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(File Nos. 2-67052 and 811-3023)
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
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(3)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
FORUM 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
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
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 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
____________________________________
5) Total fee paid:
____________________________________
[ ] Fee paid previously with preliminary materials.
[ ] 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:
_______________________
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FORUM FUNDS
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DAILY ASSETS CASH FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 27, 1996
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Dear Shareholders:
Notice is hereby given that a Special Meeting of Shareholders of Daily Assets
Cash Fund (the "Fund"), a series of Forum Funds (the "Trust"), will be held at
the offices of Forum Financial Services, Inc., the Trust's manager and
distributor, at Two Portland Square, Portland, Maine 04101, on Friday, December
27, 1996 at 10:00 a.m. Eastern time, for the following purposes:
1. To authorize the Trust on behalf of the Fund, to vote at a meeting of
the interestholders of Cash Portfolio of Core Trust (Delaware) to
approve an amendment to the Investment Advisory Agreement between Core
Trust (Delaware) and Linden Asset Management, Inc., to increase the
investment advisory fee with respect to Cash Portfolio; and
2. To transact such other business as may properly come before the
meeting.
The matters to be considered at the meeting are discussed more fully in the
attached Proxy Statement.
You are entitled to vote at the meeting and any adjournment thereof if you owned
shares of the Fund at the close of business on November 22, 1996. If you do not
expect to attend the meeting, please complete, date, sign and return the
enclosed proxy card(s) in the enclosed postage paid envelope.
By order of the Board of Trustees,
/s/ David I. Goldstein
David I. Goldstein
Secretary
Portland, Maine
November 27, 1996
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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 CARD(S), DATE AND SIGN
IT, AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED.
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FORUM FUNDS
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DAILY ASSETS CASH FUND
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 27, 1996
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INTRODUCTORY MATTERS
This is a proxy statement for Forum Funds (the "Trust"), a registered open-end
management investment company and relates to one series of the Trust - Daily
Assets Cash Fund (the "Fund"). This proxy statement is being furnished to the
shareholders of the Fund in connection with the Board of Trustees' (the "Board")
solicitation of proxies to be used at a special meeting of shareholders of the
Fund to be held on December 27, 1996 or any adjournment or adjournments thereof
(the "Meeting"). This proxy statement will first be mailed to shareholders on
or about November 27, 1996.
The record date to determine shareholders eligible to vote at the meeting is
November 22, 1996. Shareholders of the Fund on the record date (hereafter
"Shareholders") will be entitled to one vote for each share held on that date.
One third of the shares of the Fund outstanding on the record date, represented
in person or by proxy, must be present to form a quorum for the transaction of
business at the Meeting. In the event that a quorum for the Fund 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. Any such adjournment will require the
affirmative vote of a majority of those shares of the Fund represented at the
Meeting in person or by proxy. If a quorum is present, the persons named as
proxies will vote those proxies that they are entitled to vote for any such
proposal FOR such adjournment and will vote those proxies required to be voted
against any such proposal against such adjournment. A shareholder vote may be
taken on any proposal in this proxy statement prior to adjournment if sufficient
votes have been received and it is otherwise appropriate.
The persons named as proxies on the enclosed proxy card(s) will vote in
accordance with your direction as indicated thereon if your proxy card is
received and properly executed. If you give no voting instructions, your shares
will be voted for the proposal described in this proxy statement. The proxy
card may be revoked by giving another proxy, by letter or telegram revoking your
proxy received by the Trust prior to the meeting, or by appearing and voting at
the meeting.
Abstentions and broker non-votes will be counted as shares present for
determining whether a quorum is present but will not be counted for or against
any adjournment. Accordingly, abstentions and broker non-votes effectively will
be a vote against adjournment. Abstentions and broker non-votes will also not
be counted as votes cast for the purpose of determining whether sufficient votes
have been received to approve a proposal. Broker non-votes are shares held by a
broker or nominee as to which instructions have not been received from the
beneficial owners or persons entitled to vote and the broker or nominee does not
have discretionary voting power.
The solicitation of proxies, the cost of which will be borne by the Trust, will
be made primarily by mail but also may include telephone or oral communications
by regular employees of Forum Financial Services, Inc., the Trust's manager and
distributor, or its affiliates. These persons will not receive any compensation
from the Trust for their solicitation efforts. The Fund commenced operations on
October 1, 1996 and, therefore, has no current financial statement.
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MASTER-FEEDER ARRANGEMENTS
Under a structure commonly referred to as "master-feeder," Daily Assets Cash
Fund invests all of its investable assets in Cash Portfolio (the "Portfolio").
The Portfolio is a series of Core Trust (Delaware) ("Core Trust"), itself a
registered open-end management investment company. The Portfolio directly
acquires securities and the Fund (as well as other investors in the Portfolio)
acquires an indirect interest in those securities through its ownership of
interests in the Portfolio. Under this structure, investment advisory services
are rendered to the Portfolio and not the Fund, but shareholders of the Fund are
afforded the same rights to vote on the investment advisory agreement of the
Portfolio as they would have if the Fund invested directly in portfolio
securities.
The Board is proposing for shareholder approval an amendment to the investment
advisory agreement (the "Advisory Agreement") between Core Trust and Linden
Asset Management, Inc. ("Linden") with respect to the Portfolio. The amendment
would increase the advisory fee payable to Linden by the Portfolio.
The Board will vote the Fund's interest in the Portfolio at the meeting of
interestholders of the Portfolio (the "Portfolio Meeting") in the same
proportion as Shareholders cast their votes at the Meeting. For example, as of
November 15, Daily Assets Cash Fund owned 3% of the outstanding interests in
Cash Portfolio (Cash Fund, a separate series of Monarch Funds, a registered
open-end management investment company, owns the other 97% in Cash Portfolio).
If, at the Meeting, 60% of the votes cast by shareholders are for the Proposal,
the Board will vote at the Portfolio Meeting 60% of the Fund's interest in Cash
Portfolio for the investment advisory agreement amendment. There can be no
assurance that a majority of the Fund's shareholders will be able to determine
the outcome of the vote by interestholders of the Portfolio on the Proposal.
PROPOSAL - APPROVAL OF AN AMENDMENT TO THE INVESTMENT ADVISORY AGREEMENT
Linden also provides investment advisory services to Treasury Cash Portfolio and
Government Cash Portfolio, two additional series of Core Trust (Delaware)
(collectively, with Cash Portfolio, the "Portfolios"). If this Proposal is
approved by the interestholders of the Portfolio, the Portfolio's investment
advisory fee will be increased to 0.06% of the first $200 million of total
average daily net assets of the Portfolios ("Total Portfolio Assets"), 0.04% of
the next $300 million of Total Portfolio Assets, and 0.03% of the remaining
Total Portfolio Assets. Currently, the Portfolio incurs investment advisory
fees of 0.05% of the first $200 million of Total Portfolio Assets, 0.03% of the
next $300 million of Total Portfolio Assets, and 0.02% of the remaining Total
Portfolio Assets. The Portfolios are currently the only advisory accounts of
Linden. Advisory fees are paid to Linden monthly. The advisory fees paid to
Linden for the Portfolio's fiscal year ended August 31, 1996, and the advisory
fees that would have been paid to Linden for the same period had the proposed
Advisory Agreement amendments been in place during the year are $38,083 and
$49,306, respectively. This represents an increase of 29.47% over the actual
advisory fees paid during the year. The proposed amendments would change
Section 7 of the Investment Advisory Agreement attached hereto as Exhibit A.
The size of the Portfolios as of November 22, 1996, follows:
ASSETS
PORTFOLIO ($000,000'S)
Treasury Cash Portfolio 27.9
Government Cash Portfolio 613.3
Cash Portfolio 154.2
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In order for the Portfolio's investment advisory fee to be increased, a
"majority of the interests in the Portfolio" must approve the increase. For
this purpose a "majority of the interests in the Portfolio" requires the
affirmative vote of the lesser of (i) more than 50% of the outstanding interests
of the Portfolio or (ii) 67% of the interests of the Portfolio present or
represented at an interestholders' meeting at which the holders of more than 50%
of the outstanding interests of the Portfolio are present or represented. The
Portfolio and, to the best of the Trust's knowledge, all other investment
company interestholders in the Portfolio, will have a shareholders meeting on or
about the same date as the Meeting.
CURRENT TERMS OF THE ADVISORY AGREEMENT
Under the Advisory Agreement, Linden, subject to the control of the Board of
Trustees of Core Trust (the "Core Board") manages the Portfolio's investments.
In this regard, it is the responsibility of Linden to continuously provide the
Portfolio with investment management, including investment research, advice and
supervision, to determine which securities shall be purchased or sold by the
Portfolio, and to make purchases and sales of securities on behalf of the
Portfolio.
The Advisory Agreement between Core Trust and Linden with respect to the
Portfolio, was initially approved by the Core Board on August 30, 1995 and is
dated September 1, 1995. The Advisory Agreement continues in effect for
successive twelve-month periods, provided that the continuance is specifically
approved at least annually (i) by the Core Board or by vote of a majority of the
outstanding voting interests of the Portfolio, and in either case, (ii) by a
majority of Core Trust's trustees who are not parties to the Advisory Agreement
or interested persons of any such party (other than as trustees of Core Trust).
If the continuation of the Advisory Agreement is not approved as to a Portfolio,
Linden may continue to render the services described in the Advisory Agreement
with respect to the other Portfolios. Continuance of the Advisory Agreement in
its present form was most recently approved by the Core Board at a meeting held
on September 27, 1996. The Advisory Agreement was approved by the initial
interestholder of the Portfolio on September 1, 1995. The Advisory Agreement is
terminable without penalty (i) by the Core Board or by a vote of a majority of
the outstanding voting securities of the Portfolio on 60 days' written notice to
Linden or (ii) by Linden on 60 days' written notice to Core Trust. The Advisory
Agreement will automatically terminate in the event of its assignment.
COMPARATIVE FEE TABLE
The following table shows, for the Fund's first fiscal year of operations, the
estimated operating expenses of the Fund under the current Advisory Agreement
and the projected pro-forma operating expenses of the Fund assuming the proposed
amendments to the Advisory Agreement are in effect. The Fund commenced
operations on October 1, 1996. The purpose of the table and example that
follows is to assist investors in understanding the various costs and expenses
of investing in shares of the Fund.
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)(1)
Management Other Expenses
Fees(2) (after Total Operating
(after fee waivers) reimbursements) Expenses
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ACTUAL 0.07% 0.48% 0.55%
PRO-FORMA 0.08% 0.47% 0.55%
(1) All information is net of applicable waivers and reimbursements and
includes the Fund's pro-rata portion of the expenses of the Portfolio. Absent
expense reimbursements and fee waivers, the Actual and Pro-Forma expenses of the
Fund would be: Management Fees, 0.18% (actual) and 0.19% (pro-forma); Other
Expenses, 0.81% (actual) and 0.81% (pro-forma); and Total Operating Expenses,
0.99% (actual) and 1.00% (pro-forma).
(2) Includes all advisory, management and administration fees.
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EXAMPLE
The following illustrates the expenses an investor would pay on a $1,000
investment in the Fund under the existing and proposed fees and the expenses
stated above, assuming a 5% annual return, reinvestment of all distributions and
redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
------ -------- -------- --------
ACTUAL $6 $18 N/A N/A
PRO-FORMA $6 $18 N/A N/A
THE EXAMPLE SHOULD NOT BE CONSIDERED A PRESENTATION OF PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY VARY FROM YEAR TO YEAR AND MAY BE HIGHER OR LOWER THAN THOSE
SHOWN.
FACTORS CONSIDERED BY THE BOARDS OF TRUSTEES
The Board and the Core Board comprise the same individuals. At a meeting held
on September 27, 1996, the Core Board considered various matters in determining
the reasonableness and fairness of the proposed increase in the advisory fee
payable by Core Trust. On the same date, at a separate meeting, the Board
considered the same information as it pertains to the Fund in determining to
submit this proposal to Shareholders.
In reaching its decision, each of the Boards examined and weighed certain
factors, including (i) the nature and quality of the services rendered and the
results achieved by Linden in its management of the Portfolio (including
investment performance comparisons with other mutual funds and certain indices);
(ii) the payments received by Linden related to the Portfolio; (iii) the
organizational capabilities and financial condition of Linden; (iv) an analysis
of the proposed fee rate changes; (v) information concerning the Portfolio's and
the Fund's expense ratios on both an existing and pro forma basis (see
"Comparative Fee Table" above).
Certain of the factors addressed by the Board in reaching its determination are
discussed in more detail below. The same factors were considered by the Core
Board with respect to the Portfolio.
- - PORTFOLIO PERFORMANCE. The Board considered the performance of the Fund as
compared to the performance of securities indices and performance of other
funds having comparable investment objectives and policies. The Board also
took into account the strong historical gross investment results of the
Portfolio and the Fund.
- - ACTUAL AND PRO FORMA ADVISORY FEES AND EXPENSES. The Board considered the
effect of the proposed advisory fee increase on the Fund's fee rates and
annual expense ratios (which include the advisory fee and all other
operating expenses incurred by the Portfolio).
- - COMPARISONS WITH OTHER FUNDS. The Board considered the advisory fees paid
by other funds with similar investment objectives. The Board also compared
the proposed operating expense ratio of the Fund with the ratios of those
other investment companies.
Based on the foregoing, each of the Boards determined that the compensation to
be paid to Linden is fair and reasonable, recommended that the Advisory
Agreement be amended, that the amendment be submitted to the interestholders of
the Portfolio and the shareholders of the Fund, as appropriate, and that
approval of the amendment be recommended to the interestholders and
shareholders.
If approved by the interestholders of the Portfolio, the Advisory Agreement as
proposed to be amended will become effective as of January 1, 1997, and the
amended Advisory Agreement will continue in effect from year to year thereafter
if approved in the same manner as the Advisory Agreement in present form. If
the amendment is not approved by interestholders, the Advisory Agreement will
continue in effect in its present form.
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Based on the Board's belief that the compensation to be paid under the amended
Advisory Agreement is fair and reasonable, the Board believes it is in the best
interests of the Fund and its shareholders to continue to invest the Fund's
assets in the Portfolio notwithstanding the proposed advisory fee increase.
Accordingly, if the Agreement is approved by the interestholders of the
Portfolio, but is not approved by the shareholders of the Fund, the Board would
continue to invest the Fund's assets in the Portfolio.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR
PROPOSAL ONE
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 on such matters in accordance with the judgment of
the persons designated in the proxy.
ADDITIONAL INFORMATION
ADVISERS, PRINCIPAL UNDERWRITER AND MANAGER
Linden serves as the investment adviser to the Portfolio and Forum Advisors,
Inc. ("Forum Advisors") provides certain investment advisory services to the
Portfolio at the request of Linden. Linden is wholly owned by Anthony Fischer,
its president and sole director. Linden's and Mr. Fischer's principal business
address is 812 North Linden Drive, Beverly Hills, California 90210. The
principal business address of Forum Advisors and its affiliate, Forum Financial
Services, Inc., as well as of the Trust, is Two Portland Square, Portland, Maine
04101. Forum Financial Services, Inc. serves as the principal underwriter of
the Fund, as the manager of the Trust and as administrator of the Portfolio.
For a further description of the services provided by and compensation paid to
any of these persons, shareholders should refer to the Fund's prospectus.
John Y. Keffer, Chairman and President of the Trust and Mark D. Kaplan, Vice
President, Assistant Treasurer and Assistant Secretary of the Trust are the only
two executive officers of the Trust. Mr. Keffer is the president and director
of Forum Financial Services, Inc., Forum Financial Corp., the Trust's transfer
agent, and Forum Advisors. Mr. Keffer also serves other investment companies,
including Core Trust, in capacities similar to those he holds with the Trust.
Mr. Kaplan is a Managing Director at Forum Financial Services, Inc. since
September 1995. Prior thereto, Mr. Kaplan was Managing Director and Director of
Research at H.M. Payson & Co. The address of the executive officers is Two
Portland Square, Portland, Maine 04101.
CERTAIN INFORMATION CONCERNING SHARE OWNERSHIP
As of November 21, 1996, there were 4,461,747 shares of the Fund outstanding.
Also as of November 21, 1996, the Trust believed the following persons owned, of
record, five percent or more of the total outstanding shares of the Fund.
Management is not aware of any other person who owns of record or beneficially
five percent or more of the shares of the Fund.
Number of Percent of
Shares Fund Shares
------ ------------
H.M. Payson FBO Custody Account 2,695,221.01 60.41%
H.M. Payson FBO Trust Account 1,679,461.76 37.64%
As of the record date, the Trustees and officers of the Trust, in the aggregate,
owned no shares of the Fund.
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SUBMISSION OF SHAREHOLDER PROPOSALS
Following the Meeting, it is anticipated that neither the Trust nor the Fund
will hold any shareholder meetings except as required by Federal or Delaware
state law. Shareholders wishing to submit proposals, including proposals to
nominate persons for election as trustees, for inclusion in a proxy statement
for a subsequent shareholder meeting should send proposals to the Secretary of
the Trust, David I. Goldstein, in care of Forum Financial Services, Inc.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR NOMINEES
Banks, broker-dealers and voting trustees and their nominees should advise the
Vice President and Secretary of the Trust, David I. Goldstein, in care of Forum
Financial Services, Inc., whether, with respect to shares of record held by
them, other persons are beneficial owners of shares for which proxies are being
solicited and if so, the number of copies of the Proxy Statement needed in order
to supply copies to the beneficial owners of the shares.
YOU ARE URGED TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY
November 27, 1996 By order of the Board of Trustees,
/s/ David I. Goldstein
David I. Goldstein
Secretary
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EXHIBIT A
CORE TRUST (DELAWARE)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made the 1st day of September, 1995 and amended this __th day of
_____, 199__, between Core Trust (Delaware) (the "Trust"), a business trust
organized under the laws of the State of Delaware with its principal place of
business at Two Portland Square, Portland, Maine 04101, and Linden Asset
Management, Inc. (the "Adviser"), a corporation organized under the laws of
State of California with its principal place of business at 812 North Linden
Drive, Beverly Hills, California 90210.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended, (the "Act") as an open-end management investment company and is
authorized to issue interests (as defined in the Trust's Trust Instrument) in
separate series; and
WHEREAS, the Trust desires that Linden perform investment advisory services
for Treasury Cash Portfolio, Government Cash Portfolio and Cash Portfolio (each
a "Portfolio," and collectively the "Portfolios"), and Linden is willing to
provide those services on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
SECTION 1. THE TRUST; DELIVERY OF DOCUMENTS
The Trust is engaged in the business of investing and reinvesting its
assets in securities of the type and in accordance with the limitations
specified in its Trust Instrument and Registration Statement filed with the
Securities and Exchange Commission (the "Commission") under the Act, as may be
supplemented from time to time, all in such manner and to such extent as may
from time to time be authorized by the Trust's Board of Trustees (the "Board").
The Trust is currently authorized to issue eight series of interests and the
Board is authorized to issue interests in any number of additional series. The
Trust has delivered to Linden copies of the Trust's Trust Instrument and
Registration Statement and will from time to time furnish Linden with any
amendments thereof.
SECTION 2. INVESTMENT ADVISER; APPOINTMENT
The Trust hereby employs Linden, subject to the direction and supervision
of the Board, to manage the investment and reinvestment of the assets in each
Portfolio and, without limiting the generality of the foregoing, to provide
other services specified in Section 3 hereof.
SECTION 3. DUTIES OF THE ADVISER
(a) The Adviser shall make decisions with respect to all purchases and
sales of securities and other investment assets in each Portfolio. To carry out
such decisions, Linden 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
Portfolios. In all purchases, sales and other transactions in securities for
the Portfolios, Linden 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.
(b) The Adviser will report to the Board at each meeting thereof all
changes in each Portfolio since the prior report, and will also keep the Board
informed of important developments affecting the Trust, the Portfolios and
Linden, and on its own initiative, will furnish the Board from time to time with
such information as Linden may believe appropriate for this purpose, whether
concerning the individual companies whose securities are included in
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the Portfolios' holdings, the industries in which they engage, or the economic,
social or political conditions prevailing in each country in which the
Portfolios' maintain investments. The Adviser will also furnish the Board with
such statistical and analytical information with respect to securities in the
Portfolios as Linden may believe appropriate or as the Board reasonably may
request.
(c) In making purchases and sales of securities for the Portfolios, Linden
will follow and comply with the policies set from time to time by the Board as
well as the limitations imposed by the Trust's Trust Instrument and Registration
Statement under the Act, the limitations in the Act and in the Internal Revenue
Code of 1986, as amended, in respect of regulated investment companies and the
investment objectives, policies and restrictions of the Portfolios.
(d) The Adviser will from time to time employ or associate with such
persons as Linden believes to be particularly qualified to assist in the
execution of Linden's duties hereunder, the cost of performance of such duties
to be borne and paid by Linden. No obligation may be incurred on the Trust's
behalf in any such respect.
(e) The Adviser shall either monitor the performance of brokers, dealers
and other persons who introduce or execute purchases, sales and other
transactions of securities and other investment assets of the Portfolios or
select an introducing broker who shall, as part of its transaction charges,
monitor such performance. Such persons may be affiliated with Linden, any
investment subadviser or other affiliates of the Trust to the extent permitted
by the Act.
(f) The Adviser shall maintain records relating to portfolio transactions
and the placing and allocation of brokerage orders as are required to be
maintained by the Trust under the Act. The Adviser 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 Linden pursuant to this Agreement required
to be prepared and maintained by the Trust pursuant to the rules and regulations
of any national, state, or local government entity with jurisdiction over the
Trust, including the Commission and the Internal Revenue Service. The books and
records pertaining to the Trust which are in possession of Linden shall be the
property of the Trust. The Trust, or the Trust's authorized representatives,
shall have access to such books and records at all times during Linden's normal
business hours. Upon the reasonable request of the Trust, copies of any such
books and records shall be provided promptly by Linden to the Trust or the
Trust's authorized representatives.
SECTION 4. SUBADVISERS
The Adviser may carry out any of its obligations under this Agreement by
employing, subject to the Board's supervision, one or more persons who are
registered as investment advisers pursuant to the Investment Advisers Act of
1940, as amended, (the "Advisers Act") or who are exempt from registration
thereunder ("SubAdvisers"). Each SubAdviser's employment will be evidenced by a
separate written agreement approved by the Trustees of the Trust and the
interestholders of the applicable Portfolios. The Adviser shall not be liable
for any act or omission of any SubAdviser except with respect to matters as to
which Linden specifically assumes responsibility in writing.
SECTION 5. EXPENSES
The Trust hereby confirms that the Trust shall be responsible and shall
assume the obligation for payment of all the Trust's expenses, including:
interest charges, taxes, brokerage fees and commissions; certain insurance
premiums; fees, interest charges and expenses of the Trust's custodian and
transfer agent; telecommunications expenses; auditing, legal and compliance
expenses; costs of the Trust's formation and maintaining its existence; costs of
preparing the Trust's registration statement, account application forms and
interestholder reports and delivering them to existing and prospective
interestholders; costs of maintaining books of original entry for portfolio and
fund accounting and other required books and accounts and of calculating the net
asset value of interests in the Trust; costs of reproduction, stationery and
supplies; compensation of the Trust's trustees, officers and employees and the
costs of other personnel performing services for the Trust; costs of Trust
meetings; registration fees and related expenses for registration with the
Commission and the securities regulatory authorities of other countries in
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which the Trust's interests are sold; state securities law registration fees and
related expenses; and fees and out-of-pocket expenses payable to Forum Financial
Services, Inc. under any placement agent, management or similar agreement.
SECTION 6. STANDARD OF CARE
(a) The Adviser shall give the Trust the benefit of its best judgment and
efforts in rendering its services to the Trust and shall not be liable for error
of judgment or mistake of law, for any loss arising out of any investment, or in
any event whatsoever, provided that nothing herein shall be deemed to protect,
or purport to protect, Linden against any liability to the Trust or to the
security holders of the Trust to which it would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder, or by reason of reckless disregard of its obligations and
duties hereunder. No provision of this Agreement shall be construed to protect
any Trustee or officer of the Trust, or Linden, from liability in violation of
Sections 17(h), 17(i) or 36(b) of the Act.
(b) The Adviser shall not be held responsible for any loss incurred by
reason of any act or omission of any dealer, broker or custodian; provided that
such loss in not the result of Linden's willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or the result of Linden's
reckless disregard of its obligations and duties hereunder.
(c) This Section shall survive the termination of this Agreement and shall
be binding upon the Trust's and Linden's successors and personal
representatives.
SECTION 7. COMPENSATION
For the services provided by Linden pursuant to this Agreement, the Trust
shall pay Linden, with respect to each of the Portfolios, a fee based upon the
total average daily net assets of the Portfolios ("Total Portfolio Assets").
The Trust shall pay Linden a total fee of 0.06% for the first $200 million of
Total Portfolio Assets, 0.04% of the next $300 million of Total Portfolio
Assets, and 0.03% of the remaining Total Portfolio Assets. Such fees shall be
accrued by the Trust daily with respect to each Portfolio in the proportion that
Portfolio's average daily net assets bear to Total Portfolio Assets and shall be
payable monthly in arrears on the first day of each calendar month. Upon the
termination of this Agreement, the Trust shall pay to Linden such compensation
as shall be payable prior to the effective date of such termination. The
Adviser shall be paid a minimum annual fee of $50,000 for its services to the
Trust with respect to the Portfolios. To the extent Linden has delegated its
responsibilities with respect to a Portfolio to a SubAdviser, Linden shall pay
the advisory fee to that SubAdviser.
SECTION 8. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to a Portfolio
immediately upon approval by a majority of the outstanding voting interests of
that Portfolio.
(b) This Agreement shall remain in effect with respect to a Portfolio for
a period of two years from the date of its effectiveness and shall continue in
effect for successive twelve-month periods (computed from each anniversary date
of the approval) with respect to the Portfolio; 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 interests of the Portfolio, 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 this Agreement or the continuation of
this Agreement is not approved as to a Portfolio, Linden may continue to render
to that Portfolio the services described herein in the manner and to the extent
permitted by the Act and the rules and regulations thereunder.
(c) This Agreement may be terminated with respect to a Portfolio at any
time, without the payment of any penalty, (i) by the Board or by a vote of a
majority of the outstanding voting securities of the Portfolio on 60
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<PAGE>
days' written notice to Linden or (ii) by Linden on 60 days' written notice to
the Trust. This agreement shall terminate upon assignment.
SECTION 9. ACTIVITIES OF THE ADVISER
(a) Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict Linden's right, or the right
of any of Linden's officers, directors or employees who may also be a trustee,
officer or employee of the Trust, or persons otherwise affiliated persons of the
Trust 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.
(b) The Adviser represents that it is currently registered, and will
during the entire period this Agreement is in effect be registered, as an
investment adviser under Lindens Act.
SECTION 10. LIMITATION OF INTERESTHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the interestholders of each Portfolio shall
not be liable for any obligations of the Trust or of the Portfolios under this
Agreement, and Linden 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
Portfolio to which Linden's rights or claims relate in settlement of such rights
or claims, and not to the Trustees of the Trust or the interestholders of the
Portfolios.
SECTION 11. NOTICE
Any notice or other communication required to be given pursuant to this
Agreement shall be in writing or by telex and shall be effective upon receipt.
Notices and communications shall be given, if to the Trust, at:
Two Portland Square
Portland, Maine 04101
Attention: Secretary
and if to Linden at:
812 North Linden Drive
Beverly Hills, California 90210
Attention: President
SECTION 12. 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, if required by the Act, by a vote of a majority of the
outstanding voting interests of the Portfolios thereby affected. No amendment
to this Agreement or the termination of this Agreement with respect to a
Portfolio shall effect this Agreement as it pertains to any other Portfolio.
(b) 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 Advisory
Agreement did not contain the particular part, term or provision held to be
illegal or invalid.
(c) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
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<PAGE>
(d) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(e) This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Delaware.
(f) The terms "vote of a majority of the outstanding voting interests,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act to the terms "vote of a majority of the
outstanding voting securities," "interested person," "affiliated person" and
"assignment," respectively.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
CORE TRUST (DELAWARE)
/s/ John Y. Keffer
-----------------------------------
John Y. Keffer
President
LINDEN ASSET MANAGEMENT, INC.
/s/ Anthony R. Fischer, Jr.
-----------------------------------
Anthony R. Fischer, Jr.
President
<PAGE>
FORUM FUNDS
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DAILY ASSETS CASH FUND
PROXY
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 27, 1996
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
Revoking any such prior appointments, the undersigned appoints David I.
Goldstein and Richard C. Butt (or, if only one shall act, that one) proxies with
the power of substitution to vote all of the shares of Daily Assets Cash Fund
(the "Fund"), a series of Forum 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 Financial Services, Inc., the Trust's manager and
distributor, at Two Portland Square, Portland, Maine 04101, on Friday, December
27, 1996 at 10:00 a.m. Eastern time, and at any adjournment or adjournments
thereof.
PROPOSAL 1:
To consider and act upon a proposal to authorize the Trust, on behalf
of the Fund, to vote at a meeting of Core Trust (Delaware) to approve
an amendment to the Investment Advisory Agreement between Core Trust
(Delaware) and Linden Asset Management, Inc. to increase the
investment advisory fee with respect to Cash Portfolio.
For / / Against / / Abstain / /
Receipt is acknowledged of the Proxy Statement for the Special Meeting of
Shareholders to be held on December 27, 1996. (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.)
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Authorized Signature Date
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Printed Name (and Title if Applicable)
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Authorized Signature (Joint Investor) Date
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Printed Name (and Title if Applicable)
