<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Norwest Advantage Funds
- -----------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rule 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which
transaction applies:
- -----------------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
- -----------------------------------------------------------------
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11
(Set forth the amount on which the filing fee is
calculated and state how it was determined):
- -----------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -----------------------------------------------------------------
(5) Total fee paid:
- -----------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously.
Identify the previous filing by registration statement
<PAGE>
number, or the Form or Schedule and the date of its
filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
2
47180160.CO7
<PAGE>
PRELIMINARY
NORWEST ADVANTAGE FUNDS
Income Equity Fund
Two Portland Square
Portland, Maine 04101
_____________________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
_____________________________
To the Shareholders of Income Equity Fund:
Notice is hereby given that a Special Meeting of
Shareholders (the ``Meeting'') of Income Equity Fund (the
``Fund''), a series of Norwest Advantage Funds (the ``Trust''),
will be held at the offices of Forum Financial Services, Inc.,
Two Portland Square, Portland, Maine 04101 on March 11, 1996 at
10:00 a.m. Eastern Time. The purpose of this Meeting is:
1. To approve a proposal to amend the Investment
Advisory Agreement between the Trust and Norwest Bank
Minnesota, N.A., to increase the advisory fee paid by
the Fund.
2. To transact such other business as may
properly come before the Meeting.
The Board of Trustees has fixed the close of business on
February 16, 1996 as the record date for the determination of
shareholders entitled to notice of and to vote at the Meeting or
any adjournment thereof.
By order of the Board of Trustees,
David I. Goldstein
Vice President and Secretary
Portland, Maine
[ ], 1996
YOUR VOTE IS IMPORTANT NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS
MAY BE. IN ORDER TO AVOID THE UNNECESSARY EXPENSE OF FURTHER
SOLICITATION, WE URGE YOU TO INDICATE YOUR VOTING INSTRUCTIONS ON
THE ENCLOSED PROXY, DATE AND SIGN IT, AND RETURN IT PROMPTLY IN
THE ENVELOPE PROVIDED.
<PAGE>
PRELIMINARY
NORWEST ADVANTAGE FUNDS
Income Equity Fund
Two Portland Square
Portland, Maine 04101
_____________________________
PROXY STATEMENT
_____________________________
Special Meeting of Shareholders
To Be Held on March 11, 1996
This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Trustees (the
``Board'') of Norwest Advantage Funds (the ``Trust''), a Delaware
business trust, of shareholders of Income Equity Fund (the
``Fund''), to be voted at the Special Meeting of Shareholders of
the Fund to be held at the offices of Forum Financial Services,
Inc. (``Forum''), Two Portland Square, Portland, Maine 04101, on
March 11, 1996, at 10:00 a.m. Eastern Time, and any adjournment
thereof (the ``Meeting''), for the purposes set forth in the
accompanying Notice of Special Meeting of Shareholders. The
solicitation is made primarily by the mailing of this Proxy
Statement and the accompanying form of Proxy on or about
[ ], 1996. The Fund will furnish to each person to whom
the Proxy Statement is delivered a copy of the Fund's latest
annual report to stockholders and any succeeding semi-annual
report to stockholders, upon request and without charge. To
request a copy, please call Norwest Bank Minnesota, N.A.
(``Norwest'') at 800-338-1348.
The solicitation of proxies will be primarily by mail
but may also include telephone or oral communications by the
officers of the Trust or by regular employees of Norwest, the
Fund's investment adviser, Forum, the Trust's manager and
distributor, or their affiliates. The costs of the Meeting and
the preparation, printing and mailing of proxies will be borne by
Norwest.
The Trust is a registered, open-end, management
investment company whose shares of beneficial interest are
divided into thirty-one separate portfolios. The Fund's shares
of beneficial interest currently consist of one class of shares:
I Shares (the ``Shares'').
The Shares may be voted in person at the Meeting or by
proxy. Each whole Share is entitled to one vote and each
fractional Share is entitled to a proportionate fractional vote.
All properly executed proxies received prior to the Meeting will
be voted at the Meeting, and any adjournment thereof, in
accordance with the instructions marked thereon or otherwise
provided therein.
Unless instructions to the contrary are marked, proxies
will be voted FOR the approval of the amendment to the Investment
Advisory Agreement described in this Proxy Statement. Any
shareholder may revoke his or her proxy at any time prior to
exercise thereof by giving written notice to Norwest, the Trust's
transfer agent, at 733 Marquette Avenue, Minneapolis, Minnesota
55479-0040, by signing and mailing another proxy of a later date
or by personally casting a vote at the Meeting. In completing
proxies, shareholders should be aware that checking the box
labeled ABSTAIN will result in the Shares covered by the proxy
being treated as if they were voted AGAINST the proposal.
If a quorum is present at the Meeting, but sufficient
votes to approve the proposal are not received, the persons named
as proxies may propose one or more adjournments of the Meeting to
permit further solicitation of proxies with respect to the
proposal. The presence in person or by proxy of the holders of
one-third of the Fund's Shares entitled to vote constitutes a
quorum. Any adjournment will require the affirmative vote of a
majority of Shares represented in person or by proxy at the
Meeting. In that case, the persons named as proxies will vote
all proxies that they are entitled to vote FOR such an
adjournment; provided, however, any proxies required to be voted
against the proposal will be voted AGAINST such adjournment. A
shareholder vote may be taken on the proposal prior to such
adjournment if sufficient votes have been received and it is
otherwise appropriate. In the event of any adjournment, the Fund
will continue to solicit proxies.
The Board has fixed the close of business on February
16, 1996 for determination of shareholders entitled to notice of,
and to vote at, the Meeting and at any adjournment thereof. As
of February 16, 1996, there were [ ] voting Shares of
the Fund outstanding. As of February 16, 1996, the Trustees and
officers of the Trust as a group owned beneficially less than 1%
of the outstanding Shares of the Fund.
Approval of the proposal requires the affirmative action
of ``a majority of the outstanding voting securities'' of the
Fund as that term is defined under the Investment Company Act of
2
1940 (the ``1940 Act''), which means the affirmative vote of the
lessor of (a) 67% or more of the Shares of the Fund present at
the Meeting or represented by proxy if the holders of more than
50% of the outstanding Shares are present or represented by proxy
at the Meeting or (b) more than 50% of the outstanding Shares.
PROPOSAL
APPROVAL OF AN AMENDMENT TO THE INVESTMENT ADVISORY
AGREEMENT TO INCREASE THE ADVISORY FEE PAYABLE BY THE FUND
GENERAL. The Board is proposing for shareholder approval an
amendment to the Investment Advisory Agreement between the Trust
and Norwest with respect to the Fund (the ``Advisory
Agreement''), which, if approved, would increase the advisory
fee payable by the Fund to Norwest from 0.50% to 0.65% of the
Fund's average daily net assets. The amendment will not change
the way the Fund is advised or operated; there are no proposed
changes in any other terms or conditions of the Advisory
Agreement. The Board has determined that the amendment is in the
best interests on the Fund and its shareholders. The factors
considered by the Board in determining the reasonableness and
fairness of the proposed advisory fee increase are described
below under ``Factors Considered by the Board of Trustees.'' A
copy of the Advisory Agreement reflecting the proposed amendment
is set forth as Exhibit A to this Proxy Statement.
Norwest's proposal to increase the advisory fee was
considered at a meeting of the Board, held on January 29, 1996,
at which a majority of the Board who are not ``interested
persons'' (as defined in the 1940 Act) of the Fund or Norwest was
present. Such consideration was based upon financial,
statistical and other information supplied to the Board by
Norwest. The Board unanimously concluded that the proposed
amendment to the Advisory Agreement was fair and reasonable and
determined to submit the Advisory Agreement as amended to
shareholders for their approval.
TERMS OF ADVISORY AGREEMENT. Under the Advisory Agreement,
Norwest, at its expense and subject to the control of the Board
and in accordance with the investment objective and policies of
the Fund, manages the Fund's investments. In this regard, it is
the responsibility of Norwest to continuously provide the Fund
with investment management, including investment research, advice
and supervision, determine which securities shall be purchased or
sold by the Fund, and make purchases and sales of securities on
behalf of the Fund.
Pursuant to the Advisory Agreement, Norwest has agreed
to reimburse the Trust for certain of the Fund's operating
expenses (exclusive of interest, taxes and brokerage fees,
organization expenses and, if applicable, distribution expenses,
3
all to the extent permitted by applicable state law or
regulation) which in any year exceed the limits prescribed by any
state in which the Fund's shares are qualified for sale. Subject
to the foregoing, the Trust has confirmed its obligation to pay
all other expenses with respect to the Fund, as more fully
described in Section 4 of the Advisory Agreement included as
Exhibit A to this Proxy Statement.
The Advisory Agreement was initially approved by the
sole shareholder of the Fund on November 9, 1994. The Advisory
Agreement with respect to the Fund continues in effect through
December 31 of each year only if such continuance is specifically
approved at least annually by the Board or by vote of the
shareholders of the Fund, and in either case by a majority of the
Board who are not parties to the Advisory Agreement or interested
persons of Norwest or the Fund, at a meeting called for the
purpose of voting on the Advisory Agreement. Continuance of the
Advisory Agreement in its present form was most recently approved
by the Board at a meeting called for such purpose held on
July 24-25, 1995. The Advisory Agreement is terminable without
penalty by the Fund on 60 days written notice when authorized
either by vote of the Fund's shareholders or by a vote of a
majority of the Board, or by Norwest on not more than 60 days nor
less than 30 days written notice, and will automatically
terminate in the event of its assignment.
FACTORS CONSIDERED BY THE BOARD OF TRUSTEES. The Board has
considered various matters in determining the reasonableness and
fairness of the proposed increase in the advisory fee payable by
the Fund.
In reaching its decision, the Board examined and weighed
many factors, including (1) the nature and quality of the
services rendered and the results achieved by Norwest in its
management of the Fund (including investment performance
comparisons with other mutual funds and certain indices); (2)
changes in the mutual fund industry that have affected the Fund;
(3) the payments received by Norwest from all sources related to
both the Fund and the other investment companies advised by
Norwest; (4) the organizational capabilities and financial
condition of Norwest; (5) an analysis of the proposed fee rate
changes; (6) information concerning the Fund's expense ratio on
both an existing and pro forma basis; (7) information as to the
advisory fees paid by other portfolios advised by Norwest with
investment objectives and similar to the Fund (see ``Additional
Information--Portfolio Comparison'', below); and (8) competitive
industry fee structures and expense ratios, including,
specifically, the relationship of the proposed advisory fee rates
to those typically paid by similar funds and bank-advised mutual
funds.
4
Certain of the factors addressed by the Board in
reaching its determination are discussed in more detail below.
-- Portfolio Performance. The Board considered the
performance of the Fund as compared to the performance of other
funds with comparable investment objectives and as compared to
securities indices. The Board took into account the historical
investment results of the Fund. The Board noted that
organizational and operational changes designed to improve
investment results that had been made recently and that had been
previously reported by Norwest to the Board.
-- Actual and Pro Forma Advisory Fees and Expenses.
The Board considered the effect of the proposed advisory fee
increase on the Fund's fee rates and annual expense ratios (which
include the advisory fee and all other operating expenses
incurred by the Fund). The table set forth below under
``Proposed Fee Increase'' provides comparative data for the
fiscal year ended October 31 1995, assuming that the proposed fee
increase had been in effect throughout the year.
-- Comparisons With Other Funds. The Board considered
the advisory fees paid by other funds with similar investment
objectives and also investment companies advised by banks. In
addition to comparing the proposed advisory fees, the Board also
considered the comparability of operating expense ratios with the
ratios of these other investment companies. Notwithstanding that
under the proposal the Fund's management fee and operating
expense ratios would increase, the Board believes that the
management fee and expense ratios would remain comparable to
industry norms.
-- Non-Advisory Services Provided To The Fund. The
Board reviewed the general nature of the non-investment advisory
services performed by Norwest. In addition to reviewing such
services, the Board considered the organizational structure
employed by Norwest to provide those services.
PROPOSED FEE INCREASE
The Advisory Agreement currently provides for a fee,
computed daily and paid monthly, equal to 0.50% of the annual
average daily net assets of the Fund and, accordingly, in 1995,
the advisory fee paid amounted to $187,584.
Under the proposed amendment to the Advisory Agreement,
the advisory fee rate would be 0.65% of the Fund's annual average
daily net assets and, accordingly, if the proposed amendment to
the advisory fee had been in effect throughout 1995, the advisory
fee paid for that year would have amounted to $243,859. This
5
would have represented an increase of 30% over the actual
advisory fee paid during the year.
Comparative Fee Table. The following table shows, for the Fund's
fiscal year ended October 31, 1995, (a) the operating expenses
for the Fund's Shares as a percentage of average net assets and
(b) the pro forma operating expenses assuming the proposed
amendments to the Advisory Agreement had been in effect
throughout the year.
ACTUAL PRO FORMA
Advisory Fees .............. 0.50% 0.65%
Shareholder Servicing ...... 0.20% 0.20%
Other Expenses
(after waivers and
reimbursements) ............ 0.15% 0.15%
Investment Total
Operating Expenses
(after waivers and
reimbursements) .......... 0.85% 1.00%
EXAMPLE: The following illustrates the expenses on a $1,000
investment under the existing and proposed fees and the expenses
stated above, assuming (1) a 5% annual return and (2) redemption
at the end of each time period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
Existing Fee .....$ 9 $27 $47 $105
Proposed Fee ..... $10 $32 $55 $122
The purpose of this example and the table is to assist
investors in understanding the various costs and expenses of
investing in shares of the Fund. THE EXAMPLE ABOVE SHOULD NOT BE
CONSIDERED A PRESENTATION OF PAST OR FUTURE EXPENSES OF THE FUND.
ACTUAL EXPENSES MAY VARY FROM YEAR TO YEAR AND MAY BE HIGHER OR
LOWER THAN THOSE SHOWN ABOVE.
If approved by shareholders at the Meeting, the proposed
amendment to the Advisory Agreement and the Advisory Agreement as
so amended will become effective as of the date of such approval
and the amended Advisory Agreement will continue in from year to
year thereafter if approved in the same manner as the Advisory
Agreement in present form. If the amendment is not approved by
shareholders, the Advisory Agreement will continue in effect in
its present form, subject to the continuation and termination
provisions referred to above.
6
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS VOTE IN FAVOR OF THE PROPOSAL.
ADDITIONAL INFORMATION
[BENEFICIAL SHARE OWNERSHIP. As of the record date, the
following shareholders beneficially owned more than 5% of the
outstanding Shares of the Fund:]
PORTFOLIO COMPARISON. Following are the net assets and
the advisory fee payable to Norwest for 1995 by other portfolios
of the Trust that have investment objectives similar to Income
Equity Fund.
Net Assets Advisory Fee as a
Name of Portfolio at 1995 Fiscal Percentage of Average
(Fiscal Year End) Year End Daily Net Assets
Diversified Equity $711.1 million 0.65%
Fund (October 31)
Growth Equity Fund $564.0 million 0.90%
(October 31)
Income Stock Fund $76.3 million 0.80% - first $300
(May 31) million*
0.76% - next $400
million
0.72% - above $400
million
ValuGrowthsm Stock Fund $152.3 million 0.80% - first $300
(May 31) million
0.76% - next $400
million
0.72% - above $400
million
____________________
* Norwest voluntarily waived a portion of its advisory fee for
1995. After such voluntary waiver, the fee amounted to 0.37%
of the portfolio's average daily net assets.
INFORMATION CONCERNING NORWEST. Pursuant to
agreements between the Trust and Norwest, Norwest acts as
transfer agent and custodian for the Trust. For the fiscal
year ended October 31, 1995, the Trust, with respect to the
Fund, paid Norwest $93,792 in transfer agency fees. Norwest
7
receives no fee for custodial services provided to the Trust
except for performing certain functions in connection with
loans of portfolio securities. For the fiscal year ended
October 31, 1995, the Trust, with respect to the Fund, paid
Norwest $[ ] for services related to loans of portfolio
securities. Norwest will continue to act as transfer agent
and custodian for the Trust if the amended Advisory
Agreement is approved at the Meeting.
Norwest is a wholly-owned subsidiary of Norwest
Corporation, a bank holding company with operations in 30
states and $59.3 billion in total assets. Norwest provides
investment advice with respect to assets that totaled
approximately $___ billion as of December 31, 1995. [10%
owners of Norwest Corporation, if any.]
Set forth below is information concerning the
principal executive officer and Directors of Norwest:
Name Principal Occupation
James R. Campbell Director, President and Chief Executive
Officer of Norwest
Scott A. Kisting Director of Norwest
William H. Queenan Director of Norwest and Executive Vice
President of Norwest Corporation
John T. Thornton Director of Norwest and Executive Vice
President and Chief Financial Officer of
Norwest Corporation
The address of each of the foregoing is 733 Marquette Avenue,
Minneapolis, Minnesota 55479.
OTHER MATTERS; SHAREHOLDER PROPOSALS
Management knows of no other matters which are to be
brought before the Meeting. However, if any other matters come
before the Meeting, it is intended that the persons named in the
enclosed form of Proxy, or their substitutes, will vote the Proxy
in accordance with their judgment on such matters.
It is anticipated that, following the Meeting, the
Fund will not hold any meetings of shareholders
except as required by Federal or Delaware law.
Shareholders wishing to submit proposals for
inclusion in a proxy statement for a subsequent
shareholder meeting should send proposals to the
Secretary of the Trust, David I. Goldstein, in care
8
of Forum, Two Portland Square, Portland, Maine
04101.
9
YOU ARE URGED TO FILL IN, DATE AND SIGN AND RETURN
THE ENCLOSED PROXY PROMPTLY
By Order of the Board of Trustees,
David I. Goldstein
Vice President and Secretary
10
EXHIBIT A
NORWEST FUNDS (ADVANTAGE)
INVESTMENT ADVISORY AGREEMENT
November 11, 1994, as Amended _______, 1996
AGREEMENT made this 11th day of November, 1994, between
Norwest Funds (the "Trust"), a business trust organized under the
laws of the State of Delaware with its principal place of
business at 61 Broadway, New York, New York 10006 and Norwest
Bank Minnesota, N.A. (the "Adviser"), a banking association
organized under the laws of the United States of America with its
principal place of business at Sixth Street and Marquette,
Minneapolis, Minnesota 55479.
WHEREAS, the Trust is registered under the Investment
Company Act of 1940, as amended, (the "Act") as an open-end
management investment company and is authorized to issue
interests (as defined in the Trust's Trust Instrument), in
separate series;
WHEREAS, the Trust desires that the Adviser perform
investment advisory services for each series of the Trust as
listed in Appendix A hereto (each a "Fund" and collectively the
"Funds"), and the Adviser is willing to provide those services on
the terms and conditions set forth in this Agreement;
NOW THEREFORE, the Trust and the Adviser agree as
follows:
SECTION 1. THE TRUST; DELIVERY OF DOCUMENTS
The Trust is engaged in the business of investing and
reinvesting its assets in securities of the type and in
accordance with the limitations specified in its Trust
Instrument, By-Laws and Registration Statement filed with the
Securities and Exchange Commission (the "Commission") under the
Act and the Securities Act of 1933 (the "Securities Act"),
including any representations made in the prospectus and
statement of additional information relating to the Funds
contained therein and as may be supplemented from time to time,
all in such manner and to such extent as may from time to time be
authorized by the Trust's Board of Trustees (the "Board"). The
Trust is currently authorized to issue thirty-one series of
shares and the Board is authorized to issue any unissued shares
in any number of additional classes or series. The Trust has
delivered copies of the documents listed in this Section 1 and
will from time to time furnish Adviser with any amendments
thereof.
11
SECTION 2. INVESTMENT ADVISER; APPOINTMENT
The Trust hereby employs Adviser, subject to the
direction and control of the Board, to manage the investment and
reinvestment of the assets in each Fund and, without limiting the
generality of the foregoing, to provide other services specified
in Section 3 hereof.
SECTION 3. DUTIES OF THE ADVISER
(a) The Adviser shall make decisions with respect to
all purchases and sales of securities and other investment assets
in each Fund. To carry out such decisions, the Adviser is hereby
authorized, as agent and attorney-in-fact for the Trust, for the
account of, at the risk of and in the name of the Trust, to place
orders and issue instructions with respect to those transactions
of the Funds. In all purchases, sales and other transactions in
securities for the Funds, the Adviser is authorized to exercise
full discretion and act for the Trust in the same manner and with
the same force and effect as the Trust might or could do with
respect to such purchases, sales or other transactions, as well
as with respect to all other things necessary or incidental to
the furtherance or conduct of such purchases, sales or other
transactions.
(b) The Adviser will report to the Board at each
meeting thereof all changes in each Fund since the prior report,
and will also keep the Board informed of important developments
affecting the Trust, the Funds and the Adviser, and on its own
initiative, will furnish the Board from time to time with such
information as the Adviser may believe appropriate for this
purpose, whether concerning the individual companies whose
securities are included in the Funds' holdings, the industries in
which they engage, or the economic, social or political
conditions prevailing in each country in which the Funds maintain
investments. The Adviser will also furnish the Board with such
statistical and analytical information with respect to securities
in the Funds as the Adviser may believe appropriate or as the
Board reasonably may request. In making purchases and sales of
securities for the Funds, the Adviser will bear in mind the
policies set from time to time by the Board as well as the
limitations imposed by the Trust's Trust Instrument, By-Laws and
Registration Statement under the Act and the Securities Act, the
limitations in the Act and in the Internal Revenue Code of 1986,
as amended in respect of regulated investment companies and the
investment objectives, policies and restrictions of the Funds.
(c) The Adviser will from time to time employ or
associate with such persons as the Adviser believes to be
particularly fitted to assist in the execution of the Adviser's
duties hereunder, the cost of performance of such duties to be
12
borne and paid by the Adviser. No obligation may be incurred on
the Trust's behalf in any such respect.
(d) The Adviser shall maintain records relating to
portfolio transactions and the placing and allocation of
brokerage orders as are required to be maintained by the Trust
under the Act. The Adviser shall prepare and maintain, or cause
to be prepared and maintained, in such form, for such periods and
in such locations as may be required by applicable law, all
documents and records relating to the services provided by the
Adviser pursuant to this Agreement required to be prepared and
maintained by the Trust pursuant to the rules and regulations of
any national, state, or local government entity with jurisdiction
over the Trust, including the Securities and Exchange Commission
and the Internal Revenue Service. The books and records
pertaining to the Trust which are in possession of the Adviser
shall be the property of the Trust. The Trust, or the Trust's
authorized representatives, shall have access to such books and
records at all times during the Adviser's normal business hours.
Upon the reasonable request of the Trust, copies of any such
books and records shall be provided promptly by the Adviser to
the Trust or the Trust's authorized representatives.
(e) The Adviser shall have no duties or obligations
pursuant to this Agreement, including any obligation to reimburse
Fund expenses pursuant to Section 4 hereof, during any period in
which the Fund invests all (or substantially all) of its
investment assets in a registered, open-end management investment
company, or separate series thereof, in accordance with Section
12(d)(1)(E) under the Act.
SECTION 4. EXPENSES
The Adviser shall be responsible for that portion of the
net expenses of each Fund (except interest, taxes, brokerage,
fees and other expenses paid by the fund in accordance with an
effective plan pursuant to Rule 12b-1 under the Act and
organization expenses, all to the extent such exceptions are
permitted by applicable state law and regulation) incurred by the
Fund during each of the Fund's fiscal years or portion thereof
that this Agreement is in effect which, as to the Fund, in any
such year exceeds the limits applicable to the Fund under the
laws or regulations of any state in which shares of the Fund are
qualified for sale (reduced pro rata for any portion of less than
a year) and which is not assumed by Forum Financial Services,
Inc., the Trust's manager and distributor, or any other person.
The Trust hereby confirms that, subject to the
foregoing, the Trust shall be responsible and shall assume the
obligation for payment of all the Trust's other expenses,
including: interest charges, taxes, brokerage fees and
13
commissions; certain insurance premiums; fees, interest charges
and expenses of the Trust's custodian, transfer agent and
dividend disbursing agent; telecommunications expenses; auditing,
legal and compliance expenses; costs of the Trust's formation and
maintaining its existence; costs of preparing and printing the
Trust's prospectuses, statements of additional information,
account application forms and shareholder reports and delivering
them to existing and prospective shareholders; costs of
maintaining books of original entry for portfolio and fund
accounting and other required books and accounts and of
calculating the net asset value of shares in the Trust; costs of
reproduction, stationery and supplies; compensation of the
Trust's trustees, officers, employees and other personnel
performing services for the Trust who are not the Adviser's
employees or employees of Forum Financial Services, Inc. or
affiliated persons of either; costs of corporate meetings;
registration fees and related expenses for registration with the
Commission and the securities regulatory authorities of other
countries in which the Trust's shares are sold; state securities
law registration fees and related expenses; fees and out-of-
pocket expenses payable to Forum Financial Services, Inc. under
any distribution, management or similar agreement; and all other
fees and expenses paid by the Trust pursuant to any distribution
or shareholder service plan adopted pursuant to Rule 12b-1 under
the Act.
SECTION 5. STANDARD OF CARE
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, and as an
inducement to the Adviser's undertaking these services the
Adviser 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, 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.
SECTION 6. COMPENSATION
(a) In consideration of the foregoing, the Trust shall
pay the Adviser, with respect to each of the Funds, a fee at an
annual rate as listed in Appendix A hereto. Such fees shall be
accrued by the Trust daily and shall be payable monthly in
arrears on the first day of each calendar month for services
performed hereunder during the prior calendar month. The
Adviser's reimbursement, if any, of a Fund's expenses as provided
14
in Section 4 hereof, shall be estimated and paid to the Trust
monthly in arrears, at the same time as the Trust's payment to
the Adviser for such month. Payment of the advisory fee will be
reduced or postponed, if necessary, with any adjustments made
after the end of the year.
(b) For purposes of calculating a Fund's daily net
assets in determining the fees payable hereunder there shall be
excluded all holdings (and liabilities related to the purchase of
holdings) in any registered open-end management investment
company for which the Adviser acts as investment adviser. No fee
shall be payable hereunder with respect to a Fund during any
period in which the Fund invests all (or substantially all) of
its investment assets in a registered, open-end management
investment company, or separate series thereof, in accordance
with Section 12(d)(1)(E) under the Act.
SECTION 7. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect
to a Fund immediately upon approval by a majority of the
outstanding voting securities of that Fund.
(b) This Agreement shall remain in effect with respect
to a Fund for a period of one year from the date of its
effectiveness and shall continue in effect for successive twelve-
month periods (computed from each anniversary date of the
approval) with respect to the Fund; provided that such
continuance is specifically approved at least annually (i) by the
Board or by the vote of a majority of the outstanding voting
securities of the Fund, and, in either case, (ii) by a majority
of the Trust's trustees who are not parties to this Agreement or
interested persons of any such party (other than as trustees of
the Trust); provided further, however, that if this Agreement or
the continuation of this Agreement is not approved as to a Fund,
the Adviser may continue to render to that Fund the services
described herein in the manner and to the extent permitted by the
Act and the rules and regulations thereunder.
(c) This Agreement may be terminated with respect to a
Fund at any time, without the payment of any penalty, (i) by the
Board or by a vote of a majority of the outstanding voting
securities of the Fund on 60 days' written notice to the Adviser
or (ii) by the Adviser on 60 days' written notice to the Trust.
This agreement shall terminate upon assignment.
SECTION 8. ACTIVITIES OF THE ADVISER
Except to the extent necessary to perform its
obligations hereunder, nothing herein shall be deemed to limit or
restrict the Adviser's right, or the right of any of the
15
Adviser's officers, directors or employees who may also be a
trustee, officer or employee of the Trust, or persons otherwise
affiliated persons of the Trust to engage in any other business
or to devote time and attention to the management or other
aspects of any other business, whether of a similar or dissimilar
nature, or to render services of any kind to any other
corporation, trust, firm, individual or association.
SECTION 9. SUBADVISERS
At its own expense, the Adviser may carry out any of its
obligations under this agreement by employing, subject to your
supervision, one or more persons who are registered as investment
advisers pursuant to the Investment Advisers Act of 1940, as
amended, or who are exempt from registration thereunder
("Subadvisers"). Each Subadviser's employment will be evidenced
by a separate written agreement approved by the Board and, if
required, by the shareholders of the applicable Fund. The
Adviser shall not be liable hereunder for any act or omission of
any Subadviser, except to exercise good faith in the employment
of the Subadviser and except with respect to matters as to which
the Adviser assumes responsibility in writing.
SECTION 10. LIMITATION OF SHAREHOLDER AND TRUSTEE
LIABILITY
The Trustees of the Trust and the interest holders of
each Fund shall not be liable for any obligations of the Trust or
of the Funds under this Agreement, and the Adviser agrees that,
in asserting any rights or claims under this Agreement, it shall
look only to the assets and property of the Trust or the Fund to
which the Adviser's rights or claims relate in settlement of such
rights or claims, and not to the Trustees of the Trust or the
interest holders of the Funds.
SECTION 11. "NORWEST" NAME
If the Adviser ceases to act as investment adviser to
the Trust or any Fund whose name includes the word "Norwest," or
if the Adviser requests in writing, the Trust shall take prompt
action to change the name of the Trust any such Fund to a name
that does not include the word "Norwest." The Adviser may from
time to time make available without charge to the Trust for the
Trust's use any marks or symbols owned by the adviser, including
marks or symbols containing the word "Norwest" or any variation
thereof, as the Adviser deems appropriate. Upon the Adviser's
request in writing, the Trust shall cease to use any such mark or
symbol at any time. The Trust acknowledges that any rights in or
to the word "Norwest" and any such marks or symbols which may
exist on the date of this Agreement or arise hereafter are, and
under any and all circumstances shall continue to be, the sole
16
property of the Adviser. The Adviser may permit other parties,
including other investment companies, to use the word "Norwest"
in their names without the consent of the Trust. The Trust shall
not use the word "Norwest" in conducting any business other than
that of an investment company registered under the Act without
the permission of the Adviser.
SECTION 12. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or
modified in any manner except by a written agreement properly
authorized and executed by both parties hereto and, if required
by the Act, by a vote of a majority of the outstanding voting
securities of any Fund thereby affected. No amendment to this
Agreement or the termination of this Agreement with respect to a
Fund shall effect this Agreement as it pertains to any other
Fund, nor shall any such amendment require the vote of any of the
Fund's shareholders.
(b) Section headings in this Agreement are included for
convenience only and are not to be used to construe or interpret
this Agreement.
(c) This Agreement shall be governed by and shall be
construed in accordance with the laws of the State of Delaware.
(d) The terms "vote of a majority of the outstanding
voting securities", "interested person", "affiliated person" and
"assignment" shall have the meanings ascribed thereto in the Act.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed all as of the day and year first
above written.
NORWEST FUNDS
_______________________________
John Y. Keffer
President
NORWEST BANK MINNESOTA, N.A.
_______________________________
P. Jay Kiedrowski
Executive Vice President
17
NORWEST FUNDS (ADVANTAGE)
INVESTMENT ADVISORY AGREEMENT
Appendix A
Fee as a % of
the Annual Average Daily
Funds of the Trust Net Assets of the Fund
__________________ ________________________
Diversified Equity Fund .65%
PRELIMINARY
APPENDIX
NORWEST ADVANTAGE FUNDS
Income Equity Fund
Two Portland Square
Portland, Maine 04101
PROXY
This Proxy is Solicited on Behalf of the Board of Trustees
Revoking any such prior appointments, the undersigned appoints
Thomas G. Sheehan and David L. Goldstein (or, if only one shall
act, that one) proxies with the power of substitution to vote all
of the shares of Income Equity Fund (the ``Fund''), a series of
Norwest Advantage Funds (the ``Trust''), registered in the name
of the undersigned at the Special Meeting of Shareholders of the
Fund to be held at the offices of Forum Financial Services, Inc.,
Two Portland Square, Portland, Maine 04101, on March 11, 1996 at
10:00 a.m. Eastern Time, and at any adjournment or adjournments
thereof.
The shares of beneficial interest represented by this Proxy will
be voted in accordance with the specifications made by the
undersigned. If no specifications are made, such shares will be
voted FOR the Proposal set forth below. The Board of Trustees
recommends voting FOR the Proposal.
PROPOSAL: TO APPROVE AN AMENDMENT TO THE INVESTMENT
ADVISORY AGREEMENT BETWEEN THE TRUST AND NORWEST BANK
MINNESOTA, N.A. TO INCREASE THE ADVISORY FEE PAID BY THE
FUND.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Receipt is acknowledged of the Proxy Statement for the Special
Meeting of Shareholders to be held on [ ], 1996.
(NOTE: Checking the box labeled ABSTAIN will result in the
shares covered by the Proxy being treated as if they were voted
AGAINST the proposal.)
___________________________________ ________________________
Authorized Signature Date
1
___________________________________ ________________________
Printed Name (and Title if Applicable) Date
___________________________________ ________________________
Authorized Signature (Joint Investor) Date
___________________________________ ________________________
Printed Name (and Title if Applicable) Date
2
47180160.CO7
