As filed with the Securities and Exchange Commission on January 16, 2001
File Nos. 2-67052 and 811-3023
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
Post-Effective Amendment No. 87
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 89
FORUM FUNDS
(Formerly "Forum Funds, Inc.")
Two Portland Square
Portland, Maine 04101
(207) 879-1900
Leslie K. Klenk, Esq.
Forum Fund Services, LLC
Two Portland Square
Portland, Maine 04101
Copies to:
Anthony C.J. Nuland, Esq.
Seward & Kissel LLP
1200 G Street, N.W.
Washington, D.C. 20005
--------------------------------------------------------------------------------
It is proposed that this filing become effective:
immediately upon filing pursuant to Rule 485, paragraph (b)
on __________ pursuant to Rule 485, paragraph (b)
60 days after filing pursuant to Rule 485, paragraph (a)(1)
on _________________ pursuant to Rule 485, paragraph (a)(1)
X 75 days after filing pursuant to Rule 485, paragraph (a)(2)
on ________________pursuant to Rule 485, paragraph (a)(2)
this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered: Investor Shares and Institutional
Shares of Shaker Fund.
<PAGE>
PROSPECTUS
April 1, 2001
SHAKER FUND
The Fund seeks capital appreciation by investing primarily
in the common stock of domestic companies.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
The Securities and Exchange Commission has not approved or disapproved the
Fund's shares or determined whether this Prospectus is accurate or complete.
Any representation to the contrary is a criminal offense.
<PAGE>
TABLE OF CONTENTS
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RISK/RETURN SUMMARY
PERFORMANCE
FEE TABLES
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES
AND PRINCIPAL INVESTMENT RISKS
MANAGEMENT
YOUR ACCOUNT
HOW TO CONTACT THE FUND
GENERAL INFORMATION
BUYING SHARES
SELLING SHARES
SALES CHARGES
EXCHANGE PRIVILEGES
RETIREMENT ACCOUNTS
ADVISER PAST PERFORMANCE
OTHER INFORMATION
FINANCIAL HIGHLIGHTS
<PAGE>
RISK/RETURN SUMMARY
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[Margin Callout: CONCEPTS TO UNDERSTAND
COMMON STOCK means an equity or ownership interest in a company.
GROWTH COMPANIES are companies that have exhibited an above average increase in
earnings over the past few years and that have strong, sustainable earnings
prospects and attractive stock prices.
MARKET CAPITALIZATION means the value of a company's common stock in the stock
market.]
This Prospectus offers Institutional Shares and Investor Shares of Shaker Fund
(the "Fund"). Institutional Shares are designed for institutional investors.
Investor Shares are designed for retail investors.
INVESTMENT OBJECTIVE
The Fund seeks long-term capital appreciation.
PRINCIPAL INVESTMENT STRATEGY
The Fund invests primarily in the common stock of small and medium size domestic
growth companies. Small domestic companies typically have market capitalizations
of less than $1.5 billion at the time of investment. Medium domestic companies
typically have market capitalizations in the range of $2 billion to $12 billion.
PRINCIPAL RISKS OF INVESTING IN THE FUNDS
GENERAL RISKS You could lose money on your investment in the Fund, or the Fund
could underperform other investments, if any of the following occur:
o The stock market does not recognize the growth potential of the stocks in
the Fund's portfolio
o Shaker Management Inc.'s (the "Adviser") judgment as
to the growth potential of a stock proves to be wrong
o The stock market goes down
SPECIFIC RISKS OF SMALL COMPANIES Because investing in small companies can have
more risk than investing in larger, more established companies, an investment in
the Fund may have the following additional risks:
o Analysts and other investors typically follow these companies less
actively and, therefore, information about these companies is not
always readily available
o Securities of many small companies are traded in the over-the-counter
markets or on a regional securities exchange potentially making them
thinly traded, less liquid and their prices more volatile than the
prices of the securities of larger companies
3
<PAGE>
o Changes in the value of small company stocks may not mirror the
fluctuation of the general market
o More limited product lines, markets and financial resources make these
companies more susceptible to economic or market setbacks
For these and other reasons, the prices of small capitalization securities can
fluctuate more significantly than the securities of larger companies. The
smaller the company, the greater effect these risks may have on that company's
operations and performance. As a result, an investment in the Fund may exhibit a
higher degree of volatility than the general domestic securities market.
WHO MAY WANT TO INVEST IN THE FUNDS
The Fund may be appropriate for you if you:
o Are willing to tolerate significant changes in the value of your
investment
o Are pursuing a long-term goal, and
o Are willing to accept higher short-term risk
The Fund may NOT be appropriate for you if you:
o Want an investment that pursues market trends or focuses only on
particular sectors or industries
o Need regular income or stability of principal, or
o Are pursuing a short-term goal or investing emergency reserves
PERFORMANCE
Performance information is not provided because the Fund had not commenced
operations prior to the date of this Prospectus.
4
<PAGE>
FEE TABLES
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The following tables describe the various fees and expenses that you will bear
if you invest in the Fund.
<TABLE>
<S> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
----------------------------------------------------------
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of the offering price)1 5.75%
Maximum Sales Charge (Load) Imposed on Reinvested Distributions None
Maximum Deferred Sales Charge (Load) None
Redemption Fee None
Exchange Fee None
</TABLE>
(1) Applicable to the purchase of Investor Shares only.
<TABLE>
<S> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)(1)
------------------------------------------------------------------------------
INSTITUTIONAL INVESTOR
SHARES SHARES
------------- --------
Management Fees 1.10% 1.10%
Distribution (12b-1) Fees None 0.25%
Other Expenses 1.01% 1.46%
Total Annual Fund Operating Expenses 2.11% 2.81%
Fee Waiver and Expense Reimbursement (2) 0.21% 0.66%
Net Expenses 1.90% 2.15%
</TABLE>
(1) Based on estimated amounts for the Fund's fiscal year ending March 31, 2002.
(2) The Adviser has contractually agreed to waive a portion of its fees and
reimburse certain expenses through July 31, 2002.
EXAMPLE
The following is a hypothetical example intended to help you compare the cost of
investing in the Fund to the cost of investing in other mutual funds. This
example assumes that you invest $10,000 in one of the Fund's classes (paying the
maximum sales charge with respect to Investor Shares) and then redeem all of
your shares at the end of the period. The example also assumes that your
investment has a 5% annual return, that the Fund's total and net operating
expenses remain as stated in the table above and that distributions are
reinvested. Although your actual costs may be higher or lower, under these
assumptions your costs would be:
<TABLE>
<S> <C> <C>
INSTITUTIONAL SHARES INVESTOR SHARES
-------------------- ---------------
1 Year $193 $792
3 Years $595 $1,241
</TABLE>
5
<PAGE>
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND PRINCIPAL INVESTMENT
RISKS
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Fund seeks long-term capital appreciation.
PRINICIPAL INVESTMENT STRATEGIES
The Adviser relies on selecting individual stocks and does not try to predict
when the stock market might rise or fall. The Adviser uses in-house research and
other sources to conduct analyses of prospective Fund investments. As part of
this analysis, the Adviser may visit prospective companies, their suppliers and
customers.
THE ADVISER'S PROCESSES -- PURCHASING PORTFOLIO SECURITIES The Adviser's
investment process begins with an economic analysis of industry sectors
including consideration of demographic factors and industry trends affecting
growth rates. From these industries, the Adviser selects those small and medium
size companies with the potential to grow earnings at a rate that exceeds that
of their industries. The Adviser seeks to invest in companies evidencing revenue
growth of approximately 7-10% per year.
The Adviser then analyzes these growth companies for fundamental superiority.
The Adviser considers a fundamentally superior company to be one that has:
o Strong management that emphasizes quality products and services within
one business (no conglomerates)
o Sustainable competitive advantage
through strong niche products or services and significant and
consistent new product development
o Broad customer and/or product base
o Management interests aligned with shareholder interests
o Positive earnings or cash flow and conservative financial statements
The Adviser plans to invest in these companies early in their life cycle and to
hold the investments long term if they continue to satisfy the Fund's investment
criteria.
6
<PAGE>
THE ADVISER'S PROCESSES -- SELLING PORTFOLIO SECURITIES The Adviser monitors the
companies in the Fund's portfolio to determine if there have been any
fundamental changes in the companies. The Adviser may sell a stock if:
o It subsequently fails to meet the Adviser's initial investment
criteria
o A more attractively priced company is found or if funds are needed for
other purposes
o It becomes overvalued relative to the long-term expectation for the
stock price
o Changes in economic conditions or fundamental sector affect the
company's financial outlook
INVESTMENT POLICIES The Fund invests primarily in the common stock of small and
medium size domestic growth companies. Small domestic companies typically have
market capitalizations of less than $1.5 billion at the time of investment.
Medium domestic companies typically have market capitalizations in the range of
$2 billion to $12 billion.
TEMPORARY DEFENSIVE POSITION In order to respond to adverse market, economic,
political or other conditions, the Fund may assume a temporary defensive
position and invest without limit in cash and prime quality cash equivalents
such as prime commercial paper and other money market instruments. As a result,
the Fund may not achieve its investment objective.
7
<PAGE>
PRINCIPAL INVESTMENT RISKS
GENERAL The value of the Fund's investments will fluctuate as the stock market
fluctuates. An investment in the Fund is not by itself a complete or balanced
investment program and there is no guarantee the Fund will achieve its
investment objective. Investing in equity securities with different
capitalizations may, however, be important for investors seeking a diversified
portfolio, particularly for long-term investors able to tolerate short-term
fluctuations in the value of their investments.
Because the Fund invests in growth stocks, there is a risk that the stocks will
not continue to grow at expected rates, thus causing the price of the stock to
decline. There is also the risk that the market will not recognize the growth
potential of a stock. The Adviser's judgment as to the growth potential of a
stock may also prove to be wrong. A decline in investor demand for growth stocks
may also adversely affect the value of these securities.
SPECIFIC RISKS OF SMALL COMPANIES Because investing in small companies can have
more risk than investing in larger, more established companies, an investment in
the Fund may have the following additional risks:
o Analysts and other investors typically follow these companies less
actively and information about these companies is not always readily
available
o Securities of many small companies are traded in the over-the-counter
markets or on a regional securities exchange, potentially making them
thinly traded, less liquid and their prices more volatile than the
prices of the securities of larger companies
o Changes in the value of small company stocks may not mirror the
fluctuations of the general market
o More limited product lines, markets and financial resources make these
companies more susceptible to economic or market setbacks
For these and other reasons, the prices of small capitalization securities can
fluctuate more significantly than the securities of larger companies. The
smaller the company, the greater effect these risks may have on that company's
operations and performance. As a result, an investment in the Fund may exhibit a
higher degree of volatility than the general domestic securities market.
8
<PAGE>
MANAGEMENT
--------------------------------------------------------------------------------
The Fund is a series of Forum Funds (the "Trust"), an open-end, management
investment company (mutual fund). The business of the Trust and the Fund is
managed under the direction of the Board of Trustees (the "Board"). The Board
formulates the general policies of each Fund and meets periodically to review
the Fund's performance, monitor investment activities and practices and discuss
other matters affecting the Fund. Additional information regarding the Board, as
well as the Trust's executive officers, may be found in the Statement of
Additional Information ("SAI").
THE ADVISER
The Fund's Adviser is Shaker Management, Inc., 2000 Auburn Drive, Suite 300,
Cleveland, Ohio 44122. The Adviser is a privately owned corporation controlled
by Edward P. Hemmelgarn, David R. Webb, and Adam S. Solomon, and conducts its
business under the name "Shaker Investments." The Adviser and its affiliates
have provided investment advisory and management services to clients since 1991.
The Fund is the first mutual fund for which the Adviser has provided investment
advisory services.
Subject to the general control of the Board, the Adviser makes investment
decisions for the Fund. The Adviser receives an annual advisory fee of 1.10% of
the average daily net assets of the Fund. The Adviser has contractually agreed
to waive a portion of its fee and reimburse certain expenses so that total
annual operating expenses of Institutional Shares and Investor Shares do not
exceed 1.90% and 2.15%, respectively, of that class's average daily net assets
through July 31, 2002.
As of September 30, 2000, the Adviser and its affiliates had approximately $1.5
billion of assets under management.
PORTFOLIO MANAGERS
Edward P. Hemmelgarn and Edward Matuszak are responsible for the day-to-day
management of the Fund.
EDWARD P. HEMMELGARN Founder and President of Shaker Investments, Inc. since
1991 and Shaker Management, Inc. since 2000. Mr. Hemmelgarn has more than 20
years of experience in the investment industry.
EDWARD MATUSZAK Head Trader and Assistant Portfolio Manager with Shaker
Investments, Inc. since 1995 and Shaker Management, Inc. since 2000. Mr.
Matuszak has more than 10 years of experience in the investment industry.
9
<PAGE>
OTHER SERVICE PROVIDERS
Forum Financial Group, LLC and its affiliates (collectively "Forum") provide
services to the Fund. As of October 31, 2000, Forum provided administration and
distribution services to investment companies and collective investment funds
with assets of approximately $123 billion.
Forum Fund Services, LLC, a registered broker-dealer and member of the National
Association of Securities Dealers, Inc., is the distributor (principal
underwriter) of each class of shares of the Fund. The distributor acts as the
representative of the Trust in connection with the offering of the Fund's
shares. The distributor may enter into arrangements with banks, broker-dealers
or other financial institutions through which investors may purchase or redeem
shares and may, at its own expense, compensate persons who provide services in
connection with the sale or expected sale of the Fund's shares.
The Trust has adopted a Rule 12b-1 plan under which the Fund pays the
distributor 0.25% of the average daily net assets of Investor Shares for
distribution services and the servicing of shareholder accounts. Because
Investor Shares pay distribution fees on an ongoing basis, your investment cost
over time may be higher than paying other types of sales charges.
Forum Administrative Services, LLC ("FAdS") provides administrative services to
the Fund, Forum Accounting Services, LLC is the Fund's fund accountant, Forum
Shareholder Services, LLC (the "Transfer Agent") is the Fund's transfer agent,
and Forum Trust, LLC is the Fund's custodian.
The Trust has adopted a shareholder servicing plan for Institutional Shares and
Investor Shares under which each class pays FAdS a fee of 0.25% of that class's
average daily net assets for providing shareholder service activities that are
not otherwise provided under the Rule 12b-1 plan or by the Transfer Agent. FAdS
may pay this fee to various financial institutions that provide shareholder
servicing to their customers invested in the Fund.
FUND EXPENSES
The Fund pays for its own expenses. Expenses of each of Institutional Shares and
Investor Shares include that class's own expenses as well as Trust expenses that
are allocated among the Fund, its classes of shares and all other funds of the
Trust. The Adviser or other service provider may waive all or any portion of
their fees and reimburse certain expenses of a Fund. Any fee waiver or expense
reimbursement increases investment performance of a Fund and/or its applicable
share classes for the period during which the waiver or reimbursement is in
effect.
Certain service providers of the Fund have undertaken to waive a portion of
their fees and reimburse Fund expenses in order to limit total operating
expenses (excluding taxes, interest, portfolio transaction expenses and
extraordinary expenses) of Institutional Shares and Investors Shares to 1.90%
and 2.15%, respectively, of that class's average daily net assets.
10
<PAGE>
YOUR ACCOUNT
--------------------------------------------------------------------------------
HOW TO CONTACT THE FUNDS
WRITE TO US AT:
Forum Funds
P.O. Box 446
Portland, ME 04112
OVERNIGHT ADDRESS:
Forum Funds
Two Portland Square
Portland, Maine 04101
TELEPHONE US AT:
(800) XXX-XXXX (toll free) or
(207) 879-0001
WIRE INVESTMENTS (OR ACH
PAYMENTS) TO:
Bankers Trust Company
New York, New York
ABA #021001033
FOR CREDIT TO:
Forum Shareholder Services, LLC
Account # 01-465-547
Shaker Fund
(Your Name)
(Your Account Number)
GENERAL INFORMATION
You may purchase or sell (redeem) the Fund's Institutional Shares or Investor
Shares at the net asset value of a share ("NAV") plus any applicable sales
charge (or minus any applicable sales charge in the case of redemptions) next
calculated after the Transfer Agent receives your request in proper form (as
described in this Prospectus on pages ___ through ___). For instance, if the
Transfer Agent receives your purchase request in proper form after 4:00 p.m.,
Eastern time, your transaction will be priced at the next business day's NAV
plus the applicable sales charge. The Fund cannot accept orders that request a
particular day or price for the transaction or any other special conditions.
The Fund does not issue share certificates.
If you purchase shares directly from the Fund, you will receive quarterly
statements and a confirmation of each transaction. You should verify the
accuracy of all transactions in your account as soon as you receive your
confirmations.
The Fund reserves the right to waive minimum investment amounts and may
temporarily suspend (during unusual market conditions) or discontinue any
service or privilege.
11
<PAGE>
WHEN AND HOW NAV IS DETERMINED The Fund calculates its NAV as of the close of
the New York Stock Exchange (normally 4:00 p.m., Eastern time) on each weekday
except days when the New York Stock Exchange is closed. The time at which NAV is
calculated may change in case of an emergency. The Fund's NAV is determined by
taking the market value of all securities owned by the Fund (plus all other
assets such as cash), subtracting liabilities and then dividing the result (net
assets) by the number of shares outstanding. The Fund values securities for
which market quotations are readily available at current market value. If market
quotations are not readily available, the Fund values securities at fair value
pursuant to procedures adopted by the Board.
TRANSACTIONS THROUGH THIRD PARTIES If you invest through a broker or other
financial institution, the policies and fees (other than sales charges) charged
by that institution may be different than those of the Fund. Financial
institutions may charge transaction fees and may set different minimum
investments or limitations on buying or selling shares. These institutions may
also provide you with certain shareholder services such as periodic account
statements and trade confirmations summarizing your investment activity. Consult
a representative of your financial institution for more information.
BUYING SHARES
HOW TO MAKE PAYMENTS All investments must be in U.S. dollars and checks must be
drawn on U.S. banks.
CHECKS For individual, sole proprietorship, joint, Uniform Gift to
Minors Act ("UGMA") or Uniform Transfer to Minors Act ("UTMA")
accounts, the check must be made payable to "Shaker Fund" or to one or
more owners of the account and endorsed to "Shaker Fund." For all other
accounts, the check must be made payable on its face to "Shaker Fund."
No other method of check payment is acceptable (for instance, you may
not pay by traveler's check).
ACH Refers to the "Automated Clearing House" System maintained by the
Federal Reserve Bank, which allows banks to process checks, transfer
funds and perform other tasks.
WIRES Instruct your financial institution to make a Federal Funds wire
payment to us. Your financial institution may charge you a fee for this
service.
MINIMUM INVESTMENTS The Fund accepts investments in the following minimum
amounts:
<TABLE>
<S> <C> <C>
MINIMUM INITIAL MINIMUM ADDITIONAL
INSTITUTIONAL SHARES INVESTMENT INVESTMENT
-------------------- --------------- ------------------
Standard Accounts $1,000,000 $1,000
INVESTOR SHARES
---------------
Standard Accounts $10,000 $1,000
Traditional and Roth IRA Accounts $2,000 $250
Accounts with Systematic Investment Plans $2,000 $250
</TABLE>
12
<PAGE>
ACCOUNT REQUIREMENTS
<TABLE>
<S> <C> <C>
Type of Account Requirement
--------------- -----------
INDIVIDUAL, SOLE PROPRIETORSHIP AND JOINT ACCOUNTS o Instructions must be signed by all persons
Individual accounts are owned by one person, as are sole required to sign exactly as their names
proprietorship accounts. Joint accounts can have two appear on the account
or more owners (tenants)
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA) o Depending on state laws, you can set up a custodial
These custodial accounts provide a way to give money to a account under the UGMA or the UTMA
child and obtain tax benefits o The custodian must sign instructions in a manner
indicating custodial capacity
BUSINESS ENTITIES o Submit a Corporate/Organization Resolution form or
similar document
TRUSTS o The trust must be established before an account can
be opened
o Provide a certified trust document, or the pages
from the trust document that identify the trustees
</TABLE>
13
<PAGE>
INVESTMENT PROCEDURES
<TABLE>
<S> <C> <C>
HOW TO OPEN AN ACCOUNT HOW TO ADD TO YOUR ACCOUNT
---------------------- --------------------------
BY CHECK BY CHECK
o Call or write us for an account application (and o Fill out an investment slip from a confirmation
Corporate Organization/Resolution form, if applicable) or write us a letter
o Complete the application (and resolution form) o Write your account number on your check
o Mail us your application (and resolution form) and a o Mail us the slip (or your letter) and the check
check
BY WIRE BY WIRE
o Call or write us for an account application (and o Call to notify us of your incoming wire
Corporate Organization/Resolution form, if applicable) o Instruct your bank to wire your money to us
o Complete the application (and resolution form)
o Call us to fax the completed application (and
resolution form) and we will assign you an account number
o Mail us your application (and resolution form)
o Instruct your financial institution to wire your money to us
BY ACH PAYMENT BY AUTOMATIC INVESTMENT
o Call or write us for an account application (and o Complete the systematic investment section
Corporate Organization/Resolution form, if applicable) of the application
o Complete the application (and resolution form) o Attach a voided check to your application
o Call us to fax the completed application (and o Mail us the completed application and voided
resolution form) and we will assign you an account number check
o Mail us your original application (and resolution form)
o Instruct your financial institution to make an ACH
payment to us
</TABLE>
SYSTEMATIC INVESTMENTS You may invest a specified amount of money in the Fund's
Investor Shares once or twice a month on specified dates. These payments are
taken from your bank account by ACH payment. Systematic investments must be for
at least $250.
14
<PAGE>
LIMITATIONS ON PURCHASES The Fund reserves the right to refuse any purchase
(including exchange) request, particularly requests that could adversely affect
the Fund or its operations. This includes those from any individual or group
who, in the Fund's view, is likely to engage in excessive trading (including two
or more substantial redemptions or exchanges out of the Fund followed by
substantial repurchases into the Fund within a calendar year).
CANCELED OR FAILED PAYMENTS The Fund accepts checks and ACH transfers at full
value subject to collection. If the Fund does not receive your payment for
shares or you pay with a check or ACH transfer that does not clear, your
purchase will be canceled. You will be responsible for any losses or expenses
incurred by the Fund or the Transfer Agent, and the Fund may redeem shares you
own in the account (or another identically registered account that you maintain
with the Transfer Agent) as reimbursement. The Fund and its agents have the
right to reject or cancel any purchase or exchange due to nonpayment.
SELLING SHARES
The Fund processes redemption orders promptly. Under normal circumstances, the
Fund will send redemption proceeds to you within a week. If the Fund has not yet
collected payment for the shares you are selling, it may delay sending
redemption proceeds for up to 15 calendar days.
15
<PAGE>
<TABLE>
<S> <C>
HOW TO SELL SHARES FROM YOUR ACCOUNT
------------------------------------
BY MAIL
o Prepare a written request including:
o Your name(s) and signature(s)
o Your account number
o The Fund name
o The dollar amount or number of shares you want to sell
o How and where to send the redemption proceeds
o Obtain a signature guarantee (if required)
o Obtain other documentation (if required)
o Mail us your request and documentation
BY WIRE
o Wire redemptions are only available if your redemption is for $5,000 or more
and you did not decline wire redemption privileges on your account application
o Call us with your request (unless you declined telephone redemption
privileges on your account application) (See "By Telephone") OR
o Mail us your request (See "By Mail")
BY TELEPHONE
o Call us with your request (unless you declined telephone redemption privileges
on your account application)
o Provide the following information:
o Your account number
o Exact name(s) in which the account is registered
o Additional form of identification
o Redemption proceeds will be:
o Mailed to you OR
o Wired to you (unless you declined wire redemption privileges on your account
application) (See "By Wire")
SYSTEMATICALLY
o Complete the systematic withdrawal section of the application
o Attach a voided check to your application
o Mail us your completed application
</TABLE>
WIRE REDEMPTION PRIVILEGES You may redeem your shares by wire unless you
declined wire redemption privileges on your account application. The minimum
amount that may be redeemed by wire is $5,000.
TELEPHONE REDEMPTION PRIVILEGES You may redeem your shares by telephone unless
you declined telephone redemption privileges on your account application. You
may be responsible for any fraudulent telephone order as long as the Transfer
Agent takes reasonable measures to verify the order.
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<PAGE>
SYSTEMATIC WITHDRAWALS You may redeem a specified amount of money from an
Investor Shares account once a month on a specified date. These payments are
sent from your account to a designated bank account by ACH payment. Systematic
withdrawals must be for at least $250.
SIGNATURE GUARANTEE REQUIREMENTS To protect you and the Fund against fraud,
signatures on certain requests must have a "signature guarantee." A signature
guarantee verifies the authenticity of your signature. You can obtain one from
most banking institutions or securities brokers, but not from a notary public.
For requests made in writing, a signature guarantee is required for any of the
following:
o Sales of over $50,000 worth of shares
o Changes to a shareholder's record name
o Redemptions from an account for which the address or account
registration has changed within the last 30 days
o Sending redemption proceeds to any person, address, brokerage firm or
bank account not on record
o Sending redemption proceeds to an account with a different
registration (name or ownership) from yours
o Changes to systematic investment or withdrawals, distribution,
telephone redemption or exchange option or any other election in
connection with your account
SMALL ACCOUNTS If the value of your account falls below $100,000 for
Institutional Shares or $5,000 ($1,000 for IRAs) for Investor Shares, the Fund
may ask you to increase your balance. If the account value is still below
$100,000 for Institutional Shares or $5,000 ($1,000 for IRAs) for Investor
Shares after 60 days, the Fund may close your account and send you the proceeds.
The Fund will not close your account if it falls below these amounts solely as a
result of a reduction in your account's market value.
REDEMPTIONS IN KIND The Fund reserves the right to pay redemption proceeds in
portfolio securities rather than in cash. These redemptions "in kind" usually
occur if the amount to be redeemed is large enough to affect the Fund's
operations (for example, if it represents more than 1% of the Fund's assets).
LOST ACCOUNTS The Transfer Agent will consider your account lost if
correspondence to your address of record is returned as undeliverable, unless
the Transfer Agent determines your new address. When an account is lost, all
distributions on the account will be reinvested in additional Fund shares. In
addition, the amount of any outstanding (unpaid for six months or more) checks
for distributions that have been returned to the Transfer Agent will be
reinvested and the checks will be canceled.
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<PAGE>
SALES CHARGES
PURCHASES A sales charge is assessed on purchases of the Fund's Investor Shares
as follows:
<TABLE>
<S> <C> <C> <C>
SALES CHARGE (LOAD) AS % OF:
----------------------------
PUBLIC NET ASSET
AMOUNT OF PURCHASE OFFERING PRICE VALUE* REALLOWANCE%
------------------ -------------- --------- ------------
$0 to $99,999 5.75% 6.10% 5.00%
$100,000 to $249,999 5.25% 5.54% 4.50%
$250,000 to $499,999 4.50% 4.71% 3.75%
$500,000 to $999,999 3.00% 3.09% 2.50%
$1,000,000 and up 0.00% 0.00% 0.00%
</TABLE>
* Rounded to the nearest one-hundredth percent.
The offering price for the Fund's Investor Shares includes the relevant sales
charge. The commission paid to the distributor is the sales charge less the
reallowance paid to certain financial institutions purchasing shares. Normally,
reallowances are paid as indicated in the above table. From time to time,
however, the distributor may elect to reallow the entire sales charge for all
sales during a particular period.
From time to time and at its own expense, the distributor may provide
compensation, including financial assistance, to certain dealers in connection
with conferences, sales or training programs for their employees, seminars for
the public, advertising campaigns or other dealer-sponsored special events.
Compensation may include the provision of travel arrangements and lodging,
tickets for entertainment events and merchandise.
REDUCED SALES CHARGES You may qualify for a reduced sales charge on purchases of
the Fund's Investor Shares under rights of accumulation or a letter of intent.
Certain persons may also be eligible to purchase or redeem Fund shares without a
sales charge. Please see the SAI for further information.
EXCHANGE PRIVILEGES
You may exchange your Institutional Shares of the Fund for Institutional Shares
of any money market fund of the Trust. You may exchange your Investor Shares of
the Fund for Investor Shares of any money market fund of the Trust. You will not
have to pay a sales charge at the time of exchange. Because exchanges are a sale
and purchase of shares, they may have tax consequences. For a list of funds
available for exchange, you may call the Transfer Agent.
REQUIREMENTS You may make exchanges only between identically registered accounts
(name(s), address and taxpayer ID number). There is currently no limit on
exchanges but the Fund reserves the right to limit exchanges. You may exchange
your shares by mail or telephone, unless you declined telephone redemption
privileges on your account application. You may be responsible for any
fraudulent telephone order as long as the Transfer Agent takes reasonable
measures to verify the order.
18
<PAGE>
<TABLE>
<S> <C>
HOW TO EXCHANGE
---------------
BY MAIL
o Prepare a written request including:
o Your name(s) and signature(s)
o Your account number
o The names of each fund you are exchanging
o The dollar amount or number of shares you want to sell (and exchange)
o Open a new account and complete an account application if you are
requesting different shareholder privileges
o Obtain a signature guarantee, if required
o Mail us your request and documentation
BY TELEPHONE
o Call us with your request (unless you declined telephone redemption privileges
on your account application)
o Provide the following information:
o Your account number
o Exact name(s) in which account is registered
o Additional form of identification
</TABLE>
RETIREMENT ACCOUNTS
The Fund offers IRA accounts, including traditional and Roth IRAs, for Investor
Shares of the Fund. The Fund's Investor Shares may also be appropriate for other
retirement plans. Before investing in any IRA or other retirement plan, you
should consult your tax adviser. Whenever making an investment in an IRA, be
sure to indicate the year in which the contribution is made.
19
<PAGE>
ADVISER PAST PERFORMANCE
--------------------------------------------------------------------------------
The following chart and table sets forth the performance data relating to the
historical performance of the private client accounts (which do not include
hedge funds) managed by the Adviser* of the Fund. The private accounts of the
Adviser have investment objectives and investment policies, strategies and risks
substantially similar to those of the Fund. The Adviser does not manage
registered investment companies with investment objectives and investment
policies, strategies and risks substantially similar to those of the Fund. While
the Adviser is primarily responsible for the Fund's performance, the information
presented does not represent the past performance of the Fund. You should not
consider this performance data as an indication of future performance of the
Fund.
All returns presented were calculated on a total return basis, include the
reinvestment of all dividends and interest, and take into account accrued income
and realized and unrealized gains and losses. All returns reflect the deduction
of the actual investment advisory fees charged, brokerage commissions and
execution costs paid by the Adviser's private accounts, without provision for
Federal or state income taxes. Custodial fees, if any, were not included in the
calculations.
The Fund's performance will be calculated using the method required by the U.S.
Securities and Exchange Commission, which differs from the method used to
calculate the performance of the private accounts. The private accounts are not
subject to the same types of expenses to which the Fund is subject nor to the
diversification requirements, specific tax restrictions and investment
limitations imposed on the Fund by the Investment Company Act of 1940 or
Subchapter M of the Internal Revenue Code of 1986, as amended. Consequently, the
performance results for the private accounts could have been adversely affected
(i.e., lower) if the private accounts included in the composite had been
regulated as investment companies under the Federal securities laws.
The following chart and table show the composite performance data of the
Adviser's private accounts for the period ended December 31, 2000. The data are
unaudited and not intended to predict or suggest the returns that might be
experienced by the Fund or an individual investor investing in the Fund. You
should be aware that the use of a methodology different from that used below to
calculate performance could result in different performance data.
* Prior to December 1999, the private client accounts were managed by Shaker
Investments, Inc., an affiliate of the Adviser. In December 1999, the Adviser,
d/b/a Shaker Investments, was created to maximize income tax benefits to the
controlling principals of each entity. Both companies hold accounts that are
currently included in the Shaker Small/Mid Cap Composite, but all new accounts,
after December 1999, are administered by the Adviser. Both companies are under
common control and there are no differences in management, principal ownership
or investment strategy.
40.00% ------------------------------------------------------------------
30.00% ------------------------------------------------------------------
20.00% ------------------------------------------------------------------
10.00% ------------------------------------------------------------------
0.00% ------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
20
<PAGE>
<TABLE>
<S> <C> <C> <C>
COMPOSITE FOR THE COMPARISON COMPARISON
YEAR(S) GROWTH EQUITY INDEX A INDEX B
STYLE(1)
------------------------------------------------------------------------------------
10 Years (1991-2000) (4)
5 Years (1996-2000)(4)
3 Years (1998-2000)(4)
1 Year (2000)
1996
1997
1998
1999
2000
</TABLE>
(1) The presentation above describes and contains ___________ (__) accounts
valued, as of December 31, 2000, at $____ _illion.
(2) Information on comparison index A.
(3) Information on comparison index B.
(4) Average annual returns through December 31, 2000.
21
<PAGE>
OTHER INFORMATION
--------------------------------------------------------------------------------
DISTRIBUTIONS
The Fund distributes its net investment income quarterly and net capital gain at
least annually.
All distributions are reinvested in additional shares, unless you elect to
receive distributions in cash. For Federal income tax purposes, distributions
are treated the same whether they are received in cash or reinvested. Shares
become entitled to receive distributions on the day after the shares are issued.
TAXES
The Fund generally intends to operate in a manner such that it will not be
liable for Federal income or excise tax.
The Fund's distribution of net income (including short-term capital gain) is
taxable to you as ordinary income. The Fund's distribution of long-term capital
gain is taxable to you as long-term capital gain regardless of how long you have
held your Fund shares. Generally, the Fund's distributions will consist
primarily of long-term capital gain. Distributions may also be subject to
certain state and local taxes.
If you buy shares shortly before the Fund makes a distribution, you may pay the
full price for the shares and then receive a portion of the price back as a
distribution that may be taxable to you. The sale or exchange of Fund shares is
a taxable transaction for income tax purposes.
The Fund will send you information about the income tax status of distributions
paid during the year shortly after December 31 of each year.
For further information about the tax effects of investing in the Fund,
including state and local tax matters, please see the SAI and consult your tax
adviser.
ORGANIZATION
The Trust is a Delaware business trust. The Fund does not expect to hold
shareholders' meetings unless required by Federal or Delaware law. Shareholders
of each series of the Trust are entitled to vote at shareholders' meetings
unless a matter relates only to specific series (such as approval of an advisory
agreement for the Fund). From time to time, large shareholders may control the
Fund or the Trust.
22
<PAGE>
FINANCIAL HIGHLIGHTS
Financial highlights are not provided because the Fund had not commenced
operations prior to the date of this Prospectus.
23
<PAGE>
SHAKER FUND
FOR MORE INFORMATION
The following documents are available free upon request:
ANNUAL/SEMI-ANNUAL REPORTS
Additional information about the Fund's investments will be
available in the Fund's annual and semi-annual reports to
shareholders. In the Fund's annual report, you will find a
discussion of the market conditions and investment
strategies that significantly affected the Fund's
performance during its last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
The SAI provides more detailed information about the Fund
and is incorporated by reference into this Prospectus.
CONTACTING THE FUND
You can get free copies of both reports (when available) and
the SAI, request other information and discuss your
questions about the Fund by contacting the Fund at:
Forum Shareholder Services, LLC
P.O. Box 446
Portland, Maine 04112
(800) XXX-XXXX (toll free)
(207) 879-0001
SECURITIES AND EXCHANGE COMMISSION INFORMATION
You can also review the Fund's reports (when available) and
the SAI at the Public Reference Room of the Securities and
Exchange Commission ("SEC"). The scheduled hours of
operation of the Public Reference Room may be obtained by
calling the SEC at (202)942-8090. You can get copies of this
information, for a fee, by e-mailing or writing to:
Public Reference Room
Securities and Exchange Commission
Washington, D.C. 20549-0102
E-mail address: [email protected]
------------------
Free copies of the reports and the SAI are available from
the SEC's Internet website at www.sec.gov.
Investment Company Act File No. 811-3023
24
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
April 1, 2001
SHAKER FUND
INVESTMENT ADVISER:
Shaker Management, Inc.
2000 Auburn Drive, Suite 300
Cleveland, Ohio 44122
ACCOUNT INFORMATION AND SHAREHOLDER SERVICES:
Forum Shareholder Services, LLC
P.O. Box 446
Portland, Maine 04112
(800) 94FORUM
(800) XXX-XXXX
(207) 879-0001
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY ANY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION DOES NOT CONSTITUTE A
PROSPECTUS.
This Statement of Additional Information (the "SAI") supplements the Prospectus
dated April 1, 2001, as may be amended from time to time, offering shares of the
Shaker Fund (the "Fund"), a separate series of Forum Funds, a registered,
open-end management investment company (the "Trust"). This SAI is not a
prospectus and should only be read in conjunction with the Prospectus. You may
obtain the Prospectus without charge by contacting Forum Shareholder Services,
LLC at the address or telephone number listed above.
<PAGE>
TABLE OF CONTENTS
GLOSSARY 1
INVESTMENT POLICIES AND RISKS 2
INVESTMENT LIMITATIONS 4
PERFORMANCE DATA AND ADVERTISING 6
MANAGEMENT 9
PORTFOLIO TRANSACTIONS 16
PURCHASE AND REDEMPTION INFORMATION 18
TAXATION 21
OTHER MATTERS 25
APPENDIX A - DESCRIPTION OF SECURITIES RATINGS A-1
APPENDIX B - MISCELLANEOUS TABLES B-1
APPENDIX C - PERFORMANCE DATA C-1
<PAGE>
GLOSSARY
As used in this SAI, the following terms have the meanings listed.
"Adviser" means Shaker Management, Inc.
"Board" means the Board of Trustees of the Trust.
"CFTC" means Commodities Future Trading Commission.
"Code" means the Internal Revenue Code of 1986, as amended.
"Custodian" means the custodian of the Fund's assets.
"FAcS" means Forum Accounting Services, LLC, the fund accountant of
the Fund.
"FAdS" means Forum Administrative Services, LLC, the administrator of
the Fund.
"FFS" means Forum Fund Services, LLC, the distributor of the Fund's
shares.
"Fitch" means Fitch IBCA, Inc.
"FSS" means Forum Shareholder Services, LLC, the transfer agent of the
Fund.
"Fund" means Shaker Fund.
"IRS" means Internal Revenue Service.
"Moody's" means Moody's Investors Service.
"NAV" means net asset value per share.
"NRSRO" means a nationally recognized statistical rating organization.
"SAI" means Statement of Additional Information.
"SEC" means the U.S. Securities and Exchange Commission.
"S&P" means Standard & Poor's Corporation, A Division of the McGraw
Hill Companies.
"Trust" means Forum Funds.
"U.S. Government Securities" means obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities.
"1933 Act" means the Securities Act of 1933, as amended.
"1940 Act" means the Investment Company Act of 1940, as amended.
1
<PAGE>
INVESTMENT POLICIES AND RISKS
The Fund is a diversified series of the Trust. This section discusses in greater
detail than the Fund's Prospectus certain investments that the Fund can make.
EQUITY SECURITIES
COMMON AND PREFERRED STOCK
GENERAL. Common stock represents an equity (ownership) interest in a company,
and usually possesses voting rights and earns dividends. Dividends on common
stock are not fixed but are declared at the discretion of the issuer. Common
stock generally represents the riskiest investment in a company. In addition,
common stock generally has the greatest appreciation and depreciation potential
because increases and decreases in earnings are usually reflected in a company's
stock price.
Preferred stock is a class of stock having a preference over common stock as to
the payment of dividends and the recovery of investment should a company be
liquidated, although preferred stock is usually junior to the debt securities of
the issuer. Preferred stock typically does not possess voting rights and its
market value may change based on changes in interest rates.
RISKS. The fundamental risk of investing in common and preferred stock is the
risk that the value of the stock might decrease. Stock values fluctuate in
response to the activities of an individual company or in response to general
market and/or economic conditions. Historically, common stocks have provided
greater long-term returns and have entailed greater short-term risks than
preferred stocks, fixed-income and money market investments. The market value of
all securities, including common and preferred stocks, is based upon the
market's perception of value and not necessarily the book value of an issuer or
other objective measures of a company's worth. If you invest in the Fund, you
should be willing to accept the risks of the stock market and should consider an
investment in the Fund only as a part of your overall investment portfolio.
The Fund's investment in preferred stocks is subject to the credit risk relating
to the financial condition of the issuers of those securities. To limit credit
risk, the Fund may only invest in preferred stocks that are rated "Baa" or
higher by Moody's or "BBB" or higher by S&P at the time of purchase. The Fund
may purchase unrated debt securities if, at the time of purchase, the Adviser
believes that they are of comparable quality to rated securities that the Fund
may purchase.
The Fund may retain preferred stocks whose rating has been lowered below the
lowest permissible rating category if the Adviser determines that retaining such
security is in the best interests of the Fund.
Moody's, S&P and other NRSROs are private services that provide ratings of the
credit quality of securities, including preferred stocks. A description of the
range of ratings assigned to preferred stcocks by several NRSROs is included in
Appendix A to this SAI. The Fund may use these ratings to determine whether to
purchase, sell or hold a security. Ratings are general and are not absolute
standards of quality. Securities with the same rating may have different market
prices. If an issue of securities ceases to be rated or if its rating is reduced
after it is purchased by the Fund, the Adviser will determine whether the Fund
should continue to hold the obligation. Because a downgrade often results in a
reduction in the market price of the security, the sale of a downgraded security
may result in a loss. To the extent that the ratings given by an NRSRO may
change as a result of changes in such organizations or their rating systems, the
Adviser will attempt to substitute comparable ratings. Credit ratings attempt to
evaluate the safety of principal and dividend or interest payments and do not
evaluate the risks of fluctuations in market value. Also, rating agencies may
fail to make timely changes in credit ratings. An issuer's current financial
condition may be better or worse than a rating indicates.
2
<PAGE>
Unrated securities may not be as actively traded as rated securities. The Fund
may retain securities whose rating has been lowered below the lowest permissible
rating category (or that are unrated and determined by the Adviser to be of
comparable quality to securities whose rating has been lowered below the lowest
permissible rating category) if the Adviser determines that retaining such
security is in the best interests of the Fund.
WARRANTS
GENERAL. Warrants are securities issued either alone or with another security
that give the holder the right to purchase a given number of shares of common
stock at a specified price and time. The price of the warrant usually represents
a premium over the applicable market value of the common stock at the time of
the warrant's issuance. Warrants have no voting rights with respect to the
common stock, receive no dividends and have no rights with respect to the assets
of the issuer.
RISKS. Investments in warrants involve certain risks, including the possible
lack of a liquid market for the resale of the warrants, potential price
fluctuations due to adverse market conditions or other factors and failure of
the price of the common stock to rise. If the warrant is not exercised within
the specified time period, it becomes worthless.
DEPOSITARY RECEIPTS
GENERAL. The Fund may invest in sponsored and unsponsored American Depositary
Receipts ("ADRs"). ADRs typically are issued by a U.S. bank or trust company,
evidence ownership of underlying securities issued by a foreign company and are
designed for use in U.S. securities markets. The Fund may invest in depositary
receipts in order to obtain exposure to foreign securities markets.
RISKS. Unsponsored depositary receipts may be created without the participation
of the foreign issuer. Holders of these receipts generally bear all the costs of
the depositary receipt facility, whereas foreign issuers typically bear certain
costs in a sponsored depositary receipt. The bank or trust company depository of
an unsponsored depositary receipt may be under no obligation to distribute
shareholder communications received from the foreign issuer or to pass through
voting rights. Accordingly, available information concerning the issuer may not
be current and the prices of unsponsored depositary receipts may be more
volatile than the prices of sponsored depositary receipts.
ILLIQUID AND RESTRICTED SECURITIES
GENERAL
The term "illiquid securities", as used herein, means securities that cannot be
disposed of within seven days in the ordinary course of business at
approximately the amount at which the Fund has valued the securities. Illiquid
securities include: (1) repurchase agreements not entitling the holder to
payment of principal within seven days; (2) purchased over-the-counter options;
(3) securities which are not readily marketable; and (4) securities subject to
contractual or legal restrictions on resale because they have not been
registered under the 1933 Act ("restricted securities").
RISKS
Limitations on resale may have an adverse effect on the marketability of a
security and the Fund might also have to cause an issuer to register a
restricted security in order to dispose of it, resulting in expense and delay.
Generally, the Fund would not have the right to require an issuer to register a
restricted secuirty. The Fund might not be able to dispose of restricted or
illiquid securities promptly or at reasonable prices and might thereby
experience difficulty satisfying redemption requests. There can be no assurance
that a liquid market will exist for any security at any particular time. Any
security, including securities determined by the Adviser to be liquid, can
become illiquid.
DETERMINATION OF LIQUIDITY
3
<PAGE>
The Board has the ultimate responsibility for determining whether specific
securities are liquid or illiquid and has delegated the function of making
determinations of liquidity to the Adviser, pursuant to guidelines approved by
the Board. The Adviser determines and monitors the liquidity of the portfolio
securities and reports periodically on its decisions to the Board. The Adviser
takes into account a number of factors in reaching liquidity decisions,
including but not limited to: (1) the frequency of trades and quotations for the
security; (2) the number of dealers willing to purchase or sell the security and
the number of other potential buyers; (3) the willingness of dealers to
undertake to make a market in the security; and (4) the nature of the
marketplace trades, including the time needed to dispose of the security, the
method of soliciting offers and the mechanics of the transfer.
An institutional market has developed for certain restricted securities.
Accordingly, contractual or legal restrictions on the resale of a security may
not be indicative of the liquidity of the security. If such securities are
eligible for purchase by institutional buyers in accordance with Rule 144A under
the 1933 Act or other exemptions, the Adviser may determine that the securities
are not illiquid.
TEMPORARY DEFENSIVE POSITION
The Fund may invest in prime quality money market instruments, pending
investment of cash balances. The Fund may also assume a temporary defensive
position and may invest without limit in prime quality money market instruments.
Prime quality instruments are those instruments that are rated in one of the two
highest short-term rating categories by an NRSRO or, if not rated, determined by
the Adviser to be of comparable quality.
Money market instruments usually have maturities of one year or less and fixed
rates of return. The money market instruments in which the Fund may invest
include short-term U.S. Government Securities, commercial paper, bankers'
acceptances, certificates of deposit, interest-bearing savings deposits of
commercial banks, repurchase agreements concerning securities in which the Fund
may invest and money market mutual funds.
CORE AND GATEWAY(R)
The Fund may seek to achieve its investment objective by converting to a Core
and Gateway structure. The Fund operating under a Core and Gateway structure
holds, as its only investment, shares of another investment company having
substantially the same investment objective and policies. The Board will not
authorize conversion to a Core and Gateway structure if it would materially
increase costs to the Fund's shareholders. The Board will not convert the Fund
to a Core and Gateway structure without notice to the shareholders.
INVESTMENT LIMITATIONS
For purposes of all investment policies of the Fund: (1) the term 1940 Act
includes the rules thereunder, SEC interpretations and any exemptive order upon
which the Fund may rely; and (2) the term Code includes the rules thereunder,
IRS interpretations and any private letter ruling or similar authority upon
which the Fund may rely.
Except as required by the 1940 Act or the Code, if any percentage restriction on
investment or utilization of assets is adhered to at the time an investment is
made, a later change in percentage resulting from a change in the market values
of the Fund's assets or purchases and redemptions of shares will not be
considered a violation of the limitation.
A fundamental policy of the Fund and the Fund's investment objective cannot be
changed without the affirmative vote of the lesser of: (1) 50% of the
outstanding shares of the Fund; or (2) 67% of the shares of the Fund present or
represented at a shareholders meeting at which the holders of more than 50% of
the outstanding shares of the Fund are present or represented. A nonfundamental
policy of the Fund may be changed by the Board without shareholder approval.
FUNDAMENTAL LIMITATIONS
4
<PAGE>
The Fund has adopted the following investment limitations, that cannot be
changed by the Board without shareholder approval. The Fund may not:
BORROWING MONEY
Borrow money if, as a result, outstanding borrowings would exceed an amount
equal to 33 1/3% of the Fund's total assets.
CONCENTRATION
Purchase a security if, as a result, more than 25% of the Fund's total assets
would be invested in securities of issuers conducting their principal business
activities in the same industry. For purposes of this limitation, there is no
limit on: (1) investments in U.S. Government Securities, in repurchase
agreements covering U.S. Government Securities, in tax-exempt securities issued
by the states, territories or possessions of the United States ("municipal
securities") or in foreign government securities; or (2) investments in issuers
domiciled in a single jurisdiction. Notwithstanding anything to the contrary, to
the extent permitted by the 1940 Act, the Fund may invest in one or more
investment companies; provided that, except to the extent the Fund invests in
other investment companies pursuant to Section 12(d)(1)(A) or (F) of the 1940
Act, the Fund treats the assets of the investment companies in which it invests
as its own for purposes of this policy.
DIVERSIFICATION
With respect to 75% of its assets, purchase a security (other than a U.S.
Government Security or security of an investment company) if, as a result: (1)
more than 5% of the Fund's total assets would be invested in the securities of a
single issuer; or (2) the Fund would own more than 10% of the outstanding voting
securities of a single issuer.
UNDERWRITING ACTIVITIES
Underwrite securities issued by other persons except, to the extent that in
connection with the disposition of portfolio securities, the Fund may be deemed
to be an underwriter.
MAKING LOANS
Make loans to other parties. For purposes of this limitation, entering into
repurchase agreements, lending securities and acquiring any debt security are
not deemed to be the making of loans.
PURCHASES AND SALES OF REAL ESTATE
Purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the Fund from
investing in securities backed by real estate or securities of companies engaged
in the real estate business).
PURCHASES AND SALES OF COMMODITIES
Purchase or sell physical commodities unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the Fund from
purchasing or selling options and futures contracts or from investing in
securities or other instruments backed by physical commodities).
ISSUANCE OF SENIOR SECURITIES
Issue senior securities except pursuant to Section 18 of the 1940 Act.
5
<PAGE>
NON-FUNDAMENTAL LIMITATIONS
The Fund has adopted the following investment limitations that may be changed by
the Board without shareholder approval. The Fund may not:
SECURITIES OF INVESTMENT COMPANIES
Invest in the securities of any investment company except to the extent
permitted by the 1940 Act.
SHORT SALES
Sell securities short, unless it owns or has the right to obtain securities
equivalent in kind and amount to the securities sold short (short sales "against
the box"), and provided that transactions in futures contracts and options are
not deemed to constitute selling securities short.
ILLIQUID SECURITIES
Invest more than 15% of its net assets in illiquid assets such as: (1)
securities that cannot be disposed of within seven days at their then-current
value; (2) repurchase agreements not entitling the holder to payment of
principal within seven days; and (3) securities subject to restrictions on the
sale of the securities to the public without registration under the 1933 Act
("restricted securities") that are not readily marketable. The Fund may treat
certain restricted securities as liquid pursuant to guidelines adopted by the
Board.
PURCHASES ON MARGIN
Purchase securities on margin, except that the Fund may use short-term credit
for the clearance of the Fund's transactions, and provided that initial and
variation margin payments in connection with futures contracts and options on
futures contracts shall not constitute purchasing securities on margin.
BORROWING
Purchase or otherwise acquire any security if the total of borrowings would
exceed 5% of the value of its total assets.
EXERCISING CONTROL OF ISSUERS
Make investments for the purpose of exercising control of an issuer. Investments
by the Fund in entities created under the laws of foreign countries solely to
facilitate investment in securities in that country will not be deemed the
making of investments for the purpose of exercising control.
PERFORMANCE DATA AND ADVERTISING
PERFORMANCE DATA
Institutional Shares and Investor Shares (each a "class," and collectively the
"classes") may each quote performance in various ways. All performance
information supplied in advertising, sales literature, shareholder reports or
other materials is historical and is not intended to indicate future returns.
Each Fund class may compare any of its performance information with:
o Data published by independent evaluators such as Morningstar, Inc.,
Lipper, Inc., iMoneyNet, Inc. (IBC Financial Data, Inc.),
CDA/Wiesenberger or other companies which track the investment
performance of investment companies ("Fund Tracking Companies").
o The performance of other mutual funds.
6
<PAGE>
o The performance of recognized stock, bond and other indices, including
but not limited to the Standard & Poor's 500(R) Index, the Russell
2000(R) Index, the Russell MidcapTM Index, the Russell 1000(R) Value
Index, the Russell 2500(R) Index, the Morgan Stanley Capital
International - Europe, Australasia and Far East Index, the Dow Jones
Industrial Average, the Salomon Brothers Bond Index, the Shearson
Lehman Bond Index, U.S. Treasury bonds, bills or notes and changes in
the Consumer Price Index as published by the U.S. Department of
Commerce.
Performance information may be presented numerically or in a table, graph or
similar illustration.
Indices are not used in the management of the Fund but rather are standards by
which the Fund's Adviser and shareholders may compare the performance of the
Fund to an unmanaged composite of securities with similar, but not identical,
characteristics as the Fund.
Each Fund class may refer to: (1) general market performances over past time
periods such as those published by Ibbotson Associates (for instance, its
"Stocks, Bonds, Bills and Inflation Yearbook"); (2) mutual fund performance
rankings and other data published by Fund Tracking Companies; and (3) material
and comparative mutual fund data and ratings reported in independent
periodicals, such as newspapers and financial magazines.
The performance of each Fund will fluctuate in response to market conditions and
other factors.
PERFORMANCE CALCULATIONS
The performance of each Fund class may be quoted in terms of total return. Table
1 in Appendix C includes performance information for each Fund class.
TOTAL RETURN CALCULATIONS
The total return of each Fund class shows that class' overall change in value,
including changes in share price, and assumes all of the Fund's or class's
distributions are reinvested.
Total return figures may be based on amounts invested in a Fund class net of any
applicable sales charges that may be paid by an investor. A computation of total
return that does not take into account sales charges paid by an investor would
be higher than a similar computation that takes into account payment of sales
charges.
AVERAGE ANNUAL TOTAL RETURN
Average annual total return is calculated using a formula prescribed by the SEC.
To calculate standard average annual total return, each Fund class: (1)
determines the growth or decline in value of a hypothetical historical
investment in the class over a stated period; and (2) calculates the annually
compounded percentage rate that would have produced the same result if the rate
of growth or decline in value had been constant over the period. For example, a
cumulative return of 100% over ten years would produce an average annual total
return of 7.18%. While average annual total returns are a convenient means of
comparing investment alternatives, investors should realize that performance is
not constant over time but changes from year to year, and that average annual
total returns represent averaged figures as opposed to the actual year-to-year
performance of each Fund class.
7
<PAGE>
Average annual total return is calculated according to the following formula:
P(1+T)n = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value: ERV is the value, at the end of the
applicable period, of a hypothetical $1,000 payment made at the
beginning of the applicable period
OTHER MEASURES OF TOTAL RETURN
Standardized total return quotes may be accompanied by non-standardized total
return figures calculated by alternative methods. For instance, each Fund class
may quote unaveraged or cumulative total returns, which reflect that class'
performance over a stated period of time. Moreover, total returns may be stated
in their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors and
their contributions to total return.
Any total return may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments and/or a series of
redemptions over any time period. Total returns may be quoted with or without
taking into consideration a Fund class' front-end sales charge.
Period total return is calculated according to the following formula:
PT = (ERV/P-1)
Where:
PT = period total return The other definitions are the same as in
average annual total return above
OTHER MATTERS
Each Fund class may also include a variety of information in its advertising,
sales literature, shareholder reports or other materials including, but not
limited to: (1) portfolio holdings and portfolio allocation as of certain dates,
such as portfolio diversification by instrument type, by instrument, by location
of issuer or by maturity; (2) statements or illustrations relating to the
appropriateness of types of securities and/or mutual funds that may be employed
by an investor to meet specific financial goals, such as funding retirement,
paying for children's education and financially supporting aging parents; (3)
information (including charts and illustrations) showing the effects of
compounding interest (compounding is the process of earning interest on
principal plus interest that was earned earlier; interest can be compounded at
different intervals, such as annually, quarterly or daily); (4) information
relating to inflation and its effects on the dollar; (for example, after ten
years the purchasing power of $25,000 would shrink to $16,621, $14,968, $13,465
and $12,100, respectively, if the annual rates of inflation were 4%, 5%, 6% and
7%, respectively); (5) information regarding the effects of automatic investment
and systematic withdrawal plans, including the principal of dollar-cost
averaging; (6) biographical descriptions of the Fund's portfolio managers and
the portfolio management staff of the Fund's investment adviser, summaries of
the views of the portfolio managers with respect to the financial markets, or
descriptions of the nature of the Adviser's and its staff's management
techniques; (7) the results of a hypothetical investment in the Fund class over
a given number of years, including the amount that the investment would be at
the end of the period; (8) the effects of investing in a tax-deferred account,
such as an individual retirement account or Section 401(k) pension plan; (9) the
NAV, net assets or number of shareholders of the Fund class as of one or more
dates; and (10) a comparison of the Fund class' operations to the operations of
other funds or similar investment products, such as a comparison of the nature
and scope of regulation of the products and the products' weighted average
maturity, liquidity, investment policies and the manner of calculating and
reporting performance.
8
<PAGE>
As an example of compounding, $1,000 compounded annually at 9.00% will grow to
$1,090 at the end of the first year (an increase in $90) and $1,118 at the end
of the second year (an increase in $98). The extra $8 that was earned on the $90
interest from the first year is the compound interest. One thousand dollars
compounded annually at 9.00% will grow to $2,367 at the end of ten years and
$5,604 at the end of 20 years. Other examples of compounding are as follows: at
7% and 12% annually, $1,000 will grow to $1,967 and $3,106, respectively, at the
end of ten years and $3,870 and $9,646, respectively, at the end of twenty
years. These examples are for illustrative purposes only and are not indicative
of any Fund class' performance.
Each Fund class may advertise information regarding the effects of applicable
systematic investment and systematic withdrawal plans, including the principal
of dollar cost averaging. In a dollar-cost averaging program, an investor
invests a fixed dollar amount in a class of the Fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when prices
are low. While such a strategy does not insure a profit or guard against a loss
in a declining market, the investor's average cost per share can be lower than
if fixed numbers of shares had been purchased at those intervals. In evaluating
such a plan, investors should consider their ability to continue purchasing
shares through periods of low price levels. For example, if an investor invests
$100 a month for a period of six months in a fund the following will be the
relationship between average cost per share ($14.35 in the example given) and
average price per share:
SYSTEMATIC SHARE SHARES
PERIOD INVESTMENT PRICE PURCHASED
------ ---------- ----- ---------
1 $100 $10 10.00
2 $100 $12 8.33
3 $100 $15 6.67
4 $100 $20 5.00
5 $100 $18 5.56
6 $100 $16 6.25
---- --- -----
TOTAL AVERAGE TOTAL
INVESTED $600 PRICE $15.17 SHARES 41.81
In connection with its advertisements, the Fund may provide "shareholder's
letters" which serve to provide shareholders or investors with an introduction
into the Fund's, the Trust's or any of the Trust's service providers' policies
or business practices.
MANAGEMENT
TRUSTEES AND OFFICERS
The names of the Trustees and officers of the Trust, their position with the
Trust, address, date of birth and principal occupations during the past five
years are set forth below. Each Trustee who is an "interested person" (as
defined by the 1940 Act) of the Trust is indicated by an asterisk (*).
9
<PAGE>
<TABLE>
<S> <C> <C>
-------------------------------------------- -----------------------------------------------------------------------
NAME, POSITION WITH THE TRUST, PRINCIPAL OCCUPATION(S) DURING
DATE OF BIRTH AND ADDRESS PAST 5 YEARS
-------------------------------------------- -----------------------------------------------------------------------
-------------------------------------------- -----------------------------------------------------------------------
-------------------------------------------- -----------------------------------------------------------------------
-------------------------------------------- -----------------------------------------------------------------------
John Y. Keffer*, Chairman and President Member and Director, Forum Financial Group, LLC (a mutual fund
Born: July 15, 1942 services holding company)
Two Portland Square Director, Forum Fund Services, LLC (Trust's underwriter)
Portland, ME 04101 Officer of six other investment companies for which Forum Financial
Group, LLC provides services
-------------------------------------------- -----------------------------------------------------------------------
-------------------------------------------- -----------------------------------------------------------------------
Costas Azariadas, Trustee Professor of Economics, University of California-Los Angeles
Born: February 15, 1943 Visiting Professor of Economics, Athens University of Economics and
Department of Economics Business 1998 - 1999
University of California Trustee of one other investment company for which Forum Financial
Los Angeles, CA 90024 Group, LLC provides services
-------------------------------------------- -----------------------------------------------------------------------
-------------------------------------------- -----------------------------------------------------------------------
James C. Cheng, Trustee President, Technology Marketing Associates
Born: July 26, 1942 (marketing company for small and medium size businesses in New
27 Temple Street England)
Belmont, MA 02718 Trustee of one other investment company for which Forum Financial
Group, LLC provides services
-------------------------------------------- -----------------------------------------------------------------------
-------------------------------------------- -----------------------------------------------------------------------
J. Michael Parish, Trustee Partner, Thelen Reid & Priest LLP (law firm) since 1995
Born: November 9, 1943 Trustee of one other investment company for which Forum Financial
40 West 57th Street Group, LLC provides services
New York, NY 10019
-------------------------------------------- -----------------------------------------------------------------------
-------------------------------------------- -----------------------------------------------------------------------
Thomas G. Sheehan, Vice President Director of Relationship Management, Forum Financial Group, LLC
Born: July 15, 1954 Officer of four other investment companies for which Forum Financial
Two Portland Square Group, LLC provides services
Portland, ME 04101
-------------------------------------------- -----------------------------------------------------------------------
-------------------------------------------- -----------------------------------------------------------------------
Dale Denno, Vice President General Counsel, Forum Financial Group, LLC since October 2000
Born: May 1, 1950 Vice President, Marketing & Development, UNUM Life Insurance Company
Two Portland Square 1995 - 2000
Portland, ME 04101
-------------------------------------------- -----------------------------------------------------------------------
-------------------------------------------- -----------------------------------------------------------------------
Ronald H. Hirsch, Treasurer Managing Director, Operations/Finance and Operations/Sales, Forum
Born: October 14, 1943 Financial Group, LLC since 1999
Two Portland Square Member of the Board - Citibank Germany 1991 - 1998
Portland, ME 04101 Officer of six other investment companies for which Forum Financial
Group, LLC provides services
-------------------------------------------- -----------------------------------------------------------------------
-------------------------------------------- -----------------------------------------------------------------------
Leslie K. Klenk, Secretary Counsel, Forum Financial Group, LLC since 1998
Born: August 24, 1964 Associate General Counsel, Smith Barney Inc. (brokerage firm) 1993 -
Two Portland Square 1998
Portland, ME 04101 Officer of two other investment companies for which Forum Financial
Group, LLC provides services
-------------------------------------------- -----------------------------------------------------------------------
</TABLE>
10
<PAGE>
COMPENSATION OF TRUSTEES AND OFFICERS
Each Trustee of the Trust is paid a quarterly retainer fee of $1,500 for his
service to the Trust. In addition, each Trustee will be paid a fee of $750 for
each Board meeting attended (whether in person or by electronic communication).
Trustees are also reimbursed for travel and related expenses incurred in
attending Board meetings. Mr. Keffer receives no compensation (other than
reimbursement for travel and related expenses) for his service as Trustee of the
Trust. No officer of the Trust is compensated by the Trust but officers are
reimbursed for travel and related expenses incurred in attending Board meetings
held outside of Portland, Maine.
The following table sets forth the estimated fees to be paid to each Trustee by
the Fund and the Fund Complex, which includes all series of the Trust and
another investment company for which Forum Financial Group, LLC provides
services for the fiscal year ending March 31, 2002.
<TABLE>
<S> <C> <C> <C>
-------------------------- ------------------ -------------------------------
Compensation Total Compensation from the
Trustee from the Fund Fund
And Fund Complex
-------------------------- ------------------ -------------------------------
-------------------------- ------------------ -------------------------------
John Y. Keffer $0 $0
-------------------------- ------------------ -------------------------------
-------------------------- ------------------ -------------------------------
Costas Azariadis $1,427 $9,000
-------------------------- ------------------ -------------------------------
-------------------------- ------------------ -------------------------------
James C. Cheng $1,427 $9,000
-------------------------- ------------------ -------------------------------
-------------------------- ------------------ -------------------------------
J. Michael Parish $1,427 $9,000
-------------------------- ------------------ -------------------------------
</TABLE>
INVESTMENT ADVISER
SERVICES OF ADVISER
The Adviser serves as investment adviser to the Fund pursuant to an investment
advisory agreement with the Trust. Under its agreement, the Adviser furnishes,
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.
OWNERSHIP OF ADVISER
The Adviser is a privately owned corporation organized under the laws of Ohio in
December 1999. Shaker Investments, Inc., an affiliate of the Adviser, is a
privately owned corporation organized under the laws of Ohio in 1991. Both
companies are controlled by Edward P. Hemmelgarn and there are no differences in
management, principal ownership or investment strategy.
FEES
The Adviser's fee is calculated as a percentage of the Fund's average daily net
assets. The fee is accrued daily by the Fund and is paid monthly based on
average net assets for the previous month.
In addition to receiving its advisory fee from the Fund, the Adviser may also
act and be compensated as investment manager for its clients with respect to
assets they invested in the Fund. If you have a separately managed account with
the Adviser with assets invested in the Fund, the Adviser will credit an amount
equal to all or a portion of the fees received by the Adviser against any
investment management fee received from you.
Table 1 in Appendix B shows the dollar amount of the fees payable by the Fund to
the Adviser, the amount of fees waived by the Adviser, and the actual fees
received by the Adviser. The data are for the past three fiscal years (or
shorter period depending on the Fund's commencement of operations).
11
<PAGE>
OTHER PROVISIONS OF ADVISER'S AGREEMENT
The Adviser's agreement remains in effect for a period of two years from the
date of its effectiveness and then the agreement must be approved annually.
Subsequently, the Adviser's agreement must be approved at least annually by the
Board or by majority vote of the shareholders, and in either case by a majority
of the Trustees who are not parties to the agreement or interested persons of
any such party (other than as Trustees of the Trust).
The Adviser's agreement is terminable without penalty by the Trust with respect
to the Fund on 60 days' written notice when authorized either by vote of the
Fund's shareholders or by a majority vote of the Board, or by the Adviser on 60
days' written notice to the Trust. The agreement terminates immediately upon
assignment.
Under its agreement, the Adviser is not liable for any error of judgment,
mistake of law, or in any event whatsoever, except for 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.
DISTRIBUTOR
DISTRIBUTOR; SERVICES AND COMPENSATION OF DISTRIBUTOR
FFS, the distributor (also known as principal underwriter) of the shares of the
Fund is located at Two Portland Square, Portland, Maine 04101. FFS is a
registered broker-dealer and is a member of the National Association of
Securities Dealers, Inc.
FFS, FAdS, FAcS and FSS are each controlled indirectly by Forum Financial Group,
LLC, which is controlled by John Y. Keffer.
Under a distribution agreement (the "Distribution Agreement") with the Trust,
FFS acts as the agent of the Trust in connection with the offering of shares of
the Fund. FFS continually distributes shares of the Fund on a best efforts
basis. FFS has no obligation to sell any specific quantity of Fund shares.
FFS may enter into arrangements with various financial institutions through
which you may purchase or redeem shares. FFS may, at its own expense and from
its own resources, compensate certain persons who provide services in connection
with the sale or expected sale of shares of the Fund.
FFS may enter into agreements with selected broker-dealers, banks or other
financial institutions for distribution of shares of the Fund. These financial
institutions may charge a fee for their services and may receive shareholder
service fees even though shares of the Fund are sold with a sales charge. These
financial institutions may otherwise act as processing agents, and will be
responsible for promptly transmitting purchase, redemption and other requests to
the Fund.
Investors who purchase shares in this manner will be subject to the procedures
of the institution through whom they purchase shares, which may include charges,
investment minimums, cutoff times and other restrictions in addition to, or
different from, those listed herein. Information concerning any charges or
services will be provided to customers by the financial institution. Investors
purchasing shares of the Fund in this manner should acquaint themselves with
their institution's procedures and should read this Prospectus in conjunction
with any materials and information provided by their institution. The financial
institution, and not its customers, will be the shareholder of record, although
customers may have the right to vote shares depending upon their arrangement
with the institution.
Pursuant to the Distribution Agreement, FFS receives, and may reallow to certain
financial institutions, the sales charge paid by the purchasers of the Fund's
shares. Table 2 in Appendix B shows the aggregate sales charges paid to FFS, the
amount of sales charge reallowed by FFS, and the amount of sales charge retained
by FFS. The data are for the past three years (or shorter depending on the
Fund's commencement of operations).
OTHER PROVISIONS OF THE DISTRIBUTOR'S AGREEMENT
12
<PAGE>
The Distribution Agreement with respect to the Fund must be approved at least
annually by the Board or by majority vote of the shareholders of the Fund and,
in either case, by a majority of the Trustees who are not parties to the
agreement or interested persons of any such party (other than as Trustees of the
Trust).
The Distribution Agreement is terminable without penalty by the Trust with
respect to the Fund on 60 days' written notice when authorized either by vote of
the Fund's shareholders, or by a majority vote of the Board, or by FFS on 60
days' written notice to the Trust.
Under the Distribution Agreement, FFS is not liable to the Trust or the Trust's
shareholders for any error of judgment or mistake of law, for any loss arising
out of any investment or for any act or omission in the performance of its
duties to the Fund, except for 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.
Under the Distribution Agreement, FFS and certain related parties (such as FFS's
officers and persons that control FFS) are indemnified by the Trust against all
claims and expenses in any way related to alleged untrue statements of material
fact contained in the Trust's Registration Statement or any alleged omission of
a material fact required to be stated in the Registration Statement to make
statements contained therein not misleading. The Trust, however, will not
indemnify FFS for any such misstatements or omissions if they were made in
reliance upon information provided in writing by FFS in connection with the
preparation of the Registration Statement.
DISTRIBUTION PLAN - INVESTOR SHARES
In accordance with Rule 12b-1 under the 1940 Act, the Trust has adopted a
distribution plan (the "Plan") for the Fund's Investor Shares which provides for
payment to FFS of a Rule 12b-1 fee at the annual rate of up to 0.25% of the
average daily net assets of the Investor Shares of the Fund as compensation for
FFS's services as distributor.
The Plan provides that FFS may incur expenses for activities including, but not
limited to, (1) expenses of sales employees or agents of the Distributor,
including salary, commissions, travel and related expense for services in
connection with the distribution of shares; (2) payments to broker-dealers and
financial institutions for services in connection with the distribution of
shares, including fees calculated with reference to the average daily net asset
value of shares held by shareholders who have a brokerage or other service
relationship with the broker-dealer of institution receiving such fees; (3)
costs of printing prospectuses and other materials to be given or sent to
prospective investors; and (4) the costs of preparing, printing and distributing
sales literature and advertising materials used by FFS or others in connection
with the offering of Investor Shares for sale to the public.
The Plan provides that all written agreements relating to the Plan must be
approved by 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
("Qualified Trustees"). In addition, the Plan (as well as the Distribution
Agreement) requires the Trust and Forum to prepare and submit to the Board, at
least quarterly, and the Board to review, written reports setting forth all
amounts expended under the Plan and identifying the activities for which those
expenditures were made. The Plan obligates the Fund to compensate FFS for its
services and not to reimburse it for expenses incurred.
The Plan provides that it will remain in effect for one year from the date of
its adoption and thereafter shall continue in effect provided it is approved at
least annually by the shareholders or by the Board, including a majority of the
Qualified Trustees. The Plan further provides that it may not be amended to
materially increase the costs which the Trust bears for distribution pursuant to
the Plan without shareholder approval and that other material amendments of the
Plan must be approved by the Qualified Trustees. The Plan may be terminated at
any time by the Board, by a majority of the Qualified Trustees or by the Fund's
Investor Class shareholders.
Table 3 in Appendix B shows the dollar amount of fees payable under the Plan
with respect to the Fund. This information is provided for the past three years
(or shorter period depending on a Fund's commencement of operations).
13
<PAGE>
OTHER FUND SERVICE PROVIDERS
ADMINISTRATOR
As administrator, pursuant to an administration agreement with the Trust, FAdS
is responsible for the supervision of the overall management of the Trust,
providing the Trust with general office facilities and providing persons
satisfactory to the Board to serve as officers of the Trust.
For its services, FAdS receives a fee from the Fund at an annual rate of 0.20%
of the average daily net assets of the Fund plus $24,000 per year. The fee is
accrued daily by the Fund and is paid monthly based on average net assets for
the previous month.
The Administration Agreement with respect to the Fund must be approved at least
annually by the Board or by majority vote of the shareholders of that Fund and,
in either case, by a majority of the Trustees who are not parties to the
agreement or interested persons of any such party (other than as Trustees of the
Trust). The Administration Agreement is terminable without penalty by the Trust
or by FAdS with respect to the Fund on 60 days' written notice to the Trust.
Under the Administration Agreement, FAdS is not liable to the Trust or the
Trust's shareholders for any act or omission, except for 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. Under the
agreement, FAdS and certain related parties (such as FAdS's officers and persons
who control FAdS) are indemnified by the Trust against any and all claims and
expenses related to FAdS's actions or omissions that are consistent with FAdS's
contractual standard of care.
Table 4 in Appendix B shows the dollar amount of the fees payable by the Fund to
FAdS, the amount of the fee waived by FAdS, and the actual fees received by
FAdS. The data is for the past three fiscal years (or shorter period depending
on the Fund's commencement of operations).
FUND ACCOUNTANT
As fund accountant, pursuant to an agreement with the Trust (the "Accounting
Agreement"), FAcS provides fund accounting services to the Fund. These services
include calculating the NAV of the Fund and preparing the Fund's financial
statements and tax returns.
For its services, FAcS receives a fee from the Fund at an annual rate of 0.01%
of the average daily net assets of the Fund plus $57,000 per year plus $2,000
for the preparation of tax returns and certain surcharges based upon the number
and type of the Fund's portfolio transactions and positions. The fee is accrued
daily by the Fund and is paid monthly based on the transactions and positions
for the previous month.
The Accounting Agreement with respect to the Fund must be approved at least
annually by the Board or by majority vote of the shareholders, and in either
case by a majority of the Trustees who are not parties to the agreement or
interested persons of any such party (other than as Trustees of the Trust). The
Accounting Agreement is terminable without penalty by the Trust or by FAcS with
respect to the Fund on 60 days' written notice.
Under the Accounting Agreement, FAcS is not liable for any action or omission in
the performance of its duties to the Fund, except for willful misfeasance, bad
faith, gross negligence or by reason of reckless disregard of its obligations
and duties under the agreement. Under the agreement, FAcS and certain related
parties (such as FAcS's officers and persons who control FAcS) are indemnified
by the Trust against any and all claims and expenses related to FAcS's actions
or omissions that are consistent with FAcS's contractual standard of care.
Under the Accounting Agreement, in calculating the Fund's NAV, FAcS is deemed
not to have committed an error if the NAV it calculates is within 1/10 of 1% of
the actual NAV (after recalculation). The agreement also provides that FAcS will
not be liable to a shareholder for any loss incurred due to an NAV difference if
such difference is
14
<PAGE>
less than or equal to 1/2 of 1% or less than or equal to $10.00. In addition,
FAcS is not liable for the errors of others, including the companies that supply
securities prices to FAcS and the Fund.
Table 5 in Appendix B shows the dollar amount of the fees payable by the Fund to
FAcS, the amount of the fee waived by FAcS, and the actual fees received by
FAcS. The data is for the past three fiscal years (or shorter period depending
on the Fund's commencement of operations).
TRANSFER AGENT
As transfer agent and distribution paying agent, pursuant to an agreement with
the Trust ("Transfer Agency Agreement"), FSS maintains an account for each
shareholder of record of the Fund and is responsible for processing purchase and
redemption requests and paying distributions to shareholders of record. FSS is
located at Two Portland Square, Portland, Maine 04101 and is registered as a
transfer agent with the SEC.
For its services, FSS receives a fee from the Fund at an annual rate of $30,000
plus $24 per shareholder account, plus certain out-of-pocket expenses. The fee
is accrued daily by the Fund and is paid monthly based on the average net assets
for the previous month.
The Transfer Agency Agreement with respect to the Fund must be approved at least
annually by the Board or by majority vote of the shareholders, and in either
case by a majority of the Trustees who are not parties to the agreement or
interested persons of any such party (other than as Trustees of the Trust). The
Transfer Agency Agreement is terminable without penalty by the Trust or by FFS
with respect to the Fund on 60 days' written notice.
Under the Transfer Agency Agreement, FSS is not liable for any act in the
performance of its duties to the Fund, except for willful misfeasance, bad faith
or gross negligence in the performance of its duties under the agreement. Under
the agreement, FSS and certain related parties (such as FSS's officers and
persons who control FSS) are indemnified by the Trust against any and all claims
and expenses related to FSS's actions or omissions that are consistent with
FSS's contractual standard of care.
Table 6 in Appendix B shows the dollar amount of the fees payable by the Fund to
FSS, the amount of the fee waived by FSS, and the actual fees received by FSS.
The data is for the past three fiscal years (or shorter period depending on the
Fund's commencement of operations).
SHAREHOLDER SERVICING AGENT
Pursuant to a Shareholder Service Plan (the "Plan") between the Trust and FAdS
effective March 1, 2000, FAdS is authorized to perform, or arrange for the
performance of, certain activities relating to the servicing and maintenance of
shareholder accounts not otherwise provided by FSS ("Shareholder Servicing
Activities"). Under the Plan, FAds may enter into shareholder service agreements
with financial institutions or other persons who provide Shareholder Servicing
Activities for their clients invested in the Fund.
Shareholder Servicing Activities shall include one or more of the following: (1)
establishing and maintaining accounts and records for shareholders of the Fund;
(2) answering client inquiries regarding the manner in which purchases,
exchanges and redemptions of shares of the Trust may be effected and other
matters pertaining to the Trust's services; (3) providing necessary personnel
and facilities to establish and maintain client accounts and records; (4)
assisting clients in arranging for processing purchase, exchange and redemption
transactions; (5) arranging for the wiring of funds; (6) guaranteeing
shareholder signatures in connection with redemption orders and transfers and
changes in shareholder-designated accounts; (7) integrating periodic statements
with other shareholder transactions; and (8) providing such other related
services as the shareholder may request.
As compensation for the Shareholder Servicing Activities, the Trust pays the
shareholder servicing agent, through FAdS, with respect to the Fund, a fee of up
to 0.25% of that Fund's average daily net assets of the shares owned by
investors for which the shareholder servicing agent maintains a servicing
relationship.
15
<PAGE>
Any material amendment to the Plan must be approved by the Board, including a
majority of the Disinterested Trustees. The Plan may be terminated without
penalty at any time: (1) by vote of a majority of the Board, including a
majority of the Trustees who are not parties to the Plan or interested persons
of any such party; or (2) by FAdS.
CUSTODIAN
As custodian, pursuant to an agreement with the Trust, Forum Trust LLC
safeguards and controls the Fund's cash and securities, determines income and
collects interest on Fund investments. The Custodian may employ subcustodians to
provide custody of the Fund's domestic and foreign assets. The Custodian is
located at Two Portland Square, Portland, Maine 04101.
For its services, the Custodian receives a fee at an annual rate of 0.01% of the
Fund's average daily net assets, plus $3,6000 per year, and certain transaction
costs. The Fund also pays an annual domestic custody fee as well as certain
other transaction fees. These fees are accrued daily by the Fund and are paid
monthly based on average net assets and transactions for the previous month.
LEGAL COUNSEL
Seward & Kissel LLP, 1200 G Street, N.W., Washington, D.C. 20005 pass upon legal
matters in connection with the issuance of shares of the Trust.
INDEPENDENT AUDITORS
Deloitte & Touche LLP, 200 Berkeley Street, 14th Floor, Boston, Massachusetts,
02116-5022, independent auditors, have been selected as independent auditors for
the Fund. The auditor audits the annual financial statements of the Fund and
provides the Fund with an audit opinion. The auditors also review certain
regulatory filings of the Fund and the Fund's tax returns.
PORTFOLIO TRANSACTIONS
HOW SECURITIES ARE PURCHASED AND SOLD
Purchases and sales of portfolio securities that are fixed income securities
(for instance, money market instruments and bonds, notes and bills) usually are
principal transactions. In a principal transaction, the party from whom the Fund
purchases or to whom the Fund sells is acting on its own behalf (and not as the
agent of some other party such as its customers). These securities normally are
purchased directly from the issuer or from an underwriter or market maker for
the securities. There usually are no brokerage commissions paid for these
securities.
Purchases and sales of portfolio securities that are equity securities (for
instance common stock and preferred stock) are generally effected: (1) if the
security is traded on an exchange, through brokers who charge commissions; and
(2) if the security is traded in the "over-the-counter" markets, in a principal
transaction directly from a market maker. In transactions on stock exchanges,
commissions are negotiated. When transactions are executed in an
over-the-counter market, the Adviser will seek to deal with the primary market
makers; but when necessary in order to obtain best execution, the Adviser will
utilize the services of others.
The price of securities purchased from underwriters includes a disclosed fixed
commission or concession paid by the issuer to the underwriter, and prices of
securities purchased from dealers serving as market makers reflect the spread
between the bid and asked price.
In the case of fixed income and equity securities traded in the over-the-counter
markets, there is generally no stated commission, but the price usually includes
an undisclosed commission or markup.
16
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COMMISSIONS PAID
Table 7 in Appendix B shows the aggregate brokerage commissions paid by the Fund
as well as aggregate commissions paid to an affiliate of the Fund or the
Adviser. The data presented are for the past three fiscal years (or shorter
period depending on the Fund's commencement of operations).
ADVISER RESPONSIBILITY FOR PURCHASES AND SALES
The Adviser places orders for the purchase and sale of securities with
broker-dealers selected by and in the discretion of the Adviser. The Fund has no
obligation to deal with a specific broker or dealer in the execution of
portfolio transactions. Allocations of transactions to brokers and dealers and
the frequency of transactions are determined by the Adviser in its best judgment
and in a manner deemed to be in the best interest of the Fund rather than by any
formula.
The Adviser seeks "best execution" for all portfolio transactions. This means
that the Adviser seeks the most favorable price and execution available. The
Adviser's primary consideration in executing transactions for the Fund is prompt
execution of orders in an effective manner and at the most favorable price
available.
CHOOSING BROKER-DEALERS
The Fund may not always pay the lowest commission or spread available. Rather,
in determining the amount of commissions (including certain dealer spreads) paid
in connection with securities transactions, the Adviser takes into account
factors such as size of the order, difficulty of execution, efficiency of the
executing broker's facilities (including the research services described below)
and any risk assumed by the executing broker.
Consistent with applicable rules and the Adviser's duties, the Adviser may: (1)
consider sales of shares of the Fund as a factor in the selection of
broker-dealers to execute portfolio transactions for the Fund; and (2) payments
made by brokers effecting transactions for the Fund (these payments may be made
to the Fund or to other persons on behalf of the Fund for services provided to
the Fund for which those other persons would be obligated to pay).
OBTAINING RESEARCH FROM BROKERS
The Adviser may give consideration to research services furnished by brokers to
the Adviser for its use and may cause the Fund to pay these brokers a higher
amount of commission than may be charged by other brokers. This research is
designed to augment the Adviser's own internal research and investment strategy
capabilities. This research may be used by the Adviser in connection with
services to clients other than the Fund, and not all research services may be
used by the Adviser in connection with the Fund. The Adviser's fees are not
reduced by reason of the Adviser's receipt of research services.
The Adviser has full brokerage discretion. It evaluates the range and quality of
a broker's services in placing trades including securing best price,
confidentiality, clearance and settlement capabilities, promptness of execution
and the financial stability of the broker-dealer. Under certain circumstances,
the value of research provided by a broker-dealer may be a factor in the
selection of a broker. This research would include reports that are common in
the industry. Typically, the research will be used to service all of the
Adviser's accounts, although a particular client may not benefit from all the
research received on each occasion. The nature of the services obtained for
clients include industry research reports and periodicals, quotation systems,
software for portfolio management and formal data bases.
Occasionally, the Adviser utilizes a broker and pays a slightly higher
commission than another might charge. The higher commission is paid because of
the Adviser's need for specific research, for specific expertise a firm may have
in a particular type of transaction (due to factors such as size or difficulty),
or for speed/efficiency in execution. Since most of the Adviser's brokerage
commissions for research are for economic research on specific companies or
industries, and since the Adviser follows a limited number of securities, most
of the commission dollars spent for industry and stock research directly benefit
the Adviser's clients and the Fund's investors.
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COUNTERPARTY RISK
The Adviser monitors the creditworthiness of counterparties to the Fund's
transactions and intends to enter into a transaction only when it believes that
the counterparty presents minimal and appropriate credit risks.
TRANSACTIONS THROUGH AFFILIATES
The Adviser may effect transactions through affiliates of the Adviser (or
affiliates of those persons) pursuant to procedures adopted by the Trust.
OTHER ACCOUNTS OF THE ADVISER
Investment decisions for the Fund are made independently from those for any
other account or investment company that is or may in the future become advised
by the Adviser or its affiliates. Investment decisions are the product of many
factors, including basic suitability for the particular client involved. A
particular security may be bought or sold for certain clients even though it
could have been bought or sold for other clients at the same time. Likewise, a
particular security may be bought for one or more clients when one or more
clients are selling the security. In some instances, one client may sell a
particular security to another client. In addition, two or more clients may
simultaneously purchase or sell the same security, in which event, each day's
transactions in such security are, insofar as is possible, averaged as to price
and allocated between such clients in a manner which, in the Adviser's opinion,
is equitable to each and in accordance with the amount being purchased or sold
by each. There may be circumstances when purchases or sales of a portfolio
security for one client could have an adverse effect on another client that has
a position in that security. In addition, when purchases or sales of the same
security for the Fund and other client accounts managed by the Adviser occurs
contemporaneously, the purchase or sale orders may be aggregated in order to
obtain any price advantages available to large denomination purchases or sales.
PORTFOLIO TURNOVER
The frequency of portfolio transactions of the Fund (the portfolio turnover
rate) will vary from year to year depending on many factors. From time to time,
the Fund may engage in active short-term trading to take advantage of price
movements affecting individual issues, groups of issues or markets. An annual
portfolio turnover rate of 100% would occur if all the securities in a fund were
replaced once in a period of one year. High portfolio turnover rates may result
in increased brokerage costs to the Fund and a possible increase in short-term
capital gains or losses.
SECURITIES OF REGULAR BROKER-DEALERS
From time to time, the Fund may acquire and hold securities issued by its
"regular brokers and dealers" or the parents of those brokers and dealers. For
this purpose, regular brokers and dealers means the 10 brokers or dealers that:
(1) received the greatest amount of brokerage commissions during the Fund's last
fiscal year; (2) engaged in the largest amount of principal transactions for
portfolio transactions of the Fund during the Fund's last fiscal year; or (3)
sold the largest amount of the Fund's shares during the Fund's last fiscal year.
Table 8 in Appendix B lists the regular brokers and dealers of the Funds whose
securities (or the securities of the parent company) were acquired during the
past fiscal year and the aggregate value of the Fund's holdings of those
securities as of the Fund's most recent fiscal year.
PURCHASE AND REDEMPTION INFORMATION
GENERAL INFORMATION
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You may effect purchases or redemptions or request any shareholder privilege in
person at FSS's offices located at Two Portland Square, Portland, Maine 04101.
The Fund accepts orders for the purchase or redemption of shares on any weekday
except days when the New York Stock Exchange is closed.
Not all classes or funds of the Trust may be available for sale in the state in
which you reside. Please check with your investment professional to determine a
class or fund's availability.
ADDITIONAL PURCHASE INFORMATION
Shares of the Fund are sold on a continuous basis by the distributor.
The Fund reserves the right to refuse any purchase request.
Fund shares are normally issued for cash only. In the Adviser's discretion,
however, the Fund may accept portfolio securities that meet the investment
objective and policies of the Fund as payment for Fund shares. The Fund will
only accept securities that: (1) are not restricted as to transfer by law and
are not illiquid; and (2) have a value that is readily ascertainable (and not
established only by valuation procedures).
IRAS
All contributions into an IRA through the automatic investing service are
treated as IRA contributions made during the year the investment is received.
UGMAS/UTMAS
If the custodian's name is not in the account registration of a gift or transfer
to minor ("UGMA/UTMA") account, the custodian must provide instructions in a
manner indicating custodial capacity.
PURCHASES THROUGH FINANCIAL INSTITUTIONS
You may purchase and redeem shares through certain broker-dealers, banks and
other financial institutions. Financial institutions may charge their customers
a fee for their services and are responsible for promptly transmitting purchase,
redemption and other requests to the Fund.
If you purchase shares through a financial institution, you will be subject to
the institution's procedures, which may include charges, limitations, investment
minimums, cutoff times and restrictions in addition to, or different from, those
applicable when you invest in the Fund directly. When you purchase the Fund's
shares through a financial institution, you may or may not be the shareholder of
record and, subject to your institution's procedures, you may have Fund shares
transferred into your name. There is typically a three-day settlement period for
purchases and redemptions through broker-dealers. Certain financial institutions
may also enter purchase orders with payment to follow.
You may not be eligible for certain shareholder services when you purchase
shares through a financial institution. Contact your financial institution for
further information. If you hold shares through a financial institution, the
Fund may confirm purchases and redemptions to the financial institution, which
will provide you with confirmations and periodic statements. The Fund is not
responsible for the failure of any financial institution to carry out its
obligations.
Investors purchasing shares of the Fund through a financial institution should
read any materials and information provided by the financial institution to
acquaint themselves with its procedures and any fees that the institution may
charge.
ADDITIONAL REDEMPTION INFORMATION
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The Fund may redeem shares involuntarily to: (1) reimburse the Fund for any loss
sustained by reason of the failure of a shareholder to make full payment for
shares purchased; or (2) collect any charge relating to transactions effected
for the benefit of a shareholder which is applicable to the Fund's shares as
provided in the Prospectus.
SUSPENSION OF RIGHT OF REDEMPTION
The right of redemption may not be suspended, except for any period during
which: (1) the New York Stock Exchange is closed (other than customary weekend
and holiday closings) or during which the SEC determines that trading thereon is
restricted; (2) an emergency (as determined by the SEC) exists as a result of
which disposal by the Fund of its securities is not reasonably practicable or as
a result of which it is not reasonably practicable for the Fund fairly to
determine the value of its net assets; or (3) the SEC may by order permit for
the protection of the shareholders of the Fund.
REDEMPTION-IN-KIND
Redemption proceeds normally are paid in cash. If deemed appropriate and
advisable by the Adviser, the Fund may satisfy a redemption request from a
shareholder by distributing portfolio securities pursuant to procedures adopted
by the Board. The Trust has filed an election with the SEC pursuant to which the
Fund may only effect a redemption in portfolio securities if the particular
shareholder is redeeming more than $250,000 or 1% of the Fund's total net
assets, whichever is less, during any 90-day period.
NAV DETERMINATION
In determining the Fund's NAV, securities for which market quotations are
readily available are valued at current market value using the last reported
sales price provided by independent pricing services. If no sale price is
reported, the average of the last bid and ask price is used. If no average price
is available, the last bid price is used. If market quotations are not readily
available, then securities are valued at fair value as determined by the Board
(or its delegate).
DISTRIBUTIONS
Distributions of net investment income will be reinvested at the Fund's NAV
(unless you elect to receive distributions in cash) as of the last day of the
period with respect to which the distribution is paid. Distributions of capital
gain will be reinvested at the Fund's NAV (unless you elect to receive
distributions in cash) on the payment date for the distribution. Cash payments
may be made more than seven days following the date on which distributions would
otherwise be reinvested.
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SALES CHARGES (INVESTOR SHARES ONLY)
REDUCED SALES CHARGES
You may qualify for a reduced sales charge on purchases of the Fund's Investor
Shares under rights of accumulation ("ROA") or a letter of intent ("LOI"). If
you qualify under the ROA, the sales charge you pay is based on the total of
your current purchase and the net asset value (at the end of the previous fund
business day) of shares that you already hold. To qualify for ROA on a purchase,
you must inform FSS and supply sufficient information to verify that each
purchase qualifies for the privilege or discount. You may also enter into a LOI,
which expresses your intent to invest $100,000 or more in the Fund's Investor
Shares within a period of 13 months. Each purchase under a LOI will be made at
the public offering price applicable at the time of the purchase to a single
transaction of the dollar amount indicated in the LOI. If you do not purchase
the minimum investment referenced in the LOI, you must pay the Fund's Investor
Shares an amount equal to the difference between the dollar value of the sales
charges paid under the LOI and the dollar value of the sales charges due on the
aggregate purchases of the Investor Shares as if such purchases were executed in
a single transaction.
ELIMINATION OF SALES CHARGES
No sales charge is assessed on the reinvestment of Investor Shares'
distributions. No sales charge is assessed on purchases made for investment
purposes or on redemptions by:
o Any bank, trust company, savings association or similar institution
with whom the distributor has entered into a share purchase agreement
acting on behalf of the institution's fiduciary customer accounts or
any account maintained by its trust department (including a pension,
profit sharing or other employee benefit trust created pursuant to a
qualified retirement plan)
o Any registered investment adviser with whom the distributor has
entered into a share purchase agreement and which is acting on behalf
of its fiduciary customer accounts
o Any broker-dealer with whom the distributor has entered into a
Fee-Based Wrap Account Agreement or similar agreement and which is
acting on behalf if its fee-based program clients
o Trustees and officers of the Trust; directors, officers and full-time
employees of the Adviser, the distributor, any of their affiliates or
any organization with which the distributor has entered into a
Selected Dealer or similar agreement; the spouse, sibling, direct
ancestor or direct descendent (collectively, "relatives") of any such
person; any trust or individual retirement account or self-employed
retirement plan for the benefit of any such person or relative; or the
estate of any such person or relative
o Any person who has, within the preceding 90 days, redeemed Fund shares
(but only on purchases in amounts not exceeding the redeemed amounts)
and completes a reinstatement form upon investment
o Persons who exchange into the Fund from a mutual fund other than a
fund of the Trust that participates in the Trust's exchange program
o Employee benefit plans qualified under Section 401 of the Internal
Revenue Code of 1986, as amended
o Any person who is a private client of the Adviser or its affiliates,
as of April 1, 2001.
The Fund requires appropriate documentation of an investor's eligibility to
purchase or redeem Investor Shares without a sales charge. Any shares so
purchased may not be resold except to the Fund.
TAXATION
The tax information set forth in the Prospectus and the information in this
section relates solely to U.S. Federal income tax law and assumes that the Fund
qualifies as a regulated investment company (as discussed below). This
information is only a summary of certain key Federal income tax considerations
affecting the Fund and its shareholders and is in addition to the information
provided in the Prospectus. No attempt has been made to present a complete
explanation of the Federal tax treatment of the Fund or the tax implications to
shareholders. The discussions here and in the Prospectus are not intended as
substitutes for careful tax planning.
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This "Taxation" section is based on the Code and applicable regulations in
effect on the date hereof. Future legislative or administrative changes or court
decisions may significantly change the tax rules applicable to the Fund and its
shareholders. Any of these changes or court decisions may have a retroactive
effect.
ALL INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISOR AS TO THE FEDERAL, STATE,
LOCAL AND FOREIGN TAX PROVISIONS APPLICABLE TO THEM.
QUALIFICATION AS A REGULATED INVESTMENT COMPANY
The Fund intends, for each tax year, to qualify as a "regulated investment
company" under the Code. This qualification does not involve governmental
supervision of management or investment practices or policies of the Fund.
The tax year end of the Fund is March 31 (the same as the Fund's fiscal year
end).
MEANING OF QUALIFICATION
As a regulated investment company, the Fund will not be subject to Federal
income tax on the portion of its investment company taxable income (that is,
taxable interest, dividends, net short-term capital gains and other taxable
ordinary income, net of expenses) and net capital gain (that is, the excess of
net long-term capital gains over net short-term capital losses) that it
distributes to shareholders. In order to qualify to be taxed as a regulated
investment company the Fund must satisfy the following requirements:
o The Fund must distribute at least 90% of its investment company
taxable income for the tax year. (Certain distributions made by the
Fund after the close of its tax year are considered distributions
attributable to the previous tax year for purposes of satisfying this
requirement.)
o The Fund must derive at least 90% of its gross income from certain
types of income derived with respect to its business of investing in
securities.
o The Fund must satisfy the following asset diversification test at the
close of each quarter of the Fund's tax year: (1) at least 50% of the
value of the Fund's assets must consist of cash and cash items, U.S.
Government securities, securities of other regulated investment
companies, and securities of other issuers (as to which the Fund has
not invested more than 5% of the value of the Fund's total assets in
securities of an issuer and as to which the Fund does not hold more
than 10% of the outstanding voting securities of the issuer); and (2)
no more than 25% of the value of the Fund's total assets may be
invested in the securities of any one issuer (other than U.S.
Government securities and securities of other regulated investment
companies), or in two or more issuers which the Fund controls and
which are engaged in the same or similar trades or businesses.
FAILURE TO QUALIFY
If for any tax year the Fund does not qualify as a regulated investment company,
all of its taxable income (including its net capital gain) will be subject to
tax at regular corporate rates without any deduction for dividends to
shareholders, and the dividends will be taxable to the shareholders as ordinary
income to the extent of the Fund's current and accumulated earnings and profits.
Failure to qualify as a regulated investment company would thus have a negative
impact on the Fund's income and performance. It is possible that the Fund will
not qualify as a regulated investment company in any given tax year.
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FUND DISTRIBUTIONS
The Fund anticipates distributing substantially all of its investment company
taxable income for each tax year. These distributions are taxable to you as
ordinary income. A portion of these distributions may qualify for the 70%
dividends-received deduction for corporate shareholders.
The Fund anticipates distributing substantially all of its net capital gain for
each tax year. These distributions generally are made only once a year, usually
in November or December, but the Fund may make additional distributions of net
capital gain at any time during the year. These distributions are taxable to you
as long-term capital gain regardless of how long you have held shares. These
distributions do not qualify for the dividends-received deduction.
Distributions by the Fund that do not constitute ordinary income dividends or
capital gain dividends will be treated as a return of capital. Return of capital
distributions reduce your tax basis in the shares and are treated as gain from
the sale of the shares to the extent your basis would be reduced below zero.
All distributions by the Fund will be treated in the manner described above
regardless of whether the distribution is paid in cash or reinvested in
additional shares of the Fund (or of another Fund). If you receive distributions
in the form of additional shares, you will be treated as receiving a
distribution in an amount equal to the fair market value of the shares received,
determined as of the reinvestment date.
You may purchase shares whose NAV at the time reflects undistributed net
investment income or recognized capital gain, or unrealized appreciation in the
value of the assets of the Fund. Distributions of these amounts are taxable to
you in the manner described above, although the distribution economically
constitutes a return of capital to you.
Ordinarily, you are required to take distributions by the Fund into account in
the year in which they are made. A distribution declared in October, November or
December of any year and payable to shareholders of record on a specified date
in those months, however, is deemed to be received by you (and made by the Fund)
on December 31 of that calendar year if the distribution is actually paid in
January of the following year.
You will be advised annually as to the U.S. Federal income tax consequences of
distributions made (or deemed made) during the year.
FEDERAL EXCISE TAX
A 4% non-deductible excise tax is imposed on a regulated investment company that
fails to distribute in each calendar year an amount equal to: (1) 98% of its
ordinary taxable income for the calendar year; and (2) 98% of its capital gain
net income for the one-year period ended on October 31 of the calendar year. The
balance of the Fund's income must be distributed during the next calendar year.
The Fund will be treated as having distributed any amount on which it is subject
to income tax for any tax year.
For purposes of calculating the excise tax, the Fund: (1) reduces its capital
gain net income (but not below its net capital gain) by the amount of any net
ordinary loss for the calendar year; and (2) excludes foreign currency gains and
losses incurred after October 31 of any year in determining the amount of
ordinary taxable income for the current calendar year. The Fund will include
foreign currency gains and losses incurred after October 31 in determining
ordinary taxable income for the succeeding calendar year.
The Fund intends to make sufficient distributions of its ordinary taxable income
and capital gain net income prior to the end of each calendar year to avoid
liability for the excise tax. Investors should note, however, that the Fund may
in certain circumstances be required to liquidate portfolio investments to make
sufficient distributions to avoid excise tax liability.
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SALE OR REDEMPTION OF SHARES
In general, you will recognize gain or loss on the sale or redemption of shares
of the Fund in an amount equal to the difference between the proceeds of the
sale or redemption and your adjusted tax basis in the shares. All or a portion
of any loss so recognized may be disallowed if you purchase (for example, by
reinvesting dividends) other shares of the Fund within 30 days before or after
the sale or redemption (a so called "wash sale"). If disallowed, the loss will
be reflected in an upward adjustment to the basis of the shares purchased. In
general, any gain or loss arising from the sale or redemption of shares of the
Fund will be considered capital gain or loss and will be long-term capital gain
or loss if the shares were held for longer than one year. Any capital loss
arising from the sale or redemption of shares held for six months or less,
however, is treated as a long-term capital loss to the extent of the amount of
distributions of net capital gain received on such shares. In determining the
holding period of such shares for this purpose, any period during which your
risk of loss is offset by means of options, short sales or similar transactions
is not counted. Capital losses in any year are deductible only to the extent of
capital gains plus, in the case of a non-corporate taxpayer, $3,000 of ordinary
income.
BACKUP WITHHOLDING
The Fund will be required in certain cases to withhold and remit to the U.S.
Treasury 31% of distributions, and the proceeds of redemptions of shares, paid
to any shareholder: (1) who has failed to provide its correct taxpayer
identification number; (2) who is subject to backup withholding by the IRS for
failure to report the receipt of interest or dividend income properly; or (3)
who has failed to certify to the Fund that it is not subject to backup
withholding or that it is a corporation or other "exempt recipient." Backup
withholding is not an additional tax; any amounts so withheld may be credited
against a shareholder's Federal income tax liability or refunded.
FOREIGN SHAREHOLDERS
Taxation of a shareholder who, under the Code, is a nonresident alien
individual, foreign trust or estate, foreign corporation or foreign partnership
("foreign shareholder"), depends on whether the income from the Fund is
"effectively connected" with a U.S. trade or business carried on by the foreign
shareholder.
If the income from the Fund is not effectively connected with a U.S. trade or
business carried on by a foreign shareholder, distributions of ordinary income
(and short-term capital gains) paid to a foreign shareholder will be subject to
U.S. withholding tax at the rate of 30% (or lower applicable treaty rate) upon
the gross amount of the distribution. The foreign shareholder generally would be
exempt from U.S. Federal income tax on gain realized on the sale of shares of
the Fund and distributions of net capital gain from the Fund.
If the income from the Fund is effectively connected with a U.S. trade or
business carried on by a foreign shareholder, then ordinary income
distributions, capital gain distributions, and any gain realized upon the sale
of shares of the Fund will be subject to U.S. Federal income tax at the rates
applicable to U.S. citizens or U.S. corporations.
In the case of a non-corporate foreign shareholder, the Fund may be required to
withhold U.S. Federal income tax at a rate of 31% on distributions that are
otherwise exempt from withholding (or taxable at a reduced treaty rate), unless
the shareholder furnishes the Fund with proper notification of its foreign
status.
The tax consequences to a foreign shareholder entitled to claim the benefits of
an applicable tax treaty may be different from those described herein.
The tax rules of other countries with respect to distributions from the Fund can
differ from the U.S. Federal income taxation rules described above. These
foreign rules are not discussed herein. Foreign shareholders are urged to
consult their own tax advisers as to the consequences of foreign tax rules with
respect to an investment in the Fund.
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STATE AND LOCAL TAXES
The tax rules of the various states of the U.S. and their local jurisdictions
with respect to distributions from the Fund can differ from the U.S. Federal
income taxation rules described above. These state and local rules are not
discussed herein. Shareholders are urged to consult their tax advisers as to the
consequences of state and local tax rules with respect to an investment in the
Fund.
OTHER MATTERS
THE TRUST AND ITS SHAREHOLDERS
GENERAL INFORMATION
Forum Funds was organized as a business trust under the laws of the State of
Delaware on August 29, 1995. On January 5, 1996, the Trust succeeded to the
assets and liabilities of Forum Funds, Inc.
The Trust is registered as an open-end, management investment company under the
1940 Act. The Trust offers shares of beneficial interest in its series. As of
the date hereof, the Trust consisted of the following shares of beneficial
interest:
Austin Global Equity Fund
BrownIA Growth Equity Fund
BrownIA Maryland Bond Fund Maine TaxSaver Bond Fund
BrownIA Small-Cap Growth Fund Mastrapasqua Growth Value Fund
Daily Assets Cash Fund(1) New Hampshire TaxSaver Bond Fund
Daily Assets Government Fund(1) Payson Balanced Fund
Daily Assets Government Obligations Fund(1) Payson Value Fund
Daily Asset Municipal Fund(1) Polaris Global Value Fund
Daily Assets Treasury Obligations Fund(1) TaxSaver Bond Fund
Equity Index Fund The Advocacy Fund
Investors Bond Fund
(1) The Trust offers shares of beneficial interest in an institutional,
institutional service, and investor share class of these series.
The Trust has an unlimited number of authorized shares of beneficial interest.
The Board may, without shareholder approval, divide the authorized shares into
an unlimited number of separate series and may divide series into classes of
shares; the costs of doing so will be borne by the Trust.
The Trust, the Fund's investment adviser and the principal underwriter have
adopted codes of ethics under Rule 17j-1, as amended, of the 1940 Act. These
codes permit personnel subject to the codes to invest in securities, including
securities that may be purchased or held by the Fund.
The Trust and the Fund will continue indefinitely until terminated.
SERIES AND CLASSES OF THE TRUST
Each series or class of the Trust may have a different expense ratio and its
expenses will affect each class's performance.
SHAREHOLDER VOTING AND OTHER RIGHTS
Each share of each series of the Trust and each class of shares has equal
dividend, distribution, liquidation and voting rights, and fractional shares
have those rights proportionately, except that expenses related to the
distribution
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of the shares of each series or class (and certain other expenses such as
transfer agency, shareholder service and administration expenses) are borne
solely by those shares and each series or class votes separately with respect to
the provisions of any Rule 12b-1 plan which pertains to the series or class and
other matters for which separate series or class voting is appropriate under
applicable law. Generally, shares will be voted separately by individual series
except if: (1) the 1940 Act requires shares to be voted in the aggregate and not
by individual series; and (2) when the Trustees determine that the matter
affects more than one series and all affected series must vote. The Trustees may
also determine that a matter only affects certain series or classes of the Trust
and thus only those such series or classes are entitled to vote on the matter.
Delaware law does not require the Trust to hold annual meetings of shareholders,
and it is anticipated that shareholder meetings will be held only when
specifically required by Federal or state law. There are no conversion or
preemptive rights in connection with shares of the Trust.
All shares, when issued in accordance with the terms of the offering, will be
fully paid and nonassessable.
A shareholder in a series is entitled to the shareholder's pro-rata share of all
distributions arising from that series' assets and, upon redeeming shares, will
receive the portion of the series' net assets represented by the redeemed
shares.
Shareholders representing 10% or more of the Trust's (or a series') shares may,
as set forth in the Trust Instrument, call meetings of the Trust (or series) for
any purpose related to the Trust (or series), including, in the case of a
meeting of the Trust, the purpose of voting on removal of one or more Trustees.
TERMINATION OR REORGANIZATION OF TRUST OR ITS SERIES
The Trust or any series may be terminated upon the sale of its assets to, or
merger with, another open-end, management investment company or series thereof,
or upon liquidation and distribution of its assets. The Trustees, may, without
prior shareholder approval change the form of organization of the Trust by
merger, consolidation or incorporation. Under the Trust Instrument, the Trustees
may, without shareholder vote, cause the Trust or certain series to merge or
consolidate into one or more trusts, partnerships or corporations, or cause the
Trust to be incorporated under Delaware law, so long as the surviving entity is
an open-end, management investment company that will succeed to or assume the
Trust's registration statement. The Trustees may also, without shareholder vote,
cause the Trust or certain series to be terminated.
FUND OWNERSHIP
As of _____________, 2001, the officers and trustees of the Trust, as a group,
owned less than 1% of the shares of each class of the Fund. From time to time,
certain shareholders of record may own 5% or more of a class of shares of the
Fund. Shareholders known by the Fund to own beneficially 5% or more of a class
of shares of the Fund, as of ____________________, 2001, are listed in Table 9
in Appendix B.
From time to time, certain shareholders may own a large percentage of the shares
of the Fund or class. Accordingly, those shareholders may be able to greatly
affect (if not determine) the outcome of a shareholder vote. As of
______________, 2001, and prior to the public offering of the Fund, Forum
Financial Group, LLC or its affiliates owned 100% of each class of shares of the
Fund and may be deemed to control each class and the Fund. "Control" for this
purpose is the ownership of 25% or more of the Fund's or class's voting
securities.It is not expected that Forum Financial Group, LLC will continue to
control the Fund after its public offering.
LIMITATIONS ON SHAREHOLDERS' AND TRUSTEES' LIABILITY
Delaware law provides that Fund shareholders are entitled to the same
limitations of personal liability extended to stockholders of private
corporations for profit. In the past, the Trust believes that the securities
regulators of some states, however, have indicated that they and the courts in
their states may decline to apply Delaware law on this point. The Trust's Trust
Instrument (the document that governs the operation of the Trust) contains an
express disclaimer of shareholder liability for the debts, liabilities,
obligations and expenses of the Trust. The Trust's Trust Instrument provides for
indemnification out of each series' property of any shareholder or former
shareholder held personally liable for the obligations of the series. The Trust
Instrument also provides that each series shall, upon
26
<PAGE>
request, assume the defense of any claim made against any shareholder for any
act or obligation of the series and satisfy any judgment thereon. Thus, the risk
of a shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which Delaware law does not apply, no contractual
limitation of liability was in effect and the portfolio is unable to meet its
obligations. FAdS believes that, in view of the above, there is no risk of
personal liability to shareholders.
The Trust Instrument provides that the Trustees shall not be liable to any
person other than the Trust and its shareholders. In addition, the Trust
Instrument provides that the Trustees shall not be liable for any conduct
whatsoever, provided that a Trustee is not protected against any liability to
which he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office.
REGISTRATION STATEMENT
This SAI and the Prospectus do not contain all the information included in the
Trust's registration statement filed with the SEC under the 1933 Act with
respect to the securities offered hereby. The registration statement, including
the exhibits filed therewith, may be examined at the office of the SEC in
Washington, D.C.
Statements contained herein and in the Prospectus as to the contents of any
contract or other documents are not necessarily complete and, in each instance,
are qualified by reference to the copy of such contract or other documents filed
as exhibits to the registration statement.
FINANCIAL STATEMENTS
Financial statements are not available because the Fund had not commenced
operations prior to the date of this SAI.
27
<PAGE>
APPENDIX A - DESCRIPTION OF SECURITIES RATINGS
PREFERRED STOCK
MOODY'S
AAA An issue which is rated "aaa" is considered to be a top-quality preferred
stock. This rating indicates good asset protection and the least risk of
dividend impairment within the universe of preferred stocks.
AA An issue which is rated "aa" is considered a high- grade preferred stock.
This rating indicates that there is a reasonable assurance the earnings and
asset protection will remain relatively well maintained in the foreseeable
future.
A An issue which is rated "a" is considered to be an upper-medium grade
preferred stock. While risks are judged to be somewhat greater then in the
"aaa" and "aa" classification, earnings and asset protection are,
nevertheless, expected to be maintained at adequate levels.
BAA An issue which is rated "baa" is considered to be a medium-grade preferred
stock, neither highly protected nor poorly secured. Earnings and asset
protection appear adequate at present but may be questionable over any
great length of time.
BA An issue which is rated "ba" is considered to have speculative elements and
its future cannot be considered well assured. Earnings and asset protection
may be very moderate and not well safeguarded during adverse periods.
Uncertainty of position characterizes preferred stocks in this class.
B An issue which is rated b" generally lacks the characteristics of a
desirable investment. Assurance of dividend payments and maintenance of
other terms of the issue over any long period of time may be small.
CAA An issue which is rated "caa" is likely to be in arrears on dividend
payments. This rating designation does not purport to indicate the future
status of payments.
CA An issue which is rated "ca" is speculative in a high degree and is likely
to be in arrears on dividends with little likelihood of eventual payments.
C This is the lowest rated class of preferred or preference stock. Issues so
rated can thus be regarded as having extremely poor prospects of ever
attaining any real investment standing.
NOTE Moody's applies numerical modifiers 1, 2, and 3 in each rating
classification: the modifier 1 indicates that the security ranks in the
higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking and the modifier 3 indicates that the issue ranks in the
lower end of its generic rating category.
S&P
AAA This is the highest rating that may be assigned by Standard & Poor's to a
preferred stock issue and indicates an extremely strong capacity to pay the
preferred stock obligations.
A-1
<PAGE>
AA A preferred stock issue rated AA also qualifies as a high-quality,
fixed-income security. The capacity to pay preferred stock obligations is
very strong, although not as overwhelming as for issues rated AAA.
A An issue rated A is backed by a sound capacity to pay the preferred stock
obligations, although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions.
BBB An issue rated BBB is regarded as backed by an adequate capacity to pay the
preferred stock obligations. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to make
payments for a preferred stock in this category than for issues in the A
category.
BB, Preferred stock rated BB, B, and CCC is regarded, on balance, as
B, predominantly speculative with respect to the issuer's capacity to pay
CCC preferred stock obligations. BB indicates the lowest degree of speculation
and CCC the highest. While such issues will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or
major risk exposures to adverse conditions.
CC The rating CC is reserved for a preferred stock issue that is in arrears on
dividends or sinking fund payments, but that is currently paying.
C A preferred stock rated C is a nonpaying issue.
D A preferred stock rated D is a nonpaying issue with the issuer in default
on debt instruments.
N.R. This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard &
Poor's does not rate a particular type of obligation as a matter of policy.
NOTE Plus (+) or minus (-). To provide more detailed indications of preferred
stock quality, ratings from AA to CCC may be modified by the addition of a
plus or minus sign to show relative standing within the major rating
categories.
SHORT TERM RATINGS
MOODY'S
Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:
PRIME-1 Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics:
o Leading market positions in well-established industries.
o High rates of return on funds employed.
o Conservative capitalization structure with moderate reliance on
debt and ample asset protection.
o Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.
o Well-established access to a range of financial markets and
assured sources of alternate liquidity.
A-2
<PAGE>
PRIME-2 Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but
to a lesser degree. Earnings trends and coverage ratios, while sound,
may be more subject to variation. Capitalization characteristics,
while still appropriate, may be more affected by external conditions.
Ample alternate liquidity is maintained.
PRIME-3 Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of
industry characteristics and market compositions may be more
pronounced. Variability in earnings and profitability may result in
changes in the level of debt protection measurements and may require
relatively high financial leverage. Adequate alternate liquidity is
maintained.
NOT
PRIME Issuers rated Not Prime do not fall within any of the Prime rating
categories.
S&P
A-1 A short-term obligation rated A-1 is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment
on the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity
to meet its financial commitment on these obligations is extremely strong.
A-2 A short-term obligation rated A-2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to
meet its financial commitment on the obligation is satisfactory.
A-3 A short-term obligation rated A-3 exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.
B A short-term obligation rated B is regarded as having significant
speculative characteristics. The obligor currently has the capacity to meet
its financial commitment on the obligation; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet
its financial commitment on the obligation.
C A short-term obligation rated C is currently vulnerable to nonpayment and
is dependent upon favorable business, financial, and economic conditions
for the obligor to meet its financial commitment on the obligation.
D A short-term obligation rated D is in payment default. The D rating
category is used when payments on an obligation are not made on the date
due even if the applicable grace period has not expired, unless Standard &
Poor's believes that such payments will be made during such grace period.
The D rating also will be used upon the filing of a bankruptcy petition or
the taking of a similar action if payments on an obligation are
jeopardized.
FITCH
F1 Obligations assigned this rating have the highest capacity for timely
repayment under Fitch IBCA's national rating scale for that country,
relative to other obligations in the same country. This rating is
automatically assigned to all obligations issued or guaranteed by the
sovereign state. Where issues possess a particularly strong credit feature,
a "+" is added to the assigned rating.
A-3
<PAGE>
F2 Obligations supported by a strong capacity for timely repayment relative to
other obligors in the same country. However, the relative degree of risk is
slightly higher than for issues classified as 'A1' and capacity for timely
repayment may be susceptible to adverse change sin business, economic, or
financial conditions.
F3 Obligations supported by an adequate capacity for timely repayment relative
to other obligors in the same country. Such capacity is more susceptible to
adverse changes in business, economic, or financial conditions than for
obligations in higher categories.
B Obligations for which the capacity for timely repayment is uncertain
relative to other obligors in the same country. The capacity for timely
repayment is susceptible to adverse changes in business, economic, or
financial conditions.
C Obligations for which there is a high risk of default to other obligors in
the same country or which are in default.
A-4
<PAGE>
APPENDIX B - MISCELLANEOUS TABLES
TABLE 1 - INVESTMENT ADVISORY FEES
The following table shows the dollar amount of fees payable to the Adviser by
the Fund, the amount of fee that was waived by the Adviser, if any, and the
actual fees received by the Adviser.
<TABLE>
<S> <C> <C> <C>
ADVISORY FEE ADVISORY FEE ADVISORY FEE
PAYABLE WAIVED RETAINED
------------ ------------ ------------
</TABLE>
Advisory fee information is not provided because the Fund had not commenced
operations prior to the date of this SAI.
TABLE 2 - SALES CHARGES
The following table shows the dollar amount of aggregate sales charge paid to
FFS, the amount retained, and the amount reallowed to financial institutions in
connection with purchases of the Fund's Investor Shares.
<TABLE>
<S> <C> <C> <C>
AGGREGATE SALES AMOUNT AMOUNT
CHARGE RETAINED REALLOWED
--------------- -------- ---------
</TABLE>
Sales charge information is not provided because the Fund's Investor Shares had
not commenced operations prior to the date of this SAI.
TABLE 3 - INVESTOR SHARES RULE 12B-1 FEES
The following table shows the dollar amount of fees payable to FFS by the Fund,
the amount of fee that was waived by FFS, if any, and the actual fees received
by FFS.
<TABLE>
<S> <C> <C> <C>
FEE FEE FEE
PAYABLE WAIVED RETAINED
------- ------ --------
</TABLE>
Rule 12b-1 fee information is not provided because the Fund had not commenced
operations prior to the date of this SAI.
TABLE 4 - ADMINISTRATION FEES
The following table shows the dollar amount of fees payable to FAdS by the Fund,
the amount of fee that was waived by FAdS, if any, and the actual fees received
by FAdS.
<TABLE>
<S> <C> <C> <C>
ADMINISTRATION FEE ADMINISTRATION FEE ADMINISTRATION FEE
PAYABLE WAIVED RETAINED
------------------ ------------------ ------------------
</TABLE>
Administration fee information is not provided because the Fund had not
commenced operations prior to the date of this SAI.
B-1
<PAGE>
TABLE 5 - ACCOUNTING FEES
The following table shows the dollar amount of fees payable to FAcS by the Fund,
the amount of fee that was waived by FAcS, if any, and the actual fees received
by FAcS.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ACCOUNTING FEE ACCOUNTING FEE ACCOUNTING FEE
PAYABLE WAIVED RETAINED
-------------- -------------- --------------
</TABLE>
Accounting fee information is not provided because the Fund had not commenced
operations prior to the date of this SAI.
TABLE 6 - TRANSFER AGENCY FEES
The following table shows the dollar amount of fees payable to FSS by the Fund,
the amount of fee that was waived by FSS, if any, and the actual fees received
by FSS.
<TABLE>
<S> <C> <C> <C>
TRANSFER AGENCY FEE TRANSFER AGENCY FEE TRANSFER AGENCY FEE
PAYABLE WAIVED RETAINED
------------------- ------------------- -------------------
</TABLE>
Transfer agency fee information is not provided because the Fund had not
commenced operations prior to the date of this SAI.
TABLE 7 - COMMISSIONS
The following table shows the brokerage commissions of the Fund. The data is for
the past three fiscal years (or shorter period if the Fund has been in operation
for a shorter period).
<TABLE>
<S> <C> <C> <C> <C>
TOTAL BROKERAGE % OF BROKERAGE
COMMISSIONS ($) COMMISSIONS % OF
PAID TO AN PAID TO AN TRANSACTIONS
TOTAL BROKERAGE AFFILIATE OF AFFILIATE OF EXECUTED BY AN
COMMISSIONS THE FUND OR THE FUND OR AFFILIATE OF THE
($) ADVISER ADVISER FUND OR ADVISER
</TABLE>
Information regarding brokerage commissions paid is not provided because the
Fund had not commenced operations prior to the date of this SAI.
TABLE 8 - SECURITIES OF REGULAR BROKERS OR DEALERS
The following table lists the regular brokers and dealers of the Fund whose
securities (or the securities of the parent company) were acquired during the
past fiscal year and the aggregate value of the Fund's holdings of those
securities as of the Fund's most recent fiscal year.
<TABLE>
<S> <C> <C>
REGULAR BROKER OR DEALER VALUE HELD
------------------------ ----------
</TABLE>
Information regarding positions held in the securities of regular brokers and
dealers of the Fund is not provided because the Fund had not commenced
operations prior to the date of this SAI.
B-2
<PAGE>
TABLE 9 - 5% SHAREHOLDERS
The following table lists: (1) the persons who owned of record 5% or more of the
outstanding shares of a class of shares of the Fund; and (2) any person known by
the Fund to own beneficially 5% or more of a class of shares of the Fund, as of
_____________, 2001.
NAME AND ADDRESS % OF FUND
Forum Financial Group, LLC 100%
B-3
<PAGE>
APPENDIX C - PERFORMANCE DATA
TABLE 1 - TOTAL RETURNS
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Calendar
One Three Year to One Three Five Since Inception
Month Months Date Year Years Years (annualized)
----- ------ -------- ---- ----- ----- ---------------
</TABLE>
Performance information is not provided because the Fund had not commenced
operations prior to the date of this SAI.
C-1
<PAGE>
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS
(a) Trust Instrument of Registrant as amended and restated on August 14, 2000
(Exhibit incorporated by reference as filed as Exhibit (a) in
post-effective amendment No. 83 via EDGAR on September 29, 2000, accession
number 0001004402-00-000327).
(b) By-Laws of Registrant (Exhibit incorporated by reference as filed as
Exhibit (2) in post-effective amendment No. 43 via EDGAR on July 31, 1997,
accession number 0000912057-97-025707).
(c) See Sections 2.04 and 2.07 of the Trust Instrument as filed as Exhibit (a).
(d) (1) Investment Advisory Agreement between Registrant and H.M. Payson &
Co. relating to Payson Value Fund and Payson Balanced Fund dated
December 18, 1995 (Exhibit incorporated by reference as filed as
Exhibit (5)(a) in post-effective amendment No. 62 via EDGAR on May 26,
1998, accession number 0001004402-98-000307).
(2) Investment Advisory Agreement between Registrant and Austin Investment
Management, Inc. relating to Austin Global Equity Fund dated as of
June 14, 1996 (Exhibit incorporated by reference as filed as Exhibit
(5)(d) in post-effective amendment No. 62 via EDGAR on May 26, 1998,
accession number 0001004402-98-000307).
(3) Investment Advisory Agreement between Registrant and Forum Investment
Advisors, LLC relating to Investors Bond Fund, Investors Growth Fund,
Investors High Grade Bond Fund, Maine TaxSaver Bond Fund, New
Hampshire TaxSaver Bond Fund and TaxSaver Bond Fund dated as of
January 2, 1998 (Exhibit incorporated by reference as filed as Exhibit
(5)(p) in post-effective amendment No. 56 via EDGAR on December 31,
1997, accession number 0001004402-97-000281).
(4) Investment Advisory Agreement between Registrant and Polaris Capital
Management, Inc. dated as of June 1, 1998 (Exhibit incorporated by
reference as filed as Exhibit (5)(h) in post-effective amendment No.
63 via EDGAR on June 8, 1998, accession number 0001004402-98-000339).
(5) Investment Advisory Agreement between Registrant and Brown Investment
Advisory & Trust Company relating to BrownIA Small-Cap Growth Fund and
BrownIA Growth Equity Fund dated as of June 29, 1999 (Exhibit
incorporated by reference as filed as Exhibit (d)(7) in post-effective
amendment No. 73 via EDGAR on July 30, 1999, accession number
0001004402-99-000341).
(6) Investment Advisory Agreement between Registrant and Mastrapasqua &
Associates relating to Mastrapasqua Growth Value Fund dated July 1,
2000 (Exhibit incorporated by reference as filed as Exhibit (d)(8) in
post-effective amendment No. 81 via EDGAR on July 31, 2000, accession
number 0001004402-00-000261).
(7) Investment Advisory Agreement between Registrant and Trillium Asset
Management Corporation relating to The Advocacy Fund dated as of July
26, 2000 (Exhibit incorporated by reference as filed as Exhibit (d)(9)
in post-effective amendment No. 82 via EDGAR on August 14, 2000,
accession number 0001004402-00-000283).
(8) Investment Advisory Agreement between Registrant and Brown Advisory
Incorporated dated December 20, 2000 relating to BrownIA Maryland Bond
Fund (Exhibit incorporated by reference as filed as Exhibit (d)(9) in
post-effective amendment No. 86 via EDGAR on December 27, 2000,
accession number 0001004402-00-000412).
1
<PAGE>
(9) Form of Investment Advisory Agreement between Registrant and Shaker
Management, Inc., dated _____, 2001 relating to Shaker Fund (filed
herewith).
(e) (1) Form of Selected Dealer Agreement between Forum Financial
Services, Inc. and securities brokers (Exhibit incorporated by
reference as filed as Exhibit (6)(a) in post-effective amendment No.
62 via EDGAR on May 26, 1998, accession number 0001004402-98-000307).
(2) Form of Bank Affiliated Selected Dealer Agreement between Forum
Financial Services, Inc. and bank affiliates (Exhibit incorporated by
reference as filed as Exhibit (6)(b) in post-effective amendment No.
62 via EDGAR on May 26, 1998, accession number 0001004402-98-000307).
(3) Distribution Agreement between Registrant and Forum Fund Services, LLC
relating to, Austin Global Equity Fund, BrownIA Small-Cap Growth Fund,
BrownIA Growth Equity Fund, BrownIA Maryland Bond Fund, Equity Index
Fund, Investors Bond Fund, Investors Equity Fund, Investors Growth
Fund, Investors High Grade Bond Fund, Maine TaxSaver Bond Fund,
Mastrapasqua Growth Value Fund, New Hampshire TaxSaver Bond Fund,
Payson Balanced Fund, Payson Value Fund, Polaris Global Value Fund,
TaxSaver Bond Fund, The Advocacy Fund, and Investor Shares,
Institutional Shares and Institutional Service Shares of Daily Assets
Treasury Obligations Fund, Daily Assets Government Fund, Daily Assets
Government Obligations Fund, Daily Assets Cash Fund and Daily Assets
Municipal Fund (Exhibit incorporated by reference as filed as Exhibit
(e)(4) in post-effective amendment No. 84 via EDGAR on October 17,
2000, accession number 0001004402-00-000346).
(4) Form of Distribution Agreement between Registrant and Forum Fund
Services, LLC relating to, Austin Global Equity Fund, BrownIA
Small-Cap Growth Fund, BrownIA Growth Equity Fund, BrownIA Maryland
Bond Fund, Equity Index Fund, Investors Bond Fund, Investors Growth
Fund, Maine TaxSaver Bond Fund, Mastrapasqua Growth Value Fund, New
Hampshire TaxSaver Bond Fund, Payson Balanced Fund, Payson Value Fund,
Polaris Global Value Fund, Shaker Fund, TaxSaver Bond Fund, The
Advocacy Fund, and Investor Shares, Institutional Shares and
Institutional Service Shares of Daily Assets Treasury Obligations
Fund, Daily Assets Government Fund, Daily Assets Government
Obligations Fund, Daily Assets Cash Fund and Daily Assets Municipal
Fund (filed herewith).
(f) None.
(g) (1) Custodian Agreement between Registrant and Forum Trust, LLC dated
May 12, 1999 relating to Austin Global Equity Fund, BrownIA Small-Cap
Growth Fund, BrownIA Growth Equity Fund, BrownIA Maryland Bond Fund,
Equity Index Fund, Investors Bond Fund, Investors Growth Fund, Maine
TaxSaver Bond Fund, Mastrapasqua Growth Value Fund, New Hampshire
TaxSaver Bond Fund, Payson Balanced Fund, Payson Value Fund, Polaris
Global Value Fund, TaxSaver Bond Fund, The Advocacy Fund, and Investor
Shares, Institutional Shares and Institutional Service Shares of Daily
Assets Treasury Obligations Fund, Daily Assets Government Fund, Daily
Assets Government Obligations Fund, Daily Assets Cash Fund and Daily
Assets Municipal Fund (Exhibit incorporated by reference as filed as
Exhibit (g)(2) in post-effective amendment No. 84 via EDGAR on October
17, 2000, accession number 0001004402-00-000346).
(2) Form of Custodian Agreement between Registrant and Forum Trust, LLC
dated May 12, 1999 relating to Austin Global Equity Fund, BrownIA
Small-Cap Growth Fund, BrownIA Growth Equity Fund, BrownIA Maryland
Bond Fund, Equity Index Fund, Investors Bond Fund, Investors Growth
Fund, Maine TaxSaver Bond Fund, Mastrapasqua Growth Value Fund, New
Hampshire TaxSaver Bond Fund, Payson Balanced Fund, Payson Value Fund,
Polaris Global Value Fund, Shaker Fund, TaxSaver Bond Fund, The
Advocacy Fund, and Investor Shares, Institutional Shares and
Institutional Service Shares of Daily Assets Treasury Obligations
Fund, Daily Assets Government Fund, Daily Assets Government
Obligations Fund, Daily Assets Cash Fund and Daily Assets Municipal
Fund (filed herewith).
(3) Master Custodian Agreement between Forum Trust, LLC and Bankers Trust
Company relating to Austin Global Equity Fund, BrownIA Small-Cap
Growth Fund, BrownIA Growth Equity Fund, BrownIA Maryland Bond Fund,
Equity Index Fund, Investors Bond Fund, Investors Growth Fund, Maine
TaxSaver Bond Fund, Mastrapasqua Growth Value Fund, New Hampshire
TaxSaver Bond Fund, Payson Balanced Fund, Payson Value Fund, Polaris
Global Value Fund, TaxSaver Bond Fund, The Advocacy Fund, and Investor
Shares, Institutional Shares and Institutional Service Shares of Daily
Assets Treasury Obligations Fund, Daily Assets Government Fund, Daily
Assets Government Obligations Fund, Daily Assets Cash Fund and Daily
Assets Municipal Fund (Exhibit incorporated by reference as filed as
Exhibit (g)(4) in post-effective amendment No. 84 via EDGAR on October
17, 2000, accession number 0001004402-00-000346).
(4) Form of Master Custodian Agreement between Forum Trust, LLC and
Bankers Trust Company relating to Austin Global Equity Fund, BrownIA
Small-Cap Growth Fund, BrownIA Growth Equity Fund, BrownIA Maryland
Bond Fund, Equity Index Fund, Investors Bond Fund, Investors Growth
Fund, Maine TaxSaver Bond Fund, Mastrapasqua Growth Value Fund, New
Hampshire TaxSaver Bond Fund, Payson Balanced Fund, Payson Value Fund,
Polaris Global Value Fund, Shaker Fund, TaxSaver Bond Fund, The
Advocacy Fund, and Investor Shares, Institutional Shares and
Institutional Service Shares of Daily Assets Treasury Obligations
Fund, Daily Assets Government Fund, Daily Assets Government
Obligations Fund, Daily Assets Cash Fund and Daily Assets Municipal
Fund (filed herewith).
(h) (1) Administration Agreement between Registrant and Forum Administrative
Services, LLC relating to Austin Global Equity Fund, BrownIA Small-
Cap Growth Fund, BrownIA Growth Equity Fund, BrownIA Maryland Bond
Fund, Equity Index Fund, Investors Bond Fund, Investors Growth Fund,
Maine TaxSaver Bond Fund, Mastrapasqua Growth Value Fund, New
Hampshire TaxSaver Bond Fund, Payson Balanced Fund, Payson Value Fund,
Polaris Global Value Fund, TaxSaver
2
<PAGE>
Bond Fund, The Advocacy Fund, and Investor Shares, Institutional
Shares and Institutional Service Shares of Daily Assets Treasury
Obligations Fund, Daily Assets Government Fund, Daily Assets
Government Obligations Fund, Daily Assets Cash Fund and Daily Assets
Municipal Fund (Exhibit incorporated by reference as filed as Exhibit
(h)(2) in post-effective amendment No. 84 via EDGAR on October 17,
2000, accession number 0001004402-00-000346).
(2) Form of Administration Agreement between Registrant and Forum
Administrative Services, LLC relating to Austin Global Equity Fund,
BrownIA Small- Cap Growth Fund, BrownIA Growth Equity Fund, BrownIA
Maryland Bond Fund, Equity Index Fund, Investors Bond Fund, Investors
Growth Fund, Maine TaxSaver Bond Fund, Mastrapasqua Growth Value Fund,
New Hampshire TaxSaver Bond Fund, Payson Balanced Fund, Payson Value
Fund, Polaris Global Value Fund, Shaker Fund, TaxSaver Bond Fund, The
Advocacy Fund, and Investor Shares, Institutional Shares and
Institutional Service Shares of Daily Assets Treasury Obligations
Fund, Daily Assets Government Fund, Daily Assets Government
Obligations Fund, Daily Assets Cash Fund and Daily Assets Municipal
Fund (filed herewith).
(3) Fund Accounting Agreement between Registrant and Forum Accounting
Services, LLC relating to Austin Global Equity Fund, BrownIA Small-Cap
Growth Fund, BrownIA Growth Equity Fund, BrownIA Maryland Bond Fund,
Equity Index Fund, Investors Bond Fund, Investors Growth Fund, Maine
TaxSaver Bond Fund, Mastrapasqua Growth Value Fund, New Hampshire
TaxSaver Bond Fund, Payson Balanced Fund, Payson Value Fund, Polaris
Global Value Fund, TaxSaver Bond Fund, The Advocacy Fund, and Investor
Shares, Institutional Shares and Institutional Service Shares of Daily
Assets Treasury Obligations Fund, Daily Assets Government Fund, Daily
Assets Government Obligations Fund, Daily Assets Cash Fund and Daily
Assets Municipal Fund (Exhibit incorporated by reference as filed as
Exhibit (h)(4) in post-effective amendment No. 84 via EDGAR on October
17, 2000, accession number 0001004402-00-000346).
(4) Form of Fund Accounting Agreement between Registrant and Forum
Accounting Services, LLC relating to Austin Global Equity Fund,
BrownIA Small-Cap Growth Fund, BrownIA Growth Equity Fund, BrownIA
Maryland Bond Fund, Equity Index Fund, Investors Bond Fund, Investors
Growth Fund, Maine TaxSaver Bond Fund, Mastrapasqua Growth Value Fund,
New Hampshire TaxSaver Bond Fund, Payson Balanced Fund, Payson Value
Fund, Polaris Global Value Fund, Shaker Fund, TaxSaver Bond Fund, The
Advocacy Fund, and Investor Shares, Institutional Shares and
Institutional Service Shares of Daily Assets Treasury Obligations
Fund, Daily Assets Government Fund, Daily Assets Government
Obligations Fund, Daily Assets Cash Fund and Daily Assets Municipal
Fund (filed herewith).
(5) Transfer Agency and Services Agreement between Registrant and Forum
Shareholder Services, LLC relating to Austin Global Equity Fund,
BrownIA Small-Cap Growth Fund, BrownIA Growth Equity Fund, BrownIA
Maryland Bond Fund, Equity Index Fund, Investors Bond Fund, Investors
Growth Fund, Maine TaxSaver Bond Fund, Mastrapasqua Growth Value Fund,
New Hampshire TaxSaver Bond Fund, Payson Balanced Fund, Payson Value
Fund, Polaris Global Value Fund, TaxSaver Bond Fund, The Advocacy
Fund, and Investor Shares, Institutional Shares and Institutional
Service Shares of Daily Assets Treasury Obligations Fund, Daily Assets
Government Fund, Daily Assets Government Obligations Fund, Daily
Assets Cash Fund and Daily Assets Municipal Fund (Exhibit incorporated
by reference as filed as Exhibit (h)(6) in post-effective amendment
No. 84 via EDGAR on October 17, 2000, accession number
0001004402-00-000346).
(6) Form of Transfer Agency and Services Agreement between Registrant and
Forum Shareholder Services, LLC relating to Austin Global Equity Fund,
BrownIA Small-Cap Growth Fund, BrownIA Growth Equity Fund, BrownIA
Maryland Bond Fund, Equity Index Fund, Investors Bond Fund, Investors
Growth Fund, Maine TaxSaver Bond Fund, Mastrapasqua Growth Value Fund,
New Hampshire TaxSaver Bond Fund, Payson Balanced Fund, Payson Value
Fund, Polaris Global Value Fund, Shaker Fund, TaxSaver Bond Fund, The
Advocacy Fund, and Investor Shares, Institutional Shares and
Institutional Service Shares of Daily Assets Treasury Obligations
Fund, Daily Assets Government Fund, Daily Assets Government
Obligations Fund, Daily Assets Cash Fund and Daily Assets Municipal
Fund (filed herewith).
(7) Shareholder Service Plan of Registrant dated December 5, 1997 and Form
of Shareholder Service Agreement relating to the Daily Assets Treasury
Obligations Fund, Daily Assets Government Fund, Daily Assets
Government Obligations Fund, Daily Assets Cash Fund and Daily Assets
Municipal Fund (Exhibit incorporated by reference as filed as Exhibit
(9)(c) in post-effective amendment No. 50 via EDGAR on November 12,
1997, accession number 0001004402-97-000189).
(8) Shareholder Service Plan of Registrant dated March 18, 1998 and Form
of Shareholder Service Agreement relating to Polaris Global Value Fund
(Exhibit incorporated by reference as filed as Exhibit (9)(d) in
post-effective amendment No. 65 via EDGAR on September 30, 1998,
accession number 0001004402-98-000530).
(9) Shareholder Service Plan of Registrant dated March 1, 2000 relating to
BrownIA Small Cap Growth Fund, BrownIA Growth Equity Fund and BrownIA
Maryland Bond Fund (Exhibit incorporated by reference as filed as
Exhibit (h)(6) in post-effective amendment No. 86 via EDGAR on
December 27, 2000, accession number 0001004402-00-000412).
(10) Shareholder Service Plan of Registrant dated July 1, 2000 related to
Mastrapasqua Growth Value Fund (Exhibit incorporated by reference as
filed as Exhibit (h)(7) in post-effective amendment No. 82 via EDGAR
on August 14, 2000, accession number 0001004402-00-000283).
(11) Form of Shareholder Service Plan of Registrant dated _____, 2001
relating to Shaker Fund (filed herewith).
(i) (1) Opinion of Seward & Kissel LLP dated January 5, 1996 (Exhibit
incorporated by reference as filed as Exhibit (10)(a) in
post-effective amendment No. 33 via EDGAR on January 5, 1996,
accession number 0000912057-96-000216).
3
<PAGE>
(2) Consent of Seward & Kissel LLP dated June 14, 2000 (Exhibit
incorporated by reference as filed as Exhibit (i)(2) in post-effective
amendment No. 80 via EDGAR on June 30, 2000, accession number
0001004402-00-000233).
(j) None.
(k) None.
(l) Investment Representation letter of Reich & Tang, Inc. as original
purchaser of shares of Registrant (Exhibit incorporated by reference as
filed as Exhibit (13) in post-effective amendment No. 62 via EDGAR on May
26, 1998, accession number 0001004402-98-000307).
(m) (1) Rule 12b-1 Plan effective January 1, 1999 adopted by the Investor
Shares of Daily Assets Treasury Obligations Fund, Daily Assets
Government Fund, Daily Assets Government Obligations Fund, Daily Asset
Cash Fund and Daily Assets Municipal Fund (Exhibit incorporated by
reference as filed as Exhibit (15)(b) in post-effective amendment No.
69 via EDGAR on December 15, 1998, accession number
0001004402-98-000648).
(2) Rule 12b-1 Plan effective August 15, 2000 adopted by The Advocacy Fund
(Exhibit incorporated by reference as filed as Exhibit (m)(2) in
post-effective amendment No. 82 via EDGAR on August 14, 2000,
accession number 0001004402-00-000283).
(3) Form of Rule 12b-1 Plan effective ____, 2001 adopted by Shaker Fund
(filed herewith).
(n) 18f-3 plan adopted by Registrant (Exhibit incorporated by reference as
filed as Exhibit (18) in post-effective amendment No. 62 via EDGAR on May
26, 1998, accession number 0001004402-98-000307).
(p) (1) Code of Ethics adopted by Registrant (Exhibit incorporated by
reference as filed as Exhibit (p)(1) in post-effective amendment No.
83 via EDGAR on September 29, 2000, accession number
0001004402-00-000327).
(2) Code of Ethics adopted by Brown Investment Advisory & Trust Company
and Brown Advisory Incorporated (Exhibit incorporated by reference as
filed as Exhibit (p)(2) in post-effective amendment No. 83 via EDGAR
on September 29, 2000, accession number 0001004402-00-000327).
(3) Code of Ethics adopted by H.M. Payson & Co (Exhibit incorporated by
reference as filed as Exhibit (p)(3) in post-effective amendment No.
83 via EDGAR on September 29, 2000, accession number
0001004402-00-000327).
(4) Code of Ethics adopted by Austin Investment Management, Inc. (Exhibit
incorporated by reference as filed as Exhibit (p)(4) in post-effective
amendment No. 82 via EDGAR on August 14, 2000, accession number
0001004402-00-000283).
(5) Code of Ethics adopted by Forum Fund Services, LLC and Forum
Investment Advisors, LLC (Exhibit incorporated by reference as filed
as Exhibit (p)(5) in post-effective amendment No. 78 via EDGAR on
April 17, 2000, accession number 0001004402-00-000112).
(6) Code of Ethics adopted by Polaris Capital Management, Inc. (Exhibit
incorporated by reference as filed as Exhibit (p)(6) in post-effective
amendment No. 82 via EDGAR on August 14, 2000, accession number
0001004402-00-000283).
(7) Code of Ethics adopted by Wells Capital Management Incorporated
(Exhibit incorporated by reference as filed as Exhibit (p)(8) in
post-effective amendment No. 78 via EDGAR on April 17, 2000, accession
number 0001004402-00-000112).
(8) Code of Ethics adopted by Wells Fargo Bank N.A. (Exhibit incorporated
by reference as filed as Exhibit (p)(9) in post-effective amendment
No. 78 via EDGAR on April 17, 2000, accession number
0001004402-00-000112).
4
<PAGE>
(9) Joint Code of Ethics adopted by Wells Fargo Funds Trust, Wells Fargo
Variable Trust and Wells Fargo Core Trust (Exhibit incorporated by
reference as filed as Exhibit (p)(10) in post-effective amendment No.
78 via EDGAR on April 17, 2000, accession number
0001004402-00-000112).
(10) Code of Ethics adopted by Mastrapasqua & Associates (Exhibit
incorporated by reference as filed as Exhibit (p)(11) in
post-effective amendment No. 79 via EDGAR on May 31, 2000, accession
number 0001004402-00-000185).
(11) Code of Ethics adopted by Trillium Asset Management Corporation
(Exhibit incorporated by reference as filed as Exhibit (p)(12) in
post-effective amendment No. 82 via EDGAR on August 14, 2000,
accession number 0001004402-00-000283).
(12) Form of Code of Ethics adopted by Shaker Management Inc. (filed
herewith).
Other Exhibits:
(A) Power of Attorney for James C. Cheng, Costas Azariadis and J. Michael
Parish, Trustees of Registrant (Exhibit incorporated by reference as filed
as Other Exhibit in post-effective amendment No. 34 via EDGAR on May 9,
1996, accession number 0000912057-96-008780).
(B) Power of Attorney for John Y. Keffer, Trustee of Registrant (Exhibit
incorporated by reference as filed as Other Exhibit in post-effective
amendment No. 65 via EDGAR on September 30, 1998, accession number
0001004402-98-000530).
(C) Power of Attorney for John Y. Keffer, James C. Cheng, Costas Azariadis and
J. Michael Parish, Trustees of Core Trust (Delaware) (Exhibit incorporated
by reference as filed as Other Exhibit in post-effective amendment No. 15
to the registration statement of Monarch Funds via EDGAR on December 19,
1997, accession number 0001004402-97-000264).
(D) Powers of Attorney for the Trustees of Wells Fargo Core Trust (Exhibit
incorporated by reference as filed as exhibits (j)(1), (j)(2), (j)(3),
(j)(4), (j)(5), (j)(6), (j)(7), (j)(8), (j)(9), (j)(10), (j)(11) and
(j)(12) as filed in post-effective amendment No. 10 to the registration
statement of Wells Fargo Funds Trust via EDGAR on May 10, 2000, accession
number 0000925421-00-000034).
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH FUNDS
Daily Assets Treasury Obligations Fund, Daily Assets Government Fund
and Daily Assets Municipal Fund may be deemed to control Treasury Cash
Portfolio, Government Portfolio and Municipal Cash Portfolio,
respectively, each a series of Core Trust (Delaware).
ITEM 25. INDEMNIFICATION
In accordance with Section 3803 of the Delaware Business Trust Act,
Section 10.02 of Registrant's Trust Instrument provides as follows:
"10.02. INDEMNIFICATION.
(a) Subject to the exceptions and limitations contained in Section (b)
below:
"(i) Every Person who is, or has been, a Trustee or officer of
the Trust (hereinafter referred to as a "Covered Person") shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him
in connection with any claim, action, suit or proceeding in which he
becomes involved as a party or otherwise by virtue of being or having
been a Trustee or officer and against amounts paid or incurred by him
in the settlement thereof;
(ii) The words "claim," "action," "suit," or "proceeding"
shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened while in
office or thereafter, and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs, judgments, amounts
paid in settlement, fines, penalties and other liabilities.
5
<PAGE>
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) Who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the Trust or its
Holders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of the
Covered Person's office or (B) not to have acted in good faith in the
reasonable belief that Covered Person's action was in the best interest
of the Trust; or
(ii) In the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the Trustee's or officer's office,
(A) By the court or other body approving the
settlement;
(B) By at least a majority of those Trustees who are
neither Interested Persons of the Trust nor are parties to the matter
based upon a review of readily available facts (as opposed to a full
trial-type inquiry); or
(C) By written opinion of independent legal counsel
based upon a review of readily available facts (as opposed to a full
trial-type inquiry);
provided, however, that any Holder may, by appropriate legal
proceedings, challenge any such determination by the Trustees or by
independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered
Person may now or hereafter be entitled, shall continue as to a person
who has ceased to be a Covered Person and shall inure to the benefit of
the heirs, executors and administrators of such a person. Nothing
contained herein shall affect any rights to indemnification to which
Trust personnel, other than Covered Persons, and other persons may be
entitled by contract or otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character
described in paragraph (a) of this Section 5.2 may be paid by the Trust
or Series from time to time prior to final disposition thereof upon
receipt of an undertaking by or on behalf of such Covered Person that
such amount will be paid over by him to the Trust or Series if it is
ultimately determined that he is not entitled to indemnification under
this Section 5.2; provided, however, that either (a) such Covered
Person shall have provided appropriate security for such undertaking,
(b) the Trust is insured against losses arising out of any such advance
payments or (c) either a majority of the Trustees who are neither
Interested Persons of the Trust nor parties to the matter, or
independent legal counsel in a written opinion, shall have determined,
based upon a review of readily available facts (as opposed to a
trial-type inquiry or full investigation), that there is reason to
believe that such Covered Person will be found entitled to
indemnification under this Section 5.2.
(e) Conditional advancing of indemnification monies under this Section
5.2 for actions based upon the 1940 Act may be made only on the
following conditions: (i) the advances must be limited to amounts used,
or to be used, for the preparation or presentation of a defense to the
action, including costs connected with the preparation of a settlement;
(ii) advances may be made only upon receipt of a written promise by, or
on behalf of, the recipient to repay that amount of the advance which
exceeds that amount which it is ultimately determined that he is
entitled to receive from the Trust by reason of indemnification; and
(iii) (a) such promise must be secured by a surety bond, other suitable
insurance or an equivalent form of security which assures that any
repayments may be obtained by the Trust without delay or litigation,
which bond, insurance or other form of security must be provided by the
recipient of the advance, or (b) a majority of a quorum of the
6
<PAGE>
Trust's disinterested, non-party Trustees, or an independent legal
counsel in a written opinion, shall determine, based upon a review of
readily available facts, that the recipient of the advance ultimately
will be found entitled to indemnification.
(f) In case any Holder or former Holder of any Series shall be held to
be personally liable solely by reason of the Holder or former Holder
being or having been a Holder of that Series and not because of the
Holder or former Holder acts or omissions or for some other reason, the
Holder or former Holder (or the Holder or former Holder's heirs,
executors, administrators or other legal representatives, or, in the
case of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the assets belonging to the
applicable Series to be held harmless from and indemnified against all
loss and expense arising from such liability. The Trust, on behalf of
the affected Series, shall, upon request by the Holder, assume the
defense of any claim made against the Holder for any act or obligation
of the Series and satisfy any judgment thereon from the assets of the
Series."
With respect to indemnification of an adviser to the Trust, the
Investment Advisory Agreements between the Trust and Austin Investment
Management, Inc., H.M. Payson & Co., and Forum Investment Advisers,
LLC include language similar to the following:
"SECTION 4. STANDARD OF CARE. We shall expect of you, and you will give
us the benefit of, your best judgment and efforts in rendering these
services to us, and we agree as an inducement to your undertaking these
services that you shall not be liable hereunder for any mistake of
judgment or in any event whatsoever, except for lack of good faith,
provided that nothing herein shall be deemed to protect, or purport to
protect, you against any liability to us or to our security holders to
which you would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of your duties
hereunder, or by reason of your reckless disregard of your obligations
and duties hereunder."
With respect to indemnification of an adviser to the Trust, the
Investment Advisory Agreements between the Trust and Polaris Capital
Management, Inc., Mastrapasqua & Associates, Brown Investment Advisors
& Trust Company, Brown Advisory Incorporated, Shaker Management, Inc.
and Trillium Asset Management Corporation provide similarly as
follows:
"SECTION 5. STANDARD OF CARE. (a) The Trust shall expect of the
Adviser, and the Adviser will give the Trust the benefit of, the
Adviser's best judgment and efforts in rendering its services to the
Trust. The Adviser shall not be liable hereunder for error of judgment
or mistake of law or in any event whatsoever, except for lack of good
faith, provided that nothing herein shall be deemed to protect, or
purport to protect, the Adviser against any liability to the Trust or
to the Trust's security holders to which the Adviser would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence
in the performance of the Adviser's duties hereunder, or by reason of
the Adviser's reckless disregard of its obligations and duties
hereunder. (b) The Adviser 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 Adviser's employees), fire, mechanical
breakdowns, flood or catastrophe, acts of God, insurrection, war, riots
or failure of the mails, transportation, communication or power supply.
With respect to indemnification of the underwriter of the Trust,
Section 8 of the Distribution Agreement provides:
"(a) The Trust will indemnify, defend and hold the Distributor, its
employees, agents, directors and officers and any person who controls
the Distributor within the meaning of section 15 of the Securities Act
or section 20 of the 1934 Act ("Distributor Indemnitees") free and
harmless from and against any and all claims, demands, actions, suits,
judgments, liabilities, losses, damages, costs, charges, reasonable
counsel fees and other expenses of every nature and
7
<PAGE>
character (including the cost of investigating or defending such
claims, demands, actions, suits or liabilities and any reasonable
counsel fees incurred in connection therewith) which any Distributor
Indemnitee may incur, under the Securities Act, or under common law or
otherwise, arising out of or based upon any alleged untrue statement
of a material fact contained in the Registration Statement or the
Prospectuses or arising out of or based upon any alleged omission to
state a material fact required to be stated in any one thereof or
necessary to make the statements in any one thereof not misleading,
unless such statement or omission was made in reliance upon, and in
conformity with, information furnished in writing to the Trust in
connection with the preparation of the Registration Statement or
exhibits to the Registration Statement by or on behalf of the
Distributor ("Distributor Claims").
After receipt of the Distributor's notice of termination under Section
13(e), the Trust shall indemnify and hold each Distributor Indemnitee
free and harmless from and against any Distributor Claim; provided,
that the term Distributor Claim for purposes of this sentence shall
mean any Distributor Claim related to the matters for which the
Distributor has requested amendment to the Registration Statement and
for which the Trust has not filed a Required Amendment, regardless of
with respect to such matters whether any statement in or omission from
the Registration Statement was made in reliance upon, or in conformity
with, information furnished to the Trust by or on behalf of the
Distributor.
(b) The Trust may assume the defense of any suit brought to enforce any
Distributor Claim and may retain counsel of good standing chosen by the
Trust and approved by the Distributor, which approval shall not be
withheld unreasonably. The Trust shall advise the Distributor that it
will assume the defense of the suit and retain counsel within ten (10)
days of receipt of the notice of the claim. If the Trust assumes the
defense of any such suit and retains counsel, the defendants shall bear
the fees and expenses of any additional counsel that they retain. If
the Trust does not assume the defense of any such suit, or if
Distributor does not approve of counsel chosen by the Trust or has been
advised that it may have available defenses or claims that are not
available to or conflict with those available to the Trust, the Trust
will reimburse any Distributor Indemnitee named as defendant in such
suit for the reasonable fees and expenses of any counsel that person
retains. A Distributor Indemnitee shall not settle or confess any claim
without the prior written consent of the Trust, which consent shall not
be unreasonably withheld or delayed.
(c) The Distributor will indemnify, defend and hold the Trust and its
several officers and trustees (collectively, the "Trust Indemnitees"),
free and harmless from and against any and all claims, demands,
actions, suits, judgments, liabilities, losses, damages, costs,
charges, reasonable counsel fees and other expenses of every nature and
character (including the cost of investigating or defending such
claims, demands, actions, suits or liabilities and any reasonable
counsel fees incurred in connection therewith), but only to the extent
that such claims, demands, actions, suits, judgments, liabilities,
losses, damages, costs, charges, reasonable counsel fees and other
expenses result from, arise out of or are based upon:
(i) any alleged untrue statement of a material fact contained in the
Registration Statement or Prospectus or any alleged omission of a
material fact required to be stated or necessary to make the statements
therein not misleading, if such statement or omission was made in
reliance upon, and in conformity with, information furnished to the
Trust in writing in connection with the preparation of the Registration
Statement or Prospectus by or on behalf of the Distributor; or
(ii) any act of, or omission by, the Distributor or its sales
representatives that does not conform to the standard of care set forth
in Section 7 of this Agreement ("Trust Claims").
(d) The Distributor may assume the defense of any suit brought to
enforce any Trust Claim and may retain counsel of good standing chosen
by the Distributor and approved by the Trust, which approval shall not
be withheld unreasonably. The Distributor shall advise the Trust that
it will assume the defense of the suit and retain counsel within ten
(10) days of receipt of the notice of the claim. If the Distributor
assumes the defense of any such suit and retains counsel, the
8
<PAGE>
defendants shall bear the fees and expenses of any additional
counsel that they retain. If the Distributor does not assume the
defense of any such suit, or if the Trust does not approve of counsel
chosen by the Distributor or has been advised that it may have
available defenses or claims that are not available to or conflict
with those available to the Distributor, the Distributor will
reimburse any Trust Indemnitee named as defendant in such suit for the
reasonable fees and expenses of any counsel that person retains. A
Trust Indemnitee shall not settle or confess any claim without the
prior written consent of the Distributor, which consent shall not be
unreasonably withheld or delayed.
(e) The Trust's and the Distributor's obligations to provide
indemnification under this Section is conditioned upon the Trust or the
Distributor receiving notice of any action brought against a
Distributor Indemnitee or Trust Indemnitee, respectively, by the person
against whom such action is brought within twenty (20) days after the
summons or other first legal process is served. Such notice shall refer
to the person or persons against whom the action is brought. The
failure to provide such notice shall not relieve the party entitled to
such notice of any liability that it may have to any Distributor
Indemnitee or Trust Indemnitee except to the extent that the ability of
the party entitled to such notice to defend such action has been
materially adversely affected by the failure to provide notice.
(f) The provisions of this Section and the parties' representations and
warranties in this Agreement shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any
Distributor Indemnitee or Trust Indemnitee and shall survive the sale
and redemption of any Shares made pursuant to subscriptions obtained by
the Distributor. The indemnification provisions of this Section will
inure exclusively to the benefit of each person that may be a
Distributor Indemnitee or Trust Indemnitee at any time and their
respective successors and assigns (it being intended that such persons
be deemed to be third party beneficiaries under this Agreement).
(g) Each party agrees promptly to notify the other party of the
commencement of any litigation or proceeding of which it becomes aware
arising out of or in any way connected with the issuance or sale of
Shares.
(h) Nothing contained herein shall require the Trust to take any action
contrary to any provision of its Organic Documents or any applicable
statute or regulation or shall require the Distributor to take any
action contrary to any provision of its Articles of Incorporation or
Bylaws or any applicable statute or regulation; provided, however, that
neither the Trust nor the Distributor may amend their Organic Documents
or Articles of Incorporation and Bylaws, respectively, in any manner
that would result in a violation of a representation or warranty made
in this Agreement.
(i) Nothing contained in this section shall be construed to protect the
Distributor against any liability to the Trust or its security holders
to which the Distributor would otherwise be subject by reason of its
failure to satisfy the standard of care set forth in Section 7 of this
Agreement."
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
(a) Forum Investment Advisors, LLC
The description of Forum Investment Advisors, LLC (investment adviser
to Investors High Grade Bond Fund, Investors Bond Fund, Investors
Growth Fund, Maine TaxSaver Bond Fund, New Hampshire TaxSaver Bond
Fund, TaxSaver Bond Fund and the Institutional, Institutional Service
and Investor Shares of Daily Assets Treasury Obligations Fund, Daily
Assets Government Fund, Daily Assets Government Obligations Fund, Daily
Assets Cash Fund and Daily Assets Municipal Fund) contained in Parts A
and B of post-effective amendment No. 86 (accession number
0001004402-00-000412) to the Trust's Registration Statement, is
incorporated by reference herein.
9
<PAGE>
The following are the members of Forum Investment Advisors, LLC, Two
Portland Square, Portland, Maine 04101, including their business
connections, which are of a substantial nature.
Forum Trust, LLC, Member.
Forum Trust, LLC is controlled indirectly by John Y. Keffer, Chairman
and President of the Registrant. Mr. Keffer is Director and President
of Forum Trust, LLC and Director of Forum Financial Group, LLC. Mr.
Keffer is also a director and/or officer of various registered
investment companies for which the various operating subsidiaries of
Forum Financial Group, LLC provide services.
The following are the officers of Forum Investment Advisors, LLC,
including their business connections that are of a substantial nature.
Each officer may serve as an officer of various registered investment
companies for which the Forum Financial Group provides services.
<TABLE>
<S> <C> <C>
Name Title Business Connection
.................................... ................................... ..................................
David I. Goldstein Director and Secretary Forum Investment Advisors, LLC
................................... ..................................
Secretary Forum Financial Group, LLC
................................... ..................................
Officer Other Forum affiliated companies
.................................... ................................... ..................................
Marc D. Keffer Assistant Secretary Forum Investment Advisors, LLC
................................... ..................................
Corporate Counsel Forum Financial Group, LLC
................................... ..................................
Officer Other Forum affiliated companies
.................................... ................................... ..................................
Ronald Hirsch Treasurer Forum Investment Advisors, LLC
................................... ..................................
Treasurer Forum Financial Group, LLC
................................... ..................................
Officer Other Forum affiliated companies
</TABLE>
(b) H.M. Payson & Co.
The description of H.M. Payson & Co. (investment adviser to Payson
Value Fund, Payson Balanced Fund) contained in Parts A and B of
post-effective amendment No. 81 to the Trust's Registration Statement
(accession number 0001004402-00-000261), is incorporated by reference
herein.
The following are the directors and principal executive officers of
H.M. Payson & Co., including their business connections, which are of
a substantial nature. The address of H.M. Payson & Co. is One Portland
Square, Portland, Maine 04101.
10
<PAGE>
<TABLE>
<S> <C> <C>
Name Title Business Connection
..................................... .................................. ...................................
Adrian L. Asherman Managing Director H.M. Payson & Co.
..................................... .................................. ...................................
John C. Downing Managing Director, Treasurer H.M. Payson & Co.
..................................... .................................. ...................................
Thomas M. Pierce Managing Director H.M. Payson & Co.
..................................... .................................. ...................................
Peter E. Robbins Managing Director H.M. Payson & Co.
..................................... .................................. ...................................
John H. Walker Managing Director, President H.M. Payson & Co.
..................................... .................................. ...................................
Teresa M. Esposito Managing Director H.M. Payson & Co.
..................................... .................................. ...................................
John C. Knox Managing Director H.M. Payson & Co.
..................................... .................................. ...................................
Harold J. Dixon Managing Director H.M. Payson & Co.
..................................... .................................. ...................................
Michael R. Currie Managing Director H.M. Payson & Co.
..................................... .................................. ...................................
William O. Hall, III Managing Director H.M. Payson & Co.
..................................... .................................. ...................................
William N. Weikert Managing Director H.M. Payson & Co.
</TABLE>
(c) Austin Investment Management, Inc.
The description of Austin Investment Management, Inc. (investment
adviser to Austin Global Equity Fund) contained in Parts A and B of
post-effective amendment No. 81 to the Trust's Registration Statement
(accession number 0001004402-00-000261), is incorporated by reference
herein.
The following is the director and principal executive officer of
Austin Investment Management, Inc., 375 Park Avenue, New York, New
York 10152, including his business connections, which are of a
substantial nature.
<TABLE>
<S> <C> <C>
Name Title Business Connection
..................................... .................................. ...................................
Peter Vlachos Director, President, Treasurer, Austin Investment Management Inc.
Secretary
</TABLE>
(d) Brown Investment Advisory & Trust Company
The description of Brown Investment Advisory & Trust Company
("Brown")(investment adviser to BrownIA Small-Cap Growth Fund and
BrownIA Growth Equity Fund) contained in Parts A and B of
post-effective amendment No. 83 to the Trust's Registration Statement
(accession number 0001004402-00-000327), is incorporated by reference
herein.
The following are the directors and principal executive officers of
Brown, including their business connections, which are of a substantial
nature. The address of Brown is Furness House, 19 South Street,
Baltimore, Maryland 21202 and, unless otherwise indicated below, that
address is the principal business address of any company with which the
directors and principal executive officers are connected.
<TABLE>
<S> <C> <C>
Name Title Business Connection
..................................... .................................. ...................................
Michael D. Hankin President, Chief Executive Brown
Officer, Trustee
.................................. ...................................
President The Maryland Zoological Society
.................................. ...................................
Trustee The Valleys Planning Council
..................................... .................................. ...................................
David L. Hopkins, Jr. Trustee Brown
.................................. ...................................
Director Westvaco Corporation
.................................. ...................................
Director Metropolitan Opera Association
.................................. ...................................
Trustee and Chairman, Finance Episcopal Church Foundation
Committee
.................................. ...................................
Trustee Maryland Historical Society
11
<PAGE>
Name Title Business Connection
..................................... .................................. ...................................
Frank Bonsal Trustee Brown
.................................. ...................................
Partner New Enterprise Associates
1119 St. Paul Street
Baltimore, MD 21202
.................................. ...................................
Board Member Aether Systems
Owings Mills, MD
.................................. ...................................
Board Member CORVIS Corporation
Columbia, MD
.................................. ...................................
Board Member ViewGate Networks, Inc. (formerly
Network People)
Arlington, VA
.................................. ...................................
Board Member MedSpecialists, Inc.
Charlottesville, VA
.................................. ...................................
Board Member Seneca Networks, Inc.
Rockville, MD
.................................. ...................................
Board Member Versient.com (formerly
Worldnetpress)
.................................. ...................................
Special Limited Partner Amadeus Capital Partners
.................................. ...................................
Special Limited Partner Boulder Venture
.................................. ...................................
Special Limited Partner Novak Biddle
.................................. ...................................
Special Limited Partner Trellis Ventures
.................................. ...................................
Special Limited Partner Windward Ventures
..................................... .................................. ...................................
Truman T. Semans Vice Chairman of the Board of Brown
Trustees
.................................. ...................................
Trustee, Member and Former Duke University
Chairman of Investment Committee
.................................. ...................................
Trustee, Chairman of Finance Lawrenceville School
Committee and Member of
Investment and Executive
Committees
.................................. ...................................
Board of Directors, Member of Chesapeake Bay Foundation
Investment and Executive
Committees
.................................. ...................................
Chairman Flag Investors Mutual Funds
.................................. ...................................
Investment Committee Member Mercy Medical Center
.................................. ...................................
Investment Committee Member St. Mary's Seminary
.................................. ...................................
Investment Committee Member Archdiocese of Baltimore
.................................. ...................................
Investment Committee Member Robert E. Lee Memorial Foundation
.................................. ...................................
Investment Committee Member W. Alton Jones Foundation
..................................... .................................. ...................................
William C. Baker Trustee Brown
.................................. ...................................
President and Chief Executive Chesapeake Bay Foundation
Officer
.................................. ...................................
Trustee John Hopkins Hospital
.................................. ...................................
Member Washington College Board of
Visitors and Governors
.................................. ...................................
Director Baltimore Community Foundation
12
<PAGE>
Name Title Business Connection
..................................... .................................. ...................................
Jack S. Griswold Trustee Brown
.................................. ...................................
Managing Director Armata Partners
.................................. ...................................
Director Alex. Brown Realty
.................................. ...................................
Trustee The Baltimore Community Foundation
.................................. ...................................
Trustee The Chesapeake Bay Foundation
Living Classrooms
.................................. ...................................
Chairman Maryland Historical Society
.................................. ...................................
Member Washington College Board of
Visitors and Governors
.................................. ...................................
Treasurer Washington College
.................................. ...................................
.................................. ...................................
Chair Campaign for Washington's College
..................................... .................................. ...................................
Earl L. Linehan Trustee Brown
.................................. ...................................
President Woodbrook Capital, Inc.
.................................. ...................................
Chairman Strescon Industries
.................................. ...................................
Chairman UMBC Board of Visitors
.................................. ...................................
Chairman Investment Committee Gilman School
.................................. ...................................
Board of Directors Member Stoneridge, Inc.
.................................. ...................................
Board of Directors Member Sagemaker, Inc.
.................................. ...................................
Board of Directors Member Medical Mutual Liability
Insurance Society of Maryland
.................................. ...................................
Board of Directors Member Heritage Properties, Inc.
.................................. ...................................
Board of Directors Member St. Mary's Seminary & University
.................................. ...................................
Board of Directors Member St. Ignatius Loyola Academy
.................................. ...................................
Board of Directors Member University of Notre Dame Advisory
Council
13
<PAGE>
Name Title Business Connection
..................................... .................................. ...................................
Walter D. Pinkard, Jr. Trustee Brown
.................................. ...................................
President and Chief Executive Colliers Pinkard
Officer
.................................. ...................................
Chairman The Americas Region of Colliers
International
.................................. ...................................
Vice President France Foundation
.................................. ...................................
Chairman The Baltimore Community Foundation
.................................. ...................................
Board of Directors Member France-Merrick Foundation
.................................. ...................................
Trustee The John Hopkins University
.................................. ...................................
Trustee The Greater Baltimore Committee
.................................. ...................................
Trustee Gilman School
.................................. ...................................
Trustee Calvert School
.................................. ...................................
Trustee The Baltimore Community Foundation
.................................. ...................................
Trustee The East Baltimore Community
Development Bank
.................................. ...................................
Trustee The Greater Baltimore Alliance
.................................. ...................................
Director Baltimore Reads, Inc.
.................................. ...................................
Trustee The Downtown Baltimore District
Authority
.................................. ...................................
Trustee The Yale University Development
Board
.................................. ...................................
Trustee The Maryland Business Roundtable
for Education
..................................... .................................. ...................................
John J.F. Sherrerd Trustee Brown
.................................. ...................................
Director Provident Mutual Life Insurance
Company
.................................. ...................................
Director C. Brewer and Company
.................................. ...................................
Trustee, Vice Chairman of Princeton University
Executive Committee
.................................. ...................................
Trustee, Chairman of Investment The Robertson Foundation
Committee
.................................. ...................................
Trustee GESU School
.................................. ...................................
Director and Executive Committee Princeton Investment Management
Member
.................................. ...................................
Board of Overseers University of Pennsylvania
Wharton School
..................................... .................................. ...................................
David M. Churchill, CPA Chief Financial Officer Brown
</TABLE>
(e) Brown Advisory Incorporated
The description of Brown Advisory Incorporated ("Brown
Advisory")(investment adviser to BrownIA Maryland Bond Fund) contained
in Parts A and B of this amendment to the Trust's Registration
Statement, is incorporated by reference herein.
The following are the directors and principal executive officers of
Brown Advisory, including their business connections, which are of a
substantial nature. The address of Brown Advisory is Furness House, 19
South Street, Baltimore, Maryland 21202 and, unless otherwise indicated
below, that address is the principal business address of any company
with which the directors and principal executive officers are
connected.
14
<PAGE>
<TABLE>
<S> <C> <C>
Name Title Business Connection
..................................... .................................. ...................................
Michael D. Hankin President Brown Advisory
.................................. ...................................
President, Chief Executive Brown
Officer, Trustee
.................................. ...................................
President The Maryland Zoological Society
.................................. ...................................
Trustee The Valleys Planning Council
..................................... .................................. ...................................
David L. Hopkins, Jr. Treasurer Brown Advisory
.................................. ...................................
Chairman Brown
.................................. ...................................
Director Westvaco Corporation
.................................. ...................................
Director Metropolitan Opera Association
.................................. ...................................
Trustee and Chairman, Finance Episcopal Church Foundation
Committee
.................................. ...................................
Trustee Maryland Historical Society
..................................... .................................. ...................................
Edward Dunn III Secretary Brown Advisory
</TABLE>
(f) Polaris Capital Management, Inc.
The description of Polaris Capital Management, Inc.
("Polaris")(investment adviser to Polaris Global Value Fund) contained
in Parts A and B of post-effective amendment No. 83 (accession number
0001004402-00-000327) to the Trust's Registration Statement, is
incorporated by reference herein.
The following are the directors and principal executive officers of
Polaris, including their business connections, which are of a
substantial nature. The address of Polaris is 125 Summer Street,
Boston, Massachusetts 02110 and, unless otherwise indicated below, that
address is the principal business address of any company with which the
directors and principal executive officers are connected.
<TABLE>
<S> <C> <C>
Name Title Business Connection
..................................... .................................. ...................................
Bernard R. Horn, Jr. President, Portfolio Manager Polaris
..................................... .................................. ...................................
Edward E. Wendell, Jr. Treasurer Polaris
.................................. ...................................
President Boston Investor Services, Inc.
</TABLE>
(g) Mastrapasqua & Associates
The description of Mastrapasqua & Associates ("Mastrapasqua")
(investment adviser to Mastrapasqua Growth Value Fund) contained in
Parts A and B of post-effective amendment No. 80 to the Trust's
Registration Statement (accession number 0001004402-00-000233), is
incorporated by reference herein.
The following are the directors and principal executive officers of
Mastrapasqua, including their business connections, which are of a
substantial nature. The address of Mastrapasqua is 814 Church Street,
Suite 600, Nashville, Tennessee, 37203 and, unless otherwise indicated
below, that address is the principal business address of any company
with which the directors and principal executive officers are
connected.
<TABLE>
<S> <C> <C>
Name Title Business Connection
..................................... .................................. ...................................
Frank Mastrapasqua Chairman, CEO and Portfolio Mastrapasqua
Manager
..................................... .................................. ...................................
Thomas A. Trantum President, Portfolio Manager and Mastrapasqua
Security Analyst
</TABLE>
(h) Trillium Asset Management Corporation
The description of Trillium Asset Management Corporation (the
"Adviser") (investment adviser to The Advocacy Fund) contained in Parts
A and B of post-effective amendment No. 82 to the
15
<PAGE>
Trust's Registration Statement (accession number
0001004402-00-000283), is incorporated by reference herein.
The following are the directors and principal executive officers of the
Adviser, including their business connections, which are of a
substantial nature. The address of the Adviser is 711 Atlantic Avenue,
Boston, Massachusetts 02111-2809 and, unless otherwise indicated below,
that address is the principal business address of any company with
which the directors and principal executive officers are connected.
<TABLE>
<S> <C> <C>
Name Title Business Connection
..................................... .................................. ...................................
Joan Bavaria President, Board of Directors Adviser
Member, Treasurer
.................................. ...................................
President, Treasurer and Director FRDC California Corporation
(dissolved)
.................................. ...................................
President, Treasurer and Franklin Insight, Inc. (Purchased
Director (formerly) by the Adviser)
.................................. ...................................
Founding Co-Chair Coalition for Environmentally
Responsible Economies
Boston, MA
.................................. ...................................
Director (formerly) Green Seal
Washington, DC
.................................. ...................................
Director Lighthawk
San Francisco, CA
.................................. ...................................
Advisory Board The Greening of Industry
Worcester, MA
.................................. ...................................
Director (formerly) Social Investment Forum
Boston, MA
.................................. ...................................
Chair (formerly) National Advisory Committee for
Policy and Technology's
Subcommittee, Community Based
Environmental Policy
Washington, DC
..................................... .................................. ...................................
Patrick J. McVeigh Executive Vice President Adviser
.................................. ...................................
Director SEED Haiti Community Development
Loan Fund
99 High Street,
Brookline, MA 02445
..................................... .................................. ...................................
Shelley Alpern Director, Assistant Vice Adviser
President
.................................. ...................................
Student (formerly) University of Texas
Austin, TX
..................................... .................................. ...................................
Samuel B. Jones, Jr., CFA Senior Vice President, Chief Adviser
Investment Officer
.................................. ...................................
Chairman 1991-1997 Standards and Policy
Member 1982-1999 Subcommittee, Association for
Investment Management and Research
Charlottesville, VA 22903
.................................. ...................................
Member (formerly) Council of Examiners, Institute
of Chartered Financial Analysts
Charlottesville, VA 22903
..................................... .................................. ...................................
F. Farnum Brown, Jr., Ph.D. Senior Vice President Adviser327 West Main Street
Durham, NC 27701-3215
.................................. ...................................
Director (until 6/98) Durham Community Land Trust
1401 Morehead Avenue
Durham, NC 27707
16
<PAGE>
..................................... .................................. ...................................
Name Title Business Connection
..................................... .................................. ...................................
Susan Baker Martin Vice President Adviser
.................................. ...................................
Trustee Congregational Church of South
Dartmouth
Middle Street
Dartmouth, MA
..................................... .................................. ...................................
Lisa Leff, CFA Vice President Adviser
.................................. ...................................
Director and Employee (until Smith Barney Asset Management
1999) 388 Greenwich Street
New York, NY 10013
.................................. ...................................
Director (until 1999) Social Investment Forum
Washington, DC
.................................. ...................................
Founder and Co-Chair (until 1999) Social Investment Security
Analysts Group, New York Society
of Security Analysts
New York, NY
.................................. ...................................
Director Verite
Amherst, MAs
.................................. ...................................
Director (until 1999) Maternity Center Association
23rd and Park Avenue
New York, NY
..................................... .................................. ...................................
Stephanie R. Leighton, CFA Vice President Adviser
.................................. ...................................
Treasurer Local Enterprise Assistance Fund,
Boston, MA
.................................. ...................................
Executive Committee Member New England Chapter of the Social
Investment Forum
Boston, MA
..................................... .................................. ...................................
Cheryl I. Smith, CFA Vice President Adviser
.................................. ...................................
Finance Committee (Director, Resist
formerly) 259 Elm Street, Suite 201
Somerville, MA 02144
.................................. ...................................
Treasurer Performing Artists at Lincoln
School
Kennard Road
Brookline, MA 02445
..................................... .................................. ...................................
Eric Becker, CFA Vice President Adviser
.................................. ...................................
.................................. ...................................
Director Interlock Media, Inc.
Cambridge, MA
..................................... .................................. ...................................
Linnie McLean Senior Vice President Adviser
.................................. ...................................
Loan Committee Boston Community Loan Fund
Boston, MA
..................................... .................................. ...................................
Patricia L. Davidson Vice President Adviser
.................................. ...................................
Member Program Committee, The Women's
Foundation
340 Pine Street
San Francisco, CA 94104
..................................... .................................. ...................................
Diane M. DeBono Senior Vice President Adviser
17
<PAGE>
..................................... .................................. ...................................
Name Title Business Connection
..................................... .................................. ...................................
James Crawford, JD Board of Directors Member Adviser
.................................. ...................................
Professor, Associate Dean University of California,
(retired) Berkley, CA
..................................... .................................. ...................................
Thomas Gladwin, Ph.D. Board of Directors Member Adviser
.................................. ...................................
Professor New York University
Stern School of Business
44 W. 4th Street
New York, NY
.................................. ...................................
Max McGraw Professorship of University of Michigan
Sustainable Enterprise and Ann Arbor, MI 48109
Associated Directorship
..................................... .................................. ...................................
Robert Glassman Board of Directors Member Adviser
.................................. ...................................
.................................. ...................................
Chairman and Co-Chairman Wainwright Bank & Trust Company
63 Franklin Street
Boston, MA 02110
.................................. ...................................
Chairman Investment Committee The Boston Foundation
Boston, MA
..................................... .................................. ...................................
Sally Greenberg, JD Board of Directors Member Adviser
.................................. ...................................
Senior Product Safety Counsel Consumers Union
1666 Connecticut Avenue N.W.
Washington, DC 20009
.................................. ...................................
President (past) Massachusetts Women's Bar
Association
Boston, MA
.................................. ...................................
Eastern States Civil Rights Anti-Defamation League
Counsel 1 Lincoln Plaza
Boston, MA
..................................... .................................. ...................................
Charles Grigsby Board of Directors Member Adviser
.................................. ...................................
Senior Vice President Mass Capital Resource Company
420 Boylston Street
Boston, MA 02116
.................................. ...................................
Director and Acting Deputy City of Boston Neighborhood
Development Department
26 Court Street
Boston, MA 02108
.................................. ...................................
Member (formerly) Federal Reserve Bank Small
Business Advisory Committee
.................................. ...................................
Member (formerly) Massachusetts State Board of
Education
..................................... .................................. ...................................
Milton Moskowitz Board of Directors Member Adviser
.................................. ...................................
Writer Mill Valley, CA 94941
..................................... .................................. ...................................
Carol O'Cleireacain, Ph.D. Board of Directors Member
.................................. ...................................
Economic Consultant New York, NY
.................................. ...................................
Senior Fellow Brookings Institution, Center on
Urban and Metropolitan Policy
1775 Massachusetts Avenue N.W.,
Washington, DC 20036
.................................. ...................................
Chair (formerly) Council of Institutional
Investors Executive Committee
18
<PAGE>
..................................... .................................. ...................................
Name Title Business Connection
..................................... .................................. ...................................
John Plukas Board of Directors Member Adviser
.................................. ...................................
President and Co-Chairman Wainwright Bank & Trust Company
63 Franklin Street
Boston, MA 02110
.................................. ...................................
Director New England Foundation for the
Arts
Boston, MA
..................................... .................................. ...................................
George Rooks Portfolio Manager, Board of Adviser
Directors Member
.................................. ...................................
President and Owner Heritage Capital Management
31 Milk Street
Boston, MA
.................................. ...................................
Investment Manager J.L. Kaplan Associates
29 Commonwealth Avenue
Boston, MA
.................................. ...................................
President (formerly) First Capital Corporation of
Boston
Boston, MA
.................................. ...................................
President (formerly) First Venture Capital Corporation
Boston, MA
.................................. ...................................
Portfolio Manager (formerly) BankBoston
Boston, MA
.................................. ...................................
Trustee Jewish Federation of the North
Shore
Boston, MA
..................................... .................................. ...................................
Elliot Sclar, Ph.D. Chairman, Board of Directors Adviser
.................................. ...................................
Professor Columbia University School of
Architecture
New York, NY
.................................. ...................................
Director, Vice President Franklin Insight, Inc.
(Formerly)
.................................. ...................................
Director Wainwright Bank & Trust Company
63 Franklin Street
Boston, MA 02110
..................................... .................................. ...................................
William Torbert, Ph.D. Board of Directors Member Adviser
.................................. ...................................
Professor Boston College
Chestnut Hill, MA
</TABLE>
(i) Wells Fargo Bank, N.A.
The description of Wells Fargo Bank, N.A. ("Wells Fargo Bank"), the
investment adviser for the Portfolio in which Equity Index Fund
invests, contained in Parts A and B of post-effective amendment No. 83
(accession number 0001004402-00-000327) to the Trust's Registration
Statement, is incorporated by reference herein.
The following are the directors and principal executive officers of
Wells Fargo Bank, including their business connections, which are of a
substantial nature. The address of Wells Fargo Bank is 420 Montgomery
Street, San Francisco, California 94105 and, unless otherwise indicated
below, that address is the principal business address of any company
with which the directors and principal executive officers are
connected.
19
<PAGE>
<TABLE>
<S> <C> <C>
Name Title Business Connection
..................................... .................................. ...................................
H. Jesse Arnelle Director Wells Fargo Bank
.................................. ...................................
455 Market Senior Partner Arnelle, Hastie, McGee, Willis &
Street San Francisco, CA 94105 Greene
.................................. ...................................
Director Armstrong World Industries, Inc.
.................................. ...................................
Director Eastman Chemical Corporation
.................................. ...................................
Director FPL Group, Inc.
..................................... .................................. ...................................
Michael R. Bowlin Director Wells Fargo Bank
.................................. ...................................
Highway 150 Chairman of the Board of Atlantic Richfield Co. (ARCO)
Santa Paula, CA 93060 Directors, Chief Executive
Officer, Chief Operating Officer
and President
..................................... .................................. ...................................
Edward Carson Director Wells Fargo Bank
.................................. ...................................
633 West Fifth Street Chairman of the Board and Chief First Interstate Bancorp
Los Angeles, CA 90071 Executive Officer
.................................. ...................................
Director Aztar Corporation
.................................. ...................................
Director Castle & Cook, Inc.
.................................. ...................................
Director Terra Industries, Inc.
..................................... .................................. ...................................
William S. Davilla Director Wells Fargo Bank
.................................. ...................................
618 Michillinda Ave. President (Emeritus) and The Vons Companies, Inc.
Arcadia, CA 91007 Director
.................................. ...................................
Director Pacific Gas & Electric Company
..................................... .................................. ...................................
Rayburn S. Dezember Director Wells Fargo Bank
.................................. ...................................
.................................. ...................................
3200 San Fernando Road Director CalMat Co.
Los Angeles, CA 90065
.................................. ...................................
Director Tejon Ranch Company
.................................. ...................................
Director The Bakersfield Californian
.................................. ...................................
Trustee Whittier College
..................................... .................................. ...................................
Paul Hazen Chairman of the Board of Wells Fargo Bank
Directors
.................................. ...................................
Chairman of the Board of Wells Fargo & Company
Directors
.................................. ...................................
Director Phelps Dodge Corporation
.................................. ...................................
Director Safeway, Inc.
..................................... .................................. ...................................
Robert K. Jaedicke Director Wells Fargo Bank
.................................. ...................................
Graduate School of Business Professor (Emeritus) Graduate School of Business
Stanford University Stanford University
Stanford, CA 94305
.................................. ...................................
Director Bailard Biehl & Kaiser Real
Estate Investment Trust, Inc.
.................................. ...................................
Director Boise Cascade Corporation
.................................. ...................................
Director California Water Service Company
.................................. ...................................
Director Enron Corporation
.................................. ...................................
Director GenCorp, Inc.
.................................. ...................................
Director Homestake Mining Company
..................................... .................................. ...................................
Thomas L. Lee Director Wells Fargo Bank
.................................. ...................................
10302 Avenue 7 1/2 Chairman and Chief Executive The Newhall Land and Farming
Firebaugh, CA 93622 Officer Company
.................................. ...................................
Director CalMat Co.
.................................. ...................................
Director First Interstate Bancorp
20
<PAGE>
Name Title Business Connection
..................................... .................................. ...................................
Ellen Newman Director Wells Fargo Bank
.................................. ...................................
323 Geary Street President Ellen Newman Associates
Suite 507
San Francisco, CA 94102
.................................. ...................................
Chair (Emeritus) of the Board of University of California at San
Trustees Francisco Foundation
.................................. ...................................
Director California Chamber of Commerce
..................................... .................................. ...................................
Philip J. Quigley Director Wells Fargo Bank
.................................. ...................................
130 Kearney Street Rm. 3700 San Chairman, President and Chief Pacific Telesis Group
Francisco, CA 94108 Executive Officer
..................................... .................................. ...................................
Carl E. Reichardt Director Wells Fargo Bank
.................................. ...................................
Director Columbia/HCA Healthcare
Corporation
.................................. ...................................
Director Ford Motor Company
.................................. ...................................
Director Newhall Management Corporation
.................................. ...................................
Director Pacific Gas and Electric Company
.................................. ...................................
Retired Chairman of the Board of Wells Fargo & Company
Directors and Chief Executive
Officer
..................................... .................................. ...................................
Donald B. Rice Director Wells Fargo Bank
.................................. ...................................
2049 Century Park East President and Chief Executive Teledyne, Inc.
Los Angeles, CA 90067 Officer
.................................. ...................................
Retired Secretary The United States Air Force
.................................. ...................................
Director Vulcan Materials Company
..................................... .................................. ...................................
Richard J. Stegemeier Director Wells Fargo Bank
.................................. ...................................
Chairman (Emeritus) Unocal Corporation
.................................. ...................................
Director Foundation Health Corporation
.................................. ...................................
Director Halliburton Company
.................................. ...................................
Director Northrop Grumman Corporation
.................................. ...................................
Director Outboard Marine Corporation
.................................. ...................................
Director Pacific Enterprises
.................................. ...................................
Director First Interstate Bancorp
..................................... .................................. ...................................
Susan G. Swenson Director Wells Fargo Bank
.................................. ...................................
651 Gateway Blvd. President and Chief Executive Cellular One
San Francisco, CA 94080 Officer
..................................... .................................. ...................................
David M. Tellep Director Wells Fargo Bank
.................................. ...................................
Retired Chairman of the Board Martin Lockheed Corporation
and Chief Executive Officer
.................................. ...................................
Director Edison International and Southern
California Edison Company
.................................. ...................................
Director First Interstate Bancorp
..................................... .................................. ...................................
Chang-Lin Tien Director Wells Fargo Bank
.................................. ...................................
Chancellor University of California at
Berkeley
.................................. ...................................
Director Raychem Corporation
21
<PAGE>
..................................... .................................. ...................................
Name Title Business Connection
..................................... .................................. ...................................
John A. Young Director Wells Fargo Bank
.................................. ...................................
3000 Hanover Street President, Chief Executive Hewlett-Packard Company
Palo Alto, CA 9434 Officer and Director
.................................. ...................................
Director Chevron Corporation
.................................. ...................................
Director Lucent Technologies
.................................. ...................................
Director Novell, Inc.
.................................. ...................................
Director Shaman Pharmaceuticals Inc.
..................................... .................................. ...................................
William F. Zuendt Director Wells Fargo Bank
.................................. ...................................
President Wells Fargo & Company
.................................. ...................................
Director 3Com Corporation
.................................. ...................................
Director California Chamber of Commerce
</TABLE>
(j) Wells Capital Management Incorporated
The description of Wells Capital Management ("WCM"), the investment
sub-adviser for the Portfolio in which Equity Index Fund invests,
contained in Parts A and B of post-effective amendment No. 83
(accession number 0001004402-00-000327) of the Trust's Registration
Statement, is incorporated by reference herein.
The following are the directors and principal executive officers of
WCM, including their business connections, which are of a substantial
nature. The address of WCM is 525 Market Street, San Francisco,
California 94105 and, unless otherwise indicated below, that address is
the principal business address of any company with which the directors
and principal executive officers are connected.
<TABLE>
<S> <C> <C>
Name Title Business Connection
..................................... .................................. ...................................
Allen J. Ayvazian Chief Equity Officer WCM
..................................... .................................. ...................................
Robert Willis President and Chief Investment WCM
Officer
..................................... .................................. ...................................
Brigid Breen Chief Compliance Officer WCM
..................................... .................................. ...................................
Jose Casas Chief Operating Officer WCM
..................................... .................................. ...................................
Larry Fernandes Principal WCM
..................................... .................................. ...................................
Jacqueline Anne Flippin Principal WCM
..................................... .................................. ...................................
Stephen Galiani Senior Principal Director WCM
..................................... .................................. ...................................
Madeleine Gish Senior Principal WCM
..................................... .................................. ...................................
Kelli Ann Lee Managing Director WCM
..................................... .................................. ...................................
Melvin Lindsey Managing Director WCM
..................................... .................................. ...................................
Clark Messman Chief Legal Officer WCM
..................................... .................................. ...................................
Brian Mulligan Managing Director WCM
..................................... .................................. ...................................
Thomas O'Malley Managing Director WCM
..................................... .................................. ...................................
Clyde Ostler Director WCM
..................................... .................................. ...................................
Guy Rounsaville Director WCM
..................................... .................................. ...................................
Katherine Schapiro Senior Principal WCM
..................................... .................................. ...................................
Gary Schlossbertg Economist WCM
</TABLE>
(k) Shaker Management, Inc.
The description of Shaker Management, Inc. ("Shaker"), investment
adviser for Shaker Fund, contained in Parts A and B of this amendment
to the Trust's Registration Statement, is incorporated by reference
herein.
The following are the directors and principal executive officers of
Shaker, including their business connections, which are of a
substantial nature. The address of Shaker is 2000 Auburn Drive, Suite
300, Cleveland, Ohio 44122 and, unless otherwise indicated below, that
address is the principal business address of any company with which
the directors and principal executive officers are connected.
<TABLE>
<S> <C> <C>
Name Title Business Connection
..................................... .................................. ...................................
Edward Paul Hemmelgarn President and Director Shaker
.................................. ...................................
President and Director Shaker Investments, Inc.
(Investment Advisor)
.................................. ...................................
Managing Member Shaker Investment Management, LLC
(Holding Company)
..................................... .................................. ...................................
David Rogers Webb Executive Vice President and Shaker
Director
.................................. ...................................
Executive Vice President and Shaker Investments, Inc.
Director (Investment Advisor)
.................................. ...................................
Managing Member Shaker Investments Management, LLC
(Holding Company)
..................................... .................................. ...................................
Adam Sanders Solomon Chairman of the Board and Shaker
Director
.................................. ...................................
Chairman of the Board and Shaker Investments, Inc.
Director (Investment Advisor)
.................................. ...................................
Managing Member Shaker Investments Management, LLC
..................................... .................................. ...................................
Raymond Joseph Rund Managing Director Shaker
.................................. ...................................
Managing Director Shaker Investments, Inc.
(Investment Advisor)
</TABLE>
22
<PAGE>
ITEM 27. PRINCIPAL UNDERWRITERS
(a) Forum Fund Services, LLC, Registrant's underwriter, serves as
underwriter for the following investment companies registered under the
Investment Company Act of 1940, as amended:
The Cutler Trust Monarch Funds
Memorial Funds Sound Shore Fund, Inc.
Forum Funds TrueCrossing Funds
(b) The following officers of Forum Fund Services, LLC, the Registrant's
underwriter, hold the following positions with the Registrant. Their
business address is Two Portland Square, Portland, Maine 04101.
<TABLE>
<S> <C> <C>
Name Position with Underwriter Position with Registrant
..................................... .................................. ...................................
John Y. Keffer Director Chairman, President
..................................... .................................. ...................................
David I. Goldstein Secretary Vice President
..................................... .................................. ...................................
Ronald H. Hirsch Treasurer Treasurer
</TABLE>
(c) Not Applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
The majority of the accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940 and
the Rules thereunder are maintained at the offices of Forum
Administrative Services, LLC and Forum Shareholder Services, LLC, Two
Portland Square, Portland, Maine 04101. The records required to be
maintained under Rule 31a-1(b)(1) with respect to journals of receipts
and deliveries of securities and receipts and disbursements of cash are
maintained at the offices of the Registrant's custodian, as listed
under "Custodian" in Part B to this Registration Statement. The records
required to be maintained under Rule 31a-1(b)(5), (6) and (9) are
maintained at the offices of the Registrant's adviser or subadviser, as
listed in Item 26 hereof.
ITEM 29. MANAGEMENT SERVICES
Not Applicable.
ITEM 30. UNDERTAKINGS
None.
23
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
amendment to its registration statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Portland, and State of Maine on
January 16, 2001.
FORUM FUNDS
By: /s/ John Y. Keffer
----------------------------------------
John Y. Keffer, President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons on January
16, 2001.
(a) Principal Executive Officer
/s/ John Y. Keffer
--------------------------------------------
John Y. Keffer
President and Chairman
(b) Principal Financial Officer
/s/ Ronald H. Hirsch
--------------------------------------------
Ronald H. Hirsch
Treasurer
(c) A majority of the Trustees
/s/ John Y. Keffer
--------------------------------------------
John Y. Keffer
Trustee
James C. Cheng, Trustee
J. Michael Parish, Trustee
Costas Azariadis, Trustee
By: /s/ John Y. Keffer
-----------------------------------------
John Y. Keffer
Attorney in Fact*
*Pursuant to powers of attorney previously filed as Other Exhibits to this
Registration Statement.
24
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Index to Exhibits
(d)(10) Form of Investment Advisory Agreement between Registrant and Shaker
Management, Inc. relating to Shaker Fund.
(e)(4) Form of Distribution Agreement between Registrant and Forum Fund
Services, LLC.
(g)(2) Form of Custodian Agreement between Registrant and Forum Trust, LLC.
(g)(4) Form of Master Custodian Agreement between Forum Trust, LLC and
Bankers Trust Company.
(h)(2) Form of Administration Agreement between Registrant and Forum
Administrative Services, LLC.
(h)(4) Form of Fund Accounting Agreement between Registrant and Forum
Accounting Services, LLC.
(h)(6) Form of Transfer Agency Agreement between Registrant and Forum
Shareholder Services, LLC.
(h)(11) Form of Shareholder Service Plan of Registrant relating to Shaker Fund
(m)(3) Form of Rule 12b-1 Plan adopted by Shaker Fund.
(p)(12) Form of Code of Ethics adopted by Shaker Management Inc.
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