<PAGE>
As Filed With The Securities And Exchange Commission On May 26, 1998
File No. 333-22967
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 7
Post-Effective Amendment No.
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THE NAVELLIER PERFORMANCE FUNDS
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(Exact Name of Registrant as Specified in Charter)
One East Liberty Street, Third Floor, Reno, Nevada 89501
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(Address of Principal Executive Offices) (Zip Code)
(702) 785-2300
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(Registrant's Telephone Number, Including Area Code)
Mr. Louis G. Navellier
The Navellier Performance Funds
One East Liberty, Third Floor
Reno, Nevada 89501
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(Name and Address of Agent for Service of Process)
Copies to:
Samuel Kornhauser, Esq.
155 Jackson Street, Suite 1807
San Francisco, California 94111
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
The Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Section 24(f) under the Investment Company
Act of 1940; accordingly, no fee is payable herewith. The Registrant has
undertaken to file on February 28, 1999, a Rule 24f-2 Notice for its most recent
fiscal year ended December 31, 1998.
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THE NAVELLIER PERFORMANCE FUNDS
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following
pages and documents:
Front Cover
Contents Page
Cross-Reference Sheet
Letters to Shareholders
Notice of Special Meeting
PART A
Combined Prospectus/Proxy Statement
PART B
Statement of Additional Information
PART C
Other Information
Signatures
Exhibits
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THE NAVELLIER PERFORMANCE FUNDS
REGISTRATION STATEMENT ON FORM N-14
CROSS REFERENCE SHEET
N-14 LOCATION IN
ITEM NO. REGISTRATION STATEMENT
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PART A. INFORMATION REQUIRED IN PROSPECTUS/PROXY STATEMENT
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1. Beginning of Registration Cover Page; Cross Reference Sheet
Statement and Outside Front
Cover Page of Prospectus
2. Beginning and Outside Back Table of Contents
Cover Page of Prospectus
3. Synopsis and Risk Factors Synopsis; Principal Risk Factors
4. Information About the Synopsis; The Proposed Transactions;
Transaction Appendix A
5. Information About the Synopsis; Comparison of Investment
Registrant Objectives and Policies; Principal Risk
Factors; Additional Information About the
Acquiring Fund and the Acquiring Fund
Shares; Miscellaneous; Current Prospectus
of The Navellier Aggressive Small Cap
Equity Portfolio
6. Information About the Company Synopsis; Comparison of Investment
Being Acquired Objectives and Policies; Principal Risk
Factors; Additional Information About the
Portfolio and the Portfolio Shares;
Current Prospectus of The Navellier
Aggressive Small Cap Equity Portfolio
7. Voting Information Introduction and Voting Information;
Synopsis
8. Interest of Certain Persons Introduction and Voting Information; The
and Experts Proposed Transactions; Miscellaneous
9. Additional Information Not Applicable
Required for Reoffering by
Persons Deemed to be
Underwriters
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N-14 LOCATION IN
ITEM NO. REGISTRATION STATEMENT
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PART B: INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
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10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. Additional Information About Current Statement of Additional
the Registrant Information of The Navellier Aggressive
Small Cap Equity Portfolio of The
Navellier Performance Funds
PART B: INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION (CONTINUED)
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13. Additional Information About Current Statement of Additional
the Company Being Acquired Information of The Navellier Series Fund
14. Financial Statements Current Annual Report of The Navellier
Performance Funds (December 31, 1997);
Current Annual Report of The Navellier
Series Fund (December 31, 1997); "PRO
FORMA FINANCIAL STATEMENTS"
(December 31, 1997)
PART C: OTHER INFORMATION
--------------------------
15. Indemnification Indemnification
16. Exhibits Exhibits
17. Undertakings Undertakings
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THE NAVELLIER SERIES FUND
ONE EAST LIBERTY STREET, THIRD FLOOR
RENO, NEVADA 89501
1-800-887-8671
MAY 26, 1998
TO THE SHAREHOLDERS OF
THE NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
Dear Shareholder:
A special meeting of the shareholders of The Navellier Aggressive Small Cap
Equity Portfolio (the "Portfolio"), a series of The Navellier Series Fund will
be held at 10:00 A.M., Pacific Standard Time, on June 19, 1998, or a date
shortly thereafter, at the offices of The Navellier Series Fund, One East
Liberty Street Third Floor, Reno, Nevada 89501 (the "Meeting"). The shareholders
of the Portfolio (the "Shareholders") will vote on a proposed Agreement and Plan
of Reorganization (the "Plan"). Under the Plan, the Navellier Aggressive Small
Cap Equity Portfolio will merge into The Navellier Aggressive Small Cap Equity
Portfolio (the "Acquiring Fund"), a separate portfolio of The Navellier
Performance Funds (the "Reorganization"). The Acquiring Fund has investment
objectives and policies which are the same as the investment objectives,
investment style and policies of the Portfolio. The Acquiring Fund is a no load
portfolio but, unlike the Portfolio, does charge a 0.25% annual 12b-1 fee. To
offset this 0.25% annual 12b-1 fee which Portfolio shareholders will be charged
if a merger is approved, Navellier Management, Inc. has reduced its annual
management fee from 1.15% to 0.84% for Acquiring Fund shareholders.
If the Plan is approved and implemented by the Portfolio, the Shareholders
of the Portfolio will become shareholders of the Acquiring Fund and will receive
shares of the Acquiring Fund having an aggregate value equal to the aggregate
value of his or her investment in the Portfolio. No sales charge will be imposed
as a result of the Reorganization. The Acquiring Fund and the Portfolio have
received an opinion of counsel indicating that the Reorganization will qualify
as a tax-free reorganization for Federal income tax purposes which opinion has
been received.
I and the Trustees of the Portfolio by a unanimous vote have voted in FAVOR
of the proposed merger and are urging you and the other Portfolio shareholders
to vote FOR a merger of the Portfolio into the Acquiring Fund. I and the other
Portfolio Trustees ("Management") are soliciting your proxy (vote) because we
believe that the proposed merger should benefit Shareholders by reducing
portfolio operating costs.
We believe that this Reorganization is in the best interest of the Portfolio
and the Shareholders and, therefore, recommend that the Shareholders vote FOR
approving the Plan.
WE STRONGLY URGE YOU TO REVIEW, COMPLETE, AND RETURN YOUR GOLD PROXY CARD AS
SOON AS POSSIBLE. YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN.
VOTING YOUR SHARES EARLY WILL HELP TO AVOID COSTLY FOLLOW-UP MAIL AND TELEPHONE
SOLICITATION. LOUIS NAVELLIER AND NAVELLIER MANAGEMENT, INC. ARE PAYING FOR THIS
PROXY SOLICITATION AND WILL NOT SEEK REIMBURSEMENT FROM THE FUND OR YOU. AFTER
REVIEWING THE ENCLOSED MATERIALS, PLEASE EXERCISE YOUR RIGHT TO VOTE TODAY AND
VOTE FOR BY COMPLETING, DATING, AND SIGNING EACH PROXY CARD YOU RECEIVE AND
MAILING THE PROXY IN THE SELF-ADDRESSED, POSTAGE-PAID ENVELOPE TO MACKENZIE
PARTNERS AT 156 FIFTH AVENUE, NEW YORK, NY 10010. IT IS VERY IMPORTANT THAT YOU
VOTE AND THAT YOUR VOTING INSTRUCTIONS BE RECEIVED NO LATER THAN JUNE 19, 1998
OR A DATE SHORTLY THEREAFTER.
Please note that you may receive more than one proxy package if you hold
shares of the Portfolio in more than one account. You should return separate
proxy cards for each such account. If you have any questions, please call
Navellier Management, Inc. at 1-800-887-8671.
Sincerely,
Louis G. Navellier
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Trustee of The Navellier Aggressive
Small Cap Equity Portfolio of The
Navellier Series Fund
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THE TRUSTEES OF
THE NAVELLIER SERIES FUND
ONE EAST LIBERTY STREET, THIRD FLOOR
RENO, NEVADA 89501
------------------------
THE NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 19, 1998 OR A DATE SHORTLY THEREAFTER
To: The Shareholders of the Navellier Aggressive Small Cap Equity Portfolio of
The Navellier Series Fund
You are hereby notified that a Special Meeting of the Shareholders of The
Navellier Aggressive Small Cap Equity Portfolio of The Navellier Series Fund
will be held at the offices of The Navellier Series Fund One East Liberty
Street, Third Floor, Reno, Nevada 89501 on June 19, 1998 or a date shortly
thereafter at 10:00 a.m. (Pacific Standard Time), for the purpose of considering
and voting upon the following matter:
PROPOSAL 1.
To approve a proposed Agreement and Plan of Reorganization (the "Plan"),
whereby The Navellier Aggressive Small Cap Equity Portfolio ("Portfolio")
would transfer all of its assets to The Navellier Aggressive Small Cap
Equity Portfolio of The Navellier Performance Funds (the "Acquiring Fund")
in a tax-free exchange for shares of beneficial interest in the Acquiring
Fund that would be distributed to the shareholders of the Portfolio. Also,
as part of the Plan, the Acquiring Fund would assume all valid liabilities
of the Portfolio.
The transactions contemplated by the proposed Plan of Reorganization and
related matters are described in the attached Combined Prospectus/Proxy
Statement. A copy of the form of the proposed Plan is attached as Appendix A
thereto. A copy of the Investment Advisory Fee Agreement between the Acquiring
Fund and Navellier Management, Inc. reducing its management fee to 0.84% of the
Acquiring Fund's net asset value per annum is attached thereto as Appendix B. A
copy of the Acquiring Fund's 12b-1 Plan is attached thereto as Appendix C.
You are entitled to vote at the Meeting, and any adjournment(s) thereof, if
you owned shares of the Portfolio at the close of business on May 8, 1998. If
you attend the Meeting, you may vote your shares in person. If you do not expect
to attend the meeting, please complete, date, sign, and return the enclosed
proxy card marked FOR in the enclosed self-addressed, postage-paid return
envelope.
Louis G. Navellier
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Trustee of The Navellier Aggressive
Small Cap Equity Portfolio of The
Navellier Series Fund
May 26, 1998
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YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
PLEASE VOTE "FOR" PROPOSAL 1 ON THE ENCLOSED GOLD PROXY CARD, THEN PLEASE
DATE AND SIGN THE CARD AND RETURN THE PROXY CARD IN THE ENVELOPE PROVIDED. IF
YOU SIGN, DATE AND RETURN THE PROXY CARD BUT GIVE NO VOTING INSTRUCTIONS, YOUR
SHARES WILL BE VOTED "FOR" THE PROPOSAL NOTICED ABOVE. IN ORDER TO AVOID THE
ADDITIONAL EXPENSE AND DELAY OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN
MAILING IN YOUR GOLD PROXY CARD PROMPTLY SO THAT A QUORUM MAY BE ENSURED. A VOTE
OF 67% OF THE SHARES OF THE PORTFOLIO WHICH ARE PRESENT IN PERSON OR BY PROXY
AND ENTITLED TO VOTE (IF MORE THAN 50% OF THE OUTSTANDING SHARES OF RECORD ARE
PRESENT IN PERSON OR BY PROXY) OR MORE THAN 50% OF THE OUTSTANDING SHARES
ENTITLED TO VOTE, WHICHEVER IS LESS, IS REQUIRED TO PASS ANY PROPOSAL, SO RETURN
OF YOUR PROXY IS IMPORTANT. UNLESS PROXY CARDS SUBMITTED BY CORPORATIONS AND
PARTNERSHIPS ARE SIGNED BY THE APPROPRIATE PERSONS AS INDICATED IN THE VOTING
INSTRUCTIONS ON THE PROXY CARD, SUCH PROXY CARDS CANNOT BE VOTED.
Louis G. Navellier
--------------------------------------
Trustee of The Navellier Aggressive
Small Cap Equity Portfolio of The
Navellier Series Fund
<PAGE>
PROXY SOLICITATION
BY
THE TRUSTEES OF THE NAVELLIER
AGGRESSIVE SMALL CAP EQUITY PORTFOLIO OF THE NAVELLIER SERIES FUND
------------------------
ONE EAST LIBERTY STREET, THIRD FLOOR
RENO, NEVADA 89501
1-800-887-8671
COMBINED PROSPECTUS/PROXY STATEMENT
This combined prospectus/proxy statement is being furnished in connection
with the solicitation of proxies by the Trustees of The Navellier Aggressive
Small Cap Equity Portfolio ("Portfolio") of The Navellier Series Fund ("Fund"),
for use at a special meeting of shareholders ("Shareholders") of the "Portfolio"
to be held at 10:00 a.m., Pacific Standard Time, on June 19, 1998, or a date
shortly thereafter at the offices of The Navellier Series Fund, One East Liberty
Street, Third Floor, Reno, Nevada 89501, and at any adjournment(s) thereof (the
"Meeting"). The Meeting is being held so that shareholders can vote on the
following proposal made by the Trustees of the Portfolio:
PROPOSAL 1.
To approve a proposed Agreement and Plan of Reorganization (the "Plan"),
whereby the Portfolio would transfer all of its assets to The Navellier
Aggressive Small Cap Equity Portfolio of The Navellier Performance Funds
(the "Acquiring Fund") in a tax-free exchange for shares of beneficial
interest in the Acquiring Fund that would be distributed to the shareholders
of The Portfolio. Also, as part of the Plan, the Acquiring Fund would assume
all valid liabilities of The Portfolio.
The Portfolio is a series investment company organized by Louis Navellier as
a Business Trust in the State of Delaware with one class of common stock
outstanding, with such class representing an interest in a separate series of
the Fund. Since only one portfolio currently exists, all shareholders of the
Fund are being solicited in connection with the Meeting.
The purpose of the Meeting is to consider a proposed Plan of Reorganization
(the "Plan"), which would effect a merger of the Portfolio into the Acquiring
Fund, and the transactions contemplated thereby, as described below
(collectively, the "Reorganization"). The Navellier Performance Funds is a
series open-end investment company which seeks capital appreciation by investing
in growth securities. The Plan has been approved unanimously by the Board of
Trustees of the Portfolio and by the Board of Trustees of the Acquiring Fund.
Pursuant to the proposed Plan, all of the assets of the Portfolio would be
acquired by the Acquiring Fund (which has investment policies the same as those
of the Portfolio), in a tax-free exchange for shares of beneficial interest in
the Acquiring Fund ("Acquiring Fund Shares") and the assumption by the Acquiring
Fund of all valid liabilities of the Portfolio. Specifically, it is proposed
that the assets of the Portfolio be transferred to the Acquiring Fund in a
tax-free exchange for Acquiring Fund Shares of value equal to the assets
transferred from the Portfolio. Following such transfer, the Acquiring Fund
Shares received by the Portfolio would then be distributed pro rata to the
shareholders of the Portfolio, and then the Portfolio would be liquidated. As a
result of the proposed transactions, each shareholder of the Portfolio would
receive a number of full and fractional Acquiring Fund Shares having a total net
asset value equal, on the effective date of the Reorganization, to the net asset
value of the Shareholder's shares of common stock in the Portfolio. In order to
have a merger, the Trustees of the Portfolio and the Trustees of the Acquiring
Fund must approve the proposed merger. The Trustees of both the Portfolio and of
the Acquiring Fund have already approved the proposed merger.
This combined prospectus/proxy statement, which should be retained for
future reference, sets forth concisely the information about the Portfolio and
the Acquiring Fund, and the transactions contemplated
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by the proposed Reorganization, that an investor should know before voting on
the proposed Reorganization. A copy of the current Prospectus of The Navellier
Performance Funds dated May 26, 1998 is included with this combined
prospectus/proxy statement for each Shareholder of the Portfolio, and is
incorporated by reference herein.
A Statement of Additional Information regarding The Navellier Performance
Funds dated May 26, 1998 has been filed with the Securities and Exchange
Commission (the "Commission") and is incorporated by reference herein. Copies of
such Statement of Additional Information also may be obtained without charge by
contacting Navellier Management Inc. at One East Liberty Street, Third Floor,
Reno, Nevada 89501, or by telephoning Navellier Management, Inc., toll-free at
1-800-887-8671.
A Prospectus and a Statement of Additional Information regarding the
Portfolio each dated April 30, 1998 also have been filed with the Commission and
each is incorporated by reference herein.
Copies of these Portfolio documents also may be obtained without charge by
contacting Navellier Management, Inc., at One East Liberty Street, Third Floor,
Reno, Nevada 89501, or by telephoning Navellier Management, Inc., toll-free at
1-800-887-8671.
A Statement of Additional Information dated May 26, 1998, relating to the
proposed transactions described in this combined prospectus/proxy statement,
including historical financial statements, has been filed with the Commission
and is incorporated by reference herein. Copies of this Statement of Additional
Information may be obtained without charge by contacting Navellier Management,
Inc., at One East Liberty Street, Third Floor, Reno, Nevada 89501, or by
telephoning Navellier Management, Inc., toll-free at 1-800-887-8671.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Combined Prospectus/Proxy Statement is May 26, 1998.
2
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COMBINED PROSPECTUS/PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Introduction and Voting Information........................................................................ 4
Special Meeting; Voting of Proxies; Adjournment.......................................................... 4
Proxy Solicitation....................................................................................... 5
Revocation of Proxies.................................................................................... 5
No Dissenters' Rights of Appraisal....................................................................... 5
Additional Voting Information............................................................................ 6
Synopsis................................................................................................... 6
The Proposed Reorganization.............................................................................. 6
Investment Objectives and Policies....................................................................... 7
Operations of the Navellier Performance Funds and the Acquiring Fund following the Reorganization........ 8
Management Fees, Administrative Fees, and Other Operating Expenses....................................... 8
Purchases and Exchanges.................................................................................. 9
Redemption Procedures and Fees........................................................................... 10
Dividends and Distributions; Automatic Reinvestment...................................................... 10
Federal Tax Consequences of the Proposed Reorganization.................................................. 10
Costs and Expenses of the Reorganization................................................................. 10
Continuation of Shareholder Accounts; Share Certificates................................................. 11
Form of Organization of The Navellier Performance Funds.................................................. 11
Comparison of Investment Objectives and Policies........................................................... 11
Investment Objectives and Policies....................................................................... 12
Investment Objective of the Acquiring Fund............................................................... 12
Investment Objective of the Portfolio.................................................................... 12
Certain Investment Restrictions and Limitations.......................................................... 13
Principal Risk Factors..................................................................................... 14
The Proposed Transactions.................................................................................. 16
Proposed Agreement and Plan of Reorganization............................................................ 16
Reasons for the Proposed Transactions.................................................................... 17
Description of Securities to Be Issued................................................................... 18
Federal Income Tax Consequences.......................................................................... 19
Pro Forma Capitalization and Ratios...................................................................... 20
Dissolution of the Portfolios............................................................................ 20
Navellier Group Recommendation........................................................................... 21
Required Vote............................................................................................ 21
Additional Information About the Acquiring Fund and the Acquiring Fund Shares.............................. 21
Additional Information About the Portfolio and the Portfolio Shares........................................ 21
Miscellaneous.............................................................................................. 21
Available Information.................................................................................... 21
Legal Matters............................................................................................ 22
Financial Statements and Experts......................................................................... 22
Other Business............................................................................................. 23
Appendix A: Form of Agreement and Plan of Reorganization................................................... A-1
Appendix B: Investment Advisory Agreement Between Acquiring Fund and Navellier Management, Inc............. B-1
Appendix C: Distribution Agreement Between Acquiring Fund and Navellier Securities Corp.................... C-1
</TABLE>
3
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PART A
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SOLICITATION BY THE TRUSTEES OF
THE NAVELLIER SERIES FUND
ONE EAST LIBERTY STREET, THIRD FLOOR
RENO, NEVADA 89501
1-800-887-8671
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THE NAVELLIER SERIES FUND
(THE NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO)
------------------------
COMBINED PROSPECTUS/PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON
JUNE 19, 1998 OR A DATE SHORTLY THEREAFTER
------------------------
INTRODUCTION AND VOTING INFORMATION
SPECIAL MEETING; VOTING OF PROXIES; ADJOURNMENT
This combined prospectus/proxy statement is being furnished to the
shareholders of The Navellier Series Fund's Navellier Aggressive Small Cap
Equity Portfolio ("Portfolio") in connection with the solicitation by the
Trustees of the Portfolio, (collectively "your Trustees") of proxies to be used
at a special meeting of the shareholders of this Portfolio to be held on June
19, 1998 or a date shortly thereafter at 10:00 a.m. Pacific Standard Time at the
offices of The Navellier Series Trust, One East Liberty Street, Third Floor,
Reno, Nevada 89501 and at any adjournment(s) thereof (the "Meeting"). The
purpose of the Meeting is to vote on the proposed tax-free Reorganization (the
"Plan") to merge the Portfolio into The Navellier Aggressive Small Cap Equity
Portfolio (the "Acquiring Fund"), which is a series of The Navellier Performance
Funds, pursuant to the terms and conditions of the Plan, as described below in
greater detail. A vote on the approval or disapproval of the Plan will be
conducted at the Meeting by the shareholders of the Portfolio.
Shareholders of record of the Portfolio at the close of business on May 8,
1998 (the "Record Date") will be entitled to vote at the Meeting. Such holders
of shares of beneficial interest in the Portfolio ("Portfolio Shares") are
entitled to one vote for each Portfolio Share held and to fractional votes for
fractional Portfolio Shares held. A quorum for the Portfolio must be present in
person or represented by Proxy for the transaction of business at the Meeting.
The holders of record of one-third of the Portfolio Shares outstanding at the
close of business on that Record Date present in person or represented by proxy
will constitute a quorum for the Meeting of the Shareholders of the Portfolio. A
quorum being present, the approval at the Meeting by the shareholders of the
Portfolio for the proposed Reorganization requires the affirmative vote of at
least 67% of the outstanding shares of the Portfolio present in person or
represented by proxy at the Meeting if more than 50% of the outstanding shares
of the Portfolio are present in person or represented by proxy or more than 50%
of the outstanding shares entitled to vote, whichever is less.
If either (i) a quorum is not present at the Meeting or (ii) a quorum is
present but sufficient votes in favor of a matter proposed at the Meeting (a
"Proposal"), as set forth in the Notice of this Meeting, are not received by
June 19, 1998, or a date shortly thereafter, then the persons named as attorneys
and proxies in the enclosed proxy ("Proxies") may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of at least one-third of the
shares present in person or by proxy. The persons named as Proxies will vote
those proxies that such persons are required to vote FOR such Proposal in favor
of such an adjournment and will vote those proxies required to be voted AGAINST
such Proposal against such an adjournment. A Shareholder
4
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vote may be taken on a Proposal in this combined prospectus/proxy statement
prior to any such adjournment if sufficient votes have been received and it is
otherwise appropriate.
The individuals named as Proxies on the enclosed GOLD proxy card will vote
in accordance with your direction, as indicated thereon, if your proxy card is
received and is properly executed. If you properly execute your GOLD proxy and
give no voting instructions with respect to a Proposal, your shares will be
voted in favor of the Proposal. The duly-appointed Proxies, in their discretion,
may vote upon such other matters as may properly come before the Meeting. Your
Trustees are not aware of any other matters to come before the Meeting.
If a broker returns a "non-vote" proxy, indicating a lack of authority to
vote on the Plan, then the Portfolio Shares covered by such broker non-vote
shall be deemed present at the Meeting for the purposes of determining a quorum,
but shall not be deemed to be represented at the Meeting for the purposes of
calculating the number of Portfolio Shares present in person or represented by
proxy at the Meeting with respect to the Plan or any other Proposal.
PROXY SOLICITATION
Proxies will be solicited by mail and, if necessary to obtain the requisite
representation of Shareholders, your Trustees also may solicit proxies by
telephone, telegraph, facsimile and/or personal interview by representatives of
the Portfolio, Mr. Navellier, Navellier Management, Inc., employees of Navellier
Management, Inc., or their affiliates, and by representatives of any independent
proxy solicitation service retained for the Meeting including MacKenzie
Partners, Inc., a proxy solicitation firm. Mr. Navellier has previously agreed
to pay MacKenzie Partners a base fee of $15,000 if the proposal herein is
approved. Navellier Management, Inc., whose principal location is One East
Liberty Street, Third Floor, Reno, Nevada 89501, will bear the costs of its
solicitation, including the costs such as the preparation and mailing of the
notice, the combined prospectus/proxy statement, and the proxy, and the
solicitation of proxies, including reimbursement to persons who forward proxy
materials to their clients, and the expenses connected with the solicitation of
these proxies in person, by telephone, or by telegraph. Banks, brokers, and
other persons holding Portfolio Shares registered in their names or in the names
of their nominees will be reimbursed for their expenses incurred in sending
proxy materials to and obtaining proxies from the beneficial owners of such
Portfolio Shares.
Mr. Navellier, as sole owner of Navellier Management, Inc., and as sole
owner of Navellier Securities Corp has a financial interest in the outcome of
the vote because Navellier Management, Inc. would be investment advisor to the
merged Portfolio, for which it would receive investment advisory fees and
administrative services fees, and Navellier Securities Corp would receive some
or all of the 12b-1 fees.
The vote of the shareholders of the Acquiring Fund is not being solicited,
since their approval or consent is not necessary for the approval of the
Reorganization.
REVOCATION OF PROXIES
You may revoke your proxy: (i) at any time prior to the proxy's exercise by
written notice to The Navellier Series Fund, One East Liberty Street, Third
Floor, Reno, Nevada 89501 prior to the Meeting; (ii) by the subsequent execution
and return of another proxy prior to the Meeting; or (iii) by being present and
voting in person at the Meeting and giving oral notice of revocation to the
Chairman of the Meeting.
NO DISSENTERS' RIGHTS OF APPRAISAL
The purpose of the Meeting is to vote on the proposed tax-free
Reorganization of the Portfolio into the Acquiring Fund, as described below in
greater detail. The Portfolio is a separate series of the Navellier Series Fund.
The Declaration of Trust of the Navellier Series Fund (the "Declaration of
Trust") does not entitle shareholders to appraisal rights (i.e., to demand the
fair value of their shares) in the event of a
5
<PAGE>
reorganization or proposed merger. Consequently, the shareholders will be bound
by the terms of the Plan, if the Plan is approved at the Meeting. Any
Shareholder, however, may redeem his or her Portfolio Shares at net asset value
prior to the closing date of the proposed Reorganization.
ADDITIONAL VOTING INFORMATION
As of the Record Date, there were outstanding and entitled to be voted
3,762,418.556 Portfolio Shares. As of the Record Date Charles Schwab & Company,
San Francisco, California, The Fidelity Group and Smith Barney, each held for
the benefit of others more than 5% of the Portfolio. Trustees and officers of
The Navellier Series Fund own in the aggregate less than 1% of the shares of the
Portfolio. To the knowledge of Mr. Navellier, no other person then owned more
than 5% of the outstanding shares of the Portfolio.
As more fully described in this combined prospectus/proxy statement, the
Meeting has been called for the following purpose:
PROPOSAL 1.
To approve a proposed Agreement and proposed Plan of Reorganization (the
"Plan"), whereby The Portfolio would transfer all of its assets to The
Navellier Aggressive Small Cap Equity Portfolio (the "Acquiring Fund") of
The Navellier Performance Funds in a tax-free exchange for shares of
beneficial interest in the Acquiring Fund that would then be distributed to
the shareholders of The Portfolio. Also, as part of the Plan, the Acquiring
Fund would assume all valid liabilities of The Portfolio.
As described below, if holders of more than 50% of the outstanding shares of
record are present in person or by proxy, the approval by the Portfolio of
Proposal 1 at the Meeting requires the affirmative vote of at least 67% of the
Portfolio Shares present in person or represented by proxy at the Meeting or the
vote of more than 50% of the outstanding shares entitled to vote, whichever is
less.
MR. NAVELLIER AND THE OTHER TRUSTEES OF THE PORTFOLIO UNANIMOUSLY RECOMMEND
THAT THE PROPOSED REORGANIZATION DESCRIBED HEREIN BE "APPROVED."
SYNOPSIS
The following is a summary of certain information contained elsewhere in
this combined prospectus/ proxy statement, including the prospectuses of the
Portfolio and the Acquiring Fund and the proposed Agreement and Plan of
Reorganization. Shareholders should read this entire combined prospectus/proxy
statement carefully.
THE PROPOSED REORGANIZATION
Shareholders of the Portfolio will be asked at the Meeting to vote upon and
approve the proposed Plan, which provides for the Reorganization of the
Portfolio. A copy of the form of the Plan is set forth in Appendix A to this
combined prospectus/proxy statement. Pursuant to the Plan, the Portfolio, which
is a series of The Navellier Series Fund, a diversified, open-end management
investment company organized as a business trust under the laws of the State of
Delaware, would be merged tax-free into the Acquiring Fund of The Navellier
Performance Funds. The Acquiring Fund is a no load series of THE NAVELLIER
PERFORMANCE FUNDS, an open-end management investment company organized under the
laws of the State of Delaware as a business trust. The Plan sets forth the terms
and conditions under which the proposed Reorganization may be consummated.
Approval by the present Trustees of the Portfolio is required in order to merge
the Portfolio into the Acquiring Fund. The present Trustees of the Portfolio
have approved the proposed merger.
YOUR TRUSTEES BELIEVE THE PROPOSED REORGANIZATION PLAN SHOULD BE
APPROVED. The consummation of the proposed transactions contemplated by the
Reorganization is
6
<PAGE>
subject to a number of conditions set forth in the Plan, some of which
conditions may be waived by the Trustees. See "The Proposed
Transactions--Agreement and proposed Plan of Reorganization." Among the
significant conditions (which may not be waived) for the Reorganization are (i)
the receipt by each of the Funds of an opinion of counsel (or a revenue ruling
of the U.S. Internal Revenue Service) as to certain Federal income tax aspects
of the Reorganization (see "The Proposed Transactions--Federal Income Tax
Consequences") (that opinion of counsel has been received) and (ii) the approval
of the Plan by the affirmative vote of at least 67% of the Portfolio Shares
present in person or by proxy if a quorum of shareholders is present or the
holders of at least a majority of the outstanding voting Shares of the
Portfolio, whichever amount is less and (iii) approval of the proposed merger by
the Trustees of the Portfolio (this condition has also been satisfied). The Plan
provides, with respect to the Reorganization, for the acquisition of all the
assets of the Portfolio by Acquiring Fund in exchange for Acquiring Fund Shares
and the assumption by Acquiring Fund of all valid liabilities of the Portfolio.
The Acquiring Fund Shares received by Portfolio then would be distributed pro
rata to the Shareholders of the Portfolio, and the outstanding Portfolio Shares
of the Portfolio would be cancelled and the Portfolio would be liquidated. The
Reorganization is anticipated to occur on June 20, 1998, or such later date as
the parties may agree (the "Closing Date"). As a result of the proposed
transactions contemplated by the Reorganization, each shareholder would receive
a number of full and fractional shares of the corresponding Acquiring Fund
having a total net asset value equal in value to the net asset value of his or
her Portfolio Shares in the Portfolio as of the Closing Date of the
Reorganization.
The following sets forth the Portfolio and the corresponding Acquiring Fund:
<TABLE>
<CAPTION>
PORTFOLIO OF ACQUIRING FUND OF
THE NAVELLIER SERIES FUND THE NAVELLIER PERFORMANCE FUNDS
- -------------------------------------------- --------------------------------------------
<S> <C>
The Navellier Aggressive Small Cap Equity The Navellier Aggressive
Portfolio Small Cap Equity Portfolio
</TABLE>
For the reasons set forth below under "The Proposed Transactions--Reasons
for the Proposed Transactions", the Trustees of the Portfolio and the Investment
Advisor, have unanimously concluded that the Reorganization would be in the best
interests of the Portfolio and its shareholders and that the interests of
existing shareholders will not be diluted as a result of the transactions
contemplated by the Reorganization. The Portfolio Trustees, therefore, have
submitted the proposed Plan effecting the proposed Reorganization for approval
by the shareholders of the Portfolio at the Meeting and recommend a vote FOR the
proposed Plan.
INVESTMENT OBJECTIVES AND POLICIES
GENERAL. The Acquiring Fund and the Portfolio each are chartered and
managed the same, i.e. to invest in equities of small cap issuers. Navellier
Management, Inc. the investment adviser to both the Portfolio and the Acquiring
Fund uses the same modern portfolio theory style of stock selection for the
Portfolio and for the Acquiring Fund.
The investment objective of the Portfolio and of the Acquiring Fund is a
fundamental policy which may not be changed without the approval of a vote of at
least a "majority" (as that term is defined in the 1940 Act) of the outstanding
shares, respectively, of the Portfolio or the Acquiring Fund. All other
investment policies of the Portfolio and of the Acquiring Fund that are not
specified as fundamental are not fundamental policies and may be changed by the
Acquiring Fund Board of Trustees and the Portfolio Board of Trustees,
respectively, without shareholder approval.
THE PORTFOLIO. The investment objective of the Portfolio is to seek to
achieve long term growth of capital primarily through investments in securities
of small cap companies (companies with market capitalization of less than $1
Billion) with appreciation potential by employing a modern portfolio theory to
select securities.
7
<PAGE>
The investment objective of the Acquiring Fund is to seek to achieve long
term growth of capital primarily through investments in securities of small cap
companies (companies with market capitalization of less than $1 Billion) with
appreciation potential by employing a modern portfolio theory to select
securities. The Acquiring Fund is a newly organized Portfolio of The Navellier
Performance Funds. The Acquiring Fund has no significant history of operations.
The Acquiring Fund has the same investment advisor (Navellier Management, Inc.)
which the Portfolio has and employs the same modern portfolio investment style
which is used by the Portfolio.
For further discussion of the comparisons in the investment policies of the
Acquiring Fund and of the Portfolio, see "Comparison of Investment Objectives
and Policies" in this combined prospectus/proxy statement.
OPERATIONS OF THE NAVELLIER PERFORMANCE FUNDS AND THE ACQUIRING FUND FOLLOWING
THE REORGANIZATION
The Navellier Performance Funds and the Acquiring Fund will continue to
operate substantially the same as each did prior to the Reorganization. The
responsibilities, powers and fiduciary duties of the Trustees of The Navellier
Performance Funds are essentially the same as those of the Trustees of the
Portfolio. Subject to the provisions of The Navellier Performance Funds
Declaration of Trust, dated October 17, 1995 (the "Trust Declaration"), the
business of The Navellier Performance Funds and the Acquiring Fund is managed by
the Navellier Performance Funds Board of Trustees (the "Trust Board"), which has
all powers necessary and appropriate to carry out that business responsibility.
The Trust Board supervises the business affairs and investments of the Acquiring
Fund. The Acquiring Fund of The Navellier Performance Funds receives investment
advisory services from Navellier Management, Inc. which is also the Investment
Advisor to the Portfolio. Administrative services for The Navellier Performance
Funds are provided for by Navellier Management, Inc. The Acquiring Fund receives
distribution, marketing and customer services from Navellier Securities Corp
pursuant to a Distributor Agreement (12b-1 Plan).
MANAGEMENT FEES, ADMINISTRATIVE FEES, AND OTHER OPERATING EXPENSES
MANAGEMENT FEES. Navellier Management, Inc., is the investment advisor to
the Portfolio pursuant to an investment management agreement between the
Navellier Series Fund and Navellier Management, Inc. (the "Series Fund
Management Contract"). Navellier Management, Inc. currently manages the
investment and reinvestment of the assets of the Acquiring Fund, subject to the
general supervision and control of the officers and Trustees of The Navellier
Performance Funds. The Portfolio pays Navellier Management, Inc. an investment
advisory fee at an annual rate of 1.15% of the aggregate average daily net asset
value of the Portfolio. The Acquiring Fund pays Navellier Management, Inc. an
investment advisory fee at an annual rate of 0.84% of the aggregate average
daily net asset value of the Acquiring Fund. If the merger is approved, the
management fee paid by Portfolio shareholders to Navellier Management, Inc. will
be reduced from 1.15% to 0.84% of the aggregate average daily net asset value of
the Acquiring Fund, which will offset the annual 0.25% 12b-1 fees that Portfolio
shareholders will be charged if the merger is approved.
ADMINISTRATIVE FEES AND OTHER OPERATING EXPENSES. Portfolio pays its own
operating costs. Pursuant to an Administrative Services Agreement, Portfolio
pays Navellier Management, Inc. an annual fee, pro rata monthly, of 0.25% of the
aggregate average daily net asset value of the Portfolio to provide
administrative services including shareholder servicing services to the
Portfolio. The Acquiring Fund has an Administrative Services Agreement with
Navellier Management, Inc. which has the same terms as the Administrative
Services Agreement between Portfolio and Navellier Management, Inc.
12b-1 PLAN FEES. The Portfolio does not have a 12b-1 plan and does not pay
12b-1 fees. The Acquiring Fund does have a 12b-1 plan which pays Navellier
Securities Corp. an annual fee of 0.25% of the aggregate average daily net asset
value of the Acquiring Fund for marketing, distribution and client
8
<PAGE>
services. To offset this 0.25% 12b-1 fee, Navellier Management, Inc. has agreed
to reduce its investment advisory fee to the Acquiring Fund from 1.15% to 0.84%
per annum if the merger is approved.
The following sets forth the fund operating expenses (as a percentage of the
average daily net assets) for the Portfolio for the twelve-month period ended
December 31, 1997. Adjacent to the column for Portfolio expenses is presented
the expected fund operating expenses (as a percentage of the average daily net
assets) of the Acquiring Fund into which the Portfolio would merge under the
Plan.
TABLE
<TABLE>
<CAPTION>
COMBINED
PORTFOLIO ACQUIRING FUND PRO FORMA
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
Management Fees 1.15% 0.84% 0.84%
Other Expenses 1.18%(3) 0.40%(4) 0.40%(4)
(after waiver of (after waiver of (pro forma after
reimbursement by reimbursement by waiver of
investment advisor) investment advisor) reimbursement by
investment advisor)
12b-1 Fees 0 0.25% 0.25%
Total Fund Operating Expenses 2.33% 1.49% 1.49%
(after waiver of (after waiver of (pro forma after
reimbursement by reimbursement by waiver of
investment investment reimbursement by
advisor)(1) advisor)(2) investment
advisor)(2)
</TABLE>
- ------------------------------
(1) Total operating expenses before waiver of reimbursements were 2.62% before
the investment advisor waived reimbursement of $295,677 of expenses.
(2) This estimated 1.49% figure for Total Fund Operating Expenses was arrived
at based on an estimate that the Investment Advisor would waive
reimbursement of an estimated $233,718 of expenses advanced by the
investment advisor thereby reducing the total estimated operating expenses
from an estimated 1.78% to 1.49%.
(3) Other expenses of 1.18% (after waiver of reimbursement) includes a 0.25%
Administrative Services fee. The Other Expenses before waiver of
reimbursement by the Investment Advisor would have been 1.47% of which 0.25%
were Administrative Services fees.
(4) The estimated Other Expenses of 0.40% (after waiver of reimbursement)
includes a 0.25% Administrative Services fee. The estimated Other Expenses
before waiver of reimbursement by the investment advisor are estimated at
0.63% of which 0.25% were Administrative Services fees.
As reflected above, it is expected that the Acquiring Fund will have lower
total operating expenses than those historically incurred by Portfolio. Mr.
Navellier believes that the lower management fee charged to the Acquiring Fund
and avoiding or reducing costs by merging the Portfolio into the Acquiring Fund
will save the Portfolio in excess of $100,000 per year by reducing the fees paid
to trustees, outside counsel to the independent trustees, reducing printing and
mailing and reduced management fees, and that the Reorganization would be
advantageous to and in the best interests of the Shareholders. See "The Proposed
Transactions--Reasons for the Proposed Transactions".
PURCHASES AND EXCHANGES
Acquiring Fund Shares are sold in a continuous offering and are offered to
the public, and may be purchased through securities dealers or directly from the
Acquiring Fund's underwriter, Navellier Securities Corp., at the net asset value
next computed after the receipt of a purchase order. No sales charge is imposed
by Acquiring Fund or Navellier Securities Corp. on any purchase of Acquiring
Fund Shares; however, Acquiring Fund does charge an annual 0.25% 12b-1 fee and
securities dealers may charge a processing fee for orders transmitted by such
dealers to the Acquiring Fund. The Acquiring Fund does not charge any sales
charge. The Portfolio has closed its sale of Portfolio shares to new investors
other than investors obtained from financial planners and has stopped charging a
sales charge of between 3% and 0% as set forth in the current Prospectus for the
Portfolio. The Portfolio does not charge a 12b-1 fee.
The Acquiring Fund currently offers an exchange privilege, including
telephone exchange privileges, which, subject to certain restrictions, permit
shares of any of the other portfolios of The Navellier
9
<PAGE>
Performance Funds to be exchanged for shares of the Acquiring Fund. These
exchanges are based upon each Portfolio's net asset value per share next
computed following receipt of a properly-executed exchange request, without any
sales charge, and are not subject to an early withdrawal fee. These exchanges
also may be made only between identically-registered accounts, and these
exchange privileges also are available only in states where the shares to be
acquired may be legally sold. If the proposed merger does not occur, Portfolio
shareholders will not be able to exchange their Portfolio shares for shares of
any series of the Navellier Performance Funds. Except for the foregoing, there
would be no material differences between the exchange privileges which
shareholders of the Portfolio currently have and the exchange privileges which
such shareholders will have as shareholders of the Acquiring Fund upon
effectiveness of the Reorganization.
The Acquiring Fund has reserved the right to reject or refuse, at Acquiring
Fund's discretion, any order for the purchase of its shares in whole or in part.
REDEMPTION PROCEDURES AND FEES
Acquiring Fund Shares may be redeemed at a redemption price equal to the net
asset value of the shares as next computed following the receipt of a request
for redemption in proper form. Payment of redemption proceeds for redeemed
Acquiring Fund Shares ordinarily are made within seven days after receipt of a
redemption request in proper form and documentation. Shares of the Acquiring
Fund may be redeemed without charge.
DIVIDENDS AND DISTRIBUTIONS; AUTOMATIC REINVESTMENT
The Acquiring Fund and Portfolio each declares and pays dividends from the
net investment income and short-term capital gains, if any, to shareholders
during December of each year and distributes long-term capital gains, if any, to
shareholders on an annual basis in December.
The income dividends and capital gains distributions for investors in the
Acquiring Fund and in the Portfolio are each automatically reinvested, without
sales charge, in additional shares of the Acquiring Fund and of the Portfolio
respectively at the applicable net asset value of such shares calculated on the
ex-dividend date unless such an investor has requested otherwise in writing.
FEDERAL TAX CONSEQUENCES OF THE PROPOSED REORGANIZATION
The Acquiring Fund and the Portfolio have received, as a condition to the
Reorganization, an opinion of Samuel Kornhauser, counsel to The Navellier
Performance Funds, to the effect, for Federal income tax purposes, that the
proposed Reorganization will constitute a tax-free reorganization within the
meaning of Section 368(a)(1)(C) of the U.S. Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, it is believed that no gain or loss generally
will be recognized by The Navellier Performance Funds or by the Acquiring Fund,
by the Fund or by the Portfolio, or by their respective shareholders (see "The
Proposed Transactions--Federal Income Tax Consequences").
COSTS AND EXPENSES OF THE REORGANIZATION
Navellier Management, Inc. will bear the costs, expenses, and professional
fees incurred in the preparation and mailing of this notice and this combined
prospectus/proxy statement and the proxy, and in the solicitation of proxies,
which may include reimbursement to broker-dealers and others who forward proxy
materials to their clients and the costs of a professional solicitation firm.
See "Introduction and Voting Information--Proxy Solicitation".
10
<PAGE>
CONTINUATION OF SHAREHOLDER ACCOUNTS; SHARE CERTIFICATES
As a result of the proposed transactions contemplated by the Reorganization
of the Portfolio into the Acquiring Fund, Shareholders would cease to be
shareholders of the Portfolio and would receive on the books of the Acquiring
Fund, that number of full and fractional Acquiring Fund Shares having an
aggregate net asset value equal to the aggregate net asset value of his or her
Portfolio Shares as of the close of business on the Closing Date.
The Acquiring Fund will establish accounts on the Closing Date for
Shareholders which will contain the appropriate number of Acquiring Fund Shares.
Acceptance of Acquiring Fund Shares by a Shareholder will be deemed to be
authorization of the Acquiring Fund and its agents to establish, with respect to
the Acquiring Fund, all of the account options, including telephone redemptions,
if any, and dividend and distribution options, as have been established for the
Shareholder's Portfolio account. Shareholders who are receiving payments under
an Automatic Investment Plan, with respect to Portfolio Shares, will retain the
same rights and privileges as to Acquiring Fund Shares under such an Automatic
Investment Plan after the Reorganization. Similarly, no further action will be
necessary in order to continue, with respect to Acquiring Fund Shares, any
retirement plan currently maintained by a Shareholder with respect to Portfolio
Shares.
As a series of a Delaware business trust, the Acquiring Fund will not issue
certificates evidencing ownership of Acquiring Fund Shares. Shareholders of
Portfolio will have their beneficial interests in Portfolio cancelled on the
books of Portfolio in order to receive Acquiring Fund Shares on the books of
Acquiring Fund as a result of the Reorganization.
No sales or other charges will be imposed in connection with the issuance of
Acquiring Fund Shares to Portfolio Shareholders pursuant to the Reorganization.
FORM OF ORGANIZATION OF THE NAVELLIER PERFORMANCE FUNDS
The Navellier Performance Funds is an unincorporated voluntary association
organized under the laws of the State of Delaware as a business trust pursuant
to the Declaration of Trust. The operations of The Navellier Performance Funds
and the Acquiring Fund (a Portfolio of The Navellier Performance Funds) are
governed by this Declaration of Trust, by The Navellier Performance Funds'
By-Laws, and by Delaware Law, as applicable. The Navellier Series Fund is an
unincorporated voluntary association organized under the laws of the State of
Delaware as a business trust. The operations of The Navellier Series Fund and
the Portfolio are governed by The Navellier Series Fund Declaration of Trust
dated May 28, 1993, and by Delaware law, as applicable. Both The Navellier
Performance Funds and The Navellier Series Fund, as well as their series
investment portfolios, are subject to the provisions of the 1940 Act, and the
rules and regulations of the Commission thereunder. The Navellier Performance
Funds is authorized to issue an unlimited number of shares of beneficial
interest in one or more series investment portfolios or funds. Currently, The
Navellier Performance Funds is composed of eight (8) separate investment
portfolios: The Navellier Aggressive Growth Portfolio, The Navellier Mid Cap
Growth Portfolio, The Navellier Aggressive Micro Cap Portfolio, The Navellier
Small Cap Value Portfolio, the Navellier Large Cap Growth Portfolio, The
Navellier Large Cap Value Portfolio, The Navellier International Equity
Portfolio and the Navellier Agressive Small Cap Equity Portfolio ("the
Portfolio"). See "The Proposed Transactions--Description of Securities to Be
Issued".
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
As discussed below, the investment objective and policies of the Acquiring
Fund and the Portfolio are essentially the same.
11
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
GENERAL. The Acquiring Fund and the Portfolio each invest in the common
stocks of small cap companies (companies with market capitalization of less than
$1 Billion).
INVESTMENT OBJECTIVE OF THE ACQUIRING FUND
The Investment Objective of the Acquiring Fund is to achieve long-term
growth of capital primarily through investment in small cap companies with
appreciation potential. The Acquiring Fund invests in securities traded in the
United States securities markets of domestic issuers and of foreign issuers. The
sole objective of the Acquiring Fund is to seek to achieve long term growth of
capital primarily through investments in securities of small cap companies
(companies with market capitalization of less than $1 Billion) with appreciation
potential by applying the proprietary modern portfolio theory techniques of
Navellier Management, Inc. There can be no assurance that the Acquiring Fund
will achieve its investment objectives. The Acquiring Fund's investment
objectives may not be changed without shareholder approval. The Acquiring Fund
should not be considered suitable for investors seeking current income.
Investors in this Portfolio pay no sales charge but do pay a 12b-1 fee of 0.25%
of the Acquiring Fund's aggregate average daily net asset value.
INVESTMENT OBJECTIVE OF THE PORTFOLIO
The investment objective of the Portfolio is the same as the investment
objective of the Acquiring Fund. The Portfolio's investment objective is to
achieve long-term growth of capital primarily through investment in small cap
companies with appreciation potential. The Portfolio invests in securities
traded in the United States securities markets of domestic issuers and of
foreign issuers. The sole objective of the Portfolio is to seek to achieve long
term growth of capital primarily through investments in securities of small cap
companies (companies with market capitalization of less than $1 Billion) with
appreciation potential. There can be no assurance that the Portfolio will
achieve its investment objectives. The Portfolio's investment objectives may not
be changed without shareholder approval. The Portfolio should not be considered
suitable for investors seeking current income. The Portfolio is closed to new
investors except investors obtained by financial planners; such new investors in
the Portfolio no longer pay a sales charge. There is no 12b-1 fee.
OTHER INVESTMENTS. Both the Acquiring Fund and the Portfolio may, for
temporary defensive purposes or to maintain cash or cash equivalents to meet
anticipated redemptions, also invest in debt securities and money market funds
if, in the opinion of the investment advisor, such investment will further their
cash needs or temporary defensive needs. In addition, when the investment
advisor feels that market or other conditions warrant it, for temporary
defensive purposes, both the Acquiring Fund and the Portfolio may retain cash or
invest all or any portion of their assets in cash equivalents, including money
market mutual funds. Under normal conditions, both the Acquiring Fund's and
Portfolio's holdings in such non-equity securities should not exceed 35% of the
total assets of such fund. If either the Acquiring Fund's or the Portfolio's
assets, or a portion thereof, are retained in cash or money market funds or
money market mutual funds, such cash will, in all probability, be deposited in
interest-bearing or money market accounts or Rushmore's money market mutual
funds. Rushmore Trust & Savings, FSB is also the Acquiring Fund's Transfer Agent
and Custodian. Cash deposits by both the Acquiring Fund and the Portfolio in
interest bearing instruments issued by Rushmore Trust & Savings ("Transfer
Agent") will only be deposited with the Transfer Agent if its interest rates,
terms, and security are equal to or better than could be received by depositing
such cash with another savings institution. Money market investments have no
FDIC protection and deposits in Rushmore Trust & Savings, FSB accounts have only
$100,000 protection.
12
<PAGE>
CERTAIN INVESTMENT RESTRICTIONS AND LIMITATIONS
The investment restrictions and limitations of Acquiring Fund and those of
the Portfolio are substantially the same. Unless otherwise specified, the
investment restrictions and limitations are considered to be "fundamental"
policies, and, as such, may not be changed without approval of the holders of a
"majority" (as that term is defined in the 1940 Act) of Acquiring Fund's or
Portfolio's respective outstanding shares.
Both the Acquiring Fund and Portfolio may not:
1. Purchase securities of any issuer, other than obligations issued or
guaranteed as to principal and interest by the United States government or
its agencies or instrumentalities, if immediately thereafter (i) more than
5% of Acquiring Fund's or Portfolio's total assets (taken at market value)
would be invested in the securities of such issuer, or (ii) more than 10% of
the voting securities of any class of such issuer would be held by Acquiring
Fund or by Portfolio.
2. Concentrate the Portfolio investments of Acquiring Fund or of
Portfolio in any one industry. To comply with this restriction, no security
may be purchased for Acquiring Fund or Portfolio if such purchase would
cause the value of the aggregate investment of Acquiring Fund or of
Portfolio in any one industry to be 25% or more of Acquiring Fund's or
Portfolio's total assets (taken at market value).
3. Purchase any securities or other property on margin, or engage in
short sales of securities (unless it owns, or by virtue of its ownership of
other securities has the right to obtain without payment of any additional
consideration securities equivalent in kind and amount to the securities
sold); PROVIDED, HOWEVER, that both Acquiring Fund and Portfolio may obtain
short-term credit as may be necessary for the clearance of purchases and
sales of securities.
4. Make cash loans, except that both the Acquiring Fund and Portfolio
may purchase bonds, notes, debentures, or similar obligations which are
customarily purchased by institutional investors whether publicly
distributed or not.
5. Make securities loans, except that both the Acquiring Fund and
Portfolio may make loans of the securities of Acquiring Fund or of
Portfolio, provided that the market value of the securities subject to any
such loans does not exceed 33 1/3% of the value of the total assets (taken
at market value) of Acquiring Fund or Portfolio.
6. Make investments in real estate or commodities or commodity
contracts, including futures contracts, although both Acquiring Fund and
Portfolio may purchase securities of issuers which deal in real estate or
commodities although this is not a primary objective of the Acquiring Fund
or of Portfolio but only if such securities are small cap equity securities
or constitute less than 35% of the Acquiring Funds or Portfolio's total
assets.
7. Invest in oil, gas, or other mineral exploration or development
programs, although both the Acquiring Fund and Portfolio may purchase
securities of issuers which engage in whole or in part of such activities,
but only if such securities are small cap equity securities or constitute
less than 35% of Acquiring Fund's or Portfolio's total assets.
8. Invest in or sell puts, calls, straddles, and any combination
thereof.
9. Purchase securities of companies for the purpose of exercising
management or control.
10. Participate in a joint or joint and several trading account in
securities.
11. Purchase the securities of (i) other open-end investment companies,
or (ii) closed-end investment companies.
12. Issue senior securities or borrow money, except that Acquiring Fund
and Portfolio may (i) borrow money only from banks for temporary or
emergency (not leveraging) purposes, including
13
<PAGE>
the meeting of redemption requests, that might otherwise require the
untimely disposition of securities, provided that any such borrowing does
not exceed 10% of the value of the total assets (taken at market value) of
Acquiring Fund or Portfolio, and (ii) borrow money only from banks for
investment purposes, provided that (a) after each such borrowing, when added
to any borrowing described in clause (i) of this paragraph, there is an
asset coverage of at least 300% as defined in the Investment Company Act of
1940, and (b) is subject to an agreement by the lender that any recourse is
limited to the assets of Acquiring Fund or Portfolio with respect to which
the borrowing has been made. Neither Acquiring Fund or Portfolio may invest
in securities while the amount of its borrowing exceeds 5% of its total
assets.
13. Pledge, mortgage, or hypothecate its assets to an extent greater
than 10% of its total assets to secure borrowings made pursuant to the
provisions of Item 12 above.
PRINCIPAL RISK FACTORS
The principal risks associated with an investment in the Portfolio and an
investment in the Acquiring Fund are:
LACK OF OPERATING HISTORY AND EXPERIENCE
The Acquiring Fund is a newly organized investment company portfolio of The
Navellier Performance Funds with no history of operations. Navellier Management,
Inc. was organized on May 28, 1993 and managed the assets of The Navellier
Series Fund from January 3, 1994 (and the publicly invested assets of The
Navellier Series Fund since April 1, 1994) to March 15, 1997 and from July 15,
1997 to the present.
Navellier Management, Inc. is also the investment advisor to the Acquiring
Fund and has been managing the assets of The Navellier Performance Funds since
December 28, 1995.
Louis Navellier, the owner of Navellier Management, Inc., is also the owner
of another investment advisory firm, Navellier & Associates Inc., which
presently manages over $1.5 billion in investor funds. The owner of Navellier
Management, Inc. is also the owner of another investment advisory firm,
Navellier Fund Management, Inc., and controls other investment advisory entities
which manage assets and/or act as sub-advisors, all of which firms employ the
same basic modern portfolio theories and select many of the same
over-the-counter stocks and other securities which Navellier Management, Inc.
intends to employ and invest in while managing the portfolios of the Acquiring
Fund. Because many of the over-the-counter and other securities which Navellier
Management, Inc. intends to, or may, invest in have a smaller number of shares
available to trade than more conventional companies, lack of shares available at
any given time may result in the Portfolio or the Acquiring Fund not being able
to purchase or sell all shares which Navellier Management, Inc. desires to trade
at a given time or period of time, thereby creating a potential liquidity
problem which could adversely affect their performance. Since Navellier
Management, Inc. will be trading on behalf of the Portfolio and the Acquiring
Fund in some or all of the same securities at the same time that Navellier &
Associates, Inc., Navellier Fund Management, Inc. and other Navellier controlled
investment entities are trading, the potential liquidity problem could be
exacerbated. In the event the number of shares available for purchase or sale in
a security or securities is limited and therefore the trade order cannot be
fully executed at the time it is placed, i.e., where the full trade orders of
Navellier & Associates, Inc., Navellier Fund Management, Inc. and other
Navellier controlled investment entities and the Acquiring Fund or Portfolio
cannot be completed at the time the order is made, Navellier & Associates Inc.,
and the other Navellier controlled investment entities and Navellier Management,
Inc. will allocate their purchase or sale orders in proportion to the dollar
value of the order made by the other Navellier entities, and the dollar value of
the order made by the Acquiring Fund or Portfolio. For example, if Navellier &
Associates, Inc. and Navellier Fund Management, Inc. each place a $25,000
purchase order and Navellier Management, Inc., on behalf of the Acquiring Fund
or Portfolio, places a $50,000 purchase order for the same stock and only
$50,000 worth of stock is available for purchase, the order would be
14
<PAGE>
allocated $12,500 each of the stock to Navellier & Associates, Inc. and
Navellier Fund Management, Inc., and $25,000 of the stock to the Acquiring Fund
or Portfolio. As the assets of the Acquiring Fund or Portfolio increase, the
potential for shortages of buyers or sellers increases, which could adversely
affect the performance of the Acquiring Fund or Portfolio. While Navellier
Management, Inc. generally does not anticipate liquidity problems (i.e., the
possibility that the Acquiring Fund or Portfolio cannot sell shares of a company
and therefore the value of those shares drops) unless the Acquiring Fund or
Portfolio has assets in excess of two billion dollars (although liquidity
problems could still occur when the Acquiring Fund or Portfolio has assets of
substantially less than two billion dollars), each investor is being made aware
of this potential risk in liquidity. These same liquidity risks exist for the
Portfolio.
An investment in shares of the Acquiring Fund involves certain speculative
considerations. There can be no assurance that any of the Acquiring Fund's
objectives will be achieved or that the value of the investment will increase.
An investment in shares of the Portfolio also involves the same risks.
All securities in which the Acquiring Fund may invest are inherently subject
to market risk, and the market value of the Acquiring Fund's investments will
fluctuate. The Portfolio is subject to the same risks.
INVESTING IN SECURITIES OF FOREIGN ISSUERS
Investments in foreign securities, particularly those of non-governmental
issuers, involve considerations which are not ordinarily associated with
investing in domestic issuers. These considerations include, among others,
changes in currency rates, currency exchange control regulations, the
possibility of expropriation, the unavailability of financial information, the
difficulty of interpreting financial information prepared under laws applicable
to foreign securities markets, the impact of political, social, or diplomatic
developments, difficulties in invoking legal process abroad, and the difficulty
of assessing economic trends in foreign countries. Navellier Management, Inc.
will use the same basic selection criteria for investing in foreign securities
as it uses in selecting domestic securities.
While, to some extent, the risks to the Acquiring Fund of investing in
foreign securities may be limited, since it may not invest more than 25% of its
net asset value in such securities and since it may only invest in foreign
securities which are traded in the United States securities markets, the risks
nonetheless exist. The same risks apply to the Portfolio's investments in
foreign securities.
PORTFOLIO TURNOVER
The annual rate of portfolio turnover for the Acquiring Fund is unknown,
since it is newly formed and has no significant operating history and therefore,
no annual portfolio turnover rate presently exists. Navellier Management, Inc.
estimates that the annual portfolio turnover rate will not exceed 200%.
Navellier Management, Inc., which is also the investment advisor to the
Portfolio, employs the same investment style for the Acquiring Fund as it
employed in managing the Portfolio, which had an annual portfolio turnover rate
in 1997 of 183.5%. However, these are NOT restrictions on Navellier Management,
Inc. and if, in Navellier Management Inc.'s judgment, a higher annual portfolio
turnover rate is required in order to attempt to achieve a higher overall
performance, then Navellier Management, Inc. is permitted to do so. However,
high portfolio turnover (100% or more) will result in increased brokerage
commissions, dealer mark-ups, and other transaction costs on the sale of
securities and on reinvestment in other securities and could therefore adversely
affect performance.
The risks associated with portfolio turnover for Acquiring Fund are
essentially the same for the Portfolio.
Both the Portfolio and the Acquiring Fund are diversified investment
companies and as such, at least 75% of each of said portfolio's total assets
must be invested in cash, U.S. Government securities and other securities. Such
securities of any one issuer are limited, for the purposes of this calculation,
to an amount
15
<PAGE>
not greater than 5% of the value of each of the portfolio's total assets and 10%
of the outstanding voting securities of any one issuer.
THE PROPOSED TRANSACTIONS
PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
The terms and conditions of the proposed merger, as contemplated by the
Reorganization, are set forth in the Plan. Significant provisions of the Plan,
with respect to the proposed Reorganization of the Portfolio into the Acquiring
Fund, are summarized immediately below. This summary, however, is qualified in
its entirety by reference to the Plan, a form of which is attached to this
combined prospectus/ proxy statement as Appendix A.
With respect to the proposed Reorganization, the Plan contemplates (i) the
Acquiring Fund, on the closing date of the Reorganization, acquiring all of the
assets of the Portfolio in exchange for Acquiring Fund Shares and the assumption
by the Acquiring Fund of all valid liabilities of the Portfolio (the former
Trustees of the Portfolio have made a demand on the Portfolio's indemnification
of their attorney's fees and expenses in connection with a class action lawsuit
filed against them; the Trustees' demand has been disclosed in writing to the
Acquiring Fund; the Portfolio and Acquiring Fund Trustees and their counsel do
not believe that the former Trustees are entitled to indemnification or that
their claim is a valid liability; the issue will be decided by a court) and (ii)
the constructive distribution of Acquiring Fund Shares to the Shareholders of
the Portfolio in exchange for the Portfolio Shares of such Shareholders, all as
provided for by the Plan.
The assets of the Portfolio to be acquired by the Acquiring Fund include all
property, including without limitation, all cash, securities, commodities and
futures interests and dividends or interest receivables which are owned by the
Portfolio and any deferred or prepaid expenses shown as an asset on the books of
the Portfolio on the closing date of the Reorganization. The Acquiring Fund will
assume from the Portfolio all valid liabilities, expenses, costs, charges and
reserves reflected on an unaudited statement of assets and liabilities of the
Portfolio. The Acquiring Fund also will deliver Acquiring Fund Shares to the
Portfolio, which Acquiring Fund Shares the Portfolio then shall distribute to
the Shareholders of Portfolio in exchange for such Shareholders' Portfolio
Shares. The exchange of the Portfolio's assets for the Acquiring Fund Shares is
anticipated to occur on June 20, 1998, or such later date as the parties may
agree (the "Closing Date").
The value of the Portfolio's assets to be acquired by, and the value of the
Portfolio's valid liabilities to be assumed by, the Acquiring Fund and the net
asset value of a share of the Acquiring Fund will be determined as of
immediately after the close of regular trading on the NYSE on the Closing Date,
using the valuation procedures set forth in the Acquiring Fund's then-current
Prospectus and Statement of Additional Information.
Upon the Closing Date, the Portfolio will liquidate and distribute pro rata
to its Shareholders of record (as evidenced by such Shareholders' Portfolio
Shares) the Acquiring Fund Shares received by the Portfolio in exchange for such
Shareholders' interests in the Portfolio. This liquidation and distribution will
be accomplished by opening accounts on the books of the Acquiring Fund in the
name of each shareholder of record in the Portfolio and by crediting thereon the
shares previously credited to the Portfolio account of the shareholder on those
books, as described above (see "Synopsis--Continuation of Shareholder Accounts;
Share Certificates"). Each such Acquiring Fund shareholder account shall
represent the respective pro-rata number of the Acquiring Fund Shares due to
such Shareholder.
Accordingly, every Shareholder will own Acquiring Fund Shares immediately
after the Reorganization, the total value of which Acquiring Fund Shares will be
equal to the total value of his or her Portfolio Shares immediately prior to the
Reorganization. Moreover, because the Acquiring Fund Shares will be issued at
net asset value in exchange for the net assets transferred from the Portfolio,
the total net asset
16
<PAGE>
value of the Acquiring Fund Shares received by Portfolio Shareholders after the
transfer of assets will be equal to the net asset value of the Portfolio Shares
at the Closing Date. Thus, the Reorganization will not result in a dilution in
value of any Shareholder account.
The consummation of the proposed transaction contemplated by the
Reorganization is subject to a number of conditions set forth in the Plan, some
of which conditions may be waived by the Series Fund Board or the Performance
Funds Board, or by an authorized officer of The Navellier Series Fund or The
Navellier Performance Funds, as appropriate. Among the significant conditions
(which may not be waived) for the Reorganization are: (i) the receipt by the
Portfolio and by the Acquiring Fund of an opinion of counsel to The Navellier
Performance Funds as to certain Federal income tax aspects of the Reorganization
(see "The Proposed Transactions--Federal Income Tax Consequences") (which
opinion of counsel has already been received); (ii) the approval of the Plan by
the affirmative vote of the holders of at least 67% of the Portfolio shares
present in person or by proxy entitled to vote at the Portfolio shareholders'
meeting if a quorum is present or a majority of the Portfolio's outstanding
voting shares, whichever percentage is less and (iii) approval of the Plan by
the Portfolio's Board of Trustees (which approval has also already been
obtained). The Plan may be terminated and the Reorganization abandoned at any
time, before or after approval by the Shareholders, prior to the applicable
Closing Date or by mutual consent of the Portfolio and the Acquiring Fund. In
addition, the Plan may be amended in any mutually-agreeable manner, except that
no amendment may be made to the Plan subsequent to the Meeting that would be
materially detrimental to the Shareholders.
The Investment Advisor to the Acquiring Fund (Navellier Management, Inc.)
contemplates that the Portfolio's assets at the date of the transactions of the
Reorganization will be invested in a manner consistent with the investment
objectives and policies of both the Portfolio and the Acquiring Fund.
REASONS FOR THE PROPOSED TRANSACTIONS
As described below in greater detail, the Portfolio's Trustees and the
Performance Fund's Trustees believe the Reorganization would benefit
Shareholders of the Portfolio by substantially reducing existing operating costs
and expenses of the Portfolio by an estimated $100,000 per year or more thereby
promoting more efficient operations. It is estimated that a proposed merger of
the Portfolio into the Acquiring Fund would substantially reduce the annual
operating expenses of the Portfolio by reducing the Portfolio's annual
Independent Trustee's fees, expenses, independent counsel's fees and; by
reducing liability insurance, costs of printing separate prospectuses, annual
and semi-annual shareholder reports, quarterly reports and mailings for the
Portfolio; by reducing the management fee charged by the Investment Advisor; and
that a proposed merger would generally increase the efficiency of operations and
would not result in any change in the way the assets were managed, since the
Investment Advisor, Navellier Management, Inc., would remain the same and would
operate pursuant to the same investment objectives and restrictions. For these
reasons, the Trustees believe that the Reorganization of the Portfolio into the
Acquiring Fund is in the best interests of the Shareholders of the Portfolio and
that the interests of the Shareholders of the Portfolio would not be diluted by
the Reorganization.
The Portfolio Trustees strongly recommend that the Shareholders of the
Portfolio vote FOR Proposal 1 (the Reorganization of the Portfolio) based on a
number of factors, first and foremost of which is that the Reorganization should
result in substantial savings. The Portfolio Trustees also believe that the
Reorganization, if effected, would enable the resulting larger fund complex,
with its larger asset base, to achieve enhanced distribution capability through
the no load fund supermarkets. It is also believed that the anticipated
reduction in costs should increase the performance of the Portfolio.
It is estimated that the proposed merger should permit the reduction or
elimination of certain costs and expenses presently incurred for services that
are separately performed for both the Portfolio and the Acquiring Fund. For
example, the projected Independent Trustees fees and expenses expected to be
paid to the Independent Trustees of the Portfolio would be reduced, as would the
$25,000 per year in liability insurance and the attorney's fees and costs of the
outside counsel for the Independent Trustees should be
17
<PAGE>
eliminated or greatly reduced. Printing and mailing costs should be reduced as a
result of a single prospectus, annual report, and semi-annual report. As a
general rule, economies can be expected to be realized primarily with respect to
fixed expenses, such as costs of printing and fees for professional services.
Expenses that are based on the value of assets or the number of shareholder
accounts, such as custody and transfer agent fees, however, would be largely
unaffected by the Reorganization. Achievement of these goals, of course, cannot
be assured.
The Portfolio Trustees recommend the proposed Reorganization, and the
transactions contemplated thereby, to the Shareholders for the reasons set forth
above as well as on a number of other factors, including the following:
1. the terms and conditions of the Reorganization and the fact that the
Reorganization would not result in dilution of Shareholder interests;
2. the fact that the investment objectives, policies, Navellier investment
style and restrictions of the Portfolio and the Acquiring Fund would remain
essentially the same;
3. similar service features available to shareholders in the Portfolio and the
Acquiring Fund;
4. the anticipated benefits to the Shareholders of the Portfolio of being part
of the Navellier Performance Funds family of funds; and
5. the tax-free nature and consequences of the Reorganization.
DESCRIPTION OF SECURITIES TO BE ISSUED
GENERAL. The Acquiring Fund Shares to be issued pursuant to the proposed
Reorganization represent shares of beneficial interest in The Navellier
Aggressive Small Cap Equity Portfolio of The Navellier Performance Funds, which
is a newly formed diversified, open-end management investment company. The
Navellier Performance Funds is an unincorporated voluntary association organized
under the laws of the State of Delaware as a business trust, pursuant to The
Navellier Performance Funds' Declaration of Trust, dated October 17, 1995 (the
"Declaration of Trust"). The Declaration of Trust authorizes The Navellier
Performance Funds to issue an unlimited number of shares of beneficial interest
in one or more series. Currently, The Navellier Performance Funds has authorized
eight series: the Navellier Aggressive Growth Portfolio, the Navellier Mid Cap
Growth Portfolio, the Navellier Aggressive Micro Cap Portfolio, the Navellier
Small Cap Value Portfolio, the Navellier Large Cap Growth Portfolio, the
Navellier Large Cap Value Portfolio, the Navellier International Equity
Portfolio and the Navellier Aggressive Small Cap Equity Portfolio (which is the
"Acquiring Fund"). Other series in The Navellier Performance Funds, however, may
be added in the future. Each Acquiring Fund Share represents an equal
proportionate interest with each other Acquiring Fund Share and each such
Acquiring Fund Share is entitled to equal voting, dividend, liquidation and
redemption rights. Acquiring Fund Shares entitle their holders to one vote per
full share held and to fractional votes for fractional shares held. The
Acquiring Fund Shares do not have cumulative voting rights, preemptive rights or
subscription rights and are fully paid, nonassessable, redeemable and freely
transferable.
Currently, each shareholder of the Acquiring Fund is permitted to inspect
the records, accounts and books of The Navellier Performance Funds for any
legitimate business purpose.
MEETINGS. As a Delaware business trust, The Navellier Performance Funds is
not required to hold an annual shareholders' meeting if the 1940 Act does not
require such a meeting. The Declaration of Trust provides that a special meeting
of The Navellier Performance Funds shareholders of any series of The Navellier
Performance Funds may be called by the Trustees of The Navellier Performance
Funds ("Trustees") and shall be called by the Trustees upon the written request
of shareholders owning at least 10% of the outstanding shares of The Navellier
Performance Funds entitled to vote. The Navellier Performance Funds will hold
special shareholder meetings as required or deemed desirable by the Performance
Board for such purposes as electing Trustees, changing fundamental policies or
approving an investment advisory or shareholder services agreement. Any Trustee
may be removed from office with or without cause at any
18
<PAGE>
time either by written instrument, signed by at least two-thirds (2/3) of the
number of Trustees prior to such removal, specifying the date upon which such
removal shall become effective, or by a vote of The Navellier Performance Funds
shareholders owning at least two-thirds (2/3) of the outstanding shares of The
Navellier Performance Funds. If requested by shareholders of at least 10% of the
outstanding shares of The Navellier Performance Funds, The Navellier Performance
Funds will call a shareholder meeting for the purpose of voting upon the
question of the removal of a Trustee and will assist in communications with
other Navellier Performance Funds shareholders as required by Section 16(c) of
the 1940 Act.
SHAREHOLDER LIABILITY. Beneficial owners of a Delaware business trust, such
as The Navellier Performance Funds, except to the extent otherwise provided in
the governing instrument of the business trust, are entitled to the same
limitation of personal liability extended to stockholders of private for-profit
corporations. The Navellier Performance Funds's governing instrument, the Trust
Declaration, specifically disclaims shareholder liability for acts or
obligations of The Navellier Performance Funds and provides that The Navellier
Performance Funds' shareholders shall not be subject to any personal liability
for the acts or obligations of The Navellier Performance Funds. The Trust
Declaration further provides for indemnification, out of the property of the
series of The Navellier Performance Funds with respect to which such
shareholder's shares are issued, for all losses and expenses of any shareholder
held personally liable solely by reason of his or her being or having been a
shareholder of such series and not because of his or her acts or omissions or
for some other reason. Thus, the risk of a shareholder of The Navellier
Performance Funds incurring financial loss on account of shareholder liability
is considered remote since such liability is limited to circumstances in which a
disclaimer is inoperative and The Navellier Performance Funds would be unable to
meet its obligations.
LIABILITY OF TRUSTEES. Under the Declaration of Trust of The Navellier
Performance Funds, a Trustee will be held personally liable only for the
Trustee's own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of a Trustee.
Under said Declaration of Trust and separate indemnity agreements, trustees and
officers of The Navellier Performance Funds ("Trust Officers") will be
indemnified for the expenses of litigation against them unless it is determined
that the person did not act in good faith in the reasonable belief that the
person's action was in or not opposed to the best interest of The Navellier
Performance Funds or if the person's conduct is determined to constitute willful
misfeasance, bad faith, gross negligence or reckless disregard of that person's
duties. The Navellier Performance Funds also may advance money for these
expenses provided that the Trustee or the Trust Officer undertakes to repay The
Navellier Performance Funds if that person's conduct later is determined to
preclude indemnification. The Navellier Series Fund's Declaration of Trust and
separate indemnity agreements currently set forth comparable provisions.
The foregoing is only a summary of certain characteristics of (i) the shares
of beneficial interest of The Navellier Performance Funds to be issued pursuant
to the proposed Reorganization, (ii) the operations of The Navellier Performance
Funds' Declaration of Trust and By-Laws, and (iii) Delaware law. The foregoing
is not a complete description of the shares of beneficial interest of The
Navellier Performance Funds nor of the documents or laws cited. Shareholders
should refer to the provisions of Delaware law directly for a more thorough
description.
FEDERAL INCOME TAX CONSEQUENCES
The Navellier Series Fund and The Navellier Performance Funds have received,
as a condition to the Reorganization, an opinion from Samuel Kornhauser, counsel
to The Navellier Performance Funds to the effect, for Federal income tax
purposes and with respect to the Reorganization, that:
1. the proposed Reorganization and the transactions contemplated thereby, as
described herein, will constitute a tax-free "reorganization" within the
meaning of Section 368(a)(1)(C) of the Internal Revenue Code (the "Code");
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<PAGE>
2. no gain or loss generally will be recognized to the Portfolio upon the
transfer of all of the Portfolio's assets to the Acquiring Fund in exchange
solely for Acquiring Fund Shares and the assumption by the Acquiring Fund of
all valid liabilities of the Portfolio and the subsequent distribution of
those Acquiring Fund Shares to the Portfolio's Shareholders of record in
liquidation thereof;
3. no gain or loss will be recognized to the Acquiring Fund upon the receipt of
those Portfolio assets in exchange solely for Acquiring Fund Shares and the
assumption by the Acquiring Fund of those valid Portfolio liabilities;
4. the Acquiring Fund's basis for those Portfolio assets transferred by the
Portfolio to the Acquiring Fund will be the same as the basis thereof in the
Portfolio's hands immediately before the Reorganization and the Acquiring
Fund's holding period for those assets will include the Portfolio's holding
period therefor;
5. each Shareholder of record will recognize no gain or loss upon the
constructive exchange of all of his or her Portfolio Shares solely for
Acquiring Fund Shares pursuant to the Reorganization;
6. each Shareholder's basis for the Acquiring Fund Shares to be received by the
Shareholder pursuant to the Reorganization will be the same as the
Shareholder's basis in the Portfolio Shares to be constructively surrendered
in exchange therefor; and
7. each such Shareholder's holding period for those Acquiring Fund Shares will
include the period during which the Portfolio Shares to be constructively
surrendered in exchange for Acquiring Fund Shares were held, provided the
Portfolio Shares were held as capital assets by that Shareholder on the date
of the Reorganization.
A revenue ruling of the Internal Revenue Service as to the Reorganization is
not expected to be obtained.
THE FOREGOING IS INTENDED TO BE ONLY A SUMMARY OF THE PRINCIPAL FEDERAL
INCOME TAX CONSEQUENCES OF THE REORGANIZATION AND SHOULD NOT BE CONSIDERED TO BE
TAX ADVICE. THERE CAN BE NO ASSURANCE THAT THE INTERNAL REVENUE SERVICE WILL
CONCUR ON ALL OR ANY OF THE ISSUES DISCUSSED ABOVE. SHAREHOLDERS OF THE
PORTFOLIO ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE FEDERAL,
STATE AND LOCAL TAX CONSEQUENCES WITH RESPECT TO THE FOREGOING MATTERS AND ANY
OTHER CONSIDERATIONS WHICH MAY BE APPLICABLE TO THE SHAREHOLDERS.
PRO FORMA CAPITALIZATION AND RATIOS
The following tables show the capitalization of the Portfolio as of December
31, 1997 and the Acquiring Fund separately, as of December 31, 1997, and
combined in the aggregate on a pro forma basis, as of December 31, 1997, giving
effect to the Reorganization:
<TABLE>
<CAPTION>
ACQUIRING PRO FORMA
PORTFOLIO FUND COMBINED
--------------- ------------- ------------
<S> <C> <C> <C>
Net Assets.............................. $ 72,879,241 $0 $ 72,879,241
Net Asset Value Per Share............... $16.00 $0 $16.00
Shares Outstanding...................... 4,555,000 0 4,555,000
</TABLE>
DISSOLUTION OF THE PORTFOLIOS
If the Plan is approved by the Shareholders of the Portfolio and the
Reorganization is completed, the Portfolio will be dissolved as soon as
practicable in accordance with the provisions of Delaware law and the Plan. See
"The Proposed Transactions--Agreement and proposed Plan of Reorganization".
20
<PAGE>
NAVELLIER GROUP RECOMMENDATION
The Portfolio Trustees have solicited this shareholder vote to approve the
Reorganization and recommend that the Portfolio Shareholders vote FOR the
Reorganization on the enclosed GOLD proxy card. The Portfolio Trustees, for the
reasons mentioned herein (See "Reasons For Proposed Transactions"), believe the
Reorganization of the Portfolio into the Acquiring Fund would result in cost
savings, would be in the best interests of the Portfolio Shareholders and that
their interests would not be diluted.
The Portfolio Trustees therefore recommends that the Shareholders of the
Portfolio vote FOR Proposal No. 1 (the proposal to merge the Portfolio into the
Acquiring Fund and the transactions contemplated thereby).
REQUIRED VOTE
As described above, if 50% of the outstanding shares entitled to vote) is
present in person or by proxy, the approval of the Plan by the Shareholders of
the Portfolio under Proposal 1 requires the affirmative vote of at least 67% of
the shares present in person or by proxy at a meeting in which a quorum is
present or more than 50% of the outstanding voting shares of the Portfolio,
whichever is less.
ADDITIONAL INFORMATION ABOUT
THE ACQUIRING FUND AND THE ACQUIRING FUND SHARES
Additional information about the Acquiring Fund is included in the current
Prospectus of The Navellier Performance Funds, dated May 26, 1998. A copy of
that prospectus has been filed with the Commission and is incorporated by
reference herein. A Shareholder of the Portfolio will receive with this combined
prospectus/proxy statement, a copy of the prospectus for The Navellier
Performance Funds. Further information about the Acquiring Fund is included in
the Statement of Additional Information for The Navellier Performance Funds,
dated May 26, 1998. The Statement of Additional Information has been filed with
the Commission and is incorporated by reference herein. Copies of that Statement
of Additional Information for The Navellier Performance Funds may be obtained
without charge by contacting Navellier Management, Inc. (which provides
administrative services to the Acquiring Fund) or by telephoning Navellier
Management, Inc. toll-free at 1-800-887-8671.
ADDITIONAL INFORMATION ABOUT
THE PORTFOLIO AND THE PORTFOLIO SHARES
Additional information about the Portfolio is included in the current
Prospectus of the Navellier Series Fund, dated April 30, 1998. A copy of that
prospectus has been filed with the Commission and is incorporated by reference
herein. A Shareholder will receive with this combined prospectus/proxy statement
a copy of the prospectus for The Navellier Series Fund. Further information
about the Portfolio is included in the Statement of Additional Information for
The Navellier Series Fund, dated April 30, 1998, which also has been filed with
the Commission and is incorporated by reference herein. A copy of this Statement
of Additional Information for The Navellier Series Fund may be obtained without
charge by contacting Navellier Management, Inc. at One East Liberty Street,
Third Floor, Reno, Nevada 89501, or by telephoning Navellier Management, Inc.
toll-free at 1-800-887-8671.
MISCELLANEOUS
AVAILABLE INFORMATION
The Navellier Performance Funds is registered under the 1940 Act and is
subject to the informational requirements of the Securities Exchange Act of
1934, as amended, and the 1940 Act and, in accordance therewith, files reports,
proxy materials and other information with the Commission. The Navellier Series
Fund also is registered under the 1940 Act and is required to file reports under
the 1940 Act. Such reports,
21
<PAGE>
proxy materials and other information can be inspected at the Securities and
Exchange Commission at 450 Fifth Street, N.W., Washington, DC 20549. Copies of
such material can also be obtained from the Public Reference Branch, Office of
Consumer Affairs and Information Services, Securities and Exchange Commission,
450 Fifth Street, N.W., Washington, DC 20539, at prescribed rates.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the Acquiring Fund
Shares will be passed upon by Samuel Kornhauser, 155 Jackson Street, Suite 1807,
San Francisco, California 94111 ("Counsel"). Counsel has rendered an opinion as
to certain Federal income tax consequences of the Reorganization.
FINANCIAL STATEMENTS AND EXPERTS
Both the audited financial statement of the Acquiring Fund included in the
Statement of Additional Information related to this combined prospectus/proxy
statement (the "SAI") and the audited financial statement of the Portfolio
included in the SAI have been audited by Tait, Weller & Baker, independent
accountants, for the periods indicated in the reports of independent accountants
thereon which appear in the SAI. Such financial statements are relied upon as
reports of independent accountants and were given by such firm as experts in
accounting and auditing. Copies of these financial statements, as included in
the SAI, may be obtained without charge by contacting Navellier Management,
Inc., at One East Liberty Street, Third Floor, Reno, Nevada 89501, or by
telephoning Navellier Management, Inc. toll-free at 1-800-887-8671.
22
<PAGE>
OTHER BUSINESS
The Portfolio Trustees know of no business to be brought before the Meeting
other than the matters set forth in this combined prospectus/proxy statement.
Should any other matter requiring a vote of Shareholders arise, however, the
Proxies will vote thereon according to their best judgment in the interests of
the Portfolio and of the Shareholders.
<TABLE>
<S> <C> <C>
By Louis G. Navellier
By -----------------------------------------
Trustee, The Navellier Series Fund
</TABLE>
One East Liberty Street, Third Floor
Reno, Nevada 89501
May 26, 1998
23
<PAGE>
APPENDIX A:
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this day of , 1998, by and between THE NAVELLIER
SERIES FUND (the "Series Fund"), a Delaware business trust with its principal
place of business at One East Liberty Street, Third Floor, Reno, Nevada 89501,
and THE NAVELLIER PERFORMANCE FUNDS (the "Performance Funds"), a Delaware
business trust with its principal place of business at One East Liberty Street,
Third Floor, Reno, Nevada 89501.
This Agreement is intended to be and is adopted as a plan of reorganization
and liquidation within the meaning of Section 368(a) of the United States
Internal Revenue Code of 1986, as amended (the "Code"), with respect to the
proposed reorganization of the NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
(the "Portfolio"), which portfolio is a series of the Series Fund, pursuant to
which the Portfolio will be merged into and become part of The Navellier
Aggressive Small Cap Equity Portfolio (the "Acquiring Fund") of the Performance
Funds (the "Reorganization"). Specifically, this Agreement is intended to be and
is adopted for the purpose of providing for the Reorganization of the Portfolio
into the Acquiring Fund. The Reorganization will consist of the transfer of all
of the assets of the Portfolio to the Acquiring Fund in exchange solely for (i)
shares of beneficial interest in the Acquiring Fund (the "Acquiring Fund
Shares") and (ii) the assumption by the Acquiring Fund of all valid liabilities
of the Portfolio and the distribution of the Acquiring Fund Shares to the
Shareholders of the Portfolio in complete liquidation of the Portfolio, as
provided herein, all upon the terms and conditions hereinafter set forth in this
Agreement.
WHEREAS, the Performance Funds and the Series Fund are both open-end,
registered investment companies of the management type and the Portfolio owns
securities which are assets of the character in which the Acquiring Fund is
permitted to invest;
WHEREAS, the Shareholders of the Series Fund have determined, with respect
to such Reorganization, that the exchange of all of the assets of the Portfolio
for Acquiring Fund shares and the assumption of all valid liabilities of the
Portfolio by the Acquiring Fund is in the best interests of the Portfolio and
its Shareholders and that the interests of the existing Shareholders of the
Portfolio would not be diluted as a result of this transaction; and
WHEREAS, the purpose of the Reorganization is to combine the assets of the
Acquiring Fund with those of the Portfolio in an attempt to achieve greater
operating economies and to retain Navellier Management, Inc. as the investment
advisor to manage the assets of the Portfolio;
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree, with
respect to the Reorganization, as follows:
1. THE TRANSFER OF ASSETS OF THE PORTFOLIO TO THE ACQUIRING FUND IN EXCHANGE FOR
THE ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL VALID LIABILITIES OF THE
PORTFOLIO, AND THE LIQUIDATION OF THE PORTFOLIO
1.1 For the Reorganization, the closing shall take place as provided for
in paragraph 3.1 ("Closing") and the provisions of paragraphs 1 through 8 of
this Agreement shall apply. At the Closing, the Portfolio agrees to transfer
all of its assets, as set forth in paragraph 1.2, to the Acquiring Fund, and
the Acquiring Fund agrees in exchange therefor: (1) to deliver to the
Portfolio the number of Acquiring Fund Shares, including fractional
Acquiring Fund Shares, determined by dividing the value of the Portfolio's
net assets computed in the manner and as of the time and date set forth in
paragraph 2.1 by the net asset value of one Acquiring Fund Share computed in
the manner and as of the time and date set forth in paragraph 2.2; and (ii)
to assume all valid liabilities of the Portfolio, as set forth in paragraph
1.3.
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1.2 The assets of the Portfolio to be acquired by the Acquiring Fund
shall consist of all property, including, without limitation, all cash,
securities, interests, and dividends or interest receivable which are owned
by the Portfolio and any deferred or prepaid expenses shown as assets on the
books of the Portfolio on the closing date provided in paragraph 3.1 (the
"Closing Date").
1.3 The Portfolio will endeavor to discharge all of its known valid
liabilities and obligations prior to the Closing Date. The Acquiring Fund
shall assume all valid liabilities, expenses, costs, charges and reserves
reflected on an unaudited statement of assets and liabilities of the
Portfolio prepared by the administrator of the Acquiring Fund and the
Portfolio, as of the Valuation Date (as defined in paragraph 2.1), in
accordance with generally accepted accounting principles consistently
applied from the prior audited period.
1.4 Immediately after the transfer of assets provided for in paragraph
1.1, the Portfolio will distribute pro rata to its Shareholders of record,
determined as of immediately after the close of business on the Closing Date
(the "Portfolio Shareholders"), the Acquiring Fund Shares received by the
Portfolio pursuant to paragraph 1.1 and will completely liquidate. Such
distribution and liquidation will be accomplished by the transfer of the
Acquiring Fund Shares then credited to the account of the Portfolio on the
books of the Acquiring Fund to the share records of the Acquiring Fund in
the names of the Portfolio Shareholders and representing the respective pro
rata number of the Acquiring Fund Shares due such Shareholders. All issued
and outstanding shares of the Portfolio will simultaneously be canceled on
the books of the Portfolio. The Acquiring Fund shall not issue certificates
representing the Acquiring Fund Shares in connection with such exchange.
Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent.
2. VALUATION
2.1 The value of the Portfolio's assets to be acquired by the Acquiring
Fund hereunder shall be the net asset value of such assets computed as of
immediately after the close of business of the New York Stock Exchange on
the Closing Date (such time and date being hereinafter called the "Valuation
Date"), using the valuation procedures for computing net asset value set
forth in the Portfolio's then-current prospectus or statement of additional
information.
2.2 The net asset value of an Acquiring Fund Share shall be the net
asset value per share computed as of immediately after the close of business
of the New York Stock Exchange on the Valuation Date, using the valuation
procedures for computing net asset value set forth in the Performance Funds'
then-current prospectus or statement of additional information.
2.3 The number of the Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Portfolio's assets shall be
determined by dividing the value of the net assets of the Portfolio
determined using the same valuation procedures referred to in paragraph 2.1
by the net asset value of an Acquiring Fund Share determined in accordance
with paragraph 2.2.
2.4 All computations of value for the Performance Funds and the
Acquiring Fund shall be made by Rushmore Trust & Savings Bank, FSB; all
computations of value for the Series Fund and the Portfolio shall be made by
Rushmore Trust & Savings Bank, FSB.
3. CLOSING AND CLOSING DATE
3.1 The Closing for the Reorganization shall be December 31, 1997 or
such other date as the parties may agree to in writing. All acts taking
place at the Closing shall be deemed to take place simultaneously as of
immediately after the close of business on the Closing Date unless otherwise
agreed to by the parties. The close of business on the Closing Date shall be
as of 4:00 p.m., New York Time. The Closing shall be held at the offices of
the Performance Funds, One East Liberty Street, Third Floor, Reno, Nevada
89501, or at such other time and/or place as the parties may agree.
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3.2 Rushmore Trust & Savings Bank, FSB, Bethesda, Maryland, as custodian
for the Portfolio (the "Custodian"), shall deliver at the Closing a
certificate of an authorized officer stating that: (i) the Portfolio's
portfolio securities, cash, and any other assets shall have been delivered
in proper form to the Acquiring Fund within two business days prior to or on
the Closing Date; and (ii) all necessary taxes, including all applicable
Federal and state stock transfer stamps, if any, shall have been paid, or
provision for payment shall have been made, in conjunction with the delivery
of the Portfolio's portfolio securities.
3.3 Rushmore Trust & Savings Bank, FSB (the "Transfer Agent"), on behalf
of the Acquiring Fund and the Portfolio, shall deliver at the Closing a
certificate of an authorized officer stating that their records contain the
names and addresses of the Portfolio Shareholders and the number and
percentage ownership of outstanding shares owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund shall issue and deliver
a confirmation evidencing the Acquiring Fund Shares to be credited on the
Closing Date to the Secretary of the Portfolio or provide evidence
satisfactory to the Portfolio that such Acquiring Fund Shares have been
credited to the Portfolio's account on the books of the Acquiring Fund. At
the Closing, each party shall deliver to the other such bills of sales,
checks, assignments, share certificates, if any, receipts or other documents
as such other party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Series Fund, on its own and on behalf of the Portfolio,
represents and warrants to the Performance Funds and the Acquiring Fund as
follows:
(a) The Series Fund is a business trust duly organized, validly
existing, and in good standing under the laws of the State of Delaware;
(b) The Series Fund is a registered investment company classified as
a management company of the open-end type, and its registration with the
Securities and Exchange Commission (the "Commission"), as an investment
company under the Investment Company Act of 1940, as amended (the "1940
Act"), and the registration of its shares, under the Securities Act of
1933, as amended (the "1933 Act") are in full force and effect;
(c) Neither the Series Fund nor the Portfolio is in, and the
execution, delivery and performance of this Agreement will not result in,
a material violation of the Series Fund's Declaration of Trust or By-Laws
or of any agreement, indenture, instrument, contract, lease or other
undertaking to which the Series Fund or the Portfolio is a party or by
which either or both of the Series Fund and the Portfolio are bound;
(d) Neither the Series Fund nor the Portfolio has any material
contracts or other commitments (other than this Agreement) which will be
terminated with liability to the Series Fund or the Portfolio prior to
the Closing Date;
(e) Except as otherwise disclosed in writing to and accepted by the
Performance Funds or the Acquiring Fund, no material litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or to their knowledge threatened
against the Series Fund or the Portfolio or any of their properties or
assets which, if adversely determined, would materially and adversely
affect the Series Fund's or the Portfolio's financial condition or the
conduct of either the Series Fund's or the Portfolio's business. Neither
the Series Fund nor the Portfolio knows of any facts which might form the
basis for the institution of such proceedings and neither the Series Fund
nor the Portfolio is a party to or subject to the provisions of any
order, decree or judgment of any court or governmental body which
materially and adversely affects the business or the ability of the
Series Fund or the Portfolio to consummate the transactions herein
contemplated;
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(f) The Statement of Assets and Liabilities of the Portfolio at
December 31, 1997 has been audited by Tait, Weller & Baker, independent
accountants, and is in accordance with generally accepted accounting
principles consistently applied, and such statement (a copy of which has
been furnished to the Performance Funds) fairly reflects the financial
condition of the Portfolio as of such date, and there are no known
contingent liabilities of the Portfolio as of such date not disclosed
therein;
(g) Since December 31, 1997, there has not been any material adverse
change in the Portfolio's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business,
or any incurrence by the Portfolio of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Performance Funds (including the
disclosure of the former Trustees' April 1998 demand for indemnity which
was disclosed and deemed legally unfounded and immaterial). For the
purposes of this subparagraph (g), a decline in net asset value per share
of the Portfolio, the discharge of Portfolio liabilities, or the
redemption of Portfolio shares by Portfolio Shareholders shall not
constitute a material adverse change;
(h) At the Closing Date, all material Federal and other tax returns
and reports of the Series Fund and the Portfolio required by law to have
been filed by such date or due after request for extension, if any, shall
have been filed and are or will be correct, and all Federal and other
taxes shown as due or required to be shown as due on said returns and
reports shall have been paid or provision shall have been made for the
payment thereof, and to the best knowledge of the Series Fund and the
Portfolio, no such return is currently under audit and no assessment has
been asserted with respect to such returns;
(i) For each taxable year of its operation, the Portfolio has met the
requirements of Subchapter M of the Code for qualification as a regulated
investment company and has elected to be treated as such;
(j) All issued and outstanding shares of the Portfolio are, and at
the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable by the Portfolio. All of the issued and
outstanding shares of the Portfolio will, at the time of closing, be held
by the persons and in the amounts set forth in the records of the
Transfer Agent, on behalf of the Portfolio as provided in paragraph 3.3.
The Portfolio does not have outstanding any options, warrants or other
rights to subscribe for or to purchase any of the Portfolio shares, nor
is there outstanding any security convertible into any of the Portfolio
shares;
(k) At the Closing Date, the Portfolio will have good and marketable
title to the Portfolio's assets to be transferred to the Acquiring Fund
pursuant to paragraph 1.2 and full right, power and authority to sell,
assign, transfer and deliver such assets hereunder and, upon delivery and
payment for such assets, the Acquiring Fund will acquire good and
marketable title thereto, subject to any restrictions as might arise
under the 1933 Act, other than as disclosed to the Acquiring Fund;
(l) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
action on the part of the Series Fund's Trustees and, subject to the
approval of the Portfolio Shareholders, this Agreement will constitute a
valid and binding obligation of the Series Fund and of the Portfolio,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights and to general equity
principles;
(m) The information to be furnished by the Series Fund and the
Portfolio for use in registration statements, proxy materials and other
documents which may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete in all material
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respects and shall comply in all material respects with Federal
securities and other laws and regulations thereunder applicable thereto;
and
(n) The proxy statement of the Series Fund (the "Proxy Statement") to
be included in the Registration Statement referred to in paragraph 5.6
(other than information therein that relates to the Performance Funds and
the Acquiring Fund) will, on the effective date of the Registration
Statement and on the Closing Date, not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not materially
misleading.
4.2 The Performance Funds, on its own behalf and on behalf of the
Acquiring Fund, represents and warrants to the Series Fund and the Portfolio
as follows:
(a) The Performance Funds is a business trust duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) The Performance Funds is a registered investment company
classified as a management company of the open-end type, and its
registration with the Commission, as an investment company under the 1940
Act, and the registration of its shares, under the 1933 Act, are in full
force and effect;
(c) The current prospectus and statement of additional information of
the Performance Funds conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder and do not include any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not materially
misleading;
(d) At the Closing Date, the Acquiring Fund will have good and
marketable title to the Acquiring Fund's assets;
(e) Neither the Performance Funds nor the Acquiring Fund is in, and
the execution, delivery and performance of this Agreement will not result
in, a material violation of the Performance Funds' Declaration of Trust
or By-Laws or of any agreement, indenture, instrument, contract, lease or
other undertaking to which the Performance Funds or the Acquiring Fund is
a party or by which the Performance Funds or the Acquiring Fund are
bound;
(f) No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently
pending or threatened against the Performance Funds or the Acquiring Fund
or any of their properties or assets, except as previously disclosed in
writing to the Series Fund. Neither the Performance Funds nor the
Acquiring Fund knows of any facts which might form the basis for the
institution of such proceedings and neither the Performance Funds nor the
Acquiring Fund is a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body which materially and
adversely affects the business or the ability of the Performance Funds or
the Acquiring Fund to consummate the transactions contemplated herein;
(g) The Statement of Assets and Liabilities of the Acquiring Fund at
December 31, 1997, audited by Tait, Weller & Baker, independent
accountants, and a copy of which has been furnished to the Series Fund,
fairly and accurately reflects the financial condition of the Acquiring
Fund as of such date in accordance with generally accepted accounting
principles consistently applied;
(h) Since December 31, 1997, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities
or business other than changes occurring in the ordinary course of
business, or any incurrence by the Acquiring Fund of indebtedness
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maturing more than one year from the date such indebtedness was incurred.
For the purposes of this subparagraph (h), a decline in net asset value
per share of the Acquiring Fund shares, the discharge of Acquiring Fund
liabilities or the redemption of Acquiring Fund shares by Acquiring Fund
Shareholders, shall not constitute a material adverse change;
(i) At the Closing Date all material Federal and other tax returns
and reports of the Performance Funds and the Acquiring Fund required by
law to have been filed by such date or due after request for extension,
if any, shall have been filed and are or will be correct, and all Federal
and other taxes shown as due or required to be shown as due on said
returns and reports
shall have been paid or provision shall have been made for the payment
thereof, and, to the best knowledge of the Performance Funds and the
Acquiring Fund, no such return is currently under audit and no assessment
has been asserted with respect to such returns;
(j) For each taxable year of its operation, the Acquiring Fund has
met the requirements of Subchapter M of the Code for qualification as a
regulated investment company and has elected to be treated as such;
(k) All issued and outstanding Acquiring Fund Shares are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable by the Acquiring Fund. The Acquiring Fund does not
have outstanding any options, warrants or other rights to subscribe for
or to purchase any Acquiring Fund Shares, nor is there outstanding any
security convertible into any Acquiring Fund Shares;
(l) The execution, delivery and performance of this Agreement will
have been fully authorized prior to the Closing Date by all necessary
action, if any, on the part of the Trustees of the Performance Funds and
this Agreement will constitute a valid and binding obligation of the
Acquiring Fund enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights, and to general
equity principles;
(m) The Acquiring Fund Shares to be issued and delivered (transferred
on the Acquiring Fund's books) to the Portfolio for the account of the
Portfolio Shareholders, pursuant to the terms of this Agreement, will, at
the Closing Date, have been duly authorized and, when so issued and
delivered, will be duly and validly issued Acquiring Fund Shares, and
will be fully paid and non-assessable by the Acquiring Fund;
(n) The information to be furnished by the Acquiring Fund for use in
registration statements, proxy materials and other documents which may be
necessary in connection with the transactions contemplated hereby shall
be accurate and complete in all material respects and shall comply in all
material respects with Federal securities and other laws and regulations
applicable thereto;
(o) The Proxy Statement to be included in the Registration Statement
(only insofar as it relates to the Performance Funds and the Acquiring
Fund) will, on the effective date of the Registration Statement and on
the Closing Date, not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statement therein, in light of the circumstances under which
such statements were made, not materially misleading; and
(p) The Performance Funds and the Acquiring Fund each agrees to use
all reasonable efforts to obtain the approvals and authorizations
required by the 1933 Act, the 1940 Act and such of the state blue sky or
securities laws as may be necessary in order to continue their operations
after the Closing Date.
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5. COVENANTS OF THE ACQUIRING FUND AND THE PORTFOLIO
The following covenants of the Acquiring Fund and the Portfolio, as
applicable, are made, respectively, by the Performance Funds and the Series
Fund:
5.1 The Acquiring Fund and the Portfolio each will operate its business
in the ordinary course between the date hereof and the Closing Date, it
being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions and any
other distribution that may be advisable.
5.2 The Portfolio will call a meeting of the Portfolio Shareholders to
consider and act upon this Agreement and to take all other action necessary
to obtain approval of the transactions contemplated herein.
5.3 The Portfolio covenants that the Acquiring Fund Shares to be issued
hereunder are not being acquired for the purpose of making any distribution
thereof other than in accordance with the terms of this Reorganization
Agreement.
5.4 The Portfolio will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the
beneficial ownership of the shares of the Portfolio.
5.5 Subject to the provisions of this Agreement, the Acquiring Fund and
the Portfolio will each take, or cause to be taken, all actions and do, or
cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this
Agreement.
5.6 The Portfolio will provide the Acquiring Fund with information
reasonably necessary for the preparation of a prospectus (the "Prospectus")
which will include the Proxy Statement referred to in paragraph 4.1(n), all
to be included in a Registration Statement on Form N-14 of the Performance
Funds (the "Registration Statement"), in compliance with the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the 1940
Act, in connection with the meeting of the Portfolio Shareholders to
consider approval of this Agreement and the transactions contemplated herein
(the "Meeting").
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SERIES FUND AND THE PORTFOLIO
The obligations of the Series Fund and the Portfolio to consummate the
transactions provided for herein shall be subject, at their election, to the
performance by the Performance Funds and the Acquiring Fund of all the
obligations to be performed by the Performance Funds and the Acquiring Fund
hereunder on or before the Closing Date and, in addition thereto, to the
following further conditions:
6.1 All representations and warranties of the Performance Funds and the
Acquiring Fund contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected
by the transactions contemplated by this Agreement, as of the Closing Date
with the same force and effect as if made on and as of the Closing Date; and
6.2 The Performance Funds shall have delivered to the Series Fund, on
the Closing Date, a certificate executed in the Performance Funds' name by
the Performance Funds' President and Treasurer, in a form reasonably
satisfactory to the Series Fund and dated as of the Closing Date, to the
effect that the representations and warranties of the Performance Funds and
the Acquiring Fund made in this Agreement are true and correct at and as of
the Closing Date, except as these representations and warranties may be
affected by the transactions contemplated by this Agreement and as to such
other matters as the Performance Funds shall reasonably request.
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7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PERFORMANCE FUNDS AND THE
ACQUIRING FUND
The obligations of the Performance Funds and the Acquiring Fund to complete
the transactions provided for herein shall be subject, at their election, to the
performance by the Series Fund and the Portfolio of all of the obligations to be
performed by the Series Fund and the Portfolio hereunder on or before the
Closing Date and, in addition thereto, to the following conditions:
7.1 All representations and warranties of the Series Fund and the
Portfolio contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as these representations
and warranties may be affected by the transactions contemplated by this
Agreement, as of the Closing Date, with the same force and effect as if made
on and as of the Closing Date;
7.2 The Series Fund shall have delivered to the Performance Funds a
statement of the Portfolio's assets and liabilities, as of the Closing Date,
certified by the Treasurer of the Series Fund; and
7.3 The Series Fund shall have delivered to the Performance Fund, on the
Closing Date, a certificate executed in the Series Fund's name and the
Portfolio's name by the Series Fund's President and Treasurer, in form and
substance satisfactory to the Performance Funds and dated as of the Closing
Date, to the effect that the representations and warranties of the Series
Fund and the Portfolio, with respect to the Series Fund and the Portfolio
made in this Agreement are true are correct at and as of the Closing Date,
except as these representations and warranties may be affected by the
transactions contemplated by this Agreement and as to such other matters as
the Performance Funds shall reasonably request.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND THE
PORTFOLIO
If any of the conditions set forth below do not exist on or before the
Closing Date, with respect to the Portfolio or the Acquiring Fund, then the
other party to this Agreement shall, at its option, not be required to
consummate the transactions contemplated by this Agreement:
8.1 The Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares
of beneficial interest of the Portfolio in accordance with the provisions of
the Series Fund's Declaration of Trust and By-Laws and copies of the
resolutions evidencing such approval shall have been delivered to the
Performance Fund. Notwithstanding anything herein to the contrary, neither
the Performance Funds or the Acquiring Fund nor the Series Fund or the
Portfolio may waive the conditions set forth in this paragraph 8.1;
8.2 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed necessary
by the Performance Funds or the Series Fund to permit consummation, in all
material respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order or permit
would not involve a risk of a material adverse effect on the assets or
properties of the Performance Funds or the Acquiring Fund or the Series Fund
or the Portfolio, provided that either party hereto may, for itself, waive
any of such conditions;
8.3 The Registration Statement shall have become effective under the
1933 Act and no stop orders suspending the effectiveness thereof shall have
been issued; and
8.4 The parties shall have received the legal opinion of Samuel
Kornhauser, attorney at law, addressed to the Performance Funds and the
Series Fund, substantially to the effect that the transactions contemplated
by this Agreement shall constitute a tax-free reorganization for Federal
income tax purposes.
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9. BROKERAGE FEES AND EXPENSES
9.1 The Performance Funds and the Series Fund each represents and
warrants to the other that there are no brokers or finders entitled to
receive any payments in connection with the transactions provided for
herein.
9.2 Navellier Management Inc. will bear the aggregate expenses and costs
of its solicitation of this Proxy Solicitation regarding the Reorganization.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Performance Funds and the Series Fund agree that neither party
has made any representation, warranty or covenant not set forth herein and
that this Agreement constitutes the entire agreement between the parties.
10.2 The representations, warranties and covenants contained in this
Agreement, or in any document delivered pursuant hereto or in connection
herewith, shall survive the consummation of the transactions contemplated
hereunder.
11. TERMINATION
This Agreement and the transactions contemplated hereby may be terminated
and abandoned by either party by resolution of the party's Board of Trustees and
resolution passed by the requisite number of Shareholders of that party at any
time prior to the Closing Date if circumstances should develop that make
proceeding with the Agreement inadvisable.
12. WAIVER
The Performance Funds and the Series Fund, by mutual consent of their
respective Board of Trustees, may waive any condition to their respective
obligations hereunder, except as provided herein.
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the
Performance Funds and the Series Fund; provided, however, that following the
meeting of the Portfolio Shareholders called by the Portfolio pursuant to
paragraph 5.2 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of the Acquiring Fund Shares
to be issued to the Portfolio Shareholders under this Agreement to the detriment
of such Shareholders without their further approval.
14. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the Performance Funds at One
East Liberty Street, Third Floor, Reno, Nevada 89501 or to the Series Fund at
One East Liberty Street, Third Floor, Reno, Nevada 89501.
15. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
15.1 The Article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15.2 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
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15.3 This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
15.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by
any party without the written consent of the other party. Nothing herein
expressed or implied is intended or shall be construed to confer upon or to
give any person, firm or corporation, other than the parties hereto and
their respective successors and assigns, any rights or remedies under or by
reason of this Agreement.
15.5 It is expressly agreed that the obligations of the Series Fund and
the Portfolio hereunder shall not be binding upon any of the Trustees,
Shareholders, nominees, officers, agents or employees of the Series Fund
personally, but shall bind only the corporate property of the Series Fund
and the Portfolio, as provided in the Declaration of Trust of the Series
Fund. The execution and delivery by such officers of the Series Fund shall
not be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property
of the Series Fund and the Portfolio as provided in the Declaration of Trust
of the Series Fund.
15.6 It is expressly agreed that the obligations of the Performance
Funds and the Acquiring Fund hereunder shall not be binding upon any of the
Trustees, Shareholders, nominees, officers, agents or employees of the
Performance Funds personally, but shall bind only the trust property of the
Performance Funds and the Acquiring Fund, as provided in the Performance
Funds' Declaration of Trust. The execution and delivery by such officers of
the Performance Funds shall not be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Performance Funds and the Acquiring
Fund, as provided in the Performance Funds' Declaration of Trust.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its President and attested by its Secretary.
Attest: THE NAVELLIER PERFORMANCE FUNDS
By: By:
------------------------- -------------------------
Secretary President
Attest: THE NAVELLIER SERIES FUND
BY: By:
------------------------- -------------------------
Secretary President
A-10
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APPENDIX B
INVESTMENT MANAGEMENT AGREEMENT
BETWEEN
NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
AND
NAVELLIER MANAGEMENT, INC.
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
INVESTMENT ADVISORY AGREEMENT
FOR
THE NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
AGREEMENT made as of the 27th day of April, 1998, by and between The
Navellier Aggressive Small Cap Equity Portfolio ("Portfolio") of THE
NAVELLIER PERFORMANCE FUNDS, a business trust organized under the laws of the
State of Delaware (the "Fund"), and NAVELLIER MANAGEMENT, INC., a Delaware
corporation (the "Adviser").
WHEREAS, the Fund intends to engage in business as an open-end
management investment company and is being registered as such under the
Investment Company Act of 1940, as amended (the "Investment Company Act"); and
WHEREAS, the Fund has a portfolio designated as the "Navellier
Aggressive Small Cap Equity Portfolio" ("Portfolio"); and
WHEREAS, the Adviser is being registered as an investment adviser under
the Investment Advisers Act of 1940, and engages in the business of acting as
investment adviser with an emphasis on over the counter stocks; and
WHEREAS, the Portfolio desires to retain the Adviser as investment
adviser to furnish advisory and portfolio management services to the
Portfolio;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the Portfolio and the Adviser agree as
follows:
1. DUTIES AS ADVISER. The Portfolio hereby appoints the Adviser to
act as the investment adviser to the Portfolio and, subject to the
supervision of the Board of Trustees of the Portfolio, to provide investment
advisory services to the Portfolio as hereinafter set forth: (i) to obtain
and evaluate such information and advice relating to the economy, securities
markets, and securities as it deems necessary or useful to discharge its
duties hereunder; (ii) to continuously manage the assets of the Portfolio in
a manner consistent with applicable law and the investment objectives and
policies set forth in the most current prospectus and statement of additional
information of the Fund under the Securities Act of 1933 (the "Prospectus");
(iii) to determine which issuers will be deemed "Qualified Issuers" (as
defined in the Prospectus); (iv) to determine the timing of purchases, sales,
and dispositions of securities; (v) to take such further action in its sole
discretion (but always in compliance with applicable law and the Prospectus)
without obligation to give prior notice to the Board of Trustees of the
Portfolio, or the Custodian, including the placing of purchase and sale
orders on behalf of the Portfolio as it shall deem necessary and appropriate;
(vi) to furnish to or place at the disposal of the Portfolio such of the
information, evaluations, analyses, and opinions formulated or obtained by
it in the discharge of its duties as the Portfolio may, from time to time,
reasonably request; (vii) to take such actions necessary or appropriate to
carry out the decisions of the Portfolio's Board of Trustees; (viii) to make
decisions for the Portfolio as to the manner in which voting rights, rights
to consent to trust action, and any
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other rights pertaining to how the Portfolio's securities shall be exercised
("Portfolio Voting Rights"). The Portfolio has directed the Custodian, and
Custodian as agreed, to act in accordance with the instructions of the
Adviser. The Adviser shall at no time have custody of or physical control
over the investment account assets or securities, and the Adviser shall not
be liable for any act or omission of the Custodian. The Adviser shall
maintain records required under the Investment Advisers Act of 1940
("Advisers Act") and shall make them available to the Portfolio or its
designees for review or inspection upon demand and at the Adviser's expense.
2. ALLOCATION OF CHARGES AND EXPENSES. The Adviser shall bear the
cost of rendering the investment advisory services to be performed by it
under this Agreement and shall, at its expense, maintain such staff and
employ or retain personnel and consult with other persons as it shall
determine necessary. Without limiting the generality of the foregoing, the
staff and personnel of the Adviser shall be deemed to include persons
employed or otherwise retained by the Adviser to furnish statistical and
other factual data, advice regarding economic factors and trends, information
with respect to technical and scientific developments, and such other
information, advice, and assistance as the Adviser may deem appropriate. The
Adviser shall, without expense to the Portfolio, furnish the services of such
members of the Adviser's organization as may be duly elected to be officers
of the Portfolio, subject to their individual consent to serve and to any
limitations imposed by law.
The Portfolio will pay or cause to be paid all other expenses of the
Portfolio (except for the expenses to be paid by the Portfolio's
Distributor), including, without limitation, the following: (i) services
rendered by the Custodian and the Transfer Agent, (ii) fees, voluntary
assessments, and other expenses incurred in connection with membership in
investment company organizations, (iii) cost of stock certificates, reports,
proxy materials and notices to shareholders, and other like miscellaneous
expenses, (iv) brokerage commissions and other brokerage expenses, (v) taxes
(including any income or franchise taxes), and any fees payable to federal,
state, and other governmental agencies, (vi) fees and salaries payable to the
Trustees, officers, and advisory board members of the Portfolio, if any,
(vii) auditing the Fund's books and accounts, (viii) the cost of bookkeeping
and accounting services, (ix) any and all Portfolio legal expenses, (x) costs
of mailing and tabulating proxies and costs of shareholders' and Trustees'
meetings, (xi) the cost of investment company literature and other
publications provided by the Portfolio to its Trustees and officers, (xii)
costs of any liability, uncollectible items of deposit and other insurance or
fidelity bonds, (xiii) any extraordinary expenses (including fees and
disbursements of counsel) incurred by the Portfolio, (xiv) costs of printing
and mailing monthly statements and confirmations, (xv) expense of organizing
the Portfolio, (xvi) filing fees and expenses relating to the registration
and qualification of the Portfolio's shares under federal and/or state
securities laws and maintaining such registrations and qualifications and
(vii) other expenses properly payable by the Portfolio.
3. COMPENSATION OF THE ADVISER. For the services to be rendered by
the Adviser hereunder, the Portfolio shall pay to the Adviser, on a monthly
basis, an annual fee of eighty-four one hundredths of one percent (0.84%)
(the "Management Fee") of the Portfolio's average daily net assets. Payment
of the Adviser's compensation for the preceding month shall be made as
2
<PAGE>
promptly as possible after the last day of each such month. The compensation
for the period from the effective date hereof to the next succeeding last day
of the month shall be prorated according to the proportion which such period
bears to the full month ending on such date, and provided further that, upon
any termination of this Agreement before the end of the month, such
compensation for the period from the end of the last month ending prior to
such termination shall be prorated according to the proportion which such
period bears to a full month, and shall be payable upon the date of
termination. If the annual operating expenses borne by the Fund relating to
any Portfolio, including amounts payable to the Adviser hereunder paid or
payable by such Portfolio for any fiscal year, exceed the applicable expense
limitations imposed by state securities laws or regulations thereunder (as
same may be adjusted from time to time), the Adviser will reduce its
Management Fee to the extent of such excess and if required, pursuant to any
such laws or regulations ((unless otherwise waived), will reimburse the
Portfolio for annual operating expenses in excess of any such expense
limitation up to the amount of the Management Fee payable to it during that
fiscal year with respect to the Portfolio. The Adviser has the right, but
not the obligation, to waive any portion or all of its Management Fee, from
time to time.
The "average daily net assets" of the Portfolio for a particular period
shall be determined by adding together all calculations of net assets, as
regularly computed for the Portfolio on each business day during such period,
and dividing the resulting total by the number of business days during such
period.
4. LIMITATIONS OF LIABILITY OF ADVISER. The Adviser shall not be
liable for any error of judgment or mistake of law or fact, or, for any loss
suffered by the Portfolio or its investors in connection with the matters to
which this Agreement relates, except (i) a loss resulting from willful
misfeasance, bad faith, or gross negligence on the part of the Adviser in the
performance of its duties, or from reckless disregard by the Adviser of its
obligations and duties under this Agreement, or (ii) a loss for which the
Adviser would not be permitted to be indemnified under the federal Securities
laws. The Portfolio also agrees to indemnify Adviser to the extent provided
for and agreed to by the parties in that agreement entitled Indemnification
Agreement executed by both parties on this date and incorporated herein as
Exhibit A and made a part hereof.
5. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall
become effective as of the date hereof and shall continue in effect unless
sooner terminated, as herein provided, for two years after the date hereof,
and thereafter only if approved at least annually: (a) by the Board of
Trustees of the Portfolio; or (b) by the vote of a majority (as defined in
the Act) of the outstanding voting securities of the Portfolio, and, in
addition, (c) by the vote of a majority of the Trustees of the Portfolio who
are not parties hereto nor interested persons of any party, as required by
the Act.
This Agreement may be terminated at any time, without payment of any
penalty, by the Board of Trustees of the Portfolio, or by a vote of a
majority (as defined in the Act) of the outstanding voting securities of the
Portfolio, in either case upon written notice to the Adviser, and it may be
terminated by the Adviser upon sixty (60) days' written notice to the
Portfolio. This Agreement shall automatically terminate in the event of its
assignment,
3
<PAGE>
within the meaning of the Act, unless such automatic termination shall be
prevented by an exemptive order of the Securities and Exchange Commission.
6. SEPARATE CONTRACT. This Agreement is separate and distinct form,
and neither affects nor is affected by (i) the Fund's Distribution Agreement,
and (ii) the Fund's Administrative Services Agreement. Nothing contained in
this Agreement shall prevent the Adviser or any affiliated person of the
Adviser from acting as investment adviser or manager for any other person,
firm, corporation, or other entity and shall not in any way bind or restrict
the Adviser or any such affiliated person from buying, selling, or trading
any securities, commodities, futures contracts, or options on such contracts
for their own accounts or for the account of others for whom they may be
acting. Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of the Adviser to engage in any other business
or to devote his time and attention in part to the management or other
aspects of any other business whether of a similar or dissimilar nature.
7. AMENDMENT. This Agreement may be amended from time to time by
agreement of the parties; provided, that such amendment shall be approved
both by the vote of a majority of Trustees of the Portfolio, including a
majority of Trustees who are not parties to this Agreement or interested
persons of any such party to this Agreement (other than as Trustees of the
Portfolio) cast in person at a meeting called for that purpose, and by the
holders of a majority (as defined in the Act) of the outstanding voting
securities of the Portfolio.
This Agreement may be amended by agreement of the parties without the
vote or consent of the shareholders of the Portfolio to supply any omission,
to cure, correct, or supplement any ambiguous, defective, or inconsistent
provision hereof, or if they deem it necessary to conform this Agreement to
the requirements of applicable federal and/or state laws or regulations, but
neither the Portfolio nor the Investment Adviser shall be liable for failing
to do so.
8. BINDING EFFECT. This Agreement shall be binding upon, and inure to
the benefit of the Portfolio and the Adviser and their respective successors.
9. NAME OF THE PORTFOLIO. The Portfolio acknowledges that the name
"Navellier" is and shall remain the sole property of the Adviser,
notwithstanding the use thereof by the Portfolio. The Portfolio may use the
name "The Navellier Performance Fund, The Navellier Aggressive Small Cap
Equity Portfolio" or any name derived from the name "Navellier" only for so
long as this Agreement or any extension, renewal, or amendment hereof remains
in effect, including any similar agreement with any organization which shall
have succeeded to the business of the Adviser and for only so long as
Navellier Management, Inc., remains as Adviser to the Portfolio. At such
time as such an agreement shall no longer be in effect, or Adviser's services
have terminated, the Portfolio will (to the extent that it is lawfully able)
cease to use such a name or any other name connected with the Adviser or any
organization which shall have succeeded to the business of the Adviser.
10. DEFINITIONS. Capitalized terms used herein without definition shall
have the meanings ascribed thereto in the Prospectus. For the purpose of
this Agreement, the terms
4
<PAGE>
"vote of a majority of the outstanding voting securities," "assignment,"
"affiliated person," and "interested person" shall have the respective
meanings specified in the Investment Company Act of 1940.
11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and each party may
become a party hereto by executing a counterpart hereof. This Agreement and
any counterpart so executed shall be deemed to be one and the same instrument.
12. APPLICABLE LAW. This Agreement shall be governed by, and construed
in accordance with the laws of the State of Delaware. Any dispute or
controversy arising out of this Agreement shall be either submitted to
arbitration (if both parties agree) in Reno, Nevada (near the Fund's
principal place of business) in accordance with the rules and regulations of
the National Association of Securities Dealers, Inc., or decided by a trier
of fact in a federal or state court in Reno, Nevada, and in no other
jurisdiction or court venued outside of Reno, Nevada.
13. ACKNOWLEDGEMENT OF RECEIPT OF FORM ADV PART II. The Portfolio
hereby acknowledges receipt of the Adviser's Form ADV Part II or its brochure
as required by Rule 204-3 promulgated under the Investments Advisers Act of
1940.
14. INTEGRATION OF ALL PRIOR DISCUSSIONS, NEGOTIATIONS AND AGREEMENTS.
This Agreement integrates all prior discussions, negotiations and agreements
between the parties relating to Adviser's and Portfolio's agreement relating
to the performance of investment advisory services for the Portfolio, and no
evidence or parol evidence may be introduced to vary or change the terms of
this written Agreement which is the full and final expression of the parties'
agreement. Any change in the terms of this Agreement must be in writing
signed by both parties.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in Reno, Nevada.
THE NAVELLIER AGGRESSIVE SMALL CAP EQUITY
PORTFOLIO OF THE NAVELLIER
PERFORMANCE FUNDS
By:
----------------------------
Barry Sander, Trustee
By:
----------------------------
Attest: Joel Rossman, Trustee
/s/ By:
---------------------- ----------------------------
Arnold Langsen, Trustee
By:
----------------------------
Jacques Delacroix, Trustee
NAVELLIER MANAGEMENT, INC.
By:
----------------------------
Louis Navellier, President
Attest:
/s/
----------------------
6
<PAGE>
EXHIBIT A
7
<PAGE>
INDEMNIFICATION AGREEMENT
The Navellier Aggressive Small Cap Equity Portfolio of The Navellier
Performance Funds (the "Fund") and Navellier Management, Inc. (the "Advisor")
agree as follows:
1. The Fund agrees with the Advisor, for the benefit of the Advisor
and each person, if any, who controls the Advisor within the meaning of
Section 15 of the Securities Act and each and all and any of them, to
indemnify and hold harmless the Advisor and any such controlling person from
and against any and all losses, claims, damages or liabilities, joint or
several (including reasonable legal fees and expenses) to which they or any
of them may become subject under the Securities Act or under any other
statute, at common law or otherwise, and to reimburse the Advisor and such
controlling persons, if any, for any legal or other expenses (including the
cost of any investigation and preparation) reasonably incurred by them in
connection with any litigation, whether or not resulting in any liability,
insofar as such losses, claims, damages, liabilities or litigation arise out
of, or are based upon, any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or any Prospectus,
filed with the SEC, or any amendment thereof or supplement thereto, or which
arise out of, or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; PROVIDED, HOWEVER, that this indemnity
agreement shall not apply to amounts paid in settlement of any such
litigation if such settlement is effected without the consent of the Fund or
to any such losses, claims, damages, liabilities or litigation arising out
of, or based upon, any untrue statement or alleged untrue statement of a
material fact contained in any such Registration Statement or prospectus, or
any amendment thereof of or supplement thereof, or arising out of, or based
upon, the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, which statement or omission was made in reliance upon information
furnished in writing to the Fund by the Advisor for inclusion in any such
Registration Statement or Prospectus or any amendment thereof or supplement
thereto. The Advisor and each such controlling person shall, within thirty
(30) days after the complaint shall have been served upon the Advisor or such
controlling person in respect of which indemnity may be sought from the Fund
on account of its agreement contained in this paragraph, notify the Fund in
writing of the commencement thereof. The omission of the Advisor of such
controlling person so to notify the Fund of any such litigation shall relieve
the Fund from any liability which it may have to the Advisor or such
controlling person on account of the indemnity agreement contained in this
paragraph if such failure to timely notify the Fund has resulted in
substantial prejudice to the Fund, but shall not relieve the Fund from any
liability which it may have to the Advisor or controlling person otherwise
than on account of the indemnity agreement contained in this paragraph. In
case any such litigation shall be brought against the Advisor or any such
controlling person and notice of the commencement thereof shall have been
timely given to the Fund, the Fund shall be entitled to participate in (and,
to the extent that it shall wish, to direct) the defense thereof at its own
expense, but such defense shall be conducted by counsel of good standing and
reasonably satisfactory to the Advisor or such controlling person(s) or
defendant(s) in the litigation. The indemnity agreement of the Fund
contained in this paragraph shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Advisor or
any such controlling person, and shall survive any delivery of shares of the
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<PAGE>
Fund. The Fund agrees to notify the Advisor promptly of the commencement of
any litigation or proceeding against it or any of it officers or directors of
which it may be advised in connection with the issue and sale of shares of
the Fund.
2. Anything herein to the contrary notwithstanding, the agreement in
paragraph 1 of this Indemnification Agreement, insofar as it constitutes a
basis of reimbursement by the Fund for liabilities (other than payment by the
Fund of expenses incurred or paid in the successful defense of any action,
suit or proceeding) arising under the Securities Act, shall not extend to the
extent of any interest therein of any person who is an underwriter or a
partner or controlling person of an underwriter within the meaning of Section
15 of the Securities Act or who, at the date of this Agreement, is a Trustee
of the Fund, except to the extent that an interest of such character shall
have been determined by a court of appropriate jurisdiction as not against
public policy as expressed in the Securities Act. Unless in the opinion of
counsel for the Fund the matter has been adjudicated by controlling
precedent, the Fund, will, if a claim for such reimbursement is asserted,
submit to a court of appropriate jurisdiction the question of whether or not
such interest is against the public policy as expressed in the Securities Act.
3. The Advisor agrees to indemnify and hold harmless the Fund and
its Trustees and such officers as shall have signed any Registration
Statement filed with the Commission from and against any and all losses,
claims, damages, or liabilities, joint or several, to which the Fund or such
Trustees or officers may become subject under the Securities Act, under any
other statute, at common law or otherwise, and will reimburse the Fund or
such Trustees or officers for any legal or other expenses (including the cost
of any investigation and preparation) reasonably incurred by it or them or
any of them in connection with any litigation, whether or not resulting in
any liability, insofar as such losses, claims, damages, liabilities, or
litigation arise out of, or are based upon, any untrue statement or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, which statement or
omission was made by the Fund in reliance upon information furnished in
writing to the Fund by the Advisor for inclusion in any Registration
Statement or any Prospectus, or any amendment thereof or supplement thereto
or otherwise for distribution or publication. The Advisor shall not be
liable for amounts paid in settlement of any such litigation if such
settlement was effected without its consent. The Fund and its Trustees and
such officers or defendant(s), in any such litigation, shall, within thirty
(30) days after the complaint shall have been served upon the Fund or any
such Trustee or officer in respect of which indemnity may be sought from the
Advisor or account of its agreement contained in this paragraph, notify the
Advisor in writing of the commencement thereof. The omission of the Fund or
such Trustee or officer so to notify the Advisor of any such litigation shall
relieve the Advisor from any liability which it may have to the Fund or such
Trustee or officer of liability which it may have to the Fund or such Trustee
or officer on account of the indemnity agreement contained in this paragraph,
but shall not relieve the Advisor from any liability which it may have to the
Fund or such Trustee or officer otherwise than on account of the indemnity
agreement contained in this paragraph. In case any such litigation shall be
brought against the Fund or any such Trustee or officer and timely notice of
the commencement thereof shall have been so given to the Advisor, the Advisor
shall be entitled to participate in (and, to the extent it shall wish, to
direct) the defense thereof at its own expense, but such defense shall be
conducted by counsel of good standing and satisfactory to the Fund. The
indemnity agreement of the Advisor
9
<PAGE>
contained in this paragraph shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Fund and
shall survive any delivery of shares of the Fund. The Fund agrees to notify
the Advisor promptly of the commencement of any litigation or proceeding
against it or any of its officers or Trustees or against any such controlling
person of which it may be advised in connection with the issue and sale of
the Fund's shares.
4. Notwithstanding any provision contained in this Agreement, no
party hereto and no person or persons in control of any party hereto shall be
protected against any liability to the Fund or its security holders to which
they would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence, in the performance of their duties, or by reason of
their reckless disregard of their obligations and duties under this Agreement.
5. Except as expressly provided in paragraphs 1 and 3 hereof, the
agreements herein set forth have been made and are made solely for the
benefit of the Fund, the Advisor, and the persons expressly provided for in
paragraphs 1 and 3, their respective heirs, successor, personal
representatives and assigns, and except as so provided, nothing expressed or
mentioned herein is intended or shall be construed to give any person, firm
or corporation, other than the Fund, the Advisor, and the persons expressly
provided for in paragraphs 1 and 3, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any representation, warranty
or agreement herein contained. Except as so provided, the terms "heirs,
successors, personal representatives and assigns" shall not include any
purchaser of shares merely because of such purchase.
10
<PAGE>
ATTEST: THE NAVELLIER AGGRESSIVE SMALL CAP EQUITY
PORTFOLIO OF THE NAVELLIER
PERFORMANCE FUNDS
- -------------------------
By:
----------------------------
Barry Sander, Trustee
By:
----------------------------
Joel Rossman, Trustee
By:
----------------------------
Jacques Delacroix, Trustee
By:
----------------------------
Arnold Langsen, Trustee
ATTEST: NAVELLIER MANAGEMENT, INC.
By:
- ------------------------- ----------------------------
Louis Navellier, President
11
<PAGE>
APPENDIX C
PROPOSED 12b-1 PLAN
FOR
THE NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
RULE 12b-1 DISTRIBUTION PLAN
FOR
THE NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
This distribution plan (the "Rule 12 b-1 Distribution Plan" or the
"Plan"), has been adopted by the Aggressive Small Cap Equity Portfolio
("Portfolio") of The Navellier Performance Funds, a registered open-end
investment company organized as a Delaware Business Trust (the "Fund"),
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended
(the "Act").
W H E R E A S
The Portfolio presently distributes its shares of capital stock
through a contractual arrangement with a principal distributor, Navellier
Securities Corp. (the "Principal Distributor"), duly qualified to act on
behalf of the Aggressive Small Cap Equity Portfolio in such capacity, which
contract has been approved by the Fund's Board of Trustees in accordance with
requirements of the Act (the "Distribution Agreement"). Pursuant to the
Distribution Agreement, the Principal Distributor may enter into service
agreements ("Service Agreements") with certain securities dealers, financial
institutions or other industry professionals, such as investment advisers,
accountants and estate planning firms (severally, a "Service Organization")
for distribution and
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promotion of, administration of, and servicing investors in, the Portfolio's
shares.
Under this proposal, the Portfolio and its Investment Advisor (the
"Advisor") may from time to time and from their own funds or from such other
resources as may be permitted by rules of the Securities and Exchange
Commission, make payments as described in Sections 2 and 3 hereof for
distribution and service assistance.
In voting to approve the Plan and related Service Agreement, the
Board requested and evaluated such information as it deemed necessary to an
informed determination and has concluded, in the exercise of their reasonable
business judgment and in light of their respective fiduciary duties, that
there is a reasonable likelihood that the plan will benefit the Portfolio and
its shareholders.
NOW, THEREFORE, in consideration of the foregoing, the Portfolio
hereby adopts this Plan under the Act:
1. The Principal Distributor shall act as distributor of the
Portfolio's shares pursuant to the Distribution Agreement and shall receive
from the Portfolio an annual 0.25% 12b-1 fee (payable pro rata monthly) of
the average daily net assets of the Portfolio. Payments under this 0.25%
12b-1 fee may exceed actual expenses of the Principal Distributor in
distributing, promoting and servicing the Portfolio. The Principal
Distributor may, at its own expense, enter into Service Agreements with
Service Organizations for Distribution and Service Assistance.
2
<PAGE>
2. The Portfolio shall pay all costs and expenses in
connection with the preparation, printing and distribution of the Portfolio's
prospectuses and shareholder reports to existing shareholders. The Principal
Distributor shall pay for printing and distribution of prospectuses sent to
prospective investors and any promotional material.
3. (a) There shall be paid periodically to one or more Service
Organizations payments in respect of such Service Organizations' services to
the Portfolio's shares owned by shareholders for whom the Service
Organization is the dealer of record or holder of record, or owned by
shareholders for whom the Service Organization provides service assistance.
These payments for services shall be included in the 12b-1 fee paid to
Distributor and shall be paid by Distributor to such Service Organization out
of the 12b-1 fee. Payments to the Principal Distributor under the 12b-1 plan
may exceed the Principal Distributor's actual expenses and payments to
Service Organizations. The Service Payments are subject to compliance with
the terms of the Service Agreements between the Service Organization and the
Principal Distributor.
(b) Distribution and Service Assistance, as defined in this
Plan, shall include, but not be limited to, INTER ALIA, (i) formulating and
implementing marketing and promotional activities, including, but not limited
to, direct mail promotions and television, radio, newspaper, magazine and
other mass media advertising;
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(ii) arranging and contracting for the preparation and printing of sales
literature and the mailing and distribution thereof; (iii) procuring,
evaluating and providing to the Portfolio such information, analyses and
opinions with respect to marketing and promotional activities as the
Portfolio may, from time to time, reasonably request; (iv) providing office
space and equipment, telephone facilities and dedicated personnel as is
necessary to provide the services hereunder; (v) answering Client inquiries
regarding the Portfolio and assisting Clients in changing dividend options,
account designations and addresses; (vi) establishing and maintaining Client
accounts and records; (vii) processing purchase and redemption transactions;
(viii) providing automatic investment in Portfolio shares of Client cash
account balances; (ix) providing periodic statements showing a client's
account balance and integrating such statements with those of other
transactions and balances in the Client's other accounts serviced by the
Service Organization; and (x) arranging for bank wires and such other
services as the Portfolio may request, to the extent that the Service
Organization is permitted by applicable statute, rule or regulation.
Anything stated herein to the contrary notwithstanding and subject to the
rules and regulations of the Act, any Service Payments made pursuant to this
Plan shall cover any series or class of shares of capital stock of the
Portfolio as to which the Plan is effective.
(c) In each year that this Plan remains in effect, the
Distributor of the Portfolio and/or the
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Investment Advisor shall prepare and furnish to the Board of Trustees of the
Portfolio and the Trustees shall review, at least quarterly, written reports,
complying with the requirements of Rule 12b-1 under the Act, of the amounts
expended under the Plan and purposes for which such expenditures were made.
4. The Fund will allocate the amounts expended by it under the
Plan to each series or class of securities of the Fund as to which the Plan
is effective in the proportion that the average daily net asset values of
such series or class of securities bears to the average daily net assets of
all such series or classes of securities as to which the Plan is effective.
5. The Plan shall become effective upon approval by (a) a vote of
(i) the Portfolio's Board of Trustees and (ii) the Qualified Trustees (as
defined in Section 8 hereof), cast in person at a meeting called for the
purpose of voting thereon, and (b) with respect to the securities of the
Portfolio, at least a majority vote of the outstanding voting securities of
the Portfolio, as defined in Section 2(a)(42) of the Act.
6. This Plan shall remain in effect for one year from its
adoption date and may be continued thereafter if this Plan is approved at
least annually by a vote of the Board of Trustees of the Portfolio, and of
the Qualified Trustees, cast in person at a meeting called for the purpose of
voting on such Plan. This Plan may not be amended in order to increase
materially the amounts to be expended in accordance with Sections 1, 2 and
3(a) hereof without approval of each series or class of securities
5
<PAGE>
affected in accordance with Section 5 hereof. All material amendments to
this Plan must be approved by a vote of the Board of Trustees of the
Portfolio, and of the Qualified Trustees, cast in person at a meeting called
for the purpose of voting thereon.
7. This Plan may be terminated at any time by a majority vote of
the Trustees who are not interested persons (as defined in Section 2(a)(19)
of the Act) of the Portfolio ("Independent Trustees") and have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related to the Plan ("Qualified Trustees"), by vote of a majority of the
outstanding voting securities of the Portfolio, as defined in Section
2(a)(42) of the Act.
8. While this Plan shall be in effect, the selection and
nomination of the Independent Trustees of the Portfolio shall be committed to
the discretion of the Independent Trustees then in office.
9. Any termination or noncontinuance of a Service Agreement by
the Principal Distributor with a particular Service Organization shall have
no effect on similar agreements between the Principal Distributor and other
Service Organizations.
10. The Principal Distributor is not obligated by this Plan to
execute a Service Agreement with a qualifying Service Organization nor is it
required to pay all or any portion of the 12b-1 fee to any service
organization. The Principal Distributor shall be entitled to retain the
entire amount of the 12b-1 fee.
6
<PAGE>
11. The Portfolio shall preserve copies of this Plan and any
related agreements and all reports made pursuant to Paragraph 6 hereof, for a
period of not less than six years from the date of this Plan, or the
agreements or such report, as the case may be, the first two years in an
easily accessible place.
Dated: April 27, 1998
THE AGGRESSIVE SMALL CAP EQUITY PORTFOLIO OF
THE NAVELLIER PERFORMANCE FUNDS
By
----------------------------
Louis Navellier, Trustee
By
----------------------------
Barry Sander, Trustee
By
----------------------------
Joel Rossman, Trustee
By
----------------------------
Arnold Langsen, Trustee
By
----------------------------
Jacques Delacroix, Trustee
7
<PAGE>
PROXY THE NAVELLIER AGGRESSIVE SMALL CAP EQUITY PROXY
PORTFOLIO
OF
THE NAVELLIER SERIES FUND
One East Liberty Street, Third Floor
Reno, Nevada 89501
--------------------
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS
June 19, 1998 (or another date shortly thereafter)
THIS PROXY IS SOLICITED BY THE TRUSTEES OF THE NAVELLIER SERIES FUND,
for use at a special meeting of the shareholders of The Navellier Aggressive
Small Cap Equity Portfolio (the "Portfolio"), an investment portfolio offered
by The Navellier Series Fund (the "Series Fund") which meeting will be held
at 10:00 a.m., Pacific Standard Time, on June 19, 1998 OR ANOTHER DATE SHORTLY
THEREAFTER, at the offices of The Navellier Series Fund, One East Liberty
Street, Third Floor, Reno, Nevada 89501 (the "Meeting").
The undersigned shareholder of the Portfolio, revoking any and all previous
proxies heretofore given for shares of the Portfolio held by the undersigned
("Shares"), does hereby appoint Louis Navellier and Samuel Kornhauser, and each
and any of them, with full power to substitution to each to be the attorneys and
proxies of the undersigned (the "Proxies"), to attend the Meeting of the
shareholders of the Portfolio, and to represent and direct the voting interests
represented by the undersigned as of the record date for said Meeting for the
Proposal specified below.
This proxy, if properly executed, will be voted in the manner as directed
herein by the undersigned shareholder. Unless otherwise specified below in the
squares provided, the undersigned's vote will be cast "FOR" each Proposal. If
no direction is made for any Proposal, this proxy will be voted "FOR" any and
all such Proposals. In their discretion, the Proxies are authorized to transact
and vote upon such other matters and business as may come before the Meeting or
any adjournments thereof.
<PAGE>
Please mark | |
your votes as | X |
indicated in | |
this example
Proposal 1 To approve a proposed Agreement and Plan of
Reorganization (the "Plan"), whereby The Navellier
Aggressive Small Cap Equity Portfolio ("Portfolio") would
transfer all of its assets to The Navellier Aggressive
Small Cap Equity Portfolio of The Navellier Performance
Funds (the "Acquiring Fund") in exchange for shares of
beneficial interest in the Acquiring Fund that would then
be distributed to the shareholders of The Navellier
Aggressive Small Cap Equity Portfolio. Also, as part of
the Plan, the Acquiring Fund would assume all valid
liabilities of The Navellier Aggressive Small Cap Equity
Portfolio.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
To avoid the expense of adjourning the Meeting to a subsequent date, please
return this proxy in the enclosed self-addressed, postage-paid envelope. THIS
PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF THE NAVELLIER SERIES FUND
WHICH RECOMMEND A VOTE FOR PROPOSAL 1.
---
Dated _______________, 1998
------------------------ ----------------
Signature of Shareholder Number of shares
------------------------ ----------------
Signature of Shareholder Number of shares
This proxy may be revoked by the shareholder(s) at any time
prior to the special meeting.
NOTE: Please sign exactly as your name appears hereon. If shares are
registered in more than one name, all registered shareholders should sign this
proxy; but if one shareholder signs, that signature binds the other shareholder.
When signing as an attorney, executor, administrator, agent, trustee, or
guardian, or custodian for a minor, please give full title as such. If a
corporation, please sign in full corporate name by an authorized person. If a
partnership, please sign in partnership name by an authorized person.
<PAGE>
PART B
<PAGE>
PART B
THE NAVELLIER PERFORMANCE FUNDS
(THE NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO)
STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 26, 1998
This Statement of Additional Information, which is not a prospectus, should
be read in conjunction with the Combined Prospectus/Proxy Statement of The
Navellier Performance Funds (the "Fund"), dated May 26, 1998 for the special
meeting (the "Meeting") of the shareholders of the Navellier Aggressive Small
Cap Equity Portfolio (the "Portfolio") of the Navellier Series Fund, a copy of
which Prospectus/ Proxy Statement may be obtained, without charge, by contacting
the Fund, at its mailing address c/o Navellier Securities Corp., One East
Liberty, Third Floor, Reno, Nevada 89501; Tel: 1-800-887-8671. This Statement of
Additional Information contains additional and more detailed information about
the operations and activities of The Navellier Aggressive Small Cap Equity
Portfolio (the "Acquiring Fund") of the Fund and the operations and activities
of the Portfolio.
The combined Prospectus/Proxy Statement describes certain transactions
contemplated by the proposed merger of the Portfolio into the Acquiring Fund
(the "Reorganization") whereby the Acquiring Fund would acquire all of the
assets of the Portfolio in exchange solely for shares of beneficial interest in
the Acquiring Fund and the assumption by the Acquiring Fund of all of the valid
liabilities of the Portfolio.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
PROSPECTUS OF THE NAVELLIER PERFORMANCE FUNDS DATED MAY 26, 1998 (incorporated herein by reference to
Registrant's May 26, 1998 N-1A post-effective amendment No. 11 EDGAR filing)..............................
STATEMENT OF ADDITIONAL INFORMATION FOR THE NAVELLIER PERFORMANCE FUNDS DATED MAY 26, 1998 (incorporated
herein by reference to Registrant's May 26, 1998 N-1A post-effective amendment No. 11 EDGAR filing).......
PROSPECTUS OF THE NAVELLIER SERIES FUND DATED APRIL 30, 1998 (incorporated herein by reference to the April
30, 1998 N-1A EDGAR filing)...............................................................................
STATEMENT OF ADDITIONAL INFORMATION FOR THE NAVELLIER SERIES FUND DATED APRIL 30, 1998 (incorporated herein
by reference to the April 30, 1998 N-1A EDGAR filing).....................................................
CURRENT AUDITED ANNUAL REPORT OF THE NAVELLIER PERFORMANCE FUNDS AS OF DECEMBER 31, 1997 (incorporated
herein by reference to the March 31, 1998 N-1A filing post effective amendment No. 9 for #33-30195).......
CURRENT AUDITED ANNUAL REPORT OF THE NAVELLIER SERIES FUND AS OF DECEMBER 31, 1997 (incorporated herein by
reference to the March 31, 1998 N-1A filing post effective amendment No. 10 for #33-64010)................
Pro Forma Financial Statement..............................................................................
</TABLE>
<PAGE>
NAVELLIER PERFORMANCE AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
AND
NAVELLIER SERIES AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------------------------------- --------------------------------------
NAVELLIER NAVELLIER NAVELLIER NAVELLIER
PERFORMANCE SERIES PERFORMANCE SERIES
AGGRESSIVE AGGRESSIVE AGGRESSIVE AGGRESSIVE
SMALL CAP SMALL CAP SMALL CAP SMALL CAP
EQUITY EQUITY PRO FORMA EQUITY EQUITY PRO FORMA
PORTFOLIO PORTFOLIO COMBINED PORTFOLIO PORTFOLIO COMBINED
(UNAUDITED) (AUDITED) (UNAUDITED) (UNAUDITED) (AUDITED) (UNAUDITED)
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS -- 92.4% of Total
Investments
AEROSPACE -- 1.9%
Ducommun, Inc.*.................. -- 40,000 40,000 -- $ 1,397,500 $ 1,397,500
----- ----------- -----------
APPAREL -- 2.5%
Oshkosh B Gosh, Inc.............. -- 56,800 56,800 -- 1,874,400 1,874,400
----- ----------- -----------
AUTOMOTIVE -- 0.9%
Carlisle Companies, Inc.......... -- 16,000 16,000 -- 684,000 684,000
----- ----------- -----------
BANKS -- 5.9%
City National Corp............... -- 30,000 30,000 -- 1,108,125 1,108,125
Commercial Bank of New York...... -- 39,000 39,000 -- 897,000 897,000
First Oak Brook Bancshares,
Inc............................ -- 18,400 18,400 -- 883,200 883,200
Independent Bank Corp............ -- 80,500 80,500 -- 1,479,187 1,479,187
----- ----------- -----------
-- 4,367,512 4,367,512
----- ----------- -----------
BUILDING AGGREGATES -- 3.8%
Centex Construction Products,
Inc............................ -- 35,000 35,000 -- 1,054,375 1,054,375
Florida Rock Industries, Inc..... -- 50,800 50,800 -- 1,155,700 1,155,700
Southdown, Inc................... -- 10,000 10,000 -- 590,000 590,000
----- ----------- -----------
-- 2,800,075 2,800,075
----- ----------- -----------
BUILDING PRODUCTS -- 1.5%
American Woodmark Corp........... -- 50,600 50,600 -- 1,113,200 1,113,200
----- ----------- -----------
CATALOG AND SPECIALTY
DISTRIBUTION -- 2.8%
D M Management, Co.*............. -- 49,700 49,700 -- 776,563 776,563
New England Business Service,
Inc............................ -- 38,500 38,500 -- 1,299,375 1,299,375
----- ----------- -----------
-- 2,075,938 2,075,938
----- ----------- -----------
COMPUTER SOFTWARE -- 1.8%
Compuware Corp.*................. -- 40,800 40,800 -- 1,305,600 1,305,600
----- ----------- -----------
CONSTRUCTION AND HEAVY
EQUIPMENT -- 6.8%
Gardner Denver Machinery,
Inc.*.......................... -- 42,000 42,000 -- 1,063,125 1,063,125
Gehl Co.*........................ -- 70,000 70,000 -- 1,470,000 1,470,000
Terex Corp.*..................... -- 55,300 55,300 -- 1,299,550 1,299,550
Wabash National Corp............. -- 41,100 41,100 -- 1,168,781 1,168,781
----- ----------- -----------
-- 5,001,456 5,001,456
----- ----------- -----------
</TABLE>
1
<PAGE>
NAVELLIER PERFORMANCE AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
AND
NAVELLIER SERIES AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------------------------------- --------------------------------------
NAVELLIER NAVELLIER NAVELLIER NAVELLIER
PERFORMANCE SERIES PERFORMANCE SERIES
AGGRESSIVE AGGRESSIVE AGGRESSIVE AGGRESSIVE
SMALL CAP SMALL CAP SMALL CAP SMALL CAP
EQUITY EQUITY PRO FORMA EQUITY EQUITY PRO FORMA
PORTFOLIO PORTFOLIO COMBINED PORTFOLIO PORTFOLIO COMBINED
(UNAUDITED) (AUDITED) (UNAUDITED) (UNAUDITED) (AUDITED) (UNAUDITED)
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
CONSUMER SERVICES -- 1.0%
Ambassadors International,
Inc.*.......................... -- 38,500 38,500 -- $ 750,750 $ 750,750
----- ----------- -----------
CONTAINERS AND PACKAGING -- 0.2%
BWAY Corp........................ -- 5,000 5,000 -- 114,375 114,375
----- ----------- -----------
CONTRACT DRILLING -- 1.9%
Patterson Energy, Inc.*.......... -- 36,000 36,000 -- 1,392,750 1,392,750
----- ----------- -----------
DISCOUNT STORES -- 1.3%
Ames Department Stores*.......... -- 53,000 53,000 -- 927,500 927,500
----- ----------- -----------
EDP PERIPHERALS AND SERVICES -- 3.0%
Genicom Corp.*................... -- 71,000 71,000 -- 816,500 816,500
Systems & Computer Tech.*........ -- 27,900 27,900 -- 1,384,538 1,384,538
----- ----------- -----------
-- 2,201,038 2,201,038
----- ----------- -----------
ELECTRONICS -- 4.8%
Advanced Energy Industries,
Inc.*.......................... -- 60,000 60,000 -- 896,250 896,250
C & D Technologies, Inc.......... -- 30,400 30,400 -- 1,466,800 1,466,800
EFTC Corp.*...................... -- 72,200 72,200 -- 1,173,250 1,173,250
----- ----------- -----------
-- 3,536,300 3,536,300
----- ----------- -----------
FLUID CONTROLS -- 1.1%
ESSF Corp.*...................... -- 49,400 49,400 -- 790,400 790,400
----- ----------- -----------
HOMEBUILDING -- 6.2%
Engle Homes, Inc................. -- 67,400 67,400 -- 1,238,475 1,238,475
Fairfield Communities, Inc.*..... -- 50,000 50,000 -- 2,212,500 2,212,500
NVR, Inc.*....................... -- 53,000 53,000 -- 1,159,375 1,159,375
----- ----------- -----------
-- 4,610,350 4,610,350
----- ----------- -----------
HOSPITAL AND NURSING
MANAGEMENT -- 0.5%
Quorum Health Group, Inc.*....... -- 13,950 13,950 -- 364,444 364,444
----- ----------- -----------
INDUSTRIAL SPECIALTIES -- 1.4%
Carbide/Graphite Group, Inc.*.... -- 30,000 30,000 -- 1,012,500 1,012,500
----- ----------- -----------
INSURANCE -- 4.5%
Allied Group, Inc................ -- 15,000 15,000 -- 429,375 429,375
Enhance Financial Services
Group.......................... -- 24,000 24,000 -- 1,428,000 1,428,000
Hooper Holmes, Inc............... -- 100,000 100,000 -- 1,456,250 1,456,250
----- ----------- -----------
-- 3,313,625 3,313,625
----- ----------- -----------
</TABLE>
2
<PAGE>
NAVELLIER PERFORMANCE AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
AND
NAVELLIER SERIES AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------------------------------- --------------------------------------
NAVELLIER NAVELLIER NAVELLIER NAVELLIER
PERFORMANCE SERIES PERFORMANCE SERIES
AGGRESSIVE AGGRESSIVE AGGRESSIVE AGGRESSIVE
SMALL CAP SMALL CAP SMALL CAP SMALL CAP
EQUITY EQUITY PRO FORMA EQUITY EQUITY PRO FORMA
PORTFOLIO PORTFOLIO COMBINED PORTFOLIO PORTFOLIO COMBINED
(UNAUDITED) (AUDITED) (UNAUDITED) (UNAUDITED) (AUDITED) (UNAUDITED)
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT BANKERS AND BROKERS
SERVICES -- 3.6%
Duff & Phelps Credit Rating
Co............................. -- 40,500 40,500 -- $ 1,645,312 $ 1,645,312
Southwest Securities Group,
Inc............................ -- 38,500 38,500 -- 991,375 991,375
----- ----------- -----------
-- 2,636,687 2,636,687
----- ----------- -----------
MEDICAL SPECIALTIES -- 0.4%
Osteotech, Inc.*................. -- 10,000 10,000 -- 272,500 272,500
----- ----------- -----------
METAL FABRICATIONS -- 2.2%
Encore Wire Corp.*............... -- 52,500 52,500 -- 1,611,094 1,611,094
----- ----------- -----------
MILITARY/GOVERNMENT/
TECHNICAL -- 3.4%
Allied Research Corp.*........... -- 50,000 50,000 -- 621,875 621,875
Applied Signal Technology*....... -- 99,100 99,100 -- 1,362,625 1,362,625
Engineered Support Systems,
Inc............................ -- 30,000 30,000 -- 551,250 551,250
----- ----------- -----------
-- 2,535,750 2,535,750
----- ----------- -----------
OIL AND GAS TRANSMISSION -- 1.3%
Santa Fe Pacific Pipeline
Partner........................ -- 21,500 21,500 -- 983,625 983,625
----- ----------- -----------
PRECISION INSTRUMENTS -- 2.2%
MTS Systems Corp................. -- 43,200 43,200 -- 1,620,000 1,620,000
----- ----------- -----------
PRINTING AND FORMS -- 2.9%
Consolidated Graphics, Inc.*..... -- 29,000 29,000 -- 1,352,125 1,352,125
Mail--Well, Inc.*................ -- 20,000 20,000 -- 810,000 810,000
----- ----------- -----------
-- 2,162,125 2,162,125
----- ----------- -----------
SAVINGS AND LOAN
ASSOCIATIONS -- 12.3%
Advantage Bancorp, Inc.*......... -- 7,000 7,000 -- 496,125 496,125
Andover Bancorp, Inc............. -- 10,000 10,000 -- 402,500 402,500
CFSB Bancorp, Inc................ -- 40,500 40,500 -- 1,063,125 1,063,125
Columbia Banking Systems,
Inc.*.......................... -- 31,000 31,000 -- 837,000 837,000
New York Bancorp, Inc............ -- 39,466 39,466 -- 1,566,307 1,566,307
PDS Financial Corp.*............. -- 101,400 101,400 -- 684,450 684,450
St. Paul Bancorp, Inc............ -- 66,800 66,800 -- 1,753,500 1,753,500
TR Financial Corp................ -- 50,000 50,000 -- 1,662,500 1,662,500
Trans Financial, Inc............. -- 16,000 16,000 -- 622,000 622,000
----- ----------- -----------
-- 9,087,507 9,087,507
----- ----------- -----------
SEMICONDUCTORS -- 1.8%
Dallas Semiconductor Corp........ -- 33,000 33,000 -- 1,344,750 1,344,750
----- ----------- -----------
</TABLE>
3
<PAGE>
NAVELLIER PERFORMANCE AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
AND
NAVELLIER SERIES AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------------------------------- --------------------------------------
NAVELLIER NAVELLIER NAVELLIER NAVELLIER
PERFORMANCE SERIES PERFORMANCE SERIES
AGGRESSIVE AGGRESSIVE AGGRESSIVE AGGRESSIVE
SMALL CAP SMALL CAP SMALL CAP SMALL CAP
EQUITY EQUITY PRO FORMA EQUITY EQUITY PRO FORMA
PORTFOLIO PORTFOLIO COMBINED PORTFOLIO PORTFOLIO COMBINED
(UNAUDITED) (AUDITED) (UNAUDITED) (UNAUDITED) (AUDITED) (UNAUDITED)
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
SERVICES: HEALTH INDUSTRY -- 0.7%
TLII Liquidating Corp............ -- 54,000 54,000 -- $ 536,625 $ 536,625
----- ----------- -----------
SPECIALTY FOODS AND CANDY -- 0.8%
Suiza Food Corp.*................ -- 9,400 9,400 -- 559,887 559,887
----- ----------- -----------
SPECIALTY STEELS -- 1.5%
Universal Stainless Alloy........ -- 74,500 74,500 -- 1,080,250 1,080,250
----- ----------- -----------
SPECIALTY STORES -- 0.5%
Funco, Inc.*..................... -- 24,000 24,000 -- 357,000 357,000
----- ----------- -----------
TELECOMMUNICATIONS
EQUIPMENT -- 1.3%
Cognitronics Corp.*.............. -- 51,500 51,500 -- 988,156 988,156
----- ----------- -----------
TEXTILES -- 2.0%
Dyersburg Corp................... -- 126,900 126,900 -- 1,443,488 1,443,488
----- ----------- -----------
TRUCKING -- 1.2%
Landair Services, Inc.*.......... -- 35,600 35,600 -- 863,300 863,300
----- ----------- -----------
WHOLESALERS -- 0.7%
Cellstar Corp.*.................. -- 20,000 20,000 -- 397,500 397,500
United Stationers, Inc.*......... -- 3,000 3,000 -- 144,375 144,375
----- ----------- -----------
-- 541,875 541,875
----- ----------- -----------
TOTAL COMMON STOCK
(Cost $60,320,356)............... 68,258,332 68,258,332
----- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
---------- -----------
<S> <C> <C> <C> <C> <C> <C>
AGENCY OBLIGATIONS -- 7.6%
Federal Home Loan Bank Discount
Notes, 4.75%, 1/2/97. Cost
($5,599,522)................... -- $5,601,000 $5,601,000 -- 5,599,522 5,599,522
----- ----------- -----------
TOTAL INVESTMENTS --
MARKET -- 100.0%................. $73,857,854 $73,857,854
----- ----------- -----------
----- ----------- -----------
TOTAL INVESTMENTS -- COST.......... $65,919,878 $65,919,878
----- ----------- -----------
----- ----------- -----------
</TABLE>
- ------------------------------
* Non-income Producing.
SEE NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS.
4
<PAGE>
PRO FORMA COMBINED
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
NAVELLIER NAVELLIER
PERFORMANCE SERIES
AGGRESSIVE AGGRESSIVE
SMALL CAP SMALL CAP
EQUITY EQUITY PRO FORMA PRO FORMA
PORTFOLIO PORTFOLIO ADJUSTMENTS COMBINED
(UNAUDITED) (AUDITED) (UNAUDITED) (UNAUDITED)
---------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
ASSETS
Securities at Value (Cost $0 and $65,919,878)......... $ -- $ 73,857,854 $ -- $ 73,857,854
Cash in Custodian Bank................................ -- 1,863 -- 1,863
Receivable for Shares Sold............................ -- 35,000 -- 35,000
Dividends Receivable.................................. -- 31,419 -- 31,419
Interest Receivable................................... -- 739 -- 739
Unamortized Organizational Costs...................... -- 1,918 (1,918) --
-------- ------------- ----------- -------------
Total Assets........................................ -- 73,928,793 (1,918) 73,926,875
-------- ------------- ----------- -------------
LIABILITIES
Distributions Payable................................. -- 584,370 -- 584,370
Payable for Shares Redeemed........................... -- 351,137 -- 351,137
Investment Advisory Fee Payable....................... -- 79,945 -- 79,945
Commissions Payable................................... -- 204 -- 204
Administrative Fee Payable............................ -- 15,989 -- 15,989
Other Payables and Accrued Expenses................... -- 15,989 -- 15,989
Organizational Expenses Payable to Adviser............ -- 1,918 (1,918) --
-------- ------------- ----------- -------------
Total Liabilities................................... -- 1,049,552 (1,918) 1,047,634
-------- ------------- ----------- -------------
NET ASSETS.............................................. $ -- $ 72,879,241 $ -- $ 72,879,241
-------- ------------- ----------- -------------
-------- ------------- ----------- -------------
NET ASSETS CONSIST OF:
Capital Paid in on Shares of Common Stock............. $ -- $ 62,554,653 $ -- $ 62,554,653
Net Investment Loss................................... -- -- -- --
Accumulated Net Realized Gain on Investments.......... -- 2,386,612 -- 2,386,612
Net Unrealized Appreciation on Investments............ -- 7,937,976 -- 7,937,976
-------- ------------- ----------- -------------
Total............................................... $ -- $ 72,879,241 $ -- $ 72,879,241
-------- ------------- ----------- -------------
-------- ------------- ----------- -------------
SHARES OUTSTANDING...................................... -- 4,555,116 -- 4,555,116
-------- ------------- ----------- -------------
-------- ------------- ----------- -------------
NET ASSET VALUE PER SHARE............................... -- $ 16.00 -- $ 16.00
-------- ------------- ----------- -------------
-------- ------------- ----------- -------------
</TABLE>
SEE NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS.
5
<PAGE>
PRO FORMA COMBINED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
NAVELLIER NAVELLIER
PERFORMANCE SERIES
AGGRESSIVE AGGRESSIVE
SMALL CAP SMALL CAP
EQUITY EQUITY PRO FORMA PRO FORMA
PORTFOLIO PORTFOLIO ADJUSTMENTS COMBINED
(UNAUDITED) (AUDITED) (UNAUDITED) (UNAUDITED)
----------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest.......................................... $ -- $ 353,737 $ -- $ 353,737
Dividends......................................... -- 606,957 -- 606,957
----------- -------------- ------------- --------------
Total Investment Income........................... -- 960,694 -- 960,694
----------- -------------- ------------- --------------
EXPENSES (Note 2B)
Investment Advisory Fee (Note 2B)................. -- 1,257,496 (412,456) 845,040
Extraordinary Expenses............................ -- 578,902 -- 578,902
Administrative Fee................................ -- 251,499 -- 251,499
Distribution Plan Fees (Note 2B).................. -- -- 251,499 251,499
Transfer Agent and Custodian Fee.................. -- 230,537 (20,000) 210,537
Legal Fees........................................ -- 75,991 (45,000) 30,991
Shareholder Reports and Notices................... -- 63,197 (15,000) 48,197
Registration Fees................................. -- 56,935 -- 56,935
Proxy Expenses.................................... -- 43,234 (43,234) --
Audit Fees........................................ -- 22,100 (10,000) 12,100
Trustees' Fees and Expenses....................... -- 21,150 (18,337) 2,813
Organizational Expense (Note 4)................... -- 2,892 (2,892) 0
Other Expenses.................................... -- 31,140 (10,000) 21,140
----------- -------------- ------------- --------------
Total Expenses.................................. -- 2,635,073 (325,420) 2,309,653
Less Expenses Reimbursed by Investment Adviser
(Note 2B)....................................... -- (295,677) 63,871 (231,806)
----------- -------------- ------------- --------------
Net Expenses...................................... -- 2,339,396 (261,549) 2,077,847
----------- -------------- ------------- --------------
NET INVESTMENT LOSS................................. -- (1,378,702) 261,549 (1,117,153)
----------- -------------- ------------- --------------
Net Realized Gain on Investment Transactions........ -- 25,247,521 -- 25,247,521
Net Change in Unrealized Appreciation of
Investments....................................... -- (28,940,108) -- (28,940,108)
----------- -------------- ------------- --------------
NET GAIN ON INVESTMENTS............................. -- (3,692,587) -- (3,692,587)
----------- -------------- ------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS........................................ $ -- $ (5,071,289) $ 261,549 $ (4,809,740)
----------- -------------- ------------- --------------
----------- -------------- ------------- --------------
</TABLE>
SEE NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS.
6
<PAGE>
NAVELLIER PERFORMANCE AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
AND
NAVELLIER SERIES AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(UNAUDITED)
1. BASIS OF PRESENTATION
Subject to approval of the proposed Agreement and Plan of Reorganization
(Agreement) by the shareholders of The Navellier Aggressive Small Cap Equity
Portfolio (the Portfolio), a series of The Navellier Series Fund, the Navellier
Aggressive Small Cap Equity Portfolio (the Acquiring Fund), a separate portfolio
of The Navellier Performance Funds would acquire substantially all of the assets
of the Portfolio and would assume all valid liabilities of the Portfolio in
exchange for shares of the Acquiring Fund at the net asset value of the
Acquiring Fund as of the Valuation Date as defined in the Agreement (the
Reorganization). Shares of the Acquiring Fund would then be distributed pro-rata
to the shareholders of the Portfolio. The Investment Advisor does not anticipate
selling any of the Portfolio's securities before or after the Reorganization due
to the Reorganization.
The pro forma information is intended to provide the shareholders of the
Portfolio with information about the impact of the proposed merger by showing
how it might have affected historical financial statements if the transaction
had been consummated at an earlier time. The pro forma combined Schedule of
Investments and Statement of Assets and Liabilities have been presented as if
the proposed merger had taken place on December 31, 1997; the pro forma combined
Statement of Operations for the year ended December 31, 1997, has been presented
as if the proposed merger had taken place on January 1, 1997. This information
is based upon historical financial statement data giving effect to the pro forma
adjustments described below. The accounting policies of the Portfolio and the
Acquiring Fund are not materially different. The pro forma financial statements
should be read in conjunction with the separate financial statements of the
Portfolio and the Acquiring Fund incorporated by reference into this
Registration Statement on Form N-14.
2. PRO FORMA ADJUSTMENTS
A. The pro forma combined Statement of Assets and Liabilities reflects the
number of shares that will be outstanding after the conversion of the
Portfolio shares (the converted shares) into Acquiring Fund shares as
part of the Agreement. The converted shares are calculated by dividing
the total net assets of the Portfolio by the net asset value per share of
the Acquiring Fund. These converted shares are then added to the shares
outstanding in the Acquiring Fund to arrive at the combined shares
outstanding. As of December 31, 1997 the Acquiring Fund had no assets.
B. The pro forma combined Statement of Operations of the Portfolio and the
Acquiring Fund reflects the net decrease in Investment Advisory Fee
expense and other operating expenses and a net increase in Net Investment
Income resulting from the expected lower expense ratio of the Acquiring
Fund after the proposed merger. The Portfolio pays Navellier Management,
Inc., the Portfolio's Investment Adviser, an advisory fee at an annual
rate of 1.15% of the average daily net assets of the Portfolio. The
Acquiring Fund pays an advisory fee at an annual rate of 0.84% of the
average daily net assets of the Acquiring Fund. Additionally, the
Acquiring Fund has adopted a Distribution Plan pursuant to Rule 12b-1
under the Act, whereby it reimburses the Distributor or others in an
amount not to exceed 0.25% per annum of the average daily net assets.
Other operating expenses are estimated to be reduced as the merger should
permit the reduction or
7
<PAGE>
NAVELLIER PERFORMANCE AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
AND
NAVELLIER SERIES AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(UNAUDITED)
2. PRO FORMA ADJUSTMENTS (CONTINUED)
elimination of certain costs and expenses presently incurred for services
that are separately performed for both the Portfolio and the Navellier
Performance Funds and by the waiver by the investment advisor of an
estimated $234,692 of expenses advanced by the adviser thereby reducing
the total operating expenses from an estimated 2.36% to an estimated
2.13%.
3. COSTS AND EXPENSES OF REORGANIZATION
Navellier Management, Inc., the investment adviser to the Acquiring Fund,
will bear all the costs and expenses related to the Reorganization (including
costs of the N-14 filing and Navellier's proxy solicitation efforts).
4. UNAMORTIZED ORGANIZATIONAL EXPENSES
As a result of the Reorganization, the investment adviser will lose its
right to reimbursement of the remaining $1,918 in unamortized organizational
expenses.
8
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
PART C. OTHER INFORMATION
ITEM 15. INDEMNIFICATION
The Navellier Performance Funds (the "Registrant" or the "Trust") is an
unincorporated voluntary association, organized under the laws of the State of
Delaware as a business trust, and is operated pursuant to its Declaration of
Trust, dated October 17, 1995 (the "Declaration of Trust"), its By-Laws, and the
laws of the State of Delaware, which permit the Registrant to indemnify its
trustees and officers under certain circumstances. Such indemnification,
however, is subject to the limitations imposed by the Securities Act of 1933, as
amended (the "1933 Act"), and the Investment Company Act of 1940, as amended
(the "1940 Act"). Pursuant to Delaware Code Ann. title 12 Section 3817, a
Delaware business trust may provide in its governing instrument for the
indemnification of its officers and trustees from and against any and all claims
and demands whatsoever. Article X, Section 10.02, of the Declaration of Trust
of the Registrant states that the Trust shall indemnify any present or former
trustee or officer to the fullest extent permitted by law against liability, and
all expenses reasonably incurred by him or her in connection with any claim,
action, suit, or proceeding in which he or she is involved by virtue of his or
her service as a trustee, officer, or both, and against any amount incurred in
settlement thereof. Indemnification will not be provided to a person adjudged
by a court or other adjudicatory body either to be liable to the Trust or its
shareholders by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of his or her duties (collectively, "disabling conduct"), or
not to have acted in good faith in the reasonable belief that his or her action
was in the best interest of the Trust. In the event of a settlement, no
indemnification may be provided unless there has been a determination, as
specified in the Declaration of Trust, that the officer or trustee did not
engage in disabling conduct.
Insofar as indemnification for liability arising under the 1933 Act 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 1933 Act and,
therefore, is 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 as to whether such indemnification by the
Registrant is against public policy as expressed in the 1993 Act and will be
governed by the final adjudication of such issue.
ITEM 16. EXHIBITS
(1) Declaration of Trust of Registrant.(1)
(2) By-Laws of Registrant.(1)
(3) Voting Trust Agreement.(2)
(4) Agreement and proposed Plan of Reorganization. (Filed herewith as
Appendix A to Part A)
- -----------------------------
(1) Incorporated by reference to Pre-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form N-1A previously filed
December 8, 1995 (Registration Nos. 33-80195 and 811-9142).
(2) None.
(3) Incorporated by reference to Registrant's 24f-2 Notice filed February
28, 1998.
<PAGE>
(5) Specimen share certificate.(2)
(6) Form of Management Contract between the Navellier Aggressive Small Cap
Portfolio of The Navellier Performance Funds and Navellier Management,
Inc.(1)
(6)(a) Form of Management Contract between Navellier Aggressive Small Cap
Portfolio of the Navellier Performance Funds and Navellier
Management Inc. if the merger is approved. Filed as
Appendix B to Part A.(4)
(7) Form of Underwriting Agreement.(1)
(8) Bonus, Profit Sharing, or Pension Plans.(2)
(9) Form of Custody Agreement between Registrant and Rushmore Trust &
Savings, Bank F.S.B.(1)
(10) Form of Rule 12b-1 Distribution Plan. Filed as Appendix C
to Part A.(4)
(11) Opinion of Samuel Kornhauser regarding the legality of securities
being registered.(6)
(12) Opinion of Samuel Kornhauser regarding certain tax matters and
consequences to shareholders discussed in Part A.(4)
(13) Form of Administrative Services Agreement between Registrant and
Navellier Management, Inc.(1)
(14) Consent of Tait, Weller & Baker, independent accountants for
Registrant.(6)
(14)(c) Consent of Samuel Kornhauser (see exhibit (11)).
(14)(d) Consent of Samuel Kornhauser (see exhibit (12)).
(15) Financial Statements Omitted Pursuant to Item 14(a)(1).(2)
(16) Powers of Attorney.(1)
(17) Rule 24f-2 Notice.(3)
ITEM 17 UNDERTAKINGS
(1) The Registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is part of
this Registration Statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) under the Securities
Act of 1933, as amended, the reoffering prospectus will contain the
information called for by the applicable registration form for
reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.
(2) The Registrant agrees that every prospectus that is filed under
paragraph (1), above, will be filed as part of an amendment to this
Registration Statement and will not be used until the amendment is
effective, and that, in determining any liability under the Securities
Act of 1933, as amended, each post-effective amendment shall be deemed
to be a new registration statement for the securities offered therein,
and the offering of the securities at that time shall be deemed to be
the initial bona fide offering of them.
- -----------------------------
(4) Incorporated by reference to Pre-effective Amendment No. 6 to
Registrant's N-14 EDGAR filing on May 13, 1998.
(5) Incorporated by reference from Post-effective Amendment No. 4 to
Registrant's Registration Statement on Form N-1A filed November 26,
1996.
(6) Filed herewith.
C-2
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, as amended, this Registration
Statement has been signed on behalf of the Registrant, in the City of Reno
and the State of Nevada, on the 26th day of May, 1998.
Registrant:
THE NAVELLIER PERFORMANCE FUNDS
BY:
-----------------------------------------
Louis Navellier
Chairman of the Board
As required by the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
- ---------------------------- Chairman of The May 26, 1998
Louis Navellier Board, President,
Treasurer, Trustee.
- ---------------------------- Trustee May 26, 1998
Joel Rossman
- ---------------------------- Trustee May 26, 1998
Barry Sander
- ---------------------------- Trustee May 26, 1998
Jacques Delacroix
- ---------------------------- Trustee May 26, 1998
Arnold Langsen
</TABLE>
C-3
<PAGE>
EXHIBITS TO
PART C
<PAGE>
EXHIBIT 11
OPINION AND CONSENT OF
LAW OFFICES OF SAMUEL KORNHAUSER
<PAGE>
[LETTERHEAD]
May 22, 1998
The Navellier Performance Funds
One East Liberty Street, Third Floor
Reno, Nevada 89501
Re: The Navellier Performance Funds
Registration Statement//Proxy Statement on Form N-14
----------------------------------------------------
Gentlemen:
This opinion is furnished in connection with the registration under the
Securities Act of 1933, as amended, of shares (the "Shares") of The Navellier
Aggressive Small Cap Equity Portfolio ("Acquiring Fund") of the Navellier
Performance Funds (the "Performance Fund"), an open-end, diversified management
investment company whose Shares are the subject of a Registration
Statement/Proxy Statement on Form N-14.
In rendering my opinion, I have examined such documents, records, and
matters of law as I deemed necessary for purposes of this opinion, including the
Registration Statement/Proxy Statement on Form N-14, the Performance Fund's
Declaration of Trust, the Performance Fund's By-Laws, and the proceedings of the
Performance Fund's and the Navellier Series Fund's Boards of Trustees.
Based upon and subject to the foregoing, it is my opinion that the Shares
that will be issued by the Acquiring Fund, when sold will be legally issued,
fully paid and nonassessable.
My opinion is rendered solely in connection with the Registration
Statement/Proxy Statement on Form N-14 under which the Shares will be registered
and may not be relied upon for any other purposes without my written consent. I
hereby consent to the use of this opinion as an exhibit to such Registration
Statement/Proxy Statement on Form N-14 and to my being named under the "Legal
Matters" section therein.
By:
---------------------
Samuel Kornhauser
LAW OFFICES OF SAMUEL KORNHAUSER
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated February 20, 1998, accompanying the
financial statements and financial highlights of Navellier Aggressive Small
Cap Equity Portfolio, a series of shares of Navellier Series Fund, appearing
in the Annual Report to Shareholders for the year ended December 31, 1997,
which is incorporated by reference in Pre-Effective Amendment No. 7 to the
Registration Statement on Form N-14 of Navellier Performance Fund. We have
also issued our reports each dated February 20, 1998, accompanying the
financial statements and financial highlights of Navellier Aggressive Growth
Portfolio, Navellier Mid Cap Growth Portfolio, Navellier Aggressive Micro Cap
Portfolio (formerly "Navellier Aggressive Small Cap Portfolio"), Navellier
Small Cap Value Portfolio, Navellier Large Cap Growth Portfolio, Navellier
Large Cap Value Portfolio, and Navellier International Equity Portfolio, each
a series of shares of Navellier Performance Funds, appearing in the Annual
Reports to Shareholders for the year ended December 31, 1997, which are
incorporated by reference in the Pre-Effective Amendment No. 7 to the
Registration Statement on Form N-14 of Navellier Performance Fund. We consent
to the use of the aforementioned reports and to the references to our Firm in
the Registration Statement.
/s/ TAIT, WELLER & BAKER
-----------------------------
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
May 26, 1998
