<PAGE>
______________________________________________________________________________
Registration No. 33-64010
811-7768
As filed with the Securities and Exchange Commission on April 29, 1996
______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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Pre-Effective Amendment No.
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Post-Effective Amendment No. 6 X
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
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AMENDMENT NO. 8 X
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NAVELLIER SERIES FUND
920 Incline Way, Building No. 1
Incline Village, Nevada 89450
(702) 831-7800
Agent for Service:
SAMUEL KORNHAUSER
155 Jackson Street, Suite 1807
San Francisco, California 94111
It is proposed that this filing will become effective (check appropriate box)
[X] immediately upon filing pursuant to Rule 485 paragraph (b)(1)(vii)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of the rule 485
______________________________________________________________________________
Registrant has declared that it has registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to Investment Company Act
Rule 24f-2 and that the Rule 24f-2 Notice for Registrant's fiscal year was filed
on February 26, 1996.
Page 1 of __ pages sequentially numbered. The index to exhibits appears on page
___.
<PAGE>
CROSS-REFERENCE SHEET
Part A
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<TABLE>
<CAPTION>
Form N-1A Item Number Prospectus Caption
- --------------------- ------------------
<S> <C>
1. Cover Page
2. Summary of Fund Expenses
3. Condensed Financial Information -
Financial Highlights
4. Investment Objectives and Policies,
General Information, Risk Considerations
5. Management of the Fund
6. (a-d) General Information
7. (a & f) Management of the Fund
(b & d) Determination of Net Asset Value
How to Buy Shares
(c) Dividend Reinvestment
(e) NA
8. How to Redeem Shares
9. NA
</TABLE>
<PAGE>
Part B
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<TABLE>
<CAPTION>
Statement of Additional Information
Caption or Prospectus Caption
Form N-1A Item Number (Indicated by "See Part A")
- --------------------- -----------------------------------
<S> <C>
10. Cover Page
11. Table of Contents
12. NA
13. Investment Objective and Policies
Investment Restrictions
14. Management
15. Management
16. (a-e & i) Management of the Fund, See Part A
Management
(f) Distribution Plan
(g) NA
(h) Other Information
17. Portfolio Transactions
Management of the Fund, See Part A
18. General Information, See Part A
19. How to Buy Shares, See Part A
Net Asset Value
20. Dividends, Distributions, and Taxes, See
Part A
21. Management
Distribution Plan
22. Performance Information
23. Financial Statements
</TABLE>
<PAGE>
Part C
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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>
THE NAVELLIER SERIES FUND
The Navellier Series Fund (the "Fund") is an open-end, diversified
management investment company which intends to offer its shares in a series of
funds. The Fund is presently offering its shares in the first Portfolio of the
series which is the Navellier Aggressive Small Cap Equity Portfolio.
Additional portfolios may be added to the Fund in the future. The Navellier
Aggressive Small Cap Equity Portfolio invests primarily in securities traded in
the United States' over-the-counter securities markets of domestic small cap
issuers and of foreign small cap issuers.
This Prospectus sets forth concisely the information about the Fund
that a prospective investor should know before investing and should be read and
retained for future reference. A Statement of Additional Information about the
Fund has been filed with the Securities and Exchange Commission and is available
upon request and without charge by calling or writing The Navellier Series Fund
c/o Navellier Securities Corp., Call Box 10012, Incline Village, Nevada 89450-
1012; Telephone: 1-800-887-8671. The Statement of Additional Information bears
the same date as this Prospectus and is incorporated by reference into this
Prospectus in its entirety.
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO DEALER, SALESMAN, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND, ITS INVESTMENT
ADVISER, OR ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY STATE TO ANY PERSON TO WHOM IT
IS UNLAWFUL TO MAKE SUCH AN OFFER IN SUCH STATE.
Distributor and Sales Information
---------------------------------
Navellier Securities Corp.
Call Box 10012
Incline Village, NV 89450-1012
1-800-887-8671
The date of this Prospectus is April 29, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
AND ANNUAL FUND OPERATING EXPENSES.......... 1
FUND HIGHLIGHTS............................. 4
THE FUND.................................... 7
INVESTMENT OBJECTIVES AND POLICIES.......... 8
SPECIAL INVESTMENT METHODS AND RISKS........ 10
INVESTMENT RESTRICTIONS..................... 11
RISK FACTORS................................ 12
PERFORMANCE AND YIELD....................... 14
MANAGEMENT OF THE FUND...................... 14
EXPENSES OF THE FUND........................ 16
REPORTS AND INFORMATION..................... 17
DESCRIPTION OF SHARES....................... 17
DIVIDENDS AND DISTRIBUTIONS................. 19
TAXES....................................... 20
PURCHASE AND PRICING OF SHARES.............. 21
REDEMPTION OF SHARES........................ 27
CERTAIN SERVICES PROVIDED TO SHAREHOLDERS... 29
ADDITIONAL INFORMATION...................... 29
ASSENT TO TRUST INSTRUMENT.................. 30
TERMS APPLICABLE TO LETTER OF INTENT........ 33
</TABLE>
<PAGE>
SHAREHOLDER TRANSACTION EXPENSES
AND ANNUAL FUND OPERATING EXPENSES
NAVELLIER AGGRESSIVE
SMALL CAP EQUITY
PORTFOLIO
---------
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
- --------------------------------
<S> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)/2/ ............. 3%
Maximum Sales Load Imposed on Reinvested
Dividends .......................................... None
Redemption Fees ..................................... None
Exchange Fee/3/ ..................................... 0-$5
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ----------------------------------------------------------------------
Management Fees/4/ .................................. 1.25%
Other Expenses/5/ ................................... 0.50%
Total Fund Operating Expenses ....................... 1.75%/1/
=====
</TABLE>
/1/ The above table of fees and other expenses is provided to assist you
in understanding the various potential costs and expenses that an investor in
the Fund may bear directly or indirectly. The total Fund operating expenses are
net of expenses for which the Advisor has waived reimbursement. If the Advisor
had sought full reimbursement of all expenses paid by it, the Fund's total
operating expenses would have been 2.10%.
/2/ The sales load is reduced to 2-1/2% for purchases between $25,000 and
$49,999.99, 2% for purchases between $50,000 and $74,999.99, 1-1/2% for
purchases between $75,000 and $99,999.99, and 1% for purchases of $100,000 or
more. There is no sales load for purchases of $1 million or more, or for
Trustees of the Fund, the Investment Adviser, the Distributor, the Transfer
Agent, the Custodian, retirement or deferred compensation plans and trusts used
to fund such plans, or the employees of any of the above. There is no sales load
for brokers or their employees directly involved in selling the Fund's shares
and whose firm has executed a selling agreement with the Distributor. There is
no sales load on accounts as to which an investment advisor, financial planner,
agent, bank or broker-dealer that charges an account management or transaction
fee ("wrap accounts") receives a transaction fee as part of a "wrap fee"
account, provided the investment advisor, financial planner, agent, bank or
broker-dealer has an agreement with the Distributor; there is no sales load for
the spouse or child of any of the above. (See also Reduced Sales Charges, pp.
26-27.)
/3/ Shares of the Navellier Aggressive Small Cap Equity Portfolio may be
exchanged for shares of any other Fund Portfolio at net asset value without a
sales charge (up to five (5) exchanges per account). There is a charge of $5 per
exchange thereafter. There are presently no other Fund Portfolios.
1
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PER SHARE INCOME AND CAPITAL CHANGES
The following financial highlights, which has been audited by Deloitte &
Touche LLP, the Fund's independent auditors, shows the per share income and
capital changes for an outstanding share of the NAVELLIER AGGRESSIVE SMALL CAP
EQUITY PORTFOLIO for the fiscal year ended December 31, 1995. The information on
the table should be read in conjunction with the financial statement and related
notes which are included in the Fund's April 29, 1996 Statement of Additional
Information and in the annual report to shareholders dated December 31, 1995
which may be obtained without charge by contacting the Fund's distributor at the
number shown on the cover of this Prospectus:
- -------------
/4/ Represents the advisory fee paid to Navellier Management, Inc. (See
"Expenses of the Fund--Compensation of the Investment Adviser").
/5/ This 0. 50% represents all other expenses of the Fund during the
Fund's 1995 fiscal year, set forth in the Fund's December 31, 1995 audited
financial statement after reduction of expenses by the Advisor's waiver of
-----
reimbursement of $187,305 of expenses paid by the Advisor for the fiscal year
1995. Without this waiver, these expenses would have been 2.10%.
The Adviser had an Agreement with the Fund in which the Adviser could
"temporarily" waive reimbursement of expenses advanced on behalf of the Fund.
That Agreement has been changed. The Adviser will no longer "temporarily" waive
expenses. It will either currently accrue the expenses or will currently notify
the Fund as to any waiver of expenses.
EXAMPLE:
The following example indicates the direct and indirect expenses an
investor (maintaining an average annual investment of $1,000) could expect to
incur in a single, three-year, five year and ten year period, respectively:
Navellier Aggressive Small Cap Equity Portfolio
-----------------------------------------------
One-Year ....... $46
Three-Year ..... $81
Five-Year ...... $129
Ten-Year ....... $238
The foregoing example assumes (a) that an investor maintains an average of
$1,000 invested in the Portfolio; (b) payment of the maximum 3% sales load, (c)
a 5% annual return; (d) percentage amounts listed above for Annual Fund
Operating Expenses remain constant (for all periods shown above); (e)
reinvestment of all dividends and distributions; and (f) no exchanges between
Portfolios.
THE EXAMPLE SHOWN ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST
OR FUTURE EXPENSES. ACTUAL EXPENSES OF THE FUND MAY BE GREATER OR LESS THAN
THOSE SHOWN ABOVE.
2
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FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE
ENDED PERIOD ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994/*/
--------------------- -----------------------
<S> <C> <C>
Per Share Operating Performance: $10.98 $10.00
------ ------
Net Asset Value -- Beginning of Period........................... (0.16) (0.08)
Net Investment Loss.............................................. 4.97 1.06
------ ------
Net Realized and Unrealized Gains on Securities.................. 4.81 0.98
Net Increase in Net Asset Value Resulting from Operations........
Distributions to Shareholders: -- --
From Net Investment Income..................................... (0.38) --
------ ------
From Net Realized Capital Gains................................ 4.43 0.98
------ ------
Net Increase in Net Asset Value.................................. $15.41 $10.98
Net Asset Value -- End of Period................................. ====== ======
Total Investment Return/1/......................................... 43.80% 9.80%
Ratios to Average Net Assets:
Expenses After Reimbursement (Note 2)/2/......................... 1.75% 1.68%
Expenses Before Reimbursement (Note 2)/2/........................ 2.10% 4.52%
Net Investment Loss.............................................. (1.15%) (0.81)%
Supplementary Data:
Portfolio Turnover Rate.......................................... 169.6% 139.9%
Number of Shares Outstanding at End of Period (000s omitted)..... 6,831 1,660
</TABLE>
___________________
/1/ Total returns do not include the maximum sales load. Total returns for
periods of less than one year are not annualized.
/2/ Under an agreement between the Fund and the Adviser related to payment of
operating expenses, the Adviser has reserved the right to 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, 1995,
the Adviser paid operating expenses of the Fund totaling $320,254. Under the
operating expense agreement, the Adviser requested, and the Fund reimbursed,
$132,949 of such expenses. The Adviser voluntarily agreed not to seek future
reimbursement of $187,305 of such 1995 expenses.
In addition, at December 31, 1995, the Adviser voluntarily agreed not to
seek future reimbursement of $81,221 of expenses for which reimbursement had
been temporarily waived at December 31, 1994. Accordingly, at December 31, 1995,
there were no prior expenses which could be reimbursed in the future under the
agreement.
- ------------------------------------------------------------------------------
/*/ From Commencement of Operations January 3, 1994./
See Notes to Financial Statements.
3
<PAGE>
FUND HIGHLIGHTS
THE FUND
The Navellier Series Fund (the "Fund") is an open-end diversified management
investment company organized as a business trust under the laws of the State of
Delaware on May 28, 1993. The Fund is currently offering its shares in one
series (a "Portfolio") consisting of an aggressive small cap equity portfolio
(the "Navellier Aggressive Small Cap Equity Portfolio"). The Navellier
Aggressive Small Cap Equity Portfolio will be closed to new investors after
April 15, 1996. Existing shareholders and mutual fund wrap fee advisers,
financial advisers and planners will be able to continue to purchase additional
shares after April 15, 1996.
INVESTMENT OBJECTIVES
The Navellier Aggressive Small Cap Equity Portfolio invests in securities
traded in the United States securities markets of domestic issuers and of
foreign issuers. The sole objective of the Navellier Aggressive Small Cap
Equity Portfolio will be to seek to achieve long-term growth of capital
primarily through investments in stocks of small cap companies (companies with
market capitalization of less than one billion dollars) with appreciation
potential. There can be no assurance that the Portfolio will achieve its
investment objectives. The Portfolio's investment objectives may not be changed
without shareholder approval. This portfolio should not be considered suitable
for investors seeking current income.
INVESTMENT ADVISER
Navellier Management, Inc. (the "Investment Adviser") administers the Fund's
assets and determines the pool of issuers whose securities will be selected as
investments for the Fund (the "Qualified Issuers"). Louis Navellier and Alan
Alpers are the persons primarily responsible for the day to day investment
activities of the Fund. Both have been associated with Navellier & Associates,
Inc. during the past five years. The Investment Adviser receives an annual fee,
equal to 1.25% of the value of assets under management for the Navellier
Aggressive Small Cap Equity Portfolio, and any other portfolio in the series of
Fund portfolios, payable monthly, based upon a percentage of that Portfolio's
average daily net assets. The advisory fees paid by the Navellier Aggressive
Small Cap Equity Portfolio to the Investment Adviser are higher than those paid
by most other investment companies. The Fund is paying this higher fee based on
its desire to retain Navellier Management, Inc.'s specific application of modern
portfolio theory and its method of analyzing small cap stocks and its investment
advisory services. The Fund has retained Navellier Management, Inc., to provide
the Fund with a continuous investment program for the Fund's Portfolio,
including investment research and management with respect to all securities and
investments. The Investment Adviser will determine from time to time what
securities and other investments will be selected and purchased, retained, or
sold by the Fund. Navellier Management, Inc., also receives an annual
administrative fee of .25% of the value of assets under management.
4
<PAGE>
DISTRIBUTION OF SHARES
Navellier Securities Corp. (the "Distributor") acts as the sole underwriter
of the Fund's shares. It is a wholly owned corporation owned by Louis Navellier
who also owns Navellier Management, Inc., the Fund's Investment Adviser. (See
"Purchase and Pricing of Shares"). The Distributor may sell shares of the Fund
directly to investors or through a network of broker-dealers selected by
Distributor. The Distributor will compensate these selected dealers by paying
them directly or allowing them to receive directly from the investor some or all
of the sales charge paid by the Fund investors.
HOW TO INVEST
Shares of the Fund are continuously offered for sale by the Distributor and
are also available for purchase from the Distributor through selected broker-
dealers. The daily public offering price for shares is the net asset value per
share next computed after receipt of your order plus sales charge. As described
in the foregoing table (see page ___), the Portfolio has a sliding sales charge
beginning at 3% on initial investments of between $2,000 and $24,999.99. The
sales charge is incrementally reduced to 1% on purchases of $100,000 or more.
No sales charge is charged on investments of $1 million or more, or to Trustees
of the Fund, the Investment Adviser, the Distributor, the Transfer Agent, the
Custodian, a retirement plan or deferred compensation plan and trust to fund
such plan, or their employees; or to brokers directly involved in selling the
Fund's shares and whose firm has executed a selling agreement with the
Distributor, or their employees; or on purchases through accounts as to which an
investment advisor, financial planner, agent, banker or broker-dealer charges an
account management or transaction fee as part of a "wrap fee", provided the
investment advisor, financial planner, agent, bank or broker-dealer has an
agreement with Distributor; or the spouse or child of any of the above. (See
also Reduced Sales Charges, pp 26-27.) The sales charge is paid at the time of
the investor's purchase. Initial purchases must be at least $2,000 ($500 in the
case of IRA and other retirement plans or qualifying group plans) and subsequent
investments must be $100 or more. Investments in the Fund can be made directly
with the Distributor or through selected securities dealers (who have the
responsibility to transmit orders promptly and may charge a fee for the purchase
or redemption of Fund shares), or through the transfer agent Rushmore Trust and
Savings, FSB. (See "Purchase and Pricing of Shares"). Investors can also
invest in the Fund by automatically investing monthly in any Fund Portfolio, by
completing an application authorizing the transfer agent to transfer funds
automatically every month from the investor's checking account to the Fund for
purchase of Fund shares for the investor's account.
REDEMPTION OF SHARES
On any day the Fund and the stock exchanges are open for business the shares
will be redeemed at the next determined net asset value per share after receipt
of the redemption order. Redemption orders cannot be accepted after 4:00 p.m.
E.S.T.
If the investor requests payment of redemptions to a third party or to a
location other than his/her address of record listed on the account application,
the request must be in
5
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writing and the investor's signature must be guaranteed by a commercial bank or
stock exchange member firm.
The applicable Portfolio will redeem its shares in cash at a redemption price
equal to their net asset value as next computed following the receipt of a
request for redemption. Payment for the redemption price will be made within
seven days after the applicable Portfolio's receipt of the request for
redemption. For investments that have been made by check, payment on withdrawal
requests may be delayed only until such time as it is reasonably necessary to
assure that good payment has been collected for the purchase of such shares
which may be up to fifteen (15) days from purchase date. This delay is
necessary to assure the Fund that investments made by check are good funds. The
proceeds of the redemption will be forwarded promptly upon confirmation of
receipt of good funds.
The right of redemption may also be suspended, or the date of payment
postponed, (a) for any period during which the New York Stock Exchange is closed
(other than customary weekend or holiday closings); or (b) when trading on the
Exchange is restricted, or an emergency exists, as determined by the Securities
and Exchange Commission, so that disposal of the applicable Portfolio's
investments for determination of net asset value is not reasonably practical; or
(c) for such other periods as the Commission, by order, may permit for
protection of the Fund's investors.
RISK FACTORS
Investment in the Fund involves special considerations because neither the
Fund nor the Investment Adviser has a history of operations. The principals,
officers, legal counsel, and directors of the Investment Adviser (and such of
those persons who are also controlling persons of and legal counsel to the Fund)
have no prior experience in the registration or operation of an investment
company. However, Louis Navellier, the principal person involved in making
investment decisions, has been engaged in the business of rendering advisory
services to significant pools of capital since 1987. The number of securities
in which the Investment Adviser will have the discretion to invest on behalf of
the Portfolio will be limited due to the selection process employed by the
Investment Adviser with respect to those issuers deemed "Qualified Issuers."
While the Investment Adviser, who uses a modern portfolio theory and places
primary emphasis on selecting small cap stocks (companies with market
capitalization of less than one billion dollars) traded primarily on the over-
the-counter market, believes that those restrictions should not, in and of
themselves, cause the investment results of the Fund to differ from the results
obtainable by an investment company without such a restriction, there is
certainly the possibility that such restriction could adversely affect that
Portfolio's performance.
The owner of the Investment Adviser is also the owner of another investment
advisory firm, which presently manages over $850 million in investor funds and
is the owner of another investment advisory firm, Navellier International
Management, Inc., both of which employ the same basic modern portfolio theories
and select many of the same over-the-counter small cap stocks and other
securities which the Investment Adviser intends to employ and select in managing
the various Portfolios in the Fund. Because many of the over-the-
6
<PAGE>
counter and other securities which Investment Adviser intends to or may invest
in have a smaller number of shares or shareholders available to trade than more
conventional companies, lack of sellers or purchasers available at any given
time may result in the Fund not being able to purchase or sell all shares
Investment Adviser desires to trade at a given time or period of time, thereby
creating a potential liquidity problem which could adversely affect the
performance of the Fund. Since the Investment Adviser will be trading in some
or all of the same securities at the same time that Navellier & Associates
Incorporated and Navellier International Management, Inc., and other Navellier
controlled investment entities are trading, the potential liquidity problems
could be exacerbated. As the assets of the Fund increase the potential for
shortages of buyers or sellers increases, which could adversely affect the
Fund's performance. Each investor is being made aware of these potential risks
and should not invest in the Fund if he, she, or it is not willing to accept
these potentially adverse risks. (See also "Risk Factors" and "Management of
the Fund").
INVESTING IN SECURITIES OF FOREIGN ISSUERS
Investments in foreign securities, particularly those of non-governmental
issuers, involve considerations which are not ordinarily associated with
investing in domestic issuers. These considerations include, among others,
changes in currency rates, currency exchange control regulations, the
possibility of expropriation, the unavailability of financial information, the
difficulty of interpreting financial information prepared under laws applicable
to foreign securities markets, the impact of political, social, or diplomatic
developments, difficulties in invoking legal process abroad, and the difficulty
of assessing economic trends in foreign countries.
While to some extent the risks to the Fund of investing in foreign securities
may be limited, since the Portfolio may not invest more than 25% of its total
net asset value in such securities and the Fund may only invest in foreign
securities which are traded in the United States securities markets, the risks
nonetheless exist.
THE FUND
The Navellier Series Fund is an open-end diversified management investment
company organized as a business trust under the laws of the State of Delaware on
May 28, 1993. The Fund is presently comprised of one segregated portfolio of
assets and is currently offering its shares in one series as a separate
Portfolio. This Portfolio is designated as the: Navellier Aggressive Small Cap
Equity Portfolio.
7
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
THE INVESTMENT OBJECTIVE OF THE NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
IS TO ACHIEVE LONG-TERM GROWTH OF CAPITAL PRIMARILY THROUGH INVESTMENTS IN
STOCKS OF COMPANIES WITH APPRECIATION POTENTIAL.
The Navellier Aggressive Small Cap Equity Portfolio will close to new
investors on April 15, 1996. The Portfolio's current shareholders and certain
others may continue to add to an existing account or open new accounts. (See
"Purchase of Shares".) The Portfolio may resume sales to new investors at some
future date, but it has no present intention to do so.
The Navellier Aggressive Small Cap Equity Portfolio will invest
primarily in the common stock of small cap companies (companies with market
capitalization of less than one billion dollars) believed by the Investment
Adviser to have appreciation potential. This portfolio should not be considered
suitable for investors seeking current income. Since no one class or type of
security necessarily affords the greatest promise for capital appreciation at
all times, the Navellier Aggressive Small Cap Equity Portfolio may invest up to
35% of its assets in non-small cap securities of any issuer believed by the
Investment Adviser to offer potential for capital appreciation over both the
intermediate and long term. Under normal circumstances, the Navellier
Aggressive Small Cap Equity Portfolio will invest at least 65% of its total
assets in small cap equities. However, that projected minimum percentage could
be lowered during adverse market conditions. Equity securities include, but are
not limited to, common and preferred stock, and convertible preferred stocks
that are convertible into common stock.
The Navellier Aggressive Small Cap Equity Portfolio may also invest in
debt securities and money market instruments if, in the opinion of the
Investment Adviser, such investment will further the investment objective of the
Navellier Aggressive Small Cap Equity Portfolio. In addition, for temporary
defensive purposes, the Navellier Aggressive Small Cap Equity Portfolio may
retain cash or invest all or any portion of its assets in cash equivalents,
including money market funds. The Navellier Aggressive Small Cap Equity
Portfolio's holdings in such non-equity non-small cap securities will not exceed
35% of the total assets of the Portfolio. If the Fund's assets or a portion
thereof are retained in cash or money market funds, such cash will, in all
probability, be deposited in interest-bearing or money market accounts with
Rushmore Trust and Savings, FSB, which is also the Fund's Transfer Agent and
Custodian. Such cash 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.
It is anticipated that all of this 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 the three highest grades
determined by Standard & Poor's Corporation (AAA, AA, A). When investing in
8
<PAGE>
debt securities, said debt securities will have a rating within at least one of
the four highest grades determined by Moody's Investors Service or the three
highest grades determined by Standard & Poor's Corporation. 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.
In determining the types of companies which will be suitable for
investment by the Navellier Aggressive Small Cap Equity Portfolio, the
Investment Adviser will take into account various factors and base its security
selection on model portfolio theory concepts.
The Fund invests primarily in undervalued common stocks believed to
have long-term growth potential. Stocks are selected on the basis of an
evaluation of factors such as earnings growth, expanding profit margins, market
dominance and/or factors that create the potential for market dominance, sales
growth, and other factors that indicate a company's potential for growth.
There are no limitations on the type, operating history, or dividend
paying record of small capitalization companies or industries in which the Fund
may invest, the principal criteria for investment being that the securities
provide opportunities for capital growth. The Fund will invest up to 100% of
its capital in equity securities selected for their capital growth potential.
The Investment Adviser will typically (but not always) purchase common
stocks of issuers which have records of profitability and strong earnings
momentum. Such companies are likely to 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. Investment Adviser may,
however, purchase common stocks of well known, highly researched, large
companies if it believes such common stocks offer opportunity for long-term
capital growth. Investments in such large company stocks will not exceed 35% of
the Navellier Aggressive Small Cap Equity Portfolio's total assets.
Diversification is a consideration in selecting investments for the
Navellier Aggressive Small Cap Equity Portfolio which is a diversified Navellier
Series Fund Portfolio. However, greater emphasis will be placed upon selection
of securities believed to have good potential for appreciation rather than upon
wide diversification.
Statistics may be used to specify a Portfolio's volatility risk.
Measures of volatility or risk are generally used to compare a Portfolio's net
asset value or performance relative to a market index. One measure of
volatility is beta. Beta is the volatility of a Portfolio relative to the total
market as represented by the selected market index. A beta of more than 1.00
indicates a volatility greater than the market, and a beta of less than 1.00
indicates volatility less than the market. Sometimes beta may be calculated
relative to a different market index. Another measure of volatility or risk is
standard deviation. Standard deviation is used to measure variability of net
asset value or total return around an average, over a specified
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period of time. The premise is that greater volatility connotes greater risk
undertaken in achieving performance.
One measure of performance that adjusts for risk is alpha. Alpha is a
measure of the difference between a Portfolio's performance and a market index
portfolio with the same beta.
The owner of the Investment Adviser is also the owner of another
investment advisory firm, which presently manages over $850 million in investor
funds and employs the same basic modern portfolio theories and selects many of
the same over-the-counter small capitalization stocks and other securities which
the Investment Adviser intends to employ and select in managing the various
Portfolios in the Fund. Because many of the over-the-counter and other
securities which Investment Adviser intends to or may invest in have a smaller
number of shares or shareholders available to trade than more conventional
companies, lack of sellers or purchasers available at any given time may result
in the Fund not being able to purchase or sell all shares Investment Adviser
desires to trade at a given time or period of time, thereby creating a potential
liquidity problem which could adversely affect the performance of the Fund.
Each investor is being made aware of these potential risks and should not invest
in the Fund if he, she, or it is not willing to accept these potentially adverse
risks, and by investing acknowledges that he, she, or it is aware of the risk
and has invested with knowledge of the risk. (See Also "Risk Factors" and
"Management of the Fund".)
SPECIAL INVESTMENT METHODS AND RISKS
"SHORT SALES AGAINST THE BOX"
The Portfolio is permitted to make short sales if at the time of the
short sale the Portfolio owns or has the right to acquire a security equal in
kind and amount to the security being sold short, at no additional cost. This
investment technique is known as a "short sale against the box."
In a short sale, the seller does not immediately deliver the
securities sold and is said to have a short position in those securities until
delivery occurs. To make delivery to the purchaser, the executing broker
borrows the securities being sold short on behalf of the seller. While the
short position is maintained, the seller collateralizes its obligation to
deliver the securities sold short in an amount equal to the proceeds of the
short sale plus an additional margin amount established by the Board of
Governors of the Federal Reserve. If the Fund engages in a short sale, the
collateral account will be maintained by the Fund's custodian. While the short
sale is open, the Fund will maintain, in a segregated custodial account, an
amount of securities equal in kind and amount to the securities sold short or
securities convertible into or exchangeable for such equivalent securities at no
additional cost. These securities would constitute the Fund's long position.
The Portfolio may make a short sale against the box, when it believes
that the price of a security may decline, causing a decline in the value of a
security owned by the Fund (or a security convertible into or exchangeable for
such security), or when the Fund desires to sell the security it owns at a
current attractive price, but also wishes to defer recognition of
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gain or loss for federal income tax purposes and for purposes of satisfying
certain tests applicable to regulated investment companies under the Internal
Revenue Code. In such a case, any future losses in the Fund's long position
should be reduced by a gain in the short position. The extent to which such
gains or losses are reduced would depend upon the amount of the security sold
short relative to the amount the Fund owns. There will be certain additional
transaction costs associated with short sales against the box, but the Fund will
endeavor to offset theses costs with income from the investment of the cash
proceeds of short sales.
Short sales of securities, other than "short sales against the box,"
will not be permitted by the Portfolio.
INVESTMENT RESTRICTIONS
The Fund may not invest 25% or more of the total assets of the
Portfolio in any one industry. The Fund may not make investments in real estate
or commodities or commodity contracts, including futures contracts, but may
purchase securities of issuers which deal in real estate or commodities. The
Fund is also prohibited from investing in or selling puts, calls, straddles (or
any combination thereof). The Fund may borrow money only from banks for the
Portfolio only for temporary or emergency (not leveraging) purposes (provided
that, after each borrowing, there is an asset coverage of at least 300%). In
order to secure any such borrowing, the Fund may pledge, mortgage, or
hypothecate up to 10% of the market value of the assets of the Portfolio. The
investment by the Portfolio in securities, including American Depository
Receipts, of issuers incorporated or organized, or any governmental entity or
political subdivision thereof, located outside of the United States is limited
to 25% of the net asset value of the Portfolio, provided that no such foreign
securities may be purchased unless they are traded in United States securities
markets.
The Fund may not purchase for any Portfolio "restricted securities"
(as defined in Rule 144(a)(3) of the Securities Act of 1933) if, as a result of
such purchase, more than 10% of the net assets (taken at market value) of such
Portfolio would be invested in such securities nor will the Fund invest in
illiquid or unseasoned securities if as a result of such purchase more than 5%
of the net assets of such portfolio would be invested in either illiquid or
unseasoned securities.
In addition to the investment restrictions described above, the
investment program of the Portfolio is subject to further restrictions which are
described in the Statement of Additional Information. The restrictions for the
Portfolio are fundamental and may not be changed without shareholder approval.
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RISK FACTORS
LACK OF OPERATING HISTORY AND EXPERIENCE
The Fund and the Investment Adviser are both newly organized and have
no history of operations. Although the Investment Adviser sub-contracts a
substantial portion of its responsibilities for managing the Fund's operations
to various agents, including the Transfer Agent, the Custodian, and accountant,
the Investment Adviser will still have overall responsibility for the selection
of securities for investment and, along with the Fund's Trustees, for the
selection of such agents and their oversight. None of the principals, officers,
legal counsel, or directors of the Investment Adviser (including such of those
persons who are also controlling persons or legal counsel of the Fund) have ever
registered, operated, or supervised the operations of investment companies in
the past, and there is no assurance that their past business experiences will
enable them to successfully manage the assets of the Fund in the future. The
owner of the Investment Adviser has been in the business of rendering advisory
services to significant pools of capital such as retirement plans and large
investors since 1987.
The owner of the Investment Adviser is also the owner of another
investment advisory firm, Navellier & Associates, Incorporated, which presently
manages over $850,000,000 in investor funds, and is also the owner of an
investment advisory firm, Navellier International Management, Inc., and controls
other investment entities all of which firms employ the same basic modern
portfolio theories and select many of the same over-the-counter stocks and other
securities which the Investment Adviser intends to employ in managing the
Portfolio in the Fund. Because many of the over-the-counter and other
securities which Investment Adviser intends to or may invest in have a smaller
number of shares available to trade than more conventional companies, lack of
shares available at any given time may result in the Fund not being able to
purchase or sell all shares Investment Adviser desires to trade at a given time
or period of time, thereby creating a potential liquidity problem which could
adversely affect the performance of the Fund. Since the Investment Adviser will
be trading on behalf of the Fund in some or all of the same securities at the
same time that Navellier & Associates, Incorporated, Navellier International
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,
Incorporated, Navellier International Management, Inc., and other Navellier
controlled investment entities and the Fund cannot be completed at the time the
order is made, Navellier & Associates, Incorporated, and the other Navellier
controlled investment entities and the Investment Adviser will allocate their
purchase or sale orders in proportion to the dollar value of the order made by
Navellier & Associates, Incorporated, Navellier International Management, Inc.
and the other Navellier controlled investment entities, and the dollar value of
the order made by the Investment Adviser. For example, if Navellier &
Associates, Incorporated, and Navellier International Management, Inc., each
place a $25,000 purchase order and Investment Adviser 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, Incorporated, and Navellier International Management, Inc., and
$25,000 of the
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stock to Investment Adviser. This potential allocation or liquidity situation
could adversely affect performance. As the assets of the Fund increase the
potential for shortages of buyers or sellers increases, which could adversely
affect the Fund's performance. While the Investment Adviser generally does not
anticipate liquidity problems unless the Fund has assets in excess of one
billion dollars (although liquidity problems could still occur when the Fund has
assets of substantially less than one 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.
INVESTING IN SECURITIES OF FOREIGN ISSUERS
Investments in foreign securities, particularly those of non-
governmental issuers, involve considerations which are not ordinarily associated
with investing in domestic issuers. These considerations include, among others,
changes in currency rates, currency exchange control regulations, the
possibility of expropriation, the unavailability of financial information, the
difficulty of interpreting financial information prepared under laws applicable
to foreign securities markets, the impact of political, social, or diplomatic
developments, difficulties in invoking legal process abroad, and the difficulty
of assessing economic trends in foreign countries. The Investment Adviser will
use the same basic selection criteria for investing in foreign securities as it
uses in selecting domestic securities as described in the Investment Objectives
and Policies section on p. _____ herein.
While to some extent the risks to the Fund 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 Fund may only invest in foreign
securities which are traded in the United States securities markets, the risks
nonetheless exist.
NET ASSET VALUE
The net asset value of the Navellier Aggressive Small Cap Equity
Portfolio is determined by adding the values of all securities and other assets
of the individual Portfolio, subtracting liabilities, and dividing by the number
of outstanding shares of the Portfolio. (See "Purchase and Pricing of Shares--
Valuation of Shares" and the Statement of Additional Information).
PORTFOLIO TURNOVER
The annual rate of portfolio turnover for the Navellier Aggressive
Small Cap Equity Portfolio during its first year was 139.9%. The Investment
Adviser does not intend to have a portfolio turnover rate in excess of 300% per
annum, however, this is not a restriction on the Investment Adviser and if in
---
the Investment Adviser's judgment a higher annual portfolio turnover rate is
required in order to attempt to achieve a higher overall Portfolio performance
then the Investment Adviser is permitted to do so. However, high portfolio
turnover (100% or more) will result in increased brokerage commissions, dealer
mark-ups, and other transaction costs on the sale of securities and on
reinvestment in other securities and could therefore adversely affect Portfolio
performance. To the extent that increased portfolio turnover results in sales
at a profit of securities held less than three months, the Fund's ability to
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<PAGE>
qualify as a "regulated investment company" under the Internal Revenue Code may
be affected. (See the Statement of Additional Information, "Taxes").
SPECIAL RISK CONSIDERATIONS RELATING TO SECURITIES OF THE PORTFOLIO
For a description of certain other factors, including certain risk
factors, which investors should consider relating to the securities in which the
Portfolio will invest, see "Investment Objectives and Policies".
PERFORMANCE & YIELD
From time to time the Fund may include the performance history of the
Portfolio in advertisements, sales literature, or reports to current or
prospective shareholders. Performance information about the Portfolio is based
on its past performance only and is not an indication of future performance.
Performance history may be expressed as yield or as total return of the
Navellier Aggressive Small Cap Equity Portfolio.
The Navellier Aggressive Small Cap Equity Portfolio quotations of
yield will be based on all investment income per share earned during a given 30-
day period (including dividends and interest), less expenses accrued during the
period ("net investment income") and are computed by dividing net investment
income by the maximum offering price per share on the last day of the period and
multiplying the result by the average daily number of shares outstanding during
the period.
The "total return" of the Navellier Aggressive Small Cap Equity
Portfolio refers to the average annual compounded rate of return of the
Portfolio over some representative period that would equate an initial payment
of $1,000 (after deduction of the maximum sales load) at the beginning of a
stated period to the ending redeemable value of the investment, after giving
effect to the reinvestment of all dividends and distributions and deductions of
expenses during the period.
For more information about calculation of the investment performance
of the Portfolio, see the Statement of Additional Information.
MANAGEMENT OF THE FUND
THE BOARD OF TRUSTEES
The Fund's Board of Trustees directs the business and affairs of the
Fund as well as supervises the Investment Adviser, Distributor, accountant,
Transfer Agent and Custodian, as described below.
THE INVESTMENT ADVISER
Navellier Management, Inc., acts as the Investment Adviser of the
Fund. The Investment Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940. The Investment Adviser is responsible for
selecting the securities which will
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constitute the pool of securities which will be selected for investment.
Pursuant to a separate Administrative Services Agreement, the Investment Adviser
provides the Fund with certain administrative services, including accounting and
bookkeeping services and supervising the Fund's compliance with its reporting
obligations. The Investment Adviser may contract for the performance of such
services to the Custodian, Transfer Agent, or others, and may share some or all
of its fee with such other person(s). The Investment Adviser also provides the
Fund with a continuous investment program for the Fund's Portfolio, including
investment research and management with respect to all securities and
investments. The Investment Adviser will determine from time to time what
securities and other investments will be selected to be purchased, retained, or
sold by the Fund.
The Investment Adviser is owned and controlled by its sole
shareholder, Louis G. Navellier (a 100% stockholder). In 1987, Louis Navellier
was in litigation with a business partner and on the advice of his then legal
counsel, as part of a legal strategy, filed a personal bankruptcy petition in
connection with that litigation. The bankruptcy petition was voluntarily
dismissed by Mr. Navellier less than two months later with all creditors being
paid in full. Louis G. Navellier is an affiliated person of the Fund and is
also the sole owner of the Distributor, Navellier Securities Corp. Louis
Navellier is also the sole shareholder of Navellier & Associates, Incorporated.
(See the Statement of Additional Information). Navellier & Associates,
Incorporated, is registered as an investment adviser with the Securities and
Exchange Commission and with all states which require investment adviser
registration. Louis Navellier is registered as an investment adviser
representative or agent in all states requiring such registration. Louis
Navellier and Navellier & Associates, Incorporated, without admitting liability,
did in the past agree to a two-week suspension in California and agreed to pay
civil penalties to the States of California, Connecticut, and Maryland for
allegedly not being properly registered as an investment adviser. The
Investment Adviser and its controlling person have not previously been engaged
in the rendering of investment advisory services for an investment company.
Investment Adviser, Navellier Management, Inc., is a newly-formed corporation.
Louis Navellier is and has been in the business of rendering investment advisory
services to significant pools of capital since 1987.
For information regarding the Fund's expenses and the fees paid to the
Investment Adviser see "Expenses of the Fund" on the following page.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
On January 3, 1994, 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 an agreement dated May 15, 1993. Such
acquisition was made for an aggregate of $300,000 allocated 100% for the
Navellier Aggressive Small Cap Equity Portfolio (to purchase 30,000 shares).
THE DISTRIBUTOR
Navellier Securities Corp., acts as the Fund's Distributor and is
registered as a broker-dealer under the Securities Exchange Act of 1934 and is a
member of the National
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Association of Securities Dealers ("NASD"). The Distributor renders its
services to the Fund pursuant to a distribution agreement pursuant to which it
serves as the principal underwriter of the Fund's shares. The Distributor may
sell certain of the Fund's shares by direct placements. Through a network
established by the Distributor, the Fund's shares may also be sold through
selected broker-dealers. (For information regarding the Fund's expenses and the
fees it pays to the Distributor, see "Expenses of the Fund" following). Louis
G. Navellier, an affiliate of the Fund and the Investment Adviser, is an
officer, director, and sole shareholder of the Distributor.
THE CUSTODIAN AND THE TRANSFER AGENT
Rushmore Trust and Savings, FSB, 4922 Fairmont Avenue, Bethesda,
Maryland, 20814, telephone: (301) 657-1517 or (800) 621-7874, is custodian for
the Fund's securities and cash and Transfer Agent for the Fund shares. The
Distributor shall be responsible for the review of applications in order to
guarantee that all requisite and statistical information has been provided with
respect to the establishment of accounts.
EXPENSES OF THE FUND
GENERAL
The Portfolio is responsible for the payment of its own expenses.
These expenses are deducted from investment income before dividends are paid.
These expenses include, but are not limited to: fees paid to the Investment
Adviser, the Custodian, the Transfer Agent, and the Accountant; Trustees' fees;
taxes; interest; brokerage commissions; organization expenses; securities
registration ("blue sky") fees; legal and auditing fees; and printing and other
expenses which are not directly assumed by the Investment Adviser under its
investment advisory agreement with the Fund. General expenses which are not
associated directly with the Portfolio (including fidelity bond and other
insurance) are allocated to each Portfolio based upon their relative net assets.
The Fund and the Investment Adviser have executed a letter
acknowledging that since the inception of the Fund's operations, the Investment
Adviser has paid all of the operating expenses of the Fund and may seek
reimbursement from the Fund. Although the Investment Adviser is under no
obligation to continue to pay for the Fund's operating expenses, the Investment
Adviser may, but is not obligated to, continue to pay the Fund's operating
expenses without any immediate reimbursement from the Fund until further notice.
The Investment Adviser has reserved the right to seek reimbursement for past,
present, and future operating expenses of the Fund at any time upon notice to
the Fund that all such operating expenses of the Fund shall be required to be
reimbursed to the Investment Adviser, or paid directly by the Fund after the
date of such notice.
COMPENSATION OF THE INVESTMENT ADVISER
The Investment Adviser receives an annual 1.25% fee, payable monthly,
based upon the Portfolio's average daily net assets for the Navellier Aggressive
Small Cap Equity Portfolio and will receive the same 1.25% fee for management of
any other Fund Portfolio. The advisory fee paid by the Navellier Aggressive
Small Cap Equity Portfolio is higher than
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that paid by most other investment companies. The Investment Adviser also
receives a .25% annual fee and is reimbursed by the Fund for expenses incurred
by it in connection with the rendering of services under the Administrative
Services Agreement and for operating expenses advanced.
BROKERAGE COMMISSIONS
The Investment Adviser may select Navellier Securities Corp. or
selected broker-dealers to execute portfolio transactions for the Fund, provided
that the commissions, fees, or other remuneration received by such party in
exchange for executing such transactions are reasonable and fair compared to
those paid to other brokers in connection with comparable transactions. In
addition, when selecting broker-dealers for Fund portfolio transactions, the
Investment Adviser may consider the record of such broker-dealers with respect
to the sale of shares of the Fund. (See the Statement of Additional
Information).
REPORTS AND INFORMATION
The Fund will distribute to its shareholders semi-annual reports
containing unaudited financial statements and information pertaining to matters
of the Fund, including the Navellier Aggressive Small Cap Equity Portfolio. An
annual report containing financial statements together with the report of the
independent auditors of the Fund is distributed to shareholders each year.
Shareholder inquiries should be addressed to The Navellier Series Fund, at Call
Box 10012, Incline Village, Nevada 89450-1012; Tel: (800) 887-8671, or to the
Transfer Agent, Rushmore Trust and Savings FSB, 4922 Fairmont Avenue, Bethesda,
Maryland, 20814, Tel: (301) 657-1517 or (800) 621-7874.
DESCRIPTION OF SHARES
The Fund is a Delaware business trust organized on May 28, 1993. 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 the Portfolio described above.
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 redeemable at the
option of the Fund under certain circumstances (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 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
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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 third 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.
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
ordinary income or long-term capital gain for federal income tax purposes.
Between the record date and the cash payment date, the Portfolio retains the use
and benefits of such monies as would be paid as cash dividends.
The Navellier Aggressive Small Cap Equity 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. The 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,
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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.
TAXES
FEDERAL TAXES
Each Portfolio of the Fund is a separate taxpayer and intends to meet
the requirements of Subchapter M of the Internal Revenue Code of 1986 (relating
to regulated investment companies) with respect to diversification of assets,
sources of income, and distributions of taxable income and will elect to be
taxed as a regulated investment company for federal income tax purposes.
However, the Code contains a number of complex tests relating to
qualification which a Portfolio might not meet in any particular year. For
example, if a Portfolio derives 30% or more of its gross income from the sale of
securities held for less than three months, it may fail to qualify. If a
Portfolio did not so qualify, it would be treated for tax purposes as an
ordinary corporation and receive no tax deduction for payments made to
shareholders.
Because the Navellier Aggressive Small Cap Equity Portfolio intends to
distribute all of its net investment income and net realized capital gains at
least annually, it is not expected that the Fund will be required to pay federal
income tax for any year throughout which it was a regulated investment company
nor, for this reason, is it expected that the Portfolio will be required to pay
the 4% federal excise tax imposed on regulated investment companies that fail to
satisfy certain minimum distribution requirements. However, the possibility of
federal or state income tax and/or imposition of the federal excise tax does
exist.
If the Portfolio pays a dividend in January of any year which was
declared in the last three months of the previous year and was payable to
shareholders of record on a specified date in such a month, the dividend will be
treated as having been paid and received in the previous year.
Dividends (other than capital gains dividends) will be taxable to
shareholders as ordinary income, whether received in shares or cash and will, in
the case of corporate shareholders, generally qualify for the dividends-received
deduction to the extent paid out of qualifying dividends received by the
Portfolio.
Capital gains dividends will ordinarily be taxable to shareholders as
long-term capital gain, regardless of how long they have held their shares. A
dividend is a capital gains dividend if it is so designated by the Portfolio and
is paid out of the Portfolio 's net capital gain (that is, the excess of the
Portfolio's net long-term capital gain over its net short-term capital loss).
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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 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.
If the Fund redeems some or all of the shares held by any shareholder,
the transaction will generally be treated as a sale or exchange unless the
redemption fails to substantially reduce the shareholder's percentage ownership
interest in the Fund (determined for this purpose using certain specific rules
of constructive ownership). If a redemption of shares is not treated as a sale
or exchange, the amount paid for the shares will 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 or loss will generally
be treated as capital gain (long-term or short-term, depending upon the holding
period for the redeemed shares).
Shareholders will be subject to information reporting with respect to
dividends and redemptions, and may be subject to backup withholding with respect
to dividends at the rate of 31% unless (a) they are corporations or come within
other exempt categories or (b) they provide correct taxpayer identification
numbers, certify as to no loss of exemption from backup withholding, and
otherwise comply with applicable requirements of the law relating to backup
withholding. Any amounts paid as backup withholding will be creditable against
the federal income tax liabilities of the affected shareholders.
The Fund may pay taxes to foreign countries with respect to dividends
or interest it receives from foreign issuers or from domestic issuers that
derive a substantial amount of their revenues in foreign countries, or such
taxes may be withheld at the source by such issuers. The Fund will generally be
entitled to deduct such taxes in computing its taxable income.
STATE AND LOCAL TAXES
The Fund may be subject to state or local taxation in jurisdictions in
which it may be deemed to be doing business. Taxable income of the Fund and its
shareholders for state and local purposes may be different from taxable income
calculated for federal income tax purposes.
Each prospective investor is advised to consult his or her tax adviser
for advice as to the federal, state, and local taxation which may be applicable
to such investor in connection with an investment in the Fund.
20
<PAGE>
PURCHASE AND PRICING OF SHARES
PURCHASE OF SHARES
The Fund's shares are sold to the general public on a continuous basis
through the Distributor and its network of broker-dealers and Transfer Agent.
The Navellier Aggressive Small Cap Equity Portfolio will close to new
investors on April 15, 1996. Shareholders of the Navellier Aggressive Small Cap
Equity Portfolio as of such closing date may continue to add to an account
through the reinvestment of dividends and cash distributions on any Navellier
Aggressive Small Cap Equity Portfolio shares owned, and through the purchase of
additional Navellier Aggressive Small Cap Equity Portfolio shares. Shareholders
of the Navellier Aggressive Small Cap Equity Portfolio as of the April 15, 1996
closing date may also open and add to additional Navellier Aggressive Small Cap
Equity Portfolio accounts that use the same social security number as the
account existing as of April 15, 1996, such as accounts where the shareholder is
the owner, a joint owner or a custodian for a minor child. Shares of the
Portfolio may continue to be purchased through mutual fund wrap fee advisers and
financial planners. Additionally, directors of the Portfolio and employees and
directors of the Portfolio's Manager may continue to open new Portfolio
accounts. The Portfolio may resume sales to new investors at some future date,
but it has no present intention to do so.
PURCHASE BY MAIL
Investments in the Fund can be made directly with the Fund or through
selected securities dealers, who have the responsibility to transmit orders
promptly and may charge a processing fee, or through the transfer agent Rushmore
Trust and Savings, FSB.
TO INVEST BY MAIL: Fill out an application designating which Portfolio you are
investing in and make a check payable to "The Navellier Series Fund." Mail the
check along with the application to:
The Navellier Series Fund
c/o Rushmore Trust and Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
Purchases by check will normally be credited to an account within one
business day after receipt of payment. Foreign checks will not be accepted. Be
certain to specify which Portfolio or Portfolios you are investing in.
Purchase orders which do not specify the Portfolio in which an
investment is to be made will be invested in the Navellier Aggressive Small Cap
Equity Portfolio. (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. In the event that the New York Stock Exchange or
the national securities exchanges on which stocks are traded adopt different
trading hours on either a permanent or temporary basis, the Trustees
21
<PAGE>
of the Fund will reconsider the time at which net asset value is to be computed.
(See "Purchase and Pricing of Shares--Valuation of Shares").
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. E.S.T., the investor
must settle his or her entitlement to that day's net asset value with the
Selected Dealer.
Certain selected Dealers may effect transactions in shares of the
Portfolios on a "five day settlement" basis 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. The sales charge
applicable to the investor's purchase (See "Navellier Aggressive Small Cap
Equity Portfolio" following) is the same when purchased through a Selected
Dealer as when 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) 621-7874.
TO INVEST BY BANK WIRE: Request a wire transfer to:
Rushmore Federal Savings Bank
Bethesda, MD
Routing Number 0550 71084
For Account of The Navellier Series Fund
Account Number 0293 85770
AFTER INSTRUCTING YOUR BANK TO TRANSFER MONEY BY WIRE, YOU MUST
TELEPHONE THE FUND AT (800) 622-1386 OR (301) 657-1510 BETWEEN 8:30 A.M. AND
4:00 P.M. E.S.T. AND TELL US THE AMOUNT YOU TRANSFERRED AND THE NAME OF THE BANK
SENDING THE TRANSFER. YOUR BANK MAY CHARGE A FEE FOR SUCH SERVICES. IF THE
PURCHASE IS CANCELLED BECAUSE YOUR WIRE TRANSFER IS NOT RECEIVED, YOU MAY BE
LIABLE FOR ANY LOSS THE FUND MAY INCUR.
Such wire should identify the name of the Portfolio, the account
number, the order number (if available), and your name.
22
<PAGE>
TO INVEST BY AUTOMATIC MONTHLY INVESTMENT PLAN:
Shareholders may make automatic monthly purchases of the Fund's shares
by executing an automatic monthly withdrawl appplication authorizing his/her/its
bank to transfer money from his/her/its checking account to the Transfer Agent
for the automatic monthly purchase of shares of the Fund for the shareholder.
There is no charge by the Fund for this automatic monthly investment plan and
the shareholder can discontinue the service at any time.
NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
The shares of the Navellier Aggressive Small Cap Equity Portfolio are
sold at their net asset value per share next determined after an order in proper
form (completely filled out application form and additional information or
documentation) is received by the Transfer Agent, plus a maximum sales charge of
3% on a single purchase of between $2,000 and $24,999.99. The sales load is
reduced to 2-1/2% for purchases of between $25,000 and $49,999.99, 2% for
purchases of between of between $50,000 and $74,999.99, 1-1/2% for purchases of
between $75,000 and $99,999.99, and 1% for purchases of $100,000 or more. There
is no sales charge for purchases of $1 Million or more. The sales charge is
payable at the time shares are purchased and is deducted from the amount
credited to the investor's account. If an order for shares of the Navellier
Aggressive Small Cap Equity Portfolio is received by the Transfer Agent by 4
p.m. on any business day, such shares will be purchased at the net asset value
determined as of 4 p.m. on that day (plus the applicable sales charge).
Otherwise, such shares will be purchased at the net asset value determined as of
4 p.m on the next day (plus the applicable sales charge). 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 offering
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 p.m.
E.S.T.). Shares are entitled to receive any declared dividends on the day
following the date of purchase.
REDUCED SALES CHARGES
Abatement of Sales Charges for Transferred Accounts
Any investor who transfers all or any portion of his investment from
any other registered investment company which charges a sales load (other than
those which charge a deferred sales load) to the Navellier Aggressive Small Cap
Equity Portfolio will not be required to pay a sales charge on the amount
invested. The Fund Trustees, the Distributor, the Custodian, the Transfer
Agent, retirement or deferred compensation plans and trusts used to fund such
plans, and their employees; or brokers directly involved in selling the Fund's
shares and whose firm has executed a selling agreement with the Distributor or
the Investment Adviser or their employees or the spouse or child of any of the
above will not be required to pay any sales charge, nor will any investor who
purchases more than $1 million of the Fund's shares nor will any investor who
purchases through an account as to which an investment advisor, financial
planner, agent, bank or broker-dealer charges an account
23
<PAGE>
management or transaction fee ("wrap fee"), provided the investment advisor,
financial planner, agent, bank or broker-dealer has an Agreement with
Distributor.
Purchases may also be made at net asset value (no load) by Investment
Advisors or Financial Planners who place trades for their own accounts or the
accounts of their clients and who charge a management, consulting or other fee
for their services; and clients of such investment advisors or financial
planners who place trades for their own accounts if the accounts are linked to
the master account of such investment advisor or financial planner on the books
and records of the broker or agent; and by retirement and deferred compensation
plans and trusts used to fund those plans, including, but not limited to, those
defined in section 401(a), 403(b), or 457 of the Internal Revenue Code and
"rabbi trusts".
General Purchasing Information
The Fund has established a minimum initial investment of $2,000 ($500
in the case of IRA and other retirement plans or qualifying group plans) and
$100 for subsequent investments in any Portfolio. Orders for shares may be made
by mail by completing the Account Application included with this Prospectus and
mailing the completed application and the payment for shares to the Transfer
Agent. Documentation in addition to the information required by the Account
Application may be required when deemed appropriate by the Fund and/or the
Transfer Agent and the Account Application will not be deemed complete until
such additional information has been received.
Reduced Sales Charges
A reduction in the sales charge rate applicable to sales of Portfolio
shares may be obtained by volume discounts as described in the Prospectus. In
addition, members of qualified groups or persons purchasing shares for
retirement plans or individual retirement accounts (IRAs) may purchase shares of
the Fund at the same discounts charged on volume discount purchases. Also,
persons who transfer their investments from another investment company, to which
they paid a sales charge, will not be charged a sales charge.
Purchases of Fund shares are made at the public offering price next
determined after the Distributor or Transfer Agent receives payment, including
the applicable sales charge. To receive the group rate on their individual
purchase, group members must purchase shares through a single investment dealer
designated by the group. After the initial purchase, a member may send funds
for the purchase of shares directly to the Transfer Agent. Sales to members of
qualified groups are made at a reduced sales charge because such sales normally
involve less sales effort and sales-related expense than would usually be
associated with sales to individual investors. Also, it is believed that such
reduced sales charges will provide an incentive for increased investment in the
Fund by members of qualified groups which could benefit the Fund and its
shareholders by enabling the Fund to achieve certain economies of scale and
benefits of size more rapidly than would otherwise be the case.
As determined by the Distributor, qualified groups include the
employees of a corporation or a sole proprietorship, members, and employees of a
partnership or association (including, without limitation, members of tax-exempt
organizations enumerated under
24
<PAGE>
Sections 501(c)(3) and 501(c)(13) of the Internal Revenue Code of 1986, or other
organized groups of persons (the members of which may include other qualified
groups), provided that: (i) the group has at least 25 members, of which at least
10 members participate in the initial purchase; (ii) the group has been in
existence for at least six months; (iii) the group has some purpose in addition
to the purchase of investment company shares at a reduced sales charge; and (iv)
the group's sole organizational nexus or connection is not that the members are
credit card holders of a company, policy holders of an insurance company,
customers of a bank or a broker-dealer, clients of an investment adviser, or
security holders of a company.
Members of a qualified group include: (i) any group which meets the
requirements stated above and which is a constituent member of a qualified
group; (ii) any individual purchasing for his or her own account who is carried
on the records of the group or on the records of any constituent member of the
group as being a good standing employee, partner member, or person of like
status of the group or constituent member; or (iii) any fiduciary purchasing
shares for the account of a member of a qualified group or a member's
beneficiary, or participants in a qualified retirement plan, or contributors to
an individual retirement account (IRA). For example, a qualified group could
consist of a trade association which would have as its members individuals, sole
proprietors, partnerships, and corporations. The members of the group would
then consist of the individuals, the sole proprietors and their employees, the
members of the partnerships and their employees, as well as trustees of
employment benefit trusts acquiring Fund shares for the benefit of any of the
foregoing. The Fund reserves the right to revise the terms of, or to suspend or
discontinue, group sales charge discounts at any time.
LETTER OF INTENT
An investor may pay reduced sales charges by signing and fulfilling a
Letter of Intent which is on the Application Form. The Letter of Intent confirms
the investor's intention as to the total investment in shares of the Fund within
the following 13 consecutive months, and thereby the investor will become
eligible for the reduced sales charges applicable to the total amount to be
purchased. Purchases made within 90 days prior to the signing of the Letter of
Intent may be included in the total amount and will be valued on the effective
date of the Letter of Intent. The Letter of Intent will not be a binding
obligation on either the purchaser or the Fund. Purchases made under the Letter
of Intent are made at the sales charge applicable to the aggregate amount to be
invested in shares of the Fund under the Letter of Intent as if all the shares
were purchased in a single transaction. During the period of the Letter of
Intent, the Transfer Agent will hold shares representing 5% of the intended
purchase in escrow to provide payment of additional sales commissions that may
have to be paid if the Letter of Intent is reduced. If the total shares stated
in the Letter of Intent are not purchased, a price adjustment is made, depending
upon the actual amount invested within the period covered by the Letter of
Intent, by the redemption of sufficient shares held in escrow for the account of
the investor. Otherwise, shares held in escrow will be released upon completion
of the intended investment. A Letter of Intent can be amended: (a) during the
13-month period if the purchaser files an amended Letter of Intent with the same
expiration date as the original and (b) automatically after the end of the
period, if the total purchases credited to the Letter of Intent qualify for an
additional reduction in sales charge. For more
25
<PAGE>
information concerning the Letter of Intent, see the Application Form or contact
the Transfer Agent.
VALUATION OF SHARES
The net asset value of the shares of the Portfolio of the Fund is
determined once daily as of 4 p.m E.S.T., on days when the New York Stock
Exchange is open for trading. In the event that the New York Stock Exchange or
the national securities exchanges on which stocks are traded adopt different
trading hours on either a permanent or temporary basis, the Trustees of the Fund
will reconsider the time at which net asset value is to be computed. The net
asset value is determined by adding the values of all securities and other
assets of the Portfolio, subtracting liabilities, and dividing by the number of
outstanding shares of the Portfolio. The price at which a purchase is effected
is based on the next calculation of net asset value after the order is received.
In determining the value of the assets of the Navellier Aggressive
Small Cap Equity Portfolio, the securities for which market quotations are
readily available are valued at market value. Debt securities (other than
short-term obligations) are normally valued on the basis of valuations provided
by a pricing service when such prices are believed to reflect the fair value of
such securities. Use of a pricing service has been approved by the Trustees of
the Fund. All other securities and assets are valued at their fair value as
determined in good faith by the Trustees, although the actual calculations may
be made by persons acting pursuant to the direction of the Trustees.
REDEMPTION OF SHARES
GENERAL
A shareholder may redeem shares of the Portfolio at the net asset
value next determined after receipt of a notice of redemption in accordance
with the procedures set forth below and compliance with the further redemption
information and/or additional documentation requirements described in this
Section. As used in this Prospectus, the term "business day" refers to those
days on which stock exchanges trading small cap stocks are open for business.
The Fund may change the following procedures at its discretion.
The shareholder will not be credited with dividends on those shares
being redeemed for the day on which the shares are redeemed by the Fund. A
check for the proceeds of redemption will normally be mailed within seven days
of receipt of any redemption request received by the Transfer Agent. If shares
to be redeemed were purchased by check, the Fund may delay transmittal of
redemption proceeds only until such times as it is reasonably assured that good
payment has been collected for the purchase of such shares, which may be up to
15 days from purchase date. Such delays can be avoided by wiring Federal Funds
in effecting share purchases.
If a shareholder wishes to redeem his or her entire shareholdings in
the Portfolio, he or she will receive, in addition to the net asset value of
shares, all declared but unpaid dividends thereon. The net asset value of the
shares may be more or less than a
26
<PAGE>
shareholder's cost depending on the market value of the portfolio securities at
the time of the redemption.
REDEMPTION BY MAIL
A shareholder may redeem shares by mail on each day that the New York
Stock Exchange is open by submitting a written redemption request to:
The Navellier Series Fund
c/o Rushmore Trust and Savings FSB
4922 Fairmont Avenue
Bethesda, MD 20814
The request for redemption should include the name of the Portfolio,
the account name and number, and should be signed by all registered owners of
the shares in the exact names in which they are registered. Each request should
specify the number or dollar amount of shares to be redeemed or that all shares
in the account are to be redeemed.
OPTION TO MAKE SYSTEMATIC WITHDRAWALS
The owner of $25,000 or more worth of the shares of the Portfolio may
provide for the payment from his account of any requested dollar amount (but not
less than $1,000) to him or his designated payee monthly, quarterly, or
annually. Shares will be redeemed on the last business day of each month.
Unless otherwise instructed, the Transfer Agent will mail checks to the
shareholder at its address of record. A sufficient number of shares will be
redeemed to make the designated payment. This redemption option is not
available with respect to shares for which certificates are held by a
shareholder. Since a sales charge is imposed on investors, investors should not
purchase shares in the Fund while they are participating in the withdrawal plan.
FURTHER REDEMPTION INFORMATION
Additional documentation 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
or to charge a fee for providing these services upon 30 days' written notice to
shareholders.
Due to the high cost of maintaining accounts of less than $2,000 ($500
for IRA or other qualifying plan accounts), the Fund reserves the right to
redeem shares involuntarily in any such account at their then current net asset
value. Shareholders will first be notified and allowed 30 days to make
additional share purchases to bring their accounts to more than $2,000 ($500 for
IRA or other qualifying plan accounts). An account will not be redeemed
involuntarily if the balance falls below $2,000 ($500 for IRA or other
qualifying plan
27
<PAGE>
accounts) by virtue of fluctuations in net asset value rather than through
investor redemptions.
Under certain circumstances, the right of redemption may be suspended
or the redemption may be satisfied by distribution of portfolio securities
rather than cash. Information as to those matters is set forth in the Statement
of Additional Information.
CERTAIN SERVICES PROVIDED TO SHAREHOLDERS
STATEMENTS OF ACCOUNT
Statements of Account for the Navellier Aggressive Small Cap Equity
Portfolio and subsequent Portfolios (if any) will be sent to each shareholder at
least quarterly.
DIVIDEND ELECTION
A shareholder may elect to receive dividends in shares or in cash. If
no election is made, dividends will automatically be credited to a shareholder's
account in additional shares of the Portfolio to which such dividend relates.
EXCHANGE PRIVILEGES
Shares of the Navellier Aggressive Small Cap Equity Portfolio and
other subsequently opened Portfolios in this Navellier series of funds may be
exchanged for one another at net asset value. Exchanges among portfolios of the
Fund may be made only in those states where such exchanges may legally be made.
The total value of shares being exchanged must at least equal the minimum
investment requirement of the Portfolio into which they are being exchanged.
Exchanges are made based on the net asset value next determined of the shares
involved in the exchange. Only one exchange in any 30-day period is permitted.
The Fund reserves the right to restrict the frequency or otherwise modify,
condition, terminate, or impose charges upon the exchange, upon 60 days' prior
written notice to shareholders. Exchanges between Portfolios will be subject to
a $5 exchange fee after five (5) exchanges per year. There is a limit of ten
(10) exchanges per year. Exchanges will be effected by the redemption of shares
of the Portfolio held and purchase of shares of the other Portfolio. For federal
income tax purposes, any such exchange constitutes a sale upon which a gain or
loss, if any, may be realized, depending upon whether the value of the shares
being exchanged is more or less than the shareholder's adjusted cost basis. For
this purpose, however, a shareholder's cost basis may not include the sales
charge if the exchange is effectuated within 90 days of the acquisition of the
shares. (See "Taxes"). Shareholders wishing to make an exchange should contact
the Transfer Agent. Exchange requests in the form required by the Transfer Agent
and received by the Transfer Agent prior to 4 p.m. E.S.T. will be effected on
the next business day after such request is received.
ADDITIONAL INFORMATION
The Statement of Additional Information, available upon request,
without charge from the Fund, provides a further discussion of certain sections
of the Prospectus and other
28
<PAGE>
information which may be of interest to certain investors. This Prospectus and
the Statement of Additional Information do not contain all the information
included in the Registration Statement filed with the Securities and Exchange
Commission with respect to the securities being sold, certain portions of which
have been omitted pursuant to the rules and regulations of the Securities and
Exchange Commission. The Registration Statement, including the exhibits filed
therewith, may be examined at the office of the Securities and Exchange
Commission in Washington, D.C.
Statements contained in this Prospectus as to the contents of any
contract or other document referred to are not necessarily complete, and, in
each instance, reference is made to the Statement of Additional Information and
the copy of such contract or other document filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, each such
statement being qualified in all respects by such reference.
ASSENT TO TRUST INSTRUMENT
Every Shareholder, by virtue of having purchased a Share or Interest
shall become a Shareholder and shall be held to have expressly assented and
agreed to be bound by the terms hereof.
TERMS APPLICABLE TO LETTER OF INTENT
By indicating in the Letter of Intent Section of the Account Application that
the provisions of the Letter of Intent have been selected, the Investor agrees
as follows:
Each purchase of shares under the Letter of Intent will be made at the public
offering price which, at the time of such purchase, is applicable to a single
transaction of the dollar amount checked on the Account Application, as
described in the current Prospectus relating to such shares.
Out of the initial purchase (or subsequent purchases if necessary), 5% of the
total purchases required to complete the Letter of Intent will be held in escrow
in the form of shares (valued at the purchase price thereof) registered in the
investor's name. The Letter of Intent will terminate and the escrow will be
released when the total purchases made under the Letter of Intent, together with
the value on the date of the Letter of Intent of any shares of the named
Portfolios then owned by the investor, equal the aggregate amount checked on the
Account Application. All dividends and any capital gain distributions on the
escrowed shares will be paid to the investor or to the investor's order, but the
receipt of dividends and capital gain distributions in shares computed at net
asset value will not apply towards the completion of the Letter of Intent.
No commitment is made to purchase additional shares. If, within 13 months from
the date of the Letter of Intent, the investor's total purchases under the
Letter of Intent, together with the value on the date of the Letter of Intent of
any shares of the named Portfolios then owned by such investor, do not equal or
exceed the aggregate amount checked on the Account Application, the Investor
will remit to Rushmore Trust and Savings FSB, the difference in the sales
charge actually paid and the sales charge which the investor would have paid if
total
29
<PAGE>
purchases made under the Letter of Intent had been made at a single time. If,
within 20 days after written request by Rushmore Trust and Savings FSB, or the
appropriate dealer, the investor does not pay such difference in the sales
charge, such investor irrevocably constitutes and appoints Rushmore Trust and
Savings FSB, as his/her attorney to surrender for redemption any or all escrowed
shares, with full power of substitution in the premises, to be redeemed in order
to realize such difference.
For purposes of a Letter of Intent, a "single purchaser" means:
(i) an individual, or an individual, his spouse and their children under the age
of 21 purchasing for his or their own account (including an IRA account)
including his or their own trusts, commonly known as living trusts; or
(ii) a trustee or other fiduciary purchasing for a single trust estate or single
fiduciary account, although more than one beneficiary is involved; or
(iii) multiple trusts for the same employer, or
(iv) trust companies and bank trust departments placing orders with respect to
funds over which they exercise discretionary investment authority and which are
held in a fiduciary, agency, custodial, or similar capacity, provided all shares
are held of record in the name, or nominee name, of the trust company or bank.
Except as provided above, a "single purchaser" does not include a group of
individuals whose funds are combined, directly or indirectly, for the purchase
of redeemable securities of a registered investment company jointly or through a
trustee, agent, custodian, or other representative, nor shall it include a
trustee, agent, custodian, or other representative of such a group of
individuals.
30
<PAGE>
Investment Adviser
Navellier Management, Inc.
920 Incline Way, Building #1
Incline Village, NV 89450
(800) 887-8671
Distributor NAVELLIER SERIES FUND, INC.
Navellier Securities Corp.
920 Incline Way, Building #1
Incline Village, NV 89450
(800) 887-8671
Independent Auditors
Deloitte & Touche LLP
1900 M Street
Washington, D.C. 20036
(202) 955-6530
Transfer Agent and Custodian
Rushmore Trust and Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
(800) 621-7874
Counsel
Samuel Kornhauser
LAW OFFICES OF SAMUEL KORNHAUSER
155 Jackson Street, Suite 1807
San Francisco, CA 94111
(415) 981-6281
Sales Information
Navellier Securities Corp.
920 Incline Way, Building #1
Incline Village, NV 89450
(800) 887-8671
Shareholder Inquiries
Rushmore Trust and Savings FSB
4922 Fairmont Avenue
Bethesda, MD 20814
(800) 621-7874 April 29, 1996
31
<PAGE>
PART B
THE NAVELLIER SERIES FUND
STATEMENT OF ADDITIONAL INFORMATION
DATED APRIL 29, 1996
This Statement of Additional Information, which is not a prospectus, should
be read in conjunction with the Prospectus of The Navellier Series Fund (the
"Fund"), dated April 29, 1996, a copy of which Prospectus may be obtained,
without charge, by contacting the Fund, at its mailing address c/o Navellier
Securities, Corp., Call Box 10012, Incline Village, NV 89450; Tel: 1-800-887-
8671.
TABLE OF CONTENTS
<TABLE>
<S> <C>
GENERAL INFORMATION AND HISTORY....................... 1
INVESTMENT OBJECTIVES AND POLICIES.................... 1
TRUSTEES AND OFFICERS OF THE FUND..................... 5
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES... 8
THE INVESTMENT ADVISER, DISTRIBUTOR,
CUSTODIAN AND TRANSFER AGENT.......................... 9
BROKERAGE ALLOCATION AND OTHER PRACTICES.............. 11
CAPITAL STOCK AND OTHER SECURITIES.................... 13
PURCHASE, REDEMPTION, AND PRICING OF SHARES........... 13
TAXES................................................. 17
UNDERWRITERS.......................................... 20
CALCULATION OF PERFORMANCE DATA....................... 20
REPORT OF INDEPENDENT ACCOUNTANTS..................... 22
FINANCIAL STATEMENT................................... 22
APPENDIX.............................................. 23
</TABLE>
<PAGE>
GENERAL INFORMATION AND HISTORY
The Fund is a business trust company (organized under the laws of the State
of Delaware on May 28, 1993) and has no prior history.
INVESTMENT OBJECTIVES AND POLICIES
INVESTMENT POLICIES. The investment objectives and policies of each
-------------------
Portfolio are described in the "Investment Objectives and Policies" section of
the Prospectus. The following general policies supplement the information
contained in that section of the Prospectus. Prior to being considered as a
permissible investment for any Portfolio, each issuer of the following
instruments will first have to be determined by the Investment Adviser to
qualify as a "Qualified Issuer" (as defined by the Prospectus).
CERTIFICATES OF DEPOSIT. Certificates of deposit are generally short-term,
-----------------------
interest-bearing, negotiable certificates issued by banks or savings and loan
associates 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
1
<PAGE>
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.
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 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 all Portfolios (unless otherwise specified below) and may not be
changed except as described above. The Fund may not:
1. Purchase for any Portfolio securities of any issuer, other than
obligations issued or guaranteed as to principal and interest by the United
States government or its agencies or instrumentalities, if immediately
thereafter (i) more than 5% of such Portfolio's total assets (taken at market
value) would be invested in the securities of such issuer, or (ii) more than 10%
of the voting securities of any class of such issuer would be held by such
Portfolio or by all Portfolios of the Fund in the aggregate.
2. Concentrate the portfolio investments of any Portfolio in any one
industry. To comply with this restriction, no security may be purchased for a
Portfolio if such purchase would cause the value of the aggregate investment of
such Portfolio in any one industry to be 25% or more of that Portfolio's total
assets (taken at market value).
3. Purchase any securities or other property on margin, or engage in short
sales of securities (unless it owns, or by virtue of its ownership of other
securities has the right to obtain without payment of any additional
consideration securities equivalent in kind and amount to the securities sold);
provided, however, that the Fund may obtain short-term credit as may be
- -------- -------
necessary for the clearance of purchases and sales of securities.
2
<PAGE>
4. Make cash loans, except that the Fund may purchase bonds, notes,
debentures, or similar obligations which are customarily purchased by
institutional investors whether publicly distributed or not.
5. Make securities loans, except that the Fund may make loans of the
portfolio securities of any 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 such Portfolio.
6. Make investments in real estate or commodities or commodity contracts,
including futures contracts, although the Fund may purchase securities of
issuers which deal in real estate or commodities although this is not a primary
objective of the Portfolio but only if such securities are small cap equity
securities or constitute less than 35% of the Navellier Aggressive Small Cap
Equity Portfolio's total assets.
7. Invest in oil, gas, or other mineral exploration or development programs,
although the Fund may purchase securities of issuers which engage in whole or in
part of such activities, but only if such securities are small cap equity
securities or constitute less than 35% of the Navellier Aggressive Small Cap
Equity Portfolio's total assets, although the Fund may purchase securities of
issuers which engage in whole or in part of such activities.
8. Invest in or sell puts, calls, straddles, and any combination thereof.
9. Purchase securities of companies for the purpose of exercising management
or control.
10. Participate in a joint or joint and several trading account in
securities.
11. Purchase the securities of (i) other open-end investment companies, or
(ii) closed-end investment companies.
12. Issue senior securities or borrow money, except that the Fund may (i)
borrow money only from banks for any 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 such Portfolio, and (ii) borrow money only from banks for any
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 that Portfolio with respect to which the borrowing has
been made. No Portfolio may invest in portfolio securities while the amount of
borrowing of the Portfolio exceeds 5% of the total assets of such Portfolio.
13. Pledge, mortgage, or hypothecate the assets of any Portfolio to an
extent greater than 10% of the total assets of such Portfolio to secure
borrowings made pursuant to the provisions of Item 12 above.
3
<PAGE>
14. Purchase for any Portfolio "restricted securities" (as defined in Rule
144(a)(3) of the Securities Act of 1933), if, as a result of such purchase, more
than 10% of the net assets (taken at market value) of such Portfolio would then
be invested in such securities nor will the Fund invest in illiquid or
unseasoned securities if as a result of such purchase more than 5% of the net
assets of such portfolio would be invested in either illiquid or unseasoned
securities.
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 12 above.
PORTFOLIO TURNOVER. Each Portfolio has a different 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 Fund, 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 each Portfolio's shares and
by requirements which enable the Fund to receive certain favorable tax
treatment. The Portfolio turnover rate for the Navellier Aggressive Small Cap
Equity Portfolio during 1995 was 169.6%. The Fund will attempt to limit the
annual portfolio turnover rate to 300% or less, however this rate may be
exceeded if in the Investment Adviser's discretion securities are or should be
sold or purchased in order to attempt to increase the Portfolio's performance.
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.
4
<PAGE>
TRUSTEES AND OFFICERS OF THE FUND
The following information, as of April 24, 1996, is provided with respect to
each director and officer of the Fund:
<TABLE>
<CAPTION>
POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING
NAME AND ADDRESS REGISTRANT AND ITS AFFILIATES PAST FIVE YEARS
- ---------------- -------------------------------- ----------------------------------
<S> <C> <C>
Louis Navellier/1/ Trustee, President and Mr. Navellier is and has been the
920 Incline Way Treasurer of The Navellier CEO and President of Navellier &
Building 1 Series Fund. Mr. Navellier is Associates Inc., an investment
Incline Village also the CEO, President, management company since 1988,
Nevada 89450 Secretary, and Treasurer of Navellier Management, Inc., an
Navellier Management Inc., a investment management company
Delaware corporation which is since May 10, 1993; Navellier
the Investment Adviser to the International Management, Inc.
Fund. Mr. Navellier is also since May 10, 1993; Navellier
CEO, President, Secretary, and International Management, Inc.
Treasurer of Navellier since May 10, 1993, and has been
Securities Corp., the principal publisher and editor of MPT Review
underwriter of the Fund's from August 1987 to the present
shares. and was publisher and editor of
the predecessor investment
advisory newsletter OTC Insight,
which he began in 1980 and wrote
through July 1987.
Alan Alpers/1/ Trustee, Portfolio Manager, and Mr. Alpers was a stockbroker with
920 Incline Way Secretary of The Navellier Shearson Lehman Brothers and was
Building 1 Series Fund, Investment employed by Navellier & Associates
Incline Village Advisor Representative for Inc. as an analyst and is now an
Nevada, 89450 Navellier & Associates, Inc. investment advisor representative
for that firm.
Donald A. Simon Independent Trustee Currently the Executive Vice
Air Ambulance, Inc. President and Director of Air
21893 Skywest Dr. Ambulance, Inc., an aeromedical
Hayward, CA 94941 transportation company, Mr. Simon
was formerly Chairman of KangaROOS
USA, Inc., a footwear importer;
Executive
</TABLE>
- --------------------------------------------------------------------------------
/1/ These persons are interested persons affiliated with the Investment Advisor.
5
<PAGE>
<TABLE>
<CAPTION>
POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING
NAME AND ADDRESS REGISTRANT AND ITS AFFILIATES PAST FIVE YEARS
- ---------------- -------------------------------- ----------------------------------
<S> <C> <C>
Vice President of Life Insurance
RX Corp., a commuter services
firm; and President of Air
Chaparral/Inland Empire Airlines,
a regional commuter airline. He
has over 35 years of experience in
the mutual fund, financial
planning, insurance, and corporate
areas of large and small
companies.
Lawrence Bianchi Independent Trustee Currently Chairman of the Board of
Codman Company Directors of The Codman Company,
211 Congress Street Inc., and a member of The American
Boston, MA 02210 Society of Real Estate
Consultants, Mr. Bianchi has been
in the Boston real estate market
for 28 years. He has been a
Commissioner for 16 years,
representing the Greater Boston
Real Estate Board on the Boston
Landmarks Commission, served 20
years on the Industrial
Development Financing Authority of
the City of Boston, and for the
past 11 years has been its
Chairman. He was President in
1989 of the New England Chapter of
The Society of Industrial and
Office Realtors. He is an
incorporator of both Massachusetts
General Hospital and University
Hospital and a Director of
Historic Boston, Inc., and the
Bostonian Society. Prior to its
sale in 1992 to the John Hancock
Insurance Company, Mr. Bianchi
served for 3-1/2 years as one of
four outside directors of the 750
million dollar Patriot Group of
three closed-end mutual funds
listed on the New York Stock
Exchange.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING
NAME AND ADDRESS REGISTRANT AND ITS AFFILIATES PAST FIVE YEARS
- ---------------- -------------------------------- ----------------------------------
<S> <C> <C>
Kenneth Sletten Independent Trustee President of Rudolph & Sletten,
Rudolph & Sletten Inc., a prominent construction
989 E. Hillsdale company in California. He has
Foster City, CA been Chairman of the Board of
94404 Directors in the Santa Clara
District of the Associated
General Contractors (AGC), and is
a member of the Board of Directors
of their Building Division. He is
a lifetime member of the Northern
California Construction Institute
(NCCI), and a member of the
American Institute of Plant
Engineers (AIPE). He serves on
the boards of the Children's
Health Council and Menlo School
and College.
</TABLE>
7
<PAGE>
OFFICERS
--------
The officers of the Fund are affiliated with the Investment Adviser and
receive no salary or fee from the Fund. The Fund's disinterested Trustees are
each compensated by the Fund with an annual fee, payable quarterly (calculated
at an annualized rate), of $10,000, if the Fund's net assets are $200 million or
less, and $20,000 if the Fund's net assets are over $200 million. The Trustees'
fees may be adjusted according to increased responsibilities if the Fund's
assets exceed one billion dollars. In addition, each disinterested Trustee
receives an attendance fee from the Fund of $500 per board meeting and for
attendance at any meeting of a committee of the board, as well as reimbursement
for actual expenses of such attendance.
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 Adviser), (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.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
The Fund does not control and is not under common control of any person.
8
<PAGE>
THE INVESTMENT ADVISER, DISTRIBUTOR,
CUSTODIAN AND TRANSFER AGENT
(a) THE INVESTMENT ADVISER
----------------------
The offices of the Investment Adviser (Navellier Management, Inc.) are
located at 920 Incline Way, Building 1, Incline Village, Nevada 89450. The
Investment Adviser has no prior business history.
(i) The following individuals own the enumerated shares of outstanding stock
of the Investment Adviser and, as a result, maintain control over the
Investment Adviser:
<TABLE>
<CAPTION>
Shares of Outstanding Stock Percentage of
Name of the Investment Adviser Outstanding Shares
- ---- --------------------------- ------------------
<S> <C> <C>
Louis G. Navellier 1,000 100%
</TABLE>
(ii) The following individuals are affiliated with the Fund, the
Investment Adviser, and the Distributor in the following capacities:
<TABLE>
<CAPTION>
Name Position
- ---- --------
<S> <C>
Louis G. Navellier Trustee, President, and Treasurer of The Navellier
Series Fund; Director, CEO, President, Secretary, and
Treasurer of Navellier Management, Inc.,; Director,
President, CEO, Secretary, and Treasurer of Navellier
Securities Corp.
Alan Alpers Trustee, Portfolio Manager, and Secretary of The
Navellier Series Fund.
</TABLE>
(iii) The management fee payable to the Investment Adviser under the terms
of the Investment Advisory Agreement (the "Advisory Agreement") between the
Investment Adviser and the Fund is payable monthly and is based upon a
percentage of each Portfolio's average daily net assets, equal to 1.25% for
the Navellier Aggressive Small Cap Equity Portfolio and/or any subsequent
Portfolio. The Investment Adviser has the right, but not the obligation, to
waive any portion or all of its management fee, from time to time.
Expenses not expressly assumed by the Investment Adviser under the Advisory
Agreement are paid by the Fund. The Advisory Agreement lists examples of
expenses paid by the Fund for the account of the 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.
9
<PAGE>
In the event that the annual operating expenses of any Portfolio, including
amounts payable to the Investment Adviser, paid or payable by such Portfolio for
any fiscal year, exceed the expense limitations applicable to the Portfolio
imposed by state securities laws or regulations thereunder, as such limitations
may be adjusted from time to time, the Investment Adviser shall reduce its
management fee to the extent of such excess and, if required, pursuant to any
such laws or regulations (unless otherwise waived), will reimburse the
applicable Portfolio for annual operating expenses in excess of any such expense
limitation. Presently, California has the most restrictive state expense
limitations applicable to the Fund. Generally, these limitations provide that
the Fund's aggregate annual expenses shall not normally exceed 2-1/2% of the
first $30 million of average net assets, 2% of the next $70 million of average
net assets, and 1-1/2% of the remaining average net assets of the Fund for any
fiscal year.
The Advisory Agreement provides that the Investment Adviser shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund or its investors except for losses (i) resulting from the willful
misfeasance, bad faith, or gross negligence on its part, (ii) resulting from
reckless disregard by it of its obligations and duties under the Advisory
Agreement, or (iii) a loss for which the Investment Adviser would not be
permitted to be indemnified under the Federal Securities laws.
(iv) Pursuant to an Administrative Services Agreement, the Investment
Adviser receives an annual fee of .25% of the value of the assets under
management and provides or is responsible for the provision of certain
administrative services to the Fund, including, among others, the preparation
and maintenance of certain books and records required to be maintained by the
Fund under the Investment Company Act of 1940. The Administrative Services
Agreement permits the Investment Adviser to contract out for all of its duties
thereunder; however, in the event of such contracting, the Investment Adviser
remains responsible for the performance of its obligations under the
Administrative Services Agreement. The Investment Adviser has entered into an
agreement with Rushmore Trust and Savings, FSB, to perform, in addition to
custodian and transfer agent services, some or all administrative services.
In exchange for its services under the Administrative Services Agreement, the
Fund reimburses the Investment Adviser for certain expenses incurred by the
Investment Adviser in connection therewith. The agreement also allows
Investment Adviser to pay to its delegate part or all of such fees and
reimbursable expense payments incurred by it or its delegate.
The Investment Adviser Agreement permits the Investment Adviser to act as
investment adviser for any other person, firm, or corporation, and designates
the Investment Adviser as the owner of the name "Navellier" or any use or
derivation of the word Navellier. If the Investment Adviser shall no longer act
as investment adviser to the Fund, the right of the Fund to use the name
"Navellier" as part of its title may, solely at the Investment Adviser's option,
be withdrawn.
The Investment Adviser advanced the Fund's organizational expenses which have
been estimated to be $143,294. The Fund agreed to reimburse the Investment
Adviser for the organizational expenses it advances, without interest on a date
or dates to be chosen at the sole discretion of Navellier Management, Inc., at
any time after (i) the Fund has $20 million
10
<PAGE>
in total net assets or is breaking even or making a profit, which ever first
occurs. In the event that the total net assets of the Fund does not attain the
foregoing levels before the end of five years, the unreimbursed portion of such
expenses shall become fully payable at the end of the fifth year. 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 and will be registered with such
agencies and governments before any Fund shares are sold. The Fund's shares
will be continuously distributed by Navellier Securities Corp. (the
"Distributor") located at 920 Incline Way, Building 1, Incline Village, Nevada,
89450, pursuant to a Distribution Agreement, dated May 15, 1993. 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 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.
For the year ended December 31, 1995, the Distributor received $731,298 from
sales loads earned on sales of the Fund's shares.
(c) THE CUSTODIAN AND TRANSFER AGENT
--------------------------------
Rushmore Trust and 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.
BROKERAGE ALLOCATION AND OTHER PRACTICES
In effecting portfolio transactions for the Fund, the Investment Adviser
adheres to the Fund's policy of seeking best execution and price, determined as
described below, except to the extent it is permitted to pay higher brokerage
commissions for "brokerage and research services," as defined herein. The
Investment Adviser may cause the Fund to pay a broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission which another broker or dealer would have charged for effecting the
transaction if the Investment Adviser determines in good faith that such amount
of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer or that any offset of direct
expenses of a Portfolio yields the best net price. As provided in Section 28(e)
of the Securities Exchange Act of 1934, "brokerage and research services"
include giving advice as to the value of securities, the
11
<PAGE>
advisability of investing in, purchasing, or selling securities, and the
availability of securities; furnishing analysis and reports concerning issuers,
industries, economic facts and trends, portfolio strategy and the performance of
accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). Brokerage and research
services provided by brokers to the Fund or to the Investment Adviser are
considered to be in addition to and not in lieu of services required to be
performed by the Investment Adviser under its contract with the Fund and may
benefit both the Fund and other clients of the Investment Adviser or customers
of or affiliates of the Investment Advisor. Conversely, brokerage and research
services provided by brokers to other clients of the Investment Adviser or its
affiliates may benefit the Fund.
If the securities in which a particular Portfolio of the Fund invests are
traded primarily in the over-the-counter market, where possible, the Fund will
deal directly with the dealers who make a market in the securities involved
unless better prices and execution are available elsewhere. Such dealers
usually act as principals for their own account. On occasion, securities may be
purchased directly from the issuer. Bonds and money market instruments are
generally traded on a net basis and do not normally involve either brokerage
commissions or transfer taxes.
The determination of what may constitute best execution and price in the
execution of a securities transaction by a broker involves a number of
considerations including, without limitation, the overall direct net economic
result to the Fund (involving both price paid or received and any net
commissions and other costs paid), the efficiency with which the transaction is
effected, the ability to effect the transaction at all where a large block is
involved, the availability of the broker to stand ready to execute possibly
difficult transactions in the future, and the financial strength and stability
of the broker. Such considerations are judgmental and are weighed by the
Investment Adviser in determining the overall reasonableness of brokerage
commissions paid by the Fund. Some portfolio transactions are subject to the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.,
and subject to obtaining best prices and executions, effected through dealers
who sell shares of the Fund.
The Board of Trustees of the Fund will periodically review the performance of
the Investment Adviser of its respective responsibilities in connection with the
placement of portfolio transactions on behalf of the Fund and review the
commissions paid by the Fund over representative periods of time to determine if
they are reasonable in relation to the benefits to the Fund.
The Board of 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.
12
<PAGE>
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 class or
series affected by such matter. Rule 18f-2 further provides that a class or
series shall be deemed to be affected by a matter unless the interests of each
class or series in the matter are substantially identical or that the matter
does not affect any interest of such class or 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.
PURCHASE, REDEMPTION, AND PRICING OF SHARES
REDUCED SALES CHARGES. A reduction in the sales charge rate applicable to
---------------------
sales of Portfolio shares may be obtained by volume discounts as described in
the Prospectus. In addition, members of qualified groups or persons purchasing
shares for retirement plans or individual retirement accounts (IRA's) may
purchase shares of the Fund at the same discounts charged on volume discount
purchases. Also, persons who transfer their investments from another investment
company, to which they paid a sales charge, will not be charged a sales charge.
Nor will the Fund Trustees, the Distributor, the Custodian, the Transfer Agent,
retirment or deferred compensation plans or trusts used to fund such plans or
the employees of any of the above, or investment advisors, financial planners,
agents, banks, or brokers directly involved in selling the Fund's shares and
whose firm has executed a selling agreement with the Distributor, or their
employees or the spouse or child of any of the above have to pay a sales charge.
Nor will investors who invest through an account as to which an investment
advisor, financial planner, agent, a bank or broker-dealer charges an account
management or transaction fee ("wrap fee"), provided the bank or broker-dealer
has a selling Agreement with Distributor, have to pay a sales charge.
Purchases may also be made at net asset value (no load) by Investment
Advisors or Financial Planners who place trades for their own accounts or the
accounts of their clients and who charge a management, consulting or other fee
for their services; and clients of such investment advisors or financial
planners who place trades for their own accounts if the accounts are linked to
the master account of such investment advisor or financial planner on the books
and records of the broker or agent; and by retirement and deferred compensation
plans and trusts used to fund those plans, including, but not limited to, those
defined in section 401(a), 403(b), or 457 of the Internal Revenue Code and
"rabbi trusts".
Purchases of Fund shares are made at the public offering price next
determined after the Distributor or Transfer Agent receives payment, including
the applicable sales charge. To receive the group rate on their individual
purchase, group members must purchase shares through a single investment dealer
designated by the group. After the initial purchase, a
13
<PAGE>
member may send funds for the purchase of shares directly to the Transfer Agent.
Sales to members of qualified groups are made at a reduced sales charge because
such sales normally involve less sales effort and sales-related expense than
would usually be associated with sales to individual investors. Also, it is
believed that such reduced sales charges will provide an incentive for increased
investment in the Fund by members of qualified groups which could benefit the
Fund and its shareholders by enabling the Fund to achieve certain economies of
scale and benefits of size more rapidly than would otherwise be the case.
As determined by the Distributor, qualified groups include the employees of a
corporation or a sole proprietorship, members, and employees of a partnership or
association (including, without limitation, members of tax-exempt organizations
enumerated under Sections 501(c)(3) and 501(c)(13) of the Internal Revenue Code
of 1986, or other organized groups of persons (the members of which may include
other qualified groups), provided that: (i) the group has at least 25 members,
of which at least 10 members participate in the initial purchase; (ii) the group
has been in existence for at least six months; (iii) the group has some purpose
in addition to the purchase of investment company shares at a reduced sales
charge; and (iv) the group's sole organizational nexus or connection is not that
the members are credit card holders of a company, policy holders of an insurance
company, customers of a bank or a broker-dealer, clients of an investment
adviser, or security holders of a company.
Members of a qualified group include: (i) any group which meets the
requirements stated above and which is a constituent member of a qualified
group; (ii) any individual purchasing for his or her own account who is carried
on the records of the group or on the records of any constituent member of the
group as being a good standing employee, partner member, or person of like
status of the group or constituent member; or (iii) any fiduciary purchasing
shares for the account of a member of a qualified group or a member's
beneficiary, or participants in a qualified retirement plan, or contributors to
an individual retirement account (IRA). For example, a qualified group could
consist of a trade association which would have as its members individuals, sole
proprietors, partnerships, and corporations. The members of the group would
then consist of the individuals, the sole proprietors and their employees, the
members of the partnerships and their employees, as well as trustees of
employment benefit trusts acquiring Fund shares for the benefit of any of the
foregoing. The Fund reserves the right to revise the terms of, or to suspend or
discontinue, group sales charge discounts at any time.
An investor who purchases shares in amounts of $25,000 or more shall be
charged a reduced sales charge in accordance with the breakpoints set forth at
page 1 of the Prospectus.
In addition, purchases of shares of the Fund by (i) Trustees, officers, and
full-time employees of the Fund, (ii) directors, officers, and full-time
employees of the Distributor or the Investment Adviser, (iii) selected dealers,
(iv) Trustees, officers, partners, and full-time employees of selected dealers
which are not individuals, and (v) the spouse or child of those individuals
included in (i) and (iv) will not be subject to any sales charge nor will
investors who invest through an account as to which a bank or broker-dealer
charges an account management fee, provided the bank or broker-dealer has a
selling agreement with Distributor, have to pay a sales charge. Any of the
persons listed in clauses (i)-(iv) above and their spouses can also purchase
shares for custodial or trust accounts for their minor children.
14
<PAGE>
LETTERS OF INTENT. Shares of one or more Portfolio may be purchased by a
-----------------
"single purchaser," within a period of 13 months, pursuant to a Letter of Intent
in the form provided by the Distributor. Such Letter of Intent shall state the
investor's intention to invest in such shares during such period in an amount
which, together with the value (at their maximum offering prices on the date of
the Letter of Intent) of the shares of one or more of the specified Portfolios
then owned by such investor, equals a specified dollar amount ($25,000 or more).
Each purchase of shares made pursuant to a Letter of Intent will be made at the
public offering price, as described in the then current Prospectus relating to
such shares, which at the time of purchase is applicable to a single transaction
of the dollar amount specified in the Letter of Intent. The term "single
purchaser" includes an individual, or an individual, his spouse and their
children under the age of 21 purchasing for his or their own account (including
an IRA account) including his or their own trust, commonly known as living
trusts; a trustee or other fiduciary purchasing for a single trust, estate, or
single fiduciary account, although more than one beneficiary is involved;
multiple trusts for the same employer; or trust companies and bank trust
departments placing orders with respect to funds over which they exercise
discretionary investment authority and which are held in a fiduciary, agency,
custodial, or similar capacity, provided all shares are held of record in the
name, or nominee name, of the trust company or bank.
An investor's Letter of Intent is not a binding commitment of the investor to
purchase or a binding obligation of the Fund or the Distributor to sell a
specified dollar amount of shares qualifying for a reduced sales charge.
Accordingly, out of his initial purchase (and subsequent purchases if
necessary), 5% of the dollar amount of purchases required to complete the
investor's investment is held in escrow in the form of shares (valued at the
purchase price thereof) registered in the investor's name until he completes his
investment, at which time escrowed shares are deposited to his account. If the
investor does not complete his investment and does not within 20 days after
written request by the Distributor or his dealer pay the difference between the
sales charge on the dollar amount specified in his Letter of Intent and the
sales charge on the dollar amount of actual purchases, the difference will be
realized through the redemption of an appropriate number of the escrowed shares
and any remaining escrowed shares will be deposited to the investor's account.
COMBINATION PURCHASE PRIVILEGE. Purchases, either singly or in any
------------------------------
combination, of shares of one or more Portfolios, if made at a single time by a
single purchaser, will be combined for the purpose of determining whether the
total dollar amount of such purchases entitles the purchaser to a reduced sales
charge on any of such purchases. Each purchase of shares will then be made at
the public offering price, as described in the then current Prospectus relating
to such shares, which at the time of such purchase is applicable to a single
transaction of the total dollar amount of all such purchases. The term "single
purchaser" includes an individual, or an individual, his spouse and their
children under the age of 21, purchasing for his or their own account (including
an IRA account), including his or their own trust, commonly known as living
trusts; a trustee or other fiduciary purchasing for a single trust, estate, or
single fiduciary account, although more than one beneficiary is involved;
multiple trusts for the same employer; or trust companies and bank trust
departments placing orders with respect to funds over which they exercise
discretionary investment authority and which are held in a fiduciary, agency,
custodial, or similar capacity, provided all shares are held of record in the
name, or nominee name, of the trust company or bank.
15
<PAGE>
RIGHTS OF ACCUMULATION. Purchases, either singly or in any combination, of
----------------------
shares of one or more Portfolios, if made at a single time by a "single
purchaser" (as defined above) who already owns shares of one or more Portfolios,
will be combined for the purpose of determining whether the dollar amount of
such purchases plus the current value (at their maximum offering prices) of
shares of one or more of the specified Portfolios then owned by such purchaser
equals a dollar amount of purchases entitling the purchaser to a reduced sales
charge on any of such purchases, provided that at the time of any such
purchases, the purchaser, either directly or through his broker or dealer,
furnishes the Distributor (in the case of an investment through a broker or
dealer) or its agent (in the case of a direct cash investment by mail to
Rushmore Trust and Savings FSB), with sufficient information as to account
registrations and account numbers to permit verification that one or more of his
purchases qualifies for a reduced sales charge.
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, redemption payments could be made in securities valued at
the value used in determining net asset value. There may be brokerage and other
costs incurred by the redeeming shareholder in selling such securities.
DETERMINATION OF NET ASSET VALUE. As described in the Prospectus under
--------------------------------
"Purchase and Pricing of Shares--Valuation of Shares," the net asset value of
shares of each Portfolio of the Fund is determined once daily as of 4 p.m. New
York time on each day during which the New York Stock Exchange, or other
applicable exchange, is open for trading. The New York Stock Exchange is
scheduled to be closed for trading on the following days: New Year's Day,
Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day. The Board of 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.
NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO. In determining the value of
-----------------------------------------------
the assets of the Navellier Aggressive Small Cap Equity Portfolio, the
securities for which market quotations are readily available are valued at
market value, which is currently determined using the last reported sale price,
or, if no sales are reported -- as is the case with many securities traded over-
the-counter -- the last reported bid price. Debt securities
16
<PAGE>
(other than short-term obligations, 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 the 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. Use of a pricing
service has been approved by the Board of Trustees. 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, (c) derive less than 30% of its gross income from the sale
or other disposition within three months of purchase of (i) stock or securities,
(ii) options, futures, or forward contracts (other than options, futures, or
forward contracts on foreign currencies), or (iii) foreign currencies or
options, futures, or forward contracts on foreign currencies that are not
directly related to its principal business of investing in stocks or securities
(or options and futures with respect to stocks or securities), and (d) diversify
its holdings so that at the end of each fiscal quarter (i) 50% of the market
value of its assets is represented by cash, government securities, securities of
other regulated investment companies, and securities of one or more other
issuers (to the extent the value of the securities of any one such issuer owned
by the Portfolio does not exceed 5% of the value of its total assets and 10% of
the outstanding voting securities of such issuer) and (ii) not more than 25% of
the value of its assets is invested in the securities (other than government
securities and securities of other regulated investment companies) of any one
issuer. 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
17
<PAGE>
dividend is required to include the dividend in income on the later of the ex-
dividend date or the date of acquisition.
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. Any losses recognized upon the sale or exchange of shares of a
series within six months from the date of their purchase will be treated as
long-term capital loss to the extent of any amounts treated as dividends paid or
deemed paid during such period out of the net long-term capital gain of the
related Portfolio.
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.
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
18
<PAGE>
90 days of the acquisition of the original shares, however, the shareholder's
basis in the original shares will not include the sales charge 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 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 20% 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 30% (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
its capital gain net 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.
19
<PAGE>
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.
UNDERWRITERS
The Fund's shares will be continuously distributed through Navellier
Securities Corp. (the "Distributor") located at 920 Incline Way, Building No. 1,
Incline Village, Nevada 89450, pursuant to a distribution agreement dated May
15, 1993. The Distributor is a newly incorporated entity and has no prior
business history.
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 Adviser, Distributor, Custodian and Transfer Agent - Distributor."
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 yield or total return on the Navellier Aggressive Small Cap Equity Portfolio.
Quotations of yield for the Navellier Aggressive Small Cap Equity Portfolio
will be based on all investment income per share earned during a particular 30-
day period (including dividends and interest), less expenses accrued during the
period ("net investment income"), and are computed by dividing net investment
income by the value of the Fund on the last day of the period, according to the
following formula:
YIELD = 2[[a-b+1]/6/-1]
---
cd
where a = dividends and interest earned, as calculated in accordance with
the SEC's instructions, during the period by the Portfolio
b = expenses accrued for the period (net of any reimbursements)
c = the average daily number of shares outstanding during the period
that were entitled to receive dividends, and
d = the maximum offering price per share on the last day of the
period
20
<PAGE>
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:
P (1 + T)/n/ = 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 manner in which total return will be calculated for public use is
described above. Since the Fund has been in operation for less than one (1)
year, a table summarizing the calculation of total return for each Portfolio has
not been included.
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.
As summarized in the Prospectus under the heading "Performance and Yield," the
total return of the Navellier Aggressive Small Cap Equity Portfolio may be
quoted in advertisements and sales literature.
/*/ The Portfolio's Total Return Calculation assumes the maximum sales load is
deducted from the initial $1,000 payment.
21
<PAGE>
REPORT OF INDEPENDENT AUDITORS
22
<PAGE>
December 31, 1995 NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
- -------------------------------------------------------- --------------------------------------------------------
Market Value Market Value
Shares (Note 1) Shares (Note 1)
- -------------------------------------------------------- --------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS COMMON STOCKS (continued)
ADVANCED MEDICAL DEVICES -- 3.32% DIAGNOSTIC EQUIPMENT -- 0.98%
36,500 Avecor Cardiovascular, Inc.* $ 647,875 47,000 Media Logic, Inc. $ 387,750
51,600 Cyberoptics Corp.* 2,051,100 88,500 Nanometrics, Inc. 652,688
84,000 Q-Med, Inc.* 808,500 -------------
------------- 1,040,438
3,507,475 -------------
-------------
ADVERTISING/MARKETING -- 1.88% DIVERSIFIED TECHNOLOGY -- 1.83%
65,000 Ha-Lo Industries, Inc.* 1,998,750 76,950 Zygo Corp.* 1,933,369
------------- -------------
AIRLINES -- 0.57% ELECTRONICS -- 6.44%
60,000 Atlantic Coast Airlines, Inc.* 615,000 56,000 Burr Brown Corp.* 1,428,000
------------- 217,700 Computer Products, Inc.* 2,503,550
BEVERAGES -- 1.31% 38,800 Keithley Instruments, Inc. 649,900
50,000 Robert Mondavi Corp.* 1,381,250 114,000 Semtech Corp.* 2,223,000
------------- -------------
BIOTECHNOLOGY -- 3.70% 6,804,450
60,000 Cephalon, Inc.* 2,445,000 -------------
108,000 Cyanotech Corp.* 1,296,000 ENGINEERING/DESIGN -- 2.23%
19,000 Prime Medical Service, Inc.* 171,000 300,000 IMP, Inc.* 2,362,500
------------- -------------
3,912,000 ENVIRONMENTAL CONTROL/
------------- WASTE MANAGEMENT -- 0.90%
CASINOS/GAMING -- 2.38% 55,000 TETRA Technologies, Inc. 955,025
108,000 Grand Casinos, Inc.* 2,511,000 -------------
-------------
COMPUTER HARDWARE -- 2.55% FINANCIAL -- 1.54%
58,047 Hadco Corp.* 1,632,573 100,000 Olympic Financial, LTD. 1,625,000
94,500 Jabil Circuit, Inc.* 1,063,125 -------------
-------------
2,695,698 FINANCIAL SERVICES -- 1.71%
------------- 51,000 Aames Financial Corp. 1,421,625
COMPUTER SOFTWARE -- 15.34% 40,000 American Physicians Service
101,000 PC Docs Group International* 1,805,375 Group* 385,000
70,500 McAffee Associates, Inc.* 3,093,188 -------------
78,000 Quality Systems, Inc.* 2,262,000 1,806,625
100,000 Quarterdeck Office Systems, -------------
Inc.* 2,750,000 FOOD -- 1.02%
137,000 Structural Dynamics Research 60,000 Manhattan Bagel Company, Inc.* 1,080,000
Corp.* 4,024,375 -------------
60,000 Veritas Software Corp.* 2,280,000 INSURANCE -- 0.44%
------------- 12,000 American Bankers Insurance
16,214,938 Group, Inc. 468,000
------------- -------------
CONSUMER NON-CYCLICAL -- 0.46% MEDIA -- 1.19%
10,000 Culbro Corp.* 491,250 60,000 National Media Corp.* 1,260,000
------------- -------------
COSMETICS/PERSONAL CARE -- 1.47%
60,000 Thermolase Corp.* 1,552,500 OIL -- 2.41%
------------- 76,500 Chesapeake Energy Corp.* 2,543,625
-------------
DATA COMMUNICATIONS/NETWORKING -- 7.56% PHARMACEUTICALS -- 4.08%
53,000 Ascend Communications, Inc.* 4,299,625 50,000 Interneuron Pharmaceuticals,
150,000 Gandalf Technologies, Inc.* 2,550,000 Inc.* 1,275,000
67,000 Microdyne Corp.* 1,139,000 113,000 Neurogen Corp.* 3,036,875
------------- -------------
7,988,625 4,311,875
------------- -------------
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
December 31, 1995 Navellier Aggressive Small Cap Equity Portfolio
- -------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
Market Value
Shares (Note 1)
- ----------------------------------------------------------------
<S> <C>
COMMON STOCKS (continued)
Recreation Products - 3.87%
165,000 Macgregor Sports & Fitness,
Inc.* $ 443,437
111,7000 Ride, Inc.* 3,644,212
------------
4,087,649
------------
Restaurants - 0.34%
20,000 Long Horn Steaks, Inc.* 355,000
------------
Savings and Loans - 1.80%
55,000 Coast Savings Financial, Inc.* 1,904,374
Semiconductors and Related - 5.35%
49,000 Advanced Semiconductors
Material Intl.* 2,413,250
48,000 Kennel Corp.* 1,146,000
89,000 Trident Microsystems, Inc.* 2,091,500
------------
5,650,750
------------
Telecommunications - 8.98%
91,500 California Amplifier, Inc.* 2,584,875
118,000 Computer Telephone Corp.* 1,593,000
50,000 NRP, Inc.* 300,000
72,000 Picturetel Corp.* 3,105,000
55,000 Wireless Telecom Group 921,250
50,000 Zoom Telephonic, Inc.* 987,500
------------
9,491,625
------------
<CAPTION>
- ----------------------------------------------------------------
Market Value
Shares (Note 1)
- ----------------------------------------------------------------
<S> <C>
COMMON STOCKS (continued)
Temp Staffing - 5.34%
75,000 AccuStaff, Inc.* $ 3,300,000
69,000 Employee Solutions, Inc.* 2,346,000
------------
5,646,000
------------
Transportation Equipment - 1.5%
73,000 Greenwich Air Services, Inc. 1,679,000
------------
Total Common Stocks - 92.58%
(Cost $79,462,554) 97,874,391
------------
MUTUAL FUNDS - 7.42%
Fund for Government Investors, Inc.
(Cost $7,842,413) 7,842,413
------------
Total Investments - 100.00%
(Cost $87,304,967) $105,716,804
============
</TABLE>
*Nonincome producing
See Notes to Finacial Statements
<PAGE>
December 31, 1995 NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<S> <C>
ASSETS
Securities at Value (Note 1, see portfolio for cost information)....... $105,716,804
Cash in Custodian Bank................................................. 121,277
Receivable for Shares Purchased........................................ 1,859,629
Interest Receivable.................................................... 45,746
Dividends Receivable................................................... 3,300
Unamortized Organizational Costs (Note 1).............................. 26,171
------------
Total Assets........................................................... 107,772,927
------------
LIABILITIES
Distributions Payable.................................................. 143,365
Payable for Securities Purchased....................................... 1,797,419
Payable for Shares Redeemed............................................ 242,463
Commissions Payable.................................................... 115,151
Investment Advisory Fee Payable (Note 2)............................... 106,574
Administrative Fee Payable (Note 2).................................... 42,630
Organizational Expenses Payable to Adviser (Note 1).................... 26,171
------------
Total Liabilities...................................................... 2,473,773
------------
NET ASSETS............................................................. $105,299,154
============
Shares Outstanding..................................................... 6,831,185
============
Net Asset Value Per Share.............................................. $ 15.41
============
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
For the Year Ended
December 31, 1995 NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest (Note 1).............................................. $ 227,654
Dividends (Note 1)............................................. 92,464
-----------
Total Investment Income........................................ 320,118
-----------
EXPENSES
Investment Advisory Fee (Note 2)............................... 664,744
Transfer Agent and Custodian Fee (Note 3)...................... 137,089
Administrative Fee (Note 2).................................... 132,949
Trustees' Fees................................................. 36,938
Registration Fees.............................................. 29,918
Insurance...................................................... 24,514
Audit Fees..................................................... 18,000
Printing....................................................... 17,557
Organizational Expense (Note 1)................................ 14,215
Other Expenses................................................. 42,023
-----------
Total Expenses................................................. $ 1,117,947
Less Expenses Reimbursed by Investment Adviser (Note 2)........ (187,305)
-----------
Net Expenses................................................... 930,642
-----------
NET INVESTMENT LOSS............................................ (610,524)
-----------
Net Realized Gain on Investments............................... 1,524,157
Net Change in Unrealized Appreciation of Investments........... 15,989,475
-----------
NET GAIN ON INVESTMENTS........................................ 17,513,632
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........... $16,903,108
===========
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Year For the
Ended Period Ended
December 31, December 31,
1995 1994*
----------- -----------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES
Net Investment Income (Loss).............. $ (610,524) $ (38,577)
Net Realized Gain (Loss) on Investment
Transactions............................. 1,524,157 (788,364)
Net Change In Unrealized Appreciation
of Investments........................... 15,989,475 2,422,362
------------ -----------
Net Increase in Net Assets Resulting
from Operations.......................... 16,903,108 1,595,421
DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income................ - -
From Net Realized Capital Gains........... (2,499,314) -
From Share Transactions (Note 5).......... 72,671,665 16,328,274
------------ -----------
Net Increase in Net Assets................ 87,075,459 17,923,695
Net Assets - Beginning of Period.......... 18,223,695 300,000
------------ -----------
Net Assets - End of Period................ $105,299,154 $18,223,695
</TABLE> ============ ===========
*From Commencement of Operations January 3, 1994.
See Notes to Financial Statements.
7
<PAGE>
Navellier Aggressive Small Cap Equity Portfolio
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the Year For the
Ended Period Ended
December 31, 1995 December 31, 1994*
----------------- ------------------
<S> <C> <C>
Per Share Operating Performance:
Net Asset Value-Beginning of Period............................. $10.98 $10.00
------ ------
Net Investment Loss............................................. (0.16) (0.08)
Net Realized and Unrealized Gains on Securities................. 4.97 1.06
------ ------
Net Increase in Net Asset Value Resulting from Operations....... 4.81 0.98
Distributions to Shareholders:
From Net Investment Income.................................... - -
From Net Realized Capital Gains............................... (0.98) -
------ ------
Net Increase in Net Asset Value................................. 4.43 0.98
------ ------
Net Asset Value-End of Period................................... $15.41 $10.98
====== ======
Total Investment Return........................................... 43.80% 9.80%
Ratios to Average Net Assets:
Expenses After Reimbursement (Note 2)........................... 1.75% 1.68%
Expenses Before Reimbursement (Note 2).......................... 2.10% 4.52%
Net Investment Loss............................................. (1.15)% (0.81)%
Supplementary Data:
Portfolio Turnover Rate......................................... 169.6% 139.9%
Number of Shares Outstanding at End of Period (000's omitted)... 6,831 1,660
</TABLE>
- ------------------------
* Total returns do not include the maximum sales load. Total returns for
periods of less than one year are not annualized.
* From Commencement of Operations January 3, 1994.
See Notes to Financial Statements.
8
<PAGE>
December 31, 1995
NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies
Navellier Series Fund (the "Fund") is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940 as a diversified,
open-end investment company. The Fund consists of one portfolio, Navellier
Aggressive Small Cap Equity Portfolio (the "Portfolio"). Shares of the Fund are
purchased at the public offering price which includes a maximum sales charge of
up to 3.00% depending on the size of the purchase. 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 Portfolio's securities in good faith. The
Board of Trustees will periodically review this method of valuation and
recommend changes which may be necessary to assure that the Portfolio'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 gains and losses
from securities transactions are computed on an identified cost basis.
(c) Dividends from net investment income 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 complies with the provisions of the Internal Revenue Code
applicable to regulated investment companies and distributes all net investment
income to its shareholders. Therefore, no Federal income tax provision is
required.
(e) Organizational expenses of the Fund totaling $143,294 are being deferred
and amortized over 60 months beginning with the public offering of shares. Any
redemption by an initial investor during the amortization period will be reduced
by a prorata portion of any of the unauthorized organization expenses. Such
proration is to be calculated by dividing the number of initial shares redeemed
by the number of initial shares outstanding at the date of redemption. During
the year ended December 31, 1995, the initial investor redeemed a portion of the
initial shares resulting in a prorata reduction of unamortized organization
expenses. At December 31, 1995, unamortized organization costs were $26,171.
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 1.25% of the daily net assets for the Navellier Aggressive
Small Cap Equity Portfolio. The Adviser also receives a 0.25% annual fee in
connection with the rendering of services under the administrative services
agreement and is reimbursed by the Fund for operating expenses incurred on
behalf of the Fund. 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 to 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, 1995,
the Adviser paid operating expenses of the Fund totaling $320,354. Under the
operating expense agreement, the Adviser requested, and the Fund reimbursed,
$132,949 of such expenses. The Adviser voluntarily agreed not to seek future
reimbursement of $187,305 of such 1995 expenses.
In addition, at December 31, 1995, the Adviser voluntarily agreed not to
seek future reimbursement of $81,221 of expenses for which reimbursement had
been temporarily waived at December 31, 1994. Accordingly, at December 31,
1995, there were no prior expenses which could be reimbursed in the future under
the agreement.
9
<PAGE>
December 31, 1995
- -------------------------------------------------------------------------------
Navellier Securities Corp. 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 Funds shares, renders its
services to the Fund pursuant to a distribution agreement. An officer and
trustee of the Fund is also an officer and director of the Distributor.
For the year ended December 31, 1995, the Distributor received $731,298
from sales loads earned on sales of the Fund's capital stock.
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. Securities Transactions
For the year ended December 31, 1995, purchases of securities were
$142,588,828 and sales of securities were $79,543,783. These totals exclude
short-term securities.
5. Share Transactions
On December 31, 1995, the Fund is authorized to issue an unlimited number
of shares of capital stock with no stated par value. Transactions in shares of
the Fund were as follows:
<TABLE>
<CAPTION>
Shares Dollars
------ -------
<S> <C> <C>
Shares Sold....................................... 9,128,613 $130,265,618
Shares Issued in Reinvestment of Dividends........ 152,845 2,355,336
--------- ------------
9,281,458 132,620,954
Shares Redeemed................................... (4,110,315) (59,949,289)
--------- ------------
Net Increase...................................... 5,171,143 $ 72,671,665
========= ============
</TABLE>
6. Net Unrealized Appreciation/Depreciation of Investments
As of December 31, 1995, net appreciation of investments for Federal income
tax purposes was $18,411,837 of which $22,002,047 related to appreciated
investments and $3,590,210 related to depreciated investments. At December 31,
1995, the cost of the Fund's securities for Federal income tax purposes was
$87,307,967.
7. Net Assets
At December 31, 1995, net assets consisted of the following:
<TABLE>
<S> <C>
Paid-in Capital........................................... $ 89,261,316
Net Unrealized Appreciation on Investments................ 18,411,837
Accumulated Realized Loss on Investments.................. (2,373,999)
- ------------
NET ASSETS................................................ $105,299,154
============
</TABLE>
<PAGE>
December 31, 1995
- -------------------------------------------------------------------------------
8. Federal Income Tax
No provision is made for Federal Income taxes as it is the Fund's intention
to continue to qualify as a regulated investment company and to make requisite
distributions to the shareholders which will be sufficient to relieve it from
all or substantially all Federal Income and excise taxes.
Effective January 3, 1994, the Fund has adopted Statement of Position 93-2;
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies.
Adoption of this standard results in the reclassification to paid-in-capital of
permanent differences between tax and financial reporting of net investment
income and realized gains/(losses).
9. Subsequent Event
During 1995, the Fund invested its daily cash balance in Fund for Government
Investors, Inc. (FGI), a registered investment company. FGI invested only in
U.S. Government Securities. Due to an interpretation of the Fund's current
investment policy, as of January 22, 1996 the Fund will no longer invest in
other investment companies.
11
<PAGE>
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees
of Navellier Series Fund:
We have audited the statement of assets and liabilities, including the
portfolio of investments, of Navellier Aggressive Small Cap Equity Portfolio of
Navellier Series Fund (the "Fund") as of December 31, 1995, and the related
statement of operations for the year then ended and the statements of changes in
net assets and the financial highlights for the year ended December 31, 1995
and the period January 3, 1994 (commencement of operations) to December 31,
1994. These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility it to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits 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 at December
31, 1995 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 audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the net assets of Navellier Aggressive Small
Cap Equity Portfolio of Navellier Series Fund at December 31, 1995, the result
of its operations, the changes in its net assets, and the financial highlights
for the respective stated periods in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
Washington, D.C.
February 16, 1996
<PAGE>
APPENDIX
--------
A-1 AND P-1 COMMERCIAL PAPER RATINGS
- ------------------------------------
Each of the Portfolios will invest only in commercial paper which, at the
date of investment, is rated A-1 by Standard & Poor's Corporation ("S&P") or P-1
by Moody's Investors Services, Inc. ("Moody's"), or, if not rated, is issued or
guaranteed by companies which at the date of investment have an outstanding debt
issue rated AA or higher by Standard & Poor's or Aa or higher by Moody's.
Commercial paper rated A-1 by S&P has the following characteristics: (1)
liquidity ratios are adequate to meet cash requirements; (2) long-term senior
debt is rated "A" or better; (3) the issuer has access to at least two
additional channels of borrowing; (4) basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances; (5) typically, the
issuer's industry is well established and the issuer has a strong position
within the industry; and (6) the reliability and quality of management are
unquestioned.
The rating P-1 is the highest commercial paper rating assigned by Moody's.
Among the factors considered by Moody's in assigning ratings are the following:
(1) evaluation of the management of the issuer; (2) economic evaluation of the
issuer's industry or industries and an appraisal of speculative-type risks which
may be inherent in certain areas; (3) evaluation of the issuer's products in
relation to competition and customer acceptance; (4) liquidity; (5) amount and
quality of long-term debt; (6) trend of earnings over a period of ten years; (7)
financial strength of a parent company and the relationship which exists with
the issuer; and (8) recognition by the management of obligations which may be
present or may arise as a result of public interest questions and preparations
to meet such obligations.
33
<PAGE>
PART C
OTHER INFORMATION
ITEM 24 FINANCIAL STATEMENTS AND EXHIBITS
1. FINANCIAL STATEMENTS:
(a) Included in Part A of this Registration Statement:
Financial highlights January 1, 1995 - December 31, 1995
(b) Included in Part B of this Registration Statement:
(i) Statement of Assets and Liabilities as of December 31, 1995,
and related statements of operations, changes in net assets and
financial highlights for period January 1, 1995 - December 31,
1995.
(ii) Report of Independent Auditors
(c) Included in Part C of this Registration Statement: none
All other statements and schedules have been omitted because they are not
applicable or the information is shown in the Financial Statements or Financial
Highlights or notes thereto.
2. EXHIBITS:
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C>
1.1 Certificate of Trust of Registrant
1.2 Declaration of Trust of Registrant
2 By-Laws of Registrant
3 None
4 None
5 Investment Management Agreement between
Registrant and Navellier Management, Inc.,
dated May 15, 1993
6.1 Distribution Agreement dated May 15, 1993
6.2 Selected Dealer Agreement (specimen)
7 None
8.1 Administrative Services, Custodian, Transfer
Agreement with Rushmore Trust and Savings, FSB,
dated March 10, 1994
8.2 Navellier Administrative Services Agreement
9.0 Trustee Indemnification Agreements
10 Opinion and Consent of Counsel
11 Consent of Independent Auditors
12 None
13 Subscription Agreement between The Navellier
Series Fund and Louis Navellier, dated
May 15, 1993
13.1 Investment Adviser Operating Expense
Reimbursement Agreement
14 None
15 None
16 Yield Calculation schedule
</TABLE>
34
<PAGE>
ITEM 25 PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
The Registrant does not control any person nor is it under common control by
any person.
ITEM 26 NUMBER OF HOLDERS OF SECURITIES
The following table indicates the number of record holders of each class of
securities of the Fund, as of December 31, 1995:
<TABLE>
<CAPTION>
Title of Class Number of Record Holders
-------------- ------------------------
<S> <C>
Navellier Aggressive
Small Cap Equity Portfolio 10,000
</TABLE>
ITEM 27 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
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.
35
<PAGE>
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.
ITEM 28 BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Set forth below is a description of any other business, profession, vocation,
or employment of a substantial nature in which each investment adviser of the
Fund and each director, officer, or partner of any such investment adviser, is
or has been at any time during the past two fiscal years, engaged for his own
account or in the capacity of director, officer, employee, partner, or trustee:
36
<PAGE>
<TABLE>
<CAPTION>
Name and
Principal Positions Held with Principal Occupations
Business Address Registrant and Its Affiliates During Past Two Years
- ---------------- ----------------------------- ---------------------
<S> <C> <C>
Louis Navellier Trustee, President, and Mr. Navellier is and has been the
920 Incline Way Treasurer of The Navellier CEO and President of Navellier &
Incline Village Series Fund. Mr. Navellier is Associates Incorporated, an invest
NV 89450 also the CEO, President, ment management company since
Treasurer, and Secretary of 1988, and has been publisher and
Navellier Management Inc., a editor of MPT Review from August
Delaware Corporation which is 1987 to the present, and was pub-
the Investment Adviser to the lisher and editor of the
Fund. Mr. Navellier is also predecessor investment advisory
CEO, President, Secretary, and newsletter OTC Insight, which he
Treasurer of Navellier & Asso- began in 1980 and wrote through
ciates, Inc., Navellier Publica- July 1987.
tions, Inc., MPT Review Inc.,
Navellier Fund Management,
Inc. and Navellier International
Management Inc.
</TABLE>
ITEM 29 PRINCIPAL UNDERWRITERS
(a) The Distributor does not currently act as principal underwriter,
depositor, or investment adviser for any investment company other than the Fund
and The Navellier Performance Fund.
(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:
<TABLE>
<CAPTION>
Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ------------------ -------------------- ---------------------
<S> <C> <C>
Louis Navellier CEO, President, Director, Trustee, President,
920 Incline Way Treasurer, and Secretary CEO, Treasurer
Incline Village NV 89450
</TABLE>
(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 30 LOCATION OF ACCOUNTS AND RECORDS
All accounts, records, and other documents required to be maintained under
Section 31(a) of the 1940 Act and the rules promulgated thereunder are
maintained at the office of the Navellier Series Fund located at 920 Incline
Way, Building One, Incline
37
<PAGE>
Village, Nevada 89450, and the offices of the Fund's Custodian and Transfer
agent at 4922 Fairmont Avenue, Bethesda, MD 20814.
ITEM 31 MANAGEMENT SERVICES
Other than as set forth in Part A and Part B of this Registration Statement,
the Fund is not a party to any management-related service contract.
ITEM 32 UNDERTAKINGS
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.
38
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Amendment to the Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized in the City of Incline Village and State of
Nevada, on the 26th day of April, 1996.
THE NAVELLIER SERIES FUND
By: /s/ LOUIS NAVELLIER
-----------------------
Louis Navellier
President and Trustee
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons or
their attorneys-in-fact pursuant to authorization given on May 15, 1993, in the
capacities and on the date indicated:
<TABLE>
<S> <C> <C>
/s/ LOUIS G. NAVELLIER Trustee and President
- ---------------------- (Principal Executive
Louis Navellier/2/ Officer), Treasurer April 26, 1996
/s/ LOUIS G. NAVELLIER Trustee, Vice President,
- ---------------------- and Secretary April 26, 1996
Alan Alpers/2/
/s/ LOUIS G. NAVELLIER Trustee April 26, 1996
- ----------------------
Donald Simon
/s/ LOUIS G. NAVELLIER Trustee April 26, 1996
- ----------------------
Lawrence Bianchi
/s/ LOUIS G. NAVELLIER Trustee April 26, 1996
- ----------------------
Kenneth Sletten
</TABLE>
- --------------------
/2/These persons are interested persons affiliated with the Investment Advisor.
39
<PAGE>
Registration No. 33-64010
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
*********
EXHIBITS
TO
FORM N-1A
REGISTRATION STATEMENT
UNDER THE
INVESTMENT COMPANY ACT OF 1940
**********
THE NAVELLIER SERIES FUND
920 INCLINE WAY, BLDG. 1
INCLINE VILLAGE, NEVADA 89450
30
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description Numbered Page
- ----------- ------------ -------------
<C> <S> <C>
1.0 None (Financial Statement
1.1 Certificate of Trust of Registrant 32
1.2 Declaration of Trust of Registrant 34
2 By-Laws of Registrant 84
3 None
4 None
5 Investment Advisory Agreement between Registrant and 94
Navellier Management, Inc., dated May 15, 1993
6.1 Distribution Agreement dated May 15, 1993 as amended 100
April 26, 1996
6.2 Selected Dealer Agreement (specimen) 110
7 None
8.1 Administrative Services Agreement between Registrant and 114
Rushmore Trust and Savings, FSB, dated March 11, 1994
8.2 Administrative Services Agreement between Registrant and 122
Navellier Management, Inc., dated May 15, 1993
9 Trustee Indemnification Agreements 127
10 Opinion and Consent of Counsel 137
11 Consent of Independent Auditors 139
12 None
13 Subscription Agreement between The Navellier Series Fund 140
and Louis Navellier dated May 15, 1993
13.1 Investment Adviser Operating Expense Reimbursement 141
Agreement dated April 26, 1996
14, 15 None
16 Performance Calculation 142
</TABLE>
<PAGE>
EXHIBIT 1.1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
--------------------------------
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
BUSINESS TRUST OF "THE NAVELLIER SERIES FUND" FILED IN THIS OFFICE ON THE
TWENTY-EIGHTH DAY OF MAY, A.D. 1993, AT 9 O'CLOCK A.M.
* * * * * * * * * *
[Seal /S/ William T. Quillen
appears --------------------------------------
here.] William T. Quillen, Secretary of State
AUTHENTICATION: "3917516
931395093 DATE: 05/28/1993
<PAGE>
CERTIFICATE OF TRUST
THE NAVELLIER SERIES FUND
The undersigned, constituting all the members of the Board of Trustees of
The Navellier Series Fund (the "Trust"), in order to form a Delaware business
trust pursuant to Section 3810 of the Delaware Business Trust Act, do hereby
certify the following:
1. The name of the Delaware business trust is
THE NAVELLIER SERIES FUND
2. The registered office of the Trust in Delaware is The Company
Corporation, Three Christina Centre, 201 N. Walnut Street, Wilmington, DE,
19801, in New Castle county.
3. Prior to the issuance of beneficial interests, the Trust will become a
registered investment company under the Investment Company Act of 1940, as
amended.
4. The registered agent for service of process on the Trust is The Company
Corporation, Three Christina Centre, 201 N. Walnut Street, Wilmington, DE,
19801, in New Castle county.
5. This Certificate of Trust shall be effective the date it is filed with
the Office of the Delaware Secretary of State.
6. Section 3804(a) of the Delaware Business Trust Act shall apply to limit
the liabilities of any Series of this Trust solely to the liabilities, debts,
obligations, and expenses incurred, contracted for, or otherwise existing,
incurred, or accrued with respect to that Series and shall only be enforceable
against the assets of that particular Series and not against the assets of the
business trust generally.
IN WITNESS WHEREOF, the undersigned Trustees of The Navellier Series Fund
have executed this Certificate of Trust as of the 15 day of May, 1993.
--
/s/ Louis G. Navellier /s/ John Drinkwater
- ---------------------------------- ----------------------------------
Louis G. Navellier, Trustee John Drinkwater, Trustee
/s/ Donald Simon /s/ Lawrence Bianchi
- ---------------------------------- ----------------------------------
Donald Simon, Trustee Lawrence Bianchi, Trustee
/s/ Kenneth Sletten
- ----------------------------------
Kenneth Sletten, Trustee
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 05/28/1993
931395093 - 2338304
<PAGE>
EXHIBIT 1.2 QR
DECLARATION OF TRUST
OF
THE NAVELLIER SERIES FUND
DATED MAY __ , 1993
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I....................................................... 1
NAMES AND DEFINITIONS...................................... 1
NAME................................................... 1
DEFINITIONS............................................ 1
SECTION 1.02...................................... 1
ARTICLE II...................................................... 3
BENEFICIAL INTEREST........................................ 3
SHARES OF BENEFICIAL INTEREST......................... 3
Section 2.01...................................... 3
Section 2.02...................................... 4
REGISTER OF SHARES AND SHARE CERTIFICATES............. 4
Section 2.03...................................... 4
TRANSFER OF SHARES.................................... 5
Section 2.04...................................... 5
TREASURY SHARES....................................... 5
Section 2.05...................................... 5
ESTABLISHMENT OF SERIES............................... 6
Section 2.06...................................... 6
INVESTMENT IN THE TRUST............................... 7
Section 2.07...................................... 7
ASSETS AND LIABILITIES OF SERIES...................... 7
Section 2.08...................................... 7
NO PREEMPTIVE RIGHTS.................................. 9
Section 2.09...................................... 9
PERSONAL LIABILITY OF SHAREHOLDERS.................... 9
Section 2.10...................................... 9
ASSENT TO TRUST INSTRUMENT............................ 10
Section 2.11...................................... 10
ARTICLE III..................................................... 10
THE TRUSTEES............................................... 10
MANAGEMENT OF THE TRUST............................... 10
Section 3.01...................................... 10
INITIAL TRUSTEES...................................... 11
Section 3.02...................................... 11
TERM OF OFFICE OF TRUSTEES............................ 11
Section 3.03...................................... 11
VACANCIES AND APPOINTMENT OF TRUSTEES................. 12
Section 3.04...................................... 12
TEMPORARY ABSENCE OF TRUSTEE.......................... 13
Section 3.05...................................... 13
NUMBER OF TRUSTEES.................................... 13
Section 3.06...................................... 13
EFFECT OF DEATH, RESIGNATION ETC., OF A TRUSTEE....... 13
</TABLE>
fund\declaration of trust 35
<PAGE>
<TABLE>
<S> <C>
Section 3.07..................................... 13
OWNERSHIP OF ASSETS OF THE TRUST..................... 13
Section 3.08..................................... 13
ARTICLE IV..................................................... 14
POWERS OF THE TRUSTEES.................................... 14
POWERS............................................... 14
Section 4.01..................................... 14
ISSUANCE AND REPURCHASE OF SHARES.................... 18
Section 4.02..................................... 18
TRUSTEES AND OFFICERS AS SHAREHOLDERS................ 19
Section 4.03..................................... 19
ACTION OF THE TRUSTEES............................... 19
Section 4.04..................................... 19
CHAIRMAN OF THE TRUSTEES............................. 20
Section 4.05..................................... 20
PRINCIPAL TRANSACTIONS............................... 20
Section 4.06..................................... 20
ARTICLE V...................................................... 21
EXPENSES OF THE TRUST..................................... 21
TRUSTEE REIMBURSEMENT................................ 21
Section 5.01..................................... 21
ARTICLE VI..................................................... 22
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER, AND
TRANSFER AGENT....................................... 22
INVESTMENT ADVISER................................... 22
Section 6.01..................................... 22
PRINCIPAL UNDERWRITER................................ 23
Section 6.02..................................... 23
TRANSFER AGENT....................................... 23
Section 6.03..................................... 23
PARTIES TO CONTRACT.................................. 23
Section 6.04..................................... 23
PROVISIONS AND AMENDMENTS............................ 24
Section 6.05..................................... 24
ARTICLE VII.................................................... 25
SHAREHOLDERS' VOTING POWERS AND MEETINGS.................. 25
VOTING POWERS........................................ 25
Section 7.01..................................... 25
MEETINGS............................................. 26
Section 7.02..................................... 26
QUORUM AND REQUIRED VOTE............................. 26
Section 7.03..................................... 26
</TABLE>
fund\declaration of trust 36
<PAGE>
<TABLE>
<S> <C>
ARTICLE VIII............................................ 27
CUSTODIAN.............................................. 27
APPOINTMENT AND DUTIES................................ 27
Section 8.01......................................... 27
CENTRAL CERTIFICATE SYSTEM............................ 28
Section 8.02......................................... 28
ARTICLE IX.............................................. 29
DISTRIBUTIONS AND REDEMPTIONS.......................... 29
DISTRIBUTIONS......................................... 29
Section 9.01......................................... 29
REDEMPTIONS........................................... 30
Section 9.02......................................... 30
DETERMINATION OF NET ASSET VALUE AND VALUATION
OF PORTFOLIO ASSETS.................................. 30
Section 9.03......................................... 30
SUSPENSION OF THE RIGHT OF REDEMPTION................. 32
Section 9.04......................................... 32
REDEMPTION OF SHARES IN ORDER TO QUALIFY AS
REGULATED INVESTMENT COMPANY......................... 32
Section 9.05......................................... 32
ARTICLE X............................................... 33
LIMITATION OF LIABILITY AND INDEMNIFICATION............ 33
NO PERSONAL LIABILITY OF TRUSTEES, OFFICERS,
EMPLOYEES, OR AGENTS................................. 33
Section 10.01........................................ 33
INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES,
AGENTS............................................... 34
Section 10.02........................................ 34
LIABILITY OF SHAREHOLDERS; INDEMNIFICATION............ 35
Section 10.03........................................ 35
NO BOND REQUIRED OF TRUSTEES.......................... 35
Section 10.04........................................ 35
NO DUTY OF INVESTIGATION; NOTICE IN TRUST
INSTRUMENTS, ETC..................................... 35
Section 10.05........................................ 35
RELIANCE ON EXPERTS, ETC.............................. 36
Section 10.06........................................ 36
SHAREHOLDERS.......................................... 37
Section 10.07........................................ 37
ARTICLE XI.............................................. 37
MISCELLANEOUS.......................................... 37
TRUST NOT A PARTNERSHIP............................... 37
Section 11.01........................................ 37
</TABLE>
37
<PAGE>
<TABLE>
<S> <C>
TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE, NO
BOND OR SURETY....................................... 38
Section 11.02........................................ 38
ESTABLISHMENT OF RECORD DATES......................... 38
Section 11.03........................................ 38
TERMINATION OF TRUST.................................. 39
Section 11.04........................................ 39
REORGANIZATION........................................ 40
Section 11.05........................................ 40
FILING OF COPIES, REFERENCES, HEADINGS................ 41
Section 11.06........................................ 41
APPLICABLE LAW........................................ 42
Section 11.07........................................ 42
AMENDMENTS............................................ 43
Section 11.08........................................ 43
FISCAL YEAR........................................... 43
Section 11.09........................................ 43
USE OF THE WORLD NAVALLIER............................ 44
Section 11.10........................................ 44
PROVISIONS IN CONFLICT WITH LAW....................... 44
Section 11.11........................................ 44
</TABLE>
38
<PAGE>
DECLARATION OF TRUST
OF
THE NAVELLIER SERIES FUND
THIS TRUST INSTRUMENT is made May __, 1993 by Louis G. Navellier, John
Drinkwater, Donald Simon, Lawrence Bianchi, and Kenneth Sletten (the
"Trustees").
WHEREAS, the Trustees desire to establish a business trust for the
investment and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust hereunder shall be held and managed in trust as a
series open end management investment company under this Trust Instrument as
herein set forth below.
ARTICLE I
---------
NAMES AND DEFINITIONS
---------------------
NAME
- ----
Section 1.01. The name of the trust created hereby is "The Navellier Series
------------
Fund."
DEFINITIONS.
- -----------
Section 1.02. Wherever used herein, unless otherwise required by the context
------------
or specifically provided:
(a) "Bylaws" means the Bylaws referred to in Article IV, Section 4.01(e)
hereof, as from time to time amended;
(b) The term "Commission" has the meaning given it in the 1940 Act. The terms
"Affiliated Person," "Assignment," "Interested Person," and "Principal
Underwriter" shall
39
<PAGE>
have the meanings given them in the 1940 Act, as modified by or interpreted by
any applicable order or orders of the Commission or any rules or regulations
adopted or interpretive releases of the Commission thereunder. "Majority
Shareholder Vote" shall have the same meaning as the term "vote of a majority of
the outstanding voting securities" is given in the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Commission or any rules or
regulations adopted or interpretive releases of the Commission thereunder.
(c) The "Delaware Act" refers to Chapter 38 of Title 12 of the Delaware Code
entitled "Treatment of Delaware Business Trusts," as it may be amended from time
to time.
(d) "Net Asset Value" means the net asset value of each Series of the Trust
determined in the manner provided in Article IX, Section 9.03 hereof;
(e) "Outstanding Shares" means those Shares shown from time to time in the
books of the Trust or its Transfer Agent as then issued and outstanding, or, if
Shares are not issued, then the Shares which would have been issued if Shares
had been issued, but shall not include Shares which have been redeemed or
repurchased by the Trust and which are at the time held in the treasury of the
Trust;
(f) "Series" means a series of Shares of the Trust established in accordance
with the provisions of Article II, Section 2.06 hereof.
(g) "Shareholder" means a record owner of Outstanding Shares of the Trust;
(h) "Shares" means the equal proportionate transferable units of beneficial
interest into which the beneficial interest of each Series of the Trust or class
thereof shall be divided and may include fractions of Shares as well as whole
Shares;
(i) The "Trust" refers to the Navellier Series Fund and reference to the
Trust, when applicable to one or more Series of the Trust, shall refer to any
such Series;
40
<PAGE>
(j) the "Trustees" means the person or persons who has or have signed this
Trust Instrument, so long as he or they shall continue in office in accordance
with the terms hereof, and all other persons who may from time to time be duly
qualified and serving as Trustees in accordance with the provisions of Article
III hereof, and reference herein to a Trustee or to the Trustees shall refer to
the individual Trustees in their capacity as Trustees hereunder;
(k) "Trust Property" means any and all property, real or personal, tangible
or intangible, which is owned or held by or for the account of one or more of
the Trust or any Series, or the Trustees on behalf of the Trust or any Series.
(1) The "1940 Act" refers to the Investment Company Act of 1940, and the
Rules and Regulations thereunder, as amended from time to time.
ARTICLE II
----------
BENEFICIAL INTEREST
-------------------
SHARES OF BENEFICIAL INTEREST
- -----------------------------
Section 2.01. The beneficial interest in the Trust shall be divided into such
------------
transferable Shares of one or more separate and distinct Series or classes of a
Series as the Trustees shall from time to time create and establish. The number
of Shares of each Series, and class thereof, authorized hereunder is unlimited.
Each Share shall have no par value. All Shares issued hereunder, including,
without limitation, Shares issued in connection with a dividend in Shares or a
split or reverse split of Shares, shall be fully paid and nonassessable.
41
<PAGE>
ISSUANCE OF SHARES
- ------------------
Section 2.02. The Trustees in their discretion may, from time to time,
------------
without vote of the Shareholders, issue Shares, in addition to the then issued
and outstanding Shares and Shares held in the treasury, to such party or parties
and for such amount and type of consideration, subject to applicable law,
including cash or securities, at such time or times and on such terms as the
Trustees may deem appropriate, and may in such manner acquire other assets
(including the acquisition of assets subject to, and in connection with, the
assumption of liabilities) and businesses. In connection with any issuance of
Shares, the Trustees may issue fractional Shares and Shares held in the
treasury. the Trustees may from time to time divide or combine the Shares into a
greater or lesser number without thereby changing the proportionate beneficial
interests in the Trust. Contributions to the Trust may be accepted for, and
Shares shall be redeemed as, whole Shares and/or 1/100th of a Share or integral
multiples thereof.
REGISTER OF SHARES AND SHARE CERTIFICATES
- -----------------------------------------
Section 2.03. A register shall be kept at the principal office of the Trust
------------
or an office of the Trust's transfer agent which shall contain the names and
addresses of the Shareholders of each Series, the number of Shares of that
Series (or any class or classes thereof) held by them respectively, and a record
of all transfers thereof. As to Shares for which no certificate has been issued,
such register shall be conclusive as to who are the holders of the Shares and
who shall be entitled to receive dividends or other distributions or otherwise
to exercise or enjoy the rights of Shareholders. No Shareholder shall be
entitled to receive payment of any dividend or other distribution, nor to have
notice given him as herein or in the Bylaws provided, until he has given his
address to the transfer agent or such other officer or agent of the Trustees as
shall keep the said register for entry thereon. The Trustees, in their
42
<PAGE>
discretion, may authorize the issuance of share certificates and promulgate
appropriate rules and regulations as to their use. Such certificates may be
issuable for any purpose limited in the Trustees' discretion. In the event that
one or more certificates are issued, whether in the name of a shareholder or a
nominee, such certificate or certificates shall constitute evidence of ownership
of Shares for all purposes, including transfer, assignment, or sale of such
Shares, subject to such limitations as the Trustees may, in their discretion,
prescribe.
TRANSFER OF SHARES
- ------------------
Section 2.04. Except as otherwise provided by the Trustees, Shares shall be
------------
transferable on the records of the Trust only by the record holder thereof or by
his agent thereunto duly authorized in writing, upon delivery to the Trustees or
the Trust's transfer agent of a duly executed instrument of transfer, together
with a Share certificate, if one is outstanding, and such evidence of the
genuineness of each such execution and authorization and of such other matters
as may be required by the Trustees. Upon such delivery the transfer shall be
recorded on the register of the Trust. Until such record is made, the
Shareholder of record shall be deemed to be holder of such Shares for all
purposes hereunder, and neither the Trustees nor the Trust, nor any transfer
agent or registrar nor any officer, employee, or agent of the Trust shall be
affected by any notice of the proposed transfer.
TREASURY SHARES
- ---------------
Section 2.05. Shares held in the treasury shall, until reissued pursuant to
------------
Section 2.02 hereof, not confer any voting rights on the Trustees, nor shall
such Shares be entitled to any dividends or other distributions declared with
respect to the Shares.
43
<PAGE>
ESTABLISHMENT OF SERIES
- -----------------------
Section 2.06. The Trust created hereby shall consist of one or more Series,
------------
and separate and distinct records shall be maintained by the Trust for each
Series and the assets associated with any such Series shall be held and
accounted for separately from the assets of the Trust or any other Series. The
Trustees shall have full power and authority, in their sole discretion, and
without obtaining any prior authorization or vote of the Shareholders of any
Series of the Trust, to establish and designate and to change in any manner any
such Series of Shares or any classes of initial or additional Series and to fix
such preferences, voting powers, rights and privileges of such Series or classes
thereof as the Trustees may from time to time determine, to divide or combine
the Shares or any Series or classes thereof into a greater or lesser number, to
classify or reclassify any issued Shares or any Series or classes thereof into
one or more Series or classes of Shares, and to take such other action with
respect to the Shares as the Trustees may deem desirable. The establishment and
designation of any Series shall be effective upon the adoption of a resolution
by a majority of the Trustees setting forth such establishment and designation
and the relative rights and preferences of the Shares of such Series. A Series
may issue any number of Shares and need not issue shares. At any time that there
are no Shares outstanding of any particular Series previously established and
designated, the Trustees may by a majority vote abolish that Series and the
establishment and designation thereof.
All references to Shares in this Trust Instrument shall be deemed to be
Shares of any or all Series, or classes thereof, as the context may require. All
provisions herein relating to the Trust shall apply equally to each Series of
the Trust, and each class thereof, except as the context otherwise requires.
44
<PAGE>
Each Share of a Series of the Trust shall represent an equal beneficial
interest in the net assets of such Series. Each holder of Shares of a Series
shall be entitled to receive his pro rata share of distributions of income and
capital gains, if any, made with respect to such Series. Upon redemption of his
Shares, such Shareholder shall be paid solely out of the funds and property of
such Series of the Trust.
INVESTMENT IN THE TRUST
- -----------------------
Section 2.07. The Trustees shall accept investments in any Series of the
------------
Trust from such persons and on such terms as they may from time to time
authorize. At the Trustees' discretion, such investments, subject to applicable
law, may be in the form of cash or securities in which the affected Series is
authorized to invest, valued as provided in Article IX, Section 9.03 hereof.
Investments in a Series shall be credited to each Shareholder's account in the
form of full Shares at the Net Asset Value per Share next determined after the
investment is received; provided, however, that the Trustees may, in their sole
discretion, (a) fix the Net Asset Value per Share of the initial capital
contribution, (b)impose a sales charge upon investments in the Trust in such
manner and at such time determined by the Trustees, or (C) issue fractional
Shares.
ASSETS AND LIABILITIES OF SERIES
- --------------------------------
Section 2.08. All consideration received by the Trust for the issue or sale
------------
of Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange, or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall be held
and accounted for separately from the other assets of the Trust and of every
other Series and may be referred to herein as "assets belonging to" that Series.
the assets belonging to a
45
<PAGE>
particular Series shall belong to that Series for all purposes, and to no other
Series, subject only to the rights of creditors of that Series. In addition, any
assets, income, earnings, profits or funds, or payments and proceeds with
respect thereto, which are not readily identifiable as belonging to any
particular Series, shall be allocated by the Trustees between and among one or
more of the Series in such manner as the Trustees, in their sole discretion,
deem fair and equitable. Each such allocation shall be conclusive and binding
upon the Shareholders of all Series for all purposes, and such assets, income,
earnings, profits or funds, or payments and proceeds with respect thereto shall
be assets belonging to that Series. The assets belonging to a particular Series
shall be so recorded upon the books of the Trust, and shall be held by The
Trustees in trust for the benefit of the holders of Shares of that Series. The
assets belonging to each particular Series shall be charged with the liabilities
of that Series and all expenses, costs, charges, and reserves attributable to
that Series. Any general liabilities, expenses, costs, charges, or reserves of
the Trust which are not readily identifiable as belonging to any particular
Series shall be allocated and charged by the Trustees between or among any one
or more of the Series in such manner as the Trustees, in their sole discretion,
deem fair and equitable. Each such allocation shall be conclusive and binding
upon the Shareholders of all Series for all purposes. Without limitation of the
foregoing provisions of this Section 2.08, but subject to the right of the
Trustees in their discretion to allocate general liabilities, expenses, costs,
charges, or reserves as herein provided, the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular Series shall be enforceable against the assets of such Series only,
and not against the assets of the Trust generally. Notice of this contractual
limitation on inter-Series liabilities may, in the Trustees' sole discretion, be
set forth in the certificate of trust of the Trust (whether originally or by
amendment) as filed or to be filed in
46
<PAGE>
the Office of the Secretary of State of the State of Delaware pursuant to the
Delaware ACT, and upon the giving of such notice in the certificate of trust,
the statutory provisions of Section 3804 of the Delaware Act relating to
limitations on inter-Series liabilities (and the statutory effect under Section
3804(a) of setting forth such notice in the certificate of trust) shall become
applicable to the Trust and each Series. Any person extending credit to,
contracting with, or having any claim against any Series may look only to the
assets of that Series to satisfy or enforce any debt, liability, obligation or
expense incurred, contracted for, or otherwise existing with respect to that
Series. No Shareholder or former Shareholder of any Series shall have a claim on
or any right to any assets allocated or belonging to any other Series.
NO PREEMPTIVE RIGHTS
- --------------------
Section 2.09. Shareholders shall have no preemptive or other right to
-------------
subscribe to any additional Shares or other securities issued by the Trust or
the Trustees, whether of the same or other Series.
PERSONAL LIABILITY OF SHAREHOLDERS
- ----------------------------------
Section 2.10. Pursuant to Section 3803(a) of the Delaware Act, each
------------
Shareholder of the Trust and of each Series shall not be personally liable for
the debts, liabilities, obligations and expenses incurred by, contracted for, or
otherwise existing with respect to, the Trust or by or on behalf of any Series.
the Trustees shall have no power to bind any Shareholder personally or to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay by way of subscription for any Shares or otherwise. Every note, bond,
contract, or other undertaking issued by or on behalf of the Trust or the
Trustees relating to the Trust or to a Series shall include a recitation
limiting the obligation represented thereby to the Trust
47
<PAGE>
or to one or more Series and its or their assets (but the omission of such a
recitation shall not operate to bind any Shareholder or Trustee of the Trust).
ASSENT TO TRUST INSTRUMENT
- --------------------------
Section 2.11. Every Shareholder, by virtue of having purchased a Share or
------------
Interest shall become a Shareholder and shall be held to have expressly assented
and agreed to be bound by the terms hereof, and shall further be held to have
expressly assented to and agreed that he/she or it has relied solely on the
Prospectus, Registration Statement, and Statement of Additional Information and
any written sales material given him in connection with the offering and his
investment in this Fund and has not relied on any other representation, promise,
or statement by any agent, broker, dealer, or other person or entity not
expressly contained in said written documents.
ARTICLE III
-----------
THE TRUSTEES
------------
MANAGEMENT OF THE TRUST
- -----------------------
Section 3.01. the Trustees shall have exclusive and absolute control
------------
over the Trust Property and over the business of the Trust to the same extent as
if the Trustees were the sole owners of the Trust Property and business in their
own right, but with such powers of delegation as may be permitted by this Trust
Instrument. the Trustees shall have power to conduct the business of the Trust
and carry on its operations in any and all of its branches and maintain offices
both within and without the State of Delaware, in any and all states of the
United States of America, in the District of Columbia, in any and all
commonwealths, territories, dependencies, colonies, or possessions of the United
States of America, and in any foreign jurisdiction, and to do all such other
things and execute all such instruments as
48
<PAGE>
they deem necessary, proper, or desirable in order to promote the interests of
the Trust although such things are not herein specifically mentioned. Any
determination as to what is in the interests of the Trust made by the Trustees
in good faith shall be conclusive. In construing the provisions of this Trust
Instrument, the presumption shall be in favor of a grant of power to the
Trustees.
The enumeration of any specific power in this Trust Instrument shall
not be construed as limiting the aforesaid power. the powers of the Trustees may
be exercised without order of or resort to any court.
Except for the Trustees named herein or appointed to fill vacancies
pursuant to Section 3.04 of this Article III, the Trustees shall be elected by
the Shareholders owning of record a plurality of the Shares voting at a meeting
of Shareholders. Such a meeting shall be held on a date fixed by the Trustees.
In the event that less than a majority of the Trustees holding office have been
elected by Shareholders, the Trustees then in office will call a Shareholders'
meeting for the election of Trustees.
INITIAL TRUSTEES
- ----------------
Section 3.02. The initial Trustees shall be the persons named herein.
------------
On a date fixed by the Trustees, the Shareholders shall elect five (5) Trustees,
as specified by the Trustees pursuant to Section 3.06 of this Article III.
TERM OF OFFICE OF TRUSTEES
- --------------------------
Section 3.03. The Trustees shall hold office during the lifetime of
------------
this Trust, and until its termination as herein provided; except (a) That any
Trustee may resign his trust by written instrument signed by him and delivered
to the other Trustees, which shall take effect upon such delivery or upon such
later date as is specified therein; (b) that any Trustee may be removed at any
time by written instrument, signed by at least two-thirds of the number of
49
<PAGE>
Trustees prior to such removal, specifying the date when such removal shall
become effective; (c) that any Trustee who requests in writing to be retired or
who has died, become physically or mentally incapacitated by reason of disease
or otherwise, or is otherwise unable to serve, may be retired by written
instrument signed by a majority of the other Trustees, specifying the date of
his retirement; and (d) that a Trustee may be removed at any meeting of the
Shareholders of the Trust by a vote of Shareholders owning at least two-thirds
of the outstanding Shares.
VACANCIES AND APPOINTMENT OF TRUSTEES
- -------------------------------------
Section 3.04. In case of the declination to serve, death, resignation,
------------
retirement, removal, physical or mental incapacity by reason of disease or
otherwise, or a Trustee is otherwise unable to serve, or an increase in the
number of Trustees, a vacancy shall occur. Whenever a vacancy in the Board of
Trustees shall occur, until such vacancy is filled, the other Trustees shall
have all the powers hereunder and the certificate of the other Trustees of such
vacancy shall be conclusive. In the case of an existing vacancy, the remaining
Trustees shall fill such vacancy by appointing such other person as they in
their discretion shall see fit consistent with the limitations under the 1940
Act. Such appointment shall be evidenced by a written instrument signed by a
majority of the Trustees in office or by resolution of the Trustees, duly
adopted, which shall be recorded in the minutes of a meeting of the Trustees,
whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office
in anticipation of a vacancy to occur by reason of retirement, resignation, or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation, or increase in number of Trustees. As soon as any
Trustee appointed pursuant to this Section 3.04 shall have accepted
50
<PAGE>
this trust, the trust estate shall vest in the new Trustee or Trustees, together
with the continuing Trustees, without any further act or conveyance, and he
shall be deemed a Trustee hereunder. The power to appoint a Trustee pursuant to
this Section 3.04 is subject to the provisions of Section 16(a) of the 1940 Act.
TEMPORARY ABSENCE OF TRUSTEE
- ----------------------------
Section 3.05. Any Trustee may, by power of attorney, delegate his
------------
power for a period not exceeding six months at any one time to any other Trustee
or Trustees, provided that in no case shall less than two Trustees personally
exercise the other powers hereunder except as herein otherwise expressly
provided.
NUMBER OF TRUSTEES
- ------------------
Section 3.06. The number of Trustees shall be five (5) or such number
------------
as shall be fixed from time to time by a majority of the Trustees.
EFFECT OF DEATH, RESIGNATION, ETC., OF A TRUSTEE
- ------------------------------------------------
Section 3.07. The declination to serve, death, resignation,
------------
retirement, removal, incapacity, or inability of the Trustees, or any one of
them, shall not operate to terminate the Trust or to revoke any existing agency
created pursuant to the terms of this Trust Instrument.
OWNERSHIP OF ASSETS OF THE TRUST
- --------------------------------
Section 3.08. The assets of the Trust and of each Series shall be held
------------
separate and apart from any assets now or hereafter held in any capacity other
than as Trustee hereunder by the Trustees or any successor Trustees. Legal title
in all of the assets of the Trust and the right to conduct any business shall at
all times be considered as vested in the Trustees on behalf of the Trust, except
that the Trustees may cause legal title to any Trust Property to be held by, or
in the name of the Trust, or in the name of any person as nominee. No
Shareholder shall be deemed to have a severable ownership in any individual
asset of the
51
<PAGE>
Trust or of any Series or any right of partition or possession thereof, but each
Shareholder shall have, except as otherwise provided for herein, a proportionate
undivided beneficial interest in the Trust or Series. The Shares shall be
personal property giving only the rights specifically set forth in this Trust
Instrument.
ARTICLE IV
----------
POWERS OF THE TRUSTEES
----------------------
POWERS
- ------
Section 4.01. THE Trustees in all instances shall act as principals, and
------------
are and shall be free from the control of the Shareholders. The Trustees shall
have full power and authority to do any and all acts and to make and execute any
and all contracts and instruments that they may consider necessary or
appropriate in connection with the management of the Trust. The Trustees shall
not in any way be bound or limited by present or future laws or customs in
regard to trust investments, but shall have full authority and power to make any
and all investments which they, in their sole discretion, shall deem proper to
accomplish the purpose of this Trust without recourse to any court or other
authority. Subject to any applicable limitation in this Trust Instrument or the
Bylaws of the Trust and applicable federal law, the Trustees shall have power
and authority, including but not limited,
(a) To invest and reinvest cash and other property, and to hold cash or
other property uninvested, without in any event being bound or limited by any
present or future law or custom in regard to investments by trustees, and to
sell, exchange, lend, pledge, mortgage, hypothecate, write options on and lease
any or all of the assets of the Trust;
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(b) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of such
operations;
(c) To borrow money and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging, or
otherwise subjecting as security the Trust Properly; to endorse, guarantee, or
undertake the performance of an obligation or engagement of any other Person and
to lend Trust Property;
(d) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereinafter provided for or by the
Trust itself, or both, or otherwise pursuant to a plan of distribution of any
kind;
(e) To adopt Bylaws not inconsistent with this Trust Instrument
providing for the conduct of the business of the Trust and to amend and repeal
them to the extent that they do not reserve that right to the Shareholders; such
Bylaws shall be deemed incorporated and included in this Trust Instrument;
(f) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
(g) To employ one or more banks, trust companies, or companies that
are members of a national securities exchange, or such other entities as the
Commission may permit as custodians of any assets of the Trust subject to any
conditions set forth in this Trust Instrument or in the Bylaws.;
(h) To retain one or more transfer agents and shareholder servicing
agents, or both;
(i) To set record dates in the manner provided herein or in the
Bylaws;
(j) To delegate such authority as they consider desirable to any
officers of the Trust and to any investment adviser, manager, custodian,
underwriter, or other agent or independent contractor;
53
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(k) To sell or exchange any or all of the assets of the Trust, subject
to the provisions of Article XI, Section 11.04(b) hereof;
(1) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
powers of attorney to such person or persons as the Trustees shall deem proper,
granting to such person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(m) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(n) To hold any security or property in a form not indicating any
trust, whether in bearer, book entry, unregistered, or other negotiable form; or
either in the name of the Trust or in the name of a custodian or a nominee or
nominees, subject in either case to proper safeguards according to the usual
practice of Delaware business trusts or investment companies;
(o) to establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article II thereof and to establish classes of
such Series having relative rights, powers, and duties as they may provide
consistent with applicable law;
(p) Subject to the provisions of Section 3804(a) of the Delaware Act,
to allocate assets, liabilities, and expenses of the Trust to a particular
Series or to apportion the same between or among two or more Series, provided
that any liabilities or expenses incurred by a particular Series shall be
payable solely out of the assets belonging to that Series as provided for in
Article II hereof;
(q) To consent to or participate in any plan for the reorganization,
consolidation, or merger of any corporation or concern, any security of which is
held in the Trust; to consent
54
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to any contract, lease, mortgage, purchase, or sale of property by such
corporation or concern, and to pay calls or subscriptions with respect to any
security held in the Trust;
(r) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy including, but not limited to,
claims for taxes;
(s) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided;
(t) To establish, from time to time, a minimum investment for
Shareholders in the Trust or in one or more Series or class, and to require the
redemption of the Shares of any Shareholders whose investment is less than such
minimum upon giving notice to such Shareholder;
(u) To establish one or more committees, to delegate any of the powers
of the Trustees to said committees and to adopt a committee charter providing
for such responsibilities, membership (including Trustees, officers, or other
agents of the Trust therein) and any other characteristics of said committees as
THE Trustees may deem proper. Notwithstanding the provisions of this Article IV,
and in addition to such provisions or any other provision of this Trust
Instrument or of the Bylaws, the Trustees may by resolution appoint a committee
consisting of less than the whole number of Trustees then in office, which
committee may be empowered to act for and bind the Trustees and the Trust, as if
the acts of such committee were the acts of all the Trustees then in office,
with respect to the institution, prosecution, dismissal, settlement, review, or
investigation of any action, suit, or proceeding which shall be pending or
threatened to be brought before any court, administrative agency, or other
adjudicatory body;
(v) To interpret the investment policies, practices, or limitations of
any Series;
55
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(w) To establish a registered office and have a registered agent in
the State of Delaware; and
(x) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable,
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees. Any action by one or
more of the Trustees in their capacity as such hereunder shall be deemed an
action on behalf of the Trust or the applicable Series, and not an action in an
individual capacity.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust.
No one dealing with the Trustees shall be under any obligation to make
any inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the Trustees or upon
their order.
ISSUANCE AND REPURCHASE OF SHARES
- ---------------------------------
Section 4.02. The Trustees shall have THE power to issue, sell,
------------
repurchase, redeem, retire, cancel, acquire, hold, resell, reissue, dispose of,
and otherwise deal in Shares and, subject to the provisions set forth in Article
II and Article IX, to apply to any such repurchase, redemption, retirement,
cancellation, or acquisition of Shares any funds or
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property of the Trust, or the particular Series of the Trust, with respect to
which such Shares are issued.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
- -------------------------------------
Section 4.03. Any Trustee, officer, or other agent of the Trust may
------------
acquire, own, and dispose of Shares to the same extent as if he were not a
Trustee, officer, or agent; and the Trustees may issue and sell or cause to be
issued and sold Shares to and buy such Shares from any such person or any firm
or company in which he is interested, subject only to the general limitations
herein contained as to the sale and purchase of such Shares; and all subject to
any restrictions which may be contained in the Bylaws.
ACTION OF THE TRUSTEES
- ----------------------
Section 4.04. The Trustees shall act by majority vote at a meeting
------------
duly called or by unanimous written consent without a meeting or by telephone
meeting provided a quorum of Trustees participate in any such telephone meeting,
unless the 1940 Act requires that a particular action be taken only at a meeting
at which the Trustees are present in person. At any meeting of the Trustees, a
majority of the Trustees shall constitute a quorum. Meetings of the Trustees may
be called orally or in writing by the Chairman of the Board of Trustees or by
any two other Trustees. Notice of the time, date, and place of all meetings of
the Trustees shall be given by the party calling the meeting to each Trustee by
telephone, telefax, or telegram sent to his home or business address at least 24
hours in advance of the meeting or by written notice mailed to his home or
business address at least 72 hours in advance of the meeting. Notice need not be
given to any Trustee who attends the meeting without objecting to the lack of
notice or who executes a written waiver of notice with respect to the meeting.
Any meeting conducted by telephone shall be deemed to take place at the
principal office of the Trust, as determined by the Bylaws or by the
Trustees. Subject
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to the requirements of the 1940 Act, the Trustees by majority vote may delegate
to any one or more of their number their authority to approve particular matters
or take particular actions on behalf of the Trust. Written consents or waivers
of the Trustees may be executed in one or more counterparts. Execution of a
written consent or waiver and delivery thereof to the Trust may be accomplished
by telefax.
CHAIRMAN OF THE TRUSTEES
- ------------------------
Section 4.05. The Trustees shall appoint one of their number to be
------------
Chairman of the Board of Trustees. The Chairman shall preside at all meetings of
the Trustees, shall be responsible for the execution of policies established by
the Trustees and the administration of the Trust, and may be (but is not
required to be) the chief executive, financial and/or accounting officer of the
Trust.
PRINCIPAL TRANSACTIONS
- ----------------------
Section 4.06. Except to the extent prohibited by applicable law, the
------------
Trustees may, on behalf of the Trust, buy any securities from or sell any
securities to, or lend any assets of the Trust to, any Trustee or officer of the
Trust or any firm of which any such Trustee or officer is a member acting as
principal, or have any such dealings with any investment adviser, distributor,
or transfer agent for the Trust or with any Interested Person of such person;
and the Trust may employ any such person, or firm or company in which such
person is an Interested Person, as broker, legal counsel, registrar, investment
adviser, distributor, transfer agent, dividend disbursing agent, custodian, or
in any other capacity upon customary terms.
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ARTICLE V
---------
EXPENSES OF THE TRUST
---------------------
TRUSTEE REIMBURSEMENT
- ---------------------
Section 5.01. Subject to the provisions of Article II, Section 2.08
------------
hereof, the Trustees shall be reimbursed from the Trust estate or the assets
belonging to the appropriate Series for their expenses and disbursements,
including, without limitation, fees and expenses of Trustees who are not
Interested Persons of the Trust, interest expense, taxes, fees and commissions
of every kind, expenses of pricing Trust portfolio securities, expenses of
issue, repurchase and redemption of shares, including expenses attributable to a
program of periodic repurchases or redemptions, expenses of registering and
qualifying the Trust and its Shares under federal and state laws and regulations
or under the laws of any foreign jurisdiction, charges of third parties,
including investment advisers, managers, custodians, transfer agents, portfolio
accounting and/or pricing agents, and registrars, expenses of preparing and
setting up in type prospectuses and statements of additional information and
other related Trust documents, expenses of printing and distributing
prospectuses sent to existing Shareholders, auditing and legal expenses, reports
to Shareholders, expenses of meetings of Shareholders and proxy solicitations
therefor, insurance expenses, association membership dues and for such non-
recurring items as may arise, including litigation to which the Trust (or a
Trustee acting as such) is a party, and for all losses and liabilities by them
incurred in administering the Trust, and for the payment of such expenses,
disbursements, losses, and liabilities the Trustees shall have a lien on the
assets belonging to the appropriate Series, or in the case of an expense
allocable to more than one Series, on the assets of each such Series, prior to
any rights or interests of the Shareholders thereto. This Section shall not
preclude the Trust from directly paying any of the aforementioned fees and
expenses.
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ARTICLE VI
----------
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER, AND TRANSFER AGENT
-------------------------------------------------------------
INVESTMENT ADVISER
- ------------------
Section 6.01. The Trustees may in their discretion, from time to time,
------------
enter into an investment advisory or management contract or contracts with
respect to the Trust or any Series whereby the other party or parties to such
contract or contracts shall undertake to furnish the Trustees with such
management, investment advisory, statistical and research facilities and
services, and such other facilities and services, if any, and all upon such
terms and conditions as the Trustees may, in their discretion, determine;
provided, however, that the initial approval and entering into of such contract
or contracts shall be subject to a Majority Shareholder Vote. Notwithstanding
any other provision of this Trust Instrument, the Trustees may authorize any
investment adviser (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales, or exchanges
of portfolio securities, other investment instruments of the Trust, or other
Trust Property on behalf of the Trustees, or may authorize any officer, agent,
or Trustee to effect such purchases, sales, or exchanges pursuant to
recommendations of the investment adviser (and all without further action by the
Trustees). Any such purchases, sales, and exchanges shall be deemed to have been
authorized by all of the Trustees.
The Trustees may authorize, subject to applicable requirements of the
1940 Act, including those relating to Shareholder approval, the investment
adviser to employ, from time to time, one or more sub-advisers to perform such
of the acts and services of the investment adviser, and upon such terms and
conditions, as may be agreed upon between the investment adviser and sub-
adviser. Any reference in this Trust Instrument to the investment adviser shall
be deemed to include such sub-advisers, unless the context otherwise requires.
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PRINCIPAL UNDERWRITER
- ---------------------
Section 6.02. The Trustees may in their discretion from time to time
------------
enter into an exclusive or non-exclusive underwriting contract or contracts
providing for the sale of Shares, whereby the Trust may either agree to sell
Shares to the other party to the contract or appoint such other party its sales
agent for such Shares. In either case, the contract shall be on such terms and
conditions, if any, as may be prescribed in the Bylaws, and such further terms
and conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Article VI, or the Bylaws; and such
contract may also provide for the repurchase or sale of Shares by such other
party as principal or as agent of the Trust.
TRANSFER AGENT
- --------------
Section 6.03. The Trustees may, in their discretion, from time to time
------------
enter into one or more transfer agency and Shareholder service contracts whereby
the other party or parties shall undertake to furnish the Trustees with transfer
agency and Shareholder services. The contract or contracts shall be on such
terms and conditions as the Trustees may, in their discretion, determine not
inconsistent with the provisions of this Trust lnstrument or of the Bylaws.
PARTIES TO CONTRACT
- -------------------
Section 6.04. Any contract of the character described in Sections
------------
6.01, 6.02, and 6.03 of this Article VI or any contract of the character
described in Article VIII hereof may be entered into with any corporation, firm,
partnership, trust, or association, although one or more of the Trustees or
officers of the Trust may be an officer, director, trustee, shareholder, or
member of such other party to the contract, and no such contract shall be
invalidated or rendered void or voidable by reason of the existence of any
relationship, nor
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shall any person holding such relationship be disqualified from voting on or
executing the same in his capacity as Shareholder and/or Trustee, nor shall any
person holding such relationship be liable merely by reason of such relationship
for any loss or expense to the Trust under or by reason of said contract or
accountable for any profit realized directly or indirectly therefrom, provided
that the contract when entered into was not inconsistent with the provisions of
this Article VI or Article VIII hereof or of the Bylaws. The same person
(including a firm, corporation, partnership, trust, or association) may be the
other party to contracts entered into pursuant to Sections 6.01, 6.02, and 6.03
of this Article VI or pursuant to Article VIII hereof, and any individual may be
financially interested or otherwise affiliated with persons who are parties to
any or all of the contracts mentioned in this Section 6.04.
PROVISIONS AND AMENDMENTS
- -------------------------
Section 6.05. Any contract entered into pursuant to Sections 6.01 or
------------
6.02 of this Article VI shall be consistent with and subject to the requirements
of Section 15 of the 1940 Act or other applicable Act of Congress hereafter
enacted with respect to its continuance in effect, its termination, and the
method of authorization and approval of such contract or renewal thereof, and no
amendment to any contract, entered into pursuant to Section 6.01 of this Article
VI shall be effective unless assented to in a manner consistent with the
requirements of said Section 15, as modified by any applicable rule, regulation,
or order of the Commission.
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ARTICLE VII
-----------
SHAREHOLDERS' VOTING POWERS AND MEETINGS
----------------------------------------
VOTING POWERS
- -------------
Section 7.01. The Shareholders shall have power to vote only (i) for
------------
the election of Trustees as provided in Article III, Sections 3.01 and 3.02
hereof, (ii) for the removal of Trustees as provided in Article III, Section
3.03(d) hereof, (iii) with respect to any investment advisory or management
contract as provided in Article VI, Sections 6.01 and 6.05 hereof, and (iv) with
respect to such additional matters relating to the Trust as may be required by
law, by this Trust Instrument, or the Bylaws, or any registration of the Trust
with the Commission or any state, or as the Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares
shall be voted separately by individual Series, except (i) when required by the
1940 Act, Shares shall be voted in the aggregate and not by individual Series;
and (ii) when the Trustees have determined that the matter affects the interests
of more than one Series, then the Shareholders of all such Series shall be
entitled to vote thereon. The Trustees may also determine that a matter affects
only the interests of one or more classes of a Series, in which case any such
matter shall be voted on by such class or classes. Each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote, and each
fractional Share shall be entitled to a proportionate fractional vote. There
shall be no cumulative voting in the Election of Trustees. Shares may be voted
in person or by proxy or in any manner provided for in the Bylaws. A proxy may
be given in writing. The Bylaws may provide that proxies may also, or may
instead, be given by any electronic or telecommunications device or in any other
manner. Notwithstanding anything else herein or in the Bylaws, in the event a
proposal by anyone other than the officers or Trustees of the Trust is submitted
to a vote of
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the Shareholders of one or more Series or of the Trust, or in the event of any
proxy contest or proxy solicitation or proposal in opposition to any proposal by
the officers or Trustees of the Trust, Shares may be voted only in person or by
written proxy. Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required or permitted by law, this Trust
Instrument, or any of the Bylaws of the Trust to be taken by Shareholders.
MEETINGS
- --------
Section 7.02. The first Shareholders' meeting shall be held in order
------------
to elect Trustees as specified in Section 3.02 of Article III hereof at the
principal office of the Trust or such other place as the Trustees may designate.
Meetings may be held within or without the State of Delaware. Special meetings
of the Shareholders of any Series may be called by the Trustees and shall be
called by the Trustees upon the written request of Shareholders owning at least
one-tenth of the Outstanding Shares entitled to vote. Whenever ten or more
Shareholders meeting the qualifications set forth in Section 16(c) of the 1940
Act, as the same may be amended from time to time, seek the opportunity of
furnishing materials to the other Shareholders with a view to obtaining
signatures on such a request for a meeting, the Trustees shall comply with the
provisions of said Section 16(c) with respect to providing such Shareholders
access to the list of the Shareholders of record of the Trust or the mailing of
such materials to such Shareholders of record, subject to any rights provided to
the Trust or any Trustees provided by said Section 16(c). Notice shall be sent,
by First Class Mail or such other means determined by the Trustees, at least 15
days prior to any such meeting.
QUORUM AND REQUIRED VOTE
- ------------------------
Section 7.03. One-third of Shares entitled to vote in person or by
------------
proxy shall be a quorum for the transaction of business at a Shareholders'
meeting, except that where any
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provision of law or of this Trust Instrument permits or requires that holders of
any Series shall vote as a Series (or that holders of a class shall vote as a
class), then one-third of the aggregate number of Shares of that Series (or
that class) entitled to vote shall be necessary to constitute a quorum for the
transaction of business by that Series (or that class). Any lesser number shall
be sufficient for adjournments. Any adjourned session or sessions may be held,
within a reasonable time after the date set for the original meeting, without
the necessity of further notice. Except when a larger vote is required by law or
by any provision of this Trust Instrument or the Bylaws, a majority of the
Shares voted in person or by proxy shall decide any questions and a plurality
shall elect a Trustee, provided that where any provision of law or of this Trust
Instrument permits or requires that the holders of any Series shall vote as a
Series (or that the holders of any class shall vote as a class), then a majority
of the Shares present in person or by proxy of that Series or, if required by
law, a Majority Shareholder Vote of that Series (or class), voted on the matter
in person or by proxy shall decide that matter insofar as that Series (or class)
is concerned. Shareholders may act by unanimous written consent. Actions taken
by Series (or class) may be consented to unanimously in writing by Shareholders
of that Series.
ARTICLE VIII
------------
CUSTODIAN
---------
APPOINTMENT AND DUTIES
- ----------------------
Section 8.01. The Trustees shall at all times employ a bank, a company
------------
that is a member of a national securities exchange, or a trust company as
custodian with authority as its agent, but subject to such restrictions,
limitations, and other requirements, if any, as may be contained in the Bylaws
of the Trust:
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(1) to hold the securities owned by the Trust and deliver the same
upon written order or oral order confirmed in writing;
(2) to receive and receipt for any moneys due to the Trust and deposit
the same in its own banking department or elsewhere as the Trustees may direct;
and
(3) to disburse such funds upon orders or vouchers; and the Trust may
also employ such custodian as its agent:
(4) to keep the books and accounts of the Trust or of any Series or
class and furnish clerical and accounting services; and
(5) to compute, if authorized to do so by the Trustees, the Net Asset
Value of any Series, or class thereof, in accordance with the provisions hereof;
all upon such basis of compensation as may be agreed upon between the Trustees
and the custodian.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian, and upon such terms and conditions, as may be agreed upon between the
custodian and sub-custodian and approved by the Trustees, provided that in every
case such sub-custodian shall be a bank, a company that is a member of a
national securities exchange, or a trust company organized under the laws of the
United States or one of the states thereof, or such other person as may be
permitted by the Commission, or otherwise in accordance with the 1940 Act.
CENTRAL CERTIFICATE SYSTEM
- --------------------------
Section 8.02. Subject to such rules, regulations, and orders as the
------------
Commission may adopt, the Trustees may direct the custodian to deposit all or
any part of the securities owned by the Trust in a system for the central
handling of securities established by a national securities exchange or a
national securities association registered with the Commission under the
Securities Exchange Act of 1934, as amended, or such other person as may be
permitted
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<PAGE>
by the Commission, or otherwise in accordance with the 1940 Act, pursuant to
which system all securities of any particular class or series of any issuer
deposited within the system are treated as fungible and may be transferred or
pledged by bookkeeping entry without physical delivery of such securities,
provided that all such deposits shall be subject to withdrawal only upon the
order of the Trust or its custodians, sub-custodians, or other agents.
ARTICLE IX
----------
DISTRIBUTIONS AND REDEMPTIONS
------------------------------
DISTRIBUTIONS
- -------------
Section 9.01. (a) The Trustees may from time to time declare and pay
------------
dividends or other distributions with respect to any Series. The amount of such
dividends or distributions and the payment of them and whether they are in cash
or any other Trust Property shall be wholly in the discretion of the Trustees.
(b) Dividends and other distributions may be paid or made to the
Shareholders of record at the time of declaring a dividend or other distribution
or among the Shareholders of record at such other date or time or dates or times
as the Trustees shall determine, which dividends or distributions, at the
election of the Trustees, may be paid pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Trustees may
determine. The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans, or related plans as the Trustees
shall deem appropriate.
(c) Anything in this Trust Instrument to the contrary notwithstanding,
the Trustees may at any time declare and distribute a stock dividend pro rata
among the Shareholders of a particular Series, or class thereof, as of the
record date of that Series fixed as provided in Section (b) hereof.
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REDEMPTIONS
- -----------
Section 9.02. In case any holder of record of Shares of a particular
------------
Series desires to dispose of his Shares or any portion thereof, he may deposit
at the office of the transfer agent or other authorized agent of that Series a
written request or such other form of request as the Trustees may from time to
time authorize, requesting that the Series purchase the Shares in accordance
with this Section 9.02; and the Shareholder so requesting shall be entitled to
require the Series to purchase, and the Series or the principal underwriter of
the Series shall purchase his said Shares, but only at the Net Asset Value
thereof (as described in Section 9.03 of this Article IX). The Series shall make
payment for any such Shares to be redeemed, as aforesaid, in cash or property
from the assets of that Series and payment for such Shares shall be made by the
Series or the principal underwriter of the Series to the Shareholder of record
within seven (7) days after the date upon which the request is effective. Upon
redemption, shares shall become Treasury shares and may be re-issued from time
to time.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
- ------------------------------------------------------------------
Section 9.03. The term "Net Asset Value" of any Series shall mean
------------
that amount by which the assets of that Series exceed its liabilities, all as
determined by or under the direction of the Trustees. Such value shall be
determined separately for each Series and shall be determined on such days and
at such times as the Trustees may determine. Such determination shall be made
with respect to securities for which market quotations are readily available, at
the market value of such securities; and with respect to other securities and
assets, at the fair value as determined in good faith by the Trustees; provided,
however, that the Trustees, without Shareholder approval, may alter the method
of valuing portfolio
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<PAGE>
securities insofar as permitted under the 1940 Act and the rules, regulations,
and interpretations thereof promulgated or issued by the Commission, or insofar
as permitted by any Order of the Commission applicable to the Series. The
Trustees may delegate any of their powers and duties under this Section 9.03
with respect to valuation of assets and liabilities. The resulting amount, which
shall represent the total Net Asset Value of the particular Series, shall be
divided by the total number of shares of that Series outstanding at the time,
and the quotient so obtained shall be the Net Asset Value per Share of that
Series. At any time the Trustees may cause the Net Asset Value per Share last
determined to be determined again in similar manner, and may fix the time when
such redetermined value shall become effective. If, for any reason, the net
income of any Series, determined at any time, is a negative amount, the Trustees
shall have the power with respect to that Series (i) to offset each
Shareholder's pro rata share of such negative amount from the accrued dividend
account of such Shareholder, or (ii) to reduce the number of Outstanding Shares
of such Series by reducing the number of Shares in the account of each
Shareholder by a pro rata portion of that number of full and fractional Shares
which represents the amount of such excess negative net income, or (iii) to
cause to be recorded on the books of such Series an asset account in the amount
of such negative net income (provided that the same shall thereupon become the
property of such Series with respect to such Series and shall not be paid to any
Shareholder), which account may be reduced by the amount of dividends declared
thereafter upon the Outstanding Shares of such Series on the day such negative
net income is experienced, until such asset account is reduced to zero; (iv) to
combine the methods described in clauses (i) and (ii) and (iii) of this
sentence; or (v) to take any other action they deem appropriate, in order to
cause (or in order to assist in causing) the Net Asset Value per Share of such
Series to remain at a constant amount per Outstanding Share
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immediately after each such determination and declaration. The Trustees shall
also have the power not to declare a dividend out of net income for the purpose
of causing the Net Asset Value per Share to be increased. The Trustees shall not
be required to adopt, but may at any time adopt, discontinue, or amend the
practice of maintaining the Net Asset Value per Share of the Series at a
constant amount.
SUSPENSION OF THE RIGHT OF REDEMPTION
- -------------------------------------
Section 9.04. The Trustees may declare a suspension of the right of
------------
redemption or postpone the date of payment as permitted under the 1940 Act. Such
suspension shall take effect at such time as the Trustees shall specify but not
later than the close of business on the business day next following the
declaration of suspension, and thereafter there shall be no right of redemption
or payment until the Trustees shall declare the suspension at an end. In the
case of a suspension of the right of redemption, a Shareholder may either
withdraw his request for redemption or receive payment based on the Net Asset
Value per Share next determined affer the termination of the suspension. In the
event that any Series is divided in to classes, the provisions of this Section
9.03, to the extent applicable as determined in the discretion of the Trustees
and consistent with applicable law, may be equally applied to each such class.
REDEMPTION OF SHARES IN ORDER TO QUALIFY AS REGULATED INVESTMENT COMPANY
- ------------------------------------------------------------------------
Section 9.05. If the Trustees shall, at any time and in good faith, be
------------
of the opinion that direct or indirect ownership of Shares of any Series has or
may become concentrated in any Person to an extent which would disqualify any
Series as a regulated investment company under the Internal Revenue Code, then
the Trustees shall have the power (but not the obligation) by lot or other means
deemed equitable by them (i) to call for redemption by
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any such person of a number, or principal amount, of Shares sufficient to
maintain or bring the direct or indirect ownership of Shares into conformity
with the requirements for such qualification and (ii) to refuse to transfer or
issue Shares to any person whose acquisition of the Shares in question would
result in such disqualification. The redemption shall be effected at the
redemption price and in the manner provided in this Article IX.
The holders of Shares shall upon demand disclose to the Trustees in
writing such information with respect to direct and indirect ownership of Shares
as the Trustees deem necessary to comply with the provisions of the Internal
Revenue Code, or to comply with the requirements of any other taxing authority.
ARTICLE X
---------
LIMITATION OF LIABILITY AND INDEMNIFICATION
-------------------------------------------
NO PERSONAL LIABILITY OF TRUSTEES, OFFICERS, EMPLOYEES, OR AGENTS
- -----------------------------------------------------------------
Section 10.01. No Trustee, officer, employee, or agent of the Trust
-------------
shall be subject to any personal liability whatsoever, in his official or
individual capacity, to any Person, other than the Trust or its Shareholders, in
connection with Trust Property or the affairs of the Trust, save only that
arising from his bad faith, willful misfeasance, gross negligence, or reckless
disregard of his duty to such Person; and all such Persons shall look solely to
the Trust Property for satisfaction of claims of any nature against a Trustee,
officer, employee, or agent of the Trust arising in connection with the affairs
of the Trust. No Trustee, officer, employee, or agent of the Trust shall be
liable to the Trust, Shareholders of Interests therein, or to any Trustee,
officer, employee, or agent thereof for any action or failure to act (including,
without limitation, the failure to compel in any way any former or acting
Trustee
71
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to redress any breach of trust) except for his own bad faith, willful
misfeasance, gross negligence, or reckless disregard of his duties.
INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES, AGENTS
- --------------------------------------------------------
Section 10.02. The Trust 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 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
the 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 the Trustees. 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 in Section 10.01 or to which he may
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be otherwise entitled except out of the Trust Property. The Trustees may make
advance payments in connection with indemnification under this Section 10.02,
provided that the indemnified Person shall have given a written undertaking to
reimburse the Trust in the event it is subsequently determined that he is not
entitled to such indemnification.
LIABILITY OF SHAREHOLDERS: INDEMNIFICATION
- ------------------------------------------
Section 10.03. "Shareholders" shall mean as of any particular time
-------------
any or all holders of record of interests in the Trust or in Trust Property, as
the case may be, at such time. The Trust shall indemnify and hold each
Shareholder harmless from and against any claim or liability to which such
Shareholder may become subject solely by reason of his being or having been a
Shareholder and not because of such Shareholder's acts or omissions or for some
other reason, and shall reimburse such Shareholder for all legal and other
expenses reasonably incurred by him in connection with any such claim or
liability (upon proper and timely request by the Shareholder). The rights
accruing to a Shareholder under this Section 10.03 shall not exclude any other
right to which such Shareholder may be lawfully entitled, nor shall anything
herein contained restrict the right of the Trust to indemnify or reimburse a
Shareholder in any appropriate situation even though not specifically provided
herein.
NO BOND REQUIRED OF TRUSTEES
- ----------------------------
Section 10.04. No Trustee shall, as such, be obligated to give any
-------------
bond or surety or other security for the performance of any of his duties
hereunder.
NO DUTY OF INVESTIGATION: NOTICE IN TRUST INSTRUMENTS, ETC.
- -----------------------------------------------------------
Section 10.05. No purchaser, lender, or other Person dealing with the
-------------
Trustees or any officer, employee, or agent of the Trust shall be bound to make
any inquiry concerning the validity of any transaction purporting to be made by
the Trustees or by said officer,
73
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employee, or agent, or be liable for the application of money or property paid,
loaned, or delivered to, or on the order of, the Trustees or of said officer,
employee, or agent. Every obligation, contract, instrument, certificate, or
other interest or undertaking of the Trust, and every other act or thing
whatsoever executed in connection with the Trust, shall be conclusively taken to
have been executed or done by the executors thereof only in their capacity as
Trustees, officers, employees, or agents of the Trust. Every written obligation,
contract, instrument, certificate, or other interest or undertaking of the Trust
made by the Trustees or by any officer, employee, or agent of the Trust, in his
capacity as such, shall contain an appropriate recital to the effect that the
Trustee, officer, employee, and agent of the Trust shall not personally be bound
by or liable thereunder, nor shall resort be had to their private property for
the satisfaction of any obligation or claim thereunder, and appropriate
references shall be made therein to the Declaration, and may contain any further
recital which they may deem appropriate, but the omission of such recital shall
not operate to impose personal liability on any of the Trustees, officers,
employees, or agents of the Trust. The Trustees may maintain insurance for the
protection of the Trust Property, Shareholders, Trustees, officers, employees,
and agents in such amount as the Trustees shall deem advisable.
RELIANCE ON EXPERTS, ETC.
- -------------------------
Section 10.06. Each Trustee and officer or employee of the Trust
-------------
shall, in the performance of his duties, be fully and completely justified and
protected with regard to any act or any failure to act resulting from reliance
in good faith upon the books of account or other records of the Trust, upon an
opinion of counsel, or upon reports made to the Trust by any of its officers or
employees or by any Investment Adviser, Administrator, accountant, appraiser, or
other experts or consultants selected with reasonable care by the Trustees,
74
<PAGE>
officers, or employees of the Trust, regardless of whether such counsel or
expert may also be a Trustee.
SHAREHOLDERS
- ------------
Section 10.07. In case any Shareholder or former Shareholder of any
-------------
Series shall be held to be personally liable solely by reason of his being or
having been a Shareholder of such Series and not because of his acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
his heirs, executors, administrators, or other legal representatives, or, in the
case of a corporation or other entity, its corporate or other general successor)
shall be entitled out of the assets belonging to the applicable Series to be
held harmless from and indemnified against all loss and expense arising from
such liability. The Trust, on behalf of the affected Series, shall, upon request
by the Shareholder, assume the defense of any claim made against the Shareholder
for any act or obligation of the Series and satisfy any judgement thereon from
the assets of the Series.
ARTICLE XI
----------
MISCELLANEOUS
-------------
TRUST NOT A PARTNERSHIP
- -----------------------
Section 11.01. lt is hereby expressly declared that a trust and not a
-------------
partnership is created hereby. No Trustee hereunder shall have any power to bind
personally either the Trust's officers or any Shareholder. All persons extending
credit to, contracting with, or having any claim against the Trust or the
Trustees shall look only to the assets of the appropriate Series or (if the
Trustees shall have yet to have established Series) of the Trust for payment
under such credit, contract, or claim; and neither the Shareholders nor the
Trustees, nor any of their agents, whether past, present, or future, shall be
personally liable
75
<PAGE>
therefor. Nothing in this Trust Instrument shall protect a Trustee against any
liability to which the Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of the office of Trustee hereunder.
TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
- -------------------------------------------------------------
Section 11.02. The exercise by the Trustees of their powers and
-------------
discretions hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested. Subject
to the provisions of Article X hereof and to Section 11.01 of this Article XI,
the Trustees shall not be liable for errors of judgment or mistakes of fact or
law. The Trustees may take advice of counsel or other experts with respect to
the meaning and operation of this Trust Instrument, and subject to the
provisions of Article X hereof and Section 11.01 of this Article XI, shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
- -----------------------------
Section 11.03. The Trustees may close the Share transfer books of the
-------------
Trust for a period not exceeding sixty (60) days preceding the date of any
meeting of Shareholders, or the date for the payment of any dividends or other
distributions, or the date for the allotment of rights, or the date when any
change or conversion or exchange of Shares shall go into effect; or in lieu of
closing the stock transfer books as aforesaid, the Trustees may fix in advance a
date, not exceeding sixty (60) days preceding the date of any meeting of
Shareholders, or the date for payment of any dividend or other distribution, or
the date for the allotment of rights, or the date when any change or conversion
or exchange of Shares shall go into effect, as a record date for the
determination of the Shareholders entitled to
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<PAGE>
notice of, and to vote at, any such meeting, or entitled to receive payment of
any such dividend or other distribution, or to any such allotment of rights, or
to exercise the rights in respect of any such change, conversion, or exchange of
Shares, and in such case such Shareholders and only such Shareholders as shall
be Shareholders of record on the date so fixed shall be entitled to such notice
of, and to vote at, such meeting, or to receive payment of such dividend or
other distribution, or to receive such allotment or rights, or to exercise such
rights, as the case may be, notwithstanding any transfer of any Shares on the
books of the Trust after any such record date fixed as aforesaid.
TERMINATION OF TRUST
- --------------------
Section 11.04. (a) This Trust shall continue without limitation of
-------------
time but subject to the provisions of sub-section (b) of this Section 11.04.
(b) The Trustees may, subject to a Majority Shareholder Vote of each
Series affected by the matter or, if applicable, to a Majority Shareholder Vote
of the Trust, and subject to a vote of a majority of the Trustees:
(i) sell and convey all or substantially all of the assets of the
Trust or any affected Series to another trust, partnership, association, or
corporation, or to a separate series of shares thereof, organized under the laws
of any state which trust, partnership, association, or corporation is an open-
end management investment company as defined in the 1940 Act, or is a series
thereof, for adequate consideration which may include the assumption of all
outstanding obligations, taxes, and other liabilities, accrued or contingent, of
the Trust or any affected Series, and which may include shares of beneficial
interest, stock, or other ownership interests of such trust, partnership,
association, or corporation or of a series thereof; or
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<PAGE>
(ii) at any time sell and convert into money all of the assets of
the Trust or any affected Series.
Upon making reasonable provision, in the determination of the
Trustees, for the payment of all such liabilities in either (i) or (ii), by such
assumption or otherwise, the Trustees shall distribute the remaining proceeds or
assets (as the case may be) of each Series (or class) ratably among the holders
of Shares of that Series then outstanding.
(c) Upon completion of the distribution of the remaining proceeds or
the remaining assets as provided in sub-section (b), the Trust or any affected
Series shall terminate, and the Trustees and the Trust shall be discharged of
any and all further liabilities and duties hereunder and the right, title, and
interest of all parties with respect to the Trust or Series shall be cancelled
and discharged.
Upon termination of the Trust, following completion of winding up of
its business, the Trustees shall cause a certificate of cancellation of the
Trust's certificate of trust to be filed in accordance with the Delaware Act,
which certificate of cancellation may be signed by any one Trustee.
REORGANIZATION
- --------------
Section 11.05. Notwithstanding anything else herein, the Trustees, in
-------------
order to change the form of organization of the Trust, may, without prior
Shareholder approval, (i) cause the Trust to merge or consolidate with or into
one or more trusts, partnerships, associations, or corporations so long as the
surviving or resulting entity is an open-end management investment company under
the 1940 Act, or is a series thereof, that will succeed to or assume the Trust's
registration under that Act and which is formed, organized, or existing under
the laws of a state, commonwealth, possession, or colony of the United States,
or (ii) cause the Trust to incorporate under the laws of Delaware. Any agreement
of merger or
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<PAGE>
consolidation or certificate of merger may be signed by a majority of Trustees,
and facsimile signatures conveyed by electronic or telecommunication means shall
be valid.
Pursuant to and in accordance with the provisions of Section 3815(f)
of the Delaware Act, and notwithstanding anything to the contrary contained in
this Trust Instrument, an agreement of merger or consolation approved by the
Trustees in accordance with this Section 11.05 may effect any amendment to the
Trust Instrument or effect the adoption of a new trust instrument of the Trust
if it is the surviving or resulting trust in the merger or consolidation .
FILING OF COPIES, REFERENCES, HEADINGS
- --------------------------------------
Section 11.06. The original or a copy of this Trust Instrument and of
-------------
each amendment hereof or Trust Instrument supplemental hereto shall be kept at
the office of the Trust where it may be inspected by any Shareholder. Anyone
dealing with the Trust may rely on a certificate by an officer or Trustee of the
Trust as to whether or not any such amendments or supplements have been made and
as to any matters in connection with the Trust hereunder, and with the same
effect as if it were the original, may rely on a copy certified by an officer or
Trustee of the Trust to be a copy of this Trust Instrument or of any such
amendment or supplemental Trust Instrument. In this Trust Instrument or in any
such amendment or supplemental Trust Instrument, references to this Trust
Instrument, and all expressions like "herein," hereof," and "hereunder," shall
be deemed to refer to this Trust Instrument as amended or affected by any such
supplemental Trust Instrument. All expressions like "his," "he," and "him,"
shall be deemed to include the feminine and neuter, as well as masculine,
genders. Headings are placed herein for convenience of reference only, and in
case of any conflict, the text of this Trust Instrument, rather than the
headings,
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<PAGE>
shall control. This Trust Instrument may be executed in any number of
counterparts, each of which shall be deemed an original.
APPLICABLE LAW
- --------------
Section 11.07. The trust set forth in this instrument is made in the
-------------
State of Delaware, and the Trust and this Trust Instrument, and the rights and
obligations of the Trustees and Shareholders hereunder, are to be governed by
and construed and administered according to the Delaware Act and the laws of
said State; provided, however, that there shall not be applicable to the Trust,
the Trustees, or this Trust Instrument (a) the provisions of Section 3540 of
Title 12 of the Delaware Code or (b) any provisions of the laws (statutory or
common) of the State of Delaware (other than the Delaware Act) pertaining to
trusts which relate to or regulate (i) the filing with any court or governmental
body or agency of trustee accounts or schedules of trustee fees and charges,
(ii) affirmative requirements to post bonds for trustees, officers, agents, or
employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding, or disposition of
real or personal property, (iv) fees or other sums payable to trustees,
officers, agents, or employees of a trust, (v) the allocation of receipts and
expenditures to income or principal, (vi) restrictions or limitations on the
permissible nature, amount, or concentration of trust investments or
requirements relating to the titling, storage, or other manner of holding of
trust assets, or (vii) the establishment of fiduciary or other standards or
responsibilities or limitations on the acts or powers of trustees, which are
inconsistent with the limitations or liabilities or authorities and powers of
the Trustees set forth or referenced in this Trust Instrument. The Trust shall
be of the type commonly called a "business trust," and without limiting the
provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust under Delaware law. The Trust specifically reserves
the right to
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<PAGE>
exercise any of the powers or privileges afforded to trusts or actions that may
be engaged in by trusts under the Delaware Act, and the absence of a specific
reference herein to any such power, privilege, or action shall not imply that
the Trust may not exercise such power or privilege or take such actions.
AMENDMENTS
- ----------
Section 11.08. Except as specifically provided herein, the Trustees
-------------
may, without shareholder vote, amend, or otherwise supplement this Trust
Instrument by making an amendment, a Trust Instrument supplemental hereto, or an
amended and restated trust instrument. Shareholders shall have the right to vote
(i) on any amendment which would affect their right to vote granted in Section
7.01 of Article VII hereof, (ii) on any amendment to this Section 11.08, (iii)
on any amendment as may be required by law or by the Trust's registration
statement filed with the Commission, and (iv) on any amendment submitted to them
by the Trustees. Any amendment required or permitted to be submitted to
Shareholders which, as the Trustees determine, shall affect the Shareholders of
one or more Series shall be authorized by vote of the Shareholders of each
Series affected,and no vote of shareholders of a Series not affected shall be
required. Notwithstanding anything else herein, any amendment to Article X
hereof shall not limit the rights to indemnification or insurance provided
therein with respect to action or omission of Covered Persons prior to such
amendment.
FISCAL YEAR
- -----------
Section 11.09. The fiscal year of the Trust shall end on December 31;
-------------
provided, however, that the Trustees may, without Shareholder approval, change
the fiscal year of the Trust.
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USE OF THE WORD "NAVELLIER"
- ---------------------------
Section 11.10. Louis G. Navellier ("Navellier") has consented to, and
-------------
granted a non-exclusive license for, the use by any Series or by the Trust of
the identifying word "Navellier" in the name of any Series or of the Trust. Such
consent is subject to revocation by Navellier in its discretion, if Navellier or
any entity owned or controlled by Louis Navellier or subsidiary or affiliate
thereof is not employed as the investment adviser of each Series of the Trust.
As between the Trust and Navellier, Navellier controls the use of the name of
the Trust insofar as such name contains the identifying word "Navellier."
Navellier may, from time to time, use the identifying word "Navellier" in other
connections and for other purposes, including, without limitation, in the names
of other investment companies, corporations, or businesses which it may manage,
advise, sponsor, or own, or in which it may have a financial interest. Navellier
may require the Trust or any Series thereof to cease using the identifying word
"Navellier" in the name of the Trust or any Series thereof if the Trust or any
Series thereof ceases to employ Navellier or a subsidiary or affiliate thereof
as investment adviser.
PROVISIONS IN CONFLICT WITH LAW
- -------------------------------
Section 11.11. The provisions of this Trust Instrument are severable,
-------------
and if the Trustees shall determine, with the advice of counsel, that any of
such provisions are in conflict with the 1940 Act, the regulated investment
company provisions of the Internal Revenue Code, or with other applicable laws
and regulations, the conflicting provision shall be deemed never to have
constituted a part of this Trust Instrument; provided, however, that such
determination shall not affect any of the remaining provisions of this Trust
Instrument, or render invalid or improper any action taken or omitted prior to
such determination. If any provision of this Trust Instrument shall be held
invalid or unenforceable in any jurisdiction,
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such invalidity or unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any other
jurisdiction or any other provision of this Trust Instrument in any
jurisdiction.
IN WITNESS WHEREOF, the undersigned being all of the initial Trustees
of the Trust, have executed this 6th day of May, 1993.
/s/ LOUIS G. NAVELLIER
------------------------------------
Louis G. Navellier, as Trustee
and not individually.
/s/ JOHN DRINKWATER
------------------------------------
John Drinkwater, as Trustee
and not individually.
/s/ DONALD SIMON
------------------------------------
Donald Simon, as Trustee
and not individually.
/s/ LAWRENCE BIANCHI
------------------------------------
Lawrence Bianchi, as Trustee
and not individually.
/s/ KENNETH SLETTEN
------------------------------------
Kenneth Sletten, as Trustee
and not individually.
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<PAGE>
BYLAWS
OF
THE NAVELLIER SERIES FUND
These Bylaws of The Navellier Series Fund (the "Trust"), a Delaware
business trust, are subject to the Trust Instrument of the Trust dated May __,
1993, as from time to time amended, supplemented or restated (the "Trust
Instrument"). Capitalized terms used herein which are defined in the Trust
Instrument are used as therein defined.
ARTICLE I
---------
PRINCIPAL OFFICE
----------------
The principal office of the Trust shall be located at 920 Incline Way,
Building 1, Incline Village, Nevada, or such other location as the Trustees may,
from time to time, determine. The Trust may establish and maintain such other
offices and places of business as the Trustees may, from time to time,
determine.
ARTICLE II
----------
OFFICERS AND THEIR ELECTION
- ---------------------------
Officers
- -------
Section 1. The officers of the Trust shall be a President, a
---------
Treasurer,a Secretary, and such other officers as the Trustees may from time to
time elect. The Trustees may delegate to any officer or committee the power to
appoint any subordinate officers or agents. It shall not be necessary for any
Trustee or other officer to be a holder of Shares in the Trust.
Election of Officers
- --------------------
Section 2. The Treasurer and Secretary shall be chosen by the
---------
Trustees. The President shall be chosen by and from the Trustees. Two or more
offices may be held by a single person. Subject to the provisions of Section 12
hereof, the President, the Treasurer, and the Secretary shall each hold office
until their successors are chosen and qualified, and all other officers shall
hold office at the pleasure of the Trustees.
Resignations
- ------------
Section 3. Any officer of the Trust may resign, notwithstanding
---------
Section 2 hereof, by filing a written resignation with the President, the
Trustees, or the Secretary, which resignation shall take effect on being so
filed or at such time as may be therein specified.
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<PAGE>
ARTICLE III
-----------
POWERS AND DUTIES OF OFFICERS AND TRUSTEES
------------------------------------------
Management of the Trust--General
- --------------------------------
Section 1. The business and affairs of the Trust shall be managed by,
---------
or under the direction of, the Trustees, and they shall have all powers
necessary and desirable to carry out their responsibilities, so far as such
powers are not inconsistent with the laws of the State of Delaware, the Trust
Instrument, or with these Bylaws.
Executive and Other Committees
- ------------------------------
Section 2. The Trustees may elect from their own number an executive
----------
committee, which shall have any or all the powers of the Trustees while the
Trustees are not in session. The Trustees may also elect from their own number
other committees from time to time. The number composing such committees and the
powers conferred upon the same are to be determined by vote of a majority of the
Trustees. All members of such committees shall hold such offices at the pleasure
of the Trustees. The Trustees may abolish any such committee at any time. Any
committee to which the Trustees delegate any of their powers or duties shall
keep records of its meetings and shall report its actions to the Trustees. The
Trustees shall have power to rescind any action of any committee, but no such
rescission shall have retroactive effect.
Compensation
- ------------
Section 3. Each Trustee and each committee member may receive such
---------
compensation for his services and reimbursement for his expenses as may be fixed
from time to time by resolution of the Trustees.
Chairman of the Trustees
- ------------------------
Section 4. The Trustees shall appoint from among their number a
---------
Chairman who shall serve as such at the pleasure of the Trustees. When present,
he shall preside at all meetings of the Shareholders and the Trustees, and he
may, subject to the approval of the Trustees, appoint a Trustee to preside at
such meetings in his absence. He shall pefform such other duties as the Trustees
may from time to time designate.
President
- ---------
Section 5. The President shall be the chief executive officer of the
---------
Trust and, subject to the direction of the Trustees, shall have general
administration of the business and policies of the Trust. Except as the Trustees
may otherwise order, the President shall have the power to grant, issue,
execute, or sign such powers of attorney, proxies, agreements, or other
documents as may be deemed advisable or necessary in the furtherance of the
interests of the Trust or any Series thereof. He shall also have the power to
employ attorneys, accountants,
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and other advisers and agents and counsel for the Trust. The President shall
perform such duties additional to all of the foregoing as the Trustees may from
time to time designate.
Treasurer
- ---------
Section 6. The Treasurer shall be the principal financial and
---------
accounting officer of the Trust. He shall deliver all funds and securities of
the Trust which may come into his hands to such company as the Trustees shall
employ as Custodian in accordance with the Trust Instrument and applicable
provisions of law. He shall make annual reports regarding the business and
condition of the Trust, which reports shall be preserved in Trust records, and
he shall furnish such other reports regarding the business and condition of the
Trust as the Trustees may from time to time require. The Treasurer shall perform
such additional duties as the Trustees may from time to time designate.
Secretary
- ---------
Section 7. The Secretary shall record in books kept for the purpose
---------
all votes and proceedings of the Trustees and the Shareholders at their
respective meetings. He shall have the custody of the seal of the Trust. The
Secretary shall perform such additional duties as the Trustees may from time to
time designate.
Vice President
- --------------
Section 8. Any Vice President of the Trust shall perform such duties
---------
as the Trustees or the President may from time to time designate. At the request
or in the absence or disability of the President, the Vice President (or, if
there are two or more Vice Presidents, then the senior of the Vice Presidents
present and able to act) may perform all the duties of the President and, when
so acting, shall have all the powers of and be subject to all the restrictions
upon the President.
Assistant Treasurer
- -------------------
Section 9. Any Assistant Treasurer of the Trust shall perform such
---------
duties as the Trustees or the Treasurer may from time to time designate, and, in
the absence of the Treasurer, the senior Assistant Treasurer, present and able
to act, may perform all the duties of the Treasurer.
Assistant Secretary
- -------------------
Section 10. Any Assistant Secretary of the Trust shall perform such
----------
duties as the Trustees or the Secretary may from time to time designate, and, in
the absence of the Secretary, the senior Assistant Secretary, present and able
to act, may perform all the duties of the Secretary.
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<PAGE>
Subordinate Officers
- --------------------
Section 11. The Trustees from time to time may appoint such other
----------
officers or agents as they may deem advisable, each of whom shall have such
title, hold office for such period, have such authority, and perform such duties
as the Trustees may determine. The Trustees from time to time may delegate to
one or more officers or committees of Trustees the power to appoint any such
subordinate officers or agents and to prescribe their respective terms of
office, authorities, and duties.
Surety Bonds
- ------------
Section 12. The Trustees may require any officer or agent of the Trust
----------
to execute a bond (including, without limitation, any bond required by the
Investment Company Act of 1940, as amended ("the 1940 Act") and the rules and
regulations of the Securities and Exchange Commission ("Commission") to the
Trust in such sum and with such surety or sureties as the Trustees may
determine, conditioned upon the faithful performance of his duties to the Trust,
including responsibility for negligence and for the accounting of any of the
Trust's property, funds, or securities that may come into his hands.
Removal
- -------
Section 13. Any officer may be removed from office whenever, in the
----------
judgment of the Trustees, the best interest of the Trust will be served thereby,
by the vote of a majority of the Trustees given at any regular meeting or any
special meeting of the Trustees. In addition, any officer or agent appointed in
accordance with the provisions of Section 11 hereof may be removed, either with
or without cause, by any officer upon whom such power of removal shall have been
conferred by the Trustees.
Remuneration
- ------------
Section 14. The salaries or other compensation, if any, of the
----------
officers of the Trust shall be fixed from time to time by resolution of the
Trustees.
ARTICLE IV
----------
SHAREHOLDERS' MEETTNGS
----------------------
Special Meetings
- ----------------
Section 1. A special meeting of the Shareholders shall be called
---------
by the Secretary whenever (j) ordered by the Trustees or (ii) requested in
writing by the holder or holders of at least 10% of the Outstanding Shares
entitled to vote. If the Secretary, when so ordered or requested, refuses or
neglects for more than 30 days to call such special meeting, the Trustees or the
Shareholders so requesting may, in the name of the Secretary, call the meeting
by giving notice thereof in the manner required when notice is given by the
Secretary. If the meeting is a meeting of the Shareholders of one or more Series
or classes of Shares, but not a meeting of all Shareholders of the Trust, then
only special meetings of
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the Shareholders of such one or more Series or Classes shall be called, and only
the Shareholders of such one or more Series or Classes shall be entitled to
notice of and to vote at such meeting.
Notices
- -------
Section 2. Except as above provided, notices of any meeting of the
---------
Shareholders shall be given by the Secretary by delivering or mailing, postage
prepaid, to each Shareholder entitled to vote at said meeting, written or
printed notification of such meeting at least 15 days before the meeting, to
such address as may be registered with the Trust by the Shareholder. Notice of
any Shareholder meeting need not be given to any Shareholder if a written waiver
of notice, executed before or after such meeting, is filed with the record of
such meeting, or to any Shareholder who shall attend such meeting in person or
by proxy. Notice of adjournment of a Shareholders' meeting to another time or
place need not be given, if such time and place are announced at the meeting or
reasonable notice is given to persons present at the meeting and the adjourned
meeting is held within a reasonable time after the date set for the original
meeting.
Voting--Proxies
- ---------------
Section 3. Subject to the provisions of the Trust Instrument,
---------
Shareholders entitled to vote may vote either in person or by proxy, provided
that either (i) an instrument authorizing such proxy to act is executed by the
Shareholder in writing and dated not more than 11 months before the meeting,
unless the instrument specifically provides for a longer period, or (ii) the
Trustees adopt by resolution an electronic, telephonic, computerized, or other
alternative to execution of a written instrument authorizing the proxy to act,
which authorization is received not more than 11 months before the meeting.
Proxies shall be delivered to the Secretary of the Trust or other person
responsible for recording the proceedings before being voted. A proxy with
respect to Shares held in the name of two or more persons shall be valid if
executed by one of them, unless at or prior to exercise of such proxy the Trust
receives a specific written notice to the contrary from any one of them. Unless
otherwise specifically limited by their terms, proxies shall entitle the holder
thereof to vote at any adjournment of a meeting. A proxy purporting to be
exercised by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise, and the burden or proving invalidity
shall rest on the challenger. At all meetings of the Shareholders, unless the
voting is conducted by inspectors, all questions relating to the qualifications
of voters, the validity of proxies, and the acceptance or rejection of votes
shall be decided by the Chairman of the meeting. Except as otherwise provided
herein or in the Trust Instrument, as these Bylaws or such Trust Instrument may
be amended or supplemented from time to time, all matters relating to the
giving, voting, or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and the
Shareholders were shareholders of a Delaware corporation.
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Place of Meeting
- ----------------
Section 4. All special meetings of the Shareholders shall be held
---------
at the principal of business of the Trust or at such other place in the United
States as the Trustees may place designate. at the
Action Without a Meeting
- ------------------------
Section 5. Any action to be taken by Shareholders may be taken
---------
without a meeting if all Shareholders entitled to vote on the matter consent to
the action in writing and the written consents are filed with the records of
meetings of Shareholders of the Trust. Such consent shall be treated for all
purposes as a vote at a meeting of the Trustees held at the principal place of
business of the Trust.
ARTICLE V
---------
TRUSTEES' MEETINGS
------------------
Special Meetings
- ----------------
Section 1. Special meetings of the Trustees may be called orally or in
---------
writing by the Chairman of the Board of Trustees or any two other Trustees.
Regular Meetings
- ----------------
Section 2. Regular meetings of the Trustees may be held at such
---------
places and at such times as the Trustees may from time to time determine; each
Trustee present at such determination shall be deemed a party calling the
meeting, and no call or notice will be required to such Trustee provided that
any Trustee who is absent when such determination is made shall be given notice
of the determination by the Chairman or any two other TRUSTEES, as provided for
in Section 4.04 of the Trust Instrument. places and
Quorum
- ------
Section 3. A majority of the Trustees shall constitute a quorum for
---------
the transaction of business, and an action of a majority of the quorum shall
constitute action of the Trustees.
Notice
- ------
Section 4. Except as otherwise provided, notice of any special
---------
meeting of the Trustees shall be given by the party calling the meeting to each
Trustee, as provided for in Section 4.04 of the Trust Instrument. A written
notice may be mailed, postage prepaid, addressed to him at his address as
registered on the books of the Trust, or, if not so registered, at his last
known address.
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Place of Meeting
- ----------------
Section 5. All special meetings of the Trustees shall be held at the
---------
principal place of business of the Trust or such other place as the Trustees may
designate. Any meeting may adjourn to any place.
Special Action
- --------------
Section 6. When all the Trustees shall be present at any meeting,
---------
however called or wherever held, or shall assent to the holding of the meeting
without notice, or shall sign a written assent thereto filed with the record of
such meeting, the acts of such meeting shall be valid as if such meeting had
been regularly held.
Action by Consent
- -----------------
Section 7. Any action by the Trustees may be taken without a meeting
if a written consent thereto is signed by all the Trustees and filed with the
records of the Trustees' meeting. Such consent shall be treated, for all
purposes, as a vote at a meeting of the Trustees held at the principal place of
business of the Trustees.
Participation in Meetings by Conference Telephone
- -------------------------------------------------
Section 8. Trustees may participate in a meeting of Trustees by
---------
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and such participation
shall constitute presence in person at such meeting. Any meeting conducted by
telephone shall be deemed to take place at and from the principal office of the
Trust.
ARTICLE VI
----------
SHARES OF BENEFICIAL INTEREST
-----------------------------
Beneficial Interest
- -------------------
Section 1. The beneficial interest in the Trust shall at all times
---------
be divided into such transferable Shares of one or more separate and distinct
Series, or classes thereof, as the Trustees shall from time to time create and
establish. The number of Shares is unlimited, and each Share of each Series or
class thereof shall be without par value and shall represent an equal
proportionate interest with each other Share in the Series, none having priority
or preference over another, except to the extent that such priorities or
preferences are established with respect to one or more classes of shares
consistent with applicable law and any rule or order of the Commission.
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Transfer of Shares
- ------------------
Section 2. The Shares of the Trust shall be transferable, so as to
---------
affect the rights of the Trust, only by transfer recorded on the books of the
Trust, in person, by attorney, or by written and notarized direction of the
shareholder.
Equitable Interest Not Recognized
- ---------------------------------
Section 3. The Trust shall be entitled to treat the holder of record
---------
of any Share or Shares of beneficial interest as the holder in fact thereof, and
shall not be bound to recognize any equitable or other claim or interest in such
Share or Shares on the part of any other person except as may be otherwise
expressly provided by law.
Share Certificate
- -----------------
Section 4. No certificates certifying the ownership of Shares shall be
---------
issued except as the Trustees may otherwise authorize. The Trustees may issue
certificates to a Shareholder of any Series or class thereof for any purpose,
and the issuance of a certificate to one or more Shareholders shall not require
the issuance of certificates generally. In the event that the Trustees authorize
the issuance of Share certificates, such certificate shall be in the form
proscribed from time to time by the Trustees and shall be signed by the
President or a Vice President and by the Treasurer, Assistant Treasurer,
Secretary, or Assistant Secretary. Such signatures may be facsimiles if the
certificate is signed by a transfer or shareholder services agent or by a
registrar, other than a Trustee, officer, or employee of the Trust. In case any
officer who has signed or whose facsimile signature has been placed on such
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the Trust with the same effect as if he or she were
such officer at the time of issue.
In lieu of issuing certificates for Shares, the Trustees or the
transfer or shareholder services agent may either issue receipts therefor or may
keep accounts upon the books of the Trust for the record holders of such Shares,
who shall in either case be deemed, for all purposes hereunder, to be the
holders of certificates for such Shares as if they had accepted such
certificates and shall be held to have expressly assented and agreed to the
terms hereof.
Loss of Certificate
- -------------------
Section 5. In the case of the alleged loss or destruction or the
---------
mutilation of a Share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees may prescribe.
Discontinuance of Issuance of Certificates
- ------------------------------------------
Section 6. The Trustees may at any time discontinue the issuance of
---------
Share certificates and may, by written notice to each Shareholder, require the
surrender of Share certificates to the Trust for cancellation. Such surrender
and cancellation shall not affect the ownership of Shares in the Trust.
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<PAGE>
ARTICLE VII
-----------
OWNERSHIP OF ASSETS OF THE TRUST
--------------------------------
The Trustees, acting for and on behalf of the Trust, shall be deemed
to hold legal and beneficial ownership of any income earned on securities held
by the Trust issued by any business entity formed, organized, or existing under
the laws of any jurisdiction other than a state, commonwealth, possession, or
colony of the United States or the laws of the United States.
ARTICLE VIII
------------
INSPECTION OF BOOKS
-------------------
The Trustees shall from time to time determine whether and to what
extent, and at what times and places, and under what conditions and regulations
the accounts and books of the Trust or any of them shall be open to the
inspection of the Shareholders; and no Shareholder shall have any right to
inspect any account or book or document of the Trust except as conferred by law
or otherwise by the Trustees or by resolution of the Shareholders.
ARTICLE IX
----------
INSURANCE OF OFFICERS, TRUSTEES, AND EMPLOYEES
----------------------------------------------
The Trust may purchase and maintain insurance on behalf of any Covered
Person or employee of the Trust, including any Covered Person or employee of the
Trust who is or was serving at the request of the Trust as a Trustee, officer,
or employee of a corporation, partnership, joint venture, trust, or in any other
capacity or in any other enterprise, against any liability asserted against him
and incurred by him in any such capacity or arising out of his status as such,
whether or not the Trustees would have the power to indemnify him against such
liability.
The Trust may not acquire or obtain a contract for insurance that
protects or purports to protect any Trustee or officer of the Trust against any
liability to the Trust or its Shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office.
ARTICLE X
---------
SEAL
----
The seal of the Trust shall be circular in form bearing the
inscription:
THE NAVELLIER SERIES FUND -- 1993
THE STATE OF DELAWARE
The form of the seal shall be subject to alteration by the Trustees,
and the seal may be used by causing it or a facsimile to be impressed or affixed
or printed or otherwise reproduced.
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Any officer or Trustee of the Trust shall have authority to affix the
seal of the Trust to any document, instrument, or other paper executed and
delivered by or on behalf of the Trust; however, unless otherwise required by
the Trustees, the seal shall not be necessary to be placed on and its absence
shall not impair the validity of any document, instrument, or other paper
executed by or on behalf of the Trust.
ARTICLE XI
----------
FISCAL YEAR
-----------
The fiscal year of the Trust shall end on such date as the Trustees
shall from time to time determine.
ARTICLE XII
-----------
AMENDMENTS
-----------
These Bylaws may be amended at any meeting of the Trustees of the
Trust by a majority vote.
ARTICLE XIII
------------
REPORTS TO SHAREHOLDERS
-----------------------
The Trustees shall at least semi-annually submit to the Shareholders a
written financial report of the Trust including financial statements which shall
be certified at least annually by independent public accountants.
XIV
---
HEADINGS
--------
Headings are placed in these Bylaws for convenience of reference only,
and in case of any conflict, the text of these Bylaws rather than the headings
shall control.
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<PAGE>
EXHIBIT 5
THE NAVELLIER SERIES FUND
INVESTMENT ADVISORY AGREEMENT
-----------------------------
AGREEMENT made as of the 15th day of May, 1993, by and between THE NAVELLIER
SERIES FUND, a business trust organized under the laws of the State of Delaware
(the "Fund"), and NAVELLIER MANAGEMENT, INC., a Delaware corporation (the
"Adviser").
WHEREAS, the Fund intends to engage in business as an open-end management
investment company and is being registered as such under the Investment Company
Act of 1940, as amended (the "Investment Company Act"); and
WHEREAS, the Fund is currently comprised of one portfolio designated as the
"Navellier Aggressive Small Cap Equity Portfolio" ("Portfolio"); and
WHEREAS, the Adviser is being registered as an investment adviser under the
Investment Advisers Act of 1940, and engages in the business of acting as
investment adviser with an emphasis on over the counter stocks; and
WHEREAS, the Fund desires to retain the Adviser as investment adviser to
furnish advisory and portfolio management services to the Fund;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and the Adviser agree as follows:
1. Duties as Adviser. The Fund hereby appoints the Adviser to act as the
-----------------
investment adviser to the Fund with respect to all of the Fund's Portfolios (the
"Portfolios"), and, subject to the supervision of the Board of Trustees of the
Fund, to provide investment advisory services to the Fund as hereinafter set
forth: (i) to obtain and evaluate such information and advice relating to the
economy, securities markets, and securities as it deems necessary or useful to
discharge its duties hereunder; (ii) to continuously manage the assets of the
Fund in a manner consistent with applicable law and the investment objectives
and policies set forth in the most current prospectus and statement of
additional information of the Fund under the Securities Act of 1933 (the
"Prospectus"); (iii) to determine which issuers will be deemed "Qualified
Issuers" (as defined in the Prospectus); (iv) to determine the timing of
purchases, sales, and dispositions of securities; (v) to take such further
action in its sole discretion (but always in compliance with applicable law and
the Prospectus) without obligation to give prior notice to the Board of Trustees
of the Fund, or the Custodian, including the placing of purchase and sale orders
on behalf of the Fund as it shall deem necessary and appropriate; (vi) to
furnish to or place at the disposal of the Fund such of the information,
evaluations, analyses, and opinions formulated or obtained by it in the
discharge of its duties as the Fund may, from time to time, reasonably request;
(vii) to take such actions necessary or appropriate to carry out the decisions
of the Fund's Board of Trustees; (viii) to make decisions for the Fund as to the
manner in which voting rights, rights to consent to trust action, and any other
rights pertaining to how the Fund's portfolio securities shall be exercised
("Portfolio Voting Rights"). The Fund has directed the Custodian, and Custodian
as agreed, to act in accordance with the instructions of the Adviser. The
Adviser shall at no time have custody of or physical control over the investment
account assets or securities, and the Adviser shall not be liable for any act or
omission of the Custodian. The Adviser shall maintain records required under the
Investment Advisers Act of 1940 ("Advisers Act") and shall make them available
to the Fund or its designees for review or inspection upon demand and at the
Adviser's expense.
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<PAGE>
2. Allocation of Charges and Expenses. The Adviser shall bear the cost of
----------------------------------
rendering the investment advisory services to be performed by it under this
Agreement and shall, at its expense, maintain such staff and employ or retain
personnel and consult with other persons as it shall determine necessary.
Without limiting the generality of the foregoing, the staff and personnel of the
Adviser shall be deemed to include persons employed or otherwise retained by the
Adviser to furnish statistical and other factual data, advice regarding economic
factors and trends, information with respect to technical and scientific
developments, and such other information, advice, and assistance as the Adviser
may deem appropriate. The Adviser shall, without expense to the Fund, furnish
the services of such members of the Adviser's organization as may be duly
elected to be officers of the Fund, subject to their individual consent to serve
and to any limitations imposed by law.
The Fund will pay or cause to be paid all other expenses of the Fund (except
for the expenses to be paid by the Fund's Distributor), including, without
limitation, the following: (i) services rendered by the Custodian and the
Transfer Agent, (ii) fees, voluntary assessments, and other expenses incurred in
connection with membership in investment company organizations, (iii) cost of
stock certificates, reports, proxy materials and notices to shareholders, and
other like miscellaneous expenses, (iv) brokerage commissions and other
brokerage expenses, (v) taxes (including any income or franchise taxes), and any
fees payable to federal, state, and other governmental agencies, (vi) fees and
salaries payable to the Trustees, officers, and advisory board members of the
Fund, if any, (vii) auditing the Fund's books and accounts, (viii) the cost of
bookkeeping and accounting services, (ix) any and all Fund legal expenses, (x)
costs of mailing and tabulating proxies and costs of shareholders' and Trustees'
meetings, (xi) the cost of investment company literature and other publications
provided by the Fund to its Trustees and officers, (xii) costs of any liability,
uncollectible items of deposit and other insurance or fidelity bonds, (xiii) any
extraordinary expenses (including fees and disbursements of counsel) incurred by
the Fund, (xiv) costs of printing and mailing monthly statements and
confirmations, (xv) expense of organizing the Fund, (xvi) filing fees and
expenses relating to the registration and qualification of the Fund's shares
under federal and/or state securities laws and maintaining such registrations
and qualifications and (vii) other expenses properly payable by the Fund.
3. Compensation of the Adviser. For the services to be rendered by the
---------------------------
Adviser hereunder, the Fund shall pay to the Adviser, on a monthly basis, an
annual fee of one and a quarter percent (1.25%) (the "Management Fee") of the
Fund's average daily net assets for the Navellier Aggressive Small Cap Equity
Portfolio and a one and a quarter percent (1.25%) management fee for any other
Portfolio subsequently opened and managed by Adviser. Payment of the Adviser's
compensation for the preceding month shall be made as promptly as possible after
the last day of each such month. The compensation for the period from the
effective date hereof to the next succeeding last day of the month shall be
prorated according to the proportion which such period bears to the full month
ending on such date, and provided further that, upon any termination of this
Agreement before the end of the month, such compensation for the period from the
end of the last month ending prior to such termination shall be prorated
according to the proportion which such period bears to a full month, and shall
be payable upon the date of termination. If the annual operating expenses borne
by the Fund relating to any Portfolio, including amounts payable to the Adviser
hereunder paid or payable by such Portfolio for any fiscal year, exceed the
applicable expense limitations imposed by state securities laws or regulations
thereunder (as same may be adjusted from time to time), the Adviser will reduce
its Management Fee to the extent of such excess and if required, pursuant to any
such laws or regulations ((unless otherwise waived), will reimburse the
applicable Portfolio for annual operating expenses in excess of any such expense
limitation up to the amount of the Management Fee payable to it during that
fiscal year with respect to such Portfolio. The Adviser has the right, but not
the obligation, to waive any portion or all of its Management Fee, from time to
time.
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<PAGE>
The "average daily net assets" of each Portfolio for a particular period
shall be determined by adding together all calculations of net assets, as
regularly computed for such Portfolio on each business day during such period,
and dividing the resulting total by the number of business days during such
period.
4. Limitations of Liability of Adviser. The Adviser shall not be liable for
-----------------------------------
any error of judgment or mistake of law or fact, or, for any loss suffered by
the Fund or its investors in connection with the matters to which this Agreement
relates, except (i) a loss resulting from willful misfeasance, bad faith, or
gross negligence on the part of the Adviser in the performance of its duties, or
from reckless disregard by the Adviser of its obligations and duties under this
Agreement, or (ii) a loss for which the Adviser would not be permitted to be
indemnified under the federal Securities laws. The Fund also agrees to
indemnify Adviser to the extent provided for and agreed to by the parties in
that agreement entitled Indemnification Agreement executed by both parties on
this date and incorporated herein as Exhibit A and made a part hereof.
5. Duration and Termination of this Agreement. This Agreement shall become
------------------------------------------
effective as of the date hereof and shall continue in effect unless sooner
terminated, as herein provided, for two years after the date hereof, and
thereafter only if approved at least annually: (a) by the Board of Trustees of
the Fund; or (b) by the vote of a majority (as defined in the Act) of the
outstanding voting securities of the fund, and, in addition, (c) by the vote of
a majority of the Trustees of the Fund who are not parties hereto nor interested
persons of any party, as required by the Act.
This Agreement may be terminated at any time, without payment of any penalty,
by the Board of Trustees of the Fund, or by a vote of a majority (as defined in
the Act) of the outstanding voting securities of the Fund, in either case upon
written notice to the Adviser, and it may be terminated by the Adviser upon
sixty (60) days' written notice to the Fund. This Agreement shall automatically
terminate in the event of its assignment, within the meaning of the Act, unless
such automatic termination shall be prevented by an exemptive order of the
Securities and Exchange Commission.
96
<PAGE>
6. Separate Contract. This Agreement is separate and distinct form, and
-----------------
neither affects nor is affected by (i) the Fund's Distribution Agreement, and
(ii) the Fund's Administrative Services Agreement. Nothing contained in this
Agreement shall prevent the Adviser or any affiliated person of the Adviser from
acting as investment adviser or manager for any other person, firm, corporation,
or other entity and shall not in any way bind or restrict the Adviser or any
such affiliated person from buying, selling, or trading any securities,
commodities, futures contracts, or options on such contracts for their own
accounts or for the account of others for whom they may be acting. Nothing in
this Agreement shall limit or restrict the right of any director, officer, or
employee of the Adviser to engage in any other business or to devote his time
and attention in part to the management or other aspects of any other business
whether of a similar or dissimilar nature.
7. Amendment. This Agreement may be amended from time to time by agreement
---------
of the parties; provided, that such amendment shall be approved both by the vote
of a majority of Trustees of the Fund, including a majority of Trustees who are
not parties to this Agreement or interested persons of any such party to this
Agreement (other than as Trustees of the Fund) cast in person at a meeting
called for that purpose, and by the holders of a majority (as defined in the
Act) of the outstanding voting securities of the Portfolios of the Fund to which
this Agreement is applicable.
This Agreement may be amended by agreement of the parties without the vote or
consent of the shareholders of the Fund to supply any omission, to cure,
correct, or supplement any ambiguous, defective, or inconsistent provision
hereof, or if they deem it necessary to conform this Agreement to the
requirements of applicable federal and/or state laws or regulations, but neither
the Fund nor the Investment Adviser shall be liable for failing to do so.
8. Binding Effect. This Agreement shall be binding upon, and inure to the
--------------
benefit of the Fund and the Adviser and their respective successors.
9. Name of the Fund. The Fund acknowledges that the name "Navellier" is and
----------------
shall remain the sole property of the Adviser, notwithstanding the use thereof
by the Fund. The Fund may use the name "The Navellier Series Fund" or any name
derived from the name "Navellier" only for so long as this Agreement or any
extension, renewal, or amendment hereof remains in effect, including any similar
agreement with any organization which shall have succeeded to the business of
the Adviser and for only so long as Navellier Management, Inc., remains as
Adviser to the Fund. At such time as such an agreement shall no longer be in
effect, or Adviser's services have terminated, the Fund will (to the extent that
it is lawfully able) cease to use such a name or any other name connected with
the Adviser or any organization which shall have succeeded to the business of
the Adviser.
10. Definitions. Capitalized terms used herein without definition shall have
-----------
the meanings ascribed thereto in the Prospectus. For the purpose of this
Agreement, the terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person," and "interested person" shall have the
respective meanings specified in the Investment Company Act of 1940.
11. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, and each party may
become a party hereto by executing a counterpart hereof. This Agreement and any
counterpart so executed shall be deemed to be one and the same instrument.
12. Applicable Law. This Agreement shall be governed by, and construed in
--------------
accordance with the laws of the State of Delaware. Any dispute or controversy
arising out of this Agreement shall be either submitted to arbitration (if both
parties agree) in Reno, Nevada (near the Fund's principal place of business) in
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<PAGE>
accordance with the rules and regulations of the National Association of
Securities Dealers, Inc., or decided by a trier of fact in a federal or state
court in Reno, Nevada, and in no other jurisdiction or court venued outside of
Reno, Nevada.
13. Acknowledgement of Receipt of Form ADV Part II. The Fund hereby
----------------------------------------------
acknowledges receipt of the Adviser's Form ADV Part II or its brochure as
required by Rule 204-3 promulgated under the Investments Advisers Act of 1940.
14. Integration of All Prior Discussions, Negotiations and Agreements. This
-----------------------------------------------------------------
Agreement integrates all prior discussions, negotiations and agreements between
the parties relating to Adviser's and Fund's agreement relating to the
performance of investment advisory services for the Fund, and no evidence or
parol evidence may be introduced to vary or change the terms of this written
Agreement which is the full and final expression of the parties' agreement. Any
change in the terms of this Agreement must be in writing signed by both parties.
98
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in Incline Village, Nevada.
THE NAVELLIER SERIES FUND
By: /s/ Donald I. Simon
------------------------------
Donald Simon, Trustee
By: /s/ Lawrence G. Bianchi
------------------------------
Attest: Lawrence Bianchi, Trustee
/s/ Samuel Kornhauser By: /s/ Kenneth Sletten
- ---------------------- ------------------------------
Kenneth Sletten, Trustee
NAVELLIER MANAGEMENT, INC.
By: /s/ Louis Navellier
------------------------------
Louis Navellier, President
Attest:
/s/
- -----------------------
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<PAGE>
EXHIBIT 6.1
DISTRIBUTION AGREEMENT
----------------------
(As Amended)
AGREEMENT, made as of this 15th day of May 1993 and amended as of April 26,
1996, by and between The Navellier Series Fund, a business trust organized under
the laws of the State of Delaware (the "Fund"), and Navellier Securities Corp.,
a corporation organized under the laws of the State of Delaware (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 shares of common stock, at no par value (the "Shares), which shall initially
---------
be sold in one series consisting of an equity portfolio (the "Navellier
Aggressive Small Cap Equity Portfolio"), along with any other series as may be
created in the future, from time to time (the "Portfolios"), 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 each of the Fund's Portfolios 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 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 or as said
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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 Portfolios, 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 Fund 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 Fund 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 3% of the net asset value of the Shares sold shall
constitute the entire compensation (subject to any fees reimbursed to the
Distributor as provided in Section 8 hereof) of the Distributor for acting as
principal underwriter and distributor of the Portfolios. The 3% sales charge
shall be reduced to 2.5% for purchases of between $25,000 and $49,999.99, and
shall be reduced to 2% for purchases of between $50,000 and $74,99.99, and shall
be reduced to 1-1/2% for purchases of between $75,000 and $99,999.99, and shall
be reduced to 1% for purchases of $100,000 or more. 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.
(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 not equal an even cent, the
public offering price may be adjusted to the nearest cent. All payments to the
Fund hereunder shall be made in the manner set forth in Section 3(g).
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(e) The net asset value of the shares of each Portfolio of the Fund 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 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 Fund (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 Fund 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 Fund hereunder shall be
made in the manner set forth below.
The Fund, on behalf of the applicable 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 Fund, 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
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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 Fund.
------------------
(a) The Fund 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 Fund 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 Portfolios, and examined by
independent accountants. The Fund 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 Portfolios' 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 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
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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 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.
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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 Fund. 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
Fund, 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. Expenses.
--------
(a) The Fund shall, on a monthly basis, reimburse the Distributor for
particular expenditures incurred by it in connection with the distribution of
such Shares. Such expenditures shall include 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 (and
the Fund as a broker, as applicable) 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.
(b) The Fund will not pay any of Distributor's interest expenses,
carrying charges, or other financing costs or the 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.
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(c) The Fund 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 Fund 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 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 Fund on account of its agreement contained in this paragraph,
notify the Fund in writing of the commencement thereof. The omission of the
Distributor of such controlling person so to notify the Fund of any such
litigation shall relieve the Fund from any liability which it may have to the
Distributor or such controlling person on account of the indemnity agreement
contained in this paragraph if such failure to timely notify the Fund has
resulted in substantial prejudice to the Fund, but shall not relieve the Fund
from any liability which it may have to the 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 Fund, the Fund shall be entitled to participate in
(and, to the extent that it shall wish, to direct) the defense thereof at its
own expense, but such defense shall be conducted by counsel of good standing and
reasonably satisfactory to the 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
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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 Fund.
The Fund 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 Fund.
(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 Fund for liabilities (other than payment by the Fund of
expenses incurred or paid in the successful defense of any action, suit or
proceeding) arising under the Securities Act, shall not extend to the extent of
any interest therein of any person who is an underwriter or a partner or
controlling person of an underwriter within the meaning of Section 15 of the
Securities Act or who, at the date of this Agreement, is a Trustee of the Fund,
except to the extent that an interest of such character shall have been
determined by a court of appropriate jurisdiction as not against public policy
as expressed in the Securities Act. Unless in the opinion of counsel for the
Fund the matter has been adjudicated by controlling precedent, the Fund, will,
if a claim for such reimbursement is asserted, submit to a court of appropriate
jurisdiction the question of whether or not such interest is against the public
policy as expressed in the Securities Act.
(c) The Distributor agrees to indemnify and hold harmless the Fund and
its Trustees and such officers as shall have signed any Registration Statement
filed with the Commission from and against any and all losses, claims, damages,
or liabilities, joint or several, to which the Fund or such Trustees or officers
may become subject under the Securities Act, under any other statute, at common
law or otherwise, and will reimburse the Fund or such Trustees or officers for
any legal or other expenses (including the cost of any investigation and
preparation) reasonably incurred by it or them or any of them in connection with
any litigation, whether or not resulting in any liability, insofar as such
losses, claims, damages, liabilities, or litigation arise out of, or are based
upon, any untrue statement or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, which statement or omission was made by the Fund in reliance upon
information furnished in writing to the Fund by the 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 Fund and
its Trustees and such officers or defendant(s), in any such litigation, shall,
within thirty (30) days after the complaint shall have been served upon the Fund
or any such Trustee or officer in respect of which indemnity may be sought from
the Distributor or account of its agreement contained in this paragraph, notify
the Distributor in writing of the commencement thereof. The omission of the
Fund 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 Fund or such Trustee or officer of liability which it may have to the Fund
or such Trustee or officer on account of the indemnity agreement contained in
this paragraph, but shall not relieve the Distributor from any liability which
it may have to the Fund or such Trustee or officer otherwise than on account of
the indemnity agreement contained in this paragraph. In case any such
litigation shall be brought against the Fund or any such Trustee or officer and
timely notice of the commencement thereof shall have been
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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 Fund and shall survive any
delivery of shares of the Fund. The Fund 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 Fund'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 Fund or its security holders to which
they would otherwise be subject by reason of willful misfeasance, bad faith, or
gross negligence, in the performance of their duties, or by reason of their
reckless disregard of their obligations and duties under this Agreement.
(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 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 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 Fund. This
Agreement may be terminated by the Fund at any time or by the Distributor on
sixty (60) days' written notice to the Fund. This Agreement shall automatically
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 of other communication required to be given pursuant to this
Agreement shall be deemed duly given if delivered or mailed by registered mail,
postage
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prepaid, to the Distributor or to the Fund, each at 920 Incline Way, Incline
Village, Nevada 89450.
12. Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware and any action arising out of a breach of this
Agreement shall be brought in the State or federal court in Reno, Nevada.
ATTEST: THE NAVELLIER SERIES FUND
By:
- --------------------------- ----------------------------
Donald Simon, Trustee
By:
-----------------------------
Lawrence Bianchi, Trustee
By:
-----------------------------
Kenneth Sletten, Trustee
ATTEST: NAVELLIER SECURITIES CORP.
By:
- --------------------------- ------------------------------
Louis Navellier, President
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<PAGE>
EXHIBIT 6.2
Navellier Securities Corp.
920 Incline Way
Incline Village, Nevada 89450
SELECTED DEALER AGREEMENT
_____________, 1993
Dear Sir/Madam:
We invite you, upon the following terms and conditions, to participate as
principal in the distribution of the shares of any of the mutual funds including
The Navellier Series Fund, of which we are, or may become, Distributor
(hereinafter collectively referred to as the "Funds" and each individually as a
"Fund"):
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 to
selected dealers shall be as stated in the Fund's then current prospectus.
Such sales charges 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 the acquisition of the assets or shares of any entity by
the Fund.
3. As a selected dealer, you are hereby authorized (i) to place orders
directly with the Fund 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 Fund,
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 Fund 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 fund shares sold
to you by us in accordance with the terms and
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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.
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 you 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
Fund. You shall, however, be permitted to sell shares for the account
of their record owners to the Fund 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 Fund's 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.
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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 Fund 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 Fund (in which case you will be
responsible for any loss, including loss or profit, suffered by the Fund
resulting from your failure to make payment as aforesaid), or, at our option, we
may sell the shares so ordered back to the Fund (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 of
the Fund 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 Fund 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, and you agree that the
Fund 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.
12. As compensation for your marketing services, we shall pay you 75% of the
Sales Charge paid by each investor you obtain for the Fund.
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<PAGE>
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.
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 located
in Reno, Nevada. 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.
920 Incline Way, Building No. 1
Incline Village, Nevada 89450
113
<PAGE>
EXHIBIT 8.1
ADMINISTRATIVE SERVICES AGREEMENT
BETWEEN
THE NAVELLIER SERIES FUND
AND RUSHMORE TRUST AND SAVINGS, FSB
This Administrative Services Agreement (the "Agreement") is entered into
this 11th day of March, 1994 by and between The Navellier Series Fund (the
"Fund") and Rushmore Trust and Savings, FSB ("RTS" sometimes hereinafter
referred to as the "Administrator").
RECITALS
I. WHEREAS RTS and its personnel have expertise and experience in
providing administrative services to registered investment companies, and
II. WHEREAS The parties wish to set forth herein the manner and terms upon
which services will be provided.
NOW THEREFORE, the parties hereto agree as follows:
EMPLOYMENT OF RTS
1. RTS shall provide shareholder services, transfer agent, custodian and
administrative services to the Fund as set forth in EXHIBIT I to this Agreement.
2. As compensation for the services to be rendered by the Administrator
as provided above, the Fund shall pay the Administrator in accordance with the
fee schedule in EXHIBIT II to this Agreement. The fees will be paid monthly.
However, during the first three months, beginning on the date the Fund goes
"effective", the monthly minimum charges set forth in Exhibit II attached hereto
will be waived (i.e., only actual fees will be charged) and during the next
three months the monthly minimum fees charges will total $2500/month. In the
event of termination of this Agreement, the fees shall be computed on the basis
of the period ending on the last business day on which this Agreement is in
effect subject to a pro rata adjustment based on the number of days elapsed in
the current month as a percentage of the total number of days in such month.
3. Subject to and in accordance with the governing instruments of the
Fund and of the Administrator respectively, directors, officer, agents and
stockholders of the Fund are or may be interested in the Administrator (or any
successor thereof) as
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shareholders or otherwise; and the effect of any such interrelationships shall
be governed by said governing instruments and the applicable provisions of the
Investment Company Act of 1940.
4. This Agreement shall continue in effect until the first meeting of the
shareholders of the Fund (but in no event longer than two years from the date
hereof), and if approved at such shareholders' meeting, until two years from the
date hereof, and thereafter only so long as such continuance is approved at
least annually by a vote of a majority of the Fund's Board of Directors,
including the vote of a majority of the Directors who are not parties to such
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting such approval. Provided, however, that (a) this
Agreement may be terminated without penalty either by votes of the Board of
Directors of the Fund or by vote of a majority of the outstanding voting
securities of the Fund, on sixty-days proper written notice to the
Administrator, (b) this Agreement shall automatically terminate in the event of
its assignment (within the meaning of the Investment Company Act of 1940), and
(c) this Agreement may be terminated by the Administrator on sixty-days prior
written notice to the Fund. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid, to the other party at any
office of such party. As used in this Agreement, the terms "interested persons"
and "vote of a majority of the outstanding securities" shall have the
respective meanings set forth in Section 2(a)(19) and Section 2(a)(42) of the
Investment Company Act of 1940.
5. The services of the Administrator to the Fund hereunder are not to be
deemed exclusive, and the Administrator shall be free to render similar services
to others so long as its services hereunder are not impaired thereby. The
Administrator shall for purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent of the Fund.
6. No provisions of this Agreement shall be deemed to protect the
Administrator against any liability to the Fund or its shareholders to which it
otherwise would be subject by reason of any willful misfeasance, bad faith or
negligence in the performance of its duties or the reckless disregard of its
obligations under this Agreement. Nor shall any provisions hereof be deemed to
protect any Director or officer of the Fund against any such liability to which
he might otherwise be subject by reason of any willful misfeasance, bad faith or
negligence in the performance of his duties or the reckless disregard of his
obligations. If any provision of this Agreement shall be held or made invalid by
a
115
<PAGE>
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
7. Upon delivery of services by RTS to the Fund, RTS shall prepare and
submit to the Fund an invoice for the amounts to by paid by the Fund under the
Agreement. The invoice shall contain a description of the services rendered. The
calculation of the amount of the invoice shall be in accordance with the fee
schedule as set forth in EXHIBIT II which has been reviewed as to the
reasonableness of the amounts by the Directors of the Fund who are not
"interested persons" of the Fund. Within thirty (30) days of receipt of such
invoice, the Fund shall pay to RTS all amounts indicated as due and payable
except for those amounts, if any, which are in dispute.
8. If the Fund or its designers shall dispute any amounts in the invoice,
the Fund shall give RTS written notice of such discrepancy and the amount
thereof. Within ten (10) days after receipt of such notice, RTS shall either
agree with the Fund as to the amount of the discrepancy or inform the Fund in
writing that RTS disputes the existence or amount of the discrepancy. If RTS
disputes the existence or amount of the discrepancy, the parties agree that for
a period of thirty (30) days they shall use their best efforts to resolve such
dispute on a mutually satisfactory basis.
9. Any dispute or disagreement arising between RTS and the Fund in
conjunction with any provision of this Agreement, or the compliance or non-
compliance therewith, or the validity or enforceability thereof which is not
settled within thirty (30) days (or such other period as may be mutually agreed
upon) from the data that either party informs the other in writing that such
dispute or disagreement exists, may be resolved by litigation or may with the
written consent of both RTS and the Fund be settled by arbitration in accordance
with rules set by a three member panel, one member each selected by RTS and the
Fund and the third being an attorney selected by mutual agreement of RTS and the
Fund, with all charges submitted by said attorney to be shared equally by RTS
and the Fund. A decision shall be rendered by the panel within thirty (30) days
of a meeting held in such place or places as may be agreed by the panel, and RTS
and the Fund shall comply with such decision. If both parties agree in writing
to submit to arbitration then the decision of the panel shall be final and not
subject to judicial review, and judgment may be entered thereon in accordance
with applicable law in any court having jurisdiction thereof.
10. Absent willful misfeasance, bad faith, negligence or reckless disregard
of duties, RTS shall not be liable to the Fund for any special, incidental, or
consequential damages for losses arising out of relating to the performance of
its obligations under
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<PAGE>
this Agreement, whether or not such damages or losses were caused by the acts of
omissions of RTS or its employees. RTS is fully responsible for the accurate
transmission to the Fund of information provided to RTS by third parties but is
not responsible for the accuracy of the information so provided.
11. All documents, information and files which may be or have been
furnished by RTS to the Fund and which may be produced or prepared by RTS in
connection with this Agreement shall be and remain confidential and the
exclusive property of the Fund.
12. RTS will preserve for periods required in Rule 31a-2 of the General
Rules and Regulations under the Investment Company Act of 1940 such records
maintained by it as required to be maintained by Rule 31a-1 of such rules.
13. All books and records of RTS, insofar as such books and records pertain
to the services, shall be available for inspection by the Fund and its agents at
the offices of RTS during regular business hours, upon prior written notice to
RTS by the Fund. RTS shall on the same or next day provide the Fund and/or its
agents including Navellier Securities Corp. and/or Navellier Management, Inc.
confirmation of all investor activities including but not limited to initial
investment, additions, withdrawals, and account balances, and shall arrange for
a computer link-up so that the Fund and/or its said agents shall have computer
access to all investor account information. RTS shall further arrange that all
information relating to such investor accounts and all information relating to
persons requesting a Fund prospectus, and investor and prospective investor
mailing and telephone information, mailing list, databases, etc., are kept
strictly confidential and remain the exclusive property and trade secret
information of the Fund, Navellier Securities Corp. and Navellier Management,
Inc., and such information shall not be used by RTS or anyone else for any
purpose except with the express written consent of the Fund. RTS shall further
insure that none of its employees or agents or independent contractors uses such
information for any purposes except with the express written consent of the
Fund. RTS shall further insure that none of the employees, agents or independent
contractors has access to such information (computer or hard copy) except those
employees specifically designated and approved by the Fund.
14. Neither RTS nor the Fund shall be considered to be in default in the
performance or their respective obligations hereunder to the extent that the
performance of any such obligation or obligations is prevented or delayed by Act
of God or any cause reasonably beyond the control of RTS or the Fund, as the
case may be. In the event of equipment breakdown beyond its control, RTS shall
take reasonable steps to minimize service interruptions.
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<PAGE>
15. The services as provided by RTS in accordance with this Agreement shall
not be deemed accepted until the Fund has notified RTS in writing of the Fund's
receipt of services and of its acceptance or rejection of such services.
16. RTS and the Fund may amend, modify or supplement this Agreement only by
a written instrument executed by both RTS and the Fund. If any such amendment,
modification or supplement causes an increase or decrease in the price of, or
time required for, the performance of this Agreement, an equitable adjustment
shall be made, and this adjustment shall be mutually agreed upon by RTS and the
Fund and the Agreement modified in writing accordingly.
17. All notices, demands and other communications required or permitted to
be given hereunder shall be made in writing and shall be deemed to be duly given
if personally delivered or if deposited in the United States mail, registered or
certified mail, with postage prepaid, and addressed to the appropriate party at
the address set forth below, or at such other address as the parties may
designate in writing delivered in accordance with the provisions of this Section
17.
If to RTS:
Rushmore Trust and Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 30814
Attention: Daniel L. O'Connor, Chairman
If to the Fund:
Navellier Series Fund
920 Incline Way, Bldg. 1
Incline Village, NV 89450-5695
18. RTS shall have no right to the use of, or otherwise, the name or any
derivative of the name Navellier, and shall not use such name or derivative in
any way, including by not limited to, advertising, publications, or
testimonials, without the express written consent of Louis Navellier.
19. RTS shall arrange to have the Fund and its officers and trustees added
as additional named insureds to RTS's fidelity bond. RTS will also provide IRA
and Keogh accounts to Fund investors at the same face charged to Rushmore
Group investors.
20. This Agreement is intended by the parties as a full expression of their
agreement with respect to the subject matter hereof and a complete and
exclusive statement of the terms thereof.
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<PAGE>
No course of prior dealings between the parties shall be relevant or admissible
to supplement, explain, or vary any of the terms of this Agreement. No
representations, undertakings, or agreements have been made or relied upon in
the making this Agreement other than those specifically set forth herein.
21. This Agreement shall be governed by and construed in accordance with
the laws of the State of Nevada and shall be binding upon and shall inure to the
benefit of the parties hereto, and litigation between the parties out of or
related to this agreement shall only be brought in the state of federal court
located in Reno, Nevada, and in the event of such litigation the prevailing
party shall be entitled to its reasonable attorneys fees and costs.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
WITNESS: RUSHMORE TRUST AND SAVINGS, FSB
/s/ ????? /s/ ?????
- ------------------ ----------------------------
By: Chief Financial Officer
WITNESS: THE NAVELLIER SERIES FUND
/s/ ?????
----------------------------
By:
119
<PAGE>
EXHIBIT I
RUSHMORE TRUST AND SAVINGS, PSB
DESCRIPTION OF SERVICES
-----------------------
SHAREHOLDER SERVICING AND TRANSFER AGENT SERVICES
- -------------------------------------------------
Services included:
Maintenance of individual shareholders accounts
Posting all transactions
Preparation of periodic shareholder statements
(including annual and semi-annual shareholder reports)
Preparation of transaction confirmations
Income distributions
Respond to inquiries from shareholders
Process account changes such as name or address
CUSTODIAN SERVICES
- ------------------
Services included:
Safekeeping of securities
Delivery of securities sold
Receipt of securities purchased
Retain Fund cash in separate account(s)
Receive and process investor funds for purchases of
Fund shares
ADMINISTRATIVE SERVICES
- -----------------------
Services included:
General ledger accounting
Portfolio accounting
Daily share pricing (Daily Net Asset Value calculation)
Maintenance of records and regulatory reporting
per SEC regulations
DIRECT FUND EXPENSES NOT INCLUDED:
- ----------------------------------
SEC registration fees
State "blue sky fees":
Director fees and expenses
Insurance
Legal fees
Prospectus preparation
Tax return preparation
Shareholder report preparation
Printing
Postage
Printing of statement stock
Mailing envelopes
Postage
<PAGE>
EXHIBIT II
FEE SCHEDULE
------------
BASE CHARGE
- -----------
Monthly fee payable at the annual rate of 10 basis points (10/100's one
percent) of average daily net assets.
Does not apply to balance in Fund for Government Investors, Inc. or the Rushmore
- --------------
Fund, Inc. money market funds.
SHAREHOLDER SERVICING AND TRANSFER AGENT SERVICES
- -------------------------------------------------
Monthly account maintenance $1.00
Shareholder transaction charge $1.00
Minimum monthly charge $2,500.00
CUSTODIAN SERVICES
- ------------------
Portfolio transaction charge $10.00
(does not include Mortgage Backed Securities, Foreign or Options transactions)
Charges applied to any discretionary security transaction such as buy, sell,
tender, conversion, maturity, free receipt/delivery, in-kind distribution, etc.
Does not apply to dividend and interest payments or to cash transaction in the
- --------------
Fund for Government Investors, Inc. or Rushmore Fund, Inc. money market funds.
Minimum monthly charge $1,500.00
ADMINISTRATIVE SERVICES
- -----------------------
Monthly charge $1,500.00
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<PAGE>
EXHIBIT 8.2
THE NAVELLIER SERIES FUND
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made as of the 15th day of May, 1993, by and between THE NAVELLIER
SERIES FUND, a business trust organized under the laws of the State of Delaware
(the "Fund"), and NAVELLIER MANAGEMENT, INC., a Delaware corporation (the
"Adviser").
WHEREAS, the Fund intends to engage in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Investment Company Act"); and
WHEREAS, the Fund is currently comprised of one portfolio designated as the
"Navellier Aggressive Small Cap Equity Portfolio" ("Portfolio"); and
WHEREAS, the Adviser is registering as an investment adviser under the
Investment Advisers Act of 1940, and will be engaged in the business of acting
as investment adviser and providing certain other services to the Fund; and
WHEREAS, the Fund desires to retain the Adviser to render certain additional
services to the Fund regarding certain bookkeeping, accounting, and
administrative services (the "Services") in the manner and on the terms and
conditions hereinafter set forth; and
WHEREAS, the Adviser desires to be retained to perform such services on said
terms and conditions;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and the Adviser agree as follows:
1. Duties of Adviser: (a) The Fund hereby retains the Adviser to provide to
-----------------
the Fund: (A) such accounting and bookkeeping services and functions as are
reasonably necessary for the operation of the Fund. Such services shall
include, but shall not be limited to, preparation and maintenance of the
following books, records, and other documents: (1) journals containing daily
itemized records of all purchases and sales, and receipts and deliveries of
securities, and all receipts and disbursements of cash, and all other debits and
credits, in the form required by Rule 31a-1(b)(1) under the Investment Company
Act; (2) general and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, in the form required by Rules
31a-1(b)(2)(i)-(iii) under the Investment Company Act; (3) a securities record
or ledger reflecting separately for each portfolio security as of trade date all
"long" and "short" positions carried by the Fund for the account of each
Portfolio, if any, and showing the location of all securities long and the off-
setting position to all securities short, in the form required by Rule 31a-
1(b)(3) under the Investment Company Act; (4) a record of all portfolio
purchases or sales, in the form required by Rule 31a-1(b)(6) under the
Investment Company Act; (5) a record of all puts, calls, spreads, straddles, and
all other options, if any, in which any Portfolio has any direct or indirect
interest or which any Portfolio has granted or guaranteed, in the form required
by Rule 31a-1(b)(7) under the Investment Company Act; (6) a record of the proof
of money balances in all ledger accounts maintained pursuant to this Agreement,
in the form required by Rule 31a-1(b)(8) under the Investment Company Act; and
(7) price make-up
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<PAGE>
sheets and such records as are necessary to reflect the determination of each
Portfolio's net asset value. The foregoing books and records shall be maintained
by the Adviser in accordance with and for the time periods specified by
applicable rules and regulations, including Rule 31a-2 under the Investment
Company Act. All such books and records shall be the property of the Fund and
upon request therefore, the Adviser shall surrender to the Fund such of the
books and records so requested; and (B) certain administrative services
including, but not limited to, administrative services to shareholders of the
Fund and to respond to inquiries related to shareholder accounts.
(b) The services to be provided hereunder shall also include supervisory
services relating to the preparation and filing with the appropriate offices of
any reports or other documents, on behalf of the Fund, as shall be required by
applicable law and requested by the Fund, from time to time, including but not
limited to tax returns, financial statements, and such Forms N-1A and other
filings required by the securities laws of the United States or any state as may
be requested form time to time by the Fund.
2. Provision of Personnel. The Adviser shall, at its own expense, maintain
----------------------
such staff and employ or retain such personnel and consult with such other
persons as it shall, from time to time, determine to be necessary or useful to
the performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, such staff and personnel shall be deemed to include
officers of the Adviser and persons employed or otherwise retained by the
Adviser to provide or assist in providing of the Services to the Fund.
3. Provision of Certain Facilities and Equipment. The Adviser shall provide
---------------------------------------------
such office space, facilities, and equipment (including, but not limited to,
computer equipment, communication lines and supplies) and such clerical help and
other services as shall be necessary to provide the services to the Fund. In
addition, the Adviser may arrange, on behalf of the Fund and its Portfolios, to
obtain: (1) data processing and/or all of the above services, subject to
approval by a majority of the Fund's Board of Trustees, as necessary to assist
it in providing the Services to the Fund, and (2) pricing information regarding
the Fund's investment securities from such company or companies as are approved
by a majority of the Fund's Board of Trustees, and the Fund shall be financially
responsible to such company or companies as aforesaid, for the reasonable cost
of such services.
4. Provision of Information to the Adviser. The Fund will, from time to
---------------------------------------
time, furnish or otherwise make available to the Adviser such information
relating to the business and affairs of the Fund as the Adviser may reasonably
require in order to discharge its duties and obligations hereunder.
5. Reimbursement of Expenses of Adviser. The Fund shall reimburse the
------------------------------------
Adviser for such direct expenses, including, but not limited to, (i) those
listed in paragraph 1(b) and 3 above, incurred on behalf of the Fund that are
associated with the providing of the Services, and (ii) those paid to any
delegates of the Adviser pursuant to Section 13 hereof. In no event, however,
shall such reimbursement exceed levels that are fair and reasonable in light of
the usual and customary charges made by others for services of the same nature
and quality. Reimbursement under this Agreement shall be calculated and paid
monthly.
The Adviser shall not be required to pay any filing fees and expenses
incurred in connection with the filing of reports or documents pursuant to
section 1(b) herein, or required to be filed by applicable federal or state law,
which fees or expenses shall be borne directly by the Fund.
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<PAGE>
6. Access to Records. The Adviser will permit representatives of the Fund,
-----------------
including the Fund's independent auditors, to have reasonable access to the
personnel and records of the Adviser in order to enable such representatives to
monitor the quality of services being provided and the determination of
reimbursements due the Adviser pursuant to this Agreement. In addition, the
Adviser shall promptly deliver to the Board of Trustees of the Fund such
information as may reasonably be requested form time to time to permit the Board
of Trustees to make an informed determination regarding continuation of this
Agreement and the payments contemplated to be made hereunder.
7. Limitation of Liability of Adviser. The Adviser shall not be liable for
----------------------------------
any error of judgment or mistake of law or fact, or for any loss suffered by the
Fund or its investors in connection with the matters to which this Agreement
relates, except (i) a loss resulting from willful misfeasance, bad faith, or
gross negligence on the part of the Adviser in the performance of its duties or
from reckless disregard by the Adviser of its obligations and duties under this
Agreement, or (ii) a loss for which the Adviser would not be permitted to be
indemnified under the Federal Securities laws.
8. Duration of Agreement. This Agreement shall become effective as of the
---------------------
date of execution hereof and shall remain in effect for two (2) years from the
date hereof and from year to year thereafter, provided such continuance is
approved at least annually by the vote of a majority of the Trustees of the Fund
who are not parties to this Agreement or "interested persons" (as defined in the
Investment Company Act) of any such party, which vote must be cast in person at
a meeting called for the purpose of voting on such approval; and further
provided, however, that (a) the Fund may, at any time and without the payment of
- -------- -------
any penalty, terminate this Agreement upon written notice to the Adviser; (b)
this Agreement shall immediately terminate in the event of its "assignment"
(within the meaning of the Investment company Act) to the extent that it would
similarly be required to terminate under similar circumstances if it were an
advisory contract subject to the provisions of Section 15 of the Investment
Company Act and the rules thereunder; and (c) the Adviser may terminate this
Agreement without payment of penalty on sixty days' written notice to the Fund.
Any notice under this Agreement shall be given in writing, addressed and
delivered, or mailed post-paid, to the other party at the principal office of
such party.
9. Governing Law. This Agreement shall be construed in accordance with the
-------------
laws of the State of Delaware and the applicable provisions of the Investment
Company Act. To the extent the applicable law of the State of Nevada or any of
the provisions herein conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
10. Separate Contract. This Agreement is separate and distinct from, and
-----------------
neither affects nor is affected by (i) the Distribution Agreement in effect
between the Fund and Navellier Securities Corp., a Delaware Corporation, or (ii)
the Investment Advisory Agreement in effect between the Adviser and the Fund.
11. Binding Effect. This Agreement shall be binding upon and inure to the
--------------
benefit of the Fund and the Adviser and their respective successors.
12. Amendment. No amendment or modification of this Agreement shall be
---------
effective unless in writing signed by other parties and witnessed and until
approved by a majority of the outstanding shares of the Fund.
124
<PAGE>
13. Delegation of Duties. The Adviser may delegate each duty to be
--------------------
performed by it hereunder; provided, however, that notwithstanding any such
-------- -------
delegation, the Adviser shall remain responsible for the performance of the
duties to be performed by it hereunder as though such delegation had not
occurred.
14. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
15. Compensation. The Fund shall, in addition to reimbursing Adviser for
------------
expenses as described in Section 5, pay Adviser an annual fee payable monthly
equal to .25% of the Fund's average daily net asset value for performing such
administrative services.
125
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in Incline Village, Nevada.
-----------------------
THE NAVELLIER SERIES FUND
By: /s/ Louis G. Navellier
-----------------------------
Louis Navellier, Trustee
ATTEST:
By: /s/ John Drinkwater
-----------------------------
John Drinkwater, Trustee
/s/ Samuel Kornhauser By: /s/ Donald I. Simon
- ------------------------- -----------------------------
Donald Simon, Trustee
By: /s/ Lawrence G. Bianchi
-----------------------------
Lawrence Bianchi, Trustee
By: /s/ Kenneth Sletten
-----------------------------
Kenneth Sletten, Trustee
Attest:
/s/
- -------------------------
NAVELLIER MANAGEMENT, INC.
By: /s/ Louis G. Navellier
-----------------------------
Louis Navellier
President
126
<PAGE>
TRUSTEE INDEMNIFICATION AGREEMENT
---------------------------------
In consideration of Louis Navellier ("Trustee"), acting as a trustee of The
Navellier Series Fund (the "Fund"), pursuant to a Declaration of Trust dated May
6, 1993, the Fund and Trustee agree as follows: Trustee will use his best
efforts in performing his Trustee obligations, but in the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard of his
obligations, Trustee shall not be liable to the Fund, or any of the Fund's
investors, for any error of judgment or mistake of law or fact, for any act or
omission by Trustee or for any losses sustained by the Fund, or the Fund's
investors. The Fund agrees to indemnify and hold harmless Trustee against any
claim by any of the Fund's investors for any error of judgment or mistake of law
or fact, for any act or omission by Trustee, or for any losses sustained by the
Trustee or the Fund's investors except to the extent that the Trustee has
engaged in willful misfeasance, bad faith, gross negligence, or reckless
disregard of his obligations. Anything contained in this Agreement
notwithstanding, Trustee shall not be relieved of any liability or be
indemnified for any loss for which Trustee would not be permitted to be
indemnified under the Federal Securities Laws.
This Agreement may be amended from time to time by written agreement signed
by all of the parties; provided, that such amendment shall be approved both by
the vote of a majority of Trustees of the Fund, including a majority of Trustees
who are not interested persons of the Trustee to this Agreement (other than as
Trustees of the Fund) cast in person at a meeting called for that purpose, and
by the holders of a majority (as defined in the Act) of the outstanding voting
securities of the Fund to which this Agreement is applicable.
127
<PAGE>
This Agreement may be amended by agreement of the parties without the vote or
consent of the shareholders of the Fund to supply any omission, to cure,
correct, or supplement any ambiguous, defective, or inconsistent provision
hereof, or if they deem it necessary to conform this Agreement to the
requirements of applicable federal and/or state laws or regulations, but neither
the Fund nor the Trustee shall be liable for failing to do so.
In the event of any litigation or disagreement between the parties regarding
the subject of this indemnification, the prevailing party shall, in addition to
any other relief, be paid its reasonable attorneys' fees and costs as determined
by the court or trier of fact hearing said dispute. The parties agree that any
litigation arising out of this indemnification shall only be brought and heard
and shall only be venued in a federal or state court in Reno, Nevada.
THE NAVELLIER SERIES FUND
Dated as of May 15, 1993
By: /s/ John Drinkwater
----------------------------
John Drinkwater, Trustee
By: /s/ Lawrence G. Bianchi
----------------------------
Lawrence Bianchi, Trustee
By: /s/ Kenneth Sletten
----------------------------
Kenneth Sletten, Trustee
By: /s/ Donald I. Simon
----------------------------
Donald Simon, Trustee
ACCEPTED AND AGREED
By: /s/ Louis G. Navellier
-------------------------
Louis Navellier, Trustee
128
<PAGE>
TRUSTEE INDEMNIFICATION AGREEMENT
---------------------------------
In consideration of John Drinkwater ("Trustee"), acting as a trustee of The
Navellier Series Fund (the "Fund"), pursuant to a Declaration of Trust dated May
6, 1993, the Fund and Trustee agree as follows: Trustee will use his best
efforts in performing his Trustee obligations, but in the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard of his
obligations, Trustee shall not be liable to the Fund, or any of the Fund's
investors, for any error of judgment or mistake of law or fact, for any act or
omission by Trustee or for any losses sustained by the Fund, or the Fund's
investors. The Fund agrees to indemnify and hold harmless Trustee against any
claim by any of the Fund's investors for any error of judgment or mistake of law
or fact, for any act or omission by Trustee, or for any losses sustained by the
Trustee or the Fund's investors except to the extent that the Trustee has
engaged in willful misfeasance, bad faith, gross negligence, or reckless
disregard of his obligations. Anything contained in this Agreement
notwithstanding, Trustee shall not be relieved of any liability or be
indemnified for any loss for which Trustee would not be permitted to be
indemnified under the Federal Securities Laws.
This Agreement may be amended from time to time by written agreement signed
by all of the parties; provided, that such amendment shall be approved both by
the vote of a majority of Trustees of the Fund, including a majority of Trustees
who are not interested persons of the Trustee to this Agreement (other than as
Trustees of the Fund) cast in person at a meeting called for that purpose, and
by the holders of a majority (as defined in the Act) of the outstanding voting
securities of the Fund to which this Agreement is applicable.
129
<PAGE>
This Agreement may be amended by agreement of the parties without the vote or
consent of the shareholders of the Fund to supply any omission, to cure,
correct, or supplement any ambiguous, defective, or inconsistent provision
hereof, or if they deem it necessary to conform this Agreement to the
requirements of applicable federal and/or state laws or regulations, but neither
the Fund nor the Trustee shall be liable for failing to do so.
In the event of any litigation or disagreement between the parties regarding
the subject of this indemnification, the prevailing party shall, in addition to
any other relief, be paid its reasonable attorneys' fees and costs as determined
by the court or trier of fact hearing said dispute. The parties agree that any
litigation arising out of this indemnification shall only be brought and heard
and shall only be venued in a federal or state court in Reno, Nevada.
THE NAVELLIER SERIES FUND
THE NAVELLIER SERIES FUND
Dated as of May ___, 1993
By: /s/ Louis G. Navellier
----------------------------
Louis Navellier, Trustee
By: /s/ Lawrence G. Bianchi
----------------------------
Lawrence Bianchi, Trustee
By: /s/ Kenneth Sletten
----------------------------
Kenneth Sletten, Trustee
By: /s/ Donald I. Simon
----------------------------
Donald Simon, Trustee
ACCEPTED AND AGREED
By: /s/ John Drinkwater
-------------------------
John Drinkwater, Trustee
130
<PAGE>
TRUSTEE INDEMNIFICATION AGREEMENT
---------------------------------
In consideration of Donald Simon ("Trustee"), acting as a trustee of The
Navellier Series Fund (the "Fund"), pursuant to a Declaration of Trust dated May
6, 1993, the Fund and Trustee agree as follows: Trustee will use his best
efforts in performing his Trustee obligations, but in the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard of his
obligations, Trustee shall not be liable to the Fund, or any of the Fund's
investors, for any error of judgment or mistake of law or fact, for any act or
omission by Trustee or for any losses sustained by the Fund, or the Fund's
investors. The Fund agrees to indemnify and hold harmless Trustee against any
claim by any of the Fund's investors for any error of judgment or mistake of law
or fact, for any act or omission by Trustee, or for any losses sustained by the
Trustee or the Fund's investors except to the extent that the Trustee has
engaged in willful misfeasance, bad faith, gross negligence, or reckless
disregard of his obligations. Anything contained in this Agreement
notwithstanding, Trustee shall not be relieved of any liability or be
indemnified for any loss for which Trustee would not be permitted to be
indemnified under the Federal Securities Laws.
This Agreement may be amended from time to time by written agreement signed
by all of the parties; provided, that such amendment shall be approved both by
the vote of a majority of Trustees of the Fund, including a majority of Trustees
who are not interested persons of the Trustee to this Agreement (other than as
Trustees of the Fund) cast in person at a meeting called for that purpose, and
by the holders of a majority (as defined in the Act) of the outstanding voting
securities of the Fund to which this Agreement is applicable.
131
<PAGE>
This Agreement may be amended by agreement of the parties without the vote or
consent of the shareholders of the Fund to supply any omission, to cure,
correct, or supplement any ambiguous, defective, or inconsistent provision
hereof, or if they deem it necessary to conform this Agreement to the
requirements of applicable federal and/or state laws or regulations, but neither
the Fund nor the Trustee shall be liable for failing to do so.
In the event of any litigation or disagreement between the parties regarding
the subject of this indemnification, the prevailing party shall, in addition to
any other relief, be paid its reasonable attorneys' fees and costs as determined
by the court or trier of fact hearing said dispute. The parties agree that any
litigation arising out of this indemnification shall only be brought and heard
and shall only be venued in a federal or state court in Reno, Nevada.
THE NAVELLIER SERIES FUND
Dated as of May ___, 1993
By: /s/ Louis G. Navellier
------------------------------
Louis Navellier, Trustee
By: /s/ John Drinkwater
------------------------------
John Drinkwater, Trustee
By: /s/ Lawrence G. Bianchi
------------------------------
Lawrence Bianchi, Trustee
By: /s/ Kenneth Sletten
------------------------------
Kenneth Sletten, Trustee
ACCEPTED AND AGREED
By: /s/ Donald I. Simon
-----------------------
Donald Simon, Trustee
132
<PAGE>
TRUSTEE INDEMNIFICATION AGREEMENT
---------------------------------
In consideration of Lawrence Bianchi ("Trustee"), acting as a trustee of The
Navellier Series Fund (the "Fund"), pursuant to a Declaration of Trust dated May
6, 1993, the Fund and Trustee agree as follows: Trustee will use his best
efforts in performing his Trustee obligations, but in the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard of his
obligations, Trustee shall not be liable to the Fund, or any of the Fund's
investors, for any error of judgment or mistake of law or fact, for any act or
omission by Trustee or for any losses sustained by the Fund, or the Fund's
investors. The Fund agrees to indemnify and hold harmless Trustee against any
claim by any of the Fund's investors for any error of judgment or mistake of law
or fact, for any act or omission by Trustee, or for any losses sustained by the
Trustee or the Fund's investors except to the extent that the Trustee has
engaged in willful misfeasance, bad faith, gross negligence, or reckless
disregard of his obligations. Anything contained in this Agreement
notwithstanding, Trustee shall not be relieved of any liability or be
indemnified for any loss for which Trustee would not be permitted to be
indemnified under the Federal Securities Laws.
This Agreement may be amended from time to time by written agreement signed
by all of the parties; provided, that such amendment shall be approved both by
the vote of a majority of Trustees of the Fund, including a majority of Trustees
who are not interested persons of the Trustee to this Agreement (other than as
Trustees of the Fund) cast in person at a meeting called for that purpose, and
by the holders of a majority (as defined in the Act) of the outstanding voting
securities of the Fund to which this Agreement is applicable.
133
<PAGE>
This Agreement may be amended by agreement of the parties without the vote or
consent of the shareholders of the Fund to supply any omission, to cure,
correct, or supplement any ambiguous, defective, or inconsistent provision
hereof, or if they deem it necessary to conform this Agreement to the
requirements of applicable federal and/or state laws or regulations, but neither
the Fund nor the Trustee shall be liable for failing to do so.
In the event of any litigation or disagreement between the parties regarding
the subject of this indemnification, the prevailing party shall, in addition to
any other relief, be paid its reasonable attorneys' fees and costs as determined
by the court or trier of fact hearing said dispute. The parties agree that any
litigation arising out of this indemnification shall only be brought and heard
and shall only be venued in a federal or state court in Reno, Nevada.
THE NAVELLIER SERIES FUND
Dated as of May ___, 1993
By: /s/ Louis G. Navellier
-----------------------------
Louis Navellier, Trustee
By: /s/ John Drinkwater
-----------------------------
John Drinkwater, Trustee
By: /s/ Kenneth Sletten
-----------------------------
Kenneth Sletten, Trustee
By: /s/ Donald I. Simon
-----------------------------
Donald Simon, Trustee
ACCEPTED AND AGREED
By: /s/ Lawrence G. Bianchi
-------------------------
Lawrence Bianchi, Trustee
134
<PAGE>
TRUSTEE INDEMNIFICATION AGREEMENT
---------------------------------
In consideration of Kenneth Sletten ("Trustee"), acting as a trustee of The
Navellier Series Fund (the "Fund"), pursuant to a Declaration of Trust dated May
6, 1993, the Fund and Trustee agree as follows: Trustee will use his best
efforts in performing his Trustee obligations, but in the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard of his
obligations, Trustee shall not be liable to the Fund, or any of the Fund's
investors, for any error of judgment or mistake of law or fact, for any act or
omission by Trustee or for any losses sustained by the Fund, or the Fund's
investors. The Fund agrees to indemnify and hold harmless Trustee against any
claim by any of the Fund's investors for any error of judgment or mistake of law
or fact, for any act or omission by Trustee, or for any losses sustained by the
Trustee or the Fund's investors except to the extent that the Trustee has
engaged in willful misfeasance, bad faith, gross negligence, or reckless
disregard of his obligations. Anything contained in this Agreement
notwithstanding, Trustee shall not be relieved of any liability or be
indemnified for any loss for which Trustee would not be permitted to be
indemnified under the Federal Securities Laws.
This Agreement may be amended from time to time by written agreement signed
by all of the parties; provided, that such amendment shall be approved both by
the vote of a majority of Trustees of the Fund, including a majority of Trustees
who are not interested persons of the Trustee to this Agreement (other than as
Trustees of the Fund) cast in person at a meeting called for that purpose, and
by the holders of a majority (as defined in the Act) of the outstanding voting
securities of the Fund to which this Agreement is applicable.
135
<PAGE>
This Agreement may be amended by agreement of the parties without the vote or
consent of the shareholders of the Fund to supply any omission, to cure,
correct, or supplement any ambiguous, defective, or inconsistent provision
hereof, or if they deem it necessary to conform this Agreement to the
requirements of applicable federal and/or state laws or regulations, but neither
the Fund nor the Trustee shall be liable for failing to do so.
In the event of any litigation or disagreement between the parties regarding
the subject of this indemnification, the prevailing party shall, in addition to
any other relief, be paid its reasonable attorneys' fees and costs as determined
by the court or trier of fact hearing said dispute. The parties agree that any
litigation arising out of this indemnification shall only be brought and heard
and shall only be venued in a federal or state court in Reno, Nevada.
THE NAVELLIER SERIES FUND
Dated as of May ___, 1993
By: /s/ Louis G. Navellier
------------------------------
Louis Navellier, Trustee
By: /s/ John Drinkwater
------------------------------
John Drinkwater, Trustee
By: /s/ Lawrence G. Bianchi
------------------------------
Lawrence Bianchi, Trustee
By: /s/ Donald I. Simon
------------------------------
Donald Simon, Trustee
ACCEPTED AND AGREED
By: /s/ Kenneth Sletten
-------------------------
Kenneth Sletten, Trustee
136
<PAGE>
EXHIBIT 10
April 24, 1996
The Navellier Series Fund
920 Incline Way, Bldg. #1
Incline Village, NV 89450
Gentlemen:
I have acted as counsel to The Navellier Series Fund (the "Fund") in
connection with the preparation of a Registration Statement on Form N-1A for
filing with the Securities and Exchange Commission, covering shares of common
stock at no par value, of the Fund.
I have prepared and examined the Declaration of Trust and By-Laws of the
Fund, the Registration Statement, and such other corporate records and documents
as I have deemed necessary for the purpose of this opinion. I also have
examined such other documents, papers, statutes, and authorities as I deemed
necessary to form a basis for the opinion hereinafter expressed. In my
examination of such material, I have assumed the genuineness of all signatures
and the conformity to original documents of all copies submitted to me. As to
various questions of fact material to such opinion, I have relied upon
statements and certificates of officers and representatives of the Fund and
others.
I am admitted only to the bar of the State of California and Ohio. As to
various questions arising under the laws of the State of Delaware, I have relied
on statutes and various other registered Delaware business trust documents.
Based upon the foregoing, I am of the opinion that the shares of common
stock, no par value, of the Fund to be issued in accordance with the terms of
the offering as set forth in the Prospectus included as part of the Registration
Statement, have been duly and validly authorized for issuance by the Board of
Trustees of the Fund and, when issued and sold as described in the Registration
Statement, will be legally issued, fully paid, and non-assessable.
137
<PAGE>
The Navellier Series Fund
May 15, 1993
Page 2
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement 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
SK/jh
LAW OFFICES OOF SAMUEL KORNHAUSER One Maritime Plaza, Suite 2200,
San Francisco, CA 94111 (415) 981-6281
138
<PAGE>
EXHIBIT 11
CONSENT OF INDEPENDENT AUDITORS
The Navellier Series Fund:
We consent to the incorporation by reference in this Post-Effective Amendment
No. 6 to Registration Statement No. 33-64010 of our report dated February 16,
1996 appearing in the Annual Report of the Navellier Series Fund Aggressive
Small Cap Equity Portfolio for the year ended December 31, 1995, and to the
reference to us under the caption "Financial Highlights" appearing in the
Prospectus, which is also a part of such Registration Statement.
Deloitte & Touche LLP
Washington, D.C.
April 29, 1996
<PAGE>
EXHIBIT 13
SUBSCRIPTION FOR SHARES
-----------------------
May 15, 1993
The Board of Trustees
of The Navellier Series Fund
Gentlemen:
The undersigned hereby offers to purchase an aggregate of 30,000 shares of
common stock (no par value per share) of The Navellier Series Fund (the "Fund")
for the consideration set forth below. This subscription and purchase is made
for investment purposes without any present intention of redeeming or selling
the shares subscribed for and purchased.
<TABLE>
<CAPTION>
Number of Purchase
Shares Price
--------- --------
<S> <C> <C>
Navellier Aggressive Small Cap
Equity Portfolio 30,000 $300,000
</TABLE>
Very truly yours,
/s/ Louis G. Navellier
-------------------------
Louis Navellier
139
<PAGE>
EXHIBIT 13.1
Navellier Management, Inc.
920 Incline Way
Incline Village, NV 89450
As of April 26, 1996
The Navellier Series Fund
920 Incline Way
Incline Village, NV 89450
Re: Investment Adviser Operating Expenses Reimbursement
Gentlemen:
Since the inception of operations of The Navellier Series Fund (the "Fund"),
Navellier Management, Inc. (the "Adviser"), has paid a portion of the operating
expenses of the Fund without requiring reimbursement from the Fund. The Adviser
has waived reimbursement for the unreimbursed expenses paid by Adviser during
fiscal 1994 and 1995. The purpose of this letter is to obtain an acknowledgment
from the Fund that (i) the Adviser has been under no obligation to pay such
operating expenses, and (ii) the Adviser is under no obligation to continue to
pay the Fund's operating expenses now or in the future.
Notwithstanding the foregoing, the Adviser may continue to pay a portion of
the Fund's operating expenses without requiring current reimbursement from the
Fund. The Adviser reserves the right to require reimbursement in the future for
operating expenses advanced to the Fund, not previously waived, at any time upon
notice to the Fund that all non-waived and presently accrued operating expenses
advanced by Adviser to the Fund shall be required to be reimbursed to the
Adviser, or paid directly by the Fund. All such unreimbursed operating expenses
paid by Adviser shall be treated as currently accrued by the Fund unless Adviser
waives its right to reimbursement.
140
<PAGE>
If the foregoing accurately reflects the Fund's understanding regarding the
matters discussed herein, please sign and return the enclosed copy of this
letter.
Very truly yours,
NAVELLIER MANAGEMENT, INC.
By: /s/ Louis G. Navellier
-----------------------------
Louis Navellier, President
ACKNOWLEDGED AND AGREED as to
the _____ day of April, 1996
THE NAVELLIER SERIES FUND
By:
------------------------------
Donald Simon, Trustee
By:
------------------------------
Lawrence Bianchi, Trustee
By:
------------------------------
Kenneth Sletten, Trustee
141
<PAGE>
EXHIBIT 16
THE NAVELLIER SERIES FUND
SCHEDULE FOR COMPUTATION OF
TOTAL RETURN FIGURES INCLUDED IN THE
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
The following reflects the calculation of the Navellier Aggressive
Small Cap Equity Portfolio average annual total return ("T") for the one year
ended December 31, 1994, which has been included in the Statement of Additional
Information. In the following equations, "ERV" represents the Redeemable Value
at the end of each time period, "n" represents the period of time and "P"
represents the amount of the initial investment, i.e. $1,000. The calculation
----
assumes reinvesmtent of all dividends and distributions. The formula for
calculating average annual total return is:
T= n(square root of ERV-1)
---
P
Period January 3, 1994 through December 31, 1994
- ------------------------------------------------
n = 1
ERV = 10.98
P = $1,000
T = 1(square root of [10.98]-1)
-----
1,000
T = 9.8%
142
