<PAGE>
Norwest Advantage Funds
Two Portland Square
Portland, Maine 04101
April 15, 1996
Dear Shareholder:
We are pleased to forward to your attention the attached
Notice and Proxy Statement for the Special Meeting of
Shareholders of Income Equity Fund (the "Fund"), a series of
Norwest Advantage Funds (the "Trust"), to be held on May 13,
1996. Please take time to read these materials and cast your
vote as the proposal to be voted on is important to the Fund and
to you as a shareholder.
At the Meeting, shareholders of the Fund will be asked to
approve an amendment to the Investment Advisory Agreement (the
"Advisory Agreement") between the Trust and Norwest Bank
Minnesota, N.A. ("Norwest"), the Fund's investment adviser, with
respect to the Fund. This amendment, which has been approved by
the Trust's Board of Trustees (the "Board"), would increase the
investment advisory fee payable by the Fund from 0.50% to 0.65%
of the Fund's average daily net assets. Until the amendment is
approved by shareholders, the Fund will continue to pay Norwest
at the current rate.
Norwest requested this increase in the Fund's advisory fee in
light of fees paid by comparable funds and Norwest's belief that
the Fund's performance reflects Norwest's commitment to the
quality of its investment management techniques and resources,
such as portfolio management personnel, research staff and
systems technology.
The Board carefully evaluated the proposed fee change,
considering, among other things, the Fund's historical investment
results as compared with other funds with comparable investment
objectives, the effect of the change on the Fund's expense
levels, and fees paid by comparable funds. In light of such
consideration, the Board determined that the proposed fee
increase is fair and reasonable.
The Board recommends that you vote FOR the proposal.
If you have any questions about voting your proxy or the
matter to be voted upon, please contact your Norwest account
manager. We appreciate your participation and prompt response to
<PAGE>
this matter and thank you for your continued confidence in our
investment products.
Sincerely,
/s/ John Y. Keffer
John Y. Keffer
Chairman
2
<PAGE>
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 May 13, 1996 at 9:00 a.m. Eastern Time
for the following purposes:
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 April 3,
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
April 15, 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.
3
<PAGE>
NORWEST ADVANTAGE FUNDS
Income Equity Fund
Two Portland Square
Portland, Maine 04101
_____________________________
PROXY STATEMENT
_____________________________
Special Meeting of Shareholders
To Be Held on May 13, 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
May 13, 1996, at 9:00 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 April
17, 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 also
may 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 separate portfolios. The Fund's shares of beneficial
interest currently consist of three classes of shares: I Shares,
A Shares and B Shares. Currently, only I Shares (the "Shares")
of the Fund are offered for sale to investors.
4
<PAGE>
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 fixed the close of business on April 3, 1996 for
determination of shareholders entitled to notice of, and to vote
at, the Meeting and at any adjournment thereof. As of April 3,
1996, there were 2,675,893.207 voting Shares of the Fund
outstanding. As of the same date, 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 1940
(the "1940 Act"), which means the affirmative vote of the lesser
of (a) 67% or more of the Shares of the Fund present at the
Meeting or represented by proxy if the holders of more than 50%
5
<PAGE>
of the outstanding Shares are present or represented by proxy at
the Meeting or (b) more than 50% of the outstanding Shares.
6
<PAGE>
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 of 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, 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,
7
<PAGE>
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 policies similar to those of 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.
Certain of the factors addressed by the Board in reaching its
determination are discussed in more detail below.
8
<PAGE>
Portfolio Performance. The Board considered the performance of
the Fund as compared to the performance of securities indices
and performance of other funds having comparable investment
objectives and policies. The Board took into account the
superior historical investment results of the Fund. The
Board also noted organizational and operational changes
designed to improve investment results that had been made
recently.
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. The Board
also compared the proposed operating expense ratio of the
Fund with the ratios of those 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 after the
increase 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
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
9
<PAGE>
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%
Other Expenses
(after waivers and reimbursements)* 0.35% 0.35%
Total Operating Expenses
(after waivers and reimbursements)* 0.85% 1.00%
===== =====
* Absent expense reimbursements and fee waivers, the actual and
pro forma expenses of the Fund would be: Other Expenses,
0.62% (actual) and 0.62% (pro forma); Total Operating
Expenses, 1.12% (actual) and 1.27% (pro forma).
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 the table and example is to assist investors in
understanding the various costs and expenses of investing in
shares of the Fund. The example 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.
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.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS VOTE IN FAVOR OF THE PROPOSAL.
10
<PAGE>
Additional Information
Beneficial Share Ownership. As of the record date, the following
shareholders owned of record or beneficially more than 5% of the
outstanding Shares of the Fund:
Shareholder Number of Shares % of Fund
The Northland Company 285,940.250 11%
1285 Northland Drive,
St. Paul, MN 55120
G&K Services, Inc. 191,780.890 7%
5995 Opus Parkway,
Minnetonka, MN 55343
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 Fund $711.1 million 0.65%
(October 31)
Growth Equity Fund $564.0 million 0.90%
(October 31)
Income Stock Fund $76.3 million 0.80% - first $300 million*
(May 31) 0.76% - next $400 million
0.72% - above $400 million
ValuGrowth(SM) Stock
Fund $152.3 million 0.80% - first $300 million
(May 31) 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 receives no fee for custodial
services provided to the Fund other than for performing certain
functions in connection with loans of portfolio securities. For
the fiscal year ended October 31, 1995, the Fund did not pay
11
<PAGE>
Norwest any fees for these securities lending services. 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 subsidiary of Norwest Corporation, a multi-bank
holding company incorporated under the laws of Delaware in 1929.
As of December 31, 1995, the Adviser managed or provided
investment advice with respect to assets totaling approximately
$23 billion. As of March 31, 1996, Norwest Corporation owned
approximately 80% of the outstanding shares of Norwest. As of
the same date, Norwest Holding Company owned more than 10% of the
outstanding shares of Norwest.
Set forth below is information concerning the principal executive
officer and Directors of Norwest:
Name Principal Occupation
Scott A. Kisting Director, President and Chief
Executive Officer of Norwest
James R. Campbell 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
Richard C. Westergaard Director of Norwest
The address of each of the foregoing is Sixth and Marquette,
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.
12
<PAGE>
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 of Forum Financial Services, Inc.,
Two Portland Square, Portland, Maine 04101.
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
13
<PAGE>
EXHIBIT A
NORWEST ADVANTAGE FUNDS
INVESTMENT ADVISORY AGREEMENT
November 11, 1994, as amended _________________
AGREEMENT made this 11th day of November, 1994, between
Norwest Advantage Funds (the "Trust"), a business trust organized
under the laws of the State of Delaware with its principal place
of business at Two Portland Square, Portland, Maine 04101 and
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 the Adviser with any amendments
thereof.
14
<PAGE>
SECTION 2. INVESTMENT ADVISER; APPOINTMENT
The Trust hereby employs the 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 Fund's 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 borne and
15
<PAGE>
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 commissions; certain insurance
16
<PAGE>
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
in Section 4 hereof, shall be estimated and paid to the Trust
17
<PAGE>
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 Adviser's
officers, directors or employees who may also be a trustee,
18
<PAGE>
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 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 property of
the Adviser. The Adviser may permit other parties, including
other investment companies, to use the word "Norwest" in their
19
<PAGE>
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 ADVANTAGE FUNDS
__________________________
John Y. Keffer
President
NORWEST BANK MINNESOTA, N.A.
________________________
P. Jay Kiedrowski
Executive Vice President
20
<PAGE>
NORWEST ADVANTAGE FUNDS
INVESTMENT ADVISORY AGREEMENT
Appendix A
Fee as a % of
the Annual Average Daily
Funds of the Trust Net Assets of the Fund
* * * * * *
Income Equity Fund 0.65%
* * * * * *
21
<PAGE>
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 I. 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 May 13, 1996 at
9:00 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 instructions given by the
undersigned below. If no instructions are given, 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 Notice Proxy Statement for the
Special Meeting of Shareholders to be held on May 13, 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.) Please sign and date this Proxy in the
space provided. Execution by shareholders who are not
individuals must be made by an authorized signatory. Executors,
administrators, trustees, guardians and others signing in a
representative capacity should give their full title as such.
22
<PAGE>
_________________________________________ _____________________
Authorized Signature Date
_______________________________ _____________________
Printed Name (and Title if Applicable) Date
_________________________________________ _____________________
Authorized Signature (Joint Investor) Date
_________________________________________ _____________________
Printed Name (and Title if Applicable) Date
Please Sign And Date This Proxy and Return It In The Enclosed
Envelope.
23
47180012.AG2
