<PAGE> 1
As filed with the Securities and Exchange Commission
on June 4, 1996
Registration No. 33-91448 811-9024
------------------------------------
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. 2 /X/
and/or
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 3
(Check appropriate box or boxes)
TIME HORIZON FUNDS
(Exact Name of Registrant as Specified in Charter)
3435 STELZER ROAD
COLUMBUS, OHIO 43219
(Address of Principal Executive Offices, including Zip Code)
J. DAVID HUBER
3435 STELZER ROAD
COLUMBUS, OHIO 43219
(Name and Address of Agent for Service)
COPY TO:
CATHY G. O'KELLY
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 N. LASALLE
CHICAGO, ILLINOIS 60601
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the Registrant
has registered an indefinite number of shares of beneficial interest under the
Securities Act of 1933. Registrant's initial Rule 24f-2 Notice will be filed no
later than August 29, 1996.
It is proposed that this filing will become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b); or
/ / on (date) pursuant to paragraph (b); or
/X/ 60 days after filing pursuant to paragraph (a)(1); or
/ / on (date) pursuant to paragraph (a)(1); or
/ / 75 days after filing pursuant to paragraph (a)(2); or
/ / on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
/ / This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
Explanatory Note: Registrant is filing this Post-Effective Amendment No. 2 to
Registrant's Registration Statement solely to amend Parts A and B of its
Registration Statement to add a supplement thereto and to amend Part C to add
additional exhibits. Part A and Part B of Post-Effective Amendment No. 1 to
Registrant's Registration Statement filed on February 5, 1996 are incorporated
herein by reference to such Post-Effective Amendment No. 1.
<PAGE> 2
CONTENTS OF REGISTRATION STATEMENT
TIME HORIZON FUNDS
The Registration Statement comprises the following papers and contents:
The Facing Sheet
Cross-Reference Sheet
Supplement to Prospectus for Class K Shares
Supplement to Statement of Additional Information
Part A - Prospectus contained in Post-Effective Amendment No. 1 is
incorporated by reference
Part B - Statement of Additional Information contained in Post-Effective
Amendment No. 1 is incorporated by reference
Part C - Other Information
Signatures
Index to Exhibits
Exhibits
2
<PAGE> 3
TIME HORIZON FUNDS
CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 495)
<TABLE>
<CAPTION>
N-1A
ITEM NO. LOCATION
- ------------------------------------------------------------- ----------------------------------------------------
<S> <C>
PART A
Item 1. Cover Page........................................... Cover Page
Item 2. Synopsis............................................. Expense Summary; Supplement to Prospectus
Item 3. Condensed Financial Information...................... Financial Highlights; Supplement to Prospectus
Item 4. General Description of Registrant.................... Cover Page; Fund Investments; The Business of the
Funds; Description of Shares
Item 5. Management of Fund................................... The Business of the Funds
Item 5A. Management's Discussion of Fund
Performance................................. Not Applicable
Item 6. Capital Stock and Other Securities................... Description of Shares; Shareholder Guide; Tax
Information
Item 7. Purchase of Securities Being Offered................. Shareholder Guide; Plan Payments; Supplement to
Prospectus
Item 8. Redemption or Repurchase............................. Shareholder Guide
Item 9. Pending Legal Proceedings............................ Not Applicable
PART B
Item 10. Cover Page........................................... Cover Page
Item 11. Table of Contents.................................... Table of Contents
Item 12. General Information and History...................... Not Applicable
Item 13. Investment Objectives and Policies................... Investment Objectives and Policies
Item 14. Management of the Fund............................... Management
Item 15. Control Persons and Principal Holders of
Securities....................................... General Information
Item 16. Investment Advisory and Other Services............... Management
Item 17. Brokerage Allocation and Other Practices............. Management
Item 18. Capital Stock and Other Securities................... General Information
Item 19. Purchase, Redemption and Pricing of
Securities Being Offered ........................ Additional Purchase and Redemption Information
Item 20. Tax Status........................................... Additional Information Concerning Taxes
Item 21. Underwriters......................................... General Information
Item 22. Calculation of Performance Data...................... General Information
Item 23. Financial Statements................................. Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to the Registration Statement.
3
<PAGE> 4
TIME HORIZON FUNDS
(THE "COMPANY")
TIME HORIZON PORTFOLIO 1
TIME HORIZON PORTFOLIO 2
TIME HORIZON PORTFOLIO 3
(COLLECTIVELY, THE "FUNDS" AND INDIVIDUALLY, A "FUND")
SUPPLEMENT DATED JULY 1, 1996
TO PROSPECTUS DATED FEBRUARY 5, 1996
1. CLASS K SHARES
Each Fund currently offers three classes of shares to provide investors
with different purchasing options. These are Class A shares and Class B shares,
which are described in the prospectus, and Class K shares, which are described
in the prospectus as supplemented hereby. The primary distinctions among the
classes lie in their initial and contingent deferred sales charge schedules and
in their ongoing expenses, including asset-based charges in the form of Rule
12b-1 distribution or administrative services fees. Class K shares are offered
at net asset value without an initial sales charge or a contingent deferred
sales charge, but subject to distribution and administrative services plan and
shareholder servicing fees. Class K Shares of the Fund may be exchanged for
Class K Shares of another Time Horizon Fund or Pacific Horizon Fund with no
sales charge.
Class K shares are available for purchase exclusively by the following
investors:
O business and other organizations that participate in the Daily
Advantage(R) Retirement Plan Program sponsored by Bank of
America; and
O individuals investing the proceeds of a redemption from
another open-end investment company on which a front-end sales
charge was paid if (i) such redemption occurred within thirty
(30) days prior to the date of the purchase order and (ii)
such other open-end investment company was not distributed and
advised by Concord Financial Group, Inc. and Bank of America,
respectively, or their affiliates.
<PAGE> 5
EXPENSE SUMMARY
<TABLE>
<CAPTION>
PORTFOLIO 1 PORTFOLIO 2 PORTFOLIO 3
----------- ----------- -----------
SHAREHOLDER TRANSACTION EXPENSES CLASS K CLASS K CLASS K
------- ------- -------
<S> <C> <C> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of
offering price) (1)(2)............................................... None None None
Sales Load Imposed on Reinvested Dividends........................... None None None
Maximum Contingent Deferred Sales Load............................... None None None
Redemption Fee....................................................... None None None
Exchange Fee......................................................... None None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets
after expense reimbursements*)
Management Fees (after expense reimbursements*)...................... 0.30% 0.30% 0.30%
12b-1 Fees........................................................... 0.75% 0.75% 0.75%
All Other Estimated Expenses
Shareholder Service Payments................................ 0.25% 0.25% 0.25%
Other Estimated Expenses (after expense reimbursements*).... 0.45% 0.45% 0.45%
Total Estimated Fund Operating Expenses.............................. 1.75% 1.75% 1.75%
<FN>
- ---------------
(1) The total of all 12b-1 fees, administrative service fees and
shareholder service fees may not exceed, in the aggregate, the annual
rate of 1.00% of the average net assets of the Fund's K shares. Because
of the Rule 12b-1, administrative and/or shareholder service fees paid
by the Funds as shown in the above tables, long-term Class K
shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of
Securities Dealers, Inc. For a further description of shareholder
transaction expenses and the Funds' operating expenses, see the
sections entitled "Shareholder Guide," "The Business of the Funds" and
"Plan Payments" below.
(2) Bank of America will compensate Seafirst Investment Services, Inc.
("SISI") and BA Investment Services, Inc. ("BAIS") (BAIS and SISI are
collectively referred to herein as "Affiliated Brokers") for its
customers who have invested in the Funds and are participants in the
Daily Advantage(R) Retirement Plan Program. The Affiliated Brokers will
be compensated by Bank of America at the rate of 1.00% of the first $1
million of combined Pacific Horizon Funds, Inc. and Time Horizon Funds
K shares in each Daily Advantage(R) Retirement Plan Program.
* The Manager has currently agreed to reduce its fees and absorb other
operating expenses to ensure that the operating expenses for each Fund
(other than interest, taxes, brokerage commissions and other portfolio
transaction expenses, capital expenditures and extraordinary expenses)
will not exceed 1.75% of the average net assets of each Fund's Class K
shares on an annual basis. Absent expense reimbursement, management
fees would be 0.60% of average net assets, "Other Estimated Expenses"
would be 1.75% of average net assets (annualized), and "Total Estimated
Fund Operating Expenses" would be 3.35% of average net assets
(annualized).
</TABLE>
EXAMPLE: Assume the annual return is 5% and operating expenses are the same as
those stated above. For every $1,000 you invest in a Fund, for example, here's
how much you would have paid in total expenses if you closed your account after
the number of years indicated:
<TABLE>
<CAPTION>
AFTER 1 YEAR AFTER 3 YEARS
------------ -------------
<S> <C> <C>
Class K shares................ $18 $55
</TABLE>
- ---------------
Note: The preceding example should not be considered representative of future
investment returns and operating expenses. Class K shares are new and the above
figures are based on estimated expenses for the first twelve months after their
initial offering. Actual investment returns and operating expenses may be more
of less than those shown.
-2-
<PAGE> 6
This expense information is provided to help you understand the
expenses you would bear either directly (as with transaction expenses) or
indirectly (as with annual operating expenses) as a Class K shareholder.
The Company has adopted an Administrative and Shareholder Services Plan
for Class K shares, under which the Class K shares of the Funds may reimburse
the Distributor for administrative and shareholder servicing expenses incurred.
The Company has also adopted a Distribution and Administrative Services Plan
pursuant to Rule 12b-1 under the 1940 Act, under which the Class K shares of
each Fund may compensate the Distributor for administrative and other services
rendered and costs incurred in connection with distribution of the Class K
shares. The total of all 12b-1 fees, administrative services fees and
shareholder services fees paid under both the Administrative and Shareholder
Services Plan and the Distribution and Administrative Services Plan may not
exceed, in the aggregate, the annual rate of 1.00% of the average daily net
assets of a Fund's K shares. To compensate certain brokers whose customers
purchase Class K shares, Bank of America pays Affiliated Brokers an amount equal
to 1.00% of the purchase price.
THE ADMINISTRATIVE AND SHAREHOLDER SERVICES PLAN
Shareholder servicing expenses include expenses incurred in connection
with shareholder services provided by the Distributor and payments to Service
Organizations for support services for the beneficial owners of a Fund's shares,
such as establishing and maintaining accounts and records relating to the
Service Organization's clients who invest in Fund shares; assisting those
clients in processing exchange and redemption requests and in changing dividend
options and account designations; and responding to inquiries from clients
concerning their investments.
Administrative services expenses include processing dividend and
distribution payments from a Fund on behalf of clients, providing statements
periodically to clients, and forwarding shareholder communications such as
proxies, shareholder reports and annual and semi-annual reports to clients.
Under the Administrative and Shareholder Services Plan, payments by a
Fund for shareholder servicing expenses may not exceed 0.25% (annualized) of the
Fund's average daily net assets attributable to the Class K shares, and payments
by a Fund for administrative services may not exceed 0.75% (annualized) of the
Fund's average daily net assets attributable to the Class K shares.
If in any month the Distributor is due more monies than are immediately
payable because of the percentage limitation described above, the unpaid amount
is "carried forward" from month to month while the Administrative and
Shareholder Services Plan is in effect until such time when it may be paid.
However, any "carried forward" amounts will not be payable beyond the fiscal
year during which the amounts are accrued. No interest, carrying or other
finance charge is borne by a Fund with respect to the amount "carried forward."
-3-
<PAGE> 7
Banks may act as Service Organizations. The Glass-Steagall Act and
other applicable laws, among other things, prohibit banks from engaging in the
business of underwriting securities. If a bank were prohibited from acting as a
Service Organization its shareholder clients would be permitted to remain
Company shareholders and alternative means for continuing the servicing of such
shareholders would be sought. In such event, changes in the operation of the
Company might occur and a shareholder serviced by such bank might no longer be
able to avail itself of the automatic investment or other services then being
provided by the bank. It is not expected that shareholders would suffer any
adverse financial consequences as a result of these occurrences.
THE DISTRIBUTION AND ADMINISTRATIVE SERVICES PLAN
Distribution expenses include advertising and marketing expenses,
commissions and other payments to broker-dealers and others which have entered
into agreements with the Distributor, the expenses of preparing, printing and
distributing prospectuses, and indirect and overhead costs associated with the
sale of Class K shares.
Administrative services expenses include processing dividend and
distribution payments from a Fund on behalf of clients, providing statements
periodically to clients, and forwarding shareholder communications such as
proxies, shareholder reports and annual and semi-annual reports to clients.
Under the Distribution and Administrative Services Plan, payments made
by the Class K shares of a Fund for distribution and administrative expenses may
not exceed the rate of 0.75% (annualized) of the average daily net assets of the
Fund attributable to the Class K shares. This amount may be reduced pursuant to
the undertakings by the Distributor.
The Distribution and Administrative Services Plan is a "compensation"
plan, which means that the fees paid to the Distributor under the plan are
intended to compensate the Distributor for services rendered and expenses borne
even if the amounts paid exceed the Distributor's actual expenses (in which case
the Distributor would realize a profit). If in any month the Distributor's
expenses incurred in connection with the distribution and administration of a
Fund's Class K shares exceed the fees paid by the Fund, the Distributor will
recover the excess only if the Distribution and Administrative Services Plan
with respect to such shares continues to be in effect in some later year when
the fees exceed the Distributor's expenses. No interest, carrying or other
finance charge is borne by a Fund with respect to any amounts "carried forward,"
and no Fund will be obligated to pay any unreimbursed expenses that may exist at
such time, if any, as the Distribution and Administrative Services Plan is
terminated.
FINANCIAL HIGHLIGHTS
No financial information is presented for Class K shares since Class K
shares were first offered on July 1, 1996.
-4-
<PAGE> 8
2. CLASS A SHARES - LARGE PURCHASE EXEMPTION
The sales load structure with respect to each Fund is amended as
follows:
There is no front-end sales load on combined purchases of Class A
shares of the Company of $1,000,000 or more ("Large Purchase Exemption"). Unless
you participated in the Bank of America's Daily Advantage(R) Retirement Plan
Program, Class A shares purchased under the Large Purchase Exemption are subject
to a contingent-deferred sales charge of 1.00% and 0.50%, respectively, on
redemptions within one and two years after purchase. The contingent-deferred
sales charge is paid to the Distributor. Class A shares cannot be purchased
under the Large Purchase Exemption if there is another Class A no-load exemption
available. Accordingly, Class A shares purchased under another Class A no-load
exemption are not subject to a contingent-deferred sales charge.
Neither a contingent-deferred sales charge nor a front-end sales load
will be imposed upon exchanges, at the time of the exchange, if a shareholder
who has entered a Fund under the Large Purchase Exemption exchanges shares
between funds of the Company or Pacific Horizon Funds, Inc. However, shares
acquired in the exchange will remain subject to the contingent-deferred sales
charge discussed above and will retain their original cost and purchase date for
purposes of calculating the contingent-deferred sales charge.
The contingent-deferred sales charge is calculated as a percentage of
the lesser of the current market value or the cost of the shares being redeemed.
This means that this charge will not be imposed upon increases in net asset
value above the initial purchase price or upon reinvested dividends. In
determining whether a contingent-deferred sales charge is applicable to a
redemption of such shares, the calculation will be made in a manner that results
in the lowest possible rate. It will be assumed that the redemption is made
first of amounts representing shares acquired pursuant to the reinvestment of
dividends and distributions; then of amounts representing the increase in net
asset value of your holdings of shares above the total amount of payments for
the purchase of shares during the preceding 2 years; then of amounts
representing the cost of shares held beyond the applicable contingent-deferred
sales charge period; and finally, of amounts representing the cost of the shares
held for the longest period of time.
Despite the fact that no front-end sales load will be paid on Class A
shares purchased under the Large Purchase Exemption, the Distributor will
compensate brokers whose customers purchase such shares at the following rates:
1.00% of the amount under $3 million, .50% of the next $47 million and 0.25%
thereafter.
The preceding paragraphs are inserted immediately below the table
entitled "SHAREHOLDER TRANSACTION EXPENSES" under the heading "EXPENSE SUMMARY"
and also under the heading "SHAREHOLDER GUIDE - HOW TO BUY SHARES." The
contingent-deferred sales charge has not been included in calculating the
expenses in the "EXPENSE SUMMARY" sections.
-5-
<PAGE> 9
3. The chart under the heading "SHAREHOLDER GUIDE - HOW TO BUY SHARES -
HOW ARE SHARES PRICED? - CLASS A SALES LOAD" is amended and restated in
its entirety for each Fund as follows:
<TABLE>
<CAPTION>
=============================================================================================================================
AMOUNT OF TRANSACTION AS A % OF AS A % OF DEALER'S
OFFERING NET ASSET REALLOWANCE
PRICE VALUE AS A % OF
PER SHARE PER SHARE OFFERING PRICE*
<S> <C> <C> <C>
Less Than $100,000 4.50 4.71 4.00
$100,000 but less than $250,000 3.75 3.90 3.35
$250,000 but less than $500,000 2.50 2.56 2.20
$500,000 but less than $750,000 2.00 2.04 1.75
$750,000 but less than $1,000,000 1.00 1.01 0.90
$1,000,000 or more 0.00** 0.00** 0.00**
<FN>
*Dealer's reallowance may be changed periodically.
**See 2 above for a description of the contingent-deferred sales charge.
From time to time, the Fund's Distributor will make or allow additional payments or
promotional incentives in the form of cash or other compensation such as trips to sales
seminars, tickets to sporting and other entertainment events and gifts of
merchandise to firms that sell shares of the Funds.
=============================================================================================================================
</TABLE>
4. The following exemption is deleted with respect to each Fund from the
list of types of transactions exempt from the Class A share front-end
sales load appearing below the heading "SHAREHOLDER GUIDE-HOW TO BUY
SHARES-HOW ARE SHARES PRICED?-WHEN NO SALES LOAD IS APPLIED":
O employer-sponsored employee pension or retirement plans making
direct investments in a Fund.
5. The contingent-deferred sales charge on Class A shares purchased
under the Large Purchase Exemption will be waived under the same
circumstances specified for Class B shares under the heading
"SHAREHOLDER GUIDE - HOW TO BUY SHARES - HOW ARE SHARES PRICED? -
WHEN NO CONTINGENT-DEFERRED SALES CHARGE IS APPLIED."
-6-
<PAGE> 10
TIME HORIZON FUNDS
(THE "COMPANY")
TIME HORIZON PORTFOLIO 1
TIME HORIZON PORTFOLIO 2
TIME HORIZON PORTFOLIO 3
SUPPLEMENT DATED JULY 1, 1996
TO STATEMENT OF ADDITIONAL INFORMATION
DATED FEBRUARY 5, 1996
MANAGEMENT
The listing of officers of the Company is amended to read as follows:
<TABLE>
<CAPTION>
POSITION
NAME AND ADDRESS WITH COMPANY PRINCIPAL OCCUPATION AND AGE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
J. David Huber President Senior Vice President of Client Services,
BISYS Fund Services BISYS Fund Services since 1987. Age:
3435 Stelzer Road 50.
Columbus, Ohio 43219
Irimga McKay Vice President Senior Vice President, July 1993 to date,
1230 Columbia Street prior thereto First Vice President of the
5th Floor, Suite 500 Administrator and Distributor, November
San Diego, CA 92037 1988 to July 1993; Regional Vice
President, Continental Equities, June 1987
to November 1988; Assistant Wholesaler,
VMS Realty Partners (a real estate limited
partnership), May 1986 to June 1987. Age: 35
Stephanie L. Blaha Vice President Manager of Client Services of the
BISYS Fund Services Administrator, March 1995 to date, prior
3435 Stelzer Road thereto Assistant Vice President of the
Columbus, Ohio 43219 Administrator and Distributor, October
1991 to March 1995; Account Manager,
AT&T American Transtech, Mutual Fund
Division, July 1989 to October 1991.
Age: 36.
George O. Martinez Secretary Senior Vice President and Director of
BISYS Fund Services Legal and Compliance Services, of the
3435 Stelzer Road Administrator since April 1995; prior
Columbus, Ohio 43219 thereto, Vice President and Associate
General Counsel, Alliance Capital
Management, L.P. Age: 35.
</TABLE>
4
<PAGE> 11
<TABLE>
<CAPTION>
POSITION
NAME AND ADDRESS WITH COMPANY PRINCIPAL OCCUPATION AND AGE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Mark E. Nagle Treasurer Senior Vice President, Fund Accounting
BISYS Fund Services Services The BISYS Group, Inc.,
3435 Stelzer Road September 1995 to Present; Senior Vice
Columbus, Ohio 43219 President Fidelity Institutional Retirement
Services (1993 to September 1995);
Fidelity Accounting & Custody Services
(1981 to 1993). Age: 36.
</TABLE>
The listing beginning on page 30 of persons who owned of record 5% or
more of the outstanding share of any Fund is replaced by the following list,
which is as of May 23, 1996:
<TABLE>
<CAPTION>
NAME AND ADDRESS TOTAL SHARES % OWNED FUND CLASS
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bank of America-Illinois 194,930.107 31.345 Portfolio 1 A
FBO UPS IRA's
P.O Box 5747
Denver, CO 80217-5747
Bank of America-Illinois 137,130.525 20.709 Portfolio 2 A
FBO UPS IRA's
P.O Box 5747
Denver, CO 80217-5747
BA Investment Services Inc. 40,791.411 6.160 Portfolio 2 A
FBO 201926211
185 Berry Street
3rd Floor 2640
San Francisco, CA 94104
Bank of America Illinois 37,043.632 7.190 Portfolio 3 A
PO Box 5747
Denver, CO 80217-5747
</TABLE>
5
<PAGE> 12
TIME HORIZON FUNDS
FORM N-1A
PART C: OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
A. FINANCIAL STATEMENTS:
(i) Financial Statements included in Part A of the
Registration Statement: Financial Highlights
(ii) Financial Statements included in Part B of the
Registration Statement:
Statement of Assets and Liabilities as of July 28, 1995.
Statement of Assets and Liabilities as of December 31, 1995
Statement of Operations for the period ended December 31,
1995
Statement of Changes in net assets for the period ended
December 31, 1995
Portfolio of Investments as of December 31, 1995
Notes to financial statements
Schedules II, III, IV and V have been omitted as the required
information is not present. Schedule I has been omitted as the
required information is presented in the portfolio of
investments at December 31, 1995
B. EXHIBITS:
<TABLE>
<S> <C>
* (1.1) Certificate of Trust of Registrant.
** (1.2) Amended and Restated Declaration of Trust of Registrant.
* (2) Bylaws of Registrant.
(3) None.
(4) None.
*** (5) Management Agreement between Registrant and Bank of America.
*** (6) Distribution Agreement between Registrant and Concord Financial Group, Inc.
(7) None.
*** (8) Custodian Services Agreement between Registrant and PNC Bank, N.A.
*** (9.1) Accounting Services Agreement between Registrant and BISYS Fund Services.
*** (9.2) Transfer Agency and Service Agreement between Registrant and BISYS Fund Services.
(9.3) Shareholder Service Plan (Class A and Class B).
*** (9.4) Sub-Administration Agreement between Registrant and BISYS Fund Services.
(9.5) Administrative and Shareholder Services Plan (Class K).
</TABLE>
1
<PAGE> 13
<TABLE>
<S> <C>
(10) Not applicable.
(11) Consent of independent accountants.
(12) Not applicable.
** (13) Investment Letter of initial investor in Registrant.
(14) None.
(15.1) Distribution Plan (Class B Shares).
(15.2) Distribution and Administrative Services Plan (Class K Shares).
**** (16) Performance Calculations.
** (17) Limited Powers of Attorney of Trustees.
(18) Multi-Class Plan.
(19) Not applicable.
**** (27) Financial Data Schedule.
* Filed as exhibit to initial Registration Statement on April 21, 1995.
** Filed as exhibit to Pre-Effective Amendment No. 1 on July 31, 1995.
*** Form of agreement filed as exhibit to Pre-Effective Amendment No. 1 on July 31, 1995.
**** Filed as exhibit to Post-Effective Amendment No. 1 on February 5, 1996.
</TABLE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
Inapplicable.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
As of March 31, 1996, the number of record holders of each
series of Registrant was as follows:
<TABLE>
<CAPTION>
TITLE OF SERIES NUMBER OF RECORD HOLDERS
------------------------------------------------------------------------------
<S> <C>
Time Horizon Portfolio 1 953
Time Horizon Portfolio 2 1,356
Time Horizon Portfolio 3 1,766
</TABLE>
ITEM 27. INDEMNIFICATION.
Article V of Registrant's Declaration of Trust, filed herewith
as Exhibit 1, provides for the indemnification of Registrant's trustees,
officers, employees and agents against liabilities incurred by them in
connection with the defense or disposition of any action or proceeding in which
they may be involved or with which they may be threatened, while in office or
thereafter, by reason of being or having been in such office, except with
respect to matters as to which it has been determined that they acted with
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of their office ("Disabling Conduct").
Registrant has obtained from a major insurance carrier a
trustees' and officers' liability policy covering certain types of errors and
omissions.
2
<PAGE> 14
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
Bank of America performs investment advisory services for
Registrant. Bank of America and its predecessors have been in the business of
managing investments of fiduciary and other accounts since 1904. In addition to
its trust business, Bank of America provides commercial and consumer banking
services.
To the knowledge of Registrant, none of the directors or
officers of Bank of America, except those set forth below, is or has been, at
any time during the past two calendar years, engaged in any other business,
profession, vocation or employment of a substantial nature, except that certain
directors and officers of Bank of America also hold various positions with, and
engage in business for, BankAmerica Corporation (which owns all the outstanding
stock of Bank of America) or other subsidiaries of BankAmerica Corporation. Set
forth below are the names and principal businesses of the directors of Bank of
America and the directors and certain of the senior executive officers of Bank
of America who are engaged in any business, profession, vocation or employment
of a substantial nature other than with BankAmerica Corporation.
3
<PAGE> 15
<TABLE>
<CAPTION>
POSITION WITH
BANK OF AMERICA PRINCIPAL
NT&SA NAME OCCUPATION TYPE OF BUSINESS
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Director Joseph F. Alibrandi Chairman of the Board Manufacturer of Aerospace
Whittaker Corporation and Biotechnology Products
Director Jill Elikann Barad President and Chief Toy Manufacturer
Operating Officer,
Mattel, Inc.
Director Peter B. Bedfors Chairman and CEO, Bedford California based Real
Property Investors, Inc. Estate Development and
Investment Firm
Director Andrew F. Brimmer President, Brimmer & Co. Inc. Consulting
Director Richard A. Clarke Chairman of the Utility Company
Board, Pacific Gas and
Electric Company
Director David A. Coulter Chief Executive Officer and Banking
President, Bank of America
Corporation and Bank of America
NT&SA
Director Timm F. Crull Chairman of the Board, Food and Related Products
Nestle USA, Inc.
Director Kathleen Feldstein President, Economic Economic Consulting
Studies, Inc. Telecommunications and
Director Donald E. Guinn Chairman Emeritus, Diversified Holding Company
Pacific Telesis Group
Director Philip M. Hawley Retired Chairman and Retail Department Stores
Chief Executive Officer,
Carter Hawley Hale
Stores, Inc.
Director Frank L. Hope, Jr. Consulting Architect Architectural and
Engineering Consulting
Director Ignacio E. Lozano, Jr. Editor-In-Chief, Newspaper Publishing
"La Opinion"
Director Walter E. Massey, Ph.D Morehouse College Higher Education
Director John M. Richman Counsel, Wachtell, Law Firm
Lipton, Rosen & Katz
</TABLE>
4
<PAGE> 16
<TABLE>
<CAPTION>
POSITION WITH
BANK OF AMERICA PRINCIPAL
NT&SA NAME OCCUPATION TYPE OF BUSINESS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Chairman Richard M. Rosenberg Chairman of the Board, Bank Banking
America Corporation and Bank
America NT&SA
Director A. Michael Spense Dean of the Graduate Higher Education
School of Business,
Stanford University
</TABLE>
5
<PAGE> 17
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) Concord Financial Group, Inc. ("Concord") acts as
principal underwriter for the Company. Concord also acts as principal
underwriter or exclusive distributor for Pacific Horizon Funds, Inc., The
Centerland Funds, The Infinity Funds, Inc., The Pilot Funds, Seafirst Retirement
Funds and The Victory Funds, and distributor for the Mutual Fund Group.
(b) For information as to the business, profession, vocation
or employment of a substantial nature of each of Concord, its officers and
directors, reference is made to the Form BD filed by Concord (File No. 8-3760),
which is incorporated by reference herein. Information as to the positions or
offices of each of Concord, its officers and directors is as follows:
<TABLE>
<CAPTION>
POSITION WITH POSITION WITH
NAME AND ADDRESS CONCORD REGISTRANT
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Lynn J. Mangum Chairman of the Board None
150 Clove Road
Little Falls, NJ 07424
Richard E. Stierwalt Chief Executive Officer None
125 W. 55th Street
New York, NY 10019
Robert J. McMullen Executive Vice President None
150 Clove Road
Little Falls, NJ 07424
Dennis Sheehan Vice President None
125 W. 55th Street
New York, NY 10019
Michael D. Burns Vice President, Compliance None
3435 Stelzer Road
Columbus, OH 43219-3036
Joseph Kissel Executive Vice President None
125 W. 55th Street
New York, NY 10019
Irimga McKay Vice President Vice President
1230 Columbia Street
5th Floor, Suite 500
San Diego, CA 92037
Stephan G. Mintos Executive Vice President None
3435 Stelzer Road Chief Operating Officer
Columbus, OH 43219-3036
George O. Martinez Senior Vice President Secretary
3435 Stelzer Road
Columbus, OH 43219-3036
</TABLE>
6
<PAGE> 18
<TABLE>
<CAPTION>
POSITION WITH POSITION WITH
NAME AND ADDRESS CONCORD REGISTRANT
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Dale Smith Vice President None
1230 Columbia Street Chief Financial Officer
5th Floor, Suite 500
San Diego, CA 92101
</TABLE>
7
<PAGE> 19
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
<TABLE>
<S> <C>
(1) Concord Financial Group, Inc., 3435 Stelzer Road, Columbus, Ohio 43219 (records relating to
the Distributor).
(2) Bank of America National Trust and Savings Association, 555 California Street, San Francisco,
California 94104 (records relating to the Manager).
(3) 3435 Stelzer Road, Columbus, Ohio 43219 (records relating to the Transfer Agent).
(4) 222 N. LaSalle, 26th Floor, Chicago, Illinois 60601 (Registrant's Declaration of Trust, By-Laws
and minute books).
(5) PNC Bank, N.A., Broad and Chestnut Streets, Philadelphia, PA 19101 (records relating to the
Custodian).
(6) 3435 Stelzer Road, Columbus, Ohio 43219 (records relating to the Sub-Administrator).
(7) 3435 Stelzer Road, Columbus, Ohio 43219 (records relating to the Accounting Services
Agreement).
</TABLE>
ITEM 31. MANAGEMENT SERVICES.
Not Applicable.
ITEM 32. UNDERTAKINGS.
Registrant hereby undertakes that if it is requested by the
holders of at least 10% of its outstanding shares to call a meeting of
shareholders for the purpose of voting upon the question of removal of a
Trustee, it will do so and will assist in communications with other shareholders
as required by Section 16(c) of the Investment Company Act of 1940.
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of Registrant's latest annual report to
shareholders, upon request and without charge.
8
<PAGE> 20
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Columbus, State of Ohio, on the 31st day of May,
1996.
TIME HORIZON FUNDS
By: /s/J. David Huber
-----------------------------
J. David Huber, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ J. David Huber President May 31, 1996
- --------------------------------------
J. David Huber
/s/ Charles L. Booth Treasurer May 31, 1996
- --------------------------------------
Charles L. Booth
/s/ Robert E. Greeley* Trustee May 31, 1996
- --------------------------------------
Robert E. Greeley
/s/ John Privat* Trustee May 31, 1996
- --------------------------------------
John Privat
/s/ Edward S. Bottum* Trustee May 31, 1996
- --------------------------------------
Edward S. Bottum
/s/ William P. Carmichael* Trustee May 31, 1996
- --------------------------------------
William P. Carmichael
*By /s /J. David Huber
- --------------------------------------
J. David Huber
Attorney-in-fact
</TABLE>
9
<PAGE> 21
EXHIBIT INDEX
TIME HORIZON FUNDS
FORM N-1A REGISTRATION STATEMENT
FILE NO. 811-9024
<TABLE>
<CAPTION>
Exhibit No. Title of Exhibit
----------- ----------------
<S> <C>
* (1.1) Certificate of Trust of Registrant.
** (1.2) Amended and Restated Declaration of Trust of Registrant.
* (2) Bylaws of Registrant.
(3) None.
(4) None.
*** (5) Management Agreement between Registrant and Bank of America.
*** (6) Distribution Agreement between Registrant and Concord Financial Group, Inc.
(7) None.
*** (8) Custodian Services Agreement between Registrant and PNC Bank, N.A.
*** (9.1) Accounting Services Agreement between Registrant and BISYS Fund Services.
*** (9.2) Transfer Agency and Service Agreement between Registrant and BISYS Fund Services.
(9.3) Shareholder Service Plan (Class A and Class B).
*** (9.4) Sub-Administration Agreement between Registrant and BISYS Fund Services.
(9.5) Administrative and Shareholder Services Plan (Class K).
(10) Not applicable.
(11) Consent of independent accountants.
(12) Not applicable.
** (13) Investment Letter of initial investor in Registrant.
(14) None.
(15.1) Distribution Plan (Class B Shares).
(15.2) Distribution and Administrative Services Plan (Class K Shares).
**** (16) Performance Calculations.
** (17) Limited Powers of Attorney of Trustees.
(18) Multi-Class Plan.
(19) Not applicable.
**** (27) Financial Data Schedule.
* Filed as exhibit to initial Registration Statement on April 21, 1995.
** Filed as exhibit to Pre-Effective Amendment No. 1 on July 31, 1995.
*** Form of agreement filed as exhibit to Pre-Effective Amendment No. 1 on July 31, 1995.
**** Filed as exhibit to Post-Effective Amendment No. 1 on February 5, 1996.
</TABLE>
10
<PAGE> 1
Exhibit 9.3
TIME HORIZON FUNDS
AMENDMENT AND RESTATED
SHAREHOLDER SERVICE PLAN
(CLASS A AND B SHARES)
The Board of Trustees of Time Horizon Funds (the "Company"), on behalf
of Class A Shares and Class B Shares of each series (each a "Fund") of the
Company, has adopted the following amended and restated plan (the "Plan") to pay
for expenses incurred in connection with the provision of shareholder services
to the shareholders of each Fund.
Pursuant to the Plan, the Funds shall bear: (a) expenses incurred in
connection with nondistribution shareholder services provided by the distributor
of shares of the Company (the "Distributor") to securities dealers, financial
institutions or other industry professionals such as investment advisers,
accountants and estate planning firms (collectively, "Service Organizations")
and/or the beneficial owners of Fund shares; (b) periodic payments made to
Service Organizations for the provision of support services to the beneficial
owners of Fund shares; and (c) expenses incurred in implementing and operating
this Plan. Payments shall be made by the Company to the Distributor to the
extent described below.
I. FINANCING
The material aspects of the financing by the Company of shareholder
servicing expenses incurred in connection with shares of the Funds are as
follows:
The Funds will pay the Distributor for expenses incurred in
connection with non-distribution shareholder services provided by the
Distributor to Service Organizations and/or the beneficial owners of
Fund shares, including but not limited to shareholder servicing
provided by the Distributor at facilities dedicated for Fund use,
provided that such shareholder servicing is not duplicative of the
servicing otherwise provided on behalf of the Funds.
In addition, the Funds will pay the Distributor for fees to
Service Organizations (which may include the Distributor itself) for
the provision of support services to persons who are the beneficial
owners of Fund shares ("Clients"). Such services may include: (a)
establishing and maintaining accounts and records relating to Clients
that invest in Fund shares; (b) processing dividend and distribution
payments from the Funds on behalf of Clients; (c) providing information
periodically to Clients regarding their positions in Fund shares; (d)
arranging for bank wires; (e) responding to Client inquiries concerning
their investments in Fund shares; (f) providing the information to the
Funds necessary for accounting and subaccounting; (g) if required by
law, forwarding shareholder
<PAGE> 2
communications from the Funds (such as proxies, shareholder reports,
annual and semi-annual financial statements and dividend, distribution
and tax notices) to Clients; (h) assisting in processing exchange and
redemption requests from Clients; (i) assisting Clients in changing
dividend options, account designations and addresses; and (j) providing
such other similar services as the Distributor may reasonably request.
While this Plan is in effect, the Distributor will be paid for
such shareholder servicing expenses that are incurred in connection
with each class of shares of each Fund on a monthly basis, at an annual
rate of up to but not more than 0.25% of each such class average daily
net assets during such month. These monthly payments to the Distributor
shall be made in accordance with, and subject to, the conditions set
forth in Part II of this Plan.
II. OTHER PROVISIONS
(a) The monthly payments to the Distributor under Part I of this Plan
shall be made in accordance with, and subject to, the following conditions:
(1) the calculation of a class average daily net assets shall
not include those assets held in accounts opened via a transfer of
assets from trust and agency accounts of Bank of America National Trust
and Savings Association;
(2) if in any month the Distributor expends or is due more
monies than can be immediately paid under Part I, due to the percentage
limitation noted therein, the unpaid amount shall be carried forward
from month to month while this Plan is in effect until such time, if
ever, when it can be paid in accordance with the provisions of Part I;
(3) if in any month the Distributor does not expend the entire
amount then available under Part I, and if no unpaid amounts have been
carried forward and remain unpaid under Part I, then the amount not
expended shall be considered a credit and may be drawn upon from month
to month by the Distributor to permit payment under Part I when
necessary in the future (i.e., carried back);
(4) payments made out of or charged against the assets of a
particular class of a Fund shall be in payment for shareholder services
incurred on behalf of such class; and
(5) payments made pursuant to Part I shall be for the
shareholder servicing expenses described therein.
Notwithstanding any provision of items (2) and (3) above, no amounts
payable or credit due pursuant to this Plan for any fiscal year may be carried
over for payment or utilized as a
2
<PAGE> 3
credit beyond the end of such year. In addition, any amount being carried
forward during any given year will be extinguished in the event this Plan is
terminated in that year.
Payments to a Service Organization under Part I shall be subject to
compliance by the Service Organization with the terms of an agreement between
the Service Organization and the Distributor. If an investor in a Fund ceases to
be a client of a Service Organization that has entered into an agreement with
the Distributor, but continues to hold shares of the Fund, the Distributor will
be entitled to receive similar payments with respect to the shareholder
servicing provided to such investor.
(b) For the purposes of determining the amount payable under this Plan,
the value of a Fund's net assets shall be computed in the manner specified in
the Fund's prospectus as then in effect.
(c) The Distributor shall provide the Board of Trustees, at least
quarterly, with a written report of all amounts expended pursuant to Part I of
this Plan. The report shall state the purpose for which the amounts were
expended.
(d) This Plan shall continue until October 31, 1996 unless earlier
terminated in accordance with its terms, and thereafter shall continue
automatically for successive annual periods, provided such continuance is
approved by a majority of the Board of Trustees, including a majority of the
Trustees who are not "interested persons" (as defined in the Investment Company
Act of 1940) of the Company and who have no direct or indirect financial
interest in the operation of this Plan or in any agreements entered into in
connection with this Plan (the "Disinterested Trustees"), pursuant to a vote
cast in person at a meeting called for the purpose of voting on the continuance
of the Plan.
(e) This Plan may be amended at any time by the Board of Trustees,
provided that any material amendments of the terms of this Plan shall become
effective only upon approval as provided in paragraph (d) hereof.
(f) This Plan is terminable, as to any class of any Fund, without
penalty at any time by (i) vote of a majority of the Disinterested Trustees, or
(ii) vote of a majority of the outstanding voting securities of such class.
(g) The Company's Board of Trustees has adopted this Plan as of
April 22, 1996.
3
<PAGE> 1
Exhibit 9.5
TIME HORIZON FUNDS
ADMINISTRATIVE AND
SHAREHOLDER SERVICES PLAN
(CLASS K SHARES)
The Board of Trustees of Time Horizon Funds (the "Company"), on behalf
of the Class K Shares of each series (each a "Fund") of the Company, has adopted
the following plan (the "Plan") to pay for expenses incurred in connection with
the provision of administrative and shareholder services to the shareholders of
each Fund.
Pursuant to the Plan, the Funds shall bear: (a) expenses incurred in
connection with non-distribution administrative and shareholder services
provided by the distributor of shares of the Company (the "Distributor") to
securities dealers, financial institutions or other industry professionals such
as investment advisers, accountants and estate planning firms (collectively,
"Service Organizations") and/or the beneficial owners of Fund shares; (b)
periodic payments made to Service Organizations for the provision of
administrative and support services to the beneficial owners of Fund shares;
and (c) expenses incurred in implementing and operating this Plan. Payments
shall be made by the Company to the Distributor to the extent described below.
I. FINANCING
The material aspects of the financing by the Company of administrative
and shareholder servicing expenses incurred in connection with shares of the
Funds are as follows:
The Funds may pay the Distributor for expenses incurred in
connection with nondistribution administrative and shareholder services
provided by the Distributor to Service Organizations and/or the
beneficial owners of Fund shares, including but not limited to
administrative and shareholder servicing provided by the Distributor at
facilities dedicated for Fund use, provided that such administrative
and shareholder servicing is not duplicative of the servicing otherwise
provided on behalf of the Funds.
In addition, the Funds may pay the Distributor for fees to
Service Organizations (which may include the Distributor itself) for
the provision of administrative and support services to persons who are
the beneficial owners of Fund shares ("Clients"). Such services may
include: (a) establishing and maintaining accounts and records relating
to Clients that invest in Fund shares; (b) processing dividend and
distribution payments from the Funds on behalf of Clients; (c)
providing information periodically to Clients regarding their positions
in Fund shares; (d) arranging for bank wires; (e) responding to Client
inquiries concerning their investments in Fund shares; (f) providing
the information to the Funds necessary for accounting and
subaccounting; (g) if required by
<PAGE> 2
law, forwarding shareholder communications from the Funds (such as
proxies, shareholder reports, annual and semi-annual financial
statements and dividend, distribution and tax notices) to Clients; (h)
assisting in processing exchange and redemption requests from Clients;
(i) assisting Clients in changing dividend options, account
designations and addresses; (j) aggregating and processing purchase,
exchange and redemption requests from Clients and placing net purchase,
exchange and redemption orders for Clients; and (k) providing such
other similar services as the Distributor may reasonably request.
While this Plan is in effect, the Company may incur aggregate
expenses under the Plan in an amount not to exceed 1.00% annually of
the average daily net assets of a Fund's outstanding K Shares. The
total expenses incurred under this Plan and the Distribution and
Administrative Services Plan for K Shares may not exceed, in the
aggregate, 1.00% annually of the average daily net assets of a Fund's
outstanding K Shares. Of such amount, up to 0.75% may be paid for
administrative services and up to 0.25% may be paid for shareholders
servicing.
II. OTHER PROVISIONS
(a) The monthly payments to the Distributor under Part I of this Plan
shall be made in accordance with, and subject to, the following conditions:
(1) the calculation of a class average daily net assets shall
not include those assets held in accounts opened via a transfer of
assets from trust and agency accounts of Bank of America National Trust
and Savings Association;
(2) if in any month the Distributor expends or is due more
monies than can be immediately paid under Part I, due to the percentage
limitation noted therein, the unpaid amount shall be carried forward
from month to month while this Plan is in effect until such time, if
ever, when it can be paid in accordance with the provisions of Part I;
(3) if in any month the Distributor does not expend the entire
amount then available under Part I, and if no unpaid amounts have been
carried forward and remain unpaid under Part I, then the amount not
expended shall be considered a credit and may be drawn upon from month
to month by the Distributor to permit payment under Part I when
necessary in the future (i.e., carried back);
(4) payments made out of or charged against the assets of a
particular class of a Fund shall be in payment for shareholder services
incurred on behalf of such class; and
2
<PAGE> 3
(5) payments made pursuant to Part I shall be for the
shareholder servicing expenses described therein.
Notwithstanding any provision of items (2) and (3) above, no amounts
payable or credit due pursuant to this Plan for any fiscal year may be carried
over for payment or utilized as a credit beyond the end of such year. In
addition, any amount being carried forward during any given year will be
extinguished in the event this Plan is terminated in that year.
Payments to a Service Organization under Part I shall be subject to
compliance by the Service Organization with the terms of an agreement between
the Service Organization and the Distributor. If an investor in a Fund ceases to
be a client of a Service Organization that has entered into an agreement with
the Distributor, but continues to hold shares of the Fund, the Distributor will
be entitled to receive similar payments with respect to the administrative and
shareholder servicing provided to such investor.
(b) For the purposes of determining the amount payable under this Plan,
the value of a Fund's net assets shall be computed in the manner specified in
the Fund's prospectus as then in effect.
(c) The Distributor shall provide the Board of Trustees, at least
quarterly, with a written report of all amounts expended pursuant to Part I of
this Plan. The report shall state the purpose for which the amounts were
expended.
(d) This Plan shall continue until October 31, 1996 unless earlier
terminated in accordance with its terms, and thereafter shall continue
automatically for successive annual periods, provided such continuance is
approved by a majority of the Board of Trustees, including a majority of the
Trustees who are not "interested persons" (as defined in the Investment Company
Act of 1940) of the Company and who have no direct or indirect financial
interest in the operation of this Plan or in any agreements entered into in
connection with this Plan (the "Disinterested Trustees"), pursuant to a vote
cast in person at a meeting called for the purpose of voting on the continuance
of the Plan.
(e) This Plan may be amended at any time by the Board of Trustees,
provided that any material amendments of the terms of this Plan shall become
effective only upon approval as provided in paragraph (d) hereof.
(f) This Plan is terminable, as to any class of any Fund, without
penalty at any time by (i) vote of a majority of the Disinterested Trustees, or
(ii) vote of a majority of the outstanding voting securities of such class.
(g) The Company's Board of Trustees has adopted this Plan as of
April 22, 1996.
3
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of
Time Horizon Funds
We consent to the inclusion in the Post-Effective Amendment #2 to the
Registration Statement of Form N-1A of Time Horizon Funds (File No. 33-91448) of
our report dated July 28, 1995 on our audits of the statements of assets and
liabilities of the portfolios of Time Horizon Funds as of July 28, 1995. We also
consent to the reference to our Firm under the captions "Independent
Accountants" and "Financial Statements" in the Statement of Additional
Information.
Los Angeles, California COOPERS & LYBRAND L.L.P.
June 4, 1996
<PAGE> 1
Exhibit 15.1
TIME HORIZON FUNDS
AMENDED AND RESTATED
DISTRIBUTION SERVICE PLAN
(CLASS B SHARES)
The Board of Trustees of Time Horizon Funds (the "Company"), on behalf
of the Class B shares of each series (each a "Fund") of the Company, has adopted
the following amended and restated plan (the "Plan") pursuant to the Investment
Company Act of 1940 (the "Act") and Rule 12b-1 promulgated thereunder.
I. DISTRIBUTION PLAN
For the services and facilities rendered to the Company in connection
with the distribution of Class B shares of the Funds, the Funds will pay the
distributor of shares of the Company (the "Distributor") for:
(a) expenses incurred in connection with advertising and
marketing the shares, including but not limited to, advertising or marketing via
radio, television, newspapers, magazines, telemarketing or direct mail
solicitations;
(b) periodic payments made to securities dealers, financial
institutions or other industry professionals such as investment advisers,
accountants and estate planning firms (collectively, "Service Organizations"),
for assistance in connection with the distribution (as the Securities and
Exchange Commission construes such term under Rule 12b-1) of the shares
beneficially owned by persons ("Clients") for whom the Service Organization is
the dealer of record or holder of record or with whom the Service Organization
has a servicing relationship; and
(c) expenses incurred in preparing, printing and distributing
prospectuses for the shares (except those used for regulatory purposes or for
distribution to existing shareholders of the Funds, which is considered a
non-12b-1 expense) and in implementing and operating this Plan.
While this Plan is in effect, the Distributor will be compensated by
the Funds for such distribution expenses which are incurred in connection with
Class B shares of the Funds on a monthly basis, at the annual rate of average
daily net assets attributable to such Class B shares during such month as
follows:
Class B Shares 0.75%
<PAGE> 2
These monthly payments to the Distributor shall be made in accordance with, and
subject to, the conditions set forth in Part II of this Plan.
The payments to the Distributor are designed to compensate the
Distributor for the expenses it incurs and the services it renders in
distributing Class B shares of the Funds. However, this Plan is a "compensation"
plan, and the Distributor will receive payments hereunder even if the amount
paid exceeds the Distributor's actual expenses. If in any year the Distributor's
expenses incurred in connection with the distribution of Class B shares of a
Fund exceed the distribution fees paid by such class of the Fund, the
Distributor will recover such excess only if this Plan for such class continues
to be in effect in some later year when the payments hereunder exceed the
Distributor's expenses. There is no limit on the periods during which
unreimbursed expenses may be carried forward, although the Company is not
obligated to repay any unreimbursed expenses for a class that may exist at such
time, if any, as this Plan terminates or is not continued with respect to the
class. No interest, carrying or finance charge will be imposed on any amounts
carried forward.
II. OTHER PROVISIONS
(a) The monthly payments to the Distributor under Part I of
this Plan shall be made in accordance with, and subject to, the following
conditions: (1) the calculation of a Fund's average daily net assets
attributable to a class will not include those assets held in accounts opened
via a transfer of assets from trust and agency accounts of Bank of America
National Trust and Savings Association; and (2) the payments made out of or
charged against the assets of a particular class of a Fund shall be in payment
for distribution expenses incurred on behalf of such class.
(b) Payments to a Service Organization made pursuant to Part I
shall be subject to compliance by the Service Organization with the terms of an
agreement between the Service Organization and the Distributor. If an investor
in a Fund ceases to be a client of a Service Organization that has entered into
an agreement with the Distributor, but continues to hold shares of the Fund, the
Distributor will be entitled to receive similar payments with respect to the
assistance provided to such investor.
(c) For the purposes of determining the amounts payable under
this Plan, the value of a Fund's net assets shall be computed in the manner
specified in the Fund's prospectus as then in effect.
(d) The Distributor shall provide the Board of Trustees with a
written report at least quarterly, of all amounts expended pursuant to Part I of
this Plan. The report shall state the purpose for which the amounts were
expended.
(e) This Distribution Services Plan shall continue until
October 31, 1996, unless earlier terminated in accordance with its terms, and
thereafter shall continue automatically for successive annual periods, provided
such continuance is approved by a majority of the Board
2
<PAGE> 3
of Trustees, including a majority of the Trustees who are not "interested
persons" (as defined in the Act) of the Company and who have no direct or
indirect financial interest in the operation of this Plan or in any agreements
entered into in connection with this Plan (the "Disinterested Trustees"),
pursuant to a vote cast in person at a meeting called for the purpose of voting
on the continuance of this Distribution Services Plan.
(f) This Plan may be amended at any time by the Board of
Trustees provided that (i) any amendment to increase materially the costs which
any Fund may bear for distribution services pursuant to Part I of the Plan shall
be effective only upon approval by a vote of a majority of the outstanding
voting securities of the respective Fund, and (ii) any material amendments of
the terms of this Plan shall become effective only upon approval as provided in
paragraph (e) hereof.
(g) This Plan is terminable, as to any class of any Fund,
without penalty at any time by a (i) vote of a majority of the Disinterested
Trustees, or (ii) vote of a majority of the outstanding voting securities of
such class.
(h) The Company's Board of Trustees has adopted this Plan as
of April 22, 1996.
3
<PAGE> 1
Exhibit 15.2
TIME HORIZON FUNDS
DISTRIBUTION AND ADMINISTRATIVE SERVICES PLAN
(CLASS K SHARES)
The Board of Trustees of Time Horizon Funds (the "Company"),
on behalf of the Class K Shares of each series (each a "Fund") of the Company,
has adopted the following plan (the "Plan") pursuant to the Investment Company
Act of 1940 (the "Act") and Rule 12b-1 promulgated thereunder.
I. DISTRIBUTION AND ADMINISTRATIVE SERVICES PLAN
For the services and facilities rendered to the Company in
connection with the distribution of Class K Shares of the Funds and/or
administrative support services relating to Class K Shares of the Funds, the
Funds will pay the distributor of shares of the Company (the "Distributor") for:
(a) expenses incurred in connection with the advertising and
marketing the shares, including but not limited to, advertising or marketing via
radio, television, newspapers, magazines, telemarketing or direct mail
solicitations;
(b) periodic payments made to securities dealers, financial
institutions or other industry professionals such as investment advisers,
accountants and estate planning firms (collectively, "Service Organizations"),
for administrative support services provided with respect to the shares
beneficially owned by persons ("Clients") for whom the Service Organization is
the dealer of record or holder of record or with whom the Service Organization
has a servicing relationship for the following: (i) aggregating and processing
purchase, exchange, and redemption requests from Clients and placing net
purchase, exchange, and redemption orders for Clients; (i) establishing and
maintaining accounts and records relating to Clients that invest in shares; and
(iii) other similar services that the Company may reasonably request to the
extent permitted under applicable law. Payments hereunder are not intended for
distribution services if not permitted by the Employee Retirement Income
Security Act of 1974, as amended; and
(c) expenses incurred in preparing, printing and distributing
prospectuses for the shares (except those used for regulatory purposes or for
distribution to existing shareholders of the Funds, which is considered a
non-12b-1 expense) and in implementing and operating this Plan.
While this Plan is in effect, the Distributor will be compensated by
the Funds for such distribution expenses which are incurred in connection with
Class K shares of the Funds on a
<PAGE> 2
monthly basis, at the annual rate of average daily net assets attributable to
such Class K shares during such month as follows:
Class K Shares 0.75%
These monthly payments to the Distributor shall be made in accordance with, and
subject to, the conditions set forth in Part II of this Plan.
The payments to the Distributor are designed to compensate the
Distributor for the expenses it incurs and the services it renders in
distributing and providing administrative support services with respect to Class
K shares of the Funds. However, this Plan is a "compensation" plan, and the
Distributor will receive payments hereunder even if the amount paid exceeds the
Distributor's actual expenses. If in any year the Distributor's expenses
incurred in connection with the distribution of and provision of administrative
support services with respect to Class K shares of a Fund exceed the
distribution and administrative service fees paid by such class of the Fund, the
Distributor will recover such excess only if this Plan for such class continues
to be in effect in some later year when the payments hereunder exceed the
Distributor's expenses. There is no limit on the periods during which
unreimbursed expenses may be carried forward, although the Company is not
obligated to repay any unreimbursed expenses for a class that may exist at such
time, if any, as this Plan terminates or is not continued with respect to the
class. No interest, carrying or finance charge will be imposed on any amounts
carried forward.
II. OTHER PROVISIONS
(a) The monthly payments to the Distributor under Part I of
this Plan shall be made in accordance with, and subject to, the following
conditions: (1) the calculation of a Fund's average daily net assets
attributable to a class will not include those assets held in accounts opened
via a transfer of assets from trust and agency accounts of Bank of America
National Trust and Savings Association; and (2) the payments made out of or
charged against the assets of a particular class of a Fund shall be in payment
for distribution and administrative support expenses incurred on behalf of such
class.
(b) Payments to a Service Organization made pursuant to Part I
shall be subject to compliance by the Service Organization with the terms of an
agreement between the Service Organization and the Distributor. If an investor
in a Fund ceases to be a client of a Service Organization that has entered into
an agreement with the Distributor, but continues to hold shares of the Fund, the
Distributor will be entitled to receive similar payments with respect to the
assistance provided to such investor.
(c) For the purposes of determining the amounts payable under
this Plan, the value of a Fund's net assets shall be computed in the manner
specified in the Fund's prospectus as then in effect.
2
<PAGE> 3
(d) The Distributor shall provide the Board of Trustees with a
written report at least quarterly, of all amounts expended pursuant to Part I of
this Plan. The report shall state the purpose for which the amounts were
expended.
(e) This Distribution Services Plan shall continue until
October 31, 1996, unless earlier terminated in accordance with its terms, and
thereafter shall continue automatically for successive annual periods, provided
such continuance is approved by a majority of the Board of Trustees, including a
majority of the Trustees who are not "interested persons" (as defined in the
Act) of the Company and who have no direct or indirect financial interest in the
operation of this Plan or in any agreements entered into in connection with this
Plan (the "Disinterested Trustees"), pursuant to a vote cast in person at a
meeting called for the purpose of voting on the continuance of this Distribution
and Administrative Services Plan.
(f) This Plan may be amended at any time by the Board of
Trustees provided that (i) any amendment to increase materially the costs which
any Fund may bear for distribution and administrative services pursuant to Part
I of the Plan shall be effective only upon approval by a vote of a majority of
the outstanding voting securities of the respective Fund, and (ii) any material
amendments of the terms of this Plan shall become effective only upon approval
as provided in paragraph (e) hereof.
(g) This Plan is terminable, as to any class of any Fund,
without penalty at any time by a (i) vote of a majority of the Disinterested
Trustees, or (ii) vote of a majority of the outstanding voting securities of
such class.
(h) The Company's Board of Trustees has adopted this Plan as
of April 22, 1996.
3
<PAGE> 1
Exhibit 18
TIME HORIZON FUNDS
MULTIPLE CLASS PLAN
This Multiple Class Plan ("Plan") has been prepared, pursuant
to the requirements of rule 18f-3(d) under the Investment Company Act of 1940
("Investment Company Act" or "Act"), in connection with the offer and sale of
shares of Time Horizon Funds (the "Company"). The Company is a multiple class
fund within the meaning of rule 18f-3.
In accordance with the requirements of rule 18f-3, this Plan
describes the differences between the classes of shares that are issued by the
Company, including the various services offered to shareholders, the
distribution arrangement that pertains to each class, the methods of allocating
expenses relating to those differences, and the conversion features or exchange
privileges relating to the classes.
I. Background
----------
The Company is an open-end investment company registered under
the Investment Company Act. The Company currently has four authorized separate
series ("Funds") -- Time Horizon Portfolio 1, Time Horizon Portfolio 2, Time
Horizon Portfolio 3 and Time Horizon Portfolio 4.
Each Fund has three classes of shares: Class A, Class B and
Class K. The classes of each Fund represent interests in the same portfolio of
investments held by that Fund and, except as described below, are identical in
all respects. The classes differ in the following respects: (1) in the manner in
which an investor may pay for the distribution of shares of the Funds; (2) in
the expenses that may be incurred by one class as compared to another, and in
the method of allocating expenses between the classes; (3) in the services
provided to shareholders of each class; and (4) in the voting rights accorded to
each class. These differences are discussed below in more detail.
II. Discussion of Differences
-------------------------
A. Distribution and Service Arrangements
-------------------------------------
A Class A shareholder of a Fund pays a front-end sales charge
of up to 4.5% of the offering price at time of investing in the Fund. The
offering price is based on the Fund's net asset value per share plus the
front-end sales load. In addition, a Class A shareholder of a Fund pays a
shareholder servicing fee assessed at a rate of 0.25% of the average annual net
assets of the Class A shares of the Fund.
<PAGE> 2
A Class B shareholder of a Fund pays a "spread load"
consisting of a distribution fee and a contingent deferred sales load ("CDSL").
The distribution fee is assessed pursuant to a Distribution Plan adopted by the
Board of Trustees for the Funds in accordance with the requirements of rule
12b-1 under the Investment Company Act. This fee is assessed at a current rate
of 0.75% of the average annual net assets of the Class B shares of each Fund.
The CDSL has been established at a maximum level of 5.00% of the lesser of the
current market value or the cost of the shares being redeemed. A Class B
shareholder of a Fund also pays a shareholder servicing fee assessed at a rate
of 0.25% of the average annual net assets of the Class B shares of the Fund.
A Class K shareholder of a Fund pays a "level load,"
consisting of a distribution and/or administrative services fee as well as a
shareholder servicing fee. The total of all distribution, administrative
services and shareholder services fees may not exceed, in the aggregate, the
annual rate of 1.00% of the average daily net assets of a Fund's K Shares. A
distribution and administrative services fee may be assessed pursuant to a
Distribution and Administrative Services Plan adopted by the Board of Trustees
for the Funds in accordance with the requirements of Rule 12b-1 under the
Investment Company Act. This fee is assessed at a current rate of 0.75% of the
average annual net assets of the Class K shares of each Fund. Alternatively, an
administrative services fees may be assessed pursuant to an Administrative and
Shareholders Services Plan. This fee is assessed at a current rate of 0.75% of
the average annual net assets of the Class K Shares of each Fund. A Class K
shareholder of a Fund also pays a shareholder servicing fee assessed at a rate
of 0.25% of the average annual net assets of the Class K Shares of the Fund.
B. Paying for Expenses
-------------------
1. Expenses Allocated to a Particular Class
----------------------------------------
Certain expenses of each Fund will be allocated solely to a
particular class of shares of that Fund because they relate only to the
distribution of shares of that class or to services provided only to the
shareholders of that class. Such expenses include:
(a) distribution expenses associated with the sale of Class B and
Class K shares and for which a distribution fee will be
assessed;
(b) shareholder servicing fees associated with the servicing of a
specific class;
(c) incremental transfer agent fees identified by the transfer
agent as being attributable to a specific class;
(d) printing and postage expenses related to preparing and
distributing materials such as shareholder reports,
prospectuses, and proxies to shareholders of a particular
class;
2
<PAGE> 3
(e) blue sky registration fees incurred by a particular class;
(f) SEC registration fees incurred by a particular class;
(g) the expenses of administrative personnel and services as
required to support the shareholders of a particular class;
(h) litigation or other legal expenses relating to one class;
(i) trustees' fees incurred as a result of issues relating to one
class;
(j) any other incremental expenses subsequently identified that
should be properly allocated to one class of shares.
2. Expenses Allocated to All Classes
---------------------------------
Other expenses of the each Fund will be allocated to all
classes of shares of the Fund in accordance with the requirements of rule
18f-3(c). These include the management fee paid to Bank of America National
Trust and Savings Association ("Bank of America"), the manager to the Funds; the
custodial fee; and certain other expenses of the Funds. These expenses will be
allocated to each class of a Fund based upon the net asset value of such class
in relation to the net asset value of the Fund.
3. Dividends
---------
Dividends paid by each Fund as to each class of shares, to the
extent any dividends are paid, will be calculated in the same manner, at the
same time, on the same day, and will be in the same amount; except that any
distribution fees, shareholder servicing fees and class expenses allocated to a
class will be borne exclusively by that class.
C. Differences in Services Offered
-------------------------------
1. Conversions of Classes of Shares
--------------------------------
(a) Class B shares will convert to Class A shares on the first
business day of the month following the eighth anniversary of the date of
purchase.
(b) Any conversion of shares of one class of shares to another
class is subject to the continuing availability of a ruling of the Internal
Revenue Service or an opinion of counsel to the effect that the conversion of
shares does not constitute a taxable event under federal income tax law. Any
such conversion may be suspended if such a ruling or opinion is no longer
available.
2. Exchange of Classes of Shares
-----------------------------
3
<PAGE> 4
Class A, Class B and Class K Interests of a series may be
exchanged for Class A, Class B and Class K Interests, respectively, of any other
series, or any similar class of any investment company (or series) managed,
administered or distributed by Bank of America (or its affiliates), on such
terms as are determined by the Trustees from time to time and as described in
the Funds' prospectus. Exchanges will comply with all applicable provisions of
Rule 11a-3 under the Investment Company Act. For purposes of calculating the
time period remaining on the conversion of Class B shares to Class A shares,
Class B shares received on exchange retain their original purchase date.
D. Voting of Class Shares
----------------------
A Class B shareholder of a Fund has exclusive voting rights
with respect to the approval of the Distribution Plan with respect to the Fund.
A Class K shareholder of a Fund has exclusive voting rights with respect to the
approval of the Distribution and Administrative Services Plan with respect to
the Fund. In all other respects, the voting rights of a Class A, Class B and
Class K shareholder of a Fund are the same. Each shareholder is entitled to one
vote for each full share held and fractional votes for fractional shares held.
Shareholders will vote in the aggregate and not by class or series, except as
noted above and where otherwise required by law (or when permitted by the Board
of Trustees).
III. Amendment
---------
All material amendments to this Plan must be approved by a
majority of the Trustees, including a majority of the Trustees who are not
interested persons of the Company.
4
