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Registration Nos. 333-63155
811-08995
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 3 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 3 [X]
(Check appropriate box or boxes.)
THE NAVELLIER MILLENNIUM FUNDS
---------------------------------
(Exact name of registrant as specified in charter)
One East Liberty, Third Floor
Reno, Nevada 89501
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (800) 887-8671
Arjen Kuyper
The Navellier Millennium Funds
One East Liberty, Third Floor
Reno, Nevada 89501
(Name and Address of Agent For Service)
Copy to:
Samuel Kornhauser, Esq.
Law Offices of Samuel Kornhauser
155 Jackson Street, Suite 1807
San Francisco, CA 94111
(415) 981-6281
It is proposed that this filing will become effective:
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X immediately upon filing pursuant to paragraph (b)
-----
on (date) pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)(1)
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on (date) pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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on (date) pursuant to paragraph (a)(2) of rule 485
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If appropriate, check the following box:
___ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered:
Investment Company Shares
<TABLE>
<CAPTION>
CROSS REFERENCE SHEET
(required by Rule 495)
Item No. Location
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<S> <C> <C>
PART A
Item 1. Front and Back Cover Pages............. Front and Back Cover Pages
Item 2. Risk/Return Summary: Investments,
Risks and Performance.................. The Principal Risks; How the Portfolio
Has Performed
Item 3. Risk/Return Summary: Fee Table......... Fees and Expenses of the Portfolio
Item 4. Investment Objectives, Principal
Investment Strategies, and Related
Risks.................................. Our Principal Strategy
Item 5. Management's Discussion of Fund
Performance............................ Not Applicable
Item 6. Management, Organization, and
Capital Structure...................... Who is Responsible for the Portfolios
Item 7. Shareholder Information................ Account Policies; How to Buy, Sell and
Exchange Shares; Understanding Taxes;
Understanding Earnings
Item 8. Distribution Arrangements.............. How to Buy, Sell and Exchange Shares
Item 9. Financial Highlights Information........ Financial Highlights
PART B
Item 10. Cover Page and Table of Contents....... Cover Page and Table of Contents
Item 11. Fund History........................... General Information and History
Item 12. Description of the Fund and Its
Investments and Risks.................. Investment Objectives and Policies
Item 13. Management of the Fund................. Trustees and Officers of the Fund
Item 14. Control Persons and Principal
Holders of Securities.................. Control Persons and Principal Holders
of Securities
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Item 15. Investment Advisory and Other
Services............................... The Investment Advisor, Distributor,
Custodian and Transfer Agent
Item 16. Brokerage Allocations and Other
Practices.............................. Brokerage Allocation and Other Practices
Item 17. Capital Stock and Other
Securities............................. Capital Stock and Other Securities
Item 18. Purchase, Redemption and
Pricing of Shares...................... Purchase, Redemption, and Pricing of
Shares
Item 19. Taxation of the Fund................... Taxes
Item 20. Underwriters........................... Underwriters
Item 21. Calculation of Performance Data........ Calculation of Performance Data
Item 22. Financial Statements................... Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.
<PAGE>
PART A
[LOGO]
THE NAVELLIER
MILLENNIUM FUNDS
NAVELLIER TOP 20 PORTFOLIO
INVESTING FOR
LONG-TERM CAPITAL GROWTH
Prospectus dated March 3, 2000
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR ANY
OTHER MUTUAL FUND PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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(THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY)
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<S> <C>
INTRODUCING OUR PORTFOLIO...................................1
NAVELLIER TOP 20 PORTFOLIO..................................2
FINANCIAL HIGHLIGHTS........................................7
WHO IS RESPONSIBLE FOR THE PORTFOLIO........................8
Investment advisor......................................8
Distributor.............................................8
ACCOUNT POLICIES............................................8
UNDERSTANDING EARNINGS......................................8
UNDERSTANDING TAXES.........................................9
HOW TO BUY, SELL, AND EXCHANGE SHARES......................10
Buying shares..........................................14
Selling or exchanging shares...........................15
Buying or selling through selected broker-dealers......16
NEED TO KNOW MORE? (BACK COVER).............................
</TABLE>
More detailed information on subjects covered in this prospectus are
contained within the Statement of Additional Information (SAI).
Investors seeking a more in-depth explanation of the Navellier Top 20
Portfolio should request the SAI to review it before purchasing shares
of the Portfolio.
<PAGE>
INTRODUCING OUR PORTFOLIO
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WHO SHOULD INVEST IN OUR PORTFOLIO?
The Navellier Top 20 Portfolio, (formerly, the American Tiger Top 20 Portfolio)
of The Navellier Millennium Funds (formerly, The American Tiger Funds) uses an
aggressive investment style suitable for investors willing to accept more risk
and tolerate more price fluctuations while seeking higher than average returns.
This Portfolio is for investors who can keep their money invested for longer
periods, preferably at least five years, without needing to rely on this money
for other purposes. The Navellier Top 20 Portfolio is not suitable for investors
seeking current income.
INVESTMENT GOAL FOR NAVELLIER TOP 20 PORTFOLIO
The investment goal of the Navellier Top 20 Portfolio is to achieve
long-term capital growth -- in other words, to increase the value of your
investment over time.
KEY DEFINITIONS
"We", "Us", "Our" and "Fund" -- means The Navellier Millennium Funds.
"You" and "Your" -- mean the prospective investor.
"Portfolio" -- refers to the Navellier Top 20 Portfolio.
"Market capitalization" -- means the number of shares available for trading
multiplied by the price per share.
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YEAR 2000 COMPLIANCE.
MOST COMPUTER SYSTEMS TODAY RECOGNIZE ONLY TWO DIGIT DATES (E.G. 99 INSTEAD OF
1999). THESE SAME SYSTEMS WITHOUT THE PROPER CHANGES WILL RECOGNIZE 00 AS THE
YEAR 1900. WE HAVE A DETAILED PLAN TO CORRECT POTENTIAL PROBLEMS ASSOCIATED WITH
THIS SITUATION. WE ALSO HAVE A CONTINGENCY PLAN. THE OBJECTIVE OF THE
CONTINGENCY PLAN IS TO PROVIDE UNINTERRUPTED BUSINESS SERVICES FOR NAVELLIER'S
ADVISORY CLIENTS, INCLUDING THE FUND, DURING PERIODS WHERE THE POTENTIAL FOR
UNPREDICTABLE BUSINESS INTERRUPTIONS IS HIGH. ALTHOUGH WE CANNOT GUARANTEE THAT
WE WILL SUCCESSFULLY COMPLETE OUR PLANS, WE ARE CONFIDENT THAT OUR SYSTEMS WILL
BE ADAPTED IN TIME FOR THE YEAR 2000. ALTHOUGH WE HAVE ASSURANCES FROM OUR
VENDORS THAT THEY WILL ALSO ADAPT THEIR SYSTEMS IN TIME, WE CAN PROVIDE NO
GUARANTEES. WE ALSO HAVE NO CONTROL OVER THE SYSTEMS OF THE COMPANIES IN WHICH
WE INVEST, PARTICULARLY FOREIGN COMPANIES AND FOREIGN MARKETS WHICH MAY NOT BE
AS PREPARED AS U.S. COMPANIES AND MARKETS. YEAR 2000 PROBLEMS AT ANY COMPANY OR
MARKET IN WHICH WE INVEST MAY HAVE AN ADVERSE IMPACT ON THE VALUE OF THE
PORTFOLIO.
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LIMITED PROTECTION
THE PORTFOLIO WILL NORMALLY HOLD LESS THAN 35% OF ITS TOTAL ASSETS IN CASH OR
CASH EQUIVALENTS (SUCH AS MONEY MARKET SECURITIES). THE ASSETS WILL MOST
LIKELY BE DEPOSITED IN RUSHMORE TRUST & SAVINGS FSB INTEREST BEARING
ACCOUNTS, MONEY MARKET ACCOUNTS, OR MONEY MARKET MUTUAL FUNDS WITH RUSHMORE
TRUST & SAVINGS, FSB. AN INVESTMENT IN THE PORTFOLIO IS NOT A BANK DEPOSIT.
PLEASE BE AWARE THAT MONEY MARKET INVESTMENTS HAVE NO FDIC PROTECTION AND
THE RUSHMORE INTEREST BEARING ACCOUNT IS PROTECTED ONLY UP TO $100,000.
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CUSTOMER ASSISTANCE PHONE NUMBER: 1-800-622-1386
SHAREHOLDER AND ACCOUNT INQUIRIES: 1-800-622-1386
NAVELLIER TOP 20 PORTFOLIO
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THIS PORTFOLIO SEEKS LONG-TERM CAPITAL GROWTH BY INVESTING MAINLY IN STOCKS
OF COMPANIES WHICH HAVE THE POTENTIAL TO RISE IN PRICE.
OUR PRINCIPAL STRATEGY
The Portfolio will invest in equity securities of companies selected for
their growth or value potential. At times, the Portfolio may invest up to
100% of its total assets in such securities. The Portfolio may invest in
the securities of a broad range of companies without restriction on their
market capitalization. The Portfolio may invest in, among other things:
- common stock
- preferred stock
- convertible preferred stock
- convertible debt
We attempt to uncover stocks with strong return potential and acceptable
risk characteristics. To do this, we use our proprietary computer model to
calculate and analyze a "reward/risk ratio." The reward/risk ratio is
designed to identify stocks with above market average returns and risk
levels which are reasonable for higher return rates.
Our research team then applies two or more sets of criteria to identify the
most attractive stocks. Examples of these criteria include:
- earnings growth
- expanding profit margins
- market dominance and/or factors that create potential for market
dominance
- sales growth
- other factors that indicate a company's potential for growth or increased
value
We select from the twenty stocks which have the highest ranking based on our
analysis, although we will not necessarily limit our investments to only those
stocks. We are not limited as to the type, operating history, or dividend paying
record of companies or industries in which the Portfolio may invest. The main
criteria for investment is that the securities provide opportunities for capital
growth and that they rank in our top 20 highest rated investment opportunities
when we make our analysis. Our analysis is made at least once a month. Currently
the Portfolio invests primarily in what we believe are undervalued common stocks
with long-term appreciation potential.
Typically, we purchase common stocks of issuers which have records of
profitability and strong earnings momentum. These issuers may be lesser known
2
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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.
However, we may also purchase common stocks of well known, highly researched
large companies if we believe such common stocks offer opportunity for long-term
capital appreciation.
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EVERY QUARTER, WE EVALUATE OUR TESTS AND RE-WEIGHT THEIR INFLUENCE ON THE
COMPUTER MODELS AS NECESSARY. THIS ALLOWS US TO CONTINUOUSLY MONITOR WHICH
FACTORS APPEAR TO BE CURRENTLY IN FAVOR IN THE FINANCIAL MARKETS.
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WHAT WE INVEST IN
Under normal conditions, the Portfolio invests at least 65% of its total
assets in companies without regard to market capitalization. The remaining
35% may be invested in other types of securities, such as:
- bonds, cash, or cash equivalents, for temporary defensive purposes, if we
believe it will help protect the Portfolio from potential losses, or to
meet shareholder redemptions; and,
- up to 25% of its total assets in foreign securities traded on the United
States market.
THE PRINCIPAL RISKS
As with any mutual fund, there are risks of investing. We cannot guarantee
we will meet our investment goals. Furthermore, it is possible that you may
lose some or all of your money.
MARKET RISK. Investment in common stocks is subject to the risks of
changing economic, stock market, industry, and company conditions which
could cause the Portfolio's stocks to decrease in value. Because we invest
aggressively, the Portfolio could experience more price volatility than
less aggressive funds.
LIQUIDITY RISK. Smaller capitalization stocks trade fewer shares than
larger capitalization stocks. This may make shares more difficult to sell
if there are not enough buyers. Although we do not anticipate liquidity
problems, the potential risk exists. You should not invest in this
Portfolio unless you are willing to accept this risk.
NON-DIVERSIFIED STATUS RISK. The Portfolio is non-diversified. This means
that the Portfolio may invest up to 10% of its assets in securities of a
single issuer and up to 25% of its assets in securities of companies in a
single industry. The Portfolio is subject to a greater risk of loss because
of its non-diversified status. There is also a greater potential for
volatility. The Portfolio's investment returns are more likely to be
impacted by changes in the market value and returns of any one portfolio
holding.
FOREIGN SECURITIES RISKS
Political Risk: the risk that a change in foreign government will occur and
that the assets of a company in which the Portfolio has invested will be
affected.
Currency Risk: the risk that a foreign currency will decline in value. The
Portfolio may trade in currencies other than the U.S. dollar. An increase
in the value of the U.S. dollar relative to a foreign currency will
adversely affect the value of the Portfolio.
Limited Information Risk: the risk that foreign companies may not be
subject to accounting standards or governmental supervision comparable to
U.S. companies and that less public information about their operations
3
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may exist.
Emerging Market Country Risk: the risks associated with investment in
foreign securities are heightened in connection with investments in the
securities of issuers in emerging markets, as these markets are generally
more volatile than the markets of developed countries.
Settlement and Clearance Risk: the risks associated with the clearance and
settlement procedures in non-U.S. markets, which may be unable to keep pace
with the volume of securities transactions and may cause delays.
Liquidity Risk: foreign markets may be less liquid and more volatile than
U.S. markets and offer less protection to investors; over-the-counter
securities may also be less liquid than exchange-traded securities.
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PORTFOLIO TURNOVER.
THE MORE OFTEN STOCKS ARE TRADED, THE MORE A PORTFOLIO WILL BE CHARGED BROKERAGE
COMMISSIONS, DEALER MARK-UPS, AND OTHER TRANSACTION COSTS THAT LOWER
PERFORMANCE. IN ADDITION, SALES OF STOCKS MAY GENERATE CAPITAL GAINS TAXES. WE
DO NOT EXPECT THIS PORTFOLIO TO HAVE A TURNOVER RATE OF MORE THAN 300% EACH
YEAR, AND IT MAY BE LOWER. WE WILL GO HIGHER IF IT WILL IMPROVE A PORTFOLIO'S
PERFORMANCE.
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HOW THE PORTFOLIO HAS PERFORMED
The chart below gives some indication of the risks of investing in the
Navellier Top 20 Portfolio. Of course, past performance is not necessarily
an indication of future performance.
The information provided is for the initial share class (Class A shares)
and does not reflect sales charges, which reduce return.
NAVELLIER TOP 20 PORTFOLIO
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
YEAR BY YEAR TOTAL RETURNS
<S> <C>
Russel 2000 Index Navellier Top Twenty
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21.25% 75.91%
</TABLE>
The Portfolio's Shares are sold subject to a Contingent Deferred Sales
Charge ("CDSC"). This CDSC is not reflected in the Bar Chart's performance
figures. If the CDSC were reflected, the returns (and the highest and lowest
quarterly return figures) would be lower than those figures shown on the Bar
Chart depending on whether an investor redeemed and how much the CDSC charge
was. For example, a 4.95% load would have resulted in a 67.2% total return
for 1999.
HIGHEST AND LOWEST QUARTERLY RETURNS. This chart shows the range of returns
experienced by the Portfolio for 1999, its first full calendar year.
Highest Quarterly Return Lowest Quarterly Return
4th quarter 1999 - up 33.31% 3rd quarter 1999 - down 2.36%
AVERAGE ANNUAL RETURNS. This chart compares the Portfolio's average annual
returns to the Russell 2000 Index for the same time period. This
information may help provide an indication of the Portfolio's risks and
potential rewards. All figures assume reinvestment of dividends and
distributions. The Portfolio's past performance is not a guarantee of how
it will perform in the future. The sale of Class B shares and Class C
shares will begin as of the date of this Prospectus. There is, therefore,
no performance history for the Class B shares or the Class C shares. The
average annual return information shown below is for the initial class of
shares of the Portfolio (Class A shares).
<TABLE>
<CAPTION>
ONE YEAR SINCE INCEPTION (1)
<S> <C> <C>
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Navellier Top 20 Portfolio.............. 75.91% 80.75%
Russell 2000 Index (2).................. 21.25% 31.61%
</TABLE>
4
<PAGE>
(1) The effective date of the Navellier Top 20 Portfolio was September 30,
1998. However Performance was measured against the Russell 2000 for the
calendar year 1999, the first full year which the Porfolio was in
existence.
(2) The Russell 2000 Index is an unmanaged index consisting of the stocks of
2000 U.S.-based companies. The Index does not include fees or expenses and
is not available for direct investment.
FEES AND EXPENSES OF THE PORTFOLIO
This section will help you understand the fees and operating expenses of
this Portfolio and how they may affect you. You pay the fees shown below
directly to us when you buy or sell shares. Operating expenses are paid
each year by the Portfolio.
FEES. This table describes the fees you may pay if you buy and hold shares
of this Portfolio. Each class of shares has a different set of transaction
fees, which will vary based on the length of time you hold shares in the
Portfolio and the amount of your investment. You will find details about
fee discounts and waivers under "How to Buy, Sell and Exchange Shares" in
this Prospectus.
<TABLE>
<CAPTION>
Class A Class B Class C
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<S> <C> <C> <C>
Maximum Sales Charge (Load)
Imposed on Purchases (as % of
offering price) 4.95% None None
Maximum Deferred Sales Charge
(Load) (as % of redemption proceeds) 1.00%(2) 5.00% 1.00%
Maximum Deferred Sales Charge
(Load) (as a % of net amount invested) None(2) 5.26% None
Maximum Sales Charge (Load)
Imposed on Reinvested
Dividends/Distributions None None None
Redemption Fee (as % of amount
redeemed, if applicable) None None None
Exchange Fee (1) 0-$5 0-$5 0-$5
</TABLE>
(1) Shares of each Portfolio of the Fund may be exchanged for shares of each
other Portfolio at net asset value without charge (up to five (5) exchanges
per account). There is a charge of $5 per exchange thereafter.
(2) There is a 1% CDSC on purchases between $1,000,000 and $2,499,999; a 0.50%
CDSC on purchases between $2,500,000 and $4,999,989; 0.25% CDSC on
purchases over $5,000,000 if you redeem within 18 months of your purchase.
OPERATING EXPENSES PAID EACH YEAR BY THE PORTFOLIO. This table describes
the operating expenses you may pay if you buy and hold shares of this
Portfolio. Expenses are deducted from the Portfolio's income before
dividends are paid. Some expenses are shared by all the Portfolios and are
allocated on a pro rata basis.
5
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<TABLE>
<CAPTION>
(as a % of average daily net assets)
Class A Class B Class C
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<S> <C> <C> <C> <C>
Management Fee........................................... 1.00% 1.00% 1.00%
Distribution (and/or service)(12b-1) Fees................ 0.25% 1.00%(2) 1.00%(2)
Other Expenses........................................... 1.09% 0.25% 0.25%
Administration Fees.................................0.25%
Other Operating Expenses............................0.84% ----- ----- -----
Total Annual Fund Operating Expenses(1).................. 2.34% 2.25% 2.25%
Expense Reimbursment (1)................................. 0.84%
Net Annual Portfolio Operating Expenses.................. 1.50%
</TABLE>
(1) Reflects Investment Advisor's contractual waiver of reimbursement of a
portion of the Portfolio's expenses paid by Investment Advisor.
(2) The 1% 12b-1 fee is allocated 0.75% to distribution services and 0.25% to
Shareholder services.
FEE EXAMPLE. This example is intended to help you compare the cost of
investing in the various classes of shares of the Portfolio with the cost
of investing in other mutual funds.
The example assumes that you invest $10,000 in the shares of the Portfolio
for the time periods indicated and then redeem all of your shares at the
end of those periods. The example also assumes that your investment has a
5% return each year and that the Portfolio's operating expenses remain the
same. This example uses net annual operating expenses for the first year
and total operating expenses (i.e., without the expense reimbursement) for
3 years, 5 years and 10 years. Assuming the Advisor continues to reimburse
the Portfolio, your actual expenses could be lower. Although your actual
costs may be higher or lower, based on these assumptions your costs are as
follows:
<TABLE>
<CAPTION>
Fees and expenses if you sold shares after:
Class A Class B Class C
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<S> <C> <C> <C>
1 Year $640 $728 $328
3 Years $946 $1103 $703
5 Years $1273 $1405 $1205
10 Years $2197 $2393 $2585
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $640 $228 $228
3 Years $946 $703 $703
5 Years $1273 $1205 $1205
10 Years $2197 $2393 $2585
</TABLE>
EXPENSES PAID TO THE DISTRIBUTOR.
THE PORTFOLIO IS ALLOWED TO PAY FEES TO THE DISTRIBUTOR AND OTHERS FOR
PROMOTING, SELLING, DISTRIBUTING AND OR SERVICING ITS SHARES. THESE ARE COMMONLY
CALLED "12B-1 FEES." BECAUSE THESE FEES ARE PAID OUT OF THE PORTFOLIO'S ASSETS
ON AN ONGOING BASIS, OVER TIME THESE FEES WILL INCREASE THE COST OF YOUR
INVESTMENT AND MAY COST YOU MORE THAN PAYING OTHER TYPES OF SALES CHARGES, SUCH
AS A SALES COMMISSION AT THE TIME OF PURCHASE ("FRONT END LOAD") OR SALE ("BACK
END LOAD"). PAYMENTS ARE MADE MONTHLY AND CAN BE UP TO 0.25% ANNUALLY OF THE
PORTFOLIO'S AVERAGE DAILY NET ASSETS FOR CLASS A SHARES AND UP TO 1.00% ANNUALLY
OF THE PORTFOLIO'S AVERAGE DAILY NET ASSETS FOR CLASS B AND CLASS C SHARES.
6
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NAVELLIER MILLENNIUM FUNDS
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FINANCIAL HIGHLIGHTS
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The financial highlights are intended to help you understand the Portfolio's
financial performance to date. Certain information reflects financial results
for a single Portfolio share. The total returns in the table represent the
rate you would have earned (or lost) on an investment in the Portfolio
(assuming reinvestment of all dividends and distributions). This financial
information has been audited by Tait, Weller and Baker, whose report, along
with the Portfolio's financial statements, are included in the SAI or annual
report, available upon request. The Board of Trustees voted to change the
name of the fund family from American Tiger Funds to Navellier Millennium
Funds and to change the name of the Portfolio from American Tiger Top 20
Portfolio to Navellier Top 20 Portfolio.
<TABLE>
<CAPTION>
TOP 20 PORTFOLIO
-----------------------------
FOR THE YEAR FOR THE PERIOD
ENDED ENDED
DECEMBER 31, DECEMBER 31,
1999 1998*
------------ --------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value -- Beginning of Period.................... $12.55 $10.00
------- ------
Income from Investment Operations:
Net Investment Loss..................................... (0.18) (0.01)
Net Realized and Unrealized Gains on Investments........ 9.68 2.56
------- ------
Total from Investment Operations...................... 9.50 2.55
------- ------
Distributions to Shareholders:
From Net Realized Gains................................. (1.09) --
------- ------
Net Increase in Net Asset Value........................... 8.41 2.55
------- ------
Net Asset Value -- End of Period.......................... $20.96 $12.55
======= ======
TOTAL INVESTMENT RETURN..................................... 75.91% 25.50%(A)
RATIOS TO AVERAGE NET ASSETS:
Expenses After Reimbursement (Note 2)..................... 1.50% 1.50%(B)
Expenses Before Reimbursement (Note 2).................... 2.34% 7.90%(B)
Net Investment Loss After Reimbursement (Note 2).......... (1.34)% (0.64)%(B)
Net Investment Loss Before Reimbursement (Note 2)......... (2.19)% (7.04)%(B)
SUPPLEMENTARY DATA:
Portfolio Turnover Rate................................... 235% 82%
Net Assets at End of Period (in thousands)................ $23,433 $7,202
Number of Shares Outstanding at End of Period (in
thousands).............................................. 1,118 574
</TABLE>
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(A) Total returns for periods of less than one year are not annualized.
(B) Annualized
* FROM COMMENCEMENT OF OPERATIONS SEPTEMBER 30, 1998
SEE NOTES TO FINANCIAL STATEMENTS.
7
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WHO IS RESPONSIBLE FOR THE PORTFOLIO
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INVESTMENT ADVISOR
Navellier Management, Inc. is the Investment Advisor to the Navellier Top
20 Portfolio. Navellier is located at One East Liberty, Third Floor, Reno,
Nevada, 89501.
LOUIS G. NAVELLIER has been the CEO and President of Navellier Management,
Inc. since 1994. He has an aggressive investment style suitable only for
investors willing to accept a little more risk and who can hold stocks
long-term. Mr. Navellier developed a computer model based on an existing
proven model, which identifies attractive stocks to meet the goals of the
Portfolio. He has been advising Portfolio Managers based on his investment
technique since 1987. Mr. Navellier has the final decision making authority
on stock purchases and sales and is ultimately responsible for all
decisions regarding the Portfolio.
DISTRIBUTOR
Navellier Securities Corp. is the Distributor for the Fund and is
responsible for the sale and distribution of shares to individual
shareholders, broker-dealers and investment advisers. Mr. Navellier is 100%
owner of the Distributor.
ACCOUNT POLICIES
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Here are some important details to know before investing in the Portfolio:
HOW WE PRICE SHARES.
Shares are priced at net asset value (NAV). The net asset value is
calculated by adding the values of all securities and other assets of the
Portfolio, subtracting liabilities, and dividing by the number of
outstanding shares.
WHEN SHARES ARE PRICED.
NAV calculations are made once each day, after the close of trading (4:00
p.m. Eastern Time). Shares are not priced on any national holidays or other
days when the New York Stock Exchange (NYSE) is closed.
IMPORTANT INFORMATION ABOUT FOREIGN STOCK TRADES.
Foreign stock trades may occur on days when the NYSE is closed. As a
result, share values may change when you are unable to buy or sell shares.
NOTIFICATION OF CHANGES.
You will be notified of any significant changes to the Portfolio in writing
at least 90 days before the changes take effect.
WHEN STATEMENTS ARE SENT.
We will send you an account statement at least quarterly.
UNDERSTANDING EARNINGS
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The Portfolio may pay you dividends or distributions. Here are some specifics
about these earnings:
THREE KINDS OF DIVIDENDS.
Dividends paid to you could be:
- a return of capital (a repayment of the money you invested);
- dividends or interest earned by shares of the stocks in the Portfolio;
- capital gains earned by selling shares of stocks at a profit.
WHEN DIVIDENDS AND DISTRIBUTIONS ARE PAID.
The Portfolio will distribute all of its net investment income and net
realized capital gains (if any) once a year, usually in December.
YOUR CHOICE: SHARES OR CASH.
You may choose to receive dividends or distributions in one of two ways:
8
<PAGE>
- We will automatically reinvest your dividends and distributions in
additional shares of the Portfolio, priced at the net asset value, unless
you ask to be paid in cash. We have the right to alter this policy as long
as we notify you at least 90 days before the record date for a dividend or
distribution; or
- To be paid in cash, you must notify us in writing. Cash payments will be
made by check, mailed to the same address as statements and confirmations,
unless you instruct us otherwise in writing.
WHO RECEIVES A DIVIDEND.
You are entitled to a dividend or distribution if you buy shares before the
close of business (4 p.m. Eastern Time) on the record date (the day the
dividend or distribution is declared). The Portfolio has the right to use
this money until the date of payment to you.
UNDERSTANDING TAXES
- -
- --------------------------------------------------------------------------------
Distributions received in cash or additional shares of the Portfolio may be
subject to federal income tax. The following are general rules concerning
the tax consequences of investing in the Navellier Top 20 Portfolio. Be
sure to consult your tax advisor about the specific tax implications of
your investments.
TAX CONSEQUENCES OF DIVIDENDS.
Your dividends are taxable in the following ways:
- A return of capital is not taxable to you.
- Dividends and interest earned by the Portfolio are taxable to you as
ordinary income.
- Capital gains distributions are taxable as long-term capital gains,
regardless of how long you have held the shares. When you sell or exchange
shares you will realize a capital gain or loss, depending on the difference
between what your shares cost you and what you receive for them. A capital
gain or loss will be long-term or short-term, depending on the length of
time you held the shares.
WHEN DIVIDENDS ARE TAXABLE.
Dividends are taxable in the year they are declared. You could, therefore,
receive a dividend payment in January that is taxable in the previous year
because it was declared in the previous year.
TAX EXCEPTIONS.
Dividends will not be taxable in the year they are paid if the Portfolio is
being held in a tax-advantaged account, such as an IRA.
GAINS AND LOSSES.
If you sell or exchange shares, you will usually receive either a gain or a
loss (based on the difference between what you paid for the shares and the
price at which you sold or exchanged them). These gains and losses may be
subject to federal income tax, are usually treated as capital gains, and
will be either long-term or short-term depending on how long you held the
shares.
REPORTING.
You must report all dividends and redemptions. You may be subject to a 31%
backup withholding, as required by law. (See the bottom of the back side of
our application.) This amount will be credited against your federal income
tax liabilities.
9
<PAGE>
STATE AND LOCAL TAXES.
Dividends may be subject to state and local taxes.
- -------------------------------------------------------------------------------
BE CAREFUL: TIMING CAN MAKE A DIFFERENCE.
CAPITAL GAINS AND DIVIDENDS REDUCE THE NET ASSET VALUE (NAV) OF EACH PORTFOLIO
SHARE. BEFORE BUYING SHARES, BE AWARE WHEN DIVIDENDS, INCLUDING CAPITAL GAINS
DISTRIBUTIONS, ARE EXPECTED TO BE PAID. IF THEY ARE PAID SHORTLY AFTER YOU
PURCHASE SHARES, THE VALUE OF YOUR SHARES WILL BE REDUCED AND THE DIVIDEND OR
DISTRIBUTION WILL BE TAXABLE TO YOU, EVEN THOUGH THE ACCOUNT WILL HAVE THE SAME
VALUE BEFORE AND AFTER THE DISTRIBUTION. -
- -------------------------------------------------------------------------------
HOW TO BUY, SELL, AND EXCHANGE SHARES
- -------------------------------------------------------------------------------
Here are some general rules to consider:
THREE WAYS TO PLACE ORDERS.
You may place an order with:
- one of our selected broker-dealers.
- the Distributor, Navellier Securities Corp.; or
- the Transfer Agent, Rushmore Trust & Savings, FSB.
CHOOSING A SHARE CLASS
Each Portfolio provides investors with the option of purchasing shares in
the following ways:
- - ------------------------------------------------------------------------------
CLASS A SHARES Offered at net asset value plus a maximum sales charge of
4.95% of the offering price and subject to a 0.25% Rule
12b-1 distribution fee. Reduced sales charges apply to
purchases of $50,000 or more. Class A shares purchased
at net asset value are subject to a contingent deferred
sales charge where the purchase is for $1 million or more
and the shares are sold within 18 months of when you
bought them.
Class A Shares
Public Offering Price. Including Sales Charge
<TABLE>
<CAPTION>
Front-End Amount Retained by
Sales Charge Dealers As a %
As a % of of Offering
Amount of Purchase Offering Price Price
- ------------------ -------------- ---------
<S> <C> <C> <C>
Less than $50,000 4.95% 4.50%
$50,000 or more but less than $100,000 4.50% 4.10%
$100,000 or more but less than $250,000 3.50% 3.15%
$250,000 or more but less than $500,000 3.00% 2.70%
$500,000 or more but less than $1 million 2.00% 1.80%
$1 million and over 0%
</TABLE>
WAYS TO REDUCE SALES CHARGES FOR CLASS A SHARES
There are three ways you can reduce your front-end sales charges.
1. Take advantage of purchases you've already made
Rights of accumulation let you combine the value of all the Class A shares
you already own with your current investment to calculate your sales
charge.
2. Take advantage of purchases you intend to make
10
<PAGE>
By signing a non-binding letter of intent, you can combine investments you
plan to make over a 13-month period to calculate the sales charge you'll
pay on each investment.
3. Buy as part of a group of investors:
You can combine your investments with others in a recognized group when
calculating your sales charge. The following is a general list of the
groups Navellier recognizes for this benefit:
* you, your spouse and your children under the age of 21
* a trustee or fiduciary for a single trust, estate or fiduciary account
(including qualifying pension, profit sharing and other employee
benefit trusts)
* any other organized group that has been in existence for at least six
months, and wasn't formed solely for the purpose of investing at a
discount.
WAYS TO ELIMINATE SALES CHARGES OR CONTINGENT DEFERRED SALES CHARGES
You may not have to pay front-end sales charges or a contingent deferred sales
charge (CDSC) if you are:
1. an active or retired trustee, director, officer, partner or employee
(including immediate family) of:
--Navellier or Rushmore or of any of its affiliated companies
--any Navellier or Rushmore affiliated investment company
--a dealer that has a sales agreement with the distributor
2. a trustee or custodian of any qualified retirement plan or IRA
established for the benefit of anyone in the point above
3. a dealer, broker or registered investment adviser who has entered into
an agreement with the distributor providing for the use of shares of
the funds in particular investment products such as "wrap account" or
other similar managed accounts for the benefit of your clients.
CLASS B SHARES Offered at net asset value without an initial sales charge,
but subject to an annual 1.00% Rule 12b-1 distribution fee
and a contingent deferred sales charge that declines from 5%
to zero on certain redemptions made within seven years of
purchase. Class B shares automatically convert into Class A
shares (which have lower ongoing expenses) eight years after
purchase.
Class B Shares
Public Offering Price
Net asset value per share without any sales charge at the time of purchase.
Class C Shares Offered at net asset value without an initial sales charge,
but subject to an annual 1.00% Rule 12b-1 distribution fee
and a 1% contingent deferred sales charge on redemptions
made within one year of purchase. Class C shares do not
convert into another class.
Public Offering Price
Net asset value per share without any sales charge at the time of purchase.
CONTINGENT DEFERRED SALES CHARGE - ALL CLASSES
We deduct a CDSC from the proceeds when you sell shares as indicated below. A
CDSC is charged on the current market value of the shares, or on the price you
paid for them, whichever is less. You aren't charged a CDSC on shares you
acquired by reinvesting your dividends, or on amounts representing appreciation.
11
<PAGE>
When you ask us to sell shares, we will sell those that are exempt from the CDSC
first, and then sell the shares you have held the longest. This helps keep your
CDSC as low as possible.
Class A Shares
There is generally no CDSC on Class A shares, except as set forth on p.__ under
"How Dealers are Compensated", for purchases of $1 million or more, when you
sell them within 18 months of when you bought them.
<TABLE>
<CAPTION>
Your investment CDSC on Shares Being Sold
- --------------- --------------------------
<S> <C>
First $1,000,000 to $2,499,999 1.00%
$2,500,000 to $4,999,999 0.50%
$5,000,000 and over 0.25%
</TABLE>
Class B and Class C Shares
<TABLE>
<CAPTION>
Years After You Bought the Shares Class B Charge Class C Charge
- --------------------------------- -------------- --------------
<C> <C> <C>
1st year 5.0% 1.0%
2nd year 4.0% --
3rd year 4.0% --
4th year 3.0% --
5th year 2.0% --
6th year 1.0% --
7th year 0.0% --
</TABLE>
WHEN THE CDSC WILL BE WAIVED
We will waive the CDSC for Class B and Class C shares if:
* the shareholder dies or becomes disabled and the shares are redeemed within
one (1) year of the shareholder's death or disability
* you're selling your shares through our systematic withdrawal program
* you're selling shares of a retirement plan and you are over 70 1/2 years
old
* you're exchanging Class B or Class C shares for the same class of shares of
another Navellier fund
* you fall into any of the waiver categories listed above under "Ways to
Reduce Sales Charges For Class A Shares" or "Ways to Eliminate Sales
Charges or Contingent Deferred Sales Charges"
The rate of the contingent deferred sales charge is determined by the length of
the period of ownership. Investments are tracked on a monthly basis. The period
of ownership for this purpose begins the first day of the month in which the
order for the investment is received. For example, an investment made in
January, 2000 will be eligible for the second year's charge if redeemed on or
after January 1, 2001. In the event no specific order is requested when
redeeming shares subject to a contingent deferred sales charge, the redemption
will be made first from shares representing appreciation, then from reinvested
dividends and then from the earliest purchase of shares. The Distributor
receives any contingent deferred sales charge directly.
When placing orders, investors must specify whether the order is for Class A,
Class B or Class C shares. Each class of shares represents interests in the same
portfolio of investments of the Fund.
12
<PAGE>
The decision as to which class to choose depends on a number of factors,
including the amount and intended length of the investment. Investors that
qualify for reduced sales charges might consider Class A shares. Investors who
prefer not to pay an initial sales charge and who plan to hold their investment
for more than six years might consider Class B shares. Investors who prefer not
to pay an initial sales charge but who plan to redeem their shares within six
years might consider Class C shares. For more information about the three sales
arrangements, consult your financial representative. Be aware that financial
services firms may receive different compensation depending upon which class of
shares they sell.
Conversion Feature - Class B Shares
Class B shares of the Portfolio will automatically convert to Class A shares of
the same Portfolio eight years after issuance on the basis of the relative net
asset value per share. Shares purchased through the reinvestment of dividends
and other distributions paid with respect to Class B shares in a shareholder's
fund account will be converted to Class A shares on a pro-rata basis.
RULE 12b-1 PLAN
The Fund has adopted a plan under Rule 12b-1 that provides for fees payable as
an expense of each of the Class A, Class B and Class C shares that are used by
the transfer agent to pay for distribution and other services provided to
shareholders of those classes. Seventy-Five percent (75%) of the 12b-1 fee shall
be paid for distribution activities and Twenty-Five percent (25%) for
Shareholder services. Because 12b-1 fees are paid out of fund assets on an
ongoing basis, they will, over time, increase the cost of investment and may
cost more than other types of sales charges. Long-term shareholders may pay more
than the economic equivalent of the maximum initial sales charges permitted by
the National Association of Securities Dealers. Investors may also be charged a
transaction fee if they effect transactions in Fund shares through a broker or
agent.
PURCHASE MINIMUMS
You may buy the Navellier Millennium Funds for:
- an initial amount of at least $2,000 per Portfolio (at least $500 per
Portfolio for an IRA or other tax qualified retirement plan); and,
- additional investments of at least $100 per Portfolio.
MINIMUM ACCOUNT BALANCES
Accounts of less than $2,000 per Portfolio ($500 per Portfolio for IRAs)
are expensive to maintain. Therefore, if you sell an amount of shares that
brings your account balance below the minimum, we may ask you to add to the
account to raise it above the minimum. If, 30 days later, the balance is
still below the minimum, we have the right to sell the shares and close the
account without your consent. (We will not close accounts if the balance
falls because of market fluctuations.)
PRICING.
You receive the next NAV calculated after your properly completed order is
received.
DIVIDENDS.
You will be credited with dividends for shares on the day you purchase
them, but you will not be credited with dividends for shares on the day you
sell them.
WHEN YOU RECEIVE YOUR MONEY.
You may instruct us to deposit the proceeds of a sale into your Rushmore
money market account, or to mail the proceeds. Normally, we will mail your
check within seven days of the redemption. If you sell all your shares, you
13
<PAGE>
will receive an amount equal to the total value of the shares plus all
declared but unpaid dividends. If you buy shares by check and sell them
within the next 15 days, we may delay paying you until after the 15th day
from the purchase date or until the check clears, whichever occurs first.
You can avoid this delay if you wire money to buy shares.
RESTRICTIONS ON PHONE ORDERS.
You may only sell by phone if you have requested telephone redemption
privileges on your original application. Shares held in an IRA may not be
redeemed by phone. Furthermore, you must wait to sell shares by phone for
at least 30 days after notifying Rushmore Trust & Savings of a change of
address.
CHANGING THE TERMS.
We can change any of the methods of buying or selling after giving you 30
days' written notice.
EXCHANGING SHARES
You may instruct us to exchange shares in one Portfolio for shares in
another Portfolio (unless your state doesn't allow exchanges). We will do
this by selling the shares in one Portfolio and buying shares in another.
There are certain limitations:
- The amount must be at least $2,000 ($500 for IRAs) if you're exchanging
into a Portfolio for the first time; or $100 if you have already bought
shares in that Portfolio.
- You may make only one exchange within any 30-day period.
- You may make up to 10 exchanges per year; after the fifth one, there will
be a $5 fee per exchange.
- You will continue to be subject to the same CDSC to which your exchanged
shares were subject when they were exchanged.
BUYING SHARES
BY MAIL
FILL OUT AN APPLICATION. Complete an application naming the Portfolio or
Portfolios in which you are investing and how much money is to be invested
in each.
WRITE A CHECK. Make the check payable to "The Navellier Millennium Funds."
SEND THE CHECK AND APPLICATION. Mail the check and application to:
The Navellier Millennium Funds
c/o Rushmore Trust & Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
Once your check and properly completed application are received, your
shares will be bought at the next determined NAV. For example, if we
receive your check after 4 p.m. Eastern time, the purchase will be made
based on the shares' NAV of the next trading day. If additional information
is required, your application will be considered incomplete until we have
received it.
PLEASE NOTE: No foreign checks are accepted.
BY WIRE
CALL YOUR BANK. Tell your bank to send wiring instructions including:
- the Portfolio or Portfolios in which you are investing, and how much is to
be invested in each;
- your Navellier account number;
14
<PAGE>
- the order number (if available);
- your name.
GIVE THE BANK WIRING INSTRUCTIONS. Send the wire transfer to:
Rushmore Federal Savings Bank
Bethesda, MD
Routing number 0550 71084
For account of: The Navellier Millennium Funds
Account number: 029385770
FOLLOW UP WITH A PHONE CALL. You must follow up the wire with a phone call
to us at 1-800-622-1386 or 1-301-657-1510 and tell us the amount you wired
and the bank sending the wire.
PLEASE NOTE: You are responsible for any wiring charges from your bank. If
we purchase shares based on your wiring instructions and have to cancel the
purchase because your wire is not received, you may be liable for any loss
the Portfolio may incur.
BY AUTOMATIC PLAN
MAKE MONTHLY PURCHASES. You may make automatic monthly purchases of
Portfolio shares directly from your bank account. Simply complete the
automatic monthly withdrawal application authorizing your bank to transfer
money from your checking account to Rushmore Savings & Trust. This is a
free service, and you may discontinue it at any time.
SELLING OR EXCHANGING SHARES
BY MAIL
SEND THE FOLLOWING INFORMATION. Send a written request including the:
- name of the Portfolio;
- account name and number;
- exact names of each registered account owner;
- number or dollar amount of shares to be sold (or that all shares are to be
sold). If the shares are subject to a CDSC, a portion of the sale proceeds
will be deducted to pay the CDSC.
The mailing address is:
The Navellier Millennium Funds
c/o Rushmore Trust & Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
BY PHONE
MAKE A PHONE CALL. Call Rushmore Trust & Savings at 1-800-622-1386 by 4
p.m. Eastern Time to have your shares sold that day.
HAVE YOUR INFORMATION READY. Provide the proper personal identification
information requested of you. We reserve the right to refuse the order if
we cannot reasonably confirm the authenticity of the instructions.
BY AUTOMATIC PLAN
MAKE REGULAR WITHDRAWALS. If you have a total of $25,000 or more invested
in The Navellier Millennium Funds, you may instruct us to make monthly,
quarterly, or annual payments of any amount above $1,000 to anyone you
name. Shares will be sold on the last business day of each month. Contact
us to arrange this service.
15
<PAGE>
BUYING OR SELLING THROUGH SELECTED BROKER-DEALERS
You may buy or sell shares through selected broker-dealers. The shares will be
bought at the next determined NAV after receiving the order. If you think an
order should have been delivered to us before 4 p.m. Eastern time but it was
not, you must resolve the issue directly with your broker-dealer. The
broker-dealer is responsible for sending your order in promptly.
HOW DEALERS ARE COMPENSATED
Dealers are paid in two ways for selling shares of Navellier funds:
They Receive a Commission When You Buy Shares
The amount of commission depends on the amount you invest and the share class
you buy. Sales commissions are detailed in the chart below.
* Class A investments
(% of offering price)
<TABLE>
<CAPTION>
Commission Amount
Received by Dealers Out Paid by the
of Sales Charges You Pay Distributor
------------------------ -----------
<S> <C> <C>
Less than $50,000 4.50%
$50,000 or more but less than $100,000 4.10%
$100,000 or more but less than $250,000 3.15%
$250,000 or more but less than $500,000 2.70%
$500,000 or more but less than $1 million 1.80%
$1,000,000 to $2,499,999 --- 1.00%
$2,500,000 to $4,999,999 --- 0.50%
$5,000,000 and over --- 0.25%
</TABLE>
* Class B investments
Receive 4% of the sale price from the Distributor at the time of the sale
consisting of 3.75% from the initial sales charge and 0.25% as an advance
payment of the first year's 12b-1 fee allocable to shareholder services. In the
second year and each year thereafter that the shares are held, the dealer
receives an annual 12b-1 fee of 0.25% payable monthly commencing on the first
day of the 2nd month of the year.
* Class C investments
Receive 1% of the sale price from the Distributor.
They Are Paid a Fee by the Distributor for Servicing Your Account
They receive a service fee depending on the average net asset value of the class
of shares their clients hold in Navellier funds. These fees are paid from the
12b-1 fee deducted from each fund class. In addition to covering the cost of
commissions and service fees, the 12b-1 fee is used to pay for other expenses
such as sales literature, prospectus printing and distribution and compensation
to the distributor and its wholesalers. You'll find the 12b-1 fees listed
elsewhere in this prospectus.
NEED TO KNOW MORE?
- ------------------------------------------------------------------
THE NAVELLIER MILLENNIUM FUNDS
Additional information is available free of charge in the
Annual/Semi-Annual Report and the Statement of Additional Information
(SAI). In our Annual Report, you will find a discussion of the market
conditions and investment strategies that significantly affected the Fund's
performance during the past fiscal year. The SAI is incorporated by
reference (legally considered part of this document). Documents will be
sent within 3 business days of receipt of request.
The Navellier Millennium Funds
c/o Navellier Securities Corp.
One East Liberty, Third Floor
Reno, Nevada 89501
1-800-887-8670
Internet address: http://www.navellier.com
The Fund and its investment advisor and principal underwriter have adopted codes
of ethics which prohibit Fund personnel from investing in securities that may be
purchased or held by the Fund.
Information about the Fund (including the SAI and codes of ethics) can be
reviewed and copied at the Commission's Public Reference Room in Washington,
D.C. Information on the operation of the Public Reference Room may be obtained
by calling the Commission at 1-202-942-8090. Reports and other information about
the Fund including information about the codes of ethics are available on the
EDGAR Database on the Commission's internet site at http://www.sec.gov). Copies
of this information may be obtained, after paying a duplicating fee, by
electronic request at the following E-mail address: [email protected], or by
writing the Commission's Public Reference Section, Washington, D.C. 20549-0102.
SEC File Number - 811-08995
16
<PAGE>
PART B
THE NAVELLIER MILLENNIUM FUNDS
NAVELLIER TOP 20 PORTFOLIO
STATEMENT OF ADDITIONAL INFORMATION
DATED MARCH 3, 2000
This Statement of Additional Information, which is not a prospectus, should
be read in conjunction with the Prospectus of the Navellier Top 20 Portfolio of
The Navellier Millennium Funds (the "Fund"), dated March 3, 2000, a copy of
which Prospectus may be obtained, without charge, by contacting the Fund, at its
mailing address c/o Navellier Securities, Corp., One East Liberty, Third Floor,
Reno, Nevada 89501; Tel: 1-800-887-8670.
TABLE OF CONTENTS
GENERAL INFORMATION AND HISTORY. . . . . . . . . . . . . . . . . . . ..1
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . ..1
TRUSTEES AND OFFICERS OF THE FUND. . . . . . . . . . . . . . . . . . ..7
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES. . . . . . . . . ..9
THE INVESTMENT ADVISOR, DISTRIBUTOR,
CUSTODIAN AND TRANSFER AGENT . . . . . . . . . . . . . . . . . . . ..9
BROKERAGE ALLOCATION AND OTHER PRACTICES . . . . . . . . . . . . . . .13
CAPITAL STOCK AND OTHER SECURITIES . . . . . . . . . . . . . . . . . .15
PURCHASE, REDEMPTION, AND PRICING OF SHARES. . . . . . . . . . . . . .16
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
UNDERWRITERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
CALCULATION OF PERFORMANCE DATA. . . . . . . . . . . . . . . . . . . .23
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . .24
APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
GENERAL INFORMATION AND HISTORY
The Fund is a business trust company organized under the laws of the State
of Delaware on September 4, 1998.
INVESTMENT OBJECTIVES AND POLICIES
INVESTMENT OBJECTIVE AND POLICIES OF THE NAVELLIER TOP 20 PORTFOLIO
The investment objectives and policies of the Portfolio are described in the
Prospectus. The following general policies supplement the information contained
in the Prospectus.
OTHER INVESTMENTS
While under normal circumstances the Portfolio will invest at least 65% of
its total assets in equity securities, the Portfolio may, for temporary
defensive purposes or to maintain cash or cash equivalents to meet anticipated
redemptions, also invest in debt securities and money market funds if, in the
opinion of the Investment Advisor, such investment will further the cash needs
or temporary defensive needs of the Portfolio. In addition, when the Investment
Advisor feels that market or other conditions warrant it, for temporary
defensive purposes, the Portfolio may retain cash or invest all or any portion
1
<PAGE>
of its assets in cash equivalents, including money market mutual funds. Under
normal conditions, the Portfolio's holdings in such non-equity securities should
not exceed 35% of the total assets of the Portfolio. If the Portfolio's assets,
or a portion thereof, are retained in cash or money market funds or money market
mutual funds, such cash will, in all probability, be deposited in
interest-bearing or money market accounts or Rushmore's money market mutual
funds. Rushmore Trust & Savings, FSB is also the 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 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 Portfolio has invested drops below
investment grade, the 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 Navellier Top 20 Portfolio, the Investment Advisor will screen over 9,000
stocks and will take into account various factors and base its stock selection
on its own model portfolio theory concepts to select from the twenty stocks
which have the highest ranking based on the Investment Advisor's analysis. The
current Portfolio invests primarily in what the Investment Advisor believes are
undervalued common stocks believed to have long-term appreciation 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 or increased value. There are no
limitations on the Navellier Top 20 Portfolio as to the type, operating history,
or dividend paying record of companies or industries in which this Portfolio may
invest; the principal criteria for investment is that the securities provide
opportunities for capital growth and that they rank in the Investment Advisor's
Top 20 highest rated investment opportunities at the time the Investment Advisor
makes its analysis, which analysis shall be made at least monthly. The Portfolio
will invest up to 100% of its capital in equity securities selected for their
growth or value potential. The Investment Advisor 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
current 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. The Investment Advisor, when
investing for the Navellier Top 20 Portfolio, may also purchase common stocks of
well known, highly researched, large companies if the Investment Advisor
believes such common stocks offer opportunity for long-term capital
appreciation.
LACK OF OPERATING HISTORY AND EXPERIENCE
The Navellier Top 20 Portfolio went effective September 30, 1998. The
Investment Advisor was organized on May 28, 1993. Although the Investment
Advisor sub-contracts a substantial portion of its responsibilities for
administrative services of the Fund's operations to various agents, including
2
<PAGE>
the Transfer Agent and the Custodian, the Investment Advisor still has overall
responsibility for the administration of each of the Portfolios and oversees the
administrative services performed by others as well as servicing customer's
needs and, along with each Portfolio's Trustees, is responsible for the
selection of such agents and their oversight. The Investment Advisor also has
overall responsibility for the selection of securities for investment for the
the Navellier Top 20 Portfolio.
Louis Navellier, the owner of the Investment Advisor, is also the owner of
another investment advisory firm, Navellier & Associates Inc., which presently
manages over $4.5 billion in investor funds. Louis Navellier, the owner of the
Investment Advisor, is also the owner of another investment advisory firm,
Navellier Fund Management, Inc., and owns 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 Advisor
intends to employ and invest in while managing the Portfolios of the Fund.
Because many of the over-the-counter and other securities which the Investment
Advisor 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 Advisor 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 Advisor 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. and other Navellier controlled
investment entities are trading, the potential liquidity problem could be
exacerbated. In the event the number of shares available for purchase or sale in
a security or securities is limited and therefore the trade order cannot be
fully executed at the time it is placed, i.e., where the full trade orders of
Navellier & Associates Inc., Navellier Fund Management, Inc., and other
Navellier controlled investment entities and the Fund cannot be completed at the
time the order is made, Navellier & Associates, Inc., and the other Navellier
controlled investment entities and the Investment Advisor 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 Advisor 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 Advisor 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 he, she, or it is not willing to accept this
potentially adverse risk, and by investing, acknowledges that he, she or it is
aware of the risks.
An investment in shares of the Portfolio involves certain speculative
considerations. There can be no assurance that the Portfolio's objective will be
achieved or that the value of the investment will increase. The Portfolio
intends to comply with the diversification and other requirements applicable to
regulated investment companies under the Internal Revenue Code.
INVESTMENT POLICIES. The following general policies supplement the
information contained in the Prospectus. Also following are other types of
investments in which the Portfolio may invest.
3
<PAGE>
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 Associates, 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.
STOCK INDEX FUTURES. A stock index futures contract (an "Index Future") is
a contract to buy an integral number of units of the relevant index at a
specified future date at a price agreed upon when the contract is made. A unit
is the value at a given time of the relevant index.
LOANS OF PORTFOLIO SECURITIES
The Fund may lend its portfolio securities to broker-dealers. Securities
loans are made to broker-dealers pursuant to agreements requiring that loans be
continuously secured by collateral in cash or U.S. Government securities at
least equal at all times to the market value of the securities lent. The
borrower pays to the Fund an amount equal to any dividends or interest received
on the securities lent. When the collateral is cash, the Fund may invest the
cash collateral in interest-bearing, short-term securities. When the collateral
is U.S. Government securities, the Fund usually receives a fee from the
borrower. Although voting rights or rights to consent with respect to the loaned
securities passed to the borrower, the Fund retains the right to call the loans
4
<PAGE>
at any time on reasonable notice, and it will do so in order that securities may
be voted by the Fund if the holders of such securities are asked to vote upon or
consent to matters materially affecting the investment. The Fund may also call
such loans in order to sell the securities involved. The risks in lending
portfolio securities, as with other extensions of credit, include possible delay
in recovery of the securities or possible loss of rights in the collateral
should the borrower fail financially. However, such loans will be made only to
broker-dealers that are believed by the Investment Advisor to be of relatively
high credit standing.
INVESTING IN SECURITIES OF FOREIGN ISSUERS
Investments in foreign securities (those which are traded principally in
markets outside of the United States), 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. Furthermore, issuers of
foreign securities are subject to different, and often less comprehensive,
accounting, reporting and disclosure requirements than domestic issuers. The
laws of some foreign countries may limit the Portfolio's ability to invest in
securities of certain issuers located in those countries. The securities of some
foreign issuers and securities traded principally in foreign securities markets
are less liquid and at times more volatile than securities of comparable U.S.
issuers and securities traded principally in U.S. securities markets. Foreign
brokerage commissions and other fees are also generally higher than those
charged in the United States. There are also special tax considerations which
apply to securities of foreign issuers and securities traded principally in
foreign securities markets.
The risks of investing in foreign securities may be intensified in the case
of investments in emerging markets or countries with limited or developing
capital markets. Prices of securities of companies in emerging markets can be
significantly more volatile than prices of securities of companies in the more
developed nations of the world, reflecting the greater uncertainties of
investing in less developed markets and economies. In particular, countries with
emerging markets may have relatively unstable governments, present the risk of
nationalization of businesses, restrictions on foreign ownership, or
prohibitions of repatriation of assets, and may have less protection of property
rights than more developed countries. The economies of countries with emerging
markets may be predominantly based on only a few industries or dependent on
revenues from particular commodities or on international aid or development
assistance, may be highly vulnerable to changes in local or global trade
conditions, and may suffer from extreme and volatile debt burdens or inflation
rates. Local securities markets may trade a small number of securities and may
be unable to respond effectively to increases in trading volume, potentially
making prompt liquidation of substantial holdings difficult or impossible at
times. Consequently, securities of issuers located in countries with emerging
markets may have limited marketability and may be subject to more abrupt or
erratic price movements. Also, such local markets typically offer less
regulatory protections for investors.
While to some extent the risks to the Portfolio of investing in foreign
securities may be limited, since the Portfolio may not invest more than 25% of
its net asset value in such securities and the Portfolio may only invest in
foreign securities which are traded in the United States securities markets, the
risks nonetheless exist.
The Investment Advisor will use the same basic selection criteria for
investing in foreign securities as it uses in selecting domestic securities as
5
<PAGE>
described in the Prospectus.
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 Navellier Top 20 Portfolio and may not be changed except as
described above. The Portfolio may not:
1. Purchase any securities or other property on margin; PROVIDED, HOWEVER,
that the Navellier Top 20 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 Navellier Top 20 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 Navellier Top 20 Portfolio may
make loans of the portfolio securities of the Portfolio, provided that the
market value of the securities subject to any such loans does not exceed 33-1/3%
of the value of the total assets (taken at market value) of the Portfolio.
4. Make investments in real estate or commodities or commodity contracts,
including futures contracts, although the Navellier Top 20 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 Navellier Top 20 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 Navellier Top
20 Portfolio may (i) borrow money only from banks for the Portfolio 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 the Portfolio for investment purposes, provided that (a)
after each such borrowing, when added to any borrowing described in clause (i)
of this paragraph, there is an asset coverage of at least 300% as defined in the
Investment Company Act of 1940, and (b) is subject to an agreement by the lender
that any recourse is limited to the assets of the Portfolio. As an operating
policy, the Portfolio may not invest in portfolio securities while the amount of
6
<PAGE>
borrowing of the Portfolio exceeds 5% of the total assets of the Portfolio.
9. Pledge, mortgage, or hypothecate the assets of the Navellier Top 20
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 for the Navellier Top 20 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 the
Portfolio would then be invested in such securities nor will the Navellier Top
20 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 10% of the Navellier Top 20 Portfolio's assets in the
securities of any single company or 25% or more of such Portfolio's total assets
in a single industry.
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 Navellier Top 20 Portfolio has an expected annual
rate of portfolio turnover which 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 such Portfolio's shares and
by requirements which enable the Fund to receive certain favorable tax
treatment. The Navellier Top 20 Portfolio's actual turnover rate for 1999 was
235%. The Fund will attempt to limit the annual portfolio turnover rate of the
Navellier Top 20 Portfolio to 300% or less, however, this rate may be exceeded
if in the Investment Advisor's discretion securities are or should be sold or
purchased in order to attempt to increase the Portfolio's performance. In
Wisconsin an annual portfolio turnover rate of 300% or more is considered a
speculative activity and under Wisconsin statutes could involve relatively
greater risks or costs to the Fund.
TRUSTEES AND OFFICERS OF THE FUND
<TABLE>
<CAPTION>
POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS REGISTRANT AND ITS AFFILIATES DURING PAST FIVE YEARS
- - - ---------------- ----------------------------- ----------------------
<S> <C> <C>
Louis Navellier(1) Trustee and President of the Mr. Navellier is and has been
One East Liberty Navellier Millennium Funds. the CEO and President of Navellier
Third Floor Trustee and President of The & Associates Inc., an investment
Reno, NV 89501 Navellier Performance Funds. management company since 1988;
Age: 42 Mr. Navellier is also the CEO, CEO and President of Navellier
President, Secretary, and Treasurer Management, Inc., an investment
of Navellier Management, Inc., a management company since May 10,
Delaware corporation which is the 1993; CEO and President of Navellier
Investment Advisor to the Fund. International Management, Inc.,
7
<PAGE>
Mr. Navellier is also CEO, President, an investment management company,
Secretary, and Treasurer of Navellier since May 10, of Navellier Securities
Securities Corp., the principal Corp. since May 10, 1993; CEO and
underwriter of the Fund's shares. President of Navellier Fund
1993; CEO and President Management, Inc., an investment
management 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.
Barry Sander Trustee of the Navellier Currently retired as of December 1, 1998,
695 Mistletoe Rd., #2 Millennium Funds. He formerly he was the President and CEO of Ursa
Ashland, OR 97520 is also a Trustee of the Major Inc., a stencil manufacturing firm
Age: 51 Navellier Performance Funds and had been for the past nine years.
Joel Rossman Trustee of the Navellier Currently retired as of March 15, 1998.
6 Spanish Bay Court Millennium Funds. He Formerly he was President and CEO of
Petaluma, CA 94954 is also a Trustee of the Personal Stamp Exchange, Inc., a
Age: 50 Navellier Performance Funds manufacturer, designer and
distributor of rubber stamp
products. He had been President
and CEO of Personal Stamp Exchange
for the preceding 10 years.
Jacques Delacroix Trustee of the Navellier Professor of Business Administration,
University of Millennium Funds. He Leavy School of Business, Santa Clara
Santa Clara is also a Trustee of the University (1983-present)
Santa Clara, CA Navellier Performance Funds
Age: 57
Arjen Kuyper(1) Trustee and Treasurer Mr. Kuyper is and has been an operations
One East Liberty of the Navellier Millennium manager for Navellier & Associates, Inc.
Third Floor Funds. He is also Treasurer since 1992 and operations manager
Reno, NV 89501 of the Navellier Performance for Navellier Management, Inc.
Age: 43 Funds and for Navellier Securities Corp.,
since 1993.
</TABLE>
- -------------------------------
(1) This person is an interested person affiliated with the Investment Advisor.
OFFICERS
The officers of the Fund are affiliated with the Investment Advisor and
receive no salary or fee from the Fund. The Fund's disinterested Trustees are
each compensated by the Fund with an annual fee, payable quarterly (calculated
at an annualized rate), of $10,000. Each disinterested Trustee also receives
$500 per meeting. The Trustees' fees may be adjusted according to increased
responsibilities if the Fund's assets exceed two hundred million dollars. In
addition, each disinterested Trustee receives reimbursement for actual expenses
of attendance at Board of Trustees meetings.
8
<PAGE>
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)
Trustee, (b) officer, (c) affiliated person of the Fund (other than the
Investment Advisor), (d) affiliated person of an affiliate or principal
underwriter of the Fund, or (e) all Trustees and officers of the Fund as a
group.
The Board of Trustees 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
- ------------------------------------------------------------------------------
Name Capacity In Which Aggregate
Remuneration Received Remuneration
From
Registrant and
Fund Complex
for the fiscal
year ended
December 31,
1999
<S> <C> <C>
- ------------------------------------------------------------------------------
Louis G. Navellier Trustee, President, $ 0.00
Chief Executive Officer,
and Treasurer
- ------------------------------------------------------------------------------
Barry Sander Trustee $ 12,000.00
- ------------------------------------------------------------------------------
Joel Rossman Trustee $ 12,000.00
- ------------------------------------------------------------------------------
Jacques Delacroix Trustee $ 12,000.00
- ------------------------------------------------------------------------------
</TABLE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
On September 3, 1998, in order to fulfill the requirements of Section 14(a)
(1) of the Investment Company Act of 1940, one hundred percent (100%) of the
issued and outstanding shares of the only existing Portfolio of the Fund was
purchased by Louis Navellier under a subscription agreement dated September 3,
1998. Such subscription for acquisition was made for an aggregate of $100,000
allocated 100% for the Navellier Top 20 Portfolio (to purchase 10,000 shares).
Mr. Navellier is no longer a control peson.
THE INVESTMENT ADVISOR, DISTRIBUTOR,
CUSTODIAN AND TRANSFER AGENT
THE INVESTMENT ADVISOR
Navellier Management, Inc. acts as the Investment Advisor to the Navellier
Top 20 Portfolio of the Fund. The Investment Advisor is registered as an
investment adviser under the Investment Advisers Act of 1940. The Investment
Advisor is responsible for selecting the securities which will constitute the
pool of securities which will be selected for investment for the Portfolio.
Pursuant to a separate Administrative Services Agreement, the Investment Advisor
provides each Portfolio of the Fund with certain administrative services,
including accounting and bookkeeping services and supervising the Custodian's
9
<PAGE>
and Transfer Agent's activities and each Portfolio's compliance with its
reporting obligations. The Investment Advisor 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 Advisor also provides each
Portfolio of the Fund with a continuous investment program based on its
investment research and management with respect to all securities and
investments. The Investment Advisor will determine from time to time what
securities and other investments will be selected to be purchased, retained, or
sold by the various portfolios of the Fund.
The Investment Advisor is owned and controlled by its sole shareholder,
Louis G. Navellier (a 100% stockholder). Louis G. Navellier is an affiliated
person of the Fund and is also the sole owner of the Distributor, Navellier
Securities Corp. Louis Navellier is also the sole shareholder of Navellier &
Associates Inc. Navellier & Associates, Inc. is registered as an investment
adviser with the Securities and Exchange Commission. 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 Advisor see "Fees and Expenses of the Portfolio" in the Prospectus.
(a) THE INVESTMENT ADVISOR
The offices of the Investment Advisor (Navellier Management, Inc.) are
located at One East Liberty, Third Floor, Reno, Nevada 89501. The Investment
Advisor began operation in May 1993 and advises this Fund and The Navellier
Performance Funds.
(i) The following individuals own the enumerated shares of outstanding
stock of the Investment Advisor and, as a result, maintain control over the
Investment Advisor:
<TABLE>
<CAPTION>
Shares of Outstanding Stock Percentage of
Name of the Investment Advisor Outstanding Shares
- ---- --------------------------- ------------------
<S> <C> <C>
Louis G. Navellier 1,000 100%
</TABLE>
(ii) The following individuals are affiliated with the Fund, the
Investment Advisor, and the Distributor in the following capacities:
<TABLE>
<CAPTION>
Name Position
- ---- --------
<S> <C>
Louis G. Navellier Trustee and one of the Portfolio Managers
of the Fund; Director, CEO, President,
Secretary, and Treasurer of Navellier
Management, Inc.,; Director, President,
CEO, Secretary, and Treasurer of
Navellier Securities Corp.; Trustee and
one of the Portfolio Managers of The
Navellier Performance Funds.
Alan Alpers One of the Portfolio Managers of
The Navellier Performance Funds.
10
<PAGE>
Arjen Kuyper Trustee and Treasurer of the Fund; Treasurer
of The Navellier Performance Funds; Operations
Manager for Navellier Management, Inc.
</TABLE>
(iii)The management fees payable to the Investment Advisor under the
terms of the Investment Advisory Agreement (the "Advisory Agreement")
between the Investment Advisor and the Fund are payable monthly and are
based upon 1.00% of the average daily net assets of the Navellier Top 20
Portfolio. The Investment Advisor has the right, but not the obligation, to
waive any portion or all of its management fee, from time to time.
Navellier Management, Inc. was paid investment advisory fees for the
Navellier Top 20 Portfolio in the following amount for the period ended December
31, 1999:
Navellier Top 20 Portfolio
----------------------------------
1999 $147,790
-------
The investment Adviser has agreed to waive reimbursement of all or a
portion of the expenses advanced by it on behalf of the Navellier Top 20
Portfolio for the following years if total operating expenses exceed the
following amounts:
<TABLE>
<CAPTION>
Portfolio Expense Limit Year(s)
<S> <C> <C>
Navellier Top 20 Portfolio 1.5% 1999 & 2000
</TABLE>
During the period ended December 31, 1999, the Investment Advisor paid
operating expenses of $162,185 for the Navellier Top 20 Portfolio. The
Navellier Millennium Funds may seek future reimbursement of all unreimbursed
past expense incurred on behalf of the Fund. Under the operating expense
agreement, the Adviser requested, and the Navellier Top 20 Portfolio reimbursed
$36,947 of such expenses.
Expenses not expressly assumed by the Investment Advisor 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 applicable Portfolio, the major
categories of which relate to taxes, fees to Trustees, 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 Advisor 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 Advisor would not be
permitted to be indemnified under the Federal Securities laws.
(iv) Pursuant to an Administrative Services Agreement, the Investment
Advisor 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 Advisor to
contract out for all of its duties thereunder; however, in the event of
11
<PAGE>
such contracting, the Investment Advisor remains responsible for the
performance of its obligations under the Administrative Services Agreement.
The Investment Advisor 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 Advisor out of its fees or assets.
In exchange for its services under the Administrative Services Agreement,
the Fund reimburses the Investment Advisor for certain expenses incurred by the
Investment Advisor in connection therewith but does not reimburse Investment
Advisor (over the amount of 0.25% annual Administrative Services Fee) to
reimburse it for fees Investment Advisor pays to others for administrative
services. The agreement also allows Investment Advisor to pay to its delegate
part or all of such fees and reimbursable expense payments incurred by it or its
delegate.
The Investment Advisory Agreement permits the Investment Advisor to act as
investment adviser for any other person, firm, or corporation, and designates
the Investment Advisor as the owner of the name "Navellier" or any use or
derivation of the word Navellier. If the Investment Advisor 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 Advisor's option,
be withdrawn.
The Investment Advisor advanced the Fund's organizational expenses but
agreed not to seek reimbursement of those expenses. The Fund has agreed to
reimburse the Investment Advisor for other expenses (but not organizational
expenses) it advances, without interest, by the end of the applicable Fund year,
however the Investment Advisor can elect by the end of the applicable Fund
year 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 DISTRIBUTOR
The Fund's Distributor is Navellier Securities Corp., a Delaware
Corporation organized and incorporated on May 10, 1993. Navellier Securities
Corp. is registered as a broker-dealer with the Securities Exchange Commission
and National Association of Securities Dealers and the various states in which
this Fund's securities will be offered for sale by Distributor and will be
registered with such agencies and governments before any Fund shares are sold by
it. The Fund's shares will be continuously distributed by Navellier Securities
Corp. (the "Distributor") located at One East Liberty, Third Floor, Reno, Nevada
89501, pursuant to a Distribution Agreement, dated August 26, 1999. The
Distribution Agreement obligates the Distributor to pay certain expenses in
connection with the offering of the shares of the Fund. The Distributor is
responsible for any payments made to its registered representatives as well as
the cost (in excess of the 12b-1 fee) of printing and mailing Prospectuses to
potential investors and of any advertising incurred by it in connection with the
distribution of shares of the Fund.
DISTRIBUTION PLAN
THE DISTRIBUTION PLAN FOR THE NAVELLIER TOP 20 PORTFOLIO
The Navellier Top 20 Portfolio has adopted Plans pursuant to Rule 12b-1
under the 1940 Act (the "Plan"), whereby such Portfolio compensates Distributor
or others in the amount of 0.25% per annum of the average daily net assets of
such Portfolio for the Class A shares and in the amount of 1.00% per annum of
the average daily net assets for the Class B and Class C shares for expenses
incurred and services rendered for the promotion and distribution of the shares
of such Portfolio of the Fund, including, but not limited to, the printing of
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prospectuses, statements of additional information and reports used for sales
purposes, expenses (including personnel of Distributor) of preparation of sales
literature and related expenses, advertisements and other distribution-related
expenses, including a prorated portion of Distributor's overhead expenses
attributable to the distribution of such Portfolio's Fund shares. Such payments
are made monthly. The 12b-1 fee includes, in addition to promotional activities,
amounts that such Portfolio pays to Distributor or others as a service fee to
compensate such parties for personal services provided to shareholders of such
Portfolio and/or the maintenance of shareholder accounts. The Distributor can
keep all of said 12b-1 fees it receives to the extent it is not required to pay
others for such services. Such Rule 12b-1 fees are paid pursuant to the
distribution plan and distribution agreements entered into between such service
providers and Distributor or the Portfolio directly. The 12b-1 Plans for such
Portfolio also covers payments by the Distributor and Investment Advisor to the
extent such payments are deemed to be for the financing of any activity
primarily intended to result in the sale of shares issued by such Portfolio
within the context of Rule 12b-1. The payments under such 12b-1 Plans for such
Portfolio are included in the maximum operating expenses which may be borne by
such Portfolio. Payments under such 12b-1 Plans for such Portfolio may exceed
actual expenses incurred by the Distributor, Investment Advisor or others.
In addition to 12b-1 fees, investors may also be charged a transaction fee
if they effect transactions in fund shares through a broker or agent.
(c) 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.
The Fund 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 Fund out of its assets.
(d) LEGAL COUNSEL
The Law Offices of Samuel Kornhauser is legal counsel to the Fund, to the
Investment Advisor and to the Distributor.
BROKERAGE ALLOCATION AND OTHER PRACTICES
In effecting portfolio transactions for the Fund, the Investment Advisor
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 Advisor 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 Advisor 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,
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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 Advisor are considered to
be in addition to and not in lieu of services required to be performed by the
Investment Advisor under its contract with the Fund and may benefit both the
Fund and other clients of the Investment Advisor or customers of or affiliates
of the Investment Advisor. Conversely, brokerage and research services provided
by brokers to other clients of the Investment Advisor 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 Advisor 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.
The Board of Trustees of the Fund will periodically review the performance
of the Investment Advisor 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 Trustees 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
Trustees 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.
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 Advisor, the Custodian and the Transfer Agent; Trustees' 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 Advisor 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
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other insurance) are allocated to each Portfolio based upon their relative net
assets. The Investment Advisor 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 ADVISOR
The Investment Advisor presently receives an annual 1.00% fee for
investment management of the Navellier Top 20 Portfolio. The fee is payable
monthly, based upon the Portfolio's average daily net assets. The Investment
Advisor 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 Advisor 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 Advisor
may consider the record of such broker-dealers with respect to the sale of
shares of the Fund.
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 Investment
Company Act of 1940 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 Act provides that any matter required to be submitted by the
provisions of the Investment Company 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 Trustees from the separate voting requirements of the Rule.
Class A, Class B and Class C shares are available for purchase. These
classes, as described in the Prospectus, vary with respect to the type and
amount of sales charges associated with each class.
DESCRIPTION OF SHARES
The Fund is a Delaware business trust organized on September 4, 1998. The
Declaration of Trust permits the Trustees to issue an unlimited number of shares
of beneficial interest. The Board of Trustees has the power to designate one or
more classes ("Portfolios") of shares of beneficial interest and to classify or
reclassify any unissued shares with respect to such classes. Presently the Fund
is offering shares of one Portfolio, the Navellier Top 20 Portfolio which is
described herein.
The shares of each Portfolio, when issued, are fully paid and
non-assessable, are redeemable at the option of the holder, are fully
transferable, and have no conversion or preemptive rights. Shares are also
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redeemable at the option of each Portfolio of the Fund when a shareholder's
investment, as a result of redemptions in the Fund, falls below the minimum
investment required by the Fund (see "Redemption of Shares"). Each share of a
Portfolio is equal as to earnings, expenses, and assets of the Portfolio and, in
the event of liquidation of the Portfolio, is entitled to an equal portion of
all of the Portfolio's net assets. Shareholders of each Portfolio of the Fund
are entitled to one vote for each full share held and fractional votes for
fractional shares held, and will vote in the aggregate and not by Portfolio
except as otherwise required by law or when the Board of Trustees determines
that a matter to be voted upon affects only the interest of the shareholders of
a particular Portfolio. Voting rights are not cumulative, so that the holders of
more than 50% of the shares voting in any election of Trustees can, if they so
choose, elect all of the Trustees. While the Fund is not required, and does not
intend, to hold annual meetings of shareholders, such meetings may be called by
the Trustees at their discretion, or upon demand by the holders of 10% or more
of the outstanding shares of any Portfolio for the purpose of electing or
removing Trustees.
All shares (including reinvested dividends and capital gain distributions)
are issued or redeemed in full or fractional shares rounded to the second
decimal place. No share certificates will be issued. Instead, an account will be
established for each shareholder and all shares purchased will be held in
book-entry form by the Fund.
PURCHASE, REDEMPTION, AND PRICING OF SHARES
Shares of the Navellier Top 20 Portfolio are sold on a continuous basis
through the Distributor, the Transfer Agent and the Distributor's network of
broker-dealers.
PURCHASE BY MAIL
Investments in the Portfolio can be made directly to the Distributor or
through the transfer agent--Rushmore Trust & Savings, FSB--or through selected
securities dealers who have the responsibility to transmit orders promptly and
who may charge a processing fee.
TO INVEST BY MAIL: Fill out an application and make a check payable to "The
Navellier Millennium Funds." Mail the check along with the application to:
The Navellier Millennium Funds
c/o Rushmore Trust & Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
Purchases by check will be credited to an account as of the date the
Portfolio's net asset value is next determined after receipt of payment and a
properly completed account application. Foreign checks will not be accepted.
Purchase orders which do not specify the Portfolio in which an investment
is to be made will be returned. (See "Purchase and Pricing of Shares--General
Purchasing Information".) Net asset value per share is calculated once daily as
of 4 p.m. E.S.T. on each business day. (See "Purchase and Pricing of
Shares--Valuation of Shares".)
THE NAVELLIER TOP 20 PORTFOLIO
The shares of the Navellier Top 20 Portfolio are sold at their net asset
value per share next determined after an order in proper form (i.e., a
completely filled out application form) is received by the Transfer Agent.
If an order for shares of the Portfolio is received by the Transfer Agent
by 4:00 p.m. on any business day, such shares will be purchased at the net asset
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value determined as of 4:00 p.m. New York Time on that day. Otherwise, such
shares will be purchased at the net asset value determined as of 4:00 p.m New
York Time on the next business day. However, orders received by the Transfer
Agent from the Distributor or from dealers or brokers after the net asset value
is determined that day will receive such net asset value price if the orders
were received by the Distributor or broker or dealer from its customer prior to
such determination and were transmitted to and received by the Transfer Agent
prior to its close of business on that day (normally 4:00 p.m. New York Time).
Shares are entitled to receive any declared dividends on the day following the
date of purchase.
PURCHASES THROUGH SELECTED DEALERS
Shares purchased through Selected Dealers will be effected at the net asset
value next determined after the Selected Dealer receives the purchase order,
provided that the Selected Dealer transmits the order to the Transfer Agent and
the Transfer Agent accepts the order by 4:00 p.m. New York Time on the day of
determination. See "Valuation of Shares". If an investor's order is not
transmitted and accepted by 4:00 p.m. New York Time, the investor must settle
his or her entitlement to that day's net asset value with the Selected Dealer.
Investors may also purchase shares of the Portfolio by telephone through a
Selected Dealer by having the Selected Dealer telephone the Transfer Agent with
the purchase order. Investors may be charged a transaction fee if they effect
transactions in Fund shares through a broker or agent.
Certain selected Dealers may effect transactions in shares of the Portfolio
through the National Securities Clearing Corporation's Fund/SERV system.
Purchases of shares through Selected Dealers not utilizing the National
Securities Clearing Corporation's Fund/SERV system will be effected when
received in proper form by the Transfer Agent, as described above, in the same
manner and subject to the same terms and conditions as are applicable to shares
purchased directly through the Transfer Agent.
Shareholders who wish to transfer Fund shares from one broker-dealer to
another should contact the Fund at (800) 622-1386, or their broker dealer.
REDEMPTION OF SHARES. The Prospectus, under "Redemption of Shares"
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 Trustees
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
Investment Company 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.
REDEMPTIONS BY TELEPHONE
If you have indicated on your Account Application that you wish to
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establish telephone redemption privileges, you may redeem shares by calling the
Transfer Agent at 1-800-622-1386 by 4:00 p.m. New York Time on any day the New
York Stock Exchange is open for business.
If any account has more than one owner, the Transfer Agent may rely on the
instructions of any one owner. Each Portfolio of the Fund employs reasonable
procedures in an effort to confirm the authenticity of telephone instructions,
which may include giving some form of personal identification prior to acting on
the telephone instructions. If these procedures are not followed, the Fund and
the Transfer Agent may be responsible for any losses because of unauthorized or
fraudulent instructions. By requesting telephone redemption privileges, you
authorize the Transfer Agent to act upon any telephone instructions it believes
to be genuine, (1) to redeem shares from your account and (2) to mail or wire
transfer the redemption proceeds. You cannot redeem shares by telephone until 30
days after you have notified the Transfer Agent of any change of address.
Telephone redemption is not available for shares held in IRAs. Each
Portfolio may change, modify, or terminate its telephone redemption services at
any time upon 30 days' notice.
FURTHER REDEMPTION INFORMATION
Additional documentation (i.e., signature guarantee for redemptions in
excess of $1,000 or verification identification when redemption is by telephone)
regarding a redemption by any means may be required when deemed appropriate by
the Fund and / or the Transfer Agent, and the request for such redemption will
not be considered to have been received in proper form until such additional
documentation has been received. An investor should contact the Fund or the
Transfer Agent to inquire what, if any, additional documentation may be
required.
The Fund reserves the right to modify any of the methods of redemption upon
30 days' written notice to shareholders.
Under certain circumstances (i.e., when the applicable exchange is closed
or trading has been restricted, etc.), the right of redemption may be suspended
or the redemption may be satisfied by distribution of portfolio securities
rather than cash if a proper election pursuant to Rule 18f-1 of the Investment
Company Act has been made by the Fund. Information as to those matters is set
forth herein.
Investors may redeem their shares and instruct the Fund or Transfer Agent,
in writing or by telephone, to either deposit the redemption proceeds in the
money market mutual fund--Fund for Government Investors, Inc.--a regulated
investment company custodied by Rushmore Trust & Savings, FSB, pending further
instructions as to the investor's desire to subsequently reinvest in the Fund or
the investor may direct some other disposition of said redemption proceeds.
DETERMINATION OF NET ASSET VALUE. As described in the Prospectus, 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, Martin Luther King Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. The Board of
Trustees 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 Trustees 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
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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 Trustees, although the actual calculations may be made by persons acting
pursuant to the direction of the Board of Trustees.
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, and (c) 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.
DIVIDENDS AND DISTRIBUTIONS
All dividends and distributions with respect to the shares of any Portfolio
will be payable in shares at net asset value or, at the option of the
shareholder, in cash. Any shareholder who purchases shares of the Portfolio
prior to the close of business on the record date for a dividend or distribution
will be entitled to receive such dividend or distribution. Dividends and
distributions (whether received in shares or in cash) are treated either as
return of capital, ordinary income or long-term capital gain for federal income
tax purposes. Between the record date and the cash payment date, each Portfolio
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retains the use and benefits of such monies as would be paid as cash dividends.
Each Portfolio will distribute all of its net investment income and net
realized capital gains, if any, annually in December.
If a cash payment is requested with respect to the Portfolio, a check will
be mailed to the shareholder. Unless otherwise instructed, the Transfer Agent
will mail checks or confirmations to the shareholder's address of record.
The federal income tax laws impose a four percent (4%) nondeductible excise
tax on each regulated investment company with respect to the amount, if any, by
which such company does not meet distribution requirements specified in the
federal income tax laws. Each Portfolio intends to comply with the distribution
requirements and thus does not expect to incur the four percent (4%)
nondeductible excise tax, although the imposition of such excise tax may
possibly occur.
Shareholders will have their dividends and/or capital gain distributions
reinvested in additional shares of the applicable Portfolio(s) unless they elect
in writing to receive such distributions in cash. Shareholders whose shares are
held in the name of a broker or nominee should contact such broker or nominee to
determine whether they want dividends reinvested or distributed.
The automatic reinvestment of dividends and distributions will not relieve
participants of any income taxes that may be payable (or required to be
withheld) on dividends and distributions. (See "Taxes" following.)
In the case of foreign participants whose dividends are subject to U.S.
income tax withholding and in the case of any participants subject to 31%
federal backup withholding, the Transfer Agent will reinvest dividends after
deduction of the amount required to be withheld.
Experience may indicate that changes in the automatic reinvestment of
dividends are desirable. Accordingly, the Fund reserves the right to amend or
terminate this provision as applied to any dividend or distribution paid
subsequent to written notice of the change sent to shareholders at least 90 days
before the record date for such dividend or distribution.
Dividends paid out of net investment income and net short-term capital
gains of a Portfolio will be taxable to shareholders as ordinary income
regardless of whether such distributions are reinvested in additional shares or
paid in cash. If a portion of a Portfolio's net investment income is derived
from dividends from domestic corporations, a corresponding portion of the
dividends paid out of such income may be eligible for the dividends-received
deduction. Corporate shareholders will be informed as to the portion, if any, of
dividends received by them which will qualify for the dividends-received
deduction.
Dividends paid out of the net capital gain of a Portfolio that are
designated as capital gain dividends by the Fund will be taxable to shareholders
as long-term capital gains regardless of how long the shareholders have held
their shares. Such dividends will not be eligible for the dividends-received
deduction. If shares of the Fund to which such capital gains dividends are
attributable are held by a shareholder for less than 31 days and there is a loss
on the sale or exchange of such shares, then the loss, to the extent of the
capital gain dividend or undistributed capital gain, is treated as a long-term
capital loss.
All distributions, whether received in shares or cash, must be reported by
each shareholder on his federal income tax return. Taxable dividends declared in
October, November, or December of any year and payable to shareholders of record
on a specified date in such a month will be deemed to have been paid by the Fund
and received by such shareholders on December 31 of the year if such dividend is
actually paid by the Fund during January of the following year.
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Any dividends paid shortly after a purchase by an investor may have the
effect of reducing the per share net asset value of the investor's shares by the
per share amount of the dividends. Furthermore, such dividends, although in
effect a return of capital, are subject to federal income taxes. Therefore,
prior to purchasing shares of the Fund, the investor should carefully consider
the impact of dividends, including capital gains distributions, which are
expected to be or have been announced.
The redemption of all or part of the shares of a series held by any
shareholder will generally be treated as a sale or exchange unless the
redemption fails to substantially reduce the shareholder's percentage ownership
interest in the related Portfolio (determined for this purpose using certain
specific rules of constructive ownership). Any redemption that does not
substantially reduce a shareholder's percentage ownership interest in a
Portfolio may be treated as a dividend.
If a redemption is treated as a sale or exchange, the shareholder will
generally recognize gain or loss measured by the difference between the
redemption price and the basis of the shares. This gain will generally be
treated as capital gain (long-term or short-term, depending upon the
shareholder's holding period for the redeemed shares).
The exchange of the shares in one Portfolio for shares in another Portfolio
will be treated as a taxable exchange for federal income tax purposes. If the
exchange occurs within 90 days of the acquisition of the original shares,
however, the shareholder's basis in the original shares will not include the
sales charge, if any, to the extent such charge does not exceed the amount that
would have been charged on the acquisition of the second-acquired shares if such
shares were acquired directly. To the extent that the sales charge, if any, paid
upon acquisition of the original shares is not taken into account in determining
the shareholder's gain or loss from the disposition of the original shares, it
is added to the basis of the newly acquired shares.
On or before January 31 of each year, the Fund will issue to each person
who was a shareholder at any time in the prior year a statement of the federal
income tax status of all distributions made to such shareholder.
Shareholders who fail to provide correct taxpayer identification numbers or
fail to certify as to no loss of exemption from backup withholding or otherwise
fail to comply with applicable requirements of the law relating to backup
withholding will be subject to backup withholding with respect to dividends at
the rate of 31% unless they are corporations or come within other exempt
categories. Any amounts paid as backup withholding will be creditable against
the federal income tax liabilities of the affected shareholders. All
shareholders should consult their own tax advisers with regard to the tax
consequences applicable to their respective investments in the Fund.
The foregoing discussion relates solely to United States federal income tax
laws as applicable to United States persons (that is, citizens and residents of
the United States and domestic corporations, partnerships, trusts, and estates).
Each shareholder who is not a United States person should consult his tax
adviser regarding the United States and non-United States tax consequences of
ownership of shares, including the possibility that distributions by the Fund
may be subject to a United States withholding tax at the rate of 31% (or at a
lower rate under an applicable United States income tax treaty).
Each Portfolio will be subject to a nondeductible excise tax for any year
equal to 4% of the "required distribution" for the year over the "distributed
amount" for the year. For this purpose, the term "required distribution" means,
with respect to any year, the sum of (a) 98% of the Portfolio's "ordinary
income" (that is, its taxable income determined by excluding its net capital
gain, if any, by disallowing the dividends-received and net operating loss
deductions, and by not taking into account any capital gain or loss), (b) 98% of
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its net capital gain income (that is, the excess of capital gains over capital
losses) for the one-year period ending on December 31 of the year, and (c) the
"prior year shortfall" (that is, the excess, if any, of the "grossed-up required
distribution" for the prior year over the "distributed amount" for such year).
For this purpose, the term "grossed-up required distribution" means, with
respect to any year, the required distribution for the year (determined by
including 100% of the Portfolio's ordinary income and capital gain net income)
and the term "distributed amount" means, with respect to any year, the sum of
(a) the amount of dividends-paid or deemed paid during the year, (b) any amount
on which the Portfolio is required to pay corporate tax for the year, and (c)
the excess, if any, of the distributed amount for the prior year over the
required distribution for such year.
The individual Portfolios will not be subject to tax in Delaware for any
year in which they each qualify as a regulated investment company. They may,
however, be subject to such tax for any year in which they do not so qualify and
may be subject to tax in certain other states where they are deemed to be doing
business. Moreover, distributions may be subject to state and local taxes. In
those states which have income tax laws, the tax treatment of such Portfolios
and the tax treatment of shareholders with respect to distributions may be
different from the federal income tax treatment of such persons.
The foregoing is a general summary of the federal income tax consequences
of investing in the Fund to shareholders who are U.S. citizens or U.S.
corporations. Shareholders should consult their own tax advisors about the tax
consequences of an investment in the Fund in light of each shareholder's
particular tax situation. Shareholders should also consult their own tax
advisors about consequences under foreign, state, local or other applicable tax
laws.
UNDERWRITERS
The Fund's shares will be continuously distributed through Navellier
Securities Corp. (the "Distributor") located at One East Liberty, Third Floor,
Reno, Nevada 89501, pursuant to a distribution agreement dated August 26, 1999.
The Distributor has been selling this Fund's shares since August 26, 1999.
Prior to that date, shares had been distributed through GSG Securities,
Inc.
The Distributor acts as the sole principal underwriter of the Fund's
shares. Through a network established by the Distributor, the Fund's shares may
also be sold through selected investment brokers and dealers. For a description
of the Distributor's obligations to distribute the Fund's securities, see "The
Investment Advisor, Distributor, Custodian and Transfer Agent."
The following table sets forth the remuneration received by the Distributor
and prior distributor for the period ended December 31, 1999.
<TABLE>
<CAPTION>
Underwriting
Discounts and Compensation Brokerage Other
Year Commissions on Redemptions Commissions Compensation*
---- ----------- -------------- ----------- -------------
<S> <C> <C> <C> <C>
1999 $0 $0 $0 $466,722
</TABLE>
22
<PAGE>
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.
The Navellier Top 20 Portfolio had a total return of 75.91% for the period
ended December 31, 1999.
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 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. The Russell 2000 is
composed of common stocks mostly traded on NASDAQ.
As summarized in the Prospectus, the total return of each Portfolio may
be quoted in advertisements and sales literature.
23
<PAGE>
FINANCIAL STATEMENTS*
*(References in these financial statements to the Top 20 Portfolio refer to
the series of shares of the Navellier Millennium Funds portfolio named the
Navellier Top 20 Portfolio)
24
<PAGE>
December 31, 1999 Audited Financial Statement
25
<PAGE>
NAVELLIER MILLENNIUM FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
TOP 20 PORTFOLIO
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- -------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS - 95.8%
BUSINESS SERVICES - 4.7%
24,500 Zomax, Inc.* $ 1,108,625
-----------
COMMUNICATION EQUIPMENT AND
SERVICES - 31.9%
11,000 Emulex Corp.* 1,237,500
15,000 Harmonic, Inc.* 1,424,063
38,000 Lightbridge, Inc* 1,054,500
17,000 Powerwave
Technologies, Inc.* 992,375
4,800 QUALCOMM, Inc.* 845,400
12,000 Rural Cellular Corp.* 1,086,000
8,300 United States Cellular
Corp.* 837,781
-----------
7,477,619
-----------
ELECTRONIC PRODUCTS - 10.0%
25,000 KEMET Corp.* 1,126,562
29,990 Three-Five Systems, Inc.* 1,229,590
-----------
2,356,152
-----------
INSTRUMENTS - 4.5%
27,200 Photon Dynamics, Inc.* 1,054,000
-----------
MANUFACTURING - 4.4%
35,000 Meade Instruments Corp.* 997,500
-----------
MEDICAL EQUIPMENT AND SUPPLIES - 7.0%
10,000 VISX, Inc. * 517,500
29,500 Zoll Medical Corp.* 1,126,531
-----------
1,644,031
-----------
SEMICONDUCTORS AND RELATED - 29.8%
12,000 Applied Micro Circuits
Corp.* 1,527,000
26,000 Power Integrations, Inc.* 1,246,375
12,800 Qlogic Corp.* 2,046,400
14,250 TranSwitch Corp.* 1,034,016
25,000 Xilinx, Inc.* 1,136,720
-----------
6,990,511
-----------
TOYS AND CHILDREN'S PRODUCTS - 3.5%
44,038 JAKKS Pacific, Inc.* 822,960
-----------
TOTAL COMMON STOCK
(COST $15,381,793) 22,451,398
-----------
MONEY MARKET FUND - 0.7%
167,710 Fund for Government
Investors
(Cost $167,710) 167,710
-----------
TOTAL INVESTMENTS - 96.5%
(COST $15,549,503) 22,619,108
-----------
OTHER ASSETS LESS LIABILITIES - 3.5% 814,143
NET ASSETS - 100.0% $23,433,251
===========
NET ASSET VALUE PER SHARE
(BASED ON 1,118,048 SHARES OUTSTANDING) $20.96
===========
OFFERING PRICE PER SHARE (100/95.05 OF $20.96) $22.05
===========
NET ASSETS CONSIST OF:
PAID-IN-CAPITAL $14,587,159
ACCUMULATED NET REALIZED GAIN ON INVESTMENTS 1,776,487
NET UNREALIZED APPRECIATION OF INVESTMENTS 7,069,605
NET ASSETS $23,433,251
===========
</TABLE>
- --------------------------
* NON-INCOME PRODUCING
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
NAVELLIER MILLENNIUM FUNDS
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
TOP 20 PORTFOLIO
----------------
<S> <C>
INVESTMENT INCOME
Interest (Note 1)......................................... $ 18,273
Dividends (Note 1)........................................ 4,121
----------
Total Investment Income................................. 22,394
----------
EXPENSES
Investment Advisory Fee (Note 2).......................... 147,790
Distribution Plan Fee (Note 4)............................ 37,158
Transfer Agent and Custodian Fee (Note 3)................. 53,302
Trustees' Fees............................................ 36,000
Printing Expense.......................................... 19,607
Registration Fees......................................... 18,379
Insurance Expense......................................... 17,030
Legal Fees................................................ 10,867
Audit Fees................................................ 7,000
----------
Total Expenses.......................................... 347,133
Less Expenses Reimbursed by Investment Adviser
(Note 2)............................................... (125,238)
----------
Net Expenses.......................................... 221,895
----------
NET INVESTMENT LOSS......................................... (199,501)
----------
Net Realized Gain on Investments............................ 2,920,802
Change in Net Unrealized Appreciation of Investments........ 6,163,825
----------
NET GAIN ON INVESTMENTS..................................... 9,084,627
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $8,885,126
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
NAVELLIER MILLENNIUM FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
TOP 20 PORTFOLIO
-----------------------------
FOR THE YEAR FOR THE PERIOD
ENDED ENDED
DECEMBER 31, DECEMBER 31,
1999 1998*
------------ --------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES
Net Investment Loss....................................... $ (199,501) $ (5,594)
Net Realized Gain on Investment Transactions.............. 2,920,802 211,487
Change in Net Unrealized Appreciation of Investments...... 6,163,825 905,780
----------- ----------
Net Increase in Net Assets Resulting from Operations.... 8,885,126 1,111,673
----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
From Net Realized Gains................................... (1,150,707) --
----------- ----------
FROM SHARE TRANSACTIONS
Net Proceeds from Sales of Shares......................... 10,185,572 6,038,494
Reinvestment of Distributions............................. 1,126,789 --
Cost of Shares Redeemed................................... (2,815,288) (48,408)
----------- ----------
Net Increase in Net Assets Resulting from Share
Transactions.......................................... 8,497,073 5,990,086
----------- ----------
TOTAL INCREASE IN NET ASSETS............................ 16,231,492 7,101,759
NET ASSETS -- Beginning of Period........................... 7,201,759 100,000
----------- ----------
NET ASSETS -- End of Period................................. $23,433,251 $7,201,759
=========== ==========
SHARES
Sold...................................................... 661,011 567,983
Issued in Reinvestment of Distributions................... 55,261 --
Redeemed.................................................. (171,996) (4,211)
----------- ----------
Net Increase in Shares.................................. 544,276 563,772
=========== ==========
</TABLE>
- --------------------------------------------------------------------
(*) FROM COMMENCEMENT OF OPERATIONS SEPTEMBER 30 ,1998
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
NAVELLIER MILLENNIUM FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The financial highlights are intended to help you understand the Portfolio's
financial performance to date. Certain information reflects financial results
for a single Portfolio share. The total returns in the table represent the
rate you would have earned (or lost) on an investment in the Portfolio
(assuming reinvestment of all dividends and distributions). This financial
information has been audited by Tait, Weller and Baker, whose report, along
with the Portfolio's financial statements, are included in the SAI or annual
report, available upon request. The Board of Trustees voted to change the
name of the fund family from American Tiger Funds to Navellier Millennium
Funds and to change the name of the Portfolio from American Tiger Top 20
Portfolio to Navellier Top 20 Portfolio. This name change is effective with
the date of this prospectus.
<TABLE>
<CAPTION>
TOP 20 PORTFOLIO
-----------------------------
FOR THE YEAR FOR THE PERIOD
ENDED ENDED
DECEMBER 31, DECEMBER 31,
1999 1998*
------------ --------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value -- Beginning of Period.................... $12.55 $10.00
------- ------
Income from Investment Operations:
Net Investment Loss..................................... (0.18) (0.01)
Net Realized and Unrealized Gains on Investments........ 9.68 2.56
------- ------
Total from Investment Operations...................... 9.50 2.55
------- ------
Distributions to Shareholders:
From Net Realized Gains................................. (1.09) --
------- ------
Net Increase in Net Asset Value........................... 8.41 2.55
------- ------
Net Asset Value -- End of Period.......................... $20.96 $12.55
======= ======
TOTAL INVESTMENT RETURN..................................... 75.91% 25.50%(A)
RATIOS TO AVERAGE NET ASSETS:
Expenses After Reimbursement (Note 2)..................... 1.50% 1.50%(B)
Expenses Before Reimbursement (Note 2).................... 2.34% 7.90%(B)
Net Investment Loss After Reimbursement (Note 2).......... (1.34)% (0.64)%(B)
Net Investment Loss Before Reimbursement (Note 2)......... (2.19)% (7.04)%(B)
SUPPLEMENTARY DATA:
Portfolio Turnover Rate................................... 235% 82%
Net Assets at End of Period (in thousands)................ $23,433 $7,202
Number of Shares Outstanding at End of Period (in
thousands).............................................. 1,118 574
</TABLE>
- --------------------------------------------------------------------
(A) Total returns for periods of less than one year are not annualized.
(B) Annualized
* FROM COMMENCEMENT OF OPERATIONS SEPTEMBER 30, 1998
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE>
NAVELLIER MILLENNIUM FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. Significant Accounting Policies
The Navellier Millennium Funds (the "Fund"), formerly known as the American
Tiger Funds, are registered under the Investment Company Act of 1940, as
amended, (the "Act") as an open-end management investment company and are
authorized to issue shares of beneficial interests. The Investment objective of
the Fund is to achieve long term growth of capital primarily through investments
in stocks of companies with appreciation potential. The Fund currently offers
shares of beneficial interests in one Portfolio, the Navellier Top 20 Portfolio
(the "Portfolio"), formerly known as the American Tiger Top 20 Portfolio, a
non-diversified, open-end, management investment company. The Fund was
established as a Delaware Business Trust organized on September 4, 1998. The
Fund is authorized to issue an unlimited number of beneficial interest. Shares
of the fund are purchased at the public offering price which includes a maximum
sales charge of up to 4.95% depending on the size of the purchase. The financial
statements have been prepared in conformity with generally accepted accounting
principles which permit management to make certain estimates and assumptions at
the date of the financial statements. The following is a summary of significant
accounting policies which the Fund follows:
(a) Listed securities are valued at the last sales price of the New York
Stock Exchange and other major exchanges. Over-the-Counter securities are
valued at the last sales price. If market quotations are not readily
available, the Board of Trustees will value the Fund's securities in good
faith. The Trustees will periodically review this method of valuation and
recommend changes which may be necessary to assure that the Fund's instruments
are valued at fair value.
(b) Security transactions are recorded on the trade date (the date the
order to buy or sell is executed). Interest income is accrued on a daily
basis. Dividend income is recorded on the ex-dividend date. Realized gain and
loss on securities transactions are computed on an identified cost basis.
(c) Dividends from net investment income, if any, are declared and paid
annually. Dividends are reinvested in additional shares unless shareholders
request payment in cash. Net capital gains, if any, are distributed annually.
(d) The Fund intends to comply with the provisions of the Internal Revenue
Code applicable to regulated investment companies and will distribute all net
investment income and capital gains to its shareholders. Therefore, no Federal
income tax provision is required.
2. Investment Advisory Fees and Other Transactions with Affiliates
Investment advisory services are provided by Navellier Management, Inc. (the
"Adviser"). Under an agreement with the Adviser, the Fund pays a fee at the
annual rate of 1.00% of the daily net assets of the Portfolio. An officer and
trustee of the Fund is also an officer and director of the Adviser.
Under an agreement between the Fund and the Adviser related to payment of
operating expenses, the Adviser has reserved the right seek reimbursement for
the past, present and future operating expenses of the Fund paid by the Adviser,
at any time upon notice to the Fund. During the year ended December 31, 1999,
the Adviser paid operating expenses of the portfolio totaling $162,185. Under
the operating expense agreements, the Adviser requested and the Portfolio
reimbursed, $36,947 of such expenses.
Navellier Securities, Inc. (the "Distributor") acts as the Fund's
Distributor and is registered as a broker-dealer under the Securities and
Exchange Act of 1934. The distributor, which is the principal underwriter of the
Fund's shares, renders its service to the Fund pursuant to a distribution
agreement. An officer and trustee of the Fund is also an officer and director of
the Distributor.
30
<PAGE>
NAVELLIER MILLENNIUM FUNDS
- --------------------------------------------------------------------------------
For the year ended December 31, 1999, the Fund was advised that the
Distributor received $466,722 from sales loads earned on sales of the Fund's
capital stock.
The Fund pays each of its Trustees not affiliated with the Adviser $10,000
annually. For the year ended December 31, 1999, Trustees fees totaled $36,000.
3. Transfer Agent and Custodian
Rushmore Trust and Savings, FSB ("Rushmore Trust"), provides transfer
agency, dividend disbursing and other shareholder services to the Fund. In
addition, Rushmore Trust serves as custodian of the Fund's assets. Fees paid to
Rushmore Trust are based upon a fee schedule approved by the Board of Trustees.
4. Distribution Plan
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Act, whereby it reimburses the Distributor or others in an amount not
to exceed 0.25% per annum of the average daily net assets of the Portfolio for
expenses incurred in the promotion and distribution of shares of the portfolio.
These expenses include, but are not limited to, the printing of prospectuses,
statements of additional information, and reports used for sales purposes,
expenses of preparation of sales literature and related expenses (including
Distributor personnel), advertisements and other distribution-related expenses,
including a prorated portion of the Distributor's overhead expenses attributable
to the distribution of shares. Such payments are made monthly. The 12b-1 fee
includes, in addition to promotional activities, the amount the Fund may pay to
the Distributor or others as a service fee to reimburse such parties for
personal services provided to shareholders of the Fund and/or the maintenance of
shareholder accounts. Such Rule 12b-1 fees are made pursuant to the Plan and
distribution agreements entered into between such service providers and the
Distributor or the Fund directly.
5. Securities Transactions
For the year ended December 31, 1999, the cost of purchases of securities,
excluding short-term securities, were $39,949,780 and proceeds from sales,
including maturities, of securities were $33,495,351.
6. Unrealized Appreciation and Depreciation of Investments
Unrealized appreciation and depreciation as of December 31, 1999, based on
the cost for Federal income tax purposes are as follows:
<TABLE>
<CAPTION>
TOP 20
PORTFOLIO
-----------
<S> <C>
Gross Unrealized Appreciation............................... $ 7,232,466
Gross Unrealized Depreciation............................... (162,861)
-----------
Net Unrealized Appreciation................................. $ 7,069,605
===========
Cost of Investments for Federal Income Tax Purposes......... $15,549,503
===========
</TABLE>
7. Federal Income Tax
Permanent differences between tax and financial reporting of accumulated net
investment income and net realized gain/loss are reclassified. As of
December 31, 1999, $199,501 from accumulated net investment loss were
reclassified to accumulated net realized gain on investments.
31
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES
THE NAVELLIER MILLENNIUM FUNDS
RENO, NEVADA
We have audited the accompanying statement of net assets of Navellier Top 20
Portfolio, a series of shares of The Navellier Millennium Funds, including the
portfolio of investments, as of December 31, 1999, and the related statement of
operations for the year then ended and the statement of changes in net assets
and financial highlights for each of the two periods then ended. These financial
statements are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1999, by
correspondence with the custodian and brokers. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Navellier Top 20 Portfolio as of December 31, 1999, the results of its
operations for the year then ended and the changes in its net assets and
financial highlights for each of the two periods then ended, in conformity with
generally accepted accounting principles.
[SIGNATURE]
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
February 18, 2000
32
<PAGE>
PART C
OTHER INFORMATION
<TABLE>
<CAPTION>
ITEM 23. EXHIBITS
<S> <C>
(a)(1) Certificate of Trust of Registrant(1)
(a)(2) Declaration of Trust of Registrant(1)
(b) By-Laws of Registrant(1)
(c) Not Applicable
(d) Investment Management Agreement between Registrant and
Navellier Management, Inc., dated September 9, 1998(1)
(e)(1) Distribution Agreement dated August 26, 1999 for Class A Shares (filed herewith)
(e)(2) Distribution Agreement dated March 3, 2000 for Class B Shares (filed herewith)
(e)(3) Distribution Agreement dated August 26, 1999, for Class C Shares (filed herewith)
(e)(4) 12b-1 Distribution Plan dated March 3, 2000 for the Navellier Top 20 Portfolio
Class B Shares (filed herewith)
(e)(5) Selected Dealer Agreement dated __________, 1999 (specimen) for Class A Shares
(filed herewith)
(e)(6) Selected Dealer Agreement dated __________, 2000 (specimen) for Class B Shares
(filed herewith)
(e)(7) Selected Dealer Agreement dated __________, 1999 (specimen) for Class C Shares
(filed herewith)
(f) Not Applicable
(g) Agreement for Fund Accounting Services, Transfer Agency Services
and Custody Services between Registrant and Rushmore Trust &
Savings, FSB(1)
(h)(1) Administrative Services Agreement between Registrant and
Navellier Management, Inc. dated September 9, 1998(1)
(h)(2) Trustee Indemnification Agreements(1)
(i) Opinion and Consent of Counsel dated February 25, 2000 (filed herewith)
(j) Consent of Independent Auditors dated March 1, 2000 (filed herewith)
(k) Not Applicable
(l)(1) Subscription Agreement between The American Tiger Funds and
Louis Navellier, dated September 3, 1998(1)
(l)(2) Investment Advisor Operating Expense Reimbursement Agreement(1)
(m)(1) 12b-1 Distribution Plan dated August 26, 1999
for The Navellier Top 20 Portfolio Class A shares (filed herewith)
(m)(2) 12b-1 Distribution Plan dated August 26, 1999 for the Navellier Top 20
Portfolio Class C Shares (filed herewith)
(n) Financial Data Schedule dated December 31, 1999 (filed herewith)
(o) Rule 18f-3 Plan dated December 27, 1999 (filed herewith)
(p)(1) Code of Ethics for The Navellier Millennium Funds (filed herewith)
(p)(2) Code of Ethics for Navellier Management, Inc. (filed herewith)
(p)(3) Code of Ethics for Navellier Securities Corp. (filed herewith)
</TABLE>
(1) Incorporated by reference to the Registration Statement on Form N-1A, filed
by Registrant on September 10, 1998 (Reg. No. 333-63155).
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
(a) As is described in the Statement of Additional Information ("Control
Persons and Principal Holders of Securities") the Fund was initially but no
longer is controlled by Louis Navellier, the sole stockholder, officer, and
director of the Investment Advisor, who also serves as Trustee and in various
officer positions with the Fund (as described more fully under "The Investment
Advisor, Distributor, Custodian and Transfer Agent" in the Statement of
Additional Information).
(b) The Distributor Navellier Securities Corp. (incorporated under the laws
of the State of Delaware) is wholly-owned by Louis G. Navellier, who is also a
stockholder, director, and officer of the Investment Advisor and a Trustee and
officer of the Fund.
ITEM 25. INDEMNIFICATION
The Fund shall indemnify each of its Trustees, officers, employees, and
agents (including persons who serve at its request as directors, officers, or
trustees of another organization in which it has any interest, as a shareholder,
creditor, or otherwise) against all liabilities and expenses (including amounts
paid in satisfaction of judgments, in compromise, as fines and penalties, and as
counsel fees) reasonably incurred by him in connection with the defense or
<PAGE>
disposition of any action, suit, or other proceeding, whether civil or criminal,
in which he may be involved or with which he may be threatened, while in office
or thereafter, by reason of his being or having been such a Trustee, officer,
employee, or agent, except with respect to any matter as to which he shall have
been adjudicated to have acted in bad faith, willful misfeasance, gross
negligence, or reckless disregard of his duties; provided, however, that as to
any matter disposed of by a compromise payment by such Person, pursuant to a
consent decree or otherwise, no indemnification either for said payment or for
any other expenses shall be provided unless there has been a determination that
such person did not engage in bad faith, willful misfeasance, gross negligence,
or reckless disregard of his duties involved in the conduct of his office by the
court or other body approving the settlement or other disposition or by a
reasonable determination, based upon review of readily available facts (as
opposed to a full trial-type inquiry), that he did not engage in such conduct by
written opinion from independent legal counsel approved by a majority of a
quorum of trustees who are neither interested persons nor parties to the
proceedings. The rights accruing to any person under these provisions shall not
exclude any other right to which he may be lawfully entitled; provided that no
person may satisfy any right of indemnity or reimbursement granted herein or to
which he may otherwise be entitled except out of the Fund Property. A majority
of a quorum of disinterested non-party Trustees may make advance payments in
connection with indemnification under this section, provided that the
indemnified person shall have given a written undertaking adequately secured to
reimburse the Fund in the event it is subsequently determined that he is not
entitled to such indemnification, or a majority of a quorum of disinterested
non-party Trustees or independent counsel determine, after a review of readily
available facts, that the person seeking indemnification will probably be found
to be entitled to indemnification.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to the Trustees, officers, and controlling persons of
the Fund pursuant to the provisions described under this Item 27, or otherwise,
the Fund has been advised that, in the opinion of the SEC, 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 Fund of expenses incurred or paid by
a Trustee, officer, or controlling person of the Fund in the successful defense
of any action, suit, or proceeding) is asserted by such Trustee, officer, or
controlling person in connection with the securities being registered, the Fund
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 of 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.
The Fund may purchase and maintain insurance on behalf of an officer,
Trustee, employee, or agent protecting such person, to the full extent permitted
by applicable law, from liability incurred by such person as officer, Trustee,
employee, or agent of the Fund or arising from his activities in such capacity.
Section 9 of the Distribution Agreement between the Fund and Navellier
Securities Corp., provides for indemnification of the parties thereto under
certain circumstances.
Section 4 of the Advisory Agreement between the various portfolios of the
Fund and the Investment Advisor provides for indemnification of the parties
thereto under certain circumstances.
C-5
<PAGE>
ITEM 26. BUSINESS AND OTHER CONNECTION OF THE 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>
Name and Principal Positions Held with Registrant Principal Occupations During Past
Business Address and Its Affiliates Two Years
- - - ------------------ ------------------------------ ---------------------------------
<S> <C> <C>
Louis Navellier Trustee and President of The Navellier Mr. Navellier is and has been the CEO and President
One East Liberty Third Floor Millennium Funds; Trustee and President of of Navellier & Associates Inc., an investment
Reno, NV 89501 The Navellier Performance Funds, one of management company since 1988; is and has been CEO
the Portfolio Managers of the Aggressive and President of Navellier Management, Inc.; one of
Growth Portfolio, the Mid Cap Growth the Portfolio Managers for the Investment Advisor
Portfolio and the Aggressive Micro Cap to this Fund and was one of Portfolio Managers to
Portfolio. Mr. Navellier is also the CEO, The Navellier Series Fund; President and CEO of
President, Treasurer, and Secretary of Navellier Securities Corp., the principal
Navellier Management, Inc., a Delaware Underwriter to this Fund and The Navellier Series
Corporation which is the Investment Advisor Fund; CEO and President of Navellier Fund
to the Fund. Mr. Navellier is also CEO, Management, Inc. and investment advisory company,
President, Secretary, and Treasurer of since November 30, 1995; and has been publisher and
Navellier & Associates Inc., Navellier editor of MPT Review from August 1987 to the
Publications, Inc., MPT Review Inc., and present, and was publisher and editor of the
Navellier International Management, Inc. predecessor investment advisory newsletter OTC
Insight, which he began in 1980 and wrote through
July 1987.
</TABLE>
C-6
<PAGE>
ITEM 27. PRINCIPAL UNDERWRITERS
(a) The Distributor does not currently act as principal underwriter,
depositor, or investment adviser for any investment company other than the Fund,
The Navellier Series Fund and The Navellier Performance Funds
(b) The following information is provided, as of the date hereof, with
respect to each director, officer, or partner of each principal underwriter
named in response to Item 21:
Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
- - - ------------------ -------------------- ---------------------
Louis Navellier CEO, President, Director, Trustee, President and
One East Liberty, Treasurer and Secretary CEO
Third Floor
Reno, NV 89501
(c) As of the date hereof, no principal underwriter who is not an
affiliated person of the Fund has received any commissions or other compensation
during the Fund's last fiscal year.
ITEM 28. 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 Millennium Funds 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 29. 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 30. UNDERTAKINGS
The Fund hereby undertakes to furnish each person to whom a prospectus is
delivered a copy of the latest annual report to shareholders, upon request and
without change.
The Fund hereby undertakes that if it is requested by the holders of at
least 10% of its outstanding shares to call a meeting of shareholders for the
purpose of voting upon the question of removal of a Trustee, it will do so and
will assist in communications with other shareholders as required by Section
16(c) of the Investment Company Act of 1940.
C-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 3 to Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of Calgary,
province of Alberta, Canada on the 3rd day of March 2000.
THE NAVELLIER MILLENNIUM FUNDS
By:/s/LOUIS G. NAVELLIER
---------------------------
Louis G. Navellier
President and Trustee
The Navellier Millennium Funds, and each person whose signature appears
below hereby constitutes and appoints Louis Navellier as such person's true and
lawful attorney-in-fact, with full power to sign for such person and in such
person's name, in the capacities indicated below, any and all amendments to this
Registration Statement, hereby ratifying and confirming such person's signature
as it may be signed by said attorney-in-fact to any and all amendments to said
Registration Statement.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons or their
attorneys-in-fact pursuant to authorization given on September 9, 1998, in the
capacities and on the date indicated:
/s/LOUIS G. NAVELLIER
- - ---------------------- Trustee and President
Louis G. Navellier(1) (Principal Executive March 3, 2000
Officer)
/s/JOEL ROSSMAN
________________________ Trustee
Joel Rossman March 3, 2000
/s/BARRY SANDER
________________________ Trustee
Barry Sander March 3, 2000
/s/ARJEN KUYPER
________________________ Trustee and Treasurer
Arjen Kuyper(1) March 3, 2000
/s/JACQUES DELACROIX
________________________ Trustee and Secretary
Jacques Delacroix March 3, 2000
1 These persons are interested persons affiliated with the Investment
Advisor.
C-8
<PAGE>
DISTRIBUTION AGREEMENT
AGREEMENT, made as of this 26 day of August, 1999, by and between The
Navellier Top 20 Portfolio ("Portfolio") of The Navellier Millennium Funds, a
business trust organized under the laws of the State of Delaware (the
"Fund"), and Navellier Securities Corp., a corporation (the "Distributor").
W I T N E S S E T H
WHEREAS, the Fund is registering as an investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), and intends to
engage in business as an open-end management investment company;
WHEREAS, the Fund desires to employ the Distributor to act as principal
underwriter (as defined in the Act) with respect to the continuous offering of
its Class A shares of common stock of the Portfolio, at no par value (the
"Shares"), and the Distributor is willing to serve in such capacity pursuant to
the terms and conditions of this Agreement;
WHEREAS, this Agreement has been approved by a vote of the Board of
Trustees of the Fund, including a majority of the Trustees who are not
"interested persons" of the Fund, as defined in the Act, and who have no direct,
or indirect financial interest in the operation of this Agreement (the
"disinterested Trustees") cast in person at a meeting called for the purpose of
voting on this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, it is agreed by and between the parties hereto as follows:
1. APPOINTMENT OF THE DISTRIBUTOR.
(a) The Fund hereby appoints the Distributor as the principal
underwriter and distributor of the Portfolio's Class A Shares to sell and to
arrange for the sale of Shares to the public on the terms set forth in this
Agreement and the Distributor hereby accepts such appointment and agrees to
act in accordance herewith. The Fund, during the term of this Agreement,
shall sell Shares to the Distributor upon the terms and conditions set forth
herein.
(b) The Distributor agrees to purchase Shares, as principal for its
own account, from the Fund and to sell Shares, as principal, to investors and
dealers, upon the terms described herein and in the Fund's prospectus (the
"Prospectus") and statement of additional information (the "Statement of
Additional Information") included in the Fund's Registration Statement (the
"Registration Statement") last filed with the Securities and Exchange Commission
(the "SEC") and declared effective under the 1933 Act and 1940 Act
1
<PAGE>
or as said Prospectus and Statement of Additional Information may be otherwise
amended or supplemented from time to time thereafter.
2. EXCLUSIVE NATURE OF DUTIES. The Distributor shall be the exclusive
representative of the Fund, in respect of the Portfolio, and act as its
principal underwriter and distributor, except that neither the exclusive rights
granted to the Distributor to sell the Shares nor the right to receive
compensation under Section 3(b) hereof or otherwise hereunder shall apply to
Shares issued by the Fund (i) in connection with the merger or consolidation of
any other investment company or personal holding company with the Fund or the
Portfolios or the acquisition by purchase or otherwise of all (or substantially
all) of the assets or outstanding shares of any such company by the Fund or the
Portfolios, or (ii) pursuant to reinvestment of dividends or capital gains
distributions.
3. PURCHASE OF SHARES FROM THE PORTFOLIO AND COMPENSATION OF DISTRIBUTOR.
(a) Subsequent to the effective date of the Registration
Statement, the Fund will commence a continuous offering of the Shares.
During such continuous offering, the Distributor shall have the right to buy
from the Fund the Shares needed, but not more than the Shares needed (except
for clerical errors in transmissions), to fill unconditional orders for
Shares placed with the Distributor by investors or securities dealers. The
price which the Distributor shall pay for the Shares so purchased from the
Portfolio shall be the net asset value (determined as set forth in Section
3(e) hereof) used in determining the public offering price on which such
orders were based.
(b) A sales charge of 4.95% of the net asset value of the Shares sold
shall constitute the entire compensation (subject to any fees paid to the
Distributor as provided in Section 8 hereof) of the Distributor for acting as
principal underwriter and distributor of the Portfolio. The 4.95% sales charge
shall be reduced to 4.00% for purchases of between $50,000 and $99,999.99, and
shall be reduced to 3.50% for purchases of between $100,000 and $249,999.99 and
shall be reduced to 2.00% for purchases of between $500,000 and $999,999.99.
There is no sales charge for purchases of $1,000,000 or more or for purchases by
Trustees, the Distributor or its employees, or the Investment Advisor or its
employees. The sales charge shall also be reduced for other purchases as
specified in the Prospectus. The sales charge will be deducted from the
purchase price paid by the investor at the time of making the purchase.
There is a contingent deferred sales charge ("CDSC") of 1% on purchases
between $1 million and $2,499,999 which are redeemed within 18 months and the
CDSC is reduced to 0.50% for purchases of $2,500,000 to $4,999,999 which are
redeemed within 18 months of purchase. The CDSC is reduced to 0.25% for
purchases of $5,000,000 or more which are redeemed within 18 months.
(c) The Shares are to be resold by the Distributor to investors at
the public offering price, as set forth in Section 3(d) hereof, or to Selected
Dealers (as hereinafter defined) having agreements with the Distributor upon the
terms and conditions set forth in Section 7 hereof.
(d) The public offering price(s) of the Shares, i.e., the price per
share at which the Distributor or Selected Dealers (as hereinafter defined) may
sell the Shares to the public, shall be the public offering price as set forth
in the then current Prospectus and the Statement of Additional Information
relating to the Shares. If the public offering price does
2
<PAGE>
not equal an even cent, the public offering price may be adjusted to the
nearest cent. All payments to the Portfolio hereunder shall be made in the
manner set forth in Section 3(g).
(e) The net asset value of the shares of the Portfolio shall be
determined by the Fund or any agent of the Fund once daily at the times and
otherwise in accordance with the terms set forth in the Prospectus and the
Statement of Additional Information and guidelines established by the Board
of Trustees of the Fund, from time to time.
(f) The Fund shall have the right to suspend the sale of the Shares
at times when redemption is suspended pursuant to the conditions set forth in
Section 4(c) hereof. The Fund shall also have the right to suspend the sale of
the Shares if trading on the New York Stock Exchange or other exchange shall
have been suspended, if a banking moratorium shall have been declared by federal
or state authorities, or if there shall have been some other extraordinary
event, which, in the judgment of the Fund, makes it impracticable to sell the
Shares. The Fund also reserves the right to suspend the sale of Shares at any
time, in the absolute discretion of its Board of Trustees.
(g) The Fund, or any agent of the Fund designated in writing by the
Fund, shall be promptly advised of all purchase orders for Shares received by
the Distributor. Any order may be rejected by the Fund; PROVIDED, HOWEVER, that
the Fund will not arbitrarily or without reasonable cause refuse to accept
orders for the purchase of Shares. The Portfolio (or its agent) upon receipt
of payment therefore will enter the purchase and ownership on its books (in lieu
of issuing stock certificates) or a statement confirming the issuance of Shares.
The Distributor agrees to cause such payment and such instructions to be
delivered promptly to the Portfolio (or its agent).
4. REPURCHASE OR REDEMPTION OF SHARES.
(a) Any of the outstanding shares of the Portfolio may be tendered
for redemption at any time, and the Portfolio agrees to redeem the Shares so
tendered in accordance with the applicable provisions set forth in the
Prospectus and the Statement of Additional Information. The price to be paid
to redeem the Shares shall be equal to the net asset value calculated in
accordance with the provisions of Section 3(e) hereof. All payments by the
Portfolio hereunder shall be made in the manner set forth below.
The Portfolio, shall pay the total amount of the redemption price
subsequent to its having received the notice of redemption in proper form,
all in accordance with applicable provisions of the Prospectus and the
Statement of Additional Information on or before the seventh day after
receipt of notice of redemption.
(b) The Distributor is authorized, as agent for the Portfolio, to
repurchase Shares from investors and Selected Dealers in accordance with the
applicable provisions set forth in the then current Prospectus and the
Statement of Additional Information. The Distributor shall promptly transmit
to the Fund's transfer agent for redemption, all orders so received from
Selected Dealers or investors for the repurchase of Shares. The Distributor
3
<PAGE>
shall be responsible for the accuracy of instructions transmitted to the Fund's
transfer agent in connection with all such repurchases.
(c) The Fund may suspend the right of redemption or dealer payment
more than seven days (a) during any period when the New York Stock Exchange or
other exchange is closed (other than a customary weekend and holiday closing),
(b) when trading on any Exchange is restricted or an emergency exists as
determined by the Securities and Exchange Commission or the Fund so that
disposal of the Fund's investments or determination of the net asset value of
the Portfolios is not reasonably practicable, or (c) during any other period
when the Securities and Exchange Commission, by order, so permits.
5. DUTIES OF THE PORTFOLIO.
(a) The Portfolio shall furnish to the Distributor copies of all
information (including, without limitation, sales literature and
advertisements), financial statements and other papers prepared (or caused by
the Fund to be prepared) for publication or distribution which refer in any
way to the Distributor, prior to the use thereof, and shall not use such
material if the Distributor reasonably objects in writing within five (5)
business days (or such other time as may be mutually agreed) after receipt
thereof. The foregoing sentence shall survive the termination of this
Agreement. The Portfolio shall furnish or otherwise make available to the
Distributor such other information as the Distributor may reasonably request
for use in connection with the distribution of the Shares, including one
certified copy, upon request by the Distributor, of all financial statements
prepared by the Fund, in respect of the Portfolio, and examined by
independent accountants. The Portfolio shall, subject to the provisions of
Section 8 hereof, make available to the Distributor such number of copies of
the Prospectus and the Statement of Additional Information as the Distributor
shall reasonably request.
(b) The Portfolio shall take, from time to time, but subject to
the necessary approval of the Portfolio's Class A shareholders (as may be
required by applicable law), all necessary action to fix the number of its
authorized Shares and to register the Shares under the 1933 Act, to the end
that there will be available for sale such number of the Shares as investors
may reasonably be expected to purchase.
(c) The Fund shall use its best efforts to qualify and maintain the
qualification of an appropriate number of the Shares for sale under the
securities laws of such states as the Distributor and the Fund may approve. Any
such qualification may be withheld, terminated or withdrawn by the Fund at any
time in its discretion. The Distributor shall furnish such information and
other material relating to its affairs and activities as may be required by the
Fund in connection with such qualification.
(d) The Fund shall immediately advise the Distributor (i) when any
post-effective amendment to its Registration Statement or any further amendment
or supplement thereto or any further Registration Statement or amendment or
supplement thereto becomes effective, (ii) of any request by the SEC for
amendment to the Registration Statement or the
4
<PAGE>
then effective Prospectus or for additional information, (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement, or the initiation of any proceedings for that purpose,
and (iv) of the happening of any event which makes untrue any material statement
made in the Registration Statement or the current Prospectus or which, in the
opinion of counsel for the Fund, requires the making of a change in the
Registration Statement or the current Prospectus in order to make the statements
therein not misleading. In case of the happening at any time of any event which
materially affects the Fund or its securities and which should be set forth in a
supplement to or an amendment of the then effective Prospectus in order to make
the statements therein not misleading, the Fund shall prepare and furnish to the
Distributor such amendment or amendments to the then effective Prospectus, as
will correct the Prospectus so that as corrected it will not contain, or such
supplement or supplements to the then effective Prospectus which, when read in
conjunction with the then effective Prospectus, will make the combined
information not contain any untrue statement of a material fact or any omission
to state any material fact necessary in order to make the statements in the then
effective Prospectus not misleading. The Fund shall, if at any time the SEC
shall issue any stop order suspending the effectiveness of the Registration
Statement, make reasonable effort to obtain the prompt lifting of such order.
(e) Except as otherwise contemplated by Section 8(a) hereof, the Fund
shall, at the expense of the Distributor, furnish, in reasonable quantities upon
request of the Distributor, copies of Prospectuses, Statements of Additional
Information, Proxies and annual and interim reports of the Fund, in respect of
the Portfolios.
6. DUTIES OF THE DISTRIBUTOR.
(a) The Distributor shall devote reasonable time and effort to effect
sales of the Shares (but only in states and other jurisdictions in which it may
legally do so), but shall not be obligated to sell any specific number of
Shares. The services of the Distributor hereunder are not to be deemed
exclusive and nothing herein contained shall prevent the Distributor from
entering into distribution or dealer arrangements with other investment
companies so long as the performance of its obligations hereunder are not
impaired thereby.
(b) Neither the Distributor nor any Selected Dealer nor any other
person is authorized by the Fund to give any information or to make any
representations, other than those contained in the Registration Statement or
related Prospectus and Statement of Additional Information and any sales
literature specifically approved by the Fund.
(c) The Distributor shall cooperate with the Fund in effecting the
qualifications contemplated by Section 5(c) hereof.
(d) The Distributor shall furnish to the Fund copies of all
information including, without limitation, sales literature and advertisements,
financial statements and other papers prepared (or caused by the Distributor to
be prepared) for the publication or distribution, which refer in any way to the
Fund, prior to the use thereof, and shall not use such material if the Fund
reasonably objects in writing within (5) business days (or such
5
<PAGE>
other time as may be mutually agreed) after receipt thereof. The foregoing
sentence shall survive the termination of this Agreement.
(e) In selling the Shares, the Distributor shall use its best efforts
in all respects to duly conform with the requirements of all applicable federal,
state and foreign laws. In connection therewith, the Distributor shall use its
best efforts in granting any Distributor's Consent under Section 7(b) hereof, to
make certain that such Foreign Offer or Sale does not violate applicable law or
otherwise cause the Fund to have any liability with respect to such Foreign
Offer or Sale.
7. SELECTED DEALER AGREEMENTS.
(a) The Distributor shall have the right to enter into selected
dealer agreements ("Selected Dealer Agreements") with securities dealers of
its choice (the "Selected Dealers") for the sale of Shares. In connection
with such sales by Selected Dealers, the Selected Dealer Agreement shall
provide that the portion of the Sales Charge which may be allocated to
Selected Dealers shall be limited to all or a portion of the Sales Charge as
stated in the Fund's then current Prospectus. In making agreements with
Selected Dealers, the Distributor shall act only as principal and not as
agent for the Portfolio. Shares sold to Selected Dealers shall be for resale
by such dealers only at the public offering price(s) set forth in the
Prospectus and the Statement of Additional Information.
(b) The Distributor shall offer and sell Shares only to such
Selected Dealers as are (i) members in good standing of the National
Association of Securities Dealers (the "NASD"), or (ii) exempt from
membership in the NASD. In any Selected Dealer Agreement, the Distributor
shall require the Selected Dealer to obtain the written consent of the
Distributor (the "Distributor's Consent") prior to such Selected Dealer's
making, causing to be made or otherwise participating, directly or
indirectly, in the making of any offer or sale of any of the Portfolio's
shares to any individual, corporation, partnership, trust, joint venture, or
other person or entity located outside of the United States of America (a
"Foreign Offer or Sale"). Such Selected Dealer Agreements shall also provide
that any Foreign Offer or Sale shall be made only upon the terms and in
accordance with the conditions set forth in the Distributor's Consent.
(c) The Distributor shall adopt and follow procedures, as approved
by the Portfolio, for the confirmation of sales and Shares to investors and
Selected Dealers, the collection of amounts payable by investors and Selected
Dealers on such sales, and the cancellation of unsettled transactions, as may
be necessary to comply with the requirements of the National Association of
Securities Dealers, as such requirements may from time to time exist.
8. COMPENSATION AND EXPENSES.
(a) Pursuant to its 12b-1 Distribution Plan, and in order to
further enhance the distribution of the shares, the Portfolio shall, on a
monthly basis in arrears, pay the Distributor a 12b-1 fee of 1/12 of 0.25% of
the aggregate average daily net assets of the
6
<PAGE>
Portfolio. Out of said 12b-1 fee (and/or sales load), the Distributor shall
pay the distribution expenditures which expenditures shall include, but shall
not be limited to, the payment of compensation (including incentive
compensation such as continuing payments) to financial consultants, sales and
marketing personnel, broker-dealers, other financial institutions and other
organizations to obtain various distribution and shareholder related services
for the Portfolio. These services include, among others, processing new
shareholder account application, preparing and transmitting to the Fund's
Transfer Agent computer processable tapes of transactions by customers and
serving as a source of information to customers in answering their questions
concerning the Portfolio and their transactions with the Portfolio, expenses
for advertising, the preparation and distribution of sales literature and
other promotional activities on behalf of the Portfolio. The Portfolio shall
pay its proportionate share of the cost of preparing, printing and
distributing the Prospectuses and Statements of Additional Information to
existing investors, its proportionate share of the cost of (i) preparation,
filing and printing of any Registration Statements and Prospectuses required
to be filed by or under applicable federal, state or foreign law, (ii) the
preparation and mailing of annual and interim reports, Prospectuses and proxy
material to current shareholders, (iii) qualifications of Shares for sale
under the securities laws of such states or other jurisdiction as shall be
selected by the Portfolio and the Distributor in accordance with Section 5(c)
hereof and the costs and expenses payable to each such state or other
jurisdiction for continuing qualifications therein. The Distributor and/or
Investment Advisor shall pay for the printing and distribution of
Prospectuses and Statements of Additional Information to prospective
investors.
The Portfolio is not obligated to pay any distribution expenses in
excess of the distribution fees with respect to the Portfolio, pursuant to
this Section 8.(a). In addition, any expenses of distribution of the
Portfolio's shares accrued by the Distributor in any one fiscal year of the
Portfolio may not be paid from distribution fees received from the Portfolio
in subsequent fiscal years and also will not be used to pay any interest
expense, carrying charges or other financing costs or overhead of the
Distributor. "Overhead costs" include items of expense generally referred to
as overhead, including, without limitation, costs related to leases,
depreciation, salaries, payroll taxes, supplies and insurance. The 12b-1 fee
payable to Distributor may exceed actual expenses paid or incurred by
Distributor, the Investment Advisor or others.
(b) The Portfolio shall not bear the expense of the registration
or qualification of the Distributor as a dealer or a broker under federal,
state or other applicable law or the expenses of continuing such registration
or qualification.
9. INDEMNIFICATION.
(a) The Portfolio agrees with the Distributor, for the benefit of
the Distributor and each person, if any, who controls the Distributor within
the meaning of Section 15 of the Securities Act and each and all and any of
them, to indemnify and hold harmless the Distributor and any such controlling
person from and against any and all losses, claims, damages or liabilities,
joint or several (including reasonable legal fees and expenses) to which they
or any of them may become subject under the Securities Act or under any other
statute, at common law or otherwise, and to reimburse the Distributor and
such controlling persons, if any, for any legal or other expenses (including
the cost of any investigation and preparation) reasonably incurred by them in
connection with any litigation, whether or not
7
<PAGE>
resulting in any liability, insofar as such losses, claims, damages,
liabilities or litigation arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or any Prospectus, filed with the SEC, or any
amendment thereof or supplement thereto, or which arise out of, or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; PROVIDED, HOWEVER, that this indemnity agreement shall not apply
to amounts paid in settlement of any such litigation if such settlement is
effected without the consent of the Fund or to any such losses, claims,
damages, liabilities or litigation arising out of, or based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
such Registration Statement or prospectus, or any amendment thereof of or
supplement thereof, or arising out of, or based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, which statement or
omission was made in reliance upon information furnished in writing to the
Fund by the Distributor for inclusion in any such Registration Statement or
Prospectus or any amendment thereof or supplement thereto. The Distributor
and each such controlling person shall, within thirty (30) days after the
complaint shall have been served upon the Distributor or such controlling
person in respect of which indemnity may be sought from the Portfolio on
account of its agreement contained in this paragraph, notify the Portfolio in
writing of the commencement thereof. The omission of the Distributor or such
controlling person so to notify the Portfolio of any such litigation shall
relieve the Portfolio from any liability which it may have to the Distributor or
such controlling person on account of the indemnity agreement contained in
this paragraph if such failure to timely notify the Portfolio has resulted in
substantial prejudice to the Portfoliio, but shall not relieve the Portfolio
from any liability which it may have to the Distributor or controlling person
otherwise than on account of the indemnity agreement contained in this
paragraph. In case any such litigation shall be brought against the
Distributor or any such controlling person and notice of the commencement
thereof shall have been timely given to the Portfolio, the Portfolio shall be
entitled to participate in (and, to the extent that it shall wish, to direct)
the defense thereof at its own expense, but such defense shall be conducted
by counsel of good standing and reasonably satisfactory to the Distributor or
such controlling person(s) or defendant(s) in the litigation. The indemnity
agreement of the Portfolio contained in this paragraph shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of the Distributor or any such controlling person, and shall survive
any delivery of shares of the Portfolio. The Portfolio agrees to notify the
Distributor promptly of the commencement of any litigation or proceeding
against it or any of it officers or directors of which it may be advised in
connection with the issue and sale of shares of the Portfolio.
(b) Anything herein to the contrary notwithstanding, the agreement in
subparagraph (a) of this Section, insofar as it constitutes a basis of
reimbursement by the Portfolio for liabilities (other than payment by the
Portfolio of expenses incurred or paid in the successful defense of any action,
suit or proceeding) arising under the Securities Act, shall not extend to the
extent of any interest therein of any person who is an underwriter or a partner
or controlling person of an underwriter within the meaning of Section 15 of the
Securities Act or who, at the date of this Agreement, is a Trustee of the Fund,
except to the extent that an interest of such character shall have been
determined by a court of appropriate
8
<PAGE>
jurisdiction as not against public policy as expressed in the Securities Act.
Unless in the opinion of counsel for the Fund the matter has been adjudicated
by controlling precedent, the Portfolio, will, if a claim for such
reimbursement is asserted, submit to a court of appropriate jurisdiction the
question of whether or not such interest is against the public policy as
expressed in the Securities Act.
(c) The Distributor agrees to indemnify and hold harmless the
Portfolio and the Fund's Trustees and such officers as shall have signed any
Registration Statement filed with the Commission from and against any and all
losses, claims, damages, or liabilities, joint or several, to which the
Portfolio or such Trustees or officers may become subject under the
Securities Act, under any other statute, at common law or otherwise, and will
reimburse the Portfolio or such Trustees or officers for any legal or other
expenses (including the cost of any investigation and preparation) reasonably
incurred by it or them or any of them in connection with any litigation,
whether or not resulting in any liability, insofar as such losses, claims,
damages, liabilities, or litigation arise out of, or are based upon, any
untrue statement or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, which statement or omission was made by the Fund in reliance upon
information furnished in writing to the Fund by the Distributor for inclusion
in any Registration Statement or any Prospectus, or any amendment thereof or
supplement thereto or otherwise for distribution or publication. The
Distributor shall not be liable for amounts paid in settlement of any such
litigation if such settlement was effected without its consent. The
Portfolio and the Fund's Trustees and such officers or defendant(s), in any
such litigation, shall, within thirty (30) days after the complaint shall
have been served upon the Portfolio or any such Trustee or officer in respect
of which indemnity may be sought from the Distributor or account of its
agreement contained in this paragraph, notify the Distributor in writing of
the commencement thereof. The omission of the Portfolio or such Trustee or
officer so to notify the Distributor of any such litigation shall relieve the
Distributor from any liability which it may have to the Portfolio or such
Trustee or officer of liability which it may have to the Portfolio or such
Trustee or officer on account of the indemnity agreement contained in this
paragraph, but shall not relieve the Distributor from any liability which it
may have to the Portfolio or such Trustee or officer otherwise than on account
of the indemnity agreement contained in this paragraph. In case any such
litigation shall be brought against the Fund, Portfolio or any such Trustee or
officer and timely notice of the commencement thereof shall have been so given
to the Distributor, the Distributor shall be entitled to participate in (and,
to the extent it shall wish, to direct) the defense thereof at its own expense,
but such defense shall be conducted by counsel of good standing and satisfactory
to the Fund. The indemnity agreement of the Distributor contained in this
paragraph shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of the Portfolio and shall survive any
delivery of shares of the Portfolio. The Portfolio agrees to notify the
Distributor promptly of the commencement of any litigation or proceeding
against it or any of its officers or the Fund's Trustees or against any such
controlling person of which it may be advised in connection with the issue
and sale of the Portfolio's shares.
(d) Notwithstanding any provision contained in this Agreement, no
party hereto and no person or persons in control of any party hereto shall be
protected against any liability to the Portfolio or its security holders to
which they would otherwise be subject by
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reason of willful misfeasance, bad faith, or gross negligence, in the
performance of their duties, or by reason of their reckless disregard of their
obligations and duties under this Agreement.
(e) Except as expressly provided in subparagraphs (a) and (c)
hereof, the agreements herein set forth have been made and are made solely
for the benefit of the Fund, the Portfolio, the Distributor, and the persons
expressly provided for in subparagraphs (a) and (c), their respective heirs,
successor, personal representatives and assigns, and except as so provided,
nothing expressed or mentioned herein is intended or shall be construed to
give any person, firm or corporation, other than the Fund, the Portfolio, the
Distributor, and the persons expressly provided for in subparagraphs (a) and
(c), any legal or equitable right, remedy or claim under or in respect of
this Agreement or any representation, warranty or agreement herein contained.
Except as so provided, the terms "heirs, successors, personal
representatives and assigns" shall not include any purchaser of shares merely
because of such purchase.
10. DURATION, TERMINATION AND AMENDMENT OF THIS AGREEMENT.
This Agreement shall become effective on the date it shall be
approved by a vote of the Board of Trustees of the Fund and of a majority of
the disinterested Trustees, and shall, unless terminated as hereinafter
provided, continue in effect for a period of more than one (1) year from such
date so long as such continuance is specifically approved at least annually
by a vote of the Board of Trustees of the Fund and of a majority of the
disinterested Trustees or by vote of a majority of the outstanding voting
securities of the Class A shares of the Portfolio. This Agreement may be
terminated by the Portfolio at any time or by the Distributor on sixty (60)
days' written notice to the Portfolio. No provisions of this Agreement may
be changed, waived, discharged, or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought and approved by a majority
of the disinterested Trustees.
11. NOTICES.
Any notice or other communication required to be given pursuant to
this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, to the Distributor at One East Liberty,
Third Floor, Reno, Nevada 89501 or to the Portfolio at One East Liberty,
Third Floor, Reno, Nevada 89501.
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12. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Nevada and any action arising out of a breach of this
Agreement shall be brought in the State or Federal Court in San Francisco,
California.
ATTEST: THE NAVELLIER MILLENNIUM FUNDS
By: /s/
- ------------------------ --------------------------------
Barry Sander, Trustee
By: /s/
--------------------------------
Joel Rossman, Trustee
By: /s/
--------------------------------
Jacques Delacroix, Trustee
By: /s/
--------------------------------
Arjen Kuyper, Trustee
By: /s/
--------------------------------
Louis G. Navellier, Trustee
ATTEST: NAVELLIER SECURITIES CORP.
By: /s/
- ------------------------ --------------------------------
Louis G. Navellier, President
11
<PAGE>
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, made as of this 3rd day of March, 2000, by
and between The Navellier Top 20 Portfolio (the "Portfolio"), a portfolio of The
Navellier Millennium Funds, a business trust organized under the laws of the
State of Delaware (the "Fund"), and Navellier Securities Corp., a corporation
(the "Distributor").
W I T N E S S E T H
WHEREAS, the Fund is registering as an investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), and intends to
engage in business as an open-end management investment company;
WHEREAS, the Portfolio desires to employ the Distributor to act as
principal underwriter (as defined in the Act) with respect to the continuous
offering of its Class B Shares, at no par value (the "Shares"), and the
Distributor is willing to serve in such capacity pursuant to the terms and
conditions of this Agreement;
WHEREAS, this Agreement is being entered into pursuant to the
distribution plan adopted by the Portfolio in respect of the Shares pursuant to
Rule 12b-1 adopted under the 1940 Act (the "Distribution Plan") and has been
approved by a vote of the Board of Trustees of the Fund, including a majority of
the Trustees who are not "interested persons" of the Fund, as defined in the
Act, and who have no direct, or indirect financial interest in the operation of
this Agreement (the "Disinterested Trustees") cast in person at a meeting called
for the purpose of voting on this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, it is agreed by and between the parties hereto as follows:
1. APPOINTMENT OF THE DISTRIBUTOR.
(a) The Portfolio hereby appoints the Distributor as the
principal distributor of the Portfolio's Shares whether now existing or
hereafter created, to sell and to arrange for the sale of Shares to the public
on the terms set forth in this Agreement and the Distributor hereby accepts such
appointment and agrees to act in accordance herewith. The Portfolio, during the
term of this Agreement, shall sell Shares to the Distributor upon the terms and
conditions set forth herein.
(b) The Distributor agrees to purchase Shares, as principal for
its own account, from the Portfolio and to sell Shares, as principal, to
investors and dealers, upon the terms described herein and in the Portfolio's
prospectus (the "Prospectus") and statement of additional information (the
"Statement of Additional Information") included in the Fund's Registration
Statement (the "Registration Statement") last filed with the Securities and
Exchange Commission (the "SEC") and declared effective under the 1933 Act and
1940 Act or
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as said Prospectus and Statement of Additional Information may be otherwise
amended or supplemented from time to time thereafter.
2. EXCLUSIVE NATURE OF DUTIES. The Distributor shall be the
exclusive representative of the Portfolio, and act as its principal underwriter
and distributor of the Shares of the Portfolio, except that neither the
exclusive rights granted to the Distributor to sell the Shares nor the right to
receive compensation under Section 3(b) hereof or otherwise hereunder shall
apply to Shares issued by the Fund (i) in connection with the merger or
consolidation of any other investment company or personal holding company with
the Fund or the Portfolios or the acquisition by purchase or otherwise of all
(or substantially all) of the assets or outstanding shares of any such company
by the Fund or the Portfolios, or (ii) pursuant to reinvestment of dividends or
capital gains distributions.
3. PURCHASE OF SHARES FROM THE PORTFOLIO AND COMPENSATION OF
DISTRIBUTOR.
(a) Subsequent to the effective date of the Registration
Statement, the Portfolio will commence a continuous offering of the Shares.
During such continuous offering, the Distributor shall have the right to buy
from the Portfolio the Shares needed, but not more than the Shares needed
(except for clerical errors in transmissions), to fill unconditional orders for
Shares placed with the Distributor by investors or securities dealers. The
price which the Distributor shall pay for the Shares so purchased from the
Portfolio shall be the net asset value (determined as set forth in Section 3(e)
hereof) used in determining the public offering price on which such orders were
based.
(b) In consideration of the Distributor's services as principal
distributor of the Portfolio's Shares pursuant to this Distribution Agreement
and the Portfolio's Distribution Plan in respect of the Shares, the Portfolio
agrees: (i) to pay to the Distributor monthly in arrears its "Allocable Portion"
(as hereinafter defined) of a fee (the "Distribution Fee") which shall accrue
daily in an amount equal to the product of (A) 1/365th of 0.75% per annum
multiplied by (B) the net asset value of the Shares of the Portfolio outstanding
on such day and (ii) to withhold from redemption proceeds such Distributor's
Allocable Portion of the Contingent Deferred Sales Charges ("CDSCs") in respect
of the Shares and to pay the same over to such Distributor or at its direction.
In addition, in consideration of the Distributor's provision of, or arranging
for the provision of, shareholder services to persons who purchase Shares, the
Portfolio agrees to pay the Distributor monthly in arrears a fee (the
"Shareholder Servicing Fee") which shall accrue daily in an amount equal to the
product of (A) 1/365th of 0.25% per annum multiplied by (B) the net asset value
of the Shares of the Portfolio outstanding on such day. The Distributor may pay
all or any portion of the Shareholder Servicing Fee to securities dealers for
providing such shareholder services in respect of particular Shares. If, in lieu
of allowing a portion of the Shareholder Servicing Fee relating to a particular
Share to a securities dealer in consideration of such securities dealer
providing shareholder services to such Share for the twelve month period
following the issuance thereof, and for annual twelve month periods thereafter
during which Shares are held, the Distributor makes a payment to such securities
dealer on the settlement date for the issuance of such Share, and during
subsequent annual twelve month periods, in consideration of such security
dealer's commitment to provide such services for such twelve month period, and
during subsequent
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<PAGE>
annual twelve month periods, without further compensation the Distributor will
be deemed to have earned the Shareholder Servicing Fee that accrues in respect
of such Share during each such twelve month period (the "Earned Service Fee")
upon making such payment to such securities dealer and all of the provisions of
the Distribution Plan referred to in Section 3(c) below shall apply to the
Earned Service Fee, in the same manner as they apply to the Distributor's
Allocable Portion of the Distribution Fee and for this purpose references in the
provisions of the Distribution Plan referred to in Section 3(c) hereof to
"Distribution Fees" shall be deemed to include Earned Service Fees and
references in such provision to the financing of distribution services shall be
deemed to include financing of shareholder services.
(c) Each of the provisions set forth in the third sentence,
including clauses (I) through (IV) thereof, of the Portfolio's Distribution Plan
as in effect on the date hereof, together with the related definitions, are
hereby incorporated herein by reference with the same force and effect as if set
forth herein in its entirety.
(d) The Distributor's Allocable Portion of the Distribution Fee
and CDSCs shall be 100% until it ceases to be the principal distributor of the
Portfolio's Shares and thereafter shall be determined in a manner, to be agreed
between the Portfolio and the Distributor, that fairly allocates the
Distribution Fee and CDSCs among the Distributor and the successor distributors
in proportion to the outstanding Shares attributable to their respective
efforts.
(e) The Shares are to be resold by the Distributor to investors
at the public offering price, as set forth in Section 3(d) hereof, or to
Selected Dealers (as hereinafter defined) having agreements with the Distributor
upon the terms and conditions set forth in Section 7 hereof.
(f) The public offering price(s) of the Shares, i.e., the price
per share at which the Distributor or Selected Dealers (as hereinafter defined)
may sell the Shares to the public, shall be the public offering price as set
forth in the then current Prospectus and the Statement of Additional Information
relating to the Shares. If the public offering price does not equal an even
cent, the public offering price may be adjusted to the nearest cent. All
payments to the Portfolio hereunder shall be made in the manner set forth in
Section 3(g).
(g) The net asset value of the Shares of the Portfolio shall be
determined by the Fund or any agent of the Fund once daily at the times and
otherwise in accordance with the terms set forth in the Prospectus and the
Statement of Additional Information and guidelines established by the Board of
Trustees of the Fund, from time to time.
(h) The Fund shall have the right to suspend the sale of the
Shares at times when redemption is suspended pursuant to the conditions set
forth in Section 4(c) hereof. The Fund shall also have the right to suspend the
sale of the Shares if trading on the New York Stock Exchange or other exchange
shall have been suspended, if a banking moratorium shall have been declared by
federal or state authorities, or if there shall have been some other
extraordinary event, which, in the judgment of the Fund, makes it impracticable
to sell the Shares. The Fund also reserves the right to suspend the sale of
Shares at any time, in the
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<PAGE>
absolute discretion of its Board of Trustees.
(i) The Portfolio, or any agent of the Portfolio designated in
writing by the Fund, shall be promptly advised of all purchase orders for Shares
received by the Distributor. Any order may be rejected by the Portfolio;
PROVIDED, HOWEVER, that the Portfolio will not arbitrarily or without reasonable
cause refuse to accept orders for the purchase of Shares. The Distributor (or
its agent) upon receipt of payment therefore will enter the purchase and
ownership on its books (in lieu of issuing stock certificates) or a statement
confirming the issuance of Shares. The Distributor agrees to cause such payment
and such instructions to be delivered promptly to the Portfolio (or its agent).
4. REPURCHASE OR REDEMPTION OF SHARES.
(a) Any of the outstanding shares of any portfolio may be
tendered for redemption at any time, and the Portfolio agrees to redeem the
Shares so tendered in accordance with the applicable provisions set forth in the
Prospectus and the Statement of Additional Information. The price to be paid to
redeem the Shares shall be equal to the net asset value calculated in accordance
with the provisions of Section 3(e) hereof. All payments by the Portfolio
hereunder shall be made in the manner set forth below.
The Portfolio, shall pay the total amount of the redemption price
subsequent to its having received the notice of redemption in proper form, all
in accordance with applicable provisions of the Prospectus and the Statement of
Additional Information on or before the seventh day after receipt of notice of
redemption.
(b) The Distributor is authorized, as agent for the Portfolio,
to repurchase Shares from investors and Selected Dealers in accordance with the
applicable provisions set forth in the then current Prospectus and the Statement
of Additional Information. The Distributor shall promptly transmit to the
Fund's transfer agent for redemption, all orders so received from Selected
Dealers or investors for the repurchase of Shares. The Distributor shall be
responsible for the accuracy of instructions transmitted to the Fund's transfer
agent in connection with all such repurchases.
(c) The Fund may suspend the right of redemption or dealer
payment more than seven days (a) during any period when the New York Stock
Exchange or other exchange is closed (other than a customary weekend and holiday
closing), (b) when trading on any Exchange is restricted or an emergency exists
as determined by the Securities and Exchange Commission or the Fund so that
disposal of the Fund's investments or determination of the net asset value of
the Portfolio is not reasonably practicable, or (c) during any other period when
the Securities and Exchange Commission, by order, so permits.
5. DUTIES OF THE PORTFOLIO.
(a) The Portfolio shall furnish to the Distributor copies of
all information (including, without limitation, sales literature and
advertisements), financial statements and other papers prepared (or caused by
the Fund to be prepared) for publication or distribution
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<PAGE>
which refer in any way to the Distributor, prior to the use thereof, and shall
not use such material if the Distributor reasonably objects in writing within
five (5) business days (or such other time as may be mutually agreed) after
receipt thereof. The foregoing sentence shall survive the termination of this
Agreement. The Portfolio shall furnish or otherwise make available to the
Distributor such other information as the Distributor may reasonably request for
use in connection with the distribution of the Shares, including one certified
copy, upon request by the Distributor, of all financial statements prepared by
the Fund, in respect of the Portfolio, and examined by independent accountants.
The Portfolio shall, subject to the provisions of Section 8 hereof, make
available to the Distributor such number of copies of the Prospectus and the
Statement of Additional Information as the Distributor shall reasonably request.
(b) The Fund shall take, from time to time, but subject to the
necessary approval of the Portfolio's shareholders (as may be required by
applicable law), all necessary action to fix the number of its authorized Shares
and to register the Shares under the 1933 Act, to the end that there will be
available for sale such number of the Shares as investors may reasonably be
expected to purchase.
(c) The Portfolio shall use its best efforts to qualify and
maintain the qualification of an appropriate number of the Shares for sale under
the securities laws of such states as the Distributor and the Portfolio may
approve. Any such qualification may be withheld, terminated or withdrawn by the
Portfolio at any time in its discretion. The Distributor shall furnish such
information and other material relating to its affairs and activities as may be
required by the Portfolio in connection with such qualification.
(d) The Fund shall immediately advise the Distributor (i) when
any post-effective amendment to its Registration Statement or any further
amendment or supplement thereto or any further Registration Statement or
amendment or supplement thereto becomes effective, (ii) of any request by the
SEC for amendment to the Registration Statement or the then effective Prospectus
or for additional information, (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement, or the
initiation of any proceedings for that purpose, and (iv) of the happening of any
event which makes untrue any material statement made in the Registration
Statement or the current Prospectus or which, in the opinion of counsel for the
Fund, requires the making of a change in the Registration Statement or the
current Prospectus in order to make the statements therein not misleading. In
case of the happening at any time of any event which materially affects the Fund
or its securities and which should be set forth in a supplement to or an
amendment of the then effective Prospectus in order to make the statements
therein not misleading, the Fund shall prepare and furnish to the Distributor
such amendment or amendments to the then effective Prospectus, as will correct
the Prospectus so that as corrected it will not contain, or such supplement or
supplements to the then effective Prospectus which, when read in conjunction
with the then effective Prospectus, will make the combined information not
contain any untrue statement of a material fact or any omission to state any
material fact necessary in order to make the statements in the then effective
Prospectus not misleading. The Fund shall, if at any time the SEC shall issue
any stop order suspending the effectiveness of the Registration Statement, make
reasonable effort to obtain the prompt lifting of such order.
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<PAGE>
(e) Except as otherwise contemplated by Section 8(a) hereof,
the Fund shall, at the expense of the Distributor, furnish, in reasonable
quantities upon request of the Distributor, copies of Prospectuses, Statements
of Additional Information, Proxies and annual and interim reports of the Fund,
in respect of the Portfolio.
6. DUTIES OF THE DISTRIBUTOR.
(a) The Distributor shall devote reasonable time and effort to
effect sales of the Shares (but only in states and other jurisdictions in which
it may legally do so), but shall not be obligated to sell any specific number of
Shares. The services of the Distributor hereunder are not to be deemed
exclusive and nothing herein contained shall prevent the Distributor from
entering into distribution or dealer arrangements with other investment
companies so long as the performance of its obligations hereunder are not
impaired thereby.
(b) Neither the Distributor nor any Selected Dealer nor any
other person is authorized by the Fund to give any information or to make any
representations, other than those contained in the Registration Statement or
related Prospectus and Statement of Additional Information and any sales
literature specifically approved by the Fund.
(c) The Distributor shall cooperate with the Portfolio in
effecting the qualifications contemplated by Section 5(c) hereof.
(d) The Distributor shall furnish to the Portfolio copies of
all information including, without limitation, sales literature and
advertisements, financial statements and other papers prepared (or caused by the
Distributor to be prepared) for the publication or distribution, which refer in
any way to the Portfolio, prior to the use thereof, and shall not use such
material if the Portfolio reasonably objects in writing within (5) business days
(or such other time as may be mutually agreed) after receipt thereof. The
foregoing sentence shall survive the termination of this Agreement.
(e) In selling the Shares, the Distributor shall use its best
efforts in all respects to duly conform with the requirements of all applicable
federal, state and foreign laws. In connection therewith, the Distributor shall
use its best efforts in granting any Distributor's Consent under Section 7(b)
hereof, to make certain that such Foreign Offer or Sale does not violate
applicable law or otherwise cause the Fund to have any liability with respect to
such Foreign Offer or Sale.
7. SELECTED DEALER AGREEMENTS.
(a) The Distributor shall have the right to enter into selected
dealer agreements ("Selected Dealer Agreements") with securities dealers of its
choice (the "Selected Dealers") for the sale of Shares. In connection with such
sales by Selected Dealers, the Selected Dealer Agreement shall provide that the
portion of the Sales Charge which may be allocated to Selected Dealers shall be
limited to all or a portion of the Sales Charge as stated in the Portfolio's
then current Prospectus. In making agreements with Selected Dealers, the
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Distributor shall act only as principal and not as agent for the Portfolio.
Shares sold to Selected Dealers shall be for resale by such dealers only at the
public offering price(s) set forth in the Prospectus and the Statement of
Additional Information.
(b) The Distributor shall offer and sell Shares only to such
Selected Dealers as are (i) members in good standing of the National Association
of Securities Dealers (the "NASD"), or (ii) exempt from membership in the NASD.
In any Selected Dealer Agreement, the Distributor shall require the Selected
Dealer to obtain the written consent of the Distributor (the "Distributor's
Consent") prior to such Selected Dealer's making, causing to be made or
otherwise participating, directly or indirectly, in the making of any offer or
sale of any of the Fund's shares to any individual, corporation, partnership,
trust, joint venture, or other person or entity located outside of the United
States of America (a "Foreign Offer or Sale"). Such Selected Dealer Agreements
shall also provide that any Foreign Offer or Sale shall be made only upon the
terms and in accordance with the conditions set forth in the Distributor's
Consent.
(c) The Distributor shall adopt and follow procedures, as
approved by the Portfolio, for the confirmation of sales and Shares to investors
and Selected Dealers, the collection of amounts payable by investors and
Selected Dealers on such sales, and the cancellation of unsettled transactions,
as may be necessary to comply with the requirements of the National Association
of Securities Dealers, as such requirements may from time to time exist.
8. COMPENSATION AND EXPENSES.
(a) Pursuant to its Distribution Plan, and in order to further
enhance the distribution of the Shares, the Portfolio shall, on a monthly basis,
pay the Distributor the Distribution Fee and Shareholder Servicing Fee described
in Section 3(b) hereof. Out of said fees, the Distributor shall pay the
distribution expenditures which expenditures shall includ, but shall not be
limited to, the payment of compensation (including incentive compensation such
as continuing payments) to financial consultants, sales and marketing personnel,
broker-dealers, other financial institutions and other organizations to obtain
various distribution related services for the Portfolio and amounts payable
pursuant to arrangements entered into to fund the distribution effort. These
services include, among others, processing new shareholder account applications,
preparing and transmitting to the Fund's Transfer Agent computer processable
tapes of transactions by customers and serving as a source of information to
customers in answering their questions concerning the Portfolio and their
transactions with the Portfolio, expenses for advertising, the preparation and
distribution of sales literature and other promotional activities on behalf of
the Portfolio. The Portfolio shall pay the cost of preparing, printing and
distributing the Prospectuses and Statements of Additional Information to
existing investors, the cost of (i) preparation, filing and printing of any
Registration Statements and Prospectuses required to be filed by or under
applicable federal, state or foreign law, (ii) the preparation and mailing of
annual and interim reports, Prospectuses and proxy material to current
shareholders, (iii) qualifications of Shares for sale under the securities laws
of such states or other jurisdiction as shall be selected by the Portfolio and
the Distributor in accordance with Section 5(c) hereof and the costs and
expenses payable to each such state or
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other jurisdiction for continuing qualifications therein. The Distributor and/
or Investment Advisor shall pay for the printing and distribution of
Prospectuses and Statements of Additional Information to prospective investors.
The Portfolio is not obligated to pay any distribution expenses in
excess of the distribution fees with respect to the Portfolio, pursuant to this
Section 8.(a). In addition, any expenses of distribution of the Portfolio's
shares accrued by the Distributor in any one fiscal year of the Portfolio may
not be paid from distribution fees received from the Portfolio in subsequent
fiscal years and also will not be used to pay any interest expense, carrying
charges or other financing costs or overhead of the Distributor. "Overhead
costs" include items of expense generally referred to as overhead, including,
without limitation, costs related to leases, depreciation, salaries, payroll
taxes, supplies and insurance. The Distribution Fees and Shareholder Servicing
Fees described in Section 3(b) hereof payable to the Distributor may exceed
actual expenses incurred by the Distributor, the Investment Advisor and/or
others.
(b) The Portfolio shall not bear the expense of the
registration or qualification of the Distributor as a dealer or a broker under
federal, state or other applicable law or the expenses of continuing such
registration or qualification.
9. INDEMNIFICATION.
(a) The Portfolio agrees with the Distributor, for the benefit
of the Distributor and each person, if any, who controls the Distributor within
the meaning of Section 15 of the Securities Act and each and all and any of
them, to indemnify and hold harmless the Distributor and any such controlling
person from and against any and all losses, claims, damages or liabilities,
joint or several (including reasonable legal fees and expenses) to which they or
any of them may become subject under the Securities Act or under any other
statute, at common law or otherwise, and to reimburse the Distributor and such
controlling persons, if any, for any legal or other expenses (including the cost
of any investigation and preparation) reasonably incurred by them in connection
with any litigation, whether or not resulting in any liability, insofar as such
losses, claims, damages, liabilities or litigation arise out of, or are based
upon, any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or any Prospectus, filed with the SEC,
or any amendment thereof or supplement thereto, or which arise out of, or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; PROVIDED, HOWEVER, that this indemnity agreement shall not apply to
amounts paid in settlement of any such litigation if such settlement is effected
without the consent of the Portfolio or to any such losses, claims, damages,
liabilities or litigation arising out of, or based upon, any untrue statement or
alleged untrue statement of a material fact contained in any such Registration
Statement or prospectus, or any amendment thereof of or supplement thereof, or
arising out of, or based upon, the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, which statement or omission was made in
reliance upon information furnished in writing to the Portfolio by the
Distributor for inclusion in any such Registration Statement or Prospectus or
any amendment thereof or supplement thereto. The Distributor and each such
controlling person shall, within thirty (30) days after the complaint shall have
been
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served upon the Distributor or such controlling person in respect of which
indemnity may be sought from the Portfolio on account of its agreement contained
in this paragraph, notify the Portfolio in writing of the commencement thereof.
The omission of the Distributor or such controlling person so to notify the
Portfolio of any such litigation shall relieve the Portfolio from any liability
which it may have to the Distributor or such controlling person on account of
the indemnity agreement contained in this paragraph if such failure to timely
notify the Portfolio has resulted in substantial prejudice to the Portfolio, but
shall not relieve the Portfolio from any liability which it may have to the
Distributor or controlling person otherwise than on account of the indemnity
agreement contained in this paragraph. In case any such litigation shall be
brought against the Distributor or any such controlling person and notice of the
commencement thereof shall have been timely given to the Portfolio, the
Portfolio shall be entitled to participate in (and to the extent that it shall
wish, to direct) the defense thereof at its own expense, but such defense shall
be conducted by counsel of good standing and reasonably satisfactory to the
Distributor or such controlling person(s) or defendant(s) in the litigation.
The indemnity agreement of the Fund contained in this paragraph shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Distributor or any such controlling person, and shall
survive any delivery of shares of the Portfolio. The Portfolio agrees to notify
the Distributor promptly of the commencement of any litigation or proceeding
against it or any of it officers or directors of which it may be advised in
connection with the issue and sale of shares of the Portfolio.
(b) Anything herein to the contrary notwithstanding, the
agreement in subparagraph (a) of this Section, insofar as it constitutes a basis
of reimbursement by the Portfolio for liabilities (other than payment by the
Portfolio of expenses incurred or paid in the successful defense of any action,
suit or proceeding) arising under the Securities Act, shall not extend to the
extent of any interest therein of any person who is an underwriter or a partner
or controlling person of an underwriter within the meaning of Section 15 of the
Securities Act or who, at the date of this Agreement, is a Trustee of the Fund,
except to the extent that an interest of such character shall have been
determined by a court of appropriate jurisdiction as not against public policy
as expressed in the Securities Act. Unless in the opinion of counsel for the
Fund the matter has been adjudicated by controlling precedent, the Portfolio,
will, if a claim for such reimbursement is asserted, submit to a court of
appropriate jurisdiction the question of whether or not such interest is against
the public policy as expressed in the Securities Act.
(c) The Distributor agrees to indemnify and hold harmless the
Fund and Portfolio and its Trustees and such officers as shall have signed any
Registration Statement filed with the Commission from and against any and all
losses, claims, damages, or liabilities, joint or several, to which the
Portfolio or such Trustees or officers may become subject under the Securities
Act, under any other statute, at common law or otherwise, and will reimburse the
Portfolio or such Trustees or officers for any legal or other expenses
(including the cost of any investigation and preparation) reasonably incurred by
it or them or any of them in connection with any litigation, whether or not
resulting in any liability, insofar as such losses, claims, damages,
liabilities, or litigation arise out of, or are based upon, any untrue statement
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, which
statement or omission was made by the
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<PAGE>
Portfolio in reliance upon information furnished in writing to the Portfolio by
the Distributor for inclusion in any Registration Statement or any Prospectus,
or any amendment thereof or supplement thereto or otherwise for distribution or
publication. The Distributor shall not be liable for amounts paid in settlement
of any such litigation if such settlement was effected without its consent. The
Portfolio and its Trustees and such officers or defendant(s), in any such
litigation, shall, within thirty (30) days after the complaint shall have been
served upon the Portfolio or any such Trustee or officer in respect of which
indemnity may be sought from the Distributor on account of its agreement
contained in this paragraph, notify the Distributor in writing of the
commencement thereof. The omission of the Portfolio or such Trustee or officer
so to notify the Distributor of any such litigation shall relieve the
Distributor from any liability which it may have to the Portfolio or such
Trustee or officer of liability which t may have to the Portfolio or such
Trustee or officer on account of the indemnity agreement contained in this
paragraph, but shall not relieve the Distributor from any liability which it may
have to the Portfolio or such Trustee or officer otherwise than on account of
the indemnity agreement contained in this paragraph. In case any such
litigation shall be brought against the Portfolio or any such Trustee or officer
and timely notice of the commencement thereof shall have been so given to the
Distributor, the Distributor shall be entitled to participate in (and, to the
extent it shall wish, to direct) the defense thereof at its own expense, but
such defense shall be conducted by counsel of good standing and satisfactory to
the Portfolio. The indemnity agreement of the Distributor contained in this
paragraph shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Portfolio and shall survive any
delivery of shares of the Portfolio. The Portfolio agrees to notify the
Distributor promptly of the commencement of any litigation or proceeding against
it or any of its officers or Trustees or against any such controlling person of
which it may be advised in connection with the issue and sale of the Portfolio's
shares.
(d) Notwithstanding any provision contained in this Agreement,
no party hereto and no person or persons in control of any party hereto shall be
protected against any liability to the Portfolio or its security holders to
which they would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence, in the performance of their duties, or by reason of
their reckless disregard of their obligations and duties under this Agreement.
(e) Except as expressly provided in subparagraphs (a) and (c)
hereof, the agreements herein set forth have been made and are made solely for
the benefit of the Portfolio, the Distributor, and the persons expressly
provided for in subparagraphs (a) and (c), their respective heirs, successors,
personal representatives and assigns, and except as so provided, nothing
expressed or mentioned herein is intended or shall be construed to give any
person, firm or corporation, other than the Portfolio, the Distributor, and the
persons expressly provided for in subparagraphs (a) and (c), any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
representation, warranty or agreement herein contained. Except as so provided,
the terms "heirs, successors, personal representatives and assigns" shall not
include any purchaser of shares merely because of such purchase.
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<PAGE>
10. DURATION, TERMINATION AND AMENDMENT OF THIS AGREEMENT.
This Agreement shall become effective on the date it shall be
approved by a vote of the Board of Trustees of the Fund and of a majority of the
disinterested Trustees, and shall, unless terminated as hereinafter provided,
continue in effect for a period of more than one (1) year from such date so long
as such continuance is specifically approved at least annually by a vote of the
Board of Trustees of the Fund and of a majority of the disinterested Trustees or
by vote of a majority of the outstanding voting securities of the Portfolio.
This Agreement may be terminated by the Portfolio at any time, without the
payment of a penalty, by vote of a majority of the members of the Board of
Trustees of the Fund who are not interested persons of the Fund and have no
direct or indirect financial interest in the operation of the Distribution Plan
or in any agreement related to the Plan or by a vote of a majority of the
outstanding securities of the Portfolio on sixty (60) days' written notice to
the Distributor. In addition this Agreement shall terminate in the event of its
assignment. No provisions of this Agreement may be changed, waived, discharged,
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought and approved by a majority of the disinterested Trustees.
11. NOTICES.
Any notice or other communication required to be given pursuant to
this Agreement shall be deemed duly given if delivered or mailed by registered
mail, postage prepaid, to the Distributor Navellier Securities Corp. at One East
Liberty, Third Floor, Reno, Nevada 89501.
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<PAGE>
12. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance
with the laws of the State of Nevada and any action arising out of a breach of
this Agreement shall be brought in the State or Federal Court in San Francisco,
California.
ATTEST: The Navellier Millennium Funds
By: /s/
- ------------------------ ----------------------------------
Barry Sander, Trustee
By: /s/
----------------------------------
Joel Rossman, Trustee
By: /s/
----------------------------------
Jacques Delacroix, Trustee
By: /s/
----------------------------------
Arjen Kuyper, Trustee
By: /s/
----------------------------------
Louis G. Navellier, Trustee
ATTEST: NAVELLIER SECURITIES CORP.
By: /s/
- ------------------------ ----------------------------------
Louis G. Navellier, President
- 12 -
<PAGE>
DISTRIBUTION AGREEMENT
AGREEMENT, made as of this 26 day of August, 1999, by and between The
Navellier Top 20 Portfolio ("Portfolio") of The Navellier Millennium Funds, a
business trust organized under the laws of the State of Delaware (the
"Fund"), and Navellier Securities Corp., a corporation (the "Distributor").
W I T N E S S E T H
WHEREAS, the Fund is registering as an investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), and intends to
engage in business as an open-end management investment company;
WHEREAS, the Fund desires to employ the Distributor to act as principal
underwriter (as defined in the Act) with respect to the continuous offering
of its Class C shares of common stock of the Portfolio, at no par value (the
"Shares), and the Distributor is willing to serve in such capacity pursuant to
the terms and conditions of this Agreement;
WHEREAS, this Agreement has been approved by a vote of the Board of
Trustees of the Fund, including a majority of the Trustees who are not
"interested persons" of the Fund, as defined in the Act, and who have no direct,
or indirect financial interest in the operation of this Agreement (the
"disinterested Trustees") cast in person at a meeting called for the purpose of
voting on this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, it is agreed by and between the parties hereto as follows:
1. APPOINTMENT OF THE DISTRIBUTOR.
(a) The Fund hereby appoints the Distributor as the principal
underwriter and distributor of the Portfolio's Class C Shares, to sell and to
arrange for the sale of Shares to the public on the terms set forth in this
Agreement and the Distributor hereby accepts such appointment and agrees to
act in accordance herewith. The Fund, during the term of this Agreement,
shall sell Shares to the Distributor upon the terms and conditions set forth
herein.
(b) The Distributor agrees to purchase Shares, as principal for its
own account, from the Fund and to sell Shares, as principal, to investors and
dealers, upon the terms described herein and in the Fund's prospectus (the
"Prospectus") and statement of additional information (the "Statement of
Additional Information") included in the Fund's Registration Statement (the
"Registration Statement") last filed with the Securities and Exchange Commission
(the "SEC") and declared effective under the 1933 Act and 1940 Act
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<PAGE>
or as said Prospectus and Statement of Additional Information may be otherwise
amended or supplemented from time to time thereafter.
2. EXCLUSIVE NATURE OF DUTIES. The Distributor shall be the exclusive
representative of the Fund, in respect of the Portfolio, and act as its
principal underwriter and distributor, except that neither the exclusive rights
granted to the Distributor to sell the Shares nor the right to receive
compensation under Section 3(b) hereof or otherwise hereunder shall apply to
Shares issued by the Fund (i) in connection with the merger or consolidation of
any other investment company or personal holding company with the Fund or the
Portfolios or the acquisition by purchase or otherwise of all (or substantially
all) of the assets or outstanding shares of any such company by the Fund or the
Portfolios, or (ii) pursuant to reinvestment of dividends or capital gains
distributions.
3. PURCHASE OF SHARES FROM THE PORTFOLIO AND COMPENSATION OF DISTRIBUTOR.
(a) Subsequent to the effective date of the Registration Statement,
the Fund will commence a continuous offering of the Shares. During such
continuous offering, the Distributor shall have the right to buy from the Fund
the Shares needed, but not more than the Shares needed (except for clerical
errors in transmissions), to fill unconditional orders for Shares placed with
the Distributor by investors or securities dealers. The price which the
Distributor shall pay for the Shares so purchased from the Portfolio shall be
the net asset value (determined as set forth in Section 3(e) hereof) used in
determining the public offering price on which such orders were based.
(b) A contingent deferred sales charge ("CDSC") of 1% of the net
asset value of the Shares sold shall constitute the entire compensation (subject
to any fees paid to the Distributor as provided in Section 8 hereof) of the
Distributor for acting as principal underwriter and distributor of the
Portfolio. The 1% CDSC shall be eliminated if the shares are held for more
than 1 year. There is no CDSC for purchases of $1,000,000 or more or for
purchases by Trustees, the Distributor or its employees, or the Investment
Advisor or its employees.
(c) The Shares are to be resold by the Distributor to investors at
the public offering price, as set forth in Section 3(d) hereof, or to Selected
Dealers (as hereinafter defined) having agreements with the Distributor upon the
terms and conditions set forth in Section 7 hereof.
(d) The public offering price(s) of the Shares, i.e., the price per
share at which the Distributor or Selected Dealers (as hereinafter defined) may
sell the Shares to the public, shall be the public offering price as set forth
in the then current Prospectus and the Statement of Additional Information
relating to the Shares. If the public offering price does
2
<PAGE>
not equal an even cent, the public offering price may be adjusted to the nearest
cent. All payments to the Portfolio hereunder shall be made in the manner set
forth in Section 3(g).
(e) The net asset value of the shares of the Portfolio shall be
determined by the Fund or any agent of the Fund once daily at the times and
otherwise in accordance with the terms set forth in the Prospectus and the
Statement of Additional Information and guidelines established by the Board of
Trustees of the Fund, from time to time.
(f) The Fund shall have the right to suspend the sale of the Shares
at times when redemption is suspended pursuant to the conditions set forth in
Section 4(c) hereof. The Fund shall also have the right to suspend the sale of
the Shares if trading on the New York Stock Exchange or other exchange shall
have been suspended, if a banking moratorium shall have been declared by federal
or state authorities, or if there shall have been some other extraordinary
event, which, in the judgment of the Fund, makes it impracticable to sell the
Shares. The Fund also reserves the right to suspend the sale of Shares at any
time, in the absolute discretion of its Board of Trustees.
(g) The Fund, or any agent of the Fund designated in writing by the
Fund, shall be promptly advised of all purchase orders for Shares received by
the Distributor. Any order may be rejected by the Fund; PROVIDED, HOWEVER, that
the Fund will not arbitrarily or without reasonable cause refuse to accept
orders for the purchase of Shares. The Portfolio (or its agent) upon receipt
of payment therefore will enter the purchase and ownership on its books (in lieu
of issuing stock certificates) or a statement confirming the issuance of Shares.
The Distributor agrees to cause such payment and such instructions to be
delivered promptly to the Portfolio (or its agent).
4. REPURCHASE OR REDEMPTION OF SHARES.
(a) Any of the outstanding shares of the Portfolio may be tendered
for redemption at any time, and the Portfolio agrees to redeem the Shares so
tendered in accordance with the applicable provisions set forth in the
Prospectus and the Statement of Additional Information. The price to be paid
to redeem the Shares shall be equal to the net asset value calculated in
accordance with the provisions of Section 3(e) hereof. All payments by the
Portfolio hereunder shall be made in the manner set forth below.
The Portfolio, shall pay the total amount of the redemption price
subsequent to its having received the notice of redemption in proper form,
all in accordance with applicable provisions of the Prospectus and the Statement
of Additional Information on or before the seventh day after receipt of notice
of redemption.
(b) The Distributor is authorized, as agent for the Portfolio, to
repurchase Shares from investors and Selected Dealers in accordance with the
applicable provisions set forth in the then current Prospectus and the Statement
of Additional Information. The Distributor shall promptly transmit to the
Fund's transfer agent for redemption, all orders so received from Selected
Dealers or investors for the repurchase of Shares. The Distributor
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<PAGE>
shall be responsible for the accuracy of instructions transmitted to the Fund's
transfer agent in connection with all such repurchases.
(c) The Fund may suspend the right of redemption or dealer payment
more than seven days (a) during any period when the New York Stock Exchange or
other exchange is closed (other than a customary weekend and holiday closing),
(b) when trading on any Exchange is restricted or an emergency exists as
determined by the Securities and Exchange Commission or the Fund so that
disposal of the Fund's investments or determination of the net asset value of
the Portfolios is not reasonably practicable, or (c) during any other period
when the Securities and Exchange Commission, by order, so permits.
5. DUTIES OF THE PORTFOLIO.
(a) The Portfolio shall furnish to the Distributor copies of all
information (including, without limitation, sales literature and
advertisements), financial statements and other papers prepared (or caused by
the Fund to be prepared) for publication or distribution which refer in any
way to the Distributor, prior to the use thereof, and shall not use such
material if the Distributor reasonably objects in writing within five (5)
business days (or such other time as may be mutually agreed) after receipt
thereof. The foregoing sentence shall survive the termination of this
Agreement. The Portfolio shall furnish or otherwise make available to the
Distributor such other information as the Distributor may reasonably request
for use in connection with the distribution of the Shares, including one
certified copy, upon request by the Distributor, of all financial statements
prepared by the Fund, in respect of the Portfolio, and examined by
independent accountants. The Portfolio shall, subject to the provisions of
Section 8 hereof, make available to the Distributor such number of copies of
the Prospectus and the Statement of Additional Information as the Distributor
shall reasonably request.
(b) The Portfolio shall take, from time to time, but subject to the
necessary approval of the Portfolio's Class C shareholders (as may be required
by applicable law), all necessary action to fix the number of its authorized
Shares and to register the Shares under the 1933 Act, to the end that there
will be available for sale such number of the Shares as investors may
reasonably be expected to purchase.
(c) The Fund shall use its best efforts to qualify and maintain the
qualification of an appropriate number of the Shares for sale under the
securities laws of such states as the Distributor and the Fund may approve. Any
such qualification may be withheld, terminated or withdrawn by the Fund at any
time in its discretion. The Distributor shall furnish such information and
other material relating to its affairs and activities as may be required by the
Fund in connection with such qualification.
(d) The Fund shall immediately advise the Distributor (i) when any
post-effective amendment to its Registration Statement or any further amendment
or supplement thereto or any further Registration Statement or amendment or
supplement thereto becomes effective, (ii) of any request by the SEC for
amendment to the Registration Statement or the
4
<PAGE>
then effective Prospectus or for additional information, (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement, or the initiation of any proceedings for that purpose,
and (iv) of the happening of any event which makes untrue any material statement
made in the Registration Statement or the current Prospectus or which, in the
opinion of counsel for the Fund, requires the making of a change in the
Registration Statement or the current Prospectus in order to make the statements
therein not misleading. In case of the happening at any time of any event which
materially affects the Fund or its securities and which should be set forth in a
supplement to or an amendment of the then effective Prospectus in order to make
the statements therein not misleading, the Fund shall prepare and furnish to the
Distributor such amendment or amendments to the then effective Prospectus, as
will correct the Prospectus so that as corrected it will not contain, or such
supplement or supplements to the then effective Prospectus which, when read in
conjunction with the then effective Prospectus, will make the combined
information not contain any untrue statement of a material fact or any omission
to state any material fact necessary in order to make the statements in the then
effective Prospectus not misleading. The Fund shall, if at any time the SEC
shall issue any stop order suspending the effectiveness of the Registration
Statement, make reasonable effort to obtain the prompt lifting of such order.
(e) Except as otherwise contemplated by Section 8(a) hereof, the Fund
shall, at the expense of the Distributor, furnish, in reasonable quantities upon
request of the Distributor, copies of Prospectuses, Statements of Additional
Information, Proxies and annual and interim reports of the Fund, in respect of
the Portfolios.
6. DUTIES OF THE DISTRIBUTOR.
(a) The Distributor shall devote reasonable time and effort to effect
sales of the Shares (but only in states and other jurisdictions in which it may
legally do so), but shall not be obligated to sell any specific number of
Shares. The services of the Distributor hereunder are not to be deemed
exclusive and nothing herein contained shall prevent the Distributor from
entering into distribution or dealer arrangements with other investment
companies so long as the performance of its obligations hereunder are not
impaired thereby.
(b) Neither the Distributor nor any Selected Dealer nor any other
person is authorized by the Fund to give any information or to make any
representations, other than those contained in the Registration Statement or
related Prospectus and Statement of Additional Information and any sales
literature specifically approved by the Fund.
(c) The Distributor shall cooperate with the Fund in effecting the
qualifications contemplated by Section 5(c) hereof.
(d) The Distributor shall furnish to the Fund copies of all
information including, without limitation, sales literature and advertisements,
financial statements and other papers prepared (or caused by the Distributor to
be prepared) for the publication or distribution, which refer in any way to the
Fund, prior to the use thereof, and shall not use such material if the Fund
reasonably objects in writing within (5) business days (or such
5
<PAGE>
other time as may be mutually agreed) after receipt thereof. The foregoing
sentence shall survive the termination of this Agreement.
(e) In selling the Shares, the Distributor shall use its best efforts
in all respects to duly conform with the requirements of all applicable federal,
state and foreign laws. In connection therewith, the Distributor shall use its
best efforts in granting any Distributor's Consent under Section 7(b) hereof, to
make certain that such Foreign Offer or Sale does not violate applicable law or
otherwise cause the Fund to have any liability with respect to such Foreign
Offer or Sale.
7. SELECTED DEALER AGREEMENTS.
(a) The Distributor shall have the right to enter into selected
dealer agreements ("Selected Dealer Agreements") with securities dealers of its
choice (the "Selected Dealers") for the sale of Shares. In connection with such
sales by Selected Dealers, the Selected Dealer Agreement shall provide that the
portion of the Sales Charge which may be allocated to Selected Dealers shall be
limited to all or a portion of the Sales Charge as stated in the Fund's then
current Prospectus. In making agreements with Selected Dealers, the Distributor
shall act only as principal and not as agent for the Portfolio. Shares sold to
Selected Dealers shall be for resale by such dealers only at the public offering
price(s) set forth in the Prospectus and the Statement of Additional
Information.
(b) The Distributor shall offer and sell Shares only to such Selected
Dealers as are (i) members in good standing of the National Association of
Securities Dealers (the "NASD"), or (ii) exempt from membership in the NASD. In
any Selected Dealer Agreement, the Distributor shall require the Selected Dealer
to obtain the written consent of the Distributor (the "Distributor's Consent")
prior to such Selected Dealer's making, causing to be made or otherwise
participating, directly or indirectly, in the making of any offer or sale of any
of the Portfolio's shares to any individual, corporation, partnership, trust,
joint venture, or other person or entity located outside of the United States of
America (a "Foreign Offer or Sale"). Such Selected Dealer Agreements shall also
provide that any Foreign Offer or Sale shall be made only upon the terms and in
accordance with the conditions set forth in the Distributor's Consent.
(c) The Distributor shall adopt and follow procedures, as approved by
the Portfolio, for the confirmation of sales and Shares to investors and
Selected Dealers, the collection of amounts payable by investors and Selected
Dealers on such sales, and the cancellation of unsettled transactions, as may
be necessary to comply with the requirements of the National Association of
Securities Dealers, as such requirements may from time to time exist.
8. COMPENSATION AND EXPENSES.
(a) Pursuant to its 12b-1 Distribution Plan, and in order to further
enhance the distribution of the shares, the Portfolio shall, on a monthly
basis in arrears, pay the Distributor a 12b-1 fee of 1/12 of 1.00% of the
aggregate average daily net assets of the
6
<PAGE>
Portfolio. Out of said 12b-1 fee (and/or sales load), the Distributor shall
pay the distribution expenditures which expenditures shall include, but shall
not be limited to, the payment of compensation (including incentive
compensation such as continuing payments) to financial consultants, sales and
marketing personnel, broker-dealers, other financial institutions and other
organizations to obtain various distribution and shareholder related services
for the Fund. These services include, among others, processing new
shareholder account application, preparing and transmitting to the Fund's
Transfer Agent computer processable tapes of transactions by customers and
serving as a source of information to customers in answering their questions
concerning the Portfolio and their transactions with the Portfolio, expenses
for advertising, the preparation and distribution of sales literature and
other promotional activities on behalf of the Portfolio. The Portfolio shall
pay its proportionate share of the cost of preparing, printing and
distributing the Prospectuses and Statements of Additional Information to
existing investors, its proportionate share of the cost of (i) preparation,
filing and printing of any Registration Statements and Prospectuses required
to be filed by or under applicable federal, state or foreign law, (ii) the
preparation and mailing of annual and interim reports, Prospectuses and proxy
material to current shareholders, (iii) qualifications of Shares for sale
under the securities laws of such states or other jurisdiction as shall be
selected by the Fund and the Distributor in accordance with Section 5(c)
hereof and the costs and expenses payable to each such state or other
jurisdiction for continuing qualifications therein. The Distributor and/or
Investment Advisor shall pay for the printing and distribution of
Prospectuses and Statements of Additional Information to prospective
investors.
The Portfolio is not obligated to pay any distribution expenses in
excess of the distribution fees with respect to the Portfolio, pursuant to
this Section 8.(a). In addition, any expenses of distribution of the
Portfolio's shares accrued by the Distributor in any one fiscal year of the
Portfolio may not be paid from distribution fees received from the
Portfolio in subsequent fiscal years and also will not be used to pay any
interest expense, carrying charges or other financing costs or overhead of
the Distributor. "Overhead costs" include items of expense generally
referred to as overhead, including, without limitation, costs related to
leases, depreciation, salaries, payroll taxes, supplies and insurance. The
12b-1 fee payable to Distributor may exceed actual expenses paid or incurred
by Distributor, the Investement Advisor or others.
(b) The Portfolio shall not bear the expense of the registration or
qualification of the Distributor as a dealer or a broker under federal, state or
other applicable law or the expenses of continuing such registration or
qualification.
9. INDEMNIFICATION.
(a) The Portfolio agrees with the Distributor, for the benefit of the
Distributor and each person, if any, who controls the Distributor within the
meaning of Section 15 of the Securities Act and each and all and any of them, to
indemnify and hold harmless the Distributor and any such controlling person from
and against any and all losses, claims, damages or liabilities, joint or several
(including reasonable legal fees and expenses) to which they or any of them may
become subject under the Securities Act or under any other statute, at common
law or otherwise, and to reimburse the Distributor and such controlling persons,
if any, for any legal or other expenses (including the cost of any investigation
and preparation) reasonably incurred by them in connection with any litigation,
whether or not
7
<PAGE>
resulting in any liability, insofar as such losses, claims, damages,
liabilities or litigation arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or any Prospectus, filed with the SEC, or any
amendment thereof or supplement thereto, or which arise out of, or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; PROVIDED, HOWEVER, that this indemnity agreement shall not apply
to amounts paid in settlement of any such litigation if such settlement is
effected without the consent of the Portfolio or to any such losses, claims,
damages, liabilities or litigation arising out of, or based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
such Registration Statement or prospectus, or any amendment thereof of or
supplement thereof, or arising out of, or based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, which statement or
omission was made in reliance upon information furnished in writing to the
Portfolio by the Distributor for inclusion in any such Registration Statement
or Prospectus or any amendment thereof or supplement thereto. The
Distributor and each such controlling person shall, within thirty (30) days
after the complaint shall have been served upon the Distributor or such
controlling person in respect of which indemnity may be sought from the
Portfolio on account of its agreement contained in this paragraph, notify the
Portfolio in writing of the commencement thereof. The omission of the
Distributor or such controlling person so to notify the Portfolio of any such
litigation shall relieve the Portfolio from any liability which it may have
to the Distributor or such controlling person on account of the indemnity
agreement contained in this paragraph if such failure to timely notify the
Portfolio has resulted in substantial prejudice to the Portfolio, but shall
not relieve the Portfolio from any liability which it may have to the
Distributor or controlling person otherwise than on account of the indemnity
agreement contained in this paragraph. In case any such litigation shall be
brought against the Distributor or any such controlling person and notice of
the commencement thereof shall have been timely given to the Portfolio, the
Portfolio shall be entitled to participate in (and, to the extent that it
shall wish, to direct) the defense thereof at its own expense, but such
defense shall be conducted by counsel of good standing and reasonably
satisfactory to the Distributor or such controlling person(s) or defendant(s)
in the litigation. The indemnity agreement of the Portfolio contained in
this paragraph shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of the Distributor or any such
controlling person, and shall survive any delivery of shares of the
Portfolio. The Portfolio agrees to notify the Distributor promptly of the
commencement of any litigation or proceeding against it or any of it officers
or directors of which it may be advised in connection with the issue and sale
of shares of the Portfolio.
(b) Anything herein to the contrary notwithstanding, the agreement in
subparagraph (a) of this Section, insofar as it constitutes a basis of
reimbursement by the Portfolio for liabilities (other than payment by the
Portfolio of expenses incurred or paid in the successful defense of any
action, suit or proceeding) arising under the Securities Act, shall not
extend to the extent of any interest therein of any person who is an
underwriter or a partner or controlling person of an underwriter within the
meaning of Section 15 of the Securities Act or who, at the date of this
Agreement, is a Trustee of the Fund, except to the extent that an interest of
such character shall have been determined by a court of appropriate
8
<PAGE>
jurisdiction as not against public policy as expressed in the Securities Act.
Unless in the opinion of counsel for the Fund the matter has been adjudicated
by controlling precedent, the Portfolio, will, if a claim for such
reimbursement is asserted, submit to a court of appropriate jurisdiction the
question of whether or not such interest is against the public policy as
expressed in the Securities Act.
(c) The Distributor agrees to indemnify and hold harmless the
Portfolio and the Funds's Trustees and such officers as shall have signed any
Registration Statement filed with the Commission from and against any and all
losses, claims, damages, or liabilities, joint or several, to which the
Portfolio or such Trustees or officers may become subject under the
Securities Act, under any other statute, at common law or otherwise, and will
reimburse the Portfolio or such Trustees or officers for any legal or other
expenses (including the cost of any investigation and preparation) reasonably
incurred by it or them or any of them in connection with any litigation,
whether or not resulting in any liability, insofar as such losses, claims,
damages, liabilities, or litigation arise out of, or are based upon, any
untrue statement or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, which statement or omission was made by the Portfolio in reliance
upon information furnished in writing to the Fund by the Distributor for
inclusion in any Registration Statement or any Prospectus, or any amendment
thereof or supplement thereto or otherwise for distribution or publication.
The Distributor shall not be liable for amounts paid in settlement of any
such litigation if such settlement was effected without its consent. The
Portfolio and the Fund's Trustees and such officers or defendant(s), in any
such litigation, shall, within thirty (30) days after the complaint shall
have been served upon the Portfolio or any such Trustee or officer in respect
of which indemnity may be sought from the Distributor or account of its
agreement contained in this paragraph, notify the Distributor in writing of
the commencement thereof. The omission of the Portfolio or such Trustee or
officer so to notify the Distributor of any such litigation shall relieve the
Distributor from any liability which it may have to the Portfolio or such
Trustee or officer of liability which it may have to the Portfolio or such
Trustee or officer on account of the indemnity agreement contained in this
paragraph, but shall not relieve the Distributor from any liability which it
may have to the Portfolio or such Trustee or officer otherwise than on
account of the indemnity agreement contained in this paragraph. In case any
such litigation shall be brought against the Fund, Portfolio or any such
Trustee or officer and timely notice of the commencement thereof shall have
been so given to the Distributor, the Distributor shall be entitled to
participate in (and, to the extent it shall wish, to direct) the defense
thereof at its own expense, but such defense shall be conducted by counsel of
good standing and satisfactory to the Fund. The indemnity agreement of the
Distributor contained in this paragraph shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
Portfolio and shall survive any delivery of shares of the Portfolio. The
Portfolio agrees to notify the Distributor promptly of the commencement of
any litigation or proceeding against it or any of its officers or the Fund's
Trustees or against any such controlling person of which it may be advised in
connection with the issue and sale of the Portfolio's shares.
(d) Notwithstanding any provision contained in this Agreement, no
party hereto and no person or persons in control of any party hereto shall be
protected against any liability to the Portfolio or its security holders to
which they would otherwise be subject by
9
<PAGE>
reason of willful misfeasance, bad faith, or gross negligence, in the
performance of their duties, or by reason of their reckless disregard of their
obligations and duties under this Agreement.
(e) Except as expressly provided in subparagraphs (a) and (c) hereof,
the agreements herein set forth have been made and are made solely for the
benefit of the Fund, the Portfolio, the Distributor, and the persons
expressly provided for in subparagraphs (a) and (c), their respective heirs,
successor, personal representatives and assigns, and except as so provided,
nothing expressed or mentioned herein is intended or shall be construed to
give any person, firm or corporation, other than the Fund, the Portfolio, the
Distributor, and the persons expressly provided for in subparagraphs (a) and
(c), any legal or equitable right, remedy or claim under or in respect of
this Agreement or any representation, warranty or agreement herein contained.
Except as so provided, the terms "heirs, successors, personal representatives
and assigns" shall not include any purchaser of shares merely because of such
purchase.
10. DURATION, TERMINATION AND AMENDMENT OF THIS AGREEMENT.
This Agreement shall become effective on the date it shall be approved
by a vote of the Board of Trustees of the Fund and of a majority of the
disinterested Trustees, and shall, unless terminated as hereinafter provided,
continue in effect for a period of more than one (1) year from such date so
long as such continuance is specifically approved at least annually by a vote
of the Board of Trustees of the Fund and of a majority of the disinterested
Trustees or by vote of a majority of the outstanding voting securities of the
Class C shares of the Portfolio. This Agreement may be terminated by the
Portfolio at any time or by the Distributor on sixty (60) days' written
notice to the Portfolio. No provisions of this Agreement may be changed,
waived, discharged, or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought and approved by a majority of the
disinterested Trustees.
11. NOTICES.
Any notice or other communication required to be given pursuant to
this Agreement shall be deemed duly given if delivered or mailed by registered
mail, postage prepaid, to the Distributor at One East Liberty, Third Floor,
Reno, Nevada 89501 or to the Portfolio at One East Liberty, Third Floor, Reno,
Nevada 89501.
10
<PAGE>
12. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Nevada and any action arising out of a breach of this
Agreement shall be brought in the State or Federal Court in San Francisco,
California.
ATTEST: THE NAVELLIER MILLENNIUM FUNDS
By: /s/
- ------------------------ --------------------------------
Barry Sander, Trustee
By: /s/
--------------------------------
Joel Rossman, Trustee
By: /s/
--------------------------------
Jacques Delacroix, Trustee
By: /s/
--------------------------------
Arjen Kuyper, Trustee
By: /s/
--------------------------------
Louis G. Navellier, Trustee
ATTEST: NAVELLIER SECURITIES CORP.
By: /s/
- ------------------------ --------------------------------
Louis G. Navellier, President
11
<PAGE>
THE DISTRIBUTION PLAN FOR THE NAVELLIER TOP 20 PORTFOLIO
The Navellier Top 20 Portfolio (the "Portfolio") has adopted this Distribution
Plan pursuant to Rule 12b-1 under the 1940 Act (the "Plan") pursuant to which
the Portfolio will compensate persons acting as principal distributor for its
Class B Shares ("Share"s) from time to time (each such person, a "Distributor")
for services to the Portfolio in that capacity.
Pursuant to this Plan, the Portfolio shall pay to the Distributor, as
compensation, its Allocable Portion of a fee (the "Distribution Fee"), which
shall accrue daily, at the rate of 0.75% per annum of the average daily net
asset value of the Class B Shares and a fee (a "Shareholder Servicing Fee"),
which shall accrue daily, at the rate of 0.25% per annum of the average daily
net asset value of the Class B Shares. The Distribution Agreement between the
Portfolio and the Distributor shall provide that, notwithstanding anything to
the contrary in this Plan or such Distribution Agreement:
I. The Distributor will have earned its Allocable Portion of the
Distribution Fee as determined from time to time on the settlement date
of each sale of a Class B Share, in respect of which the Distributor has
funded the related brokerage commission, taken into account in
determining its Allocable Portion at such time;
II. The Portfolio's obligation to pay the Distribution Fee shall not be
terminated or modified (including without limitation by way of
termination of this Plan or the Distribution Agreement) except by the
full Board of Trustees of the Fund, acting in good faith, and then only
so long as after the effective date of such modification or termination
neither the Portfolio, any successor Fund or any Fund that acquires
substantially all the assets of the Portfolio nor any Fund sponsor or
affiliate thereof, pay, directly or indirectly, a fee or expense
reimbursement for the provision of shareholder services to the holders of
Class B shares or any substantially similar class of shares;
III. The Portfolio will not take any action to waive or change any Contingent
Deferred Sales Chare ("CDSC") except as provided in the Portfolio's
prospectus on the date such Share was issued, and nothing will terminate
such Distributor's right to its Allocable Portion of the CDSCs;
IV. Such Distributor may assign, sell or pledge (collectively, "Transfer")
its rights to the Distribution Fees and CDSCs and the Portfolio shall pay
to the assignee, purchaser or pledgee (collectively, "Transferees"), as
third party beneficiaries, such Distributor's Allocable Portion of the
Distribution Fees or CDSCs so transferred, and except as provided in (II)
above, the Portfolio's obligation to pay the same to such Transferees
shall be absolute and unconditional and shall not be subject to offset,
counterclaim or defense, including without limitation, any of the
foregoing based on the bankruptcy of such Distributor; and
- 1 -
<PAGE>
V. The Distributor may pay or allow all or any portion of the Shareholder
Servicing Fee to securities dealers for providing such shareholder
services in respect of particular Shares. If, in lieu of paying or
allowing a portion of the Shareholder Servicing Fee relating to a
particular Share to a securities dealer in consideration of such
securities dealer providing shareholder services to such Share for the
twelve month period following the issuance thereof, and for annual twelve
month periods thereafter during which the Shares are held, the
Distributor makes a payment to such securities dealer on the settlement
date for the issuance of such Share in consideration of such security
dealer's commitment to provide such services for such twelve month
periods without further compensation, the Distributor will be deemed to
have earned the Shareholder Servicing Fee that accrues in respect of such
Share during such twelve month periods (the "Earned Service Fee") upon
making such payment to such securities dealer, all of the provisions of
clauses (I) through (IV) above shall apply to the Earned Service Fee, in
the same manner as they apply to the Distributor's Allocable Portion of
the Distribution Fee and for this purpose references in clauses (I)
through (IV) above to "Distribution Fees" shall be deemed to include
Earned Service Fees and references therein to the financing of
distribution services shall be deemed to include financing of shareholder
services.
For purposes of this Plan, the term Allocable Portion shall mean, in respect of
a Distributor the portion allocable to such Distributor in accordance with
allocation procedures, to which the Portfolio and such Distributor shall agree,
which fairly allocate the Distribution Fee and CDSCs among such Distributor and
any predecessor or successor Distributors in proportion to the outstanding Class
B Shares attributable to their respective efforts.
The Distributor may apply the Distribution Fee and Shareholder Servicing Fee to
expenses incurred and services rendered for the promotion and distribution of
the Class B Shares of the Fund, including, but not limited to, the printing of
propectuses, statements of additional information and reports used for sales
purposes, expenses (including personnel of Distributor) of preparation of sales
literature and related expenses, advertisements and other distribution-related
expenses, including a prorated portion of Distributor's overhead expenses
attributable to the distribution of the Fund's Class B Shares and amounts
payable pursuant to arrangements entered into to fund the distribution effort.
Payment of the Distribution Fees and Shareholder Servicing Fees shall be made
monthly.
The Shareholder Servicing Fee includes amounts that the Portfolio pays to
Distributor or others as a service fee to compensate such parties for personal
services provided to shareholders of such Portfolio and/or the maintenance of
shareholder accounts.
The Distributor may keep all of said Distribution Fees and Shareholder Servicing
Fees it receives to the extent it is not required to pay others for such
services. Such fees are paid
- 2 -
<PAGE>
pursuant to the distribution plan and distribution agreements entered into
between such service providers and Distributor or the Portfolio directly. This
Plan for the Portfolio also covers payments by the Distributor and Investment
Advisor to the extent such payments are deemed to be for the financing of any
activity primarily intended to result in the sale of shares issued by the Fund
within the context of Rule 12b-1. The payments under this Plan are included in
the maximum operating expenses which may be borne by such Portfolio. Payments
under this Plan for such Portfolio may exceed actual expenses incurred by the
Distributor, Investment Advisor or others.
In addition to 12b-1 fees, investors may also be charged a transaction fee if
they effect transactions in Portfolio Shares through a broker or agent.
This Plan shall become effective when approved by a vote of at least a majority
of the outstanding voting securities of the Portfolio or by a vote of the Board
of Trustees of the Fund, and of the Trustees, who are not interested persons of
the Fund and have no direct or indirect financial interest in the operations of
the Plan or in an agreement related to the Plan, cast in person at a meeting
called for the purpose of voting on this Plan.
This Plan shall continue in effect for a period of more than one year from the
date of its execution or adoption only so long as such continuance is
specifically approved at least annually by the Trustees of the Fund in the
manner specified in the immediately preceding sentence.
Any person authorized to direct the disposition of monies paid or payable to the
Portfolio pursuant to this Plan or any related agreement shall provide to the
Fund's Board of Trustees for their review at least quarterly a written report of
the amounts so expended and the purposes for which such expenditures were made.
This Plan may be terminated at any time by vote of a majority of the Trustees of
the Fund, who are not interested persons of the Fund and have no direct or
indirect financial interest in the operation of this Plan or in any agreements
related to this Plan, or by vote of a majority of the outstanding Class B
Shares of the Portfolio.
This Plan may not be amended to increase materially the amount to be spent for
distribution without Shareholder approval and that all material amendments of
this Plan must be approved by the Trustees of the Fund as provided in the fourth
preceding sentence.
- 3 -
<PAGE>
SELECTED DEALER AGREEMENT
Navellier Securities Corp.
One East Liberty, Third Floor
Reno, Nevada 89501
, 1999
-----------------
Dear Sir/Madam:
We invite you, upon the following terms and conditions, to participate as
principal in the distribution of Class A shares ("shares") of the Navellier Top
20 Portfolio ("Portfolio") of the Navellier Millennium Funds (the "Fund"), of
which we are Distributor;
1. You are to offer and sell such shares only at the public offering
prices which shall be then currently in effect in accordance with the terms of
the then current prospectus of the Fund. You agree to act only as principal in
such transactions and shall not have authority to act as transfer agent for the
Fund, for us, or for any other dealer in any respect. All orders are subject to
acceptance or rejection by us or the Fund (or its agent) (in such party's sole
discretion) and become effective only upon confirmation by us or the Fund (or
its agent).
2. On each purchase of shares by you from us, the total sales charges, if
any, to selected dealers shall be as stated in the Fund's then current
prospectus.
Such sales charges, if any, to selected dealers are subject to reductions
under circumstances as described in the Fund's then current prospectus.
There is no sales charge to selected dealers on the reinvestment of
dividends or capital gains distributions or upon any merger or consolidation of
any other entity with the Fund or Portfolio or the acquisition of the assets or
shares of any entity by the Fund or Portfolio.
3. As a selected dealer, you are hereby authorized (i) to place orders
directly with the Portfolio for shares to be resold by us to you, at all
times, subject to (a) the applicable terms and conditions governing the
placement of orders by us set forth in the Distribution Agreement between us
and the Portfolio, and (b) applicable compensation provisions set forth in
the Fund's then current prospectus, and (c) instructions issued by us from
time to time, and (ii) to tender shares directly to the Portfolio or its
transfer agent for redemption subject to (a) the applicable terms and
conditions set forth in the Distribution Agreement, (b) the provisions of the
Fund's then current prospectus, or (c) instructions issued by us from time to
time. You appoint the transfer agent for the Fund as your agent to execute
customers' purchases of shares sold to you by us in accordance with the terms
and provisions of any account, program, plan or service established or used
by your customers and to confirm each such purchase to your customers on your
behalf, and you guarantee the legal capacity of your customers so purchasing
such shares and any co-owners of such shares.
<PAGE>
4. Repurchases of shares will be made at the net asset value of such
shares in accordance with the then current prospectus of the Fund.
5. You represent that you are either (i) a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD") or (ii) that you
are exempt from membership in the NASD. If you are a member of the NASD, any
termination of such membership in good standing shall terminate this Agreement.
6. Regardless of whether or not you are a member of the NASD this
Agreement is in all respects subject to, and you agree to abide by all the rules
and regulations of the NASD concerning the distribution of securities of
open-end investment companies, including, without limitation, Section 26 of
Article III of the Rules of Fair Practice of the NASD which shall control any
provisions to the contrary in this Agreement.
7. You agree:
(a) To purchase shares only from us or from your customers.
(b) To purchase shares from us only for the purpose of covering
purchase orders already received or for your own bona fide
investment.
(c) That you will not purchase any shares from your customers at
prices lower than the redemption or repurchase prices then quoted
by the Portfolio. You shall, however, be permitted to sell
shares for the account of their record owners to the Portfolio at
the repurchase prices currently established for such shares and
may charge the owner a fair commission for handling the
transaction.
(d) That you will not withhold placing customers' orders for shares
so as to profit yourself as a result of such withholding.
(e) You will not make, cause to be made, or otherwise participate,
directly or indirectly, in the making of, any offer or sale (a
"Foreign Offer or Sale") of any of the shares to any individual,
corporation, partnership, trust, joint venture or other person or
entity located outside of the geographical boundaries of the
United States of America without first obtaining our written
consent. Any Foreign Offer or Sale will be made only upon the
terms and in accordance with the conditions set forth in such
consent.
(f) Except as provided by Section 12 hereof, all expenses which you
incur in connection with your activities under this Agreement
will be borne by you.
<PAGE>
8. We shall not accept from you any conditional orders for shares.
Confirmations of purchases of shares (or the delivery of share certificates,
if any) shall be made by the Portfolio only against receipt of the purchase
price. If payment for the purchase is not received within the time customary
for such payments, the sale may be cancelled forthwith without any
responsibility or liability on our part or on the part of the Portfolio (in
which case you will be responsible for any loss, including loss or profit,
suffered by the Portfolio resulting from your failure to make payment as
aforesaid), or, at our option, we may sell the shares so ordered back to the
Portfolio (in which case we may hold you responsible for any loss, including
loss or profit suffered by us resulting from your failure to make payment as
aforesaid).
9. You will not offer or sell any of the shares except under
circumstances that will result in compliance with the applicable federal, state
and foreign securities and other applicable laws and in connection with sales
and offers to sell shares you will furnish to each person to whom any such sale
or offer is made a copy of the Fund's then current prospectus. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us herein. Nothing herein contained however, shall be
deemed to be a condition, stipulation or provision binding any persons acquiring
any security to waive compliance with any provision of the Securities Act of
1933, or of the Rules and Regulations of the Securities and Exchange Commission,
or to relieve the parties hereto from any liability arising under the Securities
Act of 1933.
10. No person is authorized to make any representations concerning shares
except those contained in the then current prospectus and printed information
issued by the Fund or by us as information supplemental to such prospectus.
We shall supply you with prospectuses and reasonable quantities of
supplemental sales literature, sales bulletins, and additional information as
same are issued. You agree not to use other advertising or sales material
relating to the Portfolio unless approved in writing by us in advance of such
use. Any printed information furnished by us other than the then current
prospectus for the Fund, periodic reports and proxy solicitation materials
are our sole responsibility and not the responsibility of the Fund or the
Portfolio, and you agree that the Fund or the Portfolio shall have no
liability or responsibility to you in these respects unless expressly assumed
thereby in connection therewith.
11. Either party to this Agreement may cancel this Agreement by giving
written notice to the other. Such notice shall be deemed to have been given on
the date on which it was either delivered personally to the other party, or was
mailed postpaid or delivered to a telegraph office for transmission to the other
party at his or its address as shown below. If you are a member of the NASD,
upon your ceasing to be a member in good standing of the NASD, this Agreement
shall automatically terminate. This Agreement and any schedule of distribution
assistance payments adopted pursuant to paragraph 12 hereof may be amended by us
at any time and your placing of an order after the effective date of any such
amendment shall constitute your acceptance thereof.
<PAGE>
12. As compensation for your marketing and customer services, we shall
pay you 90% of the Sales Charge (if any, paid by each investor you obtain for
the Fund) and 75% of the 0.25% annual 12b-1 fee, payable pro rata monthly,
as set forth in the Distribution Agreement between The Portfolio and the
Distributor (i.e., 100% of 0.25% of the value of the assets of each investor
you obtain for the Fund).
13. Our obligations to you under this Agreement are subject to all the
provisions of any distributorship agreement entered into between us and the
Fund, a copy of which you hereby acknowledge receiving. You understand and
agree that in performing your services covered by this Agreement you are acting
as principal, and that we are in no way responsible for any of your acts, or the
acts of your employees or representatives, and that neither you nor your
employees, representatives, or agents is our agent, partner, or employee, or the
agent or employee of the Fund or the Portfolio.
<PAGE>
14. This Agreement shall be construed in accordance with the laws of the
State of Nevada and shall be binding upon both parties hereto when signed by us
and accepted by you in the space provided below. In the event of any
disagreement or litigation arising out of or concerning this Agreement the
parties agree that such litigation or arbitration (if both parties agree to
arbitration) shall only be brought and decided in a court (or arbitration, if
mutually agreed upon) located in San Francisco, California. The prevailing
party to such action shall be entitled, in addition to any other relief, to its
reasonable attorneys' fees, costs, and expenses.
NAVELLIER SECURITIES CORP.
By:____________________________
(Authorized Signature)
Firm Name
------------------------------------------------------------
Address
--------------------------------------------------------------
City State Zip Code
------------------------ ----- ------------------
ACCEPTED BY (signature)
---------------------------------------------
Name (print) Title
------------------------ --------------------------
Date 19 Telephone #
---------- --------- ------------------------------
Please return two signed copies of this Agreement
(one of which will be signed by us and thereafter
returned to you) in the
accompanying return envelope to:
Navellier Securities Corp.
One East Liberty, Third Floor
Reno, Nevada 89501
<PAGE>
SELECTED DEALER AGREEMENT
Navellier Securities Corp.
One East Liberty, Third Floor
Reno, Nevada 89501
, 2000
-----------------
Dear Sir/Madam:
We invite you, upon the following terms and conditions, to participate as
principal in the distribution of Class B shares ("shares") of the Navellier Top
20 Portfolio ("Portfolio") of the Navellier Millennium Funds (the "Fund"), of
which we are Distributor;
1. You are to offer and sell such shares only at the public offering
prices which shall be then currently in effect in accordance with the terms of
the then current prospectus of the Fund. You agree to act only as principal in
such transactions and shall not have authority to act as transfer agent for the
Fund, for us, or for any other dealer in any respect. All orders are subject to
acceptance or rejection by us or the Fund (or its agent) (in such party's sole
discretion) and become effective only upon confirmation by us or the Fund (or
its agent).
2. On each purchase of shares by you from us, the total sales charges, if
any, to selected dealers shall be as stated in the Fund's then current
prospectus.
Such sales charges, if any, to selected dealers are subject to reductions
under circumstances as described in the Fund's then current prospectus.
There is no sales charge to selected dealers on the reinvestment of
dividends or capital gains distributions or upon any merger or consolidation of
any other entity with the Fund or Portfolio or the acquisition of the assets or
shares of any entity by the Fund or Portfolio.
3. As a selected dealer, you are hereby authorized (i) to place orders
directly with the Portfolio for shares to be resold by us to you, at all
times, subject to (a) the applicable terms and conditions governing the
placement of orders by us set forth in the Distribution Agreement between us
and the Portfolio, and (b) applicable compensation provisions set forth in
the Fund's then current prospectus, and (c) instructions issued by us from
time to time, and (ii) to tender shares directly to the Portfolio or its
transfer agent for redemption subject to (a) the applicable terms and
conditions set forth in the Distribution Agreement, (b) the provisions of the
Fund's then current prospectus, or (c) instructions issued by us from time to
time. You appoint the transfer agent for the Fund as your agent to execute
customers' purchases of shares sold to you by us in accordance with the terms
and provisions of any account, program, plan or service established or used
by your customers and to confirm each such purchase to your customers on your
behalf, and you guarantee the legal capacity of your customers so purchasing
such shares and any co-owners of such shares.
<PAGE>
4. Repurchases of shares will be made at the net asset value of such
shares in accordance with the then current prospectus of the Fund.
5. You represent that you are either (i) a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD") or (ii) that you
are exempt from membership in the NASD. If you are a member of the NASD, any
termination of such membership in good standing shall terminate this Agreement.
6. Regardless of whether or not you are a member of the NASD this
Agreement is in all respects subject to, and you agree to abide by all the rules
and regulations of the NASD concerning the distribution of securities of
open-end investment companies, including, without limitation, Section 26 of
Article III of the Rules of Fair Practice of the NASD which shall control any
provisions to the contrary in this Agreement.
7. You agree:
(a) To purchase shares only from us or from your customers.
(b) To purchase shares from us only for the purpose of covering
purchase orders already received or for your own bona fide
investment.
(c) That you will not purchase any shares from your customers at
prices lower than the redemption or repurchase prices then quoted
by the Portfolio. You shall, however, be permitted to sell
shares for the account of their record owners to the Portfolio at
the repurchase prices currently established for such shares and
may charge the owner a fair commission for handling the
transaction.
(d) That you will not withhold placing customers' orders for shares
so as to profit yourself as a result of such withholding.
(e) You will not make, cause to be made, or otherwise participate,
directly or indirectly, in the making of, any offer or sale (a
"Foreign Offer or Sale") of any of the shares to any individual,
corporation, partnership, trust, joint venture or other person or
entity located outside of the geographical boundaries of the
United States of America without first obtaining our written
consent. Any Foreign Offer or Sale will be made only upon the
terms and in accordance with the conditions set forth in such
consent.
(f) Except as provided by Section 12 hereof, all expenses which you
incur in connection with your activities under this Agreement
will be borne by you.
<PAGE>
8. We shall not accept from you any conditional orders for shares.
Confirmations of purchases of shares (or the delivery of share certificates,
if any) shall be made by the Portfolio only against receipt of the purchase
price. If payment for the purchase is not received within the time customary
for such payments, the sale may be cancelled forthwith without any
responsibility or liability on our part or on the part of the Portfolio (in
which case you will be responsible for any loss, including loss or profit,
suffered by the Portfolio resulting from your failure to make payment as
aforesaid), or, at our option, we may sell the shares so ordered back to the
Portfolio (in which case we may hold you responsible for any loss, including
loss or profit suffered by us resulting from your failure to make payment as
aforesaid).
9. You will not offer or sell any of the shares except under
circumstances that will result in compliance with the applicable federal, state
and foreign securities and other applicable laws and in connection with sales
and offers to sell shares you will furnish to each person to whom any such sale
or offer is made a copy of the Fund's then current prospectus. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us herein. Nothing herein contained however, shall be
deemed to be a condition, stipulation or provision binding any persons acquiring
any security to waive compliance with any provision of the Securities Act of
1933, or of the Rules and Regulations of the Securities and Exchange Commission,
or to relieve the parties hereto from any liability arising under the Securities
Act of 1933.
10. No person is authorized to make any representations concerning shares
except those contained in the then current prospectus and printed information
issued by the Fund or by us as information supplemental to such prospectus.
We shall supply you with prospectuses and reasonable quantities of
supplemental sales literature, sales bulletins, and additional information as
same are issued. You agree not to use other advertising or sales material
relating to the Portfolio unless approved in writing by us in advance of such
use. Any printed information furnished by us other than the then current
prospectus for the Fund, periodic reports and proxy solicitation materials
are our sole responsibility and not the responsibility of the Fund or the
Portfolio, and you agree that the Fund or the Portfolio shall have no
liability or responsibility to you in these respects unless expressly assumed
thereby in connection therewith.
11. Either party to this Agreement may cancel this Agreement by giving
written notice to the other. Such notice shall be deemed to have been given on
the date on which it was either delivered personally to the other party, or was
mailed postpaid or delivered to a telegraph office for transmission to the other
party at his or its address as shown below. If you are a member of the NASD,
upon your ceasing to be a member in good standing of the NASD, this Agreement
shall automatically terminate. This Agreement and any schedule of distribution
assistance payments adopted pursuant to paragraph 12 hereof may be amended by us
at any time and your placing of an order after the effective date of any such
amendment shall constitute your acceptance thereof.
<PAGE>
12. As compensation for your marketing and customer services, we shall
pay you 90% of the Sales Charge (if any, paid by each investor you obtain for
the Fund) and 75% of the 0.25% annual 12b-1 fee, payable pro rata monthly,
as set forth in the Distribution Agreement between The Portfolio and the
Distributor (i.e., 100% of 0.25% of the value of the assets of each investor
you obtain for the Fund).
13. Our obligations to you under this Agreement are subject to all the
provisions of any distributorship agreement entered into between us and the
Fund, a copy of which you hereby acknowledge receiving. You understand and
agree that in performing your services covered by this Agreement you are acting
as principal, and that we are in no way responsible for any of your acts, or the
acts of your employees or representatives, and that neither you nor your
employees, representatives, or agents is our agent, partner, or employee, or the
agent or employee of the Fund or the Portfolio.
<PAGE>
14. This Agreement shall be construed in accordance with the laws of the
State of Nevada and shall be binding upon both parties hereto when signed by us
and accepted by you in the space provided below. In the event of any
disagreement or litigation arising out of or concerning this Agreement the
parties agree that such litigation or arbitration (if both parties agree to
arbitration) shall only be brought and decided in a court (or arbitration, if
mutually agreed upon) located in San Francisco, California. The prevailing
party to such action shall be entitled, in addition to any other relief, to its
reasonable attorneys' fees, costs, and expenses.
NAVELLIER SECURITIES CORP.
By:____________________________
(Authorized Signature)
Firm Name
------------------------------------------------------------
Address
--------------------------------------------------------------
City State Zip Code
------------------------ ----- ------------------
ACCEPTED BY (signature)
---------------------------------------------
Name (print) Title
------------------------ --------------------------
Date 19 Telephone #
---------- --------- ------------------------------
Please return two signed copies of this Agreement
(one of which will be signed by us and thereafter
returned to you) in the
accompanying return envelope to:
Navellier Securities Corp.
One East Liberty, Third Floor
Reno, Nevada 89501
<PAGE>
SELECTED DEALER AGREEMENT
Navellier Securities Corp.
One East Liberty, Third Floor
Reno, Nevada, 89501
, 1999
-----------------
Dear Sir/Madam:
We invite you, upon the following terms and conditions, to participate
as principal in the distribution of Class C shares ("Shares") of the
Navellier Top 20 Portfolio ("Portfolio") of the Navellier Millennium Funds,
(the "Fund") of which we are Distributor;
1. You are to offer and sell such shares only at the public offering
prices which shall be then currently in effect in accordance with the terms of
the then current prospectus of the Fund. You agree to act only as principal in
such transactions and shall not have authority to act as transfer agent for the
Fund, for us, or for any other dealer in any respect. All orders are subject to
acceptance or rejection by us or the Fund (or its agent) (in such party's sole
discretion) and become effective only upon confirmation by us or the Fund (or
its agent).
2. On each purchase of shares by you from us, the total sales charges, if
any, to selected dealers shall be as stated in the Fund's then current
prospectus.
Such sales charges, if any, to selected dealers are subject to reductions
under circumstances as described in the Fund's then current prospectus.
There is no sales charge to selected dealers on the reinvestment of
dividends or capital gains distributions or upon any merger or consolidation of
any other entity with the Fund or Portfolio the acquisition of the assets or
shares of any entity by the Fund or Portfolio.
3. As a selected dealer, you are hereby authorized (i) to place orders
directly with the Portolio for shares to be resold by us to you, at all
times, subject to (a) the applicable terms and conditions governing the
placement of orders by us set forth in the Distribution Agreement between us
and the Portfolio and (b) applicable compensation provisions set forth in the
Fund's then current prospectus, and (c) instructions issued by us from time
to time, and (ii) to tender shares directly to the Portfolio or its transfer
agent for redemption subject to (a) the applicable terms and conditions set
forth in the Distribution Agreement, (b) the provisions of the Fund's then
current prospectus, or (c) instructions issued by us from time to time. You
appoint the transfer agent for the Fund as your agent to execute customers'
purchases of shares sold to you by us in accordance with the terms and
provisions of any account, program, plan or service established or used by
your customers and to confirm each such purchase to your customers on your
behalf, and you guarantee the legal capacity of your customers so purchasing
such shares and any co-owners of such shares.
<PAGE>
4. Repurchases of shares will be made at the net asset value of such
shares in accordance with the then current prospectus of the Fund.
5. You represent that you are either (i) a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD") or (ii) that you
are exempt from membership in the NASD. If you are a member of the NASD, any
termination of such membership in good standing shall terminate this Agreement.
6. Regardless of whether or not you are a member of the NASD this
Agreement is in all respects subject to, and you agree to abide by all the rules
and regulations of the NASD concerning the distribution of securities of
open-end investment companies, including, without limitation, Section 26 of
Article III of the Rules of Fair Practice of the NASD which shall control any
provisions to the contrary in this Agreement.
7. You agree:
(a) To purchase shares only from us or from your customers.
(b) To purchase shares from us only for the purpose of covering
purchase orders already received or for your own bona fide
investment.
(c) That you will not purchase any shares from your customers at
prices lower than the redemption or repurchase prices then quoted
by the Portolio. You shall, however, be permitted to sell shares
for the account of their record owners to the Portofio at the
repurchase prices currently established for such shares and may
charge the owner a fair commission for handling the transaction.
(d) That you will not withhold placing customers' orders for shares
so as to profit yourself as a result of such withholding.
(e) You will not make, cause to be made, or otherwise participate,
directly or indirectly, in the making of, any offer or sale (a
"Foreign Offer or Sale") of any of the shares to any individual,
corporation, partnership, trust, joint venture or other person
or entity located outside of the geographical boundaries of the
United States of America without first obtaining our written
consent. Any Foreign Offer or Sale will be made only upon the
terms and in accordance with the conditions set forth in such
consent.
(f) Except as provided by Section 12 hereof, all expenses which you
incur in connection with your activities under this Agreement
will be borne by you.
<PAGE>
8. We shall not accept from you any conditional orders for shares.
Confirmations of purchases of shares (or the delivery of share certificates,
if any) shall be made by the Portfolio only against receipt of the purchase
price. If payment for the purchase is not received within the time customary
for such payments, the sale may be cancelled forthwith without any
responsibility or liability on our part or on the part of the Portfolio (in
which case you will be responsible for any loss, including loss or profit,
suffered by the Portfolio resulting from your failure to make payment as
aforesaid), or, at our option, we may sell the shares so ordered back to the
Portfolio (in which case we may hold you responsible for any loss, including
loss or profit suffered by us resulting from your failure to make payment as
aforesaid).
9. You will not offer or sell any of the shares except under
circumstances that will result in compliance with the applicable federal, state
and foreign securities and other applicable laws and in connection with sales
and offers to sell shares you will furnish to each person to whom any such sale
or offer is made a copy of the Fund's then current prospectus. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us herein. Nothing herein contained however, shall be
deemed to be a condition, stipulation or provision binding any persons acquiring
any security to waive compliance with any provision of the Securities Act of
1933, or of the Rules and Regulations of the Securities and Exchange Commission,
or to relieve the parties hereto from any liability arising under the Securities
Act of 1933.
10. No person is authorized to make any representations concerning
shares except those contained in the then current prospectus and printed
information issued by the Fund or by us as information supplemental to such
prospectus. We shall supply you with prospectuses and reasonable quantities
of supplemental sales literature, sales bulletins, and additional information
as same are issued. You agree not to use other advertising or sales material
relating to the Portfolio unless approved in writing by us in advance of such
use. Any printed information furnished by us other than the then current
prospectus for the Fund,periodic reports and proxy solicitation materials are
our sole responsibility and not the responsibility of the Fund or the
Portfolio, and you agree that the Fund or the Portfolio shall have no
liability or responsibility to you in these respects unless expressly assumed
thereby in connection therewith.
11. Either party to this Agreement may cancel this Agreement by giving
written notice to the other. Such notice shall be deemed to have been given on
the date on which it was either delivered personally to the other party, or was
mailed postpaid or delivered to a telegraph office for transmission to the other
party at his or its address as shown below. If you are a member of the NASD,
upon your ceasing to be a member in good standing of the NASD, this Agreement
shall automatically terminate. This Agreement and any schedule of distribution
assistance payments adopted pursuant to paragraph 12 hereof may be amended by us
at any time and your placing of an order after the effective date of any such
amendment shall constitute your acceptance thereof.
<PAGE>
12. As compensation for your marketing and customer services, we shall pay
you 90% of the Sales Charge (if any, paid by each investor you obtain for the
Fund) and 100% of the 1.00% annual 12b-1 fee, payable pro rata monthly, as set
forth in the Distribution Agreement between The Portfolio and the Distributor
(i.e., 100% of 1.00% of the value of the assets of each investor you obtain for
the Fund).
13. Our obligations to you under this Agreement are subject to all the
provisions of any distributorship agreement entered into between us and the
Fund, a copy of which you hereby acknowledge receiving. You understand and
agree that in performing your services covered by this Agreement you are acting
as principal, and that we are in no way responsible for any of your acts, or the
acts of your employees or representatives, and that neither you nor your
employees, representatives, or agents is our agent, partner, or employee, or the
agent or employee of the Fund or the Portfolio.
<PAGE>
14. This Agreement shall be construed in accordance with the laws of the
State of Nevada and shall be binding upon both parties hereto when signed by us
and accepted by you in the space provided below. In the event of any
disagreement or litigation arising out of or concerning this Agreement the
parties agree that such litigation or arbitration (if both parties agree to
arbitration) shall only be brought and decided in a court (or arbitration, if
mutually agreed upon) located in San Francisco, California. The prevailing
party to such action shall be entitled, in addition to any other relief, to
its reasonable attorneys' fees, costs, and expenses.
NAVELLIER SECURITIES CORP.
By:____________________________
(Authorized Signature)
Firm Name
------------------------------------------------------------
Address
--------------------------------------------------------------
City State Zip Code
------------------------ ----- ------------------
ACCEPTED BY (signature)
---------------------------------------------
Name (print) Title
------------------------ --------------------------
Date 19 Telephone #
---------- --------- ------------------------------
Please return two signed copies of this Agreement
(one of which will be signed by us and thereafter
returned to you) in the
accompanying return envelope to:
Navellier Securities Corp.
One East Liberty, Third Floor
Reno, Nevada, 89501
<PAGE>
[LETTERHEAD]
February 25, 2000
The Navellier Millennium Funds
One East Liberty, Third Floor
Reno, NV 89501
Re: The Navellier Millennium Funds N-1A
Post-Effective Amendment No. 3
File No. 033-63155
File No. 811-08995
Gentlemen:
I have acted as counsel to The Navellier Millennium Funds previously
named the American Tiger Funds (the "Fund") in connection with the
preparation of the initial Registration Statement on Form N-1A and all
Post-Effective Amendments for filing with the Securities and Exchange
Commission, covering shares of common stock at no par value, of the Fund.
I hereby consent to the incorporation by reference of my September 9,
1998 Opinion and Consent as an Exhibit to the Registration Statement of the
Fund filed September 10, 1998 and to the reference of my name in the
Prospectus included in the Registration Statement and to the filing of this
opinion as an exhibit to any application made by or on behalf of the Fund or
any Distributor or dealer in connection with the registration and
qualification of the Fund or its common stock under the securities laws of
any state or jurisdiction. In giving such permission, I do not admit hereby
that I come within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933 or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
LAW OFFICES OF SAMUEL KORNHAUSER
By: /s/ Samuel Kornhauser
--------------------------------
Samuel Kornhauser
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the references to our firm in the Post-Effective Amendment
No. 3 to the Registration Statement on Form N-1A of The Navellier Millennium
Funds and to the use of our report dated February 18, 2000 on the financial
statements and financial highlights of The Navellier Top 20 Portfolio, a series
of shares of The Navellier Millennium Funds. Such financial statements,
financial highlights and report of independent certified public accountants
appear in the 1999 Annual Report to Shareholders and are incorporated by
reference in the Registration Statement and Prospectus.
/s/ Tait, Weller & Baker
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
March 1, 2000
<PAGE>
THE NAVELLIER MILLENNIUM FUNDS
RULE 12b-1 DISTRIBUTION PLAN
FOR
THE NAVELLIER TOP 20 PORTFOLIO
This distribution plan (the "Rule 12b-1 Distribution Plan" or the
"Plan"), has been adopted by the Navellier Top 20 Portfolio (the "Portfolio")
of The Navellier Millennium Funds, a registered open-end investment company
organized as a Delaware Business Trust (the "Fund"), pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act").
W H E R E A S
The Portfolio presently distributes its Class A shares ("Shares")
of capital stock through a contractual arrangement with its principal
distributor, Navellier Securities Corp. (the "Distributor"), duly qualified
to act on behalf of the Portfolio in such capacity, which contract has been
approved by the Fund's Board of Trustees in accordance with requirements of
the Act (the "Distribution Agreement"). Pursuant to the Distribution
Agreement, the Distributor may enter into service agreements ("Service
Agreements") with certain securities dealers, financial institutions or other
industry professionals, such as investment advisers, accountants and estate
planning firms (severally, a "Service Organization") for
<PAGE>
distribution and promotion of, administration of, and servicing investors in,
the Portfolio's shares.
Under this proposal, the Portfolio and its Investment Advisor (the
"Advisor") may from time to time and from their own funds or from such other
resources as may be permitted by rules of the Securities and Exchange
Commission, make payments as described in Sections 2 and 3 hereof for
distribution and service assistance.
In voting to approve the Plan and related Service Agreement, the
Board requested and evaluated such information as it deemed necessary to an
informed determination and has concluded, in the exercise of their reasonable
business judgment and in light of their respective fiduciary duties, that
there is a reasonable likelihood that the plan will benefit the Portfolio and
its Class A shareholders.
NOW, THEREFORE, in consideration of the foregoing, the Portfolio
hereby adopts this Plan under the Act:
1. The Distributor shall act as distributor of the Portfolio's
shares pursuant to the Distribution Agreement and shall receive from the
Portfolio an annual 0.25% 12b-1 fee (payable pro rata monthly) of the average
daily net assets of the Portfolio. Payments under this 0.25% 12b-1 fee may
exceed actual expenses of the Distributor in distributing, promoting and
servicing the Portfolio. The Distributor may, at its own expense, enter into
Service
<PAGE>
Agreements with Service Organizations for Distribution and Service Assistance.
2. The Portfolio shall pay all costs and expenses in connection
with the preparation, printing and distribution of the Portfolio's
prospectuses and shareholder reports to existing shareholders. The
Distributor shall pay for printing and distribution of prospectuses sent to
prospective investors and any promotional material.
3. (a) There shall be paid periodically to one or more Service
Organizations payments in respect of such Service Organizations' services to
the Portfolio's shares owned by shareholders for whom the Service
Organization is the dealer of record or holder of record, or owned by
shareholders for whom the Service Organization provides service assistance.
These payments for services shall be included in the 12b-1 fee paid to
Distributor and shall be paid by Distributor to such Service Organization out
of the 12b-1 fee. Payments to the Distributor under the 12b-1 plan may
exceed the Distributor's actual expenses and payments to Service
Organizations. The Service Payments are subject to compliance with the terms
of the Service Agreements between the Service Organization and the
Distributor.
(b) Distribution and Service Assistance, as defined in this
Plan, shall include, but not be limited to, INTER ALIA, (i) formulating and
implementing marketing and promotional activities,
<PAGE>
including, but not limited to, direct mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (ii) arranging and
contracting for the preparation and printing of sales literature and the
mailing and distribution thereof; (iii) procuring, evaluating and providing
to the Portfolio such information, analyses and opinions with respect to
marketing and promotional activities as the Portfolio may, from time to time,
reasonably request; (iv) providing office space and equipment, telephone
facilities and dedicated personnel as is necessary to provide the services
hereunder; (v) answering Client inquiries regarding the Portfolio and
assisting Clients in changing dividend options, account designations and
addresses; (vi) establishing and maintaining Client accounts and records;
(vii) processing purchase and redemption transactions; (viii) providing
automatic investment in Portfolio shares of Client cash account balances;
(ix) providing periodic statements showing a client's account balance and
integrating such statements with those of other transactions and balances in
the Client's other accounts serviced by the Service Organization; and (x)
arranging for bank wires and such other services as the Portfolio may
request, to the extent that the Service Organization is permitted by
applicable statute, rule or regulation. Anything stated herein to the
contrary notwithstanding and subject to the rules and regulations of the Act,
any Service Payments made pursuant to this Plan shall cover Class A shares of
capital stock of the Portfolio as to which the Plan is effective.
<PAGE>
(c) In each year that this Plan remains in effect, the
Distributor of the Portfolio and/or the Investment Advisor shall prepare and
furnish to the Board of Trustees of the Fund and the Trustees shall review,
at least quarterly, written reports, complying with the requirements of Rule
12b-1 under the Act, of the amounts expended under the Plan and purposes for
which such expenditures were made.
4. The Fund will allocate the amounts expended by it under the Plan
to each series or class of securities of the Fund as to which the Plan is
effective in the proportion that the average daily net asset values of such
series or class of securities bears to the average daily net assets of all such
series or classes of securities as to which the Plan is effective.
5. The Plan shall become effective upon approval by (a) a vote of
(i) the Fund's Board of Trustees and (ii) the Qualified Trustees (as defined
in Section 8 hereof), cast in person at a meeting called for the purpose of
voting thereon, and (b) with respect to the Class A shares of the Portfolio,
at least a majority vote of the outstanding Class A voting securities of the
Portfolio, as defined in Section 2(a)(42) of the Act.
6. This Plan shall remain in effect for one year from its
adoption date and may be continued thereafter if this Plan is approved at
least annually by a vote of the Board of Trustees of the Fund, and of the
Qualified Trustees, cast in person at a meeting called for the purpose of
voting on
<PAGE>
such Plan. This Plan may not be amended in order to increase materially the
amounts to be expended in accordance with Sections 1, 2 and 3(a) hereof
without approval of the Class A securities affected in accordance with
Section 5 hereof. All material amendments to this Plan must be approved by a
vote of the Board of Trustees of the Fund, and of the Qualified Trustees,
cast in person at a meeting called for the purpose of voting thereon.
7. This Plan may be terminated at any time by a majority vote of
the Trustees who are not interested persons (as defined in Section 2(a)(19)
of the Act) of the Fund ("Independent Trustees") and have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related to the Plan ("Qualified Trustees"), by vote of a majority of the
outstanding Class A voting securities of the Portfolio, as defined in Section
2(a)(42) of the Act.
8. While this Plan shall be in effect, the selection and
nomination of the Independent Trustees of the Portfolio shall be committed to
the discretion of the Independent Trustees then in office.
9. Any termination or noncontinuance of a Service Agreement by
the Distributor with a particular Service Organization shall have no effect
on similar agreements between the Distributor and other Service Organizations.
10. The Distributor is not obligated by this Plan to execute a
Service Agreement with a qualifying Service Organization nor is it required
to pay all or any portion of the
<PAGE>
12b-1 fee to any service organization. The Distributor shall be entitled to
retain the entire amount of the 12b-1 fee.
11. The Portfolio shall preserve copies of this Plan and any
related agreements and all reports made pursuant to Paragraph 6 hereof, for a
period of not less than six years from the date of this Plan, or the
agreements or such report, as the case may be, the first two years in an
easily accessible place.
Dated: August 26, 1999
THE NAVELLIER TOP 20 PORTFOLIO
OF THE NAVELLIER MILLENNIUM FUNDS
By /s/
------------------------------
Louis G. Navellier, Trustee
By /s/
------------------------------
Barry Sander, Trustee
By /s/
------------------------------
Joel Rossman, Trustee
By /s/
------------------------------
Arjen Kuyper, Trustee
By /s/
------------------------------
Jacques Delacroix, Trustee
<PAGE>
THE NAVELLIER MILLENNIUM FUNDS
RULE 12b-1 DISTRIBUTION PLAN
FOR
THE NAVELLIER TOP 20 PORTFOLIO
This distribution plan (the "Rule 12b-1 Distribution Plan" or the
"Plan"), has been adopted by the Navellier Top 20 Portfolio (the "Portfolio")
of The Navellier Millennium Funds, a registered open-end investment company
organized as a Delaware Business Trust (the "Fund"), pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act").
W H E R E A S
The Portfolio presently distributes its Class C shares ("Shares")
of capital stock through a contractual arrangement with its distributor,
Navellier Securities Corp. (the "Distributor"), duly qualified to act on
behalf of the Portfolio in such capacity, which contract has been approved by
the Fund's Board of Trustees in accordance with requirements of the Act (the
"Distribution Agreement"). Pursuant to the Distribution Agreement, the
Distributor may enter into service agreements ("Service Agreements") with
certain securities dealers, financial institutions or other industry
professionals, such as investment advisers, accountants and estate planning
firms (severally, a "Service Organization") for
<PAGE>
distribution and promotion of, administration of, and servicing investors in,
the Portfolio's shares.
Under this proposal, the Portfolio and its Investment Advisor (the
"Advisor") may from time to time and from their own funds or from such other
resources as may be permitted by rules of the Securities and Exchange
Commission, make payments as described in Sections 2 and 3 hereof for
distribution and service assistance.
In voting to approve the Plan and related Service Agreement, the
Board requested and evaluated such information as it deemed necessary to an
informed determination and has concluded, in the exercise of their reasonable
business judgment and in light of their respective fiduciary duties, that
there is a reasonable likelihood that the plan will benefit the Portfolio and
its Class C shareholders.
NOW, THEREFORE, in consideration of the foregoing, the Portfolio
hereby adopts this Plan under the Act:
1. The Distributor shall act as distributor of the Portfolio's
shares pursuant to the Distribution Agreement and shall receive from the
Portfolio an annual 1.00% 12b-1 fee (payable pro rata monthly) of the average
daily net assets of the Portfolio. Payments under this 1.00% 12b-1 fee may
exceed actual expenses of the Distributor in distributing, promoting and
servicing the Portfolio. The Distributor may, at its own expense, enter into
Service
<PAGE>
Agreements with Service Organizations for Distribution and Service Assistance.
2. The Portfolio shall pay all costs and expenses in connection
with the preparation, printing and distribution of the Portfolio's
prospectuses and shareholder reports to existing shareholders. The
Distributor shall pay for printing and distribution of prospectuses sent to
prospective investors and any promotional material.
3. (a) There shall be paid periodically to one or more Service
Organizations payments in respect of such Service Organizations' services to
the Portfolio's shares owned by shareholders for whom the Service
Organization is the dealer of record or holder of record, or owned by
shareholders for whom the Service Organization provides service assistance.
These payments for services shall be included in the 12b-1 fee paid to
Distributor and shall be paid by Distributor to such Service Organization out
of the 12b-1 fee. Payments to the Distributor under the 12b-1 plan may
exceed the Distributor's actual expenses and payments to Service
Organizations. The Service Payments are subject to compliance with the terms
of the Service Agreements between the Service Organization and the
Distributor.
(b) Distribution and Service Assistance, as defined in this
Plan, shall include, but not be limited to, INTER ALIA, (i) formulating and
implementing marketing and promotional activities,
<PAGE>
including, but not limited to, direct mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (ii) arranging and
contracting for the preparation and printing of sales literature and the
mailing and distribution thereof; (iii) procuring, evaluating and providing
to the Portfolio such information, analyses and opinions with respect to
marketing and promotional activities as the Portfolio may, from time to time,
reasonably request; (iv) providing office space and equipment, telephone
facilities and dedicated personnel as is necessary to provide the services
hereunder; (v) answering Client inquiries regarding the Portfolio and
assisting Clients in changing dividend options, account designations and
addresses; (vi) establishing and maintaining Client accounts and records;
(vii) processing purchase and redemption transactions; (viii) providing
automatic investment in Portfolio shares of Client cash account balances;
(ix) providing periodic statements showing a client's account balance and
integrating such statements with those of other transactions and balances in
the Client's other accounts serviced by the Service Organization; and (x)
arranging for bank wires and such other services as the Portfolio may
request, to the extent that the Service Organization is permitted by
applicable statute, rule or regulation. Anything stated herein to the
contrary notwithstanding and subject to the rules and regulations of the Act,
any Service Payments made pursuant to this Plan shall cover Class C shares of
capital stock of the Portfolio as to which the Plan is effective.
<PAGE>
(c) In each year that this Plan remains in effect, the
Distributor of the Portfolio and/or the Investment Advisor shall prepare and
furnish to the Board of Trustees of the Fund and the Trustees shall review,
at least quarterly, written reports, complying with the requirements of Rule
12b-1 under the Act, of the amounts expended under the Plan and purposes for
which such expenditures were made.
4. The Fund will allocate the amounts expended by it under the Plan
to each series or class of securities of the Fund as to which the Plan is
effective in the proportion that the average daily net asset values of such
series or class of securities bears to the average daily net assets of all such
series or classes of securities as to which the Plan is effective.
5. The Plan shall become effective upon approval by (a) a vote of
(i) the Fund's Board of Trustees and (ii) the Qualified Trustees (as defined
in Section 8 hereof), cast in person at a meeting called for the purpose of
voting thereon, and (b) with respect to the Class C shares of the Portfolio,
at least a majority vote of the outstanding Class C voting securities of the
Portfolio, as defined in Section 2(a)(42) of the Act.
6. This Plan shall remain in effect for one year from its
adoption date and may be continued thereafter if this Plan is approved at
least annually by a vote of the Board of Trustees of the Fund, and of the
Qualified Trustees, cast in person at a meeting called for the purpose of
voting on
<PAGE>
such Plan. This Plan may not be amended in order to increase materially the
amounts to be expended in accordance with Sections 1, 2 and 3(a) hereof
without approval of the Class C securities affected in accordance with
Section 5 hereof. All material amendments to this Plan must be approved by a
vote of the Board of Trustees of the Fund, and of the Qualified Trustees,
cast in person at a meeting called for the purpose of voting thereon.
7. This Plan may be terminated at any time by a majority vote of
the Trustees who are not interested persons (as defined in Section 2(a)(19)
of the Act) of the Fund ("Independent Trustees") and have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related to the Plan ("Qualified Trustees"), by vote of a majority of the
outstanding Class C voting securities of the Portfolio, as defined in Section
2(a)(42) of the Act.
8. While this Plan shall be in effect, the selection and
nomination of the Independent Trustees of the Portfolio shall be committed to
the discretion of the Independent Trustees then in office.
9. Any termination or noncontinuance of a Service Agreement by
the Distributor with a particular Service Organization shall have no effect
on similar agreements between the Distributor and other Service Organizations.
10. The Distributor is not obligated by this Plan to execute a
Service Agreement with a qualifying Service Organization nor is it required
to pay all or any portion of the
<PAGE>
12b-1 fee to any service organization. The Distributor shall be entitled to
retain the entire amount of the 12b-1 fee.
11. The Portfolio shall preserve copies of this Plan and any
related agreements and all reports made pursuant to Paragraph 6 hereof, for a
period of not less than six years from the date of this Plan, or the
agreements or such report, as the case may be, the first two years in an
easily accessible place.
Dated: August 26, 1999
THE NAVELLIER TOP 20 PORTFOLIO
OF THE NAVELLIER MILLENNIUM FUNDS
By /s/ Louis G. Navellier
------------------------------
Louis G. Navellier, Trustee
By /s/ Barry Sander
------------------------------
Barry Sander, Trustee
By /s/ Joel Rossman
------------------------------
Joel Rossman, Trustee
By /s/ Arjen Kuyper
------------------------------
Arjen Kuyper, Trustee
By /s/ Jacques Delacroix
------------------------------
Jacques Delacroix, Trustee
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0001070026
<NAME> THE NAVELLIER MILLENNIUM FUNDS
<SERIES>
<NUMBER> 1
<NAME> NAVELLIER TOP 20 PORTFOLIO
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<INVESTMENTS-AT-COST> 15,549,503
<INVESTMENTS-AT-VALUE> 22,619,108
<RECEIVABLES> 859,825
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 23,478,933
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 45,682
<TOTAL-LIABILITIES> 45,682
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 14,587,159
<SHARES-COMMON-STOCK> 1,118,048
<SHARES-COMMON-PRIOR> 573,772
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,776,487
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7,069,605
<NET-ASSETS> 23,433,251
<DIVIDEND-INCOME> 4,121
<INTEREST-INCOME> 18,273
<OTHER-INCOME> 0
<EXPENSES-NET> (221,895)
<NET-INVESTMENT-INCOME> (199,501)
<REALIZED-GAINS-CURRENT> 2,920,802
<APPREC-INCREASE-CURRENT> 6,163,825
<NET-CHANGE-FROM-OPS> 8,885,126
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (1,150,707)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 661,011
<NUMBER-OF-SHARES-REDEEMED> (171,996)
<SHARES-REINVESTED> 55,261
<NET-CHANGE-IN-ASSETS> 16,231,492
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 205,893
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 147,790
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 347,133
<AVERAGE-NET-ASSETS> 14,840,900
<PER-SHARE-NAV-BEGIN> 12.550
<PER-SHARE-NII> (0.180)
<PER-SHARE-GAIN-APPREC> 9.680
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> (1.090)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 20.96
<EXPENSE-RATIO> 1.500
</TABLE>
<PAGE>
THE NAVELLIER MILLENNIUM FUNDS
(NAVELLIER TOP 20 PORTFOLIO)
(the Fund)
PLAN PURSUANT TO RULE 18F-3
The Fund hereby adopts this plan pursuant to Rule 18f-3 under the
Investment Company Act of 1940 (the 1940 Act), setting forth the separate
arrangement and expense allocation of each class of shares. Any material
amendment to this plan is subject to prior approval of the Board of Trustees,
including a majority of the independent Trustees.
CLASS CHARACTERISTICS
CLASS A SHARES: Class A shares are subject to an initial sales charge of
4.95% and to an annual distribution or service fee pursuant
to Rule 12b-1 under the 1940 Act (Rule 12b-1 fee) of 0.25% per
annum of the average daily net assets of the class.
CLASS B SHARES: Class B shares are subject to a contingent deferred sales
charge ("CDSC") of between 5% and 0% depending on the length
of time the shares are held (as set forth in the Prospectus)
and an annual distribution or service fee pursuant to Rule
12b-1 under the 1940 Act (Rule 12b-1 fee) of 1% per annum of
the average daily net assets of the class.
CLASS C SHARES: Class C shares are subject to a CDSC of 1% depending on the
length of time the shares are held (as set forth in the
Prospectus) and to an annual distribution or service fee
pursuant to Rule 12b-1 under the 1940 Act (Rule 12b-1 fee) of
1% per annum of the average daily net assets of the class.
INCOME AND EXPENSE ALLOCATIONS
Income, any realized and unrealized capital gains and losses, and expenses
not allocated to a particular class, will be allocated to each class on the
basis of the relative net assets (settled shares). "Relative net assets
(settled shares)" are net assets valued in accordance with generally accepted
accounting principles but excluding the value of subscriptions receivable in
relation to the net assets of the Fund.
DIVIDENDS AND DISTRIBUTIONS
Dividends and other distributions paid by the Fund to each class of shares,
to the extent paid, will be paid on the same day and at the same time, and
will be determined in the same manner and will be in the same amount, except
that the amount of the dividends and other distributions declared and paid by
a particular class may be different from that paid by another class because
of Rule 12b-1 fees and other expenses borne exclusively by that class.
EXCHANGE PRIVILEGE
Each class of shares is generally exchangeable for a class of shares with
similar characteristics, if any, of the other portfolios of the Navellier
Millennium Funds (subject to certain minimum investment requirements) at
relative net asset value without the imposition of any additional sales
charge but subject to the same sales charge obligations which applied to the
shares exchanged.
GENERAL
A. Each class of shares shall have exclusive voting rights on any matter
submitted to shareholders that relates solely to its arrangement and
shall have separate voting rights on any matter submitted to
shareholders in which the interests of one class differ from the
interests of any other class.
B. On an ongoing basis, the Trustees, pursuant to their fiduciary
responsibilities under the 1940 Act and otherwise, will monitor the Fund
for the existence of any material conflicts among the interests of its
several classes. The Trustees, including a majority of the independent
Trustees, shall take such action as is reasonably necessary to eliminate
any such conflicts that may develop. Navellier Management, Inc., the
Fund's investment advisor, will be responsible for reporting any
potential or existing conflicts to the Trustees.
C. For purposes of expressing an opinion on the financial statements of the
Fund, the methodology and procedures for calculating the net asset value
and dividends/distributions of the Fund's several classes and the proper
allocation of income and expenses among such classes will be examined
annually by the Fund's independent auditors who, in performing such
examination, shall consider the factors set forth in the relevant
auditing standards adopted, from time to time, by the American Institute
of Certified Public Accountants.
Dated: December 27, 1999
<PAGE>
CODE OF ETHICS
FOR
THE NAVELLIER MILLENNIUM FUNDS
<PAGE>
SECTION 1 - DEFINITIONS
- -----------------------
1. DEFINITIONS
(a) "Fund" means The Navellier Millennium Funds.
(b) "Access person" means any director, officer, general partner, or
advisory person of the Fund.
(c) "Advisory person" means (i) any employee of the Fund or of any
company in a control relationship to the Fund, who, in connection
with his or her regular functions or duties, makes, participates
in, or obtains information regarding the purchase or sale of a
security by the Fund, or whose functions relate to the making of
any recommendations with respect to such purchases or sales; and
(ii) any natural person in a control relationship to the Fund who
obtains information concerning recommendations made to the Fund
with regard to the purchase or sale of a security.
(d) A security is "being considered for purchase or sale" when a
recommendation to purchase or sell a security has been made and
communicated and, with respect to the person making the
recommendation, when such person seriously considers making such
a recommendation.
(e) "Beneficial ownership" shall be interpreted in the same manner as
it would be in determining whether a person is subject to the
provisions of Section 16 of the Securities Exchange Act of 1934
and the rules and regulations thereunder, except that the
determination of direct or indirect beneficial ownership shall
apply to all securities which an access person has or acquires.
(f) "Control" shall have the same meaning as that set forth in
Section 2(a)(9) of the Investment Company Act.
(g) "Disinterested director" means a director of the Fund who is not
an "interested person" of the Fund within the meaning of Section
2(a)(19) of the Investment Company Act.
(h) "Purchase or sale of a security" includes, INTER ALIA, the
writing of an option to purchase or sell a security.
1
<PAGE>
(i) "Security" shall have the meaning set forth in Section 2(a)(36)
of the Investment Company Act, except that it shall not include
shares of registered open-end investment companies, securities
issued by the Government of the United States, short term debt
securities which are "government securities" with the meaning of
Section 2(a)(16) of the Investment Company Act, bankers'
acceptances, bank certificates of deposit, commercial paper, and
such other money market instruments as designated by the board of
trustees.
(j) "Security held or to be acquired" by the Fund means any security
as defined in the Rule which, within the most recent 15 days, (i)
is or has been held by the Fund, or (ii) is being or has been
considered by the Fund for purchase by the Fund.
SECTION 2 - EXEMPTED TRANSACTIONS
- ---------------------------------
2. EXEMPTED TRANSACTIONS
The prohibitions of Section 3 of this Code shall not apply to:
(a) Purchases or sales effected in any account over which the access
person has no direct or indirect influence or control.
(b) Purchases or sales of securities which are not eligible for
purchase or sale by the Fund.
(c) Purchases or sales which are non-volitional on the part of either
the access person or the Fund.
(d) Purchases which are part of an automatic dividend reinvestment
plan.
(e) Purchases effected upon the exercise of rights issued by an
issuer PRO RATA to all holders of a class of its securities, to
the extent such rights were acquired from such issuer, and sales
of such rights so acquired.
(f) Purchases or sales which receive the prior written approval of
Louis Navellier which approval shall only be given if in
conformance with the criteria and anti-conflict of interest
provisions set forth herein and because they are only remotely
2
<PAGE>
potentially harmful to the Fund, because they would be very
unlikely to affect a highly institutional market, or because they
clearly are not related economically to the securities to be
purchased, sold or held by the Fund.
SECTION 3 - PROHIBITIONS
- ------------------------
3. PROHIBITED PURCHASES AND SALES
No access person shall purchase or sell, directly or indirectly, any
security in which he or she has, or by reason of such transaction acquires,
any direct or indirect beneficial ownership and which he or she knows or
should have known at the time of such purchase or sale:
(a) is being considered for puchase or sale by the Fund; or
(b) is being purchased or sold by the Fund.
SECTION 4 - REPORTING
- ---------------------
4. REPORTING
(a) Every access person shall report to the Fund the information
described in Section 4(c) of this Code with respect to
transactions in any security in which such access person has, or
by reason of such transaction acquires, any direct or indirect
beneficial ownership in the security; provided, however, that an
access person shall not be required to make a report with respect
to transactions effected for any account over which such person
does not have any direct or indirect influence.
(b) A disinterested director of the Fund need only report a
transaction in a security if such director, at the time of that
transaction, knew or, in the ordinary course of fulfilling his or
her official duties as a director of the Fund, should have known
that, during the 15-day period immediately preceding the date of
the transaction by the director, such security was purchased or
sold by the Fund or was being considered by the
3
<PAGE>
Fund or its investment adviser for purchase or sale by the Fund.
(c) Every report shall be made not later than 10 days after the end
of the calendar quarter in which the transaction to which the
report relates was effected, and shall contain the following
information:
(i) The date of the transaction, the title and the number of
shares, and the principal amount of each security
involved;
(ii) The nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
(iii) The price at which the transaction was effected; and,
(iv) The name of the broker, dealer or bank with or through whom
the transaction was effected.
(d) Any such report may contain a statement that the report shall not
be construed as an admission by the person making such report
that he or she has any direct or indirect beneficial ownership in
the security to which the report relates.
SECTION 5 - SANCTIONS
- ---------------------
5. SANCTIONS
Upon discovering a violation of this Code, the board of directors of
the Fund may impose such sanctions as it deems appropriate, including,
INTER ALIA, a letter of censure or suspension or termination of the
employment of the violator.
4
<PAGE>
CODE OF ETHICS
FOR
NAVELLIER MANAGEMENT, INC.
<PAGE>
SECTION 1 - DEFINITIONS
1. DEFINITIONS
(a) "Adviser" means Navellier Management, Inc.
(b) "Investment Company" means The Navellier Millennium Funds,
a company registered as such under the Investment Company
Act of 1940 and for which the Adviser is the investment
adviser.
(c) "Access person" means any director, officer, general
partner, or advisory person of the Advisor.
(d) A security is "being considered for purchase or sale" when
a recommendation to purchase or sell a security has been
made and communicated and, with respect to the person
making the recommendation, when such person seriously
considers making such a recommendation.
(e) "Beneficial ownership" shall be interpreted in the same
manner as it would be in determining whether a person is
subject to the provisions of Section 16 of the Securities
Exchange Act of 1934 and the rules and regulations
thereunder, except that the determination of direct or
indirect beneficial ownership shall apply to all securities
which an access person has or acquires.
(f) "Control" shall have the same meaning as that set forth in
Section 2(a)(9) of the Investment Company Act.
(g) "Disinterested director" means a director of the Adviser
who is not an "interested person" of the Adviser within the
meaning of Section 2(a)(19) of the Investment Company Act.
(h) "Purchase or sale of a security" includes, INTER ALIA, the
writing of an option to purchase or sell a security.
(i) "Security" shall have the meaning set forth in Section
2(a)(36) of the Investment Company Act, except that it
shall not include shares of registered open-end investment
companies, securities issued by the Government of the
United States, short term debt securities which are
"government securities" with the meaning of Section
2(a)(16) of the Investment Company Act, bankers'
2
<PAGE>
acceptances, bank certificates of deposit, commercial
paper, and such other money market instruments as
designated by the board of directors.
(j) "Security held or to be acquired" by the Fund means any
security as defined in the Rule which, within the most
recent 15 days, (i) is or has been held by the Fund, or
(ii) is being or has been considered by the Fund for
purchase by the Fund.
SECTION 2 - EXEMPTED TRANSACTIONS
2. EXEMPTED TRANSACTIONS
The prohibitions of Section 3 of this Code shall not apply to:
(a) Purchases or sales effected in any account over which the
access person has no direct or indirect influence or
control.
(b) Purchases or sales of securities which are not eligible for
purchase or sale by the Fund.
(c) Purchases or sales which are non-volitional on the part of
either the access person or the Adviser.
(d) Purchases which are part of an automatic dividend
reinvestment plan.
(e) Purchases effected upon the exercise of rights issued by an
issuer PRO RATA to all holders of a class of its
securities, to the extent such rights were acquired from
such issuer, and sales of such rights so acquired.
(f) Purchases or sales which receive the prior written approval
of Louis Navellier which approval shall only be given if in
conformance with the criteria and anti-conflict of interest
provisions set forth herein and because they are only
remotely potentially harmful to the Fund, because they
would be very unlikely to affect a highly institutional
market, or because they clearly are not related
economically to the securities to be purchased, sold or
held by the Fund.
3
<PAGE>
SECTION 3 - PROHIBITIONS
3. PROHIBITED PURCHASES AND SALES
No access person shall purchase or sell, directly or indirectly,
any security in which he or she has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership and which he or she
knows or should have known at the time of such purchase or sale:
(a) is being considered for purchase or sale by the Fund; or
(b) is being purchased or sold by the Fund.
SECTION 4 - REPORTING
4. REPORTING
(a) Every access person shall report to the Adviser the
information described in Section 4(c) of this Code with
respect to transactions in any security in which such
access person has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership in
the security; provided, however, that an access person
shall not be required to make an a report with respect to
transactions effected for any account over which such
person does not have any direct or indirect influence.
(b) Notwithstanding Section 4(a) of this Code, an access person
need not make a report where the report would duplicate
information recorded pursuant to Rules 204-2(a)(12) or
204-2(a)(13) under the Investment Advisers Act of 1940.
(c) Every report shall be made not later than 10 days after the
end of the calendar quarter in which the transaction to
which the report relates was effected, and shall contain
the following information:
(i) The date of the transaction, the title and the
number of shares, and the principal amount of each
security involved;
(ii) the nature of the transaction (i.e, purchase, sale
or any other type of acquisition or
4
<PAGE>
disposition);
(iii) The price at which the transaction was effected;
and,
(iv) the name of the broker, dealer, or bank with or
through whom the transaction was effected.
(d) Any such report may contain a statement that the report
shall not be construed as an admission by the person making
such report that he or she has any direct or indirect
beneficial ownership in the security to which the report
relates.
SECTION 5 - SANCTIONS
5. SANCTIONS
Upon discovering a violation of this Code, the Adviser may impose
such sanctions as it deems appropriate, including, INTER ALIA, a letter
of censure or suspension or termination to the employment of the
violator. All material violations of the Code and any sanctions imposed
with respect thereto shall be reported periodically to the board of
directors of the investment company with respect to whose securities the
violation occurred.
5
<PAGE>
CODE OF ETHICS
FOR
NAVELLIER SECURITIES CORP.
<PAGE>
SECTION 1- DEFINITIONS
1. DEFINITIONS
(a) "Underwriter" means Navellier Securities Corp.
(b) "Investment Company" or "Fund" means a company registered as such
under the Investment Company Act of 1940 and for which the
Underwriter is the principal underwriter.
(c) "Advisory person" means (i) any employee of the Fund or of any
company in a control relationship to the Fund, who, in connection
with his or her regular functions or duties, makes, participates
in, or obtains information regarding the purchase or sale of a
security by the Fund, or whose functions relate to the making of
any recommendations with respect to such purchases or sales; and
(ii) any natural person in a control relationship to the Fund who
obtains information concerning recommendations made to the Fund
with regard to the purchase or sale of a security.
(d) A security is "being considered for purchase or sale" when a
recommendation to purchase or sell a security has been made and
communicated and, with respect to the person making the
recommendation, when such person seriously considers making such
a recommendation.
(e) "Beneficial ownership" shall be interpreted in the same manner as
it would be in determining whether a person is subject to the
provisions of Section 16 of the Securities Exchange Act of 1934
and the rules and regulations thereunder, except that the
determination of direct or indirect beneficial ownership shall
apply to all securities which an access person has or acquires.
(f) "Control" shall have the same meaning as that set forth in
Section 2(a) (9) of the Investment Company Act.
(g) "Disinterested director" means a director of the Fund who is not
an "interested person" of the Fund within the meaning of Section
2(a) (19) of the Investment Company Act.
(h) "Purchase or sale of a security" includes, INTER ALIA, the
writing of an option to purchase sell
2
<PAGE>
a security.
(i) "Security" shall have the meaning set forth in Section 2(a) (36)
of the Investment Company Act, except that it shall not include
shares of registered open-end investment companies, securities
issued by the Government of the United States, short term debt
securities which are "government securities" with the meaning of
Section 2(a) (16) of the Investment Company Act, bankers'
acceptances, bank certificates of deposit, commercial paper, and
such other money market instruments as designated by [the board
or some other entity or person].
(j) "Security held or to be acquired" by the Fund means any security
as defined in the Rule which, within the most recent 15 days,
(i) is or has been held by the Fund, or (ii) is being or has been
considered by the Fund for purchase by the Fund.
SECTION 2 - EXEMPTED TRANSACTIONS
2. EXEMPTED TRANSACTIONS
The prohibitions of Section 3 of this Code shall not apply to:
(a) Purchases or sales effected in any account over which the access
person has no direct or indirect influence or control.
(b) Purchases or sales of securities which are not eligible for
purchase or sale by the Fund.
(c) Purchases or sales which are non-volitional on the part of
either the access person or the Fund.
(d) Purchases which are part of an automatic dividend reinvestment
plan.
(e) Purchases effected upon the exercise of rights issued by an
issuer PRO RATA to all holders of a class of its securities, to
the extent such rights were acquired from such issuer, and sales
of such rights so acquired.
(f) Purchases or sales which receive the prior written
3
<PAGE>
approval of Louis Navellier which approval shall only be given
if in conformance with the criteria and anti-conflict of interest
provisions set forth herein and because they are only remotely
potentially harmful to the Fund, because they would be very
unlikely to affect a highly institutional market, or because they
clearly are not related economically to the securities to be
purchased, sold or held by the Fund.
SECTION 3 - PROHIBITIONS
3. PROHIBITED PURCHASES AND SALES
No access person shall purchase or sell, directly or indirectly, any
security in which he or she has, or by reason of such transaction acquires,
any direct or indirect beneficial ownership and which he or she knows or
should have known at the time of such purchase or sale:
(a) is being considered for purchase or sale by the Fund; or
(b) is being purchased or sold by the Fund.
SECTION 4 - REPORTING
4. REPORTING
(a) Every access person shall report to the Fund the information
described in Section 4(c) of this Code with respect to
transactions in any security in which such access person has, or
by reason of such transaction acquires, any direct or indirect
beneficial ownership in the security; provided, however, that an
access person shall not be required to make a report with respect
to transactions effected for any account over which such person
does not have any direct or indirect influence.
(b) "Advisory person" means (i) any employee of the Fund or of any
company in a control relationship to the Fund, who, in connection
with his or her regular functions or duties, makes, participates
in, or obtains information regarding the purchase or sale of a
security by the Fund, or whose functions relate to the making of
any recommendations with
4
<PAGE>
respect to such purchases or sales; and (ii) any natural person
in a control relationship to the Fund who obtains information
concerning recommendations with respect to such purchases or
sales; and (ii) any natural person in a control relationship to
the Fund who obtains information concerning recommendations made
to the Fund with regard to the purchase or sale of a security.
(c) A security is "being considered for purchase or sale" when a
recommendation to purchase or sell a security has been made and
communicated and, with respect to the person making such a
recommendation.
SECTION 5 - SANCTIONS
5. SANCTIONS
Upon discovering a violation of this Code, the Underwriter may impose
such sanctions as it deems appropriate, including INTER ALIA, a letter of
censure or suspension or termination of the employment of the violator.
All material violations of this Code and any sanctions imposed with respect
thereto shall periodically be reported to the board of directors of the
investment company with respect to whose securities the violation occurred.
5
