MEMORIAL FUNDS
DEF 14A, 2000-05-03
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[PG NUMBER]



                                                 (File Nos. 811-8529; 333-41461)


                            SCHEDULE 14A INFORMATION

                Proxy Statement Pursuant to Section 14(a) of the
                         Securities Exchange Act of 1934
                                (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [   ]

Check the appropriate box:
         [ ]    Preliminary Proxy Statement
         [X]    Definitive Proxy Statement
         [ ]    Definitive Additional Materials

         [ ]    Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12

                                 MEMORIAL FUNDS
                (Name of Registrant as Specified in its Charter)

                         BOARD OF TRUSTEES OF REGISTRANT
                   (Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

     [X]  No Fee Required

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          0-11

          1)   Title of each class of securities to which transaction applies:


          2)   Aggregate number of securities to which transaction applies:


          3)   Per unit price or other underlying value of transaction  computed
               pursuant to Exchange Act Rule 0-11:


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          5)   Total fee paid:


     []   Check box if any part of the fee is offset as provided by Exchange Act
          Rule  0-11(a)(2)  and identify the filing for which the offsetting fee
          was paid  previously.  Identify  the previous  filing by  registration
          statement number, or the Form or Schedule and the date of its filing.

          1)   Amount Previously Paid:


          2)   Form, Schedule or Registration Statement No.:


          3)   Filing Party:


          4)   Date Filed:



<PAGE>



                                 MEMORIAL FUNDS
                               TWO PORTLAND SQUARE
                              PORTLAND, MAINE 04101

May 3, 2000

Dear Shareholder:

         The Board of  Trustees  of Memorial  Funds (the  "Trust")  has called a
special  meeting of  shareholders of Value Equity Fund (the "Fund") to approve a
new investment  sub-advisory  agreement (the "Agreement") among the Trust, Forum
Investment Advisors,  LLC ("FIA") and PPM America,  Inc. ("PPM"). The meeting is
scheduled to be held on May 31,2000.

         Beutel,   Goodman   Capital   Management   ("Beutel")  was  the  Fund's
sub-adviser  until March 29, 2000. On March 30, 2000, PPM replaced Beutel as the
Fund's sub-adviser under an interim  sub-advisory  agreement.  Fund shareholders
are now being  asked to  approve  the  Agreement  for PPM to remain  the  Fund's
sub-adviser.  The  Agreement  will  have  substantially  the  same  terms as the
investment  sub-advisory agreement among the Trust, FIA and Beutel. The rates at
which the advisory fees are determined will also remain the same.

         After careful consideration, the Board of Trustees unanimously approved
this proposal and recommends that you vote "FOR" the proposal.

         YOUR VOTE IS IMPORTANT  REGARDLESS  OF THE NUMBER OF SHARES YOU OWN. IN
ORDER  TO  AVOID  THE  ADDED  COST  OF  FOLLOW-UP   SOLICITATIONS  AND  POSSIBLE
ADJOURNMENTS,  PLEASE  READ THE  PROXY  STATEMENT  AND  CAST  YOUR  VOTE.  IT IS
IMPORTANT THAT YOUR VOTE BE RECEIVED NO LATER THAN MAY 30, 2000. IF YOU HAVE ANY
QUESTIONS ABOUT THE PROXY STATEMENT,  PLEASE DO NOT HESITATE TO CALL US AT (888)
263-5593.

         We appreciate your  participation and prompt response and thank you for
your continued support.

                                                       Sincerely,



                                                       Christopher W. Hamm
                                                       President and Chairman of
                                                       the Board of the Trustees


<PAGE>


                                 MEMORIAL FUNDS

                               TWO PORTLAND SQUARE
                              PORTLAND, MAINE 04101

                            -------------------------

                    NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
                             TO BE HELD MAY 31, 2000

                            -------------------------

To the Shareholders of the Fund:

         Notice is hereby  given  that a special  meeting of  shareholders  (the
"Meeting")  of Value Equity Fund (the "Fund"),  a series of Memorial  Funds (the
"Trust"), will be held at the offices of Forum Administrative Services, LLC, Two
Portland Square,  Portland,  Maine 04101 on May 31, 2000 at 10:00 a.m.  (Eastern
time). The purpose of the Meeting is:

     1.   To approve a new Investment  Sub-Advisory  Agreement  among the Trust,
          Forum Investment Advisors, LLC and PPM America, Inc.;

     2.   To  transact  such other  business  as may  properly  come  before the
          Meeting.

         The Trust's  Board of Trustees has fixed the close of business on April
28, 2000 as the record date for the  determination  of shareholders  entitled to
notice  of and to  vote  at the  Meeting  or  any  adjournment  thereof.  Please
carefully read the accompanying proxy statement.

                                              By order of the Board of Trustees,



                                              D. Blaine Riggle
                                              Secretary

Portland, Maine
May 3, 2000

YOUR VOTE IS  IMPORTANT  NO MATTER HOW LARGE OR SMALL YOUR  HOLDINGS  MAY BE. IN
ORDER TO AVOID THE UNNECESSARY EXPENSE OF FURTHER  SOLICITATION,  WE URGE YOU TO
INDICATE YOUR VOTING  INSTRUCTIONS ON THE ENCLOSED PROXY,  DATE AND SIGN IT, AND
RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED.


<PAGE>


                                 MEMORIAL FUNDS
                               TWO PORTLAND SQUARE
                              PORTLAND, MAINE 04101

                                 PROXY STATEMENT

         The  enclosed  proxy is  solicited by the Board of Trustees of Memorial
Funds (the "Trust"),  a Delaware  business trust, on behalf of Value Equity Fund
(the  "Fund").  The Trust is a  registered  open-end  investment  company  whose
executive  offices are located at Two Portland  Square,  Portland,  Maine 04101.
Proxies will be voted at a special  meeting of  shareholders  (the "Meeting") of
the  Fund  to be  held  at the  offices  of  the  Trust's  administrator,  Forum
Administrative  Services, LLC ("Forum"),  Two Portland Square,  Portland,  Maine
04101 on May 31, 2000, at 10:00 a.m.  (Eastern  time),  and any  postponement or
adjournment  thereof for the  purposes set forth in the  accompanying  Notice of
Special Meeting of Shareholders. This Proxy Statement and the enclosed Notice of
Special  Meeting and Proxy Card are first  being  mailed to  shareholders  on or
about May 3, 2000.

         The Trust's Annual Report to shareholders for the period ended December
31, 1999, which includes financial  statements for the Fund, has previously been
mailed to  shareholders.  Shareholders  may request a copy of the Annual  Report
without charge by calling the Fund's distributor,  Forum Fund Services, LLC, Two
Portland Square, Portland, Maine 04101, at 888-263-5593.

         The  solicitation  of proxies  will be  primarily  by mail but may also
include  telephone  or oral  communications  by the  officers of the Trust or by
regular employees of Forum or their affiliates. Forum will bear all of the costs
of the Meeting and the preparation, printing and mailing of this Proxy Statement
and of proxies.

PURPOSE OF MEETING

         The Meeting is being  called to approve a new  Investment  Sub-Advisory
Agreement (the "PPM Agreement") among the Trust, Forum Investment Advisors,  LLC
and PPM America, Inc. ("PPM") (the "Proposal").

DESCRIPTION OF VOTING

         Approval of the Proposal for the Fund requires the affirmative  vote of
"a majority of the  outstanding  voting  securities" of the Fund as that term is
defined under the  Investment  Company Act of 1940 (the "1940 Act").  This means
the affirmative  vote of the lesser of (a) 67% or more of the shares of the Fund
present at the Meeting or  represented  by proxy if the holders of more than 50%
of the outstanding  shares are present or represented by proxy at the Meeting or
(b) more than 50% of the outstanding shares of the Fund.

         Shareholders of record at the close of business on April 28, 2000, (the
"Record  Date"),  will be  entitled  to notice of, and to vote at, the  Meeting,
including any postponement or adjournment  thereof.  As of the Record Date there
were  3,775,070.004  shares  outstanding  of the Fund. As of the Record Date, no
Trustees or Officers  of the Trust  owned any of the  outstanding  shares of the
Fund. As of the Record Date, the following shareholders  beneficially owned more
than 5% of the outstanding shares of the Fund:


<PAGE>


5% Shareholders
Value Equity Fund
<TABLE>
<CAPTION>
- ----------------------------------------------- ---------------------- ------------------------------------------
Name/Address                                    Shares                 Percentage of Shares of the Fund

- ----------------------------------------------- ---------------------- ------------------------------------------
- ----------------------------------------------- ---------------------- ------------------------------------------
<S>                                             <C>                    <C>
Southwest Guaranty Trust Company                1,074,595.692          28.47%
Fiduciary - SCI - Merchandise
10411  Westheimer,   Suite  200,  Houston,  TX

77042

- ----------------------------------------------- ---------------------- ------------------------------------------
- ----------------------------------------------- ---------------------- ------------------------------------------
Miter & Co., fbo Chicago Trust Co-SCI PN        667,186.446            17.67%
CO Marshall & Ilsley Trust Co
PO Box 2977, Milwaukee, WI 53202-2977

- ----------------------------------------------- ---------------------- ------------------------------------------
- ----------------------------------------------- ---------------------- ------------------------------------------
Sun Trust Bank, Inc. TR (CM)                    616,252.549            16.32%
Attn: Joy Coleman
PO Box 105870 - CTR 3144
Atlanta, GA 30348-5870

- ----------------------------------------------- ---------------------- ------------------------------------------
- ----------------------------------------------- ---------------------- ------------------------------------------
First Union National Bank ttee                  335,935.789            8.90%
fbo SCI Preneed Funeral Trust
1525 West WT Harris Blvd, CMG NC 1151
Charlotte, NC 28288

- ----------------------------------------------- ---------------------- ------------------------------------------
- ----------------------------------------------- ---------------------- ------------------------------------------
Sun Trust Bank, Inc. Tr (Preneed)               322,072.780            8.53%
Attn Joy Coleman
PO Box 105870 - CTR 3144
Atlanta, GA  30348-5870

- ----------------------------------------------- ---------------------- ------------------------------------------
- ----------------------------------------------- ---------------------- ------------------------------------------
Southwest Guaranty Trust Company                308,696.620            8.18%
Fiduciary - SCI - Funeral Service
10411 Westheimer, Suite 200, Houston, TX 77042

- ----------------------------------------------- ---------------------- ------------------------------------------
</TABLE>


         Each  shareholder will be entitled to one vote for each whole share and
a fractional vote for each fractional share held.  Shares may be voted in person
or by proxy.  Shareholders  holding  one-third of the outstanding  shares of the
Fund at the close of business  on the Record Date  present in person or by proxy
will constitute a quorum for the  transaction of business  regarding the Fund at
the Meeting.  All properly  executed proxies received in time to be voted at the
Meeting  will be counted at the Meeting,  and any  postponement  or  adjournment
thereof,  in  accordance  with the  instructions  marked  thereon  or  otherwise
provided therein.

         For purposes of determining the presence of a quorum and counting votes
on  the  matters  presented,  shares  represented  by  abstentions  and  "broker
non-votes"  will be counted as  present,  but not as votes cast at the  Meeting.
Broker  non-votes are shares held in street name for which the broker  indicates
that  instructions  have not been received from the beneficial  owners and other
persons  entitled to vote and for which the broker  lacks  discretionary  voting
authority.  Under the 1940 Act,  the  affirmative  vote  necessary  to approve a
matter under  consideration  may be determined with reference to a percentage of
votes present at the Meeting.  For this reason,  abstentions  and non-votes have
the effect of votes AGAINST the  Proposal.  In  completing  proxies,  therefore,
shareholders  should be aware that checking the box labeled  ABSTAIN will result
in the shares  covered by the proxy being  treated as if they were voted AGAINST
the Proposal.

         IF YOU DO NOT SPECIFY A CHOICE ON THE PROXY,  PROPERLY EXECUTED PROXIES
THAT  ARE  RETURNED  IN TIME TO BE VOTED AT THE  MEETING  WILL BE VOTED  FOR THE
APPROVAL OF THE PROPOSAL  DESCRIBED IN THIS PROXY STATEMENT.  If a quorum is not
present at the Meeting, or if a quorum is present at the Meeting, but sufficient
votes to approve the Proposal are not received, the persons named as proxies may
propose one or more  adjournments of the Meeting to permit further  solicitation
of proxies with respect to the Proposal.  In determining  whether to adjourn the
Meeting,  the following  factors may be considered:  the nature of the Proposal,
the  percentage of votes cast, the percentage of negative votes cast, the nature
of any further  solicitation  and the information to be provided to shareholders
with respect to the reasons for the  solicitation.  Any adjournment will require
the affirmative  vote of a majority of shares  represented in person or by proxy
at the Meeting. In that case, the persons named as proxies will vote all proxies
that they are entitled to vote FOR such an adjournment;  provided,  however, any
proxies  required to be voted  against the Proposal  will be voted  AGAINST such
adjournment.  A  shareholder  vote  may  be  taken  on  the  Proposal  prior  to
adjournment  if  sufficient  votes  have  been  received  and  it  is  otherwise
appropriate.

         Any  shareholder  may  revoke  his or her  proxy at any  time  prior to
exercise  thereof by giving  written  notice of  revocation  or by executing and
delivering a later dated proxy to Forum Shareholder  Services,  LLC, the Trust's
transfer agent, at Two Portland Square, Portland, Maine, 04101, or by personally
casting a vote at the Meeting.

                                    PROPOSAL
                                   APPROVAL OF
                     A NEW INVESTMENT SUB-ADVISORY AGREEMENT

         Shareholders  of the Fund are being asked to approve the PPM  Agreement
so that PPM may serve as the Fund's  investment  sub-adviser.  Forum  Investment
Advisors, LLC ("FIA"), which is located at Two Portland Square,  Portland, Maine
04101,  serves as  investment  adviser  to the Fund  pursuant  to an  Investment
Advisory  Agreement  dated  March 13, 1998  between  the Trust and FIA.  Beutel,
Goodman  Capital  Management  ("Beutel"),  which is located at 5847 San  Felipe,
Suite 4500, Houston,  Texas 77057-3011,  served as investment sub-adviser to the
Fund pursuant to an Investment Sub-Advisory Agreement dated March 13, 1998 among
the Trust, Forum Investment  Advisors,  LLC and Beutel (the "Beutel Agreement").
The Beutel  Agreement was unanimously  approved by the Trust's Board of Trustees
(the  "Board")  at a meeting  held on March 9, 1998 and by the  written  consent
dated  March  10,  1998  of the  initial  shareholder  of the  Fund in lieu of a
shareholders'  meeting.  It was last renewed at the Trust's annual Board meeting
on February 16, 1999.

         Beutel served as the Fund's  sub-adviser until March 29, 2000. On March
30,  2000,  PPM  replaced  Beutel as the  Fund's  sub-adviser  under an  interim
sub-advisory  agreement (the "Interim Agreement") that is substantially  similar
to the Beutel  Agreement.  Fund  shareholders are now being asked to approve the
PPM Agreement for PPM to remain the Fund's sub-adviser.  The Trustees determined
that it was in the best interests of the Fund not to renew the Beutel  Agreement
and to retain PPM as the Fund's  sub-adviser  because the Trustees believed that
PPM's style of portfolio management would be more successful in light of current
and expected market conditions.  While the investing style and services provided
by PPM are  similar  to those  of  Beutel,  PPM has  generally  attained  better
historical investment performance.

         The PPM  Agreement was  unanimously  approved by the Trust's Board at a
meeting  held on February  29,  2000.  PPM began  managing  the  investment  and
reinvestment  of the  assets  of the  Fund on  March  30,  2000.  If the  Fund's
shareholders  approve  the  PPM  Agreement,   PPM  will  remain  the  investment
sub-adviser to the Fund. The form of the PPM Agreement is attached as Exhibit A.
The PPM Agreement is identical in all material respects to the Beutel Agreement,
including the sub-advisory  fees to be charged to the Fund. The Board recommends
that shareholders of the Fund approve the PPM Agreement.

         If the PPM  Agreement is approved by the Fund's  shareholders,  it will
remain in effect,  unless earlier  terminated,  for an initial term expiring two
years from the date of effectiveness  and will continue in effect thereafter for
successive  twelve-month  periods,   provided  that  each  such  continuance  is
specifically  approved  at least  annually  (i) by the Board or by the vote of a
majority of the outstanding  voting  securities of the Fund, and, in either case
(ii) by a majority of the Trustees  who are not parties to the PPM  Agreement or
interested persons of any such party (other than as Trustees of the Trust).

DISCUSSION OF THE PPM AGREEMENT AND THE BEUTEL AGREEMENT

         Under the terms of the PPM  Agreement,  PPM will manage the  investment
and  reinvestment of the assets of the Fund. PPM will be responsible for placing
orders for the purchase and sale of the Fund's investments directly with brokers
and dealers  selected by it in its  discretion.  Commissions  paid to brokers or
dealers will be determined by research and trading services  provided along with
the best execution  available for the client.  Commissions  will be also used to
pay for third-party research services through "soft dollar"  arrangements.  Such
services may include  research on proxy  issues,  economic  and  business  cycle
research  and  industry/company  specific  reports.  PPM will furnish at its own
expense all  services,  facilities  and personnel  necessary in connection  with
managing the Fund's  investments and effecting  portfolio  transactions  for the
Fund. PPM will also furnish to the Board,  which has overall  responsibility for
the  business  and  affairs of the  Trust,  periodic  reports on the  investment
performance  of the  Fund.  The  terms of the PPM  Agreement  are  substantially
identical to those of the Beutel Agreement.

         As  provided  in the Trust  Instrument  of the Trust,  a  sub-adviser's
employment  must be evidenced by a separate  written  agreement  approved by the

<PAGE>

Board and, if required,  by the  shareholders of the applicable  Fund. Under its
agreement  with the Trust,  FIA is  responsible  for  communicating  performance
targets and evaluations to a sub-adviser, supervising a sub-adviser's compliance
with the Fund's  investment  objectives  and policies,  as well as authorizing a
sub-adviser  to  engage  in  certain  investment  techniques  for the  Fund.  In
addition,  FIA  recommends to the Board whether an agreement  with a sub-adviser
should  be  renewed,  modified  or  terminated.  FIA also may from  time to time
recommend that the Trust replace one or more or appoint additional sub-advisers,
depending on FIA's  assessment of what  combination of  sub-advisers it believes
will optimize the Fund's chances of achieving its investment  objective.  In the
event that a sub-adviser ceased to provide investment  advisory services for the
Fund, FIA would recommend to the Board a similarly  qualified  person to replace
the sub-adviser, but would not manage the Fund's portfolio.

         The PPM Agreement provides that PPM shall not be liable for any mistake
of judgment or in any event whatsoever,  except for lack of good faith, provided
that the  Agreement  does not protect PPM against any  liability to the Trust to
which PPM would  otherwise be subject due to willful  misfeasance,  bad faith or
gross  negligence  in the  performance  of its  duties or by reason of  reckless
disregard of its obligations and duties under the Agreement.

         The PPM Agreement is terminable without penalty by the Board, by a vote
of a majority of the voting  securities of the Fund (as defined by the 1940 Act)
or the  investment  adviser on 60 days'  written  notice to PPM, or by PPM on 60
days' written notice to the Trust, and will automatically terminate in the event
of its assignment.

         The  terms of the PPM  Agreement  obligate  PPM to  manage  the Fund in
accordance  with applicable  laws and  regulations.  The provision of investment
advisory services by PPM to the Fund is not exclusive under the terms of the PPM
Agreement.  PPM is free to and  does  render  investment  advisory  services  to
others. See "Information About PPM" below.

SUB-ADVISORY FEES

         Under the Beutel  Agreement,  Beutel received a sub-advisory  fee at an
annual rate of 0.30% of the average daily net assets of the Fund. For the fiscal
year ended December 31, 1999, the Fund paid Beutel $132,560 in sub-advisory fees
under the Beutel Agreement.  In addition,  Beutel waived $22,816.  Excluding the
waivers,  the  sub-advisory  fee for the Fund was  $155,376.  Under the  Interim
Agreement,  PPM receives from the Fund a sub-advisory  fee at the annual rate of
0.30% of the average daily net assets of the Fund. Under the PPM Agreement,  PPM
would receive from the Fund a sub-advisory  fee at the same annual rate of 0.30%
of the average  daily net assets of the Fund.  It is not  contemplated  that PPM
will waive any of its sub-advisory fees.

INFORMATION ABOUT PPM

         PPM is a Delaware  corporation  that was  incorporated on July 5, 1990.
PPM is located at 225 West Wacker Drive,  Suite 1200,  Chicago,  Illinois 60606.
PPM is registered as an investment adviser under the Investment  Advisers Act of
1940 ("Advisers  Act").  PPM is 100% owned by PPM Holdings,  Inc. (225 W. Wacker
Drive, Suite 1200, Chicago, IL 60606). Brooke Holdings,  Inc. (1105 North Market
Street,  Wilmington,  DE 19899),  a wholly  owned direct  subsidiary  of Holborn
Delaware Partnership ("HDP"), is the sole shareholder of PPM Holdings,  Inc. HDP
is located at 1105 North Market  Street,  Wilmington,  DE 19899.  The  following
entities are partners of HDP: Prudential Three Limited (10%) ("P3");  Prudential
Two Limited (10%) ("P2");  and Prudential  One Limited (80%) ("POL").  P3 and P2
are wholly owned by POL. Prudential Corporation Holdings Limited ("PHCL") is the
sole  shareholder  of POL.  Prudential  Corporation,  plc.,  located at Laurence
Pountney Hill,  London,  England,  EC4R 0HH, is a United Kingdom publicly traded
holding company and owner of one of the largest life insurance  companies in the
United Kingdom, is the sole shareholder of PHCL.

         PPM is the  investment  adviser  for PPM  America  Large Cap Value Fund
("PPM Fund") which has an investment  objective similar to that of the Fund. The
assets of the PPM Fund are approximately $21.3 million. PPM receives an advisory
fee of 0.80% of the  average  daily net  assets of the PPM Fund.  For the fiscal
year ended  December 31,  1999,  the PPM Fund paid PPM  $120,148.33  in advisory
fees. In addition,  PPM waived $74,274.69.  Excluding the waivers,  the advisory
fee for the PPM Fund was $ 45,873.64.


<PAGE>


         PPM's principals are Russell William Swansen  (President and Director),
Mark Bernard Mandich  (Executive Vice  President,  Treasurer and Director),  and
Fred John Stark,  III (Executive  Vice President,  Secretary,  General Counsel -
Special Investments Group and Director). They are all located at 225 West Wacker
Drive,  Suite 1200,  Chicago,  Illinois 60606.  Mr. Swansen received his B.A. in
Economics in 1979 from Gustavus Adolphus College in St. Peter, Minnesota and his
M.B.A.  in Finance in 1982 from the  University  of  Minnesota  in  Minneapolis,
Minnesota.  He has  been  the  President  of PPM  since  1990.  In  addition  to
directorships  of certain  affiliates of PPM, Mr.  Swansen is also a director of
LePage's,  Inc., IPM Products  Company,  The Network  Guidance  Company,  Putnam
Lovell  Finance  Company,  a trustee  of the PPM  America  Funds and  formerly a
director of Bucyrus  International,  Inc.,  Cherrydale Farms, Inc., and Carolina
Steel  Corporation.  Prior to joining PPM in 1990,  Mr. Swansen was an Executive
Vice President of Washington  Square Capital,  Inc.  ("WSC") in  Minneapolis,  a
registered investment advisor and subsidiary of Reliastar Financial Corporation.
At WSC, Mr. Swansen was responsible for its investment advisory business and the
Guaranteed   Investment   Contract  business  of  Northwestern   National  Life,
Reliastar's principal insurance subsidiary. He was also a director of Washington
Square Mortgage Company, a residential  mortgage banking company, and Washington
Square  Capital  Markets,  a registered  broker  dealer.  He began his career in
investments  at First  American  Asset  Management,  the  investment  management
division of US Bank, a subsidiary of US Bancorp.

         Mr.  Mandich  received his B.S. in Accounting  in 1982 from  Valparaiso
University in Valparaiso,  Indiana.  He has been the Executive Vice President of
Finance and  Administration,  the Chief Compliance  Officer and Treasurer of New
Sub-Adviser  since 1993. In addition to directorships  of certain  affiliates of
PPM, Mr.  Mandich is also  director of the Fasciano  Fund and the Chicago  Youth
Programs.  Prior to joining PPM in 1993,  Mr.  Mandich was  employed as a Senior
Manager with Arthur  Andersen & Co., where he spent nine years  providing  audit
and financial  consulting  services  exclusively to financial  services industry
clients including investment advisors, broker/dealers,  mutual funds, commercial
finance and banking companies, and investment partnerships.

     Mr. Stark received his B.A. in 1981 from Wabash College in  Crawfordsville,
Indiana  and his  J.D.  in 1984  from  Vanderbilt  University  School  of Law in
Nashville,  Tennessee.  He  has  served  as  an  officer  and  director  of  New
Sub-Adviser  since 1990.  Mr.  Stark is admitted to practice law in the State of
Minnesota and the Eastern District of Wisconsin. Prior to joining PPM, Mr. Stark
was employed by Washington  Square Capital,  Inc. and the law firm of Briggs and
Morgan, in Minneapolis, Minnesota.

EVALUATION BY THE BOARD OF TRUSTEES

         On February 29, 2000,  the Board met and discussed the Proposal and its
possible effect on the Trust, the Fund and their  shareholders and evaluated the
PPM Agreement. Prior to this meeting, the Board had been reviewing and analyzing
on a quarterly  basis  Beutel's  performance  as compared with other  investment
managers  of  similar   style.   The  Board's  review  showed  that  Beutel  had
consistently  failed to perform favorably in comparison with these other similar
managers. Based upon Beutel's  under-performance,  the Board decided that it was
in the best interests of the  shareholders  of the Fund to change  sub-advisers.
The Board  decided on PPM based upon a number of  factors.  In  deciding  on the
sub-adviser  to replace  Beutel,  the Board  engaged in a rigorous  quantitative
analysis of over 1,200 investment  managers  utilizing the same investment style
of the Fund. The Board considered a number of factors including  variance from a
true "value"  investment style,  performance,  assets under management,  minimum
weighted average capitalization,  and minimum number of years of experience. The
Board found that PPM's "value"  investment  style closely  reflected that of the
Fund and that their  portfolios  were composed of  securities  that were true to
that style.  The Board found that PPM's  performance  results  were on an annual
basis  consistently  above the median of other  investment  managers of the same
style.  The Board was also impressed  with the level of assets under  management
and, in particular, the substantial background,  experience and low turn-over of
PPM's portfolio  managers.  In addition,  the Board viewed  favorably,  from the
perspective  of  stability  and support,  the fact that PPM was a subsidiary  of
Prudential  Corporation,  plc.,  one of the largest  insurance  companies in the
United Kingdom. In addition, and as aforementioned,  the sub-advisory fees to be
paid to PPM were the same as those paid to Beutel.  The Board concluded that the
PPM Agreement is reasonable,  fair and in the best interests of the Fund and its
shareholders.  Accordingly,  after consideration of the above factors,  and such

<PAGE>

other factors and information it deemed relevant, the Board unanimously approved
the  PPM   Agreement   and  voted  to  recommend  its  approval  to  the  Fund's
shareholders.

THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL.

OTHER BUSINESS

         Management  knows of no other  business to be presented at the Meeting.
If any additional matters should be properly presented,  it is intended that the
enclosed  proxy will be voted in  accordance  with the  judgment  of the persons
named in the proxy.

ADDITIONAL INFORMATION

Investment Adviser, Administrator and Principal Underwriter

         The Fund's investment adviser is FIA. The Fund's administrator is Forum
Administrative  Services, LLC and the Fund's principal underwriter is Forum Fund
Services,   LLC.  The  principal  office  of  the  Fund's  investment   adviser,
administrator, and principal underwriter is Two Portland Square, Portland, Maine
04101.

SUBMISSION OF SHAREHOLDER PROPOSALS.

         It is anticipated that,  following the Meeting,  the Fund will not hold
any  meetings of  shareholders  except as required by Federal or Delaware  state
law. Shareholders wishing to submit proposals for inclusion in a proxy statement
for a subsequent  shareholder  meeting should send proposals to the Secretary of
the Trust, D. Blaine Riggle, in care of Forum Administrative  Services, LLC, Two
Portland Square, Portland, Maine 04101.

YOU ARE URGED TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY

                                              By Order of the Board of Trustees,



                                              D. Blaine Riggle
                                              Secretary


<PAGE>




                                    EXHIBIT A
                                 MEMORIAL FUNDS
                              SUBADVISORY AGREEMENT

         AGREEMENT made as of the 30th day of March, 2000, by and among Memorial
Funds,  a  Delaware  business  trust,  with its  principal  office  and place of
business at Two Portland  Square,  Portland,  Maine 04101 (the  "Trust"),  Forum
Investment  Advisors,  LLC,  a  Delaware  limited  liability  company,  with its
principal office and place of business at Two Portland Square,  Portland,  Maine
04101 (the "Adviser") and PPM America,  Inc., a Delaware  corporation,  with its
principal  office and place of business at 225 West  Wacker  Drive,  Suite 1200,
Chicago, Illinois 60606 (the "Subadviser").

         WHEREAS,  Adviser has entered  into an  Investment  Advisory  Agreement
dated the 13th day of March, 1998, ("Advisory Agreement") with the Trust;

         WHEREAS,  the Trust is registered  under the Investment  Company Act of
1940,  as amended,  (the "1940  Act"),  as an  open-end,  management  investment
company  and may issue its  shares of  beneficial  interest,  no par value  (the
"Shares"), in separate series;

         WHEREAS,  pursuant  to  the  Advisory  Agreement,  and  subject  to the
direction and control of the Board of Trustees of the Trust (the  "Board"),  the
Adviser  acts as  investment  adviser  for each  series of the  Trust  listed on
Schedule A hereto (each, a "Fund" and, collectively, the "Funds");

         WHEREAS,  the Trust and  Adviser  desire to retain  the  Subadviser  to
perform  investment  advisory services for the Fund and Subadviser is willing to
provide those services on the terms and conditions set forth in this Agreement;

         NOW THEREFORE,  for and in  consideration  of the mutual  covenants and
agreements  contained  herein,  the Adviser and the  Subadviser  hereby agree as
follows:

         SECTION 1.  APPOINTMENT; DELIVERY OF DOCUMENTS

         (a) The Trust and the Adviser hereby employ Subadviser,  subject to the
direction and control of the Board, to manage the investment and reinvestment of
the assets in each Fund and,  without  limiting the generality of the foregoing,
to provide  other  services as specified  herein.  The  Subadviser  accepts this
employment  and agrees to render its  services  for the  compensation  set forth
herein.

         (b) In connection therewith,  the Trust has delivered to the Subadviser
copies  of (i) the  Trust's  Trust  Instrument,  (ii) the  Trust's  Registration
Statement and all amendments thereto filed with the U.S. Securities and Exchange
Commission  ("SEC")  pursuant to the  Securities  Act of 1933,  as amended  (the
"Securities  Act"), or the 1940 Act (the  "Registration  Statement"),  (iii) the
Trust's current  Prospectuses  and Statements of Additional  Information of each
Fund (collectively,  as currently in effect and as amended or supplemented,  the
"Prospectus"),  and (iv) all procedures adopted by the Trust with respect to any
Fund (i.e.,  repurchase  agreement  procedures),  and shall promptly furnish the
Subadviser  with all amendments of or  supplements  to the foregoing.  The Trust
shall deliver to the  Subadviser  (x) a certified  copy of the resolution of the
Board  appointing the Subadviser and  authorizing  the execution and delivery of
this  Agreement,  (y) a copy  of all  proxy  statements  and  related  materials
relating to any Fund, and (z) any other documents, materials or information that
the  Subadviser  shall  reasonably  request to enable it to  perform  its duties
pursuant to this Agreement.

         (c) The  Subadviser  has  delivered  to the Adviser and the Trust (i) a
copy of its Form ADV as most recently  filed with the SEC and (ii) a copy of its
code of ethics  complying with the requirements of Rule 17j-1 under the 1940 Act
(the "Code").  The Subadviser  shall promptly furnish the Adviser and Trust with
all amendments of or supplements to the foregoing at least annually.

<PAGE>


         SECTION 2.  DUTIES OF THE TRUST AND ADVISER

         (a) In order for the  Subadviser  to perform the  services  required by
this Agreement, the Trust and the Adviser (i) shall, cause all service providers
to the Trust to furnish  information  relating to any Fund to the Subadviser and
assist  the  Subadviser  as may be  required  and  (ii)  shall  ensure  that the
Subadviser has reasonable access to all records and documents  maintained by the
Adviser, the Trust or any service provider to the Trust.

         (b) In order for the  Subadviser  to perform the  services  required by
this  Agreement,  the Adviser  shall deliver to the  Subadviser  all material it
provides to the Board in accordance with the Advisory Agreement.

         SECTION 3.  DUTIES OF THE SUBADVISER

         (a) The Subadviser is hereby  authorized to make decisions with respect
to all  purchases and sales of securities  and other  investment  assets in each
Fund.  This  authority  may be modified or revoked,  in whole or in part, by the
Adviser upon reasonable notice to the Subadviser,  such notice shall not be less
than 30 days. To carry out such decisions,  the Subadviser is hereby authorized,
as agent and  attorney-in-fact for the Trust, for the account of, at the risk of
and in the name of the  Trust,  to place  orders  and  issue  instructions  with
respect to those  transactions of the Funds.  In all purchases,  sales and other
transactions in securities and other  investments for the Funds,  the Subadviser
is  authorized  to exercise  full  discretion  and act for the Trust in the same
manner and with the same  force and  effect as the Trust  might or could do with
respect to such purchases, sales or other transactions,  as well as with respect
to all other things  necessary or  incidental to the  furtherance  or conduct of
such purchases, sales or other transactions.

         Consistent  with Section 28(e) of the Securities  Exchange Act of 1934,
as amended,  the  Subadviser  may  allocate  brokerage on behalf of the Funds to
broker-dealers who provide research services. The Subadviser may aggregate sales
and purchase  orders of the assets of the Funds with  similar  orders being made
simultaneously  for other accounts  advised by the Subadviser or its affiliates.
Whenever the  Subadviser  simultaneously  places  orders to purchase or sell the
same  asset on behalf of a Fund and one or more  other  accounts  advised by the
Subadviser,  the Subadviser will allocate the order as to price and amount among
all such accounts in a manner the Subadviser  believes to be equitable over time
to each account.

         (b) The Subadviser  will report to the Board at each meeting thereof as
reasonably  requested by the Adviser or the Board all  material  changes in each
Fund caused by the  Subadviser  since the prior  report,  and will also keep the
Board informed of important  developments affecting the Trust, the Funds and the
Subadviser, and on its own initiative,  will furnish the Board from time to time
with  such  information  as the  Subadviser  may  believe  appropriate  for this
purpose,  whether  concerning  the  individual  companies  whose  securities are
included  in the Funds'  holdings,  the  industries  in which they  engage,  the
economic, social or political conditions prevailing in each country in which the
Funds maintain investments,  or otherwise.  The Subadviser will also furnish the
Board  with  such  statistical  and  analytical   information  with  respect  to
investments  of the Funds as the  Subadviser  may believe  appropriate or as the
Board  reasonably may request.  In making  purchases and sales of securities and
other  investment  assets for the Funds,  the  Subadviser  will bear in mind the
policies set from time to time by the Board as well as the  limitations  imposed
by the Trust Instrument and Registration Statement,  the limitations in the 1940
Act, the  Securities  Act, the Internal  Revenue Code of 1986,  as amended,  and
other applicable laws and the investment  objectives,  policies and restrictions
of the Funds.

         (c) The Subadviser will from time to time employ or associate with such
persons as the Subadviser  believes to be  particularly  fitted to assist in the
execution of the Subadviser's duties hereunder,  the cost of performance of such
duties to be borne and paid by the Subadviser.  No obligation may be incurred on
the Trust's or Adviser's behalf in any such respect.

         (d) The  Subadviser  will  report  to the Board  all  material  matters
related to the Subadviser.  On an annual basis,  the Subadviser  shall report on
its  compliance  with  its Code to the  Adviser  and to the  Board  and upon the
written  request of the Adviser or the Trust,  the  Subadviser  shall permit the
Adviser  and the Trust,  or their  respective  representatives  to  examine  the

<PAGE>

reports  required to be made to the  Subadviser  under the Code.  The Subadviser
will notify the Adviser and the Trust of any change of control of the Subadviser
and any changes in the key personnel who are either the portfolio  manager(s) of
the Fund or  senior  management  of the  Subadviser,  in each  case  prior to or
promptly after such change.

         (e) The  Subadviser  will  maintain  records  relating to its portfolio
transactions  and placing and allocation of brokerage  orders as are required to
be maintained by the Trust under the 1940 Act. The Subadviser  shall prepare and
maintain, or cause to be prepared and maintained, in such form, for such periods
and in such  locations as may be required by  applicable  law, all documents and
records  relating to the services  provided by the  Subadviser  pursuant to this
Agreement  required to be prepared and maintained by the Subadviser or the Trust
pursuant  to  applicable  law.  To the extent  permitted  by law,  the books and
records  pertaining to the Trust which are in possession of the Subadviser shall
be the property of the Trust.  With the consent of the  Subadviser,  the Adviser
and the Trust,  or their  respective  representatives,  may have  access to such
books and records  during the  Subadviser's  normal  business  hours,  with such
consent not to be  unreasonably  withheld.  Upon the  reasonable  request of the
Adviser or the Trust,  copies of any such books and  records  shall be  provided
promptly by the  Subadviser  to the Adviser and the Trust,  or their  respective
representatives.

         (f) The Subadviser will cooperate with each Fund's  independent  public
accountants and shall take reasonable  action to make all necessary  information
available to the accountants for the performance of the accountants' duties.

         (g)  The  Subadviser  will  provide  the  Funds'   custodian  and  fund
accountant  on  each  business  day  with  such  information   relating  to  all
transactions  concerning the Funds' assets under the Subadviser's control as the
custodian  and fund  accountant  may  reasonably  require.  In  accordance  with
procedures  adopted by the Board, the Subadviser is responsible for assisting in
the fair  valuation  of all Fund assets and will use its  reasonable  efforts to
arrange for the provision of prices from parties who are not affiliated  persons
of the Subadviser for each asset for which the Funds' fund  accountant  does not
obtain prices in the ordinary course of business.

         (h) The  Subadviser  shall  authorize and permit any of its  directors,
officers and  employees  who may be elected as Trustees or officers of the Trust
to serve in the capacities in which they are elected.

         (i) Except as  otherwise  agreed to by the Trust,  the  Adviser and the
Subadviser, during any period in which a Fund invests all (or substantially all)
of  its  investment  assets  in a  registered,  open-end  management  investment
company,  or separate  series thereof,  in accordance  with Section  12(d)(1)(E)
under the 1940 Act, the Subadviser shall have no duties or obligations  pursuant
to this Agreement with respect to the Fund.

         SECTION 4.  COMPENSATION; EXPENSES

         (a) In  consideration  of the  foregoing,  the  Adviser  shall  pay the
Subadviser,  with  respect  to each Fund,  a fee at an annual  rate as listed in
Appendix A hereto.  Such fees shall be accrued by the Adviser daily and shall be
payable  monthly in arrears on the first day of each calendar month for services
performed  hereunder during the prior calendar month. If fees begin to accrue in
the  middle of a month or if this  Agreement  terminates  before  the end of any
month,  all fees for the period  from that date to the end of that month or from
the  beginning  of that  month to the date of  termination,  as the case may be,
shall be prorated  according to the proportion that the period bears to the full
month in which the effectiveness or termination  occurs. Upon the termination of
this  Agreement  with respect to a Fund, the Adviser shall pay to the Subadviser
such   compensation  as  shall  be  payable  prior  to  the  effective  date  of
termination.

          (b) The  Subadviser  may  agree  to  waive  all or part of its fees by
separate agreement.

<PAGE>


         (c) No fee shall be payable hereunder with respect to a Fund during any
period in which the Fund invests all (or  substantially  all) of its  investment
assets in a registered,  open-end,  management  investment  company, or separate
series thereof, in accordance with Section 12(d)(1)(E) under the 1940 Act.

         (d) The  Subadviser  will  bear  its own  costs of  providing  services
hereunder. Other than as specifically indicated herein, the Subadviser shall not
be responsible  for the Trust's or the Adviser's  expenses,  including,  without
limitation:  the expenses of organizing the Trust or any Fund and continuing its
existence;  fees and expenses of Trustees  and  officers of the Trust;  fees for
investment advisory services and administrative personnel and services; expenses
incurred in the distribution of its shares, including expenses of administrative
support  services,  fees and expenses of preparing and printing its Registration
Statements under the Securities Act of 1933 and the 1940 Act, and any amendments
thereto;  expenses of registering and qualifying the Trust,  the Fund and shares
of the Fund under federal and state laws and regulation;  expenses of preparing,
printing  and  distributing   prospectuses  (and  any  amendments   thereto)  to
shareholders;  interest  expense,  taxes,  fees and  commissions  of every kind;
expenses of issue (including cost of share certificates),  purchase,  repurchase
and  redemption  of shares  including  expenses  attributable  to a  program  of
periodic issue;  charges and expenses of custodians,  transfer agents,  dividend
disbursing  agents,  shareholder  servicing agents and registrars;  printing and
mailing costs; auditing,  accounting and legal expenses; reports to shareholders
and governmental officers and commissions;  expenses of meetings of Trustees and
shareholders and proxy solicitations in connection with such meetings; insurance
expenses;  association membership dues and such nonrecurring items as may arise,
including all losses and liabilities  incurred in  administrating  the Trust and
the Fund.  The Trust or the  Adviser,  as the case may be, shall  reimburse  the
Subadviser  for any such expenses or other  expenses of the Fund or the Adviser,
as may be reasonably  incurred with prior notice by the  Subadviser on behalf of
the Fund or the Adviser.  The Subadviser  shall keep and supply to the Trust and
the Adviser adequate records of all such expenses.

         SECTION 5.  STANDARD OF CARE

         (a) The Trust and  Adviser  shall  expect  of the  Subadviser,  and the
Subadviser  will give the Trust and Adviser  the  benefit  of, the  Subadviser's
reasonable  best efforts in rendering  its services  hereunder.  The  Subadviser
shall not be liable to the Adviser,  the Trust, any shareholder of the Trust, or
to any person,  firm or  organization  for any mistake of judgment or any act or
omission  in the course of, or  connected  with the  rendering  of its  services
hereunder,  except for lack of good faith, provided that nothing herein shall be
deemed to protect,  or purport to protect,  the Subadviser against any liability
to the Adviser,  the Trust, any shareholder of the Trust, or to any person, firm
or organization to which the Subadviser  would otherwise be subject by reason of
willful  misfeasance,  bad faith or gross  negligence in the  performance of the
Subadviser's  duties  hereunder,  or by  reason  of  the  Subadviser's  reckless
disregard of its obligations and duties hereunder.

         (b) The Subadviser  shall not be liable to the Adviser or the Trust for
any action taken or failure to act in good faith reliance upon: (i) information,
instructions or requests,  whether oral or written,  with respect to a Fund that
the Subadviser reasonably believes were made by a duly authorized officer of the
Adviser or the Trust,  (ii) the advice of counsel to the  Subadviser,  and (iii)
any written instruction or certified copy of any resolution of the Board.

         (c) The  Subadviser  shall not be responsible or liable for any failure
or delay in performance of its obligations  under this Agreement  arising out of
or caused,  directly  or  indirectly,  by  circumstances  beyond its  reasonable
control  including,  without  limitation,  acts of civil or military  authority,
national  emergencies,  labor  difficulties  (other  than  those  related to the
Subadviser's employees), fire, mechanical breakdowns, flood or catastrophe, acts
of God,  insurrection,  war,  riots or  failure  of the  mails,  transportation,
communication or power supply.

         SECTION 6.  EFFECTIVENESS, DURATION AND TERMINATION

         (a) This  Agreement  shall  become  effective  with  respect  to a Fund
immediately upon the later of approval by a majority of the Trust's trustees who

<PAGE>

are not parties to this Agreement or interested persons of any such party (other
than as trustees of the Trust) and, if required by applicable  law, by a vote of
a majority of the outstanding voting securities of the Fund.

         (b) This Agreement  shall remain in effect with respect to a Fund for a
period of two years from the date of its  effectiveness  and shall  continue  in
effect for  successive  annual  periods with respect to the Fund;  provided that
such continuance is specifically  approved at least annually (i) by the Board or
by the vote of a majority of the outstanding voting securities of the Fund, and,
in either case,  (ii) by a majority of the Trust's  trustees who are not parties
to this  Agreement  or  interested  persons  of any such  party  (other  than as
trustees of the Trust);  provided further,  however, that if the continuation of
this  Agreement is not  approved as to a Fund,  the  Subadviser  may continue to
render to that Fund the  services  described  herein  in the  manner  and to the
extent permitted by the 1940 Act and the rules and regulations thereunder.

         (c) This  Agreement  may be  terminated  with  respect to a Fund at any
time,  without  the  payment of any  penalty,  (i) by the Board,  by a vote of a
majority of the outstanding  voting  securities of the Fund or by the Adviser on
60 days' written  notice to the Subadviser or (ii) by the Subadviser on 60 days'
written notice to the Trust. This Agreement shall terminate immediately (x) upon
its assignment or (y) upon termination of the Advisory Agreement.

         SECTION 7.  ACTIVITIES OF THE SUBADVISER

         Except to the extent  necessary to perform its  obligations  hereunder,
nothing herein shall be deemed to limit or restrict the  Subadviser's  right, or
the right of any of the Subadviser's directors,  officers or employees to engage
in any other business or to devote time and attention to the management or other
aspects of any other business,  whether of a similar or dissimilar nature, or to
render services of any kind to any other corporation, trust, firm, individual or
association.  In the performance of its duties hereunder,  the Subadviser is and
shall be an  independent  contractor  and unless  otherwise  expressly  provided
herein or otherwise authorized in writing, shall have no authority to act for or
represent  the  Trust in any way or  otherwise  be  deemed to be an agent of the
Trust or of the Adviser.

         SECTION 8.  REPRESENTATIONS OF SUBADVISER and adviser

         (a) The  Subadviser  represents  and  warrants  that  (i) it is  either
registered as an investment  adviser under the Investment  Advisers Act of 1940,
as amended  ("Advisers  Act") (and will continue to be so registered for so long
as this  Agreement  remains  in effect) or exempt  from  registration  under the
Advisers  Act,  (ii) is not  prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement,  (iii) has met, and will
seek to continue to meet for so long as this  Agreement  remains in effect,  any
other applicable federal or state requirements,  or the applicable  requirements
of any  self-regulatory  agency,  necessary  to be met in order to  perform  the
services  contemplated  by this  Agreement,  and (iv) will  promptly  notify the
Adviser and the Trust of the  occurrence of any event that would  disqualify the
Subadviser  from  serving  as an  investment  adviser of an  investment  company
pursuant to Section 9(a) of the 1940 Act or otherwise.

         (b) The Adviser represents and warrants that (i) it is registered as an
investment adviser under the Advisers Act (and will continue to be so registered
for so long as this Agreement remains in effect),  (ii) is not prohibited by the
1940 Act or the Advisers Act from  performing the services  contemplated by this
Agreement,  and (iii) has met,  and will seek to continue to meet for so long as
this  Agreement  remains  in  effect,  any  other  applicable  federal  or state
requirements,  or the applicable  requirements  of any  self-regulatory  agency,
necessary  to be met in order  to  perform  the  services  contemplated  by this
Agreement.

         SECTION 9.  LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY

         The Trustees of the Trust and the  shareholders  of each Fund shall not
be liable for any obligations of the Trust or of the Funds under this Agreement,
and the  Subadviser  agrees that,  in asserting  any rights or claims under this
Agreement,  it shall look only to the assets  and  property  of the Trust or the
Fund to which the  Subadviser's  rights or claims  relate in  settlement of such
rights or claims,  and not to the Trustees of the Trust or the  shareholders  of
the Funds.

<PAGE>


         SECTION 10.  MISCELLANEOUS

         (a) No provisions  of this  Agreement may be amended or modified in any
manner except by a written  agreement  properly  authorized and executed by both
parties hereto and approved by the Trust in the manner set forth in Section 6(b)
hereof.

         (b) No amendment to this Agreement or the termination of this Agreement
with respect to a Fund shall  effect this  Agreement as it pertains to any other
Fund, nor shall any such amendment  require the vote of the  shareholders of any
other Fund.

         (c) Neither party to this Agreement  shall be liable to the other party
for consequential damages under any provision of this Agreement.

         (d) This  Agreement  shall be governed by, and the  provisions  of this
Agreement shall be construed and interpreted  under and in accordance  with, the
laws of the State of Delaware.

         (e) This Agreement constitutes the entire agreement between the parties
hereto and  supersedes  any prior  agreement  with respect to the subject matter
hereof, whether oral or written.

         (f) This  Agreement may be executed by the parties hereto on any number
of counterparts,  and all of the counterparts  taken together shall be deemed to
constitute one and the same instrument.

         (g) If any part,  term or  provision  of this  Agreement  is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered  severable and not be affected,  and the rights and
obligations  of the parties  shall be construed and enforced as if the Agreement
did not contain the  particular  part,  term or provision  held to be illegal or
invalid.

          (h) Section  headings in this  Agreement are included for  convenience
only and are not to be used to construe or interpret this Agreement.

         (i) Notices, requests,  instructions and communications received by the
parties  at their  respective  principal  places of  business,  or at such other
address as a party may have designated in writing,  shall be deemed to have been
properly given.

         (j) Notwithstanding any other provision of this Agreement,  the parties
agree that the assets and  liabilities  of each Fund are  separate  and distinct
from the assets  and  liabilities  of any other  series of the Trust and that no
Fund or other  series of the Trust  shall be liable or shall be charged  for any
debt, obligation or liability of any other Fund or series, whether arising under
this Agreement or otherwise.

         (k) No affiliated person, employee, agent, director, officer or manager
of the  Subadviser  shall be  liable at law or in  equity  for the  Subadviser's
obligations under this Agreement.

         (l)  The  terms  "vote  of  a  majority  of  the   outstanding   voting
securities",   "interested   person",   "affiliated   person,"   "control"   and
"assignment" shall have the meanings ascribed thereto in the 1940 Act.

         (m) Each of the undersigned warrants and represents that they have full
power and authority to sign this Agreement on behalf of the party  indicated and
that their  signature will bind the party indicated to the terms hereof and each
party hereto  warrants and  represents  that this  Agreement,  when executed and
delivered,  will constitute a legal,  valid and binding obligation of the party,
enforceable  against  the  party  in  accordance  with  its  terms,  subject  to
bankruptcy,  insolvency,  reorganization,  moratorium  and other laws of general
application affecting the rights and remedies of creditors and secured parties.

<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.

                                                 MEMORIAL FUNDS

                                                 Thomas G. Sheehan
                                                 Vice President

                                                 FORUM INVESTMENT ADVISORS, LLC

                                                 John F. Burns
                                                 Director

                                                 PPM AMERICA, INC.

                                                 Name:
                                                 Title:


<PAGE>



                                 MEMORIAL FUNDS

                              SUBADVISORY AGREEMENT

                                   Appendix A

                           PERCENTAGE OF THE AVERAGE ANNUAL  DAILY NET ASSETS OF
FUNDS OF THE TRUST         THE FUND REPRESENTED BY SHARES OWNED BY INVESTORS FOR
                           WHICH SUBADVISER PROVIDES SERVICES PURSUANT TO THIS
                                                 AGREEMENT

Value Equity Fund                                   .30







<PAGE>



                                 MEMORIAL FUNDS

                               TWO PORTLAND SQUARE
                              PORTLAND, MAINE 04101

                                      PROXY

           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

Revoking any such prior appointments, the undersigned appoints D. Blaine Riggle,
Thomas G. Sheehan and David I.  Goldstein  (or, if only one shall act, that one)
proxies with the power of substitution to vote all of the shares of Value Equity
Fund (the "Fund"),  a series of Memorial Funds (the "Trust"),  registered in the
name of the undersigned at the Special Meeting of Shareholders of the Fund to be
held at the offices of Forum Administrative  Services, LLC, Two Portland Square,
Portland, Maine 04101, on May 31, 2000, at 10:00 a.m. (Eastern Time), and at any
postponement or adjournment thereof.

The shares of  beneficial  interest  represented  by this Proxy will be voted in
accordance  with  the  instructions  given  by  the  undersigned  below.  IF  NO
INSTRUCTIONS  ARE GIVEN,  SUCH SHARES WILL BE VOTED FOR THE  PROPOSAL  SET FORTH
BELOW.  The Trust has proposed the  Proposal.  The Board of Trustees  recommends
voting FOR the Proposal.

          PROPOSAL: To approve a new Investment  Sub-Advisory  Agreement between
          the Trust, Forum Investment Advisors, LLC and PPM America, Inc.

             FOR _____                AGAINST _____               ABSTAIN _____

(NOTE: Checking the box labeled ABSTAIN will result in the shares covered by the
Proxy  being  treated as if they were voted  AGAINST the  Proposal.)  Receipt is
acknowledged  of the  Notice  and Proxy  Statement  for the  Special  Meeting of
Shareholders to be held on May 31, 2000.  PLEASE SIGN AND DATE THIS PROXY IN THE
SPACE PROVIDED.  Execution by shareholders  who are not individuals must be made
by an authorized signatory. Executors,  administrators,  trustees, guardians and
others  signing in a  representative  capacity  should  give their full title as
such.

         Authorized Signature                                               Date


         Printed Name (and Title if Applicable)


         Authorized Signature (Joint Investor or Second Signatory)          Date

         Printed Name (and Title if Applicable)



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