<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/ No fee required.
/ / 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
number, or the Form or Schedule and the date of its
filing.
<PAGE>
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
2
47180160.CZ3
<PAGE>
PRELIMINARY
NORWEST ADVANTAGE FUNDS(R)
Two Portland Square
Portland, Maine 04101
_____________________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
_____________________________
To the Shareholders of Norwest Advantage Funds (the "Trust"):
Notice is hereby given that a Special Meeting of
Shareholders (the "Meeting") of
Cash Investment Fund
Ready Cash Investment Fund
U.S. Government Fund
Treasury Fund
Municipal Money Market Fund
Stable Income Fund
Intermediate Government Income Fund
Diversified Bond Fund
Income Fund
Total Return Bond Fund
Limited Term Tax-Free Fund
Tax-Free Income Fund
Colorado Tax-Free Fund
Minnesota Tax-Free Fund
Conservative Balanced Fund
Moderate Balanced Fund
Growth Balanced Fund
Index Fund
Income Equity Fund
ValuGrowth(SM) Stock Fund
Diversified Equity Fund
Growth Equity Fund
Large Company Growth Fund
Small Company Stock Fund
Small Company Growth Fund
Small Cap Opportunities Fund
Contrarian Stock Fund
International Fund
___________________
(R) (SM) These registered marks are used under license from
their owner, Norwest Bank Minnesota, N.A.
1
<PAGE>
the twenty-eight series of the Trust (the "Funds"), will be held
at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April 30, 1997 at 10:00 a.m. Eastern Time. The purpose
of the Meeting is to consider and act upon the following
proposals, and to transact such other business as may properly
come before the meeting or any adjournment or adjournments
thereof.
1. For shareholders of all Funds:
To elect the Trustees of the Trust, each to hold office until
his successor is duly elected and qualified.
2. For shareholders of all Funds:
To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending
May 31, 1997.
3. For shareholders of all Funds:
To approve a new investment policy permitting a Fund to
invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
4. For shareholders of Diversified Equity Fund, Growth Equity
Fund, Conservative Balanced Fund, Moderate Balanced Fund,
Growth Balanced Fund and Diversified Bond Fund:
To approve changes to the Fund's current advisory fee
structure, including payment to Norwest Bank Minnesota, N.A.
of a fee for asset allocation services.
5. For shareholders of Cash Investment Fund:
To approve changes to the Fund's investment advisory fee
structure related to the equal investment of the Fund's
assets in two Core Portfolios.
6. For shareholders of each of Stable Income Fund, Diversified
Bond Fund, Conservative Balanced Fund, Moderate Balanced Fund
and Growth Balanced Fund:
To approve a subadvisory agreement among Norwest, Galliard
Capital Management, Inc., and the Trust, on behalf of the
Fund.
2
<PAGE>
7. For shareholders of each of Large Company Growth Fund, Small
Company Growth Fund, Conservative Balanced Fund, Moderate
Balanced Fund, Growth Balanced Fund, Diversified Bond Fund,
Diversified Equity Fund and Growth Equity Fund:
To approve subadvisory agreements among Norwest, Peregrine
Capital Management, Inc., and the Trust, on behalf of the
Fund.
8. For shareholders of each of Contrarian Stock Fund, Total
Return Bond Fund, Diversified Bond Fund, Conservative
Balanced Fund, Moderate Balanced Fund and Growth Balanced
Fund:
To approve subadvisory agreements among Norwest, United
Capital Management and the Trust, on behalf of the Fund.
9. For shareholders of Municipal Money Market Fund, Diversified
Bond Fund, Income Fund, Income Equity Fund, Small Company
Growth Fund and ValuGrowth Stock Fund:
To approve an amendment to the Fund's investment objective.
The Board of Trustees of the Trust has fixed the close
of business on February 25, 1997 as the record date for the
determination of shareholders entitled to notice of and to vote
at the Meeting or any adjournment or adjournments thereof.
By order of the Board of Trustees,
David I. Goldstein
Vice President and Secretary
Portland, Maine
March __, 1997
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>
PRELIMINARY
NORWEST ADVANTAGE FUNDS(R)
Two Portland Square
Portland, Maine 04101
_____________________________
PROXY STATEMENT
_____________________________
Special Meeting of Shareholders
To Be Held on April 30, 1997
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, from shareholders of
Cash Investment Fund
Ready Cash Investment Fund
U.S. Government Fund
Treasury Fund
Municipal Money Market Fund
Stable Income Fund
Intermediate Government Income Fund
Diversified Bond Fund
Income Fund
Total Return Bond Fund
Limited Term Tax-Free Fund
Tax-Free Income Fund
Colorado Tax-Free Fund
Minnesota Tax-Free Fund
Conservative Balanced Fund
Moderate Balanced Fund
Growth Balanced Fund
Index Fund
Income Equity Fund
ValuGrowth(SM) Stock Fund
Diversified Equity Fund
Growth Equity Fund
Large Company Growth Fund
Small Company Stock Fund
Small Company Growth Fund
Small Cap Opportunities Fund
Contrarian Stock Fund
International Fund
___________________
(R) (SM) These registered marks are used under license from
their owner, Norwest Bank Minnesota, N.A.
1
<PAGE>
(the "Funds"), the twenty-eight series of the Trust, to be voted
at the Special Meeting of Shareholders of the Trust to be held at
the offices of Forum Financial Services, Inc. ("Forum"), Two
Portland Square, Portland, Maine 04101 on April 30, 1997 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 following table summarizes the
proposals upon which the shareholders are being requested to vote
(the "Proposals") and indicates which shareholders are entitled
to vote on each Proposal.
Proposal Fund
1. To elect the Trustees of the All Funds, voting together
Trust
2. To ratify selection of the All Funds, voting together
independent auditors of the
Trust
3. To approve a new investment All Funds, voting
policy and to amend certain separately
fundamental investment policies
and the Fund's investment
advisory agreement
4. To approve changes to the Growth Equity Fund,
Fund's current advisory fee Conservative Balanced
structure, including the Fund, Moderate Balanced
payment of an asset Fund, Growth Balanced
allocation fee Fund, Diversified Equity
Fund, Diversified Bond
Fund, voting separately
5. To approve changes to the Cash Investment Fund
the Fund's advisory fee
structure related to the
investment of the Fund's
assets in two Core Portfolios
6. To approve a subadvisory Stable Income Fund,
agreement with Galliard Diversified Bond Fund,
Capital Management, Inc. Conservative Balanced
Fund, Moderate Balanced
Fund and Growth Balanced
Fund, voting separately
7. To approve a subadvisory Large Company Growth Fund,
agreement with Peregrine Small Company Growth Fund,
Capital Management, Inc. Conservative Balanced
Fund, Moderate Balanced
2
<PAGE>
Fund, Growth Balanced
Fund, Diversified Bond
Fund, Diversified Equity
Fund and Growth Equity
Fund, voting separately
8. To approve a subadvisory Contrarian Stock Fund,
agreement with United Total Return Bond Fund,
Capital Management, a Diversified Bond Fund,
division of Norwest Bank Conservative Balanced
Colorado, N.A. Fund, Moderate Balanced
Fund and Growth Balanced
Fund, voting separately
9. To amend the Fund's investment Municipal Money Market
objective Fund, Diversified Bond
Fund, Income Fund, Income
Equity Fund, Small Company
Growth Fund and ValuGrowth
Stock Fund, voting
separately
The solicitation is made primarily by the mailing of
this Proxy Statement and the accompanying form of Proxy on or
about March __, 1997. The Trust will furnish to each person to
whom the Proxy Statement is delivered, a copy of each Fund's
Annual Report to Shareholders dated May 31, 1996 and Semi-annual
Report to Shareholders dated November 30, 1996, upon request and
without charge. To request copies, please telephone Norwest Bank
Minnesota, N.A. ("Norwest"), the transfer agent of the Trust, 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
investment adviser of the Funds, Forum or their affiliates.
Currently, neither Norwest or the Trust have engaged a proxy
solicitation firm. Norwest may determine in the future to engage
a proxy solicitation firm, at its own expense.
The Trust is a registered, open-end, management
investment company whose shares of beneficial interest are
divided into twenty-eight separate series (collectively, 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. Broker non-votes will be counted as shares
present for purposes of determining whether a quorum is present
3
<PAGE>
but will not be voted for or against any adjournment or counted
as votes cast for purposes of determining whether sufficient
votes have been received to approve a proposal. Broker non-votes
are shares held in street name for which the broker indicates
that instructions have not been received from the beneficial
owners or other persons entitled to vote and for which the broker
lacks discretionary voting authority.
Unless instructions to the contrary are marked, proxies
will be voted FOR the election of each nominee for Trustee and
FOR the approval of the remaining Proposals described in this
Proxy Statement that pertain to the shareholder submitting the
proxy. A proxy may be revoked by a shareholder at any time prior
to the 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. A
shareholder who intends to revoke a proxy by personally casting a
vote at the Meeting, should be prepared to present to
representatives of Forum a copy of the previously submitted
proxy. In completing proxies, shareholders should be aware that
checking the box labeled ABSTAIN with respect to a Proposal 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 one or more of the Proposals 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 those Proposals. With respect to Proposals One and
Two, the presence in person or by proxy of the holders of one-
third of the Trust's Shares entitled to vote constitutes a
quorum. With respect to the other Proposals, the presence in
person or by proxy of the holders of one-third of the Shares of a
Fund entitled to vote constitutes a quorum for that Fund. An
adjournment with respect to a Proposal will require the
affirmative vote of a majority of Shares entitled to vote on the
Proposal 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 a Proposal will
be voted AGAINST an adjournment with respect to that Proposal.
In the event of any adjournment, the Trust will continue to
solicit proxies for Shares on Proposals for which the Meeting has
been adjourned.
All Shares of the Trust will vote together on Proposals
One and Two and Shares of each Fund entitled to vote on any other
Proposal will vote separately from Shares of other Funds entitled
to vote on that Proposal. The Board has fixed the close of
business on February 25, 1997 for determination of shareholders
4
<PAGE>
entitled to notice of, and to vote at, the Meeting and at any
adjournment thereof.
Election of each Trustee pursuant to Proposal One
requires the affirmative vote of a plurality of the Shares of the
Trust voting at the Meeting. Approval of Proposal Two requires
the affirmative vote of a majority of the Shares of the Trust
voted in person or by proxy at the Meeting. Approval of each
other Proposal requires the affirmative vote of "a majority of
the outstanding voting securities" of a Fund or the Trust, as
appropriate, as that term is defined in 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 present or
represented by proxy at the Meeting 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 (a
"Majority").
PROPOSAL ONE
ELECTION OF TRUSTEES
Shareholders of all Funds, voting together, are
entitled to vote on Proposal One. Approval of this Proposal
with respect to a Trustee requires the affirmative vote of
the holders of a plurality of the outstanding Shares of the
Trust voting at the Meeting.
At the Meeting, all of the Trustees will be elected
to serve until their successors are elected and qualified.
The nominees are Robert C. Brown, Donald H. Burkhardt, James
C. Harris, John Y. Keffer, Richard M. Leach, John S. McCune,
Timothy J. Penny and Donald C. Willeke. Messrs. Harris,
Keffer and Leach are current Trustees of the Trust and were
elected, to fill vacancies on the Board, by shareholders in
1988. Messrs. Brown and Burkhardt are current Trustees of
the Trust and were elected by shareholders in 1993. Messrs.
Willeke and Penny are current Trustees of the Trust and were
each elected by the other members of the Board, to fill
vacancies, at meetings of the Board held on July 24-25, 1995
and October 1, 1995, respectively. Mr. McCune is not
currently a Trustee of the Trust.
It is being proposed that shareholders elect each
Trustee and Mr. McCune (the "nominees"). Each nominee has
consented to serve or continue to serve as a Trustee if
elected. The Board knows of no reason why any of the
nominees would be unable to serve, but in the event a
nominee is unable to serve, the proxies received will be
voted for such substitute nominee or nominees as the Board
may recommend.
5
<PAGE>
Certain information regarding each Trustee and Mr.
McCune is provided below, including a description of their
principal occupation and business experience for the last
five years. Mr. Brown is an "interested person" of the
Trust as defined in the 1940 Act by virtue of his ownership
of stock of the parent of Norwest and Mr. Keffer is an
"interested person" by virtue of his position with Forum
Financial Services, Inc., distributor of the Shares of the
Trust. Mr. McCune is an "interested person" by virtue of
his position with Norwest Investment Services, Inc., an
affiliate of Norwest. Messrs. Brown, Keffer and McCune are
identified below with an asterisk.
Robert C. Brown, Age 65, Trustee*
Director, Federal Farm Credit Banks Funding Corporation and
Farm Credit System Financial Assistance Corporation since
February 1993. Prior thereto, he was Manager of Capital
Markets Group, Norwest Corporation, a multi-bank holding
company and parent of Norwest, until 1991.
Donald H. Burkhardt, Age 70, Trustee
Principal of The Burkhardt Law Firm.
James C. Harris, Age 76, Trustee
President and sole Director of James C. Harris & Co., Inc. (a
financial consulting firm). Mr. Harris is also a liquidating
Trustee and former Director of First Midwest Corporation (a
small business investment company).
John Y. Keffer, Age 54, Chairman and President*
President and owner, Forum Financial Services, Inc. (a
registered broker-dealer), Forum Administrative Services
Limited Liability Company, Forum Financial Corp. (a
registered transfer agent) and other companies within the
Forum Financial Group of companies. Mr. Keffer is a
Director, Trustee and/or officer of various registered
investment companies for which Forum Financial Services,
Inc., or its affiliates, serves as manager, administrator or
distributor.
Richard M. Leach, Age 63, Trustee
President of Richard M. Leach Associates (a financial
consulting firm) since 1992. Prior thereto, Mr. Leach was
Senior Adviser of Taylor Investments (a registered investment
adviser), a Director of Mountainview Broadcasting (a radio
6
<PAGE>
station) and Managing Director of Digital Techniques, Inc.
(an interactive video design and manufacturing company).
John S. McCune, age 51, nominee*
President, Chief Executive Officer and Director of Norwest
Investment Services, Inc. since 1991. Mr. McCune also serves
as a member of the Municipal Securities Rulemaking Board and
is a member of the American Bankers Association and Sales
Managers Association.
Timothy J. Penny, Age 45, Trustee
Senior Counselor to the public relations firm of Himle-Horner
since January 1995 and Senior Fellow at the Humphrey
Institute, Minneapolis, Minnesota since January 1995. Prior
thereto, Mr. Penny was the Representative to the United
States Congress from Minnesota's First Congressional
District.
Donald C. Willeke, Age 56, Trustee
Principal of the law firm of Willeke & Daniels.
During the Trust's fiscal year ended May 31, 1996, the
Board met four times. All of the Trustees serving attended each
meeting. The Trust maintains a Nominating Committee and an Audit
Committee of the Board, each of which is composed of Trustees who
are not "interested persons" of the Trust as defined in the 1940
Act (the "Independent Trustees"). Messrs. Harris, Leach,
Burkhardt, Willeke and Penny are the current members of those
committees. The Nominating Committee selects all Independent
Trustees for nomination to the Board and met three times during
the fiscal year ended May 31, 1996; all of the committee members
except Mr. Leach attended each meeting; Mr. Leach attended two of
the three meetings. The Nominating Committee accepts nominations
from shareholders of the Trust. Such nominations should be
submitted to the Committee in care of the Secretary of the Trust.
The Audit Committee selects the Trust's independent auditors and
meets to discuss the scope of the auditors' engagement and to
review the financial statements of the Trust and the results of
the auditors' examination thereof. The Audit Committee met three
times during the fiscal year ended May 31, 1996; [all] of the
committee members attended each meeting.
TRUSTEE COMPENSATION:
Each Trustee is paid by the Trust a quarterly retainer
fee for the Trustee's service to the Trust and to Norwest Select
Funds, a separate registered open-end management investment
company for which each Trustee serves as trustee, of $5000. In
7
<PAGE>
addition, each Trustee is paid $3,000 for each quarterly Board
meeting attended (whether in person or by electronic
communication) and is paid $1,000 for each telephonic Board or
Committee meeting attended on a date when a Board meeting is not
held. Trustees are also reimbursed for travel and related
expenses incurred in attending Board or Committee meetings held
when a Board meeting is not held. Mr. Keffer currently is, and,
if elected as a Trustee, Mr. McCune would be, neither compensated
nor reimbursed for his expenses in connection with serving as
Trustee. No officer of the Trust is compensated by the Trust.
Mr. Burkhardt, Chairman of the Trust's and Norwest
Select Fund's Audit Committees, receives additional compensation
of $6,000 from the Trust and Norwest Select Funds[, allocated pro
rata between the Trust and Norwest Select Funds based upon
relative net assets,] for his services as Chairman.
The following table provides the aggregate compensation
paid to the Trustees of the Trust by the Trust and by the Trust
and Norwest Select Funds, combined. Norwest Select Funds has a
December 31 fiscal year end. Information is presented for the
twelve-month period ended May 31, 1996, the most recent fiscal
year end of the Trust.
Total Compensation
Total Compensation From the Trust and
From the Trust Norwest Select Funds
Mr. Brown $28,974 $29,000
Mr. Burkhardt $36,223 $36,250
Mr. Harris $27,975 $28,000
Mr. Leach $32,970 $33,000
Mr. Penny $15,985 $16,000
Mr. Willeke $29,973 $30,000
Neither the Trust nor Norwest Select Funds has adopted any form
of retirement plan covering Trustees or officers. For the
twelve-month period ended May 31, 1996, expenses of the Trustees
(other than Mr. Keffer) totaled $30,408, and expenses of the
trustees of Norwest Select Funds totaled $27.
As of February 25, 1997, the Trustees and officers of
the Trust as a group owned less than 1% of the Shares of each
Class of each Fund.
8
<PAGE>
PROPOSAL TWO
RATIFICATION OF SELECTION OF KPMG PEAT
MARWICK LLP AS INDEPENDENT AUDITORS OF THE TRUST
Shareholders of all Funds, voting together, are entitled
to vote on Proposal Two. Approval of this Proposal requires the
approval of a majority of the outstanding Shares of the Trust.
The Board of Trustees recommends that the shareholders
of the Funds ratify the selection of KPMG Peat Marwick LLP to
audit the accounts of the Funds for the fiscal year of each Fund
ending May 31, 1997. Their selection was approved by a unanimous
vote, cast in person, at a meeting of the Board held on July 29-
30, 1996. KPMG Peat Marwick LLP has audited the accounts of the
Trust for the fiscal years ended May 31, 1996, 1995 and 1994, as
well as for the fiscal year ended October 31, 1995 with respect
to those Funds that had that fiscal year end. For prior fiscal
periods another audit firm acted as independent accountants of
the Trust's predecessor corporation. KPMG Peat Marwick LLP does
not have any direct or indirect financial interest in the Trust
or any Fund of the Trust. [A representative of KPMG Peat Marwick
LLP is expected to attend the Meeting and to have the opportunity
to make a statement and to respond to appropriate questions from
the shareholders.]
The Board recommends that the shareholders vote FOR the
ratification of the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust.
PROPOSAL THREE
APPROVAL OF A NEW INVESTMENT POLICY
PERMITTING A FUND TO INVEST ALL OR A PORTION
OF ITS ASSETS IN ONE OR MORE INVESTMENT COMPANIES
AND RELATED AMENDMENTS TO CERTAIN FUNDAMENTAL
INVESTMENT POLICIES AND THE FUND'S INVESTMENT
ADVISORY AGREEMENT TO ACCOMMODATE THESE INVESTMENTS
Shareholders of all Funds, voting separately by Fund, are
entitled to vote on Proposal Four. Approval of this Proposal
with respect to a Fund requires the approval of a Majority of the
outstanding Shares of the Fund.
INTRODUCTION
General. Approval of this Proposal would enable a Fund
to invest its assets in a master-feeder or fund-of-funds
structure. In a master-feeder structure, a Fund seeks to achieve
its investment objective by investing in a single investment
company having substantially the same investment objective,
9
<PAGE>
policies and risk profile as the Fund. In a fund-of-funds
structure, a Fund diversifies its assets by investing in two or
more investment companies, each with different investment
objectives, policies and risk profiles. These structures are
referred to as "Core and Gateway(R) structures." A Fund
investing in either type of Core and Gateway structure would
continue to pursue its current investment objective through
investment in one or more investment companies, referred to
herein as "Core Portfolios." The Core Portfolio in turn would
invest directly in the securities of individual issuers. A Fund
investing in one or more Core Portfolios pursuant to either Core
and Gateway structure may be referred to as a "Gateway Fund."
The primary reason to use a Core and Gateway structure
is to provide a mechanism to pool, in a single Core Portfolio,
the common investments of a number of Gateway Funds and other
investors in the Core Portfolio. Accordingly, management expects
that, upon approval of this Proposal and implementation of the
policies described herein, the assets of more than one Gateway
_____________________
(R) This registered mark is used under license from its owner,
Forum Financial Services, Inc.
10
<PAGE>
Fund will be pooled in each Core Portfolio. That pooling of
assets is designed to create a larger asset base for each Gateway
Fund in order to provide investment and administrative
efficiencies, economies of scale and lower expense ratios. See
"Evaluation by the Board" below. However, there can be no
assurance that any Fund's total expenses will be reduced as a
result of the Fund's investment in a Core and Gateway structure.
The following illustration compares a traditional mutual
fund structure (wherein a Fund invests directly in portfolio
securities) with a master-feeder and a fund-of-funds structure.
[INSERT DIAGRAM]
Approval of this Proposal will effect different Funds in
different ways. As described in more detail below, certain Funds
currently intend to convert to a Core and Gateway structure upon
approval of this Proposal. Other Funds seek approval of this
Proposal to convert to a Core and Gateway structure in the future
without obtaining shareholder approval at that time. In
addition, a number of the Funds currently have the ability to
convert to a Core and Gateway structure without obtaining
shareholder approval (or currently operate pursuant to a Core and
Gateway Structure) and seek approval of this Proposal solely to
standardize the form of fundamental investment policies of the
Funds. Unless canceled or delayed, the pending conversions
described herein would occur on or about May 31, 1997. All costs
of the conversions will be borne by the Fund involved. See
"Effect on the Funds" below.
Specific Approvals Under This Proposal. Approval by
shareholders of a Fund of this Proposal will be deemed approval
of the following new non-fundamental investment policy:
Notwithstanding any other investment policy or
restriction (whether fundamental or non-
fundamental) of the Fund, the Fund may seek to
11
<PAGE>
attain its investment objective by investing all or
a portion of its investable assets in one or more
investment companies to the extent permitted by
law.
In addition, approval of this Proposal will be deemed to
be approval of an amendment to each Fund's fundamental investment
restrictions regarding diversification and concentration. The
amendments will clarify that the diversification and
concentration restrictions of a Fund operating in a Core and
Gateway structure apply to the portfolio securities of the Core
Portfolios in which the Fund invests rather than to the interests
in the Core Portfolios held by the Fund as its portfolio
securities. These amendments are discussed below under
"Amendments to Investment Policies."
Approval of this Proposal also will be deemed to be
approval of an amendment to each Fund's investment advisory
agreement that will enable Norwest to provide the advisory
services necessary to accommodate the investment of any Fund in a
fund-of-funds structure in reliance on the new investment policy.
The amendments to the advisory agreements are discussed below
under "Amendments to the Advisory Agreements."
Upon approval of this Proposal, a Fund could convert to
a Core and Gateway structure upon a determination by the Board
that the conversion is in the best interests of the Fund and its
shareholders. A Fund would provide shareholders prior notice of
a conversion but would not seek prior shareholder approval. The
Board would retain the right to withdraw a Fund's investment in a
Core Portfolio at any time, and the Fund could thereafter resume
investing directly in individual securities or could re-invest
its assets in another Core Portfolio.
The conversion to a Core and Gateway structure would be
accomplished by transferring each converting Fund's assets to the
appropriate Core Portfolio in exchange for an interest in the
Core Portfolio equal in value to the assets transferred. Each
converting Fund's assets would be transferred in kind to the Core
Portfolio(s) and valued in accordance with the Fund's normal
valuation procedures. The conversion would not affect the net
asset value of the shares of a Fund.
CORE AND GATEWAY STRUCTURES
General. As described under "Effect on the Funds"
below, certain Funds intend, upon approval of this Proposal, to
invest all or a portion of their assets in one or more Core
Portfolios. The Core Portfolios will be separate series of Core
Trust (Delaware) ("Core Trust"), an open-end, registered
12
<PAGE>
investment company that was formed as a Delaware business trust
in 1994.
Core Trust currently has eight active portfolios, four
of which are Core Portfolios for five Funds that operate pursuant
to a Core and Gateway structure. It is anticipated that, at the
meeting of the board of trustees of Core Trust (the "Core Board")
to be held on March 13, 1997, the Core Board will authorize and
establish additional series of Core Trust to serve as additional
Core Portfolios. The proposed investment objectives and policies
of the Core Portfolios are set forth in Appendix A to this Proxy
Statement.
Each Core and Gateway structure and its corresponding
risks are described separately below. Aspects of the structures
that are similar are described below under "Common Aspects of the
Core and Gateway Structures."
Master-Feeder. In a master-feeder structure, a Fund
would hold as its primary asset an interest in a Core Portfolio
that has substantially the same investment objective and policies
as the Fund. In addition, to the extent necessary to manage cash
balances, a Gateway Fund could invest directly in cash and cash
equivalents or in another Core Portfolio operating as a money
market fund. The Fund would otherwise continue its normal
operations. The structure is designed to achieve economies of
scale and investment and administrative efficiencies by allowing
a Fund to pool its assets with the assets of other entities
investing in the Core Portfolio.
The Core Portfolios offer their shares only to
institutional shareholders. Other pooled investment vehicles
that invest in the Core Portfolio, including other mutual funds,
may be marketed in different ways than those used by a particular
Fund or to different types of investors than those investing in
that Fund. Another mutual fund investing in a Core Portfolio
might sell fund shares to the general public at a different
public offering price than the Funds' Shares and could have
different fees and expenses than the Funds.
Under certain circumstances, a Core Portfolio may hold a
meeting of interestholders in order to obtain their approval of a
change to the Portfolio's operations. As an interestholder of a
Core Portfolio, a Fund would be entitled to vote on the approval
in proportion to the Fund's relative interest in the Core
Portfolio. A Fund investing through a master-feeder structure
will hold a meeting of its shareholders to obtain instructions on
how to vote its interest in the Core Portfolio and will vote its
interests in a Core Portfolio in proportion to the votes cast by
the Fund's shareholders on that issue only when those votes are
required by law. In other circumstances, the Board will vote the
13
<PAGE>
Fund's interest in the Core Portfolio in accordance with the best
interests of the shareholders of the Fund.
If there are other investors in a Core Portfolio, there
can be no assurance that a vote of all the interestholders of the
Core Portfolio would result in the same outcome as a vote of the
shareholders of the Fund. If the outcome of a Core Portfolio
vote were not consistent with the vote of the shareholders of the
Fund, the Board would consider whether it was still in the best
interests of the Fund and its shareholders to invest in the Core
Portfolio.
Subject to applicable legal requirements, the Fund will
not seek instructions from its shareholders with respect to (i)
any proposal relating to a Core Portfolio that, if made with
respect to the Fund, would not require the vote of Fund
shareholders or (ii) any proposal relating to the Core Portfolio
that is substantially the same as a proposal previously approved
by the Fund's shareholders.
Fund-of-Funds. In a fund-of-funds structure, a Gateway
Fund would hold as its assets interests in two or more Core
Portfolios and, to the extent it managed a portion of its assets
directly, individual securities of other issuers. The Fund would
otherwise continue its normal operations. A Fund would invest in
a number of different Core Portfolios to obtain greater
diversification and achieve economies of scale and investment and
administrative efficiencies by pooling its assets with the assets
of other entities investing in the Core Portfolios.
Investment through percentage allocations consistent
with the Fund's investment objective and policies in a number of
Core Portfolios, each with different investment objectives or
styles, is intended to increase asset diversification and to
reduce the risk of relying on a single investment style. A Fund
would convert to a fund-of-funds structure if the Board
determined it was in the best interests of the Fund to follow a
"multi-style" investment approach in which the Fund's assets
would be allocated among several Core Portfolios.
A Gateway Fund would be able to rebalance its
investments in the Core Portfolios periodically to ensure that
the Fund continued to operate in accordance with its stated
percentage allocations. A Gateway Fund would, in general,
allocate its investments in the Core Portfolios within specified
ranges that are subject to Board approval. The percentage
allocations within the specified ranges could be changed by
Norwest at any time to the extent consistent with the Fund's
investment objective.
14
<PAGE>
When business or financial conditions warrant, a Gateway
Fund would assume a temporary defensive position and directly
invest without limit in cash or prime quality cash equivalents.
During periods when and to the extent that a Gateway Fund assumes
a temporary defensive position, a Gateway Fund's assets would be
invested outside of the specified ranges approved by the Board.
If a Core Portfolio holds a meeting of interestholders
to obtain their approval of a change in the Portfolio's
operations, as an interestholder of a Core Portfolio, a Fund will
be entitled to vote in proportion to its relative interest in the
Core Portfolio. A Gateway Fund investing through a fund-of-funds
structure will not, in general, hold a shareholder meeting when a
Core Portfolio is conducting a meeting of its interestholders.
As with any direct investment in securities, the Board would vote
the Fund's interests in the Core Portfolio in the best interests
of the shareholders of the Fund.
If there are other investors in a Core Portfolio, there
can be no assurance that the vote of the Board on behalf of a
Gateway Fund would be able to determine the outcome of the vote.
If the outcome of a Core Portfolio vote were not consistent with
the vote of the Board, the Board would consider whether it was
still in the best interests of the Gateway Fund and its
shareholders to invest in the Core Portfolio.
Common Aspects of the Core and Gateway Structures. A
Fund will invest in a Core Portfolio on the same terms and
conditions as any of the other investors in the Core Portfolio
and will bear a proportionate share of the Core Portfolio's
expenses.
The Board will retain the right to redeem a Fund's
investment in a Core Portfolio at any time if the Board
determines that it is in the best interests of the Fund and its
shareholders to do so. A Fund might withdraw, for example, if
the Fund were outvoted by other investors in the Core Portfolio
on an important issue, such as changing the investment objective
or policies of the Core Portfolio in a manner not acceptable to
the Board. A withdrawal could result in an in-kind distribution
of portfolio securities (as opposed to a cash distribution) to
the Fund by the Core Portfolio.
[describe pending exemptive application with respect to in-kind
redemptions to 5% shareholders]
If a Fund decided to convert securities received upon a
withdrawal to cash, it usually would incur brokerage fees or
other transaction costs. If a Fund withdrew its investment from
a Portfolio, the Board would consider what action should be taken
to manage the withdrawn assets, including management of the
15
<PAGE>
Fund's assets in accordance with its investment objectives and
policies by Norwest or investment of the assets in another Core
Portfolio. The inability of a Fund to find a suitable
replacement investment, in the event the Board decided not to
permit Norwest to manage the Fund's assets directly, could have a
significant impact on the shareholders of the Fund.
Each investor in a Core Portfolio, including the Funds,
will be liable for all obligations of the Core Portfolio in which
it invests but not for the obligations of any other portfolio of
Core Trust. The risk to investors in the Core Portfolios of
incurring financial loss on account of that liability, however,
would be limited to circumstances in which a Portfolio was unable
to meet its obligations. Upon liquidation of a Portfolio,
investors would be entitled to share pro rata in the net assets
of the Portfolio available for distribution to investors.
A Fund's investments in a Core Portfolio could be
affected by the actions of other large investors in the Core
Portfolio. For example, if a Core Portfolio had another large
investor that redeemed its interest in the Core Portfolio, the
Fund and the Core Portfolio's remaining investors could
experience higher pro rata operating expenses and resulting lower
returns.
Investment of a Fund's assets in a Core Portfolio would
affect the Fund's current arrangements for custodial, management
and administrative services. As a result of the investment, some
of those services would be provided by the service providers of
the relevant Core Portfolio while others would continue to be
provided directly to the Fund. Except as described in Proposal
Five, the overall rate at which a Fund would bear costs for the
provision of investment advisory and other services would remain
unchanged.
Tax Consequences. Management of the Trust would proceed
with a conversion to a Core and Gateway structure only upon
receipt of an opinion of counsel to the effect that neither a
contribution of the Fund's investment assets to a Core Portfolio
in exchange for an interest in the Core Portfolio nor a
withdrawal of a Fund's assets from a Core Portfolio would result
in the recognition of gain or loss to the Fund for federal income
tax purposes.
As a regulated investment company under the Internal
Revenue Code of 1986, as amended (the "Code"), a Fund does not
pay federal income or excise taxes to the extent that it
distributes to shareholders its net investment income and net
realized capital gain in accordance with the timing requirements
imposed by the Code. Under current law, so long as a Fund
qualifies as a regulated investment company for federal income
16
<PAGE>
tax purposes, the Fund itself is not liable for any income,
corporate excise or franchise taxes in the state of Delaware.
Any Core Portfolio in which the Board would invest the investment
assets of a Fund will conduct its operations in a manner such
that it also will not be required to pay any federal or state
income or corporate excise or franchise taxes.
AMENDMENTS TO THE ADVISORY AGREEMENTS
Approval of this Proposal constitutes approval of
conforming changes to the investment advisory agreements between
Norwest and the Trust on behalf of the Funds (the "Advisory
Agreements") that would accommodate the investment by a Fund in a
fund-of-funds structure. Specifically, the Advisory Agreements
would be amended to address the provision by Norwest of asset
allocation services (described more fully below) with respect to
any Fund that seeks to obtain its investment objective by
investing varying amounts of its assets in two or more Core
Portfolios. Also, the Advisory Agreements would be amended to
provide that Norwest would neither render nor receive a fee for
its portfolio management services with respect to the assets of a
Fund that are invested in a Core Portfolio, or other open-end
investment company pursuant to a Core and Gateway structure.
Asset allocation services are separate and distinct from
portfolio management services. Subject to the general
supervision of the Board, and in accordance with the investment
objective and policies of a Fund using the fund-of-funds
structure, Norwest would allocate and reallocate the Fund's
assets among the Core Portfolios in which it invests and would
rebalance the portfolio allocations. Norwest would continue to
be responsible for any direct investments made by a Fund.
For its asset allocation services, Norwest would be
entitled to an annual asset allocation fee equal to 0.25% of the
average daily net assets of a Fund invested in two or more Core
Portfolios. Norwest would continue to be entitled to receive the
contractual advisory fee set forth in a Fund's Prospectus with
respect to Fund assets invested directly in securities. Fund
shareholders will not in the future be requested to approve the
payment of the asset allocation or any other advisory fee upon
conversion by the Fund to a fund-of-funds structure if the
aggregate of any asset allocation fee and all direct and indirect
advisory fees to be paid by the Fund is less than or equal to the
current amount of the contractual advisory fee payable by the
Fund.
Shareholders of each of Conservative Balanced Fund,
Moderate Balanced Fund, Growth Balanced Fund, Diversified Equity
Fund, Growth Equity Fund and Diversified Bond Fund are being
requested separately in Proposal Five to consider and approve the
17
<PAGE>
immediate imposition of an asset allocation fee that, absent
agreed to waivers, could exceed the contractual advisory fee
currently payable by the Fund. Shareholders of Cash Investment
Fund are being requested separately in Proposal Six to consider
and approve a conversion to a fund-of-funds structure because it
entails the imposition of certain indirect advisory fees that,
absent agreed to waivers, could exceed the contractual advisory
fee currently payable by the Fund.
In addition to the amendments described above, the
Advisory Agreements of the Funds would be consolidated into a
single Agreement. Except described in this Proxy Statement, that
Agreement would be the same in all material respects as each
Fund's current advisory agreement. A copy of the Advisory
Agreement, which has been marked to indicate the changes proposed
herein is attached as Appendix A to this Proxy Statement.
AMENDMENTS TO INVESTMENT POLICIES
Upon Approval of this Proposal by the shareholders of a
Fund, the Fund will amend its investment policies regarding
diversification and concentration that otherwise would be
inconsistent with the conversion of the Fund to a Core and
Gateway structure. The amendments described below will not in
any other way affect the manner in which a Fund currently
operates. The Funds' current diversification and concentration
policies, which are set forth in Appendix B to this Proxy
Statement, will be superseded or supplemented by the policies
stated below.
Fund policies that are designated as fundamental may not
be changed without the approval of the holders of a Majority of
the outstanding Shares of the Fund. Non-fundamental policies may
be changed by the Board without shareholder approval.
Diversification - Cash Investment Fund, Ready Cash
Investment Fund, U.S. Government Fund, Treasury Fund, Municipal
Money Market Fund, Stable Income Fund, Intermediate Government
Income Fund, Diversified Bond Fund, Income Fund, Total Return
Bond Fund, Limited Term Tax-Free Fund, Tax-Free Income Fund,
Conservative Balanced Fund, Moderate Balanced Fund, Growth
Balanced Fund, Index Fund, Income Equity Fund, ValuGrowth Stock
Fund, Diversified Equity Fund, Growth Equity Fund, Large Company
Growth Fund, Small Company Stock Fund, Small Company Growth Fund,
Small Cap Opportunities Fund, Contrarian Stock Fund and
International Fund. Each of these Funds is "diversified" as that
term is defined in the 1940 Act. Upon approval of this Proposal
by the shareholders of a Fund, the following fundamental
investment restriction will replace the Fund's existing
fundamental restriction regarding diversification:
18
<PAGE>
The Fund may not, with respect to 75% of its
assets, purchase a security (other than a U.S.
Government security or a security of an investment
company) if, as a result: (i) more than 5% of the
Fund's total assets would be invested in the
securities of a single issuer, or (ii) the Fund
would own more than 10% of the outstanding voting
securities of any single issuer.
Diversification - Colorado Tax-Free Fund and
Minnesota Tax-Free Fund. Each of these Funds is "non-
diversified" as that term is defined in the 1940 Act. Upon
approval of this Proposal by the shareholders of a Fund, the
following fundamental investment restriction will replace
the Fund's existing fundamental restriction regarding
diversification:
The Fund is "non-diversified" as that term is
defined in the 1940 Act.
In addition, each non-diversified Fund will adopt
the following non-fundamental investment restriction that
will replace the Fund's existing non-fundamental investment
restriction regarding diversification:
To the extent required to qualify as a regulated
investment company under the Internal Revenue Code
of 1986, as amended (the "Code"), the Fund may not
purchase a security (other than a U.S. Government
security or a security of an investment company)
if, as a result: (i) with respect to 50% of its
assets, more than 5% of the Fund's total assets
would be invested in the securities of any single
issuer; (ii) with respect to 50% of its assets, the
Fund would own more than 10% of the outstanding
securities of any single issuer; or (iii) more than
25% of the Fund's total assets would be invested in
the securities of any single issuer.
Concentration-All Funds. Upon approval of this
Proposal by the shareholders of a Fund, the following clause
will supersede the first clause of the Fund's existing
fundamental investment restriction regarding concentration:
The Fund may not 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.
19
<PAGE>
In addition, the following clause will supplement the
restriction:
This limitation is inapplicable to the Fund's
investment, to the extent permitted by the 1940
Act, of all or a portion of its assets in one or
more open-end management investment companies.
EFFECT ON THE FUNDS
Approval of this Proposal will effect each of the Funds
in a different manner.
Cash Investment Fund, U.S. Government Fund, Treasury
Fund, Municipal Money Market Fund, Income Fund, Tax-Free Income
Fund, Minnesota Tax-Free Fund, Colorado Tax-Free Fund, ValuGrowth
Stock Fund and Contrarian Stock Fund. Upon approval of this
Proposal, the Funds would be permitted in the future to invest
pursuant to a master-feeder or fund-of-funds structure without
obtaining shareholder approval at that time. These Funds (except
Cash Investment Fund) do not, however, currently intend to
convert to a Core and Gateway structure. Shareholders of Cash
Investment Fund are requested separately in Proposal Six to
approve the conversion of the Fund to a Core and Gateway
Structure.
Shareholders of each of these Funds are requested to
approve Proposal Four in order: (i) to permit the Funds to
convert in the future to a Core and Gateway structure without
obtaining shareholder approval at that time; (ii) to approve an
amendment to their investment advisory agreement to enable
Norwest to provide asset allocation services; and (iii) to
standardize the fundamental investment policies of the Funds.
Intermediate Government Income Fund and Limited Term
Tax-Free Fund. These Funds are permitted to invest pursuant to a
master-feeder structure but are prohibited from investing
pursuant to a fund-of-funds structure. Approval of this Proposal
would enable these Funds to invest in the future in a fund-of-
funds structure without obtaining shareholder approval at that
time. These Funds do not, however, currently intend to invest
pursuant to either type of Core and Gateway structure.
Shareholders of each of these Funds are requested to
approve Proposal Four in order: (i) to permit the Funds to
convert in the future to a fund-of-funds structure without
obtaining shareholder approval at that time; (ii) to approve an
amendment to their investment advisory agreement to enable
Norwest to provide asset allocation services; and (iii) to
standardize the fundamental investment policies of the Funds.
20
<PAGE>
Conservative Balanced Fund, Moderate Balanced Fund,
Growth Balanced Fund, Diversified Equity Fund and Growth Equity
Fund. These Funds (collectively, the "Blended Funds") currently
invest in a fund-of-funds structure and, as stated in the
Prospectuses offering their Shares, could, under certain
circumstances, convert in the future to a master-feeder structure
without obtaining shareholder approval at that time. The Blended
Funds do not currently intend to convert to a master-feeder
structure. The Blended Funds currently receive but do not pay a
fee for asset allocation services from Norwest. Shareholders of
the Blended Funds are requested separately in Proposal Five to
consider and approve the imposition of an asset allocation fee.
Shareholders of each of these Funds are requested to
approve Proposal Three in order to standardize the fundamental
investment policies of the Funds.
International Fund and Small Cap Opportunities Fund.
These Funds currently invest pursuant to a master-feeder
structure but are prohibited from investing in a fund-of-funds
structure. Approval of Proposal Four would enable the Funds in
the future to convert to a fund-of-funds structure and receive
appropriate advisory services without obtaining shareholder
approval at that time. These Funds do not currently intend to
convert to a fund-of-funds structure.
Shareholders of each of these Funds are requested to
approve Proposal Four in order: (i) to permit the Funds to
convert in the future to a fund-of-funds structure without
obtaining shareholder approval at that time; (ii) to approve an
amendment to their investment advisory agreement to enable
Norwest to provide asset allocation services; and (iii) to
standardize the fundamental investment policies of the Funds.
Stable Income Fund, Index Fund, Large Company Growth
Fund, Income Equity Fund and Small Company Growth Fund. As
stated in the Prospectuses offering their Shares, these Funds
could, under certain circumstances, convert to a master-feeder
structure without obtaining shareholder approval at that time.
The Funds are prohibited, however, from investing pursuant to a
fund-of-funds structure. Upon approval of this Proposal, each
Fund would be able in the future to invest in a fund-of-funds
structure without obtaining shareholder approval at that time.
These Funds do not currently intend to invest in a fund-of-funds
structure.
Shareholders of each of these Funds are requested to
approve Proposal Four in order: (i) to enable the Funds to
convert to a fund-of-funds structure in the future without
obtaining shareholder approval at that time; (ii) to approve an
amendment to their advisory agreement to enable Norwest to
21
<PAGE>
provide asset allocation services; and (iii) to standardize the
fundamental investment policies of the Funds.
Upon approval by shareholders of the Proposals set forth
in this Proxy Statement, each of these Funds will convert to a
master-feeder structure and invest all of their investable assets
in a Core Portfolio with substantially the same investment
objectives and policies as the Fund.
Diversified Bond Fund. As stated in the Prospectuses
offering its Shares, the Fund could, under certain circumstances,
convert in the future to a master-feeder structure without
obtaining shareholder approval at that time. The Fund is
prohibited, however, from investing pursuant to a fund-of-funds
structure.
The Fund currently seeks to achieve its investment
objective by investing its assets directly in securities in
accordance with a "multi-style" investment approach designed to
reduce price and return volatility and to provide more consistent
returns. The Fund invests equally in three fixed income
investment styles - total return bond style, managed fixed income
style and positive return style. Pursuant to its investment
advisory contract, Norwest provides the Fund with asset
allocation services. Norwest rebalances Diversified Bond Fund's
portfolio periodically, and the percentage of the Fund's assets
invested using a specified style may be changed at any time by
Norwest in response to market or other conditions.
Upon approval of this Proposal, the assets of the Fund
invested in those styles will be invested equally in three
separate Core Portfolios that will operate pursuant to
substantially the same investment policies as the corresponding
style: Total Return Bond Portfolio, Managed Fixed Income
Portfolio, and Positive Return Portfolio. See "Core and Gateway
Structures - Fund-of-Funds" above. The investment objectives and
policies of each of the Core Portfolios are summarized in
Appendix C to this Proxy Statement.
Shareholders of the Fund are requested to approve
Proposal Four in order: (i) to enable the Fund to convert to a
fund-of-funds structure; and (ii) to standardize the fundamental
investment policies of the Funds.
Shareholders of Diversified Bond Fund are being
requested separately in Proposal Four to approve the imposition
of an asset allocation fee. A table comparing the Funds current
expenses to the estimated expenses of the Fund upon conversion to
a fund-of-funds structure is set forth in Proposal Four.
22
<PAGE>
Ready Cash Investment Fund, Total Return Bond Fund and
Small Company Stock Fund. Currently, each Fund is prohibited
from investing pursuant to either type of Core and Gateway
structure. Upon approval of this Proposal, each Fund would
convert to a master-feeder structure and invest all of its
investable assets in a Core Portfolio with substantially the same
investment objectives and policies as the Fund: Ready Cash
Investment Fund will invest in Rated Money Market Portfolio,
Total Return Bond Fund will invest in Total Return Bond Portfolio
and Small Company Stock Fund will invest in Small Company Stock
Portfolio.
While Rated Money Market Portfolio will have
substantially the same investment objective and policies as Ready
Cash Investment Fund, the Portfolio also will maintain, as a non-
fundamental policy, a single "A" rating from Standard & Poor's
Corporation.
Under this Proposal, the total contractual fees to be
paid by each Fund directly, and indirectly as an interestholder
in the Core Portfolio, for investment advisory, administrative,
transfer agency, custody, fund accounting and management services
would not exceed the contractual fees currently payable by the
Fund for those services. As a result, shareholders in the Fund
would not experience an increase in total operating expenses
following implementation of the proposed changes. The Fund's
direct fee structure, however, would change as a result of its
investment in the Core Portfolio because certain fees (such as
advisory and custody fees) would be borne by the Fund indirectly
as an interestholder in the Core Portfolio rather than directly.
The advisory fee paid indirectly by each Fund would be the same
as the advisory fee borne by the Fund. See "Comparative Fee
Table" below.
It is proposed that the Funds invest in the Core
Portfolios in order to pool their assets with the assets of other
investors in the Core Portfolios thereby achieving a larger asset
base that could (but would not necessarily) result in investment
and administrative efficiencies, economies of scale and lower
expense ratios. For example, upon the approval of Proposal Four
by the shareholders of Diversified Bond Fund, that Fund will
invest a portion of its assets in Total Return Bond Portfolio.
In addition, upon approval of Proposal Four by the shareholders
of Cash Investment Fund, that Fund will invest one half of its
assets in Rated Money Market Portfolio. However, in the event
that shareholders of Cash Investment Fund do not vote to approve
Proposal Four, Ready Cash Investment Fund would not convert to a
Core and Gateway Structure.
Shareholders of each of these Funds are requested to
approve Proposal Four in order: (i) to enable the Funds to
23
<PAGE>
convert to a master-feeder structure; (ii) to enable the Funds to
convert in the future to a fund-of-funds structure without
obtaining shareholder approval at that time; (iii) approve an
amendment to their advisory agreements to enable Norwest to
provide asset allocation services; and (iv) to standardize the
fundamental investment policies of the Funds.
COMPARATIVE FEE TABLE
The following table is intended to compare the various
expenses that an investor in each converting Fund would bear
directly or indirectly after conversion by the Fund to a Core and
Gateway structure with the expenses the investor bears under the
existing Fund structure. Shareholders of the converting Funds
should read this information carefully before voting on this
Proposal.
The table shows the actual expenses of each converting
Fund for the fiscal year ended May 31, 1996 and a pro forma
adjustment thereof assuming each Fund had invested all of its
investable assets in the Core Portfolio(s) for the period
presented. The table also assumes there were investors in the
Core Portfolio other than the Fund and that the average assets
invested by the Fund were the same as the average net assets of
the Fund for that period.
Annual Operating Expenses
(As a percentage of average net assets)
Gateway Fund Core Portfolio
Invest- Invest- Combined
ment Rule Total ment Total
Advisory 12b-1 Other Advisory Others Operating
Fund Fees* Fees** Expenses*** Fees Expenses+ Expenses++
Ready Cash Investment
Investor Shares .35% None .47% N/A N/A .82%
Exchange Shares .35 0 1.22 N/A N/A 1.57
Pro Forma
Investor Shares N/A None .46 .34 .02 .82
Exchange Shares N/A .75 .46 .34 .02 1.57
Total Return Bond
A Shares .50 None .25 N/A N/A .75
B Shares .50 .53 .47 N/A N/A 1.50
I Shares .50 None .25 N/A N/A .75
24
<PAGE>
Pro Forma
A Shares N/A None .36 .35 .04 .75
B Shares N/A .75 .36 .35 .04 1.50
I Shares N/A None .36 .35 .04 .75
Small Company Stock
A Shares .64 None .56 N/A N/A 1.20
B Shares .64 .57 .74 N/A N/A 1.95
I Shares .64 None .56 N/A N/A 1.20
Pro Forma
A Shares N/A None .26 .90 .04 1.20
B Shares N/A .75 .26 .90 .04 1.95
I Shares N/A None .26 .90 .04 1.20
* Absent waivers, the Investment Advisory Fees would be .36%
for Ready Cash Investment Fund; and 1.00% for Small Company
Stock Fund.
** Absent waivers, the Rule 12b-1 Fees would be 1.00% for the B
Shares of each Fund and Pro Forma Fund. Long-term
shareholders of B shares may pay aggregate sales charges
totaling more than the economic equivalent of the maximum
front-end sales charges permitted by the Conduct Rules of the
National Association of Securities Dealers, Inc.
*** Absent waivers and reimbursements, Other Expenses would be:
for Ready Cash Investment Fund, .51% for Investor Shares,
6.93% for Exchange Shares, .48% for Pro Forma Investor
Shares, 3.40% for Pro Forma Exchange Shares; for Total Return
Bond Fund, 1.08% for A Shares, 1.25% for B Shares, .57% for I
Shares, .71% for Pro Forma A Shares, 1.03% for Pro Forma B
Shares, .51% for Pro Forma I Shares; for Small Company Stock
Fund, 1.85% for A Shares, 1.22% for B Shares, .60% for I
Shares, .57% for Pro Forma A Shares, .88% for Pro Forma B
Shares, .50% for Pro Forma I Shares.
+ Absent waivers and reimbursements, Other Expenses for each
class of shares of a Fund would be: .12% for Pro Forma Ready
Cash Investment Fund, .14% for Pro Forma Total Return Bond
Fund, .14% for Pro Forma Small Company Stock Fund.
++ Absent waivers and reimbursements, Total Operating Expenses
of each Fund would be: Ready Cash Investment Fund, .87% for
Investor Shares, 8.24% for Exchange Shares, .93% for Pro
Forma Investor Shares, 4.61% for Pro Forma Exchange Shares;
for Total Return Bond Fund, 1.58% for A Shares, 2.50% for B
Shares, 1.07% for I Shares, 1.19% for Pro Forma A Shares,
2.27% for Pro Forma B Shares, .99% for Pro Forma I Shares;
for Small Company Stock Fund, 1.88% for A Shares, 2.69% for B
25
<PAGE>
Shares, 1.60% for I Shares, 1.62% for Pro Forma A Shares,
2.68% for Pro Forma B Shares, 1.54% for Pro Forma I Shares.
EXAMPLE
The following illustrates the direct and indirect
expenses attributable to a $1,000 investment in each Fund under
the existing Fund structure, assuming: (i) combined expense
reimbursements and fee waivers at the same level as are currently
in effect for the Fund; (ii) 5% annual return; (iii) reinvestment
of all dividends and distributions; and (iv) full redemption at
the end of the period:
1 Year 3 Years 5 Years 10 Years
Ready Cash Investment Fund
Investor Shares $ 8 $26 $ 46 $101
Exchange Shares
Assuming redemption
at the end of the period 56 80 106 -
Assuming no redemption 16 50 86 -
Pro Forma
Investor Shares 8 26 46 101
Exchange Shares
Assuming redemption
at the end of the period 56 80 106 -
Assuming no redemption 16 50 86 -
Total Return Bond Fund
A Shares 45 61 78 127
B Shares
Assuming redemption
at the end of the period 45 68 83 -
Assuming no redemption 15 48 83 -
I Shares 8 24 42 94
Pro Forma
A Shares 45 61 78 127
B Shares
Assuming redemption
at the end of the period 45 68 83 -
Assuming no redemption 15 48 83 -
I Shares 8 24 42 44
Small Company Stock Fund
A Shares 57 82 109 185
B Shares
Assuming redemption
at the end of the period 60 92 127 -
Assuming no redemption 20 62 107 -
I Shares 12 38 66 147
26
<PAGE>
Pro Forma
A Shares 57 82 109 185
B Shares
Assuming redemption
at the end of the period 60 92 127 -
Assuming no redemption 20 62 107 -
I Shares 12 38 66 147
The table and the examples above are intended to compare
the various fees and expenses that an investor in a Fund would
bear directly and indirectly after conversion by the Funds to a
Core and Gateway structure with the fees and expenses the
investor bears under the existing fund structure. The example
should not be considered a representation of past or future
expenses or returns. Actual expenses and returns may be greater
or less than indicated.
EVALUATION BY THE BOARD
In considering the matters described in this Proposal at
the Meeting, the Board examined and weighed for each Fund the
potential benefits, costs and risks, as presented to the Board by
the management of the Funds, of the conversion to a Core and
Gateway structure. In this regard, the Board considered the
following:
-- The possibility that a Fund using a Core and Gateway
structure could achieve investment and administrative
efficiencies, economies of scale and lower expense ratios than it
could realize if it did not convert to a Core and Gateway
structure. The Board considered that, to the extent that certain
operating costs may be fixed and are currently borne by a Fund
alone, these expenses could instead be borne in whole or in part
directly by a Core Portfolio and indirectly shared pro rata by
the Fund and other investors in the Fund's Core Portfolio.
-- The opinion of the management of the Trust that the
combined investment by the Blended Funds and converting Funds in
each of the Core Portfolios would result in immediate
efficiencies of scale and cost savings.
-- The fact that a larger asset base may allow the purchase
of investment securities by a Core Portfolio in larger
denominations, resulting in possible reductions in certain
transactional and custodial expenses.
-- The greater diversification that may be achieved by
investing a portfolio with a larger asset base. Greater
diversification is beneficial to shareholders of a Fund because
it may reduce the negative effect which the adverse performance
27
<PAGE>
of any one portfolio security may have on the performance of the
entire investment portfolio.
-- The opinion of the management of the Trust that it is
unlikely that certain of the Funds' asset bases could be grown
significantly above their present size, which is below the asset
level required to garner meaningful economies of scale, without
resorting to a Core and Gateway structure in each of the Core
Portfolios.
-- The flexibility both to attract and retain assets under
management provided by a Core and Gateway structure.
-- The fact that in certain cases the foregoing benefits
would likely arise only if a Fund's Core Portfolio were to
attract the assets of investors other than those investing in the
Fund. The Board also considered that there is no assurance that
expense savings or other benefits will be realized even if other
investors invest in a Core Portfolio.
-- The opinion of management of the Trust that over time
the aggregate per share expenses of a Fund investing in a Core
Portfolio should not be more than the expenses that would be
incurred by a Fund if it continues to invest directly in
securities, although there can be no assurance that any expense
savings would be realized.
-- The possibility that Norwest, Forum and other service
providers to the Funds may benefit through increased economies of
scale in the event that assets under management rise, whether or
not there is a corresponding benefit to Fund shareholders. The
Board considered that conversion to a Core and Gateway structure
may enable Norwest to increase assets under management through
development of new Gateway Funds with less risk than would be
possible without this structure. Because investors in a new
Gateway Fund would invest their assets in a Core Portfolio with
an established performance record, Norwest could attract assets
with less risk of limited success than is typical in the early,
developmental years of an investment vehicle.
-- The costs of the proposed change in fund structure,
other options to the proposed change, and the tax-free nature of
the proposed change.
Based on the foregoing, the Board, including a majority
of the independent Trustees, determined that it would be in the
best interests of each Fund and its respective shareholders for
shareholders to approve this Proposal. Accordingly, the Board
recommends that shareholders vote FOR Proposal Three.
The Board recommends that shareholders vote FOR Proposal Three.
28
<PAGE>
PROPOSAL FOUR
APPROVAL OF CHANGES TO THE FUND'S CURRENT ADVISORY
FEE STRUCTURE, INCLUDING PAYMENT TO NORWEST OF
AN ASSET ALLOCATION FEE
Shareholders of Conservative Balanced Fund,
Moderate Balanced Fund, Growth Balanced Fund, Diversified
Equity Fund, Growth Equity Fund and Diversified Bond Fund
(the "Blended Funds"), voting individually by Fund, are
entitled to vote on this Proposal. Approval of this
Proposal with respect to a Fund requires the approval of a
Majority of the outstanding Shares of the Fund.
INTRODUCTION
Each Blended Fund invests its assets in multiple
investment styles by allocating a certain percentage of its
assets to different styles in order to reduce price and
return volatility, diversify the Fund's assets, provide more
consistent investment returns and reduce the risk associated
with the use of a single style. Currently, the portions of
the Blended Funds' assets that are allocated to the small
company, index and international styles are invested in the
following corresponding portfolios of Core Trust -- Small
Company Portfolio, Index Portfolio and International
Portfolio II (the "Portfolios"). Assets of a Blended Fund
that are invested in a style other than those of the
Portfolios, such as large company growth or stable income
style, are managed directly by Norwest on behalf of the
Blended Fund.
It is anticipated that Core Trust will establish
additional portfolios (the "new Portfolios"), each
corresponding to one of the other investment styles employed
by the Blended Funds, so that the Blended Funds may pool
their assets that currently are managed directly by Norwest
in those styles. Each new Portfolio will have identical
investment policies to those of its corresponding style.
The Blended Funds will invest their assets in the new
Portfolios in the same percentages that the Funds currently
invest their assets in the corresponding investment styles.
The Portfolios and the new Portfolios are referred to
collectively as the "Core Portfolios."
The primary reason to invest the Blended Funds'
assets in the Core Portfolios is to pool the common
investments of the Blended Funds with the common investments
of other Funds of the Trust. That pooling is designed to
create a larger asset base for the Blended Funds in order to
provide investment and administrative efficiencies,
29
<PAGE>
economies of sale and lower expense ratios. In addition,
Management of the Trust and Norwest anticipate that the
aggregate advisory fees that will be borne indirectly by
each Blended Fund, as an interestholder in the Core
Portfolios, will be less than the contractual advisory fee
currently applicable to the Fund.
To facilitate the allocation of the Blended Funds
assets in the Core Portfolios, Norwest will provide and
receive a fee for enhanced asset allocation services. As a
result, the investment by the Blended Funds in the Core
Portfolios entails a restructuring of the nature and an
increase in the amount of investment advisory fees that are
paid directly and indirectly by the Funds.
Shareholders are asked in this Proposal to approve
the imposition of the asset allocation fee which, absent
agreed to waivers, would result in an increase in the amount
payable by a Blended Fund for advisory services. As a
result of waivers, however, approval of this Proposal will
not affect the amount of expenses borne by the Blended Funds
for at least two fiscal years. Thereafter, the amount paid
directly and indirectly for advisory services by the Blended
Funds could increase over current contractual levels only
upon approval by the Board and notice to shareholders.
CURRENT AND PROPOSED INVESTMENT ADVISORY STRUCTURE
Norwest serves as investment adviser for each
Blended Fund pursuant to an investment advisory agreement
dated December 31, 1993 between Norwest and the Trust on
behalf of each Blended Fund (the "Advisory Agreement").
Norwest serves also as investment adviser to Small Company
Portfolio and Index Portfolio and will serve as adviser to
each new Portfolio. Schroder Capital Management
International Inc. ("Schroder") serves as investment adviser
to International Portfolio II.
Pursuant to the Advisory Agreement, if a Blended
Fund's assets were withdrawn from a Portfolio, Norwest would
directly manage the withdrawn assets in the corresponding
investment style. In the event the assets of the Blended
Funds invested in International Portfolio II were withdrawn,
Schroder would act as subadviser for the Blended Funds with
respect to those assets pursuant to investment subadvisory
agreements among the Trust, Norwest and Schroder (the
"Subadvisory Agreements"). Schroder would be entitled to a
fee from Norwest for those services; that fee would not
affect the amount of the advisory fee paid to Norwest by a
Blended Fund.
30
<PAGE>
Under the Advisory Agreement, each Blended Fund
pays Norwest an advisory fee for Norwest's services. To
avoid the layering of advisory fees, Norwest currently
waives all of the advisory fees payable by Small Company
Portfolio and Index Portfolio and reimburses International
Portfolio II for the amount of the advisory fees paid by the
Portfolio to Schroder. The Blended Funds currently pay
their pro rata portion of the non-advisory expenses of the
Core Portfolios in which they invest.
As a result of the restructuring, the Blended Funds
would bear their pro rata portion of the advisory fees of
the Core Portfolios in which they invest (the "indirect
advisory fees").
Asset Allocation Services. Norwest currently
provides each Blended Fund with asset allocation services
with respect to the Fund's investments among the various
investment styles followed by the Fund. Subject to the
general supervision of the Board, and in accordance with the
investment objective and policies of a Blended Fund, Norwest
is responsible for allocating and reallocating the Fund's
assets among the investment styles and for rebalancing the
allocations ("asset allocation services"). Asset allocation
services are, in general, separate and distinct from
Norwest's portfolio management services.
To date, those allocation services have been
restricted by the limitations imposed by the exemptive order
of the Securities and Exchange Commission pursuant to which
the Blended Funds operate currently in a fund-of-funds
structure (the "the original exemptive order").
Specifically, the original order imposed limits on the
ranges of the Blended Fund's investments in a Core
Portfolio. The Trust has obtained an amendment to the
original exemptive order that modifies certain of the
existing limitations (the "amended exemptive order"). As a
result, the Blended Funds will have greater flexibility to
invest varying amounts of their assets in the Core
Portfolios.
Approval of this proposal would enable Norwest to
receive an annual asset allocation fee equal to 0.25% of the
average daily net assets of a Blended Fund in recognition of
the expanded and formal asset allocation role pursuant to
which Norwest would invest the Fund's assets in the Core
Portfolios. Norwest and Forum have agreed to waive that
portion of the asset allocation fee and other fees payable
by a Blended Fund through May 31, 1999 necessary to ensure
that there will be no increase over the current contractual
rates in the fees borne by a Blended Fund for aggregate
31
<PAGE>
asset allocation, portfolio management, administrative and
management services. Although, after that date, the total
operating expenses of the Blended Funds could increase above
current contractual rates because the waiver was reduced or
eliminated, Board approval would be required. Only if the
Board were to determine that the amount of the asset
allocation fee to be paid to Norwest was fair and reasonable
would the Board approve a future reduction or elimination in
the waiver.]
In the event that a Blended Fund's investment were
withdrawn from a Core Portfolio, in return for managing
those assets directly, Norwest would be entitled to receive
an advisory fee, with respect to those assets, equal to the
contractual advisory fee currently payable by the Blended
Fund. See "Indirect Advisory Fees" below. The Blended
Funds currently intend to invest all of their investable
assets in the Core Portfolios and do not intend to invest in
securities directly.
Each Core Portfolio, except Small Company Value
Portfolio, Managed Fixed Income Portfolio and Positive
Return Portfolio has (or will have) a Gateway Fund (as
defined in Proposal Four) that offers its shares directly to
the public. Investors that do not wish to avail themselves
of Norwest's asset allocation services would be able,
through the Gateway Funds, to invest directly in certain of
the Core Portfolios in whatever proportions the investors
desired.
INDIRECT ADVISORY FEES
As a result of the new advisory fee structure, the
amount paid by a Blended Fund for advisory services will
vary depending on the allocation of the Blended Funds assets
among the Core Portfolios. Management of the Trust has
established initial ranges that will prevent the aggregate
indirect advisory fee of a Blended Fund from exceeding the
Fund's current contractual advisory fee. The waiver
(discussed above) obligates Norwest and Forum to reimburse
the indirect advisory fees to a Blended Fund if the
aggregate indirect advisory fees exceed the current
contractual advisory fee applicable to the Blended Fund.
Accordingly, neither a Blended Fund (nor its shareholders)
would be subject to any fee increase for at least two fiscal
years.
Set forth below are the ranges and amounts of
indirect advisory fees payable to Norwest by each Core
Portfolio based on the initial percentage allocations for
each Blended Fund in the Core Portfolios.
32
<PAGE>
<TABLE>
<CAPTION>
Blended Fund allocations as a percentage of total net assets
_______________________________________________________________________
Conservative Moderate Growth Diversified Growth Diversified
Core Portfolio and Balanced Balanced Balanced Equity Equity Bond
Advisory Fee Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
Index Portfolio .15% 0-15 5-20 10-30 15-35 NA NA
Income Equity Portfolio .50% 0-15 5-20 10-30 15-35 NA NA
Large Company
Growth Portfolio .65% 0-15 5-20 10-30 15-35 20-40 NA
Small Company Stock
Portfolio .90% 0-5 0-5 0-5 0-5 5-20 NA
Small Company Growth
Portfolio .90% 0-5 0-5 0-5 0-5 5-20 NA
Small Company Value
Portfolio .90% 0-5 0-5 0-5 0-5 5-20 NA
International
Portfolio [II] .45% 0-8 0-10 0-10 5-20 20-40 NA
Total Return Bond
Portfolio .35% 5-28 5-25 0-30 NA NA 20-50
Managed Fixed Income
Portfolio .35% 5-28 5-25 0-30 NA NA 20-50
Positive Return
Portfolio .35% 5-28 5-25 0-30 NA NA 20-50
Stable Income
Portfolio .30% 5-25 5-25 NA NA NA NA
Money Market
Portfolio .10% 5-15 NA NA NA NA NA
____________________________________________________________________________________________
Ranges of Blended
Advisory Fee Rates [ ] [ ] [ ] [ ] [ ] [ ]
</TABLE>
The actual percentage allocations may be changed at any
time by Norwest in response to market or other conditions.
Subject to Board approval and only after May 31, 1999, changes in
33
<PAGE>
the allocations could increase the indirect advisory fee borne by
a Blended Fund to an amount exceeding the current contractual
advisory fee applicable to the Fund. In the event of an
allocation of assets to the Core Portfolios having the highest
advisory fees (which is unlikely), the advisory fee payable
indirectly by a Blended Fund could equal [ ]%, in the case of
Conservative Balanced Fund, [ ]%, in the case of Moderate
Balanced Fund, [ ]%, in the case of Growth Balanced Fund, [ ]%,
in the case of Diversified Equity Fund, [ ]%, in the case of
Growth Equity Fund and [ ]%, in the case of Diversified Bond
Fund. Management of the Trust and Norwest believe, however, that
those allocations would never occur.
The percentage of a Blended Fund's assets invested using
a particular investment style may be changed at any time by
Norwest in response to market or other conditions. In addition,
Norwest may, at any time, invest a Blended Fund's assets in
investment styles that are different from or are in addition to,
those listed above with respect to the Blended Fund.
COMPARATIVE EXPENSE TABLES
The following tables summarize the estimated expenses of
the Blended Funds upon imposition of the new fee structure and as
a result of the investment by the Blended Funds in the new
Portfolios.
Table A below shows the direct and indirect expenses of
each Blended Fund for the fiscal year ended May 31, 1996. Table
B below shows, for the same period, the direct and indirect
expenses of each Blended Fund assuming that each Blended Fund had
allocated its assets to the Core Portfolios in the percentages
that it allocated its assets to the corresponding investment
styles. Table B shows also the amount of expenses with and
without the waiver by Norwest of the asset allocation fee. See
"Asset Allocation Services" above.
Table A: Annual Operating Expenses
(As a percentage of average net assets)
Blended Fund Core Portfolios
Combined
Rule Total
Advisory 12b-1 Other Advisory Other Operating
Fees Fees Expenses* Fees Expenses+ Expenses++
Conservative Balanced
Fund .45% None .34% None .03% .82%
Moderate Balanced Fund .53 None .34 None .03 .90
Growth Balanced Fund .58 None .34 None .06 .98
Diversified Equity Fund
34
<PAGE>
A Shares .65 None .31 None .09 1.05
B Shares .65 .75+++ .40 None .09 1.89
I Shares .65 None .34 None .09 1.08
Growth Equity Fund
A Shares .90 None .43 None .13 1.46
B Shares .90 .75+++ .47 None .13 2.25
I Shares .90 None .34 None .13 1.37
Diversified Bond Fund .35 None .35 N/A N/A .70
_________________________
* Absent expense reimbursements and fee waivers, Other Expenses
of each Fund would be, respectively: Conservative Balanced
Fund: .45%; Moderate Balanced Fund: .40%; Growth Balanced
Fund: .40%; Diversified Equity Fund: A Shares - 1.63%,
B Shares - 1.57% and I Shares - .39%; Growth Equity Fund: A
Shares - 1.85%, B Shares - 1.66% and I Shares - .39%; and
Diversified Bond Fund: .43%. Expense reimbursements and fee
waivers are voluntary and may be reduced or eliminated at any
time.
+ Absent expense reimbursement and fee waivers, the Operating
Expenses of the Blended Funds solely attributable to their
Core Portfolios would have been: Conservative Balanced Fund,
.02%, Moderate Balanced Fund, .04%; Growth Balanced Fund,
.06%; Diversified Equity Fund, A Shares - .09%, B Shares -
.09% and I Shares - .09%; Growth Equity Fund, A Shares -
.13%, B Shares - .13% and I Shares - .13%. Expense
reimbursements are voluntary and may be reduced or eliminated
at any time.
++ Absent expense reimbursements and fee waivers relating both
to the Blended Funds and their Core Portfolios, the Total
Operating Expenses of the Blended Funds would have been:
Conservative Balanced Fund, 0.92%; Moderate Balanced Fund,
.97%; Growth Balanced Fund, 1.04%; Diversified Equity Fund, A
Shares - 2.37%, B Shares - 3.06% and I Shares - 1.13%; Growth
Equity Fund, A Shares - 2.88%, B Shares - 3.44% and I Shares
- 1.42%. Absent expense reimbursements and fee waivers, the
Total Operating Expenses of Diversified Bond Fund would have
been 0.78%. Expense reimbursements and fee waivers are
voluntary and may be reduced or eliminated at any time.
+++ Absent waivers, the Rule 12b-1 Fees would be 1.00% for the B
Shares of each Fund. Long-term shareholders of B Shares may
pay aggregate sales charges totaling more than the economic
equivalent of the maximum front-end sales charges permitted
by the Conduct Rules of the National Association of
Securities Dealers, Inc.
35
<PAGE>
EXAMPLE
The following is a hypothetical example, based on Table
A above, that indicates the dollar amount of expenses that an
investor would pay, assuming a $1,000 investment in a Blended
Fund's Shares, a 5% annual return and reinvestment of all
dividends and distributions. The example should not be
considered a representation of past or future expenses or return.
Actual expenses and return may be greater or less than indicated.
1 Year 3 Years 5 Years 10 Years
Conservative Balanced Fund $ 9 $ 27 $ 47 $104
Moderate Balanced Fund 9 29 50 112
Growth Balanced Fund 10 31 55 121
Diversified Equity Fund
A Shares 55 77 100 167
B Shares
Assuming redemption
at the end of the
period 60 92 125 221
Assuming no redemption 19 59 102 221
I Shares 11 34 59 131
Growth Equity Fund
A Shares 69 89 121 212
B Shares
Assuming redemption
at the end of the
period 63 102 143 258
Assuming no redemption 23 70 120 258
I Shares 14 43 75 165
Diversified Bond Fund 7 23 40 88
Table B: Pro Forma - Annual Operating Expenses
(As a percentage of average net assets)
Blended Fund Core Portfolios
Invest- Invest- Combined
ment Rule ment Total
Advisory 12b-1 Other Advisory Other Operating
Funds Fees Fees Expenses* Fees Expenses+ Expenses++
Conservative Balanced .10% None .30% .35% .05% .80%
- - With full asset
allocation fee .25 .95
36
<PAGE>
Moderate Balanced .13 None .30 .40 .05 .88
- - With full asset
allocation fee .25 1.00
Growth Balanced .14 None .30 .44 .05 .93
- - With full asset
allocation fee .25 1.04
Diversified Equity
A Shares .17 None .32 .48 .03 1.00
B Shares .17 .75+++ .32 .48 .03 1.75
I Shares .17 None .32 .48 .03 1.00
- - With full asset
allocation fee
A Shares .25 1.08
B Shares .25 1.83
I Shares .25 1.08
Growth Equity
A Shares .22 None .29 .68 .06 1.25
B Shares .22 .75+++ .29 .68 .06 2.00
I Shares .22 None .29 .68 .06 1.25
- - With full asset
allocation fee
A Shares .25 1.28
B Shares .25 2.03
I Shares .25 1.28
Diversified Bond .00 None .30 .35 .05 .70
- - With full asset
allocation fee .25 .95
_____________
* Absent expense reimbursements and fee waivers, Other Expenses
of each Fund would be: Conservative Balanced Fund: .40%;
Moderate Balanced Fund: .37%; Growth Balanced Fund: .37%;
Diversified Equity Fund: A Shares - .42%; B Shares - .67% and
I Shares - .37%; Growth Equity Fund: A Shares - .44%, B
Shares - .76% and I shares - .37%; Diversified Bond Fund:
.39%. Expense reimbursements and fee waivers are voluntary
and may be reduced or eliminated at any time.
+ Absent expense reimbursements and fee waivers, Other Expenses
of each Fund solely attributable to their Core Portfolios
would be: Conservative Balanced Fund: .16%; Moderate Balanced
Fund: .15%; Growth Balanced Fund: .15%; Diversified Equity
Fund: A Shares - .13%, B Shares - .13% and I Shares - .13%;
Growth Equity Fund: A Shares - .16%, B Shares - .16% and I
Shares - .16%. Expense reimbursements and fee waivers are
voluntary and may be reduced or eliminated at any time.
37
<PAGE>
++ Absent expense reimbursements and fee waivers relating both
to the Blended Funds and their Core Portfolios, the Total
Operating Expenses of the Blended Funds would have been:
Conservative Balanced Fund: 1.15%; Moderate Balanced Fund:
1.17%; Growth Balanced Fund: 1.20%; Diversified Equity Fund:
A Shares - 1.29%, B Shares - 2.29% and I Shares - 1.24%;
Growth Equity Fund: A Shares - 1.53%, B Shares - 2.28% and I
Shares - 1.45%. Absent expense reimbursements and fee
waivers, the Total Operating Expenses of Diversified Bond
Fund would have been 1.14%. Expense reimbursements and fee
waives are voluntary and may be reduced or eliminated at any
time.
+++ Absent waivers, the Rule 12b-1 Fees would be 1.00% for the B
Shares of each Fund. Long-term shareholders of B Shares may
pay aggregate sales charges totaling more than the economic
equivalent of the maximum front-end sales charges permitted
by the Conduct Rules of the National Association of
Securities Dealers, Inc.
EXAMPLE
The following is a hypothetical example that indicates
the dollar amount of expenses that an investor would pay,
assuming a $1,000 investment in a Blended Fund's Shares, a 5%
annual return and reinvestment of all dividends and
distributions. The example should not be considered a
representation of past or future expenses or return. Actual
expenses and return may be greater or less than indicated.
1 Year 3 Years 5 Years 10 Years
Conservative Balanced Fund $ 8 $26 $ 44 $ 99
With full asset
allocation fee 10 30 53 117
Moderate Balanced Fund $ 9 $28 $ 49 $108
With full asset
allocation fee 10 32 55 122
Growth Balanced Fund $ 9 $30 $ 51 $114
With full asset
allocation fee 11 33 57 127
Diversified Equity Fund
A Shares 55 75 98 162
B Shares
Assuming redemption at the end
of the period 58 87 118 206
Assuming no redemption 18 55 95 206
I Shares 10 32 55 122
38
<PAGE>
- - With full asset
allocation fee
A Shares 56 78 102 171
B Shares
Assuming redemption at the end
of the period 59 90 122 215
Assuming no redemption 19 58 99 215
I Shares 11 34 60 133
Growth Equity Fund
A Shares 57 83 111 189
B Shares
Assuming redemption at the end
of the period 61 95 131 233
Assuming no redemption 20 63 108 233
I Shares 13 40 69 151
- - With full asset
allocation fee
A Shares 57 84 112 193
B Shares
Assuming redemption at the end
of the period 61 96 132 236
Assuming no redemption 21 64 109 236
I Shares 13 41 70 155
Diversified Bond Fund 7 22 39 87
- - With full asset
allocation fee 10 30 53 117
The example is based on the expenses listed in the
Annual Operating Expenses table above. The 5% annual return is
not predictive of and does not represent the Blended Funds'
projected returns; rather, it is required by government
regulation. In addition to the assumptions applicable to the
table above, the example assumes deduction of the maximum initial
sales charge for A Shares, deduction of the contingent deferred
sales charge for B Shares applicable to a redemption at the end
of the period and the conversion of B Shares to A Shares at the
end of six years.
ADDITIONAL INFORMATION ABOUT THE ADVISORY AGREEMENT
The Advisory Agreement is substantially the same as the
investment advisory agreements between Norwest and Core Trust for
advising the Core Portfolios, except that the Core Portfolios do
not receive asset allocation services and, therefore, are not
subject to an asset allocation fee.
Under the Advisory Agreement, Norwest manages the
Blended Funds' investments at Norwest's expense, subject to the
39
<PAGE>
control of the Board and in accordance with the investment
objective and policies of the Funds. In this regard, it is the
responsibility of Norwest to make decisions relating to each
Fund's investments and to place purchase and sale orders
regarding those investments with brokers or dealers selected in
Norwest's discretion.
The Advisory Agreement was initially approved, with
respect to each Blended Fund, by the sole shareholder of the Fund
on [November 9, 1994]. The Advisory Agreement continues in
effect, with respect to a Blended Fund, 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
Blended Fund, and in either case by a majority of the Trustees
who are not parties to the Advisory Agreement or interested
persons of Norwest or the Blended 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 held on July 29-30, 1996.
The Advisory Agreement is terminable, with respect to a
Blended Fund, without penalty by the Blended Fund on 60 days
written notice when authorized either by vote of the Blended
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.
Set forth below are the investment advisory fees
currently payable to Norwest by the Trust with respect to each
Fund based on the average daily net assets of the respective
Fund.
Conservative Balanced Fund 0.45%
Moderate Balanced Fund 0.53%
Growth Balanced Fund 0.58%
Diversified Equity Fund 0.65%
Growth Equity Fund 0.90%
Diversified Bond Fund 0.35%
For the fiscal period ended May 31, 1996, under the
Advisory Agreement, Norwest received the following amounts from
the Blended Funds for advisory services: $376,529, in the case of
Conservative Balanced Fund, $1,208,825, in the case of Moderate
Balanced Fund, $1,424,260, in the case of Growth Balanced Fund,
$3,038,858, in the case of Diversified Equity Fund, $3,342,391,
in the case of Growth Equity Fund, and $344,777, in the case of
Diversified Bond Fund. Assuming that the proposed advisory fee
structure had been in place during the same period and that
Norwest had waived the asset allocation fee as described above,
40
<PAGE>
Norwest would have received exactly the same dollar amount in
fees.
For the period ended May 31, 1996, Norwest reimbursed
Schroder $1,005,925 with respect to advisory fees paid by
International Portfolio II to Schroder. Had the new fee
structure been in place during that period, it is estimated that
Schroder would have received, with respect to the Blended Fund's
investments in International Portfolio II, $14,198, in the case
of Conservative Balanced Fund, $61,923, in the case of Moderate
Balanced Fund, $108,338, in the case of Growth Balanced Fund,
$317,325, in the case of Diversified Equity Fund, and $504,140,
in the case of Growth Equity Fund.
Absent that waiver, the difference in the amount payable
by the Blended Fund for advisory services under the current
advisory fee structure and under the proposed structure,
expressed as a percentage would be: .60%, in the case of
Conservative Balanced Fund, .65%, in the case of Moderate
Balanced Fund, .69%, in the case of Growth Balanced Fund, .65%,
in the case of Diversified Equity Fund, .90%, in the case of
Growth Equity Fund, and .60%, in the case of Diversified Bond
Fund.
EVALUATION BY THE BOARD
At a meeting held on January 28, 1997, the Board
considered and voted to approve and recommended shareholder
approval of an amendment to the Advisory Agreement providing for
(i) payment by the Blended Funds to Norwest of an advisory fee
only with respect to Fund assets that are invested by Norwest
directly in portfolio securities and (ii) payment by the Blended
Funds to Norwest of an asset allocation fee equal to .25% of the
average daily net assets of the Fund that are invested in varying
percentages in two or more investment companies, such as the Core
Portfolios.
The Board considered various matters in evaluating the
reasonableness and fairness of the new indirect fee structure and
asset allocation fee. In particular, the Board examined and
weighed (1) the nature and duration of and the Board's oversight
authority with respect to the fee waivers agreed to by Norwest
and Forum; (2) the nature and quality of the services rendered
and the results achieved by Norwest in its management of each
Blended Fund (including investment performance comparisons with
other mutual funds and certain indices); (3) changes in the
mutual fund industry that have affected the Blended Funds; (4)
the payments received by Norwest from all sources related to both
the Blended Funds and the other investment companies advised by
Norwest; (5) the organizational capabilities and financial
condition of Norwest; (6) an analysis of the proposed fee rate
41
<PAGE>
change; (7) information concerning each Blended Fund's expense
ratio on both an existing and pro forma basis; (8) 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 (9) competitive industry fee structures and expense ratios,
including, specifically, the relationship of the proposed
advisory fee rates to those typically paid by similar funds,
bank-advised mutual funds and funds investing through a Core and
Gateway structure.
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 each Blended Fund 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 each Blended Fund and the
likelihood that Norwest would provide the same quantity and
quality of investment advice to each Core Portfolio with respect
to the assets of a Blended Fund as it currently provides directly
to the Blended Fund.
-- Actual and Pro Forma Advisory Fees and Expenses.
The Board considered the effect of the advisory fee charged by
Norwest on each Blended Fund's fee rates and annual expense
ratios (which include the advisory fee and all other operating
expenses incurred by the Fund).
-- Comparisons With Other Funds. The Board considered
the advisory fees paid by other investment companies (i) with
similar investment objectives and (ii) that invest in a Core and
Gateway structure. In addition to comparing the proposed
advisory fees, the Board also compared projected operating
expense ratios with the ratios of those investment companies.
Notwithstanding that the expansion of the Core and Gateway
structure and the payment by the Blended Funds of an asset
allocation fee would potentially result in increased direct and
indirect contractual management fees and operating expense
ratios, the Board believes that even after any such increase, the
management fees 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-advisory services
performed by Norwest and the fees received by Norwest for
performing the services. In addition, the Board considered the
organizational structure employed by Norwest in providing the
services.
42
<PAGE>
The Board recommends that shareholders vote FOR Proposal FOUR.
PROPOSAL FIVE
APPROVAL OF CHANGES TO THE FUND'S INVESTMENT ADVISORY
FEE STRUCTURE RELATED TO THE EQUAL INVESTMENT OF
THE FUND'S ASSETS IN TWO CORE PORTFOLIOS
Shareholders of Cash Investment Fund are entitled to
vote on Proposal Six. Approval of this Proposal requires the
approval of a Majority of the outstanding shares of the Fund.
INTRODUCTION
Upon approval of this Proposal, the Fund would convert
to a fund-of-funds structure and invest, as a non-fundamental
policy, equally in two money market portfolios of Core Trust --
Money Market Portfolio and Rated Money Market Portfolio. See
Proposal Four "Core and Gateway Structures - Fund-of-Funds"
above.
Money Market Portfolio will have the same investment
objective and policies as the Fund. While the investment
objective of Rated Money Market Portfolio will be identical to
the Fund's, the Portfolio also will maintain, as a non-
fundamental policy, a single "A" rating from Standard & Poor's
Corporation. The investment objectives and policies of each of
Money Market Portfolio and Rated Money Market Portfolio are
summarized in Appendix C to this Proxy Statement.
It is proposed that Cash Investment Fund invest equally
in the Core Portfolios in order to pool its assets with other
investors in the Core Portfolios thereby achieving a larger asset
base that could (but would not necessarily) result in investment
and administrative efficiencies, economies of scale and lower
expense ratios. For instance, upon the approval of Proposal Four
by the shareholders of Ready Cash Investment Fund, that Fund will
invest all of its assets in Rated Money Market Portfolio. In
addition, it is anticipated that Cash Investment Portfolio also
will have additional investors.
Management of the Trust and Norwest believe that the
Fund also will benefit from the investment of one-half of the
Fund's assets in a money market fund that is rated by a
nationally recognized statistical rating organization. In the
event that shareholders of Ready Cash Investment Fund do not vote
to approve Proposal Four, however, Cash Investment Fund would not
convert to a Core and Gateway Structure.
Shareholders are asked in this Proposal to approve
changes in the Fund's advisory fee structure. Specifically the
43
<PAGE>
investment by the Fund in the Core Portfolios entails both a
restructuring in the nature and an increase in the contractual
amount of investment advisory fees that could be paid directly
and indirectly by the Fund. As a result of agreed to waivers,
however, approval of this Proposal will not affect the amount of
expenses borne by the Fund for two fiscal years. Thereafter, the
amount paid directly and indirectly for advisory services by the
Fund would increase only upon approval by the Board and notice to
shareholders.
CURRENT AND PROPOSED ADVISORY FEE STRUCTURE
The contractual advisory fee indirectly applicable to
Cash Investment Fund, after the restructuring, would be a blend
of the advisory fees of each of the two Core Portfolios and would
exceed the advisory fee that Norwest is entitled to currently
from the Fund. As a result of a fee waiver described below,
however, the amount the Fund would pay for investment advisory
services would not increase over the contractual amount currently
payable by the Fund. Norwest would not receive an asset
allocation fee with respect to the investment by the Fund in the
Portfolios.
Under the new structure, Norwest would be entitled to
receive an advisory fee from Money Market Portfolio at an annual
rate of .20% of the average daily net assets for the first $300
million of net assets of the Portfolio, .16% of the average daily
net assets for the next $400 million of net assets of the
Portfolio, and .12% of the average daily net assets of the
remaining assets of the Portfolio. That is the same contractual
advisory fee currently payable by Cash Investment Fund. Norwest
would be entitled to receive an advisory fee from Rated Money
Market Portfolio at an annual rate equal to .40% of the average
daily net assets for the first $300 million of net assets of the
Portfolio, .36% of the average daily net assets for the next $400
million of net assets of the Portfolio, and .32% of the average
daily net assets of the remaining assets of the Portfolio. That
is the same contractual advisory fee currently payable by Ready
Cash Investment Fund. Absent any waiver, the blended advisory
fee will equal .30% of the average daily net assets for the first
$600 million of net assets of the Fund, .26% of the average daily
net assets of the next $800 million of net assets of the Fund and
.22% of the average daily net assets of the remaining assets of
the Fund.
To reduce the effect of the increase in the indirect
contractual advisory fee applicable to Cash Investment Fund,
Norwest has agreed to waive until May 31, 1999 that portion of
the advisory fee payable by Money Market Portfolio that exceeds
.10% of the average daily net assets of the Portfolio. As a
result of that waiver, the amount Cash Investment Fund will pay
44
<PAGE>
for investment advisory services will not increase over the
contractual amount currently borne for those services by the
Fund. Norwest has agreed that, after May 31, 1999, only with
Board approval could Norwest reduce the amount of the waiver.
Under this Proposal, the total contractual fees to be
paid by Cash Investment Fund directly, and indirectly as an
interestholder in the Portfolios, administrative, transfer
agency, custody, fund accounting and management services would
not exceed the contractual fees currently payable by the Fund for
those services. As a result, shareholders in the Fund would not
experience an increase in total operating expenses following
implementation of the proposed changes. The Fund's direct fee
structure, however, would change as a result of its investment in
the Portfolios because certain fees (such as advisory and custody
fees) would be borne by the Fund indirectly as an interestholder
in the Portfolios rather than directly. See "Comparative Fee
Table" below.
COMPARATIVE FEE TABLE
The following table is intended to compare the various
expenses that an investor in the Fund would bear directly or
indirectly after conversion by the Fund to a fund-of-funds
structure with the expenses the investor bears currently.
Shareholders should read this information carefully before voting
on this Proposal.
The table shows the actual expenses of the Fund for the
fiscal year ended May 31, 1996 and a pro forma adjustment thereof
assuming the Fund had invested all of its investable assets in
the Core Portfolios for the period presented. The table also
assumes that the assets of Ready Cash Investment Fund were
invested in Rated Money Market Portfolio and that the average
assets invested by Cash Investment Fund were the same as the
average net assets of the Fund for that period.
Annual Operating Expenses
(As a percentage of average net assets)
Gateway Fund Core Portfolio
Invest- Invest-
ment ment Total
Advisory Other Advisory Other Operating
Fees Expenses(1) Fees(2) Expenses(3) Expenses(4)
Current Fund 0.14 .34 N/A N/A .48
Pro Forma Fund None .24 .22 .02 .48
1. Absent waivers and reimbursements, Other Expenses would be [.35%] for the
Current Fund and [.27%] for the Pro Forma Fund.
45
<PAGE>
2. Absent waivers, the Investment Advisory Fees would be [.24%] for the Pro
Forma Fund.
3. Absent waivers and reimbursements, Other Expenses would be [.12%] for the
Pro Forma Fund.
4. Absent waivers and reimbursements, Total Operating Expenses would be: .49%
for the Current Fund and .63% for the Pro Forma Fund.
EXAMPLE
The following illustrates the direct and indirect
expenses attributable to a $1,000 investment in each Fund under
the existing Fund structure, assuming (i) combined expense
reimbursements and fee waivers at the same level as are currently
in effect for the Fund, (ii) 5% annual return, (iii) reinvestment
of all dividends and distributions and (iv) full redemption at
the end of the period:
1 Year 3 Years 5 Years 10 Years
Current Fund $5 $15 $27 $60
Pro Forma Fund $5 $15 $27 $60
The table and the examples above relating to the Funds
are intended to compare the various fees and expenses that an
investor in the Fund would bear directly and indirectly after
conversion by the Funds to a Core and Gateway structure with the
fees and expenses the investor bears under the existing fund
structure. The example should not be considered a representation
of past or future expenses or returns. Actual expenses and
returns may be greater or less than indicated.
EVALUATION BY THE BOARD
At the meeting held on January 28, 1997, the Board
considered and voted to approve and recommended shareholder
approval of the payment by the Fund of aggregate indirect
advisory fees that, absent waivers, would exceed the contractual
advisory fee currently applicable to the Fund.
The Board considered various matters in evaluating the
reasonableness and fairness of the new indirect fee structure.
In particular, the Board examined and weighed (1) the nature and
duration of and the Board's oversight authority with respect to
the fee waiver agreed to by Norwest; (2) 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); (3)
changes in the mutual fund industry that have affected the Fund;
46
<PAGE>
(4) the payments received by Norwest from all sources related to
both the Fund and the other investment companies advised by
Norwest; (5) the organizational capabilities and financial
condition of Norwest; (6) an analysis of the proposed fee rate
change; (7) information concerning the Fund's expense ratio on
both an existing and pro forma basis; (8) 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
(9) competitive industry fee structures and expense ratios,
including, specifically, the relationship of the proposed
advisory fee rates to those typically paid by similar funds,
bank-advised mutual funds and funds investing through a Core and
Gateway structure.
Certain of the factors addressed by the Board in
reaching its determination are discussed in more detail below.
-- The fact that Norwest has agreed to waive, until May 31,
1999, a portion of advisory fee payable by Money Market Portfolio
and that thereafter the Board would approve any reduction in the
waiver.
-- The possibility that using the Core and Gateway
structure could achieve investment and administrative
efficiencies, economies of scale and lower expense ratios than it
could realize if it did not convert to a Core and Gateway
structure. The Board considered that, to the extent that certain
operating costs may be fixed and are currently borne by the Fund
alone, these expenses could instead be borne in whole or in part
directly by the Core Portfolios and indirectly shared pro rata by
the Fund and other investors in the Fund's Core Portfolio.
-- The fact that a larger asset base may allow the purchase
of investment securities by a Core Portfolio in larger
denominations, resulting in possible reductions in certain
transactional and custodial expenses.
-- The greater diversification that may be achieved by
investing a portfolio with a larger asset base. Greater
diversification is beneficial to shareholders of the Fund because
it may reduce the negative effect which the adverse performance
of any one portfolio security may have on the performance of the
entire investment portfolio.
-- The opinion of the management of the Trust that it is
unlikely that the Fund's asset base could be grown significantly
above their present size, which is below the asset level required
to garner meaningful economies of scale, without resorting to a
Core and Gateway structure in each of the Core Portfolios.
47
<PAGE>
-- The flexibility both to attract and retain assets under
management provided by a Core and Gateway structure.
-- The fact that in certain cases the foregoing benefits
would likely arise only if the Fund's Core Portfolios were to
attract the assets of investors other than those investing in the
Fund. The Board also considered that there is no assurance that
expense savings or other benefits will be realized even if other
investors invest in a Core Portfolio.
-- The opinion of management of the Trust that over time
the aggregate per share expenses of the Fund investing in the
Core Portfolios should not be more than the expenses that would
be incurred by the Fund if it continues to invest directly in
securities, although there can be no assurance that any expense
savings would be realized.
-- The possibility that Norwest, Forum and other service
providers to the Fund may benefit through increased economies of
scale in the event that assets under management rise, whether or
not there is a corresponding benefit to Fund shareholders. The
Board considered that conversion to a Core and Gateway structure
may enable Norwest to increase assets under management through
development of new Gateway Funds with less risk than would be
possible without this structure. Because investors in a new
Gateway Fund would invest their assets in a Core Portfolio with
an established performance record, Norwest could attract assets
with less risk of limited success than is typical in the early,
developmental years of an investment vehicle.
-- The costs of the proposed change in fund structure,
other options to the proposed change, and the tax-free nature of
the proposed change.
-- Comparisons With Other Funds. The Board considered the
advisory fees paid by other investment companies (i) with similar
investment objectives and (ii) that invest in a Core and Gateway
structure. In addition to comparing the proposed advisory fees,
the Board also compared the Fund's projected operating expense
ratio with the ratios of those investment companies.
Notwithstanding that the conversion to a Core and Gateway
structure would, absent waivers, result in increased indirect
contractual management fees, the Board believes that even after
any such increase, the management fee and expense ratio would
remain comparable to industry norms.
-- Non-Advisory Services Provided To The Fund. The Board
reviewed the general nature of the non-advisory services
performed by Norwest and the fees received by Norwest for
performing the services. In addition, the Board considered the
48
<PAGE>
organizational structure employed by Norwest in providing the
services.
Based on the foregoing, the Trustees, including a
majority of the independent Trustees, determined that it would be
in the best interests of each Fund and its respective
shareholders for shareholders to approve this Proposal.
Accordingly, the Board recommends that shareholders vote FOR
Proposal Six.
The Board recommends that shareholders vote FOR Proposal Five.
PROPOSAL SIX
TO APPROVE A SUBADVISORY AGREEMENT AMONG NORWEST,
GALLIARD CAPITAL MANAGEMENT, INC., AND
THE TRUST, ON BEHALF OF CERTAIN FUNDS
Shareholders of Stable Income Fund, Diversified Bond Fund,
Conservative Balanced Fund, Moderate Balanced Fund and Growth
Balanced Fund (the "Funds"), voting separately by Fund, are
entitled to vote on this Proposal. Approval of this Proposal
with respect to a Fund requires the approval of a Majority of the
holders of the outstanding Shares of the Fund.
INTRODUCTION
Galliard Capital Management, Inc. ("Galliard") is a
registered investment adviser and an affiliate of Norwest.
Certain of Galliard's employees assist Norwest personnel in
managing the assets of the Funds that are invested in stable
income style or managed fixed income style ("Galliard management
personnel"). Currently, Stable Income Fund invests substantially
all of its assets, and each of Diversified Bond Fund,
Conservative Balanced Fund and Moderate Balanced Fund invests a
portion of its assets, in stable income style. Each of the
Diversified Bond Fund, Conservative Balanced Fund, Moderate
Balanced Fund and Growth Balanced Fund (the "Blended Funds") also
invests a portion of its assets in managed fixed income style.
Galliard management personnel who are primarily responsible for
managing the day-today operations of the Funds are identified in
the Funds' Prospectuses.
For the reasons discussed below under "Evaluation by the
Board," management of the Trust has proposed that the Trust, on
behalf of the Funds, enter into a formal sub-advisory agreement
with Norwest and Galliard (the "Subadvisory Agreement") that
reflects the current arrangements among Galliard, the Trust and
Norwest.
49
<PAGE>
THE SUBADVISORY AGREEMENT
Subject to the general supervision of Norwest and the
Board, Galliard management personnel currently make investment
decisions for each Fund and continuously review, supervise and
administer the Fund's investment program with respect a portion
of the Fund's assets. In this regard, it is the responsibility
of Galliard management personnel to make decisions relating to
each Fund's investments and to place purchase and sale orders
regarding those investments with brokers or dealers selected in
Galliard's discretion. Currently, Galliard receives a fee from
Norwest for Galliard's services.
The terms of the Subadvisory Agreement would, in all
material respects, be identical to the current arrangement among
Norwest, Galliard and the Trust. A form of subadvisory agreement
is attached to this Proxy Statement as Appendix D.
Galliard would continue, subject to Norwest's
supervision, to be responsible for managing the assets of a Fund,
if any, for which Norwest delegates advisory responsibility. For
its services with respect to a Fund, Galliard would be entitled
to a fee from Norwest that could vary from time to time as a
result of periodic negotiations with Galliard regarding such
matters as the nature and extent of the services (other than
investment selection and order placement activities) provided by
Galliard to the Fund, the increased cost and complexity of
providing services to the Fund, the investment record of Galliard
in managing the Fund's assets and the nature and magnitude of the
expenses incurred by Galliard in managing the Fund's assets and
by Norwest in overseeing and administering management of the
Fund. The contractual fee payable to Norwest by each Fund for
investment advisory services will not change as a result of those
negotiations.
Initially, the fees would not exceed an amount equal to
.30% of the average daily net assets of Stable Income Fund, .30%
of the average daily net assets of each Blended Fund that are
invested in stable income style and [.35%] of the average daily
net assets of a Blended Fund that are invested in managed fixed
income style.
EFFECT OF PROPOSED RESTRUCTURING ON THE SUBADVISORY AGREEMENT
To accommodate the investment by a Fund in a Core and
Gateway structure (as defined in Proposal Four), the Subadvisory
Agreement provides that Galliard will provide and receive a fee
for its services with respect to the assets of a Fund that are
invested directly in stable income or managed fixed income style.
To the extent that a Fund follows stable income style or managed
fixed income style by investing in a Core Portfolio, Galliard
50
<PAGE>
would neither provide nor receive a fee for its services under
the Subadvisory Agreement.
Upon approval of Proposal Five, each Blended Fund will
convert to a fund-of-funds structure and invest the portion of
its assets managed in stable income style or managed fixed income
style in Stable Income Portfolio or Managed Fixed Income
Portfolio of Core Trust (Delaware), respectively. Galliard will
serve as subadviser to each of Stable Income Portfolio and
Managed Fixed Income Portfolio pursuant to a subadvisory
agreement that is substantially the same as the Subadvisory
Agreement. Also, upon approval by the Funds of the Trust of the
Proposals set forth in this Proxy Statement, Stable Income Fund
intends to convert to a master-feeder structure and invest
substantially all of its assets in Stable Income Portfolio. That
conversion does not require shareholder approval. As a result,
Galliard will provide direct advisory services to a Fund under
the Subadvisory Agreement only in the event the Fund withdraws
its investment from a Core Portfolio.
ADDITIONAL INFORMATION ABOUT GALLIARD
Galliard is located at 800 LaSalle Avenue, Suite 2060,
Minneapolis, Minnesota 55479-2052. Galliard is a registered
investment adviser and was incorporated in 1995 under the laws of
the state of Minnesota. Norwest owns 100 percent of the voting
securities of Galliard. Galliard currently advises the Short
Term Bond Fund and Intermediate Bond Fund portfolios of INTRUST
Funds Trust, a registered investment company. Galliard has been
the investment adviser of the Short Term Bond Fund since [ ] and
Intermediate Bond Fund since [ ]. As of January 31, 1997, the
net assets of Short Term Bond Fund were $15.3 million and of
Intermediate Bond Fund were $16.7 million. No Trustee of the
Trust now holds or ever has held any securities issued by
Galliard. For its advisory services to Short Term Bond Fund and
Intermediate Bond Fund, Galliard is entitled to a fee of .125% of
the average daily net assets of each fund.
Set forth below is information concerning the Director
and principal executive officer of Galliard.
Name Principal Occupation
Peter Jay Kiedrowski [Executive Vice President of
Norwest Bank Minnesota, N.A.]
Mr. Kiedrowski's address is 800 LaSalle Avenue, Suite 2060,
Minneapolis, Minnesota 55479-2052.
51
<PAGE>
EVALUATION BY THE BOARD
The Board, at the meeting held on January 28, 1997, in
approving the Subadvisory Agreement, determined that the terms of
the Subadvisory Agreement are fair and reasonable and in the best
interests of the Funds and their shareholders.
The Board considered various matters in evaluating the
reasonableness and fairness of the Subadvisory Agreement. In
particular, the Board examined and weighed (1) the nature,
quality and extent of the services that are rendered and the
results achieved by Galliard in its management of the Funds
(including investment performance comparisons with other mutual
funds and certain indicies), (2) the relationship between
Galliard and Norwest, (3) the payments received by Galliard from
all sources related to both the Funds and the other investment
companies advised by Galliard, (4) the organizational
capabilities and financial condition of Galliard, (5) an analysis
of the fee to be paid by Norwest to Galliard and (6) competitive
industry fee structures and expense ratios, including,
specifically the relationship of the proposed advisory fee rates
to those typically paid by similar funds.
The Board recommends that the shareholders vote FOR approval of
the subadvisory agreement.
PROPOSAL SEVEN
TO APPROVE SUBADVISORY AGREEMENTS AMONG NORWEST,
PEREGRINE CAPITAL MANAGEMENT, INC., AND
THE TRUST, ON BEHALF OF CERTAIN FUNDS
Shareholders of Large Company Growth Fund, Small Company Growth
Fund, Conservative Balanced Fund, Moderate Balanced Fund, Growth
Balanced Fund, Diversified Bond Fund, Diversified Equity Fund and
Growth Equity Fund, voting separately by Fund, are entitled to
vote on this Proposal. Approval of this Proposal with respect to
a Fund requires the approval of a Majority of the holders of the
outstanding Shares of a Fund.
INTRODUCTION
Peregrine Capital Management, Inc. ("Peregrine") is a
registered investment adviser and an affiliate of Norwest.
Certain of Peregrine's employees assist Norwest personnel in
managing the assets of the Funds that are invested in large
company growth style, small company growth style or positive
return style ("Peregrine management personnel"). Currently, each
of Large Company Growth Fund and Small Company Growth Fund invest
substantially all of its assets in large company growth style and
small company growth style, respectively. In addition, each of
52
<PAGE>
the Funds identified below invest a portion of their assets in
one or more of large company growth style, small company growth
style and positive return style.
Investment Style Fund
large company growth style Conservative Balanced Fund
Moderate Balanced Fund
Growth Balanced Fund
Diversified Equity Fund
Growth Equity Fund
small company growth style Conservative Balanced Fund
Moderate Balanced Fund
Growth Balanced Fund
Diversified Equity Fund
Growth Equity Fund
positive return style Conservative Balanced Fund
Moderate Balanced Fund
Growth Balanced Fund
Diversified Bond Fund
Peregrine management personnel who are primarily responsible for
managing the day-today operations of the Funds are identified in
the Funds' Prospectuses.
For the reasons discussed below under "Evaluation by the
Board," management of the Trust has proposed that the Trust, on
behalf of the Funds, enter into a formal sub-advisory agreement
with Norwest and Peregrine (the "Subadvisory Agreement") that
reflects the current arrangements among Peregrine, the Trust and
Norwest.
THE SUBADVISORY AGREEMENT
Subject to the general supervision of Norwest and the
Board, Peregrine management personnel currently make investment
decisions for each Fund and continuously review, supervise and
administer the Fund's investment program with respect a portion
of the Fund's assets. In this regard, it is the responsibility
of Peregrine management personnel to make decisions relating to
each Fund's investments and to place purchase and sale orders
regarding those investments with brokers or dealers selected in
its discretion. Currently, Peregrine receives a fee from Norwest
for Peregrine's services.
The terms of the Subadvisory Agreement would, in all
material respects, be identical to the current arrangement among
Norwest, Peregrine and the Trust. A form of subadvisory
agreement is attached to this Proxy Statement as Appendix D.
53
<PAGE>
Peregrine would continue, subject to Norwest's
supervision, to be responsible for managing the assets of a Fund,
if any, for which Norwest delegates advisory responsibility. For
its services with respect to a Fund, Peregrine would be entitled
to a fee from Norwest that could vary from time to time as a
result of periodic negotiations with Peregrine regarding such
matters as the nature and extent of the services (other than
investment selection and order placement activities) provided by
Peregrine to the Fund, the increased cost and complexity of
providing services to the Fund, the investment record of
Peregrine in managing the Fund's assets and the nature and
magnitude of the expenses incurred by Peregrine in managing the
Fund's assets and by Norwest in overseeing and administering
management of the Fund. The contractual fee payable to Norwest
by each Fund for investment advisory services will not change as
a result of those negotiations.
Initially, the fees would not exceed an amount equal to
.65% of the average daily net assets of Large Company Growth
Fund, .65% of the average daily net assets of any Blended Fund
that are invested in large company growth style, .90% of the
average daily net assets of Small Company Growth Fund, .90% of
the average daily net assets of any Blended Fund that are
invested in small company growth style, and [.35%] of the average
daily net assets of any Blended Fund that are invested in
positive return style.
EFFECT OF PROPOSED RESTRUCTURING ON THE SUBADVISORY AGREEMENT
To accommodate the investment by a Fund in a Core and
Gateway structure (as defined in Proposal Four), the Subadvisory
Agreement provides that Peregrine will provide and receive a fee
for its services with respect to the assets of a Fund that are
invested directly in large company growth style, small company
growth style and positive return style. To the extent that a
Fund follows large company growth style, small company growth
style or positive return style by investing in a Core Portfolio,
Peregrine would neither provide nor receive a fee for its
services under the Subadvisory Agreement.
Upon approval of Proposal Five, each Blended Fund will
convert to a fund-of-funds structure and invest the portion of
its assets managed in large company growth style, small company
growth style or positive return style in Large Company Growth
Portfolio, Small Company Growth Portfolio and/or Positive Return
Portfolio of Core Trust (Delaware), respectively. Peregrine will
serve as subadviser to each of those Portfolios pursuant to a
subadvisory agreement that is substantially the same as the
Subadvisory Agreement. Also, upon approval by the Funds of the
Trust of the Proposals set forth in this Proxy Statement, each of
Large Company Growth Fund and Small Growth Fund will convert to a
54
<PAGE>
master-feeder structure and invest substantially all of its
assets in Large Company Growth Portfolio and Small Company Growth
Portfolio, respectively. Those conversions do not require
shareholder approval. As a result, Peregrine will provide direct
advisory services to a Fund under the Subadvisory Agreement only
in the event the Fund withdraws its investment from a Core
Portfolio.
ADDITIONAL INFORMATION ABOUT PEREGRINE
Peregrine is located at LaSalle Plaza, 800 LaSalle
Avenue, Suite 1850, Minneapolis, Minnesota 55402-2018.
Peregrine is a registered investment adviser and was incorporated
in 1984. Peregrine is a division of Norwest Bank Colorado, N.A.,
which is a subsidiary of Norwest Corporation, the parent company
of Norwest. No Trustee of the Trust now holds or ever has held
any securities issued by Peregrine. Peregrine does not currently
advise any other investment companies.
Set forth below is information concerning the Directors
and principal executive officer of Peregrine:
Name Principal Occupation
James R. Campbell [Director of Norwest Bank
Minnesota, N.A.]
Robert B. Mersky [Head of Investments, Norwest Bank
Minnesota, N.A.]
The address of each of the foregoing is Peregrine Capital
Management, Inc., LaSalle Plaza, 800 LaSalle Avenue, Suite 1850,
Minneapolis, MN 55402-2018.
EVALUATION BY THE BOARD
The Board, at the meeting held on January 28, 1997, in
approving the Subadvisory Agreement, determined that the terms of
the Subadvisory Agreement are fair and reasonable and in the best
interests of the Funds and their shareholders.
The Board considered various matters in evaluating the
reasonableness and fairness of the Subadvisory Agreement. In
particular, the Board examined and weighed (1) the nature,
quality and extent of the services that are rendered and the
results achieved by Peregrine in its management of the Funds
(including investment performance comparisons with other mutual
funds and certain indicies), (2) the relationship between
Peregrine and Norwest, (3) the payments received by Peregrine
from all sources related to both the Funds and the other
investment companies advised by Peregrine, (4) the organizational
55
<PAGE>
capabilities and financial condition of Peregrine, (5) an
analysis of the fee to be paid by Norwest to Peregrine and (6)
competitive industry fee structures and expense ratios,
including, specifically the relationship of the proposed advisory
fee rates to those typically paid by similar funds.
The Board recommends that the shareholders vote FOR approval of
the subadvisory agreement.
PROPOSAL EIGHT
TO APPROVE SUBADVISORY AGREEMENTS AMONG NORWEST,
UNITED CAPITAL MANAGEMENT, AND
THE TRUST, ON BEHALF OF CERTAIN FUNDS
Shareholders of Contrarian Stock Fund, Total Return Bond Fund,
Diversified Bond Fund, Conservative Balanced Fund, Moderate
Balanced Fund and Growth Balanced Fund voting separately by Fund,
are entitled to vote on this Proposal. Approval of this Proposal
with respect to a Fund requires the approval of a Majority of the
holders of the outstanding Shares of a Fund.
INTRODUCTION
United Capital Management, Inc., a division of Norwest
Bank Colorado, N.A. ("UCM"), is an affiliate of Norwest and
certain of UCM's employees assist Norwest personnel in managing
the assets of Contrarian Stock Fund and the Funds that are
invested in total return bond style ("UCM management personnel").
Currently, Total Return Bond Fund invests substantially all of
its assets, and each of Conservative Balanced Fund, Moderate
Balanced Fund and Diversified Bond Fund (the "Blended Funds")
invests a portion of its assets, in total return bond style. UCM
management personnel who are primarily responsible for managing
the day-to-day operations of the Funds are identified in the
Funds' Prospectuses.
For the reasons discussed below under "Evaluation by the
Board," management of the Trust has proposed that the Trust, on
behalf of the Funds, enter into a formal sub-advisory agreement
with Norwest and UCM (the "Subadvisory Agreement") that reflects
the current arrangements among UCM, the Trust and Norwest.
THE SUBADVISORY AGREEMENT
Subject to the general supervision of Norwest and the
Board, UCM management personnel currently make investment
decisions for each Fund and continuously review, supervise and
administer the Fund's investment program with respect a portion
of the Fund's assets. In this regard, it is the responsibility
of UCM management personnel to make decisions relating to each
56
<PAGE>
Fund's investments and to place purchase and sale orders
regarding those investments with brokers or dealers selected in
its discretion. Currently, UCM receives a fee from Norwest for
UCM's services.
The terms of the Subadvisory Agreement would, in all
material respects, be identical to the current arrangement among
Norwest, UCM and the Trust. A form of subadvisory agreement is
attached to this Proxy Statement as Appendix D.
UCM would continue, subject to Norwest's supervision, to
be responsible for managing the assets of a Fund, if any, for
which Norwest delegates advisory responsibility. For its
services with respect to a Fund, UCM would be entitled to a fee
from Norwest that could vary from time to time as a result of
periodic negotiations with UCM regarding such matters as the
nature and extent of the services (other than investment
selection and order placement activities) provided by UCM to the
Fund, the increased cost and complexity of providing services to
the Fund, the investment record of UCM in managing the Fund's
assets and the nature and magnitude of the expenses incurred by
UCM in managing the Fund's assets and by Norwest in overseeing
and administering management of the Fund. The contractual fee
payable to Norwest by each Fund for investment advisory services
will not change as a result of those negotiations.
Initially, the fee would not exceed, with respect to
Contrarian Stock Fund, an amount equal to .80% of the first
$300 million of the Fund's average daily net assets, .76% of the
next $400 million of the Fund's average daily net assets and .72%
of the remaining average daily net assets of the Fund.
Initially, the fee for Total Return Bond Fund would not exceed an
amount equal to [.35%] of the Fund's average daily net assets and
the fee for any Blended Fund would not exceed [.35%] of the
average daily net assets of any Blended Fund that are invested in
total return bond style.
EFFECT OF PROPOSED RESTRUCTURING ON THE SUBADVISORY AGREEMENT
To accommodate the investment by a Fund in a Core and
Gateway structure (as defined in Proposal Four), the Subadvisory
Agreement provides that UCM will provide and receive a fee for
its services with respect to the assets of a Fund that are
invested directly in total return bond style. To the extent that
a Fund follows total return bond style by investing in a Core
Portfolio, UCM would neither provide nor receive a fee for its
services under the Subadvisory Agreement.
Upon approval of Proposal Five, each Blended Fund will
convert to a fund-of-funds structure and invest the portion of
its assets managed in total return bond style in Total Return
57
<PAGE>
Bond Portfolio of Core Trust (Delaware). UCM will serve as
subadviser to Total Return Bond Portfolio pursuant to a
subadvisory agreement that is substantially the same as the
Subadvisory Agreement. Also, upon approval by shareholders of
Total Return Bond Fund of Proposal Four, the Fund will convert to
a master-feeder structure and invest substantially all of its
assets in Total Return Bond Portfolio. As a result, UCM will
provide direct advisory services to a Fund under the Subadvisory
Agreement only in the event the Fund withdraws its investment
from a Core Portfolio.
ADDITIONAL INFORMATION ABOUT UCM
UCM. UCM, located at 1700 Lincoln Street, Suite 3301,
Denver, Colorado 80274-8677, is a part of Norwest Bank Colorado,
N.A., and was organized in [ ]. UCM is controlled by W. Lon
Schruer, who is the president. UCM does not currently advise any
other investment companies. No Trustee of the Trust now holds or
ever has held any securities issued by [Norwest Bank Colorado,
N.A.].
Set forth below is information concerning the principal
executive officer of UCM:
Name Principal Occupation
W. Lon Schruer President of UCM
Mr. Schruer's address is United Capital Management, 1700 Lincoln
Street, Suite 3301, Denver, Colorado 80274-8677.
EVALUATION BY THE BOARD
The Board, at the meeting held on January 28, 1997, in
approving the Subadvisory Agreement, determined that the terms of
the Subadvisory Agreement are fair and reasonable and in the best
interests of the Funds and their shareholders.
The Board considered various matters in evaluating the
reasonableness and fairness of the Subadvisory Agreement. In
particular, the Board examined and weighed (1) the nature,
quality and extent of the services that are rendered and the
results achieved by UCM in its management of the Funds (including
investment performance comparisons with other mutual funds and
certain indicies), (2) the relationship between UCM and Norwest,
(3) the payments received by UCM from all sources related to both
the Funds and the other investment companies advised by UCM,
(4) the organizational capabilities and financial condition of
UCM, (5) an analysis of the fee to be paid by Norwest to UCM and
(6) competitive industry fee structures and expense ratios,
58
<PAGE>
including, specifically the relationship of the proposed advisory
fee rates to those typically paid by similar funds.
The Board recommends that the shareholders vote FOR approval of
the subadvisory agreement.
PROPOSAL NINE
APPROVAL OF AN AMENDMENT TO THE FUND'S
INVESTMENT OBJECTIVE
Shareholders of Municipal Money Market Fund, Diversified
Bond Fund, Income Fund, Income Equity Fund, Small Company
Growth Fund and ValuGrowth Stock Fund (the "Funds"), voting
separately by Fund, are entitled to vote on this Proposal.
Approval of this Proposal with respect to a Fund requires
the approval of a Majority of the outstanding Shares of the
Fund.
INTRODUCTION
The investment objective of an investment company
is a concise statement of the company's aim or goal and may
be changed only upon the approval of its shareholders. An
investment company's fundamental and non-fundamental
policies describe how it intends to achieve its investment
objective. Management proposes to amend the Funds'
investment objectives to simplify them and/or to eliminate
provisions that constitute investment policies. In certain
cases, the proposed amendments will provide Norwest with
greater flexibility in managing the Fund's assets. Listed
below are the current and proposed objectives for each Fund.
Fund Current Investment Proposed Investment
Objective Objective
Municipal
Money Provide high current Provide high current
Market income which is income exempt from
Fund exempt from federal federal income tax.
income taxes to the
extent consistent
with the
preservation of
capital and the
maintenance of
liquidity.
Diversifie Provide consistent Provide [as high a
d Bond fixed income returns level of] total
Fund by investing return [as is]
primarily in a consistent with
59
<PAGE>
portfolio of minimal annual
intermediate return volatility.
maturity, investment
grade fixed income
securities.
Income Seek current income Provide [a high
Fund and, secondarily, level of] current
growth of capital. income.
Income Provide both long- Provide long-term
Equity term capital capital appreciation
Fund appreciation in line and, secondarily,
with that of the above-average
overall equity dividend income.
securities markets
and above-average
dividend income.
Small Provide long-term Provide long-term
Company capital appreciation capital
Growth by investing appreciation.
Fund primarily in small
and medium-sized
domestic companies
that are either
growing rapidly or
completing a period
of significant
change.
ValuGrowth Seek capital Provide capital
(SM) Stock appreciation by appreciation.
Fund investing in a
diversified
portfolio of common
stock and securities
convertible into
common stock which
may be rated or
unrated.
The effect of the proposed amendments on each Fund is
described below.
Municipal Money Market Fund. The proposed amendment
would simplify the Fund's investment objective but would not
affect the manner in which the Fund's assets currently are
managed. As a money market mutual fund, the Fund is required by
law to operate in accordance with specific investment policies
60
<PAGE>
designed to preserve capital and maintain liquidity.
Accordingly, the Fund's investment objective need not repeat
those investment policies.
Diversified Bond Fund. The proposed amendment would
simplify the Fund's investment objective but would not affect the
manner in which the Fund's assets are managed. Specifically, the
amendment would remove from the Fund's objective and adopt as a
fundamental policy of the Fund the requirement that the Fund
would invest primarily in intermediate maturity, investment grade
fixed income securities.
Income Fund. The proposed amendment would eliminate the
Fund's secondary objective in order to clarify the Fund's
investment focus. Management of the Trust believes that the
secondary objective of growth of capital [is no longer
appropriate for the Fund]. The proposed amendment would clarify
that the Fund seeks to obtain current income and would not affect
the manner in which the Fund's assets currently are managed.
Income Equity Fund. The proposed amendment would
clarify that the Fund's principal emphasis is on providing long-
term capital appreciation. The amendment would not affect the
manner in which the Fund's assets currently are managed.
Small Company Growth Fund. The proposed amendment would
simplify and clarify the Fund's investment objective and would
provide Norwest with greater flexibility in managing the Fund's
assets. The reference to "small and medium sized" companies in
the Fund's investment objective enables the Fund to invest in
both small and medium sized companies which are defined in the
Fund's Prospectus as companies with capitalizations of less than
$750 million at the time of the Fund's purchase. Management and
Norwest believe that those companies may be designated as "small
sized" companies. The Fund's investment in small sized
companies will be emphasized by the name of the Fund and the
deletion from the objective of the reference to the size of the
companies in which the Fund will invest. Accordingly, upon
approval of this Proposal, the Fund would continue to invest
primarily in companies with capitalizations of less than $750
million at the time of purchase and would define those companies
as "small sized" companies.
In addition, the proposed amendment would eliminate the
limitation set forth in the Fund's objective regarding the
securities of companies that are growing rapidly or completing a
period of significant change. As a result, Norwest would be
permitted to invest the Fund's assets in the securities of small
sized companies, as defined above, which are attractively valued
for other reasons.
61
<PAGE>
ValuGrowth Stock Fund. The proposed amendment would
simplify the Fund's objective and would provide Norwest with
greater flexibility in managing the Fund's assets. Management of
the Trust proposes to eliminate the statements of investment
policy set forth in the Fund's investment objective. Approval of
this proposal would not affect the manner in which the Fund's
assets currently are managed. The Fund's investments, however,
would no longer be limited to common stock and convertible
securities. [The Fund would be permitted to invest in warrants
and debt securities, including U.S. Government securities, and
engage in transactions involving options on securities. Those
investments and investment techniques are described in Appendix A
to this Proxy Statement.]
The Board recommends that shareholders
vote FOR Proposal Three.
62
<PAGE>
OTHER MATTERS
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.
INFORMATION CONCERNING NORWEST
Norwest is a subsidiary of Norwest Corporation, a bank
holding company with operations in all 50 states and, as of
, $[___] billion in total assets. Norwest provides
investment advice with respect to assets that totaled
approximately $22 billion as of June 30, 1996. [As of February
25, 1997, 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. Norwest Holding Company is [a Minnesota
corporation].
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.
Pursuant to agreements between the Trust and Norwest,
Norwest acts as transfer agent and custodian and provides certain
ministerial services in connection with the lending of the Funds'
portfolio securities for the Trust. Norwest receives transaction
fees for providing services in connection with the securities
lending program. For the fiscal year ended May 31, 1996, the
63
<PAGE>
Trust paid Norwest the following amounts in transfer agency fees
and custodial fees, respectively:
Total Total
Compensation Compensation
For Services as For Services as
Transfer Agent Custodian
Cash Investment Fund $4,115,883 $180,261
Ready Cash Investment Fund $1,463,228 $131,517
U.S. Government Fund $3,744,761 $165,425
Treasury Fund $1,621,967 $ 90,891
Municipal Money Market Fund $ 347,985 $ 70,303
Stable Income Fund $ 88,439 $ 0
Intermediate Government $ 107,671 $ 0
Income Fund
Diversified Bond Fund $ 246,269 $ 0
Income Fund $ 457,882 $ 32,741
Total Return Bond Fund $ 284,821 $ 22,542
Limited Term Tax-Free Fund $ 0 $ 0
Tax-Free Income Fund $ 239,716 $ 37,256
Colorado Tax-Free Fund $ 51,618 $ 11,471
Minnesota Tax-Free Fund $ 29,308 $ 3,621
Conservative Balanced Fund $ 209,183 $ 0
Moderate Balanced Fund $ 570,201 $ 0
Growth Balanced Fund $ 613,905 $ 0
Index Fund $ 226,426 $ 0
Income Equity Fund $ 113,895 $ 0
ValuGrowth Stock Fund $ 403,952 $ 30,037
Diversified Equity Fund $1,168,792 $ 0
Growth Equity Fund $ 928,442 $ 0
Large Company Growth Fund $ 105,443 $ 0
Small Company Stock Fund $ 214,807 $ 17,934
Small Company Growth Fund $ 459,327 $ 0
Small Cap Opportunities Fund $ 0 $ 0
Contrarian Stock Fund $ 107,364 $ 8,747
International Fund $ 175,887 $ 0
Norwest will continue to act as transfer agent and
custodian and to provide securities lending services for each
Fund of the Trust that receives shareholder approval to amend its
advisory agreement at the Meeting. For each Fund that converts
to a Core and Gateway structure, Norwest will continue to act as
transfer agent for the Fund and will still receive custodial fees
and fees for securities lending services with respect to the
assets of the Funds that are invested directly in securities and
for Norwest's services rendered to the Fund's Core Portfolio(s).
64
<PAGE>
SHAREHOLDERS AS OF FEBRUARY 25, 1997
As of February 25, 1997 the Trust had [______]
outstanding shares, and the number of outstanding Shares of each
Fund was: Cash Investment Fund, [______]; Ready Cash Investment
Fund, [______]; U.S. Government Fund, [______]; Treasury Fund,
[______]; Municipal Money Market Fund, [______]; Stable Income
Fund [______]; Intermediate Government Income Fund, [______];
Diversified Bond Fund, [______]; Income Fund, [______]; Total
Return Bond Fund, [______]; Limited Term Tax-Free Fund, [______];
Tax-Free Income Fund, [______]; Colorado Tax-Free Fund, [______];
Minnesota Tax-Free Fund, [______]; Conservative Balanced Fund,
[______]; Moderate Balanced Fund, [______]; Growth Balanced Fund,
[______]; Index Fund, [______]; Income Equity Fund, [______];
ValuGrowth Stock Fund, [______]; Diversified Equity Fund,
[______]; Growth Equity Fund, [______]; Large Company Growth
Fund, [______]; Small Company Stock Fund, [______]; Small Company
Growth Fund, [______]; Small Cap Opportunities Fund, [______];
Contrarian Stock Fund, [______]; and International Fund,
[______].
As of February 25, 1997, the Trustees and officers of
the Trust as a group owned beneficially less than 1% of the
outstanding Shares of each Fund of the Trust.
Set forth below is certain information as to all persons
known to the Trust who owned of record or beneficially 5% or more
of a Fund's outstanding shares as of February 28, 1997.
The following table lists the persons who owned of record 5%
or more of the outstanding shares of a class of shares of a
Fund as of February 25, 1997, as well as their percentage
holding of all shares of the Fund. All percentages are
rounded off to the nearest one percent. Certain persons own
shares of the Funds of record only, including Alpine & Co.,
BHC Securities, Inc., EMSEG & Co., First Stock Co., Norwest
Bank Minnesota, N.A. and Stout & Co.
<TABLE>
<CAPTION>
SHARE %OF %OF
NAME AND ADDRESS BALANCE CLASS FUND
<S> <C> <C> <C> <C>
Cash Investment Fund Norwest Bank Minnesota NA 200,607,071 11% 11%
Collective Trust Funds
Clearing Account
733 Marquette Avenue 4th Floor
Minneapolis, MN 55479-0050
65
<PAGE>
Ready Cash Investment Fund
Investor Shares BHC Securifies, Inc. 201,599,526 40% 12%
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-3212
Institutional Shares Stout & Co. 82,921,160 7% 5%
Discretionary Cash
1740 Broadway MS 8751
Denver, CO 80274
Norwest Bank Minnesota NA AMS 458,179,987 39% 27%
VP460030I
Attn: Cash Sweep Processing
733 Marquette Avenue 4th Floor
Minneapolis, MN 55479-0050
Norwest Bank Minnesota NA AMS 327,285,687 28% 19%
VP460500022
Attn: Cash Sweep Processing
733 Marquette Avenue 4th Floor
Minneapolis, MN 55479-0050
Norwest Bank Minnesota NA AMS 124,271,901 10% 7%
VP4500030
Attn: Cash Sweep Processing
733 Marquette Avenue 4th Floor
Minneapolis, MN 55479-0050
Alpine & Co 78,689,001 7% 5%
Non Discretionary
1740 Broadway MS 8751
Denver, CO 80274
U.S. Government Fund Alpine & Co 148,485,489 9% 9%
Non-Discretionary
1740 Broadway MS 8751
Denver, CO 80274
Norwest Bank Minnesota NA AMS 1,032,827,619 64% 64%
Collective Trust Funds
Clearing Account
733 Marquette Avenue 4th Floor
Minneapolis, MN 55479-0050
Treasury Fund Alpine & Co. 61,812,363 7% 7%
Discretionary
1740 Broadway MS 8751
Denver, CO 80274
66
<PAGE>
Norwest Bank Minnesota NA AMS 455,951,871 48% 48%
Collective Trust Funds
Clearing Account
733 Marquette Avenue 4th Floor
Minneapolis, MN 55479-0050
Norwest Bank Colorado 54,923,699 7% 6%
P.O. Box 400
Colorado Springs, CO 80901
Municipal Money Market
Fund
Investor Shares Advance Homes, Inc. 5,047,919 8% 0%
4215 E 60th St., Suite 6
Davenport, IA 52807
West Texas Industries Inc. 4,063,277 6% 0%
P.O. Box 1680
Lubbock, TX 79408
BHC Securities, Inc. 20,938,370 32% 0%
One Commerce Square
2005 Market Street
Philadelphia PA 19103-3212
Institutional Shares Norwest Bank Minnesota NA AMS 107,270,676 17% 16%
Collective Trust Funds
Clearing Account
733 Marquette Avenue 4th Floor
Minneapolis, MN 55479-0050
Norwest Bank Minnesota NA 296,020,622 48% 43%
VP4620002
Attn: Cash Sweep Processing
733 Marquette Avenue 4th Floor
Minneapolis, MN 55479-0050
Stable Income Fund
A Shares BHC Securities, Inc. 83,469 7% 0%
One Commerce Square
2005 Market Street
Philadelphia PA 19103-3212
Ramsey Foundation 136,738 11% .01%
8100 34th Avenue South
P.O. Box 1309
Minneapolis, MN 55440-1309
67
<PAGE>
St. Paul Ramsey Medical Center 274,204 23% 3%
6th Floor
8100 34th Ave South
P.O. Box 1309
Minneapolis, MN 55440-1309
Von Maur Investment Co 112,663 9% 1%
6565 Brady St
Davenport, IA 52806
Aspen Medical Group, PA 90,811 8% 9%
1021 Bandana Blvd E, Suite 200
St Paul, MN 55108
Analysts International Corporation 216,969 19% 2.1%
7615 Metro Blvd
Minneapolis, MN 55439
B Shares Marjorie A. Thien 2,874 5% 3%
5400 Vernon Avenue S
Ednia, MN 55436
Benedict M. Lonsky 4,018 8% 4%
and Bernice T. Lonsky
2524 W. Armour Trce
Minneapolis, MN 55418
Fred P. Mattson 7,980 15% 8%
and Berry J. Matton
P.O. Box 248
Elmwood, WI 54740-0248
Lucy Wu 2,833 5% 3%
702 14th Avenue S
Minneapolis, MN 55414
BHC Securities, Inc. 4,566 9% 4%
FBO FAO 52490122
One Commerce Square
2005 Market St, Ste 1200
Philadelphia, PA 19103
BHC Securities, Inc. 4,973 10% 5%
FBO 52509602
One Commerce Square
2005 Market St, Ste 1200
Philadelphia, PA 19103
BHC Securities, Inc. 3,680 7% 4%
68
<PAGE>
FBO FAO 52510525
One Commerce Square
2005 Market St, Ste 1200
Philadelphia, PA 19103
BHC Securities, Inc. 3,330 6% 3%
FBO 51631241
One Commerce Square
2005 Market St, Ste 1200
Philadelphia, PA 19103
I Shares EMSEG & Co. 8,185,835 89% 78%
c/o Norwest Bank Minnesota, N.A.
733 Marquette Avenue
Minneapolis, MN 55479
Norwest Bank Texas NA 639,848 7% 6%
1500 Broadway
Lubbock, TX 79408
Diversified Bond Fund
I Shares EMSEG & Co. 5,863,877 88% 88%
c/o Norwest Bank Minnesota, N.A.
733 Marquette Avenue MS 0036
Minneapolis, MN 55479-0036
Income Fund
A Shares BHC Securities, Inc. 191,855 34% 1%
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-3212
I Shares Norwest Income Bond CTF 15,345,916 53% 51%
P.O. Box 1450 NW 8477
Minneapolis, MN 55480-8477
EMSEG & Co Ira 2,377,358 8% 1%
Norwest Bank Minnesota, NA
733 Marquette Avenue
Minneapolis, MN 55479-0036
Stout & Co. 1,591,766 6% 1%
Discretionary Cash
1740 Broadway MS 8751
Denver, CO 80274
69
<PAGE>
Dentru & Co 5,118,550 18% 17%
Non-Discretionary Cash
1740 Broadway Mail 8676
Denver CO 80274
FINABA 2,386,537 8% 8%
Discretionary Cash Acct
1314 Avenue K
Lubbock, TX 79401
Intermediate Government
Income Fund
A Shares BHC Securities, Inc. 300,189 22% 1%
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-3212
Ibraham Madani 100,694 7% 0%
and Saiwa Abdulghaffar
c/o Bernie Markel
10010 Regency Circle
Omaha, NE 68114
I Shares EMSEG & Co. 29,431,579 82% 77%
c/o Norwest Bank Minnesota, N.A.
733 Marquette Avenue MS 0036
Minneapolis, MN 55479-0036
Dentru & Co. 4,113,123 11% 9%
c/o Norwest Bank Colorado NA
Denver, CO 80274-8676
Total Return Bond Fund
A Shares BHC Securities, Inc. 91,040 33% 1%
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-3212
Norwest Wealthbuilder 96,675 35% 1%
Reinvest Account
733 Marquette Avenue
Minneapolis, MN 55479-0050
I Shares Stout & Co. 1,214,706 9% 9%
Discretionary Cash
1740 Broadway MS 8751
Denver, CO 80274
70
<PAGE>
Dentru & Co 1,665,133 13% 12%
Non-Discretionary Cash
1740 Broadway Mail 8676
Denver, CO 80274
EMSEG & Co. 667,221 5% 5%
Norwest Bank Minnesota, NA
733 Marquette Avenue
Minneapolis, MN 55479-0050
Kiwilis & Co 679,483 5% 5%
Discretionary Reinvest
1700 Broadway MS 0076
Denver, CO 80274
Seret & Co. 7,711,279 59% 57%
Discretionary Reinvest
1700 Broadway MS 0076
Denver, CO 80274
Tax-Free Income Fund
A Shares BHC Securities, Inc. 404,831 14% 1%
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-3212
I Shares Stout & Co. 1,966,104 7% 6%
Discretionary Cash
1740 Broadway MS 8751
Denver, CO 80274
Dentru & Co 5,482,571 20% 17%
Non-Discretionary Cash
1740 Broadway Mail 8676
Denver, CO 80274
FINABA 1,668,836 6% 5%
Discretionary Cash Acct
1314 Avenue K
Lubbock, TX 79401
Norwest Tax Exempt Bond Fund 17,173,002 61% 54%
P.O. Box 1450 NW 8477
Minneapolis, MN 55480-8477
Colorado Tax-Free Fund
A Shares BHC Securities, Inc. 298,280 11% 9%
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-3212
71
<PAGE>
Walter Stonehocker and Roswitha 520,622 19% 15%
Stonehocker
15600 Holly
Brighton, CO 80601
I Shares Stout & Co. 1,024,973 41% 30%
Discretionary Cash
1740 Broadway MS 8751
Denver, CO 80274
Dentru & Co 1,410,397 57% 41%
Non-Discretionary Cash
1740 Broadway Mail 8676
Denver, CO 80274
Minnesota Tax-Free Fund
A Shares BHC Securities, Inc. 360,855 14% 7%
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-3212
I Shares EMSEG & Co Ira 203,386 43% 5%
Norwest Bank Minnesota, NA
733 Marquette Avenue
Minneapolis, MN 55479-0036
Conservative Balanced Fund
I Shares EMSEG & Co. 7,246,804 92% 92%
c/o Norwest Bank Minnesota, N.A.
733 Marquette Avenue
Minneapolis, MN 55479
Moderate Balanced Fund
I Shares EMSEG & Co. 17,938,553 91% 91%
c/o Norwest Bank Minnesota, N.A.
733 Marquette Avenue MS 0036
Minneapolis, MN 55479-0036
Growth Balanced Fund
I Shares EMSEG & Co. 18,302,059 92% 92%
c/o Norwest Bank Minnesota, N.A.
733 Marquette Avenue MS 0036
Minneapolis, MN 55479-0036
72
<PAGE>
Income Equity Fund
A Shares BHC Securities, Inc. 453,389 38% 4%
Trade House Acct
One Commerce Square
2005 Market St
Philadelphia, PA 19103-3212
Abbot Limited Company 74,360 6% 1%
P.O. Box 247
305 Main Street
Walthill, NE 68067
I Shares EMSEG & Co. 5,788,026 61% 51%
c/o Norwest Bank Minnesota, N.A.
733 Marquette Avenue MS 0036
Minneapolis, MN 55479-0036
Dentru & Co. 1,249,858 13% 11%
c/o Norwest Bank Colorado NA
Denver, CO 80274-8676
Norwest Bank Texas NA 881,299 9% 8%
1500 Broadway
Lubbock, TX 79408
Stout & Co. 788,757 8% 3%
c/o Norwest Bank Colorado NA
1740 Broadway
Denver, CO 80274-8676
ValuGrowth Stock Fund
A Shares BHC Securities, Inc. 270,857 40% 3%
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-3212
I Shares EMSEG & Co. 1,386,894 20% 18%
Norwest Bank Minnesota, NA
733 Marquette Avenue
Minneapolis, MN 55479-0036
Stout & Co. 1,558,788 23% 20%
Discretionary Cash
1740 Broadway MS 8751
Denver, CO 80274
73
<PAGE>
Dentru & Co 1,800,377 26% 23%
Non-Discretionary Cash
1740 Broadway Mail 8676
Denver, CO 80274
FINABA 1,069,163 15% 14%
Discretionary Cash Acct
1314 Avenue K
Lubbock, TX 79401
Index Fund
I Shares EMSEG & Co. 8,964,468 96% 96%
c/o Norwest Bank Minnesota, N.A.
733 Marquette Avenue MS 0036
Minneapolis, MN 55479-0036
/
Diversified Equity Fund
A Shares BHC Securities, Inc. 249,054 71% 1%
One Commerce Square
2005 Market St
Philadelphia, PA 19103-3212
I Shares EMSEG & Co. 27,143,748 87% 86%
c/o Norwest Bank Minnesota, N.A.
733 Marquette Avenue MS 0036
Minneapolis, MN 55479 0036
Kiwils & Co. 2,533,749 8% 8%
c/o Norwest Bank Colorado NA
1740 Broadway MS 8676
Denver, CO 80274-8676
Growth Equity Fund
A Shares BHC Securities, Inc. 80,539 25% 3%
Trade House Acct
One Commerce Square
2005 Market St
Philadelphia, PA 19103-3212
Norwest Wealthbuilder 120,384 37% 0%
Reinvest Account
733 Marquette Avenue
Minneapolis, MN 55479-0040
Abbot Limited Company 73,959 23% 0%
P.O. Box 247
305 Main Street
Waithill, NE 68067
74
<PAGE>
I Shares EMSEG & Co. 23,807,193 93% 91%
c/o Norwest Bank Minnesota, N.A.
733 Marquette Avenue MS 0036
Minneapolis, MN 55479-0036
Large Company Growth
Fund
I Shares EMSEG & Co. 3,096,084 95% 95%
c/o Norwest Bank Minnesota, N.A.
733 Marquette Avenue MS 0036
Minneapolis, MN 55479-0036
Small Company Stock Fund
A Shares Norwest Wealthbuilder 77,299 18% 1%
Reinvest Account
733 Marquette Avenue
Minneapolis, MN 55479-0040
BHC Securities, Inc. 159,413 38% 1%
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103
B Shares BHC Securities, Inc. 30,101 10% 0%
FAO 52711393
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103
I Shares EMSEG & Co Ira 4,918,473 48% 45%
Norwest Bank Minnesota, NA
733 Marquette Avenue 50
Minneapolis, MN 55479-0050
Stout & Co. 1,010,087 10% 9%
Discretionary Cash
1740 Broadway MS 8751
Denver, CO 80274
Dentru & Co 1,166,630 11% 11%
Non-Discretionary Cash
1740 Broadway Mail 8676
Denver, CO 80274
Small Company Growth Fund
I Shares EMSEG & Co. 11,436,485 99% 99%
c/o Norwest Bank Minnesota, N.A.
733 Marquette Avenue MS 0036
Minneapolis, MN 55479-0036
Contrarian Stock Fund
75
<PAGE>
A Shares BHC Securities, Inc. 24,055 24% 1%
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103
Marathon Press, Inc. 5,127 5% 0%
P.O. Box 407
1500 Square Turn Blvd.
Norfolk, NE 68702-0407
Norwest Wealthbuilder 44,673 45% 1%
Reinvest Account
733 Marquette Avenue
Minneapolis, MN 55479-0040
B Shares BHC Securities, Inc. 3,473 7% 0%
FAO 51610366
One Commerce Square
2005 Market St, Ste 1200
Philadelphia, PA 19103
BHC Securities, Inc. 8,248 17% 0%
FAO 51611219
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103
Bonnie Forsman 4,749 10% 0%
4703 Lakeview Ave N
Brooklyn Center, MN 55429
I Shares Stout & Co. 741,467 25% 24%
Discretionary Cash
1740 Broadway MS 8751
Denver, CO 80274
Dentru & Co. 643,947 22% 21%
Non-Discretionary Cash
1740 Broadway Mail 8676
Denver, CO 80274
FINABA 271,534 9% 9%
Discretionary Cash Acct
1314 Avenue K
Lubbock, TX 79401
Kiwils & Co. 189,347 6.3% .06%
Discretionary Reinvest
1740 Broadway MS 8751
Denver, CO 80274
76
<PAGE>
Seret & Co. 760,004 25% 24%
Discretionary Reinvest
1740 Broadway MS 8751
Denver, CO 80274
International Fund
A Shares Norwest Wealthbuilder 24,633 38% 0%
Reinvest Account
733 Marquette Avenue
Minneapolis, MN 55479-0040
BHC Securities, Inc. 19,295 30% 0%
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103
B Shares BHC Securities, Inc. 5,144 9% 0%
FAO 43268824
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103
I Shares EMSEG & Co. 6,856,816 86% 85%
c/o Norwest Bank Minnesota, N.A.
733 Marquette Avenue MS 0036
Minneapolis, MN 5479-0036
</TABLE>
As to its share holdings listed above, Norwest [and its
affiliates] will solicit voting instructions with respect to the
proposals to be acted upon at the Meeting from the beneficial
owners of the shares. Norwest will vote all of its share
holdings in the same proportion and in accordance with the
instructions received from such beneficial owners.
OFFICERS OF THE TRUST
Certain information regarding each officer of the Trust
is provided below, including the officer's name, age, position at
the Trust and business experience for the last five years, and
the date since which the officer has held his or her position.
Information regarding Mr. Keffer, the President of the Trust
since 1986, is provided in Proposal Two.
Richard C. Butt, 41, Vice President, Assistant Secretary and
Treasurer since 1996.
Managing Director, Forum Financial Services, Inc., with which
he has been associated since May 1996. Prior thereto, from
December 1994 to April 1996 Mr. Butt was a Director of the
77
<PAGE>
Financial Services Consulting Practice, KPMG Peat Marwick
LLP. From November 1993 to August 1994, Mr. Butt was
President of 440 Financial Distributors, Inc. a mutual fund
administrator and distributor, and prior thereto was Senior
Vice President of 440 Financial Group, Inc. Mr. Butt is also
an officer of various registered investment companies for
which Forum Financial Services, Inc. serves as manager,
administrator and/or distributor.
David I. Goldstein, 35, Vice President and Secretary
since 1993.
Counsel, Forum Financial Services, Inc., with which he has
been associated since 1991. Prior thereto, Mr. Goldstein was
associated with the law firm of Kirkpatrick & Lockhart.
Mr. Goldstein is also an officer of various registered
investment companies for which Forum Financial Services, Inc.
serves as manager, administrator and/or distributor.
Sara M. Clark, 33, Vice President and Assistant Treasurer
since 1994.
Managing Director, Forum Financial Services, Inc., with which
she has been associated since 1994. Prior thereto, Ms. Clark
was Controller of Wright Express Corporation (a national
credit card company). Ms. Clark is also an officer of
various registered investment companies for which Forum
Financial Services, Inc. serves as manager, administrator
and/or distributor.
Thomas G. Sheehan, 42, Vice President and Assistant Secretary
since 1994.
Counsel, Forum Financial Services, Inc., with which he has
been associated since 1993. Prior thereto, Mr. Sheehan was
Special Counsel to the Division of Investment Management of
the Securities and Exchange Commission. Mr. Sheehan is also
an officer of various registered investment companies for
which Forum Financial Services, Inc. serves as manager,
administrator and/or distributor.
Catherine S. Wooledge, __, Assistant Secretary since [1996].
Counsel, Forum Financial Services, Inc. with which she has
been associated since 1996. Prior thereto, from September
1994 to 1996 Ms. Wooledge was associated with the law firm of
Morrison & Foerster. From September 1993 to September 1994,
Ms. Wooledge was associate corporate counsel at Franklin
Resources, Inc. Prior thereto, Ms. Wooledge was associated
with the law firm of Drinker, Biddle & Reath.
78
<PAGE>
Renee A. Walker, 26, Assistant Secretary since 1994.
Fund Administrator, Forum Financial Services, Inc., with
which she has been associated since 1994. Prior thereto,
Ms. Walker was an administrator at Longwood Partners (a
manager of a hedge fund partnership) for a year. From 1991
to 1993 Ms. Walker was a sales representative at PaineWebber
Incorporated (a broker-dealer). [Ms. Walker is also an
officer of various registered investment companies for which
Forum Financial Services, Inc. serves as manager,
administrator and/or distributor.]
NORWEST INVESTMENT SERVICES, INC.
During the fiscal year ended May 31, 1996, ValuGrowth
Stock Fund paid brokerage commissions of $10,494, which
constituted 2.41% of the Fund's aggregate brokerage commissions,
to Norwest Investment Services, Inc., a wholly-owned broker-
dealer subsidiary of Norwest Corporation, the parent of Norwest.
ADDITIONAL INFORMATION
It is anticipated that, following the Meeting, the Trust
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, Two Portland Square,
Portland, Maine 04101.
Banks, broker-dealers and voting trustees and their
nominees should advise Thomas G. Sheehan, in care of Forum, Two
Portland Square, Portland, Maine 04101 whether, with respect to
shares of record owned by them, other persons are beneficial
owners of shares for which proxies are being solicited and if so,
the number of copies of the Proxy Statement needed in order to
supply copies to the beneficial owners of the shares.
YOU ARE URGED TO FILL IN, DATE AND SIGN AND RETURN
THE ENCLOSED PROXY PROMPTLY
By Order of the Board of Trustees,
David I. Goldstein
Vice President and Secretary
79
47180160.CZ3
<PAGE>
APPENDIX A
NORWEST ADVANTAGE FUNDS
INVESTMENT ADVISORY AGREEMENT
November 11, 1994, as Amended _______, 1997
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
1
<PAGE>
will from time to time furnish Adviser with any amendments
thereof.
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.
2
<PAGE>
(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 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) UNDER THE ACT OR EXEMPTIVE RELIEF THERETO; THE ADVISER
SHALL HAVE NO DUTIES OR OBLIGATIONS PURSUANT TO THIS AGREEMENT,
EXCEPT AS DESCRIBED IN SUBPARAGRAPH (F) WITH RESPECT TO THE
ASSETS OF A FUND THAT ARE INVESTED IN TWO OR MORE INVESTMENT
COMPANIES, OR SEPARATE SERIES THEREOF, IN ACCORDANCE WITH SECTION
12(D) UNDER THE ACT OR EXEMPTIVE RELIEF THERETO.
(F) TO THE EXTENT THAT A FUND INVESTS ALL OR A PORTION
OF ITS INVESTMENT ASSETS IN TWO OR MORE REGISTERED, OPEN-END
MANAGEMENT INVESTMENT COMPANIES, OR SEPARATE SERIES THEREOF
(EACH, A "BLENDED FUND"), IN ACCORDANCE WITH SECTION 12(D) OF THE
ACT, THE RULES THEREUNDER OR EXEMPTIVE RELIEF THERETO, THE
ADVISER SHALL BE RESPONSIBLE FOR ALL ALLOCATION DECISIONS
REGARDING INVESTMENTS PURCHASED OR REDEEMED IN SUCH COMPANIES OR
SERIES, PROVIDED THAT THE TOTAL INVESTMENT ADVISORY FEES PAYABLE
TO THE ADVISER WITH RESPECT TO THE BLENDED FUND UNDER THE
AGREEMENT SHALL NOT BE INCREASED BECAUSE OF THIS ADDITIONAL
ADVISORY SERVICE.
3
<PAGE>
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 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
4
<PAGE>
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
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.
(c) NO FEE SHALL BE PAYABLE HEREUNDER, EXCEPT AS
DESCRIBED IN SUBPARAGRAPH (D) BELOW, WITH RESPECT TO THE ASSETS
OF A FUND THAT ARE INVESTED IN ONE OR MORE REGISTERED, OPEN-END
MANAGEMENT INVESTMENT COMPANIES, OR SEPARATE SERIES THEREOF, IN
ACCORDANCE WITH SECTION 12(D) UNDER THE ACT OR EXEMPTIVE RELIEF
THERETO. THAT FEE SHALL BE PAYABLE MONTHLY IN ARREARS ON THE
FIRST DAY OF EACH CALENDAR MONTH FOR SERVICES PERFORMED HEREUNDER
DURING THE PRIOR CALENDAR MONTH.
(D) IN EXCHANGE FOR ITS SERVICES DESCRIBED IN SECTION
3(F) THE ADVISER SHALL BE ENTITLED TO A FEE EQUAL TO 0.25% OF THE
AVERAGE DAILY NET ASSETS OF A FUND THAT ARE INVESTED IN TWO OR
MORE REGISTERED, OPEN-END MANAGEMENT INVESTMENT COMPANIES, OR
SEPARATE SERIES THEREOF, IN ACCORDANCE WITH SECTION 12(D) OF THE
ACT, THE RULES THEREUNDER OR EXEMPTIVE RELIEF THERETO. THAT FEE
SHALL BE PAYABLE MONTHLY IN ARREARS ON THE FIRST DAY OF EACH
CALENDAR MONTH FOR SERVICES PERFORMED HEREUNDER DURING THE PRIOR
CALENDAR MONTH.
5
<PAGE>
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, 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
6
<PAGE>
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
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
7
<PAGE>
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
8
<PAGE>
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
__________________ ________________________
Ready Cash Investment Fund 0.40% (first $300 million of assets)
0.36% (next $400 million of assets)
0.32% (remaining assets)
Cash Investment Fund, U.S. Government 0.20% (first $300 million of assets)
Fund and Treasury Fund 0.16% (next $400 million of assets)
0.12% (remaining assets)
Municipal Money Market Fund 0.35% (first $500 million of assets)
0.325% (next $500 million of assets)
0.30% (remaining assets)
Stable Income Fund 0.30%
Intermediate Government Income Fund 0.33%
Diversified Bond Fund 0.35%
Income Fund 0.50%
Total Return Bond Fund 0.50%
Limited Term Tax-Free Fund 0.50%
Tax-Free Income Fund 0.50%
Colorado Tax-Free Fund and 0.50% (first $300 million of assets)
Minnesota Tax-Free Fund 0.46% (next $400 million of assets)
0.42% (remaining assets)
Conservative Balanced Fund 0.45%
Moderate Balanced Fund 0.53%
Growth Balanced Fund 0.58%
Index Fund 0.15%
Income Equity Fund 0.50%
Diversified Equity Fund 0.65%
Growth Equity Fund 0.90%
Large Company Growth Fund 0.65%
ValuGrowth Stock Fund 0.80% (first $300 million of assets)
0.76% (next $400 million of assets)
0.72% (remaining assets)
Small Company Stock Fund 1.00% (first $300 million of assets)
0.96% (next $400 million of assets)
0.92% (remaining assets)
9
<PAGE>
Small Company Growth Fund 0.90%
Small Cap Opportunities Fund 0.60%
Contrarian Stock Fund 0.80% (first $300 million of assets)
0.76% (next $400 million of assets)
0.72% (remaining assets)
International Fund 0.45%
10
47180160.CZ3
<PAGE>
APPENDIX B
FUNDAMENTAL POLICIES
Set forth below are the Funds' fundamental investment
restrictions regarding diversification and concentration.
(1) Diversification
(a) With respect to 75% of its assets, Cash Investment Fund,
Ready Cash Investment Fund, U.S. Government Fund,
Treasury Fund, Income Fund, Total Return Bond Fund, Tax-
Free Income Fund and ValuGrowth Stock Fund may not
purchase a security other than a U.S. Government
Security if, as a result, more than 5% of the Fund's
total assets would be invested in the securities of a
single issuer or the Fund would own more than 10% of the
outstanding voting securities of any single issuer.
(b) With respect to 75% of its assets, Stable Income Fund,
Intermediate Government Income Fund, Diversified Bond
Fund, Limited Term Tax-Free Fund, Index Fund, Income
Equity Fund, Diversified Equity Fund, Growth Equity
Fund, Large Company Growth Fund, Small Company Stock
Fund, Small Company Growth Fund, Small Cap Opportunities
Fund, Contrarian Stock Fund and International Fund may
not purchase a security other than a U.S. Government
Security if, as a result, more than 5% of the Fund's
total assets would be invested in the securities of a
single issuer or the Fund would own more than 10% of the
outstanding voting securities of any single issuer;
provided, however, that each Fund may invest all or a
portion of its assets in another diversified, open-end
management investment company with substantially the
same investment objective, policies and restrictions as
the Fund.
(c) To the extent required to qualify as a regulated
investment company and with respect to 50% of its
assets, Municipal Money Market Fund may not purchase a
security other than a U.S. Government Security if, as a
result, more than 5% of the Fund's total assets would be
invested in the securities of a single issuer or the
Fund would own more than 10% of the outstanding voting
securities of any single issuer.
1
<PAGE>
(2) Concentration
The bracketed clauses in the following restrictions will be
replaced as described in Proposal Four.
(a) Cash Investment Fund and Ready Cash Investment Fund [may
not purchase securities if, immediately after the
purchase, more than 25% of the value of the Fund's total
assets would be invested in the securities of issuers
conducting their principal business activities in the
same industry]; provided, (i) there is no limit on
investments in U.S. Government Securities, in repurchase
agreements covering U.S. Government Securities or in
foreign government securities, (ii) municipal securities
are not treated as involving a single industry,
(iii) there is no limit on investment in issuers
domiciled in a single country, (iv) financial service
companies are classified according to the end users of
their services (for example, automobile finance, bank
finance and diversified finance) and (v) utility
companies are classified according to their services
(for example, gas, gas transmission, electric and gas,
electric and telephone); and provided the Fund will
invest more than 25% of the value of the Fund's total
assets in obligations of domestic and foreign financial
institutions and their holding companies.
(b) Treasury Fund, U.S. Government Fund and Municipal Money
Market Fund [may not purchase securities if, immediately
after the purchase, more than 25% of the value of the
Fund's total assets would be invested in the securities
of issuers conducting their principal business
activities in the same industry]; provided, (i) there is
no limit on investments in U.S. Government Securities,
in repurchase agreements covering U.S. Government
Securities, in foreign government securities, or in
obligations of domestic commercial banks (including U.S.
branches of foreign banks subject to regulations under
U.S. laws applicable to domestic banks and, to the
extent that its parent is unconditionally liable for the
obligation, foreign branches of U.S. banks),
(ii) municipal securities are not treated as involving a
single industry, (iii) there is no limit on investment
in issuers domiciled in a single country, (iv) financial
service companies are classified according to the end
users of their services (for example, automobile
finance, bank finance and diversified finance) and
(v) utility companies are classified according to their
services (for example, gas, gas transmission, electric
and gas, electric and telephone).
2
<PAGE>
(c) Income Fund, Limited Term Tax-Free Fund, Tax-Free Income
Fund, Colorado Tax-Free Fund, Minnesota Tax-Free Fund
and ValuGrowth Stock Fund [may not purchase securities,
if, immediately after the purchase, more than 25% of the
value of the Fund's total assets would be invested in
the securities of issuers conducting their principal
business activities in the same industry]; provided, (i)
there is no limit on investments in obligations issued
or guaranteed by the U.S. Government, its agencies or
instrumentalities ("U.S. Government Securities") or in
repurchase agreements covering U.S. Government
Securities, (ii) municipal securities are not treated as
involving a single industry, (iii) financial service
companies are classified according to the end users of
their services (for example, automobile finance, bank
finance and diversified finance) and (iv) utility
companies are classified according to their services
(for example, gas, gas transmissions, electric and gas,
electric and telephone).
(d) Total Return Bond Fund [may not purchase securities if,
immediately after the purchase, more than 25% of the
value of the Fund's total assets would be invested in
the securities of issuers conducting their principal
business activities in the same industry]; provided,
however, that there is no limit on investments in U.S.
Government Securities, repurchase agreements covering
U.S. Government Securities, mortgage-related or housing-
related securities (including mortgage-related or
housing-related U.S. Government Securities) or municipal
securities and that financial service companies are
classified according to the end users of their services
(for example, automobile finance, bank finance and
diversified finance) and utility companies are
classified according to their services (for example,
gas, gas transmission, electric and gas, electric and
telephone) and that the Fund may invest, to the extent
permitted by the 1940 Act, all or a portion of its
assets in another diversified, open-end management
investment company with substantially the same
investment objective, policies and restrictions as the
Fund.
(e) Small Company Stock Fund and Contrarian Stock Fund [may
not purchase securities, if, immediately after the
purchase, more than 25% of the value of the Fund's total
assets would be invested in the securities of issuers
conducting their principal business activities in the
same industry]; provided, however, that there is no
limit on investments in U.S. Government Securities,
repurchase agreements covering U.S. Government
3
<PAGE>
Securities or municipal securities and that financial
services companies are classified according to the end
users of their services (for example, automobile
finance, bank finance and diversified finance) and
utility companies are classified according to their
services (for example, gas, gas transmission, electric
and gas, electric and telephone); and that the Funds may
invest, to the extent permitted by the 1940 Act, all or
a portion or their assets in another diversified, open-
end management investment company with substantially the
same investment objective, policies and restrictions as
the Fund.
(f) Stable Income Fund, Intermediate Government Income Fund,
Diversified Bond Fund, Conservative Balanced Fund,
Moderate Balanced Fund, Growth Balanced Fund, Income
Equity Fund, Index Fund, Diversified Equity Fund, Growth
Equity Fund, Large Company Growth Fund, Small Company
Growth Fund and International Fund [may not purchase
securities if, immediately after the purchase, more than
25% of the value of the Fund's total assets would be
invested in the securities of issuers conducting their
principal business activities in the same industry];
provided, however, that there is no limit on investments
in U.S. Government Securities, repurchase agreements
covering U.S. Government Securities, foreign government
securities, mortgage-related or housing-related
securities, municipal securities and issuers domiciled
in a single country; that financial service companies
are classified according to the end users of their
services (for example, automobile finance, bank finance
and diversified finance); that utility companies are
classified according to their services (for example,
gas, gas transmission, electric and gas, electric and
telephone); and that each Fund may invest all or a
portion of its assets in another diversified, open-end
management investment company with substantially the
same investment objective, policies and restrictions as
the Fund.
4
47180160.CZ3
<PAGE>
APPENDIX C
SUMMARY DESCRIPTION OF THE INVESTMENT OBJECTIVES AND
POLICIES OF THE RATED MONEY MARKET CORE PORTFOLIO
Rated Money Market Portfolio
Investment Objective. The investment objective of Rated
Money Market Portfolio is to provide high current income to the
extent consistent with the preservation of capital and the
maintenance of liquidity. There can be no assurance that the
Portfolio will achieve its investment objective.
Investment Policies. Rated Money Market Portfolio
pursues its investment objective by investing in a broad spectrum
of high quality money market instruments of United States and
foreign issuers. The Portfolio will maintain an "Am" rating from
Standard & Poor's Corporation. The Portfolio may invest in
obligations of financial institutions. These include negotiable
certificates of deposit, bank notes, bankers' acceptances and
time deposits of U.S. banks (including savings banks and savings
associations), foreign branches of U.S. banks, foreign banks and
their non-U.S. branches (Eurodollars), U.S. branches and agencies
of foreign banks (Yankee dollars), and wholly-owned banking-
related subsidiaries of foreign banks.
Certificates of deposit represent an institution's
obligation to repay funds deposited with it that earn a specified
interest rate over a given period. Bank notes are a debt
obligation of a bank. Bankers' acceptances are negotiable
obligations of a bank to pay a draft which has been drawn by a
customer and are usually backed by goods in international trade.
Time deposits are non-negotiable deposits with a banking
institution that earn a specified interest rate over a given
period. Certificates of deposit and fixed time deposits, which
are payable at the stated maturity date and bear a fixed rate of
interest, generally may be withdrawn on demand by the Portfolio
but may be subject to early withdrawal penalties which could
reduce the Portfolio's yield. Unless there is a readily
available market for them, deposits that are subject to early
withdrawal penalties or that mature in more than seven days are
treated as illiquid securities.
The Portfolio limits its investments in obligations of
financial institutions (including their branches, agencies and
subsidiaries) to institutions which at the time of investment
have total assets in excess of one billion dollars, or the
equivalent in other currencies. The Portfolio's investments in
the obligations of foreign banks and their branches, agencies or
subsidiaries may be obligations of the parent, of the issuing
1
<PAGE>
branch, agency or subsidiary, or both. Investments in foreign
bank obligations are limited to banks, branches and subsidiaries
located in countries which the Adviser believes do not present
undue risk.
The Portfolio normally will invest more than 25% of its
total assets in the obligations of domestic and foreign financial
institutions, their holding companies, and their subsidiaries.
This concentration may result in increased exposure to risks
pertaining to the banking industry. These risks include a
sustained increase in interest rates, which can adversely affect
the availability and cost of a bank's lending activities;
exposure to credit losses during times of economic decline;
concentration of loan portfolios in certain industries;
regulatory developments; and competition among financial
institutions. The Portfolio may not invest more than 25% of its
total assets in any other single industry. Although the
Portfolio invests in dollar-denominated obligations, the foreign
securities in which the Portfolio invests also involve certain
risks. The Portfolio may invest without limit in obligations
issued or guaranteed as to principal and interest by the United
States Government or by any of its agencies and
instrumentalities. The Portfolio also may invest in obligations
of the states, territories and possessions of the United States
and of their subdivisions, authorities and corportions, the
interest on which is exempt from Federal income tax. The
Portfolio may invest in corporate debt securities, including
commercial paper and privately issued instruments and may invest
in participation interests. The Portfolio will not invest more
than 10% of its total assets in participation interests in which
the Portfolio does not have demand rights.
2
47180160.CZ3
<PAGE>
APPENDIX D
FORM OF
NORWEST ADVANTAGE FUNDS
INVESTMENT SUBADVISORY AGREEMENT
[DATE]
AGREEMENT made this __ day of _______, 19__, 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, 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, and _____________________________
(the "Sudadviser"), a corporation organized under the laws of the
State of _______________ with its principal place of business at
_______________________________.
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 its shares of
beneficial interest, no par value, in separate series and
classes;
WHEREAS, the Subadviser provides investment advice and is
registered with the Securities and Exchange Commission (the
"SEC") as an investment adviser under the Investment Advisers Act
of 1940, as amended (the "Advisers Act");
WHEREAS, the Trust and the Adviser desire that the Subadviser
perform investment advisory services for [NAMES OF FUNDS] (each a
"Fund," and collectively the "Funds"), and the Subadviser is
willing to provide those services on the terms and conditions set
forth in this Agreement; and
WHEREAS, the Subadviser is willing to render such investment
advisory services to the Funds;
NOW THEREFORE, in consideration for the promises and
covenants contained herein, the Trust, the Adviser and the
Subadviser hereby 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
1
<PAGE>
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 [NUMBER OF SERIES] 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 to the Adviser copies of the documents listed in
this Section 1 and will from time to time furnish Subadviser with
any amendments thereof.
SECTION 2. INVESTMENT SUBADVISER; APPOINTMENT
Subject to the direction and control of the Board, the
Adviser manages the investment and reinvestment of the assets of
the Funds and provides for certain management and services as
specified in the Investment Advisory Agreements between the Trust
and the Adviser with respect to the Funds.
Subject to the direction and control of the Board and the
Adviser, Subadviser shall manage the investment and reinvestment
of the assets of the Funds and, without limiting the generality
of the foregoing, shall provide the management and other services
specified below, all in such manner and to such extent as may be
directed from time to time by the Adviser.
SECTION 3. DUTIES OF THE SUBADVISER
(a) The Subadviser shall make decisions with respect to all
purchases and sales of securities and other investment assets in
the Funds. To carry out such decisions, the Subadviser 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
for the Funds. In all purchases, sales and other transactions in
securities for the Funds, the Subadviser 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 Subadviser will report to the Board at each meeting
thereof all changes in the Funds since the prior report, and will
also keep the Board informed of important developments affecting
the Trust, the Funds and the Subadviser, and on its own
initiative, will furnish the Board from time to time with such
information as the Subadviser may believe appropriate for this
2
<PAGE>
purpose, whether concerning the individual companies whose
securities are included in a Fund's holdings, the industries in
which they engage, or the economic, social or political
conditions prevailing in each country in which the Fund maintains
investments. The Subadviser will also furnish the Board with
such statistical and analytical information with respect to
securities in the Funds as the Subadviser may believe appropriate
or as the Board reasonably may request. In making purchases and
sales of securities for a Fund, the Subadviser will bear in mind
the polices 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 Subadviser will from time to time employ or
associate with such persons as the Subadviser believes to be
particularly fitted to assist in the execution of the
Subadviser's duties hereunder, the cost of performance of such
duties to be borne and paid by the Subadviser. No obligation may
be incurred on the Trust's behalf in any such respect.
(d) The Subadviser shall maintain records for each Fund
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 Subadviser 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 Subadviser 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 Subadviser 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 Subadviser's normal
business hours. Upon the reasonable request of the Trust, copies
of any such books and records shall be provided promptly by the
Subadviser to the Trust or the Trust's authorized
representatives.
SECTION 4. EXPENSES
Subject to any expense reimbursement arrangements between the
Adviser or others and the Trust, the Trust shall be responsible
and shall assume the obligation for payment of all of the Trust's
expenses. The Subadviser shall pay for maintaining its staff and
personnel necessary to perform its obligations under this
3
<PAGE>
Agreement and shall, at its own expense maintain the office
space, facilities, equipment and personnel that are reasonably
necessary to carry out its obligations hereunder.
SECTION 5. STANDARD OF CARE
The Trust shall expect of the Subadviser, and the Subadviser
will give the Trust the benefit of, the Subadviser's best
judgment and efforts in rendering its services to the Trust, and
as an inducement to the Subadviser's undertaking these services
the Subadviser shall not be liable hereunder for any mistake or
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 Subadviser against any liability to
the Trust or to the Trust's interest holders to which the
Subadviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of
the Subadviser's duties hereunder, or by reason of the
Subadviser's reckless disregard of its obligations and duties
hereunder. As used in this Section 5, the term "Subadviser"
shall include any affiliates of the Subadviser performing
services for the Funds contemplated hereby and directors,
officers and employees of the Subadviser as well as the
Subadviser itself.
The Subadviser shall not be liable for any losses caused by
disturbances of its operations by virtue of force majeure, war,
riot, or damage caused by nature or due to other events for which
the Subadviser is not responsible (e.g., strike, lock-out or
losses caused by the imposition of foreign exchange controls,
expropriation of assets or other acts of domestic or foreign
authorities).
The presence of exculpatory language in this Agreement shall
not be deemed by the Trust, the Funds, the Adviser, the
Subadviser, or any other party appointed pursuant to this
Agreement, including without limitation any custodian, as in any
way limiting causes of action and remedies which may,
notwithstanding such language, be available to the Funds either
under common law or statutory law principles applicable to
fiduciary relationships or under the Federal securities laws.
SECTION 6. COMPENSATION
In consideration of the foregoing, the Adviser and not the
Trust shall pay the Subadviser a fee with respect to each Fund as
shall be determined from time to time in writing between the
Adviser and the Subadviser.
4
<PAGE>
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
Subadviser 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 at any time, without
the payment of any penalty, (i) by the Board or by a vote of a
majority of the outstanding voting interests of a Portfolio on 60
days' written notice to the Subadviser or (ii) by the Subadviser
on 60 days' written notice to the Trust. This agreement shall
terminate upon assignment.
SECTION 8. ACTIVITIES OF THE SUBADVISER
Except to the extent necessary to perform its obligations
hereunder, nothing herein shall be deemed to limit or restrict
the Subadviser's right, or the right of any of the Subadviser'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. It is specifically understood
that officers, directors and employees of the Subadviser and its
affiliates may continue to engage in providing portfolio
management services and advice to other investment companies,
whether or not registered, and to other investment advisory
clients. When other clients of the Subadviser desire to purchase
or sell a security at the same time such security is purchased or
sold for the Funds, such purchases and sales will, to the extent
feasible, be allocated among the Funds and such clients in a
manner believed by the Subadviser to be equitable to the Funds
and such clients.
5
<PAGE>
SECTION 9. LIMITATION OF SHAREHOLDER AND
TRUSTEE LIABILITY
The Trustees of the Trust and the shareholders of the Funds
shall not be liable for any obligations of the Trust or of the
Funds under this Agreement, and the Subadviser 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 Funds to
which the Subadviser's rights or claims relate in settlement of
such rights or claims, and not to the Trustees of the Trust or
the shareholders of the Funds.
SECTION 10. NOTICE
Any notice or other communication required to be given
pursuant to this Agreement shall be in writing or by telex and
shall be effective upon receipt. Notices and communications
shall be given, if to the Trust, at:
Two Portland Square
Portland, ME 04101
Attention: Norwest Advantage Funds Secretary
if to the Adviser, at:
Sixth Street and Marquette
Minneapolis, MN 55479
Attention: _____________
and if to the Subadviser, at:
__________________________
__________________________
__________________________
Attention: ______________
SECTION 11. 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 the Funds thereby affected.
(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.
6
<PAGE>
(d) The terms "vote of a majority of the outstanding voting
securities," interested person," "affiliated person" and
"assignment" shall have the meaning ascribed thereto in the Act.
(e) The Subadviser confirms that each Fund is a "business
customer" as defined by IMRO.
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
[SUBADVISER]
[Name]
[Title]
7
47180160.CZ3
<PAGE>
Norwest Advantage Funds - Cash Investment Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Cash Investment Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL FIVE: To approve the equal investment of the Fund's
assets in two Core Portfolios and related changes to the Fund's
investment advisory fee structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Ready Cash Investment Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Ready Cash Investment Fund (the
"Fund") registered in the name of the undersigned at the Special
Meeting of Shareholders of [Norwest Advantage Funds] (the
"Trust") to be held at the offices of the Trust's manager and
distributor, Forum Financial Services, Inc., Two Portland Square,
Portland, Maine 04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - U.S. Government Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of U.S. Government Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Treasury Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Treasury Fund (the "Fund") registered
in the name of the undersigned at the Special Meeting of
Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Municipal Money Market Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Municipal Money Market Fund (the
"Fund") registered in the name of the undersigned at the Special
Meeting of Shareholders of [Norwest Advantage Funds] (the
"Trust") to be held at the offices of the Trust's manager and
distributor, Forum Financial Services, Inc., Two Portland Square,
Portland, Maine 04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL NINE: To approve an amendment to the Fund's investment
objecitve.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Stable Income Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Stable Income Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL SIX: To approve a subadvisory agreement among Norwest,
Galliard Capital Management, Inc., and the Trust, on behalf of
the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Intermediate Government Income Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Intermediate Government Income Fund
(the "Fund") registered in the name of the undersigned at the
Special Meeting of Shareholders of [Norwest Advantage Funds] (the
"Trust") to be held at the offices of the Trust's manager and
distributor, Forum Financial Services, Inc., Two Portland Square,
Portland, Maine 04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Diversified Bond Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Diversified Bond Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL FOUR: To approve changes to the Fund's current advisory
fee structure, including payment to Norwest Bank Minnesota, N.A.
of a fee for asset allocation services.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL SIX: To approve a subadvisory agreement among Norwest,
Galliard Capital Management, Inc., and the Trust, on behalf of
the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL SEVEN: To approve subadvisory agreements among Norwest,
Peregrine Capital Management, Inc., and the Trust, on behalf of
the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL NINE: To approve an amendment to the Fund's investment
objecitve.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Income Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Income Fund (the "Fund") registered in
the name of the undersigned at the Special Meeting of
Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL NINE: To approve an amendment to the Fund's investment
objecitve.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Total Return Bond Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Total Return Bond Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL EIGHT: To approve subadvisory agreements among Norwest,
United Capital Management, and the Trust, on behalf of the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Limited Term Tax-Free Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Limited Term Tax-Free Fund (the
"Fund") registered in the name of the undersigned at the Special
Meeting of Shareholders of [Norwest Advantage Funds] (the
"Trust") to be held at the offices of the Trust's manager and
distributor, Forum Financial Services, Inc., Two Portland Square,
Portland, Maine 04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Tax-Free Income Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Tax-Free Income Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Colorado Tax-Free Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Colorado Tax-Free Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Minnesota Tax-Free Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Minnesota Tax-Free Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Conservative Balanced Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Conservative Balanced Fund (the
"Fund") registered in the name of the undersigned at the Special
Meeting of Shareholders of [Norwest Advantage Funds] (the
"Trust") to be held at the offices of the Trust's manager and
distributor, Forum Financial Services, Inc., Two Portland Square,
Portland, Maine 04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL FOUR: To approve changes to the Fund's current advisory
fee structure, including payment to Norwest Bank Minnesota, N.A.
of a fee for asset allocation services.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL SIX: To approve a subadvisory agreement among Norwest,
Galliard Capital Management, Inc., and the Trust, on behalf of
the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL SEVEN: To approve subadvisory agreements among Norwest,
Peregrine Capital Management, Inc., and the Trust, on behalf of
the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL EIGHT: To approve subadvisory agreements among Norwest,
United Capital Management, and the Trust, on behalf of the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Moderate Balanced Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Moderate Balanced Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL FOUR: To approve changes to the Fund's current advisory
fee structure, including payment to Norwest Bank Minnesota, N.A.
of a fee for asset allocation services.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL SIX: To approve a subadvisory agreement among Norwest,
Galliard Capital Management, Inc., and the Trust, on behalf of
the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL SEVEN: To approve subadvisory agreements among Norwest,
Peregrine Capital Management, Inc., and the Trust, on behalf of
the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL EIGHT: To approve subadvisory agreements among Norwest,
United Capital Management, and the Trust, on behalf of the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Growth Balanced Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Growth Balanced Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL FOUR: To approve changes to the Fund's current advisory
fee structure, including payment to Norwest Bank Minnesota, N.A.
of a fee for asset allocation services.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL SIX: To approve a subadvisory agreement among Norwest,
Galliard Capital Management, Inc., and the Trust, on behalf of
the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL SEVEN: To approve subadvisory agreements among Norwest,
Peregrine Capital Management, Inc., and the Trust, on behalf of
the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL EIGHT: To approve subadvisory agreements among Norwest,
United Capital Management, and the Trust, on behalf of the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Index Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Index Fund (the "Fund") registered in
the name of the undersigned at the Special Meeting of
Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Income Equity Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Income Equity Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL NINE: To approve an amendment to the Fund's investment
objecitve.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - ValuGrowth Stock Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of ValuGrowth Stock Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL NINE: To approve an amendment to the Fund's investment
objecitve.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Diversified Equity Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Diversified Equity Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL FOUR: To approve changes to the Fund's current advisory
fee structure, including payment to Norwest Bank Minnesota, N.A.
of a fee for asset allocation services.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL SEVEN: To approve subadvisory agreements among Norwest,
Peregrine Capital Management, Inc., and the Trust, on behalf of
the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Growth Equity Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Growth Equity Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL FOUR: To approve changes to the Fund's current advisory
fee structure, including payment to Norwest Bank Minnesota, N.A.
of a fee for asset allocation services.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL SEVEN: To approve subadvisory agreements among Norwest,
Peregrine Capital Management, Inc., and the Trust, on behalf of
the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Large Company Growth Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Large Company Growth Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL SEVEN: To approve subadvisory agreements among Norwest,
Peregrine Capital Management, Inc., and the Trust, on behalf of
the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Small Company Stock Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Small Company Stock Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Small Company Growth Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Small Company Growth Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL SEVEN: To approve subadvisory agreements among Norwest,
Peregrine Capital Management, Inc., and the Trust, on behalf of
the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL NINE: To approve an amendment to the Fund's investment
objecitve.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Small Cap Opportunities Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Small Cap Opportunities Fund (the
"Fund") registered in the name of the undersigned at the Special
Meeting of Shareholders of [Norwest Advantage Funds] (the
"Trust") to be held at the offices of the Trust's manager and
distributor, Forum Financial Services, Inc., Two Portland Square,
Portland, Maine 04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - Contrarian Stock Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of Contrarian Stock Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL EIGHT: To approve subadvisory agreements among Norwest,
United Capital Management, and the Trust, on behalf of the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Norwest Advantage Funds - International Fund
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 any one
shall act, then that one) proxies with power of substitution to
vote all of the shares of International Fund (the "Fund")
registered in the name of the undersigned at the Special Meeting
of Shareholders of [Norwest Advantage Funds] (the "Trust") to be
held at the offices of the Trust's manager and distributor, Forum
Financial Services, Inc., Two Portland Square, Portland, Maine
04101 on April __, 1997, at 10:00 a.m., 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 election of all nominees for Trustee, FOR
Proposals Two and Three and FOR each other Proposal applicable to
the Fund.
Receipt is acknowledged of this Proxy Statement for the
Special Meeting of Shareholders to be held on April __, 1997.
Signature Date
Signature (if Shares held jointly) Date
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE
In voting on each of Proposals Two through Eight, checking the
box labeled ABSTAIN will result in the Shares covered by the
Proxy being treated ad if they were voted AGAINST the Proposal.
PROPOSAL ONE: ELECTION OF TRUSTEES
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY for all nominees listed below. To
withhold authority to vote for any individual nominee, strike a
line through the nominee's name.
Robert C. Brown, Donald H. Burkhart, James C. Harris, John Y.
Keffer, Richard M. Leach. John S. McCune, Timothy J. Penny and
Donald C. Willeke
<PAGE>
PROPOSAL TWO: To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of the Trust for the fiscal year ending May
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL THREE: To approve a new investment policy permitting a
Fund to invest all or a portion of its assets in one or more
investment companies and related amendments to certain
fundamental investment policies and the Fund's investment
advisory agreement to accommodate these investments.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
47180160.DF0
