Exhibit (m)(3)
FORUM FUNDS
FORM OF DISTRIBUTION PLAN
Distribution Plan (the "Plan") of Forum Funds (the "Trust") with
respect to the Investor Class of shares of Shaker Fund (the "Fund") in
accordance with the provisions of Rule 12b-1 under the Investment Company Act of
1940, as amended (the "Act").
SECTION 1. DISTRIBUTOR; ADVISER
The Trust has entered into a Distribution Agreement with Forum Fund
Services, LLC (the "Distributor") whereby the Distributor acts as principal
underwriter of the Fund's shares (the "Shares"), and has entered into an
investment advisory agreement with Shaker Management, Inc. (the "Adviser")
whereby the Adviser acts as investment adviser to the Fund, in a form
satisfactory to the Trust's Board of Trustees (the "Board").
SECTION 2. DISTRIBUTION EXPENSES
The Trust may reimburse the Distributor for the distribution expenses
incurred by the Distributor on behalf of the Fund of up to 0.25% per annum of
the Fund's average daily net assets in accordance with the following:
(a) On behalf of the Fund, the Distributor may incur expenses for any
distribution-related purpose it deems necessary or appropriate, including: (i)
the incremental costs of printing (excluding typesetting) prospectuses,
statements of additional information, annual reports and other periodic reports
for use in connection with the offering or sale of Shares, to any prospective
investor, (ii) preparing, printing and distributing any other literature used by
the Distributor in connection with the offering of Shares for sale to the public
and the cost of administering the program, compensation to and expenses
(including overhead and telephone) of employees of the Distributor who engage in
sales support and distribution activities, (iii) compensating other persons for
providing assistance in distributing the Shares and (iv) reimbursement to the
Adviser of the Adviser's distribution-related expenses, including expenses of
employees of the Adviser who train or educate others with respect to the Fund
and the investment techniques employed to achieve the Fund's investment
objective.
(b) The schedule of such reimbursements and the basis upon which they
will be paid shall be determined from time to time by the Board. Unreimbursed
expenses of the Distributor incurred during a fiscal year of the Trust may not
be reimbursed by the Trust in subsequent fiscal years.
SECTION 3. REVIEW AND RECORDS
(a) The Trust and the Distributor shall prepare and furnish to the
Board, and the Board shall review at least quarterly, written reports setting
forth all amounts expended under the Plan by the Trust and the Distributor and
identifying the activities for which the expenditures were made.
(b) The Trust shall preserve copies of the Plan, each agreement related
to the Plan and each report prepared and furnished pursuant to this Section in
accordance with Rule 12b-1 under the Act.
SECTION 4. EFFECTIVENESS; DURATION; AND TERMINATION
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(a) The Plan shall become effective upon approval by (i) a vote of at
least a majority of the outstanding voting securities of the Fund and (ii) the
Board, including a majority of the Trustees who are not interested persons of
the Trust and who have no direct or indirect financial interest in the operation
of the Plan or in any agreement related to the Plan (the "Qualified Trustees"),
pursuant to a vote cast in person at a meeting called for the purpose of voting
on approval of the Plan.
(b) The Plan shall remain in effect for a period of one year from the
date of its effectiveness, unless earlier terminated in accordance with this
Section, and thereafter shall continue in effect for successive twelve-month
periods, provided that such continuance is specifically approved at least
annually by the Board and a majority of the Qualified Trustees pursuant to a
vote cast in person at a meeting called for the purpose of voting on continuance
of the Plan.
(c) The Plan may be terminated without penalty at any time by a vote of
(i) a majority of the Qualified Trustees or (ii) a vote of a majority of the
outstanding voting securities of the Fund.
SECTION 5. AMENDMENT
The Plan may be amended at any time by the Board, provided that (i) any
material amendments to the Plan shall be effective only upon approval of the
Board and a majority of the Qualified Trustees pursuant to a vote cast in person
at a meeting called for the purpose of voting on the amendment to the Plan, and
(ii) any amendment which increases materially the amount which may be spent by
the Trust pursuant to the Plan shall be effective only upon the additional
approval a majority of the outstanding voting securities of the Fund.
SECTION 6. NOMINATION OF DISINTERESTED TRUSTEES
While the Plan is in effect, the selection and nomination of the
Trustees of the Trust who are not interested persons of the Trust shall be
committed to the discretion of the Trustees of the Trust who are not interested
persons of the Trust.
SECTION 7. MISCELLANEOUS
(a) The terms "majority of the outstanding voting securities" and
"interested person" shall have the meanings ascribed thereto in the Act.
(b) If any provision of the Plan shall be held invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not be
affected thereby.
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