To improve flexibility and adaptability of the multi-agent formation, this paper studies the centroid tracking problem of cluster formation. In particular, a team of agents are separated into multiple clusters, and the clustered agents are coordinated such that i) each cluster forms a prescribed configuration, ii) all the cluster centroids form another prescribed configuration, and iii) the centroid of the whole team tracks a reference trajectory. The agents are characterized by second-order dynamics. In addition, heterogenous input saturation levels are considered into the multi-agent system. A saturated distributed control algorithm resorting to three distributed observers is proposed. The first two distributed observers with proper initial conditions enable each agent to accurately obtain the centroid of its corresponding cluster and that of the whole team. And the third distributed observer helps each agent get the accurate reference acceleration information. It is demonstrated that the proposed saturated distributed control algorithm guarantees the accomplishment of the centroid tracking objective of cluster formation. Besides, we apply the proposed saturated distributed control algorithm to the clustered VTOL AAV formation. Simulation results finally verify the effectiveness of the proposed saturated distributed control algorithm.