AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION
ON 08/16/00
FILE NOS: 811-08228
33-73248
SECURITIES AND EXCHANGE COMMISSION
----------------------------------
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [11]
and
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X ]
Amendment No. [12]
(Check appropriate box or boxes.)
THE TIMOTHY PLAN
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(Exact name of Registrant as Specified in Charter)
1304 West Fairbanks Avenue
Winter Park, FL 32789
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(Address of Principal Executive Office)
Registrant's Telephone Number, including Area Code:
407-644-1986
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ARTHUR D. ALLY, 1304 WEST FAIRBANKS AVENUE
WINTER PARK, FL 32789
407-644-1986
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(Name and Address of Agent for Service)
Please send copy of communications to:
DAVID D. JONES, ESQUIRE
4747 Research Forest Drive,
Suite 180, # 303
The Woodlands, TX 77381
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Approximate Date of Proposed Public Offering: As soon as practicable following
effective date.
It is proposed that this filing will become effective (check appropriate box):
/ / immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/X/ on October 1, 2000 pursuant to paragraph (a)(3)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on ___________ pursuant to paragraph (a)(2) of rule 485
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If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant declares hereby that an indefinite number or amount of its securities
has been registered by this Registration Statement.
A Rule 24f-2 Notice for the year ended December 31, 1999 was filed on March 29,
2000.
TOTAL NUMBER OF PAGES _____
EXHIBIT INDEX BEGINS
ON PAGE _____
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THE TIMOTHY PLAN
(the "Trust")
PROSPECTUS
October 1, 2000
This Prospectus offers the following Series ("Funds") of the Trust:
THE TIMOTHY PLAN AGGRESSIVE GROWTH FUND
THE TIMOTHY PLAN LARGE/MID-CAP GROWTH FUND
THE TIMOTHY PLAN SMALL-CAP VALUE FUND
THE TIMOTHY PLAN LARGE/MID-CAP VALUE FUND
THE TIMOTHY PLAN FIXED-INCOME FUND
THE TIMOTHY PLAN MONEY MARKET FUND
And the following Series that invest in the Funds (each a "Portfolio")
THE TIMOTHY PLAN STRATEGIC GROWTH PORTFOLIO
THE TIMOTHY PLAN CONSERVATIVE GROWTH PORTFOLIO
The Timothy Plan was established to provide an investment alternative for people
who want to invest according to certain ethical standards. Each Fund invests in
a different market segment, and each Fund has its own investment objectives.
However, all the Funds have one thing in common. They do not invest in any
company that is involved in the business of alcohol production, tobacco
production or casino gambling, or which are involved, either directly or
indirectly, in pornography or abortion.
The Funds are distributed through Timothy Partners, Ltd.
1304 West Fairbanks Avenue, Winter Park, Florida 32789.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIME.
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TABLE OF CONTENTS
RISK/RETURN SUMMARY
The Timothy Plan Aggressive Growth Fund
The Timothy Plan Large/mid-cap Growth Fund
The Timothy Plan Small-cap Value Fund
The Timothy Plan Large/mid-cap Value Fund
The Timothy Plan Fixed Income Fund
The Timothy Plan Money Market Fund
The Timothy Plan Strategic Growth Portfolio
The Timothy Plan Conservative Growth Portfolio
FEES AND EXPENSES
INVESTING IN THE FUNDS
Class A Shares
Class B Shares
Opening and Adding to Your Account
HOW TO SELL (REDEEM) SHARES
DIVIDENDS AND DISTRIBUTIONS
THE ADVISER & INVESTMENT MANAGERS
Investment Adviser
Investment Managers
For the Aggressive Growth Fund
For the Large/mid-cap Growth Fund
For the Small-cap Value Fund
For the Large/mid-cap Value Fund
For the Fixed Income and Money Market Funds
PRINCIPAL UNDERWRITER
FEDERAL TAXES
GENERAL INFORMATION
FINANCIAL HIGHLIGHTS
FOR MORE INFORMATION
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RISK/RETURN SUMMARY
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The Timothy Plan believes that it has a responsibility to invest in a moral and
ethical manner. Accordingly, as a matter of fundamental policy, none of our
Funds invest in any company that is involved in the business of alcohol
production, tobacco production, or casino gambling, or which are involved,
either directly or indirectly, in pornography or abortion. Such companies are
referred to throughout this Prospectus as "Excluded Securities". Excluded
Securities will not be purchased by any of our Funds. Timothy Partners
Ltd.("TPL") is investment adviser to the Funds, and is responsible for
determining those companies that are Excluded Securities.
Because none of our Funds will invest in Excluded Securities, the pool of
securities from which each Fund may choose may be limited to a certain degree.
Although TPL believes that each Fund can achieve its investment objective within
the parameters of ethical investing, eliminating Excluded Securities as
investments may have an adverse effect on a Fund's performance. However, "Total
Return" is more than just numbers. It is also investing in a way that supports
and reflects your beliefs and ideals. Each of our Funds strives to maximize both
kinds of total return.
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THE TIMOTHY PLAN AGGRESSIVE GROWTH FUND
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INVESTMENT OBJECTIVE: long-term growth of capital. Current income is not a
significant investment consideration and any such
income realized will be considered incidental to the
Fund's investment objective.
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PRIMARY INVESTMENT o normally investing at least 65% of the Fund's total
STRATEGIES: assets in US common stocks;
o investing in common stocks of companies without regard
to market capitalizations;
o investing its assets in a limited number of equity
securities of companies which the Fund's Adviser
believes show a high probability for superior growth;
o investing up to 25% of its total assets in "special
situation" securities when the Fund's Adviser believes
such investments will benefit the Fund. A special
situation arises when, in the Adviser's opinion, the
securities of a company will experience an unusual gain
or loss solely by reason of a development particularly
or uniquely applicable to that company. Such situations
include but are not limited to: spin-offs, corporate
restructurings, liquidations, reorganizations,
recapitalizations or mergers, material litigation,
technological breakthroughs and new management or
management policies;
o seeking a balance between investments in "special
situation" investments and investments in large to
mid-capitalization equities (in excess of $3 billion in
market capitalization) with high or accelerating
profitability; and
o utilizing a strategy of short selling securities to
reduce volatility and enhance potential investment
gain. The Fund limits short sales to not more than 25%
of the Fund's total assets. The Fund may engage in two
types of short sales. Securities may be sold " against
the box" or outright. A short sale "against the box"
means that securities the Fund already owns are sold,
but not delivered. Instead, these securities are
segregated and pledged against the short position. When
the short sale is closed out, the securities owned are
released. Outright short selling involves the sale of
securities not presently owned by the Fund. If the Fund
does not purchase that security on the same day as the
sale, the security must be borrowed. At the time an
outright short sale is effected, the Fund incurs an
obligation to replace the security borrowed at whatever
its price may be at the time the Fund purchases the
security for delivery to the lender. Any gain or loss
on the transaction is taxable as a short term capital
gain or loss.
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PRIMARY RISKS: o GENERAL RISK- As with most other mutual funds, you can
lose money by investing in this Fund. Share prices
fluctuate from day to day, and when you sell your
shares, they may be worth less than you paid for them.
o STOCK MARKET RISK- The Fund is an equity fund, so it is
subject to the risks inherent in the stock market in
general. The stock market is cyclical, with prices
generally rising and falling over periods of time. Some
of these price cycles can be pronounced and last for a
long time.
o SMALL-CAP STOCK RISK- The Fund invests in smaller
companies. Smaller companies are particularly
susceptible to price swings, because, due to their
size, they often do not have the resources available to
them that are available to larger companies.
o EXCLUDED SECURITY RISK- Because the Fund does not
invest in Excluded Securities, the Fund may be riskier
than other Funds that invest in a broader array of
securities.
o SHORT SELLING RISKS- The Fund engages in short selling,
which involves special risks and requires special
investment expertise. Short selling involves special
risks, and the Fund could at any time suffer a loss if
the security sold short should increase in value. Funds
that maintain short positions are generally riskier
than funds that do not engage in short sales. When the
Fund engages in short sales, the securities underlying
the transaction are repriced daily, and if the value of
the underlying securities is not sufficient to fully
cover the short, the Fund will have to put up
additional cash or securities to make up any
difference. This requirement may result in additional
loss to the Fund.
o SPECIAL SITUATION RISKS-The Fund invests in "special
situation" securities, a practice which involves
special risks and requires special investment
expertise. Special situations often involve much
greater risk than is found in the normal course of
investing. These risks result from the subjective
nature of determining what a special situation is.
Liquidations, reorganizations, recapitalizations,
material litigation, technological breakthroughs and
new management or management policies may not have the
effect on a company's price that the Fund's Advisor
expects, which could negatively impact the Fund. To
minimize these risks, the Fund will not invest in
special situations unless the target company has at
least three years of continuous operations (including
predecessors) or unless the aggregate value of such
investments is not greater than 25% of the Fund's total
net assets (valued at the time of investment).
o GROWTH RISKS- The Fund invests in companies that appear
to be growth-oriented companies. If the Fund's
perceptions of a company's growth potential are wrong,
the securities purchased may not perform as expected,
reducing the Fund's return.
o TEMPORARY DEFENSIVE POSITIONS- Under abnormal market or
economic conditions, the Fund's Adviser may adopt a
temporary defensive investment position in the market.
When the Adviser assumes such a position, cash reserves
may be a significant percentage (up to 100%) of the
Fund's total net assets. During times when the Fund
holds a significant portion of its net assets in cash,
it will not be investing according to its investment
objectives and the Fund's performance may be negatively
affected as a result.
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WHO SHOULD BUY The Fund is appropriate for investors who understand
THIS FUND? the risks of investing in the stock market and who are
willing to accept moderate to high amounts of
volatility and risk.
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PAST PERFORMANCE
This Fund is being offered for the first time via this Prospectus. Accordingly,
performance information about the Fund is not yet available.
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THE TIMOTHY PLAN LARGE/MID-CAP GROWTH FUND
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INVESTMENT OBJECTIVE: long-term growth of capital. Current income is not a
significant investment consideration and any such
income realized will be considered incidental to the
Fund's investment objective.
PRIMARY INVESTMENT o normally investing at least 65% of the Fund's total
STRATEGIES: assets in US common stocks;
o primarily investing in equity securities with market
capitalizations in excess of $5 billion;
o investing in a portfolio of securities which includes a
broadly diversified number of U.S. equity securities
which the Fund's Adviser believes show a high
probability of superior prospects for above average
growth. The Adviser chooses these securities using a
"bottoms up" approach of extensively analyzing the
financial, management and overall economic conditions
of each potential investment.
Larger companies, because of their increased management
depth, broader market affiliations, and capital
resources, offer the potential for long-term growth
with reduced risk.
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PRIMARY RISKS: o GENERAL RISK- As with most other mutual funds, you can
lose money by investing in this Fund. Share prices
fluctuate from day to day, and when you sell your
shares, they may be worth less than you paid for them.
o STOCK MARKET RISK- The Fund is an equity fund, so it is
subject to the risks inherent in the stock market in
general. The stock market is cyclical, with prices
generally rising and falling over periods of time. Some
of these price cycles can be pronounced and last for a
long time.
o EXCLUDED SECURITY RISK- Because the Fund does not
invest in Excluded Securities, the Fund may be riskier
than other Funds that invest in a broader array of
securities.
o GROWTH RISKS- The Fund invests in companies that appear
to be growth-oriented companies. If the Fund's
perceptions of a company's growth potential are wrong,
the securities purchased may not perform as expected,
reducing the Fund's return.
o TEMPORARY DEFENSIVE POSITIONS- Under abnormal market or
economic conditions, the Fund's Adviser may adopt a
temporary defensive investment position in the market.
When the Adviser assumes such a position, cash reserves
may be a significant percentage (up to 100%) of the
Fund's total net assets. During times when the Fund
holds a significant portion of its net assets in cash,
it will not be investing according to its investment
objectives and the Fund's performance may be negatively
affected as a result.
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WHO SHOULD BUY The Fund is appropriate for investors who understand
THIS FUND? the risks of investing in the stock market and who are
willing to accept moderate amounts of volatility and
risk.
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PAST PERFORMANCE
THIS FUND IS BEING OFFERED FOR THE FIRST TIME VIA THIS PROSPECTUS. ACCORDINGLY,
PERFORMANCE INFORMATION ABOUT THE FUND IS NOT YET AVAILABLE.
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THE TIMOTHY PLAN SMALL-CAP VALUE FUND
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INVESTMENT OBJECTIVE Long-term capital growth, with a secondary objective of
current income.
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PRIMARY INVESTMENT The Fund seeks to achieve its objectives by primarily
STRATEGIES investing in US small-cap stocks and American
Depository Receipts ("ADRs"). Small-Cap stocks is a
reference to the common stock of smaller companies-
companies whose total market capitalization is
generally less than $1Billion. ADRs are certificates
issued by United States banks to evidence an ownership
interest in an underlying non-USA company's stock. ADRs
generally trade on United States Stock Exchanges in the
same way that American common stock trades.
Small-Cap stocks, although more susceptible to price
movements, also enjoy growth potential that is often
not available for larger companies. As a result,
prudent investing in smaller companies can result in
greater capital growth than investing in larger
companies.
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PRIMARY RISKS o GENERAL RISK- As with most other mutual funds, you can
lose money by investing in this Fund. Share prices
fluctuate from day to day, and when you sell your
shares, they may be worth less than you paid for them.
o STOCK MARKET RISK- The Fund is an equity fund, so it is
subject to the risks inherent in the stock market in
general. The stock market is cyclical, with prices
generally rising and falling over periods of time. Some
of these price cycles can be pronounced and last for a
long time.
o SMALL-CAP STOCK RISK- The Fund invests in smaller
companies. Smaller companies are particularly
susceptible to price swings, because, due to their
size, they often do not have the resources available to
them that are available to larger companies.
o EXCLUDED SECURITY RISK- Because the Fund does not
invest in Excluded Securities, the Fund may be riskier
than other Funds that invest in a broader array of
securities.
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WHO SHOULD BUY THIS The Fund is appropriate for investors who understand
FUND? the risks of investing in the stock market and who are
willing to accept moderate amounts of volatility and
risk.
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PAST PERFORMANCE
The bar chart and table below help show the returns and risks of investing in
the Fund by showing changes in the Fund's yearly performance over the lifetime
of the Fund. They also compare the Fund's performance to the performance of the
Russell 2000 Index** during each period. You should be aware that the Fund's
past performance may not be an indication of how the Fund will perform in the
future.
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Performance Bar
Chart and Table
YEAR-BY-YEAR TOTAL RETURNS FOR CLASS A SHARES FOR CALENDAR YEARS ENDING ON
12/31(1)
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25% 21.35%
20% ------
15% 12.59% ------ 12.58%
10% 7.93% ------ ------ ------
05% ------ ------ ------ ------
================================================================================
00% ------- --------
-05% (2.84%) --------
-10% --------
-15% (10.50)%
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1994(1) 1995 1996 1997 1998 1999
Best Quarter: 2nd Qtr 1999 19.88%
Worst Quarter: 3rd Qtr 1998 (23.18)%
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING ON DECEMBER 31, 1999 (1)
CLASS A(1) CLASS B(2) RUSSELL 2000 INDEX**
One Year 12.58% 11.03% 19.62%
Inception 6.56%(3) 6.67%(4) 15.15%(5)
(1) Class A shares commenced investment operations on March 21, 1994. Total
Return Calculation does not reflect sales load.
(2) Class B Shares commenced investment operations on August 25, 1995. Total
Return calculation does not reflect redemption fees.
(3) From March 21, 1994 (Commencement of Investment Operations).
(4) From August 25, 1995 (Commencement of Investment Operations).
(5) From March 21, 1994.
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** The Russell 2000 Index is a widely recognized, unmanaged index of 2000
small-capitalization companies in the United States. The Index assumes
reinvestment of all dividends and distributions and does not reflect any
asset-based charges for investment management or other expenses.
THE TIMOTHY PLAN LARGE/MID-CAP VALUE FUND
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INVESTMENT OBJECTIVE Long-term capital growth, with a secondary objective of
current income.
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PRIMARY INVESTMENT The Fund seeks to achieve its objectives by primarily
STRATEGIES investing in US common stocks and ADRs. The Fund will
normally invest in companies whose total market
capitalization exceeds $1 billion.
Larger companies, because of their increased management
depth, broader market affiliations, and capital
resources, offer the potential for long-term growth
with reduced risk.
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PRIMARY RISKS o GENERAL RISK- Like with most other mutual funds, you
can lose money by investing in this Fund. Share prices
fluctuate from day to day, and when you sell your
shares, they may be worth less than you paid for them.
o STOCK MARKET RISK- The Fund is an equity fund, so it is
subject to the risks inherent in the stock market in
general. The stock market is cyclical, with prices
generally rising and falling over periods of time. Some
of these price cycles can be pronounced and last for a
long time.
o MID-CAP STOCK RISK- Although the Fund invests in
companies with greater market capitalization than the
Small-Cap Value Fund, it does invest in smaller
companies. Smaller companies are particularly
susceptible to price swings, because, due to their
size, they often do not have the resources available to
them that are available to larger companies.
o EXCLUDED SECURITY RISK- Because the Fund does not
invest in Excluded Securities, the Fund may be riskier
than other Funds that invest in a broader array of
securities.
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WHO SHOULD BUY THIS The Fund is appropriate for investors who understand
FUND? the risks of investing in the stock market and who are
willing to accept moderate amounts of volatility and
risk.
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PAST PERFORMANCE
This Fund commenced investment operations on July 14, 1999. Because it has not
yet achieved one full calendar year of investment performance, a bar chart and
table are not available.
THE TIMOTHY PLAN FIXED-INCOME FUND
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INVESTMENT OBJECTIVE To generate a high level of current income consistent
with prudent investment risk.
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PRIMARY INVESTMENT To achieve its goal, the Fund normally invests in a
STRATEGIES diversified portfolio of debt securities. These include
corporate bonds, U.S. Government and agency securities
and preferred securities. The Fund will only purchase
securities for the Fund that are investment grade, a
rating of at least "BBB" as rated by Standard & Poors
or a comparable rating by another nationally recognized
rating agency. The Fund may also invest in debt
securities that have not been rated by one of the major
rating agencies, so long as the Fund's investment
manager has determined that the security is of
comparable credit quality to similar rated securities.
In managing its portfolio, the Fund' s investment
manager concentrates on sector analysis, industry
allocation and securities selection: deciding which
types of bonds and industries to emphasize at a given
time, and then which individual bonds to buy. The Fund
attempts to anticipate shifts in the business cycle in
determining types of bonds and industry sectors to
target. In choosing individual securities, the Fund
seeks out securities that appear to be undervalued
within the emphasized industry sector.
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PRIMARY RISKS o GENERAL RISK- Like with most other mutual funds, you
can lose money by investing in this Fund. Share prices
fluctuate from day to day, and when you sell your
shares, they may be worth less than you paid for them.
o INTEREST RATE RISK- When interest rates rise, bond
prices fall; the higher the Fund's duration ( a
calculation reflecting time risk, taking into account
both the average maturity of the Fund's portfolio and
its average coupon return), the more sensitive the Fund
is to interest rate risk.
o CREDIT RISK- The Fund could lose money if any bonds it
owns are downgraded in credit rating or go into
default. For this reason, the Fund will only invest in
investment grade bonds.
o SECTOR RISK- If certain industry sectors or types of
securities don't perform as well as the Fund expects,
the Fund's performance could suffer.
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WHO SHOULD BUY THIS This Fund is appropriate for investors who want a high
FUND? level of current income and are willing to accept a
minor degree of volatility and risk.
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PAST PERFORMANCE
This Fund commenced investment operations on July 14, 1999. Because it has not
yet achieved one full calendar year of investment performance, a bar chart and
table are not available.
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THE TIMOTHY PLAN MONEY MARKET FUND
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INVESTMENT OBJECTIVE The Fund seeks a high level of current income
consistent with the preservation of capital. The Fund
also attempts to maintain a stable net asset value of
$1.00.
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PRIMARY INVESTMENT The Fund invests primarily in short-term debt
STRATEGIES instruments, such as obligations of the U.S. Government
and its agencies, certificates of deposit, bankers
acceptances, commercial paper, and short-term corporate
notes. The Fund may also invest in repurchase
agreements. Under normal circumstances, the Fund will
not invest in any security with a maturity in excess of
397 days.
The Fund will only purchase securities for the Fund
that are investment grade. This means that the security
has a rating of at least "AA" as rated by Standard &
Poors or a comparable rating by another nationally
recognized rating agency. The Fund may also invest in
debt securities that have not been rated by one of the
major rating agencies, so long as the Fund's investment
manager has determined that the security is of
comparable credit quality to similar rated securities
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PRIMARY RISKS MONEY MARKET RISK- An investment in the Fund is not
insured or guaranteed by the Federal Deposit Insurance
Corporation or any other governmental agency. Although
the Fund seeks to preserve the value of your investment
at $1.00 per share, it is possible to lose money by
investing in the Fund.
INTEREST RATE RISK- When interest rates rise, bond
prices fall; the higher the Fund's duration ( a
calculation reflecting time risk, taking into account
both the average maturity of the Fund's portfolio and
its average coupon return), the more sensitive the Fund
is to interest rate risk.
CREDIT RISK- The Fund could lose money if its holdings
are downgraded in credit rating or go into default.
Accordingly, the Fund will only invest in investment
grade bonds.
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WHO SHOULD BUY THIS The Fund is appropriate for investors who are seeking a
FUND? high level of current income and preservation of
capital.
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PAST PERFORMANCE
This Fund commenced investment operations on July 14, 1999. Because it has not
yet achieved one full calendar year of investment performance, a bar chart and
table are not available.
TO OBTAIN THE FUND'S CURRENT 7-DAY YIELD, CALL THE FUND TOLL-FREE AT
1-800-662-0201.
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In addition to the Funds described above, the Timothy Plan offers two asset
allocation funds, The Timothy Plan Strategic Growth Portfolio and the Timothy
Plan Conservative Growth Portfolio (the "Portfolios"). Each Portfolio attempts
to achieve its investment objective by investing most of its assets in certain
of the Funds described above. The Portfolios offer you the opportunity to pursue
a variety of specially constructed asset allocation strategies. The Portfolios
are designed for long-term investors seeking total return for tax-advantaged
retirement and other long-term investment or savings accounts.
THE TIMOTHY PLAN STRATEGIC GROWTH PORTFOLIO
================================================================================
INVESTMENT OBJECTIVE Medium to high levels of long term capital growth.
Current income is a consideration only to the extent
that the Funds in which the Portfolio invests seek
current income.
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PRIMARY INVESTMENT o Normally investing at least 75% of its net assets in
STRATEGIES certain of the Timothy Plan Funds:
o Normally allocating its investments among the Funds as
follows: 20% of net assets in the Timothy Plan
Small-Cap Value Fund; 25% of its net assets in the
Large/Mid-Cap Value Fund; 35% of its net assets in the
Large/Mid-Cap Growth Fund; and 20% in the Timothy Plan
Aggressive Growth Fund;
o Normally maintaining the allocation of its assets as
described above on a continuing basis as new money is
added to the Fund, and reallocating its investments to
maintain the allocations at the end of each fiscal
quarter, as need;
o Investing up to 25% of its assets in the Timothy Plan
Money Market and or Fixed Income Funds; and
o Investing its remaining cash, if any, in short term US
Government Securities, Money Market Securities,
Repurchase Agreements and other unaffiliated mutual
funds.
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PRIMARY RISKS o GENERAL RISK- As with most other mutual funds, you can
lose money by investing in the Portfolio. Share prices
fluctuate from day to day, and when you sell your
shares, they may be worth less than you paid for them.
o PORTFOLIO RISK- The Portfolio is subject to all of the
risks that are inherent in the Timothy Plan Funds in
which the Fund invests.
o INTEREST RATE RISK- To the extent that the Fund invests
in fixed income securities, the Fund will be exposed to
interest rate risk. When interest rates rise, bond
prices fall; the higher the Fund's duration ( a
calculation reflecting time risk, taking into account
both the average maturity of the Fund's portfolio and
its average coupon return), the more sensitive the Fund
is to interest rate risk.
o CREDIT RISK- To the extent that the Fund invests in
fixed income securities, the Fund will be exposed to
credit risk. The Fund could lose money if any bonds it
owns are downgraded in credit rating or go into
default. For this reason, the Fund will only invest in
investment grade bonds.
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WHO SHOULD BUY THIS The Portfolio is appropriate for investors who
understand the risks of investing in moderately to very
aggressive equity funds, and who wish to allocate their
investments among multiple funds with a single
investment.
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PAST PERFORMANCE
This Fund is being offered for the first time via this Prospectus. Accordingly,
performance information about the Fund is not yet available.
--------------------------------------------------------------------------------
THE TIMOTHY PLAN STRATEGIC GROWTH PORTFOLIO
================================================================================
INVESTMENT OBJECTIVE Moderate levels of long term capital growth. Current
income is a secondary objective.
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PRIMARY INVESTMENT o Normally investing at least 75% of its net assets in
STRATEGIES certain of the Timothy Plan Funds:
o Normally allocating its investments among the Funds as
follows: 15% of net assets in the Timothy Plan
Small-Cap Value Fund; 25% of its net assets in the
Large/Mid-Cap Value Fund; 25% of its net assets in the
Large/Mid-Cap Growth Fund; and 25% in the Timothy Plan
Fixed Income Fund;
o Normally maintaining the allocation of its assets as
described above on a continuing basis as new money is
added to the Fund, and reallocating its investments to
maintain the allocations at the end of each fiscal
quarter, as need;
o Investing up to 25% of its assets in the Timothy Plan
Money Market Fund; and
o Investing its remaining cash, if any, in short term US
Government Securities, Money Market Securities,
Repurchase Agreements and other unaffiliated mutual
funds.
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PRIMARY RISKS o GENERAL RISK- As with most other mutual funds, you can
lose money by investing in the Portfolio. Share prices
fluctuate from day to day, and when you sell your
shares, they may be worth less than you paid for them.
o PORTFOLIO RISK- The Portfolio is subject to all of the
risks that are inherent in the Timothy Plan Funds in
which the Fund invests.
o INTEREST RATE RISK- To the extent that the Fund invests
in the Fixed Income Fund and other fixed income
securities, the Fund will be exposed to interest rate
risk. When interest rates rise, bond prices fall; the
higher the Fund's duration ( a calculation reflecting
time risk, taking into account both the average
maturity of the Fund's portfolio and its average coupon
return), the more sensitive the Fund is to interest
rate risk.
o CREDIT RISK- To the extent that the Fund invests in the
Fixed Income Fund and other fixed income securities,
the Fund will be exposed to credit risk. The Fund could
lose money if any bonds it owns are downgraded in
credit rating or go into default. For this reason, the
Fund will only invest in investment grade bonds.
--------------------------------------------------------------------------------
WHO SHOULD BUY THIS The Portfolio is appropriate for investors who
FUND? understand the risks of investing in moderately to very
aggressive equity funds, and who wish to allocate their
investments among multiple funds with a single
investment.
--------------------------------------------------------------------------------
PAST PERFORMANCE
This Fund is being offered for the first time via this Prospectus. Accordingly,
performance information about the Fund is not yet available.
ADDITIONAL INVESTMENT INFORMATION
Each Fund and Portfolio may, for temporary defensive purposes, invest up to 100%
of its assets in obligations of the United States Government, its agencies and
instrumentalities, commercial paper, and certificates of deposit and bankers
acceptances. When a Fund takes a temporary defensive position, it will not be
investing according to its investment objective, and at such times, the
performance of the Fund will be different that if it had invested strictly
according to its objectives.
In order to achieve its investment objective, each Portfolio typically allocates
its assets, within predetermined percentage ranges, among certain of the Funds.
Even so, the Portfolios may temporarily exceed one or more of the applicable
percentage limits for short periods. The percentages reflect the extent to which
each Portfolio will normally invest in the particular market segment represented
by each underlying Fund, and the varying degrees of potential investment risk
and reward represented by each Portfolio's investments in those market segments
and their corresponding Funds. The Adviser may alter these percentage ranges
when it deems appropriate. The assets of each Portfolio will be allocated among
the Funds in accordance with its investment objective, the Adviser's outlook for
the economy and the financial markets, and the relative market valuations of the
Funds.
In addition, in order to meet liquidity needs or for temporary defensive
purposes, each Portfolio may invest, without limit, directly in stocks, bonds
and the following short-term instruments:
-- short-term obligations of the U.S. Government, its agencies,
instrumentalities, authorities or political subdivisions; -- other short-term
debt securities rated A or higher by Moody's or S&P, or if unrated, of
comparable quality in the opinion of the Advisor;
================================================================================
14
<PAGE>
-- commercial paper, including master notes;
-- bank obligations, including negotiable certificates of deposit, time deposits
and bankers' acceptances; and
-- repurchase agreements.
At the time a Portfolio invests in any commercial paper, bank obligations or
repurchase agreements, the issuer must have outstanding debt rated A or higher
by Moody's or S & P; the issuer's parent corporation, if any, must have
outstanding commercial paper rated Prime-1 by Moody's or A-1 by S & P; or, if no
such ratings are available, the investment must be of comparable quality in the
opinion of the Advisor. In addition to purchasing shares of the Funds, a
Portfolio may use futures contracts and options in order to remain effectively
fully invested in proportions consistent with the Advisor's current asset
allocation strategy for the Portfolio. Specifically, each Portfolio may enter
into futures contracts and options thereon, provided that the aggregate deposits
required on these contracts do not exceed 5% of the Portfolio's total assets. A
Portfolio may also use futures contracts and options for bona fide hedging
transactions. Futures contracts and options may also be used to reallocate the
Portfolio's assets among asset categories while minimizing transaction costs, to
maintain cash reserves while simulating full investment, to facilitate trading,
to seek higher investment returns, or to simulate full investment when a futures
contract is priced attractively or is otherwise considered more advantageous
than the underlying security or index. As a fundamental policy, which may not be
changed without shareholder vote, each Portfolio will concentrate its
investments in shares of the Funds.
ADDITIONAL EXPENSE AND TAX IMPLICATIONS-
Investing in the Portfolios involves certain additional expenses and tax results
that would not be present in a direct investment in the Funds. See "Dividends
and Distributions" and "Federal Taxes" in this prospectus.
FEES AND EXPENSES
================================================================================
This table describes the fees and expenses you may pay if you buy and hold
shares of the Timothy Plan Small-Cap Value Fund ("Small"), Timothy Plan
Large/Mid-cap Value Fund ("Mid"), Timothy Plan Aggressive Growth Fund
("Aggressive"), Timothy Plan Large/Mid-cap Growth Fund ("Large"), Timothy Plan
Fixed-Income Fund ("Fixed"), Timothy Plan Strategic Growth Portfolio
("Strategic"), and Timothy Plan Conservative Growth Portfolio ("Conservative").
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
CLASS A
-------------------------------------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION
EXPENSES SMALL MID AGGRESSIVE LARGE FIXED STRATEGIC CONSERVATIVE
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MAXIMUM SALES CHARGE
ON PURCHASES
(as percentage of 5.50% 5.50% 5.50% 5.50% 4.25% 5.50% 5.50%
offering price)
-------------------------------------------------------------------------------------------------------------
MAXIMUM DEFERRED
SALES CHARGE
(as percentage of the None None None None None None None
lesser of original
purchase price or
redemption proceeds)
-------------------------------------------------------------------------------------------------------------
REDEMPTION FEES* None None None None None None None
-------------------------------------------------------------------------------------------------------------
EXCHANGE FEES None None None None None None None
-------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
CLASS B
-------------------------------------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION
EXPENSES SMALL MID AGGRESSIVE LARGE FIXED STRATEGIC CONSERVATIVE
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MAXIMUM SALES CHARGE
ON PURCHASES
(as percentage of None None None None None None None
offering price)
-------------------------------------------------------------------------------------------------------------
MAXIMUM DEFERRED
SALES CHARGE
(as percentage of the 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
lesser of original
purchase price or
redemption proceeds)
-------------------------------------------------------------------------------------------------------------
REDEMPTION FEES* None None None None None None None
-------------------------------------------------------------------------------------------------------------
EXCHANGE FEES None None None None None None None
-------------------------------------------------------------------------------------------------------------
* Firstar Bank, N.A., the Trust's custodian, charges a fee of $9 on
redemptions paid by wire transfer.
16
<PAGE>
-------------------------------------------------------------------------------------------------------------
CLASS A
-------------------------------------------------------------------------------------------------------------
ANNUAL FUND
OPERATING EXPENSES
(expenses that are
deducted from Fund SMALL MID AGGRESSIVE LARGE FIXED STRATEGIC CONSERVATIVE
assets)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MANAGEMENT FEES 0.85% 1.35% 1.35% 1.35% 0.95% 0.15% 0.15
-------------------------------------------------------------------------------------------------------------
SERVICE &
DISTRIBUTION (12B-1) 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
FEES
-------------------------------------------------------------------------------------------------------------
OTHER EXPENSES(1) 1.12% 3.09% 0.75% 0.75% 12.72% 0.69% 0.63%
------ ------ ------ ------ ------ ------ ------
-------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND
OPERATING EXPENSES
(Before Reimbursement 2.22% 4.69% 2.35% 2.35% 13.92% 1.09% 1.03%
====== ====== ====== ====== ====== ====== ======
by Adviser)
-------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND
OPERATING EXPENSES
(After Reimbursement 1.60% 1.60% 2.35% 2.35% 1.35% 1.09%(3) 1.03%(3)
====== ====== ====== ====== ====== ====== ======
by Adviser)
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
CLASS B
-------------------------------------------------------------------------------------------------------------
ANNUAL FUND
OPERATING EXPENSES
(expenses that are
deducted from Fund SMALL MID AGGRESSIVE LARGE FIXED STRATEGIC CONSERVATIVE
assets)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MANAGEMENT FEES 0.85% 1.35% 1.35% 1.35% 0.95% 0.15% 0.15
-------------------------------------------------------------------------------------------------------------
SERVICE &
DISTRIBUTION (12B-1) 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
FEES
-------------------------------------------------------------------------------------------------------------
OTHER EXPENSES(1) 0.87% 3.52% 0.75% 0.75% 12.78% 0.70% 0.63%
------ ------ ------ ------ ------ ------ ------
-------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND
OPERATING EXPENSES
(Before Reimbursement 2.72% 5.87% 3.10% 3.10% 14.73% 1.85% 1.78%
====== ====== ====== ====== ====== ====== ======
by Adviser)
-------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND
OPERATING EXPENSES
(After Reimbursement 2.35% 2.35% 3.10% 3.10% 2.10% 1.85%(3) 1.78%(3)
====== ====== ====== ====== ====== ====== ======
by Adviser)
-------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Large/Mid-Cap Value Fund and the Fixed Income Fund commenced offering
Class A shares on July 14, 1999. The Large/Mid-Cap and Fixed Income Funds
commenced offering Class B shares on July 15, 1999 and August 5, 1999,
respectively. "Other Expenses" represents administrative and other expenses
incurred by these Funds during their start-up period. The Aggressive Growth
Fund, Large/Mid-Cap Growth Fund, Strategic Growth Portfolio and
Conservative Growth Portfolio are being offered for the first time via this
prospectus. Accordingly, these fees are estimated.
(2) TPL has agreed to waive receipt of its fees and/or assume certain expenses
of the Funds, to the extent possible, to insure that total annual operating
expenses do not exceed 1.35% annually for Class A shares of the Fixed
Income Fund. TPL has also agreed to waive receipt of its fees and/or assume
certain expenses of
17
<PAGE>
the Funds, to the extent possible, to insure that total annual operating
expenses do not exceed 2.10% annually for Class B shares of the Fixed
Income Fund. TPL may terminate its agreement at any time, and will notify
you if it does so.
(3) Does not include underlying Fund expenses that the Portfolios bear
indirectly.
THIS TABLE DESCRIBES THE FEES AND EXPENSES YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF THE TIMOTHY PLAN MONEY MARKET FUND ("MONEY MARKET"). THE MONEY MARKET
FUND OFFERS ONLY NO-LOAD SHARES.
--------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES: ANNUAL FUND OPERATING EXPENSES:
--------------------------------------------------------------------------------
MAXIMUM SALES CHARGE ON PURCHASES NONE (expenses that are deducted from Fund
(as a percentage of offering price) assets)
MAXIMUM DEFERRED SALES CHARGES NONE MANAGEMENT FEES. 0.60%
(as a percentage of the lesser of SERVICE & DISTRIBUTION (12B-1) FEES.
original purchase price or 0.25%
redemption proceeds) OTHER EXPENSES(1) 4.90%
REDEMPTION FEES NONE* -----
(as a percentage of amount redeemed) TOTAL FUND OPERATING EXPENSES.(2)
EXCHANGE Fees NONE 5.75%
-----
(Before Expense Reimbursements)
TOTAL FUND OPERATING EXPENSES 0.85%
=====
(After Expense Reimbursements)
--------------------------------------------------------------------------------
(1) The Money Market Fund commenced offering its shares on July 9, 1999. "Other
Expenses" represents administrative and other expenses incurred by these
Funds during their start-up period.
(2) TPL has agreed to waive receipt of its fees and/or assume certain expenses
of the Fund, to the extent possible, to insure that the Fund's total
expenses do not exceed 0.85%. TPL may terminate its agreement at any time,
and will notify you if it does so.
EXAMPLE:
--------
The hypothetical example below shows what your expenses would be if you invested
$10,000 in each Class of shares of each Fund (No-load shares of the Money Market
Fund) for the time periods indicated, reinvested all distributions, and then
redeemed all your shares at the end of those periods. The Example assumes that
your investment has a 5% return each year and that the Fund's net operating
expenses remain the same as in the table above. This example is for comparison
only, and does not represent each Fund's actual expenses and returns, either
past or future.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES NO-LOAD
------------------------------------------------------------------------------------------------------------------------
MONEY
SMALL MID AGGRESSIVE LARGE FIXED STRATEGIC CONSERVATIVE MARKET
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
One Yr $ 704 $ 704 $ 776 $ 776 $ 680 $ 655 $ 649 $ 87
------------------------------------------------------------------------------------------------------------------------
Three Yr $ 1,029 $ 1,029 $ 1,245 $ 1,245 $ 955 $ 878 $ 860 $ 272
------------------------------------------------------------------------------------------------------------------------
Five Yr $ 1,376 $ 1,376 $ 1,740 $ 1,740 $ 1,251 $ 1,122 $ 1,091 $ 473
------------------------------------------------------------------------------------------------------------------------
Ten Yr $ 2,355 $ 2,355 $ 3,099 $ 3,099 $ 2,093 $ 1,806 $ 1,740 $ 1,055
------------------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
The $9 fee that you would have to pay if you redeemed your shares by wire
transfer is not included in these figures. A maximum sales charge of 4.25% for
the Fixed-Income Fund , and 5.50% for the other Funds and Portfolios (except the
Money Market Fund), is included in the expense calculations. The example does
not include underlying Fund expenses that the Portfolios bear indirectly.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
CLASS B SHARES (WITH REDEMPTION)
------------------------------------------------------------------------------------------------------------
SMALL MID AGGRESSIVE LARGE FIXED STRATEGIC CONSERVATIVE
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year $ 741 $ 741 $ 816 $ 816 $ 716 $ 655 $ 649
------------------------------------------------------------------------------------------------------------
3 Years $ 1,053 $ 1,053 $ 1,272 $ 1,272 $ 979 $ 878 $ 860
------------------------------------------------------------------------------------------------------------
5 Years $ 1,371 $ 1,371 $ 1,739 $ 1,739 $ 1,246 $ 1,122 $ 1,091
------------------------------------------------------------------------------------------------------------
10 Years $ 2,697 $ 2,697 $ 3,423 $ 3,423 $ 2,442 $ 1,806 $ 1,740
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
CLASS B SHARES (WITHOUT REDEMPTION)
------------------------------------------------------------------------------------------------------------
SMALL MID AGGRESSIVE LARGE FIXED STRATEGIC CONSERVATIVE
------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
1 Year $ 239 $ 239 $ 314 $ 314 $ 214 $ 655 $ 649
------------------------------------------------------------------------------------------------------------
3 Years $ 736 $ 736 $ 960 $ 960 $ 660 $ 878 $ 860
------------------------------------------------------------------------------------------------------------
5 Years $ 1,260 $ 1,260 $ 1,631 $ 1,631 $ 1,133 $ 1,122 $ 1,091
------------------------------------------------------------------------------------------------------------
10 Years $ 2,697 $ 2,697 $ 3,423 $ 3,423 $ 2,442 $ 1,806 $ 1,740
------------------------------------------------------------------------------------------------------------
</TABLE>
The $9 fee that you would have to pay if you redeemed your shares by wire
transfer is not included in these figures. The maximum contingent deferred sales
charge for each period is included in the figures showing redemption expenses.
The example does not include underlying Fund expenses that the Portfolios bear
indirectly.
The following tables set forth the estimated aggregate expenses of the
portfolios, including expenses of the underlying funds in which they invest,
based upon the expense tables for the Funds set out above. These estimates
assume a constant allocation by each Portfolio of its assets in the Funds as
described in the Risk/Return Summary. Actual Portfolio expenses may be higher or
lower than this example. Based on the assumptions previously stated, you would
pay the following combined expenses on a $10,000 investment assuming a 5% annual
return and redemption at the end of each period.
--------------------------------------------------------------------------------
Total
Annual
CLASS A SHARES Combined
Operating 1Year 3 Years 5 Years 10 Years
Expenses
--------------------------------------------------------------------------------
Strategic Growth 1.93% $ 735 $1,123 $1,540 $2,680
Portfolio
--------------------------------------------------------------------------------
Conservative Growth 1.80% $ 723 $1,085 $1,477 $2,549
Portfolio
--------------------------------------------------------------------------------
Total
CLASS B SHARES Annual
(with Redemption) Combined
Operating 1Year 3 Years 5 Years 10 Years
Expenses
--------------------------------------------------------------------------------
Strategic Growth 2.69% $ 772 $1,135 $1,531 $2,835
Portfolio
--------------------------------------------------------------------------------
Conservative Growth 2.55% $ 758 $1,093 $1,462 $2,698
Portfolio
--------------------------------------------------------------------------------
19
<PAGE>
--------------------------------------------------------------------------------
Total
CLASS B SHARES Annual
(without Redemption) Combined
Operating 1Year 3 Years 5 Years 10 Years
Expenses
--------------------------------------------------------------------------------
Strategic Growth 2.69% $ 735 $1,123 $1,540 $2,680
Portfolio
--------------------------------------------------------------------------------
Conservative Growth 2.55% $ 723 $1,085 $1,477 $2,549
Portfolio
--------------------------------------------------------------------------------
INVESTING IN THE FUNDS
DETERMINING SHARE PRICES
Shares of each Share Class of each Fund and Portfolio are offered at the public
offering price ("POP") for each share Class. The public offering price is each
share's next calculated net asset value ("NAV"), plus the applicable sales
charge, if any. NAV per share is calculated by adding the value of Fund or
Portfolio investments, cash and other assets, subtracting Fund/Portfolio
liabilities, and then dividing the result by the number of shares outstanding.
Each Fund/Portfolio generally determines the total value of its shares by using
market prices for the securities comprising its portfolio. Securities for which
quotations are not available and any other assets are valued at fair market
value as determined in good faith by each Fund or Portfolio's Adviser, subject
to the review and supervision of the Board of Trustee. Each Fund/Portfolio's per
share NAV and public offering price is computed on all days on which the New
York Stock Exchange ("NYSE") is open for business, at the close of regular
trading hours on the Exchange, currently 4:00 p.m. Eastern time. In the event
that the NYSE closes early, the share price will be determined as of the time of
closing.
The Timothy Plan Money Market Fund will use the amortized cost method to compute
its net asset value. This means that securities purchased by the Fund are not
marked to market. Instead, any premium paid or discount realized will be
amortized or accrued over the life of the security and credited/debited daily
against the total assets of the Fund. This also means that, under most
circumstances, the Fund will not sell securities prior to maturity date except
to satisfy redemption requests.
CHOOSING THE CLASS OF SHARES THAT IS BEST FOR YOU
Except for the Money Market Fund, which offers only No-Load Shares, Each Fund
and Portfolio offers you a choice of two different share classes in which to
invest. The main differences between each share Class are sales charges and
ongoing fees. Both Classes of shares in any Fund or Portfolio represent
interests in the same portfolio of investments in that Fund or Portfolio. When
deciding which Class of shares to purchase, you should consider your investment
goals, present and future amounts you may invest in the Fund(s) or Portfolio(s),
and the length of time you intend to hold your shares. You should consider,
given the length of time you may hold your shares, whether the ongoing expenses
of Class B shares will be greater than the front-end sales charge of Class A
shares, and to what extent such differences may be offset by the higher
dividends on Class A shares. To help you make a determination as to which class
of shares to buy, please refer back to the examples of Fund expenses over time
in the "Fees And Expenses" Section.
CLASS A SHARES.
Class A shares are offered at their public offering price ("POP"), which is net
asset value per share plus the applicable sales charge. The sales charge varies,
depending on which Fund or Portfolio you choose and how much you invest. There
are no sales charges on reinvested distributions. For all Funds and Portfolios
except the Fixed Income Fund and the Money Market Fund, the following sales
charges apply:
20
<PAGE>
<TABLE>
<CAPTION>
AS A % OF AS A % OF DEALER CONCESSION AS A
AMOUNT INVESTED OFFERING PRICE AMOUNT INVESTED PERCENTAGE OF OFFERING PRICE
--------------- -------------- --------------- ----------------------------
<S> <C> <C> <C>
$1000 to 24,999 5.50% 5.82% 5.25%
25,000 to 49,999 4.25% 4.44% 4.00%
50,000 to 99,999 3.00% 3.09% 2.75%
100,000 to 249,999 2.00% 2.04% 1.75%
250,000 to 499,999 1.00% 1.01% 0.75%
500,000 and up 0.00% 0.00% 0.00%
The following sales charges apply to the Fixed Income Fund:
AS A % OF AS A % OF DEALER CONCESSION AS A
AMOUNT INVESTED OFFERING PRICE AMOUNT INVESTED PERCENTAGE OF OFFERING PRICE
--------------- -------------- --------------- ----------------------------
$1000 to 24,999 4.25% 4.44% 4.00%
25,000 to 49,999 3.25% 3.36% 3.00%
50,000 to 99,999 2.25% 2.30% 2.00%
100,000 to 249,999 1.25% 1.27% 1.00%
250,000 to 499,999 0.75% 0.76% 0.50%
500,000 and up 0.00% 0.00% 0.00%
</TABLE>
The Trust's distributor will pay the appropriate dealer concession to those
selected dealers who have entered into an agreement with the distributor to sell
shares of the Funds and Portfolios. The dealer's concession may be changed from
time to time. The distributor may from time to time offer incentive compensation
to dealers who sell shares of the Funds and Portfolios subject to sales charges,
allowing such dealers to retain an additional portion of the sales load. A
dealer who receives 90% or more of the sales load may be deemed to be an
"underwriter" under the Securities Act of 1933, as amended.
EXEMPTIONS FROM SALES CHARGES
Class A shareholders who purchased their shares on or before September 22, 1997
are not subject to sales charges on future purchases of Class A shares of any
Timothy Plan Fund or Portfolio, including exchanges. Also, the Trust will waive
sales charges on purchases of Class A Shares of any Timothy Plan Fund or
Portfolio by:
1. fee-based registered investment advisers for their clients,
2. broker/dealers with wrap fee accounts,
3. registered investment advisers or brokers for their own accounts,
4. directors, officers, agents employees and employee related accounts of any
entity which provides services to the Timothy Plan pursuant to a written
agreement for such services approved by the Board of Trustees of the
Timothy Plan, and
5. for an organization's retirement plan that places either (i) 200 or more
participants or (ii) $300,000 or more of combined participant initial
assets into the Funds.
The Trust may also, at its sole discretion, waive sales charges on purchases of
Class A Shares by:
1. religious organizations for themselves or their members,
2. religiously-based charitable organizations and foundations for themselves
or their members, and/or
3. at times and under circumstances deemed appropriate by the Trust.
For purchasers that qualify for fee waivers, shares will be purchased at net
asset value.
21
<PAGE>
REDUCED SALES CHARGES
You may qualify for a reduced sales charge by aggregating the net asset value of
all your load shares previously purchased in any Fund with the dollar amount of
shares to be purchased. For example, if you already owned Class A or Class B
shares in one or more of the Funds with an aggregate net asset value of
$450,000, and you decided to purchase an additional $60,000 of Class A shares of
any Fund, there would be no sales charge on that purchase because you had
accumulated more than $500,000 in all Funds of the Trust.
LETTER OF INTENT
You can immediately qualify for a reduced or eliminated sales charge by signing
a non-binding letter of intent stating your intention to buy an amount of shares
in the Fund(s) during the next thirteen (13) months sufficient to qualify for
the reduction. Your letter will not apply to purchases made more than 90 days
prior to the letter. During the term of your letter of intent, the transfer
agent will hold in escrow shares representing the highest applicable sales load
for the Fund(s) in which you have purchased shares, each time you make a
purchase. Any shares you redeem during that period will count against your
commitment. If, by the end of your commitment term, you have purchased all the
shares you committed to purchase, the escrowed shares will be released to you.
If you have not purchased the full amount of your commitment, your escrowed
shares will be redeemed in an amount equal to the sales charge that would apply
if you had purchased the actual amount in your account(s) all at once. Any
escrowed shares not needed to satisfy that charge would be released to you.
CLASS B SHARES
Unlike Class A shares, Class B shares are sold at net asset value, without an
initial sales charge. Instead, a Contingent Deferred Sales Charge ("CDSC") is
imposed on certain redemptions of Class B shares. This means that all of your
initial investment is invested in the Fund(s) or Portfolio(s)of your choice, and
you will only incur a sales charge if you redeem shares within five years. In
that case, a CDSC may be imposed on your redemption. If a CDSC is imposed, it
will be an amount equal to the lesser of the current market value or the cost of
the shares redeemed. What this means is that no sales charge is imposed on
increases in the net asset value of your shares above their original purchase
price. Also, no charge is assessed on shares derived from reinvestment of
dividend or capital gains distributions.
The amount of the CDSC, if any, varies depending on the number of years you have
held your shares. To determine that time period, all purchases made in any month
are aggregated together and deemed to have been made on the last day of the
month. For Class B shares of the each Fund and Portfolio, except the Money
Market Fund, which does not offer Class B shares, the following CDSC charges
apply:
REDEMPTION WITHIN CDSC PERCENTAGE
First Year .................................. 5.00%
Second Year ................................. 4.00%
Third Year .................................. 3.00%
Fourth Year ................................. 2.00%
Fifth Year .................................. 1.00%
Sixth Year and Thereafter ................... None
When you send a redemption request to the Trust, shares not subject to the CDSC
are redeemed first, then shares that have been held the longest, and so on. That
way, you will be subject to the smallest charge possible.
CDSC WAIVERS
The CDSC is waived on redemptions of Class B shares (i) following the death or
disability (as defined in the Code) of a shareholder (ii) in connection with
certain distributions from an IRA or other retirement plan (iii) pursuant to the
Trust's Systematic Cash Withdrawal Plan, limited to 10% of the initial value of
the account, (iv) pursuant to the right of a Fund to liquidate a shareholder's
account.
22
<PAGE>
CONVERSION FEATURE
Class B shares automatically convert to Class A shares once the economic
equivalent of a 5.50% sales charge is recovered by the Fund or Portfolio for
each investment account. The sales charge is recoverable by the Fund or
Portfolio through the distribution fees paid under each Fund/Portfolio's Plan of
Distribution for its Class B shares. Class B shares converting to Class A shares
are not subject to additional sales charges.
DISTRIBUTION FEES
The Trust has adopted distribution and shareholder servicing plans (the
"Distribution Plans"), pursuant to Rule 12b-1 under The Investment Company Act
of 1940, as amended (the "1940 Act"), by Class of Shares, for each Fund and
Portfolio. The Distribution Plans provide for fees to be deducted from the
average net assets of the Funds and Portfolios in order to compensate TPL or
others for expenses relating to the promotion and sale of shares of each Fund
and Portfolio.
Under the Class A Plan, the Class A shares of each Fund/Portfolio compensate TPL
and others for distribution expenses at a maximum annual rate of 0.25% (of
which, the full amount may be service fees), payable on a monthly basis, of each
Fund's average daily net assets attributable to Class A shares.
Under the Class B Plan, the Class B Shares of the Fund/Portfolio compensate TPL
and others for distribution and service fees at an annual rate of 1.00% (0.25%
of which is a service fee) payable on a monthly basis, of each Fund/Portfolio's
average daily net assets attributable to Class B shares. Amounts paid under the
Class B Plan are paid to TPL and others to compensate them for services provided
and expenses incurred in the distribution of Class B shares, including the
paying of commissions for sales of Class B shares. The Class B Plan is designed
to allow investors to purchase Class B shares without incurring a front-end
sales load and to permit the distributor to compensate authorized dealers for
selling such shares. Accordingly, the Class B Plan combined with the CDSC for
Class B shares is to provide for the financing of the distribution of Class B
shares. 12b-1 service fees payable on Class B shares will be paid to TPL for the
first thirteen months after the shares are purchased.
OPENING AND ADDING TO YOUR ACCOUNT
You can invest directly in each Fund/Portfolio by mail, by wire transfer, or
through broker-dealers or other financial organizations. Simply choose the one
that is most convenient for you. You may also invest in the Fund/Portfolios
through an automatic payment plan. Any questions you may have can be answered by
calling 1-800-662-0201.
Payments for Fund/Portfolio shares should be in U.S. dollars, and in order to
avoid fees and delays, should be drawn on a U.S. bank. Please remember that the
Trust reserves the right to reject any purchase order for Fund/Portfolio shares.
The minimum initial investment amount for each Fund/Portfolio, in any Class of
shares, is $1,000.00 for regular accounts. There is no minimum purchase
requirement for additional purchases, and there is no minimum purchase
requirement for qualified retirement plans.
TO OPEN AN ACCOUNT BY MAIL
To make your initial investment in the Fund/Portfolios, simply complete the
Account Registration Form included with this Prospectus, make a check payable to
the Fund or Portfolio of your choice, and mail the Form and check to:
The Timothy Plan
c/o Unified Fund Services, Inc.
431 North Pennsylvania Street
Indianapolis, Indiana 46204
23
<PAGE>
To make subsequent purchases, simply make a check payable to the Fund or
Portfolio of your choice and mail the check to the above-mentioned address. Be
sure to note your account number on the check.
Your purchase order, if accompanied by payment, will be processed upon receipt
by Unified Fund Services, Inc., the Fund's Transfer Agent. If the Transfer Agent
receives your order and payment by the close of regular trading on the NYSE
(currently 4:00 p.m. Eastern time), your shares will be purchased at the
Fund/Portfolio's POP calculated at the close of regular trading on that day.
Otherwise, your shares will be purchased at the POP determined as of the close
of regular trading on the next business day.
PURCHASING SHARES BY WIRE TRANSFER
To make an initial purchase of shares by wire transfer, you need to take the
following steps:
1. Fill out and mail or fax (317-266-8756 fax #) an Account Application to the
Transfer Agent
2. Call 1-800-662-0201 to inform us that a wire is being sent.
3. Obtain an account number from the Transfer Agent.
4. Ask your bank to wire funds to the account of:
Firstar Bank, N.A.
Cinti/Trust, ABA # 0420-0001-3
Credit: The Timothy Plan
Acct. # 488889866 (Small-Cap Value Fund)
821602174 (Large/Mid-Cap Value Fund
821602182 (Fixed Income Fund)
821602208 (Money Market Fund)
821602--- (Aggressive Growth Fund)
821602--- (Large/Mid-Cap Growth Fund)
821602---- (Strategic Growth Portfolio)
821602---- (Conservative Growth Portfolio)
For further credit to (Your Name and Account #)
Include your name(s), address and taxpayer identification number or Social
Security number on the wire transfer instructions. The wire should state that
you are opening a new Fund account.
The Trust allows investors to fax an application to the Transfer Agent as a
convenience for the investor. However, if you fax your application to the
Transfer Agent, you must also mail the original to the Transfer Agent for the
Trust's permanent files.
To make subsequent purchases by wire, ask your bank to wire funds using the
instructions listed above, and be sure to include your account number on the
wire transfer instructions.
If you purchase Fund/Portfolio shares by wire, you must complete and file an
Account Registration Form with the Transfer Agent before any of the shares
purchased can be redeemed. Either fill out and mail the Application Form
included with this prospectus, or call the transfer agent and they will send you
an application. You should contact your bank (which will need to be a commercial
bank that is a member of the Federal Reserve System) for information on sending
funds by wire, including any charges that your bank may make for these services.
PURCHASES THROUGH FINANCIAL SERVICE ORGANIZATIONS
You may purchase shares of the Fund/Portfolios through participating brokers,
dealers, and other financial professionals. Simply call your investment
professional to make your purchase. If you are a client of a securities broker
or other financial organization, such organizations may charge a separate fee
for administrative services in connection with investments in Fund/Portfolio
shares and may impose account minimums and other requirements. These fees and
requirements would be in addition to those imposed by the Fund/Portfolio. If you
24
<PAGE>
are investing through a securities broker or other financial organization,
please refer to its program materials for any additional special provisions or
conditions that may be different from those described in this Prospectus (for
example, some or all of the services and privileges described may not be
available to you). Securities brokers and other financial organizations have the
responsibility of transmitting purchase orders and funds, and of crediting their
customers' accounts following redemptions, in a timely manner in accordance with
their customer agreements and this Prospectus.
PURCHASING SHARES BY AUTOMATIC INVESTMENT PLAN
You may purchase shares of the Fund/Portfolios through an Automatic Investment
Plan ("Plan"). The Plan provides a convenient way for you to have money deducted
directly from your checking, savings, or other accounts for investment in shares
of the Fund/Portfolios. You can take advantage of the Plan by filling out the
Automatic Investment Plan application, included with this Prospectus. You may
only select this option if you have an account maintained at a domestic
financial institution which is an Automated Clearing House member for automatic
withdrawals under the Plan. The Trust may alter, modify, amend or terminate the
Plan at any time, and will notify you at least 30 days in advance if it does so.
For more information, call the Transfer Agent at 1-800-662-0201.
RETIREMENT PLANS
Retirement plans may provide you with a method of investing for your retirement
by allowing you to exclude from your taxable income, subject to certain
limitations, the initial and subsequent investments in your plan and also
allowing such investments to grow without the burden of current income tax until
moneys are withdrawn from the plan. Contact your investment professional or call
the Trust at 1-800 TIM-PLAN to receive information concerning your options.
OTHER PURCHASE INFORMATION
Federal regulations require that you provide a certified taxpayer identification
number whenever you open or reopen an account. Congress has mandated that if any
shareholder fails to provide and certify to the accuracy of the shareholder's
social security number or other taxpayer identification number, the Company will
be required to withhold a percentage, currently 31%, of all dividends,
distributions and payments, including redemption proceeds, to such shareholder
as a backup withholding procedure.
For economy and convenience, share certificates will not be issued.
The Timothy Plan wants you to be kept current regarding the status of your
account in our Fund/Portfolio(s). To assist you, the following statements and
reports will be sent to you:
Confirmation Statements After every transaction that affects your
account balance or your account registration.
Account Statements Quarterly.
Financial Reports Semi-annually -- to reduce Fund expenses, only one copy
of the Fund report will be mailed to each taxpayer
identification number even if you have more than one
account in the Fund.
HOW TO SELL (REDEEM) YOUR SHARES
You may sell (redeem) your shares at any time. You may request the sale of your
shares either by mail, by telephone or by wire.
25
<PAGE>
BY MAIL
Sale requests should be mailed via U.S. mail or overnight courier service to:
The Timothy Plan
c/o Unified Fund Services, Inc.
431 North Pennsylvania Street
Indianapolis, Indiana 46204
The selling price for No-Load and Class A shares being redeemed will be the
Fund/Portfolio's per share net asset value next calculated after receipt of all
required documents in Good Order. The selling price for Class B shares being
redeemed will be the Fund/Portfolio's per share net asset value next calculated
after receipt of all required documents in Good Order, less any applicable CDSC.
Payment of redemption proceeds will be made no later than the third business day
after the valuation date unless otherwise expressly agreed by the parties at the
time of the transaction.
Good Order means that the request must include:
1. Your account number.
2. The number of shares to be sold (redeemed) or the dollar value of the
amount to be redeemed.
3. The signatures of all account owners exactly as they are registered on the
account.
4. Any required signature guarantees.
5. Any supporting legal documentation that is required in the case of estates,
trusts, corporations or partnerships and certain other types of accounts.
SIGNATURE GUARANTEES --
A signature guarantee of each owner is required to redeem shares in the
following situations, for all size transactions:
(i) if you change the ownership on your account;
(ii) when you want the redemption proceeds sent to a different address than is
registered on the account;
(iii)if the proceeds are to be made payable to someone other than the account's
owner(s);
(iv) any redemption transmitted by federal wire transfer to your bank; and
(v) if a change of address request has been received by the Trust or Unified
Fund Services Inc. within 15 days previous to the request for redemption.
In addition, signature guarantees are required for all redemptions of $25,000 or
more from any Fund/Portfolio shareholder account. A redemption will not be
processed until the signature guarantee, if required, is received in Good Order.
Signature guarantees are designed to protect both you and the Trust from fraud.
To obtain a signature guarantee, you should visit a bank, trust company, member
of a national securities exchange or other broker-dealer, or other eligible
guarantor institution. (Notaries public cannot provide signature guarantees.)
Guarantees must be signed by an authorized person at one of these institutions,
and be accompanied by the words "Signature Guarantee."
BY TELEPHONE
You may redeem your shares in the Fund/Portfolio(s) by calling the Transfer
Agent at 1-800-662-0201 if you elected to use telephone redemption on your
account application when you initially purchased shares. Redemption proceeds
must be transmitted directly to you or to your pre-designated account at a
domestic bank.
Shares purchased by check for which a redemption request has been received will
not be redeemed until the check or payment received for investment has cleared.
BY AUTOMATED CLEARING HOUSE ("ACH")
You may request the redemption proceeds be transferred to your designated bank
if it is a member bank or a
26
<PAGE>
correspondent of a member bank of the ACH system. There is no fee charged by the
Trust. ACH redemption requests must be received by the transfer agent before
4:00p.m. New York time to receive that day's closing net assets value. ACH
redemptions will be sent on the day following your redemption request. ACH
redemption funds are normally available two days after the redemption has been
processed.
REDEMPTION AT THE OPTION OF THE TRUST
If the value of the shares in your account falls to less than $1000, the Trust
may notify you that, unless your account is increased to $1000 in value, it will
redeem all your shares and close the account by paying you the redemption
proceeds and any dividends and distributions declared and unpaid at the date of
redemption. You will have sixty days after notice to bring the account up to
$1000 before any action is taken. This minimum balance requirement does not
apply to IRAs and other tax-sheltered investment accounts. This right of
redemption shall not apply if the value of your account drops below $1000 as the
result of market action. The Trust reserves this right because of the expense to
the Fund of maintaining very small accounts.
DIVIDENDS AND DISTRIBUTIONS
Dividends paid by each Fund/Portfolios are derived from its net investment
income. Net investment income will be distributed at least annually. The Fund's
net investment income is made up of dividends received from the stocks it holds,
as well as interest accrued and paid on any other obligations that might be held
in its portfolio.
Each Fund realizes capital gains when it sells a security for more than it paid
for it. The Fund may make distributions of its net realized capital gains (after
any reductions for capital loss carry forwards), generally, once a year.
Unless you elect to have your distributions paid in cash, your distributions
will be reinvested in additional shares of the Fund. You may change the manner
in which your dividends are paid at any time by writing to The Timothy Plan, c/o
Unified Fund Services, Inc., 431 North Pennsylvania Street, Indianapolis,
Indiana 46204.
THE INVESTMENT ADVISER & INVESTMENT MANAGERS
INVESTMENT ADVISER
Timothy Partners Ltd., (" TPL"), 1304 West Fairbanks Avenue, Winter Park,
Florida, 32789, is a Florida limited partnership organized on December 6, 1993
and is registered with the Securities and Exchange Commission as an investment
adviser. TPL supervises the investment of the assets of each Fund in accordance
with the objectives, policies and restrictions of the Trust. TPL approves the
portfolio of securities selected by the investment managers. To determine which
securities are Excluded Securities, TPL conducts its own research and consults a
number of Christian ministries on these issues. TPL retains the right to change
the sources from whom it acquires its information, at its discretion. TPL has
been the Adviser to the Funds since their inceptions.
Covenant Funds, Inc., a Florida corporation ("CFI"), is the managing general
partner of TPL. Arthur D. Ally is President, Chairman and Trustee of the Trust,
as well as President and 70% shareholder of CFI. Mr. Ally has over eighteen
years experience in the investment industry prior to founding TPL, having worked
for Prudential Bache, Shearson Lehman Brothers and Investment Management &
Research. Some or all of these firms may be utilized by an investment manager to
execute portfolio trades for a Fund. Neither Mr. Ally nor any affiliated person
of the Trust will receive any benefit from such transactions.
For its services, TPL is paid an annual fee equal to 0.85% on the Small-Cap
Value Fund, 1.35% on the Large/Mid-Cap Value Fund, 1.35% on the Aggressive
Growth Fund, 1.35% on the Large/Mid-Cap Growth Fund, 0.95% on the Fixed-Income
Fund, 0.60% on the Money Market Fund, and 0.15% on the Strategic Growth
Portfolio and Conservative Growth Portfolio.
27
<PAGE>
TPL, with the Trust's consent, has engaged the services of the following
entities to provide day-to-day investment advisory services to certain of the
Funds. TPL pays all fees charged by the investment managers for such services.
INVESTMENT MANAGERS
AGGRESSIVE GROWTH FUND
Rittenhouse Financial Services, Inc. ("Rittenhouse"), One Radnor Corporate
Center, Radnor, PA 19087, serves as investment manager to the Aggressive Growth
Fund under a written agreement with TPL. Rittenhouse selects the investments for
the Fund's portfolio, subject to the investment restrictions of the Trust and
under the supervision of TPL.
Rittenhouse has served as investment adviser to certain of the Nuveen Funds, and
currently manages assets in excess of $____ billion. Rittenhouse has been
providing investment services to mutual funds and other clients since
-------.
LARGE/MID-CAP GROWTH FUND
Provident Investment Counselors, Inc. ("Provident"), 123 Any Street, Los
Angeles, CA 11111, serves as investment manager to the Large/Mid-Cap Growth Fund
under a written agreement with TPL. Provident selects the investments for the
Fund's portfolio, subject to the investment restrictions of the Trust and under
the supervision of TPL.
Provident has served as investment adviser to certain of the __________ Funds,
and currently manages assets in excess of $____ billion. Provident has been
providing investment services to mutual funds and other clients since
-------.
SMALL-CAP VALUE FUND
Awad Asset Management, Inc. ("Awad"), a wholly-owned subsidiary of Raymond James
Financial, Inc., a diversified financial services firm traded on the New York
Stock Exchange, is the investment manager for the Small-Cap Value Fund. Awad has
offices at 250 Park Avenue, New York, New York 10177. Awad selects the
investments for the Small-Cap Value Fund's portfolio, subject to the investment
restrictions of the Trust and under the supervision of TPL.
James D. Awad, Dan Veru and Carol Egan make up the team responsible for
managing the day-to-day investments for the Fund. James Awad is the Senior
Investment Officer of the investment manager. Prior to forming Awad Asset
Management, Inc., Mr. Awad was founder and president of BMI Capital. He
also managed assets at Neuberger & Berman, Channing Management and First
Investment Corp. Mr. Awad has been involved either full or part-time in the
investment business since 1965.
Awad & Associates has served as investment manager to the Fund since January 1,
1997. It also serves as investment co-adviser to two other investment companies:
Heritage Small-Cap Stock Fund and Calvert New Vision Small-Cap Fund. As of
December 31, 1999, Awad & Associates managed in excess of $1 billion in assets.
In choosing the securities in which to invest, the Awad uses extensive
fundamental analysis to develop earnings forecasts and to identify attractive
investment opportunities relative to market valuation. Individual companies are
scrutinized concerning their individual growth prospects and their competitive
positions within their respective industries. Individual company analysis
focuses upon the outlook for sales, profit margins, returns on capital, cash
flow and earnings per share.
LARGE/MID-CAP VALUE FUND
Fox Asset Management, Inc. ("Fox"), 44 Sycamore Avenue, Little Silver, NJ 07739,
is responsible for the investment and reinvestment of the Mid-Cap Value Fund's
assets. Mr. J. Peter Skirkanich, President and majority shareholder of Fox, is
responsible for the day-to-day recommendations regarding the investment of the
Fund's portfolio. Fox was founded in 1987 and offers investment advice and
services to individuals, institutions, trusts, charities and regulated
investment companies. As of December 31, 1999, Fox managed approximately $2.2
billion in assets.
28
<PAGE>
Mr. Skirkanich is the founder of the firm, serves as chairman of the firm's
investment committee, and is the firm's controlling shareholder, with an
approximate holding of 73% of the firm's outstanding stock. Mr. Skirkanich was
formerly Managing Director of Dreman Value Management, Inc., an investment
counseling firm. Prior to that, he was a Vice President of Investments at
Kidder, Peabody & Company and Shearson/American Express, where he managed
individual and corporate accounts for twelve years. He began his investment
career as an analyst with Prudential Bache Securities.
Prior to embarking on his investment career, Mr. Skirkanich served three years
with the U.S. State Department and two years with Ernst & Whinney in both the
tax and audit areas. Mr. Skirkanich is a graduate of the Wharton School,
University of Pennsylvania. Currently he serves as a trustee on the Board of
Overseers for the School of Engineering and Applied Sciences at the University.
By gubernatorial appointment, he also serves as a member of the State Investment
Council for the State of New Jersey.
FIXED-INCOME FUND AND MONEY MARKET FUND
Carr & Associates, Inc.("Carr"), 150 Broadway, Suite 509, New York, New York,
serves as investment manager to the Fixed Income and Money Market Funds. Carr
was founded by Michael F. Carr in 1989 and has provided investment advisory
services to institutional and individual investors since that time. Each of the
Firm's co-principals is a Chartered Financial Analyst with over 38 years of
investment industry experience.
Michael F. Carr, President and Chief Investment Officer for the Firm, is
responsible for the day to day recommendations regarding the investment of the
Funds' portfolios. Mr. Carr has spent his entire 40 year career in the
investment industry. Immediately prior to founding the firm, Mr. Carr was a
Senior Vice President of Shearson Lehman Hutton. Mr. Carr is a Chartered
Financial Analyst and a member of the Association for Investment Management and
Research and the New York Society of Security Analysts. A graduate of the
University of Notre Dame, Mr. Carr received his Masters of Business
Administration degree from New York University.
PRINCIPAL UNDERWRITER
Timothy Partners Ltd.. ("TPL") acts as principal underwriter for the Trust. The
purpose of acting as an underwriter is to facilitate the registration of the
Funds' shares under state securities laws and to assist in the sale of shares.
TPL also acts as Investment Adviser to the Trust. TPL is not compensated for
providing underwriting services to the Trust.
FEDERAL TAXES
The Trust intends to qualify and maintain its qualification as a "regulated
investment company" under the Internal Revenue Code (hereafter the "Code"),
meaning that to the extent a fund's earnings are passed on to shareholders as
required by the Code, the Trust itself is not required to pay federal income
taxes on the earnings. Accordingly, each Fund will pay dividends and make such
distributions as are necessary to maintain its qualification as a regulated
investment company under the Code.
Before you purchase shares of any Fund, you should consider the effect of both
dividends and capital gain distributions that are expected to be declared or
that have been declared but not yet paid. When the Fund makes these payments,
its share price will be reduced by the amount of the payment, so that you will
in effect have paid full price for the shares and then received a portion of
your price back as a taxable dividend distribution.
The Trust will notify you annually as to the tax status of dividend and capital
gains distributions paid by the Funds. Such dividends and capital gains may also
be subject to state and local taxes.
29
<PAGE>
You may realize a taxable gain or loss when redeeming shares of a Fund depending
on the difference in the prices at which you purchased and sold the shares.
Because your state and local taxes may be different than the federal taxes
described above, you should see your tax adviser regarding these taxes.
GENERAL INFORMATION
Total return for the Funds may be calculated on an average annual total return
basis or an aggregate total return basis. Average annual total return reflects
the average annual percentage change in value of an investment over the
measuring period. Aggregate total return reflects the total percentage change in
value of an investment over the measuring period. Both measures assume the
reinvestment of dividends and distributions.
Total return of each Fund or Portfolio may be compared to those of mutual funds
with similar investment objectives and to bond, stock or other relevant indices
or to rankings prepared by independent services or other financial or industry
publications that monitor mutual fund performance.
FINANCIAL HIGHLIGHTS
The financial highlights tables and performance graphs presented below are
intended to help you understand each Fund's financial performance since it
commenced investment operations. Certain information reflects financial results
for a single Fund share. The total returns in the table represent the rate that
an investor would have earned (or lost) on an investment in a Fund, and for a
particular share class of a Fund (assuming reinvestment of all dividends and
distributions) for the time periods indicated. This information has been audited
By Tait, Weller & Baker, whose report, along with each Fund's financial
statements, are included in the Trust's annual report, dated December 31, 1999,
which is available without charge upon request.
<TABLE>
<CAPTION>
SMALL-CAP VALUE FUND, CLASS A SHARES
--------------------------------------------------------------------------------------
PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD
PER SHARE OPERATING ENDED ENDED ENDED ENDED ENDED ENDED
PERFORMANCE 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94*
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
BEGINNING OF PERIOD $10.89 $12.25 $11.24 $10.07 $ 9.66 $10.00
--------------------------------------------------------------------------------------
Income from Investment Operations
Net Investment Income (0.02) 0.01 0.02 0.10 0.11 0.06
Net Gains (losses) on
Securities (Realized
& Unrealized) 1.39 (1.30) 2.37 1.17 0.66 (0.34)
--------------------------------------------------------------------------------------
Total from Investment 1.37 (1.29) 2.39 1.27 0.77 (0.28)
---- ----- ---- ---- ---- -----
Operations
--------------------------------------------------------------------------------------
Less Distributions
From Net Investment
Income 0.00 (0.07) 0.00 (0.10) (0.11) (0.06)
From Net Capital Gains 0.00 0.00) (1.38) 0.00 (0.25) 0.00
------ ------ ------ ------ ------ ------
Total Distributions 0.00 (0.07) (1.38) (0.10) (0.36) (0.06)
--------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $12.26 $10.89 $12.25 $11.24 $10.07 $ 9.66
--------------------------------------------------------------------------------------
TOTAL RETURN (A) 12.58% (10.50)% 21.35% 12.59% 7.93% (2.84)%
--------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------
Net Assets, End of Period
(in 000s) $13,377 $13,287 $11,208 $7,760 $6,133 $2,217
--------------------------------------------------------------------------------------
30
<PAGE>
--------------------------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets
Before Expense
Reimbursements 2.22% 2.09% 2.75% 3.70% 5.84% 6.44%(B)
After Expense
Reimbursements 1.60% 1.60% 1.60% 1.60% 1.60% 1.60%(B)
--------------------------------------------------------------------------------------
Ratio of Net Investment
Income (loss) to Average
Net Assets
Before Expense
Reimbursements (0.82)% (1.15)% (0.90)% (1.05)% (2.96)% 15.49%(B)
After Expense
Reimbursements (0.20)% (0.66)% 0.25% 1.05% 1.28% 1.53%(B)
--------------------------------------------------------------------------------------
Portfolio Turnover Rate 78.79% 69.42% 136.36% 93.08% 34.12% 8.31%
--------------------------------------------------------------------------------------
</TABLE>
* Class A Shares commenced investment operations on March 21, 1994.
(A) Total Return Calculation does not reflect Sales Load.
(B) Annualized.
SMALL-CAP VALUE FUND, CLASS B SHARES
--------------------------------------------------------------------------------
PERIOD PERIOD PERIOD PERIOD PERIOD
PER SHARE OPERATING ENDED ENDED ENDED ENDED ENDED
PERFORMANCE 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
--------------------------------------------------------------------------------
NET ASSET VALUE
BEGINNING OF PERIOD $10.70 $12.13 $11.22 $10.08 $10.49
--------------------------------------------------------------------------------
Income from Investment
Operations
Net Investment Income (0.11) (0.07) (0.03) 0.07 0.11
Net Gains (losses) on
Securities (Realized &
Unrealized) 1.29 (1.29) 2.32 1.14 (0.16)
--------------------------------------------------------------------------------
Total from Investment
Operations 1.18 (1.36) 2.29 1.21 (0.05)
--------------------------------------------------------------------------------
Less Distributions
From Net Investment Income 0.00 (0.07) (1.38) 0.00 (0.25)
From Net Capital Gains 0.00 0.00 0.00 (0.07) (0.11)
------ ------ ------ ------ ------
Total Distributions 0.00 (0.07) (1.38) (0.07) (0.36)
------ ------ ------ ------ ------
--------------------------------------------------------------------------------
NET ASSET VALUE, END
OF PERIOD $11.88 $10.70 $12.13 $11.22 $10.08
--------------------------------------------------------------------------------
TOTAL RETURN (A) 11.03% (11.18)% 20.50% 11.98% (0.46)%
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period
(in 000s) $14,351 $14,114 $11,389 $3,929 $ 620
--------------------------------------------------------------------------------
Ratio of Expenses to Average
Net Assets
Before Expense
Reimbursements 2.72% 2.84% 3.41% 4.30% 6.44%B
After Expense
Reimbursements 2.35% 2.35% 2.26% 2.20% 2.20%B
--------------------------------------------------------------------------------
Ratio of Net Investment Income
(loss) to Average Net Assets
Before Expense
Reimbursements (1.34)% (1.90)% (1.56)% 1.65% 3.56%B
After Expense
Reimbursements (0.97)% (1.41)% (0.41)% 0.45% 0.68%B
--------------------------------------------------------------------------------
Portfolio Turnover Rate 78.79% 69.42% 136.36% 93.08% 34.12%
--------------------------------------------------------------------------------
* Class B Shares commenced investment operations on August 25, 1995.
(A) Total return calculation does not include redemption fee.
(B) Annualized
31
<PAGE>
LARGE/MID-CAP VALUE FUND
PERIOD ENDING 12/31/99
--------------------------------------------------------------------------------
CLASS A CLASS B
PER SHARE OPERATING PERFORMANCE SHARES (1) SHARES (2)
--------------------------------------------------------------------------------
NET ASSET VALUE
BEGINNING OF PERIOD $ 10.00 $ 10.00
--------------------------------------------------------------------------------
Income from Investment
Operations
Net Investment Income 0.02 0.02
Net Gains (losses) on
Securities (Realized
& Unrealized) (0.30) (0.62)
--------------------------------------------------------------------------------
Total from Investment
Operations (0.28) 0.60)
--------------------------------------------------------------------------------
Less Distributions
From Net Investment Income (0.02) (0.02)
From Net Capital Gains (0.02) (0.02)
Total Distributions (0.04) (0.04)
--------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.68 $ 9.36
--------------------------------------------------------------------------------
TOTAL RETURN (3.28)%(3) (4.78)%(4)
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period $ 845,879 $ 524,605
--------------------------------------------------------------------------------
Ratio of Expenses to Average
Net Assets
Before Expense
Reimbursements(5) 4.69% 5.87%
After Expense
Reimbursements(5) 1.60% 2.35%
--------------------------------------------------------------------------------
Ratio of Net Investment Income
(loss) to Average Net Assets
Before Expense
Reimbursements(5) (2.34)% (2.34)%
After Expense
Reimbursements(5) 0.75% 1.15%
--------------------------------------------------------------------------------
Portfolio Turnover Rate 8.02% 8.02%
--------------------------------------------------------------------------------
(1) For the Period July 14, 1999 (Commencement of Operations) through December
31, 1999.
(2) For the Period July 15, 1999 (Commencement of Operations) through December
31, 1999.
(3) Does not reflect sales charge.
(4) Does not reflect redemption fees.
(5) Annualized.
32
<PAGE>
FIXED INCOME FUND
PERIOD ENDING 12/31/99
--------------------------------------------------------------------------------
CLASS A CLASS B
PER SHARE OPERATING PERFORMANCE SHARES (1) SHARES (2)
--------------------------------------------------------------------------------
NET ASSET VALUE BEGINNING OF PERIOD $ 10.00 $ 10.00
--------------------------------------------------------------------------------
Income from Investment
Operations
Net Investment Income 0.12 0.15
Net Gains (losses) on Securities
(Realized & Unrealized) (0.18) (0.22)
--------------------------------------------------------------------------------
Total from Investment Operations (0.06) (0.07)
------------ ------------
--------------------------------------------------------------------------------
Less Distributions
From Net Investment Income 0.00 0.00
From Net Capital Gains (0.13) (0.13)
------------ ------------
Total Distributions (0.13) (0.13)
--------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.81 $ 9.80
--------------------------------------------------------------------------------
TOTAL RETURN (0.42)%(3) (0.92)%(4)
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period $ 124,062 $ 243,086
--------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets
Before Expense Reimbursements(5) 13.92% 14.73%
After Expense Reimbursements(5) 1.35% 2.10%
--------------------------------------------------------------------------------
Ratio of Net Investment Income
(loss) to Average Net Assets
Before Expense Reimbursements(5) (9.88)% (2.20)%
After Expense Reimbursements(5) 2.70% 10.42%
--------------------------------------------------------------------------------
Portfolio Turnover Rate 21.25% 21.25%
--------------------------------------------------------------------------------
(1) For the Period July 14, 1999 (Commencement of Operations) through December
31, 1999.
(2) For the Period August 5, 1999 (Commencement of Operations) through December
31, 1999.
(3) Does not reflect sales charge.
(4) Does not reflect redemption fees.
(5) Annualized.
33
<PAGE>
MONEY MARKET FUND
PERIOD ENDING 12/31/99
--------------------------------------------------------------------------------
NO-LOAD
PER SHARE OPERATING PERFORMANCE SHARES (1)
--------------------------------------------------------------------------------
NET ASSET VALUE BEGINNING OF PERIOD $ 1.00
--------------------------------------------------------------------------------
Income from Investment Operations
Net Investment Income 0.02
Net Gains (losses) on Securities
(Realized & Unrealized) 0.00
--------------------------------------------------------------------------------
Total from Investment Operations 0.02
------------
--------------------------------------------------------------------------------
Less Distributions
From Net Investment Income 0.00
From Net Capital Gains (0.02)
------------
Total Distributions (0.02)
--------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 1.00
--------------------------------------------------------------------------------
TOTAL RETURN (2) 1.78%
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period $ 760,184
--------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets
Before Expense Reimbursements(3) 5.75%
After Expense Reimbursements(3) 0.85%
--------------------------------------------------------------------------------
Ratio of Net Investment Income (loss)
to Average Net Assets
Before Expense Reimbursements(3) (0.73)%
After Expense Reimbursements(3) 4.17%
--------------------------------------------------------------------------------
(1) For the Period July 9, 1999 (Commencement of Operations) through December
31, 1999.
(2) Not Annualized.
(3) Annualized.
34
<PAGE>
FOR MORE INFORMATION
Additional information about the Trust is available in the Trust's annual report
to shareholders, dated December 31, 1999 and its semi-annual report to
shareholders, dated June 31, 1999. In the Trust's annual and semi-annual
reports, you will find a discussion of the market conditions and investment
strategies that significantly affected the Trust's performance during its last
year of operations.
STATEMENT OF ADDITIONAL BY MAIL:
INFORMATION (SAI)
The Timothy Plan.
The SAI contains more detailed c/o Unified Fund Services, Inc.
Information on all aspects of the 431 North Pennsylvania Street
Trust. A current SAI, dated May 1, Indianapolis, Indiana 46204
2000, has been filed with the SEC
and is incorporated by reference BY PHONE: 1-800-626-0201
into this prospectus.
ON THE INTERNET:
www.timothyplan.com
A copy of your requested document(s) will be mailed to you within three days of
your request.
Information about the Fund (including the SAI) can also be reviewed and copied
at the SEC's Public Reference Room in Washington, DC, and information concerning
the operation of the Public Reference Room may be obtained by calling the SEC at
1-202-942-8090. Information about the Fund is also available on the SEC's EDGAR
database at the SEC's web site (www.sec.gov ). Copies of this information can be
obtained, after paying a duplicating fee, by electronic request
([email protected]), or by writing the SEC's Public Reference Section,
Washington, DC 20549-0102.
The Timothy Plan
Investment Company Act No.
811-08228
35
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE TIMOTHY PLAN
A Delaware Business Trust and registered investment
management company offering the following series:
THE TIMOTHY PLAN AGGRESSIVE GROWTH FUND
THE TIMOTHY PLAN LARGE/MID-CAP GROWTH FUND
THE TIMOTHY PLAN SMALL-CAP VALUE FUND
THE TIMOTHY PLAN LARGE/MID-CAP VALUE FUND
THE TIMOTHY PLAN FIXED-INCOME FUND
THE TIMOTHY PLAN MONEY MARKET FUND
AND
THE TIMOTHY PLAN STRATEGIC GROWTH PORTFOLIO
THE TIMOTHY PLAN CONSERVATIVE GROWTH PORTFOLIO
OCTOBER 1, 2000
--------------------------------------------------------------------------------
Timothy Partners, Ltd.
1304 West Fairbanks Avenue
Winter Park, Florida 32789
(800) 846-7526
--------------------------------------------------------------------------------
This Statement of Additional Information is in addition to and supplements the
current Prospectus of The Timothy Plan (the "Trust"), dated October 1, 2000,
which prospectus offers eight separate investment series, The Timothy Plan
Aggressive Growth Fund, The Timothy Plan Large/Mid-Cap Growth Fund, The Timothy
Plan Small-Cap Value Fund, The Timothy Plan Large/Mid-Cap Value Fund, The
Timothy Plan Fixed-Income Fund, the Timothy Plan Money Market Fund, The Timothy
Plan Strategic Growth Portfolio, and The Timothy Plan Conservative Growth
Portfolio.
THE TIMOTHY PLAN (the "Trust") is registered with the Securities and Exchange
Commission as an open-end management investment company, and currently has
registered and offers eleven separate series of shares to the public:
The Timothy Plan Aggressive Growth Fund, The Timothy Plan Large/Mid-Cap Growth
Fund, The Timothy Plan Small-Cap Value Fund, The Timothy Plan Large/Mid-Cap
Value Fund, and The Timothy Plan Fixed-Income Fund (referred to herein as the
"Timothy Funds") currently each offers two classes of shares: Class A, and Class
B.
The Timothy Plan Strategic Growth Portfolio, and The Timothy Plan Conservative
Growth Portfolio (referred to herein as the "Portfolios") currently each offers
two classes of shares: Class A, and Class B.
The Timothy Plan Money Market Fund (referred to herein as the "Money Market
Fund") offers a single class of shares of the Trust without any sales charges.
This statement of additional information is not a prospectus but supplements and
should be read in conjunction with the Timothy Plan, dated October 1, 2000.
Copies of the prospectuses may be obtained from the Trust without charge by
writing the Trust at 1304 West Fairbanks Avenue, Winter Park, Florida 32789 or
by calling the Trust at (800) 846-7526. Retain this statement of additional
information for future reference.
<PAGE>
TABLE OF CONTENTS
THE TIMOTHY PLAN......................................................
THE TIMOTHY PLAN - INVESTMENTS........................................
INVESTMENT RESTRICTIONS...............................................
INVESTMENT ADVISER....................................................
INVESTMENT MANAGERS...................................................
PRINCIPAL
UNDERWRITER...........................................................
ADMINISTRATOR.........................................................
ALLOCATION OF PORTFOLIO BROKERAGE.....................................
PURCHASE OF SHARES....................................................
Tax-Deferred Retirement Plans....................................
REDEMPTIONS...........................................................
OFFICERS AND TRUSTEES OF THE TRUST....................................
DISTRIBUTION PLANS....................................................
TAXATION..............................................................
GENERAL INFORMATION...................................................
Audits and Reports...............................................
Miscellaneous....................................................
PERFORMANCE...........................................................
Comparisons and Advertisements...................................
FINANCIAL STATEMENTS..................................................
<PAGE>
THE TIMOTHY PLAN
The Timothy Plan ("Trust") was organized as a Delaware business trust, and is a
mutual fund company of the type known as an open-end management investment
company. It is authorized to create an unlimited number of series of shares
(each a "Fund" or "Portfolio") and an unlimited number of share classes within
each series. A mutual fund permits an investor to pool his or her assets with
those of others in order to achieve economies of scale, take advantage of
professional money managers and enjoy other advantages traditionally reserved
for large investors. The Trust currently offers eleven series: The Timothy Plan
Aggressive Growth Fund, The Timothy Plan Large/Mid-Cap Growth Fund, The Timothy
Plan Small-Cap Value Fund, The Timothy Plan Large/Mid-Cap Value Fund, The
Timothy Plan Fixed-Income Fund, the Timothy Plan Money Market Fund, The Timothy
Plan Strategic Growth Portfolio, The Timothy Plan Conservative Growth Portfolio,
Timothy Plan Small-Cap Variable Series, the Timothy Plan Large/Mid-Cap Variable
Series, and The Timothy Plan Fixed-Income Variable Series. The shares of each
series are fully paid and non-assessable. They are entitled to such dividends
and distributions as may be paid with respect to the shares and shall be
entitled to such sums on liquidation of the Fund or Portfolio as shall be
determined. Other than these rights, they have no preference as to conversion,
exchange, dividends, retirement or other features and have no preemption rights.
There are three Classes of shares offered by the Trust; Class A shares are
offered with a front-end sales charge and ongoing service/distribution fees;
Class B shares are offered with a contingent deferred sales charge that declines
over a period of years and ongoing service and distribution fees; and; No-Load
shares are offered without sales charges or ongoing service/distribution fees
(Timothy Plan Money Market Fund, Timothy Plan Small-Cap Variable Series, the
Timothy Plan Large/Mid-Cap Variable Series, and The Timothy Plan Fixed-Income
Variable Series only).
Shareholder meetings will not be held unless required by Federal or State law or
in connection with an undertaking given by the Fund (See Statement of Additional
Information).
THE TIMOTHY PLAN - INVESTMENTS
Each Fund/Portfolio seeks to achieve its objectives by making investments
selected in accordance with that Fund/Portfolio's investment restrictions and
policies. Each Fund/Portfolio will vary its investment strategy as described in
the Prospectus to achieve its objectives. This Statement of Additional
Information contains further information concerning the techniques and
operations of the Fund/Portfolios, the securities in which they will invest, and
the policies they will follow.
THE TIMOTHY FUNDS issue two classes of shares (Class A and Class B) that invest
in the same portfolio of securities. Class A and Class B shares differ with
respect to sales structure and 12b-1 Plan expenses.
THE TIMOTHY MONEY MARKET FUND offers a single class of shares, the No-load
class.
Each Fund has its own investment objectives and policies, and each invests in
its own portfolio of securities. Each Fund seeks to achieve its stated
objectives by investing in securities issued by companies which, in the opinion
of the Funds' Adviser, conduct business in accordance with the stated philosophy
and principles of the Funds. The following information supplements the
information provided in each Fund's Prospectus.
COMMON STOCK Common stock is defined as shares of a corporation that entitle the
holder to a pro rata share of the profits of the corporation, if any, without a
preference over any other shareholder or class of shareholders, including
holders of the corporation's preferred stock and other senior equity. Common
stock usually carries with it the right to vote, and frequently, an exclusive
right to do so. Holders of common stock also have the right to participate in
the remaining assets of the corporation after all other claims, including those
of debt securities and preferred stock, are paid.
PREFERRED STOCK Generally, preferred stock receives dividends prior to
distributions on common stock and usually has a priority of claim over common
stockholders if the issuer of the stock is liquidated. Unlike common stock,
preferred stock does not usually have voting rights; preferred stock, in some
instances, is convertible into common stock. In order to be payable, dividends
on preferred stock must be declared by the issuer's Board of Trustees. Dividends
on the typical preferred stock are cumulative, causing dividends to accrue even
if not declared by the Board of Trustees. There is, however, no assurance that
dividends will be declared by the Board of Trustees of issuers of the preferred
stocks in which the Funds invest.
1
<PAGE>
CONVERTIBLE SECURITIES Traditional convertible securities include corporate
bonds, notes and preferred stocks that may be converted into or exchanged for
common stock, and other securities that also provide an opportunity for equity
participation. These securities are generally convertible either at a stated
price or a stated rate (that is, for a specific number of shares of common stock
or other security). As with other fixed income securities, the price of a
convertible security to some extent varies inversely with interest rates. While
providing a fixed-income stream (generally higher in yield than the income
derivable from a common stock but lower than that afforded by a non-convertible
debt security), a convertible security also affords the investor an opportunity,
through its conversion feature, to participate in the capital appreciation of
the common stock into which it is convertible. As the market price of the
underlying common stock declines, convertible securities tend to trade
increasingly on a yield basis and so may not experience market value declines to
the same extent as the underlying common stock. When the market price of the
underlying common stock increases, the price of a convertible security tends to
rise as a reflection of the value of the underlying common stock. To obtain such
a higher yield, the Funds may be required to pay for a convertible security an
amount in excess of the value of the underlying common stock. Common stock
acquired by the Funds upon conversion of a convertible security will generally
be held for so long as the advisor or investment manager anticipates such stock
will provide the Funds with opportunities which are consistent with the Funds'
investment objectives and policies.
WARRANTS A warrant is an instrument issued by a corporation which gives the
holder the right to subscribe to a specified amount of the issuer's capital
stock at a set price for a specified period of time.
AMERICAN DEPOSITORY RECEIPTS ("ADRs"). ADRs are receipts typically issued by a
U.S. bank or trust company which evidence ownership of underlying securities
issued by a foreign corporation. The Funds may purchase ADRs whether they are
"sponsored" or "unsponsored". "Sponsored" ADRs are issued jointly by the issuer
of the underlying security and a depository. "Unsponsored" ADRs are issued
without participation of the issuer of the deposited security. The Funds do not
consider any ADRs purchased to be foreign. Holders of unsponsored ADRs generally
bear all the costs of such facilities. The depository of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts in respect to the deposited securities.
Therefore, there may not be a correlation between information concerning the
issuer of the security and the market value of an unsponsored ADR. ADRs may
result in a withholding tax by the foreign country of source which will have the
effect of reducing the income distributable to shareholders. Because each Fund
will not invest more than 50% of the value of its total assets in stock or
securities issued by foreign corporations, it will be unable to pass through the
foreign taxes that Fund pays (or is deemed to pay) to shareholders under the
Internal Revenue Code of 1986, as amended (the "Code").
PORTFOLIO TURNOVER It is not the policy of any of the Funds to purchase or sell
securities for short-term trading purposes, but the Funds may sell securities to
recognize gains or avoid potential for loss. The Funds will, however, sell any
portfolio security (without regard to the time it has been held) when the
investment advisor believes that market conditions, credit-worthiness factors or
general economic conditions warrant such a step. The Portfolios invest the
majority of their assets in certain of the Funds, and are required to maintain
certain investment ratios, which are adjusted at least quarterly. As a result,
portfolio turnover for the Portfolios could be substantial and could cause the
Funds to also experience additional turnover problems. The portfolio turnover
rate for each Fund and Portfolio is set forth in the table below:
2
<PAGE>
---------------------------------------------------------------------------
FUND 1996 1997 1998 1999
---------------------------------------------------------------------------
Small-Cap Value Fund 93.08% 136.36% 69.42% 78.79%
---------------------------------------------------------------------------
Large/Mid Cap Value Fund N/A N/A N/A 8.02%
---------------------------------------------------------------------------
Fixed Income Fund N/A N/A N/A 21.25%
---------------------------------------------------------------------------
Money Market Fund N/A N/A N/A N/A
---------------------------------------------------------------------------
Aggressive Growth Fund N/A N/A N/A N/A
---------------------------------------------------------------------------
Large/Mid-Cap Growth N/A N/A N/A N/A
Fund
---------------------------------------------------------------------------
Strategic Growth N/A N/A N/A N/A
Portfolio
---------------------------------------------------------------------------
Conservative Growth N/A N/A N/A N/A
Portfolio
---------------------------------------------------------------------------
The Timothy Plan Large/Mid-Cap Value Fund, the Timothy Plan Fixed-Income Fund,
and The Timothy Plan Money Market Fund commenced investment operations in 1999.
The Timothy Plan Aggressive Growth Fund, The Timothy Plan Large/Mid-Cap Growth
Fund, The Timothy Plan Strategic Growth Portfolio and The Timothy Plan
Conservative Growth Portfolio commenced investment operations on October 1,
2000.
High portfolio turnover would involve additional transaction costs (such as
brokerage commissions) which are borne by the Funds, or adverse tax effects.
(See "Dividends, Distributions and Taxes" in each Fund's Prospectus.)
INVESTMENT RESTRICTIONS
In addition to those set forth in the Funds' current Prospectuses, the Funds
have adopted the Investment Restrictions set forth below, which are fundamental
policies of each Fund, and which cannot be changed without the approval of a
majority of the outstanding voting securities of each Fund. As provided in the
Investment Company Act of 1940, as amended (the "1940 Act"), a "vote of a
majority of the outstanding voting securities" means the affirmative vote of the
lesser of (i) more than 50% of the outstanding shares, or (ii) 67% or more of
the shares present at a meeting if more than 50% of the outstanding shares are
represented at the meeting in person or by proxy. These investment restrictions
provide that each Fund will not:
(1) issue senior securities;
(2) engage in the underwriting of securities except insofar as the Fund may be
deemed an underwriter under the Securities Act of 1933 in disposing of a
portfolio security;
(3) purchase or sell real estate or interests therein, although the Small-Cap
Value Fund, the Large/Mid-Cap Value Fund, the Small-Cap Variable Series and
the Large/Mid-Cap Variable Series may each purchase securities of issuers
which engage in real estate operations;
(4) invest for the purpose of exercising control or management of another
company;
(5) purchase oil, gas or other mineral leases, rights or royalty contracts or
exploration or development programs, except that the Small-Cap Value Fund,
the Large/Mid-Cap Value Fund, the Small-Cap Variable Series and the
Large/Mid-Cap Variable Series may each invest in the securities of
companies which invest in or sponsor such programs;
(6) invest more than 25% of the value of the Fund's total assets in one
particular industry, except for temporary defensive purposes;
(7) make purchases of securities on "margin", or make short sales of
securities, provided that each Fund may enter into futures contracts and
related options and make initial and variation margin deposits in
connection therewith; and
3
<PAGE>
(8) invest in securities of any open-end investment company, except that each
Fund may purchase securities of money market mutual Funds, but such
investments in money market mutual Funds may be made only in accordance
with the limitations imposed by the 1940 Act and the rules thereunder, as
amended. But in no event may a Fund 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 a single class.
(9) as to 75% of a Fund's total assets, invest more than 5% of its 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)
(10) purchase or sell commodities or commodity futures contracts, other than
those related to stock indexes.
(11) make loans of money or securities, except (I) by purchase of fixed income
securities in which a Fund may invest consistent with its investment
objectives and policies; or (ii) by investment in repurchase agreements.
(12) invest in securities of any company if any officer of trustee of the Funds
or TPL owns more than 0.5% of the outstanding securities of such company
and such officers and trustees, in the aggregate, own more than 5% of the
outstanding securities of such company.
(13) borrow money, except that each Fund may borrow from banks (I) for temporary
or emergency purposes in an amount not exceeding of the Fund's assets or
(ii) to meet redemption requests that might otherwise require the untimely
disposition of portfolio securities, in an amount not to exceed 33% of the
value of the Fund's total assets (including the amount borrowed) at the
time the total assets, the Fund will not purchase securities. Interest paid
on borrowing will reduce net income.
(14) pledge, mortgage hypothecate, or otherwise encumber its assets, except in
an mount up to 33% of the value of its net assets, but only to secure
borrowing for temporary or emergency purposes, such as to effect
redemptions, or
(15) 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 is no readily available market
quotations, or in repurchase agreements maturing in more than 7 days, if
all such securities would constitute more than 10% of a Fund's net assets.
So long as percentage restrictions are observed by a Fund at the time it
purchases any security, changes in values of particular Fund assets or the
assets of the Fund as a whole will not cause a violation of any of the foregoing
restrictions.
The investment restrictions set forth below have been adopted by the Strategic
Growth Portfolio and the Conservative Growth Portfolio as fundamental policies.
Each of the Strategic Growth and Conservative Growth Portfolios May Not:
1. purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (except this shall not prevent
the Fund from purchasing or selling options or futures contracts or from
investing in securities or other instruments backed by physical
commodities);
2. purchase or sell real estate including limited partnership interests,
although it may purchase and sell securities of companies that deal in real
estate and may purchase and sell securities that are secured by interests
in real estate;
3. make loans to any person, except loans of portfolio securities to the
extent that no more than 33 1/3% of its total assets would be lent to other
parties, but this limitation does not apply to purchases of debt securities
or repurchase agreements;
4
<PAGE>
4. (i) purchase more than 10% of any class of the outstanding voting
securities of any issuer (except other investment companies as defined in
the 1940 Act) and (ii) purchase securities of an issuer (except obligations
of the U.S. Government and its agencies and instrumentalities and
securities of other investment companies as defined in the 1940 Act) if as
a result, with respect to 75% of its total assets, more than 5% of the
Portfolio's total assets, at market value, would be invested in the
securities of such issuer.
5. issue senior securities (as defined in the 1940 Act) except as permitted by
rule, regulation or order of the Securities and Exchange Commission;
6. will not borrow, except from banks for temporary or emergency (not
leveraging) purposes including the meeting of redemption requests that
might otherwise require the untimely disposition of securities in an
aggregate amount not exceeding 30% of the value of the Portfolio's total
assets (including the amount borrowed) at the time the borrowing is made;
and whenever borrowings by a Portfolio, including reverse repurchase
agreements, exceed 5% of the value of a Portfolio's total assets, the
Portfolio will not purchase any securities;
7. underwrite securities issued by others, except to the extent that the
Portfolio may be considered an underwriter within the meaning of the 1933
Act in the disposition of restricted securities; and
8. write or acquire options or interests in oil, gas or other mineral
exploration or development programs.
ADDITIONAL CONSIDERATIONS FOR SHAREHOLDERS OF THE PORTFOLIOS
A Portfolio will not be able to offset gains realized by one Fund in which
such Portfolio invests against losses realized by another Fund in which such
Portfolio invests. The Portfolio's use of a fund-of-funds structure could
therefore affect the amount, timing and character of distributions to
shareholders.
Depending on a Portfolio's percentage ownership in an underlying Fund both
before and after a redemption, a Portfolio's redemption of shares of such Fund
may cause the Portfolio to be treated as not receiving capital gain income on
the amount by which the distribution exceeds the Portfolio's tax basis in the
shares of the underlying Fund, but instead to be treated as receiving a dividend
taxable as ordinary income on the full amounts of the distribution. This could
cause shareholders of the Portfolio to recognize higher amounts of ordinary
income than if the shareholders had held the shares of the underlying Funds
directly.
Although a Portfolio may itself be entitled to a deduction for foreign
taxes paid by the International Growth Fund, the Portfolio will not be able to
pass any such credit or deduction through its own shareholders.
INVESTMENT ADVISER
The Trust has entered into an advisory agreement with Timothy Partners,
Ltd.(TPL), effective January 19, 1994, as amended August 28, 1995, September 1,
1997, May 1, 1999, and October 1, 2000 for the provision of investment advisory
services on behalf of the Trust to each Fund and Portfolio, subject to the
supervision and direction of the Trust's Board of Trustees.
TPL further has voluntarily undertaken to waive its advisory fee and reimburse
expenses on behalf of certain Funds to the extent normal operating expenses
(including investment advisory fees but excluding interest, taxes, brokerage
fees, commissions and extraordinary charges) exceed certain percentages for
those Funds. The percentages for each Fund are set forth in the Funds'
Prospectus. TPL may terminate its undertaking at any time by written notice to
the Board. You will be notified if TPL exercises such a right.
5
<PAGE>
The Investment Advisory Agreement is initially effective for two years. The
Investment Advisory Agreement may be renewed after its initial term only so long
as such renewal and continuance are specifically approved at least annually by
the Board of Trustees or by vote of a majority of the outstanding voting
securities of the Trust, and only if the terms of the renewal thereof have been
approved by the vote of a majority of the Trustees of the Trust who are not
parties thereto or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval. The Investment
Advisory Agreement will terminate automatically in the event of its assignment.
The table below sets forth the investment advisory fees payable to TPL for the
last three years for each of the Trust's Funds and Portfolios. The table also
sets forth the amounts reimbursed to each Fund by TPL pursuant to its voluntary
commitment to limit Fund expenses.
---------------------------------------------------------------------------
FUND 1997 1998 1999
---------------------------------------------------------------------------
SMALL-CAP VALUE FUND
IA Fees Payable to TPL $142,990 $215,187 $220,068
Amount Reimbursed by TPL ($193,945) ($124,004) ($129,595)
---------------------------------------------------------------------------
LARGE/MID-CAP VALUE FUND
IA Fees Payable to TPL N/A N/A $3,228
Amount Reimbursed by TPL N/A N/A ($12,527)
---------------------------------------------------------------------------
FIXED INCOME FUND
IA Fees Payable to TPL N/A N/A $689
Amount Reimbursed by TPL N/A N/A ($14,206)
---------------------------------------------------------------------------
MONEY MARKET FUND
IA Fees Payable to TPL N/A N/A $973
Amount Reimbursed by TPL N/A N/A ($8,025)
---------------------------------------------------------------------------
AGGRESSIVE GROWTH FUND
IA Fees Payable to TPL N/A N/A N/A
Amount Reimbursed by TPL N/A N/A N/A
---------------------------------------------------------------------------
LARGE/MID-CAP GROWTH FUND
IA Fees Payable to TPL N/A N/A N/A
Amount Reimbursed by TPL N/A N/A N/A
---------------------------------------------------------------------------
STRATEGIC GROWTH PORTFOLIO
IA Fees Payable to TPL N/A N/A N/A
Amount Reimbursed by TPL N/A N/A N/A
---------------------------------------------------------------------------
CONSERVATIVE GROWTH
PORTFOLIO N/A N/A N/A
IA Fees Payable to TPL N/A N/A N/A
Amount Reimbursed by TPL
---------------------------------------------------------------------------
The Aggressive Growth Fund, Large/Mid-Cap Growth Fund, Strategic Growth
Portfolio and Conservative Growth Portfolio had not commenced operations prior
to December 31, 1999, so no advisory fees were payable to TPL.
6
<PAGE>
INVESTMENT MANAGERS
Pursuant to an agreement between TPL, the Trust and Awad & Associates ("Awad"),
dated January 1, 1997, as amended May 1, 1998 (the "Sub-Investment Advisory
Agreement"), Awad provides advice and assistance to TPL in the selection of
appropriate investments for Small-Cap Value Fund and the Small-Cap Variable
Series, subject to the supervision and direction of the Funds' Board of
Trustees. As compensation for its services, with respect to each Fund, Awad
receives from TPL an annual fee at a rate equal to 0.42% of the first $10
million in assets of the Fund; 0.40% of the next $5 million in assets; 0.35% of
the next $10 million in assets; and 0.25% of assets over $25 million.
Pursuant to an agreement between TPL, the Trust and Carr & Associates, Inc.
("Carr"), dated May 1, 1999 (the "Sub-Investment Advisory Agreement"), Carr
provides advice and assistance to TPL in the selection of appropriate
investments for Fixed-Income Fund, Money Market Fund and the Fixed-Income
Variable Series, subject to the supervision and direction of the Funds' Board of
Trustees. As compensation for its services, with respect to the Fixed-Income
Fund and Fixed-Income Variable series, Carr receives from TPL an annual fee at a
rate equal to 0.20% of the average net assets of each Fund. As compensation for
its services with respect to the Money Market Fund, Carr receives from TPL an
annual fee at a rate equal to 0.08% of the average net assets of the Fund.
Pursuant to an agreement between TPL, the Trust and Fox Asset Management, Inc.
("Fox"), dated May 1, 1999 (the "Sub-Investment Advisory Agreement"), Fox
provides advice and assistance to TPL in the selection of appropriate
investments for the Large/Mid-Cap Value Fund and the Large/Mid-Cap Variable
Series, subject to the supervision and direction of the Funds' Board of
Trustees. As compensation for its services, with respect to each Fund, Fox
receives from TPL an annual fee at a rate equal to 0.42% of the first $10
million in assets of the Fund; 0.40% of the next $5 million in assets; 0.35% of
the next $10 million in assets; and 0.25% of assets over $25 million.
Pursuant to an agreement between TPL, the Trust and Rittenhouse Financial
Services, Inc. ("Rittenhouse"), dated October 1, 2000 (the "Sub-Investment
Advisory Agreement"), Rittenhouse provides advice and assistance to TPL in the
selection of appropriate investments for the Aggressive Growth Fund, subject to
the supervision and direction of the Funds' Board of Trustees. As compensation
for its services, with respect to the Fund, Rittenhouse receives from TPL an
annual fee at a rate equal to 0.42% of the first $10 million in assets of the
Fund; 0.40% of the next $5 million in assets; 0.35% of the next $10 million in
assets; and 0.25% of assets over $25 million.
Pursuant to an agreement between TPL, the Trust and Provident Investment
Counselors, Inc. ("Provident"), dated October 1, 2000 (the "Sub-Investment
Advisory Agreement"), Provident provides advice and assistance to TPL in the
selection of appropriate investments for the Large/Mid-Cap Growth Fund, subject
to the supervision and direction of the Funds' Board of Trustees. As
compensation for its services, with respect to the Fund, Provident receives from
TPL an annual fee at a rate equal to 0.42% of the first $10 million in assets of
the Fund; 0.40% of the next $5 million in assets; 0.35% of the next $10 million
in assets; and 0.25% of assets over $25 million.
The Sub-Investment Advisory Agreements are each initially effective for two
years. The Agreements may be renewed by the parties after their initial terms
only so long as such renewal and continuance are specifically approved at least
annually by the Board of Trustees or by vote of a majority of the outstanding
voting securities of the Trust, and only if the terms of renewal thereof have
been approved by the vote of a majority of the Trustees of the Trust who are not
parties thereto or interested persons of any such party, cast in person at the
meeting called for the purpose of voting on such approval. The Sub-Investment
Advisory Agreements will terminate automatically in the event of their
assignment.
PRINCIPAL UNDERWRITER
Effective July 1, 1997, Timothy Partners, Ltd. (TPL), 1304 West Fairbanks
Avenue, Winter Park, Florida 32789, acts as an underwriter of the Timothy Funds'
and the Timothy Variable Funds' shares for the purpose of
7
<PAGE>
facilitating the registration of shares of the Funds under state securities laws
and to assist in sales of shares pursuant to an underwriting agreement (the
"Underwriting Agreement") approved by the Fund's Trustees. TPL is not
compensated for providing underwriting services to the Funds.
In that regard, TPL has agreed at its own expense to qualify as a broker/dealer
under all applicable federal or state laws in those states which the Funds shall
from time to time identify to TPL as states in which it wishes to offer its
shares for sale, in order that state registrations may be maintained by the
Funds.
TPL is a broker/dealer registered with the U.S. Securities and Exchange
Commission and is a member in good standing of the National Association of
Securities Dealers, Inc.
The Funds and Portfolios shall continue to bear the expense of all filing or
registration fees incurred in connection with the registration of shares under
state securities laws.
The Underwriting Agreement may be terminated by either party upon 60 days' prior
written notice to the other party.
ADMINISTRATOR
Unified Financial Services, Inc., 431 North Pennsylvania Street, Indianapolis,
IN 46204 ("Unified"), provides Transfer Agent, Fund Accounting and certain
Administrative services to the Trust pursuant to an Administrative Services
Agreement dated July 1, 1999.
Under the Administrative Services Agreement, Unified: (1) coordinates with the
Custodian and performs Transfer Agent services to the Funds; (2) coordinates
with, and monitors, any third parties furnishing services to the Funds; (3)
provides the Funds with necessary office space, telephones and other
communications facilities and personnel competent to perform administrative and
clerical functions; (4) supervises the maintenance by third parties of such
books and records of the Funds as may be required by applicable federal or state
law; (5) prepares or supervises the preparation by third parties of all federal,
state and local tax returns and reports of the Funds required by applicable law;
(6) prepares and, after approval by the Funds, files and arranges for the
distribution of proxy materials and periodic reports to shareholders of the
Funds as required by applicable law; (7) reviews and submits to the officers of
the Funds for their approval invoices or other requests for payment of the
Funds' expenses and instructs the Custodian to issue checks in payment thereof;
and (8) takes such other action with respect to the Funds as may be necessary in
the opinion of Unified to perform its duties under the agreement.
Prior to July 1, 1999, Declaration Service Company, 555 North Lane, Suite 6160,
Conshohoken, PA 19428, served as the Administrator. For the Trust's fiscal years
ended December 31, 1997, 1998, and 1999, the Trust paid $ 65,386, $113,738, and
$146,604 respectively, for Administration fees.
ALLOCATION OF PORTFOLIO BROKERAGE
The Adviser and/or Investment Manager, when effecting the purchases and sales of
portfolio securities for the account of the Fund/Portfolios, will seek execution
of trades either (i) at the most favorable and competitive rate of commission
charged by any broker, dealer or member of an exchange, or (ii) at a higher rate
of commission charges if reasonable in relation to brokerage and research
services provided to the Fund/Portfolios or the Investment Manager by such
member, broker, or dealer. Such services may include, but are not limited to,
any one or more of the following: information on the availability of securities
for purchase or sale, statistical or factual information, or opinions pertaining
to investments. The Fund/Portfolios' Investment Manager may use research and
services provided to it by brokers and dealers in servicing all its clients;
however, not all such services will be used by the Investment Manager in
connection with the Funds. Brokerage may also be allocated to dealers in
consideration of the each Fund's share distribution but only when execution and
price are comparable to that offered by other brokers.
8
<PAGE>
TPL, through the Investment Managers, is responsible for making the
Fund/Portfolios ' portfolio decisions subject to instructions described in the
Prospectus. The Board of Trustees may however impose limitations on the
allocation of portfolio brokerage.
Securities held by one Fund may also be held by another Fund or other accounts
for which TPL or the Investment Manager serves as an advisor, or held by TPL or
the Investment Manager for their own accounts. If purchases or sales of
securities for a Fund or other entities for which they act as investment advisor
or for their advisory clients arise for consideration at or about the same time,
transactions in such securities will be made, insofar as feasible, for the
respective entities and clients in a manner deemed equitable to all. To the
extent that transactions on behalf of more than one client of TPL or Investment
Manager during the same period may increase the demand for securities being
purchased or the supply of securities being sold, there may be an adverse effect
on price.
On occasions when TPL or an Investment Manager deems the purchase or sale of a
security to be in the best interests of one Fund or more Funds or other
accounts, they may to the extent permitted by applicable laws and regulations,
but will not be obligated to, aggregate the securities to be sold or purchased
for the Fund with those to be sold or purchased for the other Fund or accounts
in order to obtain favorable execution and lower brokerage commissions. In that
event, allocation of the securities purchased or sold, as well as the expenses
incurred in the transaction, will be made by an Investment Manager in the manner
it considers to be most equitable and consistent with its fiduciary obligations
to the Funds and to such other accounts. In some cases this procedure may
adversely affect the size of the position obtainable for a Fund.
The Board of Trustees of the Trust periodically reviews the brokerage placement
practices of the Investment Managers on behalf of the Fund/Portfolios, and
reviews the prices and commissions, if any, paid by the Fund/Portfolios to
determine if they were reasonable.
PURCHASE OF SHARES
The shares of the Timothy Fund/Portfolios are continuously offered by the
distributor. Orders will not be considered complete until receipt by the
distributor of a completed account application form, and receipt by the
Custodian of payment for the shares purchased. Once both are received, such
orders will be confirmed at the next determined net asset value per share, plus
the applicable sales load for Class A shares (based upon valuation procedures
described in the Prospectus), as of the close of business of the business day on
which the completed order is received, normally 4 o'clock p.m. Eastern Time.
Completed orders received by the Fund/Portfolios after 4 o'clock p.m. will be
confirmed at the next day's price.
TAX-DEFERRED RETIREMENT PLANS
Shares of the Timothy Fund/Portfolios are available to all types of tax-deferred
retirement plans such as Individual Retirement Accounts (IRA's), employer-
sponsored defined contribution plans (including 401(k) plans) and tax-sheltered
custodial accounts described in Section 403(b)(7) of the Internal Revenue Code.
Qualified investors benefit from the tax-free compounding of income dividends
and capital gains distributions. The Timothy Fund/Portfolios sponsor an IRA.
Individuals, who are not active participants (and, when a joint return is filed,
who do not have a spouse who is an active participant) in an employer maintained
retirement plan are eligible to contribute on a deductible basis to an IRA
account. The IRA deduction is also retained for individual taxpayers and married
couples with adjusted gross incomes not in excess of certain specified limits.
All individuals who have earned income may make nondeductible IRA contributions
to the extent that they are not eligible for a deductible contribution. Income
earned by an IRA account will continue to be tax deferred.
9
<PAGE>
A special IRA program is available for employers under which the employers may
establish IRA accounts for their employees in lieu of establishing tax qualified
retirement plans. Known as SEP-IRA's (Simplified Employee Pension-IRA), they
free the employer of many of the record keeping requirements of establishing and
maintaining a tax qualified retirement plan trust.
If you are entitled to receive a distribution from a qualified retirement plan,
you may rollover all or part of that distribution into the Timothy
Fund/Portfolios' IRA. Your rollover contribution is not subject to the limits on
annual IRA contributions. You can continue to defer Federal income taxes on your
contribution and on any income that is earned on that contribution.
The Timothy Fund/Portfolios also sponsor 403(b)(7) Retirement Plans. The
Fund/Portfolios offer a plan for use by schools, hospitals, and certain other
tax-exempt organizations or associations who wish to use shares of the Timothy
Fund/Portfolios as a funding medium for a retirement plan for their employees
(the "403(b)(7) Plan"). Contributions are made to the 403(b)(7) Plan as a
reduction to the employee's regular compensation. Such contributions, to the
extent they do not exceed applicable limitations (including a generally
applicable limitation of $9,500 per year), are excludable from the gross income
of the employee for Federal Income tax purposes.
The Timothy Fund/Portfolios also offer a Roth IRA. While contributions to a Roth
IRA are not currently deductible, the amounts within the accounts accumulate
tax-free and qualified distributions will not be included in a shareholder's
taxable income. The contribution limit is $2,000 annually ($4,000 for joint
returns) in aggregate with contributions to traditional IRAs. Certain income
phaseouts apply.
In all these Plans, distributions of net investment income and capital gains
will be automatically reinvested.
All the foregoing retirement plan options require special plan documents. Please
call the Timothy Plan at (800) TIM-PLAN (800-846-7526) to obtain information
regarding the establishment of retirement plan accounts. In the case of IRAs and
403(b)(7) Plans, Semper Trust Company acts as the plan custodian and charges
$12.00 per account in connection with plan establishment and maintenance. These
fees are detailed in the plan documents. You should consult with your attorney
or other tax advisor for specific advice prior to establishing a plan.
REDEMPTIONS
The redemption price will be based upon the net asset value per share (subject
to any applicable CDSC for Class B shares) next determined after receipt of the
redemption request, provided it has been submitted in the manner described
below. The redemption price may be more or less than your cost, depending upon
the net asset value per share at the time of redemption. Class B shares of the
Timothy Fund/Portfolios may be redeemed through certain brokers, financial
institutions or service organizations, banks and bank trust departments who may
charge 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
purchased directly from the Timothy Fund/Portfolios.
Payment for shares tendered for redemption is made by check within seven days
after tender in proper form, except that the Funds reserve the right to suspend
the right of redemption, or to postpone the date of payment upon redemption
beyond seven days: (i) for any period during which the NYSE is restricted, (ii)
for any period during which an emergency exists as determined by the U.S.
Securities and Exchange Commission as a result of which disposal of securities
owned by the Funds is not reasonably predictable or it is not reasonably
practicable for the Funds fairly to determine the value of its net assets, or
(iii) for such other periods as the U.S. Securities and Exchange Commission may
by order permit for the protection of shareholders of the Funds.
Pursuant to the Trust'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 Trust has elected, pursuant to Rule 18f-1 under the 1940
Act, to redeem its shares solely in cash up to the lesser of $250,000 or 1% of
the net asset value of the Trust, 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 Trust. Any
portfolio securities paid or distributed in-kind would be valued as described
under "Determination of Net Asset Value" in the each Fund's prospectus. 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 Funds.
10
<PAGE>
In-kind payments need not constitute a cross-section of a Fund's' portfolio.
Where a shareholder has requested redemption of all or a part of the
shareholder's investment, and where a Fund completes such redemption in-kind,
that Fund will not recognize gain or loss for federal tax purposes, on the
securities used to complete the redemption. 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.
OFFICERS AND TRUSTEES OF THE TRUST
The Trustees and principal executive officers and their principal occupations
for the past five years are listed below.
11
<PAGE>
--------------------------------------------------------------------------------
DATE PERSON BECAME A
TRUSTEE & TRUST PRINCIPAL OCCUPATION
NAME, ADDRESS & AGE OFFICES HELD, IF ANY DURING PAST 5 YEARS
--------------------------------------------------------------------------------
Arthur D. Ally (58)* Trustee since January, President and controlling
1304 West Fairbanks 1994. Currently shareholder of Covenant Funds,
Avenue serves as President of Inc.("CFI"), a holding
Winter Park, FL the Trust and Chairman company. President and general
of the Board of partner of Timothy Partners,
Trustees. Ltd.("TPL"), the investment
adviser and principal
underwriter to each Fund. CFI
is also the managing general
partner of TPL.
--------------------------------------------------------------------------------
Joseph E. Boatwright Trustee since April, Retired Minister. Currently
(68)** 1995. Currently serves as a consultant to the
1410 Hyde Park Drive serves as Secretary to Greater Orlando Baptist
Winter Park, FL the Trust. Association. Served as Senior
Pastor to the Aloma Baptist
Church from 1970-1996.
--------------------------------------------------------------------------------
Wesley W. Pennington Trustee since January, President, Westwind Holdings,
(68) 1994. Currently Inc., a development company,
442 Raymond Avenue serves as Treasurer to since 1997. President and
Longwood, FL the Trust. controlling shareholder,
Weston, Inc., a fabric
treatment company, form
1979-1997.
--------------------------------------------------------------------------------
Jock M. Sneddon (51)** Trustee since January, Physician, Florida Hospital
6001 Vineland Drive 1997. Center.
Orlando, FL
--------------------------------------------------------------------------------
W. Thomas Fyler, Jr. Trustee since President, controlling
(42) December, 1998 shareholder of W.T. Fyler,
90 West Street, Suite Jr./Ephesus, Inc., a New York
1820 State registered investment
New York, NY 10006 advisory firm. Founding member
of the National Association of
Christian Financial Consultants.
--------------------------------------------------------------------------------
Randy R. Brunson (43) Trustee since June 21, Founder and Principal of
4500 Hugh Howell Rd, 2000 Brunson Financial Management,
Suite 750 Inc., a financial planning and
Tucker, GA 30084 investment advisory firm
located in Atlanta, Georgia.
Member, Institute of Certified
Financial Planners, the
Institute for Investment
Management Consulting, and the
Atlanta Health Care Alliance,
among others.
--------------------------------------------------------------------------------
12
<PAGE>
--------------------------------------------------------------------------------
Mathew D. Staver Trustee since June 21, Attorney specializing in free
(43)** 2000 speech, appellate practice and
210 East Palmetto Ave. religious liberty
Longwood, FL 32750 constitutional law. 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 Trustee since June 21, Director of Finance, Hospice of
(65) 2000 the Comforter, Inc., a
1145 Cross Creek non-profit organization.
Altamonte Springs, FL Formerly Comptroller, 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) Trustee since June 21, Principal and co-founder of
1215 Fern Ridge 2000 The Financial Engineering
Parkway, Suite 110 Center, Inc. a registered
Creve Coeur, MO investment advisory firm.
Co-founder, treasurer and
director 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.
--------------------------------------------------------------------------------
* 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.
The officers conduct and supervise the daily business operations of the Funds,
while the Trustees, in addition to functions set forth under "Investment
Advisor," "Investment Manager," and "Underwriter," review such actions and
decide on general policy. Compensation to officers and Trustees of the Funds who
are affiliated with TPL is paid by TPL, and not by the Fund. For the fiscal year
ended December 31, 1999, the Timothy Funds did not pay compensation to any of
its Trustees. In addition, no Trustee served on the Board of Directors of
another investment company managed by TPL for the calendar year ended December
31, 1999. As of December 31, 1999, the Timothy Variable Funds did not pay
compensation to any of its trustees.
DISTRIBUTION PLANS
As noted in the Prospectus, the Trust has adopted a plan pursuant to Rule 12b-1
under the 1940 Act (collectively, the "Plans") for each Share Class offered by
the Fund/Portfolios whereby the Fund/Portfolios may pay up to a maximum of 0.25%
for Class A shares, and up to a maximum of 1.00% for Class B shares (of which,
up to 0.25% may be service fees to be paid by each respective class of shares to
TPL, dealers and others, for providing personal service and/or maintaining
shareholder accounts) per annum of its average daily net assets for expenses
incurred by the Underwriter in the distribution of the Timothy Fund's shares.
The fees are paid on a monthly basis, based on the Fund's average daily net
assets attributable to such class of shares.
Pursuant to the Plans, TPL, as underwriter, is paid a fee each month (up to the
maximum of 0.25% for Class A shares and 1.00% for Class B shares per annum of
average net assets of each Timothy Fund/Portfolio) for expenses incurred in the
distribution and promotion of the shares, including but not limited to, printing
of
13
<PAGE>
prospectuses and reports used for sales purposes, preparation and printing of
sales literature and related expenses, advertisements, and other
distribution-related expenses as well as any distribution or service fees paid
to securities dealers or others who have executed a dealer agreement with the
underwriter. Any expense of distribution in excess of 0.25% for Class A shares
or 1.00% for Class B shares per annum will be borne by the TPL without any
additional payments by the Fund/Portfolios. You should be aware that it is
possible that Plan accruals will exceed the actual expenditures by TPL for
eligible services. Accordingly, such fees are not strictly tied to the provision
of such services.
Effective July 1, 1997, Timothy Partners, Ltd. (TPL), began serving as the
Timothy Funds' sole underwriter. For the period July 1, 1997 to December 31,
1997, the Small-Cap Value Fund reimbursed TPL $58,563 for distribution-related
expenses as follows: $12,917 compensation to dealers for Class A shares and $34,
074 compensation to dealers for Class B shares and $10,572 for servicing the
Class B shareholder accounts. As of December 31, 1998, the Small-Cap Value Fund
reimbursed TPL $63,290 for distribution-related expenses as follows: $30,886
compensation to dealers for Class A shares and $32,404 compensation to dealers
for Class B shares and for servicing the Class B shareholder accounts. As of
December 31, 1999, the Small-Cap Value Fund reimbursed TPL $164,988 for
distribution and service-related expenses Class A shares and $2,035 compensation
to dealers for Class B shares and for servicing the Class B shareholder
accounts.
The Plans also provide that to the extent that the Fund/Portfolios, TPL, the
Investment Managers, or other parties on behalf of the Fund/Portfolios, TPL, or
the Investment Managers make payments that are deemed to be payments for the
financing of any activity primarily intended to result in the sale of shares
issued by the Fund/Portfolios within the context of Rule 12b-1, such payments
shall be deemed to be made pursuant to the Plans. In no event shall the payments
made under the Plans, plus any other payments deemed to be made pursuant to the
Plans, exceed the amount permitted to be paid pursuant to the Conduct Rules of
the National Association of Securities Dealers, Inc., Article III, Section
26(d)(4).
The Board of Trustees has determined that a consistent cash flow resulting from
the sale of new shares is necessary and appropriate to meet redemptions and to
take advantage of buying opportunities without having to make unwarranted
liquidations of portfolio securities. The Board therefore believes that it will
likely benefit the Fund/Portfolios to have moneys available for the direct
distribution activities of the Underwriter in promoting the sale of the
Fund/Portfolios's shares, and to avoid any uncertainties as to whether other
payments constitute distribution expenses on behalf of the Fund/Portfolios. The
Board of Trustees, including the non- interested Trustees, has concluded that in
the exercise of their reasonable business judgment and in light of their
fiduciary duties, there is a reasonable likelihood that the Plans will benefit
the Fund/Portfolios and their shareholders.
The Plans have been approved by the Board of Trustees, including all of the
Trustees who are non-interested persons as defined in the 1940 Act. The Plans
must be renewed annually by the Board of Trustees, including a majority of the
Trustees who are non-interested persons of the Fund/Portfolios and who have no
direct or indirect financial interest in the operation of the Plans. The votes
must be cast in person at a meeting called for that purpose. It is also required
that the selection and nomination of such Trustees be done by the non-interested
Trustees. The Plans and any related agreements may be terminated at any time,
without any penalty: 1) by vote of a majority of the non-interested Trustees on
not more than 60 days' written notice, 2) by the Underwriter on not more than 60
days' written notice, 3) by vote of a majority of the Fund's outstanding shares,
on 60 days' written notice, and 4) automatically by any act that terminates the
Underwriting Agreement with the underwriter. The underwriter or any dealer or
other firm may also terminate their respective agreements at any time upon
written notice.
The Plans and any related agreement may not be amended to increase materially
the amounts to be spent for distribution expenses without approval by a majority
of the Fund/Portfolios' outstanding shares, and all material amendments to the
Plans or any related agreements shall be approved by a vote of the
non-interested Trustees, cast in person at a meeting called for the purpose of
voting on any such amendment.
14
<PAGE>
The underwriter is required to report in writing to the Board of Trustees of the
Fund, at least quarterly, on the amounts and purpose of any payment made under
the Plans, as well as to furnish the Board with such other information as may
reasonably be requested in order to enable the Board to make an informed
determination of whether the Plans should be continued.
TAXATION
The Timothy Fund/Portfolios intend to qualify each year as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code").
In order to so qualify, a Fund/Portfolio must, among other things (i) derive at
least 90% of its gross income from dividends, interest, payments with respect to
certain securities loans, gains from the sale of securities or foreign
currencies, or other income (including but not limited to gains from options,
futures or forward contracts) derived with respect to its business of investing
in such stock, securities or currencies; (ii) distribute at least 90% of its
dividends, interest and certain other taxable income each year; and (iii) at the
end of each fiscal quarter maintain at least 50% of the value of its total
assets in cash, government securities, securities of other regulated investment
companies, and other securities of issuers which represent, with respect to each
issuer, no more than 5% of the value of a Fund/Portfolio's total assets and 10%
of the outstanding voting securities of such issuer, and with no more than 25%
of its assets invested in the securities (other than those of the government or
other regulated investment companies) of any one issuer or of two or more
issuers which the Fund controls and which are engaged in the same, similar or
related trades and businesses.
To the extent each Fund/Portfolio qualifies for treatment as a regulated
investment company, it will not be subject to federal income tax on income and
net capital gains paid to shareholders in the form of dividends or capital gains
distributions.
An excise tax at the rate of 4% will be imposed on the excess, if any, of the
Fund/Portfolios' "required distributions" over actual distributions in any
calendar year. Generally, the "required distribution" is 98% of a Fund's
ordinary income for the calendar year plus 98% of its capital gain net income
recognized during the one-year period ending on December 31 plus undistributed
amounts from prior years. The Fund/Portfolios intend to make distributions
sufficient to avoid imposition of the excise tax. Distributions declared by the
Fund/Portfolios during October, November or December to shareholders of record
during such month and paid by January 31 of the following year will be taxable
to shareholders in the calendar year in which they are declared, rather than the
calendar year in which they are received.
Shareholders will be subject to federal income taxes on distributions made by
the Fund/Portfolios whether received in cash or additional shares of the
Fund/Portfolios. Distributions of net investment income and net short-term
capital gains, if any, will be taxable to shareholders as ordinary income.
Distributions of net long-term capital gains, if any, will be taxable to
shareholders as long-term capital gains, without regard to how long a
shareholder has held shares of the Fund. A loss on the sale of shares held for
six months or less will be treated as a long-term capital loss to the extent of
any long-term capital gain dividend paid to the shareholder with respect to such
shares. Dividends eligible for designation under the dividends received
deduction and paid by the Funds may qualify in part for the 70% dividends
received deduction for corporations provided, however, that those shares have
been held for at least 45 days.
The Trust will notify shareholders each year of the amount of dividends and
distributions, including the amount of any distribution of long-term capital
gains, and the portion of its dividends which may qualify for the 70% deduction.
The foregoing is a general and abbreviated summary of the applicable provisions
of the Code and Treasury regulations currently in effect. For the complete
provisions, reference should be made to the pertinent Code sections and
regulations. The Code and regulations are subject to change by legislative or
administrative action at any time, and retroactively.
Each Class of shares of the Timothy Fund/Portfolios will share proportionately
in the investment income and expenses of that Fund, except that each class will
incur different distribution expenses.
Dividends and distributions also may be subject to state and local taxes.
Shareholders are urged to consult their tax advisors regarding specific
questions as to federal, state and local taxes.
15
<PAGE>
GENERAL INFORMATION
AUDITS AND REPORTS
------------------
The accounts of the Trust are audited each year by Tait, Weller & Baker of
Philadelphia, PA, independent certified public accountants whose selection must
be ratified annually by the Board of Trustees.
Shareholders receive semi-annual and annual reports of the Funds, including the
annual audited financial statements and a list of securities owned.
MISCELLANEOUS
-------------
As of April 14, 2000, the following person owned 5% or more of a Class of shares
of a Fund or of the total outstanding shares of a Fund.
<TABLE>
<CAPTION>
HOLDERS OF MORE THAN
5% OF EACH FUND'S SHARES
-----------------------------------------------------------------------------------
% OWNERSHIP OF
NAME OF FUND SHARE NUMBER OF TOTAL
NAME OF IN WHICH CLASS SHARES % OWNERSHIP OUTSTANDING
SHAREHOLDER SHARES HELD OWNED OWNED OF SHARE FUND SHARES,
CLASS ALL CLASSES
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Annuity Timothy Plan
Investors Life, Small-Cap No-Load
FBO annuity Variable 144,655 100% 100%
investors Series
-----------------------------------------------------------------------------------
Liberty Timothy Plan
Counsel, Inc. Money Market No Load
FBO, Fund 116,147 10.50% 10.50%
beneficiaries
-----------------------------------------------------------------------------------
Timothy Plan
Sneddon, JM Money Market No Load
Fund 103,276 9.34% 9.34%
-----------------------------------------------------------------------------------
Timothy Plan
Kerchner, DM Money Market No Load
Fund 88,896 8.04% 8.04%
-----------------------------------------------------------------------------------
Donaldson, Timothy Plan
Lufkin & Small-Cap
Jenrette, FBO Value Fund Class A 61,292 5.65% 2.65%
customer accts.
-----------------------------------------------------------------------------------
Donaldson, Timothy Plan
Lufkin & Small-Cap
Jenrette, FBO Value Fund Class A 59,470 5.48% 2.57%
customer accts.
-----------------------------------------------------------------------------------
Timothy Plan
Davis, D Small-Cap
Value Fund Class A 55,823 5.14% 2.41%
-----------------------------------------------------------------------------------
Timothy Plan
Demunnick, B Small-Cap
Value Fund Class B 93,932 7.81% 4.06%
-----------------------------------------------------------------------------------
Donaldson, Timothy Plan
Lufkin & Small-Cap
Jenrette, FBO Value Fund Class C 22,395 87.80% 0.97%
customer accts.
-----------------------------------------------------------------------------------
16
<PAGE>
-----------------------------------------------------------------------------------
Timothy Plan
Wuertz, DR Large/Mid-Cap
Value Fund Class A 13,503 5.98% 3.78%
-----------------------------------------------------------------------------------
Timothy Plan
RigidPly Large/Mid-Cap
Rafters, Inc. Value Fund Class A 65,527 29.02% 18.37%
-----------------------------------------------------------------------------------
Timothy Plan
Mylod, R Large/Mid-Cap
Value Fund Class A 37,644 16.67% 10.55%
-----------------------------------------------------------------------------------
Timothy Plan
Wuertz, DR Large/Mid-Cap
Value Fund Class A 13,503 5.98% 3.78%
-----------------------------------------------------------------------------------
Timothy Plan
Zawaki, IRA Large/Mid-Cap
Value Fund Class A 12,615 5.59% 3.54%
-----------------------------------------------------------------------------------
Timothy Plan
Kelly, E. Large/Mid-Cap
Value Fund Class A 12,152 5.38% 3.40%
-----------------------------------------------------------------------------------
Timothy Plan
NFCS FBO Large/Mid-Cap
customer accts. Value Fund Class B 31,822 28.17% 8.92%
-----------------------------------------------------------------------------------
Timothy Plan
Walker, DM Large/Mid-Cap
Value Fund Class B 8,081 7.15% 2.23%
-----------------------------------------------------------------------------------
Timothy Plan
Lammers, JD Large/Mid-Cap
Value Fund Class B 6,703 5.93% 1.88%
-----------------------------------------------------------------------------------
Timothy Plan
Murphy, CM Large/Mid-Cap
Value Fund Class B 6,302 5.58% 1.77%
-----------------------------------------------------------------------------------
Timothy Plan
St. Josaphats Large/Mid-Cap
Value Fund Class C 1,043 5.80% 0.29%
-----------------------------------------------------------------------------------
Timothy Plan
Bernard, RT Large/Mid-Cap
Value Fund Class C 4,034 22.44% 1.13%
-----------------------------------------------------------------------------------
Timothy Plan
Fox Asset Large/Mid-Cap
Management, Inc. Value Fund Class C 10,044 55.87% 2.82%
-----------------------------------------------------------------------------------
Timothy Plan
NFCS FBO Fixed Income
customer accts. Fund Class A 1,013 5.62% 1.74%
-----------------------------------------------------------------------------------
Timothy Plan
Breil, R. Fixed Income
Fund Class A 1,024 5.68% 1.76%
-----------------------------------------------------------------------------------
Timothy Plan
Benes, B. Fixed Income
Fund Class A 3,407 18.91% 5.84%
-----------------------------------------------------------------------------------
Timothy Plan
Kluck, MP Fixed Income
Fund Class A 1,310 7.27% 2.25%
-----------------------------------------------------------------------------------
17
<PAGE>
-----------------------------------------------------------------------------------
Timothy Plan
Meekhof, D Fixed Income
Fund Class A 1,227 6.81% 2.10%
-----------------------------------------------------------------------------------
Timothy Plan
Glasscock, J Fixed Income
Fund Class A 1,197 6.64% 2.05%
-----------------------------------------------------------------------------------
Timothy Plan
Carrie, CH Fixed Income
Fund Class A 4,399 24.41% 7.55%
-----------------------------------------------------------------------------------
Timothy Plan
George, C Fixed Income
Fund Class B 3,115 9.36% 5.34%
-----------------------------------------------------------------------------------
Timothy Plan
Geier, MJ Fixed Income
Fund Class B 3,434 10.32% 5.89%
-----------------------------------------------------------------------------------
Timothy Plan
Murphy, CM Fixed Income
Fund Class B 5,623 16.90% 9.65%
-----------------------------------------------------------------------------------
Timothy Plan
Graybill, DM Fixed Income
Fund Class B 5,133 15.43% 8.81%
-----------------------------------------------------------------------------------
Timothy Plan
NFCS FBO Fixed Income
customer accts. Fund Class C 5,225 74.68% 8.96%
-----------------------------------------------------------------------------------
Timothy Plan
Jocelyne, V IRA Fixed Income
Fund Class C 908 12.98% 1.56%
-----------------------------------------------------------------------------------
Timothy Plan
Zollman, VJ Fixed Income
Fund Class C 376 5.38% 0.64%
-----------------------------------------------------------------------------------
</TABLE>
PERFORMANCE
Performance information for the shares of the Timothy Fund/Portfolios will vary
due to the effect of expense ratios on the performance calculations.
Current yield and total return may be quoted in advertisements, shareholder
reports or other communications to shareholders. Yield is the ratio of income
per share derived from the Fund/Portfolios investments to a current maximum
offering price expressed in terms of percent. The yield is quoted on the basis
of earnings after expenses have been deducted. Total return is the total of all
income and capital gains paid to shareholders, assuming reinvestment of all
distributions, plus (or minus) the change in the value of the original
investment, expressed as a percentage of the purchase price. Occasionally, the
Fund/Portfolios may include their distribution rates in advertisements. The
distribution rate is the amount of distributions per share made by a Fund over a
12-month period divided by the current maximum offering price.
U.S. Securities and Exchange Commission ("Commission") rules require the use of
standardized performance quotations or, alternatively, that every
non-standardized performance quotation furnished by the Fund/Portfolios be
accompanied by certain standardized performance information computed as required
by the Commission. Current yield and total return quotations used by the
Fund/Portfolios are based on the standardized methods of computing performance
mandated by the Commission. An explanation of those and other methods used by
the Fund/Portfolios to compute or express performance follows.
18
<PAGE>
As the following formula indicates, the average annual total return is
determined by multiplying a hypothetical initial purchase order of $1,000 by the
average annual compound rate of return (including capital
appreciation/depreciation and dividends and distributions paid and reinvested)
for the stated period less any fees charged to all shareholder accounts and
annualizing the result. The calculation assumes the maximum sales load is
deducted from the initial $1,000 purchase order and that all dividends and
distributions are reinvested at the net asset value on the reinvestment dates
during the period. The quotation assumes the account was completely redeemed at
the end of each one, five and ten-year period and assumes the deduction of all
applicable charges and fees. According to the Commission formula:
P(1+T)/n/ = ERV
where:
P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the one, five or ten-year periods, determined at the end of
the one, five or ten-year periods (or fractional portion thereof).
COMPARISONS AND ADVERTISEMENTS
------------------------------
To help investors better evaluate how an investment in the Fund/Portfolios might
satisfy their investment objective, advertisements regarding the Funds may
discuss total return for the Fund/Portfolios as reported by various financial
publications. Advertisements may also compare total return to total return as
reported by other investments, indices, and averages. The following
publications, indices, and averages may be used:
Lipper Mutual Fund Performance Analysis;
Lipper Mutual Fund Indices;
CDA Weisenberger; and
Morningstar
From time to time, the Fund/Portfolios may also include in sales literature and
advertising (including press releases) TPL comments on current news items,
organizations which violate the Funds' philosophy (and are screened out as
unacceptable portfolio holdings), channels of distribution and organizations
which endorse the Fund as consistent with their philosophy of investment.
FINANCIAL STATEMENTS
The Trust's Financial Statements, including the notes thereto, dated December
31, 1999, which have been audited by Tait, Weller & Baker, are incorporated by
reference from the Timothy Plan's 1999 Annual Report to Shareholders.
19
<PAGE>
PART C. OTHER INFORMATION.
ITEM 23. EXHIBITS.
------------------
(A) Agreement and Declaration of Trust is incorporated herein by reference to
Post Effective Amendment No. 4, electronically filed on April 26, 1996.
(B) By-Laws of Registrant dated January 19, 1994 is incorporated herein by
reference to Post Effective Amendment No. 4, electronically filed on April
26, 1996.
(C) None
(D) Investment Advisory Agreements:
(a)(i) Form of Amendment to Investment Advisory Agreement dated October
1, 2000 between the Registrant and Timothy Partners, Ltd. is
filed herein as Exhibit 23D(a)(i)
(a)(ii) Form of Amendment to Investment Advisory Agreement dated May 1,
1999 between the Registrant and Timothy Partners, Ltd. is
incorporated herein by reference to Post Effective Amendment No.
9, electronically filed on March 17, 1999.
(a)(iii) Form of Amendment to Investment Advisory Agreement dated May 1,
1998 between the Registrant and Timothy Partners, Ltd. is
incorporated herein by reference to Post-Effective No. 8,
electronically filed on April 16, 1998.
(a)(iv) Amendment dated March 12, 1997 to Investment Advisory Agreement
dated January 19, 1994 between Registrant and Timothy Partners,
Ltd. is incorporated herein by reference to Post-Effective No. 6,
electronically filed on July 18, 1997.
(a)(v) Amendment dated August 28, 1995 to Investment Advisory Agreement
dated January 19, 1994 between Registrant and Timothy Partners,
Ltd. is incorporated herein by reference to Post Effective
Amendment No. 4, electronically filed on April 26, 1996.
(a)(vi) Investment Advisory Agreement dated January 19, 1994 between
Registrant and Timothy Partners, Ltd. is incorporated herein by
reference to Post-Effective Amendment No. 4, electronically filed
on April 26, 1996.
(b)(i) Sub-Investment Advisory Agreement dated May 1, 1999 between
Timothy Partners, Ltd., Carr & Associates and the Registrant is
incorporated herein by reference to Post Effective Amendment No.
9, electronically filed on March 17, 1999..
(b)(ii) Sub-Investment Advisory Agreement dated May 1, 1999 between
Timothy Partners, Ltd., Fox Asset Management and the Registrant
is incorporated herein by reference to Post Effective Amendment
No. 9, electronically filed on March 17, 1999.
(b)(iii) Form of Amendment to Sub-Investment Advisory Agreement dated May
1, 1998 between Timothy Partners, Ltd., Awad & Associates and the
Registrant is incorporated herein by reference to Post-Effective
Amendment No. 8 as electronically filed on April 16, 1998.
<PAGE>
(b)(iv) Sub-Investment Advisory Agreement dated January 1, 1997 among
Timothy Partners, Ltd., Awad & Associates and the Registrant is
incorporated by reference to Post-Effective Amendment No. 5, as
electronically filed on ____________.
(b)(v) Sub-Investment Advisory Agreement dated October 1, 2000 among
Timothy Partners, Ltd., Rittenhouse Financial Services, Inc. and
the Registrant is filed herein as Exhibit 23(b)(v).
(b)(vi) Sub-Investment Advisory Agreement dated October 1, 2000 among
Timothy Partners, Ltd., Provident Investment Counselors, Inc. and
the Registrant is filed herein as Exhibit 23(b)(vi).
(E) DISTRIBUTION AGREEMENTS:
Underwriting Agreement dated July 1, 1997 between the Registrant and
Timothy Partners, Ltd. is incorporated herein by reference to
Post-Effective No. 6, electronically filed on July 18, 1997.
(F) None
(G) CUSTODIAN AGREEMENT
Custodian Agreement between Registrant and The Bank of New York, dated
November 11, 1994 is incorporated herein by reference to Post Effective
Amendment No. 5, electronically filed on ----------.
(H) OTHER MATERIAL CONTRACTS:
(a)(i). Amendment dated May 1, 1996 to Administrative Agreement dated
January 19, 1994 between Registrant and Covenant Financial
Management, Inc. is incorporated herein by reference to Post
Effective Amendment No. 4, as electronically filed on April 26,
1996.
(a)(ii) Administrative Agreement dated January 19, 1994 between
Registrant and Covenant Financial Management, Inc. is
incorporated herein by reference to Post Effective Amendment No.
4, as electronically filed on April 26, 1996.
(b)(i) Form of Participation Agreement dated May 1, 1998 among the
Registrant on behalf of The Timothy Plan Variable Series, Annuity
Investors Life Insurance Company and Timothy Partners, Ltd. is
incorporated herein by reference to Post Effective Amendment No.
9, electronically filed on March 17, 1999.
(c)(i) Mutual Fund Services Agreement among the Registrant and Unified
Financial Services, Inc. is incorporated herein by reference to
Post Effective Amendment No. 10, electronically filed on May 1,
2000.
(I) OPINION AND CONSENT OF COUNSEL AS TO THE LEGALITY OF THE SECURITIES TO BE
ISSUED:
(a) Opinion and Consent of David Jones & Assoc., P.C., counsel to the
Trust, is incorporated herein by reference to Post Effective Amendment
No. 10, electronically filed on May 1, 2000.
<PAGE>
(J) CONSENTS
(a) Consent of Tait, Weller & Baker is incorporated by reference from the
Timothy Fund's 1999 Annual Report to Shareholders.
(K) None.
(L) LETTERS OF UNDERSTANDING RELATING TO INITIAL CAPITAL:
(a) Investment letters between the Registrant and Phillis B. Crosby,
Michael J. Demaray, Thomas J. Snyder, William R. Cadle, Bernice I.
Cradle, Mary A. Gibson, Delbert E. Rich, Gwynn M. Reel, Charles E.
Davis, Gregory Tighe and Frank Salerno are incorporated herein by
reference to Post Effective Amendment No. 4, electronically filed on
April 26, 1996.
(M) PLANS UNDER 12b-1:
(a) Distribution Plan dated May 1, 1999 on behalf of Class A Shares for
the Large/Mid-Cap Value and Fixed-Income Funds is incorporated herein
by reference to Post Effective Amendment No. 9, electronically filed
on March 17, 1999.
(b) Distribution Plan dated May 1, 1999 on behalf of Class B Shares for
the Large/Mid-Cap Value and Fixed-Income Funds is incorporated herein
by reference to Post Effective Amendment No. 9, electronically filed
on March 17, 1999
(N) Not Applicable
(O) Not Applicable
(P) Code of Ethics- Filed herein as Exhibit 23(P)
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
-----------------------------------------------------------------------
None.
ITEM 25. INDEMNIFICATION.
--------------------------
Under the terms of the Delaware Business Trust Act and the Registrant's
Agreement and Declaration of Trust and By-Laws, no officer or Trustee of the
Fund shall have any liability to the Fund or its shareholders for damages,
except to the extent such limitation of liability is precluded by Delaware law,
the Agreement and Declaration of Trust, or the By-Laws.
The Delaware Business Trust Act, section 3817, permits a business trust to
indemnify any Trustee, beneficial owner, or other person from and against any
claims and demands whatsoever. Section 3803 protects a Trustee, when acting in
such capacity, from liability to any person other than the business trust or
beneficial owner for any act, omission, or obligation of the business trust or
any Trustee thereof, except as otherwise provided in the Agreement and
Declaration of Trust.
<PAGE>
The Agreement and Declaration of Trust provides that the Trustees shall not be
liable for any neglect or wrong-doing of any officer, agent, employee, manager
or underwriter of the Fund, nor shall any Trustee be responsible for the act or
By-Laws, the Fund may indemnify to the fullest extent each Trustee and officer
of the Fund acting in such capacity, except each Trustee and officer of the Fund
acting in such capacity, except as otherwise provided in the Agreement and
Declaration of Trust.
The Agreement and Declaration of Trust provides that the Trustees shall not be
liable for any neglect or wrong-doing of any officer, agent, employee, manager
or underwriter of the Fund, nor shall any Trustee be responsible for the act or
omission of any other Trustee. Subject to the provisions of; the By-Laws, the
Fund may indemnify to the fullest extent each Trustee and officer of the Fund
acting in such capacity, except that no provision in the Agreement and
Declaration of Trust shall be effective to protect or purport to protect and
indemnify any Trustee or officer of the Fund from or against any liability to
the Fund or any shareholder to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
The By-Laws provide indemnification for each Trustee and officer who is a party
or is threatened to be made a party to any proceeding, by reason of service in
such capacity, to the fullest extent, if it is determined that Trustee or
officer acted in good faith and reasonably believed: (a) in the case of conduct
in his official capacity as an agent of the Fund, that his conduct was in the
Fund's best interests and (b) in all other cases, that his conduct was at least
not opposed to the Fund's best interests and (c) in the case of a criminal
proceeding, that he had no reasonable cause to believe the conduct of that
person was unlawful. However, there shall be no indemnification for any
liability arising by reason of willful misfeasance, bad faith, gross negligence,
or the reckless disregard of the duties involved in the conduct of the Trustee's
or officer's office. Further, no indemnification shall be made:
(a) In respect of any proceeding as to which any Trustee or officer of the Fund
shall have been adjudged to be liable on the basis that personal benefit was
improperly received by him, whether or not the benefit resulted from an action
taken in the person's official capacity; or
(b) In respect of any proceeding as to which any Trustee or officer of the Fund
shall have been adjudged to be liable in the performance of that person's duty
to the Fund, unless and only to the extent that the court in which that action
was brought shall determine upon application that in view of all the relevant
circumstances of the case, that person is fairly and reasonably entitled to
indemnity for the expenses which the court shall determine; however, in such
case, indemnification with respect to any proceeding by or in the right of the
Fund or in which liability shall have been adjudged by reason of the disabling
conduct set forth in the preceding paragraph shall be limited to expenses; or
(c) Of amounts paid in settling or otherwise disposing of a proceeding, with or
without court approval, or of expenses incurred in defending a proceeding which
is settled or otherwise disposed of without court approval, unless the required
court approval set forth in the By-Laws is obtained.
In any event, the Fund shall indemnify each officer and Trustee against
reasonable expenses incurred in connection with the successful defense of any
proceeding to which each such officer or Trustee is a party by reason of service
in such Capacity, provided that the Board of Trustees, including a majority who
are disinterested, non-party Trustees, also determines that such officer or
Trustee was not liable by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of his or her duties or office. The Fundshall
advance to each officer and Trustee who is made a party to the proceeding by
reason of service in such capacity the expenses incurred by such person in
connection therewith, if (a) the officer or Trustee affirms in writing that his
good faith belief that he has met the standard of conduct necessary for
indemnification, and gives a written undertaking to repay the amount of advance
if it is ultimately determined that he has not met those requirements, and (b) a
determination that the facts then known to those making the determination would
not preclude indemnification.
<PAGE>
The Trustees and officers of the Fund are entitled and empowered under the
Declaration of Trust and By-Laws, to the fullest extent permitted by law, to
purchase errors and omissions liability insurance with assets of the Fund,
whether or not the fund would have the power to indemnify him against such
liability under the Declaration of Trust or By-Laws.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to Trustees, officers, the underwriter or control persons
of the Registrant pursuant to the foregoing provisions, the Registrant has been
informed that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in that Act and is,
therefore, unenforceable. See also Item 32.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF ADVISOR.
----------------------------------------------------
Timothy Partners, Ltd. ("TPL") serves as investment advisor of the Fund. The
following persons serving as directors or officers of TPL have held the
following positions with TPL for the past two years.
--------------------------------------------------------------------------------
Positions and Offices Positions and Offices
Name and Business Address with Timothy Partners, with the Registrant
Ltd.
--------------------------------------------------------------------------------
Arthur D. Ally President of Covenant President and Trustee
1304 West Fairbanks Funds, Inc., Managing
Avenue General Partner of
Winter Park Florida Timothy Partners, Ltd.,
32789 and Individual General
Partner of Timothy
Partners, Ltd.
--------------------------------------------------------------------------------
Covenant Financial Management, Inc. is a marketing/consulting firm owned by
Arthur Ally that renders consulting advice to TPL with regard to marketing plans
to be employed to target potential investor groups that might be interested in
investing in the Fund because of its investment objectives and criteria.
ITEM 27. PRINCIPAL UNDERWRITER.
-------------------------------
(a) Timothy Partners, Ltd. (TPL) is the principal underwriter for the
Registrant's securities and currently acts as underwriter for the
Registrant only.
(b) The table below sets forth certain information as to the Underwriter's
Directors, Officers and Control Persons:
--------------------------------------------------------------------------------
Positions and Offices Positions and Offices
Name and Business Address with the Underwriter. with the Registrant
--------------------------------------------------------------------------------
Arthur D. Ally President of Covenant President and Trustee
1304 West Fairbanks Funds, Inc., Managing
Avenue General Partner of
Winter Park Florida Timothy Partners, Ltd.,
32789 and Individual General
Partner of Timothy
Partners, Ltd.
--------------------------------------------------------------------------------
<PAGE>
(c) Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
-------------------------------------------
Each account, book or other document required to be maintained by Section 31(a)
of the 1940 Act and Rules 17 CFR 270.31a-1 to 31a-3 promulgated thereunder, is
maintained by the Fund at 1304 West Fairbanks Avenue, Winter Park, Florida
32789, except for those maintained by the Fund's Custodian, Star Bank, N.A.
Cincinatti, Ohio, and the Fund's Administrator, Transfer, Redemption and
Dividend Disbursing Agent and Accounting Services Agent, Unified Financial
Services, Inc., 431 North Pennsylvania Street, Indianapolis, IN 46204.
ITEM 29. MANAGEMENT SERVICES.
------------------------------
Not applicable.
ITEM 30. UNDERTAKINGS.
------------------------
(a) Inapplicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the Registrant hereby certifies that it meets
all of the requirements for effectiveness of this Post-Effective Amendment No.
10 to its Registration Statement pursuant to Rule 485(b) under the Securities
Act of 1933 and has duly caused this Post-Effective Amendment No. 10 to its
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in Winter Park, State of Florida, on the 15th day of August,
2000.
THE TIMOTHY PLAN
BY: /S/ ARTHUR D. ALLY
------------------------
ARTHUR D. ALLY, PRESIDENT & TRUSTEE
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 9 to the Registrant's Registration Statement has been signed below
by the following persons in the capacities indicated.
SIGNATURE TITLE DATE
/S/ ARTHUR D. ALLY President and Trustee August 15, 2000
------------------------
ARTHUR D. ALLY
/S/ JOSEPH E. BOATWRIGHT Secretary and Trustee August 15, 2000
------------------------
JOSEPH E. BOATWRIGHT
/S/ WESLEY PENNINGTON Treasurer and Trustee August 15, 2000
------------------------
WESLEY PENNINGTON
/S/ W.T. FYLER Trustee August 15, 2000
------------------------
W.T. FYLER
/S/ JOCK M. SNEDDON Trustee August 15, 2000
------------------------
JOCK M. SNEDDON
<PAGE>
EXHIBITS
23D(a)(i) Form of Amendment to Investment Advisory Agreement
23D(b)(v) Form of Sub-Advisory Agreement with Rittenhouse Financial Services,
Inc.
23D(b)(v) Form of Sub-Advisory Agreement with Provident Investment Counselors,
Inc.
23P Code of Ethics of Registrant and its Adviser, Investment Managers and
Principal Underwriter
