Standard & Poor's, or that
are of comparable quality. See "Risk Factors" herein, and the Statement of
Additional Information for information relating to these securities. While it
is the Fund's policy to seek long-term investments, changes will be made
whenever management believes that such changes will strengthen the Fund's
investments and realization of its objectives. The Fund will pursue its
objectives by investing a major portion of its assets in securities of companies
which offer prospects for growth of capital in accordance with the portfolio
investment techniques described below.

The Fund seeks to achieve its investment objective by investing primarily in
common stocks and ADRs, while foregoing investments in the Excluded Securities.
Systematic Financial Management, L.P. (the "Investment Manager") will select the
investments for the Fund, but will not invest in securities which Timothy
Partners, Ltd. (the "Advisor") will determine are Excluded Securities. The
Advisor has instructed the Investment Manager to avoid investment in any company
directly involved in the business of alcohol production, tobacco production, or
casino gambling. In addition, the Advisor will compile and maintain a list of
companies that it determines, by using information collected by and published by
three Christian ministries, participate directly or indirectly in either
pornography or abortion. The Advisor will use its best judgement in determining
which companies, through their corporate practices in either of these two areas,
need to be placed on the Excluded Securities list. The Advisor also reserves
the right to exercise its best judgement to exclude investment in other
companies whose corporate practices may not fall within the exclusions described
above, but nevertheless could be found offensive to basic traditional Judeo
Christian values.

The three Christian ministries that publish information that the Advisor will
utilize in identifying companies directly or indirectly involved in pornography
or abortion are as follows: (1) The American Family Association (to identify
companies engaged in pornography); (2) Pro Vita Advisors (to identify companies
that directly and indirectly participate in abortion); and (3) Life Decisions
International (to identify companies that indirectly support abortion causes
through corporate funding programs). The Advisor retains the right to change
the ministries whose information it reviews, at its discretion.

Page 8
<PAGE>

After eliminating the Excluded Securities, the Investment Manager will construct
a portfolio of investments to produce the highest possible risk-adjusted return
on investment as is consistent with the Fund's objective and policies.

The Fund will invest primarily in a diversified portfolio of equity securities
of companies whose market capitalizations exceed $200 million, and whose
securities trade on the New York Stock Exchange, the American Stock Exchange and
the NASDAQ National Market System. Since the Fund is an equity fund, the
Investment Manager seeks investments that show the greatest potential for
growth, with income as a secondary factor. Therefore, these companies may or
may not pay dividends.

The Fund generally will select securities based on a value-oriented investment
style employed by the Investment Manager. That style identifies investments in
securities of companies which consistently generate Free Cash Flow (as defined
by the Investment Manager), and which securities trade at reasonable multiples
of the companies' long-term Free Cash Flows. The Investment Manager defines
Free Cash Flow as the amount of cash available to a company for distribution to
stockholders or investment in its business, after paying all expenses and
providing for expenditures required to support continuing growth. Free Cash
Flow is determined using a methodology developed by the Investment Manager.

Potential equity investment candidates will be analyzed to determine their
ability to repay all fixed debt obligations (including certain "off balance
sheet debts" such as operating lease obligations and unfunded pension
liabilities) from their historical level of Free Cash Flows within a reasonable
time period, generally less than five years. Securities are typically sold when
an appreciation objective is met, the company experiences a full year of
negative operating cash flow or Free Cash Flows decline significantly. The Fund
may invest up to 30% of its assets in cash or debt securities. Although the
Investment Manager does not utilize a market timing strategy, if market
conditions are viewed to require that the Fund take a temporary defensive
position, the Fund may invest up to 100% of its assets in (i) debt securities
issued by the U.S. Government, its agencies or instrumentalities, (ii)
commercial paper, (iii) certificates of deposit and bankers' acceptances or (iv)
repurchase agreements with respect to any of the foregoing investments. The
Fund may also invest in such securities pending the investment of the proceeds
of certain sales of portfolio securities and at such other times when suitable
equity securities are not available. It is impossible to predict whether, or
for how long, the Fund will use any of such temporary defensive strategies.

The Advisor will attempt to monitor and respond to changes in business policies
within the companies selected for investment. It is possible that securities in
which the Fund has invested may become Excluded Securities. In such event, the
Fund will sell its position in those securities subject to general market
considerations.

RISK FACTORS

INVESTMENT RESTRICTIONS OF THE FUND The ethical standards established for
investments by the Fund limit the pool of securities from which investment
securities may be selected by the Investment Manager. Although the Advisor
believes the Fund's investment objective of long-term capital growth can be
achieved notwithstanding the effect of the Fund's ethical standards, this
objective may be affected by the limitations imposed by the Advisor, in
eliminating the Excluded Securities as potential investments.

ADVISOR AND INVESTMENT MANAGER The principals of the Managing General Partner
of the Advisor have been engaged in various aspects of the retail brokerage and
financial advisory business. The Investment Manager has advised individuals,
institutional clients and employee benefit plans since 1983 and currently
manages approximately $1 billion in these accounts. However, neither the
Advisor nor the Investment Manager has previously served as an investment
advisor to an investment company.

PORTFOLIO TURNOVER It is anticipated that the annualized portfolio turnover
rate for the Fund generally will not exceed a range of 50% to 75%, and may be
lower than 50%, during most periods. High portfolio turnover involves
additional transaction costs (such as brokerage commissions) which are borne by
the Fund, and might involve adverse tax effects. (See "Dividends, Distributions
and Taxes").

Page 9
<PAGE>

RISKS OF CERTAIN FIXED INCOME SECURITIES

INTEREST BEARING DEBT INSTRUMENTS The market value of interest-bearing debt
securities, if and when held by the Fund, is affected by changes in interest
rates. There is normally an inverse relationship between the market value of
securities sensitive to prevailing interest rates and actual changes in interest
rates; i.e., a decline in interest rates produces an increase in market value,
while an increase in rates produces a decrease in market value. Moreover, the
longer the remaining maturity of a security, the greater the effect of interest
rate changes on the market value of such a security. In addition, changes in an
issuer's ability to make payments of interest and principal and in the market's
perception of an issuer's creditworthiness also affect the market value of the
debt securities of that issuer.

MONEY MARKET SECURITIES The Fund will select money market securities for
investment when such securities offer a current market rate of return which the
Fund considers reasonable in relation to the risk of the investment, and the
issuer can satisfy suitable standards of credit-worthiness set by the Fund. The
money market securities in which the Fund may invest are repurchase agreements,
certificates of deposit, U.S. Government securities, commercial paper and
securities of money market mutual funds.

Although the Fund intends to invest primarily in common stocks, common stock
equivalents, and ADRs, the Fund may invest up to 30% of its assets directly in
money market securities whenever deemed appropriate to achieve the Fund's
investment objective. It may invest without limitation in such securities on a
temporary basis for defensive purposes.

Securities issued or guaranteed as to principal and interest by the U. S.
Government ("Government Securities") include a variety of Treasury
securities, which differ in their interest rates, maturities and date of issue.
Treasury bills have a maturity of one year or less; Treasury notes have
maturities of one to ten years; Treasury bonds generally have a maturity of
greater than five years. The Fund will only acquire Government Securities which
are supported by the "full faith and credit" of the United States. Securities
which are backed by the full faith and credit of the United States include
Treasury bills, Treasury notes, Treasury bonds and obligations of: the
Government National Mortgage Association, the Farmers Home Administration and
the Export-Import Bank. The Fund's direct investments in money market
securities will generally favor securities with shorter maturities (maturities
of less than 60 days) which are less affected by price fluctuations than are
those with longer maturities.

Certificates of deposit are certificates issued against funds deposited in a
commercial bank or a savings and loan association for a definite period of time
and earning a specified return. Bankers' acceptances are negotiable drafts or
bills of exchange, normally drawn by an importer or exporter to pay for specific
merchandise, which are "accepted" by a bank, meaning, in effect, that the bank
unconditionally agrees to pay the face value of the instrument on maturity.
Investments in bank certificates of deposit and bankers' acceptances are
generally limited to domestic banks and savings and loan associations that are
members of the Federal Deposit Insurance Corporation or Federal Savings and Loan
Insurance Corporation having a net worth of at least $100 million dollars
("Domestic Banks") and domestic branches of foreign banks (limited to
institutions having total assets not less than $1 billion or its equivalent).

Investments in prime commercial paper may be made in notes, drafts, or similar
instruments payable on demand or having a maturity at the time of issuance not
exceeding nine months, exclusive of days of grace, or any renewal thereof
payable on demand or having a maturity likewise limited.

REPURCHASE AGREEMENTS Under a repurchase agreement the Fund acquires a debt
instrument for a relatively short period (usually not more than one week)
subject to the obligation of the seller to repurchase and the Fund to resell
such debt instrument at a fixed price. The Fund will enter into repurchase
agreements only with banks which are members of the Federal Reserve System, or
securities dealers who are members of a national securities exchange or are
market makers in government securities and report to the Market Reports Division
of the Federal Reserve Bank of New York and, in either case, only where the debt
instrument collateralizing the repurchase agreement is a U.S. Treasury or agency
obligation supported by the full faith and credit of the United States. A
repurchase agreement may also be viewed as the loan of money by the Fund to the
seller. The resale price specified is normally in excess of the purchase price,
reflecting an agreed upon interest rate. The rate is effective for the period
of time the Fund is invested in the agreement and may not be related to the
coupon rate on the underlying security. The term of these repurchase agreements
will

Page 10
<PAGE>

usually be short (from overnight to one week). At no time will the Fund invest
in repurchase agreements of more than sixty days. The securities which are
collateral for the repurchase agreements, however, may have maturity dates in
excess of sixty days from the effective date of the repurchase agreement. The
Fund will always receive, as collateral, securities whose market value,
including accrued interest, will at least equal 102% of the dollar amount to be
paid to the Fund under each agreement at its maturity, and the Fund will make
payment for such securities only upon physical delivery or evidence of book
entry transfer to the account of the Custodian. If the seller defaults, the
Fund might incur a loss if the value of the collateral securing the repurchase
agreement declines, and might incur disposition costs in connection with
liquidation of the collateral. In addition, if bankruptcy proceedings are
commenced with respect to the seller of the security, collection of the
collateral by the Fund may be delayed or limited. The Fund also may not be able
to substantiate its interests in the underlying securities. While management of
the Fund acknowledges these risks, it is expected that such risks can be
controlled through stringent security selection and careful monitoring
procedures. The Fund may not enter into a repurchase agreement with more than
seven days to maturity if, as a result, more than 10% of the market value of the
Fund's net assets would be invested in such repurchase agreements and any other
illiquid assets. For purposes of the diversification test for qualification as
a regulated investment company under the Internal Revenue Code, Repurchase
Agreements are not counted as cash, cash items or receivables, but rather as
securities issued by the counter-party to the Repurchase Agreements.

INVESTMENT RESTRICTIONS

The investment restrictions set forth below have been adopted by the Fund as
fundamental policies, to limit certain risks that may result from investment in
specific types of securities or from engaging in certain kinds of transactions
addressed by such restrictions. They may not be changed without the affirmative
vote of the holders of a majority of the outstanding voting securities of the
Fund. Certain of these policies are detailed below, while other policies are
set forth in the Statement of Additional Information. Changes in values of
particular Fund assets or the assets of the Fund as a whole will not cause a
violation of the investment restrictions so long as percentage restrictions are
observed by the Fund at the time it purchases any security.

The investment restrictions specifically provide that the Fund will not:

(a) as to 75% of the Fund's total assets, invest more than 5% of its total
assets in the securities of any one issuer. (This limitation does not
apply to cash and cash items, or obligations issued or guaranteed by the
United States Government, its agencies or instrumentalities);

(b) purchase more than 10% of the voting securities, or more than 10% of
any class of securities, of another investment company. For purposes of
this restriction, all outstanding fixed income securities of an issuer are
considered as one class;

(c) purchase or sell commodities or commodity futures contracts, other
than those related to stock indexes as previously outlined in "Investment
Objectives and Policies;"

(d) purchase or sell real estate or interests therein, although it may
purchase securities of issuers which engage in real estate operations;

(e) make loans of money or securities, except (i) by the purchase of fixed
income obligations in which the Fund may invest consistent with its
investment objective and policies; or (ii) by investment in repurchase
agreements (see "Investment Objectives and Policies");

(f) invest in securities of any company if, any officer or trustee of the
Fund or the Advisor owns more than 0.5% of the outstanding securities of
such company and such officers and trustees (who own more than 0.5%) in the
aggregate own more than 5% of the outstanding securities of such
company;

(g) borrow money, except the Fund may borrow from banks (i) for temporary
or emergency purposes

Page 11
<PAGE>

in an amount not exceeding 5% of the Fund's assets or (ii) to meet
redemption requests that might otherwise require the untimely disposition
of portfolio securities, in an amount up to 33-1/3% of the value of the
Fund's total assets (including the amount borrowed) valued at market less
liabilities (not including the amount borrowed) at the time the borrowing
was made. While borrowing exceeds 5% of the value of the Fund's total
assets, the Fund will not purchase securities. Interest paid on borrowing
will reduce net income ;

(h) pledge, hypothecate, mortgage or otherwise encumber its assets, except
in an amount up to 33-1/3% of the value of its net assets but only to
secure borrowing for temporary or emergency purposes, such as to effect
redemptions; or

(i) purchase the securities of any issuer, if, as a result, more than 10%
of the value of a Fund's net assets would be invested in securities that
are subject to legal or contractual restrictions on resale ("restricted
securities"), in securities for which there are no readily available market
quotations, or in repurchase agreements maturing in more than seven days,
if all such securities would constitute more than 10% of the Fund's net
assets.

SHARES OF BENEFICIAL INTEREST

The beneficial interest of the Fund is divided into an unlimited number of
shares ("Shares") with a par value of $0.001 each. Each Share has equal
dividend, voting, liquidation and redemption rights. If a matter to be voted on
does not affect the interests of all classes, then only the shareholders of the
affected class shall be entitled to vote on the matter. There are no conversion
or preemptive rights. Shares, when issued, will be fully paid and
nonassessable. Fractional shares have proportional voting rights. Shares of
the Fund do not have cumulative voting rights, which means that the holders of
more than 50% of the shares voting for the election of trustees can elect all of
the trustees if they choose to do so and, in such event, the holders of the
remaining shares will not be able to elect any person to the Board of
Trustees.

MANAGEMENT OF THE FUND

BOARD OF TRUSTEES
- -----------------

The members of the Fund's Board of Trustees are fiduciaries for the Fund's
shareholders and are governed by the laws of the State of Delaware in this
regard. They establish policy for the operation of the Fund and appoint the
officers who conduct the daily business of the Fund. The Statement of
Additional Information contains more information regarding Officers and
Trustees.

INVESTMENT ADVISOR
- ------------------

Timothy Partners, Ltd. (the "Advisor") is a Florida limited partnership
organized on December 6, 1993. The Advisor supervises the investment of the
assets of the Fund in accordance with the objective, policies and restrictions
of the Fund. The Advisor approves the portfolio of securities selected by the
Investment Manager (See "Investment Manager" below). To determine which
securities are Excluded Securities with respect to abortion and pornography, the
Advisor consults with three Christian ministries on these issues: The American
Family Association (pornography), Pro Vita Advisors (direct and indirect
participation and involvement in abortion) and Life Decisions International
(indirect participation in abortion through corporate funding programs). The
Advisor retains the right to change the ministries whose information it reviews,
at its discretion.

For its services, the Advisor is paid an annual fee equal to 0.85% of the Fund's
average daily net assets. This fee is subject to reductions reflecting certain
reductions in the fee of the Advisor pursuant to state expense limitations and
other voluntary reductions in fees paid by the Fund. The fee paid to the
Advisor includes the compensation that the Advisor pays to the Investment
Manager for its services to the Fund, and the compensation that the Advisor pays
to

Page 12
<PAGE>

Covenant Financial Management, Inc. ("CFM") for its services to the Fund. In
addition, this fee also covers the cost of postage, materials and handling of
the fulfillment function of processing Prospectus requests as well as other
sundry marketing and general administration expenses. The fee payable to and
services provided by the Investment Manager are described under the heading
"Investment Manager" below. The fee payable to and services provided by CFM are
described at the end of this section. The Advisor's fee is higher than that
charged by other funds, but is comparable to fees charged by funds with similar
investment objectives. The Advisor has offices located at 1304 West Fairbanks
Avenue, Winter Park, FL 32789.

Arthur D. Ally, the President, Chairman and Trustee of the Fund, is President
and a 70% shareholder of Covenant Funds, Inc. ("Covenant"), which is the
managing general partner of the Advisor. Mr. Ally is also an individual general
partner of the Advisor. Neither the Advisor nor its managing general partners
previously has served as an advisor to a registered investment company. Mr.
Ally, however, has had extensive securities industry experience having served as
financial consultant and branch manager for three securities firms over the past
seventeen years: Prudential Bache, Shearson Lehman Brothers and Investment
Management & Research. Some or all of these firms may be used by the Investment
Manager to execute portfolio trades for the Fund. Neither Mr. Ally nor any
affiliated person to the Fund will receive any benefit from any of these
transactions.

The Advisor and CFM have entered into an agreement dated February 23, 1994
whereby the Advisor pays CFM for certain overhead expenses related to the daily
operations of the Fund that CFM carries out. These expenses include: salary of
administrative personnel, cost of preparation of shareholder fulfillment kits,
cost of phone lines and office space, and cost of postage and supplies. The
annual fee that the Advisor pays on a monthly basis for CFM's services is
designed to only cover CFM's costs in providing its services. The Advisor pays
to CFM, on a monthly basis, a minimum fee of $20,000 but in no event to exceed
actual costs incurred by CFM. Both parties have agreed that no profits will
accrue to CFM as a result of this agreement.

Arthur D. Ally is President and 100% shareholder of CFM.

INVESTMENT MANAGER
- ------------------

Systematic Financial Management, L.P. (the "Investment Manager") is a Delaware
limited partnership, which succeeded Systematic Financial Management, Inc., a
New Jersey corporation established in 1983. The Investment Manager has been
retained by the Advisor pursuant to a sub-advisory agreement to assist in the
selection and management of the Fund's investment securities. The Investment
Manager will prepare the portfolio of securities of selected issuers with
business practices that meet the objective and policies of the Fund. The
Advisor will review the portfolio to ensure compliance with the Fund's ethical
standards.

The Investment Manager's investment policy committee, comprised of Kenneth S.
Hackel, Charles J. Mohr, Jeffrey M. Moses and Jason I. Wallach is responsible
for the day-to-day management of the Fund's portfolio. For more than the past
five (5) years, Mr. Hackel has served as President and Chief Investment Officer
of the Investment Manager. The Investment Manager currently manages
approximately $1.1 billion for clients on a separate account basis utilizing the
same investment methodology that it will employ for the Fund.

The Investment Manager places portfolio transactions for the Fund. In this
regard, the Investment Manager will be governed by the policies set forth under
"Investment Objectives and Policies."

Page 13
<PAGE>

in average net assets and 0.25% of average net assets over $300 million.The
Investment Manager has offices located at Two Executive Drive, Fort Lee, NJ
07024. The Investment Manager has not previously served as an investment
advisor to an investment company.

UNDERWRITER
- -----------

Fund/Plan Broker Services, Inc. ("FPBS"), Two West Elm Street, Conshohocken, PA
19428-0874, was engaged pursuant to an agreement dated January 19, 1994, as
amended February 23, 1996. The purpose of acting as underwriter is to
facilitate the registration of shares of the Fund under state securities laws
and to assist in the sale of shares. The fee for such services is borne by the
Advisor.

PLAN OF DISTRIBUTION
- --------------------

The Fund has adopted a plan pursuant to Rule 12b-1 (the "12b-1 Plan") under the
Investment Company Act of 1940, as amended, whereby it may reimburse FPBS or
others for expenses actually incurred by FPBS or others in the promotion and
distribution of the Fund's Institutional Class shares. These expenses include,
but are not limited to, the printing of prospectuses and reports used for sales
purposes, the preparation of sales literature and related expenses,
advertisements, and other distribution-related expenses, including payments to
securities dealers and others participating in the sale and servicing of
Institutional Class shares, including payment for providing personal services
and/or maintaining shareholder accounts. The maximum amount which the Fund may
pay to FPBS and others (and which FPBS may re-allow to securities dealers and
others participating in the sale of shares) for such distribution expenses is
0.25% per annum of the Fund's average daily net assets payable on a monthly
basis. All expenses of distribution and marketing in excess of 0.25% per annum
will be borne by the Advisor. The 12b-1 Plan also covers any payments made by
the Fund, the Advisor, the Investment Manager, FPBS, or other parties on behalf
of the Fund, the Advisor, the Investment Manager, or FPBS, to the extent such
payments are deemed to be for the financing of any activity primarily intended
to result in the sale of shares issued by the Fund within the context of Rule
12b-1.

ADMINISTRATOR
- -------------

Fund/Plan Services, Inc. ("Fund/Plan"), Two West Elm Street, Conshohocken, PA
19428-0874, is the Fund's administrator pursuant to an Administration Services
Agreement (the "Agreement") with the Fund dated January 19, 1994, as amended
February 23, 1996. Under the Agreement, Fund/Plan receives a fee at the annual
rate of 0.15% of the first $50 million in average net assets of the Fund, 0.10%
of the next $50 million in average net assets and 0.05% of average net assets
over $100 million. There is a minimum fee of $50,000 per year for the initial
series/class issued by the Fund and $12,000 per year for each additional series
or class of shares.

The services Fund/Plan provides to the Fund include: considering and monitoring
of any third parties furnishing services to the Fund; providing the necessary
office space, equipment and personnel to perform administrative and clerical
functions for the Fund; preparing, filing and distributing proxy materials,
periodic reports to shareholders, registration statements, and other documents;
and responding to shareholder inquiries.

CUSTODIAN, TRANSFER AGENT AND FUND ACCOUNTING/PRICING AGENT
- -----------------------------------------------------------

The Bank of New York, 48 Wall Street, New York, New York 10286, is custodian for
the securities and cash of the Fund.

Fund/Plan serves as the Fund's transfer agent. As transfer agent, it maintains
the records of each shareholder's account, answers shareholder inquiries
concerning accounts, processes purchases and redemptions of the Fund's shares,
acts as dividend and distribution disbursing agent, and performs other
shareholder service functions. Shareholder inquiries should be directed to the
transfer agent at (800) 662-0201.

Fund/Plan also performs certain accounting and pricing services for the Fund.
This includes the daily calculation of the Fund's net asset value.

Page 14
<PAGE>

EXPENSES
- --------

Except as indicated above, the Fund is responsible for the payment of its
expenses, other than those borne by the Advisor. These expenses may include,
but are not limited to: (a) management fees; (b) the charges and expenses of
the Fund's legal counsel and independent accountants; (c) brokers' commissions,
mark-ups and mark-downs and any issue or transfer taxes chargeable to the Fund
in connection with its securities transactions; (d) all taxes and corporate fees
payable by the Fund to governmental agencies; (e) the fees of any trade
association of which the Fund is a member; (f) the cost of stock certificates,
if any, representing shares of the Fund; (g) amortization and reimbursements of
the organization expenses of the Fund and the fees and expenses involved in
registering and maintaining registration of the Fund and its shares with the
Securities and Exchange Commission, and the preparation and printing of the
Fund's registration statements and prospectuses for such purposes; (h) allocable
communications expenses with respect to investor services and all expenses of
shareholders and trustee meetings and of preparing, printing and mailing
prospectuses and reports to shareholders; (i) litigation and indemnification
expenses and other extraordinary expenses not incurred in the ordinary course of
the Fund's business; and (j) compensation for employees of the Fund.

DIVIDENDS, DISTRIBUTIONS AND TAXES

The Fund will declare and pay annual dividends to its shareholders of
substantially all of its net investment income, if any, earned during the year
from its investments, and the Fund will distribute net realized capital gains,
if any, once with respect to each year. Expenses of the Fund, including the
advisory fee, are accrued each day. Reinvestments of dividends and
distributions in additional shares of the Fund will be made at the net asset
value determined on the ex date of the dividend or distribution unless the
shareholder has elected in writing to receive dividends or distributions in
cash. An election may be changed by notifying Fund/Plan in writing thirty days
prior to record date.

Dividends paid by the Fund with respect to its Institutional Class and Retail
Class shares are calculated in the same manner and at the same time. Both
Institutional Class and Retail Class shares of the Fund will share
proportionately in the investment income and expenses of the Fund, except that
the per share dividends of Retail Class shares will differ from the per share
dividends of Institutional Class shares as a result of additional distribution
expenses charged to Retail Class shares.

As the sole series of The Timothy Plan, the Fund has qualified, and intends to
continue to qualify, as a regulated investment company under Subchapter M of the
Internal Revenue Code (the "Code"). As such, the Fund will not be subject to
federal income tax, or to any excise tax, to the extent its earnings are
distributed in accordance with the timing requirements imposed by the Code and
by meeting certain other requirements relating to the sources of its income and
diversification of its assets.

The Fund intends to distribute substantially all of its net investment income
and net capital gains. Dividends from net investment income or net short-term
capital gains will be taxable to you as ordinary income, whether received in
cash or in additional shares. Dividends from net investment income will
generally qualify, in part, for the 70% corporate dividends received deduction,
subject to certain holding period and debt financing restrictions imposed under
the Code on the corporate investor claiming the deduction. The portion of the
dividends so qualified depends on the aggregate qualifying dividend income
received by the Fund from domestic (U.S.) sources.

Distributions paid by the Fund from long-term capital gains, whether received in
cash or in additional shares, are taxable to those investors who are subject to
income tax as long-term capital gains, regardless of the length of time an
investor has owned shares in the Fund. The Fund does not seek to realize any
particular amount of capital gains during a year; rather, realized gains are a
byproduct of Fund management activities. Consequently, capital gains
distributions may be expected to vary considerably from year to year. Also, for
those investors subject to tax, if purchases of shares in the Fund are made
shortly before the record date for a dividend or capital gains distribution, a
portion of the investment will be returned as a taxable distribution.

Page 15
<PAGE>

as if paid by the Fund and received by the shareholder on December 31 of the
calendar year in which they are declared.

In addition to federal taxes, shareholders may be subject to state and local
taxes on distributions. Each year, the Fund will mail you information on the
tax status of the Fund's dividends and distributions. Of course, shareholders
who are not subject to tax on their income would not be required to pay tax on
amounts distributed to them by the Fund.

The Fund is required to withhold 31% of taxable dividends, capital gains
distributions, and redemptions paid to shareholders who have not complied with
IRS taxpayer identification regulations. You may avoid this withholding
requirement by certifying on your Account Registration Form your proper Taxpayer
Identification Number and by certifying that you are not subject to backup
withholding.

The tax discussion set forth above is included for general information only.
Prospective investors should consult their own tax advisers concerning the
federal, state, local or foreign tax consequences of an investment in the Fund.

DETERMINATION OF NET ASSET VALUE

The net asset value per Fund share is determined by the Fund as of the close of
regular trading on each day that the New York Stock Exchange (the "NYSE") is
open for unrestricted trading from Monday through Friday and on which there is a
purchase or redemption of the Fund's share. The net asset value is determined
by the Fund by dividing the value of the Fund's securities, plus any cash and
other assets, less all liabilities, by the number of shares outstanding.
Expenses and fees of the Fund, including the advisory and the distributor fees,
are accrued daily and taken into account for the purpose of determining the net
asset value.

Fund securities listed or traded on a securities exchange for which
representative market quotations are available will be valued at the last quoted
sales price on the security's principal exchange on that day. Listed securities
not traded on an exchange that day, and other securities which are traded in the
over-the-counter market, will be valued at the last reported bid price in the
market on that day, if any. Securities for which market quotations are not
readily available and all other assets will be valued at their respective fair
market value as determined in good faith by, or under procedures established by,
the Board of Trustees. In determining fair value, the Trustees may employ an
independent pricing service.

Money market securities with less than sixty days remaining to maturity when
acquired by the Fund will be valued on an amortized cost basis by the Fund,
excluding unrealized gains or losses thereon from the valuation. This is
accomplished by valuing the security at cost and then assuming a constant
amortization to maturity of any premium or discount. If the Fund acquires a
money market security with more than sixty days remaining to its maturity, it
will be valued at current market value until the 60th day prior to maturity, and
will then be valued on an amortized cost basis based upon the value on such date
unless the Trustees determine during such 60 day period that this amortized cost
value does not represent fair market value.

Net asset value is calculated separately for each class of the Fund based on
expenses applicable to the particular class. Although the methodology and
procedures for determining net asset value are identical for the Fund's classes,
the net asset value of the classes may differ because of the different fees and
expenses charged to each class.

HOW TO PURCHASE SHARES

Shares of the Fund may be purchased directly from the Fund at the net asset
value next determined after receipt of the order in proper form by the transfer
agent. There is no sales load in connection with the purchase of shares. The
Fund

Page 16
<PAGE>

reserves the right to reject any purchase order and to suspend the offering of
shares of the Fund. The minimum initial investment is $25,000, with no minimum
subsequent investment. The Fund reserves the right to vary the initial
investment minimum and minimums for additional investments at any time. There
is no minimum investment requirement for qualified retirement plans.

At the discretion of the Fund, investors may be permitted to purchase Fund
shares by transferring securities to the Fund that meet the Fund's investment
objectives and policies. Securities transferred to the Fund will be valued in
accordance with the same procedures used to determine the Fund's net asset value
at the time of the next determination of net asset value after such acceptance.
Shares issued by the Fund in exchange for securities will be issued at net asset
value determined as of the same time. All dividends, interest, subscription, or
other rights pertaining to such securities shall become the property of the Fund
and must be delivered to the Fund by the investor upon receipt from the issuer.
Investors who are permitted to transfer such securities will be required to
recognize a gain or loss on such transfer, and pay tax thereon, if applicable,
measured by the difference between the fair market value of the securities and
the investors' basis therein. Securities will not be accepted in exchange for
shares of the Fund unless: (l) such securities are, at the time of the exchange,
eligible to be included in the Fund and current market quotations are readily
available for such securities; (2) the investor represents and warrants that all
securities offered to be exchanged are not subject to any restrictions upon
their sale by the Fund under the Securities Act of 1933 or under the laws of the
country in which the principal market for such securities exists, or otherwise
and (3) the value of any such security (except U.S. Government securities) being
exchanged together with other securities of the same issuer owned by the Fund,
will not exceed 5% of the Fund's net assets immediately after the transaction.

Purchase orders for shares of the Fund which are received by the transfer agent
in proper form prior to the close of regular trading hours on the NYSE
(currently 4:00 p.m. Eastern time) on any day that the Fund calculates its net
asset value, are priced according to the net asset value determined on that day.
Purchase orders for shares of the Fund received after the close of the NYSE on a
particular day are priced as of the time the net asset value per share is next
determined.

Purchases may be made in one of the following ways:

PURCHASES BY MAIL

Shares may be purchased initially by completing the Investment Application on
pages XX and XX of this Prospectus and mailing it to the transfer agent,
together with a check payable to The Timothy Plan, c/o Fund/Plan Services, Inc.,
Two West Elm Street, P.O. Box 874, Conshohocken, PA 19428-0874. All checks for
purchase of shares must be drawn on U.S. banks and payable in U.S. dollars.

Subsequent investments in an existing account in the Fund may be made at any
time by sending a check payable to The Timothy Plan, c/o United Missouri Bank
KC, NA, P.O. Box 412797, Kansas City, MO 64141-2797. Please enclose the stub
of your account statement along with the amount of the investment and the name
of the account for which the investment is to be made and the account number.
Please note: A $20 fee will be charged to your account for any payment check
returned to the custodian.

The Fund may accept telephone orders from broker-dealers or service
organizations which have been previously approved by the Fund. It is the
responsibility of such broker-dealers or service organizations to promptly
forward purchase orders and payments for the same to the Fund. Shares of the
Fund may be purchased through broker-dealers, banks and bank trust departments
who may charge the investor a transaction fee or other fee for their services at
the time of purchase. Such fees would not otherwise be charged if the shares
were purchased directly from the Fund.

Page 17
<PAGE>

PURCHASES BY WIRE

To order shares for purchase by wiring federal funds, the transfer agent must
first be notified by calling (800) 662-0201 to request an account number and
furnish the Fund with your tax identification number. Following notification to
the transfer agent, federal funds and registration instructions should be wired
through the Federal Reserve System to:

UNITED MISSOURI BANK KC NA
ABA #10-10-00695
FOR: FUND/PLAN SERVICES, INC.
A/C 98-7037-071-9
FBO "THE TIMOTHY PLAN - INSTITUTIONAL CLASS"
ACCOUNT OF (exact name(s) of account registration)
SHAREHOLDER ACCOUNT # _______________

A completed application with signature(s) of registrant(s) must be filed with
the transfer agent immediately subsequent to the initial wire. Investors should
be aware that some banks may impose a wire service fee. Shareholders may be
subject to 31% withholding if original application is not received.

AUTOMATIC INVESTMENT PLAN

Shares of the Fund may be purchased through an Automatic Investment Plan (the
"Plan"). The Plan provides a convenient method by which investors may have
monies deducted directly from their checking, savings or bank money market
accounts for investment in the Fund. The minimum investment pursuant to this
Plan is $100 per month. If you desire to take advantage of this Plan simply
complete and remit the Automatic Investment Plan application on pages XX and XX.
The account designated will be debited in the specified amount, on the date
indicated, and Fund shares will be purchased. Only an account maintained at a
domestic financial institution which is an ACH member may be so designated. The
Fund may alter, modify or terminate this Plan at any time. For information
about participating in the Automatic Investment Plan, call Fund/Plan at
(800) 662-0201.

Page 18
<PAGE>

HOW TO REDEEM SHARES

Shareholders may redeem their shares of the Fund without charge on any business
day that the NYSE is open (see "Determination of Net Asset Value"). Redemptions
will be effective at the net asset value per share next determined after the
receipt by the transfer agent of a redemption request meeting the requirements
described below. The Fund normally sends redemption proceeds on the next
business day, but in any event redemption proceeds are sent within seven
calendar days of receipt of a redemption request in proper form. Payment may
also be made by wire directly to any bank previously designated by the
shareholder in a shareholder account application. There is a $9.00 charge for
redemptions by wire. Please note that the shareholder's bank also may impose a
fee for wire service. The Fund will honor redemption requests of shareholders
who recently purchased shares by check, but will not mail the proceeds until it
is reasonably satisfied that the purchase check has cleared, which may take up
to fifteen days from the purchase date, at which time the redemption proceeds
will be mailed to the shareholder. To avoid delays of this kind, you may wish
to purchase by wire if you are planning on redeeming your shares in the near
future.

Except as noted below, redemption requests received in proper form by the
transfer agent prior to the close of regular trading hours on the NYSE on any
business day that the Fund calculates its per share net asset value are
effective that day.

Redemption requests received after the close of the NYSE are effective as of the
time the net asset value per share is next determined.

The Fund will satisfy redemption requests in cash to the fullest extent
feasible, so long as such payments would not, in the opinion of the Advisor or
the Board of Trustees, result in the necessity of the Fund selling assets under
disadvantageous conditions and to the detriment of the remaining shareholders of
the Fund.

Pursuant to the Fund's Agreement and Declaration of Trust, payment for shares
redeemed may be made either in cash or in-kind, or partly in cash and partly in-
kind. However, the Fund has elected, pursuant to Rule 18f-1 under the Act, to
redeem its shares solely in cash up to the lesser of $250,000 or 1% of the net
asset value of the Fund, during any 90 day period for any one shareholder.
Payments in excess of this limit will also be made wholly in cash unless the
Board of Trustees believes that economic conditions exist which would make such
a practice detrimental to the best interests of the Fund. Any portfolio
securities paid or distributed in-kind would be valued as described under
"Determination of Net Asset Value." In the event that an in-kind distribution
is made, a shareholder may incur additional expenses, such as the payment of
brokerage commissions, on the sale or other disposition of the securities
received from the Fund. In-kind payments need not constitute a cross-section of
the Fund's portfolio. Where a shareholder has requested redemption of all or a
part of the shareholder's investment, and where the Fund completes such
redemption in-kind, the Fund will not recognize gain or loss for federal tax
purposes, on the securities used to complete the redemption but the shareholder
will recognize gain or loss equal to the difference between the fair market
value of the securities received and the shareholder's basis in the Fund shares
redeemed. Shares may be redeemed in one of the following ways:

REDEMPTION BY MAIL

Shares may be redeemed by submitting a written request for redemption to the
transfer agent at Two West Elm Street, P.O. Box 874, Conshohocken, PA 19428-
0874.

A written redemption request to the transfer agent must: (i) identify the
shareholder's account number, (ii) state the number of shares or dollars to be
redeemed and (iii) be signed by each registered owner exactly as the shares are
registered. A redemption request for amounts above $25,000, or redemption
requests for which proceeds are to be mailed somewhere other than the address of
record, must be accompanied by signature guarantees. Signatures must be
guaranteed by an "eligible guarantor institution" as defined in Rule 17Ad-15
under the Securities Exchange Act of 1934. Eligible guarantor institutions
include banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings associations.
Broker-dealers guaranteeing signatures must be members of a clearing corporation
or maintain net capital of at least $100,000. Credit unions must be authorized
to issue signature guarantees. Signature guarantees will be accepted from any
eligible guarantor institution

Page 19
<PAGE>

which participates in a signature guarantee program. The transfer agent may
require additional supporting documents for redemptions made by corporations,
executors, administrators, trustees and guardians.

A redemption request will not be deemed to be properly received until the
transfer agent receives all required documents in proper form. Questions with
respect to the proper form for redemption requests should be directed to the
transfer agent at (800) 662-0201.

REDEMPTION BY TELEPHONE

Shareholders who have so indicated on the application, or have subsequently
arranged in writing to do so, may redeem shares by instructing the transfer
agent by telephone. In order to arrange for redemption by wire or telephone
after an account has been opened, or to change the bank or account designated to
receive redemption proceeds, a written request must be sent to the transfer
agent at the address listed above.

Neither the Fund nor any of its service contractors will be liable for any loss
or expense in acting upon any telephone instructions that are reasonably
believed to be genuine. In attempting to confirm that telephone instructions
are genuine, the Fund will use such procedures as are considered reasonable,
including requesting a shareholder to correctly state his or her Fund account
number, the name in which his or her account is registered, his or her banking
institution, bank account number and the name in which his or her bank account
is registered. To the extent that the Fund fails to use reasonable procedures
to verify the genuineness of telephone instructions, it and/or its service
contractors may be liable for any such instructions that prove to be fraudulent
or unauthorized.

The Fund reserves the right to refuse a wire or telephone redemption if it is
believed advisable to do so. Procedures for redeeming Fund shares by wire or
telephone may be modified or terminated at any time by the Fund.

SYSTEMATIC CASH WITHDRAWAL PLAN

The Fund offers a Systematic Cash Withdrawal Plan as another option which may be
utilized by an investor who wishes to withdraw funds from his or her account on
a regular basis. To participate in this option, an investor must either own or
purchase shares having a value of $25,000 or more. Automatic payments by check
will be mailed to the investor on either a monthly, quarterly, semi-annual or
annual basis in amounts of $100 or more. All withdrawals are processed on the
25th of the month or, if such day is not a business day, on the next business
day and paid promptly thereafter. Please complete the appropriate section on the
Investment Application enclosed within this Prospectus, indicating the amount of
the distribution and the desired frequency.

ADDITIONAL INFORMATION

The Fund also reserves the right to involuntarily redeem an investor's account
where the account is worth less than the minimum initial investment required
when the account is established, presently $25,000. (Any redemption of shares
from an inactive account established with a minimum investment may reduce the
account below the minimum initial investment, and could subject the account to
redemption initiated by the Fund.) The Fund will advise the shareholder of such
intention in writing at least sixty (60) days prior to effecting such
redemption, during which time the shareholder may purchase additional shares in
any amount necessary to bring the account back to $25,000.

If the Trustees determine that it would be detrimental to the best interest of
the remaining shareholders of the Fund to make payment in cash, the Fund may pay
the redemption price in whole or in part by distribution in kind of readily
marketable securities, from the Fund, within certain limits prescribed by the
United States Securities and Exchange Commission. Such securities will be
valued on the basis of the procedures used to determine the net asset value at
the time of the redemption. If shares are redeemed in kind, the redeeming
shareholder will incur brokerage costs in converting the assets into cash.

Page 20
<PAGE>

RETIREMENT PLANS

The Fund offers its shares for use in certain Tax Deferred (such as IRA, defined
contribution, 401(k) and 403(b)(7) plans) Retirement Plans. The Fund sponsors
IRA and 403(b)(7) plans. Information on these Plans is available from Fund/Plan
or by reviewing the Statement of Additional Information.

PERFORMANCE

The Fund may compare its investment performance with appropriate market
indices such as the S&P Index and to appropriate mutual fund indices; and the
Fund may advertise its ranking compared to other similar mutual funds as
reported by industry analysts such as Lipper Analytical Services, Inc.

All data will be based on the Fund's past investment results and does not
predict future performance. Investment performance, which will vary, is based on
many factors, including market conditions, the composition of the investments in
the Fund, and the Fund's operating expenses. Investment performance also often
reflects the risk associated with the Fund's investment objective and policies.
These factors should be considered when comparing the Fund to other mutual funds
and other investment vehicles.

Further information about the performance of the Fund is included in the Fund's
Annual Report, dated December 31, 1995, which may be obtained without charge by
contacting the Fund at (800) TIM-PLAN.

Page 21
<PAGE>

BROKER DEALER: _________________________________________
REGISTERED REP: _________________________________________
BRANCH #: __________________ REP #: __________________
BRANCH NAME: ____________________________________________
BRANCH ADDRESS: _________________________________________
PHONE NUMBER: ( ) - Ext:

THE TIMOTHY PLAN(R)
RETAIL CLASS
INVESTMENT APPLICATION

MAIL TO:
Fund/Plan Services, Inc., P.O. Box 874, Conshohocken, PA 19428-0874

1. INITIAL INVESTMENT ($1,000 minimum)

FORM OF PAYMENT

<TABLE>
<CAPTION>
<C> <S>
[ ] Check for $__________________ enclosed (make payable to "The Timothy Plan")
[ ] By Wire*/1/ An initial purchase of $______________ was wired on ______ _______ _________ by
Date

_________________________________________________________________ to account # ________________________________
Name of your Bank or Broker Number assigned by F/P/S

2. REGISTRATION (Please Print) No certificate will be issued unless requested in writing.

INDIVIDUAL Must complete items 1, 3, 4 and 8 (you may choose options 5, 6 or 7).

--------------------------------------------------------------------------------------- ------------------------------------

First Name Middle Name Last Name Social Security Number

--------------------------------------------------------------------------------------- ------------------------------------

Joint Owner First Name*2 Middle Name Last Name Social Security Number

Citizen of: [ ] United States [ ] Other (Please Indicate) ____________________________________

GIFT TO MINORS Must complete items 1, 3, 4 and 8 (you may choose options 5, 6, or 7).

________________________________________________________________________________________________________________________________

Name of Custodian (Name one only) As Custodian For (Name one only)

Under the ____________________________ Uniform Gift to Minors Act _______________________________________
State Security Number

CORPORATIONS, PARTNERSHIPS, TRUSTS AND OTHERS Must complete items 1, 3, 4, 9 and 10 (you may choose options 5, 6, or 7).

________________________________________________________________________________________________________________________________

Name of Corporation, Partnership, Trust or Other

__________________________________ _________________________________________________________ _________________________________

Tax ID # Name of Trustee(s) Date of Trust

3. MAILING ADDRESS OF RECORD AND TELEPHONE NUMBER(S)

--------------------------------------------------------------------------------------------------------------------------------

Street Address and Apartment Number

----------------------------------------------------------------------------------- ----------------------- -----------------

City State Zip Code Zip Extend

------------ --------------------------- --------------- -----------------------------

(Area Code) Daytime Telephone Number (Area Code) Evening Telephone Number

4. DISTRIBUTION OPTIONS (Please indicate one) See page 11 of the Prospectus for more detail.

Income Dividends (check one box/line only) [ ] reinvested [ ] paid in cash
Capital Gains Distributions (check one box/line only) [ ] reinvested [ ] paid in cash

*1 Before making an initial investment by wire, you must be assigned an account number by calling (800) 662-0201.
Then have your local bank wire your funds to: United Missouri Bank, N.A., ABA # 10-10-00695 for credit to Fund/Plan
AC # 98-7037-071-9 (The Timothy Plan). Be sure to include your name and account number on the wire.
*2 (Joint ownership with rights of survivorship unless otherwise noted).
</TABLE>

Page 22
<PAGE>

<TABLE>
<CAPTION>
<C> <S>
5. SYSTEMATIC WITHDRAWAL PLAN ($10,000 minimum necessary) See page 17 of the Prospectus for more detail.

A check in the amount of $______________________ (minimum $100.00) will be sent to you at your address of record unless
otherwise noted.
Please select desired frequency: [ ] Monthly
[ ] Quarterly, in the months of __________, __________, __________, and __________.
[ ] Semi-Annual or Annual, in the month(s) of __________, __________, or __________.

6. TELEPHONE PRIVILEGES See page 17 of the Prospectus for more detail.

[ ] REDEEM SHARES BY TELEPHONE

I (we) authorize Fund/Plan Services to honor telephone instructions for my (our) account which I (we) understand the proceeds
of which will be mailed only to the address of record or wired to the bank specified below. Neither the Fund nor Fund/Plan
Services will be liable for properly acting upon telephone instructions believed to be genuine. Please attach a voided check
on your account if the bank option is chosen.

--------------------------------------------------------------------------------------------------------------------------------

Name of Bank City State

-------------------- -------------------------------------------------------------------

Bank Routing Number Account Number [ ] Checking [ ] Savings

7. AUTOMATIC INVESTMENT PLAN (For this option - please complete and send in form on pages 21 and 22 of the Prospectus).

8. SIGNATURE AND CERTIFICATION (This Section must be completed by INDIVIDUAL, JOINT and CUSTODIAL accounts).

The following is required by Federal tax law to avoid 31% backup withholding; "By signing below, I certify under penalties of
perjury that the social security or taxpayer identification number entered above is correct (or I am waiting for a number to
be issued to me), and that I have not been notified by the IRS that I am subject to backup withholding unless I have checked
the box." If you have been notified by the IRS that you are subject to backup withholding, check box [ ].

Receipt of current prospectus is hereby acknowledged.

----------------------------------------------------------------------------------------------- ---------------------------

Signature [ ] Owner [ ] Custodian [ ] Trustee Date

----------------------------------------------------------------------------------------------- ---------------------------

Signature of Joint Owner (if applicable) Date

9. RESOLUTIONS (This Section must be completed by CORPORATIONS, PARTNERSHIPS, TRUSTS and OTHER ORGANIZATIONS).

RESOLVED: That this corporation or organization become a shareholder of the Timothy Plan (the "Fund) and
that _______________________________________________________________________________ is (are) authorized to complete and
execute the Application on behalf of the corporation or organization and take any action for it as may be necessary or
appropriate with respect to its shareholders account(s) with the Fund, and it is

FURTHER RESOLVED: That any one of the above noted officers is authorized to sign any documents necessary or appropriate to
appoint Fund/Plan Services, Inc. as redemption agent of the corporation for shares of the Fund, to establish or acknowledge
terms and conditions governing the redemption of said shares or to otherwise implement the privileges elected on the
application.

10. CERTIFICATE (This Section must be completed by CORPORATIONS, PARTNERSHIPS, TRUSTS and OTHER ORGANIZATIONS).

I hereby certify that the foregoing resolutions are in conformity with the Charter and By-Laws or other empowering documents
of the:

_______________________________________________________________________ incorporated or formed under the laws of _______________

(Name of Corporation) (State)

and were adopted at a meeting of the Board of Directors or Trustees of the organization or corporation duly called and held
on ________________ at which a quorum was preset and acting throughout, and that the same are now in full force and effect.

I further certify that the following is (are) the duly elected officer(s) of the corporation or organization, authorized to
act in accordance with the foregoing resolutions.

NAME TITLE

____________________________________________________________________________ ________________________________________________

Witness my hand and the seal of the corporation or organization this ___________ day of _______________________, 19 ______.

________________________________________________________________________ ___________________________________________________

*Secretary-Clerk Other Authorized Officer (if required)

* If the Secretary or other recording officer is authorized to act by the above resolutions, this certificate must also be
signed by another officer.
</TABLE>

Page 23
<PAGE>

AUTOMATIC INVESTMENT PLAN APPLICATION

- --------------------------------------------------------------------------------
HOW DOES IT WORK?

1. Fund/Plan Services, Inc., through our bank, United Missouri Bank KC NA, draws
an automatic clearing house (ACH) debit electronically against your personal
checking account each month, according to your instructions.

2. Choose any amount ($100 or more) that you would like to invest regularly and
your debit for this amount will be processed by Fund/Plan Services, Inc. as if
you had written a check yourself.

3. Shares will be purchased and a confirmation sent to you.

HOW DO I SET IT UP?

1. Complete the forms and the Fund Application Form if you do not already have
an existing account.

2. Mark one of your personal checks or deposit slips VOID, attach it to the
forms below and mail to Fund/Plan Services, Inc., P.O. Box 874, Conshohocken, PA
19428-0874.

3. As soon as your bank accepts your authorization, debits will be generated and
your Automatic Investment Plan started. In order for you to have ACH debits
from your account, your bank must be able to accept ACH transactions and/or be a
member of an ACH association. Your branch manager should be able to tell you
your bank's capabilities. We cannot guarantee acceptance by your bank.

4. Please allow one month for processing of your Automatic Investment Plan
before the first debit occurs.

- --------------------------------------------------------------------------------

AUTOMATIC INVESTMENT PLAN APPLICATION

TO: Fund/Plan Services, Inc.
P.O. Box 874
Conshohocken, PA 19428-0874

Please start an Automatic Investment Plan for me and invest ___________________.
($100 or more)

on the [ ] 10th [ ] 15th [ ] 20th of each month, in shares of THE TIMOTHY
PLAN - INSTITUTIONAL CLASS.

Check one:

[ ] I am in the process of establishing an account.
or
[ ] My account number is: ____________________________________________________

- --------------------------------------------------------------------------------
Name as account is registered

- --------------------------------------------------------------------------------
Street

- --------------------------------------------------------------------------------
City State Zip + ext.

I understand that my ACH debit will be dated on the day of each month as
indicated above or as specified by written request. I agree that if such debit
is not honored upon presentation, Fund/Plan Services, Inc. may discontinue this
service and any share purchase made upon deposit of such debit may be canceled.
I further agree that if the net asset value of the shares purchased with such
debit is less when said purchase is canceled than when the purchase was made,
Fund/Plan Services, Inc. shall be authorized to liquidate other shares or
fractions thereof held in my account to make up the deficiency. This Automatic
Investment Plan may be discontinued by Fund/Plan Services, Inc. upon 30-days
written notice or at any time by the investor by written notice to Fund/Plan
Services, Inc. which is received not later than 5 business days prior to the
above designed investment date.

Signature(s): _________________________________________________

_________________________________________________

Page 24
<PAGE>

AUTOMATIC INVESTMENT PLAN APPLICATION
- --------------------------------------------------------------------------------

BANK REQUEST AND AUTHORIZATION

TO: _________________________ _______________________________
Name of Your Bank Bank Checking Account Number

_________________________________________________________________
Address of Bank or Branch Where Account is Maintained

As a convenience to me, please honor ACH debits on my account drawn by Fund/Plan
Services, Inc., United Missouri Bank KC NA and payable to "THE TIMOTHY PLAN".

I agree that your rights with respect to such debit shall be the same as if it
were a check drawn upon you and signed personally by me. This authority shall
remain in effect until you receive written notice from me changing its terms or
revoking it, and until you actually receive such notice, I agree that you shall
be fully protected in honoring such debit.

I further agree that if any debit is dishonored, whether with or without cause
or whether intentionally or inadvertently, you shall be under no liability
whatsoever.

DEPOSITOR'S __________________________________________________________________
Signature of Bank Depositor(s) as shown on bank records.

NOTE: Your bank must be able to accept ACH transactions and/or be a member of
an ACH association in order for you to use this service.

- --------------------------------------------------------------------------------

INDEMNIFICATION AGREEMENT

TO: The bank named above

So that you may comply with your Depositor's request and authorization, THE
TIMOTHY PLAN agrees as follows:

1. To indemnify and hold you harmless from any loss you may suffer arising from
or in connection with the payment by you of a debit drawn by Fund/Plan Services,
Inc. to the order of THE TIMOTHY PLAN designated on the account of your
depositor(s) executing the authorization including any costs or expenses
reasonably incurred in connection with such loss. THE TIMOTHY PLAN will not,
however, indemnify you against any loss due to your payment of any debit
generated against insufficient funds.

2. To refund to you any amount erroneously paid by you to Fund/Plan Services,
Inc. on any such debit if claim for the amount of such erroneous payment is made
by you within 3 months of the date of such debit on which erroneous payment was
made.

Page 25
<PAGE>

BROKER DEALER: __________________________
REGISTERED REP: __________________________
BRANCH #:______________ REP #: __________
BRANCH NAME: _____________________________
BRANCH ADDRESS: __________________________
PHONE NUMBER: ( ) - Ext:

THE TIMOTHY PLAN(R)
INSTITUTIONAL CLASS
REQUEST FOR TRANSFER

MAIL TO:
Fund/Plan Services, Inc., P.O. Box 874, Conshohocken, PA 19428-0874

<TABLE>
<S> <C>
1. INVESTOR INFORMATION

- ------------------------------------------------------------------------------------------------------------------------------------

First Name Middle Initial Last Name

- ------------------------------------------------------------------------------------------------------------------------------------

Street Address

- ----------------------------------------------------------- -------------- -------------------- -----------------
City State Zip Code Zip Extend

- ---------------------------- ------------------ --------- -------------------------- -------- -------------------------
Social Security Number Date of Birth (Area Code) Residence Telephone Number (Area Code) Business Telephone Number

2. PREVIOUS INVESTMENT FIRM

- ------------------------------------------------------------------------------------------------------------------------------------

Name of Previous Firm

- ------------------------------------------------------------------------------------------------------------------------------------

Address

- ------------------------------------------------------------------------------------ -----------------------------------------
Investor's Name Account Number

Type of Account: [ ] Individual [ ] Joint [ ] UGMA [ ] Trust
Type of Assets: [ ] Mutual Fund [ ] Money Market [ ] CD (Immediately/At Maturity) [ ] Securities

3. AMOUNT TO BE TRANSFERRED TO THE TIMOTHY PLAN

[ ] Liquidate all assets from the above account and transfer the proceeds.

[ ] Liquidate $_____________________________________ from the above account and transfer the proceeds

4. TRANSFER INSTRUCTIONS

Make check payable to: The Timothy Plan
Mail to: Post Office Box 874, Conshohocken, PA 19428-0874

5. INVESTOR'S AUTHORIZATION

- --------------------------------------------- ------------------------- -----------------------------------------------
Signature of Participant Date Signature Guarantee
</TABLE>

Page 26
<PAGE>

THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>

INVESTMENT ADVISOR
Timothy Partners, Ltd.
1304 West Fairbanks Avenue
Winter Park, FL 32789

INVESTMENT MANAGER
Systematic Financial Management, L.P.
Two Executive Drive
Fort Lee, NJ 07024

UNDERWRITER
Fund/Plan Broker Services, Inc.
Two West Elm Street
Conshohocken, PA 19428

SHAREHOLDER SERVICES
Fund/Plan Services, Inc.
Two West Elm Street
Conshohocken, PA 19428

CUSTODIAN
The Bank of New York
48 Wall Street
New York, NY 10286

LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098

AUDITORS
Tait, Weller & Baker
Two Penn Center
Suite 700
Philadelphia, PA 19102-1707

For Additional Information About The Timothy Plan, Please Call:
(800) TIM-PLAN
<PAGE>

PROSPECTUS FOR

THE TIMOTHY PLAN
RETAIL CLASS

APRIL 29, 1996

- --------------------------------------------------------------------------------

Distributed By:
Fund/Plan Broker Services
Two West Elm Street
Conshohocken, PA 19428
(800) 441-6580

- --------------------------------------------------------------------------------

The Timothy Plan (the "Fund") is a low level load, open-end diversified
management investment company. It was organized as a series Delaware business
trust and currently offers shares of one series, which has a specific investment
objective. There is no assurance that the Fund's objective will be achieved.

The Fund currently offers two classes of shares: Institutional Class and Retail
Class. This Prospectus pertains only to the Fund's Retail Class shares which
have a front-end sales charge and are subject to annual 12b-1 Plan expenses.
Shareholders, who purchase larger amounts than the initial investment
requirement, may qualify for a reduced sales charge at the time of purchase.
(See "How to Purchase Shares"). The Institutional Class is offered in a separate
prospectus which can be obtained by calling (800) TIM-PLAN.

The shares of the Fund may be purchased or redeemed at any time. Purchases will
be effected at the net asset value, plus the applicable sales charge, next
determined following receipt of the investor's request. (See "Determination of
Net Asset Value," "How to Purchase Shares," and "How to Redeem Shares").

This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. Investors should read and
retain this Prospectus for future reference.

TABLE OF CONTENTS

PAGE
<S> <C>
Expenses of the Fund........................................... 31

Financial Highlights........................................... 32

The Fund....................................................... 33

Investment Objectives and Policies............................. 33

Risk Factors................................................... 34

Investment Restrictions........................................ 36

Shares of Beneficial Interest.................................. 37

Management of the Fund......................................... 37

Board of Trustees............................................ 37
Investment Advisor........................................... 37
Investment Manager........................................... 38
Underwriter.................................................. 39
Plan of Distribution......................................... 39
Administrator................................................ 39
Custodian, Transfer Agent and Fund Accounting/Pricing Agent.. 40
Expenses..................................................... 40

Dividends, Distributions and Taxes............................. 40

Determination of Net Asset Value............................... 41

How to Purchase Shares......................................... 42

How to Redeem Shares........................................... 45

Retirement Plans............................................... 47

Performance.................................................... 47

Investment Application......................................... 48

Automatic Investment Plan Application.......................... 50

Application to Request to Transfer to The Timothy Plan......... 52
</TABLE>

EXPENSES OF THE FUND

The following table illustrates all estimated expenses and fees that a
shareholder of the Fund's Retail Class will incur.

SHAREHOLDER TRANSACTION EXPENSES

Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)................................. 1.75%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)................................. none
Redemption Fees...................................................... none/1/

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)

Management and Advisory Expenses After Expense Reimbursements........ 0.00%
12b-1 Fees........................................................... 0.85%/2/
Other Expenses After Expense Reimbursements.......................... 1.35%
----
Total Operating Costs After Expense Reimbursements................... 2.20%
====

The purpose of this table is to assist the investor in understanding the various
expenses that an investor in the Fund will bear directly or indirectly. The
Fund's Retail Class had not commenced operations until August 25, 1995,
therefore, for the purpose of the table above, "Other Expenses" is based on
estimated amounts for the current fiscal year. The Advisor has voluntarily
agreed to waive its fees, so that the Fund's total annual operating expenses
will never exceed 2.20% of the daily average net assets. Further, the Advisor
has agreed to reimburse the Fund for its other expenses so that the Fund's total
annual expenses will never exceed 2.20%. Absent the fee waiver and expense
reimbursements, "Management and Advisory Expenses After Expense Reimbursements"
would have been 0.85% and "Other Expenses After Expense Reimbursements" would
have been estimated at 5.59%, for the fiscal year ended December 31, 1995.

1 year 3 years 5 years 10 years
------ ------- ------- --------
$39 $85 $133 $266

THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.

The Fund issues two classes of shares that invest in the same portfolio of
securities. Shareholders of Retail Class shares are subject to a sales charge
and each class is subject to a different 12b-1 Plan, therefore, expenses and
performance figures will vary between the classes. The information set forth in
the foregoing tables and example relates only to the Retail Class shares. The
rules of the U.S. Securities and Exchange Commission require that the maximum
sales charge be reflected in the above table. However, certain investors may
qualify for a reduced sales charge. See "How to Purchase Shares." Further
information about Institutional Class shares may be obtained by calling (800)
TIM-PLAN.

____________________
/1/ United Missouri Bank KC NA charges $9.00 per redemption for
redemptions payable by wire.

/2/ For purposes of this table, "12b-1 Fees" are comprised of an asset-based
12b-1 fee up to a maximum of 0.85% of average daily net assets, of which,
up to 0.25% may be service fees to be paid to Fund/Plan Broker Services,
Inc., dealers and others, for providing personal service and/or maintaining
shareholder accounts. Long-term holders of Retail Class shares may
eventually pay more than the economic equivalent of the maximum front-end
sales charges otherwise permitted by the Rules of Fair Practice of the
National Association of Securities Dealers, Inc.

Page 31
<PAGE>

FINANCIAL HIGHLIGHTS

The following financial highlights for the fiscal period ended December 31, 1995
were derived from the Fund's Retail Class financial statements dated December
31, 1995, which were audited by Tait, Weller & Baker, independent auditors,
whose unqualified report thereon is incorporated by reference into the Statement
of Additional Information. The Fund's Statement of Additional Information may
be obtained by shareholders without charge and is incorporated by reference into
this Prospectus. The table sets forth financial data for a share of capital
stock outstanding throughout the period presented.

<TABLE>
<CAPTION>
FOR THE
PERIOD ENDED
DECEMBER 31, 1995*
------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.49
------
INCOME FROM INVESTMENT OPERATIONS

Net investment income................................ 0.11
------
Net gains (losses) on securities (both
realized and unrealized)............................ (0.16)
------
Total from investment operations.................. (0.05)
------
LESS DISTRIBUTIONS

Distributions from net investment income............. (0.11)
------
Distributions from net capital gains................. (0.25)
------
Total distributions............................... (0.36)
------

NET ASSET VALUE, END OF PERIOD........................ $10.08
------

TOTAL RETURN.......................................... (0.46%)/1/
------
RATIOS/SUPPLEMENTAL DATA

Net assets, end of period (in 000's)................. $ 620
======
Ratio of expenses to average net assets:
Before expense reimbursement..................... 6.44%/2/
======
After expense reimbursement...................... 2.20%/2/
======
Ratio of net investment income to average net assets
Before expense reimbursement..................... (3.56)%/2/
======
After expense reimbursement..................... 0.68%/2/
======
Portfolio turnover rate.............................. 34.12%
======
</TABLE>

- --------------------------------------------------------------------------------
* The Retail Class shares Fund commenced investment operations on August 25,
1995.

/1/ Total return calculation does not reflect sales load.
/2/ Annualized.

Page 32
<PAGE>

THE FUND

The Timothy Plan (the "Fund") is a low level load, open-end, diversified
management investment company commonly known as a mutual fund. The Fund was
established as a series Delaware business trust on December 16, 1993. The Fund
currently offers one series with two classes of shares: Institutional Class and
Retail Class. This Prospectus pertains only to Retail Class shares.

INVESTMENT OBJECTIVES AND POLICIES

Page 33
<PAGE>

RISK FACTORS

Page 34
<PAGE>

RISKS OF CERTAIN FIXED INCOME SECURITIES

Securities issued or guaranteed as to principal and interest by the U.S.
Government ("Government Securities") include a variety of Treasury securities,
which differ in their interest rates, maturities and date of issue. Treasury
bills have a maturity of one year or less; Treasury notes have maturities of one
to ten years; Treasury bonds generally have a maturity of greater than five
years. The Fund will only acquire Government Securities which are supported by
the "full faith and credit" of the United States. Securities which are backed by
the full faith and credit of the United States include Treasury bills, Treasury
notes, Treasury bonds and obligations of: the Government National Mortgage
Association, the Farmers Home Administration and the Export-Import Bank. The
Fund's direct investments in money market securities will generally favor
securities with shorter maturities (maturities of less than 60 days) which are
less affected by price fluctuations than are those with longer maturities.

Page 35
<PAGE>

INVESTMENT RESTRICTIONS

The investment restrictions specifically provide that the Fund will not:

(a) as to 75% of the Fund's total assets, invest more than 5% of its total
assets in the securities of any one issuer. (This limitation does not apply
to cash and cash items, or obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities);

(c) purchase or sell commodities or commodity futures contracts, other
than those related to stock indexes as previously outlined in "Investment
Objectives and Policies;"

(d) purchase or sell real estate or interests therein, although it may
purchase securities of issuers which engage in real estate operations;

(g) borrow money, except the Fund may borrow from banks (i) for temporary
or emergency purposes

Page 36
<PAGE>

SHARES OF BENEFICIAL INTEREST

MANAGEMENT OF THE FUND

BOARD OF TRUSTEES
- -----------------

INVESTMENT ADVISOR
- ------------------

Page 37
<PAGE>

of postage, materials and handling of the fulfillment function of processing
Prospectus requests as well as other sundry marketing and general administration
expenses. The fee payable to and services provided by the Investment Manager
are described under the heading "Investment Manager" below. The fee payable to
and services provided by CFM are described at the end of this section. The
Advisor's fee is higher than that charged by other funds, but is comparable to
fees charged by funds with similar investment objectives. The Advisor has
offices located at 1304 West Fairbanks Avenue, Winter Park, FL 32789.

Arthur D. Ally is President and 100% shareholder of CFM.

INVESTMENT MANAGER
- ------------------

The Investment Manager places portfolio transactions for the Fund. In this
regard, the Investment Manager will be governed by the policies set forth under
"Investment Objectives and Policies."

For its services, the Investment Manager is paid an annual fee by the Advisor
equal to 0.50% of the first $100 million in average net assets of the Fund,
0.40% of the next $100 million in average net assets, 0.30% of the next $100
million in average net assets and 0.25% of average net assets over $300 million.
The Investment Manager has offices located

Page 38
<PAGE>

at Two Executive Drive, Fort Lee, NJ 07024. The Investment Manager has not
previously served as an investment advisor to an investment company.

UNDERWRITER
- -----------

PLAN OF DISTRIBUTION
- --------------------

The Fund has adopted a plan pursuant to Rule 12b-1 (the "12b-1 Plan") under the
Investment Company Act of 1940, as amended, whereby it may reimburse FPBS or
others for expenses actually incurred by FPBS or others in the promotion and
distribution of the Fund's Retail Class shares. These expenses include, but are
not limited to, the printing of prospectuses and reports used for sales
purposes, the preparation of sales literature and related expenses,
advertisements, and other distribution-related expenses, including payments to
securities dealers and others participating in the sale and servicing of Retail
Class shares. The maximum amount which the Fund may pay to FPBS and others (and
which FPBS may re-allow to securities dealers and others participating in the
sale of shares) for such distribution expenses is 0.85% per annum of the Fund's
average daily net assets, of which, up to 0.25% may be service fees to be paid
to FPBS, dealers and others, for providing personal services and/or maintaining
shareholder accounts, payable on a monthly basis. All expenses of distribution
and marketing in excess of 0.85% per annum will be borne by the Advisor and any
amounts paid for the above services will be paid pursuant to a servicing or
other agreement. The 12b-1 Plan also covers any payments made by the Fund, the
Advisor, the Investment Manager, FPBS, or other parties on behalf of the Fund,
the Advisor, the Investment Manager, or FPBS, to the extent such payments are
deemed to be for the financing of any activity primarily intended to result in
the sale of shares issued by the Fund within the context of Rule 12b-1.

[Text moved to previous paragraph.]

ADMINISTRATOR
- -------------

Page 39
<PAGE>

CUSTODIAN, TRANSFER AGENT AND FUND ACCOUNTING/PRICING AGENT
- -----------------------------------------------------------

The Bank of New York, 48 Wall Street, New York, New York 10286, is custodian for
the securities and cash of the Fund.

Fund/Plan also performs certain accounting and pricing services for the Fund.
This includes the daily calculation of the Fund's net asset value.

EXPENSES
- --------

DIVIDENDS, DISTRIBUTIONS AND TAXES

Page 40
<PAGE>

on the corporate investor claiming the deduction. The portion of the dividends
so qualified depends on the aggregate qualifying dividend income received by the
Fund from domestic (U.S.) sources.

Dividends which are declared in October, November or December to shareholders of
record in such a month but which, for operational reasons, may not be paid to
the shareholder until the following January, will be treated for tax purposes as
if paid by the Fund and received by the shareholder on December 31 of the
calendar year in which they are declared.

The sale of shares of the Fund is a taxable event and may result in a capital
gain or loss to shareholders subject to tax. Capital gain or loss may be
realized from an ordinary redemption of shares or an exchange of shares between
two mutual funds (or two series of a mutual fund). Any loss incurred on sale or
exchange of the Fund's shares, held for six months or less, will be treated as a
long-term capital loss to the extent of capital gain dividends received with
respect to such shares. All or a portion of the sales charge incurred in
purchasing the Fund's shares will not be included in the federal tax basis of
any of such shares sold or exchanged within ninety (90) days of their purchase
(for purposes of determining gain or loss upon sale of such shares) if the sale
proceeds are reinvested in the Fund or in another fund and a sales charge that
would otherwise apply to the reinvestment is reduced or eliminated. Any portion
of such sales charge excluded from the tax basis of the shares sold will be
added to the tax basis of the shares acquired in the reinvestment.

DETERMINATION OF NET ASSET VALUE

The net asset value per Fund share is determined by the Fund as of the close of
regular trading on each day that the New York Stock Exchange (NYSE) is open for
unrestricted trading from Monday through Friday and on which there is a purchase
or redemption of the Fund's share. The net asset value is determined by the
Fund by dividing the value of the Fund's securities, plus any cash and other
assets, less all liabilities, by the number of shares outstanding. Expenses and
fees of the Fund, including the advisory and the distributor fees, are accrued
daily and taken into account for the purpose of determining the net asset value.

Page 41
<PAGE>

HOW TO PURCHASE SHARES

Shares of the Fund may be purchased directly from the Fund at the net asset
value per share, plus the applicable sales load, next determined after receipt
of the order in proper form by the transfer agent. There is a sales load in
connection with the purchase of shares which is reduced on purchases involving
large amounts and which may be eliminated in certain circumstances described
under "Reduced Sales Charges". The Fund reserves the right to reject any
purchase order and to suspend the offering of shares of the Fund. The minimum
initial investment is $1,000, with no minimum subsequent investment. The Fund
reserves the right to vary the initial investment minimum and minimums for
additional investments at any time. There is no minimum investment requirement
for qualified retirement plans.

Purchases may be made in one of the following ways:

PURCHASES BY MAIL

Shares may be purchased initially by completing the Investment Application on
pages 49 and 50 of this Prospectus and mailing it to the transfer agent,
together with a check payable to The Timothy Plan, c/o Fund/Plan Services, Inc.,
Two West Elm Street, P.O. Box 874, Conshohocken, PA 19428-0874. All checks for
purchase of shares must be drawn on U.S. banks and payable in U.S. dollars.

Page 42
<PAGE>

PURCHASES THROUGH BROKER/DEALERS

Wire orders for shares of the Fund received by Fund/Plan prior to 4:00 p.m.,
Eastern time, are confirmed at that day's public offering price. Orders
received by dealers after 4:00 p.m., Eastern time, are confirmed at the public
offering price on the following business day.

APPLICABLE SALES CHARGES

Shares of the Fund are offered at the public offering price which is the net
asset value per share, plus any applicable sales charge. The sales charge is a
variable percentage of the offering price depending upon the amount of the sale.
No sales charge will be assessed on the reinvestment of distributions. The
sales charge will be assessed as follows:

- --------------------------------------------------------------------------------

TOTAL SALES CHARGE
<TABLE>
<CAPTION>

AS A % OF AS A % OF DEALER CONCESSION
OFFERING NET AMOUNT AS A PERCENTAGE OF
AMOUNT OF YOUR INVESTMENT PRICE INVESTED OFFERING PRICE
- ------------------------------- ----------- ------------------- ---------------
<S> <C> <C> <C>
$1,000 but under $10,000.... 1.75% 1.78% 1.50%
$10,000 but under $25,000... 1.50% 1.52% 1.25%
$25,000 but under $50,000... 1.25% 1.27% 1.00%
$50,000 but under $100,000.. 1.00% 1.01% 0.75%
$100,000 or over............ 0.00% 0.00% 0.00%

- --------------------------------------------------------------------------------
</TABLE>

Shares of the Fund may be purchased at the net asset value per share next
determined after receipt of the order without a sales charge by 403(b)(7)
participants. At the discretion of the Fund, investors may be permitted to
purchase Fund shares without a sales charge by transferring securities to the
Fund that meet the Fund's investment objectives and policies.

The distributor will pay the appropriate dealer concession to those selected
dealers who have entered into an agreement with the distributor. The dealer's
concession may be changed from time to time. The distributor may from time to
time offer incentive compensation to dealers (which sell shares of the Fund
subject to sales charges) allowing such dealers to retain an additional portion
of the sales load. A dealer who receives all of the sales load may be
considered an "underwriter" under the Securities Act of 1933, as amended. All
such sales charges are paid to the securities dealer involved in the trade, if
any. The foregoing schedule of sales charges applies to single purchases and to
purchases made under a Letter of Intent and pursuant to the Rights of
Accumulation, both of which are described below.

REDUCED SALES CHARGES

The sales charge for purchases of shares of the Fund may be reduced through
Rights of Accumulation or Letter of Intent.

Page 43
<PAGE>

To qualify for a reduced sales charge, an investor must so notify his or her
distributor at the time of each purchase of shares which qualifies for the
reduction.

RIGHTS OF ACCUMULATION

A shareholder may qualify for a reduced sales charge by aggregating the net
asset values of shares requiring the payment of an initial sales charge,
previously purchased and currently owned with the dollar amount of shares to be
purchased.

LETTER OF INTENT

An investor may qualify for a reduced sales charge immediately by signing a non-
binding Letter of Intent stating the investor's intention to invest during the
next 13 months a specified amount which, if made at one time, would qualify for
a reduced sales charge. The first investment cannot be made more than 90 days
prior to the date of the Letter of Intent. Any redemptions made during the 13
month period will be subtracted from the amount of purchases in determining
whether the Letter of Intent has been completed. During the term of a Letter of
Intent, the transfer agent will hold shares representing 1.75% of the indicated
amount in escrow for payment of a higher sales load if the full amount indicated
in the Letter of Intent is not purchased. The escrowed shares will be released
when the full amount indicated has been purchased. If the full amount indicated
is not purchased within the 13 month period, an investor's escrowed shares will
be redeemed in an amount equal to the difference in the dollar amount of sales
charge actually paid and the amount of sales charge the investor would have had
to pay on his or her aggregate purchases if the total of such purchases had been
made at a single time.

PURCHASES BY WIRE

UNITED MISSOURI BANK KC NA
ABA #10-10-00695
-----------
FOR: FUND/PLAN SERVICES, INC.
A/C 98-7037-071-9
-------------
FBO "THE TIMOTHY PLAN - RETAIL CLASS"
ACCOUNT OF (exact name(s) of account registration)
---------------------------------------
SHAREHOLDER ACCOUNT # _______________

AUTOMATIC INVESTMENT PLAN

Shares of the Fund may be purchased through an Automatic Investment Plan (the
"Plan"). The Plan provides a convenient method by which investors may have
monies deducted directly from their checking, savings or bank money market
accounts for investment in the Fund. The minimum investment pursuant to this
Plan is $100 per month. If you desire to take advantage of this Plan simply
complete and remit the Automatic Investment Plan Application on pages XX and XX.
The account designated will be debited in the specified amount, on the date
indicated, and Fund shares will be purchased. Only an account maintained at a
domestic financial institution which is an ACH member may be so designated. The
Fund may alter, modify or terminate this Plan at any time. For information
about participating in the Automatic Investment Plan, call Fund/Plan Services,
Inc. at (800) 662-0201.

Page 44
<PAGE>

HOW TO REDEEM SHARES

Redemption requests received after the close of the NYSE are effective as of the
time the net asset value per share is next determined.

Retail Class shares of the Fund may be redeemed through certain brokers,
financial institutions or service organizations, banks and bank trust
departments who may charge the investor a transaction fee or other fee for their
services at the time of redemption. Such fees would not otherwise be charged if
the shares were directly redeemed from the Fund.

Page 45
<PAGE>

of the Fund. Any portfolio securities paid or distributed in-kind would be
valued as described under "Determination of Net Asset Value." In the event that
an in-kind distribution is made, a shareholder may incur additional expenses,
such as the payment of brokerage commissions, on the sale or other disposition
of the securities received from the Fund. In-kind payments need not constitute
a cross-section of the Fund's portfolio. Where a shareholder has requested
redemption of all or a part of the shareholder's investment, and where the Fund
completes such redemption in-kind, the Fund will not recognize gain or loss for
federal tax purposes, on the securities used to complete the redemption but the
shareholder will recognize gain or loss equal to the difference between the fair
market value of the securities received and the shareholder's basis in the Fund
shares redeemed. Shares may be redeemed in one of the following ways:

REDEMPTION BY MAIL

Shares may be redeemed by submitting a written request for redemption to the
transfer agent at Two West Elm Street, P.O. Box 874, Conshohocken, PA 19428-
0874.

REDEMPTION BY TELEPHONE

SYSTEMATIC CASH WITHDRAWAL PLAN

Page 46
<PAGE>

either a monthly, quarterly, semi-annual or annual basis in amounts of $100 or
more. All withdrawals are processed on the 25th of the month or, if such day is
not a business day, on the next business day and paid promptly thereafter.
Please complete the appropriate section on the Investment Application enclosed
within this Prospectus, indicating the amount of the distribution and the
desired frequency.

ADDITIONAL INFORMATION

The Fund also reserves the right to involuntarily redeem an investor's account
where the account is worth less than the minimum initial investment required
when the account is established, presently $1,000. (Any redemption of shares
from an inactive account established with a minimum investment may reduce the
account below the minimum initial investment, and could subject the account to
redemption initiated by the Fund.) The Fund will advise the shareholder of such
intention in writing at least sixty (60) days prior to effecting such
redemption, during which time the shareholder may purchase additional shares in
any amount necessary to bring the account back to $1,000.

If the Trustees determine that it would be detrimental to the best interest of
the remaining shareholders of the Fund to make payment in cash, the Fund may pay
the redemption price in whole or in part by distribution in kind of readily
marketable securities, from the Fund, within certain limits prescribed by the
U.S. Securities and Exchange Commission. Such securities will be
valued on the basis of the procedures used to determine the net asset value at
the time of the redemption. If shares are redeemed in kind, the redeeming
shareholder will incur brokerage costs in converting the assets into cash.

RETIREMENT PLANS

PERFORMANCE

Total return data may from time to time be included in advertisements about the
Fund. The Fund's total return may be calculated on an annualized and aggregate
basis for various periods (which periods will be stated in the advertisement).
Average annual return reflects the average percentage change per year in value
of an investment in the Fund. Aggregate total return reflects the total
percentage change over the stated period. Any fees charged by banks or their
institutional investors directly to their customer accounts in connections with
investments in the Retail Class shares of the Fund will not be included in the
Fund's calculations of total returns.

The performance of the Institutional Class shares will normally be higher than
the Retail Class shares because of the sales charge (when applicable) and
additional distribution expenses charged to the Retail Class shares.
Shareholders may obtain current performance information about the Fund by
calling (800) TIM-PLAN.

Further information about the performance of the Fund is included in the Fund's
Annual Report, dated December 31, 1995, which may be obtained without charge by
contacting the Fund at (800) TIM-PLAN.

Page 47
<PAGE>