<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14 (A) of THE SECURITIES
EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /
Check the appropriate box
/ / Preliminary Proxy statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material pursuant to sec.24O.14a-11(c) or sec.24O.l4a-12
/ / Confidential, for Use of the Commission only (as permitted by
Rule 14a-6(3)(2))
The Navellier Performance Funds
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX) :
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11.
l) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies.
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction.
5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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NAVELLIER PERFORMANCE FUNDS
AGGRESSIVE SMALL CAP PORTFOLIO
One East Liberty, 3rd Floor, Reno, Nevada 89501
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 30, 1998
A Special Meeting of Shareholders of The Navellier Performance Funds
Aggressive Small Cap Portfolio (the "Portfolio") will be held at One East
Liberty, 3rd Floor, Reno, Nevada 89501 on Thursday, April 30, 1998 at 9:30 am
for the following purposes:
ITEM 1. To approve a distribution agreement ("12b-1 Plan") between the
Aggressive Small Cap Portfolio of The Navellier Performance Funds and
Navellier Securities Corp.
ITEM 2. To lower the annual management fee paid by the Portfolio to Navellier
Management, Inc. pursuant to the Investment Advisory Agreement between
Navellier Management, Inc. and the Portfolio from 1.15% to 0.90% of
the average daily net assets of the Portfolio. This proposal is
contingent on the shareholders also approving the 12b-1 Plan
described in Item 1.
ITEM 3. To change the investment policy of the Portfolio to investing
primarily in micro cap companies (companies with market
capitalization of less than $300 million) and to change the name of
the Aggressive Small Cap Portfolio of The Navellier Performance
Funds to the Aggressive Micro Cap Growth Portfolio.
Your Trustees recommend that you vote in favor of Items 1, 2 and 3.
Only shareholders of record on March 12, 1998 will be entitled to vote at
the Special Meeting of Shareholders and at any adjournments thereof.
Louis G. Navellier
President
April 20, 1998
YOUR VOTE IS IMPORTANT. WE WOULD APPRECIATE YOUR PROMPTLY VOTING, SIGNING,
DATING AND RETURNING THE ENCLOSED PROXY, WHICH WILL HELP SAVE NAVELLIER
MANAGEMENT, INC. THE NECESSARY AND ADDITIONAL EXPENSE OF A SECOND
SOLICITATION. THE ENCLOSED ADDRESSED ENVELOPE REQUIRES NO POSTAGE AND IS
PROVIDED FOR YOUR CONVENIENCE.
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Dear Shareholders:
The enclosed proxy statement seeks your approval at a Special Meeting of
Shareholders to be held in Reno, Nevada on Thursday, April 30, 1998 of the
three (3) proposals: 1) To approve an annual 0.25% 12b-1 Plan of distribution,
2) to lower the annual management fee paid by the Aggressive Small
Cap Portfolio ("Portfolio") of The Navellier Performance Funds from 1.15% to
0.90% of the Portfolio's average daily net assets if the shareholders first
vote to approve a distribution plan ("12b-1 Plan") for the Portfolio; and 3) to
change the name of the Portfolio to The Navellier Aggressive Micro Cap
Growth Portfolio and to change the investment policy of the Portfolio to
investing primarily in equity securities of micro cap companies (companies
with market capitalization of less than $300 million).
The addition of the 12b-1 fee will not increase the expense ratio for the
Fund because Navellier Management has agreed to offset the 0.25% annual cost
of the 12b-1 Plan with a 0.25% annual decrease in its management fee so that
there is no overall expense increase to the shareholders. The 12b-1 Plan will
allow us to broaden the distribution channels for the Fund. This will give
shareholders access to the Fund through some of the brokerage firms and
broker wrap programs that do not carry the Fund at this time. Broader
distribution may result in lower costs at some point in the future.
We believe that changing the investment policy of the Portfolio will allow
management to invest more of the Fund's assets in smaller (micro cap)
companies which we believe offer greater growth opportunities. The Fund
currently has a median market cap of $290 million, which is considered an
industry accepted standard for a micro cap fund. We believe that by changing
the name and amending the investment policy the existing shareholders and
potential shareholders will be more fully informed as to the Fund's intended
investments.
Management's proposal to adopt a 12b-1 Plan and management's proposal
to change the investment policy of the Portfolio are each required to be
approved by a vote of at least 67% of the shares 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.
MR. NAVELLIER AND THE OTHER FOUR TRUSTEES OF THE BOARD OF TRUSTEES
UNANIMOUSLY RECOMMEND THAT YOU APPROVE EACH OF THE THREE PROPOSALS AS SET FORTH
IN ITEMS 1, 2 AND 3 OF THE PROXY STATEMENT. The Board is also very pleased that
Navellier Management, Inc. ("NMI") has agreed to a reduction in the investment
advisory fee paid by the Portfolio to NMI if you approve Item 1 at your Special
Meeting.
Your Trustees' recommendation is now subject to review by you and your
fellow shareholders at the Special Meeting. Even if you cannot attend the
Special Meeting, it is very important that you complete, sign, and return the
enclosed gold proxy card. Your prompt response will be appreciated.
Should you have any questions, we invite you to call us directly, toll
free, at 1-800-887-8671 between 8:00 am and 5:00 pm Pacific Standard Time.
Very truly yours,
Louis G. Navellier
President
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PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Trustees (the "Board of Trustees") of
the Navellier Aggressive Small Cap Portfolio (the "Portfolio"), a series of The
Navellier Performance Funds, to be used at a Special Meeting of Shareholders to
be held at One East Liberty, 3rd Floor, Reno, Nevada 89501 on April 30, 1998,
and at any adjournments thereof, for the purposes set forth in the accompanying
Notice (collectively the "Special Meeting").
This Proxy Statement, the Notice of Special Meeting of Shareholders and the
proxy card are being mailed to shareholders on or about April 21, 1998, or as
soon as practicable thereafter. All properly executed proxies received in time
for the Special Meeting will be voted as specified in the proxy or, if no
specification is made, in favor of the proposals referred to in the Proxy
Statement. Any shareholder giving a proxy has the power to revoke it by mail
(addressed to the Secretary of the Fund at the principal executive office of the
Fund, One East Liberty Street, 3rd Floor, Reno, Nevada 89501) or in person at
the Special Meeting, by executing a superseding proxy or by submitting a notice
of revocation to the Fund.
Shareholders of record at the close of business on March 12, 1998 ("Record
Date") will be entitled to one vote for each share held. There were 467,597.774
shares of the Fund outstanding on the Record Date.
FOR A FREE COPY OF THE FUND'S ANNUAL REPORT FOR ITS MOST RECENTLY COMPLETED
FISCAL YEAR ENDED DECEMBER 31, 1997, WRITE THE NAVELLIER PERFORMANCE FUNDS AT
ONE EAST LIBERTY, 3RD FLOOR, RENO, NEVADA 89501 OR CALL 1-800-887-8671.
ITEM 1 - TO APPPROVE A DISTRIBUTION PLAN ("12b-1 PLAN") OF 0.25% OF THE
AVERAGE DAILY NET ASSETS OF THE PORTFOLIO CONTINGENT ON THE INVESTMENT
ADVISOR ALSO AGREEING TO REDUCE ITS ANNUAL ADVISORY FEE FROM 1.15% TO 0.90%.
ITEM 2 - TO LOWER THE ANNUAL MANAGEMENT FEE PAID BY THE PORTFOLIO TO NAVELLIER
MANAGEMENT, INC. ("NMI") PURSUANT TO THE INVESTMENT ADVISORY AGREEMENT BETWEEN
NMI AND THE PORTFOLIO FROM 1.15% TO 0.90% OF THE AVERAGE DAILY NET ASSETS OF THE
PORTFOLIO IF THE SHAREHOLDERS APPROVE A DISTRIBUTION AGREEMENT ("12b-1 PLAN")
BETWEEN THE PORTFOLIO AND NAVELLIER SECURITIES CORP.
ITEM 3 - TO CHANGE THE INVESTMENT POLICY AND THE NAME OF THE PORTFOLIO.
BACKGROUND
At the Special Meeting, shareholders will be asked to approve three (3)
proposals which have been unanimously approved by the Portfolio's Board of
Trustees.
ITEM 1 The first proposal is to approve an annual 0.25% 12b-1
distribution plan, a copy of which is attached hereto as Appendix B,
contingent on the investment advisor agreeing to lower its annual management
fee paid by the Portfolio to Navellier Management, Inc. ("NMI") from 1.15% to
0.90% of the Portfolio's average daily net assets. The proposed 12b-1 Plan
is a compensation plan meaning that payments under the 12b-1 Plan can exceed
actual distribution expenses. NMI has agreed to lower its annual management
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fee by .025% (from 1.15% to 0.90%) to offset the annual 0.25% 12b-1 fee which
Management is proposing to help in having the Portfolio distributed through
various brokerage firm "supermarkets," including possibly Fidelity's FUNDSNET
program and Prudential's PRO CHOICE program.
Management believes that if the Portfolio could be distributed through
these various brokerage firms' fund supermarket programs, such distribution
could result in economies of scale and could eventually possibly save the
Portfolio's shareholders money by possibly lowering the Portfolio's total
operating expenses. Management also believes that approval of a 12b-1 Plan
could possibly improve the level of shareholder services by having
participating brokers available to assist investors with questions they might
have about their accounts.
The following is a comparison of the fee table of expected expenses of
the Portfolio comparing the present expenses to what the expected Portfolio
expenses would be if the proposals are approved:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Expenses If
Proposals 1 and 2
Present Expenses Are Approved
- ------------------------------------------------------------------------------
<S> <C> <C>
Management Fee 1.15% 0.90%
- ------------------------------------------------------------------------------
12b-1 Fee 0.0% 0.25%
- ------------------------------------------------------------------------------
Other Expenses 0.40% 0.40%
- ------------------------------------------------------------------------------
Total Fund
Operating Expenses 1.55% 1.55%
- ------------------------------------------------------------------------------
</TABLE>
ITEM 2. NMI is offering to reduce its annual management fee by 0.25% to
cover the additional 0.25% annual cost of such a 12b-1 plan contingent on the
shareholders agreeing to the 12b-1 Plan. The Investment Advisory Agreement
will, in all other respects, stay the same as the present agreement. (See
Appendix A.)
Under the Agreement, NMI provides portfolio management services for the
Portfolio, including investment research, advice and supervision. For its
services, the Portfolio currently pays NMI a management fee computed and paid
monthly, in an amount equal to 1.15% per annum of the average daily net asset
value of the Portfolio. If the shareholders vote to approve Item 1 at the
Special Meeting, NMI will immediately reduce the investment advisory fee from
1.15% to 0.90% per annum of the Portfolio's average daily net assets to cover
the cost of the 12b-1 Plan. NMI will remain the investment advisor and
perform the same investment advisory services after the fee reduction as it
performed before the fee reduction.
The Portfolio pays its expenses (other than those assumed by NMI or
Navellier Securities Corp. ("NSC"), the Portfolio's principal underwriter),
including: governmental fees; interest charges; taxes; membership dues in the
Investment Company Institute allocable to the Portfolio; fees and expenses of
independent auditors, of legal counsel, and of any transfer agent, registrar or
dividend disbursing agent of the Portfolio; expenses of repurchasing and
redeeming shares; expenses of preparing, printing and mailing share
certificates, shareholder reports, notices, proxy statements and reports to
governmental officers and commissions; brokerage and other expenses connected
with the execution, recording and settlement of portfolio security transactions;
insurance premiums; fees and expenses of the Portfolio's custodian and transfer
agent, for all services to the Portfolio, including safekeeping of funds and
securities and maintaining required books and accounts; expenses of calculating
the net asset value of shares of the Portfolio; and expenses of shareholder
meetings. Expenses relating to the issuance, registration and qualification of
shares of the Portfolio and the preparation, printing and mailing of
prospectuses for such purposes are borne by the Portfolio except that its
Distribution Agreement with NSC, the Portfolio's principal underwriter,
requires NSC to pay for prospectuses that are to be used for sales purposes.
The Agreement further provides that NMI will pay the compensation, if any,
of the Portfolio's officers who are affiliated with NMI and any Trustee who is
an officer of NMI and that NMI will furnish at its own expense all necessary
administrative services, including office space, equipment, clerical personnel,
investment advisory facilities, and all executive and supervisory personnel
necessary for managing the Portfolio's investments, effecting its portfolio
securities, and, in general, administering its affairs.
The Agreement provides that in the absence of willful misfeasance, bad
faith or
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gross negligence, NMI shall not be liable for any act or omission in the course
of, or in connection with, the rendering of its services thereunder.
The description of the Agreement is qualified in its entirety by reference
to the Agreement which is attached as Appendix A in this proxy statement.
ITEM 3. The third proposal to be voted on is to change the
investment policy of the Portfolio from investing primarily in equity
securities of companies with market capitalizations of less than one billion
dollars to investing primarily in equity securities of companies with market
capitalization of less than 300 million dollars. Management believes that
changing the investment objective of the Portfolio will allow management to
invest more of the Portfolio's assets in smaller (micro) cap companies, which
management believes may possibly offer better growth opportunities. Greater
investment in such companies could also possibly result in greater risk. The
median market capitalization of companies in which NMI currently invests for
the Portfolio is about $290 million. While the Portfolio's present
investment policy allows management to invest all or most of the Portfolio's
assets in equity securities of companies with market capitalization of under
300 million dollars, and even though the Portfolio is currently invested in
such companies, management believes that the investment policy should be
amended to more fully inform its shareholders of the Portfolio's intended
investments. Management is also proposing that the name of the Portfolio be
changed from Aggressive Small Cap Portfolio to Aggressive Micro Cap Growth
Portfolio to reflect the change in its investment policy. If Item 3 is
approved, then the Navellier Performance Funds will have a small cap
portfolio and a micro cap portfolio.
THE TRUSTEES OF THE PORTFOLIO UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS OF THE
PORTFOLIO VOTE FOR ITEMS 1, 2 AND 3.
REQUIRED VOTE
Approval of Item 1 (the 12b-1 Plan), Item 2 (change in investment
advisory agreement) and of Item 3 (change in investment policy) each requires
approval by a vote of at least 67% of the shares 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. Item 2 (investment
advisory fee reduction) is contingent on approval of Item 1. Therefore,
shareholders must approve both items. If both Items 1 and 2 are not approved
then the Board of Trustees will determine which action, if any, to take. The
holders of record of one-third of the Portfolio's shares outstanding at the
close of business on the Record Date, present in person or represented by
proxy, will constitute a quorum for the meeting.
The Board of Trustees has reviewed the three proposals and believes them
to be in the best interests of the shareholders and unanimously recommends
that the shareholders vote FOR Items 1, 2 and 3.
MANNER OF VOTING PROXIES
All proxies received by the management will be voted on all matters
presented at the Special Meeting and at any adjournments thereof, and if not
limited to the contrary, will be
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<PAGE>
voted FOR Item 1 and FOR Item 2 and FOR Item 3.
Broker-dealer firms holding Fund shares in "street name" for the benefit
of their customers and clients will request the instructions of such
customers and clients on how to vote their shares on Item 1 and Item 2 and
Item 3 before the Special Meeting. Proxies which are returned but which are
marked "abstain" will be counted as present for the purposes of a quorum.
However, abstentions will not be counted as votes cast. Therefore,
abstentions would count as a vote AGAINST.
The management knows of no other matters to be brought before the Special
Meeting. If, however, any other matters come before the Special Meeting and any
adjournments thereof, it is the management's intention that proxies not limited
to the contrary will be voted in accordance with the judgment of the persons
named in the enclosed form of proxy.
REVOCATION OF PROXIES
You may revoke your proxy: (i) at any time prior to the proxy's exercise by
written notice to The Navellier Performance Funds at One East Liberty, 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.
ADDITIONAL VOTING INFORMATION
As of the Record Date, there were outstanding and entitled to be voted
467,597.774 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 Performance Funds 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.
SUBMISSION OF CERTAIN PROPOSALS
The Navellier Performance Funds is a Delaware business trust, and as
such is not required to hold annual meetings of shareholders. However,
meetings of shareholders may be held from time to time to consider such
matters as changes in investment advisory agreements and/or changes in
investment objectives and restrictions of the Portfolio. Proposals of
shareholders which are intended to be presented at future shareholder's
meetings must be received by the Portfolio a reasonable time prior to the
Portfolio's solicitation of proxies relating to such future meeting.
ADDITIONAL INFORMATION
The information contained in this proxy statement relating to NMI has been
furnished by NMI.
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<PAGE>
PROXY SOLICITATION
To obtain the necessary representation at the Special Meeting,
solicitations may be made by mail, telephone or interview by MacKenzie Partners,
Inc. ("MacKenzie") or its agents as well as by officers of the Portfolio,
employees of NMI and securities dealers by whom shares of the Portfolio have
been sold. It is anticipated that the total cost of any such solicitations, if
made by MacKenzie or its agents, would be approximately $20,000 plus
out-of-pocket expenses, and if made by any other party, would be nominal. The
expense of management's solicitations as well as the preparation, printing and
mailing of the enclosed form of proxy, and this Proxy Statement, will be borne
by NMI. NMI will reimburse banks, brokers and other persons holding the Fund's
shares registered in their names or in the names of their nominees, for their
expenses incurred in sending proxy material to and obtaining proxies from the
beneficial owners of such shares.
In the event that sufficient votes in favor of the proposals set forth in
the Notice of Special Meeting are not received by April 30, 1998, the persons
named as appointed proxies on the enclosed proxy card may propose one or more
adjournments of the Special Meeting to permit further solicitation of proxies up
to May 30, 1998. Any such adjournment will require the affirmative vote of the
holders of a majority of the shares present in person or by proxy at the session
of the meeting to be adjourned. The persons named as appointed proxies on the
enclosed proxy card will vote in favor of the proposal for which further
solicitation of proxies is to be made. They will vote against any such
adjournment those proxies required to be voted against such proposal. The costs
of any such additional solicitation and of any adjourned session will be borne
by NMI.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
The Navellier Performance Funds
Aggressive Small Cap Portfolio
April 20, 1998
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<PAGE>
PROXY PROXY
THE NAVELLIER AGGRESSIVE SMALL CAP PORTFOLIO
THE NAVELLIER PERFORMANCE FUNDS
ONE EAST LIBERTY STREET, THIRD FLOOR
RENO, NEVADA 89501
--------------
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS
APRIL 30, 1998
THIS PROXY IS SOLICITED BY LOUIS NAVELLIER, and the other Trustees of THE
NAVELLIER PERFORMANCE FUNDS (the "NAVELLIER GROUP") for use at a special meeting
of the shareholders of The Navellier Aggressive Small Cap Portfolio (the
"Portfolio"), an investment portfolio offered by The Navellier Performance Funds
(the "Fund") which meeting will be held at 9:30 A.M., Pacific Time, on April 30,
1998, at the offices of THE NAVELLIER PERFORMANCE FUNDS, 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 of 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
Proposals 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" the Item. If no
direction is made for the item, this proxy will be voted "FOR" the item. 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
Item 1 TO APPROVE AN ANNUAL
0.25% 12b-1 DISTRIBUTION
FEE, CONTINGENT ON THE
INVESTMENT ADVISOR
AGREEING TO REDUCE ITS
ANNUAL MANAGEMENT FEE
BY 0.25% FROM 1.15% TO
0.90%
FOR AGAINST ABSTAIN
Item 2 TO LOWER THE ANNUAL
MANAGEMENT FEE / / / / / /
PAID BY THE
PORTFOLIO TO
NAVELLIER
MANAGEMENT, INC.
FROM 1.15% TO 0.90%
OF THE AVERAGE DAILY
NET ASSETS OF THE
PORTFOLIO CONTINGENT ON
THE PORTFOLIO SHAREHOLDERS
VOTING TO APPROVE AN
ANNUAL 0.25% 12b-1 FEE
BETWEEN THE PORTFOLIO
AND NAVELLIER SECURITIES
CORP.
FOR AGAINST ABSTAIN
Item 3 TO CHANGE THE NAME
AND THE INVESTMENT / / / / / /
POLICY OF THE
PORTFOLIO TO INVESTING
PRIMARILY IN THE
SECURITIES OF MICRO CAP
COMPANIES (COMPANIES
WITH MARKET
CAPITALIZATION OF
LESS THAN $300 MILLION).
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 LOUIS NAVELLIER and THE OTHER TRUSTEES OF THE
NAVELLIER PERFORMANCE FUNDS, WHICH RECOMMEND A VOTE FOR ITEMS 1, 2 AND 3.
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.
Dated _______________, 1998
<PAGE>
-------------------------- ----------------
Signature of Shareholder Number of shares
This proxy may be revoked by the shareholder(s) at
any time prior to the special meeting.
<PAGE>
APPENDIX A
THE NAVELLIER PERFORMANCE FUNDS
(AGGRESSIVE SMALL CAP PORTFOLIO)
INVESTMENT ADVISORY AGREEMENT
The AGREEMENT is made this __ day of April, 1998, by and between the
Aggressive Small Cap 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 engages 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 Portfolio is one of the portfolios of the Fund; and
WHEREAS, the Adviser is 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 Fund desires to retain the Adviser as investment adviser to
furnish advisory and portfolio management services to the Fund;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and the Adviser agree as follows:
1. DUTIES AS ADVISER. The Fund hereby appoints the Adviser to act as the
investment adviser to the Fund with respect to the Portfolio, and, subject to
the supervision of the Board of Trustees of the Fund, to provide investment
advisory services to the Fund 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 Fund 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
A-1
<PAGE>
of the Fund, or the Custodian, including the placing of purchase and sale orders
on behalf of the Fund as it shall deem necessary and appropriate; (vi) to
furnish to or place at the disposal of the Fund such of the information,
evaluations, analyses, and opinions formulated or obtained by it in the
discharge of its duties as the Fund may, from time to time, reasonably request;
(vii) to take such actions necessary or appropriate to carry out the decisions
of the Fund's Board of Trustees; (viii) to make decisions for the Fund as to the
manner in which voting rights, rights to consent to trust action, and any other
rights pertaining to how the Fund's portfolio securities shall be exercised
("Portfolio Voting Rights"). The Fund has directed the Custodian, and Custodian
has 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 Fund 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 Fund, furnish
the services of such members of the Adviser's organization as may be duly
elected to be officers of the Fund, subject to their individual consent to serve
and to any limitations imposed by law.
The Fund will pay or cause to be paid all other expenses of the Fund
(except for the expenses to be paid by the Fund'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
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advisory board members of the Fund, if any, (vii) auditing the Fund's books and
accounts, (viii) the cost of bookkeeping and accounting services, (ix) any and
all Fund 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 Fund 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 Fund, (xiv) costs of printing and
mailing monthly statements and confirmations, (xv) expense of organizing the
Fund, (xvi) filing fees and expenses relating to the registration and
qualification of the Fund's shares under federal and/or state securities laws
and maintaining such registrations and qualifications and (vii) other expenses
properly payable by the Fund.
3. COMPENSATION OF THE ADVISER. For the services to be rendered by the
Adviser hereunder, the Fund shall pay to the Adviser, on a monthly basis, an
annual fee of nine tenths of one percent (0.90%) (the "Management Fee") of the
Fund's average daily net assets for the Aggressive Small Cap Portfolio. Payment
of the Adviser's compensation for the preceding month shall be made as 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 applicable 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 such 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 each Portfolio for a particular period
shall be determined by adding together all calculations of net assets, as
regularly computed for such
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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 Fund 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 Fund also
agrees to indemnify Adviser to the extent provided for and agreed to by the
parties in that agreement entitled Indemnification Agreement executed by the
Fund and Adviser on May 15, 1993 and incorporated herein as and made a part
hereof.
5. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall
become effective as of April 17, 1998 and shall continue in effect unless sooner
terminated, as herein provided, for two (2) years after the date hereof, and
thereafter only if approved at least annually (a) by a majority of the
Independent Trustees of the Board of Trustees of the fund or (b) by the vote of
a majority (as defined in the Act) of the outstanding voting securities of the
fund, and, in addition, by the vote of a majority of the Trustees of the Fund
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 Fund, or by a vote of a majority (as
defined in the Act) of the outstanding voting securities of the Fund, 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 Fund. This Agreement shall
automatically terminate in the event of its assignment, 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
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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 Fund, 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 Fund) 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 Portfolios of the Fund to
which this Agreement is applicable.
This Agreement may be amended by agreement of the parties without the vote
or consent of the shareholders of the Fund 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 Fund 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 Fund and the Adviser and their respective successors.
9. NAME OF THE FUND. The Fund acknowledges that the name "Navellier" is
and shall remain the sole property of the Adviser, notwithstanding the use
thereof by the Fund. The Fund may use the name "The Navellier Performance
Funds" 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 Fund. At such time as such an agreement shall
no longer be in effect, or Adviser's services have terminated, the Fund 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 "vote
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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 San Francisco, California (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 San Francisco, California, and in no other
jurisdiction or court venued outside of San Francisco, California.
13. ACKNOWLEDGEMENT OF RECEIPT OF FORM ADV PART II. The Fund 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 Fund's agreement relating to the
performance of investment advisory services for the Fund, 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.
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 PERFORMANCE FUNDS
(THE AGGRESSIVE SMALL CAP PORTFOLIO)
By:
----------------------------
Joel Rossman, Trustee
By:
----------------------------
Attest: Barry Sander, Trustee
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Attest:
By:
- ---------------------- ----------------------------
Samuel Kornhauser Jacques Delacroix, Trustee
NAVELLIER MANAGEMENT, INC.
By:
----------------------------
Louis G. Navellier, President
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APPENDIX B
THE NAVELLIER PERFORMANCE FUNDS
RULE 12b-1 DISTRIBUTION PLAN
FOR
THE NAVELLIER AGGRESSIVE SMALL CAP PORTFOLIO
This distribution plan (the "Rule 12 b-1 Distribution Plan" or the
"Plan"), has been adopted by the Aggressive Small Cap Portfolio ("Aggressive
Small Cap 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 Aggressive Small Cap 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 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
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distribution and promotion of, administration of, and servicing investors in,
the Aggressive Small Cap Portfolio's shares.
Under this proposal, the Aggressive Small Cap 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 Aggressive Small Cap
Portfolio and its shareholders.
NOW, THEREFORE, in consideration of the foregoing, the Aggressive
Small Cap Portfolio hereby adopts this Plan under the Act:
1. The Principal Distributor shall act as distributor of the
Aggressive Small Cap Portfolio's shares pursuant to the Distribution
Agreement and shall receive from the Aggressive Small Cap Portfolio an annual
0.25% 12b-1 fee (payable pro rata monthly) of the average daily net assets of
the Aggressive Small Cap Portfolio. Payments under this 0.25% 12b-1 fee may
exceed actual expenses of the Principal Distributor in distributing,
promoting and servicing the Aggressive Small Cap Portfolio. The Principal
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Distributor may, at its own expense, enter into Service Agreements with
Service Organizations for Distribution and Service Assistance.
2. The Aggressive Small Cap Portfolio shall pay all costs and
expenses in connection with the preparation, printing and distribution of the
Aggressive Small Cap 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
Aggressive Small Cap 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,
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including, but not limited to, direct mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (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
Aggressive Small Cap Portfolio such information, analyses and opinions with
respect to marketing and promotional activities as the Aggressive Small Cap
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 Aggressive Small Cap 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 Aggressive
Small Cap 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 Aggressive Small Cap 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 Aggressive Small Cap Portfolio as to which the Plan is effective.
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(c) In each year that this Plan remains in effect, the
Distributor of the Aggressive Small Cap Portfolio and/or the Investment Advisor
shall prepare and furnish to the Board of Trustees of the Aggressive Small Cap
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 Aggressive Small Cap 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 Aggressive Small Cap Portfolio, at least a majority vote of the
outstanding voting securities of the Aggressive Small Cap 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 Aggressive Small Cap Portfolio, and of
the Qualified Trustees, cast in person at a meeting called for the purpose of
voting on
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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 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 Aggressive Small Cap 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 Aggressive Small Cap 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 Aggressive Small Cap 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 Aggressive Small Cap 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
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12b-1 fee to any service organization. The Principal Distributor shall be
entitled to retain the entire amount of the 12b-1 fee.
11. The Aggressive Small Cap 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: _________, 1998
THE AGGRESSIVE SMALL CAP PORTFOLIO OF
THE NAVELLIER PERFORMANCE FUNDS
By
---------------------------------
Barry Sander, Trustee
By
---------------------------------
Joel Rossman, Trustee
By
---------------------------------
Jacques Delacroix, Trustee
NAVELLIER SECURITIES CORP.
By
---------------------------------
Louis G. Navellier, President
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