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File No. 33-67852
811-7978
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ___
Post-Effective Amendment No. 9
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 11
NORTHSTAR ADVANTAGE TRUST
(Exact name of Registrant as specified in charter)
TWO PICKWICK PLAZA, GREENWICH, CT 06830
(Adress of Principal Executive Offices)
(203) 863-6200
(Registrant's telephone number)
MARK L. LIPSON
C/O NORTHSTAR INVESTMENT MANAGEMENT CORPORATION
TWO PICKWICK PLAZA, GREENWICH, CONNECTICUT 06830
(Name and address of agent for service)
Copies of all correspondence to:
MICHAEL A. ROSENBERG
NORTHSTAR INVESTMENT MANAGEMENT CORP.
TWO PICKWICK PLAZA
GREENWICH, CT 06830
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE:
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__ immediately upon filing pursuant to paragraph (b) __ on (date) pursuant to paragraph (b)
__ 60 days after filing pursuant to paragraph (a)(1) __ on (date) pursuant to paragraph (a)(1)
X 75 days after filing pursuant to paragraph (a)(2) __ on (date) pursuant to paragraph (a)(2) of Rule
485.
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If appropriate, check the following box:
__ This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
Registrant has registered an indefinite number of shares of beneficial
interest by its initial Registration Statement pursuant to Rule 24f-2 under the
Investment Company Act of 1940, as amended, which became effective
November 5, 1993. Registrant filed the notice required by Rule 24f-2 with
respect to its most recent fiscal year on December 8, 1995.
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CROSS REFERENCE SHEET
The enclosed materials relate only to the Northstar Growth + Value Fund which is
a separate investment series of the Northstar Trust (the "Trust"). Information
relating to the Trust's other investment series is contained in previously filed
Post-Effective Amendments.
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FORM N-1A PART A ITEM PROSPECTUS CAPTION
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1. Cover Page.............................. Cover Page
2. Synopsis.................................. Expense Information
3. Condensed Financial
Information.............................. Financial Highlights
4. General Description of
Registrant................................ Cover Page; Investment Objectives and
Policies of the Funds; Other Investment
Techniques; Risk Factors; General
Information
5. Management of the Fund................... Management of the Funds
6. Capital Stock and Other
Securities............................... How Net Asset Value is
Determined; How to Purchase Shares;
Alternative Sales Arrangements;
Investor Services and Account Policies;
Dividends, Distribution and Taxes;
General Information
7. Purchases of Securities Being
Offered................................... How Net Asset Value is Determined.
How to Purchase Shares; Alternative
Sales Arrangments; Investor Services and
Account Policies; Distribution Plans.
8. Redemption or Repurchase.................. How Net Asset Value is Determined; How
to Sell Shares
9. Legal Proceedings......................... Not Applicable
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CROSS REFERENCE SHEET
FORM N-1A PART B ITEM STATEMENT OF ADDITIONAL INFORMATION
CAPTION
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information & History Cover Page; Other Information
13. Investment Objectives & Policies Cover Page; Investment Restrictions;
Other Investment Techniques
14. Management of the Fund Trustees and Officers
15. Control Persons and Principal N/A
Holders of Securities
16. Investment Advisory and Services of the Adviser and Administrator;
Other Services Other Information
17. Brokerage Allocation and Portfolio Transactions and Brokerage
Other Practices Allocation
18. Capital Stock and Other Securities Purchases and Redemptions
19. Purchases, Redemptions and Net Asset Value; Purchases and
Pricing Redemptions.
20. Tax Status Dividends, Distributions and Taxes
21. Underwriter Underwriter and Distribution Services
22. Calculation of Performance Data Performance Information
23. Financial Statements Financial Statements
PART C
The information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C of the Registration Statement.
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[LOGO]
TWO PICKWICK PLAZA (203) 863-6200
GREENWICH, CONNECTICUT, 06830 (800) 595-7827
PROSPECTUS November __, 1996
Northstar Growth + Value Fund (the "Fund") is a separate diversified
portfolio of Northstar Trust, an open-end, management investment company (the
"Trust") , known as a mutual fund. The Fund's investment objective is capital
appreciation. It will seek to achieve this objective by primarily investing in
publicly traded equity securities of domestic and foreign issuers. The Fund will
allocate its assets among companies characterized as either "value" or "growth"
companies according to criteria established by the Fund's investment advisers.
Northstar Investment Management Corporation ("Northstar" or the
"Adviser") is the investment adviser for the Fund, Northstar Distributors, Inc.
("Underwriter") is the underwriter of the Fund's shares, and Northstar
Administrators Corporation ( the "Administrator") serves as administrator to the
Fund. The Underwriter and the Administrator are each affiliates of the Adviser.
Navellier Fund Management, Inc. serves as subadviser for the Fund.
This Prospectus sets forth concisely the information about the Fund
that prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
November __, 1996, has been filed with the Securities and Exchange Commission
and is incorporated herein by reference. The Statement of Additional Information
is available without charge upon request to Northstar at the address or
telephone number given above.
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.
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EXPENSE INFORMATION
The tables and examples below are designed to assist you in understanding the
various costs and expenses that you will bear directly or indirectly as an
investor in the Fund. Shareholder Transaction Expenses are fees charged directly
to your individual account when you buy, sell or exchange shares. Annual
Operating Expenses are paid out of Fund assets and include fees for portfolio
management, maintenance of shareholder accounts, shareholder servicing,
accounting, legal and other services. The rules of the Securities and Exchange
Commission require that maximum sales charges be reflected in the table;
however, certain investors may qualify for reduced or no sales charges. See "How
to Purchase Shares."
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CLASS A CLASS B CLASS C
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SHAREHOLDER TRANSACTION EXPENSES
Maximum Front-End Sales Load Imposed on Purchase
of Shares (as % of Offering Price).......................................... 4.75% None None
Maximum Contingent Deferred Sales Load on Sale
of Shares (as a % of the lesser of original
price or redemption proceeds)............................................... None(1) 5.00%(2) 1.00%
ANNUAL FUND OPERATING EXPENSES
(AS A % OF AVERAGE NET ASSETS)
Management Fee............................................................... 1.00% 1.00% 1.00%
12b-1 Fee.................................................................... 30% 1.00%(3) 1.00%(3)
Other Expenses............................................................... .55% .55% .55%
Total Fund Operating Expenses............................................... 1.85% 2.55% 2.55%
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(1) Purchases of $1 million or more are not subject to an initial sales charge;
however, a CDSC of up to 1% will be imposed on such purchases in the event of
certain redemption transactions within 18 months following the date of purchase.
(2) The Class B CDSC on redemptions decreases 1% annually after year one to 2%
in years four and five and to 0% after year five.
(3) Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charge permitted by the National Association of
Securities Dealers, Inc. ("NASD") rules regarding investment companies.
.
EXAMPLES: An investor in the Fund would pay the following expenses on a $1,000
investment assuming a 5% annual return throughout the period, and, unless
otherwise noted, redemption at the end of each period.
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CLASS A CLASS B CLASS B(1) CLASS C CLASS C(1)
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1 Year 65 76 26 36 25
3 Years 103 109 79 79 79
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(1) Assumes no redemption
The amounts listed in the Example should not be considered a representation of
past or future expenses and actual expenses may be greater or lesser than those
shown.
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INVESTMENT OBJECTIVE AND POLICIES OF THE FUND
The Fund's investment objective is capital appreciation. It cannot be changed
without approval by the holders of a majority (as defined in the Investment
Company Act of 1940, as amended (the "1940 Act")) of the Fund's outstanding
voting shares. There can be no assurance that the Fund's investment objective
will be achieved.
The Fund invests in a diversified portfolio of equity securities. The equity
securities in which the Fund may invest include common stocks, preferred stocks,
convertible securities, warrants and other stock purchase rights, private
placements and other restricted equity securities, equity interests in trusts,
limited partnerships and joint ventures and interests in real estate investment
trusts. The Fund may invest up to 20% of its assets in the securities of foreign
issuers in the form of American Depository Receipts.
In managing the Fund, the investment advisers will employ quantitative
analysis to identify "growth" companies and "value" companies. The percentage of
Fund assets allocated to "growth" and "value" companies will vary depending on
the advisers assessment of economic conditions and investment opportunities. In
general, the companies with greater price and return momentum, above average
earnings or sales growth, and higher price to earnings ratios are considered
growth companies by the advisers. On the other hand, companies with lower book
value to price ratios, higher earnings or dividend yields and higher returns on
equity are considered value companies.
In periods of unusual market conditions, for temporary and defensive
purposes, when the Adviser considers it appropriate, the Fund may maintain part
or all of its assets in cash, or may invest part or all of its assets in U.S.
government securities, commercial paper, bankers' acceptances, repurchase
agreements and certificates of deposit.
INVESTMENT CONSIDERATIONS AND RISK FACTORS
General - The Fund's net asset value per share is expected to fluctuate.
Investors should consider the Fund as a supplement to an overall investment
program and should invest only if they are willing to undertake the risks
involved.
Equity Securities - Equity securities can over time rise and fall in value,
often based on factors unrelated to the value of the issuer of the securities,
and such fluctuations can be pronounced. Changes in the value of the Fund's
investments will result in changes in the value of the Fund's shares and thus
its total return to investors.
Investment Techniques - Unless otherwise stated, each of the following
strategies and techniques may be utilized by the Fund. The Fund may, but does
not currently intend to, engage in certain additional investment techniques not
described in this Prospectus. These techniques and additional information on the
securities and techniques described in the Prospectus are contained in the
Statement of Additional Information.
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OPTIONS AND FUTURES TRANSACTIONS. The Fund may enter into futures contracts
on securities, financial indices and foreign currencies and options on such
contracts and may invest in options on securities, financial indices and foreign
currencies, and forward contracts (collectively "derivative instruments"). The
Funds intend to use derivative instruments primarily to hedge the value of their
portfolios against potential adverse movements in securities price, foreign
currency markets or interest rates. To a limited extent, the Fund may also use
derivative instruments for non-hedging purposes such as increasing the Fund's
income or otherwise enhancing return. When the Fund invests in a derivative
instrument, it may be required to segregate cash and other high-grade liquid
assets or portfolio securities to "cover" the Fund's position. Assets segregated
or set aside may limit the Fund's portfolio management activities while the Fund
maintains the positions, which could diminish the Fund's return due to foregoing
other potential investments with such assets.
The use of options and futures strategies involves certain other risks,
including the risk that no liquid market will exist and that the Fund will be
unable to effect closing transactions at any particular time or at an acceptable
price, and the risk of imperfect correlation between movements in options and
futures prices and movements in the price of securities which are the subject of
the hedge. The successful use of options and futures strategies depends on the
ability of the Adviser to forecast correctly rate movements and general stock
market price movements. Expenses and losses incurred as a result of these
hedging strategies will reduce the current return of the Fund. See the Statement
of Additional Information for further information on derivative instruments.
REPURCHASE AGREEMENTS. The Fund may invest in repurchase agreements, either for
temporary defensive purposes or to generate income from its cash balances. Under
a repurchase agreement, the Fund buys a security from a bank or dealer, which is
obligated to buy it back at a fixed price and time. The security is held in a
separate account at the Fund's custodian and constitutes the Fund's collateral
for the bank's or dealer's repurchase obligation. Additional collateral may be
added so that the obligation will at all times be fully collateralized. However,
if the bank or dealer defaults or enters into bankruptcy, the Fund may
experience costs and delays in liquidating the collateral, and may experience a
loss if it is unable to demonstrate its right to the collateral in a bankruptcy
proceeding. Repurchase agreements maturing more than seven days in the future
are considered illiquid, and the Fund will invest no more than 5% of its net
assets in such repurchase agreements at any time. The Fund, under normal market
conditions, does not intend to invest more than 15% of its assets in repurchase
agreements.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
illiquid securities, including restricted securities or private placements. An
illiquid security is a security that cannot be sold quickly in the normal course
of business. Some securities cannot be sold to the U.S. public because of their
terms or because of SEC regulations. The Adviser may determine that securities
that cannot be sold to the U.S. public, but that can be sold to institutional
investors ("Rule 144A" securities) or on foreign markets, are liquid, following
guidelines established by the Trustees of the Fund.
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TRADING AND PORTFOLIO TURNOVER. The Fund generally intends to purchase
securities for long-term investment. However, the Fund may purchase a security
in anticipation of relatively short-term price gains and short-term transactions
may result from liquidity needs, securities having reached a price or yield
objective, changes in interest rates or the credit standing of an issuer, or by
reason of economic or other developments not foreseen at the time of the initial
investment decision. Portfolio turnover rates are usually not a factor in making
buy and sell decisions. The Fund may also sell one security and simultaneously
purchase the same or comparable security to take advantage of short-term
differentials in yield or price. Increased portfolio turnover may result in
higher costs for brokerage commissions, dealer mark-ups and other transaction
costs and may also result in taxable capital gains. Short term trading may also
be restricted by certain tax rules. The Fund does not anticipate that its
portfolio turnover rate will exceed 200%.
INVESTMENT RESTRICTIONS. For information on certain fundamental and
non-fundamental investment restrictions applicable to the Fund, see "Investment
Restrictions" in the Statement of Additional Information.
HOW NET ASSET VALUE IS DETERMINED
All purchases, redemptions and exchanges are processed at the net asset value
("NAV") per share next calculated after your request is received and approved.
In order to receive a day's price, your order must be received by 4:00 p.m. EST.
NAV fluctuates and is determined separately for each class as of the close of
regular trading on the New York Stock Exchange (normally 4:00 p.m. EST) each day
the Exchange is open. NAV is computed by dividing the total value of the fund's
securities and other assets, less all liabilities, by the total number of shares
outstanding. The specific expenses borne by each class of shares will be
deducted from that class and will result in different NAVs and dividend
payments. The NAV of a Class B, or Class C share will generally be lower than
that of a Class A share because of the higher distribution fees or certain other
class specific expenses borne by these classes. Under normal market conditions,
daily prices for securities are obtained from independent pricing services
determined by them in accordance with the Registration Statement for the Fund.
Securities are valued at market value or, if a market quotation is not readily
available, at their fair value determined in good faith under procedures
established by and under the supervision of the Trustees. Money market
instruments maturing within 60 days are valued at amortized cost, which
approximates market value. See the Statement of Additional Information.
MANAGEMENT OF THE FUND
THE TRUSTEES. The Trustees of the Fund ("Trustees") oversee the operations of
the Fun The Trustees meet quarterly to review the Funds' investment policies,
performance, expenses and other business affairs and elect the officers of the
Fund annually. The Trustees delegate day to day management of the Fund to the
officers of the respective Funds.
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THE ADVISER AND AFFILIATED SERVICE PROVIDERS. Pursuant to an Investment
Advisory Agreement with the Fund, Northstar Investment Management Corporation
acts as the investment adviser to the Fund. In this capacity, the Adviser,
subject to the authority of the Trustees, is responsible for furnishing
continuous investment supervision to the Fund and is responsible for the
management of the Fund's portfolio. Northstar Administrators Corporation, an
affiliate of the Adviser, furnishes certain administrative, compliance and
accounting services to the Fund. Employees of the Adviser and Administrator
serve as officers of the Fund, and the Adviser provides office space for the
Fund and pays the salaries of all Fund officers and Trustees who are affiliated
with the Adviser. Northstar Distributors, Inc., also an affiliate of the
Adviser, serves as principal underwriter of the shares of the Fund, conducting a
continuous offering pursuant to a "best efforts" arrangement requiring it to
take and pay for only such securities as may be sold to the public through
investment dealers.
The Adviser and its affiliates are indirect, majority owned subsidiaries of
ReliaStar Financial Corp. ("ReliaStar"). ReliaStar's address is 20 Washington
Avenue South, Minneapolis, MN 55401. Combined minority interests of the Adviser
held by members of senior management currently equal 20%. ReliaStar is a
publicly traded holding company whose subsidiaries specialize in the life and
health insurance businesses. Through Northwestern National Life Insurance
Company and other subsidiaries, ReliaStar issues and distributes individual life
insurance, annuities and mutual funds, group life and health insurance and life
and health reinsurance, and provides related investment management services.
The Adviser's fee is accrued daily against the value of the Fund's net assets
and is payable by the Fund monthly at an annual rate of 1.00% of the Fund's
average daily net assets (which may be subject to voluntary waiver or
reimbursement by the Adviser). The Administrator's fee is accrued daily against
the value of each Fund's net assets and is payable monthly at an annual rate of
.10% of the Fund's average daily net assets. The Administrator also charges an
annual account service fee of $5.00 for each account of beneficial holders of
shares in the Fund for providing certain shareholder services and assisting
broker-dealers in servicing Fund accounts.
Generally, the Subadviser places orders for the purchase and sale of portfolio
securities. In selecting brokers, the Subadviser (and when applicable, the
Adviser) may consider research and brokerage services furnished to it. The
Adviser and Subadviser also advise other accounts that may purchase and hold
securities in which the Fund may invest and certain persons affiliated with the
Adviser or Subadviser may purchase and hold, directly or indirectly, securities
in which the Fund or other accounts invest, subject to internal guidelines
regarding conflicts of interest. In allocating trades among accounts for which
the Adviser or Subadviser recommend the purchase or sale of the same security,
the Adviser and Subadviser follow procedures designed to ensure that such trades
are executed on a basis that is fair and equitable to each account.
Navellier Fund Management, Inc. ("Navellier"), a registered investment adviser,
serves as subadviser to the Fund pursuant to a Subadvisory Agreement dated July
31, 1996, between the
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Adviser and Navellier. Navellier is a newly-formed company which is wholly-owned
by Louis G. Navellier. The principal address of Navellier is One East Liberty,
Third Floor, Reno, Nevada 89501. Mr. Navellier, who has managed investments
since 1986, is also the sole shareholder of two other registered investment
advisory firms which, on a combined basis, manage approximately $1.5 billion of
assets for individuals, institutions and a Navellier-sponsored open-end
management investment company, the Navellier Series Fund. Louis G. Navellier
will serve as portfolio manager for the Fund, with primary responsibility for
the day-to-day investment management. For its services, Navellier will receive a
fee equal to 0.62% of the average daily net assets of the Fund. The Adviser is
responsible for overseeing the investment management provided by Navellier, and
assumes all costs and expenses of the subadvisory arrangement.
OTHER SERVICE PROVIDERS. The custodian and fund accounting agent for the Funds
is State Street Bank and Trust Company, located at 225 Franklin Street, Boston,
Massachusetts 02110. The transfer agent and blue sky administrator for the Fund
is First Data Investor Services Group ("First Data" or the "Transfer Agent"),
located at 4400 Computer Drive, Westborough, Massachusetts 01581-5120.
HOW TO PURCHASE SHARES
The Fund continuously offers three classes of shares. Each class is described
below under "Alternative Purchase Arrangements." Shares of the Fund may be
purchased from the Fund or from investment dealers having a sales agreement with
the Underwriter. Orders received in good form prior to 4:00 p.m. Eastern time or
placed with a financial service firm before such time and transmitted before the
Fund processes that day's share transactions, will be processed at that day's
closing NAV, plus any applicable sales charge. The minimum initial purchase is
$2,500, except IRA accounts, for which the minimum is $250; additional
investments for as little as $100 ($25 for IRA accounts) may be made at any time
through an investment dealer or by sending a check payable to The Northstar
Funds, c/o First Data Investor Services, P.O. Box 5131, Westborough,
Massachusetts 01581, for the purchase of full and fractional shares. Most
shareholders choose not to hold their shares in certificate form because account
transactions such as exchanges and redemptions cannot be completed until the
certificate has been returned to the Funds and certificate holders may not
participate in certain shareholder services, such as telephone exchanges and
redemptions and the withdrawal program. Certificates will be issued only upon
written request. Shareholders requesting certificates may incur a fee for lost
or stolen certificates and no certificates are issued for fractional shares
(which shares remain in the shareholder's account in book entry form). The Fund
or the Underwriter may refuse any purchase order for shares.
At various times, the Underwriter implements programs under which (a) a
dealer's sales force may be eligible to win cash or material awards for certain
sales efforts or under which (b) the Underwriter will reallow an amount not
exceeding the total applicable sales charges on the sales generated by the
dealer during such programs to any dealer that (i) sponsors sales contests or
recognition programs conforming to criteria established by the Underwriter or
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(ii) participates in sales programs sponsored by the Underwriter. Pursuant to a
Purchase Agreement that was entered into in connection with the assumption of
management of the Fund by the Adviser, the Underwriter has agreed to provide
Advest, Inc. ("Advest") with certain additional compensation until June 2, 1998.
Any additional compensation is payable annually and is based upon (i) the level
of sales by Advest of shares of the Fund during each year and (ii) the rate of
redemption of certain shares during such year. Such compensation, which is paid
out of the assets of the Adviser and not the Fund, is in addition to the
compensation otherwise payable to a dealer in connection with sale of the Fund's
shares. Sales personnel of broker-dealers distributing shares of the Fund may
receive differing compensation for selling different classes of shares.
ALTERNATIVE SALES ARRANGEMENTS
The alternative purchase arrangements permit an investor to choose among three
methods (each a class) of purchasing shares. Each class is described below.Which
class is more beneficial to an investor depends on the amount and intended
length of the investment. Large investments qualifying for a reduced Class A
sales charge avoid the higher distribution fee. Investments in Class B and Class
C shares have 100% of the purchase invested immediately. Purchases of $250,000
or more must be for Class A shares. Please consult your financial service firm.
All contingent deferred sales charges are deducted from the redemption proceeds,
not the amount remaining in the account. No contingent deferred sales charge is
imposed on shares acquired through reinvestment of dividends and distributions,
or on amounts representing appreciation. In determining whether a contingent
deferred sales charge is applicable to a redemption, the calculation will be
determined in the manner that results in the lowest possible rate being charged.
Accordingly, in determining whether a contingent deferred sales charge will be
payable and, if so, the percentage charge applicable, shares acquired through
reinvestment and then shares held the longest will be considered the first to be
redeemed. Class B shares automatically convert to Class A shares after eight
years from purchase. The purpose of the conversion is to relieve the holders
from the burden of higher distribution fees once the Underwriter had been
reimbursed for most of its distribution related expenses. For purposes of
conversion to Class A shares, shares purchased through the reinvestment of
dividends and distributions paid in respect of Class B shares in a shareholder's
Fund account will be considered to be held in a separate subaccount. Each time
any Class B shares in the shareholder's Fund account (other than those in the
subaccount) convert to Class A, an equal pro rata portion of the Class B shares
in the subaccount will also convert to Class A.
As set forth below, the initial or contingent deferred sales charges may be
reduced or eliminated for certain persons or organizations purchasing Fund
shares alone or in combination with other Northstar Funds. See the Statement of
Additional Information for more details regarding waivers and purchases at net
asset value.
Investors choosing the initial sales charge alternative may under certain
circumstances be entitled to pay reduced sales charges. The sales charge varies
with the size of the purchase and reduced charges apply to the aggregate of
purchases of the Fund made at one time by any
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"Purchaser," which term includes (i) an individual and his/her spouse and their
children under the age of 21, (ii) a trustee or fiduciary purchasing for a
single trust, estate or single fiduciary account (including pension,
profit-sharing or other employee benefit trusts created pursuant to a plan
qualified under Section 401 of the Internal Revenue Code, a Simplified Employee
Pension ("SEP"), Salary Reduction and other Elective Simplified Employee Pension
Accounts ("SARSEP")) and 403(b) and 457 plans, although more than one
beneficiary or participant is involved; and (iii) any other organized group of
persons, whether incorporated or not, provided the organization has been in
existence for at least six months and has some purpose other than the purchase
at a discount of redeemable securities of a registered investment company. The
circumstances under which "Purchasers" may pay reduced sales charges are
described below.
RIGHTS OF ACCUMULATION. A Purchaser may qualify for reduced initial sales
charges based upon the Purchaser's existing investment in shares of the Fund at
the time of purchase. The applicable sales charge is determined by aggregating
the dollar amount of the new purchase and the greater of the Purchaser's total
(i) net asset value or (ii) cost of all shares owned in the Fund sold subject to
a front-end sales charge and/or designated as "Class A" shares then held by such
Purchaser, and applying the sales charge applicable to such aggregate.
In order to obtain this discount, the Underwriter (if a purchase is made
through an investment dealer) or Transfer Agent (if made by mail) must be
provided with sufficient information, including the Purchaser's total cost at
the time of purchase, to permit verification that the Purchaser qualifies for a
cumulative quantity discount, and confirmation of the order is subject to such
verification. The privilege of cumulative quantity discounts may be modified or
discontinued at any time.
LETTER OF INTENT. Purchasers may also qualify for reduced sales charges by
signing a Letter of Intent ("LOI"). This enables the Purchaser to aggregate
purchases over a 13-month period of all Funds sold subject to a front-end sales
charge and/or designated as "Class A" shares. The sales charge is based on the
total amount invested during the 13-month period. A 90-day back-dated period can
be sed to include earlier purchases (with a partial retroactive downward
adjustment in an amount equal to the commission paid to the broker-dealer); the
13-month period would then begin on the date of the first purchase during the
90-day period. No retroactive adjustment will be made if purchases exceed the
amount indicted in the LOI. A shareholder must notify the Transfer Agent
whenever a purchase is being made pursuant to a LOI.
The LOI is not a binding obligation on the investor to purchase the full
amount indicated; however, on the initial purchase, if required (or on
subsequent purchases if necessary), 5% of the dollar amount specified in the
Statement will be held in escrow by the Transfer Agent in shares registered in
the shareholder's name in order to assure payment of the proper sales charge. If
total purchases pursuant to the LOI (less any dispositions and exclusive of any
distributions on such shares automatically reinvested) are less than the amount
specified, the investor will be requested to remit to the Underwriter an amount
equal to the difference between the sales charge paid and the sales charge
applicable to the aggregate purchases actually made. If not
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remitted within 20 days after written request, an appropriate number of escrowed
shares will be redeemed in order to realize the difference.
CDSC WAIVERS. The contingent deferred sales charge is waived on redemptions of
Class B and Class C shares (a) following the death or disability, as defined in
Section 72(m)(7) of the Internal Revenue Code, of a shareholder if redemption is
made within one year of the death or disability of the shareholder, as relevant;
(b) in connection with redemptions of shares made pursuant to a shareholder's
participation in any systematic withdrawal plan adopted by the Funds provided,
however, that such withdrawals shall not exceed in any calendar year 9% of the
original principal amount invested (any excess being assessed the applicable
deferred sales charge, if any), and provided further that the redeeming
shareholder reinvests all dividends and capital gain distributions during
his/her participation in the withdrawal plan (see "Systematic Withdrawal
Program"); (c) in connection with a partial or complete redemption in connection
with distributions under Individual Retirement Accounts ("IRAs") or other
qualified retirement plans in connection with a lump-sum or other form of
distribution following retirement, or after attaining the age of 59 1/2 in the
case of an IRA, Keogh plan or custodial account pursuant to Section 403(b)(7) of
the Internal Revenue Code, or on any redemption resulting from the tax-free
return of an excess contribution pursuant to Section 408(d)(4) or (5) of the
Code; and (d) in connection with the exercise of certain exchange privileges
among Class B or Class C shares of the Funds, including shares of the Class B or
Class C Account of the Money Market Portfolio.
CLASS A SHARES. Class A shares are offered at net asset value plus an initial
or a contingent deferred sales charge as set forth below. Class A shares bear a
0.25% annual service fee and a .05% annual distribution fee.
<TABLE>
<CAPTION>
AMOUNT PURCHASED % OF AMOUNT INVESTED % OF OFFERING PRICE AMOUNT RETAINED BY DEALERS
AS % OF OFFERING PRICE
<S> <C> <C> <C> <C>
Up to $99,999 4.99% 4.75% 4.00%
$100,000 to $249,999 3.9 3.75 3.1
250,000 to 499,999 2.83 2.75 2.3
500,000 to 999,999 2.04 2 1.7
*1,000,000 and above -- -- --
</TABLE>
- ------------------------
* The Underwriter pays investment dealers or financial service firms a
commission from its own resources of up to 1.00% of the amount invested for
amounts from $1,000,000 to $2,499,999, up to 0.50% on amounts of $2,500,000 to
$4,999,999 and up to 0.25% on amounts of $5 million and above. Purchases of over
$1 Million are subject to a maximum contingent deferred sales charge of 1%
(scaled down to 0.50% for amounts of $2.5 million or more, and 0.25% on amounts
over $5 million) on redemptions made within eighteen months.
CLASS B SHARES. Class B shares are offered at net asset value, without an
initial sales charge, subject to a .75% annual distribution fee for
approximately 8 years (at which time
<PAGE>
they convert to Class A shares bearing only a .05% annual distribution fee), a
0.25% annual service fee and a contingent deferred sales charge if shares are
redeemed within five years after purchase. As set forth below, the amount of the
deferred sales charge varies depending on the number of years after purchase
that the redemption occurs. For determining the date of purchase, all payments
during a month will be aggregated and deemed to have been made on the last day
of the month. The deferred sales charge will be assessed on an amount equal to
the lesser of the current market value or the cost of the shares being redeemed.
The Underwriter currently pays investment dealers a sales commission of 4% of
the sale price of Class B shares sold by the dealers, subject to future
amendment or termination. The Underwriter will retain all or a portion of the
continuing distribution fee assessed to Class B shareholders and will receive
the entire amount of the contingent deferred sales charge paid by shareholders
on the redemption of shares to reimburse the Underwriter in whole or in part for
the payment of such sales commission, plus financing costs and related marketing
expenses.
CONTINGENT DEFERRED
SALES CHARGE AS A
PERCENTAGE OF
DOLLAR AMOUNT
YEAR SINCE PURCHASE SUBJECT TO CHARGE
- -------------------------------------------------------------------------
First............................................ 5%
Second........................................... 4%
Third............................................ 3%
Fourth........................................... 2%
Fifth............................................ 2%
Thereafter....................................... 0%
To provide an example, assume an investor purchased 100 shares at $10 per
share (at a cost of $1,000) and in the second year after purchase, the net asset
value per share is $12 and, during such time, the investor has acquired 10
additional shares upon dividend reinvestment. If, at such time the investor
makes his first redemption of 50 shares (proceeds of $600), 10 shares will not
be subject to charge because of dividend reinvestment. With respect to the
remaining 40 shares, the charge is applied only to the original cost of $10 per
share and not to the increase in net asset value of $2 per share. Therefore,
$400 of the $600 redemption proceeds will be charged at a rate of 4% (the
applicable rate in the second year after purchase).
CLASS C SHARES. Investors choosing Class C shares purchase shares at net asset
value without a sales charge at the time of purchase, subject to a 0.75% annual
distribution fee, a 0.25% annual service fee, and a 1.00% contingent deferred
sales charge on redemptions made within one year from the first day of the month
after purchase.
<PAGE>
The Underwriter currently pays investment dealers a sales commission of 1% of
the sale price of Class C shares sold by such dealers, subject to future
amendment or termination. The Underwriter will retain the distribution fee
assessed against Class C shareholders in the first year of investment, and the
entire amount of the contingent deferred sales charge paid by Class C
shareholders upon redemption in year one, in order to compensate the Underwriter
for providing distribution related services to the Fund in connection with the
sale of Class C shares, and to reimburse the Underwriter in whole or in part for
the commissions (and any related financing costs) paid to dealers at the time of
purchase. There is no conversion feature associated with Class C shares;
therefore, Class C shareholders will be subject to the higher distribution fee
associated with such shares for the life of the shareholder's investment.
INVESTOR SERVICES AND ACCOUNT POLICIES
An account will be opened for each investor after an initial investment is made.
The Transfer Agent maintains a record of your ownership and sends confirmations
and statements of account. The Fund sends annual and semi-annual financial
statements to all of its shareholders. To reduce expenses, only one copy of most
Fund reports will be mailed to accounts listed under the same social security
number or to households for multiple accounts with the same surname. Information
regarding the tax status of income dividends and capital gains distribution will
be mailed to shareholders on or before January 31st of each year. Account tax
information will also be sent to the IRS. Requests for account assistance or
additional information should be directed to Northstar at (800) 595-7827.
DIVIDEND AND DISTRIBUTION REINVESTMENT OPTIONS. Shareholders of Class A,
Class B and Class C shares may direct that income dividends and capital gain
distributions be paid to them through any one of the following options: income
dividends and capital gain distributions both paid in additional shares of the
same class of a designated Fund at net asset value; income dividends paid in
cash and capital gain distributions paid in additional shares of the same class
of a designated Fund at net asset value; or income dividends and capital gain
distributions both paid in cash. If a shareholder does not indicate which option
is preferred upon the opening of an account, both income dividends and capital
gain distributions will be paid in additional shares of the Fund from which the
investor earned such distributions. Payment options may be changed at any time
by notifying Northstar in writing.
AUTOMATIC INVESTMENT PLAN. Shareholders may elect to purchase shares through
the establishment of an Automatic Investment Plan, in which case the minimum
investment in order to open an account is $25. An Automatic Investment
Authorization Form (available on request from Northstar) provides for funds to
be automatically drawn on a shareholder's bank account and deposited in his or
her Fund account ($25 per month minimum). The shareholder's bank may charge a
nominal fee in connection with the establishment and use of automatic deposit
services. Shareholders may not participate in the Automatic Investment Plan
while participating in the Systematic Withdrawal Program described below.
SYSTEMATIC WITHDRAWAL PROGRAM. A shareholder owning $5,000 or more worth of
shares of a Fund in book-entry form may establish a withdrawal program with the
Fund and
<PAGE>
provide for the payment monthly or quarterly of any requested dollar
amount ($25 minimum per payment) from the account to his or her order. A
sufficient number of full and fractional shares will be redeemed to make the
designated payment. Shareholders may not maintain an Automatic Investment Plan
while participating in the withdrawal program. The contingent deferred sales
charge applicable to Class B and Class C shares shall be waived in connection
with redemptions made pursuant to the Systematic Withdrawal Program provided
that such withdrawals do not exceed 9% of the original principal amount invested
and provided further that the investor reinvest all dividends and capital gains
distributions during participation in such Plan. The Fund may terminate an
investor's withdrawal program if the account value falls below $5,000 due to the
transfer or redemption of shares from the account. See the enclosed application
form.
TAX-SHELTERED RETIREMENT PLANS. Shares of the Funds may be offered in
connection with the following qualified prototype retirement plans: IRA and
Rollover IRA, SEP-IRA, Profit-Sharing and Money Purchase Pension Plans which can
be adopted by self-employed persons ("Keogh") and by corporations. Call or write
Northstar for further information.
EXCHANGE PRIVILEGES. Shareholders may exchange shares of the Fund for the same
class of shares of another fund managed by Northstar, or for shares of The Cash
Management Fund of Salomon Brothers Investment Series (an open-end management
investment company comprised of various portfolios, hereafter referred to as
"Money Market Portfolio," that is not a Northstar Fund, but is available by
purchase or exchange through the Underwriter). Exchange requests in proper form
will be honored prior to 4:00 p.m. Eastern time. For telephone exchanges or
authorization forms, contact Northstar at 1-800-595-7827. Exchanges will be
based upon each Fund's NAV per share next computed following receipt of a
properly executed exchange request, without a sales charge; provided, however,
in the case of exchanges into Class A shares of a Fund after a direct purchase
into the Money Market Portfolio, a sales charge will be imposed in accordance
with the sales charge table that is applicable to direct purchases. Collection
of the contingent deferred sales charge will be deferred on shares subject to a
charge that are exchanged for shares of the same class of another Fund, or
converted to shares of the Money Market Portfolio. Under these circumstances,
the combined holding period of shares in the Funds and the Money Market
Portfolio, shall be used to calculate the conversion period, if applicable, and
to determine the deferred sales charge due upon redemption, if any. The exchange
of shares from one Fund to another is treated as a sale of the exchanged shares
and a purchase of the acquired shares for Federal income tax purposes.
Shareholders may, therefore, realize a taxable gain or loss. See "Exchanges" and
"Dividends, Distributions and Taxes" in the Statement of Additional Information.
Each Fund reserves the right to terminate or modify its exchange privileges at
any time upon prominent notice to shareholders. Such notice will be given at
least 60 days in advance. Each Fund and the Money Market Portfolio has different
investment objectives and policies. Shareholders should obtain and review the
prospectus of the Fund into which the exchange is to be made before any exchange
requests are made.
<PAGE>
TELEPHONE TRANSACTIONS. Shareholders holding shares in book-entry form may
authorize the Fund to accept telephone redemptions and exchanges. Shareholders
may redeem up to $50,000 worth of their shares by telephoning Northstar prior to
4:00 p.m. Eastern time. Redemption proceeds must be payable to the record holder
of the shares and mailed to the shareholder's address of record or wire
transferred to the shareholder's account at a domestic commercial bank that is a
member of the Federal Reserve System, normally within one business day, but in
no event longer than three days after the request. The minimum amount for a wire
transfer is $1,000. If at any time the Funds shall determine that it is
necessary to terminate or modify telephone transaction privileges, shareholders
would be promptly notified. Information on these services is included in the
Application and is available from Northstar. Neither the Adviser, the
Underwriter nor the Fund will be liable for any loss, damages, expense or cost
arising out of any telephone transaction effected in accordance with the Funds'
procedures, upon instructions believed to be genuine. Shareholders who utilize
telephone privileges bear the risk of any loss, damages, expense or cost arising
from their election, including risk of unauthorized use; provided, however that
the Fund shall employ reasonable procedures to confirm that all telephone
instructions are genuine. For this purpose, the Fund or its agent will require
all individuals delivering telephone instructions to provide specific
information to identify themselves as the account holder, such as the name in
which the account is registered, the account holder's social security number,
account number, and broker of record. In the absence of such procedures, or
should the Fund or its agents for any reason fail to follow such procedures, the
Fund or its agents may be liable for losses due to unauthorized or fraudulent
telephone instructions.
INVOLUNTARY REDEMPTIONS. Due to the high cost of maintaining accounts with
small account values, each Fund reserves the right to close all accounts that
have been in existence for at least one year and have a value that is less than
$500. Shareholders will receive 60 days' written notice during which time they
may bring the value up to $500 or more. If the account value is not raised
during that time, the Fund will redeem all shares in the account and send the
proceeds to the shareholder's address of record.
Each Fund reserves the right to close all accounts of a shareholder who has
failed to provide a social security number or other taxpayer identification
number and certification (if required) that such number is correct, or if a
shareholder is deemed to engage in activities which are illegal or otherwise
detrimental to the Fund.
REINSTATEMENT PRIVILEGE. Shareholders have a one time privilege of
reinstating their investment into any of the Fund, subject to the terms of
exchange (see "Exchange Privileges") at the NAV next determined after the
request for reinstatement is made. For Federal income tax purposes, a redemption
and reinstatement will be treated as a sale and purchase of shares; special
rules may apply in computing the amount of gain or loss in these situations. See
"Dividends, Distributions and Taxes" in the Statement of Additional Information.
<PAGE>
A written request for reinstatement must be received by the Underwriter within
30 days of the redemption accompanied by payment for the shares (not in excess
of the redemption). Shareholder accounts will be credited with an amount equal
to the deferred sales charge (or pro rata portion thereof) paid upon redemption.
HOW TO SELL SHARES
Shareholders may sell their shares back to the Fund at the NAV next determined
after the Fund receives a redemption request with any other required
documentation in proper form. Investors will be subject to the applicable
deferred sales charge, if any, for such shares. The Transfer Agent requires a
written request, with the signature guaranteed by a bank, a national stock
exchange member or other eligible guarantor institution. The Transfer Agent may
waive the signature guarantee requirement in the case of book-entry share
redemption requests of less than $50,000 if the proceeds are payable to the
account as registered and mailed to the address of record. Redemption requests
must be signed by each person in whose name the account is registered.
Shareholders may also sell shares back to the Fund through dealers who are
members of the selling group. The redemption price in such a case will be the
price as of the close of the New York Stock Exchange on that day, provided the
order is received by the dealer prior to the close of the Exchange and is
transmitted to the Underwriter prior to the close of its business. The dealer is
responsible for the timely transmission of orders to the Underwriter. No service
charge is made by the Fund on redemptions, but shares tendered through
investment dealers may be subject to a service charge by such dealers. Payment
for shares redeemed is normally made within three days. However, for shares
recently purchased by check, the Fund cannot send proceeds until the check has
cleared, which may take up to 15 days.
Redemptions by corporations, partnerships or other organizations, executors,
administrators, trustees, custodians, guardians, or from IRA's or other
retirement plans may require additional documentation. To avoid delay in
redemption or transfer, shareholders having questions about specific
requirements, including eligible guarantor institutions, should contact
Northstar at (800) 595-7827. Redemption requests will not be honored until
all required documents in the proper form have been received.
DISTRIBUTION AND SERVICE PLAN
The Fund has adopted a distribution and service plan under Rule 12b-1 of the
1940 Act for each class of shares of the Fund (collectively, the "Plans"). The
Plans permit the Fund to compensate the Underwriter in connection with
activities intended to promote the sale of shares of each
<PAGE>
class of shares of the Fund. Pursuant to the Plans, the Fund shall pay the
Underwriter 0.30% annually of the average daily net assets of the Fund's Class A
shares and 1.00% annually of the average daily net assets of the Fund's Class B
and Class C shares,. Under the NASD rules, fees of this type are limited to
0.75% annually for distribution fees and 0.25% annually for service fees,
subject to aggregate limits. The Underwriter uses the fee to defray the costs of
commissions and service fees paid to financial service firms which have sold
Fund shares, and to defray other expenses such as sales literature, prospectus
printing and distribution, shareholder servicing costs and compensation to
wholesalers. Should the fees exceed the Underwriter's expenses in any year, the
Underwriter would realize a profit.
DIVIDENDS, DISTRIBUTIONS AND TAXES
THE FOLLOWING DISCUSSION IS INTENDED FOR GENERAL INFORMATION ONLY. EACH INVESTOR
SHOULD CONSULT WITH HIS OR HER OWN TAX ADVISOR AS TO THE TAX CONSEQUENCES OF AN
INVESTMENT IN THE FUND
The Fund intends to qualify annually and elect to be treated as a regulated
investment company under the Internal Revenue Code of 1986, as amended (the
"Code"). To qualify, the Fund must meet certain income, distribution and
diversification requirements. In any year in which the Fund qualifies as a
regulated investment company and timely distributes all of its taxable income,
the Fund generally will not pay any U.S. federal income or excise tax.
The Fund intends to distribute to shareholders substantially all of its net
investment income and any net capital gains at least annually. It is intended
that dividends from net investment income will be paid annually.
Dividends paid out of the fund's investment company taxable income (including
dividends, interest and net short-term capital gains) will be taxable to a
shareholder as ordinary income. If a portion of the Fund's income consists of
dividends paid by U.S. corporations, a portion of the dividends paid by the Fund
may be eligible for the corporate dividends-received deduction. Distributions of
net capital gains (the excess of net long-term capital gains over net short-term
capital losses), if any, designated as capital gain dividends are taxable as
long-term capital gains, regardless of how long the shareholder has held the
Fund's shares. Dividends are taxable to shareholders in the same manner whether
received in cash or reinvested in additional Fund shares.
Each year the Fund will notify shareholders of the tax status of dividends and
distributions. Each Fund may be required to withhold U.S. federal income tax at
the rate of 31% of all taxable distributions payable to shareholders who fail to
provide the Fund with their correct taxpayer identification number or to make
required certifications, or who have been notified by the IRS that they are
subject to backup withholding.
Investors who purchase shares of the Fund just before the distribution will
pay full price for the shares and receive a portion of the purchase price back
as a taxable distribution. Unless your account is set up as a tax-deferred
account, dividends paid to you would be included in your
<PAGE>
gross income for tax purposes even though you may not have participated in the
increase in the net asset value of the Fund. Further information relating to tax
consequences is contained in the Statement of Additional Information. Fund
distributions also may be subject to state, local and foreign taxes. Fund
distributions that are derived from interest on obligations of the U.S.
Government and certain of its agencies, authorities and instrumentalities may be
exempt from state and local taxes in certain states.
A distribution will be treated as paid on December 31 of the current calendar
year if it is declared by the Fund in October, November or December with a
record date in such a month and paid by the Fund during January of the following
calendar year. Such distributions will be taxable to shareholders in the
calendar year in which the distributions are declared, rather than the calendar
year in which the distributions are received.
Upon the sale or other disposition of shares of the Fund, a shareholder may
realize a capital gain or loss which will be long-term or short-term, generally
depending upon the shareholder's holding period for the shares.
PERFORMANCE INFORMATION
The Fund may, from time to time, include its yield and total returns in
advertisements or reports to shareholders or prospective investors. Both yield
and total return figures are computed separately for each class of shares of the
Fund in accordance with formulas specified by the Securities and Exchange
Commission. Both yield and total return figures are based on historical earnings
and are not intended to indicate future performance. The yield for each class of
the Fund (which shows the rate of income the Fund earned on its investment as a
percentage of the Fund's share price) will be computed by dividing (a) net
investment income over a 30-day period by (b) an average value of invested
assets (using the average number of shares entitled to receive dividends and the
maximum offering price per share or the maximum redemption price per share) at
the end of the period, as appropriate, all in accordance with applicable
regulatory requirements. Such amounts will be compounded for six months and then
annualized for a twelve-month period to derive the yield of each class.
Standardized quotations of average annual total return for each class of shares
will be expressed in terms of the average annual compounded rate of return of a
hypothetical investment in the class of shares over a period of 1, 5 and 10
years (or up to the life of the class of shares). Total return is the percentage
increase or decrease in the value of an investment over a stated period of time.
Standardized total return quotations reflect the deduction of a proportional
share of expenses (on an annual basis) of a class, deduction of the maximum
initial sales load or the maximum CDSC applicable to a complete redemption of
the investment, as appropriate, and assume that all dividends and distributions
are reinvested when paid. The Fund also may quote a supplementary rate of total
return over different periods of time or by non-standardized means.
Performance for Class B and Class C shares typically will be less favorable than
that for Class A shares due to the higher expense ratios for Class B and Class C
shares. For a complete
<PAGE>
description of the methods used to determine yield and total return forthe Fund,
see the Statement of Additional Information.
GENERAL INFORMATION
ORGANIZATION OF THE FUND. The Northstar Trust (the "Trust") is organized
under Massachusetts law as a business trust. The Trust was organized in 1993.
The Trust's Declaration of Trust, as amended, and each Fund's Amended and
Restated Declaration of Trust provides that the Trustees are authorized to
create an unlimited number of series and, with respect to eachseries, to issue
an unlimited number of full and fractional shares of one or more classes and to
divide or combine the shares into a greater or lesser number of shares without
thereby changing the proportionate beneficial interests in the series. All
shares have equal voting rights, except that only shares of the respective
series or separate classes within a series are entitled to vote on matters
concerning only that series or class. As of the date of this Prospectus, the
Fund within the Trust has three classes of shares; each of the remaining Funds
has four classes of shares.
Neither the Trust nor the Fund are required to hold shareholder meetings, but
special meetings may be called under certain circumstances. Meetings of the
shareholders will be called upon written request of shareholders holding in the
aggregate not less than 10% of the outstanding shares of the affected Fund or
class having voting rights.
<PAGE>
NOVEMBER __, 1996
STATEMENT OF ADDITIONAL INFORMATION
NORTHSTAR GROWTH AND VALUE FUND
(A SERIES OF NORTHSTAR TRUST)
Two Pickwick Plaza
Greenwich, Connecticut 06830
(203) 863-6200
(800) 595-7827
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of the
Fund dated November __, 1996, as each may be revised from time to time. To
obtain a copy of the Fund's Prospectus, please contact Northstar Investment
Management Corporation at the address or phone number listed above.
Northstar Investment Management Corporation (the "Adviser") serves as
the Fund's investment adviser. The Adviser has engaged Navellier Fund
Management, Inc. (the "Subadviser") to serve as sub-investment adviser to the
Fund, subject to the supervision of the Adviser. Northstar Distributors, Inc.
(the "Underwriter") is the underwriter to the Fund. Northstar Administrators
Corporation (the "Administrator") is the Fund's administrator. The Underwriter
and the Administrator are affiliates of the Adviser.
TABLE OF CONTENTS
INVESTMENT RESTRICTIONS ............................. 2
INVESTMENT TECHNIQUES ............................... 3
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION .... 8
SERVICES OF THE ADVISER, SUBADVISER AND ADMINISTRATOR 10
NET ASSET VALUE ..................................... 12
PURCHASES AND REDEMPTIONS ........................... 13
DIVIDENDS, DISTRIBUTIONS AND TAXES .................. 15
UNDERWRITER AND DISTRIBUTION SERVICES ............... 17
TRUSTEES AND OFFICERS ............................... 19
ORGANIZATIONAL AND OTHER INFORMATION ................ 20
PERFORMANCE INFORMATION ............................. 21
FINANCIAL STATEMENTS ............................... 24
<PAGE>
INVESTMENT RESTRICTIONS
The Fund has adopted investment restrictions numbered 1 through 11 as
fundamental policies. These restrictions cannot be changed without approval by
the holders of a majority (as defined in the Investment Company Act of 1940, as
amended) of such Fund's outstanding voting shares. Investment restrictions
numbered 12 through 15 are not fundamental policies and may be changed by vote
of a majority of the Trust's Board members at any time. The Fund may not:
1. Borrow money, issue senior securities, or pledge, mortgage or
hypothecate its assets, except that it may: (a) borrow from banks but only if,
immediately after such borrowing there is asset coverage of 300%, and (b) enter
into transactions in options, futures, and options on futures and other
transactions not deemed to involve the issuance of senor securities.
2. Underwrite the securities of others;
3. Purchase or sell real property, including real estate limited
partnerships (each of these Funds may purchase marketable securities of
companies that deal in real estate or interests therein, including real estate
investment trusts);
4. Deal in commodities or commodity contracts, except in the manner
described in the current Prospectus and SAI of the Fund;
5. Make loans to other persons (but the Fund may, however, lend
portfolio securities, up to 33% of net assets at the time the loan is made, to
brokers or dealers or other financial institutions not affiliated with the Fund
or the Adviser, subject to conditions established by the Adviser (See "Lending
Portfolio Securities" in this SAI), and may purchase or hold participations in
loans, in accordance with the investment objectives and policies of the Fund, as
described in the current Prospectus and SAI of the Fund;
6. Purchase on margin (except that for purposes of this restriction,
the deposit or payment of initial or variation margin in connection with futures
contracts will not be deemed to be purchases of securities on margin);
7. Sell short, except that these Funds may enter into short sales
against the box;
8. Invest more than 25% of its assets in any one industry or related
group of industries;
9. With respect to 75% of the Fund's assets, purchase a security (other
than U.S. Government obligations) if, as a result, more than 5% of the value of
total assets of the Fund would be invested in securities of a single issuer;
2
<PAGE>
10. Purchase a security if, as a result, more than 10% of any class of
securities, or more than 10% of the outstanding voting securities of an issuer,
would be held by the Fund.
11. Borrow money except to the extent permitted under the 1940 Act;
12. Purchase securities of other investment companies, except in
connection with a merger, consolidation or sale of assets, and except that these
Funds may purchase shares of other investment companies, subject to such
restrictions as may be imposed by the 1940 Act and rules thereunder or by any
state in which shares of the Fund are registered;
13. Make an investment for the purpose of exercising control over
management;
14. Invest more than 15% of its net assets in illiquid securities;
15. Borrow any amount in excess of 10% of their respective assets,
other than for temporary emergency or administrative purposes. In
addition,assets, the Fund will not make additional investments when its
borrowings exceed 5% of total assets.
In addition to the restrictions described above, each of these Funds may, from
time to time, agree to additional investment restrictions for purposes of
compliance with the securities laws of those state and foreign jurisdictions
where that Fund intends to offer or sell its shares.
INVESTMENT TECHNIQUES
Derivative Instruments. The Fund may invest in Derivative Instruments (as
defined in the Fund's Prospectus) for a variety of reasons, including to hedge
certain market risks, to provide a substitute for purchasing or selling
particular securities or to increase potential income gain. Derivatives may
provide a cheaper, quicker or more specifically focused way for the Fund to
invest than "traditional" securities would.
Derivatives can be volatile and involve various types and degrees of risk,
depending upon the characteristics of the particular Derivative and the
portfolio as a whole. Derivatives permit a Fund to increase or decrease the
level of risk, or change the character of the risk, to which its portfolio is
exposed in much the same way as the Fund can increase or decrease the level of
risk, or change the character of the risk, of its portfolio by making
investments in specific securities.
Derivatives may be purchased on established exchanges or through privately
negotiated transactions referred to as over-the-counter Derivatives.
Exchange-traded Derivatives generally are guaranteed by the clearing agency
which is the issuer or counterparty to such Derivatives. This guarantee usually
is supported by a daily payment system (i.e., margin requirements) operated by
the clearing agency in order to reduce overall credit risk. As a result, unless
the clearing agency defaults, there is relatively little counterparty credit
risk associated with Derivatives purchased on an exchange. By contrast, no
clearing agency guarantees over-the-counter Derivatives. Therefore, each party
to an over-the-counter Derivative bears the risk that the counterparty will
default. Accordingly, the Adviser and subadviser will consider the
3
<PAGE>
creditworthiness of counterparties to over-the-counter Derivatives in the same
manner as it would review the credit quality of a security to be purchased by
the Fund. Over-the-counter Derivatives are less liquid than exchange-traded
Derivatives since the other party to the transaction may be the only investor
with sufficient understanding of the Derivative to be interested in bidding for
it.
Futures Transactions--In General. The Fund may enter into futures contracts in
U.S. domestic markets, such as the Chicago Board of Trade and the International
Monetary Market of the Chicago Mercantile Exchange, or on exchanges located
outside the United States, such as the London International Financial Futures
Exchange and the Sydney Futures Exchange Limited. Foreign markets may offer
advantages such as trading opportunities or arbitrage possibilities not
available in the United States. Foreign markets, however, may have greater risk
potential than domestic markets. For example, some foreign exchanges are
principal markets so that no common clearing facility exists and an investor may
look only to the broker for performance of the contract. In addition, any
profits that the Fund might realize in trading could be eliminated by adverse
changes in the exchange rate, or the Fund could incur losses as a result of
those changes. Transactions on foreign exchanges may include both commodities
which are traded on domestic exchanges and those which are not. Unlike trading
on domestic commodity exchanges, trading on foreign commodity exchanges is not
regulated by the Commodity Futures Trading Commission.
Engaging in these transactions involves risk of loss to the Fund which could
adversely affect the value of the Fund's net assets. Although the Fund intends
to purchase or sell futures contracts only if there is an active market for such
contracts, no assurance can be given that a liquid market will exist for any
particular contract at any particular time. Many futures exchanges and boards of
trade limit the amount of fluctuation permitted in futures contract prices
during a single trading day. Once the daily limit has been reached in a
particular contract, no trades may be made that day at a price beyond that limit
or trading may be suspended for specified periods during the trading day.
Futures contract prices could move to the limit for several consecutive trading
days with little or no trading, thereby preventing prompt liquidation of futures
positions and potentially subjecting the Fund to substantial losses.
Successful use of futures by the Fund also is subject to the Manager's ability
to predict correctly movements in the direction of the relevant market, and, to
the extent the transaction is entered into for hedging purposes, to ascertain
the appropriate correlation between the transaction being hedged and the price
movements of the futures contract. For example, if the Fund uses futures to
hedge against the possibility of a decline in the market value of securities
held in its portfolio and the prices of such securities instead increase, the
Fund will lose part or all of the benefit of the increased value of securities
which it has hedged because it will have offsetting losses in its futures
positions. Furthermore, if in such circumstances the Fund has insufficient cash,
it may have to sell securities to meet daily variation margin requirements. The
Fund may have to sell such securities at a time when it may be disadvantageous
to do so.
Pursuant to regulations and/or published positions of the Securities and
Exchange Commission, the Fund may be required to segregate cash or high quality
money market
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instruments in connection with its commodities transactions in an amount
generally equal to the value of the underlying commodity. The segregation of
such assets will have the effect of limiting the Fund's ability otherwise to
invest those assets.
Specific Futures Transactions. The Fund may purchase and sell stock index
futures contracts. A stock index future obligates the Fund to pay or receive an
amount of cash equal to a fixed dollar amount specified in the futures contract
multiplied by the difference between the settlement price of the contract on the
contract's last trading day and the value of the index based on the stock prices
of the securities that comprise it at the opening of trading in such securities
on the next business day.
The Fund may purchase and sell interest rate futures contracts. An interest rate
future obligates the Fund to purchase or sell an amount of a specific debt
security at a future date at a specific price.
The Fund may purchase and sell currency futures. A foreign currency future
obligates the Fund to purchase or sell an amount of a specific currency at a
future date at a specific price.
Options--In General. The Fund may purchase and write (i.e., sell) call or put
options with respect to specific securities. A call option gives the purchaser
of the option the right to buy, and obligates the writer to sell, the underlying
security or securities at the exercise price at any time during the option
period, or at a specific date. Conversely, a put option gives the purchaser of
the option the right to sell, and obligates the writer to buy, the underlying
security or securities at the exercise price at any time during the option
period.
A covered call option written by the Fund is a call option with respect to which
the Fund owns the underlying security or otherwise covers the transaction by
segregating cash or other securities. A put option written by the Fund is
covered when, among other things, cash or liquid securities having a value equal
to or greater than the exercise price of the option are placed in a segregated
account with the Fund's custodian to fulfill the obligation undertaken. The
principal reason for writing covered call and put options is to realize, through
the receipt of premiums, a greater return than would be realized on the
underlying securities alone. The Fund receives a premium from writing covered
call or put options which it retains whether or not the option is exercised.
There is no assurance that sufficient trading interest to create a liquid
secondary market on a securities exchange will exist for any particular option
or at any particular time, and for some options no such secondary market may
exist. A liquid secondary market in an option may cease to exist for a variety
of reasons. In the past, for example, higher than anticipated trading activity
or order flow, or other unforeseen events, at times have rendered certain of the
clearing facilities inadequate and resulted in the institution of special
procedures, such as trading rotations, restrictions on certain types of orders
or trading halts or suspensions in one or more options. There can be no
assurance that similar events, or events that may otherwise interfere with the
timely execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options. If, as a
covered call option writer, the
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Fund is unable to effect a closing purchase transaction in a secondary market,
it will not be able to sell the underlying security until the option expires or
it delivers the underlying security upon exercise or it otherwise covers its
position.
Specific Options Transactions. The Fund may purchase and sell call and put
options in respect of specific securities (or groups or "baskets" of specific
securities) or stock indices listed on national securities exchanges or traded
in the over-the-counter market. An option on a stock index is similar to an
option in respect of specific securities, except that settlement does not occur
by delivery of the securities comprising the index. Instead, the option holder
receives an amount of cash if the closing level of the stock index upon which
the option is based is greater than, in the case of a call, or less than, in the
case of a put, the exercise price of the option. Thus, the effectiveness of
purchasing or writing stock index options will depend upon price movements in
the level of the index rather than the price of a particular stock.
The Fund may purchase and sell call and put options on foreign currency. These
options convey the right to buy or sell the underlying currency at a price which
is expected to be lower or higher than the spot price of the currency at the
time the option is exercised or expires.
The Fund may purchase cash-settlement options on interest rate swaps, interest
rate swaps denominated in foreign currency and equity index swaps in pursuit of
its investment objective. Interest rate swaps involve the exchange by the Fund
with another party of their respective commitments to pay or receive interest
(for example, an exchange of floating-rate payments for fixed-rate payments)
denominated in U.S. dollars or foreign currency. Equity index swaps involve the
exchange by the Fund with another party of cash flows based upon the performance
of an index or a portion of an index of securities which usually includes
dividends. A cash-settled option on a swap gives the purchaser the right, but
not the obligation, in return for the premium paid, to receive an amount of cash
equal to the value of the underlying swap as of the exercise date. These options
typically are purchased in privately negotiated transactions from financial
institutions, including securities brokerage firms.
Successful use by the Fund of options will be subject to the ability of the
Adviser and subadviser to predict correctly movements in the prices of
individual stocks, the stock market generally, foreign currencies or interest
rates. To the extent the Manager's predictions are incorrect, the Fund may incur
losses.
SHORT SALES. The Fund may make short sales "against the box." A short-sale is a
transaction in which a party sells a security it does not own in anticipation of
decline in the market value of that security. A short sale is "against the box"
to the extent that the Fund contemporaneously owns or has the right to obtain
securities identical to those sold short. When the Fund makes a short sale, it
must borrow the security sold short and deliver it to the broker-dealer through
which it made the short sale as collateral for its obligation to deliver the
security upon conclusion of the sale. The Fund may have to pay a fee to borrow
particular securities, and is often obligated to pay over any accrued interest
on such borrowed securities.
REPURCHASE AGREEMENTS. Repurchase agreements are agreements under which the Fund
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buys a money market instrument and obtains a simultaneous commitment from the
seller to repurchase the instrument at a specified time and at an agreed- upon
yield. The Adviser and Subadviser will use standards set by the Trustees in
reviewing the creditworthiness of parties to repurchase agreements with the
Fund. In addition, no more than an aggregate of 15% of the Fund's net assets, at
the time of investment, will be invested in illiquid investments, including
repurchase agreements having maturities longer than seven days. In the event of
failure of the executing bank or broker-dealer, a Fund could experience some
delay in obtaining direct ownership of the underlying collateral and might incur
a loss if the value of the security should decline, as well as costs in
disposing of the security.
As an alternative to using repurchase agreements, the Fund may, from time to
time, invest up to 5% of its assets in money market investment companies
sponsored by a third party for short-term liquidity purposes. Such investments
are subject to the non-fundamental investment limitations described herein.
REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLL AGREEMENTS. The Fund may enter
into reverse repurchase agreements and dollar roll agreements. Under a reverse
repurchase agreement or a dollar roll agreement, the Fund sells securities and
agrees to repurchase them, or substantially similar securities in the case of a
dollar roll agreement, at a mutually agreed upon date and price. At the time the
Fund enters into a reverse repurchase or dollar roll agreement, it will
establish and maintain a segregated account with its custodian, containing cash,
U.S. government securities, or other liquid assets from its portfolio, having a
value not less than the repurchase price (including accrued interest). The Funds
do not account for dollar rolls as a borrowing.
These agreements may involve the risk that the market value of the securities to
be repurchased by the Fund may decline below the price at which the Fund is
obligated to repurchase. Also, in the event the buyer of securities under a
reverse repurchase agreement or a dollar roll agreement files for bankruptcy or
becomes insolvent, such buyer or its trustee or receiver may receive an
extension of time to determine whether to enforce the Fund's obligation to
repurchase the securities, and the Fund's use of the proceeds of the reverse
repurchase agreement or the dollar roll agreement may effectively be restricted
pending such a decision.
LENDING PORTFOLIO SECURITIES. The Fund may lend portfolio securities to
broker-dealers and other financial institutions in an amount up to one-third of
the value of its total assets, provided that such loans are callable at any time
by the Fund and are at all times secured by collateral held by the Fund at least
equal to the market value, determined daily, of the loaned securities. The Fund
will continue to receive any income on the loaned securities, while
simultaneously earning interest on cash collateral (which will be invested in
short-term debt obligations) or a securities lending fee (in the case of
collateral in the form of U.S. Government Securities).
There may be risks of delay in recovery of the loaned securities and, in some
cases, loss of rights in the collateral should the borrower of the securities
fail financially. Loans of portfolio
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securities will only be made to firms considered by the Adviser to be
creditworthy under guidelines adopted by the Trustees.
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION
Generally, the Subadviser places orders for the purchase and sale of the Fund's
securities, supervises their execution and negotiates brokerage commissions on
behalf of the Fund. It is the practice of the Subadviser to seek the best prices
and best execution of orders and to negotiate brokerage commissions that in the
Subadviser's opinion, are reasonable in relation to the value of the brokerage
services and research provided by the executing broker. Brokers who have
executed orders for the Funds are asked to quote a fair commission for their
services. If the execution is satisfactory and if the requested rate
approximates rates currently being quoted by the other brokers selected by the
Subadviser, the rate is deemed by the Subadviser to be reasonable. Brokers may
ask for higher rates of commission if all or a portion of the securities
involved in the transaction are positioned by the broker, if the broker believes
it has brought a Fund an unusually favorable trading opportunity, or if the
broker regards its research services as being of exceptional value and payment
of such commissions is authorized by the Subadviser after the transaction has
been consummated. If the Subadviser more than occasionally differs with the
broker's appraisal of opportunity or value, the broker would not be selected to
execute trades in the future. The Subadviser believes that the Fund benefits
from a securities industry comprised of many and diverse firms and that the
long-term interest of shareholders of the Fund is best served by its brokerage
policies that include paying a fair commission, rather than seeking to exploit
its leverage to force the lowest possible commission rate. The primary factors
considered in determining the firms to which brokerage orders are given are the
Subadviser's appraisal of the firm's ability to execute the order in the desired
manner, the value of research services provided by the firm, and the firm's
attitude toward and interest in mutual funds in general, including the sale of
mutual funds managed and sponsored by the Subadviser. The Subadviser does not
offer or promise to any broker an amount or percentage of brokerage commissions
as an inducement or reward for the sale of shares of the Funds. Over-the-counter
purchases and sales are transacted directly with principal market-makers, except
in those circumstances where, in the opinion of the Subadviser, better prices
and execution are available elsewhere.
In general terms, the nature of research services provided by brokers
encompasses statistical and background information, and forecasts and
interpretations with respect to U.S. and foreign economies, U.S. and foreign
money markets, fixed income markets and equity markets, specific industry groups
and individual issues. Research services will vary from firm to firm, with
broadest coverage generally from the large full-line firms. Smaller firms, in
general, tend to provide information and interpretations on a smaller scale,
frequently with a regional emphasis. In addition, several firms monitor federal,
state, local and foreign political developments; many of the brokers also
provide access to outside consultants. The outside research assistance is
particularly useful to the Adviser's and Subadviser's staffs, since the brokers,
as a group, tend to monitor a broader universe of securities and other matters
than the Adviser's and Subadviser's staffs can follow. In addition, the outside
research provides a diverse perspective on financial markets. Research and
investment information is provided by these and other brokers at no cost
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and is available for the benefit of other accounts advised by the Adviser,
Subadviser and their affiliates; and not all of this information will be used in
connection with the Funds. While this information may be useful in varying
degrees and may tend to reduce the expenses, it is not possible to estimate its
value, and, in the opinion of the Adviser and Subadviser, it does not reduce
their expenses by a determinable amount. The extent to which use of statistical,
research and other services furnished by brokers is considered in the allocation
of brokerage business, but there is no formula by which such business is
allocated. The Adviser and Subadviser do so in accordance with its judgment of
the best interests of the Funds and their shareholders.
Purchases and sales of fixed income securities will usually be principal
transactions. Such securities often will be purchased or sold from or to dealers
serving as market makers for the securities at a net price. Each Fund will also
purchase such securities in underwritten offerings and will, on occasion,
purchase securities directly from the issuer. Generally, fixed income securities
are traded on a net basis and do not involve brokerage commissions. The cost of
executing fixed income securities transactions consists primarily of dealer
spreads and underwriting commissions.
In purchasing and selling fixed income securities, it is the policy of the Fund
to obtain the best results, while taking into account the dealer's general
execution and operational facilities, the type of transaction involved and other
factors, such as the dealer's risk in positioning the securities involved. While
the Subadviser generally seeks reasonably competitive spreads or commissions,
the Fund will not necessarily pay the lowest spread or commission available.
The Fund may, under circumstances in which two or more dealers are in a position
to offer comparable results, give preference to a dealer that has provided
statistical or other research services to the Fund. By allocating transactions
in this manner, the Subadviser is able to supplement its research and analysis
with the views and information of other securities firms.
A change in securities held in the portfolio of a Fund is known as "Portfolio
Turnover" and may involve the payment by a Fund of dealer mark-ups or brokerage
or underwriting commissions and other transaction costs on the sale of
securities, as well as on the reinvestment of the proceeds in other securities.
Portfolio turnover rate for a fiscal year is the percentage determined by
dividing the lesser of the cost of purchases or proceeds from sales of portfolio
securities by the average of the value of portfolio securities during such year,
all excluding securities whose maturities at acquisition were one year or less.
The Fund cannot accurately predict its portfolio turnover rate, but the Adviser
anticipates that the Fund's rate will not exceed 200% under normal market
conditions. A Fund's portfolio turnover rate may be higher than that described
above if a Fund finds it necessary to significantly change its portfolio to
adopt a temporary defensive position or respond to economic or market events. A
high turnover rate would increase commission expenses and may involve
realization of gains that would be taxable to shareholders. The ability of a
Fund to make purchases and sales of securities and to engage in options and
futures transactions will be limited by certain requirements of the Code,
including a requirement that less than 30% of the Fund's annual gross income be
derived from gains on the sale of securities and certain other assets held for
less than three months.
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SERVICES OF THE ADVISER, SUBADVISER AND ADMINISTRATOR
Pursuant to an Investment Advisory Agreement with the Fund, Northstar Investment
Management Corporation serves as the investment adviser to the Fund. In this
capacity, the Adviser, subject to the authority of the Trustees, and subject to
delegation of certain responsibilities to the Subadviser, is responsible for
furnishing continuous investment supervision to the Fund and is responsible for
the management of the Fund's portfolio.
The Adviser is an indirect, majority-owned subsidiary of ReliaStar Financial
Corp. ("ReliaStar"). Combined minority interests in the Adviser held by members
of senior management of ReliaStar currently equal 20%. ReliaStar is a publicly
traded holding company whose subsidiaries specialize in the life insurance
business. Through Northwestern National Life Insurance Company ("Northwestern")
and other subsidiaries, ReliaStar issues and distributes individual life
insurance and annuities, group life and health insurance and life and health
reinsurance, and provides related investment management services. The address of
the Adviser is Two Pickwick Plaza, Greenwich, Connecticut 06830. The address of
ReliaStar is 20 Washington Avenue South, Minneapolis, Minnesota 55401.
The Adviser charges a fee at the annual rate of 1.00% on aggregate average daily
net assets of the Fund. The Adviser has agreed that if, in any fiscal year, the
aggregate expenses of the Fund, exclusive of taxes, distribution fees,
brokerage, interest and (with the prior consent of any necessary state
securities commissions) extraordinary expenses, but including the management
fee, exceed the most restrictive expense limitations applicable to the Fund
under state securities laws or published regulations thereunder, the Adviser
will refund on a proportionate basis to the Fund whose expenses exceeded such
limitation the excess over such amount up to the total fee received by the
Adviser.
The Fund's Investment Advisory Agreement was approved by the Trustees of the
Northstar Advantage Trust on July 31, 1996. The Investment Advisory Agreement
will continue in effect until July 31, 1998 and then will continue in effect
from year to year if specifically approved annually by (a) the Trustees, acting
separately on behalf of each Fund, including a majority of the Disinterested
Trustees, or (b) a majority of the outstanding voting securities of each class
of each Fund as defined in the 1940 Act.
The Fund's Investment Advisory Agreement may be terminated as to any class,
without penalty and at any time, by a similar vote upon not more than 60 days'
nor less than 30 days' written notice by the Adviser, the Trustees, or a
majority of the outstanding voting securities of such class of such Fund as
defined in the 1940 Act. Such agreement will automatically terminate in the
event of its assignment, as defined in Section 2(a)(4) of the 1940 Act.
Pursuant to a Subadvisory Agreement between the Adviser and the Subadviser,
effective July 31, 1996, Navellier acts as subadviser to the Fund. In this
capacity, Navellier Fund Management, Inc., subject to the supervision and
control of the Adviser and the Trustees of the Fund, will
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manage the Fund's portfolio investments, consistently with the Fund's investment
objective, and will execute any of the Fund's investment policies that it deems
appropriate to utilize from time to time. Fees payable under the Subadvisory
Agreement will accrue daily and be paid monthly by the Adviser. As compensation
for its services, the Adviser will pay the Subadviser at the annual rate of 0.62
of 1% of the average daily net assets of the Fund. The Subadviser is
wholly-owned and controlled by its sole stockholder, Louis G. Navellier. The
Subadviser's address is One East Liberty, Third Floor, Reno, Nevada 89501. The
Subadvisory Agreement was approved by the Trustees of the Fund on July 31, 1996.
The Subadvisory Agreement may be terminated without payment of any penalty by
the Adviser, the Subadviser, the Trustees of the Fund, or the shareholders of
the Fund on not more than 60 days' and not less than 30 days' prior written
notice. Otherwise, the Subadvisory Agreement will remain in effect for two years
and will, thereafter, continue in effect from year to year, subject to the
annual approval of the Trustees, or the vote of a majority of the outstanding
voting securities of the Fund, and the vote, cast in person at a meeting duly
called and held, of a majority of the Trustees who are not parties to the
Subadvisory Agreement or "interested persons" (as defined in the 1940 Act) of
any such Party.
Northstar Administrators Corporation serves as administrator for the Fund,
pursuant to an Administrative Services Agreement with the Fund. Subject to the
supervision of the Board of Trustees, the Administrator provides the overall
business management and administrative services necessary to the proper conduct
of the Fund's business, except for those services performed by the Adviser under
the Investment Advisory Agreements, the custodian for the Funds under the
Custodian Agreements, the transfer agent for the Fund under the Transfer Agency
Agreements, and such other service providers as may be retained by the Fund from
time to time. The Administrator acts as liaison among these service providers to
the Fund. The Administrator is also responsible for ensuring that the Fund
operates in compliance with applicable legal requirements and for monitoring the
Adviser for compliance with requirements under applicable law and with the
investment policies and restrictions of the Fund. The Administrator is an
affiliate of the Adviser. The address of the Administrator is: Two Pickwick
Plaza, Greenwich, Connecticut 06830.
The Administrative Services Agreement was approved by the Trustees on July 31,
1996 and will continue in effect from year to year thereafter, provided such
continuance is approved annually by a majority of the Trustees. The
Administrator's fee is accrued daily against the value of the Fund's net assets
and is payable by the Fund monthly at an annual rate of .10% of the Fund's
average daily net assets. In addition, the Administrator charges an annual
account fee of $5.00 for each account of beneficial owners of shares in the Fund
for providing certain shareholder services and assisting broker-dealer
shareholder accounts.
NET ASSET VALUE
Equity securities are valued at the last sale price on the exchange or in the
principal OTC market in which such securities are being valued, or lacking any
sales, at the last available bid price. Prices of long-term debt securities are
valued on the basis of last reported sales price, or if no sales are reported,
the value is determined based upon the mean of representative quoted bid or
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asked prices for such securities obtained from a quotation reporting system or
from established market makers, or at prices for securities of comparable
maturity, quality and type. Securities (including OTC options) for which market
quotations are not readily available and other assets are valued at their fair
value as determined by or under the direction of the Trustees. Such fair value
may be determined by various methods, including utilizing information furnished
by pricing services that determine calculations for such securities using
methods based, among other things, upon market transactions for comparable
securities and various relationships between securities that are generally
recognized as relevant.
The net asset value of the Fund's shares fluctuates and is determined separately
for each class as of the close of regular trading on the New York Stock Exchange
(currently 4:00 p.m. EST), on each business day that the Exchange is open. Net
asset value per share is computed by determining the value of the Fund's assets
(securities held plus cash and other assets, including dividend and interest
accrued but not received) less all liabilities of the Fund (including accrued
expenses other than class specific expenses), and dividing the result by the
total number of shares outstanding at such time. The specific expenses borne by
each class of shares will be deducted from that class and will result in
different net asset values and dividends. The net asset value per share of the
Class B and Class C shares of the Fund will generally be lower than that of the
Class A shares because of the higher class-specific expenses borne by each of
the Class B and Class C shares. Under normal market conditions, daily prices for
securities are obtained from independent pricing services. Securities are valued
at market value or, if a market quotation is not readily available, at their
fair value, determined in good faith under procedures established by and under
the supervision of the Trustees. Money market instruments maturing within 60
days are valued using the amortized cost method of valuation. This involves
valuing a security at cost on the date of acquisition and thereafter assuming a
constant accretion of a discount or amortization of a premium to maturity,
regardless of the impact of fluctuating interest rates on the market value of
the instrument. While this method provides certainty in valuation, it may result
in periods during which value, as determined by amortized cost, is higher or
lower than the price a Fund would receive if it sold the instrument. See "How
Net Asset Value is Determined" in the Prospectus.
PURCHASES AND REDEMPTIONS
Shares issued pursuant to the automatic reinvestment of income dividends or
capital gains distributions are not subject to a front-end or contingent
deferred sales load. There is no sales charge for qualified persons. "Qualified
Persons" are the following (a) active or retired Trustees, Directors, Officers,
Partners or Employees (including immediate family) of (i) the Adviser or any of
its affiliated companies, (ii) the Funds or any Northstar affiliated investment
company or (iii) dealers having a sales agreement with the Underwriter, (b)
trustees or custodians of any qualified retirement plan or IRA established for
the benefit of a person in (a) above; (c) dealers, brokers or registered
investment advisers that have entered into an agreement with the Underwriter
providing for the use of shares of the Fund in particular investment products
such as "wrap accounts" or other similar managed accounts for the benefit of the
clients of such brokers, dealers and registered investment advisers, and (d)
pension, profit sharing or other benefit plans created pursuant to a plan
qualified under Section 401 of the Code or plans under Section 457 of
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the Code, provided that such shares are purchased by an employer sponsored plan
with at least 100 eligible employees. Class A shares of the Fund may be
purchased at net asset value, through a dealer, where the amount invested
represents redemption proceeds from another open-end fund with the same or
similar investment objective, and provided the following conditions are met:
such redemption occurred no more than 60 days prior to the purchase of shares of
a Northstar Fund, the redeemed shares were held for at least six months prior to
redemption, and the proceeds of the redemption are sent directly to Northstar or
its agent, or maintained in cash or a money market fund. No commissions will be
paid to dealers in connection with such purchases. There is also no initial
sales charge for "Purchasers" (defined below) if the initial amount invested in
the Fund) is at least $1,000,000 or the Purchaser signs a $1,000,000 Letter of
Intent, as hereinafter defined.
Reduced Sales Charges on Class A Shares. Investors choosing the initial sales
alternative may under certain circumstances be entitled to pay reduced sales
charges. The sales charge varies with the size of the purchase and reduced
charges apply to the aggregate of purchases of a Fund made at one time by any
"Purchaser," which term includes (i) an individual and his/her spouse and their
children under the age of 21, (ii) a trustee or fiduciary purchasing for a
single trust, estate or single fiduciary account (including IRAs, pension,
profit-sharing or other employee benefit trusts created pursuant to a plan
qualified under Section 401 of the Code, a Simplified Employee Pension ("SEP"),
Salary Reduction and other Elective Simplified Employee Pension Accounts
("SARSEP")) and 403(b) and 457 plans, although more than one beneficiary or
participant is involved; and (iii) any other organized group of persons, whether
incorporated or not, provided the organization has been in existence for at
least six months and has some purpose other than the purchase at a discount of
redeemable securities of a registered investment company. The circumstances
under which "Purchasers" may pay reduced sales charges are described in the
Prospectus.
The Right of Redemption. The right to redeem shares may be suspended and payment
therefor postponed during periods when the New York Stock Exchange is closed,
other than customary weekend and holiday closings, or, if permitted by rules of
the SEC, during periods when trading on the Exchange is restricted, or during
any emergency that makes it impracticable for any Fund to dispose of its
securities or to determine fairly the value of its net assets or during any
other period permitted by order of the SEC for the protection of investors.
Furthermore, the Transfer Agent will not mail redemption proceeds until checks
received for shares purchased have cleared, but payment will be forwarded
immediately upon the funds becoming available. Class B and Class C shareholders
will be subject to the applicable deferred sales charge, if any, for their
shares at the time of redemption.
SHAREHOLDER SERVICES
Exchanges. The following conditions must be met for all exchanges among the
Fund, or other Northstar Funds and the Money Market Portfolio: (1) the shares
that will be acquired in the exchange (the "Acquired Shares") are available for
sale in the shareholder's state of residence; (2) the Acquired shares will be
registered to the same shareholder account as the shares to be surrendered (the
"Exchanged Shares"); (3) the Exchanged Shares must have been held in the
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shareholder's account for at least 30 days prior to the exchange; (4) except for
exchanges into the Money Market Portfolios, the account value of the Fund whose
shares are to be acquired must equal or exceed the minimum initial investment
amount required by that Fund after the exchange is implemented; and (5) a
properly executed exchange request has been received by the Transfer Agent.
The Fund reserves the right to delay the actual purchase of the Acquired Shares
for up to five business days if it determines that it would be disadvantaged by
an immediate transfer of proceeds from the redemption of Exchanged Shares.
Normally, however, the redemption of Exchanged Shares and the purchase of
Acquired Shares will take place on the day that the exchange request is received
in proper form. The Fund reserves the right to terminate or modify its exchange
privileges at any time upon prominent notice to shareholders. Such notice will
be given at least 60 days in advance. It is the policy of the Adviser to
discourage and prevent frequent trading by shareholders among Northstar Funds in
response to market fluctuations. Accordingly, in order to maintain a stable
asset base in each Northstar Fund and to reduce administrative expenses borne by
each Fund, the Adviser generally restricts shareholders to a maximum of six
exchanges out of a Fund each calendar year. If a shareholder exceeds this
limit, future exchange requests may be denied.
Conversion Feature. Class B shares of each Fund will automatically convert to
Class A shares without a sales charge at the relative net asset values of each
of the classes after eight years from the acquisition of the Class B shares, and
as a result, will thereafter be subject to the lower distribution fee (but same
service fee) under the Class A Rule 12b-1 plan for each Fund.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Code. At present, such qualification relieves the Fund from
any liability for Federal income taxes to the extent its net investment income
and realized capital gains are distributed in accordance with applicable
provisions of the Code. The term "regulated investment company" does not imply
the supervision of management or investment practices or policies by any
government agency.
Ordinarily, gains and losses realized from portfolio transactions will be
treated as capital gains and losses. However, a portion of the gain or loss
realized from the disposition of foreign currencies (including foreing currency
denominated bank deposits) and non-U.S. dollar denominated securities (including
debt instruments and certain forward contracts and options) may be treated as
ordinary income or loss under Section 988 of the Code. In addition, all or a
portion of the gain realized from the disposition of certain market discount
bonds will be treated as ordinary income under Section 1278 of the Code.
Finally, all or a portion of the gain realized from engaging in "conversion
transactions" may be treated as ordinary income under Section 1258 of the Code.
"Conversion transactions" are defined to include certain forward, futures,
option and straddle transactions, transactions marketed or sold to produce
capital gains, or
14
<PAGE>
transactions described in Treasury regulations to be issued in the future.
Under Section 1256 of the Code, any gain or loss the Fund realizes from certain
forward contracts and options transactions will be treated as 60% long-term
capital gain or loss and 40% short-term capital gain or loss. Gain or loss will
arise upon exercise or lapse of such contracts and options as well as from
closing transactions. In addition, any such contracts or options remaining
unexercised at the end of the Fund's taxable year will be treated as sold for
their then fair market value, resulting in additional gain or loss to the Fund
characterized in the manner described above.
Offsetting positions held by the Fund involving certain foreign currency forward
contracts or options may constitute "straddles". "Straddles" are defined to
include "offsetting positions" in actively traded personal property. The tax
treatment of "straddles" is governed by Sections 1092 and 1258 of the Code,
which, in certain circumstances, overrides or modifies the provisions of
Sections 1256 and 988 of the Code. As such, all or portion of any short or
long-term capital gain from certain "straddle" and/or conversion transactions
may be recharacterized as ordinary income.
If the Fund were treated as entering into "straddles" by reason of its engaging
in certain forward contracts or options transactions, such "straddles" would be
characterized as "mixed straddles" if the forward contracts or options
transactions comprising a part of such "straddles" were governed by Section 1256
of the Code. The Fund may make one or more elections with respect to "mixed
straddles." Depending on which election is made, if any, the results to the Fund
may differ. If no election is made to the extent the "straddles" rules apply to
positions established by the Fund, losses realized by the Fund will be deferred
to the extent of unrealized gain in the offsetting position. Moreover, as a
result of the "straddle" and the conversion transaction rules, short-term
capital loss on "straddle" positions may be recharacterized as long-term capital
loss, and long-term capital gains may be treated as short-term capital gains or
ordinary income.
Any dividend or distribution paid shortly after an investor's purchase may have
the effect of reducing the net asset value of his shares below the original cost
of his investment. Such a dividend or distribution would be a return on
investment in an economic sense although taxable as stated above. In addition,
the Code provides that if a shareholder holds shares of the Fund for six months
(or shorter period as the Internal Revenue Service may prescribe by regulation)
and has received a capital gain distribution with respect to such shares, any
loss incurred on the sale of such shares will be treated as a long-term capital
loss to the extent of the capital gain distribution received.
Depending on the composition of the Fund's income, all or a portion of the
dividends paid by the Fund from net investment income may qualify for the
dividens received deduction allowable to certain U.S. corporate shareholders
("dividends received deduction"). In general, dividend income of the Fund
distributed to qualifying corporate shareholders will be eligible for the
dividends received deduction only to the extent that (i) the Fund's income
consists of dividends paid by U.S. corporations and (ii) the Fund would have
been entitled to the dividends received deduction with respect to such dividend
income if the Fund were not a regulated investment
15
<PAGE>
company. The dividends received deduction for qualifying corporate shareholders
may be further reduced if the shares of the Fund held by them with respect to
which dividends are received are treated as debt-financed or deemed to have been
held for less than 46 days. In addition, the Code provides other limitations
with respect to the ability of a qualifying corporate shareholder to claim the
dividends received deduction in connection with holding Fund shares.
Shareholders of Class A, Class B and Class C shares may direct that income
dividens and capital gain distributions be paid to them through various options
listed in the "Dividends and Distributions Reinvestment Options" section of the
Fund's current Prospectus. If a shareholder selects either of two such options
(that: (a) income dividends be paid in caash and capital gain distributions be
paid in additional shares of the same class of the Fund at net asset value; or
(b) income dividends and capital gain distributions both be paid in cash), and
the dividend/distribution checks cannot be delivered, or, if such checks remain
uncashed for six months, the Fund reserves the right to reinvest the dividend or
distribution in the shareholder's account at the then-current net asset value
and to convert the shareholder's election to automatic reinvestment in shares of
the Fund from which the distributions were made.
UNDERWRITER AND DISTRIBUTION SERVICES
Pursuant to Underwriting Agreements, Northstar Distributors, Inc. is the
Underwriter for the Fund and as such conducts a continuous offering pursuant to
a "best efforts" arrangement requiring it to take and pay for only such
securities as may be sold to the public. The Underwriter is an affiliate of the
Adviser and the Administrator. The Underwriting Agreements may be terminated at
any time on not more than 60 days' written notice, without payment of a penalty,
by the Underwriter, by vote of a majority of the outstanding class of voting
securities of the Fund, or by vote of a majority of the Trustees, who are not
"interested persons" of the Fund and who have no direct or indirect financial
interest in the operation of the Plan or in any agreements. The Underwriting
Agreements will terminate automatically in the event of their assignment.
In addition to the amount paid to dealers pursuant to the sales charge table in
the Prospectus, the Underwriter from time to time pays, from its own resources
or pursuant to the Plans, a bonus or other incentive to dealers (other than the
Underwriter) that employ a registered representative who sells a minimum dollar
amount of the shares of the Fund during a specific period of time. Dealers may
not use sales of any of the Fund's shares to qualify for or participate in such
programs to the extent such may be prohibited by a dealer's internal procedures
or by the laws of any state or any self-regulatory agency, such as the National
Association of Securities Dealers, Inc. Such bonuses or other incentives take
the form of payment for travel expenses, including lodging, incurred in
connection with trips taken by qualifying registered representatives and members
of their families to places within or without the United States, or other
bonuses such as certificates for airline tickets, dining establishments or the
cash equivalent of such bonuses. The Underwriter, from time to time, reallows
all or a portion of the sales charge on Class A shares, which it normally
reallows to individual selling dealers. However, such additional reallowance
generally will be made only when the selling dealer commits to substantial
marketing support such as internal wholesaling through dedicated personnel,
internal communications and mass
16
<PAGE>
mailings.
The Fund has adopted a distribution and service plan under Rule 12b-1 of the
1940 Act for each class of shares of the Fund (the "Plan"). The Plan permits the
Fund to compensate the Underwriter in connection with activities intended to
promote the sale of shares of each class of shares of the Fund. Pursuant to the
Plan for Class A shares, the Fund may compensate the Underwriter up to 0.30% of
average daily net assets of such Fund's Class A shares. Under the Plans for
Class B and Class C shares, the Fund may compensate the Underwriter up to 1.00%
of the average daily net assets attributable to the respective class of the
Fund. Expenditures by the Underwriter under the Plans shall consist of: (i)
commissions to sales personnel for selling shares of the Funds (including
underwriting fees and financing expenses incurred in connection with the sale of
Class B and Class C shares); (ii) compensation, sales incentives and payments to
sales, marketing and service personnel; (iii) payments to broker-dealers and
other financial institutions that have entered into agreements with the
Underwriter in the form of a Dealer Agreement for Northstar Funds for services
rendered in connection with the sale and distribution of shares of the Funds;
(iv) payment of expenses incurred in sales and promotional activities, including
advertising expenditures related to the Fund; (v) the costs of preparing and
distributing promotional materials; (vi) the cost of printing the Fund's
Prospectus and SAI for distribution to potential investors; and (vii) other
activities that are reasonably calculated to result in the sale of shares of the
Funds.
A portion of the fees paid to the Underwriter pursuant to the Plan not exceeding
0.25% annually of the average daily net assets of the Fund's shares may be paid
as compensation for providing services to the Fund's shareholders, including
assistance in connection with inquiries related to shareholder accounts (the
"Service Fee"). In order to receive the Service Fee under the Plan, participants
must meet such qualifications as are established in the sole discretion of the
Underwriter, such as services to the Fund's shareholders; or services providing
the Fund with more efficient methods of offering shares to coherent groups of
clients, members or prospects of a participant; or services permitting purchases
or sales of shares, or transmission of such purchases or sales by computerized
tape or other electronic equipment; or other processing. If the Plan is
terminated in accordance with its terms, the obligations of the Fund to
compensate the Underwriter for distribution related services pursuant to the
Plan will cease; however, subject to approval by the Trustees, including a
majority of the independent Trustees, the Fund may continue to make payments
past the date on which the Plan terminates up to the annual limits set forth in
the Plan for the purpose of compensating the Underwriter for services that were
incurred during the term of the Plan.
The Trustees have concluded that there is a reasonable likelihood that the Plan
will benefit the Fund and its shareholders and that the Plan should result in
greater sales and/or fewer redemptions of Fund shares. On a quarterly basis, the
Trustees will review a report on expenditures under the Plan and the purposes
for which expenditures were made. The Trustees will conduct an additional, more
extensive review annually in determining whether the Plan shall be continued. By
its terms, continuation of the Plan from year to year is contingent on annual
approval by a majority of the Trustees acting on behalf of the Fund and by a
majority of the Trustees who are not "interested persons" (as defined in the
1940 Act) and who have no direct or
17
<PAGE>
indirect financial interest in the operation of the Plans or any related
agreements (the "Plan Trustees"). The Plan provides that it may not be amended
to increase materially the costs that the Fund may bear pursuant to the Plan
without approval of the shareholders of the Fund and that other material
amendments to the Plan must be approved by a majority of the Trustees acting on
behalf of the Fund, by vote cast in person at a meeting called for the purpose
of considering such amendments. The Plan further provides that while it is in
effect, the selection and nomination of Trustees who are not "interested
persons" shall be committed to the discretion of the Trustees who are not
"interested persons." The Plan may be terminated at any time by vote of a
majority of the Trustees (including a majority of the Trustees who are not
"interested persons") or a majority of the outstanding Class of shares of the
Fund.
TRUSTEES AND OFFICERS
The Trustees and principal Officers of each Fund and their business
affiliations for the past five years are set forth below. Unless otherwise
noted, the mailing address of the Trustees and Officers is Two Pickwick Plaza,
Greenwich, CT 06830.
ROBERT B. GOODE, JR., Trustee. Currently retired. From 1990 to 1991,
Chairman of The First Reinsurance Company of Hartford. From 1987 to 1989,
President and Director of American Skandia Life Assurance Company. Since
October 1993, Trustee of the Northstar affiliated investment companies.
PAUL S. DOHERTY, Trustee. President, Doherty, Wallace, Pillsbury and
Murphy, P.C., Attorneys. Director, Tambrands, Inc. Since October 1993,
Trustee of the Northstar affiliated investment companies.
DAVID W. WALLACE, Trustee. Chairman of Putnam Trust Company, Lone Star
Industries and FECO Engineered Systems, Inc. He is also President and
Trustee of Robert R. Young Foundation and Governor of the New York
Hospital. Director of UMC Electronics and Zurn Industries, Inc. Former
Chairman and Chief Executive Officer, Todd Shipyards and Bangor. Punta
Corporation, and former Chairman and Chief Executive Officer of National
Securities & Research Corporation. Since October 1993, Trustee of the
Northstar affiliated investment companies.
*MARK L. LIPSON, Trustee and President. Director, Chairman and Chief
Executive Officer of Northstar and NWNL Northstar Inc. Director and
President of Northstar Administrators Corporation and Director and Chairman
of NWNL Northstar Distributors, Inc., President and Trustee of the
Northstar affiliated investment companies since October 1993. Prior to
August, 1993, Director, President and Chief Executive Officer of National
Securities & Research Corporation and President and Director/Trustee of the
National Affiliated Investment Companies and certain of National's
subsidiaries.
*JOHN G. TURNER, Trustee. Since May 1993, Chairman and CEO of Chairman of
ReliaStar and Northwestern National the Board Life Insurance Co. and
Chairman of other ReliaStar Affiliated Insurance Companies since 1995.
Since October
18
<PAGE>
1993, Director of Northstar and affiliates. Prior to May 1993, President
and CEO of ReliaStar and Northwestern National.
ALAN L. GOSULE, Trustee. Partner, Rogers & Wells. Director, F.L. Putnam
Investment Management Co., Inc.
DAVID W.C. PUTNAM, Trustee. President, Clerk and Director of F.L. Putnam
Securities Company, Incorporated, F.L. Putnam Investment Management
Company, Incorporated, Interstate Power Company, Inc., Trust Realty Corp.
and Bow Ridge Mining Co.; Director of Anchor Investment Management
Corporation; President and Trustee of Anchor Capital Accumulation Trust,
Anchor International Bond Trust, Anchor Gold and Currency Trust, Anchor
Resources and Commodities Trust and Anchor Strategic Assets Trust.
JOHN R. SMITH, Trustee. Financial Vice President of Boston College
(1970-1991); President Fiduciary Company (financial planning); Chairman
(since 1987) of Massachusetts Educational Financing Authority; Vice
Chairman of Massachusetts Health and Education Authority.
WALTER H. MAY, Trustee. Retired. Former Marketing Director for Piper
Jaffrey, Inc.
GEOFFREY WADSWORTH, Vice President. Vice President of Northstar. Co-Manager
of Northstar Advantage Income and Growth Fund and other Northstar
affiliated equity funds. Former Vice President and Portfolio Manager with
National Securities & Research Corporation.
AGNES MULLADY, Vice President and Treasurer. Senior Vice President and
Chief Financial Officer of Northstar, Senior Vice President and Treasurer
of Northstar Administrators orporation, and Vice President and Treasurer of
NWNL Northstar Distributors, Inc. From 1987 to 1993 Treasurer and Vice
President of National Securities & Research Corporation.
MICHAEL A. ROSENBERG, Secretary. Senior Vice President, General Counsel and
Secretary of Northstar. Senior Vice President and Secretary of Northstar
Administrators Corporation, and Vice President and Secretary of NWNL
Northstar , Inc. Former Assistant General Counsel of The Dreyfus
Corporation.
*Deemed to be an "interested person" of the Trust, as defined by the 1940 Act.
Northstar and Northstar Administrators Corporation make their personnel
available to serve as Officers and "Interested Trustees" of the Funds. All
Officers and Interested Trustees of the Funds are compensated by Northstar or
Northstar Administrators Corporation. Trustees who are not "interested persons"
of the Adviser are paid an annual retainer fee of $6,000 for their combined
services as Trustees to the Funds and to retail funds sponsored or advised by
the Adviser, and a per meeting fee of $1,500 for attendance at each joint
meeting of the Funds and the other Northstar retail funds. The Funds also
reimburse Trustees for expenses incurred by
19
<PAGE>
them in connection with such meetings.
As of July 31, 1996, all Trustees and executive officers of each Fund as a group
owned beneficially or of record less than 1% of the outstanding securities of
such Fund. To the knowledge of the Funds, as of January 31, 1996, no shareholder
owned beneficially (b) or of record (r) more than 5% of a Fund's outstanding
shares.
COMPENSATION TABLE
[TO BE PROVIDED]
OTHER INFORMATION
Independent Accountants. Coopers & Lybrand L.L.P. has been selected as the
independent accountants of the Fund. Coopers & Lybrand L.L.P. audits the Funds'
annual financial statements and expresses an opinion thereon.
Custodian. State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, acts as custodian, and fund accounting agent for the Fund.
Transfer Agent. Pursuant to a Transfer Agency Agreement with the Fund , First
Data (the "Transfer Agent") acts as the transfer agent for the Fund.
Reports to Shareholders. The fiscal year of the Fund ends on October 31. The
Fund will send financial statements to its shareholders at least semi-annually.
An annual report containing financial statements audited by the independent
accountants will be sent to shareholders each year.
ORGANIZATIONAL AND RELATED INFORMATION
Northstar Trust (formerly Northstar Advantage Trust and NWNL Northstar Series
Trust), and two of its series High Total Return Fund (formerly NWNL Northstar
High Yield Bond Fund) and Income and Growth Fund (formerly NWNL Northstar Income
and Growth Fund), was organized in 1993.
The shares of the Fund, when issued, will be fully paid and non-assessable, have
no preference, preemptive, or similar rights, and will be freely transferable.
There will normally be no meetings of shareholders for the purpose of electing
Trustees unless and until such time as less than a majority of the Trustees
holding office have been elected by shareholders, at which time the Trustees
then in office will call a shareholders' meeting for the election of Trustees.
Shareholders may, in accordance with the Declaration of Trust, cause a meeting
of shareholders to be held for the purpose of voting on the removal of Trustees.
Meetings of the shareholders will be called upon written request of shareholders
holding in the aggregate not less than 10% of the outstanding shares of the Fund
or class having voting rights. Except as set forth above and subject to the 1940
Act, the Trustees will continue to hold office and appoint successor Trustees.
20
<PAGE>
Under Massachusetts law, there is a remote possibility that shareholders of a
business trust could, under certain circumstances, be held personally liable as
partners for the obligations of such trust. The Amended and Restated Declaration
of Trust for the Fund contains provisions intended to limit such liability and
to provide indemnification out of Fund property of any shareholder charged or
held personally liable for obligations or liabilities of a Fund solely by reason
of being or having been a shareholder of the Fund and not because of such
shareholder's acts or omissions or for some other reason. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund itself would be unable to meet its
obligations.
PERFORMANCE INFORMATION
Performance information for the Funds may be compared in reports and promotional
literature to (1) the S&P 500, Dow Jones Industrial Average ("DJIA"), or other
unmanaged indices, so that investors may compare each Fund's results to those of
a group of unmanaged securities that are widely regarded by investors as
representative of the securities markets in general; (ii) other groups of mutual
funds tracked by Lipper Analytical Services, Inc., a widely used independent
research firm that ranks mutual funds by overall performance, investment
objectives, and assets, or tracked by other services, companies, publications or
persons who rank mutual funds on overall performance or other criteria; (iii)
the Consumer Price Index (measure for inflation) to assess the real rate of
return from an investment in a Fund; and (iv) well known monitoring sources of
CD performance rates, such as Solomon Brothers, Federal Reserve Bulletin,
American Bankers and Tower Data/The Wall Street Journal. Unmanaged indices may
assume the reinvestment of dividends, but generally do not reflect deductions
for administrative and management costs and expenses. Performance rankings are
based on historical information and are not intended to indicate future
performance.
In addition, the Funds may, from time to time, include various measures of a
Fund's performance, including the current yield, the tax-equivalent yield and
the average annual total return of shares of the Funds in advertisements,
promotional literature or reports to shareholders or prospective investors. Such
materials may occasionally cite statistics to reflect a Fund's volatility risk.
Total Return. Standardized quotations of average annual total return
("Standardized Return") for each class of shares will be expressed in terms of
the average annual compounded rate of return for a hypothetical investment in
such class of shares over periods of 1, 5 and 10 years or up to the life of the
class of shares, calculated for each class separately pursuant to the following
formula: P(1+T)TO THE POWER OF n = ERV (where P = a hypothetical initial payment
of $1,000, T = the average annual total return, n = the number of years, and ERV
= the ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the period). All total return figures reflect the deduction of a
proportional share of each Class's expenses (on an annual basis), the deduction
of the maximum initial sales load (in the case of Class A shares) and the
maximum contingent deferred sales charge applicable to a complete redemption of
the investment (in the case of Class B, Class C and Class T shares), and assume
that all dividends and distributions are
21
<PAGE>
reinvested when paid.
Yield. Quotations of yield for a specific class of shares of a Fund will be
based on all investment income attributable to that class earned during a
particular 30-day (or one month) period (including dividends and interest), less
expenses accrued during the period ("net investment income"), and will be
computed by dividing the net investment income per share of that class earned
during the period by the maximum offering price per share on the last day of the
month, according to the following formula:
Yield = 2[(a-b + 1)TO THE POWER OF 6 -1]
cd
Where:
a = dividends and interest earned during the period attributable to a
specific class of shares
b = expenses accrued for the period attributable to that class (net of
reimbursements)
c = the average daily number of shares of that class 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.
The maximum offering price includes a maximum contingent deferred sales load of
4%, in the case of Class T shares, 5% for Class B shares, and 1%, for Class C
shares.
All accrued expenses are taken into account as follows. Accrued expenses include
all recurring expenses that are charged to all shareholder accounts in
proportion to the length of the base period, including but not limited to
expenses under the Funds' distribution plans. Except as noted, the performance
results take the contingent deferred sales load into account.
NON-STANDARDIZED TOTAL RETURN
In addition to the performance information described above, the Funds may
provide total return information that is not calculated according to the formula
set forth above ("None-Standardized Return"). Neither initial nor contingent
deferred sales charges are taken into account in calculating Non-Standardized
Return. Excluding a Fund's sales charge from a total return calculation produces
a higher total return figure.
OTHER INFORMATION CONCERNING FUND PERFORMANCE
A Fund may quote its performance in various ways, using various types of
comparisons to market indices, other funds or investment alternatives, or to
general increases in the cost of living. All performance information supplied by
the Funds in advertising is historical and is not
22
<PAGE>
intended to indicate future returns. Each Fund's share prices and total returns
fluctuate in response to market conditions and other factors, and the value of
the Fund's shares when redeemed may be more or less than their original cost.
Evaluations of Fund performance made by independent sources may also be used in
advertisements concerning the Funds, including reprints of, or selections from,
editorials or articles about a Fund. These editorials or articles may include
quotations of performance from other sources, such as Lipper or Morningstar.
Sources for Fund performance information and articles about the Fund may include
the following: BANXQUOTE, BARRON'S, BUSINESS WEEK, CDA INVESTMENT TECHNOLOGIES,
INC., CHANGING TIMES, CONSUMER DIGEST, FINANCIAL WORLD, FORBES, FORTUNE,
IBC/DONOGHUES'S MONEY FUND REPORT, IBBOTSON ASSOCIATES, INC., INVESTMENT COMPANY
DATA, INC., INVESTOR'S DAILY, LIPPER ANALYTICAL SERVICES, INC.'S MUTUAL FUND
PERFORMANCE ANALYSIS, MONEY, MUTUAL FUND VALUES, THE NEW YORK TIMES, PERSONAL
INVESTING NEWS, PERSONAL INVESTOR, SUCCESS, USA TODAY, U.S. NEWS AND WORLD
REPORT, WALL STREET JOURNAL, WIESENBERGER INVESTMENT COMPANIES SERVICES, WORKING
WOMAN.
When comparing yield, total return and investment risk of shares of a Fund with
other investments, investors should understand that certain other investments
have different risk characteristics than an investment in shares of the Fund.
For example, certificates of deposit may have fixed rates of return and may be
insured as to principal and interest by the FDIC, while a Fund's returns will
fluctuate and its share values and returns are not guaranteed. Money market
accounts offered by banks also may be insured by the FDIC and may offer
stability of principal. U.S. Treasury securities are guaranteed as to principal
and interest by the full faith and credit of the U.S. government. Money market
mutual funds may seek to offer a fixed price per share. The performance of a
Fund is not fixed or guaranteed. Performance quotations should not be considered
to be representative of performance of the Fund for any period in the future.
The performance of a Fund is a function of many factors including its earnings,
expenses and number of outstanding shares. Fluctuating market conditions;
purchases, sales and maturities of portfolio securities; sales and redemptions
of shares of beneficial interest, and changes in operating expenses are all
examples of items that can increase or decrease the Fund's performance.
FINANCIAL STATEMENTS
The Northstar Advantage Trust's audited financial statements dated October 31,
1995 and the report of the independent accountants, Coopers & Lybrand L.L.P.
with respect to such financial statements, are hereby incorporated by reference
to the Annual Report to Shareholders of the Northstar Advantage Trust for the
fiscal year ended October 31, 1995.
The audited financial statements of Government Securities Fund, High Yield Fund,
Income Fund, Growth Fund, Special Fund and Strategic Income Fund as of and for
the fiscal period ended December 31, 1995 and the report of the independent
accountants, Coopers & Lybrand L.L.P., with respect to such financial statements
are hereby incorporated by reference to the
23
<PAGE>
Annual Report to Shareholders of The Advantage Family of Funds for the fiscal
year ended December 31, 1995.
24
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements: Not Applicable
(b) Exhibits:
(1) Declaration of Trust*
(2) By-Laws*
(3)(4) N/A
(5) Forms of Investment Advisory Agreements
(6) Forms of Underwriting Agreements
(7) N/A
(8) Custody Agreement*
(9) (a) Transfer Agency Agreement*
(b) Administrative Services Agreement*
(10) Opinion of Counsel
(11) N/A
(12) N/A
(13) N/A
(14 N/A
(15) Form of Distribution and Service Plan
(16) Performance Information*
(17) N/A
(18) N/A
* Filed as part of PEA No. 8 and incorporated herein by reference.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
There are no persons controlled by or under common control with Registrant.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of January 31, 1996, the Registrant had no security holders.
ITEM 27. INDEMNIFICATION
Section 4.3 of Registrant's Declaration of Trust provides the following:
(a) Subject to the exceptions and limitations contained in paragraph (b) below:
(i) every person who is, or has been, a Trustee or officer of the Trust
shall be indemnified by the Trust to the fullest extent permitted by
law against all liability
<PAGE>
and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he
becomes involved as a party or otherwise by virtue of his being or
having been a Trustee or officer and against amounts paid or incurred
by him in the settlement thereof; and
(ii) the word "claim", "action", "suit" or "proceeding" shall apply to
all claims, actions or suits or proceedings (civil, criminal,
administrative or other including appeals), actual or threatened; and
the words "liability" and "expenses" shall include without limitation,
attorneys fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Trustee or officer:
(i) against any liability to the Trust, a series thereof, or the
Shareholders by reason of a final adjudication by a court or other body
before which a proceeding was brought or that he engaged in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office;
(ii) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in reasonable belief that
his action was in the best interest of the Trust; and
(iii) in the event of a settlement or other disposition not involving a
final adjudication as provided in paragraph (b) (i) or (b) (ii)
resulting in a payment by a Trustee or officer, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office:
(A) by the court or other body approving the settlement or other
disposition; or
(B) based upon the review of readily available facts (as opposed to full
trial-type inquiry) by (x) vote of a majority of the Disinterested
Trustees acting on the matter (provided that a majority of the
Disinterested Trustees then in office act on the matter) or (y) written
opinion of independent legal counsel.
(C) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect
any other rights to which any Trustee or officer may now or hereafter
be entitled, shall continue as to a person who has ceased to be such
Trustee or officer and shall inure to the benefit of the heirs,
executors, administrators and assigns of such a person. Nothing
contained herein shall affect any rights to indemnification to which
personnel of the Trust other than Trustees and officers may be entitled
by contract or otherwise under law.
(D) Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in paragraph (a)
of this Section 4.3 may be advanced by the Trust prior to final
disposition thereof upon receipt of an undertaking by or on behalf of
the recipient to repay such amount if it is ultimately determined that
he is
<PAGE>
not entitled to indemnification under this Section 4.3, provided
that either:
(i) such undertaking is secured by a surety bond or some other
appropriate security provided by the recipient or the Trust shall be
insured against losses arising out of any such advances; or
(ii) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees act on the
matter) or an independent legal counsel in a written opinion shall
determine, based upon a review of readily available facts (as opposed
to a full trial-type inquiry), that there is reason to believe that the
recipient ultimately will be found entitled to indemnification.
As used in this Section 4.3, a "Disinterested Trustee" is one who is not (i) an
Interested Person of the Trust (including anyone who has been exempted from
being an Interested Person by any rule, regulation or order of the Commission),
or (ii) involved in the claim, action, suit or proceeding.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to Trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Trustee, officer or controlling person of the Registrant in
connection with the successful defense of any action suit or proceeding) is
asserted by such Trustee, officer or controlling person in connection with the
shares being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy, as expressed in the Act and be governed by final
adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
See "Management of the Funds" in the Prospectus and Services of the Adviser and
Administrator" and "Trustees and Officers" in the Statement of Additional
Information, each of which is included in the Registration Statement.
Set forth is a list of each officer and director of the Adviser indicating each
business, profession, vocation or employment of a substantial nature in which
each such person has been engaged since July 31, 1994.
<TABLE>
<CAPTION>
POSITION WITH OTHER SUBSTANTIAL
INVESTMENT BUSINESS, PROFESSION
NAME ADVISER VOCATION OR EMPLOYMENT
<S> <C> <C>
John Turner Director Chairman and CEO, ReliaStar Financial
Corp; Director of Northstar Affiliates;
Trustee and Chairman, Northstar
Affiliated Investment Companies.
<PAGE>
John Flittie Director President, ReliaStar Financial Corp.
Director, Northstar Affilates.
Mark L. Lipson Chairman/CEO Director and Officer of Northstar
Director Distributors, Inc., Northstar Administrators
Corp. and NWNL Northstar, Inc. Trustee
and President, Northstar Affiliated
Investment Companies.
Robert J. Adler Executive Vice President Northstar Distributors, Inc.
President, Sales &
Marketing
Thomas Ole Dial Executive Vice Vice President, Northstar Affiliated
President - Chief Investment Companies, and Principal, TD
Investment Officer, Associates Inc.
Fixed Income
Margaret Patel Vice President/ Vice President, Northstar Affiliate Invest-
Managing Director ment Cos. Former Vice President and Port-
folio Manager for Boston Security
Cousellors, Inc.
Geoffrey Wadsworth Vice President/ Vice President - Northstar Affiliated
Investments and Investment Companies.
Portfolio Manager
Jeffrey Aurigemma Vice President - Vice President - Northstar Affiliated
Investments Investment Companies.
Michael Graves Vice President Vice President - Northstar Affiliated
Investments Investment Companies
Agnes Mullady Sr. Vice President Vice President & Treasurer of Northstar
and CFO Affiliates and the Northstar Affiliated
Investment Companies.
Michael A. Rosenberg Sr. Vice President Senior Vice President, Northstar
General Counsel & Administrators Corp., Vice President
Secretary Northstar Distributors and Northstar
Affiliated Investment Companies.
Gertrude Purus Vice President Vice President Northstar Distributors and
Operations Northstar Administrators Corp.
Stephen Vondrak Vice President Vice President - Northstar Distributors, Inc.
Sales/Marketing Former Regional Marketing
<PAGE>
Manager with Roger Engemann
and Associates from 1991-1994.
Mark Sfarra Vice President - Vice President - Northstar Distributors, Inc.
Marketing
ITEM 29 . PRINCIPAL UNDERWRITER
(a) See "Management of the Funds - The Adviser and Affiliated Service Providers"
and "How to Purchase Shares" in the Prospectus and "Underwriter and Distribution
Services" in the Statement of Additional Information, both of which are included
in this Post-Effective Amendment to the Registration Statement. Unless otherwise
indicated, the principal business address for each person is c/o Northstar, Two
Pickwick Plaza, Greenwich, CT 06830.
</TABLE>
<TABLE>
<CAPTION>
(b) (1) (2) (3)
Name and Principal Position and Offices Position and Offices
Address with Underwriter with Registrant
<S> <C> <C>
John Turner Director Trustee, Chairman
20 Washington Ave. South
Minneapolis, MN
John Flittie Director None
20 Washington Ave. South
Minneapolis, MN
Mark L. Lipson Chairman & Director Trustee and President
Robert J. Adler President None
Mark Blinder Reg. Vice President None
Richard Francis Reg. Vice President None
Daniel Leonard Reg. Vice President None
Stephen O'Brien Reg. Vice President None
David Linton Reg. Vice President None
Charles Dolce Reg. Vice President None
Hyman Glasman Reg. Vice President None
Stephen Vondrak Vice President None
<PAGE>
Mark Sfarra Vice President None
Gertrude Purus Vice President None
Agnes Mullady Vice President & Treasurer Vice President & Treasurer
Michael A. Rosenberg Vice President & Secretary Vice President & Secretary
</TABLE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
State Street Bank and Trust Co. maintains the following records as Custodian and
Fund Accounting Agent for the Fund:
(1) Receipts and delivery of securities including certificate numbers;
(2) Receipts and disbursement of cash;
(3) Records of securities in transfer, securities in physical
possession, securities owned and securities loaned.
(4) Fund Accounting Records.
First Data Investor Services Group, ("First Data") maintains the following
records at One Exchange Place, 11th Floor, Boston, Massachusetts, 02109, as
Transfer Agent and Blue Sky Administrator for the Fund.
(1) Shareholder Records;
(2) Share accumulation accounts: Details as to dates and number of
shares of each accumulation, price of each accumulation.
(3) Fund Accounting Records
(4) State Securities Regisitration Records
All other records required by item 30(a) are maintained at the office of the
Administrator, Two Pickwick Plaza, Greenwich, CT 06830.
ITEM 31. Management Services
Not Applicable
ITEM 32. Undertakings
(a) Registrant hereby undertakes to call a meeting of shareholders for the
purpose of voting upon the question of removal of a Trustee or Trustees when
requested in writing to do so by the holders of at least 10% of the Trusts'
outstanding shares of beneficial interest and in connection with such meeting to
comply with the provisions of Section 16(c) of the Investment Company Act of
1940 relating to shareholder communications.
<PAGE>
(b) Registrant hereby undertakes to furnish each person to whom a prospectus is
delivered with a copy of Registrant's latest annual report to shareholders upon
request and without charge.
(c) Registrant undertakes to file a post-effective amendment, using financial
statements which need not be certified, within four to six months from the
effective date of the Fund's registration statement.
<PAGE>
SIGNATURE PAGE
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post-Effective
Amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Greenwich and State of
Connecticut on the 31st day of July, 1996.
NORTHSTAR ADVANTAGE TRUST
/s/Mark L. Lipson
Mark L. Lipson, President*
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/John G. Turner Chairman/Trustee July 31, 1995
John G. Turner*
/s/Mark L. Lipson President/Trustee July 31, 1996
Mark L. Lipson*
/s/Paul S. Doherty Trustee July 31, 1996
Paul S. Doherty*
/s/David W. Wallace Trustee July 31, 1996
David W. Wallace*
/s/Robert B. Goode, Jr. Trustee July 31, 1996
Robert B. Goode, Jr.*
/s/Walter H. May Trustee July 31, 1996
Walter H. May*
/s/Alan L. Gosule Trustee July 31, 1996
Alan L. Gosule*
/s/David W.C. Putnam Trustee July 31, 1996
David W. C. Putnam*
/s/John R. Smith Trustee July 31, 1996
John R. Smith*
/s/Agnes Mullady Principal Financial July 31, 1996
Agnes Mullady and Accounting Officer
By:/s/Agnes Mullady
*Agnes Mullady - Attorney-in-Fact. Executed pursuant to powers of
attorney filed with PEA Nos. 6 and 7
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NUMBER UNDER
PART C OF FORM N-1A NAME OF EXHIBIT
5 FORMS OF ADVISORY AGREEMENTS
6 FORM OF UNDERWRITING AGREEMENT
10 OPINION OF COUNSEL
15 FORM OF DISTRIBUTION AND SERVICE PLAN
</TABLE>
<PAGE>
EXHIBIT 5
NORTHSTAR ADVANTAGE TRUST
INVESTMENT ADVISORY AGREEMENT
As Amended July 31, 1996
AGREEMENT made this 8th day of November 1993, by and between NORTHSTAR
ADVANTAGE TRUST, a Massachusetts business trust, (the "Trust") and NORTHSTAR
INVESTMENT MANAGEMENT CORPORATION., a Delaware business corporation (the
"Adviser").
The Trust is an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act"),
consisting of the series named on schedule 1 hereto (each "Fund" and
collectively the "Funds"), as such schedule may be revised from time to time.
The Trust desires to retain the Adviser to render investment advisory
services to the Funds, and the Adviser is willing to render such investment
advisory on the terms set forth below.
The parties agree as follows:
1. The Trust hereby appoints the Adviser to act as investment adviser to
the Trust and the Funds for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to render the
services described, for the compensation provided, in this Agreement.
2. Subject to the supervision of the Trustees, the Adviser shall manage the
investment operations of the Funds and the composition of each Fund's portfolio,
including the purchase and retention and disposition of portfolio securities, in
accordance with each Fund's investment objectives, policies and restrictions as
stated in the Trust's Prospectus and Statement of Additional Information (as
defined below) subject to the following understandings:
(a) The Adviser shall provide supervision of each Fund's investments and
determine from time to time what investments will be made, held or disposed of
or what securities will be purchased and retained, sold or loaned by each Fund,
and what portion of the assets will be invested or held uninvested as cash.
(b) The Adviser shall use its best judgment in the performance of its
duties under this Agreement.
(c) The Adviser, in the performance of its duties and obligations under
this Agreement, shall (i) act in conformity with the Declaration of Trust, By-
Laws, Prospectus and Statement of Additional Information of the Trust, with the
instructions and directions of the Trustees and (ii)
<PAGE>
conform to and comply with the requirements of the Investment Company Act and
all other applicable federal and state laws and regulations.
(d) (i) The Adviser shall determine the securities to be purchased or sold
by each Fund and will place orders pursuant to its determinations with or
through such persons, brokers or dealers to carry out the policy with respect to
brokerage as set forth in the Trust's Prospectus and Statement of Additional
Information or as the Trustees may direct from time to time. In providing each
Fund with investment supervision, the Adviser will give primary consideration to
securing the most favorable price and efficient execution. The Adviser may also
consider the financial responsibility, research and investment information and
other services and research related products provided by brokers or dealers who
may effect or be a party to any such transactions or other transactions to which
other clients of the Adviser may be a party. The Funds recognize that the
services and research related products provided by such brokers may be useful to
the Adviser in connection with its services to other clients.
(ii) When the Adviser deems the purchase or sale of a security to be
in the best interest of a Fund as well as other clients, the Adviser, to the
extent permitted by applicable laws and regulations, may aggregate the
securities to be sold or purchased in order to obtain the most favorable price
or lower brokerage commissions and efficient execution. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transactions, will be made by the Adviser in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to each Fund and to such other clients.
(e) The Adviser shall maintain, or cause to be maintained, all books and
records required under the Investment Company Act to the extent not maintained
by the custodian of the Trust. The Adviser shall render to the Trustees such
periodic and special reports as the Trustees may reasonably request.
(f) The Adviser shall provide the Trust's custodian on each business day
information relating to all transactions concerning each Fund's assets.
(g) The investment management services of the Adviser to the Trust and to
each Fund under this Agreement are not to be deemed exclusive, and the Adviser
shall be free to render similar services to others.
3. The Trust has delivered to the Adviser copies of each of the following
documents and will deliver to it all future amendments and supplements, if any:
(a) Declaration of Trust, as amended, as filed with the Secretary of the
Commonwealth of Massachusetts (such Declaration of Trust, as in effect on the
date hereof and as further amended from time to time, are herein called the
"Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date hereof and
as amended from time to time, are herein called the "By-Laws");
<PAGE>
(c) Certified resolutions of the Trustees authorizing the appointment of
the Adviser and approving this Agreement on behalf of the Trust and each Fund;
(d) Registration Statement on Form N-lA under the Investment Company Act
and the Securities Act of 1933, as amended from time to time (the "Registration
Statement"), as filed with the Securities and Exchange Commission (the
"Commission"), relating to the Trust and shares of beneficial interest of each
Fund and all amendments thereto.
(e) Notification of Registration of the Trust under the Investment Company
Act on Form N-8A as filed with the Commission and all amendments thereto;
(f) Prospectus and Statement of Additional Information included in the
Registration Statement, as amended from time to time. All references to this
Agreement, the Prospectus and the Statement of Additional Information shall be
to such documents as most recently amended or supplemented and in effect.
4. The Adviser shall authorize and permit any of its directors, officers
and employees who may be elected as trustees or officers of the Trust and/ or
the Funds to serve in the capacities in which they are elected. All services to
be furnished by the Adviser under this Agreement may be furnished through such
directors, officers or employees of the Adviser.
5. The Adviser agrees that all records which it maintains for the Trust
and/or the Funds are property of the Trust and/or the Funds. The Adviser will
surrender promptly to the Trust and/or the Funds any such records upon either
the Trust's or the Fund's request. The Adviser further agrees to preserve such
records for the periods prescribed in Rule 3la-2 of the Commission under the
Investment Company Act.
6. (i) In connection with the services rendered by the Adviser under this
Agreement, the Adviser will pay all of the following expenses:
(a) the salaries and expenses of all personnel of the Trust, the
Funds and the Adviser required to perform the services to be
provided pursuant to this Agreement, except the fees of the
trustees who are not affiliated persons of the Adviser, and
(b) all expenses incurred by the Adviser, the Trust or by the
Funds in connection the performance of the Adviser's
responsibilities hereunder, other than brokers' commissions
and any issue or transfer taxes chargeable to each respective
Fund in connection with its securities transactions.
7. In the event the expenses of each Fund for any fiscal year (including
the fees payable to the Adviser but excluding interest, taxes, brokerage
commissions, distribution fees and litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the Fund's
business) exceed the lowest applicable annual expense limitation established
pursuant to the statutes or regulations of any jurisdictions in which shares of
each respective Fund are then
<PAGE>
qualified for offer and sale, the compensation due the Adviser will be reduced
by the amount of such excess, or, if such reduction exceeds the compensation
payable to the Adviser, the Adviser will pay each Fund, whose expenses exceed
such expense limitation, the amount of such reduction which exceeds the amount
of such compensation.
8. For the services provided and the expenses assumed pursuant to this
Agreement, each Fund will pay to the Adviser as compensation a at the rate set
forth opposite each Funds' name on Schedule 1 hereto, such fee to be accrued
daily and paid monthly..
9. The Adviser may rely on information reasonably believed by it to be
accurate and reliable. Neither the Adviser nor its officers, directors,
employees or agents or controlling persons shall be liable for any error or
judgment or mistake of law, or for any loss suffered by the Trust and/or a Fund
in connection with or arising out of the matters to which this Agreement
relates, except 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 it of its obligations and duties under this Agreement.
10. As to each Fund, this Agreement shall continue until the date set forth
opposite such Fund's name on Schedule 1 hereto (the "Reapproval Date") and shall
continue automatically for successive annual periods ending on the day of each
year set forth opposite the Fund's name on Schedule 1 hereto (the "Reapproval
Day"), provided that such continuance is specifically approved at least annually
by the affirmative vote of (i) a majority of the Trustees of the Trust acting
separately on behalf of each Fund, who are not interested persons of the Trust,
cast in person at a meeting called for the purpose of voting on such approval,
and (ii) a majority of the Trustees of the Trust or the holders of a majority of
the outstanding voting securities of each respective Fund; provided however,
that this Agreement may be terminated by the Trust, on behalf of a Fund at any
time, without the payment of any penalty, by the Trustees acting on behalf of a
Fund or by vote of a majority of the outstanding voting securities (as defined
in the Investment Company Act) of a Fund, or by the Adviser at any time, without
the payment of any penalty, on not more than 60 days' nor less than 30 days'
written notice to the other party. This Agreement shall terminate automatically
in the event of its assignment provided that a transaction which does not, under
the Investment Company Act, result in a change of actual control or management
of the Adviser's business shall not be deemed to be an assignment for the
purposes of this Agreement.
11. This agreement shall terminate automatically in the event of its
assignment; the term "assignment" for this purpose shall have the meaning
defined in Section 2(a)(4) of the Investment Company Act of 1940.
12. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of the Adviser who may also be a trustee, officer
or employee of the Trust and/or the Funds to engage in any other business or to
devote his time and attention in part to the management or other aspect of any
business, whether of a similar or dissimilar nature, nor limit or restrict the
right of the Adviser to engage in any other business or to render services of
<PAGE>
any kind to any other person or entity.
13. During the term of this Agreement, the Trust and each Fund agrees to
furnish the Adviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature, or other material prepared for
distribution to shareholders of each Fund or the public, which refer in any way
to the Adviser, prior to use thereof and not to use such material if the Adviser
reasonably objects in writing within five business days (or such other time as
may be mutually agreed) after receipt. In the event of termination of the
Agreement, the Trust and/or each Fund will continue to furnish to the Adviser
such other information relating to the business affairs of the Trust and/or each
Fund as the Adviser at any time, or from time to time, reasonably requests in
order to discharge its obligations hereunder.
14. This Agreement may be amended by mutual agreement, but only after
authorization of such amendments by the affirmative vote of (i) the holders of
the majority of the outstanding voting securities of each Fund and ( ii) a
majority of the members of the Trustees who are not interested persons of the
Trust or the Adviser, cast in person at a meeting called for the purpose of
voting on such approval.
15. The Adviser, the Trust and the Funds each agree that the name
"Northstar" is proprietary to, and a property right of, the Adviser. The Trusts
and the Funds agree and consent that (i) each will only use the name "Northstar"
as part of its name and for no other purpose, (ii) each will not purport to
grant any third party the right to use the name "Northstar" and (iii) upon the
termination of this Agreement, the Trust and the Funds shall, upon the request
of the Adviser, cease to use the name "Northstar", and shall use its best
efforts to cause its officers, trustees and shareholders to take any and all
actions which the Adviser may request to effect the foregoing.
16. Any notice or other communications required to be given pursuant to
this Agreement shall be deemed to be given if delivered or mailed by registered
mail, postage paid, (1) to the Adviser at Two Greenwich Plaza, Suite 100,
Greenwich, CT 06830, Attention: Secretary; or (2) to the Trust and/or the Funds,
Two Greenwich Plaza, Suite 100, Greenwich, CT 06830, Attention: Secretary.
17. This Agreement shall be governed by and construed in accordance with
the laws of the State of Connecticut. The terms "interested person",
"assignment", and "vote of the majority of the outstanding securities" shall
have the meaning set forth in the Investment Company Act.
18. The Declaration of Trust, establishing the Trust, dated August 18,
1993, a copy of which, together with all amendments thereto (the "Declaration"),
is on file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name "Northstar Series Trust" refers to the Trustees under the
Declaration collectively as trustees, but not individually or personally; and no
Trustee, shareholder, officer, employee or agent of the Trust and/or the Funds
may be held to any personal liability, nor may resort be had to their private
property for the satisfaction of any obligation or claim or otherwise in
connection with the affairs of the Trust, but the Trust property only shall be
liable.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first written
above.
NORTHSTAR ADVANTAGE TRUST
Attest: By:
President
NORTHSTAR INVESTMENT MANAGEMENT
CORPORATION
Attest: By:
Sr. Vice President
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
ANNUAL FEE AS A PERCENTAGE
OF AVG. DAILY NET ASSETS
NAME OF FUND REAPPROVAL DATE REAPPROVAL DAY
<S> <C> <C> <C>
Northstar Advantage Income .75 of 1% on first $250 November 8, 1995 November 8th
and Growth Fund million; .70% on the next
$250 million; .65% on the
next $250 million; .60%
on the next $250 million;
and .55% on assets in
excess of $1 billion.
Northstar Advantage High .75 of 1% on first $250 November 8, 1995 November 8th
Total Return Fund million; .70% on the next
$250 million; .65% on the
next $250 million; .60%
on the next $250 million;
and .55% on assets in
excess of $1 billion
Northstar Growth + Value Fund 1.00% July 31, 1998 July 31st
</TABLE>
<PAGE>
NORTHSTAR ADVANTAGE VALUE AND GROWTH FUND
SUBADVISORY AGREEMENT
AGREEMENT made this day of , 1996 by and between Northstar
Investment Management Corporation, a Delaware Corporation (hereinafter the
"Adviser"), investment adviser for the Northstar Advantage Growth + Value Fund
(hereinafter the "Fund") and Navellier Fund Management, Inc., a Delaware
corporation (hereinafter the "Subadviser").
WHEREAS, the Adviser has been retained by the Fund, an open-end
diversified management investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), to provide investment advisory
services to the Fund pursuant to an amended Investment Advisory Agreement dated
July 31, 1996(the "Investment Advisory Agreement"); and
WHEREAS, the Fund's Trustees, including a majority of the Trustees who
are not "interested persons," as defined in the 1940 Act, and the Fund's
shareholders have approved the appointment of the Subadviser to perform certain
investment advisory services for the Fund pursuant to this Subadvisory Agreement
with the Adviser and the Subadviser is willing to perform such services for the
Fund;
WHEREAS, the Subadviser is or will be registered as an investment
adviser under the Investment Advisers Act of 1940, as amended ("Advisers Act")
prior to performing its services for the Fund under this Agreement;
NOW THEREFORE, in consideration of the promises and mutual convenants
herein contained, it is agreed between the Adviser and the Subadviser as
follows:
1. Appointment. The Adviser hereby appoints the Subadviser to perform
advisory services to the Fund for the periods and on the terms set forth in this
Subadvisory Agreement. The Subadviser accepts such appointment and agrees to
furnish the services herein set forth, for the compensation herein provided.
2. Duties of Subadviser. The Adviser hereby authorizes Subadviser to
manage the investment and reinvestment of cash and investments comprising the
assets of the Fund with power on behalf of and in the name of the Fund at
Subadviser's discretion; subject at all times to the supervision of the Adviser
and the Trustees of the Fund:
(a) to direct the purchase, subscription or other acquisition
of investments and to direct the sale, redemption, and exchange of investments,
subject to the duty to render to the Trustees of the Fund, the Adviser and the
Custodian written reports of the composition of the portfolio of the Fund as
often as the Trustees of the Fund shall reasonably require;
(b) to make all decisions relating to the manner, method and
timing of investment transactions, to select brokers, dealers and other
intermediaries by or through whom such transactions will be effected, and to
engage such consultants, analysts and experts in connection therewith as may be
considered necessary or appropriate;
(c) to direct banks, brokers or custodians to disburse funds
or assets solely in order to execute investment transactions for the Fund,
provided that the Subadviser shall have no authority to direct the transfer of
the Fund's funds or assets to itself or other persons and shall have no
authority over the disbursement (as opposed to investment decisions) of funds or
assets nor any custody of any of the Fund's funds or assets; and
(d) to take all such other actions as may be considered
necessary or appropriate to discharge its duties hereunder; PROVIDED THAT any
specific or general directions which the Trustees of the Fund, or the Adviser
may give to the Subadviser with regard to any of the foregoing powers shall,
unless the contrary is expressly stated therein, override the general authority
given by this provision to the extent that the Trustees of the Fund may, at any
time and from time to time, direct, either generally or to a limited extent and
either alone or in concert with the
<PAGE>
Adviser or the Subadviser (provided that such directions would not cause the
Subadviser to violate any fiduciary duties or any laws with regard to the
Subadviser's duties and responsibilities), all or any of the same as they shall
think fit and, in particular, the Adviser shall have the right to direct the
Subadviser to place trades through brokers and other agents of the Adviser's
choice, subject to such brokers or agents executing such trades on a "best
execution basis", i.e. at the best price and/or with research or other services
which render that broker's services the most appropriate for the Subadviser's
needs, and further that the Subadviser is satisfied that the dealing and
execution quality of such brokers are satisfactory to the Subadviser; and
PROVIDED FURTHER that nothing herein shall be construed as giving the Subadviser
power to manage the aforesaid cash and investments in such a manner as would
cause the Fund to be considered a "dealer" in stocks, securities or commodities
for U.S. federal income tax purposes.
The Adviser shall monitor and review the performance of the Subadviser
under this Agreement, including but not limited to the Subadviser's performance
of the duties delineated in subparagraphs (a)-(d) of this provision.
The Subadviser further agrees that, in performing its duties hereunder,
it will
(a) (i) comply with the 1940 Act and all rules and regulations
thereunder, the Advisers Act, the Internal Revenue Code (the "Code") and all
other applicable federal and state laws and regulations, the Prospectus and
Statement of Additional Information for the Fund, and with any applicable
procedures adopted by the Trustees in writing and made available to Subadviser;
(ii) manage the Fund in accordance with the investment requirements for
regulated investment companies under Subchapter M of the Code and regulations
issued thereunder; (iii) direct the placement of orders pursuant to its
investment determinations for the Fund directly with the issuer, or with any
broker or dealer, in accordance with applicable policies expressed in the Fund's
Prospectus and/or Statement of Additional Information and in accordance with
applicable legal requirements.
(b) furnish to the Fund whatever non-proprietary reports the
Fund may reasonably request with respect to the Fund's assets or contemplated
investments. In addition, the Subadviser will keep the Fund and the Trustees
informed of developments materially affecting the Fund's portfolio and shall, on
the Subadviser's own initiative, furnish to the Fund from time to time whatever
information the Subadviser believes appropriate for this purpose;
(c) make available to the Fund's administrator, Northstar
Administrators Corp. (the "Administrator"), the Adviser, and the Fund, promptly
upon their request, such copies of its investment records and ledgers with
respect to the Fund as may be required to assist the Adviser, the Administrator
and the Fund in their compliance with applicable laws and regulations. The
Subadviser will furnish the Trustees with such periodic and special reports
regarding the Fund as they may reasonably request;
(d) immediately notify the Adviser and the Fund in the event
that the Subadviser or any of its affiliates: (i) becomes aware that it is
subject to a statutory disqualification that prevents the Subadviser from
serving as an investment adviser pursuant to this Subadvisory Agreement; or (ii)
becomes aware that it is the subject of an administrative proceeding or
enforcement action by the Securities and Exchange Commission ("SEC") or other
regulatory authority. The Subadviser further agrees to notify the Fund and the
Adviser immediately of any material fact known to the Subadviser respecting or
relating to the Subadviser that is not contained in the Fund's Registration
Statement, or any amendment or supplement thereto, but that is required to be
disclosed therein, and of any statement contained therein that becomes untrue in
any material respect. The Fund, Adviser, Administrator, and their Affiliates
shall likewise immediately notify the Subadviser if any of them becomes aware of
any regulatory action of the type described in this subparagraph 2(d).
3. Allocation of Charges and Expenses. The Subadviser shall pay all
expenses associated with the management of its business operations in performing
its responsibilities hereunder, including the cost of its own overhead,
research, compensation and expenses of its directors, officers and employees,
and other internal operating costs; provided, however, that the Subadviser shall
be entitled to reimbursement on a monthly basis by the Adviser of all reasonable
out-of-pocket expenses properly incurred by it in connection with serving as
subadviser to the
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Fund. For the avoidance of doubt, the Fund shall bear its own overhead and other
internal operating costs (whether incurred directly or by the Adviser or the
Subadviser) including, without limitation:
(a) the costs incurred by the Fund in the preparation and
printing of the Prospectus or any offering literature (including any form of
advertisement or other solicitation materials calculated to lead to investors
subscribing for shares);
(b) all fees and expenses on behalf of the Fund to the
Transfer Agent and the Custodian;
(c) the reasonable fees and expenses of accountants, auditors,
lawyers and other professional advisors to the Fund;
(d) any interest, fee or charge payable on or on account of
any borrowing by the Fund;
(e) fiscal and governmental charges and duties relating to the
purchase, sale, issue or redemption of shares and increases in authorized share
capital of the Fund;
(f) the fees of any stock exchange or over-the-counter market
on which the shares may from time to time be listed, quoted or dealt in and the
expenses of obtaining any such listing, quotation or permission to deal;
(g) the fees and expenses (if any) payable to Trustees;
(h) brokerage, fiscal or governmental charges or duties in
respect of or in connection with the acquisition, holding or disposal of any of
the assets of the Fund or otherwise in connection with its business;
(i) the expenses of publishing details and prices of shares in
newspapers and other publications;
(j) all expenses incurred in the convening of meetings of
shareholders or in the preparation of agreements or other documents relating to
the Fund or in relation to the safe custody of the documents of title of any
investments;
(k) all Trustees communication costs; and
(1) all premiums and costs for Fund insurance and blanket
fidelity bonds.
4. Compensation. As compensation for the services provided by the
Subadviser under this Agreement, the Adviser will pay the Subadviser at the end
of each calendar month an advisory fee computed daily at an annual rate equal to
0.62 of 1 % of the Fund's average daily net assets. The "average daily net
assets" of the Fund shall mean the average of the values placed on the Fund's
net assets as of 4:00 p.m. (New York time) on each day on which the net asset
value of the Fund is determined consistent with the provisions of Rule 22c-1
under the 1940 Act or, if the Fund lawfully determines the value of its net
assets as of some other time on each business day, as of such other time. The
value of net assets of the Fund shall always be determined pursuant to the
applicable provisions of the Fund's Declaration of Trust and the Registration
Statement. If, pursuant to such provisions, the determination of net asset value
is suspended for any particular business day, then for the purposes of this
Section 4, the value of the net assets of the Fund as last determined shall be
deemed to be the value of its net assets as of the close of regular trading on
the New York Stock Exchange, or as of such other time as the value of the net
assets of the Fund's portfolio may lawfully be determined, on that day. If the
determination of the net asset value of the shares of the Fund has been so
suspended for a period including any month end when the Subadviser's
compensation is payable pursuant to this Section, the Subadviser's compensation
payable at the end of such month shall be computed on the basis of the value of
the net assets of the Fund as last determined (whether during or prior to such
month). If the Fund determines the value of the net assets of its portfolio more
than once on any day, then
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the last such determination thereof on that day shall be deemed to be the sole
determination thereof on that day for the purposes of this Section 4.
5. Books and Records. The Subadviser agrees to maintain such books and
records with respect to its services to the Fund as are required by Section 31
under the 1940 Act, and rules adopted thereunder, and by other applicable legal
provisions, and to preserve such records for the periods and in the manner
required by applicable laws or regulations. The Subadviser also agrees that
records it maintains and preserves pursuant to Rules 31a-2 under the 1940 Act
(excluding trade secrets or intellectual property rights) in connection with its
services hereunder are the property of the Fund and will be surrendered promptly
to the Fund upon its request and the Subadviser further agrees that it will
furnish to regulatory authorities having the requisite authority any information
or reports in connection with its services hereunder which may be requested in
order to determine whether the operations of the Fund are being conducted in
accordance with applicable laws and regulations.
6. Standard of Care and Limitation of Liability. The Subadviser shall
exercise its best judgment in rendering the services provided by it under this
Subadvisory Agreement. The Subadviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund or the holders
of the Fund's shares or by the Adviser in connection with the matters to which
this Subadvisory Agreement relates, provided that nothing in this Subadvisory
Agreement shall be deemed to protect or purport to protect the Subadviser
against liability to the Fund or to holders of the Fund's shares or to the
Adviser to which the Subadviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or by reason of the Subadviser's reckless disregard of its obligations
and duties under this Subadvisory Agreement. As used in this Section 6, the term
"Subadviser" shall include any officers, directors, employees or other
affiliates of the Subadviser performing services for the Fund.
7. Services Not Exclusive. It is understood that the services of the
Subadviser are not exclusive, and that nothing in this Subadvisory Agreement
shall prevent the Subadviser, its affiliates or its or their officers, directors
and employees from providing similar services to other investment companies
(whether or not their investment objectives and policies are similar to those of
the Fund) or from engaging in other investment advisory activities. When the
Subadviser recommends the purchase or sale of a security for other investment
companies and other clients, and at the same time the Subadviser recommends the
purchase or sale of the same security for the Fund, it is understood that in
light of its fiduciary duty to the Fund, such transactions will be executed on a
basis that is fair and equitable to the Fund; provided, however, that the
Subadviser is not required to recommend to the Fund the same investments it
recommends to its other clients. In connection with purchases or sales of
portfolio securities for the account of the Fund, neither the Subadviser nor any
of its directors, officers or employees shall act as a principal or agent or
receive any commission. If the Subadviser provides any advice to its clients
concerning the shares of the Fund, the Subadviser shall act solely as investment
counsel for such clients and not in any way on behalf of the Fund.
8. Duration and Termination. This Subadvisory Agreement shall continue
in effect for a period of two years unless sooner terminated as provided herein.
Notwithstanding the foregoing, this Subadvisory Agreement may be terminated: (a)
at any time without penalty by the Fund or Adviser upon the vote of a majority
of the Trustees or by vote of the majority of the Fund's outstanding voting
securities, upon sixty (60) days' written notice to the Subadviser, or (b) by
the Subadviser without cause at any time without penalty, upon (60) days'
written notice to the Fund or Adviser. This Subadvisory Agreement will also
terminate automatically in the event of its assignment (as defined in the 1940
Act) or the assignment or termination of the Investment Advisory Agreement.
9. Amendments. No provision of this Subadvisory Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by both parties, and no material amendment of this Subadvisory
Agreement shall be effective until approved by an affirmative vote of (i) a
majority of the outstanding voting securities of the Fund, and (ii) a majority
of the Trustees of the Fund, including a majority of Trustees who are not
interested persons of any party to this Subadvisory Agreement, cast in person at
a meeting called for the purpose of voting on such approval, if such approval is
required by applicable law.
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10. Indemnification. (a) The Adviser hereby agrees to indemnify the
Subadviser from and against all liabilities, losses, expenses, reasonable
attorneys' fees and costs (other than attorneys' fees and costs in relation to
the preparation of this Agreement; each party bearing responsibility for its own
such costs and fees) or damages (other than liabilities, losses, expenses,
attorneys fees and costs or damages arising from the Subadviser failing to meet
the standard of care required hereunder in the performance by the Subadviser of,
or its failure to perform, the services required hereunder), arising from the
Adviser's (its affiliates and their respective agents and employees) failure to
perform its duties or assume its obligations hereunder, or from its wrongful
actions or omissions, including, but not limited to, any claims for non-payment
of advisory fees; claims asserted or threatened by any shareholder of the Fund,
governmental or regulatory agency, or any other person; claims arising from any
wrongful act by the Fund or any of the Fund's trustees, officers, employees, or
representatives, or by the Adviser, its officers, employees or representatives,
or from any actions by the Fund's distributors or any representative of the
Fund; any action or claim against the Subadviser based on any alleged untrue
statement or misstatement of material fact in any registration statement,
prospectus, shareholder report or other information or materials covering shares
filed or made public by the Fund or any amendment thereof or supplement thereto,
or the failure or alleged failure to state therein a material fact required to
be stated in order that the statements therein are not misleading, provided that
such claim is not based upon information provided to the Adviser by the
Subadviser or approved by the Subadviser in the manner provided in paragraph
12(b) of this Agreement, or which facts or information the Subadviser failed to
provide or disclose. With respect to any claim for which the Subadviser shall be
entitled to indemnity hereunder, the Adviser shall assume the reasonable
expenses and costs (including any reasonable attorneys' fees and costs) of the
Subadviser of investigating and/or defending any claim asserted or threatened by
any party, subject always to the Adviser first receiving a written undertaking
from the Subadviser to repay any amounts paid on its behalf in the event and to
the extent of any subsequent determination that the Subadviser was not entitled
to indemnification hereunder in respect of such claim.
(b) The Subadviser hereby agrees to indemnify the Adviser, its
affiliates and the Fund from and against all liabilities, losses, expenses,
reasonable attorneys' fees and costs (other than attorneys' fees and costs in
relation to the preparation of this Agreement; each party bearing responsibility
for its own such costs and fees) or damages (other than liabilities, losses,
expenses, attorneys fees and costs or damages arising from the Adviser's failure
to perform its responsibilities hereunder or claims arising from its acts or
failure to act in performing this Agreement) arising from Subadviser's (its
affiliates and their respective agents and employees) failure to perform its
duties and assume its obligations hereunder, or from any wrongful act of
Subadviser or its failure to act in performing this Agreement, including any
action or claim against the Adviser based on any alleged untrue statement or
misstatement of a material fact made or provided by or with the consent of
Subadviser contained in any registration statement, prospectus, shareholder
report or other information or materials relating to the Fund and shares issued
by the Fund, or the failure or alleged failure to state a material fact therein
required to be stated in order that the statements therein are not misleading,
which fact should have been made or provided by the Subadviser to the Adviser.
With respect to any claim for which the Adviser is entitled to indemnity
hereunder, the Subadviser shall assume the reasonable expenses and costs
(including any reasonable attorneys' fees and costs) of the Adviser of
investigating and/or defending any claim asserted or threatened by any party,
subject always to the Subadviser first receiving a written undertaking from the
Adviser to repay any amounts paid on its behalf in the event and to the extent
of any subsequent determination that the Adviser was not entitled to
indemnification hereunder in respect of such claim.
(c) In the event that the Subadviser or Adviser is or becomes
a party to any action or proceedings in respect of which indemnification may be
sought hereunder, the party seeking indemnification shall promptly notify the
other party thereof. After becoming notified of the same, the party from whom
indemnification is sought shall be entitled to participate in any such action or
proceeding and shall assume any payment for the full defense thereof with
counsel reasonably satisfactory to the party seeking indemnification. After
properly assuming the defense thereof, the party from whom indemnification is
sought shall not be liable hereunder to the other party for any legal or other
expenses subsequently incurred by such party in connection with the defense
thereof, other than damages, if any, by way of judgment, settlement, or
otherwise pursuant to this provision. The party from whom indemnification is
sought shall not be liable hereunder for any settlement of any action or claim
effected without its written consent, which consent shall not be unreasonably
withheld.
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11. Independent Contractor. Subadviser shall for all purposes of this
Agreement be deemed to be an independent contractor and, except as otherwise
expressly provided herein, shall have no authority to act for, bind or represent
the Fund in any way or otherwise be deemed to be an agent of the Fund. Likewise,
the Fund, the Adviser and their respective affiliates, agents and employees
shall not be deemed agents of the Subadviser and shall have not authority to
bind Subadviser.
12. Use of Name. (a) The Fund may, subject to sub-clause (b) below, use
the name, "Navellier Fund Management, Inc." or any component, abbreviation or
other name derived therefrom for promotional purposes only for so long as this
Agreement (or any extension, renewal or amendment thereof) continues in force,
unless the Subadviser shall specifically consent in writing to such continued
use thereafter. Any permitted use by the Fund during the term hereof of the name
of the Subadviser, Navellier, or any derivative thereof, shall in no way prevent
the Subadviser or any of it shareholders or any of their successors, from using
or permitting the use of such name (whether singly or in any combination with
any other words) for, by or in connection with an entity or enterprise other
than the Fund. The name and right to the name Navellier Fund Management, Inc. or
any derivation of the name Navellier shall at all times be owned and be the sole
and exclusive property of Louis Navellier and his affiliated entities. Navellier
Fund Management Inc., by entering into this Agreement, is allowing the Fund to
use the name Navellier and/or derivatives thereof solely by or on behalf of the
Fund. At the conclusion of this Agreement or in the event of any termination of
this Agreement or if the Subadviser's services are terminated for any reason,
each of the authorized parties and their respective employees, representatives,
affiliates, and associates agree that they shall immediately cease using the
name Navellier and/or any derivatives of said name for any purpose whatsoever.
(b) The Adviser and its affiliates shall not publish or
distribute, and shall cause the Fund not to publish or distribute to Fund
shareholders, prospective investors, sales agents or members of the public any
disclosure document, offering literature (including any form of advertisement or
other solicitation materials calculated to lead investors to subscribe for and
purchase shares of the Fund) or other document referring by name to the
Subadviser, unless the Subadviser shall have consented in writing to such
references in the form and context in which they appear; provided however, that
where the Fund timely seeks to obtain approval of disclosure contained in any
documents required to be filed by the Fund, and such approval is not forthcoming
on or before the date on which such documents are required by law to be filed,
the Subadviser shall be deemed to have consented to such disclosure.
13. Miscellaneous.
(a) This Subadvisory Agreement shall be governed by the laws
of the State of Nevada, provided that nothing herein shall be construed in a
manner inconsistent with the 1940 Act, the Advisers Act, or rules or orders of
the SEC thereunder. In the event of any litigation in which the Adviser and the
Subadviser are adverse parties and there are no other parties to such
litigation, such action shall be brought in the United States District Court for
the State of Nevada, located in Reno, Nevada.
(b) The captions of this Subadvisory Agreement are included
for convenience only and in no way define or limit any of the provisions hereof
or otherwise affect their construction or effect.
(c) This Agreement may be executed in one or more
counterparts, all of which taken together shall be deemed to constitute one and
the same instrument.
14. Notices. Any notice, instruction or other instrument required or
permitted to be given hereunder may be delivered in person to the offices of the
parties as set forth therein during normal business hours, or delivered or sent
by prepaid registered mail, express mail or by facsimile to the parties at such
offices or such other address as may be notified by either party from time to
time. Such notice, instruction or other instrument shall be deemed to have been
served, in the case of a registered letter at the expiration of seventy-two (72)
hours after posting; in the case of express mail, within twenty-four (24) hours
after dispatch; and in the case of facsimile, immediately on dispatch, and if
delivered outside normal business hours it shall be deemed to have been received
at
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the next time after delivery or transmission when normal business hours
commence. Evidence that the notice, instruction or other instrument was properly
addressed, stamped and put into the post shall be conclusive evidence of
posting.
15. Attorneys' Fees. In the event of a material breach of this
Agreement by any party hereto, the prevailing party, as determined by the trier
of fact, shall be entitled to reasonable attorneys' fees and costs as determined
by the court in such action, in addition to any other damages awarded.
16. Non-Solicitation. Adviser, its affiliates and their respective
agents (including brokers engaged in marketing and selling shares of the Fund),
and each of their employees and affiliates agree not to knowingly solicit to
invest, or accept or retain as investors, in the Fund any persons or entities
who are clients of or investors in any fund or investment vehicle managed by any
entity owned by Louis Navellier.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of , 1996.
Northstar Investment Management Corporation
By:___________________________________
MARK L. LIPSON
Chairman and CEO
Navellier Fund Management, Inc.
By:___________________________________
LOUIS G. NAVELLIER
President
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EXHIBIT 6
UNDERWRITING AGREEMENT FOR
CLASS A SHARES OF
NORTHSTAR SERIES TRUST
NORTHSTAR HIGH TOTAL RETURN FUND
NORTHSTAR INCOME AND GROWTH FUND
NORTHSTAR VALUE AND GROWTH FUND
AGREEMENT made and entered into by and between NORTHSTAR HIGH TOTAL
RETURN FUND, NORTHSTAR INCOME AND GROWTH FUND and NORTHSTAR
VALUE AND GROWTH FUND (each a "Fund" and collectively the "Funds"),
each a series of NORTHSTAR TRUST, a Massachusetts business trust
(the "Trust"), and NORTHSTAR DISTRIBUTORS, INC., a Minnesota
corporation (the "Underwriter").
1. Each Fund hereby appoints the Underwriter as its exclusive agent to
promote the sale and to arrange for the sale of Class A shares of
beneficial interest of each Fund, including both unissued shares and
treasury shares, through broker-dealers of otherwise, in all parts of
the United States and elsewhere throughout the world. Each Fund agrees
to sell and deliver its Class A shares, upon the terms hereinafter set
forth, as long as it has unissued and/or treasury Class A shares
available for sale.
(a) Each Fund hereby authorizes the Underwriter, subject to law and the
Declaration of Trust, to accept, for the respective account of each
Fund, orders for the purchase of its Class A shares, satisfactory to
the Underwriter, as of the time of receipt of such orders by the
dealer-- or as otherwise described in the Prospectus of the Trust.
(b) The public offering price of Class A shares shall be the net asset
value per share (as determined by each Fund) of the outstanding Class A
shares of each Fund. The net asset value shall be regularly determined
on every business day as of the time of the regular closing of the New
York Stock Exchange and the public offering price based upon such net
asset value shall become effective as set forth from time to time in
the Trust's Prospectus; such net asset value shall also be regularly
determined, and the public offering price based thereon shall become
effective, as of such other times for the regular determination of net
asset value as may be required or permitted by rules of the National
Association of Securities Dealers, Inc. or of the Securities and
Exchange Commission. Each Fund shall furnish daily to the Underwriter,
with all possible promptness, a detailed computation of net asset value
of its Class A shares.
The public offering price of such shares shall be equal to the net
asset value, as described above, plus a commission to be fixed from
time to time by the Underwriter not to exceed 6% of the public offering
price, except that such priice per share may be adjusted to the nearest
cent. The Underwriter may fix quantity discounts and other similar
terms not inconsistent with the provisions of the Investment Company
Act of 1940. The Underwriter shall not impose any commission, permit
any quantity discounts or impose
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any other similar terms in connection with the sale of Class A shares
of each Fund except as disclosed in the Prospectus of the Trust.
(c) The Underwriter shall be entitled to deduct a commission on all
Class A shares sold equal to the difference between the public offering
price and the net asset value on which such price is based. If any such
commission is received by a Fund, it will pay the commission to the
Underwriter. Out of such commission, the Underwriter may allow to
dealers such concessions as the Underwriter may determine from time to
time. Notwithstanding anything in the Agreement, sales may be made at
net asset value as provided in the Trust's prospectus.
.
2. The Underwriter agrees to devote reasonable time and effort to
enlist investment dealers to sell Class A shares of each Fund and
otherwise promote the sale and distribution and act as Underwriter for
the sale and distribution of the Class A shares of each Fund as such
arrangements may profitably be made; but so long as its does so,
nothing herein contained shall prevent the Underwriter from entering
into similar arrangements with other funds and to engage in other
activities. Each Fund reserves the right to issue Class A shares in
connection with any merger or consolidation of a Fund with any other
investment company or any personal holding company or in connection
with offers of exchange exempted from Section 22(d) of the Investment
Company Act 1940.
3. To the extent a Fund shall offer (as set forth in the Trust's
Prospectus) to provide physical certificates evidencing ownership of
Class A shares, upon receipt by a Fund at its principal place of
business of a written order from the Underwriter, together with
delivery instructions, the Fund shall, as promptly as practicable,
cause certificates for the Class A shares called for in such order to
be delivered or credited in such amounts and in such names as shall be
specified by the Underwriter, against payment therefor in such manner
as may be acceptable to the Fund.
4. All sales literature and advertisements used by the Underwriter in
connection with sales of the Class A shares of each Fund shall be
subject to the approval of the respective Fund to which such literature
relates. Each Fund authorizes the Underwriter in connection with the
sale or arranging for the sale of its Class A shares to give only such
information and to make only such statements or representations as are
contained in the Prospectus or in sales literature or advertisements
approved by each respective Fund or in such financial statements and
reports as are furnished to the Underwriter pursuant to paragraph 6
below. The Funds shall not be responsible in any way for any
information, statements or representations given or made by the
Underwriter or its representatives or agents other than such
information, statements and representations.
5. The Underwriter, as agent of each Fund, is authorized, subject to
the direction of each Fund, to accept Class A shares for redemption at
prices not in excess of their net asset value, determined as prescribed
in the Prospectus of the Trust. Each respective Fund shall reimburse
the Underwriter monthly for its out-of-pocket expenses reasonably
incurred on behalf of each Fund in carrying out the foregoing
authorization, but the
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Underwriter shall not be entitled to any commissions or other
compensation in respect to such redemptions. The Underwriter shall
report all redemptions promptly to the respective Funds.
6. Each Fund shall keep the Underwriter fully informed with regard to
its affairs, shall furnish the Underwriter with a certified copy of all
financial statements, and a signed copy of each report, prepared by
independent public accountants and with such reasonable number of
printed copies of each annual and other periodic report of each Fund as
the Underwriter may request, and shall cooperate fully in the efforts
of the Underwriter to sell and arrange for the sale of its Class A
shares and in the performance by the Underwriter of all its duties
under this Agreement.
7. Each Fund will pay or cause to be paid expenses (including counsel
fees and disbursements) of any registration of its Class A shares of
beneficial interest under, but not limited to, Federal, state or other
regulatory authority, fees of filing periodic reports with regulatory
bodies and of preparing, setting in type and printing the Prospectus
and any amendments thereto prepared for use in connection with the
offering of Class A shares of each Fund, for fees and expenses incident
to the issuance of Class A shares of beneficial interest, such as the
cost of stock certificates (if offered), issuance taxes, fees of the
transfer agent, including the cost of preparing and mailing notices to
shareholders pertaining to transactions with respect to shareholders'
accounts, dividend disbursing agent's costs, including the cost for
preparing and mailing notices confirming shares acquired by
shareholders pursuant to the reinvestment of dividends and
distributions, and the mailing to shareholders of prospectuses, and
notices and reports as may be required from time to time by regulatory
bodies or for such other purposes, except for purposes of sales by the
Underwriter as outlined in paragraph 8 hereof.
8. The Underwriter shall pay all of its own costs and expenses (other
than expenses and costs heretofore deemed payable by the Funds and
other than expenses which one or more dealers may bear pursuant to any
agreement with the Underwriter) incident to the sale and distribution
of the shares issued or sold hereunder including (a) expenses of
printing copies of the Prospectus to be used in connection with the
sale of Class A shares of each Fund at printer's overrun costs; (b)
expenses of printing and distributing or disseminating any other
literature, advertising or selling aids in connection with the offering
of Class A shares for sale (however, the expenses referred to in (a)
and (b) do not include expenses incurred in connection with the
preparation, printing and distribution of the Prospectus or any report
or other communication to shareholders, to the extent that such
expenses are necessarily incurred to effect compliance by each Fund
with any Federal or state law or other regulatory bodies); and (c)
expenses of advertising in connection with such offering; provided,
however, that the Underwriter shall not be required to pay for any such
expenses to the extent that they are paid pursuant to a Fund's
distribution plan adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940.
9. Each Fund agrees to register, from time to time as necessary,
additional Class A shares with the Securities & Exchange Commission,
State and other regulatory bodies and to pay the related filing fees
therefor and to file such amendments, reports and other documents as
may be necessary in order that there may be no untrue statement of a
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material fact in the Registration Statement or Prospectus or that their
may be no omission to state a material fact therein necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading. As used in this Agreement, the
term " Registration Statement" shall mean the Registration Statement
most recently filed by the Trust with the Securities & Exchange
Commission and effective under the Securities Act of 1933, as amended,
as such Registration Statement is amended from time to time, and the
term "Prospectus" shall mean the most recent form of prospectus
authorized by the Trust for use by the Underwriter and by dealers.
10. This Agreement may be terminated at any time on not more than 60
days written notice, without payment of a penalty, by the Underwriter,
by vote of a majority of the class of outstanding voting securities of
each respective Fund or by vote of a majority of the Trustees, acting
separately on behalf of each Fund, who are not "interested persons" of
the Funds and who have not direct or indirect financial interest in the
operation of the Plan or in any agreements.
11. This Agreement shall terminate automatically in the event of its
assignment. The term "assignment" for this purpose shall have the
meaning defined in Section 2(a) (4) of the Investment Company Act of
1940.
12. This Agreement has been approved by the Trustees of the Trust on
behalf of the Funds and shall continue in effect for two years from its
effective date. Thereafter, this Agreement shall continue for
successive annual periods, provided that such continuance is
specifically approved annually by a majority of the Trustees who are
not interested persons of the parties hereto as defined in the
Investment Company Act of 1940 and either (a) by vote of the Trustees
of the Trust or (b) by vote of a majority or the outstanding voting
securities of each Fund, as defined in the Investment Company Act of
1940.
13. The Declaration of Trust, establishing the Trust, dated August 18,
1993, a copy of which together with all amendments thereto (the
"Declaration") is on file in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name of the Trust
refers to the Trustees under the Declaration collectively as trustees,
but not individually or personally; and no Trustee, shareholder
officer, employee or agent of the Trust and/or the Funds may be held to
any personal liablility, nor may resort be had to their private
property for the satisfaction of any obligation or claim or otherwise
in connection with affairs of the Trust, but the Trust property only
shall be liable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized and to become
effective as of this 8th day of November, 1993.
Attest: NORTHSTAR TRUST
By: ________________________ By: _____________________________
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Attest: NWNL NORTHSTAR DISTRIBUTORS, INC.
By: ________________________ By: _____________________________
5
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UNDERWRITING AGREEMENT FOR
CLASS B SHARES OF
NORTHSTAR SERIES TRUST
NORTHSTAR HIGH TOTAL RETURN FUND
NORTHSTAR INCOME AND GROWTH FUND
NORTHSTAR VALUE AND GROWTH FUND
AGREEMENT made and entered into by and between NORTHSTAR HIGH TOTAL
RETURN FUND, NORTHSTAR INCOME AND GROWTH FUND and NORTHSTAR VALUE
AND GROWTH FUND (each a "Fund" and collectively the "Funds"), each a
series of NORTHSTAR TRUST, a Massachusetts business trust (the
"Trust"), and NORTHSTAR DISTRIBUTORS, INC., a Minnesota corporation
(the "Underwriter").
1. Each Fund hereby appoints the Underwriter as its exclusive agent to
promote the sale and to arrange for the sale of Class B shares of
beneficial interest of each Fund, including both unissued shares and
treasury shares, through broker-dealers of otherwise, in all parts of
the United States and elsewhere throughout the world. Each Fund agrees
to sell and deliver its Class B shares, upon the terms hereinafter set
forth, as long as it has unissued and/or treasury Class B shares
available for sale.
(a) Each Fund hereby authorizes the Underwriter, subject to law and the
Declaration of Trust, to accept, for the respective account of each
Fund, orders for the purchase of its Class B shares, satisfactory to
the Underwriter, as of the time of receipt of such orders by the
dealer-- or as otherwise described in the Prospectus of the Trust.
(b) The public offering price of Class B shares shall be the net asset
value per share (as determined by each Fund) of the outstanding Class B
shares of each Fund. The net asset value shall be regularly determined
on every business day as of the time of the regular closing of the New
York Stock Exchange and the public offering price shall become
effective as set forth from time to time in the Prospectus; such net
asset value shall also be regularly determined, and the public offering
price shall become effective, as of such other times for the regular
determination of net asset value as may be required or permitted by
rules of the National Association of Securities Dealers, Inc. or of the
Securities and Exchange Commission. Each Fund shall furnish daily to
the Underwriter, with all possible promptness, a detailed computation
of net asset value of its Class B shares.
(c) As compensation for providing services under this Agreement, (i)
the Underwriter shall receive from each Fund distribution and service
fees under the terms and conditions set forth in each respective
Distribution Plan for each Fund adopted under Rule 12b-1 under the
Investment Company Act of 1940, as amended, as that Plan may be amended
from time to time and subject to any further limitations on such fees
as the Trustees may impose, and (ii) the Underwriter shall receive from
each Fund all contingent deferred sales charges applied on redemption
of Class B shares of such Fund. Whether and to what extent a contingent
deferred sales charge will be imposed with respect to a redemption
shall be determined in accordance with, and in a manner set forth in,
the Trust's Prospectus.
6
<PAGE>
(d) The Underwriter may reallow any or all of the distribution and
services fees and contingent deferred sales charges which it is paid
under the Agreement to such dealers as the Underwriter may from time to
time determine.
(e) The Underwriter may fix quantity discounts and other similar
variances or waivers of the contingent deferred sales charge not
inconsistent with the provisions of the Investment Company Act of 1940;
provided however, that the Underwriter shall not impose any commission,
permit any quantity discount, or impose any other similar waiver or
variance in connection with the sale of Class B shares except as
disclosed in the Prospectus of the Trust.
2. The Underwriter agrees to devote reasonable time and effort to
enlist investment dealers to sell Class B shares of each Fund and
otherwise promote the sale and distribution and act as Underwriter for
the sale and distribution of the Class B shares of each Fund as such
arrangements may profitably be made; but so long as its does so,
nothing herein contained shall prevent the Underwriter from entering
into similar arrangements with other funds and to engage in other
activities. Each Fund reserves the right to issue Class B shares in
connection with any merger or consolidation of a Fund with any other
investment company or any personal holding company or in connection
with offers of exchange exempted from Section 22(d) of the Investment
Company Act 1940.
3. To the extent a Fund shall offer (as set forth in the Trust's
Prospectus) to provide physical certificates evidencing ownership of
Class B shares, upon receipt by a Fund at its principal place of
business of a written order from the Underwriter, together with
delivery instructions, the Fund shall, as promptly as practicable,
cause certificates for the Class B shares called for in such order to
be delivered or credited in such amounts and in such names as shall be
specified by the Underwriter, against payment therefor in such manner
as may be acceptable to the Fund.
4. All sales literature and advertisements used by the Underwriter in
connection with sales of the Class B shares of each Fund shall be
subject to the approval of the respective Fund to which such literature
relates. Each Fund authorizes the Underwriter in connection with the
sale or arranging for the sale of its Class B shares to give only such
information and to make only such statements or representations as are
contained in the Prospectus or in sales literature or advertisements
approved by each respective Fund or in such financial statements and
reports as are furnished to the Underwriter pursuant to paragraph 6
below. The Funds shall not be responsible in any way for any
information, statements or representations given or made by the
Underwriter or its representatives or agents other than such
information, statements and representations.
5. The Underwriter, as agent of each Fund, is authorized, subject to
the direction of each Fund, to accept Class B shares for redemption at
prices determined as prescribed in the Prospectus of the Trust. Such
price shall reflect the subtraction of the applicable contingent
deferred sales charge, if any, computed in accordance with and in the
manner set forth in the Trust's Prospectus. Each respective Fund shall
reimburse the Underwriter monthly for its out-of-pocket expenses
reasonably incurred on behalf of each Fund in
7
<PAGE>
carrying out the foregoing authorization. The Underwriter shall
report all redemptions promptly to the respective Funds.
6. Each Fund shall keep the Underwriter fully informed with regard to
its affairs, shall furnish the Underwriter with a certified copy of all
financial statements, and a signed copy of each report, prepared by
independent public accountants and with such reasonable number of
printed copies of each annual and other periodic report of each Fund as
the Underwriter may request, and shall cooperate fully in the efforts
of the Underwriter to sell and arrange for the sale of its Class B
shares and in the performance by the Underwriter of all its duties
under this Agreement.
7. Each Fund will pay or cause to be paid expenses (including counsel
fees and disbursements) of any registration of its Class B shares of
beneficial interest under, but not limited to, Federal, state or other
regulatory authority, fees of filing periodic reports with regulatory
bodies and of preparing, setting in type and printing the Prospectus
and any amendments thereto prepared for use in connection with the
offering of Class B shares of each Fund, for fees and expenses incident
to the issuance of Class B shares of beneficial interest, such as the
cost of stock certificates (if offered), issuance taxes, fees of the
transfer agent, including the cost of preparing and mailing notices to
shareholders pertaining to transactions with respect to shareholders'
accounts, dividend disbursing agent's costs, including the cost for
preparing and mailing notices confirming shares acquired by
shareholders pursuant to the reinvestment of dividends and
distributions, and the mailing to shareholders of prospectuses, and
notices and reports as may be required from time to time by regulatory
bodies or for such other purposes, except for purposes of sales by the
Underwriter as outlined in paragraph 8 hereof.
8. The Underwriter shall pay all of its own costs and expenses (other
than expenses and costs heretofore deemed payable by the Funds and
other than expenses which one or more dealers may bear pursuant to any
agreement with the Underwriter) incident to the sale and distribution
of the shares issued or sold hereunder including (a) expenses of
printing copies of the Prospectus to be used in connection with the
sale of Class B shares of each Fund at printer's overrun costs; (b)
expenses of printing and distributing or disseminating any other
literature, advertising or selling aids in connection with the offering
of Class B shares for sale (however, the expenses referred to in (a)
and (b) do not include expenses incurred in connection with the
preparation, printing and distribution of the Prospectus or any report
or other communication to shareholders, to the extent that such
expenses are necessarily incurred to effect compliance by each Fund
with any Federal or state law or other regulatory bodies); and (c)
expenses of advertising in connection with such offering; provided,
however, that the Underwriter shall not be required to pay for any such
expenses to the extent that they are paid pursuant to a Fund's
distribution plan adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940.
9. Each Fund agrees to register, from time to time as necessary,
additional Class B shares with the Securities & Exchange Commission,
State and other regulatory bodies and to pay the related filing fees
therefor and to file such amendments, reports and other documents as
may be necessary in order that there may be no untrue statement of a
material fact in the Registration Statement or Prospectus or that their
may be no omission
8
<PAGE>
to state a material fact therein necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. As used in this Agreement, the term "
Registration Statement" shall mean the Registration Statement
most recently filed by the Trust with the Securities & Exchange
Commission and effective under the Securities Act of 1933, as amended,
as such Registration Statement is amended from time to time, and the
term "Prospectus" shall mean the most recent form of prospectus
authorized by the Trust for use by the Underwriter and by dealers.
10. This Agreement may be terminated at any time on not more than 60
days written notice, without payment of a penalty, by the Underwriter,
by vote of a majority of the class of outstanding voting securities of
each respective Fund or by vote of a majority of the Trustees, acting
separately on behalf of each Fund, who are not "interested persons" of
the Funds and who have not direct or indirect financial interest in the
operation of the Plan or in any agreements.
11. This Agreement shall terminate automatically in the event of its
assignment. The term "assignment" for this purpose shall have the
meaning defined in Section 2(a) (4) of the Investment Company Act of
1940.
12. This Agreement has been approved by the Trustees of the Trust on
behalf of the Funds and shall continue in effect for two years from its
effective date. Thereafter, this Agreement shall continue for
successive annual periods, provided that such continuance is
specifically approved annually by a majority of the Trustees who are
not interested persons of the parties hereto as defined in the
Investment Company Act of 1940 and either (a) by vote of the Trustees
of the Trust or (b) by vote of a majority or the outstanding voting
securities of each Fund, as defined in the Investment Company Act of
1940.
13. The Declaration of Trust, establishing the Trust, dated August 18,
1993, a copy of which together with all amendments thereto (the
"Declaration") is on file in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name of the Trust
refers to the Trustees under the Declaration collectively as trustees,
but not individually or personally; and no Trustee, shareholder
officer, employee or agent of the Trust and/or the Funds may be held to
any personal liablility, nor may resort be had to their private
property for the satisfaction of any obligation or claim or otherwise
in connection with affairs of the Trust, but the Trust property only
shall be liable.
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized and to become effective as
of this 8th day of November, 1993.
Attest: NORTHSTAR TRUST
By: ________________________ By: _____________________________
Attest: NWNL NORTHSTAR DISTRIBUTORS, INC.
By: ________________________ By: _____________________________
10
<PAGE>
UNDERWRITING AGREEMENT FOR
CLASS C SHARES OF
NORTHSTAR TRUST
NORTHSTAR HIGH TOTAL RETURN FUND
NORTHSTAR INCOME AND GROWTH FUND
NORTHSTAR VALUE AND GROWTH FUND
AGREEMENT made and entered into by and between NORTHSTAR HIGH TOTAL
RETURN FUND, NORTHSTAR INCOME AND GROWTH FUND and NORTHSTAR GROWTH +
VALUE FUND (each a "Fund" and collectively the "Funds"), series of
NORTHSTAR TRUST, a Massachusetts business trust (the "Trust"), and
NORTHSTAR DISTRIBUTORS, INC., a Minnesota corporation (the
"Underwriter").
1. Each Fund hereby appoints the Underwriter as its exclusive agent to
promote the sale and to arrange for the sale of Class C shares of
beneficial interest of each Fund, including both unissued shares and
treasury shares, through broker-dealers of otherwise, in all parts of
the United States and elsewhere throughout the world. Each Fund agrees
to sell and deliver its Class C shares, upon the terms hereinafter set
forth, as long as it has unissued and/or treasury Class C shares
available for sale.
(a) Each Fund hereby authorizes the Underwriter, subject to law and the
Declaration of Trust, to accept, for the respective account of each
Fund, orders for the purchase of its Class C shares, satisfactory to
the Underwriter, as of the time of receipt of such orders by the
dealer-- or as otherwise described in the Prospectus of the Trust.
(b) The public offering price of Class C shares shall be the net asset
value per share (as determined by each Fund) of the outstanding Class C
shares of each Fund. The net asset value shall be regularly determined
on every business day as of the time of the regular closing of the New
York Stock Exchange and the public offering price shall become
effective as set forth from time to time in the Prospectus; such net
asset value shall also be regularly determined, and the public offering
price shall become effective, as of such other times for the regular
determination of net asset value as may be required or permitted by
rules of the National Association of Securities Dealers, Inc. or of the
Securities and Exchange Commission. Each Fund shall furnish daily to
the Underwriter, with all possible promptness, a detailed computation
of net asset value of its Class C shares.
(c) As compensation for providing services under this Agreement, (i)
the Underwriter shall receive from each Fund distribution and service
fees under the terms and conditions set forth in the Class C
Distribution Plan for each Fund adopted under Rule 12b-1 under the
Investment Company Act of 1940, as amended, as that Plan may be amended
from time to time and subject to any further limitations on such fees
as the Trustees may impose, and (ii) the Underwriter shall receive from
each Fund all contingent deferred sales charges applied on redemption
of Class C shares of such Fund. Whether and to what extent a contingent
deferred sales charge will be imposed with respect to a
11
<PAGE>
redemption shall be determined in accordance with, and in a manner set
forth in, the Trust's Prospectus.
(d) The Underwriter may reallow any or all of the distribution and
services fees and contingent deferred sales charges which it is paid
under the Agreement to such dealers as the Underwriter may from time to
time determine.
(e) The Underwriter may fix quantity discounts and other similar
variances or waivers of the contingent deferred sales charge not
inconsistent with the provisions of the Investment Company Act of 1940;
provided however, that the Underwriter shall not impose any commission,
permit any quantity discount, or impose any other similar waiver or
variance in connection with the sale of Class C shares except as
disclosed in the Prospectus of the Trust.
2. The Underwriter agrees to devote reasonable time and effort to
enlist investment dealers to sell Class C shares of each Fund and
otherwise promote the sale and distribution and act as Underwriter for
the sale and distribution of the Class B shares of each Fund as such
arrangements may profitably be made; but so long as its does so,
nothing herein contained shall prevent the Underwriter from entering
into similar arrangements with other funds and to engage in other
activities. Each Fund reserves the right to issue Class C shares in
connection with any merger or consolidation of a Fund with any other
investment company or any personal holding company or in connection
with offers of exchange exempted from Section 22(d) of the Investment
Company Act 1940.
3. To the extent a Fund shall offer (as set forth in the Trust's
Prospectus) to provide physical certificates evidencing ownership of
Class C shares, upon receipt by a Fund at its principal place of
business of a written order from the Underwriter, together with
delivery instructions, the Fund shall, as promptly as practicable,
cause certificates for the Class C shares called for in such order to
be delivered or credited in such amounts and in such names as shall be
specified by the Underwriter, against payment therefor in such manner
as may be acceptable to the Fund.
4. All sales literature and advertisements used by the Underwriter in
connection with sales of the Class C shares of each Fund shall be
subject to the approval of the respective Fund to which such literature
relates. Each Fund authorizes the Underwriter in connection with the
sale or arranging for the sale of its Class C shares to give only such
information and to make only such statements or representations as are
contained in the Prospectus or in sales literature or advertisements
approved by each respective Fund or in such financial statements and
reports as are furnished to the Underwriter pursuant to paragraph 6
below. The Funds shall not be responsible in any way for any
information, statements or representations given or made by the
Underwriter or its representatives or agents other than such
information, statements and representations.
5. The Underwriter, as agent of each Fund, is authorized, subject to
the direction of each Fund, to accept Class C shares for redemption at
prices determined as prescribed in the Prospectus of the Trust. Such
price shall reflect the subtraction of the applicable
12
<PAGE>
contingent deferred sales charge, if any, computed in accordance with
and in the manner set forth in the Trust's Prospectus. Each respective
Fund shall reimburse the Underwriter monthly for its out-of-pocket
expenses reasonably incurred on behalf of each Fund in carrying out the
foregoing authorization. The Underwriter shall report all redemptions
promptly to the respective Funds.
6. Each Fund shall keep the Underwriter fully informed with regard to
its affairs, shall furnish the Underwriter with a certified copy of all
financial statements, and a signed copy of each report, prepared by
independent public accountants and with such reasonable number of
printed copies of each annual and other periodic report of each Fund as
the Underwriter may request, and shall cooperate fully in the efforts
of the Underwriter to sell and arrange for the sale of its Class C
shares and in the performance by the Underwriter of all its duties
under this Agreement.
7. Each Fund will pay or cause to be paid expenses (including counsel
fees and disbursements) of any registration of its Class C shares of
beneficial interest under, but not limited to, Federal, state or other
regulatory authority, fees of filing periodic reports with regulatory
bodies and of preparing, setting in type and printing the Prospectus
and any amendments thereto prepared for use in connection with the
offering of Class C shares of each Fund, for fees and expenses incident
to the issuance of Class C shares of beneficial interest, such as the
cost of stock certificates (if offered), issuance taxes, fees of the
transfer agent, including the cost of preparing and mailing notices to
shareholders pertaining to transactions with respect to shareholders'
accounts, dividend disbursing agent's costs, including the cost for
preparing and mailing notices confirming shares acquired by
shareholders pursuant to the reinvestment of dividends and
distributions, and the mailing to shareholders of prospectuses, and
notices and reports as may be required from time to time by regulatory
bodies or for such other purposes, except for purposes of sales by the
Underwriter as outlined in paragraph 8 hereof.
8. The Underwriter shall pay all of its own costs and expenses (other
than expenses and costs heretofore deemed payable by the Funds and
other than expenses which one or more dealers may bear pursuant to any
agreement with the Underwriter) incident to the sale and distribution
of the shares issued or sold hereunder including (a) expenses of
printing copies of the Prospectus to be used in connection with the
sale of Class C shares of each Fund at printer's overrun costs; (b)
expenses of printing and distributing or disseminating any other
literature, advertising or selling aids in connection with the offering
of Class C shares for sale (however, the expenses referred to in (a)
and (b) do not include expenses incurred in connection with the
preparation, printing and distribution of the Prospectus or any report
or other communication to shareholders, to the extent that such
expenses are necessarily incurred to effect compliance by each Fund
with any Federal or state law or other regulatory bodies); and (c)
expenses of advertising in connection with such offering; provided,
however, that the Underwriter shall not be required to pay for any such
expenses to the extent that they are paid pursuant to a Fund's
distribution plan adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940.
9. Each Fund agrees to register, from time to time as necessary,
additional Class C shares with the Securities & Exchange Commission,
State and other regulatory bodies and to
13
<PAGE>
pay the related filing fees therefor and to file such amendments,
reports and other documents as may be necessary in order that there may
be no untrue statement of a material fact in the Registration Statement
or Prospectus or that their may be no omission to state a material fact
therein necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. As used
in this Agreement, the term " Registration Statement" shall mean the
Registration Statement
most recently filed by the Trust with the Securities & Exchange
Commission and effective under the Securities Act of 1933, as amended,
as such Registration Statement is amended from time to time, and the
term "Prospectus" shall mean the most recent form of prospectus
authorized by the Trust for use by the Underwriter and by dealers.
10. This Agreement may be terminated at any time on not more than 60
days written notice, without payment of a penalty, by the Underwriter,
by vote of a majority of the class of outstanding voting securities of
each respective Fund or by vote of a majority of the Trustees, acting
separately on behalf of each Fund, who are not "interested persons" of
the Funds and who have not direct or indirect financial interest in the
operation of the Plan or in any agreements.
11. This Agreement shall terminate automatically in the event of its
assignment. The term "assignment" for this purpose shall have the
meaning defined in Section 2(a) (4) of the Investment Company Act of
1940.
12. This Agreement has been approved by the Trustees of the Trust on
behalf of the Funds and shall continue in effect for two years from its
effective date. Thereafter, this Agreement shall continue for
successive annual periods, provided that such continuance is
specifically approved annually by a majority of the Trustees who are
not interested persons of the parties hereto as defined in the
Investment Company Act of 1940 and either (a) by vote of the Trustees
of the Trust or (b) by vote of a majority or the outstanding voting
securities of each Fund, as defined in the Investment Company Act of
1940.
13. The Declaration of Trust, establishing the Trust, dated August 18,
1993, a copy of which together with all amendments thereto (the
"Declaration") is on file in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name of the Trust
refers to the Trustees under the Declaration collectively as trustees,
but not individually or personally; and no Trustee, shareholder
officer, employee or agent of the Trust and/or the Funds may be held to
any personal liablility, nor may resort be had to their private
property for the satisfaction of any obligation or claim or otherwise
in connection with affairs of the Trust, but the Trust property only
shall be liable.
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized and to become effective as
of this 31st day of March, 1994.
Attest: NORTHSTAR TRUST
By: ________________________ By: _____________________________
Attest: NORTHSTAR DISTRIBUTORS, INC.
By: ________________________ By: _____________________________
As Amended, July 31, 1996
15
<PAGE>
EXHIBIT 10
Law Offices of
DECHERT PRICE & RHOADS
1500 K STREET, N.W.
WASHINGTON, DC 20005-1208
July 31, 1996
Northstar Advantage Trust
Two Pickwick Plaza
Greenwich, Connecticut 06830
Dear Sir or Madam:
In connection with the registration under the Securities Act of 1933 of an
indefinite number of shares of beneficial interest of Northstar Growth + Value
Fund (the "Fund"), a series of Northstar Advantage Trust (the "Trust"), we have
examined such matters as we have deemed necessary, and we are of the opinion
that, as permitted by the Trust's Declaration of Trust, and assuming that the
Trust or its agent receives consideration for such Shares in accordance with the
provisions of its Declaration of Trust, the Shares will be legally and validly
issued, will be fully paid, and will be non-assessable by the Trust.
We hereby consent to the use of this opinion as an exhibit to Post-Effective
Amendment No. 9 to the Trust's Registration Statement on Form N-1A filed with
the Securities and Exchange Commission (File No. 33-67852) for the registration
under the Securities Act of 1933 of an indefinite number of the Fund's shares,
and to the use of our name in the prospectus and statement of additional
information contained therein, and any amendments thereto.
Very truly yours,
/s/DECHERT PRICE & RHOADS
<PAGE>
<PAGE>
EXHIBIT 15
NORTHSTAR ADVANTAGE TRUST
DISTRIBUTION AND SERVICE PLAN
The following is the Distribution Plan (the "Plan") for Northstar Advantage
Trust (the "Trust") consisting of the series named on Schedule 1 hereto, as such
schedule may be revised from time to time (each, a "Fund").
1. In connection with the sale and promotion of the shares of each Fund and the
furnishing of services to the shareholders of each Fund, each Fund shall pay
Northstar Distributors, Inc. (the "Distributor"), or any successor authorized to
act as underwriter, in respect of each class set forth on Schedule 1 (each, a
"Class"), at the end of each month, an annual fee not to exceed the amount set
forth in Schedule 1. With respect to each Class, such expenditures may consist
of: (i) commissions to sales personnel for selling the applicable Class of
shares of the Funds;(ii) compensation, sales incentives and payments to sales,
marketing and service personnel relating to the applicable Class; (iii) payments
to broker-dealers and other financial institutions which have entered into
agreements with the Distributor in the form of the Dealer Agreement for
Northstar Affiliated Investment Companies for services rendered in connection
with the sale and distribution of the applicable Class of shares; (iv) payment
of expenses incurred in sales and promotional activities, including advertising
expenditures related to the applicable Class of shares; (v) the costs of
preparing and distributing promotional materials relating to the applicable
Class of shares; (vi) the cost of printing the Trust's Prospectus and Statement
of Additional Information for distribution to potential investors; and (vii)
such other similar services that the Trustees determine are reasonably
calculated to result in the sale of the applicable Class of shares; provided,
however, a portion of such amount paid to the Distributor, which portion shall
be equal to or less than .25% annually of the average daily net assets of the
Fund shares may be paid for reimbursing the costs of providing services to the
shareholder, including assistance in connection with inquiries related to
shareholder accounts (the "Service Fee").
Amounts paid or payable by each Fund under this Plan or any agreement with any
person or entity relating to the implementation of this Plan ("related
agreement") shall only be used to pay for, or reimburse payment for, the
distribution expenditures described in the preceding paragraph and shall, given
all surrounding circumstances, represent charges within the range of what would
have been negotiated at arm's-length as payment for the specific sales or
promotional services and activities to be financed hereunder and any related
agreement, as determined by the Trustees, in the exercise of reasonable business
judgment, in light of their fiduciary duties under state law and Sections 36(a)
and (b) of the Investment Company Act of 1940, as amended (the "Act") and based
upon appropriate business estimates and projections.
2. At least quarterly in each year that this Plan remains in effect, each Fund's
Principal Accounting Officer or Treasurer, or such other person authorized to
direct the disposition of
<PAGE>
monies paid or payable by each Fund, shall prepare and furnish to the Trustees
for their review, and the Trustees shall review, a written report complying with
the requirements of Rule 12b-1 under the Act regarding the amounts expended by
each Fund under the Plan and the purposes for which such expenditures were made.
3. This Plan shall not take effect until it, together with any related
agreements, have been approved (a) by a vote of at least the majority of the
Trustees, acting separately on behalf of each Fund, as well as a vote of at
least a majority of the Trustees, acting separately on behalf of each Fund, who
are not interested persons (as defined in the Act) of each Fund and who have no
direct or indirect financial interest in the operation of the Plan or in any
related agreements (the "Disinterested Trustees"), cast in person at a meeting
called for the purpose of voting on the Plan or any related agreements, and if
required under the 1940 Act (b) by a vote of at least a majority (as defined in
the Act) of the outstanding Class A shares of each Fund.
4. This Plan shall remain in effect for one year from the date of its execution
and may be continued thereafter if specifically approved at least annually by
vote of at least a majority of the Trustees, acting separately on behalf of each
Fund, as well as a majority of the Disinterested Trustees. As to each Class,
this Plan may be amended at any time, provided that (a) the Plan may not be
amended to increase materially the amount of the distribution fees or Service
Fees payable hereunder pursuant to in Paragraph 1 hereof without the approval of
at least a majority (as defined in the Act) of the outstanding shares of the
applicable Class and (b) all material amendments to this Plan must be approved
by a vote of the Trustees, acting separately on behalf of each Fund, and of the
Disinterested Trustees.
5. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons (as defined in the Act) shall be committed to the
discretion of the Disinterested Trustees then in office.
6. With respect to each Class, any related agreements shall be in writing and
each shall provide that (a) such agreement shall be subject to termination,
without penalty, by vote of a majority (as defined in the Act) of the
outstanding voting shares of the applicable Class on not more than 60' days'
written notice to any other party to the agreement; and (b) such agreement shall
terminate automatically in the event of its assignment.
7. With respect to each Class, this Plan may be terminated at any time by a vote
of a majority of the Disinterested Trustees, acting separately on behalf of each
respective Fund, or by vote of a majority (as defined in the Act) of the
outstanding voting shares of the applicable Class of each Fund. In the event
this Plan is terminated or otherwise discontinued with respect to a Fund, the
Fund no longer will be obligated to reimburse the Distributor for distribution
related expenses incurred under the Plan, unless payment by the Fund of all or
any of such unreimbursed expenses shall be specifically approved by the
Trustees, including a majority of the Disinterested Trustees, of the Funds.
<PAGE>
8. The Funds shall preserve copies of this Plan and any related agreements and
all reports made pursuant to paragraph 2 hereof, and any information, estimates,
projections and other materials that serve as a basis therefor, considered by
the Trustees, for a period of not less than six years from the date of thisPlan,
or the agreements or reports, as the case may be, the first two years in an
easily accessible place.
9. The Declaration of Trust, establishing the Trust, dated August 18, 1993, a
copy of which together with all amendments thereto (the "Declaration") is on
file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name "Northstar AdvantageSeries Trust" refers to the Trustees
under the Declaration collectively as trustees, but not individually or
personally; and no Trustee, shareholder, officer, employee or agent of the Trust
and/or the Funds may be held to any personal liability, nor may resort be had to
their private property for the satisfaction of any obligation or claim or
otherwise in connection with the affairs of the Trust, but the Trust property
only shall be liable.
Dated: November 8, 1993
As Amended July 31, 1996
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
NAME OF FUND MAXIMUM CLASS A FEE MAXIMUM CLASS B FEE MAXIMUM CLASS C FEE
<S> <C> <C> <C>
Northstar Advantage High .30 of 1% 1.00% 1.00%
Total Return Fund
Northstar Advantage Income .30 of 1% 1.00% 1.00%
and Growth Fund
Northstar Value + Growth Fund .30 of 1% 1.00% 1.00%
</TABLE>
