0001021408-01-509480.txt : 20011128
0001021408-01-509480.hdr.sgml : 20011128
ACCESSION NUMBER: 0001021408-01-509480
CONFORMED SUBMISSION TYPE: DEFS14A
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 20011214
FILED AS OF DATE: 20011107
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: TIMOTHY PLAN
CENTRAL INDEX KEY: 0000916490
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 597016828
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: DEFS14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 811-08228
FILM NUMBER: 1776866
BUSINESS ADDRESS:
STREET 1: 1304 W FAIRBANKS AVE
CITY: WINTER PARK
STATE: FL
ZIP: 32789
BUSINESS PHONE: 4076441986
MAIL ADDRESS:
STREET 1: 1304 W FAIRBANKS AVE
CITY: WINTER PARK
STATE: FL
ZIP: 32789
DEFS14A
1
ddefs14a.txt
DEFINITIVE NOTICE & PROXY STATEMENT
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Timothy Plan Large/Mid-Cap Value Fund
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(Name of Registrant as Specified In Its Charter)
Timothy Plan Large/Mid-Cap Value Fund
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
TIMOTHY PLAN LARGE/MID-CAP VALUE FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on December 14, 2001
TO THE SHAREHOLDERS:
Timothy Plan Large/Mid-Cap Value Fund (the "Fund") is holding a special
meeting of shareholders ("Meeting") on December 14, 2001 at 10:00 a.m. Eastern
time. The place of the Meeting is 1304 West Fairbanks Avenue, Winter Park,
Florida 32789.
The purpose of the meeting is as follows:
(1) To approve a Subadvisory Agreement with Fox Asset Management, LLC; and
(2) To ratify the selection of Tait, Weller & Baker LLP as independent
accountants for the Fund for the fiscal year ending December 31, 2002.
The Fund offers Class A and Class B shares. This proxy statement relates to
both share classes of the Fund. You may vote at the meeting if you are the
record owner of any class of shares of the Fund as of the close of business on
October 31, 2001. If you attend the meeting, you may vote your shares in
person. If you expect to attend the meeting in person, please notify the Fund
by calling (800) 846-7526. If you do not expect to attend the meeting, please
fill in, sign and return the proxy card in the enclosed envelope.
Thank you for your cooperation and continued support.
By order of the Board of Trustees,
Arthur D. Ally
Chairman and President
November 6, 2001
TIMOTHY PLAN LARGE/MID-CAP VALUE FUND
1304 West Fairbanks Avenue
Winter Park, FL 32789
PROXY STATEMENT
Dated November 6, 2001
SPECIAL MEETING OF SHAREHOLDERS
To be held on December 14, 2001
Timothy Plan Large/Mid-Cap Value Fund (the "Fund") is holding a special meeting
of shareholders ("Meeting") on December 14, 2001 at 10:00 a.m. Eastern time.
The place of the Meeting is 1304 West Fairbanks Avenue, Winter Park, Florida
32789.
The Board of Trustees ("Board") of the Fund is sending you this proxy statement
and the enclosed proxy card on behalf of the Fund. The Board is soliciting your
proxy to vote at the Meeting.
Proposals
The following proposals will be presented at the Meeting:
(1) To approve a Subadvisory Agreement with Fox Asset Management, LLC.
(2) To ratify the selection of Tait, Weller & Baker LLP as independent
accountants for the Fund for the fiscal year ending December 31, 2002.
Who is Eligible to Vote?
The Board is sending this proxy statement on or about November 12, 2001 to all
shareholders entitled to vote. Shareholders who owned any class of shares of
the Fund at the close of business on October 31, 2001 ("Record Date") are
entitled to vote. The number of each class of shares of the Fund outstanding on
the Record Date was 1,101,619 Class A shares and 334,774 Class B shares. Each
share of the Fund entitles you to one vote on each proposal set forth above, and
each fractional share entitles you to a fractional vote.
How to Vote
Voting by Proxy
Whether you plan to attend the meeting or not, the Board urges you to complete,
sign and date the enclosed proxy card and to return it promptly. Returning the
proxy card will not affect your right to attend the meeting and vote.
2
The Board has named Arthur D. Ally and Joseph E. Boatwright as proxies. If you
properly complete your proxy card and send it to the Fund, your proxy will vote
your shares as you have directed. If you sign the proxy card but do not make
specific choices, your proxy will vote your shares with respect to Proposals 1
and 2 as recommended by the Board.
If any other matter is presented, your proxy will vote in accordance with his
best judgment. At the time this proxy statement was printed, the Board knows of
no matter that needs to be acted on at the meeting other than those discussed in
this proxy statement. If you appoint a proxy, you may revoke it any time before
it is exercised. You can do this by sending in another proxy with a later date
or by notifying the Fund's Secretary in writing before the meeting.
Voting in Person
If you do attend the meeting and wish to vote in person, you will be given a
ballot when you arrive. If shares are held in the name of a pension plan, you
must bring a letter from the plan authorizing you to vote the shares on the
plan's behalf.
Board Recommendation
The Board recommends that shareholders vote FOR each of the proposals.
Quorum and Required Vote
A quorum of shareholders is necessary to hold a valid meeting. The presence in
person or by proxy of shareholders entitled to cast a majority of all votes
entitled to be cast at the meeting constitutes a quorum.
The affirmative vote of a majority of the outstanding voting securities of the
Fund, as defined in the Investment Company Act of 1940 ("Investment Company
Act") is required to approve the Fund's new Subadvisory Agreement (Proposal 1).
The affirmative vote of a majority of votes cast is required to ratify the
Fund's independent accountants (Proposal 2). Under rules applicable to broker-
dealers, if your broker holds your shares in its name, the broker is allowed to
vote your shares on Proposal 2 (Ratification of Independent Accountants) even if
it has not received voting instructions from you. However, your broker is not
allowed to vote your shares on Proposal 1 (Approving a new Subadvisory
Agreement) unless it has received voting instructions from you. If your broker
does not vote your shares on Proposal 1 because it has not received instructions
from you, those shares will be considered broker non-votes. Broker non-votes
and abstentions with respect to a proposal count as present for purposes of
establishing a quorum. Abstentions and broker non-votes will not count as votes
cast and will have the effect of votes against Proposal 1, and will have no
effect on Proposal 2.
Information About the Fund
Upon your request, the Fund will furnish you with a free copy of its most recent
annual report and the most recent semi-annual report. You should direct your
request to Unified Fund Services, Inc. at 431 N. Pennsylvania Street,
Indianapolis, IN 46204 or by calling (800) 662-0201.
3
PROPOSAL 1: APPROVAL OF A NEW SUBADVISORY AGREEMENT
At a meeting held on August 3, 2001, the Board voted to recommend that you
approve a proposal to adopt a new subadvisory agreement between Timothy
Partners, Ltd., the Fund's Advisor, and Fox Asset Management, LLC ("Fox" or the
"Subadviser"). Effective as of September 30, 2001, Eaton Vance Corp. (through
a wholly owned subsidiary) acquired 80% of the outstanding common stock of Fox
Asset Management, Inc., the Fund's current subadviser. This change in control
of the Subadvisor resulted in an automatic termination of the subadvisory
agreement. The Board is asking you to vote on this new agreement because the
Advisor may enter into a new subadvisory agreement only with shareholder
approval. Despite this change of control in the subadviser, there are no
material changes to the new subadvisory agreement and no fee increase is
proposed.
Terms of the New Subadvisory Agreement
The initial subadvisory agreement with Fox Asset Management, Inc. was approved
by the Board and the Fund's initial shareholder effective as of May 1, 1999.
The Board approved an interim subadvisory agreement effective as of August 3,
2001 which grants Fox authority to act as subadviser for the Fund effective as
of the date of the change of control of Fox for a period not to exceed 150 days
thereafter.
The terms of the proposed new Subadvisory Agreement with Fox are identical in
all material respects to the initial and the interim subadvisory agreements.
Under the terms of the Subadvisory Agreement, the Subadviser agrees to manage
the investment and reinvestment of the Fund's assets and continuously review,
supervise and administer the investment program of the Fund, with discretion to
purchase and sell securities on behalf of the Fund in accordance with its
investment objective, policies and restrictions. The Subadviser also provides
the Advisor and the Board at least quarterly with economic and investment
analyses and reports concerning the Subadvisor's discharge of its duties. The
Subadviser is not liable for any error of judgment or mistake of law or for any
loss suffered by the Fund in connection with the matters to which the
subadvisory agreement relate except a loss resulting from the willful
misfeasance, bad faith or negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under the
agreement.
The new Subadvisory Agreement will automatically terminate if assigned and may
be terminated without penalty at any time by the Advisor, by a vote of a
majority of the Board or by a vote of a majority of the outstanding voting
securities of the Fund on no less than sixty (60) days written notice to the
Subadviser, or by the Subadviser upon no less than sixty (60) days written
notice to the Fund. The Subadvisory Agreement will continue in effect initially
for two years and annually thereafter, provided that such continuance is
specifically approved by a vote of the Board, including the affirmative votes of
a majority of the Trustees who are not parties to the Agreement or "interested
persons" (as defined in the Investment Company Act) of any such party, cast in
person at a meeting called for the purpose of considering such approval, or by
the vote of shareholders.
4
No Fee Increase
Currently, the subadvisory fee paid to Fox Asset Management, Inc. is 0.42% of
the first $10 million of the Fund's average daily net assets, 0.40% of the next
$5 million, 0.35% of the next $10 million, and 0.25% of the average daily net
assets in excess of $25 million. For the fiscal year ended December 31, 2000,
the Advisor paid Fox $12,028 in subadvisory fees. Under the proposed new
Subadvisory Agreement, Fox will receive an annual fee at the same rates as set
forth above. There will be no increase in subadvisory fees or aggregate fees to
the Fund and its shareholders.
Under the interim subadvisory agreement, the compensation earned by Fox is being
held in an interest-bearing escrow account with the Fund's custodian bank. If a
majority of the Fund's outstanding voting securities approve a final Subadvisory
Agreement with the Fund by the end of the 150-day period following the closing
of the transaction between Fox and Eaton Vance, the amount held in the escrow
account (including interest) will be paid to the Subadviser.
If a majority of the Fund's outstanding voting securities do not approve the new
Subadvisory Agreement, the Subadvisor will be paid, out of the escrow account,
the lesser of: (1) any costs incurred by the Subadviser in performing services
under the interim agreement (plus interest earned on that amount while in
escrow) or (2) the total amount in the escrow account (plus interest earned).
Factors the Board Considered
The Board discussed the approval of the proposed new Subadvisory Agreement at a
meeting held in person on August 3, 2001. In evaluating the new arrangement, the
Board reviewed materials furnished by Fox relevant to its decision. The Board
reviewed materials including information regarding Eaton Vance and its
affiliates, personnel, operations, financial condition, investment philosophy,
method of managing portfolios and long-term experience and investment results in
the large cap/mid-cap value markets. Upon careful review, the Board approved
Fox as the new subadviser for the Fund for these reasons:
1. Fox has substantial investment experience in both the large-cap and mid-cap
value markets, which combined expertise is difficult to find in an
investment subadviser;
2. Fox has displayed discipline and thoroughness in pursuit of its stated
investment objectives;
3. Fox has consistently maintained above-average performance for the Fund and
its other large and mid-cap value accounts;
4. Fox has demonstrated a high level of service and responsibility to its
clients;
5. Fox is independent from the Fund, the Board of Trustees, and the Fund's
Advisor;
6. Fox has agreed to act as subadviser to the Fund according to the terms of
the current subadvisory agreement and fee schedule, with no increase in
fees to the Fund; and
7. Fox will be a company of Eaton Vance Corp., a large, well-established and
financially stable company.
After reviewing these factors, the Board concluded that it is in the best
interests of the Fund and its shareholders to approve the new Subadvisory
Agreement with Fox. The Board reached its conclusion after careful discuss and
analysis. The Board believes that it has carefully and thoroughly examined the
pertinent issues and alternatives. In recommending that you approve the
5
proposed subadvisory agreement, the independent trustees have considered what
they believe to be in the shareholders' best interests.
About the New Subadviser
Fox Asset Management LLC, a Delaware limited liability company, is located at 44
Sycamore Avenue, Little Silver, NJ 07739. Fox currently manages more than $1.5
billion in large cap/mid-cap value accounts.
Fox is owned 80% by Eaton Vance Acquisition, a Delaware business trust which, in
turn, is 100% owned by Eaton Vance Corp., a Maryland corporation. The business
address of these firms is 225 State Street, Boston, MA 02109. The remaining
20% of Fox is owned by Saucon I, Inc., a New Jersey corporation. The business
address of this firm is 44 Sycamore Avenue, Little Silver, NJ 07739. Saucon I
is owned 60% by J. Peter Skirkanich, Manager of Fox, and the remaining 40% is
owned by other employees of Fox.
Subadvisor's Investment Philosophy
Fox believes that a disciplined, value-oriented investment approach results in
premium returns over the long haul with substantially less volatility. It
applies various aspects of modern security analysis, works of certain
academicians and practitioners, and a reverent perspective of stock market
history to the large/mid cap equity practice.
Fox's investment objective is superior long-term total return and capital
preservation, goals which are meant to help clients gain a level of comfort
necessary to properly maintain a long-term perspective. Fox typically invests
in larger companies, although a portion of client portfolios may be invested in
mid-cap stocks. Led by strong and proven management, the companies in which Fox
invests generally have demonstrated an ability to produce leading products and
services. A great number of its holdings are industry leaders, both
domestically and internationally, reflecting Fox's commitment to investing in
high quality companies.
Fox's value-oriented strategy begins with a screening process that seeks to
identify growing companies whose stock sells at discounted price to earnings
(P/E) and price to cash flow (P/CF) multiples. Fox favors companies that
maintain strong balance sheets and provide above-average dividend yields. It
also attempts to discern situations where intrinsic asset values are not widely
recognized. Fox firmly believes that the purchase of undervalued, yet
financially sound and well-managed companies, results in long-term shareholder
wealth. Although Fox employs a "bottom-up" approach to identify undervalued
stocks, it is sensitive to emerging secular trends. Fox does not, however, rely
upon economic forecasts in its stock-selection efforts, and prefers to remain
fully invested.
The various components of Fox's value-oriented philosophy are as follows:
. Low P/E with above-average earnings growth;
. Low price-to-cash flow;
. Strong financial condition;
. Solid dividend yield;
. Domestic Equities and ADRs;
. Low or declining Institutional holding.
6
Fox has advised the Fund that no benefits accrue to Fox as a result of the
Subadvisory Agreement, such as soft dollar benefits.
Executive Officer and Managers of Fox
Name and Address Title and Principal Occupation
---------------- ------------------------------
James B. Hawkes Manager of Fox, Chairman, President and CEO
c/o Eaton Vance Acquisition of Eaton Vance Corp.
225 State Street
Boston, MA 02109
Lawrence M. Sinsimer Manager of Fox, Senior Vice President of
c/o Eaton Vance Acquisition Eaton Vance Distributors
225 State Street
Boston, MA 02109
J. Peter Skirkanich Manager of Fox
c/o Fox Asset Management LLC
44 Sycamore Avenue
Little Silver, NJ 07739
James P. O'Mealia Manager of Fox
c/o Fox Asset Management LLC
44 Sycamore Avenue
Little Silver, NJ 07739
George C. Pierides Manager of Fox
c/o Fox Asset Management LLC
44 Sycamore Avenue
Little Silver, NJ 07739
John R. Sampson Manager of Fox
c/o Fox Asset Management LLC
44 Sycamore Avenue
Little Silver, NJ 07739
Philip R. Sloan Manager of Fox
c/o Fox Asset Management LLC
44 Sycamore Avenue
Little Silver, NJ 07739
Portfolio Manager
Mr. J. Peter Skirkanich, Manager of Fox Asset Management, LLC, will continue to
serve as portfolio manager of the Fund. Since the Fund's inception in July
1999, he has been responsible for the day-to-day recommendations regarding
investment of the Fund's portfolio.
Mr. Skirkanich is the founder of Fox and serves as chairman of its investment
committee. Mr. Skirkanich was formerly Managing Director of Dreman Value
Management, Inc., an investment
7
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 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.
Comparison of Subadvisory Fees
Fox has advised the Fund that it also acts as subadvisor to the Viking Large-Cap
Fund, a registered investment company with an investment objective similar to
the Fund's. As of September 30, 2001, the Viking Large-Cap Fund had assets of
approximately $1,998,749. For its subadvisory services to the Viking Large-Cap
Fund, Fox receives a fee of 0.40% of the first $100 million of the fund's
average daily net assets, and 0.35% of its net assets in excess of $100 million.
Effective Date
If approved, the new Subadvisory Agreement will become effective as of December
14, 2001 or as soon thereafter as possible.
The Board of Trustees, including the independent trustees,
unanimously recommends that you vote "FOR" Proposal 1.
8
PROPOSAL 2: RATIFICATION OF TAIT, WELLER & BAKER LLP
The Board has selected Tait, Weller & Baker LLP as the independent accountants
for the Fund for its fiscal year ending December 31, 2002. As the Fund's
independent accountants, Tait, Weller & Baker will examine and verify the
accounts and securities of the Fund and report on them to the Board and to the
Fund's shareholders. The Board's selection will be submitted for your
ratification at the Meeting.
Tait, Weller & Baker was selected primarily on the basis of its expertise as
auditors of investment companies, its independence from the Fund and its
affiliates, the quality of its audit services, and the competitiveness of the
fees charged for these services.
The Board expects that a representative of Tait, Weller & Baker will be present
via teleconference at the meeting. The representative will have an opportunity
to make a statement should he desire to do so and will be available to respond
to shareholders' questions.
The Board of Trustees, including the independent trustees,
unanimously recommends that you vote "FOR" Proposal 2.
9
GENERAL INFORMATION
Executive Officers of the Fund
------------------------------
Arthur D. Ally July 1999 Chairman, President and Treasurer of the Fund (July
1304 West Fairbanks Avenue, 1999-Present);
Winter Park, Florida 32789
Joseph E. Boatwright July 1999 Secretary of the Fund (July 1999-Present)
442 Raymond Avenue
Longwood, FL
Principal Security Holders
As of the Record Date, Firstar FBO Band & Co., Milwaukee, WI, owned 39% of the
Fund's Class A shares.
Advisor, Administrator and Distributor of the Fund
Timothy Partners, Ltd., 1304 West Fairbanks Avenue, Winter Park, Florida 32789
has served as Advisor and principal underwriter of the Fund since its inception
in July 1999.
Unified Fund Services, Inc., 431 N. Pennsylvania Avenue, Indianapolis, IN 46204
provides administration services to the Fund.
Proxy Expenses
The Fund has not hired a proxy solicitor. Fox will pay the costs of this proxy
statement and proxy solicitation directly.
Shareholder Proposals
As a general matter, the Fund does not hold annual meetings. If you would like
to submit a proposal for consideration at a shareholders' meeting, you should
send the proposal to the Fund at the address above. To be considered for
presentation at a meeting, the Fund must receive proposals a reasonable time
before proxy materials are prepared relating to that meeting. Your proposal
also must comply with applicable law.
OTHER MATTERS
The Board does not know of any other matters to be presented at the meeting
other than those set forth in this proxy statement. If any other business
should come before the Meeting, the persons named in the accompanying proxy will
vote thereon in their best judgment.
10
TIMOTHY PLAN LARGE/MID-CAP VALUE FUND
SPECIAL MEETING OF SHAREHOLDERS
November 6, 2001
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
TIMOTHY PLAN LARGE/MID-CAP VALUE FUND
The undersigned hereby appoints Arthur D. Ally and Joseph E. Boatwright,
and each of them, as proxies of the undersigned, each with the power to appoint
his substitute, for the Special Meeting of Shareholders of the Timothy Plan
Large/Mid-Cap Value Fund (the "Fund"), to be held on December 14, 2001, 10:00
a.m. Eastern time, at 1304 West Fairbanks Avenue, Winter Park, Florida 32789,
and at any and all adjournments thereof (the "Meeting"), to vote, as designated
below, all classes of shares of the Fund held by the undersigned at the close of
business on October 31, 2001. Capitalized terms used without definition have
the meanings given to them in the accompanying Proxy Statement.
A signed proxy will be voted in favor of the Proposals listed below unless
you have specified otherwise. Please sign, date and return this proxy promptly.
You may vote only if you held any class of shares in the Fund at the close of
business on October 31, 2001. Your signature authorizes the proxies to vote in
their discretion on such other business as may properly come before the Meeting
including, without limitation, all matters incident to the conduct of the
Meeting.
Please vote by filling in the boxes below.
Proposal 1: To approve a new Subadvisory Agreement with Fox Asset
Management, LLC.
FOR [_] AGAINST [_] ABSTAIN [_]
Proposal 2: To ratify the selection of Tait, Weller & Baker LLP as
independent accountants for the Fund for the fiscal year ending December
31, 2002.
FOR [_] AGAINST [_] ABSTAIN [_]
______________________________________________________ Dated: ________ ___,2001
[Shareholder Name]
______________________________________________________ Dated: _______ ___, 2001
[Signature(s) (if held jointly)]
1
Please sign exactly as the name or names appear on your shareholder account
statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give your full title. If
shares are held jointly, each shareholder should sign.
2