SCHEDULE 14A (RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/X/ Preliminary proxy statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
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(Name of Registrant as Specified in Its Charter)
TIMOTHY PLAN
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
NOT APPLICABLE
<PAGE>
The Timothy Plan
Timothy Plan Small-Cap Value Fund Timothy Plan Mid/Large-Cap Value Fund
Timothy Plan Fixed Income Fund Timothy Plan Money Market Fund
Timothy Plan Small-Cap Variable Series
1304 West Fairbanks Avenue Winter Park, FL 32789
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 15, 2000
To the Shareholders of All Timothy Plan Funds:
The Timothy Plan (the "Trust") is holding a special meeting of shareholders
on Monday, May 15, 2000 at 10:00 a.m., Eastern Time. The meeting will be held at
the Trust's offices, located at 1304 West Fairbanks Avenue, Winter Park, Florida
32789.
The Trust is a Delaware business trust, operating as a registered
management investment company. The Trust currently offers shares of the
following series (each a "Fund" and together the "Funds") to the public: Timothy
Plan Small-Cap Value Fund; Timothy Plan Mid/Large-Cap Value Fund; Timothy Plan
Fixed Income Fund; Timothy Plan Money Market Fund, and; Timothy Plan Small-Cap
Variable Series. The Trust further has divided the shares into various classes
of shares. The table below briefly describes the various share classes and
identifies which Fund(s) offer each share class. This proxy statement relates to
all share classes of all Funds.
<TABLE>
<CAPTION>
- -------------------------- ---------------------- ----------------------- ----------------------- -----------------------
CLASS C SHARES ARE
CLASS B SHARES ARE OFFERED TO THE PUBLIC
OFFERED TO THE PUBLIC WITHOUT FRONT OR NO-LOAD SHARES ARE
CLASS A SHARES ARE WITH A DECLINING BACK-END SALES LOADS, OFFERED TO THE PUBLIC
OFFERED TO THE CONTINGENT DEFERRED BUT WITH A CONTINUING WITHOUT SALES CHARGES
FUND PUBLIC WITH A SALES CHARGE ADDITIONAL SERVICING OR ADDITIONAL ONGOING
FRONT-END SALES (BACK-END LOAD) FEE. SERVICING FEES
CHARGE.
- -------------------------- ---------------------- ----------------------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
Timothy Plan Small-Cap
Value Fund X X X
- -------------------------- ---------------------- ----------------------- ----------------------- -----------------------
Timothy Plan Mid/Large
Cap Value Fund X X X
- -------------------------- ---------------------- ----------------------- ----------------------- -----------------------
Timothy Plan Fixed
Income Fund X X X
- -------------------------- ---------------------- ----------------------- ----------------------- -----------------------
Timothy Plan Money
Market Fund X
- -------------------------- ---------------------- ----------------------- ----------------------- -----------------------
Timothy Plan Small-Cap
Variable Series X
- -------------------------- ---------------------- ----------------------- ----------------------- -----------------------
</TABLE>
The meeting is being held for the following purposes:
(1) To elect nine trustees, each of whom will serve until his successor is
elected and qualified;
(2) To approve a revised Plan of Distribution Pursuant to Rule 12b-1 for the
Class A shares of the Timothy Plan Small-Cap Value Fund;
(3) To approve the conversion of Class C shares of the Timothy Plan Small-Cap
Value Fund, Timothy Plan Mid/Large-Cap Value Fund, and Timothy Plan Fixed
Income Fund to Class B shares; and
(4) To transact such other business as may properly come before the meeting.
You may vote at the meeting if you are the record owner of any class of
shares of any Fund as of the close of business on March 31, 2000. If you attend
the meeting, you may vote your shares in person. If you expect to attend the
meeting, please call the Trust at 1-800-846-7526 to inform them. If you do not
expect to attend the meeting, please fill in, date, sign and return the proxy
card in the enclosed, postage paid envelope.
PLEASE VOTE NOW TO HELP SAVE THE COST OF ADDITIONAL SOLICITATIONS.
As always, we thank you for your confidence and support.
By Order of the Board of Trustees,
/s/ Arthur D. Ally
President
April 17, 2000
<PAGE>
THE TIMOTHY PLAN
Timothy Plan Small-Cap Value Fund Timothy Plan Mid/Large-Cap Value Fund
Timothy Plan Fixed Income Fund Timothy Plan Money Market Fund
Timothy Plan Small-Cap Variable Series
1304 West Fairbanks Avenue Winter Park, FL 32789
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Toll Free: 800-846-7526
PROXY STATEMENT
DATED APRIL 17, 2000
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SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 15, 2000
WHAT IS HAPPENING?
The Board of Trustees (the "Board") of the Timothy Plan (the "Trust") has
voted to call a special meeting of shareholders of each of the seven
separate series listed above (each a "Fund" and together the "Funds"), in
order to seek shareholder approval of three proposals relating to the
Trust. The meeting will be held at the Trust's offices, located at 1304
West Fairbanks Avenue, Winter park, Florida 32789, at 10:00 a.m., Eastern
Time, on Monday, May 15, 2000. If you expect to attend the meeting in
person, please call the Trust at 1-800-846-7526 to inform them of your
intentions.
WHAT ITEMS OF TRUST BUSINESS AM I BEING ASKED TO VOTE ON?
The Board is asking you to approve three proposals: (1) Elect nine
trustees; (2) Approve a revised Rule 12b-1 Plan for the Class A shares of
the Timothy Plan Small-Cap Value Fund; and (3) Approve the conversion of
Class C shares to Class B shares for the Timothy Plan Small-Cap Value Fund,
Timothy Plan Mid/Large-Cap Value Fund, and Timothy Plan Fixed Income Fund.
WHICH PROPOSALS APPLY TO ME?
The table below summarizes each proposal to be presented at the meeting and
shows the Funds (and share classes) whose shareholders may vote for each
proposal.
<TABLE>
<CAPTION>
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PROPOSAL AFFECTED FUNDS
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<S> <C>
1. Electing Trustees All shareholders of all Funds may vote.
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2. Approving a revised 12b-1 Plan for the Class Only eligible Class A shareholders of the Timothy Plan
A shares of the Timothy Small-Cap Value Fund Small-Cap Value Fund may vote on this proposal.
- --------------------------------------------------- ------------------------------------------------------
3. Converting Class C shares to Class B shares Only eligible Class C shareholders of the Timothy Plan
Small-Cap Value Fund, the Timothy Plan Mid/Large-Cap
Value Fund, and the Timothy Plan Fixed Income Fund may
vote on this proposal.
- -------------------------------------------------- -------------------------------------------------------
</TABLE>
<PAGE>
AM I ELIGIBLE TO VOTE?
If you were the record owner of any class of shares of any Fund as of the
close of business on March 31, 2000 (the "Record Date"), then you are
eligible to vote on one or more of the proposals (See the table in the
preceding paragraph to find out which proposals apply to you). The number
of shares for each class of shares outstanding for each Fund as of the
Record Date is listed in Appendix A to this proxy statement.
HOW DO I VOTE?
VOTING BY PROXY
The simplest and quickest way for you to vote is to complete, sign and date
the enclosed proxy card and mail it back to the Trust in the envelope
provided. The Board urges you to fill out and return your proxy card even
if you plan to attend the meeting. Returning your proxy card will not
affect your right to attend the meeting and vote.
The Board has named _____________________, _______________________, and
_______________ as proxies, and their names appear on your proxy card(s).
By signing your proxy card and returning it, you are appointing those
persons to vote for you at the meeting. If you properly fill in your proxy
card and return it to the Trust in time to vote, one of the appointed
proxies will vote your shares as you have directed. If you sign and return
your proxy card, but do not make specific choices, one of the appointed
proxies will vote your shares on each proposal as recommended by the Board.
If an additional matter is presented for vote at the meeting, one of the
appointed proxies will vote in accordance with his or her best judgment. At
the time this proxy statement was printed, the Board was not aware of any
other matter that needed to be acted upon at the meeting other than the
three proposals discussed in this proxy statement.
If you appoint a proxy by signing and returning your proxy card, you can
revoke that appointment at any time before it is exercised. You can revoke
your proxy by sending in another proxy with a later date, or by notifying
the Trust's secretary in writing, before the meeting, that you have revoked
your proxy, at the following address: Mr. Joseph Boatwright, The Timothy
Plan, 1304 West Fairbanks Avenue, Winter Park, FL 32789.
VOTING IN PERSON
If you attend the meting and wish to vote in person, you will be given a
ballot when you arrive. If you have already voted by proxy and wish to vote
in person instead, you will be given an opportunity to do so during the
meeting. If you attend the meeting, but your shares are held in the name of
your broker, bank or other nominee, you must bring with you a letter from
that nominee stating that you are the beneficial owner of the shares on the
Record Date and authorizing you to vote.
HOW DOES THE BOARD RECOMMEND THAT I VOTE?
The Board recommends that you vote "For" each of the proposals described in
this proxy statement.
WHAT IS A QUORUM AND WHY IS IT IMPORTANT?
A quorum is the number of outstanding shares, as of the Record Date, that
must be present, in person or by proxy, in order for the Trust to hold a
valid shareholder meeting. The Trust cannot hold a valid shareholder
meeting unless there is a quorum of shareholders present in person or by
proxy. The Trust's Agreement and Declaration of Trust requires that the
presence, in person or by proxy, of a majority of the shares entitled to
vote on a matter shall constitute a quorum, unless a larger number of
shares is required pursuant to law. The table below sets forth the quorum
required for each proposal to be voted at the meeting:
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------- ---------------------------------------------------------
PROPOSAL NUMBER OF SHARES REQUIRED FOR QUORUM
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<S> <C>
1. Electing Trustees A majority of all outstanding shares (as of March 31,
2000) of all Funds, in the aggregate.
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2. Approving a revised 12b-1 Plan A majority of the outstanding Class A shares (as of March
31, 2000)of the Timothy Plan Small-Cap Value Fund.
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3. Converting Class C shares to Class B shares: A majority of the outstanding Class C shares (as of March
31, 2000) of the Timothy Plan Small-Cap Value Fund, the
Timothy Plan Mid/Large-Cap Value Fund, and the Timothy
Plan Fixed Income Fund.
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</TABLE>
Under rules applicable to broker-dealers, if your broker holds your shares
in its name, the broker is allowed to vote your shares on Proposal 1
(Election of Trustees) even if it has not voting received instructions form
you. However, your broker is not allowed to vote your shares on proposals 2
and 3 ( Approving a revised 12b-1 Plan and converting Class C shares to
Class B shares) unless it has received voting instructions from you. If
your broker does not vote your shares on Proposals 2 or 3 because it has
not received instructions from you, those shares will be considered broker
non-votes.
Broker non-votes and abstentions with respect to a proposal count as
present for purposes of establishing a quorum.
WHAT IS THE VOTE NECESSARY TO APPROVE EACH PROPOSAL?
The following table describes the votes needed to approve each Proposal:
<TABLE>
<CAPTION>
- --------------------------------------------------- ---------------------------------------------------------
PROPOSAL VOTES REQUIRED TO APPROVE
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<S> <C>
1. Elect new Trustees The affirmative vote of a plurality of the votes cast for
each Trustee. This means that the nine people who
receive the most votes will be elected. In an
uncontested election of trustees, the plurality
requirement is not a factor.
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2. Approve a revised 12b-1 Plan Only Class A shareholders of the Timothy Plan Small-Cap
Value Fund vote on this Proposal. The affirmative vote
of a majority of the outstanding shares of the Class
entitled to vote is required.
- --------------------------------------------------- ---------------------------------------------------------
3. Convert Class C shares to Class B shares Only Class C shareholders of the Timothy Plan Small-Cap
Value Fund, the Timothy Plan Mid/Large-Cap Value Fund,
and the Timothy Plan Fixed Income Fund vote on this
Proposal. The affirmative vote of a majority of the
Class C shares entitled to vote of each Fund is required
to approve the Proposal as to that Fund. Each Fund is
independent. Accordingly, the Class C shareholders of
one Fund could approve the Proposal and the Class C
shareholders of another Fund could reject the Proposal.
- --------------------------------------------------- ---------------------------------------------------------
</TABLE>
The Investment Company Act of 1940, as amended (the "1940 Act") defines a
"majority" of the outstanding voting securities of a Fund (or applicable
Class of shares) as the lesser of (a) the vote of holders of at least 67%
of the voting securities of the Fund (or applicable Class of shares)
present in person or by proxy, if more than 50% of such shares are present
in person or by proxy; or (b) the vote of holders of more than 50% of the
outstanding voting securities of the Fund (or applicable Class of shares).
Broker non-votes will not count as votes cast and will have the effect of
votes against proposals 2 and 3.
CAN THE MEETING BE ADJOURNED?
The appointed proxies may propose to adjourn the meeting, either in order
to solicit additional proxies or for other purposes. If there is a proposal
to adjourn the meeting, the affirmative vote of a majority of the shares
present, in person or by proxy, is required to approve such proposal.
WHO IS PAYING THE COST OF THE SHAREHOLDER MEETING AND THIS
PROXY SOLICITATION?
The Trust is paying the costs of the shareholder meeting and proxy
solicitation.
WHO DO I CALL IF I HAVE QUESTIONS?
At your request, the Trust will send you a free copy of its most recent
audited annual report, and its most recent subsequent semi-annual report,
if any. Please call the Trust at 1-800-846-7526 to request an annual and/or
semi-annual report, or with any questions you may have relating to this
proxy statement.
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PROPOSAL # 1. ELECTION OF NINE TRUSTEES TO THE BOARD
WHO ARE THE NOMINEES FOR TRUSTEE?
The Board has approved the nomination of Arthur D. Ally, Joseph E.
Boatwright, Wesley W. Pennington, Jock M. Sneddon, W. Thomas Fyler, Jr.,
Randy R. Brunson, Mathew D. Staver, Charles E. Nelson, and Mark A.
Minnella, each to serve as a Trustee until his successor has been elected
and duly qualified.
Messrs. Ally, Boatwright, Pennington, Sneddon and Fyler presently serve as
Trustees to the Trust and each Fund. Mr. Ally currently also serves as
President of the Trust and Chairman of the Board of Trustees. Mr.
Boatwright also currently serves as Secretary to the Trust, and Mr.
Pennington also currently serves as Treasurer to the Trust. Mr. Fyler was
appointed as a Trustee by the Board in December, 1998 to fill a vacancy
created by the resignation of another Trustee. Messrs. Brunson, Staver,
Nelson and Minnella are being proposed as Trustees for the first time.
No Trustee or nominee is a party adverse to the Trust or any of its
affiliates in any material legal proceeding, nor does any Trustee or
nominee have a materially adverse interest to the Trust. Each nominee has
consented to serve if elected. To the best knowledge of the Trust, as of
March 31, 2000, no Trustee or nominee owned, individually, more than 1% of
any Class of shares of any Fund, and the Trustees and nominees, in the
aggregate, owned less than 5% of any shares of the Trust.
The following table sets forth information concerning the nominees:
<TABLE>
<CAPTION>
- ---------------------------- --------------------------- ------------------------------------------------------
DATE PERSON BECAME A
TRUSTEE & TRUST OFFICES PRINCIPAL OCCUPATION
NAME, ADDRESS & AGE HELD, IF ANY DURING PAST 5 YEARS
- ---------------------------- --------------------------- ------------------------------------------------------
<S> <C> <C>
Arthur D. Ally (58)* Trustee since January, President and controlling shareholder of Covenant
1304 West Fairbanks Avenue 1994. Currently serves Funds, Inc.("CFI"), a holding company. President
Winter Park, FL as President of the Trust and general partner of Timothy Partners,
and Chairman of the Board Ltd.("TPL"), the investment adviser and principal
of Trustees. underwriter to each Fund. CFI is also the managing
general partner of TPL.
- ---------------------------- --------------------------- ------------------------------------------------------
Joseph E. Boatwright Trustee since April, Retired Minister. Currently serves as a consultant
(68)** 1995. Currently serves to the Greater Orlando Baptist Association. Served
1410 Hyde Park Drive as Secretary to the Trust. as Senior Pastor to the Aloma Baptist Church from
Winter Park, FL 1970-1996.
- ---------------------------- --------------------------- ------------------------------------------------------
Wesley W. Pennington (68) Trustee since January, President, Westwind Holdings, Inc., a development
442 Raymond Avenue 1994. Currently serves company, since 1997. President and controlling
Longwood, FL as Treasurer to the Trust. shareholder, Weston, Inc., a fabric treatment
company, form 1979-1997.
- ---------------------------- --------------------------- ------------------------------------------------------
Jock M. Sneddon (51)** Trustee since January, Physician, Florida Hospital Center.
6001 Vineland Drive 1997.
Orlando, FL
- ---------------------------- --------------------------- ------------------------------------------------------
W. Thomas Fyler, Jr. (42) Trustee since December, President, controlling shareholder of W.T. Fyler,
90 West Street, Suite 1820 1998 Jr./Ephesus, Inc., a New York State registered
New York, NY 10006 investment advisory firm. Founding member of the
National Association of Christian Financial
Consultants.
- ---------------------------- --------------------------- ------------------------------------------------------
Randy R. Brunson (43) Initial Nomination. Has Founder and Principal of Brunson Financial
4500 Hugh Howell Rd, not previously served as Management, Inc., a financial planning and
Suite 750 Trustee of the Trust. investment advisory firm located in Atlanta,
Tucker, GA 30084 Georgia. Member, Institute of Certified Financial
Planners, the Institute for Investment Management
Consulting, and the Atlanta Health Care Alliance,
among others.
- ---------------------------- --------------------------- ------------------------------------------------------
Mathew D. Staver (43)** Initial Nomination. Has Attorney specializing in free speech, appellate
210 East Palmetto Ave. not previously served as practice and religious liberty constitutional law.
Longwood, FL 32750 Trustee of the Trust. Founder of Liberty Counsel, a religious civil
liberties education and legal defense organization.
Host of two radio programs devoted to religious
freedom issues. Editor of a monthly newsletter
devoted to religious liberty topics. Mr. Staver has
argued before the united States Supreme Court and
has published numerous legal articles.
- ---------------------------- --------------------------- ------------------------------------------------------
Charles E. Nelson (65) Initial Nomination. Has Director of Finance, Hospice of the Comforter, Inc.,
1145 Cross Creek not previously served as a non-profit organization. Formerly Comptroller,
Altamonte Springs, FL Trustee of the Trust. Florida United Methodist Children's Home, Inc.
Formerly Credit Specialist with the Resolution Trust
Corporation and Senior Executive Vice President,
Barnett Bank of Central Florida, N.A. Formerly
managing partner, Arthur Anderson, CPA firm, Florida
branch.
- ---------------------------- --------------------------- ------------------------------------------------------
Mark A. Minnella (44) Initial Nomination. Has Principal and co-founder of The Financial
1215 Fern Ridge Parkway, not previously served as Engineering Center, Inc. a registered investment
Suite 110 Trustee of the Trust. advisory firm. Co-founder, treasurer and director
Creve Coeur, MO of the National Association of Christian Financial
Consultants. Mr. Minnella is a Registered
Investment Principal (NASD Series 24), and a
registered investment adviser (NASD Series 65).
Host of a weekly radio program in St. Louis devoted
to financial planning. Frequent lecturer, teacher
and author of a variety of financial software
products.
- ---------------------------- --------------------------- ------------------------------------------------------
</TABLE>
* Mr. Ally is an "interested" Trustee, as that term is defined in the 1940 Act,
because of his positions with and financial interests in CFI and TPL.
** Messrs. Boatwright, Sneddon and Staver are "interested" Trustees, as that
term is defined in the 1940 Act, because each has a limited partnership interest
in TPL.
WHY ARE TRUSTEES BEING ELECTED AT THE PRESENT TIME?
Under the 1940 Act, the Board may fill vacancies on the Board or appoint
new Trustees, but only to the extent that, immediately afterwards, at least
two-thirds of the Trustees then serving on the Board were elected by
shareholders. Four of the five current Board members have been elected by
shareholders, and there currently are two vacancies that have not been
filled by appointment. Accordingly, the Board may not fill both existing
vacancies without shareholder approval.
In September, 1999, the Board considered the composition of the Board, the
future needs of the Trust as new Funds were added, and potential changes to
the federal rules governing the Board. After full discussion, the Board
decided to expand from seven to nine members and to limit the Board to no
more than four "interested" Trustees, as that term is defined in the 1940
Act. Since a sitting majority of the Board was elected by shareholders, the
Board decided to delay the expansion of the Board until such time as other
matters requiring shareholder approval arose, in order to save expense to
the Trust. The Board began seeking qualified nominees to fill the existing
vacancies and to fill the new Trusteeships authorized by the Board, and in
April, 2000, nominated the persons described above as Trustees, called for
a special meeting of the shareholders, and directed management of the Trust
to take all necessary steps to effect the vote of the Board.
If the Trust's shareholders approve Proposal # 1, the Board will be
composed of four "interested" Trustees and six independent Trustees.
Accordingly, 56% of the Board will be composed of independent Trustees.
Current federal rules only require that 40% of the Board be independent.
The Board believes that having a majority of independent Trustees serving
on the Board better protects shareholder interests and allows for more
diversity of opinion and input into the management of the Trust.
HOW LONG DO TRUSTEES SERVE ON THE BOARD?
Trustees may serve on the Board until their successors are elected and
qualified at a meeting of the Trust's shareholders. Because the Trust
generally is not required to call periodic shareholder meetings, the
Trustees may serve for an indefinite period of time. A Trustee may retire
or resign at any time, and a Trustee may be removed from office at any time
by a majority vote of the then sitting Trustees or by two-thirds vote of
the outstanding shares of the Trust.
WHAT ARE THE BOARD'S RESPONSIBILITIES?
The Board is responsible for the general management and oversight of the
Trust's business affairs and for assuring that each Fund is managed
according to its investment policies and restrictions and in accordance
with federal and state laws and regulations, for the benefit of and in the
best interests of the shareholders.
The Board monitors the performance of each Fund and the quality of services
provided to the Funds by the Trust's various service providers. At least
annually, the Board reviews the performance of the investment managers of
the Funds, decides whether to renew their contracts or replace them, and
reviews the fees paid by the Funds for, and the quality of, all the
services provided to the Funds.
The Board represents the shareholders, and the Board is responsible for
discussing with and guiding senior management of the Trust in correcting
any deficiencies found by the Board with respect a Fund, monitoring
potential conflicts that may arise between the Trust and affiliated parties
to make sure that the shareholders' best interests are served, and
generally supervising the affairs of the Trust so as to maximize value to
the shareholders.
WHAT ARE THE BOARD'S STANDING COMMITTEES?
The Board currently has only one standing committee, the Audit Committee.
The current members of the Audit Committee are Arthur D. Ally (non-voting),
Wesley Pennington, and W.T. Fyler. The Audit Committee is responsible for:
o Considering management's recommendation of independent accountants for
each Fund and evaluating the performance, expense and financial
stability of the independent accountant(s);
o Reviewing and coordinating audit plans prepared by the independent
accountant(s) for each Fund; and
o Reviewing financial statements contained in periodic reports to
shareholders with the independent accountant(s) and Trust management.
HOW OFTEN DOES THE BOARD MEET?
The Board typically meets four times a year to review the operations of the
Trust and each Fund. Generally, all meetings are held in person at the
offices of the Trust. The Audit Committee meets at least annually.
During the fiscal year ended on December 31, 1999, the Board met four times
and the Audit Committee met once. All of the current Trustees and Committee
members attended at least 75% of those meetings.
ARE THE TRUSTEES AND OFFICERS OF THE TRUST PAID FOR THEIR SERVICES TO THE TRUST?
Currently, none of the Trustees or officers of the Trust receives any
compensation from the Trust for their services to the Trust. The Board has
repeatedly determined not to pay itself compensation until such time as the
Funds of the Trust grow in size to such a point where the expense is
justified.
Officers and/or Trustees of the Trust who are also officers of an affiliate
of the Trust are paid for their services to the affiliate by such
affiliate, but such compensation is unrelated to the person's service as a
Trustee to the Trust.
HOW DOES THE BOARD RECOMMEND THAT I VOTE ON PROPOSAL # 1?
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YOUR BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS THAT
YOU VOTE "FOR" PROPOSAL # 1.
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PROPOSAL # 2. APPROVAL OF A REVISED RULE 12B-1 PLAN
WHICH SHAREHOLDERS VOTE FOR THIS PROPOSAL?
You may vote on this Proposal only if you were the owner of Class A shares
of the Timothy Plan Small-Cap Value Fund as of March 31, 2000.
WHAT IS A RULE 12B-1 PLAN?
An investment company may pay for expenses relating to the distribution and
servicing of its shares pursuant to a plan of distribution (a "Rule 12b-1
Plan") that complies with the provisions of Rule 12b-1 under the 1940 Act.
These types of expenses include, but are not limited to, the payment of any
commissions or distribution fees; preparation of advertising or sales
literature; the cost of printing and mailing prospectuses to persons other
than existing shareholders; maintaining account records for shareholders;
answering inquiries relating to shareholders' accounts, the policies of the
Fund, and the performance of their investments; providing assistance and
handling transmission of funds in connection with purchase, redemption, and
exchange orders for shares; providing assistance in connection with
changing account setups and enrolling in various optional services;
producing and disseminating shareholder communications or servicing
materials; and expenses, including overhead, salaries, and telephone and
other communications expenses, to authorized dealers and employees who
provide such services.
WHAT IS THE DIFFERENCE BETWEEN THE CURRENT RULE 12B-1 PLAN AND THE PROPOSED RULE
12B-1 PLAN?
The Trust's current Rule 12b-1 Plan for Class A shares for the Timothy Plan
Small-Cap Value Fund (the "Fund") was originally approved by the Board and
the sole initial shareholder of the Fund on February 10, 1996, and was
amended on July 1, 1997. The Current Rule 12b-1 Plan is known as a
"reimbursement plan". Under the current Rule 12b-1 Plan, the Fund's
principal underwriter, TPL, may be reimbursed for eligible Rule 12-1
expenses it incurs during the Fund's fiscal year relating to the
distribution and servicing of the Fund's Class A shares, up to a maximum of
0.25% of the average daily net assets of the Class A shares of the Fund.
Under the current Rule 12b-1 Plan, TPL incurs the expense, then submits a
request for reimbursement to the Fund, then the Fund reimburses TPL up to
the maximum allowable amount. For the fiscal year ended December 31, 1999,
TPL incurred total eligible Rule 12b-1 expenses of $______________
attributable to Class A shares and the Fund reimbursed TPL for a total of
$____________.
Class A shares of all Funds except the Small-Cap Value Fund, as well as
Class B and Class C shares of every Fund, also operate under their own Rule
12b-1 Plans. These Plans are known as "compensation plans". A
"compensation" plan accrues and pays Rule 12b-1 fees to TPL on a monthly
basis without the requirement of a prior request for reimbursement. A
compensation plan is easier to administer and less cumbersome to monitor.
Under a compensation plan, the applicable Fund accrues Rule 12b-1 fees
against the appropriate share class in the amount set forth in the
applicable Plan and periodically pays the accrued fees to TPL and other
eligible service providers. There is no need for TPL to first submit
expenses to the Trust for approval. The Board has agreed that it would be
in the Trust's best interests to have all Rule 12b-1 Plans for every Fund
operate on a consistent basis. Accordingly, the Board is recommending that
the Class A shareholders of the Timothy Plan Small-Cap Value fund approve
the conversion of the current Rule 12b-1 Plan from a "reimbursement plan"
to a "compensation plan".
Under both the current and proposed Rule 12b-1 Plans, Class A shares of the
Fund reimburse or pay TPL a fee computed at a maximum annual rate of 0.25%
of the average daily net assets of the Class A shares of the Fund.
OTHER THAN CHANGING FROM A REIMBURSEMENT TO A COMPENSATION MODEL FOR THE
RULE 12B-1 PLAN, THE REVISED RULE 12B-1 PLAN IS ON THE SAME TERMS AS THE
FUND'S CURRENT RULE 12B-1 PLAN. A FORM OF THE NEW RULE 12B-1 PLAN IS
ATTACHED HERETO AS EXHIBIT B. NO CHANGE IN FEES IS BEING PROPOSED.
WHAT IS THE TERM OF THE PROPOSED NEW RULE 12B-1 PLAN?
Just like the current Rule 12b-1 Plan, the proposed new Rule 12b-1 Plan
will continue in effect for an initial term of one year, and may continue
thereafter from year to year if specifically approved at least annually by
vote of "a majority of the outstanding voting securities" of the Class A
shares of the Fund, as defined under the 1940 Act, or by the Board,
including, in either event, the vote of a majority of the "non interested"
Trustees, cast in person at a meeting called for such purpose. Like the
current Rule 12b-1 Plan, the new Rule 12b-1 Plan will require TPL to
prepare reports to the Board on a quarterly basis showing the amounts
expended on eligible expenses, if any, the amounts accrued and paid to TPL
and others pursuant to the Plan, and such other information as from time to
time the Board may reasonably request.
HAS THE BOARD APPROVED THE PROPOSED RULE 12B-1 PLAN?
On November 5, 1999, the Board, including a majority of the
"non-interested" Trustees, voted to approve the new Rule 12b-1 Plan and
directed that the Plan be submitted to the Fund shareholders at the next
shareholder meeting, along with a recommendation that such shareholders
approve the Rule 12b-1 Plan.
In approving the new Rule 12b-1 Plan, the Board determined, as with the
current Rule 12b-1 Plan, that there is a reasonable likelihood that the new
Rule 12b-1 Plan would benefit the Trust, the Fund and its Class A
shareholders. In doing so, the Board considered several factors, including
that the new Rule 12b-1 Plan would likely (i) facilitate distribution of
the Fund's Class A shares, (ii) help maintain the competitive position of
the Trust in relation to other funds that have implemented or are seeking
to implement similar distribution arrangements; and (iii) permit possible
economies of scale through increased Fund size.
If the new Rule 12b-1 Plan is approved by the Fund's Class A shareholders,
it will become effective and will replace the current Rule 12b-1 Plan
immediately. If the shareholders do not approve the new Rule 12b-1 Plan,
the Board would consider alternative action.
HOW DOES THE BOARD RECOMMEND THAT I VOTE ON PROPOSAL # 2?
- --------------------------------------------------------------------------------
YOUR BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS THAT
YOU VOTE "FOR" PROPOSAL # 2.
- --------------------------------------------------------------------------------
PROPOSAL # 3. CONVERSION OF CLASS C SHARES TO CLASS B SHARES
WHO MAY VOTE ON THIS PROPOSAL?
Only Class C shareholders of the Timothy Plan Small-Cap Value Fund, Timothy
Plan Mid/Large-Cap Value Fund and Timothy Plan Fixed Income Fund may vote
on this Proposal.
WHY IS THE TRUST SEEKING TO CONVERT CLASS C SHARES TO CLASS B SHARES?
The Trust currently offers Class A, Class B and Class C shares on the
following Funds: The Timothy Plan Small-Cap Value Fund, Timothy Plan
Mid/Large-Cap Value Fund, and Timothy Plan Fixed Income Fund. Each share
Class has different sales charges and ongoing fee structures. Class C
shares do not impose a front-end sales load on investors. 100% of a
person's investment in Class C shares is invested in the Fund of his or her
choice. However, Class C shares are subject to an ongoing Rule 12b-1 fee of
1%.
Each share class offered by the Trust is subject to fees and expenses
relating to the operations of that share class, as well as fees and
expenses that are common to all share classes. To the major service
providers for the Trust, each class of shares is treated as if it were an
individual Fund for purposes of computing charges. Accordingly, in order to
be successful, each share class must achieve a certain level of assets in
order to be independently self-sustaining.
Class C shares have been offered to the public since May 1, 1999. As can be
seen from the share breakdown on Exhibit A, the Class has not attracted
many investors. The expenses relating to the Class C shares, combined with
the lack of assets in the Class, has caused the Board to examine the
ongoing viability of the Class. The Board has agreed that it is not
economically prudent to continue offering Class C shares, and on February
25, 2000, unanimously agreed to indefinitely suspend the offering of Class
C shares.
Although the Trust is no longer offering new Class C shares to the public,
the existing and outstanding Class C shares are still incurring ongoing
fees and expenses, and will continue to do so as long as they exist. The
only way to stop the accrual of fees is for (1) all Class C shareholders to
redeem their shares; or (2) convert the Class C shares to another Class.
After full discussion, the Board unanimously agreed that it would be in the
best interests of the Class C shareholders and the Trust to convert all
Class C shares to Class B shares.
HOW WILL THE CONVERSION TO CLASS B SHARES AFFECT ME?
Your ongoing expenses will eventually decline and you will immediately be
exempt from all CDSC fees.
As discussed above, Class C shares are subject to a permanent and ongoing
Rule 12b-1 fee of 1%. Class B shares are also subject to an ongoing Rule
12b-1 fee of 1%, but the fee is reduced to 0.25% after fees equally the
equivalent of certain front-end sales loads is reached, generally after
about 5 years. Accordingly, if you approve converting your Class C shares
to Class B shares, your Rule 12b-1 fees will eventually decrease from 1.00%
to 0.25%.
Class B shares are subject to declining contingent deferred sales charges
("CDSC") charges over a time period of five years. Class B shares impose
CDSC charges because brokers, dealers and other financial professionals who
sell shares of the Funds expect to be compensated for those sales. Under
the Class B share structure, TPL advances to the seller a 4% commission,
then recovers that amount by receiving 0.75% in Rule 12b-1 fees until the
economic equivalent of the 4% sales charge has been recovered.
If Class C shareholders approve the conversion, TPL has agreed to advance
an additional commission of 3% to all sellers of existing Class C shares,
in order to compensate them for the termination of their ongoing receipt of
Rule 12b-1 fees. TPL will recover such advances through the receipt of Rule
12b-1 fees until the economic equivalent of the 4% sales charge has been
recovered from the converting Class C shares. TPL has also agreed that if
the conversion is approved, Class C shareholders will be exempt from all
CDSC charges on their existing holdings, and may thereafter redeem their
shares at any time without having to pay any CDSC charge. Any losses that
TPL may incur as a result of such an agreement will be borne solely by TPL.
If you vote to convert from Class C to Class B shares, all reinvested
dividends and capital gains distributions from your existing shares will
also be exempt from CDSC charges. However, any subsequent purchase by you
of Class B shares will be subject to the same CDSC charges and ongoing fees
as all other Class B shareholders.
DOES A MAJORITY OF CLASS C SHAREHOLDERS OF ALL FUNDS HAVE TO APPROVE THE
CONVERSION?
Each Fund's Class C shareholders are independent of each other Fund. All
Class C shareholders will vote on the conversion, but each Fund's Class C
share vote will be tallied separately. Accordingly, Class C shareholders of
one Fund might approve the conversion, while Class C shareholders of
another Fund might reject the conversion. In such a case, the Fund(s) that
gained approval for the conversion would then have only two classes of
shares, Class A and B, and the Fund(s) that rejected the conversion would
continue to have all three Classes.
WHAT HAPPENS IF MY FUND'S CLASS C SHAREHOLDERS DO NOT APPROVE THE CONVERSION TO
CLASS B SHARES?
If you and your fellow shareholders do not approve the conversion for your
Fund, your fees and expenses are likely to increase dramatically and have a
very negative effect on the performance of your Class C shares over time.
The Board has decided not to offer Class C shares any more. That means that
there will be no additional shareholders of Class C shares to help you
share the burden of fees and expenses on those shares. You and your
remaining shareholders will bear those expenses alone. As other Class C
shareholders redeem their shares, fewer and fewer of you will be paying
expenses that are, in many cases fixed for the entire Class, no mater how
few shareholders there are. This means that as there are fewer
shareholders, the remaining shareholders will pay an increasing share of
those expenses. The effect on your shares is obvious. AS your expenses
increase, your overall return will decrease.
WHEN WILL PROPOSAL # 3 BE IMPLEMENTED?
If each Fund's Class C shareholders approve the Proposal, it will take
effect immediately and your shares will be converted to Class B shares as
of the close of business on that day. If the Class C shareholders of one or
more affected Funds do not approve the Proposal, the Board will consider
alternative actions.
HOW DOES THE BOARD RECOMMEND THAT I VOTE ON PROPOSAL # 3?
- --------------------------------------------------------------------------------
YOUR BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS THAT
YOU VOTE "FOR" PROPOSAL # 3.
- --------------------------------------------------------------------------------
<PAGE>
OTHER INFORMATION
UNDERWRITER
Timothy Partners, Ltd. ("TPL") is a broker/dealer registered as such with
the Securities and Exchange Commission, and is a member in good standing of
the National Association of Securities Dealers. TPL has been providing
underwriting services to the Funds of the Trust since 1997.
TPL is not compensated by the Trust for its services to the Funds of the
Trust. TPL retains commissions on sales of Fund shares when such sales are
not effected by an outside broker, dealer or financial professional. TPL
receives the same commissions as any other broker with whom the Trust has
entered into a selling agreement.
ALLOCATION OF PORTFOLIO TRANSACTIONS
TPL also serves as the investment adviser for each Fund. TPL, with the
consent of the Board and each Fund's shareholders, has engaged other firms
to serve as the day-to-day investment managers for each Fund (the
"Sub-Advisers"). TPL, in effecting purchases and sales of portfolio
securities for the account of the Funds, is responsible for insuring that
such purchases and sales are effected by the Sub-Advisers in accordance
with the Trust's policy of seeking best execution of orders, which includes
best net prices, except to the extent that the Sub-Advisers may be
permitted to pay higher brokerage commissions for research services as
described below. Consistent with this policy, orders for portfolio
transactions are placed with broker-dealer firms giving consideration to
the quality, quantity and nature of each firm's professional services,
which include execution, clearance procedures, wire service quotations and
statistical and other research information provided to the Funds. Any
research benefits derived are available for all clients, including clients
of affiliated companies. Since statistical and other research information
is only supplementary to research efforts of TPL and the Sub-Advisers, and
such information still must be analyzed and reviewed by its staff, the
receipt of research information is not expected to materially reduce the
Sub-Advisers' expenses. In selecting among firms believed to meet the
criteria for handling a particular transaction, the Sub-Advisers may give
consideration to those firms that have sold or are selling shares of the
Trust, as well as to those firms that provide market, statistical and other
research information to the Trust, TPL and to the Sub-Advisers. TPL and the
Sub-Advisers are not authorized to pay higher commissions, or in the case
of principal trades, higher prices, to firms that provide such services,
except as provided below.
TPL and the Sub-Advisers may in certain instances be permitted to pay
higher brokerage commissions solely for receipt of market, statistical and
other research services. Subject to Section 28(e) of the Securities
Exchange Act of 1934 and procedures adopted by the Board, the Funds could
pay to a firm that provides research services to TPL and/or the
Sub-Advisers a commission for effecting a securities transaction for a Fund
in excess of the amount other firms would have charged for the transaction.
The Fund could do this if TPL and/or the Sub-Advisers determines in good
faith that the greater commission is reasonable in relation to the value of
the research services provided by the executing firm viewed in terms either
of a particular transaction or TPL the Sub-Advisers' overall
responsibilities to the Funds or other clients. Not all such research
services may be useful or of value in advising a particular series.
Research benefits will be available for all clients of TPL and its
subsidiaries. In addition, the investment management fee paid by the Fund
to TPL is not reduced because it receives these research services.
PROPOSALS OF SHAREHOLDERS
As a Delaware Business Trust, the Trust is not required to hold annual
shareholder meetings, but will hold special meetings as required or deemed
desirable. Since the Trust does not hold regular meetings of shareholders,
the anticipated date of the next shareholders meeting cannot be provided.
Any shareholder proposal that may properly be included in the proxy
solicitation material for a special shareholder meeting must be received by
the Trust no later than four months prior to the date when proxy statements
are mailed to shareholders.
<PAGE>
OTHER MATTERS TO COME BEFORE THE MEETING
The Board is not aware of any matters that will be presented for action at
the meeting other than the matters set forth herein. Should any other
matters requiring a vote of shareholders arise, the proxy in the
accompanying form will confer upon the person or persons entitled to vote
the shares represented by such proxy the discretionary authority to vote
the shares as to any such other matters in accordance with their best
judgment in the interest of the Trust.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE>
EXHIBIT A
TOTAL OUTSTANDING SHARES
OF EACH FUND, BY CLASS AND TOTAL,
AS OF MARCH 31, 2000
<TABLE>
<CAPTION>
- ----------------------------------------- ---------------- ------------- ------------- ------------- --------------------
NAME OF TIMOTHY PLAN FUND NO-LOAD CLASS A CLASS B CLASS C TOTAL
- ----------------------------------------- ---------------- ------------- ------------- ------------- --------------------
<S> <C> <C> <C> <C> <C>
Small-Cap Value Fund NA 1,106,940 1,212,156 25,500 2,344,596
- ----------------------------------------- ---------------- ------------- ------------- ------------- --------------------
Mid/Large Cap Value Fund NA 147,653 107,034 17,976 272,663
- ----------------------------------------- ---------------- ------------- ------------- ------------- --------------------
Fixed Income Fund NA 17,614 33,039 6,087 56,740
- ----------------------------------------- ---------------- ------------- ------------- ------------- --------------------
Money Market Fund 1,125,958 NA NA NA 1,125,958
- ----------------------------------------- ---------------- ------------- ------------- ------------- --------------------
Small-Cap Variable Series 144,655 NA NA NA 144,655
- ----------------------------------------- ---------------- ------------- ------------- ------------- --------------------
</TABLE>
HOLDERS OF MORE THAN
5% OF EACH FUND'S SHARES
<TABLE>
<CAPTION>
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
SHARE % OWNERSHIP OF TOTAL
NAME OF FUND IN CLASS NUMBER OF % OWNERSHIP OF OUTSTANDING FUND
NAME OF SHAREHOLDER WHICH SHARES HELD OWNED SHARES OWNED SHARE CLASS SHARES, ALL CLASSES
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
<S> <C> <C> <C> <C> <C>
Annuity Investors Life, Timothy Plan
FBO annuity investors Small-Cap Variable No-Load
Series 144,655 100% 100%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Liberty Counsel, Inc. Timothy Plan Money
FBO, beneficiaries Market Fund No Load 116,147 10.32% 10.32%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan Money
Sneddon, JM Market Fund No Load 103,276 9.17% 9.17%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan Money
Kerchner, DM Market Fund No Load 88,896 7.90% 7.90%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan
Jerene, KD, IRA Small-Cap Value Fund Class C 2,578 10.11% 0.1%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Donaldson, Lufkin & Timothy Plan
Jenrette, FBO customer Small-Cap Value Fund
accts. Class C 2,419 9.48% 0.1%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan
Eason, KR Small-Cap Value Fund Class C 3,622 14.21% 0.15%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan
Shipp, BW Small-Cap Value Fund Class C 3,461 13.45% 0.15%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan
Karv, KP, IRA Small-Cap Value Fund Class C 4,850 19.02% 0.21%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan
Wuertz, DR Mid/Large-Cap Value
Fund Class A 13,503 9.14% 4.95%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan
RigidPly Rafters, Inc. Mid/Large-Cap Value
Fund Class A 13,087 8.86% 4.80%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan
William, R, IRA Mid/Large-Cap Value
Fund Class A 12,863 8.71% 4.72%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan
Kelly, E. Mid/Large-Cap Value
Fund Class A 12,152 8.23% 4.46%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan
NFCS FBO customer accts. Mid/Large-Cap Value
Fund Class B 12,048 11.26% 4.42%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan
Walker, DM Mid/Large-Cap Value
Fund Class B 8,081 7.55% 2.96%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan
Lammers, JD Mid/Large-Cap Value
Fund Class B 6,433 6.01% 2.36%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan
Murphy, CM Mid/Large-Cap Value
Fund Class B 6,302 5.89% 2.31%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan
NFCS FBO customer accts. Mid/Large-Cap Value
Fund Class B 6,024 5.63% 2.21%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan
St. Josaphats Mid/Large-Cap Value
Fund Class C 1,043 5.80% 0.38%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan
Bernard, RT Mid/Large-Cap Value
Fund Class C 4,034 22.44% 1.48%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan
Fox Asset Management, Mid/Large-Cap Value
Inc. Fund Class C 10,044 55.87% 3.68%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan Fixed
NFCS FBO customer accts. Income Fund Class A 1,024 5.82% 1.80%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan Fixed
Breil, R. Income Fund Class A 1,023 5.81% 1.80%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan Fixed
Benes, B. Income Fund Class A 3,407 19.34% 6.00%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan Fixed
Kluck, MP Income Fund Class A 1,310 7.43% 2.31%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan Fixed
Meekhof, D Income Fund Class A 1,227 6.96% 2.16%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Glasscock, J Timothy Plan Fixed
Income Fund Class A 1,197 6.80% 2.11%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan Fixed
Carrie, CH Income Fund Class A 4,399 24.97% 7.75%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan Fixed
George, C Income Fund Class B 3,115 9.43% 5.49%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan Fixed
Geier, MJ Income Fund Class B 2,954 8.94% 5.21%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan Fixed
Murphy, CM Income Fund Class B 5,623 17.02% 9.91%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan Fixed
Graybill, DM Income Fund Class B 5,133 15.54% 9.05%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan Fixed
NFCS FBO customer accts. Income Fund Class C 5,225 85.83% 9.21%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
Timothy Plan Fixed
Zollman, VJ Income Fund Class C 376 6.18% 0.66%
- ------------------------- --------------------- ----------- ---------------- -------------------- -----------------------
</TABLE>
<PAGE>
EXHIBIT B
FORM OF PLAN OF DISTRIBUTION
PURSUANT TO RULE 12B-1
FOR CLASS A SHARES
OF THE TIMOTHY PLAN
RECITALS
1. THE TIMOTHY PLAN, an unincorporated organization operating as a business
trust under the laws of the State of Delaware (the "Trust") is engaged in
business as an open-end management investment company and is registered as
such under the Investment Company Act of 1940, as amended (the "Act").
2. The Trust operates as a "series company" within the meaning of Rule 18f-2
under the Act and is authorized to issue shares of beneficial interest in
various series (collectively the "Funds").
3. The Trust presently offers seven Funds. This Plan applies to Class A shares
offered by the following Funds of the Trust;
Timothy Plan Small-Cap Value Fund (the "Fund")
4. The Fund may utilize Fund assets to pay for sales or promotional services
or activities that have been or will be provided in connection with
distribution of Class A shares of the Fund if such payments are made
pursuant to a Plan adopted and continued in accordance with Rule 12b-1
under the Act.
5. The Fund, by virtue of such arrangement, may be deemed to act as a
distributor of its shares as provided in Rule 12b-1 under the Act and
desires to adopt a Plan pursuant to such Rule (the "Plan").
6. The Trustees as a whole, and the Trustees who are not interested persons of
the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan and any agreements
relating to it (the "Qualified Trustees"), have determined, in the exercise
of reasonable business judgment and in light of their fiduciary duties
under state law and under Section 36(a) and (b) of the Act, that there is a
reasonable likelihood that this Plan will benefit the Fund and its
shareholders, and have approved the Plan by votes cast in person at a
meeting called for the purpose of voting on this Plan and agreements
related thereto.
7. The Class A shareholders of the Fund have approved the Plan.
PLAN PROVISIONS
SECTION 1. EXPENDITURES
(a) Purposes. Fund assets may be utilized to pay for promotional services
related to the distribution of Fund shares, including personal services
provided to prospective and existing Fund shareholders, which include the
costs of: printing and distribution of prospectuses and promotional
materials; making slides and charts for presentations; assisting
shareholders and prospective investors in understanding and dealing with
the Fund; and travel and out-of-pocket expenses (e.g. copy and long
distance telephone charges) related thereto.
(b) Amounts. The Fund will pay to Timothy Partners, Ltd. (the
"Underwriter") a monthly distribution/servicing fee at an annual rate of
0.25% of the Fund's net assets, such fees to be computed daily based on the
daily average net assets of the Fund. The Underwriter shall utilize such
fees to pay for sales and promotional services related to the distribution
of Fund shares, including personal services provided to prospective and
existing Fund shareholders.
<PAGE>
SECTION 2. TERM AND TERMINATION
(a) Initial Term. This Plan shall become effective on May 15, 2000 and
shall continue in effect for a period of one year thereafter unless
terminated or otherwise continued or discontinued as provided in this Plan.
(b) Continuation of the Plan. The Plan and any related agreements shall
continue in effect for periods of one year thereafter for so long as such
continuance is specifically approved at least annually by votes of a
majority of both (a) the Trustees of the Trust and (b) the Qualified
Trustees, cast in person at a meeting called for the purpose of voting on
this Plan and such related agreements.
(c) Termination of the Plan. This Plan may be terminated at any time by
vote of a majority of the Qualified Trustees, or by vote of a majority of
the outstanding voting securities of the Class A Shares of the Fund.
SECTION 3. AMENDMENTS
This Plan may not be amended to increase materially the amount of
distribution expenditures provided for in Section 1 hereof unless such
amendment is approved by a vote of the majority of the outstanding voting
securities of the Class A Shares of the Fund, and no material amendment to
the Plan shall be made unless approved in the manner provided for annual
renewal in Section 2(b) hereof.
SECTION 4. INDEPENDENT TRUSTEES
While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of the Trust (as defined in the Act) shall be
committed to the discretion of the Trustees who are not interested persons.
SECTION 5. QUARTERLY REPORTS
The Underwriter shall provide to the Trustees and the Trustees shall
review, at least quarterly, a written report of the amounts accrued and the
amounts expended under this Plan for distribution, along with the purposes
for which such expenditures were made.
SECTION 6. RECORDKEEPING
The Trust shall preserve copies of this Plan and any related agreements and
all reports made pursuant to Section 5 hereof, for a period of not less
than six years from the date of this Plan, the first two years in an easily
accessible place.
SECTION 7. AGREEMENTS RELATED TO THIS PLAN
Agreements with persons providing distribution services to be paid for
under this Plan shall provide that:
(a) the agreement will continue in effect for a period of one year and
will continue thereafter only if specifically approved by vote of a
majority of the Trustees of the Trust;
(b) the agreement may be terminated at any time, without payment of any
penalty, by vote of a majority of (i) the Qualified Trustees or (ii)
the outstanding voting securities of a Fund, on not more than sixty
(60) days' written notice to any other party to the agreement;
(c) the agreement will terminate automatically in the event of an
assignment; and
(d) in the event the agreement is terminated or otherwise discontinued, no
further payments will be made by the Fund after the effective date of
such action.
- --------------------------------------------------------------------------------
<PAGE>
ABOUT THE BALLOT
Shown below is the ballot that you will use to vote on the matters described
above and hereafter in these proxy materials.
- --------------------------------------------------------------------------------
THE TIMOTHY PLAN
Proposal # 1. Elect the following persons as Trustees, to serve until their
successors are elected and qualified.
(1) Arthur D. Ally, (2) Joseph E. Boatwright, (3) Wesley W. Pennington,
(4) Jock M. Sneddon, (5) W.T. Fyler, (6) Randy R. Brunson,
(7) Mathew D. Staver, (8) Charles E. Nelson, and (9) Mark A. Minnella
All Shareholders of All Funds:
For All For All Except Withhold All
/ / / / / /
- --------------------------------------------------------------------------------
To withhold authority to vote on any individual nominee(s), please print the
number(s)of the nominee(s) on the line above.
Proposal # 2. Approve a revised Rule 12b-1 Plan for Class A Shares of the the
Timothy Plan Small-Cap Value Fund.
Class A Shareholders of the Timothy Plan Small-Cap Value Fund Only:
For Aginst Abstain
/ / / / / /
Proposal # 3. Approve the conversion of Class C Shares to Class B Shares:
Timothy Plan Small-Cap Value Fund Class C shareholders Only:
For Aginst Abstain
/ / / / / /
Timothy Plan Mid/Large-Cap Value Fund Class C Shareholders Only:
For Aginst Abstain
/ / / / / /
Timothy Plan Fixed Income Fund Class C Shareholders Only:
For Aginst Abstain
/ / / / / /
Signature(s) (All registered owners of accounts shown to the left must sign. If
signing for a corporation, estate or trust, please indicate your capacity or
title.)
X
- --------------------------------------------------------------------------------
Signature Date
X
- --------------------------------------------------------------------------------
Signature Date
PLEASE VOTE TODAY!
Please vote all issues shown on your ballot.
Please vote on each issue using blue or black ink to mark an X in one of the
three boxes provided on each ballot. On all Items, mark -- For, Against or
Abstain. Then sign, date and return your ballot in the accompanying postage-paid
envelope. All registered owners of an account, as shown in the address on the
ballot, must sign the ballot. If you are signing for a corporation, trust or
estate, please indicate your title or position.
THANK YOU FOR MAILING YOUR BALLOT PROMPTLY!
Your vote is needed! Please vote on the reverse side of this form and sign in
the space provided. Return your completed proxy in the enclosed envelope today.
You may receive additional proxies for your other accounts with the Trust. These
are not duplicates; you should sign and return each proxy card in order for your
votes to be counted. Please return them as soon as possible to help save the
cost of additional mailings.
The signers of this proxy hereby appoint _____________, _____________ and
_____________, and each of them, attorneys and proxies, with power of
substitution in each, to vote all shares for the signers at the special meeting
of shareholders to be held May 15, 2000, and at any adjournments thereof, as
specified herein, and in accordance with their best judgment, on any other
business that may properly come before this meeting. If no specification is made
herein, all shares will be voted "FOR" the proposals set forth on this proxy.
The proxy is solicited by the Board of Trust which recommends a vote "FOR" all
matters.
