As filed with the Securities and Exchange Commission
on February 28, 1997
Registration Nos. 333-
811-8079
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. [ ]
(Check appropriate box or boxes.)
NAVELLIER VARIABLE INSURANCE SERIES FUND, INC.
_________________________________________________
(Exact name of registrant as specified in charter)
One East Liberty, Third Floor
Reno, Nevada 89501
________________________________________ __________
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code 1-800-887-8671
Louis G. Navellier
One East Liberty, Third Floor
Reno, Nevada 89501
(Name and Address of Agent For Service)
Copies to:
Raymond A. O'Hara III, Esq. and to Dennis A. Holtorf
Blazzard, Grodd & Hasenauer, P.C. Navellier Management, Inc.
P.O. Box 5108 One East Liberty, Third Floor
Westport, CT 06881 Reno, Nevada 89501
(203) 226-7866 (702) 785-9402
Approximate Date of
Proposed Public Offering:
As soon as practicable after the effective date of this Filing.
Calculation of Registration Fee under the Securities Act of 1933:
Registrant is registering an indefinite number of securities under
the Securities Act of 1933 pursuant to Investment Company Act Rule 24f-2.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
NAVELLIER VARIABLE INSURANCE SERIES FUND, INC.
CROSS REFERENCE SHEET
(as required by Rule 404 (c))
<TABLE>
<CAPTION>
Part A
N-1A
Item No. Location
<C> <S> <C>
1. Cover Page........................... Cover Page
2. Synopsis............................. Shareholder Transaction
Expenses and Annual Fund
Operating Expenses; Summary
3. Condensed Financial Information...... Not Applicable
4. General Description of Registrant.... Investment Objective and
Policies; Risk Considerations;
Special Investment Methods and
Risks; Investment Restrictions
5. Management of the Fund............... Management of the Fund
6. Capital Stock and Other Securities... Description of Shares - Voting
Rights; Tax Status, Dividends
and Distributions
7. Purchase of Securities Being Offered. Purchases and Redemptions;
Risk Factors - Net Asset Value
8. Redemption or Repurchase............. Purchases and Redemptions
9. Pending Legal Proceedings............ Not Applicable
Part B
10. Cover Page........................... Cover Page
11. Table of Contents.................... Table of Contents
12. General Information and History...... General Information and
History
13. Investment Objectives and Policies... Investment Objective and
Policies; Investment
Restrictions
14. Management of the Fund............... Directors and Officers of the
Fund
15. Control Persons and Principal Holders
of Securities........................ Control Persons and Principal
Holders of Securities
16. Investment Advisory and Other
Services............................. The Investment Adviser,
Custodian and Transfer Agent
17. Brokerage Allocation and Other
Practices............................ Brokerage Allocation and Other
Practices
18. Capital Stock and Other Securities... Capital Stock and Other
Securities
19. Purchase, Redemption and Pricing of
Securities Being Offered............. Purchase, Redemption and
Pricing of Shares
20. Tax Status........................... Taxes
21. Underwriters......................... Not Applicable
22. Calculation of Performance Data...... Calculation of Performance
Data
23. Financial Statements................. Not Applicable
</TABLE>
PART C
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C of the Registration Statement.
PART A
NAVELLIER VARIABLE INSURANCE SERIES FUND, INC.
One East Liberty, Third Floor
Reno, Nevada 89501
Prospectus Dated _____________, 1997
Navellier Variable Insurance Series Fund, Inc. (the "Fund") is an open-end
management investment company authorized to issue multiple series of shares,
each representing a portfolio of investments (individually, a "Portfolio" and
collectively, the "Portfolios"). The Fund currently has authorized one series
- - the Navellier Growth Portfolio (the "Growth Portfolio"). There can be no
assurance that any Portfolio of the Fund will achieve its investment
objective.
This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. The Fund's shares are
offered only to (a) insurance companies ("Participating Insurance Companies")
to fund benefits under their variable annuity contracts ("VA Contracts") and
variable life insurance policies ("VLI Policies") and (b) tax-qualified
pension and retirement plans ("Qualified Plans"), including
participant-directed Qualified Plans which elect to make the Portfolios
available as investment options for Qualified Plan Participants.
Please read this Prospectus carefully and retain it for future reference. This
Prospectus should be read in conjunction with the prospectuses issued by the
Participating Insurance Companies for the VA Contracts and VLI Policies that
accompany this Prospectus or with the Qualified Plan documents or other
informational materials supplied by Qualified Plan sponsors. Additional
information about the Fund and the Growth Portfolio is contained in a
Statement of Additional Information which has been filed with the Securities
and Exchange Commission (the "SEC") and is available to investors without
charge by calling the Fund at 1-800-887-8671. The Statement of Additional
Information, as amended from time to time, bears the same date as this
Prospectus and is incorporated by reference in its entirety into this
Prospectus.
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, the securities of the Fund in any jurisdiction in which such
sale, offer to sell, or solicitation may not be lawfully made.
INVESTMENTS IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK. SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
GOVERNMENTAL AGENCY. AN INVESTMENT IN THE FUND IS SUBJECT TO RISK THAT MAY
CAUSE THE VALUE OF THE INVESTMENT TO FLUCTUATE, AND WHEN THE INVESTMENT IS
REDEEMED, THE VALUE MAY BE HIGHER OR LOWER THAN THE AMOUNT ORIGINALLY INVESTED
BY THE INVESTOR.
LIKE ALL MUTUAL FUNDS, 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.
SHARES OF THE FUND ARE AVAILABLE AND ARE BEING OFFERED EXCLUSIVELY (i) AS
A POOLED FUNDING VEHICLE FOR LIFE INSURANCE COMPANIES WRITING ALL TYPES OF
VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS AND (ii)
TO TAX-QUALIFIED PENSION AND RETIREMENT PLANS.
TABLE OF CONTENTS
Page
<TABLE>
<CAPTION>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES 1
AND ANNUAL FUND OPERATING EXPENSES
SUMMARY 2
INVESTMENT OBJECTIVE AND POLICIES 3
SPECIAL INVESTMENT METHODS AND RISKS 4
INVESTMENT RESTRICTIONS 5
RISK FACTORS 6
PERFORMANCE ADVERTISING 8
MANAGEMENT OF THE FUND 10
EXPENSES OF THE FUND 11
REPORTS AND INFORMATION 12
DESCRIPTION OF SHARES 12
TAX STATUS, DIVIDENDS AND DISTRIBUTIONS 14
PURCHASES AND REDEMPTIONS 14
ADDITIONAL INFORMATION 16
SHAREHOLDER TRANSACTION EXPENSES
AND ANNUAL FUND OPERATING EXPENSES
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Navellier
Growth
Portfolio
Shareholder Transaction Expenses/1/
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)............. 0%
Maximum Sales Load Imposed on
Reinvested Dividends........................... None
Deferred Sales Load................................ None
Redemption Fees.................................... None
Exchange Fee....................................... None
Annual Fund Operating Expenses
(As a percentage of average net assets)
Management Fees/2/................................. 0.85%
12b-1 Fees......................................... None
Other Expenses/3/ ................................. 0.50%
Total Fund Operating Expenses/3/ .................. 1.35%
</TABLE>
/1/ The above table of fees and other expenses is provided to assist you
in understanding the various potential costs and expenses that an investor in
the Fund may bear directly or indirectly. The Investment Adviser may, but is
under no obligation to, reimburse the Fund's expenses now or in the future.
The Growth Portfolio has no operating history and therefore "Other Expenses"
and "Total Fund Operating Expenses" are based on estimated amounts.
/2/ Represents the advisory fee paid to Navellier Management, Inc. (See
"Expenses of the Fund - Compensation of the Investment Adviser".) The
Investment Adviser has agreed to waive its advisory fee until Total Fund
Operating Expenses (including the advisory fee) are at or below 2%.
/3/ Since the Growth Portfolio has no operating history, the figure of
0.50% represents an estimate of Other Expenses of the Growth Portfolio.
EXAMPLE:
The following example indicates the direct and indirect expenses an investor
(maintaining an average annual investment of $1,000) could expect to incur in
a single year, and three-year period respectively:
<TABLE>
<CAPTION>
Growth Portfolio
<S> <C>
One-Year...................... $ ________
Three-Year.................... $ ________
</TABLE>
The foregoing example assumes (a) that an investor maintains an average of
$1,000 invested in the Growth Portfolio; (b) no sales load; (c) a 5% annual
return; (d) percentage amounts listed above for Annual Fund Operating Expenses
remain constant (for all periods shown above); and (e) reinvestment of all
dividends and distributions.
The foregoing example is based upon estimated Total Operating Expenses for the
Growth Portfolio, as set forth in the "Annual Operating Expenses" table above
and reflects the fee waiver arrangement in effect. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE SHOWN. THE TABLE DOES NOT REFLECT ADDITIONAL
CHARGES AND EXPENSES WHICH ARE, OR MAY BE, IMPOSED UNDER THE VA CONTRACTS, VLI
POLICIES OR QUALIFIED PLANS. SUCH CHARGES AND EXPENSES ARE DESCRIBED IN THE
PROSPECTUS OF THE PARTICIPATING INSURANCE COMPANY SEPARATE ACCOUNT OR IN THE
QUALIFIED PLAN DOCUMENTS OR OTHER INFORMATIONAL MATERIALS SUPPLIED BY
QUALIFIED PLAN SPONSORS.
SUMMARY
The Fund
The Fund is an open-end management investment company which currently offers
shares of the Growth Portfolio. Additional Portfolios may be added to the Fund
in the future. This Prospectus will be supplemented or amended to reflect the
addition of any new Portfolios.
This summary, which provides basic information about the Growth Portfolio and
the Fund, is qualified in its entirety by reference to the more detailed
information provided elsewhere in this Prospectus and in the Statement of
Additional Information.
The Growth Portfolio is designed for long-term investors and is not intended
as a trading vehicle or to be a complete investment program for the investor.
An investment in the Growth Portfolio involves certain speculative
considerations; see "Risk Factors."
The Growth Portfolio employs aggressive investment strategies and can
experience substantial fluctuations, including declines, so that shares may be
worth less than when originally purchased.
Investment Adviser
Navellier Management, Inc. (the "Investment Adviser") administers the assets
of the Growth Portfolio and determines which securities will be selected as
investments for the Growth Portfolio. Louis Navellier, the President and CEO
of the Investment Adviser, refined the Modern Portfolio Theory investment
strategy which is applied in managing the assets of the Growth Portfolio. He
sets the strategies and guidelines for the Growth Portfolio and oversees the
Portfolio Managers' activities. Louis Navellier and Alan Alpers, who are the
Portfolio Managers involved in the day-to-day investment activities of the
Growth Portfolio, head up a team of investment professionals who assist in
managing the Portfolio, including research analysts Jon Tesseo, Shawn Price,
Michael Borgen and Arnold Langsen. Alan Alpers has been an analyst and
portfolio manager for Navellier & Associates, Inc. since 1989 and has been
responsible along with Mr. Navellier for day-to-day management of over $100
million in individual accounts for Navellier & Associates, Inc. The Investment
Adviser receives an annual advisory fee, equal to .85% of the average daily
net asset value of assets under management, for the Growth Portfolio. The
advisory fee for the Growth Portfolio is payable monthly, based upon a
percentage of the Portfolio's average daily net assets. This advisory fee
paid to the Investment Adviser is higher than those generally paid by most
other investment companies. The Growth Portfolio is paying this higher
advisory fee based on its desire to retain Navellier Management, Inc.'s
specific application of Modern Portfolio Theory, its particular method of
analyzing securities and its investment advisory services.
How to Invest
Individual investors may not purchase or redeem shares of the Growth Portfolio
directly; shares may be purchased or redeemed only through VA Contracts and
VLI Policies offered by separate accounts of Participating Insurance Companies
or through Qualified Plans, including participant-directed Qualified Plans
which elect to make the Portfolio an investment option for Qualified Plan
Participants. See "Purchases and Redemptions."
Risk Factors
Investment in the Growth Portfolio involves special risks and there can be no
guarantee of profitability. Some of those risks are briefly described here.
Some of the small cap securities which the Growth Portfolio may purchase may
be difficult to liquidate on short notice or, on occasion, only a portion of
the shares of a company in which the Investment Adviser intends to trade may
be available to be bought or sold by the Growth Portfolio. There can be no
assurance of profitability or of what the percentage of the Portfolio's total
annual operating expenses will be. Investments, if any, in securities of
foreign issuers may pose greater risks. The Investment Adviser's investment
style could result in above average portfolio turnover which could result in
higher brokerage expenses. As with any equity fund, the investments may
decline, resulting in a loss of value to the shareholder. (For more detail,
see "Risk Factors".)
INVESTMENT OBJECTIVE AND POLICIES
Investment Objective of the Navellier Growth Portfolio
The investment objective of the Growth Portfolio is to achieve long-term
growth of capital primarily through investment in companies with appreciation
potential. This investment objective is fundamental and may not be changed
without shareholder approval. The Growth Portfolio invests in equity
securities traded in all United States markets including dollar denominated
foreign securities traded in United States markets. It is a diversified
portfolio, meaning it limits its investment in the securities of any single
company (issuer) to a maximum of 5% of the Portfolio assets and further limits
its investments to less than 25% of the Portfolio's assets in any one industry
group. The Growth Portfolio seeks long term capital appreciation through
investments in securities of companies which the Investment Adviser feels are
undervalued in the marketplace. Navellier Management, Inc. is the Investment
Adviser for the Growth Portfolio. This Portfolio should not be considered
suitable for investors seeking current income.
Other Investments
The Growth 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
Adviser, such investment will further the cash needs or temporary defensive
needs of the Portfolio. In addition, when the Investment Adviser feels that
market or other conditions warrant it, for temporary defensive purposes the
Growth Portfolio may retain cash or invest all or any portion of its assets in
cash equivalents, including money market mutual funds. Under normal
conditions, the Growth Portfolio's holdings in such non-equity securities
should not exceed 35% of the total assets of the Portfolio. If the Growth
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 in Rushmore's money
market mutual funds. Rushmore Trust & Savings, FSB is also the Fund's
Transfer Agent and Custodian. Cash deposits by the Fund 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 accounts have only $100,000
protection.
It is anticipated that all of the Growth Portfolio's investments in corporate
debt securities (other than commercial paper) and preferred stocks will be
represented by debt securities and preferred stocks which have, at the time of
purchase, a rating within the four highest grades as determined by Moody's
Investors Service, Inc. (Aaa, Aa, A, Baa) or by Standard & Poor's Corporation
(AAA, AA, A, BBB; securities which are rated BBB/Baa have speculative
characteristics). Although investment-quality securities are subject to market
fluctuations, the risk of loss of income and principal is generally expected
to be less than with lower quality securities. In the event the rating of a
debt security or preferred stock in which the Growth Portfolio has invested
drops below investment grade, the Growth Portfolio will promptly dispose of
such investment. When interest rates go up, the market value of debt
securities generally goes down and long-term debt securities tend to be more
volatile than short term debt securities.
In determining the types of companies which will be suitable for investment by
the Growth Portfolio, the Investment Adviser will screen over 6,000 stocks and
will take into account various factors and base its stock selection on its own
model portfolio theory concepts. The Growth Portfolio invests primarily in
what the Investment Adviser believes are undervalued common stocks believed to
have long-term growth potential. Stocks are selected on the basis of an
evaluation of factors such as earnings growth, expanding profit margins,
market dominance and/or factors that create the potential for market
dominance, sales growth, and other factors that indicate a company's potential
for growth. The Growth Portfolio will invest up to 100% of its capital in
equity securities selected for their capital growth potential. The Investment
Adviser will typically (but not always) purchase common stocks of issuers
which have records of profitability and strong earnings momentum. When
selecting such stocks for investment by the Growth Portfolio, the issuers may
be lesser known companies moving from a lower to a higher market share
position within their industry groups rather than the largest and best known
companies in such groups.
SPECIAL INVESTMENT METHODS AND RISKS
"Short Sales Against the Box"
The Growth Portfolio is permitted to make short sales if at the time of the
short sale the Portfolio owns or has the right to acquire a security equal in
kind and amount to the security being sold short, at no additional cost. This
investment technique is known as a "short sale against the box."
In a short sale, the seller does not immediately deliver the securities sold
and is said to have a short position in those securities until delivery
occurs. To make delivery to the purchaser, the executing broker borrows the
securities being sold short on behalf of the seller. While the short position
is maintained, the seller collateralizes its obligation to deliver the
securities sold short in an amount equal to the proceeds of the short sale
plus an additional margin amount established by the Board of Governors of the
Federal Reserve. If the Fund engages in a short sale, the collateral account
will be maintained by the Fund's custodian. While the short sale is open, the
Fund will maintain, in a segregated custodial account, an amount of securities
equal in kind and amount to the securities sold short or securities
convertible into or exchangeable for such equivalent securities at no
additional cost. These securities would constitute the Fund's long position.
The Growth Portfolio may make a short sale against the box, when it believes
that the price of a security may decline, causing a decline in the value of a
security owned by the Portfolio (or a security convertible into or
exchangeable for such security), or when the Portfolio desires to sell the
security it owns at a current attractive price, but also wishes to defer
recognition of gain or loss for federal income tax purposes and for purposes
of satisfying certain tests applicable to regulated investment companies under
the Internal Revenue Code. In such a case, any future losses in the Growth
Portfolio's long position should be reduced by a gain in the short position.
The extent to which such gains or losses are reduced would depend upon the
amount of the security sold short relative to the amount the Growth Portfolio
owns. There will be certain additional transaction costs associated with
short sales against the box, but the Growth Portfolio will endeavor to offset
these costs with income from the investment of the cash proceeds of short
sales.
INVESTMENT RESTRICTIONS
The Growth Portfolio can invest up to 5% of its assets in the securities of a
single issuer and can invest up to 25% of its assets in the securities of a
single industry. The Growth Portfolio may not make investments in real estate
or commodities or commodity contracts, including futures contracts, but may
purchase securities of issuers which deal in real estate or commodities. The
Growth Portfolio is also prohibited from investing in or selling puts, calls,
straddles (or any combination thereof). The Growth Portfolio is prohibited
from investing in derivatives. The Growth Portfolio may borrow money only from
banks for temporary or emergency (not leveraging) purposes provided that,
after each borrowing, there is an asset coverage in the Portfolio of at least
300%. The Growth Portfolio will not purchase securities if the amount of
borrowing by the Portfolio exceeds 5% of total assets of the Portfolio. In
order to secure any such borrowing, the Growth Portfolio may pledge, mortgage,
or hypothecate up to 10% of the market value of the assets of the Portfolio.
The investment by the Growth Portfolio in securities, including American
Depository Receipts, of issuers or any governmental entity or political
subdivision thereof, located, incorporated or organized outside of the United
States is limited to 25% of the net asset value of the Portfolio, provided
that no such foreign securities may be purchased unless they are traded on
United States securities markets.
The Fund may not purchase for any Portfolio "restricted securities" (as
defined in Rule 144(a)(3) of the Securities Act of 1933) if, as a result of
such purchase, more than 10% of the net assets (taken at market value) of such
Portfolio would be invested in such securities nor will the Fund invest in
illiquid or unseasoned securities if as a result of such purchase more than 5%
of the net assets of such Portfolio would be invested in either illiquid or
unseasoned securities. The Board of Directors will determine whether these
securities are liquid and will monitor liquidity on an ongoing basis.
In addition to the investment restrictions described above, the investment
program of the Growth Portfolio is subject to further restrictions which are
described in the Statement of Additional Information. The restrictions for the
Growth Portfolio are fundamental and may not be changed without shareholder
approval.
RISK FACTORS
Lack of Operating History and Experience
The Growth Portfolio is newly organized and has no history of operations. The
Investment Adviser was organized on May 28, 1993 and has been managing the
assets of The Navellier Series Fund since January 3, 1994 and the publicly
invested assets of The Navellier Series Fund since April 1, 1994. The
Investment Adviser also manages the assets of The Navellier Performance Funds
which went effective December 28, 1995. Although the Investment Adviser
sub-contracts a substantial portion of its responsibilities for administrative
services of the Fund's operations to various agents, including the Transfer
Agent, the Custodian, and Accountant, the Investment Adviser still has overall
responsibility for the administration of the Growth Portfolio and oversees the
administrative services performed by others as well as servicing shareholder's
needs and, along with the Fund's Board of Directors, is responsible for the
selection of such agents and their oversight. The Investment Adviser is also
responsible for the selection of securities for investment. None of the
principals, officers, legal counsel, or directors of the Investment Adviser
(including such of those persons who are also controlling persons of the Fund)
had, before June 1993 ever registered, operated, or supervised the operations
of investment companies in the past, and there is no assurance that their past
business experiences or their experience with The Navellier Series Fund or The
Navellier Performance Funds will enable them to successfully manage the assets
of the Fund in the future. The owner of the Investment Adviser has been in the
business of rendering advisory services to significant pools of capital such
as retirement plans and large investors since 1987.
The owner of the Investment Adviser is also the owner of another investment
advisory firm, Navellier & Associates Inc., which presently manages over $1.8
billion in investor funds. The owner of the Investment Adviser 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 the Investment Adviser intends to employ and invest in while
managing the Portfolios of the Fund. Because many of the over-the-counter and
other securities which Investment Adviser 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 one or more of the
Portfolios of the Fund not being able to purchase or sell all shares which the
Investment Adviser desires to trade at a given time or period of time, thereby
creating a potential liquidity problem which could adversely affect the
performance of the Fund portfolios. Since the Investment Adviser will be
trading on behalf of the various Portfolios of the Fund in some or all of the
same securities at the same time that Navellier & Associates Inc., Navellier
Fund Management, Inc., other Navellier controlled investment entities, The
Navellier Series Fund and The Navellier Performance Funds 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., The Navellier Series Fund, The Navellier
Performance Funds and other Navellier controlled investment entities and the
Fund cannot be completed at the time the order is made, Navellier & Associates
Inc., and the other Navellier controlled investment entities and the
Investment Adviser 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 Fund. For example, if Navellier &
Associates Inc., and Navellier Fund Management, Inc., each place a $25,000
purchase order and Investment Adviser on behalf of the Fund 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 allocated $12,500 each of the stock to
Navellier & Associates Inc., and Navellier Fund Management, Inc., and $25,000
of the stock to the Fund. As the assets of each Portfolio of the Fund
increase, the potential for shortages of buyers or sellers increases, which
could adversely affect the performance of the various Portfolios. While the
Investment Adviser generally does not anticipate liquidity problems (i.e., the
possibility that the Portfolio cannot sell shares of a company and therefore
the value of those shares drops) unless the Fund has assets in excess of two
billion dollars (although liquidity problems could still occur when the Fund
has assets of substantially less than two billion dollars), each investor is
being made aware of this potential risk in liquidity and should not invest in
the Fund if it is not willing to accept this potentially adverse risk, and by
investing, acknowledges that it is aware of the risks.
An investment in shares of any Portfolio of the Fund involves certain
speculative considerations. There can be no assurance that any of the
Portfolio's objectives will be achieved or that the value of the investment
will increase. All Portfolios intend to comply with the diversification and
other requirements applicable to regulated investment companies under the
Internal Revenue Code.
All securities in which any of the Fund's Portfolios may invest are inherently
subject to market risk, and the market value of the Fund's investments will
fluctuate. From time to time the Fund may choose to close a Portfolio or
Portfolios to new investors.
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. The
Investment Adviser will use the same basic selection criteria for investing in
foreign securities as it uses in selecting domestic securities as described in
the Investment Objective and Policies section of this Prospectus.
While to some extent the risks to the Fund of investing in foreign securities
may be limited since the Growth Portfolio may not invest more than 25% of its
net asset value in such securities and may only invest in foreign securities
which are traded in the United States securities markets, the risks
nonetheless exist.
Net Asset Value
The net asset value of the Growth Portfolio is determined by adding the values
of all securities and other assets of the Portfolio, subtracting liabilities,
and dividing by the number of outstanding shares of the Portfolio. (See
"Purchases and Redemptions - Valuation of Shares" and the Statement of
Additional Information.)
Portfolio Turnover
The annual rate of portfolio turnover for the Growth Portfolio is unknown
since it has no operating history and therefore no actual portfolio turnover
rate presently exists. The Investment Adviser estimates that the annual
portfolio turnover rate for the Growth Portfolio will not exceed 300%.
However, this is not a restriction on the Investment Adviser and if in the
Investment Adviser's judgment a higher annual portfolio turnover rate is
required in order to attempt to achieve a higher overall Portfolio
performance, then the Investment Adviser 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 Portfolio performance. To the extent that increased portfolio
turnover results in sales at a profit of securities held less than three
months, the Fund's ability to qualify as a "regulated investment company"
under the Internal Revenue Code may be affected. (See the Statement of
Additional Information, "Taxes".)
Special Risk Considerations Relating to Securities of the Growth Portfolio
For a description of certain other factors, including certain risk factors,
which investors should consider relating to the securities in which the
Portfolio will invest, see "Investment Objective and Policies".
PERFORMANCE ADVERTISING
From time to time, a Portfolio may advertise its yield and total return. These
figures will be based on historical earnings and are not intended to indicate
future performance. No representation can be made regarding actual future
yields or returns. Yield refers to the annualized income generated by an
investment in the Portfolio over a specified 30-day period. The yield is
calculated by assuming that the same amount of income generated by the
investment during that period is generated in each 30-day period over one year
and is shown as a percentage of the investment.
The total return of a Portfolio refers to the average compounded rate of
return on a hypothetical investment for designated time periods (including but
not limited to the period from which the Portfolio commenced operations
through the specified date), assuming that the entire investment is redeemed
at the end of each period and assuming the reinvestment of all dividend and
capital gain distributions.
A Portfolio may periodically compare its performance to that of other mutual
funds tracked by mutual fund rating services (such as Lipper Analytical
Services, Inc.) or by financial and business publications and periodicals,
broad groups of comparable mutual funds, unmanaged indices which may assume
investment of dividends but generally do not reflect deductions for
administrative and management costs and other investment alternatives. A
Portfolio may quote services such as Morningstar, Inc., a service that ranks
mutual funds on the basis of risk-adjusted performance, and Ibbotson
Associates of Chicago, Illinois, which provides historical returns of the
capital markets in the U.S. A Portfolio may use long-term performance of these
capital markets to demonstrate general long-term risk versus reward scenarios
and could include the value of a hypothetical investment in any of the capital
markets. A Portfolio may also quote financial and business publications and
periodicals as they relate to fund management, investment philosophy, and
investment techniques.
A Portfolio may quote various measures of volatility and benchmark correlation
in advertising and may compare these measures to those of other funds.
Measures of volatility attempt to compare historical share price fluctuations
or total returns to a benchmark while measures of benchmark correlation
indicate how valid a comparative benchmark might be. Measures of volatility
and correlation are calculated using averages of historical data and cannot be
calculated precisely.
Private Account Performance
Louis Navellier's wholly owned investment advisory firm, Navellier &
Associates, Inc., has also managed, on an individual basis, accounts for
individuals and institutions ("Private Accounts") since 1987 employing a
modern portfolio theory style of stock analysis which uses substantially the
same investment objectives, policies and strategies that are employed by
Navellier Management, Inc. for the Growth Portfolio. Thus, the performance
information derived from these Private Accounts may be relevant to an
investor. The basic investment style is a proprietary system of computer based
screens to analyze over 7,000 stocks in order to determine which stocks to buy
and sell (the "Navellier system"). Louis Navellier and his staff at Navellier
& Associates, Inc. have used the Navellier system since 1987 to manage the
Private Accounts under management.
The basic difference between the investment style used by Navellier &
Associates, Inc. with respect to the Private Accounts and the style used by
the Growth Portfolio is that Navellier & Associates, Inc. is not required to
hold securities for at least three (3) months, whereas the Growth Portfolio
intends to hold all securities for at least three (3) months.
Further, the performance of the Growth Portfolio will vary from the Private
Account composite information because the Growth Portfolio will be actively
managed and its investments will vary from time to time and will not be
identical to the past portfolio investments of the Private Accounts. Moreover,
the Private Accounts are not registered under the Investment Company Act of
1940 ("1940 Act") and therefore are not subject to certain investment
restrictions that are imposed by the 1940 Act, which, if imposed, could have
adversely affected the Private Accounts' performance.
The following tables show hypothetical performance information derived from
historical composite performance data for all Private Accounts under the
management of Navellier & Associates, Inc. during the dates indicated, as well
as comparisons with the S&P 500 Index, an unmanaged index generally considered
to be representative of the stock market. The hypothetical performance figures
shown for the Growth Portfolio represent the actual performance results of the
composite of Private Accounts managed in a comparable manner, adjusted to
reflect the deduction of the fees and expenses anticipated to be paid by the
Growth Portfolio (after fee waivers). Please refer to "Shareholder Transaction
Expenses and Annual Fund Operating Expenses" for further information
concerning fees and expenses and the fee waiver arrangements. Absent the fee
waivers, the performance figures shown below would be reduced.
The actual Private Account composite performance figures are time-weighted
rates of return which include all income and accrued income and realized and
unrealized gains or losses, but do not reflect the deduction of investment
advisory fees actually charged to the Private Accounts.
Investors should not consider the performance data of these Private Accounts
as an indication of the future performance of the Growth Portfolio.
Hypothetical Historical Growth Portfolio Performance
<TABLE>
<CAPTION>
Navellier & Associates, Inc. S&P 500 Index
<S> <C> <C>
1987.................... _____% _____%
1988.................... _____% _____%
1989.................... _____% _____%
1990.................... _____% _____%
1991.................... _____% _____%
1992.................... _____% _____%
1993.................... _____% _____%
1994.................... _____% _____%
1995.................... _____% _____%
1996.................... _____% _____%
</TABLE>
<TABLE>
<CAPTION>
Navellier & Associates, Inc. S&P 500 Index
<S> <C> <C>
One Year _____% _____%
Five Years _____% _____%
Ten Years _____% _____%
</TABLE>
For more information about calculation of the investment performance of the
Growth Portfolio, see the Statement of Additional Information.
MANAGEMENT OF THE FUND
The Board of Directors
The Fund's Board of Directors directs the business and affairs of each
Portfolio of the Fund as well as supervises the Investment Adviser,
Distributor, Accountant, Transfer Agent and Custodian, as described below.
The Investment Adviser
Navellier Management, Inc. acts as the Investment Adviser to the Growth
Portfolio. The Investment Adviser is registered as an investment adviser under
the Investment Advisers Act of 1940. The Investment Adviser is responsible for
selecting the securities which will constitute the pool of securities which
will be selected for investment for the Growth Portfolio. Pursuant to a
separate Administrative Services Agreement, the Investment Adviser provides
the Growth Portfolio with certain administrative services, including
accounting and bookkeeping services and supervising the Custodian's and
Transfer Agent's activities and the Growth Portfolio's compliance with its
reporting obligations. The Investment Adviser may contract (and pay for out of
its own resources including the administrative fee it receives) for the
performance of such services to the Custodian, Transfer Agent, or others, and
may retain all of its 0.25% administrative services fee or may share some or
all of its fee with such other person(s). The Investment Adviser also provides
the Growth Portfolio with a continuous investment program based on its
investment research and management with respect to all securities and
investments. The Investment Adviser will determine from time to time what
securities and other investments will be selected to be purchased, retained,
or sold by the Fund.
The Investment Adviser is owned and controlled by its sole shareholder, Louis
G. Navellier (a 100% stockholder). In 1987, Louis Navellier was in litigation
with a business partner and on the advice of his then legal counsel, as part
of a legal strategy, filed a personal bankruptcy petition in connection with
that litigation. The bankruptcy petition was voluntarily dismissed by Mr.
Navellier less than two months later with all creditors being paid in full.
Louis G. Navellier is an affiliated person of the Fund. Louis Navellier is
also the sole shareholder of Navellier & Associates Inc. (See the Statement of
Additional Information.) Navellier & Associates Inc., is registered as an
investment adviser with the Securities and Exchange Commission and with all
states which require investment adviser registration. Louis Navellier is
registered as an investment adviser representative or agent in all states
requiring such registration. Louis Navellier and Navellier & Associates Inc.,
without admitting liability, did in the past agree to a two-week suspension in
California and agreed to pay civil penalties to the States of California,
Connecticut, and Maryland for allegedly not being properly registered as an
investment adviser. Navellier Management, Inc. is also and has been since
January 1994, the investment adviser to The Navellier Series Fund, an open-end
diversified investment company and to The Navellier Performance Funds, an
open-end investment company, since December 1995. Louis Navellier is, and has
been, in the business of rendering investment advisory services to significant
pools of capital since 1987.
For information regarding the Fund's expenses and the fees paid to the
Investment Adviser see "Expenses of the Fund".
Control Persons and Principal Holders of Securities
On ____________, 1997, in order to fulfill the requirements of Section
14(a)(1) of the 1940 Act, one hundred percent (100%) of the issued and
outstanding shares of the Growth Portfolio was subscribed to for purchase by
Louis Navellier under an agreement dated ___________, 1997. Such subscription
was made for an aggregate of $100,000 and was allocated 100% to the Growth
Portfolio (to purchase 10,000 shares).
The Custodian and the Transfer Agent
Rushmore Trust & Savings, FSB, 4922 Fairmont Avenue, Bethesda, Maryland,
20814, telephone: (301) 657-1510 or (800) 622-1386, is Custodian for the
Fund's securities and cash and Transfer Agent for the Fund shares.
EXPENSES OF THE FUND
General
Each Portfolio is responsible for the payment of its own expenses. These
expenses are deducted from that Portfolio's investment income before dividends
are paid. These expenses include, but are not limited to: fees paid to the
Investment Adviser, the Custodian, the Transfer Agent, and the Accountant;
Directors' fees; taxes; interest; brokerage commissions; organization
expenses; securities registration ("blue sky") fees; legal fees; auditing
fees; printing and other expenses which are not directly assumed by the
Investment Adviser under its investment advisory or expense reimbursement
agreements with the Fund. General expenses which are not associated directly
with a specific Portfolio (including fidelity bond and other insurance) are
allocated to each Portfolio based upon their relative net assets. The
Investment Adviser may, but is not obligated to, from time to time advance
funds, or directly pay, for expenses of the Fund and may seek reimbursement of
or waive reimbursement of those advanced expenses.
Compensation of the Investment Adviser
The Investment Adviser receives an annual .85% fee for investment management
of the Growth Portfolio. The fee is payable monthly, based upon the
Portfolio's average daily net assets. This advisory fee is higher than those
generally paid by most other investment companies. The Investment Adviser also
receives a 0.25% annual fee for rendering administrative services to the Fund
pursuant to an Administrative Services Agreement and is entitled to
reimbursement for operating expenses it advances for the Fund.
Brokerage Commissions
The Investment Adviser may select selected broker-dealers to execute portfolio
transactions for the Portfolios of the Fund, provided that the commissions,
fees, or other remuneration received by such party in exchange for executing
such transactions are reasonable and fair compared to those paid to other
brokers in connection with comparable transactions. In addition, when
selecting broker-dealers for Fund portfolio transactions, the Investment
Adviser may consider the record of such broker-dealers with respect to the
sale of shares of the Fund or sale of VA Contracts and VLI Policies. (See the
Statement of Additional Information.)
REPORTS AND INFORMATION
The Fund will distribute to the shareholders of each Portfolio semi-annual
reports containing unaudited financial statements and information pertaining
to matters of each Portfolio of the Fund. An annual report containing
financial statements for each Portfolio, together with the report of the
independent auditors for each Portfolio of the Fund is distributed to
shareholders each year. Shareholder inquiries should be addressed to The
Navellier Performance Funds, at One East Liberty, Third Floor, Reno, Nevada
89501; Tel: (800) 887- 8671, or to the Transfer Agent, Rushmore Trust &
Savings, FSB, 4922 Fairmont Avenue, Bethesda, Maryland, 20814, Telephone:
(301) 657-1510 or (800) 622-1386.
DESCRIPTION OF SHARES
The Fund is a Maryland corporation organized on February 28, 1997. The Fund is
authorized to issue 500,000,000 shares of the Growth Portfolio and to create
additional portfolios of the Fund. Each share of the Growth Portfolio
represents an equal proportionate interest in that Portfolio with each other
share. Shares are entitled upon liquidation to a pro rata share in the net
assets of the Growth Portfolio available for distribution to shareholders.
Shareholders have no preemptive rights. All consideration received by the Fund
for shares of any Portfolio and all assets in which such consideration is
invested would belong to that Portfolio and would be subject to the
liabilities related thereto.
The Fund reserves the right to create classes of shares.
Voting Rights
Each share held entitles the shareholder of record to one vote. Shareholders
of each Portfolio will vote separately on matters relating solely to it, such
as approval of advisory agreements and changes in fundamental policies, and
matters affecting some but not all Portfolios of the Fund will be voted on
only by shareholders of the affected Portfolios. Shareholders of all
Portfolios of the Fund will vote together in matters affecting the Fund
generally, such as the election of Directors or selection of accountants. As a
Maryland corporation, the Fund is not required to hold annual meetings of
shareholders but shareholder approval will be sought for certain changes in
the operation of the Fund and for the election of Directors under certain
circumstances. In addition, a Director may be removed by the remaining
Directors or by shareholders at a special meeting called upon written request
of shareholders owning at least 10% of the outstanding shares of the Fund. In
the event that such a meeting is requested, the Fund will provide appropriate
assistance and information to the shareholders requesting the meeting. Under
current law, a Participating Insurance Company is required to request voting
instructions from VA Contract owners and VLI Policy owners and must vote all
shares held in the separate account in proportion to the voting instructions
received. Qualified Plans may or may not pass through voting rights to
Qualified Plan participants, depending on the terms of the Qualified Plan's
governing documents. For a more complete discussion of voting rights, refer to
the Participating Insurance Company separate account prospectus or the
Qualified Plan documents or other informational materials supplied by
Qualified Plan sponsors.
Conflicts of Interest. The Portfolios offers their shares to (i) VA
Contracts and VLI Policies offered through separate accounts of Participating
Insurance Companies which may or may not be affiliated with each other and
(ii) Qualified Plans including Participant-directed Plans which elect to make
the Portfolios available as investment options for Qualified Plan
participants. Due to differences of tax treatment and other considerations,
the interests of VA Contract and VLI Policy owners and Qualified Plan
participants participating in the Portfolios may conflict. The Board will
monitor the Portfolios for any material conflicts that may arise and will
determine what action, if any, should be taken. If a conflict occurs, the
Board may require one or more Participating Insurance Company separate
accounts and/or Qualified Plans to withdraw its investments in the Portfolios.
As a result, the Portfolios may be forced to sell securities at
disadvantageous prices and orderly portfolio management could be disrupted. In
addition, the Board may refuse to sell shares of the Portfolios to any VA
Contract, VLI Policy or Qualified Plan or may suspend or terminate the
offering of shares of the Portfolios if such action is required by law or
regulatory authority or is in the best interests of the shareholders of the
Portfolios.
TAX STATUS, DIVIDENDS AND DISTRIBUTIONS
Taxes
For a discussion of the tax status of a VA Contract, VLI Policy or Qualified
Plan, refer to the Participating Insurance Company separate account prospectus
or Qualified Plan documents or other informational materials supplied by
Qualified Plan sponsors.
Each Portfolio intends to qualify and elect to be treated as a regulated
investment company that is taxed under the rules of Subchapter M of the
Internal Revenue Code. As such, a Portfolio will not be subject to federal
income tax on its net ordinary income and net realized capital gains to the
extent such income and gains are distributed to the separate accounts of
Participating Insurance Companies and Qualified Plans which hold its shares.
Because shares of the Portfolios may be purchased only through VA Contracts,
VLI Policies and Qualified Plans, it is anticipated that any income, dividends
or capital gain distributions from the Portfolios are taxable, if at all, to
the Participating Insurance Companies and Qualified Plans and will be exempt
from current taxation of the VA Contract owner, VLI Policy owner, or Qualified
Plan participant if left to accumulate within the VA Contract, VLI Policy or
Qualified Plan.
Internal Revenue Service Requirements
The Portfolios intend to comply with the diversification requirements
currently imposed by the Internal Revenue Service on separate accounts of
insurance companies as a condition of maintaining the tax-deferred status of
VA Contracts and VLI Policies. See the Statement of Additional Information for
more specific information.
Dividends and Distributions
Each of the Portfolios will declare and distribute dividends from net ordinary
income at least annually and will distribute its net realized capital gains,
if any, at least annually. Distributions of ordinary income and capital gains
will be made in shares of such Portfolios unless an election is made on behalf
of a separate account of a Participating Insurance Company to receive
distributions in cash. Participating Insurance Companies and Qualified Plan
sponsors will be informed at least annually about the amount and character of
distributions from the fund for federal income tax purposes.
PURCHASES AND REDEMPTIONS
Individual investors may not purchase or redeem shares of the Portfolios
directly; shares may be purchased or redeemed only through VA Contracts and
VLI Policies offered by separate accounts of Participating Insurance Companies
or through Qualified Plans, including participant-directed Qualified Plans
which elect to make the Portfolios investment options for Qualified Plan
participants. Please refer to the prospectus of the sponsoring Participating
Insurance Company separate account or to the Qualified Plan documents or other
informational materials supplied by Qualified Plan sponsors for instructions
on purchasing a VA Contract or VLI Policy and on how to select the Portfolios
as investment options for a VA Contract, VLI Policy or Qualified Plan.
Purchases. All investments in the Portfolios are credited to a
Participating Insurance Company's separate account immediately upon acceptance
of the investments by the Portfolios. Each Participating Insurance Company
receives orders from its contract owners to purchase or redeem shares of each
Portfolio on each day that the Portfolio calculates its net asset value (a
"Business Day"). That night, all orders received by the Participating
Insurance Company prior to the close of regular trading on the New York Stock
Exchange Inc. (the "NYSE") (currently 4:00 p.m., Eastern time) on that
Business Day are aggregated, and the Participating Insurance Company places a
net purchase or redemption order for shares of the Portfolios during the
morning of the next Business Day. These orders are executed at the net asset
value (described below under "Net Asset Value") next computed after receipt of
such order by the Participating Insurance Company.
Qualified Plan participants may invest in shares of the Portfolios through
their Qualified Plans by directing the Qualified Plan trustee to purchase
shares for their account. Participants should contact their Qualified Plan
sponsors for information concerning the appropriate procedure for investing
in the Portfolios. All investments in the Portfolios by Qualified Plans
are credited to the Qualified Plans immediately upon acceptance of the
investments by the Portfolios. All orders received from Qualified Plans
are executed at the net asset value next computed after receipt of such
orders by the Portfolios.
The Portfolios reserve the right to reject any specific purchase order.
Purchase orders may be refused if, in the Investment Adviser's opinion, they
are of a size that would disrupt the management of the Portfolio. A Portfolio
may discontinue sales of its shares if management believes that a substantial
further increase in assets may adversely effect the Portfolio's ability to
achieve its investment objective. In such event, however, it is anticipated
that existing VA Contract owners, VLI Policy owners and Qualified Plan
participants would be permitted to continue to authorize investments in the
Portfolios and to reinvest any dividends or capital gains distributions.
Redemptions. Shares of a Portfolio may be redeemed on any Business Day.
Redemption orders which are received by a Participating Insurance Company or
Qualified Plan prior to the close of regular trading on the NYSE on any
Business Day and transmitted to the Fund or its specified agent during the
morning of the next Business Day will be processed at the next net asset value
computed after receipt of such order by the Participating Insurance Company or
Qualified Plan. Redemption proceeds will normally be wired to the
Participating Insurance Company or Qualified Plan the Business Day following
receipt of the redemption order by the Participating Insurance Company or
Qualified Plan, but in no event later than seven days after receipt of such
order.
Valuation of Shares
The net asset value of the shares of each Portfolio of the Fund are determined
once daily as of 4 p.m. New York Time, on days when the New York Stock
Exchange is open for trading. In the event that the New York Stock Exchange
or the national securities exchanges on which Portfolio stocks are traded
adopt different trading hours on either a permanent or temporary basis, the
Directors of the Fund will reconsider the time at which net asset value is to
be computed. The net asset value is determined by adding the values of all
securities and other assets of the Portfolio, subtracting liabilities, and
dividing by the number of outstanding shares of the Portfolio. The price at
which a purchase is effected is based on the next calculation of net asset
value after the order is received.
In determining the value of the assets of each Portfolio, the securities for
which market quotations are readily available are valued at market value. Debt
securities (other than short-term obligations) are normally valued on the
basis of valuations provided by a pricing service when such prices are
believed to reflect the fair value of such securities. All other securities
and assets are valued at their fair value as determined in good faith by the
Directors, although the actual calculations may be made by persons acting
pursuant to the direction of the Directors.
ADDITIONAL INFORMATION
The Statement of Additional Information, available upon request, without
charge from the Fund, provides a further discussion of certain sections of the
Prospectus and other information which may be of interest to certain
investors. This Prospectus and the Statement of Additional Information do not
contain all the information included in the Registration Statement filed with
the Securities and Exchange Commission with respect to the securities being
sold, certain portions of which have been omitted pursuant to the rules and
regulations of the Securities and Exchange Commission. The Registration
Statement, including the exhibits filed therewith, may be examined at the
office of the Securities and Exchange Commission in Washington, D.C.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to are not necessarily complete, and, in each
instance, reference is made to the Statement of Additional Information and the
copy of such contract or other document filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, each such
statement being qualified in all respects by such reference.
NAVELLIER VARIABLE INSURANCE SERIES FUND, INC.
Investment Adviser
Navellier Management, Inc.
One East Liberty, Third Floor
Reno, NV 89501
(800) 887-8671
Independent Auditors
Transfer Agent and Custodian
Rushmore Trust & Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
(800) 622-1386
Counsel
Blazzard, Grodd & Hasenauer, P.C.
943 Post Road East
Westport, CT 06880
(203) 226-7866
PART B
NAVELLIER VARIABLE INSURANCE SERIES FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
DATED _____________, 1997
This Statement of Additional Information, which is not a prospectus, should be
read in conjunction with the Prospectus of the Navellier Variable Insurance
Series Fund, Inc. (the "Fund"), dated ______________, 1997, a copy of which
Prospectus may be obtained, without charge, by contacting the Fund, at its
mailing address: One East Liberty, Third Floor, Reno, Nevada 89501; Tel:
1-800-887-8671.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
GENERAL INFORMATION AND HISTORY 1
INVESTMENT OBJECTIVE AND POLICIES 1
DIRECTORS AND OFFICERS OF THE FUND 3
OFFICERS 4
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES 5
THE INVESTMENT ADVISER, CUSTODIAN AND TRANSFER AGENT 5
BROKERAGE ALLOCATION AND OTHER PRACTICES 7
CAPITAL STOCK AND OTHER SECURITIES 8
PURCHASE, REDEMPTION, AND PRICING OF SHARES 8
TAXES 9
CALCULATION OF PERFORMANCE DATA 11
FINANCIAL STATEMENTS 11
APPENDIX 12
</TABLE>
GENERAL INFORMATION AND HISTORY
The Fund is a corporation (organized under the laws of the State of Maryland
on February 28, 1997) and has commenced investment operations as of the date
of this Prospectus.
INVESTMENT OBJECTIVE AND POLICIES
Investment Policies. The investment objective and policies of the Growth
Portfolio are described in the "Investment Objective and Policies" section of
the Prospectus. The following general policies supplement the information
contained in that section of the Prospectus.
Certificates of Deposit. Certificates of deposit are generally
short-term, interest-bearing, negotiable certificates issued by banks or
savings and loan associations against funds deposited in the issuing
institution.
Time Deposits. Time deposits are deposits in a bank or other financial
institution for a specified period of time at a fixed interest rate for which
a negotiable certificate is not received.
Banker's Acceptances. A banker's acceptance is a time draft drawn on a
commercial bank by a borrower usually in connection with an international
commercial transaction (to finance the import, export, transfer, or storage of
goods). The borrower, as well as the bank, is liable for payment, and the
bank unconditionally guarantees to pay the draft at its face amount on the
maturity date. Most acceptances have maturities of six months or less and are
traded in secondary markets prior to maturity.
Commercial Paper. Commercial paper refers to short-term, unsecured
promissory notes issued by corporations to finance short-term credit needs.
Commercial paper is usually sold on a discount basis and has a maturity at the
time of issuance not exceeding nine months.
Corporate Debt Securities. Corporate debt securities with a remaining
maturity of less than one year tend to become liquid and can sometimes be
traded as money market securities.
United States Government Obligations. Securities issued or guaranteed as
to principal and interest by the United States government include a variety of
Treasury securities, which differ only in their interest rates, maturities,
and times of issuance. Treasury bills have a maturity of one year or less.
Treasury notes have maturities of one to seven years, and Treasury bonds
generally have a maturity of greater than five years.
Agencies of the United States government which issue or guarantee
obligations include, among others, export-import banks of the United States,
Farmers' Home Administration, Federal Housing Administration, Government
National Mortgage Association, Maritime Administration, Small Business
Administration, the Defense Security Assistance Agency of the Department of
Defense, and the Tennessee Valley Authority. Obligations of instrumentalities
of the United States government include securities issued or guaranteed by,
among others, the Federal National Mortgage Association, Federal Intermediate
Credit Banks, Banks for Cooperatives, and the United States Postal Service.
Some of the securities are supported by the full faith and credit of the
United States government; others are supported by the right of the issuer to
borrow from the Treasury, while still others are supported only by the credit
of the instrumentality.
Investment Restrictions. The Fund's fundamental policies as they affect
a Portfolio cannot be changed without the approval of a vote of a majority of
the outstanding securities of such Portfolio. A proposed change in
fundamental policy or investment objective will be deemed to have been
effectively acted upon with respect to any Portfolio if a majority of the
outstanding voting securities of that Portfolio votes for the matter. Such a
majority is defined as the lesser of (a) 67% or more of the voting shares of
the Fund present at a meeting of shareholders of the Portfolio, if the holders
of more than 50% of the outstanding shares of the Portfolio are present or
represented by proxy or (b) more than 50% of the outstanding shares of the
Portfolio. For purposes of the following restrictions (except the percentage
restrictions on borrowing and illiquid securities -- which percentage must be
complied with) and those contained in the Prospectus: (i) all percentage
limitations apply immediately after a purchase or initial investment; and (ii)
any subsequent change in any applicable percentage resulting from market
fluctuations or other changes in the amount of total assets does not require
elimination of any security from the Portfolio.
The following investment restrictions are fundamental policies of the
Fund with respect to the Growth Portfolio and may not be changed except as
described above. The Growth Portfolio may not:
1. Purchase any securities or other property on margin; provided,
however, that the Portfolio may obtain short-term credit as may be necessary
for the clearance of purchases and sales of securities.
2. Make cash loans, except that the Portfolio may purchase bonds,
notes, debentures, or similar obligations which are customarily purchased by
institutional investors whether publicly distributed or not.
3. Make securities loans, except that the Portfolio may make loans of
its portfolio securities, 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 the Portfolio.
4. Make investments in real estate or commodities or commodity
contracts, including futures contracts, although the Portfolio may purchase
securities of issuers which deal in real estate or commodities although this
is not a primary objective of the Portfolio.
5. Invest in oil, gas, or other mineral exploration or development
programs, although the Portfolio may purchase securities of issuers which
engage in whole or in part in such activities.
6. Purchase securities of companies for the purpose of exercising
management or control.
7. Participate in a joint or joint and several trading account in
securities.
8. Issue senior securities or borrow money, except that the Portfolio
may (i) borrow money only from banks for temporary or emergency (not
leveraging) purposes, including 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 the 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
(the "1940 Act"), and (b) is subject to an agreement by the lender that any
recourse is limited to the assets of the Portfolio with respect to which the
borrowing has been made. As an operating policy, the Portfolio may not invest
in portfolio securities while the amount of borrowing of the Portfolio exceeds
5% of the total assets of the Portfolio.
9. Pledge, mortgage, or hypothecate the assets of the Portfolio to an
extent greater than 10% of the total assets of the Portfolio to secure
borrowings made pursuant to the provisions of Item 8 above.
10. Purchase "restricted securities" (as defined in Rule 144(a)(3) of
the Securities Act of 1933), if, as a result of such purchase, more than 10%
of the net assets (taken at market value) of the Portfolio would then be
invested in such securities nor will the Portfolio invest in illiquid or
unseasoned securities if as a result of such purchase more than 5% of the net
assets of the Portfolio would be invested in either illiquid or unseasoned
securities.
11. Invest more than 5% of the assets of the Portfolio in securities of
any single issuer.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in values of portfolio securities or amount of net assets shall not be
considered a violation of the restrictions, except as to the 5%, 10% and 300%
percentage restrictions on borrowing specified in Restriction Number 8 above.
Portfolio Turnover. The Growth Portfolio's annual rate of portfolio
turnover is calculated by dividing the lesser of purchases or sales of
portfolio securities during the fiscal year by the monthly average of the
value of the Portfolio's securities (excluding from the computation all
securities, including options, with maturities at the time of acquisition of
one year or less). A high rate of portfolio turnover generally involves
correspondingly greater expenses to the Portfolio, including brokerage
commission expenses, dealer mark-ups, and other transaction costs on the sale
of securities, which must be borne directly by the Portfolio. Turnover rates
may vary greatly from year to year as well as within a particular year and may
also be affected by cash requirements for redemptions of the Portfolio's
shares and by requirements which enable the Fund to receive certain favorable
tax treatment. Because the Growth Portfolio is a new fund portfolio which has
not been in operation for a year, no actual turnover rate can be given at this
time. The Fund will attempt to limit the annual portfolio turnover rate of
the Growth Portfolio to 300% or less, however, this rate may be exceeded if in
the Investment Adviser's discretion securities are or should be sold or
purchased in order to attempt to increase the Portfolio's performance.
DIRECTORS AND OFFICERS OF THE FUND
The following information is provided with respect to each director and
officer of the Fund:
<TABLE>
<CAPTION>
<S> <C> <C>
Position(s) Held With Principal Occupation(s)
Name and Address Registrant and its Affiliates During Past Five Years
Dennis A. Holtorf/1/ [INFORMATION TO BE PROVIDED [INFORMATION TO BE PROVIDED
One East Liberty BY AMENDMENT] BY AMENDMENT]
Third Floor
Reno, NV 89501
Age: ___
</TABLE>
/1/ This person is an interested person affiliated with the Investment
Adviser.
OFFICERS
The officers of the Fund are affiliated with the Investment Adviser and
receive no salary or fee from the Fund. The Fund's disinterested Directors
are each compensated by the Fund with an annual fee, payable quarterly
(calculated at an annualized rate), of $______. The Directors' fees may be
adjusted according to increased responsibilities if the Fund's assets exceed
one billion dollars. In addition, each disinterested Director receives
reimbursement for actual expenses of attendance at Board of Directors
meetings.
The Fund does not expect, in its current fiscal year, to pay aggregate
remuneration in excess of $60,000 for services in all capacities to any (a)
Director, (b) officer, (c) affiliated person of the Fund (other than the
Investment Adviser), (d) affiliated person of an affiliate or principal
underwriter of the Fund, or (e) all Directors and officers of the Fund as a
group.
The Board of Directors is permitted by the Fund's By-Laws to appoint an
advisory committee which shall be composed of persons who do not serve the
Fund in any other capacity and which shall have no power to dictate corporate
operations or to determine the investments of the Fund. The Fund currently
has no advisory committee.
<TABLE>
<CAPTION>
Remuneration Table
<S> <C> <C>
Aggregate Remuneration/*/
Capacity In Which From Registrant and
Remuneration Received Fund Complex
Dennis A. Holtorf Director $ 0.00
</TABLE>
/*/ Based on projections for fiscal year 1997.
[FN]
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
On _________________, 1997, in order to fulfill the requirements of Section
14(a)(1) of the 1940 Act, one hundred percent (100%) of the issued and
outstanding shares of the Growth Portfolio was purchased by Louis G. Navellier
under a subscription agreement dated ____________, 1997. Such subscription for
acquisition was made for an aggregate of $100,000 allocated 100% to the Growth
Portfolio (to purchase 10,000 shares).
THE INVESTMENT ADVISER, CUSTODIAN AND TRANSFER AGENT
(a) The Investment Adviser
The offices of the Investment Adviser (Navellier Management, Inc.) are
located at One East Liberty, Third Floor, Reno, Nevada 89501. The Investment
Adviser began operation in May 1993 and advises this Fund, The Navellier
Series Fund and The Navellier Performance Funds.
(i) The following individual owns the enumerated shares of
outstanding stock of the Investment Adviser and, as a result, maintains
control over the Investment Adviser:
<TABLE>
<CAPTION>
<S> <C> <C>
Shares of Outstanding Stock Percentage of Outstanding
Name of the Investment Adviser Shares
Louis G. Navellier 1,000 100%
</TABLE>
(ii) The following individual is affiliated with the Investment Adviser:
<TABLE>
<CAPTION>
<S> <C>
Name Position
Louis G. Navellier Trustee, President, and Treasurer of The
Navellier Series Fund and The Navellier
Performance Funds; Director, CEO, President,
Secretary, and Treasurer of Navellier
Management, Inc.,; Director, President, CEO,
Secretary, and Treasurer of Navellier
Securities Corp.; one of the Portfolio
Managers of the Navellier Series Fund and The
Navellier Performance Funds.
</TABLE>
(iii) The management fee payable to the Investment Adviser under the
terms of the Investment Advisory Agreement (the "Advisory Agreement") between
the Investment Adviser and the Fund is payable monthly and is based upon .85%
of the Growth Portfolio's average daily net assets. The Investment Adviser
has the right, but not the obligation, to waive any portion or all of its
management fee, from time to time.
Expenses not expressly assumed by the Investment Adviser under the Advisory
Agreement are paid by the Fund. The Advisory Agreement lists examples of
expenses paid by the Fund for the account of the Growth Portfolio, the major
categories of which relate to taxes, fees to Directors, legal, accounting, and
audit expenses, custodian and transfer agent expenses, certain printing and
registration costs, and non-recurring expenses, including litigation.
The Advisory Agreement provides that the Investment Adviser shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund or its investors except for losses (i) resulting from the willful
misfeasance, bad faith, or gross negligence on its part, (ii) resulting from
reckless disregard by it of its obligations and duties under the Advisory
Agreement, or (iii) a loss for which the Investment Adviser would not be
permitted to be indemnified under the Federal Securities laws.
Pursuant to an Administrative Services Agreement, the Investment Adviser
receives an annual fee of .25% of the value of the assets under management and
provides or is responsible for the provision of certain administrative
services to the Fund, including, among others, the preparation and maintenance
of certain books and records required to be maintained by the Fund under the
Investment Company Act of 1940. The Administrative Services Agreement permits
the Investment Adviser to contract out for all of its duties thereunder;
however, in the event of such contracting, the Investment Adviser remains
responsible for the performance of its obligations under the Administrative
Services Agreement. The Investment Adviser has entered into an agreement with
Rushmore Trust & Savings, FSB, to perform, in addition to custodian and
transfer agent services, some or all administrative services and may contract
in the future with other persons or entities to perform some or all of its
administrative services. All of these contracted services are and will be
paid for by the Investment Adviser out of its fees or assets.
In exchange for its services under the Administrative Services Agreement, the
Fund reimburses the Investment Adviser for certain expenses incurred by the
Investment Adviser in connection therewith but does not reimburse Investment
Advisor (over the amount of the 0.25% annual Administrative Services Fee) to
reimburse it for fees Investment Adviser pays to others for administrative
services. The agreement also allows Investment Adviser to pay to its delegate
part or all of such fees and reimbursable expense payments incurred by it or
its delegate.
The Advisory Agreement permits the Investment Adviser to act as investment
adviser for any other person, firm, or corporation, and designates the
Investment Adviser as the owner of the name "Navellier" or of any use or
derivation of the word Navellier. If the Investment Adviser shall no longer
act as investment adviser to the Fund, the right of the Fund to use the name
"Navellier" as part of its title may, solely at the Investment Adviser's
option, be withdrawn.
The Investment Adviser is advancing the Fund's organizational expenses which
were $________. The Fund has agreed to reimburse the Investment Adviser for
the organizational and other expenses it advances, without interest, on a date
or dates to be chosen at the sole discretion of Navellier Management, Inc., or
the Investment Adviser can elect to waive reimbursement of some or all of such
advances. No Portfolio shall be responsible for the reimbursement of more
than its proportionate share of expenses.
(b) The Custodian and Transfer Agent
Rushmore Trust & Savings, FSB, 4922 Fairmont Avenue, Bethesda, Maryland
20814, serves as the custodian of the Fund's portfolio securities and as the
Fund's transfer agent and, in those capacities, maintains certain accounting
and other records of the Fund and processes requests for the purchase or the
redemption of shares, maintains records of ownership for shareholders, and
performs certain other shareholder and administrative services on behalf of
the Fund.
(c) Legal Counsel
Blazzard, Grodd & Hasenauer, P.C., is legal counsel to the Fund.
BROKERAGE ALLOCATION AND OTHER PRACTICES
In effecting portfolio transactions for the Fund, the Investment Adviser
adheres to the Fund's policy of seeking best execution and price, determined
as described below, except to the extent it is permitted to pay higher
brokerage commissions for "brokerage and research services," as defined
herein. The Investment Adviser may cause the Fund to pay a broker or dealer
an amount of commission for effecting a securities transaction in excess of
the amount of commission which another broker or dealer would have charged for
effecting the transaction if the Investment Adviser determines in good faith
that such amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer or that any
offset of direct expenses of a Portfolio yields the best net price. As
provided in Section 28(e) of the Securities Exchange Act of 1934, "brokerage
and research services" include giving advice as to the value of securities,
the advisability of investing in, purchasing, or selling securities, and the
availability of securities; furnishing analysis and reports concerning
issuers, industries, economic facts and trends, portfolio strategy and the
performance of accounts; and effecting securities transactions and performing
functions incidental thereto (such as clearance and settlement). Brokerage
and research services provided by brokers to the Fund or to the Investment
Adviser are considered to be in addition to and not in lieu of services
required to be performed by the Investment Adviser under its contract with the
Fund and may benefit both the Fund and other clients of the Investment Adviser
or customers of or affiliates of the Investment Adviser. Conversely,
brokerage and research services provided by brokers to other clients of the
Investment Adviser or its affiliates may benefit the Fund.
If the securities in which a particular Portfolio of the Fund invests are
traded primarily in the over-the-counter market, where possible, the Fund will
deal directly with the dealers who make a market in the securities involved
unless better prices and execution are available elsewhere. Such dealers
usually act as principals for their own account. On occasion, securities may
be purchased directly from the issuer. Bonds and money market instruments are
generally traded on a net basis and do not normally involve either brokerage
commissions or transfer taxes.
The determination of what may constitute best execution and price in the
execution of a securities transaction by a broker involves a number of
considerations including, without limitation, the overall direct net economic
result to the Fund (involving both price paid or received and any net
commissions and other costs paid), the efficiency with which the transaction
is effected, the ability to effect the transaction at all where a large block
is involved, the availability of the broker to stand ready to execute possibly
difficult transactions in the future, and the financial strength and stability
of the broker. Such considerations are judgmental and are weighed by the
Investment Adviser in determining the overall reasonableness of brokerage
commissions paid by the Fund. Some portfolio transactions are subject to the
Rules of Fair Practice of the National Association of Securities Dealers,
Inc., and subject to obtaining best prices and executions, effected through
dealers who sell shares of the Fund and/or possibly the VA Contracts and/or
VLI Policies.
The Board of Directors of the Fund will periodically review the performance of
the Investment Adviser of its respective responsibilities in connection with
the placement of portfolio transactions on behalf of the Fund and review the
commissions paid by the Fund over representative periods of time to determine
if they are reasonable in relation to the benefits to the Fund.
The Board of Directors will periodically review whether the recapture for the
benefit of the Fund of some portion of the brokerage commissions or similar
fees paid by the Fund on portfolio transactions is legally permissible and
advisable. At present, no recapture arrangements are in effect. The Board of
Directors will review whether recapture opportunities are available and are
legally permissible, and, if so, will determine, in the exercise of their
business judgment, whether it would be advisable for the Fund to seek such
recapture.
CAPITAL STOCK AND OTHER SECURITIES
The rights and preferences attached to the shares of each Portfolio are
described in the Prospectus. (See "Description of Shares".) The 1940 Act
requires that where more than one class or series of shares exists, each class
or series must be preferred over all other classes or series in respect of
assets specifically allocated to such class or series. Rule 18f-2 under the
1940 Act provides that any matter required to be submitted by the provisions
of the 1940 Act or applicable state law, or otherwise, to the holders of the
outstanding voting securities of an investment company such as the Fund shall
not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each series affected by
such matter. Rule 18f-2 further provides that a series shall be deemed to be
affected by a matter unless the interests of each series in the matter are
substantially identical or that the matter does not affect any interest of
such series. However, the Rule exempts the selection of independent public
accountants, the approval of principal distribution contracts, and the
election of Directors from the separate voting requirements of the Rule.
PURCHASE, REDEMPTION, AND PRICING OF SHARES
Redemption of Shares. The Prospectus, under "Purchases and Redemptions"
describes the requirements and methods available for effecting redemption.
The Fund may suspend the right of redemption or delay payment more than seven
days (a) during any period when the New York Stock Exchange or any other
applicable exchange, is closed (other than a customary weekend and holiday
closing), (b) when trading on the New York Stock Exchange, or any other
applicable exchange, is restricted, or an emergency exists as determined by
the Securities and Exchange Commission ("SEC") or the Fund so that disposal of
the Fund's investments or a fair determination of the net asset values of the
Portfolios is not reasonably practicable, or (c) for such other periods as the
SEC by order may permit for protection of the Portfolio's shareholders.
The Fund normally redeems shares for cash. However, the Board of Directors
can determine that conditions exist making cash payments undesirable. If they
should so determine (and if a proper election pursuant to Rule 18f-1 of the
1940 Act has been made by the Fund), redemption payments could be made in
securities valued at the value used in determining net asset value. There
generally will be brokerage and other costs incurred by the redeeming
shareholder in selling such securities.
Determination of Net Asset Value. As described in the Prospectus under
"Purchases and Redemptions - Valuation of Shares," the net asset value of
shares of each Portfolio of the Fund is determined once daily as of 4 p.m. New
York time on each day during which the New York Stock Exchange, or other
applicable exchange, is open for trading. The New York Stock Exchange is
scheduled to be closed for trading on the following days: New Year's Day,
Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day. The Board of Directors of the Exchange
reserves the right to change this schedule. In the event that the New York
Stock Exchange or the national securities exchanges on which small cap
equities are traded adopt different trading hours on either a permanent or
temporary basis, the Board of Directors of the Fund will reconsider the time
at which net asset value is to be computed.
Valuation of Assets. In determining the value of the assets of any
Portfolio of the Fund, the securities for which market quotations are readily
available are valued at market value, which is currently determined using the
last reported sale price, or, if no sales are reported - as is the case with
many securities traded over-the-counter - the last reported bid price. Debt
securities (other than short-term obligations, i.e., obligations which have 60
days or less left to maturity, which are valued on the basis of amortized
cost) are normally valued on the basis of valuations provided by a pricing
service when such prices are believed to reflect the fair value of such
securities. Prices provided by a pricing service may be determined without
exclusive reliance on quoted prices and take into account appropriate factors
such as institution-size trading in similar groups of securities, yield,
quality of issue, trading characteristics, and other market data. All other
securities and assets are valued at their fair value as determined in good
faith by the Board of Directors, although the actual calculations may be made
by persons acting pursuant to the direction of the Board of Directors.
TAXES
In the case of a "series fund" (that is, a regulated investment company having
more than one segregated portfolio of investments the beneficial interests in
which are owned by the holders of a separate series of stock), each investment
portfolio is treated as a separate corporation for federal income tax
purposes. The Fund will be deemed a series fund for this purpose and, thus,
each Portfolio will be deemed a separate corporation for such purpose.
Each Portfolio of the Fund intends to qualify as a regulated investment
company for federal income tax purposes. Such qualification requires, among
other things, that each Portfolio (a) make a timely election to be a regulated
investment company, (b) derive at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, and gains from
the sale or other disposition of stock or securities (including options and
futures) or foreign currencies, (c) derive less than 30% of its gross income
from the sale or other disposition within three months of purchase of (i)
stock or securities, (ii) options, futures, or forward contracts (other than
options, futures, or forward contracts on foreign currencies), or (iii)
foreign currencies or options, futures, or forward contracts on foreign
currencies that are not directly related to its principal business of
investing in stocks or securities (or options and futures with respect to
stocks or securities), and (d) diversify its holdings so that at the end of
each fiscal quarter (i) 50% of the market value of its assets is represented
by cash, government securities, securities of other regulated investment
companies, and securities of one or more other issuers (to the extent the
value of the securities of any one such issuer owned by the Portfolio does not
exceed 5% of the value of its total assets and 10% of the outstanding voting
securities of such issuer) and (ii) not more than 25% of the value of its
assets is invested in the securities (other than government securities and
securities of other regulated investment companies) of any one industry.
These requirements may limit the ability of the Portfolios to engage in
transactions involving options and futures contracts.
If each Portfolio qualifies as a regulated investment company, it will not be
subject to federal income tax on its "investment company taxable income"
(calculated by excluding the amount of its net capital gain, if any, and by
excluding the dividends-received and net operating loss deductions) or "net
capital gain" (the excess of its long-term capital gain over its net
short-term capital loss) which is distributed to shareholders. In determining
taxable income, however, a regulated investment company holding stock on the
record date for a dividend is required to include the dividend in income on
the later of the ex-dividend date or the date of acquisition.
Section 817 Diversification Requirements
Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of segregated asset accounts that fund contracts such as the
VA Contracts and VLI Policies (that is, the assets of the Portfolios), which
are in addition to the diversification requirements imposed on the Portfolios
by the 1940 Act and Subchapter M. Failure to satisfy those standards would
result in imposition of Federal income tax on a VA Contract or VLI Policy
owner with respect to the increase in the value of the VA Contract or VLI
Policy. Section 817(h)(2) provides that a segregated asset account that funds
contracts such as the VA Contracts and VLI Policies is treated as meeting the
diversification standards if, as of the close of each calendar quarter, the
assets in the account meet the diversification requirements for a regulated
investment company and no more than 55% of those assets consist of cash, cash
items, U.S. Government securities and securities of other regulated investment
companies.
The Treasury Regulations amplify the diversification standards set forth in
Section 817(h) and provide an alternative to the provision described above.
Under the regulations, an investment portfolio will be deemed adequately
diversified if (i) no more than 55% of the value of the total assets of the
portfolio is represented by any one investment; (ii) no more than 70% of such
value is represented by any two investments; (iii) no more than 80% of such
value is represented by any three investments; and (iv) no more than 90% of
such value is represented by any four investments. For purposes of these
Regulations all securities of the same issuer are treated as a single
investment, but each United States government agency or instrumentality shall
be treated as a separate issuer.
Each Portfolio will be managed with the intention of complying with these
diversification requirements. It is possible that, in order to comply with
these requirements, less desirable investment decisions may be made which
would affect the investment performance of a Portfolio.
CALCULATION OF PERFORMANCE DATA
Performance information for each Portfolio may appear in advertisements, sales
literature, or reports to shareholders or prospective shareholders.
Performance information in advertisements and sales literature may be
expressed as total return on the applicable Portfolio.
The average annual total return on such Portfolios represents an annualization
of each Portfolio's total return ("T" in the formula below) over a particular
period and is computed by finding the current percentage rate which will
result in the ending redeemable value ("ERV" in the formula below) of a $1,000
payment/*/ ("P" in the formula below) made at the beginning of a one-, five-,
or ten-year period, or for the period from the date of commencement of the
Portfolio's operation, if shorter ("n" in the formula below). The following
formula will be used to compute the average annual total return for the
Portfolio:
N
P (1 + T) = ERV
In addition to the foregoing, each Portfolio may advertise its total return
over different periods of time by means of aggregate, average, year-by-year,
or other types of total return figures.
Performance information for the Portfolios shall reflect only the performance
of a hypothetical investment in the Portfolios during the particular time
period on which the calculations are based. Performance information should be
considered in light of the investment objectives and policies, characteristics
and quality of the particular Portfolio, and the market conditions during the
given time period, and should not be considered as a representation of what
may be achieved in the future.
Each Portfolio may, from time to time, include in advertisements containing
total return the ranking of those performance figures relative to such figures
for groups of mutual funds categorized by Lipper Analytical Services, or other
services, as having the same investment objectives. The total return may also
be used to compare the performance of the Portfolio against certain widely
acknowledged outside standards or indices for stock and bond market
performance. The Standard & Poor's Composite Stock Price Index of 500 stocks
("S&P 500") is a market value-weighted and unmanaged index showing the changes
in the aggregate market value of 500 stocks relative to the base period
1941-43. The S&P 500 is composed almost entirely of common stocks of
companies listed on the New York Stock Exchange, although the common stocks of
a few companies listed on the American Stock Exchange or traded
over-the-counter are included.
As summarized in the Prospectus under the heading "Performance Advertising",
the total return and/or yield of a Portfolio may be quoted in advertisements
and sales literature.
FINANCIAL STATEMENTS
[To be filed by Amendment]
APPENDIX
A-1 and P-1 Commercial Paper Ratings
The Growth Portfolio will invest only in commercial paper which, at the date
of investment, is rated A-1 by Standard & Poor's Corporation ("S&P") or P- 1
by Moody's Investors Services, Inc. ("Moody's"), or, if not rated, is issued
or guaranteed by companies which at the date of investment have an outstanding
debt issue rated AA or higher by Standard & Poor's or Aa or higher by Moody's.
Commercial paper rated A-1 by S&P has the following characteristics: (1)
liquidity ratios are adequate to meet cash requirements; (2) long-term senior
debt is rated "A" or better; (3) the issuer has access to at least two
additional channels of borrowing; (4) basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances; (5) typically,
the issuer's industry is well established and the issuer has a strong position
within the industry; and (6) the reliability and quality of management are
unquestioned.
The rating P-1 is the highest commercial paper rating assigned by Moody's.
Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; (3) evaluation
of the issuer's products in relation to competition and customer acceptance;
(4) liquidity; (5) amount and quality of long-term debt; (6) trend of earnings
over a period of ten years; (7) financial strength of a parent company and the
relationship which exists with the issuer; and (8) recognition by the
management of obligations which may be present or may arise as a result of
public interest questions and preparations to meet such obligations.
PART C
OTHER INFORMATION
Item 24 Financial Statements and Exhibits
(a) Financial Statements:
To be filed by amendment.
(b) Exhibits:
Exhibit
Number Description
______ ________________
1. Articles of Incorporation of Registrant
2. By_Laws of Registrant (to be filed by amendment)
3. None
4. None
5. Form of Investment Advisory Agreement between Registrant
and Navellier Management, Inc. (to be filed by amendment)
6. None
7. None
8. Administrative Services, Custodian, Transfer Agreement
with Rushmore Trust & Savings, FSB (to be filed by amendment)
9.1 Navellier Administrative Services Agreement (to be filed by
amendment)
9.2 Director Indemnification Agreements (to be filed by amendment)
10. Opinion and Consent of Counsel (to be filed by amendment)
11. Consent of Independent Auditors (to be filed by amendment)
12. None
13. Subscription Agreement between Navellier Variable Insurance
Series Fund, Inc. and Louis G. Navellier, dated ______________
(to be filed by amendment)
14. None
15. None
16. None
17. None
18. None
24. None
27. None
Item 25 Persons Controlled by or under Common Control with Registrant
There are no persons who are controlled by or under common control with the
Registrant.
Item 26 Number of Holders of Securities
None
Item 27 Indemnification
The Articles of Incorporation of the Registrant include the following:
ARTICLE VII
(4) Each Director and each officer of the Corporation shall be
indemnified by the Corporation to the full extent permitted by the Maryland
General Corporation Law and the By-Laws of the Corporation, as such law and
By-Laws may now or in the future be in effect, subject only to such
limitations as may be required by the Investment Company Act of 1940, as
amended.
The By-Laws of the Registrant include the following:
ARTICLE VI
Indemnification
"The Corporation shall indemnify (a) its Directors and officers, whether
serving the Corporation or at its request any other entity, to the full extent
required or permitted by (i) Maryland law now or hereafter in force, including
the advance of expenses under the procedures and to the full extent permitted
by law, and (ii) the Investment Company Act of 1940, as amended, and (b) other
employees and agents to such extent as shall be authorized by the Board of
Directors and be permitted by law. The foregoing rights of indemnification
shall not be exclusive of any other rights to which those seeking
indemnification may be entitled. The Board of Directors may take such action
as is necessary to carry out these indemnification provisions and is expressly
empowered to adopt, approve and amend from time to time such resolutions or
contracts implementing such provisions nor such further indemnification
arrangement as may be permitted by law."
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, 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 Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suite or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
To the extent that the Articles of Incorporation, By-Laws or any other
instrument pursuant to which the Registrant is organized or administered
indemnify any director or officer of the Registrant, or that any contract or
agreement indemnifies any person who undertakes to act as investment adviser
or principal underwriter to the Registrant, any such provision protecting or
purporting to protect such persons against any liability to the Registrant or
its security holders to which he would otherwise by subject by reason of
willful misfeasance, bad faith, or gross negligence, in the performance of his
duties, or by reason of his contract or agreement, will be interpreted and
enforced in a manner consistent with the provisions of Sections 17(h) and (i)
of the Investment Company Act of 1940, as amended, and Release No. IC-11330
issued thereunder.
Item 28 Business and Other Connections of Investment Adviser
Set forth below is a description of any other business, profession, vocation,
or employment of a substantial nature in which each investment adviser of the
Fund and each director, officer, or partner of any such investment adviser, is
or has been at any time during the past two fiscal years, engaged for his own
account or in the capacity of director, officer, employee, partner, or
trustee:
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Principal Positions Held with Principal Occupations
Business Address Registrant and Its Affiliates During Past Two Years
Louis G. Navellier Mr. Navellier is the CEO, Mr. Navellier is and has been
One East Liberty President, Treasurer, and the CEO and President of
Third Floor Secretary of Navellier Navellier & Associates Inc.,
Reno, NV 89501 Management, Inc., a Delaware an investment management
Corporation which is the company since 1988; is and has
Investment Adviser to the been CEO and President of
Fund. Mr. Navellier is also Navellier Management, Inc.;
CEO, President, Secretary, one of the Portfolio Managers
and Treasurer of Navellier & for the Investment Adviser to
Associates Inc., Navellier this Fund, The Navellier
Publications, Inc., MPT Series Fund and The Navellier
Review Inc., and Navellier Performance Funds; President
International Management, Inc. and CEO of Navellier
Securities Corp., the
principal Underwriter to The
Navellier Performance Funds
and The Navellier Series
Fund; CEO and President of
Navellier Fund Management,
Inc. and investment advisory
company, since November 30,
1995; and has been publisher
and editor of MPT Review from
August 1987 to the present,
and was publisher and editor
of the predecessor investment
advisory newsletter OTC
Insight, which he began in
1980 and wrote through July
1987.
</TABLE>
Item 29 Principal Underwriters
None
Item 30 Location of Accounts and Records
All accounts, records, and other documents required to be maintained under
Section 31(a) of the 1940 Act and the rules promulgated thereunder are
maintained at the office of the Navellier Variable Insurance Series Fund, Inc.
located at One East Liberty, Third Floor, Reno, Nevada 89501, and the offices
of the Fund's Custodian and Transfer Agent at 4922 Fairmont Avenue, Bethesda,
MD 20814.
Item 31 Management Services
Other than as set forth in Part A and Part B of this Registration Statement,
the Fund is not a party to any management-related service contract.
Item 32 Undertakings
Registrant hereby undertakes that whenever shareholders meeting the
requirements of Section 16(c) of the Investment Company Act of 1940 inform the
Board of Directors of their desire to communicate with Shareholders of the
Fund, the Directors will inform such Shareholders as to the approximate number
of Shareholders of record and the approximate costs of mailing or afford said
Shareholders access to a list of Shareholders.
Registrant undertakes to call a meeting of Shareholders for the purpose of
voting upon the question of removal of a Director(s) when requested in writing
to do so by the holders of at least 10% of Registrant's outstanding shares and
in connection with such meetings to comply with the provisions of Section
16(c) of the Investment Company Act of 1940 relating to Shareholder
communications.
Registrant undertakes to furnish each person to whom a prospectus is delivered
with a copy of the Registrant's latest annual report to Shareholders, upon
request and without charge.
Registrant hereby undertakes to file a post-effective amendment, including
financial statements which need not be audited, within 4-6 months from the
later of the commencement of operations of the Registrant or the effective
date of the Registrant's 1933 Act Registration Statement.
SIGNATURES
Pursuant to the Securities Act of 1933 and the Investment Company Act of 1940,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned thereto duly authorized, in the City of Reno, and
State of Nevada, on the 24th day of February, 1997.
NAVELLIER VARIABLE INSURANCE SERIES FUND, INC.
______________________________________________
Registrant
By: /S/ DENNIS A. HOLTORF
__________________________________________
Dennis A. Holtorf
Director
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons on the 24th day of
February, 1997 in the capacities indicated.
Signature and Title
Director
/S/ DENNIS A. HOLTORF
_________________________________
Dennis A. Holtorf
EXHIBIT LIST
Exhibit Number Description Sequentially Numbered Pages
EX-99.B1 Articles of Incorporation
ARTICLES OF INCORPORATION
OF
NAVELLIER VARIABLE INSURANCE SERIES FUND, INC.
ARTICLE 1
Preamble
The undersigned, Dennis A. Holtorf, whose address is 1 East Liberty, Third
Floor, Reno, Nevada 89501, does hereby declare that he is an incorporator
intending to form a corporation under and by virtue of the Maryland General
Corporation Law authorizing the formation of corporations.
ARTICLE II
Name
The name of the corporation is Navellier Variable Insurance Series Fund, Inc.
(the "Corporation").
ARTICLE III
Purposes and Powers
The purposes for which the Corporation is formed, and its objects, rights,
powers, and privileges are:
(1) To conduct and carry on the business of an investment company of the
open-end management type;
(2) To subscribe for, or otherwise acquire, purchase, pledge, sell,
assign, transfer, exchange, distribute or otherwise dispose of, and generally
deal in and hold all forms of securities and other investments including, but
not by way of limitation, stocks (preferred and common), notes, bonds,
debentures, scrip, warrants, participation certificates, futures, options of
all types on securities and futures, mortgages, commercial paper, choses in
action, evidences of indebtedness and other obligations of every kind and
description, precious metals and contracts and rights to acquire or dispose of
precious metals, and in connection therewith to hold part or all of its assets
in cash or cash equivalents or money market instruments;
(3) To issue and sell shares of its own capital stock in such amount and
on such terms and conditions, for such purposes and for such amount or kind of
consideration now or hereafter permitted by the Maryland General Corporation
Law and by these Articles, as its Board of Directors may determine;
(4) To redeem, purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue, retire or cancel (all without the vote or consent of the
stockholders of the Corporation) shares of its capital stock, in any manner
and to the extent now or hereafter permitted by the laws of Maryland;
(5) To borrow or raise money for any purpose of the Corporation and from
time to time draw, make, accept, endorse, execute and issue promissory notes,
drafts, bills of exchange, warrants, bonds, debentures and other negotiable
and nonnegotiable instruments and evidences of indebtedness, and to pledge,
hypothecate and borrow upon the credit of the assets of the Corporation;
(6) To take such action as shall be desirable and necessary to cause its
shares to be licensed or registered for sale under the laws of the United
States and in any state, county, city or other municipality of the United
Sates, the territories thereof, the District of Columbia or in any foreign
country and in any town, city or subdivision thereof;
(7) To make contracts and generally to do any and all acts and things
necessary or desirable in furtherance of any of the corporate purposes or
designed to protect, preserve and/or enhance the value of the corporate
assets, all to the extent permitted to business corporations authorized under
the laws of the State of Maryland, as now or may in the future be authorized
by said laws;
(8) To do all and everything necessary, suitable and proper for the
accomplishment of any of the purposes, objects or powers hereinbefore set
forth to the same extent and as fully as a natural person might or could do,
in any part of the world and either alone or in association or partnership
with other corporations, firms or individuals;
(9) To have all the rights, powers and privileges now or hereafter
conferred by the laws of the State of Maryland upon a corporation organized
under the Maryland General Corporation Law, or under any act amendatory
thereof, supplemental thereto or in substitution therefor; and
(10) To do any and all such further acts or things and to exercise any
and all such further powers or rights as may be necessary, incidental,
relative, conducive, appropriate or desirable for the accomplishment, carrying
out or attainment of all or any of the foregoing purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers, and it is
hereby expressly provided that the enumeration herein of any specific objects
and powers shall not be held to limit or restrict in any way the general
powers of the Corporation, nor shall such objects and powers, except when
otherwise expressly provided, be in any way limited or restricted by reference
to, or inference from, the terms of any other clause of these Articles, but
the objects and powers specified in each of the foregoing clauses of this
Article shall be regarded as independent objects and powers.
ARTICLE IV
Principal Office and Resident Agent
The post office address of the principal office of the Corporation in the
State of Maryland is c/o The Corporation Trust Incorporated, 32 South Street,
Baltimore, Maryland 21202-3242. The resident agent of the Corporation in the
State of Maryland is The Corporation Trust Incorporated, a corporation of the
State of Maryland, and the post office address of the resident agent is 32
South Street, Baltimore, Maryland 21202-3242.
ARTICLE V
Capital Stock
(1) The total number of shares of stock which the Corporation initially
shall have authority to issue is One Billion (1,000,000,000) shares of common
stock of the par value of one tenth of one cent ($0.001) each, to be
classified as "Common Shares", and of the aggregate par value of One Million
Dollars ($1,000,000). Unless otherwise prohibited by law, so long as the
Corporation is registered as an open-end investment company under the
Investment Company Act of 1940, as amended, the total number of shares which
the Corporation is authorized to issue may be increased or decreased by the
Board of Directors in accordance with the applicable provisions of the
Maryland General Corporation Law.
(2) The Corporation is authorized to issue its shares in series or
classes, and, except as prohibited by law, the different series or classes
shall be established and designated, and the variations in the relative
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption as between the different series or classes shall be fixed and
determined by the Board of Directors; provided that the Board of Directors
shall not classify or reclassify any of such shares into any class or series
of stock which is prior to any class or series of stock then outstanding with
respect to rights upon the liquidation, dissolution or winding up of the
affairs of, or upon any distribution of the general assets of, the
Corporation, except that there may be variations so fixed and determined
between different series or classes as to investment objective, purchase
price, right of redemption, special rights as to dividends and on liquidation
with respect to assets belonging to a particular series or class, voting
powers and conversion rights. All references to Common Shares in these
Articles shall be deemed to be shares of any or all series and classes as the
context may require.
The following is a description of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption of the series of Common
Shares of the Corporation designated as the Navellier Growth Portfolio (of
which there are initially authorized 500,000,000), and any additional class or
series of Common Shares of the Corporation (unless provided otherwise by the
Board of Directors with respect to any such additional class or series at the
time of establishing and designating such additional class or series).
(a) The number of authorized Common Shares and the number of Common
Shares of each series or of each class that may be issued shall be in such
number as may be determined by the Board of Directors. The Directors may
classify or reclassify any unissued Common Shares or any Common Shares
previously issued and reacquired of any series or class into one or more
series or one or more classes that may be established and designated from time
to time. The Directors may hold as treasury shares (of the same or some other
series or class), reissue for such consideration and on such terms as they may
determine, or cancel any Common Shares of any series or any class reacquired
by the Corporation at their discretion from time to time.
(b) All consideration received by the Corporation for the issue or sale
of Common Shares of a particular series or class, together with all assets in
which such consideration is invested or reinvested, all income, earnings,
profits and proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or payments derived from
any reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that series or class for all purposes, subject only to
the rights of creditors, and shall be so recorded upon the books of account of
the Corporation. In the event that there are any assets, income, earnings,
profits and proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular series or class, the Directors
shall allocate them among any one or more of the series or classes established
and designated from time to time in such manner and on such basis as they, in
their sole discretion, deem fair and equitable. Each such allocation by the
Corporation shall be conclusive and binding upon the stockholders of all
series or classes for all purposes. The Directors shall have full discretion,
to the extent not inconsistent with the Investment Company Act of 1940, as
amended, and the Maryland General Corporation Law to determine which items
shall be treated as income and which items shall be treated as capital; and
each such determination and allocation shall be conclusive and binding upon
the stockholders.
(c) The assets belonging to each particular class or series shall be
charged with the liabilities of the Corporation in respect of that series or
class and all expenses, costs, charges and reserves attributable to that
series or class, and any general liabilities, expenses, costs, charges or
reserves of the Corporation which are not readily identifiable as belonging to
any particular series or class shall be allocated and charged by the Directors
to and among any one or more of the series or classes established and
designated from time to time in such manner and on such basis as the Directors
in their sole discretion deem fair and equitable. Each allocation of
liabilities, expenses, costs, charges and reserves by the Directors shall be
conclusive and binding upon the stockholders of all series or classes for all
purposes.
(d) Dividends and distributions on Common Shares of a particular series
or class may be paid with such frequency as the Directors may determine, which
may be daily or otherwise, pursuant to a standing resolution or resolutions
adopted only once or with such frequency as the Board of Directors may
determine, to the holders of Common Shares of that series or class, from such
of the income and capital gains, accrued or realized, from the assets
belonging to that series or class, as the Directors may determine, after
providing for actual and accrued liabilities belonging to that series or
class. All dividends and distributions on Common Shares of a particular series
or class shall be distributed pro rata to the holders of that series or class
in proportion to the number of Common Shares of that series or class held by
such holders at the date and time of record established for the payment of
such dividends or distributions except that in connection with any dividend or
distribution program or procedure, the Board of Directors may determine that
no dividend or distribution shall be payable on shares as to which the
stockholder's purchase order and/or payment in proper form have not been
received by the time or times established by the Board of Directors under such
program or procedure.
The Corporation intends to have each separate series qualify as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended, or any successor comparable statute thereto, and regulations
promulgated thereunder. Inasmuch as the computation of net income and gains
for Federal income tax purposes may vary from the computation thereof on the
books of the Corporation, the Board of Directors shall have the power, in its
sole discretion, to distribute in any fiscal year as dividends, including
dividends designated in whole or in part as capital gains distributions,
amounts sufficient, in the opinion of the Board of Directors, to enable the
respective series to qualify as regulated investment companies and to avoid
liability of such series for Federal income tax in respect of that year.
However, nothing in the foregoing shall limit the authority of the Board of
Directors to make distributions greater than or less than the amount necessary
to qualify the series as regulated investment companies and to avoid liability
of such series for such tax.
Dividends and distributions may be made in cash, property or additional
shares of the same or another class or series, or a combination thereof, as
determined by the Board of Directors or pursuant to any program that the Board
of Directors may have in effect at the time for the election by each
stockholder of the mode of the making of such dividend or distribution to that
stockholder. Any such dividend or distribution paid in shares will be paid at
the net asset value thereof as defined in section (3) below.
(e) In the event of the liquidation or dissolution of the Corporation or
of a particular class or series, the stockholders of each class or series that
has been established and designated and is being liquidated shall be entitled
to receive, as a class or series, when and as declared by the Board of
Directors, the excess of the assets belonging to that class or series over the
liabilities belonging to that class or series. The holders of shares of any
particular class or series shall not be entitled thereby to any distribution
upon liquidation of any other class or series. The assets so distributable to
the stockholders of any particular class or series shall be distributed among
such stockholders in proportion to the number of shares of that class or
series held by them and recorded on the books of the Corporation. The
liquidation of any particular class or series in which there are shares then
outstanding may be authorized by vote of a majority of the Board of Directors
then in office, subject to the approval of a majority of the outstanding
securities of that class or series, as defined in the Investment Company Act
of 1940, as amended, and without the vote of the holders of any other class or
series. The liquidation or dissolution of a particular class or series may be
accomplished, in whole or in part, by the transfer of assets of such class or
series to another class or series or by the exchange of shares of such class
or series for the shares of another class or series.
(f) On each matter submitted to a vote of the stockholders, each holder
of a share shall be entitled to one vote for each share standing in his name
on the books of the Corporation, irrespective of the class or series thereof,
and all shares of all classes or series shall vote as a single class or series
("Single Class Voting"); provided, however, that (i) as to any matter with
respect to which a separate vote of any class or series is required by the
Investment Company Act of 1940, as amended, or by the Maryland General
Corporation Law, such requirement as to a separate vote by that class or
series shall apply in lieu of Single Class Voting as described above; (ii) in
the event that the separate vote requirements referred to in (i) above apply
with respect to one or more classes or series, then, subject to (iii) below,
the shares of each other class and series shall vote as a single class or
series; and (iii) as to any matter which does not affect the interest of a
particular class or series, only the holders of shares of the one or more
affected classes or series shall be entitled to vote.
(g) The establishment and designation of any series or class of Common
Shares shall be effective upon the adoption by a majority of the then
Directors of a resolution setting forth such establishment and designation and
the relative rights and preferences of such series or class, or as otherwise
provided in such instrument and the filing with the proper authority of the
State of Maryland of Articles Supplementary setting forth such establishment
and designation and relative rights and preferences.
(3) The Corporation shall, upon due presentation of Common Shares for
redemption, redeem such shares of stock at a redemption price prescribed by
the Board of Directors in accordance with applicable laws and regulations;
provided that in no event shall such price be less than the applicable net
asset value per share of such class or series as determined in accordance with
the provisions of this section (3), less such redemption charge or deferred
sales charge (if any) as may be determined by the Board of Directors.
Redemption proceeds shall be paid exclusively out of the assets of the class
or series whose shares are being redeemed, and shall be paid in cash or by
check (or similar form of payment) and not in kind.
Notwithstanding the foregoing, the Corporation may postpone payment of the
redemption price and may suspend the right of the holders of shares of any
class or series to require the Corporation to redeem shares of that class or
series during any period or at any time when and to the extent permissible
under the Investment Company Act of 1940, as amended, or any rule or order
thereunder.
The net asset value of a share of any class or series of Common Shares of the
Corporation shall be determined in accordance with applicable laws and
regulations or under the supervision of such persons and at such time or times
as shall from time to time be prescribed by the Board of Directors.
(4) The Corporation may issue, sell, redeem, repurchase and otherwise
deal in and with shares of its stock in fractional denominations and such
fractional denominations shall, for all purposes, be shares of capital stock
having proportionately to the respective fractions represented thereby all the
rights of whole shares including, without limitation, the right to vote, the
right to receive dividends and distributions, and the right to participate
upon liquidation of the Corporation; provided that the issue of shares in
fractional denominations shall be limited to such transactions and be made
upon such terms as may be fixed by or under authority of the By-Laws.
(5) The Corporation shall not be obligated to issue certificates
representing shares of any class or series unless it shall receive a written
request therefor from the record holder thereof in accordance with procedures
established in the By-Laws or by the Board of Directors.
ARTICLE VI
Preemptive Rights
No stockholder of the Corporation of any class or series, whether now or
hereafter authorized, shall have any preemptive or preferential or other right
of purchase of or subscription to any shares of any class or series of stock,
or securities convertible into, exchangeable for or evidencing the right to
purchase stock of any class or series whatsoever, whether or not the stock in
question be of the same class or series as may be held by such stockholders,
and whether now or hereafter authorized and whether issued for cash, property,
services or otherwise, other than such, if any, as the Board of Directors in
its discretion may from time to time fix.
ARTICLE VII
Number and Powers of Directors
(1) Prior to the issuance of stock, the number of Directors of the
Corporation shall be one (1) and after the issuance of stock shall be as
provided in the By-Laws, provided that the By-Laws may, subject to the
limitations of the Maryland General Corporation Law, fix a different number of
directors and may authorize a majority of the directors to increase or
decrease the number of directors set by these Articles or the By-Laws within
limits set by the By-Laws and to fill vacancies created by an increase in the
number of directors. Unless otherwise provided by the By-Laws of the
Corporation, Directors need not be stockholders thereof.
(2) The name of the Director who shall act until the first annual meeting
or until his successor is duly chosen and qualifies is:
Dennis A. Holtorf
(3) The Board of Directors of the Corporation is hereby empowered to
authorize the issuance from time to time of shares of capital stock, whether
now or hereafter authorized, for such consideration as the Board of Directors
may deem advisable, subject to such limitations as may be set forth in these
Articles or the By-Laws of the Corporation or in the Maryland General
Corporation Law.
(4) Each Director and each officer of the Corporation shall be
indemnified by the Corporation to the full extent permitted by the Maryland
General Corporation Law and the By-Laws of the Corporation, as such law and
By-Laws may now or in the future be in effect, subject only to such
limitations as may be required by the Investment Company Act of 1940, as
amended.
(5) The Board of Directors of the Corporation may make, alter or repeal
from time to time any of the By-Laws of the Corporation except any particular
By-Law which is specified as not subject to alteration or repeal by the Board
of Directors.
ARTICLE VIII
Stockholder Vote
(1) The presence in person or by proxy at a meeting of the stockholders
of the holders of one-third of the shares of stock of the Corporation entitled
to vote thereat shall constitute a quorum at any meeting of the stockholders.
If at any meeting of the stockholders there shall be less than a quorum
present, the stockholders present at such meeting may, without further notice,
adjourn the same from time to time until a quorum shall be present.
(2) Notwithstanding any provision of the General Laws of the State of
Maryland requiring for any purpose a proportion greater than a majority of the
votes of the shares of the Corporation, the affirmative vote of the holders of
a majority of the total number of shares of the Corporation, outstanding and
entitled to vote under such circumstances pursuant to these Articles of
Incorporation and the By-Laws of the Corporation shall be effective for such
purpose, except to the extent otherwise required by the 1940 Act and rules
thereunder; provided that, to the extent consistent with the General Laws of
the State of Maryland and other applicable law, the By-Laws may provide for
authorization to be by the vote of a proportion less than a majority of the
votes of the Corporation.
ARTICLE IX
Perpetual Existence
The duration of the Corporation shall be perpetual.
ARTICLE X
Amendment
The Corporation reserves the right to amend, alter, change or repeal any
provision of these Articles of Incorporation, and all rights conferred upon
stockholders herein are granted subject to this reservation.
IN WITNESS WHEREOF, the undersigned incorporator of NAVELLIER VARIABLE
INSURANCE SERIES FUND, INC. hereby executes the foregoing Articles of
Incorporation and acknowledges the same to be his act.
Dated this 24th day of February, 1997.
/s/ DENNIS A. HOLTORF
_____________________________________
Dennis A. Holtorf, Incorporator
