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As filed with the Securities and Exchange Commission on November 30, 1998
File Nos. 33-49570 and 811-6742
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
Post-Effective Amendment No. 17
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 18
MONARCH FUNDS
Two Portland Square
Portland, Maine 04101
207-879-1900
David I. Goldstein
Forum Fund Services, LLC
Two Portland Square
Portland, Maine 04101
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to Rule 485, paragraph (b)
[X] on December 30, 1998 pursuant to Rule 485, paragraph (b)
[ ] 60 days after filing pursuant to Rule 485, paragraph (a)(1)
[ ] on _________________ pursuant to Rule 485, paragraph (a)(1)
[ ] 75 days after filing pursuant to Rule 485, paragraph (a)(2)
[ ] on _________________ pursuant to Rule 485, paragraph (a)(2)
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Each Fund of the Registrant is structured as a master-feeder fund. This
amendment includes a manually executed signature page for the master funds, each
a series of Core Trust (Delaware).
<PAGE>
CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 481(A))
(Treasury Cash Fund, Government Cash Fund and Cash Fund)
PART A
<PAGE>
<TABLE>
<S> <C> <C> <C>
Form N-1A
Item No.
- -------- Location in Prospectus
----------------------
Item 1. Cover Page Cover Page
Item 2. Synopsis Fund Expenses
Item 3. Condensed Financial Information Financial Highlights; Other Information
Item 4. General Description of Registrant Cover Page; Investment Objective and Policies;
Other Information
Item 5. Management of the Fund Management
Item 5A. Management's Discussion of Fund Performance Not Applicable
Item 6. Capital Stock and Other Securities Investment Objective and Policies; Distributions
and Tax Matters; Other Information; Purchases and
Redemptions of Shares
Item 7. Purchase of Securities Being Offered Purchases and Redemptions of Shares; Other
Information; Management
Item 8. Redemption or Repurchase Purchases and Redemptions of Shares
Item 9. Pending Legal Proceedings Not Applicable
</TABLE>
<PAGE>
CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 481(A))
(Treasury Cash Fund, Government Cash Fund and Cash Fund)
<TABLE>
<S> <C> <C> <C>
PART B
Form N-1A
Item No.
- -------- Location in Statement of Additional Information
-----------------------------------------------
Item 10. Cover Page Cover Page
Item 11. Table of Contents Cover Page
Item 12. General Information and History Management
Item 13. Investment Objectives and Policies Investment Policies; Investment Limitations
Item 14. Management of the Fund Management; Other Information
Item 15. Control Persons and Principal Holders of Management; Other Information
Securities
Item 16. Investment Advisory and Other Services Management; Other Information
Item 17. Brokerage Allocation and Other Practices Portfolio Transactions
Item 18. Capital Stock and Other Securities Other Information
Item 19. Purchase, Redemption and Pricing of Other Information; Additional Purchase and
Securities Being Offered Redemption Information
Item 20. Tax Status Taxation
Item 21. Underwriters Management
Item 22. Calculation of Performance Data Performance Data
Item 23. Financial Statements Financial Statements
</TABLE>
<PAGE>
M O N A R C H F U N D S
================================================================================
UNIVERSAL SHARES
Treasury Cash Fund
Government Cash Fund
Cash Fund
PROSPECTUS
January [ ], 1999
This Prospectus offers Universal Shares of Treasury Cash Fund, Government Cash
Fund and Cash Fund (each a "Fund" and collectively the "Funds"). Each Fund is a
diversified money market portfolio of Monarch Funds (the "Trust"), an open-end,
management investment company. Each Fund seeks to provide its shareholders with
high current income to the extent consistent with the preservation of capital
and the maintenance of liquidity.
Treasury Cash Fund, Government Cash Fund and Cash Fund each seeks to achieve its
investment objective by investing all of its investable assets in Treasury Cash
Portfolio, Government Cash Portfolio and Cash Portfolio (each a "Portfolio" and
collectively the "Portfolios"), respectively. The Portfolios are separate series
of Core Trust (Delaware) ("Core Trust"), an open-end, management investment
company. See "Other Information - Fund Structure." Accordingly, each Fund's
investment experience will correspond directly with that of the Portfolio in
which it invests. Through its corresponding Portfolio:
TREASURY CASH FUND invests substantially all of its assets in
obligations of the U.S. Treasury and in repurchase agreements backed by
these obligations.
GOVERNMENT CASH FUND invests substantially all of its assets in
high-quality obligations of the U.S. Government, its agencies and
instrumentalities and in repurchase agreements backed by these
obligations.
CASH FUND invests in a broad spectrum of high-quality money market
instruments.
This Prospectus sets forth concisely the information concerning the Trust and
the Funds that a prospective investor should know before investing. Investors
should read this Prospectus and retain it for future reference. The Trust has
filed with the Securities and Exchange Commission ("SEC") a Statement of
Additional Information dated January [ ], 1999 ("SAI"), which contains more
detailed information about the Trust and the Funds and which is available
together with other related materials for reference on the SEC's Internet Web
Site (http://www.sec.gov). The SAI, which is incorporated into the Prospectus by
reference, also is available without charge by contacting the Trust's
distributor, Forum Fund Services, LLC, at Two Portland Square, Portland, Maine
04101.
________________________________________________________________________________
<TABLE>
<S> <C> <C> <C>
TABLE OF CONTENTS
1. Prospectus Summary............................ 5. Purchases of Shares...........................
2. Financial Highlights.......................... 6. Redemptions of Shares.........................
3. Investment Objective and Policies............. 7. Distributions and Tax Matters.................
4. Management.................................... 8. Other Information.............................
</TABLE>
________________________________________________________________________________
ALTHOUGH THE FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER
SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUNDS. AN INVESTMENT IN
THE FUNDS IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY, AND IS NOT ENDORSED OR GUARANTEED BY
ANY BANK OR ANY AFFILIATE OF A BANK. THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
1. PROSPECTUS SUMMARY
FUND HIGHLIGHTS
This prospectus offers shares of the Universal class ("Universal Shares") of
each of the Funds. The Funds operate in accordance with the provisions of Rule
2a-7 under the Investment Company Act of 1940.
MANAGEMENT. Forum Administrative Services, LLC ("Forum") supervises the overall
management of the Funds and the Portfolios. Forum Fund Services, LLC ("FFS") is
the distributor of the Funds' shares. Forum Investment Advisors, LLC (the
"Adviser") is the investment adviser of each Portfolio and provides professional
management of the Portfolios' investments. The Trust's transfer agent and
dividend disbursing agent is Forum Shareholder Services, LLC See "Management"
for a description of the services provided and fees charged to the Funds.
PURCHASES AND REDEMPTIONS. The minimum initial investment in Universal Shares is
$1,000,000. Universal Shares may be purchased and redeemed Monday through
Friday, between the hours of 5:00 a.m. and 3:00 p.m., Pacific time, except on
Federal holidays and other days that the Federal Reserve Bank of San Francisco
is closed ("Fund Business Days"). To be eligible to receive that days' income,
purchase orders must be received by the Transfer Agent in good order no later
than 11:00 a.m., Pacific time. Shareholders may elect to have redemptions of
over $5,000 redeemed by bank wire to a designated bank account. To be able to
receive redemption proceeds by wire on the day of the redemption, redemption
orders must be received by the transfer agent in good order no later than 11:00
a.m., Pacific time. All times may be changed without notice by Fund management
due to market activities. See "Purchases of Shares" and "Redemptions of Shares."
EXCHANGES. Shareholders may exchange Universal Shares for Universal Shares of
the other Funds. See "Redemptions of Shares - Exchange Program."
DISTRIBUTIONS. Distributions of net investment income are declared daily and
paid monthly by each Fund and are automatically reinvested in additional Fund
shares unless the shareholder has requested payment in cash. See "Distributions
and Tax Matters."
INVESTMENT CONSIDERATIONS. There can be no assurance that any Fund will be able
to maintain a stable net asset value of $1.00 per share. Although the Funds
invest only in money market instruments, all securities, including U.S.
Government Securities, involve some level of investment risk. An investment in a
Fund is not insured by the FDIC, nor is it insured or guaranteed against loss of
principal.
EXPENSES OF INVESTING IN THE FUNDS
The purpose of the following table is to assist investors in understanding the
various expenses that an investor in Universal Shares will bear directly or
indirectly. There are no transaction expenses associated with purchases,
redemptions or exchanges of Fund shares. For a further description of the
various expenses incurred in the operation of the Funds and the Portfolios, see
"Management." Expenses for each Fund are based on the Funds' fiscal year ended
August 31, 1998 except that expenses for Treasury Cash Fund are estimated for
its fiscal year ending August 31, 1998.
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)(1)
<TABLE>
<S> <C> <C> <C> <C>
Treasury Government
Cash Fund Cash Fund Cash Fund
Management Fees(2) (after fee waivers) 0.09% 0.09% 0.09%
Rule 12b-1 Fees None None None
Other Expenses (after expense reimbursements) 0.16% 0.09% 0.10%
Total Operating Expenses 0.25% 0.18% 0.18%
(1) All information includes the Fund's pro rata portion of the expenses of its
corresponding Portfolio. Absent expense reimbursements and fee waivers, the
expenses of Treasury Cash Fund, Government Cash Fund and Cash Fund would
be: Management Fees; 0.14%, 0.14% and 0.14%; Other Expenses; 0.36%, 0.12%
and 0.16%; and Total Operating Expenses; 0.50%, 0.26% and 0.29%.
(2) Includes all advisory, management and administration fees.
</TABLE>
<PAGE>
EXAMPLE
You would pay directly or indirectly the following expenses on a $1,000
investment in Universal Shares, assuming a 5% annual return and redemption at
the end of each period:
<TABLE>
<S> <C> <C> <C> <C> <C>
One Year Three Years Five Years Ten Years
Treasury Cash Fund $3 $8 $14 $32
Government Cash Fund $2 $6 $10 $23
Cash Fund $2 $6 $10 $23
</TABLE>
The example is based on the expenses listed in the table above and assumes the
reinvestment of all 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.
2. FINANCIAL HIGHLIGHTS
The following information represents selected data for a single outstanding
Universal Share of Government Cash Fund and Cash Fund for the periods indicated.
Until August 31, 1995, the Funds invested directly in portfolio securities. As
of January [ ], 1999, no Universal Shares of Treasury Cash Fund were
outstanding; selected data for a single outstanding Institutional Share of that
Fund is shown. This information has been audited by [ ], independent auditors.
The Funds' financial statements and the independent auditors' report thereon are
incorporated by reference into the SAI and may be obtained without charge upon
request.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Ratios to Average Net Ratio to
Beginning Distributions Ending Net Assets at Average Net
Assets End of
---------------------
Net Net From Net Net Asset Net Period Assets
------
Asset
Value Investment Investment Value per Investment Total (000's Gross
Per
Share Income Income Share Expenses Income Return Omitted) Expenses(a)
------ ------ ------ ----- -------- ------ ------ -------- -----------
TREASURY CASH FUND(C)
INSTITUTIONAL SHARES
Year Ended August 31, 1998 $ 1.00 $0.05 $(0.05) $ 1.00 0.45% 5.00% 5.11% $91,122 0.67%
Year Ended August 31, 1997 1.00 0.05 (0.05) 1.00 0.45% 4.89% 4.98% 40,803 0.66%
Year Ended August 31, 1996 1.00 0.05 (0.05) 1.00 0.45% 5.01% 5.15% 79,259 0.69%
Year Ended August 31, 1995 1.00 0.05 (0.05) 1.00 0.42% 5.18% 5.28% 28,530 0.86%
Year Ended August 31, 1994 1.00 0.03 (0.03) 1.00 0.42% 3.03% 3.11% 41,194 0.74%
July 12, 1993 to Aug. 1.00 ------ ------ 1.00 0.45%(b) 2.65%(b) 2.81%(b) 39,660 1.09%(b)
31,1993
GOVERNMENT CASH FUND(C)
UNIVERSAL SHARES
Year Ended August 31, 1998 1.00 0.05 (0.05) 1.00 0.18% 5.48% 5.63% 253,644 0.26%
Year Ended August 31, 1997 1.00 0.05 (0.05) 1.00 0.17% 5.35% 5.49% 230,410 0.26%
Year Ended August 31, 1996 1.00 0.05 (0.05) 1.00 0.19% 5.43% 5.59% 248,986 0.28%
Year Ended August 31, 1995 1.00 0.06 (0.06) 1.00 0.24% 5.46% 5.78% 182,546 0.52%
Year Ended August 31, 1994 1.00 0.04 (0.04) 1.00 0.28% 3.48% 3.64% 158,798 0.49%
Oct. 29, 1992 to Aug. 31, 1.00 0.03 (0.03) 1.00 0.21%(b) 3.19%(b) 3.23%(b) 158,516 0.52%(b)
1993
CASH FUND(C)
UNIVERSAL SHARES
Year Ended August 31, 1998 1.00 0.06 (0.06) 1.00 0.18% 5.48% 5.65% 91,671 0.29%
Year Ended August 31, 1997 1.00 0.05 (0.05) 1.00 0.23% 5.32% 5.43% 8,453 0.47%
Year Ended August 31, 1996 1.00 0.05 (0.05) 1.00 0.27% 5.48% 5.53% 3,272 0.43%
Year Ended August 31, 1995 1.00 0.06 (0.06) 1.00 0.27% 5.59% 5.75% 26,525 0.56%
Year Ended August 31, 1994 1.00 0.04 (0.04) 1.00 0.27% 3.50% 3.69% 22,105 0.55%
Dec. 1, 1992 to Aug. 31, 1.00 0.03 (0.03) 1.00 0.25%(b) 3.29%(b) 3.36%(b) 47,854 0.62%(b)
1993
</TABLE>
(a) During each period, various fees and expenses were waived and reimbursed,
respectively. The ratio of Gross Expenses to Average Net Assets reflects
the expense ratio in the absence of any waivers and reimbursements for the
Fund and its respective Portfolio.
(b) Annualized.
(c) As of August 31, 1998, the net assets of each Fund (combining the assets of
each class of shares) was: Treasury Cash Fund, $149,329,590, Government
Cash Fund, $699,288,136, and Cash Fund, $573,561,896.
<PAGE>
3. INVESTMENT OBJECTIVE AND POLICIES
Each Fund has an investment policy that allows it to invest all of its
investable assets in its corresponding Portfolio. All other investment policies
of each Fund and its corresponding Portfolio are identical. Therefore, although
the following discusses the investment policies of the Portfolios (and the
responsibilities of Core Trust's board of trustees (the "Core Trust Board")), it
applies equally to the Funds (and the Trust's board of trustees (the "Board").
INVESTMENT OBJECTIVE
The investment objective of each Fund is to provide high current income to the
extent consistent with the preservation of capital and the maintenance of
liquidity. Each Fund currently seeks to achieve its investment objective by
investing all of its investable assets in its corresponding Portfolio, which has
the same investment objective. There can be no assurance that any Fund or
Portfolio will achieve its investment objective.
INVESTMENT POLICIES
Each Portfolio invests only in high quality, U.S. dollar-denominated short-term
money market instruments that are determined by the Adviser, pursuant to
procedures adopted by the Core Trust Board, to be eligible for purchase and to
present minimal credit risks. High quality instruments include those that (i)
are rated (or, if unrated, are issued by an issuer with comparable outstanding
short-term debt that is rated) in the highest rating category by two nationally
recognized statistical rating organizations ("NRSROs") or, if only one NRSRO has
issued a rating, by that NRSRO or (ii) are otherwise unrated and determined by
the Adviser to be of comparable quality. A description of the rating categories
of certain NRSROs, such as Standard & Poor's Corporation, a Division of The
McGraw Hill Companies, and Moody's Investors Service, Inc., is contained in the
SAI.
Each Portfolio invests only in instruments that have a remaining maturity of 397
days or less (as calculated under Rule 2a-7 under the Investment Company Act of
1940 (the "1940 Act")) and maintains a dollar-weighted average portfolio
maturity of 90 days or less. Except to the limited extent permitted by Rule 2a-7
and except for U.S. Government Securities, each Portfolio will not invest more
than 5% of its total assets in the securities of any one issuer. As used in this
prospectus, "U.S. Government Securities" means obligations issued or guaranteed
as to principal and interest by the United States Government, its agencies or
instrumentalities and "Treasury Securities" means U.S. Treasury bills and notes
and other U.S. Government Securities which are guaranteed as to principal and
interest by the U.S. Treasury.
Although each Portfolio only invests in high quality money market instruments,
an investment in a Portfolio is subject to risk even if all securities in the
Portfolio's portfolio are paid in full at maturity. All money market
instruments, including U.S. Government Securities, can change in value when
there is a change in interest rates, the issuer's actual or perceived
creditworthiness or the issuer's ability to meet its obligations.
TREASURY CASH FUND
Treasury Cash Portfolio seeks to attain its investment objective by investing
substantially all of its assets in Treasury Securities and in repurchase
agreements backed by Treasury Securities.
GOVERNMENT CASH FUND
Government Cash Portfolio seeks to attain its investment objective by investing
substantially all of its assets in U.S. Government Securities and in repurchase
agreements backed by U.S. Government Securities. The U.S. Government Securities
in which the Portfolio may invest include Treasury Securities and securities
supported primarily or solely by the creditworthiness of the issuer, such as
securities of the Federal National Mortgage Association. There is no guarantee
that the U.S. Government will support securities not backed by its full faith
and credit. Accordingly, although these securities have historically involved
little risk of loss of principal if held to maturity, they may involve more risk
than securities backed by the U.S. Government's full faith and credit.
CASH FUND
Cash Portfolio seeks to attain its investment objective by investing in a broad
spectrum of money market instruments. The Portfolio may invest in (i)
obligations of domestic financial institutions, (ii) U.S. Government Securities
(see "Investment Objective and Policies - Government Cash Portfolio") and (iii)
corporate debt obligations of domestic issuers.
Financial institution obligations include negotiable certificates of deposit,
bank notes, bankers' acceptances and time deposits of banks (including savings
banks and savings associations) and their foreign branches. The Portfolio limits
its investments in bank obligations to banks which at the time of investment
have total assets in excess of one billion dollars. 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 debt obligations
<PAGE>
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.
Corporate debt obligations include commercial paper (short-term promissory
notes) issued by companies to finance their, or their affiliates', current
obligations. The Portfolio may also invest in commercial paper or other
corporate securities issued in "private placements" without registration under
the Securities Act of 1933. These "restricted securities" are restricted as to
disposition under the Federal securities laws in that any sale of these
securities may not be made absent registration under the Securities Act of 1933
or an appropriate exemption therefrom.
ADDITIONAL INVESTMENT POLICIES
Each Fund's and each Portfolio's investment objective and certain investment
limitations, as described in the SAI, may not be changed without approval of the
holders of a majority of the Fund's or Portfolio's, as applicable, outstanding
voting securities (as defined in the 1940 Act). Except as otherwise indicated in
this prospectus or in the SAI, investment policies of a Fund or a Portfolio may
be changed by the applicable board of trustees without shareholder approval.
Each Portfolio may borrow money for temporary or emergency purposes (including
the meeting of redemption requests), but not in excess of 33 1/3% of the value
of the Portfolio's total assets. Borrowing for purposes other than meeting
redemption requests will not exceed 5% of the value of the Portfolio's total
assets. Each Portfolio is permitted to hold cash in any amount pending
investment in securities and may invest in other investment companies that
intend to comply with Rule 2a-7 and have substantially similar investment
objectives and policies. To the extent a Portfolio invests in other money funds,
it will indirectly bear the expenses of those funds. A further description of
the Funds' and the Portfolios' investment policies is contained in the SAI.
REPURCHASE AGREEMENTS. Each Fund may seek additional income or liquidity by
entering into repurchase agreements. Repurchase agreements are transactions in
which a Portfolio purchases a security and simultaneously commits to resell that
security to the seller at an agreed-upon price on an agreed-upon future date,
normally one to seven days later. The resale price reflects a market rate of
interest that is not related to the coupon rate or maturity of the purchased
security. The Portfolios' custodian holds the underlying collateral, which is
maintained at not less than 100% of the repurchase price. Repurchase agreements
involve certain risks not associated with direct investment in securities. The
Portfolios, however, intend to enter into repurchase agreements only with
sellers which the Adviser believes present minimal credit risks in accordance
with guidelines established by the Core Trust Board. In the event that a seller
defaulted on its repurchase obligation, however, a Portfolio might suffer a
loss.
LIQUIDITY. To ensure adequate liquidity, each Portfolio may not invest more than
10% of its net assets in illiquid securities, including repurchase agreements
not entitling the Portfolio to payment of principal within seven days. There may
not be an active secondary market for securities held by a Portfolio. The value
of securities that have a limited market tend to fluctuate more than those that
have an active market. For this reason, a Portfolio could suffer a loss with
respect to such securities. The Adviser monitors the liquidity of the
Portfolios' investments, but there can be no guarantee that an active secondary
market will exist.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. In order to assure itself of being
able to obtain securities at prices which the Adviser believes might not be
available at a future time, each Portfolio may purchase securities on a
when-issued or delayed delivery basis. Securities so purchased are subject to
market price fluctuation and no interest on the securities accrues to a
Portfolio until delivery and payment take place. Accordingly, the value of the
securities on the delivery date may be more or less than the purchase price.
Commitments for when-issued or delayed delivery transactions will be entered
into only when a Portfolio has the intention of actually acquiring the
securities. Failure by the other party to deliver a security purchased by a
Portfolio may result in a loss or missed opportunity to make an alternative
investment.
VARIABLE AND FLOATING RATE SECURITIES. The securities in which the Portfolios
invest may have variable or floating rates of interest. These securities pay
interest at rates that are adjusted periodically according to a specified
formula, usually with reference to some interest rate index or market interest
rate. The interest paid on these securities is a function primarily of the index
or market rate upon which the interest rate adjustments are based. Securities
with ultimate maturities of greater than 397 days may be purchased only in
accordance with the provisions to Rule 2a-7. Under that Rule, only those
long-term instruments that have demand features that comply with certain
requirements and certain long-term U.S. Government Securities may be purchased.
Similar to fixed rate debt instruments, variable and floating rate instruments
are subject to changes in value based on changes in market interest rates or
changes in the issuer's creditworthiness.
<PAGE>
No Portfolio may purchase a variable or floating rate security whose interest
rate is adjusted based on a long-term interest rate or index, on more than one
interest rate or index, or on an interest rate or index that materially lags
short-term market rates (these prohibited securities are often referred to as
"derivative" securities). All variable and floating rate securities purchased by
a Portfolio will have an interest rate that is adjusted based on a single
short-term rate or index, such as the Prime Rate.
FINANCIAL INSTITUTION GUIDELINES. Treasury Cash Portfolio and Government Cash
Portfolio invest only in instruments which, if held directly by a bank or bank
holding company organized under the laws of the United States or any state
thereof, would be assigned to a risk-weight category of no more than 20% under
the current risk based capital guidelines adopted by the Federal bank
regulators. In addition, these Portfolios limit their investments to those
permissible for Federally chartered credit unions under applicable provisions of
the Federal Credit Union Act and the applicable rules and regulations of the
National Credit Union Administration. Government Cash Portfolio limits its
investments to investments that are legally permissible for Federally chartered
savings associations without limit as to percentage and to investments that
permit Fund shares to qualify as liquid assets and as short-term liquid assets.
4. MANAGEMENT
The business of the Trust is managed under the direction of the Board and the
business of Core Trust is managed under the direction of the Core Trust Board.
The Board formulates the general policies of the Funds and meets periodically to
review the results of the Funds, monitor investment activities and practices and
discuss other matters affecting the Fund and the Trust. The SAI contains general
background information about the trustees and officers of the Trust and of Core
Trust.
ADMINISTRATOR AND INVESTMENT ADVISER
Forum supervises the overall management of the Trust, including overseeing the
Trust's receipt of services, advising the Trust and the Trustees on matters
concerning the Trust and its affairs, and providing the Trust with general
office facilities and certain persons to serve as officers. For these services
and facilities, Forum receives a fee at an annual rate of 0.05% of the daily net
assets of each Fund. Forum also serves as administrator of Core Trust and
provides administrative services for each Portfolio that are similar to those
provided to the Funds. For its administrative services to the Portfolios, Forum
receives a fee at an annual rate of 0.05% of the average daily net assets of
each Portfolio.
As of the date hereof Forum and its affiliates acted as administrator and
distributor of registered investment companies with assets of approximately $38
billion. FFS, a registered broker-dealer and member of the National Association
of Securities Dealers, Inc., serves as each Fund's distributor. FFS acts as the
agent of the Trust in connection with the offering of shares of the Funds. As of
the date of this Prospectus, Forum, FFS, the Adviser and the Trust's transfer
agent were each controlled by John Y. Keffer, an officer and Trustee of the
Trust and of Core Trust. Forum, FFS and the Adviser are located at Two Portland
Square, Portland, Maine 04101.
Subject to the general supervision of the Core Trust Board, the Adviser makes
investment decisions for each Portfolio and monitors the Portfolios'
investments. In addition to the Portfolios, the Adviser currently provides
investment advisory services to six other mutual funds, including one money
market fund. Under supervision of the Adviser, Mr. Anthony R. Fischer, Jr. acts
as each Portfolio's portfolio manager pursuant to a consulting agreement with
the Adviser.
For its services, the Adviser receives from each Portfolio an advisory fee based
upon the total average daily net assets of the three Portfolios ("Total
Portfolio Assets") that is calculated on a cumulative basis as follows: 0.06% of
the first $200 million of Total Portfolio Assets, 0.04% of the next $300 million
of Total Portfolio Assets, and 0.03% of the remaining Total Portfolio Assets.
SHAREHOLDER SERVICING
Forum Shareholder Services, LLC (the "Transfer Agent"), a registered transfer
agent, acts as the Trust's transfer agent and dividend disbursing agent. The
Transfer Agent maintains an account for each shareholder of the Funds (unless
such accounts are maintained by sub-transfer agents or processing agents) and
performs other transfer agency and related functions.
The Transfer Agent is authorized to subcontract any or all of its functions to
one or more qualified sub-transfer agents or processing agents, which may be its
affiliates, who agree to comply with the terms of the Transfer Agent's agreement
with the Trust. The Transfer Agent may pay those agents for their services, but
no such payment will increase the Transfer Agent's compensation from the Trust.
For its services, the Transfer Agent is paid a transfer agent fee at an annual
rate of 0.05% of the average daily net assets of each Fund attributable to
Universal Shares plus $12,000 per year and certain account and additional class
charges and is reimbursed for certain expenses incurred on behalf of the Funds.
<PAGE>
EXPENSES
Each Fund bears all of its expenses, which include Trust expenses attributable
to the Fund, which are allocated to the Fund, and expenses not specifically
attributable to any Fund, which are allocated among the Funds in proportion to
their average net assets. Each service provider may elect to waive (or continue
to waive) all or a portion of its fees and may reimburse a Fund for certain
expenses. Any such waivers or reimbursements will have the effect of increasing
the Fund's performance for the period during which the waiver or reimbursement
is in effect. No fee waivers may be recouped at a later date.
5. PURCHASES OF SHARES
GENERAL INFORMATION
All transactions in Fund shares are effected through the Transfer Agent, which
accepts orders for purchases only from shareholders of record and new investors.
The minimum initial investment in Universal Shares is $1,000,000. Shareholders
of record will receive from the Trust monthly statements listing all account
activity during the statement period. The Trust reserves the right in the future
to modify, limit or terminate any shareholder privilege upon appropriate notice.
Fund shares are sold on a continuous basis at their next determined net asset
value on all Fund Business Days. Fund shares are issued immediately following
the next determination of the Fund's net asset value made after an order for the
shares in proper form, accompanied by funds on deposit at a Federal Reserve Bank
("Federal Funds"), is received by the Transfer Agent. An investor's funds will
not be accepted or invested by a Fund during the period before the Fund's
receipt of Federal Funds. The Trust reserves the right to reject any
subscription for the purchase of Fund shares.
Investors may obtain the account application necessary to open an account or
obtain additional information or assistance by contacting the Trust at
800-754-8757 or writing the Trust at the following address:
Monarch Funds
P.O. Box 446
Portland, Maine 04112
Purchase orders for Universal Shares will be accepted on Fund Business Days
until 3:00 p.m., Pacific time. In order to receive distributions for the day of
investment, orders and payment must be received by the Transfer Agent as
follows:
Order Must be Received by Payment Must be Received by
------------------------- ---------------------------
11:00 a.m., Pacific time 1:00 p.m., Pacific time
If a purchase order is transmitted to the Transfer Agent after 11:00 a.m.,
Pacific time, or the wire is received after 1:00 p.m., Pacific time, the
investor will not receive a distribution on that day. On days that the New York
Stock Exchange or San Francisco Federal Reserve Bank closes early or the Public
Securities Association recommends that the government securities markets close
early, the Trust may advance the time by which the Transfer Agent must receive
completed wire purchase orders and the cut-off times in the above table.
INITIAL PURCHASE PROCEDURES
BY BANK WIRE. To make an initial investment in a Fund using the federal wire
system for transmittal of money among banks, an investor should first telephone
the Transfer Agent at 800-754-8757 to obtain an account number. The investor
should then wire the investor's money immediately to:
Imperial Bank
ABA# 122201444
For Credit To: Forum Shareholder Services, LLC
Account #: 09075-933
Re: [Name of Fund] - Universal Shares
Account #: __________________________
Account Name: _________________________
The investor should then promptly complete and mail the account application.
Payment in the form of a bank wire is treated as a Federal Funds payment
received at the time the wire is received.
BY MAIL. Investors may send a check made payable to the Trust along with a
completed account application to the Transfer Agent at the address listed above.
Checks are accepted at full value subject to collection.
<PAGE>
THROUGH FINANCIAL INSTITUTIONS. Shares may be purchased and redeemed through
certain broker-dealers, banks and other financial institutions ("Participating
Organizations"). Participating Organizations may charge a fee for their services
and may otherwise act as processing agents. Participating Organizations are
responsible for promptly transmitting purchase, redemption and other requests to
the Funds.
Investors who purchase shares in this manner will be subject to the procedures
of their Participating Organization, which may include investment minimums,
cutoff times and other restrictions in addition to, or different from, those
applicable to shareholders who invest in a Fund directly. Investors purchasing
Fund shares in this manner should acquaint themselves with their Participating
Organization's procedures and should read this Prospectus in conjunction with
any materials and information provided by their Participating Organization.
Investors purchasing shares in this manner may or may not be the shareholder of
record and, subject to their Participating Organization's procedures, may have
Fund shares transferred into their name. Certain states permit shares to be
purchased and redeemed only through registered broker-dealers, including FFS.
SUBSEQUENT INVESTMENTS
Subsequent investments in a Fund, which may be made by bank wire, by check or
through Participating Organizations. Shareholders using the wire system for
subsequent investments should first telephone the Transfer Agent at 800-754-8757
to notify it of the wire transfer.
6. REDEMPTIONS OF SHARES
GENERAL INFORMATION
Fund shares may be redeemed without charge at their next determined net asset
value on any Fund Business Day following acceptance by the Transfer Agent of the
redemption order in proper form (and any supporting documentation which the
Transfer Agent may require). There is no minimum period of investment and no
restriction on the frequency of redemptions. Redemption proceeds are paid by
check mailed to the shareholder's record address immediately following any
redemption unless the shareholder has elected wire redemption privileges. The
right of redemption may not be suspended nor the payment dates postponed except
when the New York Stock Exchange is closed (or when trading thereon is
restricted) for any reason other than its customary weekend or holiday closings
or under any emergency or other circumstance as determined by the SEC.
Redemption proceeds from the Portfolios may be made wholly or partially in
portfolio securities if the Adviser determines it to be in the best interests of
the Portfolio. Similarly, redemption proceeds from a Fund may be made wholly or
partially in portfolio securities if it is determined to be in the best
interests of the Fund.
Redemption orders for Universal Shares will be accepted on Fund Business Days
until 3:00 p.m., Pacific time. In order to receive redemption proceeds by wire,
a redemption order must be received by the Transfer Agent by 11:00 a.m., Pacific
time.
For redemption orders received after 11:00 a.m., Pacific time, the Transfer
Agent will wire proceeds the next Fund Business Day. On days that the New York
Stock Exchange or San Francisco Federal Reserve Bank closes early or the Public
Securities Association recommends that the government securities markets close
early, the Trust may advance the time by which the Transfer Agent must receive
completed wire redemption orders.
If a shareholder elects telephone redemption or exchange privileges, as long as
the Trust employs reasonable procedures to insure that telephone orders are
genuine (which include recording certain transactions and the use of immediate
written confirmation by facsimile or otherwise), the Trust, the Transfer Agent
and FFS are not responsible for the authenticity of telephone instructions or
losses, if any, resulting from unauthorized telephone redemption or exchange
requests. Shareholders should verify the accuracy of telephone instructions
immediately upon receipt of confirmation statements.
REDEMPTION PROCEDURES
Shareholders that wish to redeem shares by telephone or to have redemption
proceeds transmitted by bank wire must elect these options by properly
completing the appropriate sections of their account application.
Shareholders may make a redemption in any amount by sending a written request to
the Transfer Agent accompanied by any share certificates that may have been
issued to the shareholder or, for shareholders that have elected telephone
redemption privileges, by calling the Transfer Agent and providing the
shareholder's account number, the exact name in which the shareholder's shares
are registered and a shareholder identification number. During times of drastic
economic or market changes, the telephone redemption privilege may be difficult
to implement.
<PAGE>
BANK WIRE REDEMPTION. For redemptions of more than $5,000, a shareholder that
has elected wire redemption privileges may request a Fund to transmit redemption
proceeds by Federal Funds wire to a bank account designated on the shareholder's
account application.
SIGNATURE GUARANTEES. A signature guarantee is required for written requests to
redeem shares whose value exceeds $50,000 (other than an exchange) and for any
instruction to change the shareholder's record name, to redeem shares in an
account for which the address or registration has changed within the last 30
days, to transmit redemption proceeds to an account other than the address of
record or a preauthorized bank account or to a person other than the registered
owners or to an account with a different registration, to change the
shareholder's distribution election or the telephone redemption or other option
elected on an account. In addition, all share certificates submitted for
redemption (or exchange) must be endorsed by the shareholder and in some cases
must have a signature guarantee. Signature guarantees may be provided by any
eligible institution acceptable to the Transfer Agent, including a bank, a
broker, a dealer, a national securities exchange, a credit union, or a savings
association that is authorized to guarantee signatures (notarized signatures are
not sufficient). When a signature guarantee is required, the signature of each
person required to sign for the account must be guaranteed.
OTHER REDEMPTION MATTERS. Share certificates are issued only to shareholders of
record upon their written request and no certificates are issued for fractional
shares. Shares for which certificates have been issued may not be redeemed or
exchanged by telephone. Due to the cost to the Trust of maintaining smaller
accounts, the Trust reserves the right to redeem, upon not less than 60 days'
written notice, all shares in any Fund account with an aggregate net asset value
of less than $100,000, unless an investment is made to restore the minimum
value.
The Transfer Agent will deem a shareholder's account "lost" if correspondence to
the shareholder's address of record is returned for six months, unless the
Transfer Agent determines the shareholder's new address. When an account is
deemed lost, all distributions on the account will be reinvested in additional
Universal Shares. In addition, the amount of any outstanding (unpaid for six
months or more) checks for distributions that have been returned to the Transfer
Agent will be reinvested and the checks will be canceled.
EXCHANGE PROGRAM
Investors in Universal Shares of a Fund are entitled to exchange their shares
for Universal Shares of another Fund if that Fund's shares are eligible for sale
in the shareholder's state. Exchanges are subject to minimum investment
requirements of the Funds. There is currently no limit on the number of
exchanges a shareholder may make. The Trust reserves the right in the future to
modify, limit or terminate the exchange privilege upon appropriate notice to
shareholders.
Exchanges may be accomplished by written instructions to the Transfer Agent or,
for shareholders that have elected telephone exchange privileges, by calling the
Transfer Agent and providing the shareholder's account number, the exact name in
which the shareholder's shares are registered and the shareholder's social
security or taxpayer identification number. During times of drastic economic or
market changes, the telephone exchange privilege may be difficult to implement.
7. DISTRIBUTIONS AND TAX MATTERS
DISTRIBUTIONS
Distributions of each Fund's net investment income are declared daily and paid
monthly following the close of the last Fund Business Day of the month. Net
capital gain realized by a Fund, if any, will be distributed annually. Fund
shares become entitled to receive distributions on the day the shares are issued
as described under "Purchases of Shares - General Information." Shares redeemed
are not entitled to receive distributions declared on or after the day on which
the redemption becomes effective.
Shareholders may choose either to have all distributions of net investment
income reinvested in additional Fund shares or received in cash. In addition,
shareholders may have all distributions of net capital gain reinvested in
additional Fund shares or paid in cash. All distributions are treated in the
same manner for Federal income tax purposes whether received in cash or
reinvested in shares of the Fund.
TAX MATTERS
TAX STATUS OF THE FUNDS. Each Fund intends to continue to qualify to be taxed as
a "regulated investment company" under the Internal Revenue Code of 1986, as
amended. Accordingly, each Fund will not be liable for Federal income taxes on
the net investment income and capital gain distributed to its shareholders.
Because the Funds intend to distribute all of their net investment income and
net capital gain each year, the Funds should also avoid Federal excise taxes.
<PAGE>
Distributions paid by each Fund out of its net investment income (including
realized net short-term capital gain) are taxable to the shareholders of the
Fund as ordinary income. Distributions of net capital gain, if any, realized by
a Fund are taxable to shareholders as capital gain, regardless of the length of
time the Fund shares were held by the shareholder at the time of distribution.
Different capital gain rates will apply depending on the holding period of the
securities sold by the Fund that generated the gain.
THE PORTFOLIOS. The Portfolios are not required to pay Federal income taxes on
their net investment income and capital gain, as they are treated as
partnerships for Federal income tax purposes. All interest, distributions and
gains and losses of a Portfolio are deemed to be "passed through" to the
respective Fund in proportion to the Fund's holdings of the Portfolio,
regardless of whether the interest, distributions or gains have been distributed
by the Portfolio or losses have been realized by the Portfolio.
GENERAL. Each Fund is required by Federal law to withhold 31% of reportable
payments (which may include income and capital gain distributions) paid to a
non-corporate shareholder unless that shareholder certifies in writing that the
social security or other tax identification number provided is correct and that
the shareholder is not subject to backup withholding.
Reports containing appropriate information with respect to the Federal income
tax status of distributions paid during the year by the Fund will be mailed to
shareholders shortly after the close of each calendar year.
The foregoing is only a summary of some of the Federal tax considerations
generally affecting the Funds and their shareholders. The SAI contains a further
discussion. Because other Federal, state or local tax considerations may apply,
investors are urged to consult their tax advisors.
8. OTHER INFORMATION
FUND PERFORMANCE
Universal Shares' performance may be advertised. All performance information is
based on historical results, is not intended to indicate future performance and,
unless otherwise indicated, is net of all expenses. The Funds may advertise
yield, which shows the rate of income a Fund has earned on its investments as a
percentage of the Fund's share price. To calculate yield, a Fund takes the
interest income it earned from its portfolio of investments for a specified
period (net of expenses), divides it by the average number of shares entitled to
receive distributions, and expresses the result as an annualized percentage rate
based on the Fund's share price at the end of the period. A Fund's compounded
annualized yield assumes the reinvestment of distributions paid by the Fund,
and, therefore will be somewhat higher than the annualized yield for the same
period. Each class' performance will vary. The Funds' advertisements may also
reference ratings and rankings among similar funds by independent evaluators
such as Morningstar, Lipper Analytical Services, Inc. or IBC Financial Data,
Inc. In addition, the performance of the Funds may be compared to recognized
indices of market performance. The comparative material found in a Fund's
advertisements, sales literature, or reports to shareholders may contain
performance rankings. This material is not to be considered representative or
indicative of future performance.
DETERMINATION OF NET ASSET VALUE
The Trust determines the net asset value per share of each Fund as of 1:00 p.m.,
Pacific time, on each Fund Business Day. Net asset value per share is determined
by dividing the value of the Fund's net assets (the value of its interest in the
Portfolio and other assets less its liabilities) by the number of shares
outstanding at the time the determination is made. In order to more easily
maintain a stable net asset value per share, each Portfolio's portfolio
securities are valued at their amortized cost (acquisition cost adjusted for
amortization of premium or accretion of discount) in accordance with Rule 2a-7.
The Portfolios will only value their portfolio securities using this method if
the Core Trust Board believes that it fairly reflects the market-based net asset
value per share. The Portfolios' other assets, if any, are valued at fair value
by or under the direction of the Core Trust Board.
THE TRUST AND ITS SHARES
The Trust is registered with the SEC as an open-end management investment
company and was organized as a business trust under the laws of the State of
Delaware on July 10, 1992. The Board has the authority to issue an unlimited
number of shares of beneficial interest of separate series with no par value per
share and to create classes of shares within each series. Except for the Funds,
no other series of shares are currently authorized.
<PAGE>
As of December [ ], 1998, there were no outstanding Universal Shares of Treasury
Cash Fund, and no shareholder beneficially owned more than 25% of the
outstanding Universal Shares of Government Cash Fund. As of that same date, [ ]
owned substantially all of the outstanding Universal Shares of Cash Fund. From
time to time various shareholders may own a large percentage of a class or of a
Fund. These shareholders may be deemed to be controlling persons of a class, a
Fund or the Trust, and may be able to greatly affect (if not determine) the
outcome of any shareholder vote.
Shares issued by the Trust have no conversion, subscription or preemptive
rights. Voting rights are not cumulative and the shares of each series or class
of the Trust will be voted separately except when an aggregate vote is required
by law. Separate votes are taken by each class of a Fund if a matter affects
just that class. The Trust is not required to hold annual meetings of
shareholders, and it is anticipated that shareholder meetings will be held only
when specifically required by law. Shareholders have available procedures for
requiring the Trustees to call a meeting and for removing Trustees.
FUND STRUCTURE
OTHER CLASSES OF SHARES. In addition to Universal Shares, each Fund currently
has two other classes of shares authorized, Institutional Shares and Investor
Shares. Institutional Shares are offered solely through banks, trust companies
and certain other financial institutions, and their affiliates and
correspondents, for investment of their funds or funds for which they act in a
fiduciary, agency or custodial capacity. Investor Shares are offered to the
general public and have an investment minimum of $5,000. Institutional Shares
and Investor Shares incur greater expenses than Universal Shares. Except for
certain differences, each share of each class represents an undivided,
proportionate interest in a Fund. Each share of each Fund is entitled to
participate equally in distributions and the proceeds of any liquidation of that
Fund except that, due to the differing expenses borne by the various classes,
the amount of distributions will differ among the classes.
CORE TRUST STRUCTURE. Each Fund invests all of its assets in its corresponding
Portfolio of Core Trust, a business trust organized under the laws of the State
of Delaware in September 1994 and registered under the 1940 Act as an open-end
management investment company. Accordingly, a Portfolio directly acquires its
own securities and its corresponding Fund acquires an indirect interest in those
securities. The assets of each Portfolio belong only to, and the liabilities of
the Portfolio are borne solely by, the Portfolio and no other portfolio of Core
Trust. Upon liquidation of a Portfolio, investors in the Portfolio would be
entitled to share pro rata in the net assets of the Portfolio available for
distribution to investors.
THE PORTFOLIOS. A Fund's investment in a Portfolio is in the form of a
non-transferable beneficial interest.. Besides Treasury Cash Fund, Government
Cash Fund and Cash Fund, other investment companies invest in Treasury Cash
Portfolio, Government Cash Portfolio and Cash Portfolio, respectively. All
investors in a Portfolio will invest on the same terms and conditions as the
Funds and will pay a proportionate share of the Portfolio's expenses. The
Portfolios normally will not hold meetings of investors except as required by
the 1940 Act. Each investor in a Portfolio will be entitled to vote in
proportion to the relative value of its interest in the Portfolio. On most
issues subject to a vote of investors, as required by the 1940 Act and other
applicable law, a Fund will solicit proxies from shareholders of the Fund and
will vote its interest in a Portfolio in proportion to the votes cast by its
shareholders. If there are other investors in a Portfolio, there can be no
assurance that any issue that receives a majority of the votes cast by a Fund's
shareholders will receive a majority of votes cast by all investors in the
Portfolio.
CONSIDERATIONS OF INVESTING IN A PORTFOLIO. A Fund's investment in a Portfolio
may be affected by the actions of other investors in the Portfolio. For example,
if other investors redeemed their interest in the Portfolio, the Portfolio's
remaining investors (including the Fund) might, as a result, experience higher
pro rata operating expenses. A Fund may withdraw its entire investment from a
Portfolio at any time if the Board determines that it is in the best interests
of the Fund and its shareholders to do so. The Fund might withdraw, for example,
if other investors in the Portfolio, by a vote of shareholders, changed the
investment objective or policies of the Portfolio in a manner not acceptable to
the Board or not permissible by the Fund. A withdrawal could result in a
distribution in kind of portfolio securities (as opposed to a cash distribution)
by the Portfolio. That distribution could result in a less diversified portfolio
of investments for the Fund, resulting in increased risk, and could affect
adversely the liquidity of the Fund's portfolio. If the Fund decided to convert
those securities to cash, it would incur transaction costs. If the Fund withdrew
its investment from the Portfolio, the Board would consider what action might be
taken, including the management of the Fund's assets in accordance with its
investment objective and policies by the Adviser or the investment of all of the
Fund's investable assets in another pooled investment entity having
substantially the same investment objective as the Fund. Forum has only three
years of experience in managing funds that utilize its "Core and Gateway(R)"
structure.
<PAGE>
ADDITIONAL INFORMATION. Each class of a Fund (and any other investment company
that invests in a Portfolio) may have a different expense ratio and different
sales charges, including distribution fees, and each class' (and investment
company's) performance will be affected by its expenses and sales charges. For
more information on any other class of shares of the Funds or concerning any
other investment companies that invest in a Portfolio, investors may contact FFS
at 800-754-8757. If an investor invests through a financial institution, the
investor may also contact their financial institution to obtain information
about the other classes or any other investment company investing in a
Portfolio.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, THE SAI AND THE
FUNDS' OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFERING OF THE FUNDS'
SHARES, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER
MAY NOT LAWFULLY BE MADE.
M O N A R C H F U N D S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INSTITUTIONAL SHARES
Treasury Cash Fund
Government Cash Fund
Cash Fund
PROSPECTUS
January [ ], 1999
________________________________________________________________________________
This Prospectus offers Institutional Shares of Treasury Cash Fund, Government
Cash Fund and Cash Fund (each a "Fund" and collectively the "Funds"). Each Fund
is a diversified money market portfolio of Monarch Funds (the "Trust"), an
open-end, management investment company. Each Fund seeks to provide its
shareholders with high current income to the extent consistent with the
preservation of capital and the maintenance of liquidity.
Treasury Cash Fund, Government Cash Fund and Cash Fund each seeks to achieve its
investment objective by investing all of its investable assets in Treasury Cash
Portfolio, Government Cash Portfolio and Cash Portfolio (each a "Portfolio" and
collectively the "Portfolios"), respectively. The Portfolios are separate series
of Core Trust (Delaware) ("Core Trust"), an open-end, management investment
company. See "Other Information - Fund Structure." Accordingly, each Fund's
investment experience will correspond directly with that of the Portfolio in
which it invests. Through its corresponding Portfolio:
TREASURY CASH FUND invests substantially all of its assets in
obligations of the U.S. Treasury and in repurchase agreements backed by
these obligations.
GOVERNMENT CASH FUND invests substantially all of its assets in
high-quality obligations of the U.S. Government, its agencies and
instrumentalities and in repurchase agreements backed by these
obligations.
CASH FUND invests in a broad spectrum of high-quality money market
instruments.
This Prospectus sets forth concisely the information concerning the Trust and
the Funds that a prospective investor should know before investing. Investors
should read this Prospectus and retain it for future reference. The Trust has
filed with the Securities and Exchange Commission ("SEC") a Statement of
Additional Information dated January [ ], 1999 ("SAI"), which contains more
detailed information about the Trust and the Funds and which is available
together with other related materials for reference on the SEC's Internet Web
Site (http://www.sec.gov). The SAI, which is incorporated into the Prospectus by
reference, also is available without charge by contacting the Trust's
distributor, Forum Fund Services, LLC, at Two Portland Square, Portland, Maine
04101.
________________________________________________________________________________
<TABLE>
<S> <C> <C> <C> <C>
TABLE OF CONTENTS
1. Prospectus Summary............................ 5. Purchases of Shares...........................
2. Financial Highlights.......................... 6. Redemptions of Shares.........................
3. Investment Objective and Policies............. 7. Distributions and Tax Matters.................
4. Management.................................... 8. Other Information.............................
________________________________________________________________________________
</TABLE>
ALTHOUGH THE FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER
SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUNDS. AN INVESTMENT IN
THE FUNDS IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY, AND IS NOT ENDORSED OR GUARANTEED BY
ANY BANK OR ANY AFFILIATE OF A BANK.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
1. PROSPECTUS SUMMARY
FUND HIGHLIGHTS
This prospectus offers shares of the Institutional class ("Institutional
Shares") of each of the Funds. The Funds operate in accordance with the
provisions of Rule 2a-7 under the Investment Company Act of 1940.
MANAGEMENT. Forum Administrative Services, LLC ("Forum") supervises the overall
management of the Funds and the Portfolios. Forum Financial Services, Inc.
("FFS") is the distributor of the Funds' shares. Forum Investment Advisors, LLC
(the "Adviser") is the investment adviser of each Portfolio and provides
professional management of the Portfolios' investments. The Trust's transfer
agent and dividend disbursing agent is Forum Shareholder Services, LLC See
"Management" for a description of the services provided and fees charged to the
Funds.
SHAREHOLDER SERVICING. The Trust has adopted a Shareholder Service Agreement
relating to Institutional Shares under which Forum is compensated for various
shareholder servicing activities. See "Management - Shareholder Servicing."
PURCHASES AND REDEMPTIONS. Institutional Shares may be purchased and redeemed
Monday through Friday, between the hours of 5:00 a.m. and 3:00 p.m., Pacific
time, except on Federal holidays and other days that the Federal Reserve Bank of
San Francisco is closed ("Fund Business Days"). To be eligible to receive that
day's income, purchase orders must be received by the Transfer Agent in good
order no later than 11:00 a.m., Pacific time. Shareholders may elect to have
redemptions of over $5,000 redeemed by bank wire to a designated bank account.
To be able to receive redemption proceeds by wire on the day of the redemption,
redemption orders must be received by the transfer agent in good order no later
than 11:00 a.m., Pacific time. All times may be changed without notice by Fund
management due to market activities. See "Purchases of Shares" and "Redemptions
of Shares."
EXCHANGES. Shareholders may exchange Institutional Shares for Institutional
Shares of the other Funds. See "Redemptions of Shares - Exchange Program."
DISTRIBUTIONS. Distributions of net investment income are declared daily and
paid monthly by each Fund and are automatically reinvested in additional Fund
shares unless the shareholder has requested payment in cash. See "Distributions
and Tax Matters."
INVESTMENT CONSIDERATIONS. There can be no assurance that any Fund will be able
to maintain a stable net asset value of $1.00 per share. Although the Funds
invest only in money market instruments, all securities, including U.S.
Government Securities, involve some level of investment risk. An investment in a
Fund is not insured by the FDIC, nor is it insured or guaranteed against loss of
principal.
EXPENSES OF INVESTING IN THE FUNDS
The purpose of the following table is to assist investors in understanding the
various expenses that an investor in Institutional Shares will bear directly or
indirectly. There are no transaction expenses associated with purchases,
redemptions or exchanges of Fund shares. For a further description of the
various expenses incurred in the operation of the Funds and the Portfolios, see
"Management." Expenses for each Fund are based on the Funds' fiscal year ended
August 31, 1998, restated to reflect current fees.
ANNUAL OPERATING EXPENSES (as a percentage of average net assets) (1)
<TABLE>
<S> <C> <C> <C>
Treasury Government
Cash Fund Cash Fund Cash Fund
Management Fees (2) (after fee waivers) 0.07% 0.14% 0.14%
Rule 12b-1 Fees None None None
Other Expenses (after expense reimbursements) 0.38% 0.43% 0.43%
----- ----- -----
Total Operating Expenses 0.45% 0.57% 0.57%
</TABLE>
(1) All information includes the Fund's pro rata portion of the expenses of its
corresponding Portfolio. Absent expense reimbursements and fee waivers, the
expenses of Treasury Cash Fund, Government Cash Fund and Cash Fund would
be: Management Fees; 0.14%, 0.14% and 0.14%; Other Expenses; 0.53%, 0.45%
and 0.47%; and Total Operating Expenses; 0.67%, 0.58% and 0.61%.
(2) Includes advisory, management and administration fees.
<PAGE>
EXAMPLE
You would pay directly or indirectly the following expenses on a $1,000
investment in Institutional Shares, assuming a 5% annual return and redemption
at the end of each period:
<TABLE>
<S> <C> <C> <C> <C> <C>
One Year Three Years Five Years Ten Years
Treasury Cash Fund $5 $14 $25 $57
Government Cash Fund $6 $18 $32 $72
Cash Fund $6 $18 $32 $71
</TABLE>
The example is based on the expenses listed in the table above and assumes the
reinvestment of all 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.
2. FINANCIAL HIGHLIGHTS
The following information represents selected data for a single outstanding
Institutional Share of each Fund for the periods indicated. Until August 31,
1995, the Funds invested directly in portfolio securities. Prior to the offering
of Institutional Shares of Government Cash Fund and Cash Fund, those Funds had
commenced operations; selected data for a single outstanding Universal Share of
these Funds for their first year of operations also is shown. This information
has been audited by [ .........], independent auditors. The Funds' financial
statements and the independent auditors' report thereon
are incorporated by reference into the SAI and may be obtained without charge
upon request.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Net
Ratios to Average Net Assets at Ratio to
Beginning Distributions Ending Assets End of Average Net
----------------------
Net Net From Net Net Asset Net Period Assets
Asset
Value Investment Investment Value per Investment Total (000's Gross
Per
Share Income Income Share Expense Income Return Omitted) Expenses(a)
----- ------ ------ ----- ------- ------ ------ -------- -----------
TREASURY CASH FUND(C)
INSTITUTIONAL SHARES
Year Ended August 31, 1998 $ 1.00 $ 0.05 $ (0.05) $ 1.00 0.45% 5.00% 5.11% $ 91,122 0.67%
Year Ended August 31, 1997 0.05 (0.05) 1.00 0.45% 4.89% 4.98% 40,830 0.66%
1.00
Year Ended August 31, 1996 0.05 (0.05) 1.00 0.45% 5.01% 5.15% 79,259 0.69%
1.00
Year Ended August 31, 1995 0.05 (0.05) 1.00 0.42% 5.18% 5.28% 28,530 0.86%
1.00
Year Ended August 31, 1994 0.03 (0.03) 1.00 0.42% 3.03% 3.11% 41,194 0.74%
1.00
July 12 to Aug. 31, 1993 ------ ------ 1.00 0.45%(b) 2.65%(b) 2.81%(b) 39,660 1.09%(b)
1.00
GOVERNMENT CASH FUND(C)
INSTITUTIONAL SHARES
Year Ended August 31, 1998 0.05 (0.05) 1.00 0.57% 5.09% 5.22% 443,618 0.58%
1.00
Year Ended August 31, 1997 0.05 (0.05) 1.00 0.57% 4.95% 5.06% 245,147 0.57%
1.00
Year Ended August 31, 1996 0.05 (0.05) 1.00 0.57% 5.06% 5.18% 256,244 0.57%
1.00
Year Ended August 31, 1995 0.05 (0.05) 1.00 0.54% 5.39% 5.46% 186,620 0.66%
1.00
Year Ended August 31, 1994 0.03 (0.03) 1.00 0.56% 3.45% 3.35% 61,738 0.68%
1.00
July 15 to Aug. 31, 1993 ------ ------ 1.00 0.53%(b) 2.91%(b) 2.89%(b) 31,483 1.04%(b)
1.00
UNIVERSAL SHARES
Oct. 29, 1992 to Aug. 31, 0.03 (0.03) 1.00 0.21%(b) 3.19%(b) 3.23%(b) 158,516 0.52%(b)
1993 1.00
CASH FUND(C)
INSTITUTIONAL SHARES
Year Ended August 31, 1998 0.05 (0.05) 1.00 0.57% 5.11% 5.24% 299,220 0.61%
1.00
Year Ended August 31, 1997 0.05 (0.05) 1.00 0.57% 4.97% 5.07% 152,041 0.60%
1.00
Year Ended August 31, 1996 0.05 (0.05) 1.00 0.57% 5.10% 5.22% 89,733 0.60%
1.00
Year Ended August 31, 1995 0.05 (0.05) 1.00 0.54% 5.33% 5.23% 73,802 0.69%
1.00
Year Ended August 31, 1994 0.03 (0.03) 1.00 0.54% 3.43% 3.40% 55,771 0.72%
1.00
July 15 to Aug. 31, 1993 ------ ------ 1.00 0.53%(b) 2.94%(b) 2.97%(b) 34,383 1.07%(b)
1.00
UNIVERSAL SHARES
Dec. 1, 1992 to Aug. 31, 1.00 0.03 (0.03) 1.00 0.25%(b) 3.29%(b) 3.36%(b) 47,854 0.62%(b)
1993
</TABLE>
(a) During each period, various fees and expenses were waived and reimbursed,
respectively. The ratio of Gross Expenses to Average Net Assets reflects
the expense ratio in the absence of any waivers and reimbursements for the
Fund and its respective Portfolio.
(b) Annualized.
(c) As of August 31, 1998, the net assets of each Fund (combining the assets of
each class of shares) was: Treasury Cash Fund, $149,329,590, Government
Cash Fund, $699,288,136, and Cash Fund, $573,561,896.
<PAGE>
3. INVESTMENT OBJECTIVE AND POLICIES
Each Fund has an investment policy that allows it to invest all of its
investable assets in its corresponding Portfolio. All other investment policies
of each Fund and its corresponding Portfolio are identical. Therefore, although
the following discusses the investment policies of the Portfolios (and the
responsibilities of Core Trust's board of trustees (the "Core Trust Board")), it
applies equally to the Funds (and the Trust's board of trustees (the "Board").
INVESTMENT OBJECTIVE
The investment objective of each Fund is to provide high current income to the
extent consistent with the preservation of capital and the maintenance of
liquidity. Each Fund currently seeks to achieve its investment objective by
investing all of its investable assets in its corresponding Portfolio, which has
the same investment objective. There can be no assurance that any Fund or
Portfolio will achieve its investment objective.
INVESTMENT POLICIES
Each Portfolio invests only in high quality, U.S. dollar-denominated short-term
money market instruments that are determined by the Adviser, pursuant to
procedures adopted by the Core Trust Board, to be eligible for purchase and to
present minimal credit risks. High quality instruments include those that (i)
are rated (or, if unrated, are issued by an issuer with comparable outstanding
short-term debt that is rated) in the highest rating category by two nationally
recognized statistical rating organizations ("NRSROs") or, if only one NRSRO has
issued a rating, by that NRSRO or (ii) are otherwise unrated and determined by
the Adviser to be of comparable quality. A description of the rating categories
of certain NRSROs, such as Standard & Poor's Corporation, a Division of The
McGraw Hill Companies, and Moody's Investors Service, Inc., is contained in the
SAI.
Each Portfolio invests only in instruments that have a remaining maturity of 397
days or less (as calculated under Rule 2a-7 under the Investment Company Act of
1940 (the "1940 Act")) and maintains a dollar-weighted average portfolio
maturity of 90 days or less. Except to the limited extent permitted by Rule 2a-7
and except for U.S. Government Securities, each Portfolio will not invest more
than 5% of its total assets in the securities of any one issuer. As used in this
prospectus, "U.S. Government Securities" means obligations issued or guaranteed
as to principal and interest by the United States Government, its agencies or
instrumentalities and "Treasury Securities" means U.S. Treasury bills and notes
and other U.S. Government Securities which are guaranteed as to principal and
interest by the U.S. Treasury.
Although each Portfolio only invests in high quality money market instruments,
an investment in a Portfolio is subject to risk even if all securities in the
Portfolio's portfolio are paid in full at maturity. All money market
instruments, including U.S. Government Securities, can change in value when
there is a change in interest rates, the issuer's actual or perceived
creditworthiness or the issuer's ability to meet its obligations.
TREASURY CASH FUND
Treasury Cash Portfolio seeks to attain its investment objective by investing
substantially all of its assets in Treasury Securities and in repurchase
agreements backed by Treasury Securities.
GOVERNMENT CASH FUND
Government Cash Portfolio seeks to attain its investment objective by investing
substantially all of its assets in U.S. Government Securities and in repurchase
agreements backed by U.S. Government Securities. The U.S. Government Securities
in which the Portfolio may invest include Treasury Securities and securities
supported primarily or solely by the creditworthiness of the issuer, such as
securities of the Federal National Mortgage Association. There is no guarantee
that the U.S. Government will support securities not backed by its full faith
and credit. Accordingly, although these securities have historically involved
little risk of loss of principal if held to maturity, they may involve more risk
than securities backed by the U.S. Government's full faith and credit.
CASH FUND
Cash Portfolio seeks to attain its investment objective by investing in a broad
spectrum of money market instruments. The Portfolio may invest in (i)
obligations of domestic financial institutions, (ii) U.S. Government Securities
(see "Investment Objective and Policies - Government Cash Portfolio") and (iii)
corporate debt obligations of domestic issuers.
Financial institution obligations include negotiable certificates of deposit,
bank notes, bankers' acceptances and time deposits of banks (including savings
banks and savings associations) and their foreign branches. The Portfolio limits
its investments in bank obligations to banks which at the time of investment
have total assets in excess of one billion dollars. 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 debt obligations
<PAGE>
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.
Corporate debt obligations include commercial paper (short-term promissory
notes) issued by companies to finance their, or their affiliates', current
obligations. The Portfolio may also invest in commercial paper or other
corporate securities issued in "private placements" without registration under
the Securities Act of 1933. These "restricted securities" are restricted as to
disposition under the Federal securities laws in that any sale of these
securities may not be made absent registration under the Securities Act of 1933
or an appropriate exemption therefrom.
ADDITIONAL INVESTMENT POLICIES
Each Fund's and each Portfolio's investment objective and certain investment
limitations, as described in the SAI, may not be changed without approval of the
holders of a majority of the Fund's or Portfolio's, as applicable, outstanding
voting securities (as defined in the 1940 Act). Except as otherwise indicated in
this prospectus or in the SAI, investment policies of a Fund or a Portfolio may
be changed by the applicable board of trustees without shareholder approval.
Each Portfolio may borrow money for temporary or emergency purposes (including
the meeting of redemption requests), but not in excess of 33 1/3% of the value
of the Portfolio's total assets. Borrowing for purposes other than meeting
redemption requests will not exceed 5% of the value of the Portfolio's total
assets. Each Portfolio is permitted to hold cash in any amount pending
investment in securities and may invest in other investment companies that
intend to comply with Rule 2a-7 and have substantially similar investment
objectives and policies. To the extent a Portfolio invests in other money funds,
it will indirectly bear the expenses of those funds. A further description of
the Funds' and the Portfolios' investment policies is contained in the SAI.
REPURCHASE AGREEMENTS. Each Portfolio may seek additional income or liquidity by
entering into repurchase agreements. Repurchase agreements are transactions in
which a Portfolio purchases a security and simultaneously commits to resell that
security to the seller at an agreed-upon price on an agreed-upon future date,
normally one to seven days later. The resale price reflects a market rate of
interest that is not related to the coupon rate or maturity of the purchased
security. The Portfolios' custodian holds the underlying collateral, which is
maintained at not less than 100% of the repurchase price. Repurchase agreements
involve certain risks not associated with direct investment in securities. The
Portfolios, however, intend to enter into repurchase agreements only with
sellers which the Adviser believes present minimal credit risks in accordance
with guidelines established by the Core Trust Board. In the event that a seller
defaulted on its repurchase obligation, however, a Portfolio might suffer a
loss.
LIQUIDITY. To ensure adequate liquidity, each Portfolio may not invest more than
10% of its net assets in illiquid securities, including repurchase agreements
not entitling the Portfolio to payment of principal within seven days. There may
not be an active secondary market for securities held by a Portfolio. The value
of securities that have a limited market tend to fluctuate more than those that
have an active market. For this reason, a Portfolio could suffer a loss with
respect to such securities. The Adviser monitors the liquidity of the
Portfolios' investments, but there can be no guarantee that an active secondary
market will exist.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. In order to assure itself of being
able to obtain securities at prices which the Adviser believes might not be
available at a future time, each Portfolio may purchase securities on a
when-issued or delayed delivery basis. Securities so purchased are subject to
market price fluctuation and no interest on the securities accrues to a
Portfolio until delivery and payment take place. Accordingly, the value of the
securities on the delivery date may be more or less than the purchase price.
Commitments for when-issued or delayed delivery transactions will be entered
into only when a Portfolio has the intention of actually acquiring the
securities. Failure by the other party to deliver a security purchased by a
Portfolio may result in a loss or missed opportunity to make an alternative
investment.
VARIABLE AND FLOATING RATE SECURITIES. The securities in which the Portfolios
invest may have variable or floating rates of interest. These securities pay
interest at rates that are adjusted periodically according to a specified
formula, usually with reference to some interest rate index or market interest
rate. The interest paid on these securities is a function primarily of the index
or market rate upon which the interest rate adjustments are based. Securities
with ultimate maturities of greater than 397 days may be purchased only in
accordance with the provisions to Rule 2a-7. Under that Rule, only those
long-term instruments that have demand features that comply with certain
requirements and certain long-term U.S. Government Securities may be purchased.
Similar to fixed rate debt instruments, variable and floating rate instruments
are subject to changes in value based on changes in market interest rates or
changes in the issuer's creditworthiness.
<PAGE>
No Portfolio may purchase a variable or floating rate security whose interest
rate is adjusted based on a long-term interest rate or index, on more than one
interest rate or index, or on an interest rate or index that materially lags
short-term market rates (these prohibited securities are often referred to as
"derivative" securities). All variable and floating rate securities purchased by
a Portfolio will have an interest rate that is adjusted based on a single
short-term rate or index, such as the Prime Rate.
FINANCIAL INSTITUTION GUIDELINES. Treasury Cash Portfolio and Government Cash
Portfolio invest only in instruments which, if held directly by a bank or bank
holding company organized under the laws of the United States or any state
thereof, would be assigned to a risk-weight category of no more than 20% under
the current risk based capital guidelines adopted by the Federal bank
regulators. In addition, these Portfolios limit their investments to those
permissible for Federally chartered credit unions under applicable provisions of
the Federal Credit Union Act and the applicable rules and regulations of the
National Credit Union Administration. Government Cash Portfolio limits its
investments to investments that are legally permissible for Federally chartered
savings associations without limit as to percentage and to investments that
permit Fund shares to qualify as liquid assets and as short-term liquid assets.
4. MANAGEMENT
The business of the Trust is managed under the direction of the Board and the
business of Core Trust is managed under the direction of the Core Trust Board.
The Board formulates the general policies of the Funds and meets periodically to
review the results of the Funds, monitor investment activities and practices and
discuss other matters affecting the Fund and the Trust. The SAI contains general
background information about the trustees and officers of the Trust and of Core
Trust.
ADMINISTRATOR AND INVESTMENT ADVISER
Forum supervises the overall management of the Trust, including overseeing the
Trust's receipt of services, advising the Trust and the Trustees on matters
concerning the Trust and its affairs, and providing the Trust with general
office facilities and certain persons to serve as officers. For these services
and facilities, Forum receives a fee at an annual rate of 0.05% of the daily net
assets of each Fund. Forum also serves as administrator of Core Trust and
provides administrative services for each Portfolio that are similar to those
provided to the Funds. For its administrative services to the Portfolios, Forum
receives a fee at an annual rate of 0.05% of the average daily net assets of
each Portfolio.
As of the date hereof Forum and its affiliates acted as administrator and
distributor of registered investment companies with assets of approximately $38
billion. FFS, a registered broker-dealer and member of the National Association
of Securities Dealers, Inc., serves as each Fund's distributor. FFS acts as the
agent of the Trust in connection with the offering of shares of the Funds. As of
the date of this Prospectus, Forum, FFS, the Adviser and the Trust's transfer
agent were each controlled by John Y. Keffer, an officer and Trustee of the
Trust and of Core Trust. Forum, FFS and the Adviser are located at Two Portland
Square, Portland, Maine 04101.
Subject to the general supervision of the Core Trust Board, the Adviser makes
investment decisions for each Portfolio and monitors the Portfolios'
investments. In addition to the Portfolios, the Adviser currently provides
investment advisory services to six other mutual funds, including one money
market fund. Under supervision of the Adviser, Mr. Anthony R. Fischer, Jr. acts
as each Portfolio's portfolio manager pursuant to a consulting agreement with
the Adviser.
For its services, the Adviser receives from each Portfolio an advisory fee based
upon the total average daily net assets of the three Portfolios ("Total
Portfolio Assets") that is calculated on a cumulative basis as follows: 0.06% of
the first $200 million of Total Portfolio Assets, 0.04% of the next $300 million
of Total Portfolio Assets, and 0.03% of the remaining Total Portfolio Assets.
SHAREHOLDER SERVICING
TRANSFER AND DIVIDEND DISBURSING AGENT. Forum Shareholder Services, LLC (the
"Transfer Agent"), a registered transfer agent, acts as the Trust's transfer
agent and dividend disbursing agent. The Transfer Agent maintains an account for
each shareholder of the Funds (unless such accounts are maintained by
sub-transfer agents or processing agents) and performs other transfer agency and
related functions.
The Transfer Agent is authorized to subcontract any or all of its functions to
one or more qualified sub-transfer agents or processing agents, which may be its
affiliates, who agree to comply with the terms of the Transfer Agent's agreement
with the Trust. The Transfer Agent may pay those agents for their services, but
no such payment will increase the Transfer Agent's compensation from the Trust.
For its services, the Transfer Agent is paid a transfer agent fee at an annual
rate of 0.20% of the average daily net assets of each Fund attributable to
Institutional Shares plus $12,000 per year and certain account and additional
class charges and is reimbursed for certain expenses incurred on behalf of the
Funds.
<PAGE>
SHAREHOLDER SERVICE AGENTS. The Trust has adopted a shareholder service
agreement ("Shareholder Service Agreement") which provides that, as compensation
for Forum's service activities with respect to the Institutional Shares, the
Trust shall pay Forum a fee at an annual rate of 0.20% of the average daily net
assets attributable to Institutional Shares. Forum is authorized to enter into
shareholder servicing agreements pursuant to which a shareholder servicing
agent, on behalf of its customers, performs certain shareholder services not
otherwise provided by the Transfer Agent. As compensation for its services, the
shareholder servicing agent, which will be a Participating Organization, is paid
a fee by Forum of up to 0.20% of the average daily net assets of Institutional
Shares owned by investors for which the shareholder service agent maintains a
servicing relationship. Certain shareholder servicing agents may be subtransfer
or processing agents.
Among the services provided by shareholder servicing agents are answering
customer inquiries regarding the manner in which purchases, exchanges and
redemptions of shares of the Trust may be effected and other matters pertaining
to the Trust's services; providing necessary personnel and facilities to
establish and maintain shareholder accounts and records; assisting shareholders
in arranging for processing purchase, exchange and redemption transactions;
arranging for the wiring of funds; guaranteeing shareholder signatures in
connection with redemption orders and transfers and changes in
shareholder-designated accounts; integrating periodic statements with other
customer transactions; and providing such other related services as the
shareholder may request.
EXPENSES
Each Fund bears all of its expenses, which include Trust expenses attributable
to the Fund, which are allocated to the Fund, and expenses not specifically
attributable to any Fund, which are allocated among the Funds in proportion to
their average net assets. Each service provider may elect to waive (or continue
to waive) all or a portion of its fees and may reimburse a Fund for certain
expenses. Any such waivers or reimbursements will have the effect of increasing
the Fund's performance for the period during which the waiver or reimbursement
is in effect. No fee waivers may be recouped at a later date.
5. PURCHASES OF SHARES
GENERAL INFORMATION
All transactions in Fund shares are effected through the Transfer Agent, which
accepts orders for purchases only from shareholders of record and new investors.
The minimum initial investment in Institutional Shares is $500,000. Shareholders
of record will receive from the Trust monthly statements listing all account
activity during the statement period. The Trust reserves the right in the future
to modify, limit or terminate any shareholder privilege upon appropriate notice.
Fund shares are sold on a continuous basis at their next determined net asset
value on all Fund Business Days. Fund shares are issued immediately following
the next determination of the Fund's net asset value made after an order for the
shares in proper form, accompanied by funds on deposit at a Federal Reserve Bank
("Federal Funds"), is received by the Transfer Agent. An investor's funds will
not be accepted or invested by a Fund during the period before the Fund's
receipt of Federal Funds. The Trust reserves the right to reject any
subscription for the purchase of Fund shares.
Investors may obtain the account application necessary to open an account or
obtain additional information or assistance by contacting the Trust at
800-754-8757 or writing the Trust at the following address:
Monarch Funds
P.O. Box 446
Portland, Maine 04112
Purchase orders for Institutional Shares will be accepted on Fund Business Days
until 3:00 p.m., Pacific time. In order to receive distributions for the day of
investment, orders and payment must be received by the Transfer Agent as
follows:
Order Must be Received by Payment Must be Received by
------------------------- ---------------------------
11:00 a.m., Pacific time 1:00 p.m., Pacific time
If a purchase order is transmitted to the Transfer Agent after 11:00 a.m.,
Pacific time, or the wire is received after 1:00 p.m., Pacific time, the
investor will not receive a distribution on that day. On days that the New York
Stock Exchange or San Francisco Federal Reserve Bank closes early or the Public
Securities Association recommends that the government securities markets close
early, the Trust may advance the time by which the Transfer Agent must receive
completed wire purchase orders and the cut-off times in the above table.
<PAGE>
INITIAL PURCHASE PROCEDURES
BY BANK WIRE. To make an initial investment in a Fund using the federal wire
system for transmittal of money among banks, an investor should first telephone
the Transfer Agent at 800-754-8757 to obtain an account number. The investor
should then wire the investor's money immediately to:
Imperial Bank
ABA# 122201444
For Credit To: Forum Shareholder Services, LLC
Account #: 09075-933
Re: [Name of Fund] - Institutional Shares
Account #: ____________________________
Account Name:__________________________
The investor should then promptly complete and mail the account application.
Payment in the form of a bank wire is treated as a Federal Funds payment
received at the time the wire is received.
BY MAIL. Investors may send a check made payable to the Trust along with a
completed account application to the Transfer Agent at the address listed above.
Checks are accepted at full value subject to collection.
THROUGH FINANCIAL INSTITUTIONS. Shares may be purchased and redeemed through
certain broker-dealers, banks and other financial institutions ("Participating
Organizations"). Participating Organizations may charge a fee for their services
and may otherwise act as processing agents. Participating Organizations are
responsible for promptly transmitting purchase, redemption and other requests to
the Funds.
Investors who purchase shares in this manner will be subject to the procedures
of their Participating Organization, which may include investment minimums,
cutoff times and other restrictions in addition to, or different from, those
applicable to shareholders who invest in a Fund directly. Investors purchasing
Fund shares in this manner should acquaint themselves with their Participating
Organization's procedures and should read this Prospectus in conjunction with
any materials and information provided by their Participating Organization.
Investors purchasing shares in this manner may or may not be the shareholder of
record and, subject to their Participating Organization's procedures, may have
Fund shares transferred into their name. Certain states permit shares to be
purchased and redeemed only through registered broker-dealers, including FFS.
SUBSEQUENT INVESTMENTS
Subsequent investments in a Fund, which may be made by bank wire, by check or
through Participating Organizations. Shareholders using the wire system for
subsequent investments should first telephone the Transfer Agent at 800-754-8757
to notify it of the wire transfer.
6. REDEMPTIONS OF SHARES
GENERAL INFORMATION
Fund shares may be redeemed without charge at their next determined net asset
value on any Fund Business Day following acceptance by the Transfer Agent of the
redemption order in proper form (and any supporting documentation which the
Transfer Agent may require). There is no minimum period of investment and no
restriction on the frequency of redemptions. Redemption proceeds are paid by
check mailed to the shareholder's record address immediately following any
redemption unless the shareholder has elected wire redemption privileges. The
right of redemption may not be suspended nor the payment dates postponed except
when the New York Stock Exchange is closed (or when trading thereon is
restricted) for any reason other than its customary weekend or holiday closings
or under any emergency or other circumstance as determined by the SEC.
Redemption proceeds from the Portfolios may be made wholly or partially in
portfolio securities if the Adviser determines it to be in the best interests of
the Portfolio. Similarly, redemption proceeds from a Fund may be made wholly or
partially in portfolio securities if it is determined to be in the best
interests of the Fund.
Redemption orders for Institutional Shares will be accepted on Fund Business
Days until 3:00 p.m., Pacific time. In order to receive redemption proceeds by
wire, a redemption order must be received by the Transfer Agent by 11:00 a.m.,
Pacific time.
For redemption orders received after 11:00 a.m., Pacific time, the Transfer
Agent will wire proceeds the next Fund Business Day. On days that the New York
Stock Exchange or San Francisco Federal Reserve Bank closes early or the Public
<PAGE>
Securities Association recommends that the government securities markets close
early, the Trust may advance the time by which the Transfer Agent must receive
completed wire redemption orders.
If a shareholder elects telephone redemption or exchange privileges, as long as
the Trust employs reasonable procedures to insure that telephone orders are
genuine (which include recording certain transactions and the use of immediate
written confirmation by facsimile or otherwise), the Trust, the Transfer Agent
and FFS are not responsible for the authenticity of telephone instructions or
losses, if any, resulting from unauthorized telephone redemption or exchange
requests. Shareholders should verify the accuracy of telephone instructions
immediately upon receipt of confirmation statements.
REDEMPTION PROCEDURES
Shareholders that wish to redeem shares by telephone or to have redemption
proceeds transmitted by bank wire must elect these options by properly
completing the appropriate sections of their account application.
Shareholders may make a redemption in any amount by sending a written request to
the Transfer Agent accompanied by any share certificates that may have been
issued to the shareholder or, for shareholders that have elected telephone
redemption privileges, by calling the Transfer Agent and providing the
shareholder's account number, the exact name in which the shareholder's shares
are registered and a shareholder identification number. During times of drastic
economic or market changes, the telephone redemption privilege may be difficult
to implement.
BANK WIRE REDEMPTION. For redemptions of more than $5,000, a shareholder that
has elected wire redemption privileges may request a Fund to transmit redemption
proceeds by Federal Funds wire to a bank account designated on the shareholder's
account application.
SIGNATURE GUARANTEES. A signature guarantee is required for written requests to
redeem shares whose value exceeds $50,000 (other than an exchange) and for any
instruction to change the shareholder's record name, to redeem shares in an
account for which the address or registration has changed within the last 30
days, to transmit redemption proceeds to an account other than the address of
record or a preauthorized bank account or to a person other than the registered
owners or to an account with a different registration, to change the
shareholder's distribution election or the telephone redemption or other option
elected on an account. In addition, all share certificates submitted for
redemption (or exchange) must be endorsed by the shareholder and in some cases
must have a signature guarantee . Signature guarantees may be provided by any
eligible institution acceptable to the Transfer Agent, including a bank, a
broker, a dealer, a national securities exchange, a credit union, or a savings
association that is authorized to guarantee signatures (notarized signatures are
not sufficient). When a signature guarantee is required, the signature of each
person required to sign for the account must be guaranteed.
OTHER REDEMPTION MATTERS. Share certificates are issued only to shareholders of
record upon their written request and no certificates are issued for fractional
shares. Shares for which certificates have been issued may not be redeemed or
exchanged by telephone. Due to the cost to the Trust of maintaining smaller
accounts, the Trust reserves the right to redeem, upon not less than 60 days'
written notice, all shares in any Fund account with an aggregate net asset value
of less than $100,000, unless an investment is made to restore the minimum
value.
The Transfer Agent will deem a shareholder's account "lost" if correspondence to
the shareholder's address of record is returned for six months, unless the
Transfer Agent determines the shareholder's new address. When an account is
deemed lost, all distributions on the account will be reinvested in additional
Institutional Shares. In addition, the amount of any outstanding (unpaid for six
months or more) checks for distributions that have been returned to the Transfer
Agent will be reinvested and the checks will be canceled.
EXCHANGE PROGRAM
Investors in Institutional Shares of a Fund are entitled to exchange their
shares for Institutional Shares of another Fund if that Fund's shares are
eligible for sale in the shareholder's state. Exchanges are subject to minimum
investment requirements of the Funds. There is currently no limit on the number
of exchanges a shareholder may make. The Trust reserves the right in the future
to modify, limit or terminate the exchange privilege upon appropriate notice to
shareholders.
Exchanges may be accomplished by written instructions to the Transfer Agent or,
for shareholders that have elected telephone exchange privileges, by calling the
Transfer Agent and providing the shareholder's account number, the exact name in
which the shareholder's shares are registered and the shareholder's social
security or taxpayer identification number. During times of drastic economic or
market changes, the telephone exchange privilege may be difficult to implement.
<PAGE>
7. DISTRIBUTIONS AND TAX MATTERS
DISTRIBUTIONS
Distributions of each Fund's net investment income are declared daily and paid
monthly following the close of the last Fund Business Day of the month. Net
capital gain realized by a Fund, if any, will be distributed annually. Fund
shares become entitled to receive distributions on the day the shares are issued
as described under "Purchases of Shares - General Information." Shares redeemed
are not entitled to receive distributions declared on or after the day on which
the redemption becomes effective.
Shareholders may choose either to have all distributions of net investment
income reinvested in additional Fund shares or received in cash. In addition,
shareholders may have all distributions of net capital gain reinvested in
additional Fund shares or paid in cash. All distributions are treated in the
same manner for Federal income tax purposes whether received in cash or
reinvested in shares of the Fund.
TAX MATTERS
TAX STATUS OF THE FUNDS. Each Fund intends to continue to qualify to be taxed as
a "regulated investment company" under the Internal Revenue Code of 1986, as
amended. Accordingly, each Fund will not be liable for Federal income taxes on
the net investment income and capital gain distributed to its shareholders.
Because the Funds intend to distribute all of their net investment income and
net capital gain each year, the Funds should also avoid Federal excise taxes.
Distributions paid by each Fund out of its net investment income (including
realized net short-term capital gain) are taxable to the shareholders of the
Fund as ordinary income. Distributions of net capital gain, if any, realized by
a Fund are taxable to shareholders as capital gain, regardless of the length of
time the Fund shares were held by the shareholder at the time of distribution.
Different capital gain rates will apply depending on the holding period of the
securities sold by the Fund that generated the gain.
THE PORTFOLIOS. The Portfolios are not required to pay Federal income taxes on
their net investment income and capital gain, as they are treated as
partnerships for Federal income tax purposes. All interest, distributions and
gains and losses of a Portfolio are deemed to be "passed through" to the
respective Fund in proportion to the Fund's holdings of the Portfolio,
regardless of whether the interest, distributions or gains have been distributed
by the Portfolio or losses have been realized by the Portfolio.
GENERAL. Each Fund is required by Federal law to withhold 31% of reportable
payments (which may include income and capital gain distributions) paid to a
non-corporate shareholder unless that shareholder certifies in writing that the
social security or other tax identification number provided is correct and that
the shareholder is not subject to backup withholding.
Reports containing appropriate information with respect to the Federal income
tax status of distributions paid during the year by the Fund will be mailed to
shareholders shortly after the close of each calendar year.
The foregoing is only a summary of some of the Federal tax considerations
generally affecting the Funds and their shareholders. The SAI contains a further
discussion. Because other Federal, state or local tax considerations may apply,
investors are urged to consult their tax advisors.
8. OTHER INFORMATION
FUND PERFORMANCE
Institutional Shares' performance may be advertised. All performance information
is based on historical results, is not intended to indicate future performance
and, unless otherwise indicated, is net of all expenses. The Funds may advertise
yield, which shows the rate of income a Fund has earned on its investments as a
percentage of the Fund's share price. To calculate yield, a Fund takes the
interest income it earned from its portfolio of investments for a specified
period (net of expenses), divides it by the average number of shares entitled to
receive distributions, and expresses the result as an annualized percentage rate
based on the Fund's share price at the end of the period. A Fund's compounded
annualized yield assumes the reinvestment of distributions paid by the Fund,
and, therefore will be somewhat higher than the annualized yield for the same
period. Each class' performance will vary. The Funds' advertisements may also
reference ratings and rankings among similar funds by independent evaluators
such as Morningstar, Lipper Analytical Services, Inc. or IBC Financial Data,
Inc. In addition, the performance of the Funds may be compared to recognized
indices of market performance. The comparative material found in a Fund's
advertisements, sales literature, or reports to shareholders may contain
performance rankings. This material is not to be considered representative or
indicative of future performance.
<PAGE>
DETERMINATION OF NET ASSET VALUE
The Trust determines the net asset value per share of each Fund as of 1:00 p.m.,
Pacific time, on each Fund Business Day. Net asset value per share is determined
by dividing the value of the Fund's net assets (the value of its interest in the
Portfolio and other assets less its liabilities) by the number of shares
outstanding at the time the determination is made. In order to more easily
maintain a stable net asset value per share, each Portfolio's portfolio
securities are valued at their amortized cost (acquisition cost adjusted for
amortization of premium or accretion of discount) in accordance with Rule 2a-7.
The Portfolios will only value their portfolio securities using this method if
the Core Trust Board believes that it fairly reflects the market-based net asset
value per share. The Portfolios' other assets, if any, are valued at fair value
by or under the direction of the Core Trust Board.
THE TRUST AND ITS SHARES
The Trust is registered with the SEC as an open-end management investment
company and was organized as a business trust under the laws of the State of
Delaware on July 10, 1992. The Board has the authority to issue an unlimited
number of shares of beneficial interest of separate series with no par value per
share and to create classes of shares within each series. Except for the Funds,
no other series of shares are currently authorized.
As of December [ ], 1998, [ ]owned of record for the benefit of its various
customers, more than 25% of the total outstanding Institutional Shares of
Treasury Cash Fund and Cash Fund and, as of that date, may be deemed to have
controlled that class. As of that same date, no shareholder owned more than 25%
of the outstanding Institutional Shares of Government Cash Fund. From time to
time various shareholders may own a large percentage of a class or of a Fund.
Accordingly, these shareholders may be able to greatly affect (if not determine)
the outcome of any shareholder vote.
Shares issued by the Trust have no conversion, subscription or preemptive
rights. Voting rights are not cumulative and the shares of each series or class
of the Trust will be voted separately except when an aggregate vote is required
by law. Separate votes are taken by each class of a Fund if a matter affects
just that class. The Trust is not required to hold annual meetings of
shareholders, and it is anticipated that shareholder meetings will be held only
when specifically required by law. Shareholders have available procedures for
requiring the Trustees to call a meeting and for removing Trustees.
FUND STRUCTURE
OTHER CLASSES OF SHARES. In addition to Institutional Shares, each Fund
currently has two other classes of shares authorized, Universal Shares and
Investor Shares. Universal Shares and Investor Shares are offered to the general
public and have investment minimums of $1,000,000 and $5,000, respectively.
Universal Shares incur less expenses and Investor Shares incur greater expenses
than Institutional Shares. Except for certain differences, each share of each
class represents an undivided, proportionate interest in a Fund. Each share of
each Fund is entitled to participate equally in distributions and the proceeds
of any liquidation of that Fund except that, due to the differing expenses borne
by the various classes, the amount of distributions will differ among the
classes.
CORE TRUST STRUCTURE. Each Fund invests all of its assets in its corresponding
Portfolio of Core Trust, a business trust organized under the laws of the State
of Delaware in September 1994 and registered under the 1940 Act as an open-end
management investment company. Accordingly, a Portfolio directly acquires its
own securities and its corresponding Fund acquires an indirect interest in those
securities. The assets of each Portfolio belong only to, and the liabilities of
the Portfolio are borne solely by, the Portfolio and no other portfolio of Core
Trust. Upon liquidation of a Portfolio, investors in the Portfolio would be
entitled to share pro rata in the net assets of the Portfolio available for
distribution to investors.
THE PORTFOLIOS. A Fund's investment in a Portfolio is in the form of a
non-transferable beneficial interest. Besides Treasury Cash Fund, Government
Cash Fund and Cash Fund, other investment companies invest in Treasury Cash
Portfolio, Government Cash Portfolio and Cash Portfolio, respectively. All
investors in a Portfolio will invest on the same terms and conditions as the
Funds and will pay a proportionate share of the Portfolio's expenses. The
Portfolios normally will not hold meetings of investors except as required by
the 1940 Act. Each investor in a Portfolio will be entitled to vote in
proportion to the relative value of its interest in the Portfolio. On most
issues subject to a vote of investors, as required by the 1940 Act and other
applicable law, a Fund will solicit proxies from shareholders of the Fund and
will vote its interest in a Portfolio in proportion to the votes cast by its
shareholders. If there are other investors in a Portfolio, there can be no
assurance that any issue that receives a majority of the votes cast by a Fund's
shareholders will receive a majority of votes cast by all investors in the
Portfolio.
<PAGE>
CONSIDERATIONS OF INVESTING IN A PORTFOLIO. A Fund's investment in a Portfolio
may be affected by the actions of other investors in the Portfolio. For example,
if other investors redeemed their interest in the Portfolio, the Portfolio's
remaining investors (including the Fund) might, as a result, experience higher
pro rata operating expenses. A Fund may withdraw its entire investment from a
Portfolio at any time if the Board determines that it is in the best interests
of the Fund and its shareholders to do so. The Fund might withdraw, for example,
if other investors in the Portfolio, by a vote of shareholders, changed the
investment objective or policies of the Portfolio in a manner not acceptable to
the Board or not permissible by the Fund. A withdrawal could result in a
distribution in kind of portfolio securities (as opposed to a cash distribution)
by the Portfolio. That distribution could result in a less diversified portfolio
of investments for the Fund, resulting in increased risk, and could affect
adversely the liquidity of the Fund's portfolio. If the Fund decided to convert
those securities to cash, it would incur transaction costs. If the Fund withdrew
its investment from the Portfolio, the Board would consider what action might be
taken, including the management of the Fund's assets in accordance with its
investment objective and policies by the Adviser or the investment of all of the
Fund's investable assets in another pooled investment entity having
substantially the same investment objective as the Fund.
Forum has only three years of experience in managing funds that utilize its
"Core and Gateway(R)" structure.
ADDITIONAL INFORMATION. Each class of a Fund (and any other investment company
that invests in a Portfolio) may have a different expense ratio and different
sales charges, including distribution fees, and each class' (and investment
company's) performance will be affected by its expenses and sales charges. For
more information on any other class of shares of the Funds or concerning any
other investment companies that invest in a Portfolio, investors may contact FFS
at 800-754-8757. If an investor invests through a financial institution, the
investor may also contact their financial institution to obtain information
about the other classes or any other investment company investing in a
Portfolio.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, THE SAI AND THE
FUNDS' OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFERING OF THE FUNDS'
SHARES, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER
MAY NOT LAWFULLY BE MADE.
<PAGE>
M O N A R C H F U N D S
================================================================================
INVESTOR SHARES
Treasury Cash Fund
Government Cash Fund
Cash Fund
PROSPECTUS
January [ ], 1999
This Prospectus offers Investor Shares of Treasury Cash Fund, Government Cash
Fund and Cash Fund (each a "Fund" and collectively the "Funds"). Each Fund is a
diversified money market portfolio of Monarch Funds (the "Trust"), an open-end,
management investment company. Each Fund seeks to provide its shareholders with
high current income to the extent consistent with the preservation of capital
and the maintenance of liquidity.
Treasury Cash Fund, Government Cash Fund and Cash Fund each seeks to achieve its
investment objective by investing all of its investable assets in Treasury Cash
Portfolio, Government Cash Portfolio and Cash Portfolio (each a "Portfolio" and
collectively the "Portfolios"), respectively. The Portfolios are separate series
of Core Trust (Delaware) ("Core Trust"), an open-end, management investment
company. See "Other Information - Fund Structure." Accordingly, each Fund's
investment experience will correspond directly with that of the Portfolio in
which it invests. Through its corresponding Portfolio:
TREASURY CASH FUND invests substantially all of its assets in
obligations of the U.S. Treasury and in repurchase agreements backed by
these obligations.
GOVERNMENT CASH FUND invests substantially all of its assets in
high-quality obligations of the U.S. Government, its agencies and
instrumentalities and in repurchase agreements backed by these
obligations.
CASH FUND invests in a broad spectrum of high-quality money market
instruments.
This Prospectus sets forth concisely the information concerning the Trust and
the Funds that a prospective investor should know before investing. Investors
should read this Prospectus and retain it for future reference. The Trust has
filed with the Securities and Exchange Commission ("SEC") a Statement of
Additional Information dated January [ ], 1999 ("SAI"), which contains more
detailed information about the Trust and the Funds and which is available
together with other related materials for reference on the SEC's Internet Web
Site (http://www.sec.gov). The SAI, which is incorporated into the Prospectus by
reference, also is available without charge by contacting the Trust's
distributor, Forum Fund Services, LLC, at Two Portland Square, Portland, Maine
04101.
________________________________________________________________________________
TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C> <C>
1. Prospectus Summary............................ 5. Purchases of Shares...........................
2. Financial Highlights.......................... 6. Redemptions of Shares.........................
3. Investment Objective and Policies............. 7. Distributions and Tax Matters.................
4. Management.................................... 8. Other Information.............................
</TABLE>
________________________________________________________________________________
ALTHOUGH THE FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER
SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUNDS. AN INVESTMENT IN
THE FUNDS IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY, AND IS NOT ENDORSED OR GUARANTEED BY
ANY BANK OR ANY AFFILIATE OF A BANK.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
1. PROSPECTUS SUMMARY
FUND HIGHLIGHTS
This prospectus offers shares of the Investor class ("Investor Shares") of each
of the Funds. The Funds operate in accordance with the provisions of Rule 2a-7
under the Investment Company Act of 1940.
MANAGEMENT. Forum Administrative Services, LLC ("Forum") supervises the overall
management of the Funds and the Portfolios. Forum Fund Services, LLC ("FFS") is
the distributor of the Funds' shares. Forum Investment Advisors, LLC (the
"Adviser") is the investment adviser of each Portfolio and provides professional
management of the Portfolios' investments. The Trust's transfer agent and
dividend disbursing agent is Forum Shareholder Services, LLC See "Management"
for a description of the services provided and fees charged to the Funds.
SHAREHOLDER SERVICING AND DISTRIBUTION. The Trust has adopted a Shareholder
Service Agreement and a Plan of Distribution relating to Investor Shares under
which Forum and FFS, respectively, are compensated for various shareholder
servicing and distribution related activities. See "Management - Shareholder
Servicing" and "Distributor."
PURCHASES AND REDEMPTIONS. The minimum initial investment in Investor Shares is
$5,000. The minimum subsequent investment is $100. Investor Shares may be
purchased and redeemed Monday through Friday, between the hours of 5:00 a.m. and
3:00 p.m., Pacific time, except on Federal holidays and other days that the
Federal Reserve Bank of San Francisco is closed ("Fund Business Days"). To be
eligible to receive that days' income, purchase orders must be received by the
Transfer Agent in good order no later than 11:00 a.m., Pacific time.
Shareholders may elect to have redemptions of over $5,000 redeemed by bank wire
to a designated bank account. To be able to receive redemption proceeds by wire
on the day of the redemption, redemption orders must be received by the transfer
agent in good order no later than 11:00 a.m., Pacific time. All times may be
changed without notice by Fund management due to market activities. See
"Purchases of Shares" and "Redemptions of Shares."
EXCHANGES. Shareholders may exchange Investor Shares for Investor Shares of the
other Funds. See "Redemptions of Shares - Exchange Program."
DISTRIBUTIONS. Distributions of net investment income are declared daily and
paid monthly by each Fund and are automatically reinvested in additional Fund
shares unless the shareholder has requested payment in cash. See "Distributions
and Tax Matters."
INVESTMENT CONSIDERATIONS. There can be no assurance that any Fund will be able
to maintain a stable net asset value of $1.00 per share. Although the Funds
invest only in money market instruments, all securities, including U.S.
Government Securities, involve some level of investment risk. An investment in a
Fund is not insured by the FDIC, nor is it insured or guaranteed against loss of
principal.
EXPENSES OF INVESTING IN THE FUNDS
The purpose of the following table is to assist investors in understanding the
various expenses that an investor in Investor Shares will bear directly or
indirectly. There are no transaction expenses associated with purchases,
redemptions or exchanges of Fund shares. For a further description of the
various expenses incurred in the operation of the Funds and the Portfolios, see
"Management." Expenses for Government Cash Fund are estimated for its fiscal
year ending August 31, 1998. Expenses for the other Funds are based on the
Funds' fiscal year ended August 31, 1998, restated to reflect current fees.
ANNUAL OPERATING EXPENSES (as a percentage of average net assets) (1)
<TABLE>
<S> <C> <C> <C>
Treasury Government
Cash Fund Cash Fund Cash Fund
Management Fees (2) (after fee waivers) 0.11% 0.13% 0.14%
Rule 12b-1 Fees 0.25% 0.25% 0.25%
Other Expenses (after expense reimbursements) 0.46% 0.45% 0.44%
----- ----- -----
Total Operating Expenses 0.82% 0.83% 0.83%
</TABLE>
(1) All information includes the Fund's pro rata portion of the expenses of its
corresponding Portfolio. Absent expense reimbursements and fee waivers, the
expenses of Treasury Cash Fund, Government Cash Fund and Cash Fund would
be: Management Fees; 0.14%, 0.13% and 0.14%; Other Expenses; 0.52%, 0.51%
and 0.47%; and Total Operating Expenses, 0.91%, 0.90% and 0.86%.
(2) Includes all advisory, management and administration fees.
<PAGE>
EXAMPLE
You would pay directly or indirectly the following expenses on a $1,000
investment in Investor Shares, assuming a 5% annual return and redemption at the
end of each period:
<TABLE>
<S> <C> <C> <C> <C>
One Year Three Years Five Years Ten Years
Treasury Cash Fund $8 $26 $46 $102
Government Cash Fund $8 $26 $46 $103
Cash Fund $8 $26 $46 $102
</TABLE>
The example is based on the expenses listed in the table above and assumes the
reinvestment of all 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.
2. FINANCIAL HIGHLIGHTS
The following information represents selected data for a single outstanding
Investor Share of Treasury Cash Fund and of Cash Fund; as of the date hereof,
Investor Shares of Government Cash Fund were not offered. Also shown is selected
data for a single outstanding Institutional Share of Treasury Cash Fund and
Universal Share of Government Cash Fund and Cash Fund for the periods indicated.
Those classes were the first offered for by respective Funds and, accordingly,
represent data since each Fund's inception. Until August 31, 1995, the Funds
invested directly in portfolio securities. This information has been audited by
[ ], independent auditors. The Funds' financial statements and the independent
auditors' report thereon are incorporated by reference into the SAI and may be
obtained without charge upon request.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratios to Average Net Net Assets Ratio to
at
Beginning Distributions Ending Assets End of Average Net
-----------------------
Net Asset Net From Net Net Asset Net Period Assets
Value Per Investment Investment Value per Investment Total (000's Gross
Share Income Income Share Expenses Income Return Omitted) Expenses(a)
TREASURY CASH FUND(C)
INVESTOR SHARES
Year Ended August 31, 1998 $ 1.00 $0.05 $(0.05) $ 1.00 0.82% 4.62% 4.72% $57,957 0.91%
Year Ended August 31, 1997 1.00 0.05 (0.05) 1.00 0.83% 4.55% 4.58% 30,118 0.97%
Oct. 25, 1995 to Aug. 31, 1.00 0.04 (0.04) 1.00 0.83%(b) 4.50%(b) 4.00% 3,980 1.33%(b)
1996
INSTITUTIONAL SHARES
Year Ended August 31, 1996 1.00 0.05 (0.05) 1.00 0.45% 5.01% 5.15% 79,259 0.69%
Year Ended August 31, 1995 1.00 0.05 (0.05) 1.00 0.42% 5.18% 5.28% 28,530 0.86%
Year Ended August 31, 1994 1.00 0.03 (0.03) 1.00 0.42% 3.03% 3.11% 41,194 0.74%
July 12 to Aug. 31, 1993 1.00 ------ ------ 1.00 0.45%(b) 2.65%(b) 2.81%(b) 39,660 1.09%(b)
GOVERNMENT CASH FUND(C)
UNIVERSAL SHARES
Year Ended August 31, 1998 1.00 0.05 (0.05) 1.00 0.18% 5.48% 5.63% 253,644 0.26%
Year Ended August 31, 1997 1.00 0.05 (0.05) 1.00 0.17% 5.35% 5.49% 230,410 0.26%
Year Ended August 31, 1996 1.00 0.05 (0.05) 1.00 0.19% 5.43% 5.59% 248,986 0.28%
Year Ended August 31, 1995 1.00 0.06 (0.06) 1.00 0.24% 5.46% 5.78% 182,546 0.52%
Year Ended August 31, 1994 1.00 0.04 (0.04) 1.00 0.28% 3.48% 3.64% 158,798 0.49%
Oct. 29, 1992 to Aug. 31, 1.00 0.03 (0.03) 1.00 0.21%(b) 3.19%(b) 3.23%(b) 158,516
1993 0.52%(b)
CASH FUND(C)
INVESTOR SHARES
Year Ended August 31, 1998 1.00 0.05 (0.05) 1.00 0.83% 4.86% 4.97% 181,754 0.86%
Year Ended August 31, 1997 1.00 0.05 (0.05) 1.00 0.83% 4.72% 4.81% 76,480 0.85%
Year Ended August 31, 1996 1.00 0.05 (0.05) 1.00 0.83% 4.68% 4.95% 32,731 0.96%
June 16 to Aug. 31, 1995 1.00 0.01 (0.01) 1.00 0.84%(b) 5.32%(b) 5.14%(b) 4,665 3.76%(b)
UNIVERSAL SHARES
Year Ended August 31, 1995 1.00 0.06 (0.06) 1.00 0.27% 5.59% 5.75% 26,525 0.56%
Year Ended August 31, 1994 1.00 0.04 (0.04) 1.00 0.27% 3.50% 3.69% 22,105 0.55%
Dec. 1, 1992 to Aug. 31, 1.00 0.03 (0.03) 1.00 0.25%(b) 3.29%(b) 3.36% 47,854
1993 0.62%(b)
</TABLE>
(a) During each period, various fees and expenses were waived and reimbursed,
respectively. The ratio of Gross Expenses to Average Net Assets reflects
the expense ratio in the absence of any waivers and reimbursements for the
Fund and its respective Portfolio.
(b) Annualized.
(c) As of August 31, 1998, the net assets of each Fund (combining the assets of
each class of shares) was: Treasury Cash Fund, $149,329,590, Government
Cash Fund, $699,288,136, and Cash Fund, $573,561,896.
<PAGE>
3. INVESTMENT OBJECTIVE AND POLICIES
Each Fund has an investment policy that allows it to invest all of its
investable assets in its corresponding Portfolio. All other investment policies
of each Fund and its corresponding Portfolio are identical. Therefore, although
the following discusses the investment policies of the Portfolios (and the
responsibilities of Core Trust's board of trustees (the "Core Trust Board")), it
applies equally to the Funds (and the Trust's board of trustees (the "Board").
INVESTMENT OBJECTIVE
The investment objective of each Fund is to provide high current income to the
extent consistent with the preservation of capital and the maintenance of
liquidity. Each Fund currently seeks to achieve its investment objective by
investing all of its investable assets in its corresponding Portfolio, which has
the same investment objective. There can be no assurance that any Fund or
Portfolio will achieve its investment objective.
INVESTMENT POLICIES
Each Portfolio invests only in high quality, U.S. dollar-denominated short-term
money market instruments that are determined by the Adviser, pursuant to
procedures adopted by the Core Trust Board, to be eligible for purchase and to
present minimal credit risks. High quality instruments include those that (i)
are rated (or, if unrated, are issued by an issuer with comparable outstanding
short-term debt that is rated) in the highest rating category by two nationally
recognized statistical rating organizations ("NRSROs") or, if only one NRSRO has
issued a rating, by that NRSRO or (ii) are otherwise unrated and determined by
the Adviser to be of comparable quality. A description of the rating categories
of certain NRSROs, such as Standard & Poor's Corporation, a Division of The
McGraw Hill Companies, and Moody's Investors Service, Inc., is contained in the
SAI.
Each Portfolio invests only in instruments that have a remaining maturity of 397
days or less (as calculated under Rule 2a-7 under the Investment Company Act of
1940 (the "1940 Act")) and maintains a dollar-weighted average portfolio
maturity of 90 days or less. Except to the limited extent permitted by Rule 2a-7
and except for U.S. Government Securities, each Portfolio will not invest more
than 5% of its total assets in the securities of any one issuer. As used in this
prospectus, "U.S. Government Securities" means obligations issued or guaranteed
as to principal and interest by the United States Government, its agencies or
instrumentalities and "Treasury Securities" means U.S. Treasury bills and notes
and other U.S. Government Securities which are guaranteed as to principal and
interest by the U.S. Treasury.
Although each Portfolio only invests in high quality money market instruments,
an investment in a Portfolio is subject to risk even if all securities in the
Portfolio's portfolio are paid in full at maturity. All money market
instruments, including U.S. Government Securities, can change in value when
there is a change in interest rates, the issuer's actual or perceived
creditworthiness or the issuer's ability to meet its obligations.
TREASURY CASH FUND
Treasury Cash Portfolio seeks to attain its investment objective by investing
substantially all of its assets in Treasury Securities and in repurchase
agreements backed by Treasury Securities.
GOVERNMENT CASH FUND
Government Cash Portfolio seeks to attain its investment objective by investing
substantially all of its assets in U.S. Government Securities and in repurchase
agreements backed by U.S. Government Securities. The U.S. Government Securities
in which the Portfolio may invest include Treasury Securities and securities
supported primarily or solely by the creditworthiness of the issuer, such as
securities of the Federal National Mortgage Association. There is no guarantee
that the U.S. Government will support securities not backed by its full faith
and credit. Accordingly, although these securities have historically involved
little risk of loss of principal if held to maturity, they may involve more risk
than securities backed by the U.S. Government's full faith and credit.
CASH FUND
Cash Portfolio seeks to attain its investment objective by investing in a broad
spectrum of money market instruments. The Portfolio may invest in (i)
obligations of domestic financial institutions, (ii) U.S. Government Securities
(see "Investment Objective and Policies - Government Cash Portfolio") and (iii)
corporate debt obligations of domestic issuers.
Financial institution obligations include negotiable certificates of deposit,
bank notes, bankers' acceptances and time deposits of banks (including savings
banks and savings associations) and their foreign branches. The Portfolio limits
its investments in bank obligations to banks which at the time of investment
have total assets in excess of one billion dollars. 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 debt obligations
<PAGE>
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.
Corporate debt obligations include commercial paper (short-term promissory
notes) issued by companies to finance their, or their affiliates', current
obligations. The Portfolio may also invest in commercial paper or other
corporate securities issued in "private placements" without registration under
the Securities Act of 1933. These "restricted securities" are restricted as to
disposition under the Federal securities laws in that any sale of these
securities may not be made absent registration under the Securities Act of 1933
or an appropriate exemption therefrom.
ADDITIONAL INVESTMENT POLICIES
Each Fund's and each Portfolio's investment objective and certain investment
limitations, as described in the SAI, may not be changed without approval of the
holders of a majority of the Fund's or Portfolio's, as applicable, outstanding
voting securities (as defined in the 1940 Act). Except as otherwise indicated in
this prospectus or in the SAI, investment policies of a Fund or a Portfolio may
be changed by the applicable board of trustees without shareholder approval.
Each Portfolio may borrow money for temporary or emergency purposes (including
the meeting of redemption requests), but not in excess of 33 1/3% of the value
of the Portfolio's total assets. Borrowing for purposes other than meeting
redemption requests will not exceed 5% of the value of the Portfolio's total
assets. Each Portfolio is permitted to hold cash in any amount pending
investment in securities and may invest in other investment companies that
intend to comply with Rule 2a-7 and have substantially similar investment
objectives and policies. To the extent a Portfolio invests in other money funds,
it will indirectly bear the expenses of those funds. A further description of
the Funds' and the Portfolios' investment policies is contained in the SAI.
REPURCHASE AGREEMENTS. Each Portfolio may seek additional income or liquidity by
entering into repurchase agreements. Repurchase agreements are transactions in
which a Portfolio purchases a security and simultaneously commits to resell that
security to the seller at an agreed-upon price on an agreed-upon future date,
normally one to seven days later. The resale price reflects a market rate of
interest that is not related to the coupon rate or maturity of the purchased
security. The Portfolios' custodian holds the underlying collateral, which is
maintained at not less than 100% of the repurchase price. Repurchase agreements
involve certain risks not associated with direct investment in securities. The
Portfolios, however, intend to enter into repurchase agreements only with
sellers which the Adviser believes present minimal credit risks in accordance
with guidelines established by the Core Trust Board. In the event that a seller
defaulted on its repurchase obligation, however, a Portfolio might suffer a
loss.
LIQUIDITY. To ensure adequate liquidity, each Portfolio may not invest more than
10% of its net assets in illiquid securities, including repurchase agreements
not entitling the Portfolio to payment of principal within seven days. There may
not be an active secondary market for securities held by a Portfolio. The value
of securities that have a limited market tend to fluctuate more than those that
have an active market. For this reason, a Portfolio could suffer a loss with
respect to such securities. The Adviser monitors the liquidity of the
Portfolios' investments, but there can be no guarantee that an active secondary
market will exist.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. In order to assure itself of being
able to obtain securities at prices which the Adviser believes might not be
available at a future time, each Portfolio may purchase securities on a
when-issued or delayed delivery basis. Securities so purchased are subject to
market price fluctuation and no interest on the securities accrues to a
Portfolio until delivery and payment take place. Accordingly, the value of the
securities on the delivery date may be more or less than the purchase price.
Commitments for when-issued or delayed delivery transactions will be entered
into only when a Portfolio has the intention of actually acquiring the
securities. Failure by the other party to deliver a security purchased by a
Portfolio may result in a loss or missed opportunity to make an alternative
investment.
VARIABLE AND FLOATING RATE SECURITIES. The securities in which the Portfolios
invest may have variable or floating rates of interest. These securities pay
interest at rates that are adjusted periodically according to a specified
formula, usually with reference to some interest rate index or market interest
rate. The interest paid on these securities is a function primarily of the index
or market rate upon which the interest rate adjustments are based. Securities
with ultimate maturities of greater than 397 days may be purchased only in
accordance with the provisions to Rule 2a-7. Under that Rule, only those
long-term instruments that have demand features that comply with certain
requirements and certain long-term U.S. Government Securities may be purchased.
Similar to fixed rate debt instruments, variable and floating rate instruments
are subject to changes in value based on changes in market interest rates or
changes in the issuer's creditworthiness.
<PAGE>
No Portfolio may purchase a variable or floating rate security whose interest
rate is adjusted based on a long-term interest rate or index, on more than one
interest rate or index, or on an interest rate or index that materially lags
short-term market rates (these prohibited securities are often referred to as
"derivative" securities). All variable and floating rate securities purchased by
a Portfolio will have an interest rate that is adjusted based on a single
short-term rate or index, such as the Prime Rate.
FINANCIAL INSTITUTION GUIDELINES. Treasury Cash Portfolio and Government Cash
Portfolio invest only in instruments which, if held directly by a bank or bank
holding company organized under the laws of the United States or any state
thereof, would be assigned to a risk-weight category of no more than 20% under
the current risk based capital guidelines adopted by the Federal bank
regulators. In addition, these Portfolios limit their investments to those
permissible for Federally chartered credit unions under applicable provisions of
the Federal Credit Union Act and the applicable rules and regulations of the
National Credit Union Administration. Government Cash Portfolio limits its
investments to investments that are legally permissible for Federally chartered
savings associations without limit as to percentage and to investments that
permit Fund shares to qualify as liquid assets and as short-term liquid assets.
4. MANAGEMENT
The business of the Trust is managed under the direction of the Board and the
business of Core Trust is managed under the direction of the Core Trust Board.
The Board formulates the general policies of the Funds and meets periodically to
review the results of the Funds, monitor investment activities and practices and
discuss other matters affecting the Fund and the Trust. The SAI contains general
background information about the trustees and officers of the Trust and of Core
Trust.
ADMINISTRATOR AND INVESTMENT ADVISER
Forum supervises the overall management of the Trust, including overseeing the
Trust's receipt of services, advising the Trust and the Trustees on matters
concerning the Trust and its affairs, and providing the Trust with general
office facilities and certain persons to serve as officers. For these services
and facilities, Forum receives a fee at an annual rate of 0.05% of the daily net
assets of each Fund. Forum also serves as administrator of Core Trust and
provides administrative services for each Portfolio that are similar to those
provided to the Funds. For its administrative services to the Portfolios, Forum
receives a fee at an annual rate of 0.05% of the average daily net assets of
each Portfolio.
As of the date hereof Forum and its affiliates acted as administrator and
distributor of registered investment companies with assets of approximately $38
billion. As of the date of this Prospectus, Forum, FFS, the Adviser and the
Trust's transfer agent were each controlled by John Y. Keffer, an officer and
Trustee of the Trust and of Core Trust. Forum, FFS and the Adviser are located
at Two Portland Square, Portland, Maine 04101.
Subject to the general supervision of the Core Trust Board, the Adviser makes
investment decisions for each Portfolio and monitors the Portfolios'
investments. In addition to the Portfolios, the Adviser currently provides
investment advisory services to six other mutual funds, including one money
market fund. Under supervision of the Adviser, Mr. Anthony R. Fischer, Jr. acts
as each Portfolio's portfolio manager pursuant to a consulting agreement with
the Adviser.
For its services, the Adviser receives from each Portfolio an advisory fee based
upon the total average daily net assets of the three Portfolios ("Total
Portfolio Assets") that is calculated on a cumulative basis as follows: 0.06% of
the first $200 million of Total Portfolio Assets, 0.04% of the next $300 million
of Total Portfolio Assets, and 0.03% of the remaining Total Portfolio Assets.
DISTRIBUTOR
FFS, a registered broker-dealer and member of the National Association of
Securities Dealers, Inc., serves as each Fund's distributor. FFS acts as the
agent of the Trust in connection with the offering of shares of the Funds. In
order to facilitate the distribution of Investor Shares, the Trust has adopted a
plan of distribution (the "Plan") pursuant to Rule 12b-1 under the 1940 Act with
respect to each Fund's Investor Shares. Under the Plan, FFS receives a fee at an
annual rate of 0.25% of the average daily net assets of each Fund attributable
to Investor Shares as compensation for FFS's services as distributor. From this
amount, FFS may make payments to various financial institutions, including
broker-dealers, banks and trust companies as compensation for services or
reimbursement of expenses in connection with the distribution of shares or the
provision of various shareholder services. If the distribution related expenses
of FFS exceed its Rule 12b-1 fees for any Fund, the Fund will not be obligated
to pay FFS an additional amount and if FFS's distribution related expenses are
less than its Rule 12b-1 fees, FFS will realize a profit.
<PAGE>
SHAREHOLDER SERVICING
TRANSFER AND DIVIDEND DISBURSING AGENT. Forum Shareholder Services, LLC (the
"Transfer Agent"), a registered transfer agent, acts as the Trust's transfer
agent and dividend disbursing agent. The Transfer Agent maintains an account for
each shareholder of the Funds (unless such accounts are maintained by
sub-transfer agents or processing agents) and performs other transfer agency and
related functions.
The Transfer Agent is authorized to subcontract any or all of its functions to
one or more qualified sub-transfer agents or processing agents, which may be its
affiliates, who agree to comply with the terms of the Transfer Agent's agreement
with the Trust. The Transfer Agent may pay those agents for their services, but
no such payment will increase the Transfer Agent's compensation from the Trust.
For its services, the Transfer Agent is paid a transfer agent fee at an annual
rate of 0.20% of the average daily net assets of each Fund attributable to
Investor Shares plus $12,000 per year for each Fund and certain account and
additional class charges and is reimbursed for certain expenses incurred on
behalf of the Funds.
SHAREHOLDER SERVICE AGENTS. The Trust has adopted a shareholder service
agreement ("Shareholder Service Agreement") which provides that, as compensation
for Forum's service activities with respect to the Investor Shares, the Trust
shall pay Forum a fee at an annual rate of 0.20% of the average daily net assets
attributable to Investor Shares. Forum is authorized to enter into shareholder
servicing agreements pursuant to which a shareholder servicing agent, on behalf
of its customers, performs certain shareholder services not otherwise provided
by the Transfer Agent. As compensation for its services, the shareholder
servicing agent, which will be a Participating Organization, is paid a fee by
Forum of up to 0.20% of the average daily net assets of Investor Shares owned by
investors for which the shareholder service agent maintains a servicing
relationship. Certain shareholder servicing agents may be subtransfer or
processing agents.
Among the services provided by shareholder servicing agents are answering
customer inquiries regarding the manner in which purchases, exchanges and
redemptions of shares of the Trust may be effected and other matters pertaining
to the Trust's services; providing necessary personnel and facilities to
establish and maintain shareholder accounts and records; assisting shareholders
in arranging for processing purchase, exchange and redemption transactions;
arranging for the wiring of funds; guaranteeing shareholder signatures in
connection with redemption orders and transfers and changes in
shareholder-designated accounts; integrating periodic statements with other
customer transactions; and providing such other related services as the
shareholder may request.
EXPENSES
Each Fund bears all of its expenses, which include Trust expenses attributable
to the Fund, which are allocated to the Fund, and expenses not specifically
attributable to any Fund, which are allocated among the Funds in proportion to
their average net assets. Each service provider may elect to waive (or continue
to waive) all or a portion of its fees and may reimburse a Fund for certain
expenses. Any such waivers or reimbursements will have the effect of increasing
the Fund's performance for the period during which the waiver or reimbursement
is in effect. No fee waivers may be recouped at a later date.
5. PURCHASES OF SHARES
GENERAL INFORMATION
All transactions in Fund shares are effected through the Transfer Agent, which
accepts orders for purchases only from shareholders of record and new investors.
The minimum initial investment in Investor Shares is $5,000. The minimum
subsequent investment is $100. Shareholders of record will receive from the
Trust monthly statements listing all account activity during the statement
period. The Trust reserves the right in the future to modify, limit or terminate
any shareholder privilege upon appropriate notice.
Fund shares are sold on a continuous basis at their next determined net asset
value on all Fund Business Days. Fund shares are issued immediately following
the next determination of the Fund's net asset value made after an order for the
shares in proper form, accompanied by funds on deposit at a Federal Reserve Bank
("Federal Funds"), is received by the Transfer Agent. An investor's funds will
not be accepted or invested by a Fund during the period before the Fund's
receipt of Federal Funds. The Trust reserves the right to reject any
subscription for the purchase of Fund shares.
Investors may obtain the account application necessary to open an account or
obtain additional information or assistance by contacting the Trust at
800-754-8757 or writing Imperial Securities Corporation at the following
address:
Imperial Securities Corporation
9920 South La Cienega Boulevard
14th Floor
Inglewood, California 90301
<PAGE>
Purchase orders for Investor Shares will be accepted on Fund Business Days until
3:00 p.m., Pacific time. In order to receive distributions for the day of
investment, orders and payment must be received by the Transfer Agent as
follows:
Order Must be Received by Payment Must be Received by
------------------------- ---------------------------
11:00 a.m., Pacific time 1:00 p.m., Pacific time
If a purchase order is transmitted to the Transfer Agent after 11:00 a.m.,
Pacific time, or the wire is received after 1:00 p.m., Pacific time, the
investor will not receive a distribution on that day. On days that the New York
Stock Exchange or San Francisco Federal Reserve Bank closes early or the Public
Securities Association recommends that the government securities markets close
early, the Trust may advance the time by which the Transfer Agent must receive
completed wire purchase orders and the cut-off times in the above table.
INITIAL PURCHASE PROCEDURES
BY BANK WIRE. To make an initial investment in a Fund using the federal wire
system for transmittal of money among banks, an investor should first telephone
the Transfer Agent at 800-754-8757 to obtain an account number. The investor
should then wire the investor's money immediately to:
Imperial Bank
ABA# 122201444
For Credit To: Forum Shareholder Services, LLC
Account #: 09075-933
Re: [Name of Fund] - Investor Shares
Account #:__________________________
Account Name:_________________________
The investor should then promptly complete and mail the account application.
Payment in the form of a bank wire is treated as a Federal Funds payment
received at the time the wire is received.
BY MAIL. Investors may send a check made payable to the Trust along with a
completed account application to the Transfer Agent at the address listed above.
Checks are accepted at full value subject to collection.
THROUGH FINANCIAL INSTITUTIONS. Shares may be purchased and redeemed through
certain broker-dealers, banks and other financial institutions ("Participating
Organizations"). Participating Organizations may charge a fee for their services
and may otherwise act as processing agents. Participating Organizations are
responsible for promptly transmitting purchase, redemption and other requests to
the Funds.
Investors who purchase shares in this manner will be subject to the procedures
of their Participating Organization, which may include investment minimums,
cutoff times and other restrictions in addition to, or different from, those
applicable to shareholders who invest in a Fund directly. Investors purchasing
Fund shares in this manner should acquaint themselves with their Participating
Organization's procedures and should read this Prospectus in conjunction with
any materials and information provided by their Participating Organization.
Investors purchasing shares in this manner may or may not be the shareholder of
record and, subject to their Participating Organization's procedures, may have
Fund shares transferred into their name. Certain states permit shares to be
purchased and redeemed only through registered broker-dealers, including FFS.
SUBSEQUENT INVESTMENTS
There is a $100 minimum for subsequent investments in a Fund, which may be made
by bank wire, by check or through Participating Organizations. Shareholders
using the wire system for subsequent investments should first telephone the
Transfer Agent at 800-754-8757 to notify it of the wire transfer.
6. REDEMPTIONS OF SHARES
GENERAL INFORMATION
Fund shares may be redeemed without charge at their next determined net asset
value on any Fund Business Day following acceptance by the Transfer Agent of the
redemption order in proper form (and any supporting documentation which the
Transfer Agent may require). There is no minimum period of investment and no
restriction on the frequency of redemptions. Redemption proceeds are paid by
check mailed to the shareholder's record address immediately following any
redemption unless the shareholder has elected wire redemption privileges. The
right of redemption may not be suspended nor the payment dates postponed except
when the New York Stock Exchange is closed (or when trading thereon is
<PAGE>
restricted) for any reason other than its customary weekend or holiday closings
or under any emergency or other circumstance as determined by the SEC.
Redemption proceeds from the Portfolios may be made wholly or partially in
portfolio securities if the Adviser determines it to be in the best interests of
the Portfolio. Similarly, redemption proceeds from a Fund may be made wholly or
partially in portfolio securities if it is determined to be in the best
interests of the Fund.
Redemption orders for Investor Shares will be accepted on Fund Business Days
until 3:00 p.m., Pacific time. In order to receive redemption proceeds by wire,
a redemption order must be received by the Transfer Agent by 11:00 a.m., Pacific
time.
For redemption orders received after 11:00 a.m., Pacific time, the Transfer
Agent will wire proceeds the next Fund Business Day. On days that the New York
Stock Exchange or San Francisco Federal Reserve Bank closes early or the Public
Securities Association recommends that the government securities markets close
early, the Trust may advance the time by which the Transfer Agent must receive
completed wire redemption orders.
If a shareholder elects telephone redemption or exchange privileges, as long as
the Trust employs reasonable procedures to insure that telephone orders are
genuine (which include recording certain transactions and the use of immediate
written confirmation by facsimile or otherwise), the Trust, the Transfer Agent
and FFS are not responsible for the authenticity of telephone instructions or
losses, if any, resulting from unauthorized telephone redemption or exchange
requests. Shareholders should verify the accuracy of telephone instructions
immediately upon receipt of confirmation statements.
REDEMPTION PROCEDURES
Shareholders that wish to redeem shares by telephone or to have redemption
proceeds transmitted by bank wire must elect these options by properly
completing the appropriate sections of their account application.
Shareholders may make a redemption in any amount by sending a written request to
the Transfer Agent accompanied by any share certificates that may have been
issued to the shareholder or, for shareholders that have elected telephone
redemption privileges, by calling the Transfer Agent and providing the
shareholder's account number, the exact name in which the shareholder's shares
are registered and a shareholder identification number. During times of drastic
economic or market changes, the telephone redemption privilege may be difficult
to implement.
BANK WIRE REDEMPTION. For redemptions of more than $5,000, a shareholder that
has elected wire redemption privileges may request a Fund to transmit redemption
proceeds by Federal Funds wire to a bank account designated on the shareholder's
account application.
BY CHECK. Shareholders electing check writing privileges will be provided with
redemption drafts ("checks") drawn on the Fund's account which may be made out
in an amount of $500 or more. When a check is presented for payment, the number
of shares required to cover the amount of the check will be redeemed from the
shareholder's account. If the amount of a check is greater than the value of the
shares owned by the shareholder for which certificates have not been issued, the
check will not be honored. If the amount of the check is less than $500, the
check will be honored and shareholders will be charged a $10 fee, which will be
paid by an immediate redemption from the shareholder's account. Shareholders
will be subject to the Trust's rules and regulations governing the check writing
privilege, as amended from time to time. The check writing privilege is not
available for IRA accounts.
SIGNATURE GUARANTEES. A signature guarantee is required for written requests to
redeem shares whose value exceeds $50,000 (other than an exchange) and for any
instruction to change the shareholder's record name, to redeem shares in an
account for which the address or registration has changed within the last 30
days, to transmit redemption proceeds to an account other than the address of
record or a preauthorized bank account or to a person other than the registered
owners or to an account with a different registration, to change the
shareholder's distribution election or the telephone redemption or other option
elected on an account. In addition, all share certificates submitted for
redemption (or exchange) must be endorsed by the shareholder and in some cases
must have a signature guarantee. Signature guarantees may be provided by any
eligible institution acceptable to the Transfer Agent, including a bank, a
broker, a dealer, a national securities exchange, a credit union, or a savings
association that is authorized to guarantee signatures (notarized signatures are
not sufficient). When a signature guarantee is required, the signature of each
person required to sign for the account must be guaranteed.
OTHER REDEMPTION MATTERS. Share certificates are issued only to shareholders of
record upon their written request and no certificates are issued for fractional
shares. Shares for which certificates have been issued may not be redeemed or
exchanged by telephone. Due to the cost to the Trust of maintaining smaller
accounts, the Trust reserves the right to redeem, upon not less than 60 days'
written notice, all shares in any Fund account with an aggregate net asset value
of less than $5,000, unless an investment is made to restore the minimum value.
<PAGE>
The Transfer Agent will deem a shareholder's account "lost" if correspondence to
the shareholder's address of record is returned for six months, unless the
Transfer Agent determines the shareholder's new address. When an account is
deemed lost, all distributions on the account will be reinvested in additional
Investor Shares. In addition, the amount of any outstanding (unpaid for six
months or more) checks for distributions that have been returned to the Transfer
Agent will be reinvested and the checks will be canceled.
EXCHANGE PROGRAM
Investors in Investor Shares of a Fund are entitled to exchange their shares for
Investor Shares of another Fund if that Fund's shares are eligible for sale in
the shareholder's state. Exchanges are subject to minimum investment
requirements of the Funds. There is currently no limit on the number of
exchanges a shareholder may make. The Trust reserves the right in the future to
modify, limit or terminate the exchange privilege upon appropriate notice to
shareholders.
Exchanges may be accomplished by written instructions to the Transfer Agent or,
for shareholders that have elected telephone exchange privileges, by calling the
Transfer Agent and providing the shareholder's account number, the exact name in
which the shareholder's shares are registered and the shareholder's social
security or taxpayer identification number. During times of drastic economic or
market changes, the telephone exchange privilege may be difficult to implement.
7. DISTRIBUTIONS AND TAX MATTERS
DISTRIBUTIONS
Distributions of each Fund's net investment income are declared daily and paid
monthly following the close of the last Fund Business Day of the month. Net
capital gain realized by a Fund, if any, will be distributed annually. Fund
shares become entitled to receive distributions on the day the shares are issued
as described under "Purchases of Shares - General Information." Shares redeemed
are not entitled to receive distributions declared on or after the day on which
the redemption becomes effective.
Shareholders may choose either to have all distributions of net investment
income reinvested in additional Fund shares or received in cash. In addition,
shareholders may have all distributions of net capital gain reinvested in
additional Fund shares or paid in cash. All distributions are treated in the
same manner for Federal income tax purposes whether received in cash or
reinvested in shares of the Fund.
TAX MATTERS
TAX STATUS OF THE FUNDS. Each Fund intends to continue to qualify to be taxed as
a "regulated investment company" under the Internal Revenue Code of 1986, as
amended. Accordingly, each Fund will not be liable for Federal income taxes on
the net investment income and capital gain distributed to its shareholders.
Because the Funds intend to distribute all of their net investment income and
net capital gain each year, the Funds should also avoid Federal excise taxes.
Distributions paid by each Fund out of its net investment income (including
realized net short-term capital gain) are taxable to the shareholders of the
Fund as ordinary income. Distributions of net capital gain, if any, realized by
a Fund are taxable to shareholders as capital gain, regardless of the length of
time the Fund shares were held by the shareholder at the time of distribution.
Different capital gain rates will apply depending on the holding period of the
securities sold by the Fund that generated the gain.
THE PORTFOLIOS. The Portfolios are not required to pay Federal income taxes on
their net investment income and capital gain, as they are treated as
partnerships for Federal income tax purposes. All interest, distributions and
gains and losses of a Portfolio are deemed to be "passed through" to the
respective Fund in proportion to the Fund's holdings of the Portfolio,
regardless of whether the interest, distributions or gains have been distributed
by the Portfolio or losses have been realized by the Portfolio.
GENERAL. Each Fund is required by Federal law to withhold 31% of reportable
payments (which may include income and capital gain distributions) paid to a
non-corporate shareholder unless that shareholder certifies in writing that the
social security or other tax identification number provided is correct and that
the shareholder is not subject to backup withholding.
Reports containing appropriate information with respect to the Federal income
tax status of distributions paid during the year by the Fund will be mailed to
shareholders shortly after the close of each calendar year.
The foregoing is only a summary of some of the Federal tax considerations
generally affecting the Funds and their shareholders. The SAI contains a further
discussion. Because other Federal, state or local tax considerations may apply,
investors are urged to consult their tax advisors.
<PAGE>
8. OTHER INFORMATION
FUND PERFORMANCE
Investor Shares' performance may be advertised. All performance information is
based on historical results, is not intended to indicate future performance and,
unless otherwise indicated, is net of all expenses. The Funds may advertise
yield, which shows the rate of income a Fund has earned on its investments as a
percentage of the Fund's share price. To calculate yield, a Fund takes the
interest income it earned from its portfolio of investments for a specified
period (net of expenses), divides it by the average number of shares entitled to
receive distributions, and expresses the result as an annualized percentage rate
based on the Fund's share price at the end of the period. A Fund's compounded
annualized yield assumes the reinvestment of distributions paid by the Fund,
and, therefore will be somewhat higher than the annualized yield for the same
period. Each class' performance will vary. The Funds' advertisements may also
reference ratings and rankings among similar funds by independent evaluators
such as Morningstar, Lipper Analytical Services, Inc. or IBC Financial Data,
Inc. In addition, the performance of the Funds may be compared to recognized
indices of market performance. The comparative material found in a Fund's
advertisements, sales literature, or reports to shareholders may contain
performance rankings. This material is not to be considered representative or
indicative of future performance.
DETERMINATION OF NET ASSET VALUE
The Trust determines the net asset value per share of each Fund as of 1:00 p.m.,
Pacific time, on each Fund Business Day. Net asset value per share is determined
by dividing the value of the Fund's net assets (the value of its interest in the
Portfolio and other assets less its liabilities) by the number of shares
outstanding at the time the determination is made. In order to more easily
maintain a stable net asset value per share, each Portfolio's portfolio
securities are valued at their amortized cost (acquisition cost adjusted for
amortization of premium or accretion of discount) in accordance with Rule 2a-7.
The Portfolios will only value their portfolio securities using this method if
the Core Trust Board believes that it fairly reflects the market-based net asset
value per share. The Portfolios' other assets, if any, are valued at fair value
by or under the direction of the Core Trust Board.
THE TRUST AND ITS SHARES
The Trust is registered with the SEC as an open-end management investment
company and was organized as a business trust under the laws of the State of
Delaware on July 10, 1992. The Board has the authority to issue an unlimited
number of shares of beneficial interest of separate series with no par value per
share and to create classes of shares within each series. Except for the Funds,
no other series of shares are currently authorized.
As of December [ ], 1998, there were no outstanding Investor Shares of
Government Cash Fund, and no shareholder beneficially owned more than 25% of the
outstanding Investor Shares of the other two Funds. From time to time various
shareholders may own a large percentage of a class or of a Fund. These
shareholders may be deemed to be controlling persons of a class, a Fund or the
Trust, and may be able to greatly affect (if not determine) the outcome of any
shareholder vote.
Shares issued by the Trust have no conversion, subscription or preemptive
rights. Voting rights are not cumulative and the shares of each series or class
of the Trust will be voted separately except when an aggregate vote is required
by law. Separate votes are taken by each class of a Fund if a matter affects
just that class. The Trust is not required to hold annual meetings of
shareholders, and it is anticipated that shareholder meetings will be held only
when specifically required by law. Shareholders have available procedures for
requiring the Trustees to call a meeting and for removing Trustees.
FUND STRUCTURE
OTHER CLASSES OF SHARES. In addition to Investor Shares, each Fund may create
and issue shares of other classes of securities. Each Fund currently has two
other classes of shares authorized, Universal Shares and Institutional Shares.
Universal Shares are offered to the general public and have an investment
minimum of $1,000,000. Institutional Shares are offered solely through banks,
trust companies and certain other financial institutions, and their affiliates
and correspondents, for investment of their funds or funds for which they act in
a fiduciary, agency or custodial capacity. Universal Shares and Institutional
Shares incur less expenses than Investor Shares. Except for certain differences,
each share of each class represents an undivided, proportionate interest in a
Fund. Each share of each Fund is entitled to participate equally in
distributions and the proceeds of any liquidation of that Fund except that, due
to the differing expenses borne by the various classes, the amount of
distributions will differ among the classes.
CORE TRUST STRUCTURE. Each Fund invests all of its assets in its corresponding
Portfolio of Core Trust, a business trust organized under the laws of the State
of Delaware in September 1994 and registered under the 1940 Act as an open-end
management investment company. Accordingly, a Portfolio directly acquires its
own securities and its corresponding Fund acquires an indirect interest in those
<PAGE>
securities. The assets of each Portfolio belong only to, and the liabilities of
the Portfolio are borne solely by, the Portfolio and no other portfolio of Core
Trust. Upon liquidation of a Portfolio, investors in the Portfolio would be
entitled to share pro rata in the net assets of the Portfolio available for
distribution to investors.
THE PORTFOLIOS. A Fund's investment in a Portfolio is in the form of a
non-transferable beneficial interest. Besides Treasury Cash Fund, Government
Cash Fund and Cash Fund, other investment companies invest in Treasury Cash
Portfolio, Government Cash Portfolio and Cash Portfolio. All investors in a
Portfolio will invest on the same terms and conditions as the Funds and will pay
a proportionate share of the Portfolio's expenses. The Portfolios normally will
not hold meetings of investors except as required by the 1940 Act. Each investor
in a Portfolio will be entitled to vote in proportion to the relative value of
its interest in the Portfolio. On most issues subject to a vote of investors, as
required by the 1940 Act and other applicable law, a Fund will solicit proxies
from shareholders of the Fund and will vote its interest in a Portfolio in
proportion to the votes cast by its shareholders. If there are other investors
in a Portfolio, there can be no assurance that any issue that receives a
majority of the votes cast by a Fund's shareholders will receive a majority of
votes cast by all investors in the Portfolio.
CONSIDERATIONS OF INVESTING IN A PORTFOLIO. A Fund's investment in a Portfolio
may be affected by the actions of other investors in the Portfolio. For example,
if other investors redeemed their interest in the Portfolio, the Portfolio's
remaining investors (including the Fund) might, as a result, experience higher
pro rata operating expenses. A Fund may withdraw its entire investment from a
Portfolio at any time if the Board determines that it is in the best interests
of the Fund and its shareholders to do so. The Fund might withdraw, for example,
if other investors in the Portfolio, by a vote of shareholders, changed the
investment objective or policies of the Portfolio in a manner not acceptable to
the Board or not permissible by the Fund. A withdrawal could result in a
distribution in kind of portfolio securities (as opposed to a cash distribution)
by the Portfolio. That distribution could result in a less diversified portfolio
of investments for the Fund, resulting in increased risk, and could affect
adversely the liquidity of the Fund's portfolio. If the Fund decided to convert
those securities to cash, it would incur transaction costs. If the Fund withdrew
its investment from the Portfolio, the Board would consider what action might be
taken, including the management of the Fund's assets in accordance with its
investment objective and policies by the Adviser or the investment of all of the
Fund's investable assets in another pooled investment entity having
substantially the same investment objective as the Fund. Forum has only three
years of experience in managing funds that utilize its "Core and Gateway(R)"
structure.
ADDITIONAL INFORMATION. Each class of a Fund (and any other investment company
that invests in a Portfolio) may have a different expense ratio and different
sales charges, including distribution fees, and each class' (and investment
company's) performance will be affected by its expenses and sales charges. For
more information on any other class of shares of the Funds or concerning any
other investment companies that invest in a Portfolio, investors may contact FFS
at 800-754-8757. If an investor invests through a financial institution, the
investor may also contact their financial institution to obtain information
about the other classes or any other investment company investing in a
Portfolio.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, THE SAI AND THE
FUNDS' OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFERING OF THE FUNDS'
SHARES, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER
MAY NOT LAWFULLY BE MADE.
<PAGE>
M O N A R C H F U N D S
================================================================================
TREASURY CASH FUNDS
GOVERNMENT CASH FUND
CASH FUND
STATEMENT OF ADDITIONAL INFORMATION
January [ ], 1999
Monarch Funds is a registered, open-end management investment company. This
Statement of Additional Information supplements the Prospectuses (dated January
1, 1999) offering shares of each class of Treasury Cash Fund, Government Cash
Fund and Cash Fund, each a portfolio of the Trust, and should be read only in
conjunction with the applicable Prospectus, a copy of which may be obtained
without charge by contacting the Trust at P.O. Box 446, Portland, Maine 04101.
TABLE OF CONTENTS
Page
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1. INVESTMENT POLICIES 2
2. INVESTMENT LIMITATIONS 6
3. INVESTMENTS BY FINANCIAL INSTITUTIONS 8
4. PERFORMANCE DATA AND ADVERTISING 9
5. MANAGEMENT 11
6. DETERMINATION OF NET ASSET VALUE 21
7. PORTFOLIO TRANSACTIONS 21
8. ADDITIONAL PURCHASE AND REDEMPTION INFORMATION 22
9. TAXATION 24
10. OTHER INFORMATION 24
11. FINANCIAL STATEMENTS 25
APPENDIX A - DESCRIPTION OF CERTAIN SECURITIES RATINGS 27
APPENDIX B - PERFORMANCE DATA 29
APPENDIX C- MISCELLANEOUS TABLES 31
<PAGE>
<PAGE>
DEFINITIONS
As used in this Statement of Additional Information, the following terms shall
have the meanings listed:
"Administrator" means Forum Administrative Services, LLC
"Adviser" means Forum Investment Advisors, LLC.
"Board" means the Board of Trustees of the Trust.
"Core Trust" means Core Trust (Delaware).
"Core Trust Board" means the Board of Trustees of Core Trust.
"FSS" means Forum Shareholder Services, LLC.
"Forum" means Forum Fund Services, LLC.
"FAcS" means Forum Accounting Services, LLC.
"Fund" means each of Treasury Cash Fund, Government Cash Fund and Cash
Fund.
"Fund Business Day" shall have the meaning ascribed thereto in the
Prospectuses of the Funds.
"NRSRO" means a nationally recognized statistical rating organization.
"Portfolio" means each of Treasury Cash Portfolio, Government Cash
Portfolio and Cash Portfolio.
"SAI" means this Statement of Additional Information.
"SEC" means the U.S. Securities and Exchange Commission.
"Trust" means Monarch Funds.
"U.S. Government Securities" means obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities.
"1940 Act" means the Investment Company Act of 1940, as amended.
1. INVESTMENT POLICIES
Each Fund currently seeks to achieve its investment objective by investing all
of its investable assets in its corresponding Portfolio of Core Trust.
Each Fund has a fundamental investment policy that allows it to invest all of
its investable assets in its corresponding Portfolio. The investment policies of
each Fund and its corresponding Portfolio are substantially identical.
Therefore, although this and the following sections discuss the investment
policies of the Portfolios (and the responsibilities of the Core Trust Board),
it applies equally to the Funds (and the Board). Information with respect to
periods prior to September 1, 1995, the date the Funds initially invested in the
Portfolios, reflects information with respect to the Funds.
Following is information pertaining to the investment policies of each
Portfolio, which supplements the investment policy information contained in the
Funds' Prospectuses.
<PAGE>
The Portfolio currently are prohibited from purchasing any security issued by
the Federal Home Loan Mortgage Corporation. This does not prohibit the
Portfolios from entering into repurchase agreements collateralized with
securities issued by the Federal Home Loan Mortgage Corporation.
RATINGS AS INVESTMENT CRITERIA
Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's Corporation, a
Division of The McGraw Hill Companies ("S&P") and other NRSROs are private
services that provide ratings of the credit quality of debt obligations. A
description of the higher quality ratings assigned to debt securities by several
NRSROs is included in Appendix A to this SAI. The Portfolios use these ratings
in determining whether to purchase, sell or hold a security. It should be
emphasized, however, that ratings are general and not absolute standards of
quality. Consequently, securities with the same maturity, interest rate and
rating may have different market prices. Subsequent to its purchase by a
Portfolio, an issue of securities may cease to be rated or its rating may be
reduced. The Adviser, and in certain cases the Core Trust Board, will consider
such an event in determining whether the Portfolio should continue to hold the
obligation. Credit ratings attempt to evaluate the safety of principal and
interest payments and do not evaluate the risks of fluctuations in market value.
Also, rating agencies may fail to make timely changes in credit ratings in
response to developments and events, so that an issuer's current financial
condition may be better or worse than the rating indicates.
SMALL BUSINESS ADMINISTRATION SECURITIES
Each Portfolio may purchase securities issued by the Small Business
Administration ("SBA"). SBA securities are variable rate securities that carry
the full faith and credit of the United States Government, and generally have an
interest rate that resets monthly or quarterly based on a spread to the Prime
rate. SBA securities generally have maturities at issue of up to 25 years. No
Portfolio may purchase an SBA Security if, immediately after the purchase, (1)
the Portfolio would have more than 15% of its net assets invested in SBA
securities, (2) the total unamortized premium on SBA Securities with a premium
held by the Portfolio divided by the sum of the par amount of all SBA securities
with a premium held by the portfolio would exceed 0.25% of the Portfolios' net
assets or (3) the total unamortized discount on SBA Securities with a discount
held by the Portfolio divided by the sum of the par amount of all SBA securities
with a discount held by the portfolio would exceed 0.25% of the Portfolios' net
assets. Premium is the amount above par for which a security is purchased and
discount is the amount below par for which a security is purchased.
MORTGAGE BACKED SECURITIES
The Portfolios may purchase adjustable rate mortgage backed or other asset
backed securities (such as SBA securities) that are U.S. Government Securities
or, in the case of Treasury Cash Portfolio, that are U.S. Treasury Securities.
These securities directly or indirectly represent a participation in, or are
secured by and payable from, adjustable rate mortgage or other loans which may
be secured by real estate or other assets. Unlike traditional debt instruments,
payments on these securities include both interest and a partial payment of
principal. Prepayments of the principal of underlying loans may shorten the
effective maturities of these securities. Some adjustable rate U.S. Government
Securities (or the underlying loans) are subject to caps or floors that limit
the maximum change in interest rate during a specified period or over the life
of the security.
Adjustable rate mortgage backed securities ("MBSs") are securities that have
interest rates that are reset at periodic intervals, usually by reference to
some interest rate index or market interest rate. Government Cash Portfolio and
Cash Portfolio will only invest in adjustable rate MBSs that are U.S. Government
Securities. MBSs represent an interest in a pool of mortgages made by lenders
such as commercial banks, savings associations, mortgage bankers and mortgage
brokers and may be issued by governmental or government-related entities or by
non-governmental entities such as commercial banks, savings associations,
mortgage bankers and other secondary market issuers.
Interests in pools of MBSs differ from other forms of debt securities which
normally provide for periodic payment of interest in fixed amounts with
principal payments at maturity or specified call dates. In contrast, MBSs
provide periodic payments which consist of interest and, in most cases,
principal. In effect, these payments are a "pass-through" of the periodic
<PAGE>
payments and optional prepayments made by the individual borrowers on their
mortgage loans, net of any fees paid to the issuer or guarantor of such
securities. Additional payments to holders of MBSs are caused by prepayments
resulting from the sale of the underlying property or the refinancing or
foreclosure of the underlying mortgage loans. Such prepayments may significantly
shorten the effective maturities of MBSs, and occur more often during periods of
declining interest rates.
Although the rate adjustment feature of MBSs may act as a buffer to reduce sharp
changes in the value of MBSs, these securities are still subject to changes in
value based on changes in market interest rates or changes in the issuer's
creditworthiness. Because the interest rate is reset only periodically, changes
in the interest rate on MBSs may lag behind changes in prevailing market
interest rates. Also, some MBSs (or the underlying mortgages) are subject to
caps or floors that limit the maximum change in interest rate during a specified
period or over the life of the security.
During the periods of declining interest rates, income to the Portfolios derived
from mortgages which are not prepared will decrease as the coupon rate resets
along with the decline in interest rates in contrast to the income on fixed-rate
mortgages, which will remain constant. At times, some of the MBSs in which the
Portfolios will invest will have higher-than-market interest rates, and will
therefore be purchased at a premium above their par value. Unscheduled
prepayments, which are made at par, will cause the Portfolios to suffer a loss
equal to the unamortized premium, if any.
During periods of rising interest rates, changes in the coupon rates of the
mortgages underlying the Portfolios' investments may lag behind changes in
market interest rates. This may result in a slightly lower value until the
coupons reset to market rates. Many MBSs in the Portfolios' portfolios will have
"caps" that limit the maximum amount by which the interest rate paid by the
borrower may change at each reset date or over the life of the loan and
fluctuation in interest rates above these levels could cause these securities to
"cap out" and to behave more like fixed-rate debt securities.
The Portfolios may purchase collateralized mortgage obligations ("CMOs"), which
are collateralized by MBSs or by pools of conventional mortgages. (See
"Investment by Shareholders that are Credit Unions - Government Cash Portfolio
and Treasury Cash Portfolio.") CMOs are typically structured with a number of
classes or series that have different maturities and are generally retired in
sequence. Each class of bonds receives periodic interest payments according to
the coupon rate on the bonds. However, all monthly principal payments and any
prepayments from the collateral pool are paid first to the "Class I"
bondholders. The principal payments are such that the Class 1 bonds will be
completely repaid no later than, for example, five years after the offering
date. Thereafter, all payments of principal are allocated to the next most
senior class of bonds until that class of bonds has been fully repaid. Although
full payoff of each class of bonds is contractually required by a certain date,
any or all classes of bonds may be paid off sooner than expected because of an
acceleration in pre-payments of the obligations comprising the collateral pool.
Since the inception of the mortgage-related pass-through security in 1970, the
market for these securities has expanded considerably. The size of the primary
issuance market and active participation in the secondary market by securities
dealers and many types of investors make government and government-related
pass-through pools highly liquid.
Government or private entities may create new types of MBSs in response to
changes in the market or changes in government regulation of such securities. As
new types of these securities are developed and offered to investors, the
Adviser may, consistent with the investment objective and policies of a
Portfolio, consider making investments in such new types of securities.
WHEN-ISSUED SECURITIES AND DELAYED DELIVERY SECURITIES
Each Portfolio may purchase securities on a when-issued or delayed delivery
basis. In those cases, the purchase price and the interest rate payable on the
securities are fixed on the transaction date and delivery and payment may take
place a month or more after the date of the transaction. At the time, a
Portfolio makes the commitment to purchase securities on a when-issued or
<PAGE>
delayed delivery basis, the Portfolio will record the transaction as a purchase
and thereafter reflect the value each day of such securities in determining its
net asset value. If a Portfolio chooses to dispose of the right to acquire a
when-issued security prior to its acquisition, it could, as with the disposition
of any other portfolio obligation, incur a gain or loss due to market
fluctuation. Failure of an issuer to deliver the security may result in the
Portfolio incurring a loss or missing an opportunity to make an alternative
investment. When a Portfolio agrees to purchase a security on a when-issued or
delayed delivery basis, its custodian will maintain in a segregated account
cash, U.S. Government Securities or other liquid securities with a market value
at all times at least equal to the amount of the Portfolio's commitment.
ILLIQUID SECURITIES
Each Portfolio may invest up to 10% of its net assets in illiquid securities.
The term "illiquid securities" for this purchase means repurchase agreements not
entitling the holder to payment of principal within seven days and securities
that are illiquid by virtue of legal or contractual restrictions on resale or
the absence of a readily available market.
The Core Trust Board has ultimate responsibility for determining whether
specific securities are liquid or illiquid. The Core Trust Board has delegated
the function of making day-to-day determination of liquidity to the Adviser and,
with respect to certain types of restricted securities which may be deemed to be
illiquid, has adopted guidelines to be followed by the Adviser. The Adviser
takes into account a number of factors in reaching liquidity decisions,
including but not limited to (1) the frequency of trades and quotations of the
security; (2) the number of dealers willing to purchase or sell the security and
the number of other potential buyers; (3) the willingness of dealers to
undertake to make a market in the security; (4) the nature of the marketplace
trades, including the time needed to dispose of the security, the method of
soliciting offers and the mechanics of the transfer; (5) whether the security is
registered; and (6) if the security is not traded in the United States, whether
it can be freely traded in a liquid foreign securities market. The Adviser
monitors the liquidity of the securities in each Portfolio's portfolio and
reports periodically to the Core Trust Board.
Certificates of deposit and fixed time deposits that carry an early withdrawal
penalty or mature in greater than seven days are treated by a Portfolio as
illiquid securities if there is no readily available market for the instrument.
REPURCHASE AGREEMENTS AND SECURITIES LOANS
In connection with entering into repurchase agreements and securities loans, the
Portfolios require continual maintenance by the Trust's custodian of the market
value of the underlying collateral in amounts equal to, or in excess of, the
repurchase price plus the transaction costs (including loss of interest) that
the Portfolios could expect repurchase obligation, a Portfolio might suffer a
loss to the extent that the proceeds from the sale of the collateral were less
than the repurchase price. In the event of a counterparty's bankruptcy, a
Portfolio might be delayed in, or prevented from, selling the collateral for the
Portfolio's benefit. The Adviser monitors the creditworthiness of its repurchase
agreement counterparties and securities borrowers under the Core Trust Board's
general supervision and pursuant to specific Core Trust Board adopted
procedures.
VARIABLE AND FLOATING RATE SECURITIES
The yield of variable and floating rate securities varies in relation to changes
in specific money market rates, such as the Prime rate. A "variable" interest
rate adjusts at predetermined intervals (for example, daily, weekly or monthly),
while a "floating" interest rate adjusts whenever a specified benchmark rate
(such as the bank prime lending rate) changes. These changes are reflected in
adjustments to the yields of the variable and floating rate securities, and
different securities may have different adjustment rates. Accordingly, as
interest rates increase or decrease, the capital appreciation or depreciation
may be less on these obligations than for fixed rates obligations. To the extent
that the Portfolios invest in long-term variable or floating rate securities,
the Adviser believes that the Portfolios may be able to take advantage of the
higher yield that is usually paid on long-term securities.
<PAGE>
Cash Portfolio also may purchase variable and floating rate master notes of
corporations, which are unsecured obligations redeemable upon notice that permit
investment of fluctuating amounts at varying rates of interest pursuant to
direct arrangement with the issuer of the instrument. These obligations include
master demand notes that permit investment of fluctuating amounts at varying
rates of interest pursuant to direct arrangement with the issuer of the
instrument. The issuer of these obligations often has the right, after a given
period, to prepay their outstanding principal amount of the obligations upon a
specified number of days' notice. These obligations generally are not traded,
nor generally is there an established secondary market for these obligations. To
the extent a demand note does not have a seven day or shorter demand feature and
there is no readily available market for the obligation, it is treated as an
illiquid security.
No Portfolio may purchase a variable or floating rate security whose interest
rate is adjusted based on a long-term interest rate or index, on two interest
rates or indexes, on an interest rate or index that materially lags short-term
market rates. All variable and floating rate securities purchased by the
Portfolio have an interest rate that is adjusted based on a single short-term
rate or index, such as the Prime rate.
INVESTMENT COMPANY SECURITIES
In connection with managing their cash positions, the Portfolios may invest in
the securities of other investment companies that are money market funds within
the limits proscribed by the 1940 Act. Under normal circumstances, each
Portfolio invests up to 15% of its assets in money market funds. Each Portfolio
only invests in money market funds when it has excess cash and the Adviser
believes that the investment is in the best interest of the Portfolio. In
addition to a Portfolio's expenses (including the various fees), as a
shareholder in another investment company, a Portfolio bears its pro rata
portion of the other investment company's expenses (including fees). Those
expenses are not part of the Portfolio's (or Fund's) expense ratio, but rather
are reflected in the yield of the investment in the money market fund.
ZERO-COUPON SECURITIES
All zero-coupon securities in which the Portfolio invests will have a maturity
of less than 13 months.
2. INVESTMENT LIMITATIONS
The Portfolios have adopted the following fundamental investment limitations
that cannot be changed without the affirmative vote of the lesser of (i) more
than 50% of the outstanding interests of the Portfolio or (ii) 67% of the
interests of the Portfolio present or represented at an interestholders meeting
at which the holders of more than 50% of the outstanding interests of the
Portfolio are present or represented. Each Portfolio may not:
(1) With respect to 75% of its assets, purchase a security other than a
U.S. Government Security if, as a result, more than 5% of the
Portfolio's total assets would be invested in the securities of a
single issuer.
(2) Purchase securities if, immediately after the purchase, more than
25% of the value of the Portfolio's total assets would be invested in
the securities of issuers having their principal business activities in
the same industry; provided, however, that there is no limit on
investments in U.S. Government Securities.
(3) Underwrite securities of other issuers, except to the extent that
the Portfolio may be considered to be acting as an underwriter in
connection with the disposition of portfolio securities.
(4) Purchase or sell real estate or any interest therein, except that
the Portfolio may invest in debt obligations secured by real estate or
interests therein or issued by companies that invest in real estate or
interests therein.
(5) Purchase or sell physical commodities or contracts relating to
physical commodities, provided that currencies and currency-related
contracts will not be deemed to be physical commodities.
<PAGE>
(6) Borrow money, except for temporary or emergency purposes (including
the meeting of redemption requests) and except for entering into
reverse repurchase agreements, provided that borrowings do not exceed
33 1/3% of the value of the Portfolio's total assets.
(7) Issue senior securities except as appropriate to evidence
indebtedness that the Portfolio is permitted to incur, and provided
that the Portfolio may issue shares of additional series or classes
that the Trustees may establish.
(8) Make loans except for loans of portfolio securities, through the
use of repurchase agreements, and through the purchase of debt
securities that are otherwise permitted investments.
(9) With respect to Government Cash Portfolio, purchase or hold any
security that (i) a Federally chartered savings association may not
invest in, sell, redeem, hold or otherwise deal pursuant to law or
regulation, without limit as to percentage of the association's assets
and (ii) pursuant to 12 C.F.R. Section 566.1 would cause shares of the
Portfolio not to be deemed to be short term liquid assets when owned by
Federally chartered savings associations.
The Portfolios have adopted the following nonfundamental investment limitations
that may be changed by the Core Trust Board without shareholder approval. Each
Portfolio may not:
(a) With respect to 100% of its assets, purchase a security other than
a U.S. Government Security if, as a result, more than 5% of the
Portfolio's total assets would be invested in the securities of a
single issuer, unless the investment is permitted by Rule 2a-7 under
the 1940 Act.
(b) Purchase securities for investment while any borrowing equaling 5%
or more of the Portfolio's total assets is outstanding; and if at any
time the Portfolio's borrowings exceed the Portfolio's investment
limitations due to a decline in net assets, such borrowings will be
promptly (within three days) reduced to the extent necessary to comply
with the limitations. Borrowing for purposes other than meeting
redemption requests will not exceed 5% of the value of the Portfolio's
total assets.
(c) Purchase securities that have voting rights, except the Portfolio
may invest in securities of other investment companies to the extent
permitted by the 1940 Act.
(d) Purchase securities on margin, or make short sales of securities,
except for the use of short-term credit necessary for the clearance of
purchases and sales of portfolio securities.
(e) Acquire securities or invest in repurchase agreements with respect
to any securities if, as a result, more than 10% of the Portfolio's net
assets (taken at current value) would be invested in repurchase
agreements not entitling the holder to payment of principal within
seven days and in securities that are illiquid by virtue of legal or
contractual restrictions on resale or the absence of a readily
available market.
Except as required by the 1940 Act, if a percentage restriction on investment or
utilization of assets is adhered to at the time an investment is made, a later
change in percentage resulting from a change in the market values of a
Portfolio's assets, the change in status of a security or purchases and
redemptions of shares will not be considered a violation of the limitation. For
purposes of limitation (2): (i) loan participations are considered to be issued
by both the issuing bank and the underlying corporate borrower; (ii) utility
companies are divided according to their services (for example, gas, gas
transmission, electronic and telephone will each be considered a separate
industry); and (iii) financial service companies will be classified according to
the end users of their services, for example, automobile finance, bank finance
and diversified finance will each be considered a separate industry.
Each Fund has adopted the same fundamental and nonfundamental investment
limitations. The Fund's fundamental limitations cannot be changed without the
affirmative vote of the lesser of (i) more than 50% of the outstanding shares of
<PAGE>
the Fund or (ii) 67% of the shares of the Fund present or represented at a
shareholders meeting at which the holders of more than 50% of the outstanding
shares of the Fund are present or represented. In addition, the Funds have
adopted a fundamental policy which provides that, notwithstanding any other
investment policy or restriction (whether fundamental or not), each Fund may
invest all of its assets in the securities of a single pooled investment fund
having substantially the same investment objectives, policies and restrictions
as the Fund or Portfolio, as applicable.
3. INVESTMENTS BY FINANCIAL INSTITUTIONS
INVESTMENT BY SHAREHOLDERS THAT ARE BANKS - GOVERNMENT CASH PORTFOLIO
Government Cash Portfolio invests only in instruments which, if held directly by
a bank or bank holding company organized under the laws of the United States or
any state thereof, would be assigned to a risk-weight category of no more than
20% under the current risk based capital guidelines adopted by the Federal bank
regulators (the "Guidelines"). In the event that the Guidelines are revised, the
Portfolio's portfolio will be modified accordingly, including by disposing of
portfolio securities or other instruments that no longer qualify under the
Guidelines. In addition, the Portfolio does not intend to hold in its portfolio
any securities or instruments that would be subject to restriction as to amount
held by a National bank under Title 12, Section 24 (Seventh) of the United
States Code. If the Portfolio's portfolio includes any instruments that would be
subject to a restriction as to amount held by a National bank, investment in the
Portfolio may be limited.
The Guidelines provide that shares of an investment fund are generally assigned
to the risk-weight category applicable to the highest risk-weighted security or
instrument that the fund is permitted to hold. Accordingly, Portfolio shares
should quality for a 20% risk weighting under the Guidelines. The Guidelines
also provide that, in the case of an investment fund whose shares should qualify
for a risk weighting below 100% due to limitations on the assets which it is
permitted to hold, bank examiners may review the treatment of the shares to
ensure that they have been assigned an appropriate risk-weight. In this
connection, the Guidelines provide that, regardless of the composition of an
investment fund's assets, shares of a fund may be assigned to the 100%
risk-weight category if it is determined that the fund engages in activities
that appear to be speculative in nature or has any other characteristics that
are inconsistent with a lower risk weighting. The Adviser has no reason to
believe that such a determination would be made with respect to the Portfolio.
Their are various subjective criteria for making this determination and,
therefore, it is not possible to provide any assurance as to how Portfolio
shares will be evaluated by bank examiners.
Before acquiring Fund shares, prospective investors that are banks or bank
holding companies, particularly those that are organized under the laws of any
country other than the United States or of any state, territory or other
political subdivision of the United States, and prospective investors that are
United States branches and agencies of foreign banks or Edge Corporations,
should consult all applicable laws, regulations and policies, as well as
appropriate regulatory bodies, to confirm that an investment in Fund shares is
permissible and in compliance with any applicable investment or other limits.
Fund shares held by National banks are generally required to be revalued
periodically and reported at the lower of cost or market value. Such shares may
also be subject to special regulatory reporting, accounting and tax treatment.
In addition, a bank may be required to obtain specific approval from its board
of directors before acquiring Fund shares, and thereafter may be required to
review its investment in a Fund for the purpose of verifying compliance with
applicable Federal banking laws, regulations and policies.
National banks generally must review their holdings of shares of a Fund at least
quarterly to ensure compliance with established bank policies and legal
requirements. Upon request, the Portfolios will make available to the Funds'
investors information relating to the size and composition of their portfolio
for the purpose of providing Fund shareholders with this information.
<PAGE>
INVESTMENT BY SHAREHOLDERS THAT ARE CREDIT UNIONS - GOVERNMENT CASH PORTFOLIO
AND TREASURY CASH PORTFOLIO
Government Cash Portfolio and Treasury Cash Portfolio limit their investments to
investments that are legally permissible for Federally chartered credit unions
under applicable provisions of the Federal Credit Union Act (including 12 U.S.C.
Section 1757(7), (8) and (15)) and the applicable rules and regulations of the
National Credit Union Administration (including 12 C.F.R. Part 703, Investment
and Deposit Activities), as such statutes and rules and regulations may be
amended. The Portfolios limit their investments to U.S. Government Securities
(including Treasury STRIPS) and repurchase agreements fully collateralized by
U.S. Government Securities. Certain U.S. Government Securities owned by
Government Cash Portfolio may be mortgage or asset backed, but, no such security
will be (1) a stripped mortgage backed security ("SMBS"), (2) a collateralized
mortgaged obligation ("CMO") or real estate mortgage investment conduit
("REMIC") that does not meet each of the tests outlined in 12 C.F.R. Section
703.100(e) or (3) a residual interest in a CMO or REMIC. Each Portfolio also may
invest in reverse repurchase agreements in accordance with 12 C.F.R. 703.100(j)
to the extent otherwise permitted hereunder and in the Prospectus.
INVESTMENTS BY SHAREHOLDERS THAT ARE SAVINGS ASSOCIATIONS - GOVERNMENT CASH
PORTFOLIO
Government Cash Portfolio limits its investments to investments that are legally
permissible for Federally chartered savings associations without limit as to
percentage under applicable provisions of the Home Owners' Loan Act (including
12 U.S.C. Section 1464) and the applicable rules and regulations of the Office
of Thrift Supervision, as such statutes and rules and regulations may be
amended. In addition, the Portfolio limits its investments to investments that
are permissible for an open-end investment company to hold and would permit
shares of the investment company to qualify as liquid assets under 12 C.F.R.
Section 566.1(g) and as short-term liquid assets under 12 C.F.R. Section
566.1(h). These policies may be amended only by approval of the Fund's
shareholders and Portfolio's interestholders, as applicable.
4. PERFORMANCE DATA AND ADVERTISING
For a listing of certain performance data as of August 31, 1998, see Appendix B.
YIELD INFORMATION
Each Fund may provide current annualized and effective annualized yield
quotations for each class based on its daily distributions. These quotations may
from time to time be used in advertisements, shareholder reports or other
communications to shareholders. All performance information supplied by a Fund
is historical and is not intended to indicate future returns.
In performance advertising, the Funds may compare any of their performance
information with data published by independent evaluators such as Morningstar,
Lipper Analytical Services, Inc., IBC Financial Data, Inc. or CDA/Wiesenberger
or other companies which track the investment performance of investment
companies ("Fund Tracking Companies"). The Funds may also compare any of their
performance information with the performance of recognized stock, bond and other
indexes. The Funds may also refer in such materials to mutual fund performance
rankings and other data published by Fund Tracking Companies. Performance
advertising may also refer to discussion of a Fund and comparative mutual fund
data and ratings reported in independent periodicals, such as newspapers and
financial magazines.
Any current yield quotation of a class of a Fund which is used in such a manner
as to be subject to the provisions of Rule 482(d) under the Securities Act of
1933, as amended, shall consist of an annualized historical yield, carried at
least to the nearest hundredth of one percent, based on a specific
seven-calendar-day period and shall be calculated by dividing the net change
during the seven-day period in the value of an account having a balance of one
<PAGE>
share at the beginning of the period by the value of the account at the
beginning of the period, and multiplying the quotient by 365/7. For this
purpose, the net change in account value would reflect the value of additional
shares purchased with distributions declared on the original share and
distributions declared on both the original share and any such additional
shares, but would not reflect any realized gains or losses from the sale of
securities or any unrealized appreciation or depreciation on portfolio
securities. In addition, any effective annualized yield quotation used by a Fund
shall be calculated by compounding the current yield quotation for such period
by adding 1 to the product, raising the sum to a power equal to 365/7, and
subtracting 1 from the result.
Although published yield information is useful to investors in reviewing a
class' performance, investors should be aware that each Fund's yield fluctuates
from day to day and that the class' yield for any given period is not an
indication or representation by the Fund of future yields or rates of return on
the Fund's shares. Also, Participating Organizations (as that term is used in
the Prospectus) may charge their customers direct fees in connection with an
investment in a Fund, which will have the effect of reducing the class' net
yield to those shareholders. The yields of a class are not fixed or guaranteed,
and an investment in the Fund is not insured or guaranteed. Accordingly, yield
information may not necessarily be used to compare shares of the Fund with
investment alternatives which, like money market instruments or bank accounts,
may provide a fixed rate of interest. Also, it may not be appropriate directly
to compare a Fund's yield information to similar information of investment
alternatives which are insured or guaranteed.
Income calculated for the purpose of determining a class' yield differs from
income as determined for other accounting purposes. Because of the different
accounting methods used, and because of the compounding assumed in yield
calculations, the yield quoted for a class may differ from the rate of
distribution the class paid over the same period or the rate of income reported
in the Fund's financial statements.
OTHER PERFORMANCE AND SALES LITERATURE MATTERS
Total returns quoted in sales literature reflect all aspects of a Fund's return,
including the effect of reinvesting capital gain distributions. Average annual
returns generally are calculated by determining the growth or decline in value
of a hypothetical historical investment in a Fund over a stated period, and then
calculating the annually compounded percentage rate that would have produced the
same result if the rate of growth or decline in value had been constant over the
period. While average annual returns are a convenient means of comparing
investment alternatives, investors should realize that the performance is not
constant over time but changes from year to year, and that average annual
returns represent averaged figures as opposed to the actual year-to-year
performance of the Funds.
Average annual total return is calculated by finding the average annual
compounded rates of return of a hypothetical investment, over such periods
according to the following formula:
P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value: ERV is the value, at the end
of the applicable period, of a hypothetical $1,000 payment
made at the beginning of the applicable period.
OTHER ADVERTISING MATTERS
The Funds may advertise other forms of performance. For example, average annual
and cumulative total returns may be quoted as a percentage or as a dollar
amount, and may be calculated for a single investment, a series of investments,
and/or a series of redemptions over any time period. Total returns may be broken
down into their components of income and capital (including capital gains and
changes in share price) in order to illustrate the relationship of these factors
<PAGE>
and their contributions to total return. Any performance information may be
presented numerically or in a table, graph or similar illustration.
A Fund may also include various information in their advertisements. Information
included in the Fund's advertisements may include, but is not limited to (1)
portfolio holdings and portfolio allocation as of certain dates, such as
portfolio diversification by instrument type, by instrument or by maturity, (2)
descriptions of the portfolio managers of the Funds or the Portfolios and the
portfolio management staff of the Adviser or summaries of the views of the
portfolio managers with respect to the financial markets, (3) the results of a
hypothetical investment in a Fund over a given number of years, including the
amount that the investment would be at the end of the period, (4) the effects of
earning Federally and, if applicable, state tax-exempt income from the Fund or
investing in a tax-deferred account, such as an individual retirement account
and (5) the net asset value, net assets or number of shareholders of a Fund as
of one or more dates.
In connection with its advertisements a Fund may provide "shareholders letters"
which serve to provide shareholders or investors an introduction into the
Fund's, the Portfolio's, the Trust's, Core Trust's or any of the Trust's of Core
Trust's service provider's policies or business practices.
5. MANAGEMENT
TRUSTEES AND OFFICERS OF THE TRUST
The Trustees and Officers of the Trust and their principal occupation during the
past five years are set forth below. Each Trustee who is an "interested person"
(as defined by the 1940 Act) of the Trust is indicated by an asterisk.
Rudolph I. Estrada, Trustee (age 50)
President and Chief Executive Officer of Summit Group, a banking and business
consulting company, since 1987. He is Professor (Adjunct) of Finance and
Management and Director of the Small Business Institute at California State
University; and Director, Pacific Crest Loan & Investment, Augura, California.
His address is 625 Fair Oaks Avenue, Suite 101, South Pasadena, California
91030.
Maurice J. DeWald, Trustee (age 58)
Chairman and Chief Executive Officer, Verity Financial Group, Inc. (a financial
advisory firm) since May 1991. Mr. DeWald also serves as a director of Tenet
Healthcare Corporation, ARV AssistedLiving, Inc.,Dai-Ichi Kangyo Bank and
Advanced Materials Group, Inc. of California. His address is 19200 Von Karman
Avenue, Suite 400, Irvine, California 92612.
Robert M. Franko, Trustee (age 51)
President of Imperial Financial Group, Inc. from February 1997, Chairman of
Imperial Trust Company from March 1995 and President of Imperial Trust Company
from September 1997 to September 1998. From February 1995 to April 1997 Mr.
Franko was Executive Vice President and Chief Financial Officer of Imperial Bank
and Imperial Bancorp. and held various positions with other Imperial Bancorp.
subsidiaries. Prior thereto, Mr. Franko served in various capacities with the
Springfield and Morningside Groups, including President and Chief Executive
Officer of Springfield Bank & Trust Limited, Gibraltar and Managing Director of
Springfield Securities Limited. His address is [ ].
John Y. Keffer,* Trustee, Chairman and President (age 56)
President, Forum Financial Group, LLC (mutual fund services company holding
company). Mr. Keffer is also a director and/or officer of various registered
investment companies for which the various Forum Financial Group of Companies
provides services. His address is Two Portland Square, Portland, Maine 04101.
<PAGE>
Jack J. Singer, Trustee (age 54)
President, Imperial Securities Corp. since November 1992, Senior Vice President,
Imperial Bank since November 1987 and Chairman and President of Imperial Asset
Management, Inc. since August 1997. His address is 9920 South LaCienega
Boulevard, Inglewood, California 90301.
David I. Goldstein, Vice President and Secretary (age 37)
General Counsel, Forum Financial Group, LLC, with which he has been associated
since 1991. Mr. Goldstein also serves as an officer of various registered
investment companies for which the various Forum Financial Group of Companies
provides services. His address is Two Portland Square, Portland, Maine 04101.
Sara M. Morris, Treasurer (age 35)
Chief Financial Officer, Forum Financial Group, LLC, with which she has been
associated since 1994. Prior thereto, from 1991 to 1994, Ms. Morris was
Controller of Wright Express Corporation (a national credit card company) and
for six years prior thereto was employed at Deloitte & Touche LLP as an
accountant. Ms. Morris is also an officer of various registered investment
companies for which the Forum Financial Group of companies provides services.
Her address is Two Portland Square, Portland, Maine 04101.
Beth P. Hanson, Assistant Secretary (age 32)
Fund Administration Manager, Forum Financial Group, LLC, with which she has been
associated since 1995. Prior thereto, Ms. Hanson was an English language
instructor with the Overseas Training Center, Inc. in Osaka, Japan. Her address
is Two Portland Square, Portland, Maine 04101.
TRUSTEES AND OFFICERS OF CORE TRUST
The Trustees and officers of Core Trust and their principal occupations during
the past five years are set forth below. Each Trustee who is an "interested
person" (as defined by the 1940 Act) of Core Trust is indicated by an asterisk.
Messrs. Keffer, Goldstein and Hong, officers of Core Trust, all currently serve
as officers of the Trust. Accordingly, for background information pertaining to
these officers, see "Trustees and Officers of the Trust" above.
John Y. Keffer*, Chairman and President
Costas Azariadis, Trustee (age 55)
Professor of Economics, University of California, Los Angeles, since
July 1992. His address is Department of Economics, University of
California, Los Angeles, 405 Hilgard Avenue, Los Angeles, California
90024.
James C. Cheng, Trustee (age 56)
President of Technology Marketing Associates (a marketing consulting
company) since September 1991. His address is 27 Temple Street,
Belmont, Massachusetts 02178.
J. Michael Parish, Trustee (age 54)
Partner at the law firm of Reid and Priest, LLP, since 1995. Prior
thereto, he was a partner at Winthrop Stimson Putnam & Roberts from
1989-1995. His address is 40 West 57th Street,, New York, New York
10019.
<PAGE>
Thomas G. Sheehan, Vice President (age 44)
Managing Director, Forum Financial Group, LLC, with which he has been
associated since October, 1993. Prior thereto, Mr. Sheehan was a
Special Counsel in the Division of Investment Management of the U.S.
Securities and Exchange Commission in Washington, D.C. Mr. Sheehan
also serves as an officer of other registered investment companies for
which the various Forum Financial Group of Companies provides
services. His address is Two Portland Square, Portland, Maine 04101.
Stacey Hong, Treasurer (age 32)
Director, Fund Accounting, Forum Financial Group, LLC, with which he
has been associated since April 1992. Mr. Hong also serves as an
officer of various registered investment companies for which the
various Forum Financial Group of Companies provides services. His
address is Two Portland Square, Portland, Maine 04101.
David I. Goldstein, Vice President and Secretary
Pamela J. Wheaton, Assistant Treasurer (age 38)
Senior Manager, Fund Accounting, Forum Financial Group, LLC, with which
she has been associated since 1989. Ms. Wheaton is also an officer of
other registered investment companies for which the Forum Financial
Group of Companies provides services. Her address is Two Portland
Square, Portland, Maine 04101.
Leslie K. Klenk, Secretary (age 34)
Assistant Counsel, Forum Financial Group, LLC, with which she has been
associated since April 1998. Prior thereto, Ms. Klenk was Vice
President and Associate General Counsel at Smith Barney Inc. Ms. Klenk
is also an officer of other investment companies for which the Forum
Financial Group of Companies provides services. Her address is Two
Portland Square, Portland, Maine 04101.
Pamela Stutch, Assistant Secretary (age 31)
Fund Administrator, Forum Financial Group, LLC, with which she has
been associated since May 1998. Prior thereto, Ms. Stutch attended
Temple University School of Law and graduated in 1997. Ms. Stutch was
a legal intern for the Maine Department of the Attorney General. Ms.
Stutch is also an officer of other investment companies for which the
Forum Financial Group of Companies provides services. Her address is
Two Portland Square, Portland, Maine 04101.
TRUSTEE AND OFFICER COMPENSATION
Each Trustee of the Trust is paid $3,000 ($2,000 prior to September 1, 1998) for
each Board meeting attended (whether in person or by electronic communication)
and is paid $3,000 for each 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 meetings of the Board. No officer of the Trust is
compensated by the Trust, but officers are reimbursed for travel and related
expenses incurred in attending meetings of the Board. Since commencement of the
Trust's operations, Messrs. Keffer and Singer have not accepted any fees for
their services as Trustees.
The following table provides the aggregate compensation including fees, travel
and related expenses paid to each Trustee for the twelve months ended August 31,
1998. The Trust has not adopted any form of retirement plan covering Trustees or
officers.
<TABLE>
<S> <C> <C> <C> <C>
Accrued Annual
Aggregate Pension Benefits Upon Total
Trustee Compensation Benefits Retirement Compensation
------- ------------ -------- ---------- ------------
Mr. DeWald $9,115 None None $9,115
Mr. Estrada $10,459 None None $10,459
Mr. Franko $1,731 None None $1,731
Mr. Keffer $538 None None $538
Mr. Singer $653 None None $653
</TABLE>
Each Trustee of Core Trust is paid $1,000 for each meeting of the Core Trust
Board attended (whether in person or by electronic communication) plus $100 for
each active portfolio of Core Trust and is paid $1000 for each committee meeting
attended on a date when the Core Trust Board meeting is not held. Trustees are
also reimbursed for travel and related expenses incurred in attending meetings
of the Core Trust Board. No officer of Core Trust is compensated or reimbursed
for expenses by Core Trust. Since commencement of the Trust's operations, Mr.
Keffer has not accepted any fees for his services as Trustee. Core Trust trustee
expenses were less than $600 for the twelve months ended August 31, 1998.
The following table provides the aggregate compensation paid to each trustee of
Core Trust for the twelve months ended August 31, 1998. Core Trust has not
adopted any form of retirement plan covering trustees or officers of Core Trust.
<TABLE>
<S> <C> <C> <C> <C>
Accrued Annual
Aggregate Pension Benefits Upon Total
Trustee Compensation Benefits Retirement Compensation
------- ------------ -------- ---------- ------------
Mr. Azariadis $1,880 None None $1,880
Mr. Parish $1,548 None None $1,548
Mr. Cheng $1,421 None None $1,421
Mr. Keffer None None None None
</TABLE>
INVESTMENT ADVISER
The Funds do not have an investment adviser. In the event that the Board
determines it is in the best interest of a Fund to withdraw its investment from
its corresponding Portfolio, the Board will determine whether to invest in a
similar portfolio or to directly retain an investment adviser. Shareholder
approval of a new investment advisory agreement between the Trust and the
Adviser would not be necessary, provided that the agreement is substantially
similar to the current Investment Advisory Agreement of Core Trust with respect
to the portfolio in which the Fund invests.
The Adviser furnishes at its own expense all services, facilities and personnel
necessary in connection with managing each Portfolio's investments and effecting
portfolio transactions for each Portfolio. The Investment Advisory Agreement
between Core Trust and the Adviser will continue in effect only if its
continuance is specifically approved at least annually by the Core Trust Board
or by vote of the respective Portfolio's shareholders, and in either case, by a
majority of the Core Trust trustees who are not parties to the Investment
Advisory Agreement or interested persons of any such party at a meeting called
for the purpose of voting on the Investment Advisory Agreement.
The Investment Advisory Agreement is terminable without penalty by Core Trust
with respect to a Portfolio on 60 days' written notice when authorized either by
vote of the Portfolio's interestholders or by a vote of a majority of the Core
Trust Board, or by the Adviser on 60 days' written notice and will automatically
terminate in the event of its assignment. The Investment Advisory Agreement also
provides that, with respect to each Portfolio, the Adviser shall not be liable
for any error of judgment or mistake of law or for any act or omission in the
performance of the Adviser's duties or by reason of reckless disregard of the
Adviser's obligations and duties under the Investment Advisory Agreement.
For the services provided by the Adviser, Core Trust pays the Adviser, with
respect to each Portfolio, a fee based upon the total average daily net assets
of the Portfolios ("Total Portfolio Assets") at an annual rate of 0.06% of the
first $200 million of Total Portfolio Assets, 0.04% of the next $300 million of
Total Portfolio Assets, and 0.03% of the remaining Total Portfolio Assets. These
fees are accrued by Core Trust daily with respect to each Portfolio in the
proportion that Portfolio's average daily net assets bear to Total Portfolio
Assets and are payable monthly in arrears on the first day of each calendar
<PAGE>
month for services performed under the agreement during the prior calendar
month. The Adviser may carry out any of its obligations under the Investment
Advisory Agreement by employing, subject to the supervision of the Core Trust
Board, one or more subadvisers who are registered as investment advisers or who
are exempt from registration. The Investment Advisory Agreement provides that
the Adviser shall not be liable for any act or omission of any subadviser except
with respect to matters as to which the Adviser specifically assumes
responsibility in writing. There are currently no investment subadvisory
agreements with respect to the Portfolios.
The Adviser was established in 1987 and is indirectly wholly-owned and
controlled by John Y. Keffer. In connection with the January 2, 1998 acquisition
of Linden Asset Management, Inc., the former investment adviser of each
Portfolio, the Adviser has entered into a consulting agreement with a new
company solely owned by Anthony R. Fischer, Jr., former owner, president and
sole director of Linden, under which Mr. Fischer continues to provide portfolio
management services to the Portfolios under the supervision of the Adviser. Mr.
Fischer has over 20 years experience in managing pools of assets. He has managed
the Portfolios' (and prior to September 1995, the Funds') assets since October
1992. Prior thereto, he was a Senior Vice President and Treasurer of United
California Savings Bank, Santa Ana, California from 1984 to 1989 and,
immediately prior thereto, a Manager for five years at PaineWebber Jackson &
Curtis, New York, New York.
Table 1 in Appendix C shows the dollar amount of investment advisory fees paid
by the Portfolios and the Funds.
MANAGER AND DISTRIBUTOR
MANAGEMENT SERVICES. The Administrator supervises the overall management of the
Trust (which includes, among other responsibilities, negotiation of contracts
and fees with, and monitoring of performance and billing of, the transfer agent
and custodian and arranging for maintenance of books and records of the Trust),
and provides the Trust with general office facilities pursuant to an
Administration Agreement with the Trust. The Administration Agreement will
remain in effect for a period of twelve months with respect to a Fund and
thereafter is automatically renewed each year for an additional term of one
year.
The Administration Agreement terminates automatically if it is assigned and may
be terminated without penalty with respect to any Fund by vote of that Fund's
shareholders or by either party on not more than 60 days' written notice. The
Administration Agreement provides that the Administrator shall not be liable for
any error of judgment or mistake of law or for any act or omission in the
administration or management of the Trust, except for willful misfeasance, bad
faith or gross negligence in the performance of the Administrator's duties or by
reason of reckless disregard of its obligations and duties under the
Administration Agreement.
At the request of the Board, the Administrator provides persons satisfactory to
the Board to serve as officers of the Trust. Similarly, at the request of the
Core Trust Board, the Administrator provides persons satisfactory to the Core
Trust Board to serve as officers of Core Trust. Those officers, as well as
certain other employees and Trustees of the Trust and Core Trust, may be
directors, officers or employees of the Administrator, the Adviser, Forum or
their affiliates.
Table 2 in Appendix C shows the dollar amount of administration fees paid by the
Funds. Prior to December 1, 1997, Forum acted as administrator of the Trust
under an agreement substantially identical to the Administration Agreement.
The Administrator provides substantially similar services to each Portfolio
pursuant to an administration agreement with Core Trust. The provisions of that
agreement are substantially similar to those of the Trust's Administration
Agreement.
Table 2 of Appendix C shows the dollar amount of administration fees paid by the
Portfolios. Prior to June 1, 1997, Forum acted as administrator of Core Trust
under an agreement substantially identical to the administration agreement
between Core Trust and the Administrator.
<PAGE>
DISTRIBUTION SERVICES. Forum is the Trust's distributor and acts as the agent of
the Trust in connection with the offering of shares of the Funds (and each class
thereof) pursuant to a Distribution Agreement with the Trust. With respect to
each Fund, the Distribution Agreement will continue in effect for twelve months
and will continue in effect thereafter only if its continuance is specifically
approved at least annually by the Board or by vote of the shareholders entitled
to vote thereon, and in either case, by a majority of the Trustees who (1) are
not parties to the Distribution Agreement, (2) are not interested persons of any
such party or of the Trust and (3) with respect to any class for which the Trust
has adopted a distribution plan, have no direct or indirect financial interest
in the operation of that distribution plan or in the Distribution Agreement, at
a meeting called for the purpose of voting on the Distribution Agreement. All
subscriptions for shares obtained by Forum are directed to the Trust for
acceptance and are not binding on the Trust until accepted by it. Forum receives
no compensation or reimbursement of expenses for the distribution services
provided pursuant to the Distribution Agreement except as may be paid with
respect to the Investor class pursuant to that class' distribution plan. Prior
to January 1, 1999, Forum Financial Services, Inc. acted as distributor of the
Trust under an agreement substantially identical to the Distribution Agreement.
The Distribution Agreement provides that Forum shall not be liable for any error
of judgment or mistake of law or in any event whatsoever, except for willful
misfeasance, bad faith or gross negligence in the performance of Forum's duties
or by reason of reckless disregard of its obligations and duties under the
Distribution Agreement.
The Distribution Agreement is terminable with respect to a Fund without penalty
by the Trust on 60 days' written notice when authorized either by vote of the
Fund's shareholders or by a vote of a majority of the Board, or by Forum on 60
days' written notice, and will automatically terminate in the event of its
assignment. With respect to any class that has adopted a distribution plan, the
Distribution Agreement is also terminable upon similar notice by a majority of
the Trustees who (1) are not interested persons of the Trust and (2) have no
direct or indirect financial interest in the operation of that distribution plan
or in the Distribution Agreement ("Qualified Trustees"). The Distribution
Agreement will automatically terminate in the event of its assignment.
Forum acts as sole placement agent for interests in the Portfolios and receives
no compensation for those services from the Portfolios. Prior to January 1,
1999, Forum Financial Services, Inc. acted as placement agent for the
Portfolios.
EXPENSES
The Trust pays all of its expenses, including: interest charges, taxes,
brokerage fees and commissions; expenses of issue, repurchase and redemption of
shares; premiums of insurance for the Trust, its Trustees and officers and
fidelity bond premiums; applicable fees, interest charges and expenses of third
parties, including the Trust's manager, investment adviser, investment
subadviser, custodian, transfer agent and fund accountant; fees of pricing,
interest, distribution, credit and other reporting services; costs of membership
in trade associations; telecommunications expenses; funds transmission expenses;
auditing, legal and compliance expenses; costs of forming the Trust and
maintaining its existence; costs of preparing and printing the Trust's
prospectuses, statements of additional information and shareholder reports and
delivering them to existing shareholders; expenses of meetings of shareholders
and proxy solicitations therefore; costs of maintaining books and accounts and
preparing tax returns; costs of reproduction, stationery and supplies; fees and
expenses of the Trust's Trustees; compensation of the Trust's officers and
employees who are not employees of the Adviser, Forum or their respective
affiliates and costs of other personnel (who may be employees of the Adviser,
Forum or their respective affiliates) performing services for the Trust; costs
of Trustee meetings; SEC registration fees and related expenses; and state or
foreign securities laws registration fees and related expenses.
Fund expenses also include the Fund's pro rata portion of expenses of its
corresponding Portfolio.
INVESTOR CLASS DISTRIBUTION PLAN
In accordance with Rule 12b-1 under the 1940 Act, with respect to the Investor
Class of each Fund, the Trust adopted a distribution plan (the "Investor Class
Plan") which provides for the payment to Forum of a Rule 12b-1 fee at the annual
<PAGE>
rate of 0.25% of the average daily net assets of the Investor class of each Fund
as compensation for Forum's services as distributor.
The Investor Class Plan provides that all written agreements relating to that
plan must be approved by the Board, including a majority of the Qualified
Trustees. In addition, the Investor Class Plan (as well as the Distribution
Agreement) requires the Trust and Forum to prepare and submit to the Board, at
least quarterly, and the Board will review, written reports setting forth all
amounts expended under the Investor Class Plan and identifying the activities
for which those expenditures were made.
The Investor Class Plan provides that it will remain in effect for one year from
the date of its adoption and thereafter shall continue in effect provided it is
approved at least annually by the shareholders or by the Board, including a
majority of the Qualified Trustees. The Investor Class Plan further provides
that it may not be amended to increase materially the costs which may be borne
by the Trust for distribution pursuant to the Investor Class Plan without
shareholder approval and that other material amendments of the Investor Class
Plan must be approved by the Qualified Trustees. The Investor Class Plan may be
terminated at any time by the Board, by a majority of the Qualified Trustees, or
by a Fund's Investor class shareholders.
Table 3 in Appendix C shows the dollar amount of fees paid under the Investor
Class Plan with respect to each Fund.
For the years ended August 31, 1998, 1997, 1996 and 1995, all amounts paid to
Forum under the investor Class Plan were paid out to various financial
intermediaries not affiliated with Forum for their distribution services.
TRANSFER AGENT
Forum Shareholder Services, LLC ("FSS") acts as transfer agent for the Trust
pursuant to a Transfer Agency Agreement. The Transfer Agency Agreement is
automatically renewed each year for an additional term of one year.
Among the responsibilities of the FSS as transfer agent for the Trust are, with
respect to shareholders of record: (1 (1) answering customer inquiries regarding
account status and history, the manner in which purchases and redemptions of
shares of the Funds may be effected and certain other matters pertaining to the
Funds; (2) assisting shareholders in initiating and changing account
designations and addresses; (3) providing necessary personnel and facilities to
establish and maintain shareholder accounts and records, assisting in processing
purchase and redemption transactions and receiving wired funds; (4) transmitting
and receiving funds in connection with customer orders to purchase or redeem
shares; (5) verifying shareholder signatures in connection with changes in the
registration of shareholder accounts; (6) furnishing periodic statements and
confirmations of purchases and redemptions; (7) arranging for the transmission
of proxy statements, annual reports, prospectuses and other communications from
the Trust to its shareholders; (8) arranging for the receipt, tabulation and
transmission to the Trust of proxies executed by shareholders with respect to
meetings of shareholders of the Trust; and (9) providing such other related
services as the Trust or a shareholder may reasonably request.
FSS or any sub-transfer agent or processing agent may also act and receive
compensation for acting as custodian, investment manager, nominee, agent or
fiduciary for its customers or clients who are shareholders of the Funds with
respect to assets invested in the Funds. FSS or any sub-transfer agent or other
processing agent may elect to credit against the fees payable to it by its
clients or customers all or a portion of any fee received from the Trust or from
FSS with respect to assets of those customers or clients invested in the Funds.
FSS, Forum or sub-transfer agents or processing agents retained by the FSS may
be Participating Organizations and, in the case of sub-transfer agents or
processing agents, may also be affiliated persons of FSS or Forum.
For its transfer agency services, FSS receives an annual fee from each Fund of
0.05% of each Fund's average daily net assets attributable to Universal Shares
and 0.20% of each Fund's average daily net assets attributable to Institutional
Shares and Investor Shares. Prior to September 1, 1995, the fee was 0.25% with
respect to each class of shares. In addition, FSS receives a fee from each Fund
of $6,000 per year for each class of shares above one for which there are shares
<PAGE>
outstanding plus an annual per shareholder account fee of $120 per Universal
Shares shareholder and $24 per Institutional Shares and Investor Shares
shareholder. Prior to September 1, 1995, the shareholder account fee was $18 per
account.
FAcS acts as interestholder recordkeeper for each Portfolio. See "Management --
Fund Accountant" below.
Table 4 in Appendix C shows the dollar amount of fees paid under the Transfer
Agent Agreement with respect to each Fund. Prior to November 1, 1998, Forum
Financial Corp. served as transfer agent of the Trust under an agreement
substantially identical to the Transfer Agency Agreement.
SHAREHOLDER SERVICE AGREEMENTS
The Trust has adopted a shareholder service agreement ("Shareholder Service
Agreement") with respect to the Institutional class and the Investor class of
each Fund which provides that the Administrator may obtain the services of
financial institutions, including Imperial Trust Company (the Trust's
custodian), to act as shareholder servicing agents for their customers invested
in those classes.
In adopting the Shareholder Service Agreement, the Trustees considered among
other things whether (1) the Shareholder Service Agreement is in the best
interests of the applicable classes and their respective shareholders, (2) the
services to be performed pursuant to the Shareholder Service Agreement are
required for the operation of the applicable classes, (3) the service
organizations can provide services at least equal, in nature and quality, to
those provided by others, including the Trust, providing similar services, and
(4) the fees for such services are fair and reasonable in light of the usual and
customary charges made by other entities, especially non-affiliated entities,
for services of the same nature and quality.
The Shareholder Service Agreement provides that all written agreements relating
to that plan must be approved by the Board, including a majority of the
Qualified Trustees. In addition, the Shareholder Service Agreement (as well as
the various shareholder service agreements) requires the Trust and the
Administrator to prepare and submit to the Board, at least quarterly, and the
Board will review written reports setting forth all amounts expended under the
plan and identifying the activities for which those expenditures were made.
The Shareholder Service Agreement provides that it will remain in effect for one
year from the date of its adoption and thereafter shall continue in effect
provided it is approved at least annually by the shareholders or by the Board,
including a majority of the Qualified Trustees. The Shareholder Service
Agreement further provides material amendments of the agreement must be approved
by the Qualified Trustees. The Shareholder Service Agreement may be terminated
at any time by the Board or by a majority of the Qualified Trustees.
The Trust may enter into shareholder servicing agreements with various
Shareholder Servicing Agents pursuant to which those agents, as agent for their
customers, may agree among other things to: (1) answer shareholder inquiries
regarding the manner in which purchases, exchanges and redemptions of shares of
the Trust may be effected and other matters pertaining to the Trust's services;
(2) provide necessary personnel and facilities to establish and maintain
shareholder accounts and records; (3) assist shareholders in arranging for
processing purchase, exchange and redemption transactions; (4) arrange for the
wiring of funds; (5) guarantee shareholder signatures in connection with
redemption orders and transfers and changes in shareholder-designated accounts;
(6) integrate periodic statements with other shareholder transactions; and (7)
provide such other related services as the shareholder may request.
As Participating Organizations, some Shareholder Servicing Agents also may
impose certain conditions on their customers, subject to the terms of the
Trust's Prospectus, in addition to or different from those imposed by the Trust,
such as requiring a minimum initial investment or by charging their customers a
direct fee for their services. Some Shareholder Servicing Agents may also act
and receive compensation for acting as custodian, investment manager, nominee,
agent or fiduciary for its customers or clients who are shareholders of the
Funds with respect to assets invested in the Funds. These Shareholder Servicing
Agents may elect to credit against the fees payable to it by its clients or
<PAGE>
customers all or a portion of any fee received from the Trust with respect to
assets of those customers or clients invested in the Funds.
Table 5 in Appendix C shows the dollar amount of fees paid under the Shareholder
Service Agreement with respect to Institutional Shares and Investor Shares of
each Fund. Prior to February 1, 1998, the fee payable under the Shareholder
Service Agreement was 0.15% of the average net assets of each Fund attributable
to Institutional and Investor Shares.
FUND ACCOUNTANT
Forum Accounting Services, LLC ("FAcS") provides accounting services for the
Funds and interestholder recordkeeper and accounting services for each
Portfolio.
Under its agreement with Core Trust, FAcS prepares and maintains books and
records of each Portfolio on behalf of Core Trust that are required to be
maintained under the 1940 Act, calculates the net asset value per share of each
Portfolio (and each investor therein) and prepares periodic reports to
interestholders of the Portfolios and the SEC. For these services and its
services as interestholder recordkeeper of the Portfolios, wherein it accounts
for the interest of each investor in the Portfolios. FAcS receives from Core
Trust with respect to each Portfolio a fee of the lesser of 0.05% of the average
daily net assets of each Portfolio or $48,000 plus, for each investor in a
Portfolio above one (excluding Forum and its affiliates), $6,000 per year. In
addition, FAcS is paid an additional $12,000 per year with respect to Portfolios
with more than 25% of their total assets invested in asset backed securities,
that have more than 100 security positions or that have a monthly portfolio
turnover rate of 10% or greater.
FAcS is required to use its best judgment and efforts in rendering fund
accounting services and is not be liable to Core Trust for any action or
inaction in the absence of bad faith, willful misconduct or gross negligence.
FAcS is not responsible or liable for any failure or delay in performance of its
fund accounting obligations arising out of or caused, directly or indirectly, by
circumstances beyond its reasonable control and Core Trust has agreed to
indemnify and hold harmless FAcS, its employees, agents, officers and directors
against and from any and all claims, demands, actions, suits, judgments,
liabilities, losses, damages, costs, charges, counsel fees and other expenses of
every nature and character arising out of or in any way related to FAcS's
actions taken or failures to act with respect to a Portfolio or based, if
applicable, upon information, instructions or requests with respect to a
Portfolio given or made to FAcS by an officer of the Trust duly authorized. This
indemnification does not apply to FAcS's actions taken or failures to act in
cases of FAcS's own bad faith, willful misconduct or gross negligence.
The Trust has retained FAcS as fund accountant to each Fund under arrangements
and agreements substantially similar to the arrangements and agreements
described above with respect to the Portfolios. No fee is payable for fund
accounting services to the Funds (a fee may be charged, subject to Board
approval). Prior to investing in the Portfolios, each Fund paid fund accounting
fees directly.
Table 6 in Appendix C shows the dollar amount of fees paid under the
Interestholder Recordkeeper and Fund Accounting Agreement with respect to each
Portfolio.
FORUM FINANCIAL GROUP
Each of the Administrator, the Adviser, Forum, FSS and FAcS are members of the
Forum Financial Group of Companies. Each of these companies are affiliated
through the common control by John Y. Keffer.
6. DETERMINATION OF NET ASSET VALUE
The Trust and each Portfolio does not determine net asset value on the following
holidays (or the days on which they are observed): New Year's Day, Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Columbus Day, Veterans' Day, Thanksgiving and Christmas.
<PAGE>
Pursuant to the rules of the SEC, both the Board and the Core Trust Board have
established procedures to stabilize each Fund's and each Portfolio's, as
applicable, net asset value at $1.00 per share. These procedures include a
review of the extent of any deviation of net asset value per share as a result
of fluctuating interest rates, based on available market rates, from each Fund's
and Portfolio's, as applicable, $1.00 amortized cost price per share. Should
that deviation exceed 1/2 of 1%, the Board and the Core Trust Board,
respectively, will consider whether any action should be initiated to eliminate
or reduce material dilution or other unfair results to shareholders. Such action
may include redemption of shares in kind, selling portfolio securities prior to
maturity, reducing or withholding distributions and utilizing a net asset value
per share as determined by using available market quotations.
In determining the appropriate market value of portfolio investments, the
Portfolios may employ outside organizations, which may use a matrix or formula
method that takes into consideration market indices, matrices, yield curves and
other specific adjustments. This may result in the securities being valued at a
price different from the price that would have been determined had the matrix or
formula method not been used. All cash, receivables and current payables are
carried at their face value.
Each investor in a Portfolio including the Funds, may add to or reduce its
investment in that Portfolio on each Fund Business day. The Portfolios maintain
the same business days as do the Funds. As of the close of regular trading on
any Fund Business Day, the value of a Fund's beneficial interest in a Portfolio
is determined by multiplying the net asset value of the Portfolio by the
percentage, effective for that day, which represents the Fund's share of the
aggregate beneficial interests in the Portfolio. Any additions or reductions,
which are to be effected as of the close of the Fund Business Day, are then
effected. The Fund's percentage of the aggregate beneficial interests in the
Portfolio are then recomputed as the percentage equal to the fraction (1) the
numerator of which is the value of the Fund's investment in the Portfolio as of
the close of the Fund Business Day plus or minus, as the case may be, the amount
of net additions to or reductions from the Fund's investment in the Portfolio
effected as of that time, and (2) the denominator of which is the aggregate net
asset value of the Portfolio as of the close of the Fund Business Day plus or
minus, as the case may be, the amount of net additions to or reductions from the
aggregate investments in the Portfolio by all investors in the Portfolio. The
percentage determined is then applied to determine the value of the Fund's
interest in the Portfolio as of the close of the next Fund Business Day.
7. PORTFOLIO TRANSACTIONS
Purchases and sales of portfolio securities for each Portfolio usually are
principal transactions. Portfolio securities are normally purchased directly
from the issuer or from an underwriter or market maker for the securities.
Purchases from underwriters of portfolio securities include a commission or
concession paid by the issuer to the underwriter, and purchases from dealers
serving as market makers include the spread between the bid and asked price.
There usually are no brokerage commissions paid for any purchases. Since each
Fund's inception, no brokerage fees were paid by any Fund (during those periods
of the Funds invested directly in securities). Since each Portfolio's inception,
no brokerage fees were paid by any Portfolio. While Core Trust does not
anticipate that the Portfolios will pay any amounts of commission, in the event
a Portfolio pays brokerage commissions or other transaction-related
compensation, the payments may be made to broker-dealers who pay expenses of the
Portfolio that it would otherwise be obligated to pay itself. Any transaction
for which a Portfolio pays transaction-related compensation will be effected at
the best price and execution available, taking into account the amount of any
payments made on behalf of the Portfolio by the broker-dealer effecting the
transaction.
Allocations of transactions to dealers and the frequency of transactions are
determined for each Portfolio by the Adviser in its best judgment and in a
manner deemed to be in the best interest of shareholders of that Portfolio
rather than by any formula. The primary consideration is prompt execution of
orders in an effective manner and at the most favorable price available to the
Portfolio.
Investment decisions for the Portfolios will be made independently from those
for any other account or investment company that is or may in the future become
managed by the Adviser, Forum Advisors or their respective affiliates. If,
however, a Portfolio and other investment companies or accounts managed by the
Adviser or Forum Advisors are contemporaneously engaged in the purchase or sale
<PAGE>
of the same security, the transactions may be averaged as to price and allocated
equitably to each account. In some cases, this policy might adversely affect the
price paid or received by a Portfolio or the size of the position obtainable for
the Portfolio. In addition, when purchases or sales of the same security for a
Portfolio and for other investment companies managed by the Adviser or Forum
Advisors occur contemporaneously, the purchase or sale orders may be aggregated
in order to obtain any price advantages available to large denomination
purchases or sales.
8. ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
For each shareholder of record of the Trust, FSS, as the shareholder's agent,
establishes an open account to which all shares purchased by the shareholder are
credited, together with any distributions that are reinvested in additional
shares.
Shares of each Fund are sold on a continuous basis by the distributor without
any sales charge. Shareholders may effect purchases or redemptions or request
any shareholder privilege in person at the offices of the Transfer Agent, which
are located at Two Portland Square, Portland, Maine 04101.
Investors who are not shareholders of record may nonetheless have the right to
vote shares depending upon their arrangement with the financial institution that
holds their shares.
Certain Participating Organizations (as defined in the Prospectus) may enter
purchase orders with payment to follow.
BANKING LAW INFORMATION
Banking laws and regulations generally permit a bank or bank affiliate to
purchase shares of an investment company as agent for and upon the order of a
customer and permit a bank or bank affiliate to serve as a Participating
Organization or perform sub-transfer agent or similar services for the Trust and
its shareholders. If a bank or bank affiliate were prohibited from performing
all or a part of the foregoing services, its shareholder customers would be
permitted to remain shareholders of the Trust and alternative means for
continuing to serve them would be sought.
REDEMPTION-IN-KIND
Redemptions may be made wholly or partially in portfolio securities if the Board
determines that payment in cash would be detrimental to the best interests of
the Fund. The Trust has filed an election with the SEC pursuant to which a Fund
will only consider effecting a redemption in portfolio securities if the
particular shareholder is redeeming more than $250,000 or 1% of the Fund's net
asset value, whichever is less, during any 90-day period. Core Trust has filed a
similar election.
PURCHASING SHARES OTHER THAN BY BANK WIRE
In addition to the situations described in the Prospectus under "Purchases and
Redemptions of Shares", the Trust may redeem shares involuntarily to reimburse a
Fund for any loss sustained by reason of the failure of a shareholder to make
full payment for shares purchased by the shareholder or to collect any charge
relating to transactions effected for the benefit of a shareholder which is
applicable to a Fund's shares as provided in the Prospectus from time to time.
For individual and Uniform Gift/Transfer to Minors Act accounts, the check or
money order used to purchase shares of a Fund must be made payable to "Monarch
Funds" or to one or more owners of the account and endorsed to Monarch Funds.
For corporation, partnership, trust, 401(k) plan and other non-individual type
accounts, any check used to purchase shares of a Fund must be made payable to
"Monarch Funds." No other payment by checks will be accepted, All purchases must
be paid in U.S. dollars; checks must be drawn on U.S. depository institutions.
Payment by traveler's checks is prohibited.
<PAGE>
Redemption proceeds will not be paid unless any check (including a certified or
cashier's check) used for investment has been cleared by the shareholder's bank,
which may take up to 15 calendar days.
EXCHANGE PRIVILEGE
The exchange privilege permits shareholders of each class of the Funds to
exchange their shares for shares of the same class of any other Fund of the
Trust or shares of certain other portfolios of investment companies which retain
Forum or its affiliates as investment advisor or distributor and which
participate in the Trust's exchange privilege program ("Participating Fund").
Exchange transactions will be made on the basis of relative net asset value per
share at the time of the exchange transaction. Exchanges are subject to the fees
charged by, and the restrictions listed in the Prospectus for, the Participating
Fund into which a shareholder is exchanging, including minimum investment
requirements. For Federal tax purposes, exchange transactions are treated as
sales on which a purchaser will realize a capital gain or loss depending on
whether the value of the shares redeemed is more or less than his basis in such
shares at the time of the transaction.
By the use of the exchange privilege, the shareholder authorizes the Transfer
Agent to act upon the instruction of any person representing himself either to
be, or to have the authority to act on behalf of, the investor and is believed
by the Transfer Agent to be genuine. The records of the Transfer Agent of such
instructions are binding. Proceeds of an exchange transaction may be invested
only in another Participating Fund account for which the share registration is
the same as the account from which the exchange is made.
If a shareholder exchanges into a Participating Fund that imposes a sales
charge, that shareholder is required to pay the difference between the Fund's
sales charge and any sales charge the shareholder has previously paid in
connection with the shares being exchanged.
The terms of the exchange privilege are subject to change, and the privilege may
be terminated by any of the Participating Funds or the Trust. However the
privilege will not be terminated, and no material change that restricts the
availability of the privilege to shareholders will be implemented, without 60
days' notice to shareholders, to the extent required by the applicable
regulation.
CHECK WRITING
Because of the difficulty of determining in advance the exact value of a
shareholder's Fund account, a shareholder may not use a redemption draft
("check") to close a Fund account. There are currently no charges for the check
writing privilege, but a shareholder's Fund account will be charged a fee for
stopping payment of a check upon a Shareholder's request or if a check cannot be
honored because of insufficient funds or other valid reasons. All drafts are
payable through Imperial Bank, an affiliate of the Funds' custodian and the
checkwriting privilege is subject to such rules as Imperial Bank may from to
time adopt.
9. TAXATION
Qualification as a regulated investment company under the Internal Revenue Code
of 1986, as amended, does not, of course, involve governmental supervision of
management or investment practices or policies. The information set forth in the
Prospectus and the following discussion relate solely to Federal income taxes on
distributions and other distributions by the Funds and assumes that each Fund
qualifies for treatment as a regulated investment company. Investors should
consult their own counsel for further details and for the application of
Federal, state and local tax laws to the investor's particular situation.
In order to continue to qualify for treatment as a regulated investment company
under the Internal Revenue Code, each Fund must distribute to its shareholders
for each taxable year at least 90% of its net investment income and must meet
several additional requirements. Among these requirements are the following: (1)
each Fund must derive at least 90% of its gross income each taxable year from
distributions, interest, payments with respect to securities loans, gains from
the sale or other disposition of securities and certain other income; (2)
subject to certain exceptions, at the close of each quarter of the Fund's
taxable year, at least 50% of the value of its total assets must be represented
<PAGE>
by cash and cash items, U.S. Government Securities and other securities, with
these other securities limited, in respect of any one issuer, to an amount that
does not exceed 5% of the value of the Fund's total assets, and (3) subject to
certain exceptions, at the close of each quarter of the Fund's taxable year, not
more than 25% of the value of its total assets may be invested in securities
(other than U.S. Government Securities) of any one issuer.
Each Fund expects to derive substantially all of its gross income (exclusive of
capital gains) from sources other than dividends. Accordingly, it is expected
that none of the Funds' distributions will qualify for the dividends-received
deduction for corporations.
Distributions declared by a Fund in October, November, or December of any year
and payable to shareholders of record on a date in such a month will be deemed
to have been paid by the Fund and received by the shareholders on December 31 of
the year declared if paid by the Fund during the following January.
10. OTHER INFORMATION
CUSTODIAN
Pursuant to a Custodian Contract with Core Trust, Imperial Trust Company, 201
North Figueroa Street, Suite 610, Los Angeles, California 90012, a subsidiary of
Imperial Bank, acts as the custodian of each Portfolio's assets. The custodian's
responsibilities include safeguarding and controlling the Portfolios cash and
securities and determining income payable on and collecting interest on
Portfolio investments. Effective September 1, 1998, Core Trust pays the
custodian a fee at an annual rate of 0.25% of the first $1.5 billion, 0.020% of
the next $1.0 billion and 0.015% of the balance of the annual average daily net
assets of the Portfolios combined. Prior to September 1, 1998, Core Trust paid
the custodian a fee at an annual rate of 0.025% of each Portfolio's average
daily net assets.
AUDITORS
[ ], independent auditors, acts as auditors for the Trust and as
auditors for the Portfolios.
THE TRUST AND ITS SHAREHOLDERS
The Trust is a business trust organized under Delaware law. Delaware law
provides that shareholders shall be entitled to the same limitations of personal
liability extended to stockholders of private corporations for profit. The
securities regulators of some states, however, have indicated that they and the
courts in their state may decline to apply Delaware law on this point.
The Trust Instrument contains an express disclaimer of shareholder liability for
the debts, liabilities, obligations, and expenses of the Trust and requires that
a disclaimer be given in each contract entered into or executed by the Trust or
the Trustees. The Trust Instrument provides for indemnification out of each
series' property of any shareholder or former shareholder held personally liable
for the obligations of the series. The Trust Instrument also provides that each
series shall, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the series and satisfy any judgment
thereon. Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which Delaware law does not
apply, no contractual limitation of liability was in effect and the portfolio is
unable to meet its obligations. Forum believes that, in view of the above, there
is no risk of personal liability to shareholders.
The Trust Instrument further provides that the Trustees shall not be liable to
any person other than the Trust or its shareholders; moreover, the Trustees
shall not be liable for any conduct whatsoever, provided that a Trustee is not
protected against any liability to which he would otherwise by subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
The Board is required to call a meeting of shareholders for the purpose of
voting upon the removal of any trustee when so requested in writing by the
shareholders of record holding at least 10% of the Trust's outstanding shares.
<PAGE>
Each series capital consists of shares of beneficial interest. Shares are fully
paid and nonassessable, except as set forth above with respect to Trustee and
shareholder liability. Shareholders representing 10% or more of the Trust or a
series may, as set forth in the Trust Instrument, call meetings of the Trust or
series for any purpose related to the Trust or series, as the case may be,
including, in the case of a meeting of the entire Trust, the purpose of voting
on removal of one or more Trustees.
Generally such terminations must be approved by the vote of the holders of a
majority of the outstanding shares of the Trust or the series; however, the
Trustees may, without prior shareholder approval, change the form of
organization of the Trust by merger, consolidation or incorporation. If not so
terminated or reorganized, the Trust and its series will continue indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder vote, cause
the Trust to merge or consolidate into one or more trusts, partnerships or
corporations or cause the Trust to merge or consolidate into one or more trusts,
partnerships or corporations or cause the Trust to be incorporated under
Delaware law, so long as the surviving entity is an open-end management
investment company that will succeed to or assume the Trust's registration
statement.
SHAREHOLDINGS
As of November 2, 1998, the officers and trustees of the Trust as a group owned
less than 1% of the outstanding shares of each Fund.
Table 7 to Appendix C lists the persons who owned of record 5% or more of the
outstanding shares of a class of shares of a Fund.
MASTER FEEDER ARRANGEMENT
The Board may withdraw a Fund's assets from a Portfolio if it determines that to
be in the best interests of the Fund. The inability of a Fund that withdrew its
assets from its corresponding Portfolio to find a suitable investment adviser,
in the event the Board decided not to permit the Adviser to manage the Fund's
assets could have a significant impact on shareholders of the Fund. Each
investor in a Portfolio, including the Funds, may be deemed to be liable for all
obligations of the Portfolio, but not any other portfolio of Core Trust. The
risk to an investor in the Portfolio of incurring financial loss on account of
such liability, however, would be limited to circumstances in which the
Portfolio was unable to meet its obligations.
11. FINANCIAL STATEMENTS
The Statements of Assets and Liabilities, Statements of Operations, Statements
of Changes in Net Assets, notes thereto and Financial Highlights of the Funds
for the fiscal year ended August 31, 1998 and the Independent Auditors' Report
thereon (included in the Annual Report to Shareholders), which are delivered
along with this SAI, are incorporated herein by reference. Also incorporated by
reference into this SAI are the Schedules of Investments, Statements of Assets
and Liabilities, Statements of Operations, Statements of Changes in Net Assets,
and notes thereto, of the Portfolios for the fiscal year ended August 31, 1998
and the Independent Auditors' Report thereon (included in the Annual Report to
Shareholders).
<PAGE>
APPENDIX A - DESCRIPTION OF CERTAIN SECURITIES RATINGS
1. CORPORATE BONDS
MOODY'S INVESTORS SERVICE, INC. ("MOODY'S")
Bonds which are rated Aaa are judged by Moody's to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
STANDARD & POOR'S CORPORATION ("S&P")
Bonds rated AAA have the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
Bonds rated AA have a very strong capacity to pay interest and repay principal
and differ from the highest rated issues only in small degree.
FITCH INVESTORS SERVICE, INC. ("FITCH")
AAA Bonds are considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
A Bonds are considered to be investment grade of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
Plus and minus signs are used with a rating symbol to indicate the relative
level of credit quality within the rating category. Plus and minus signs,
however, are not used in the AAA category.
2. COMMERCIAL PAPER
MOODY'S INVESTORS SERVICE, INC.
Moody's two highest ratings for short-term debt, including commercial paper, are
Prime-1 and Prime-2; both are judged investment grade, to indicate the relative
repayment ability of rated issuers.
Issuers (or supporting institutions) rated Prime-1 have a superior ability for
repayment of senior short-term debt obligations. Prime-1 repayment ability will
often be evidenced by many of the following characteristics:
Leading market positions in well-established industries. High rates of
return on funds employed. Conservative capitalization structure with
moderate reliance on debt and ample asset protection. Broad margins in
earnings, coverage of fixed financial charges and high internal cash
generation. Well-established access to a range of financial markets and
assured sources of alternate liquidity.
<PAGE>
Issuers rated Prime-2 by Moody's have a strong ability for repayment of senior
short-term debt obligations. This will normally be evidenced by many of the
characteristics of issuers rated Prime-1 but to a lesser degree. Earnings trends
and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.
STANDARD & POOR'S CORPORATION
S&P's two highest commercial paper ratings are A and B. Issues in this category
are delineated with the numbers 1, 2 and 3 to indicate the relative degree of
safety. An A-1 designation indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus (+) sign designation. The capacity for
timely payment on issues with an A-2 designation is satisfactory. However, the
relative degree of safety is not as high as for issues designated A-1. A-3
issues have an adequate capacity for timely payment. They are, however, somewhat
more vulnerable to the adverse effects of changes in circumstances than
obligations carrying the higher designations. Issues rated B are regarded as
having only a speculative capacity for timely payment.
FITCH INVESTORS SERVICE, INC.
Fitch's short-term ratings apply to debt obligations that are payable on demand
or have original maturities of generally up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes.
F-1+.Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1. Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.
F-2. Good Credit Quality. Issues assigned this rating have a satisfactory degree
of assurance for timely payment, but the margin of safety is not as great
as for issues assigned F-1+ or F-1 ratings.
<PAGE>
APPENDIX B - PERFORMANCE DATA
For the seven day period ended August 31, 1998, the annualized yields of each of
the classes of the Funds that were then operating were as follows:
<TABLE>
<S> <C> <C> <C> <C>
7 Day 30 Day
7 Day Yield Effective Yield 30 Day Yield Effective Yield
----------- --------------- ------------ ---------------
Treasury Cash Fund
Institutional Shares 5.04% 5.16% 5.00% 5.12%
Investor Shares 4.66% 4.77% 4.63% 4.73%
Government Cash Fund
Universal Shares 5.40% 5.55% 5.40% 5.54%
Institutional Shares 5.00% 5.13% 5.00% 5.12%
Cash Fund
Universal Shares 5.48% 5.63% 5.48% 5.62%
Institutional Shares 5.09% 5.22% 5.09% 5.21%
Investor Shares 4.83% 4.94% 4.83% 4.93%
</TABLE>
<PAGE>
For the periods ended August 31, 1998, the total return of each of the classes
of the Funds were as follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
One Month Three Months Calendar Year to Date One Three Years
--------- ------------ --------------------- ---- -----------
Year
----
Cumulative Annualized Cumulative Annualized Cumulative Annualized Cumulative Annualized
Treasury Cash Fund
Institutional 0.43 5.12 1.26 5.11 3.37 5.10 5.11 16.04 5.08
Shares
Investor Shares 0.39 4.73 1.17 4.72 3.11 4.71 4.72 n/a n/a
Government Cash Fund
Universal Shares 0.46 5.54 1.38 5.58 3.70 5.62 5.63 17.65 5.57
Institutional 0.43 5.12 1.28 5.16 3.44 5.21 5.22 16.28 5.16
Shares
Cash Fund
Universal Shares 0.47 5.62 1.39 5.62 3.72 5.64 5.65 17.56 5.54
Institutional 0.43 5.21 1.29 5.21 3.45 5.23 5.24 16.36 5.18
Shares
Investor Shares 0.41 4.94 1.22 4.94 3.28 4.96 4.97 15.47 4.91
</TABLE>
Inception dates are listed in the Funds' annual report.
Five Years Since Inception
---------- ---------------
Cumulative Annualized Cumulative Annualized
- ---------- ---------- ---------- ----------
25.97 4.73 26.44 4.67
n/a n/a 13.91 4.67
28.98 5.22 32.48 4.93
26.74 4.85 30.13 4.61
28.89 5.20 32.14 4.96
26.88 4.88 30.14 4.67
n/a n/a 16.77 4.95
APPENDIX C- MISCELLANEOUS TABLES
TABLE 1 - INVESTMENT ADVISORY FEES
Prior to January 1, 1998, the Portfolios paid advisory fees to Linden Asset
Management, Inc., the Portfolios' investment adviser.
For the fiscal year ended August 31, 1998, the fees paid under the Investment
Advisory Agreement with respect to each Portfolio were:
Treasury Cash Portfolio $37,075
Government Cash Portfolio $236,018
Cash Portfolio $151,875
For the fiscal year ended August 31, 1997, the fees paid under the Investment
Advisory Agreement with respect to each Portfolio were:
Treasury Cash Portfolio $19,083
Government Cash Portfolio $196,857
Cash Portfolio $72,872
For the fiscal year ended August 31, 1996, the fees paid under the Investment
Advisory Agreement with respect to each Portfolio were:
Treasury Cash Portfolio $12,930
Government Cash Portfolio $156,552
Cash Portfolio $38,083
TABLE 2 - ADMINISTRATION FEES
For the fiscal year ended August 31, 1998, the fees payable by the Funds under
the Administration Agreement were:
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Fund $50,255 $30,532 $19,723
Government Cash Fund $312,844 $107,575 $205,269
Cash Fund $203,477 $25,795 $177,682
</TABLE>
For the fiscal year ended August 31, 1997, the fees payable by the Funds under
the Administration Agreement were:
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Fund $24,300 $24,300 $0
Government Cash Fund $252,810 $123,045 $129,765
Cash Fund $89,942 $2,893 $87,049
</TABLE>
For the fiscal year ended August 31, 1996, the fees payable by the Funds under
the Administration Agreement were:
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Fund $19,198 $9,307 $9,891
Government Cash Fund $230,547 $104,558 $125,989
Cash Fund $56,125 $3,719 $52,406
</TABLE>
For the fiscal year ended August 31, 1998, the fees payable by the Portfolios
for administrative services were:
>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Portfolio $49,866 $33,171 $16,695
Government Cash Portfolio $313,973 $0 $313,973
Cash Portfolio $203,628 $0 $203,628
</TABLE>
For the fiscal year ended August 31, 1997, the fees payable by the Portfolios
for administrative services were:
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Portfolio $24,287 $14,346 $9,941
Government Cash Portfolio $252,821 $0 $252,821
Cash Portfolio $92,652 $7,621 $85,031
</TABLE>
For the fiscal year ended August 31, 1996, the fees payable by the Portfolios
for administrative services were:
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Portfolio $19,902 $17,696 $1,506
Government Cash Portfolio $230,634 $0 $230,634
Cash Portfolio $56,113 $12,698 $43,415
</TABLE>
TABLE 3 - INVESTOR CLASS DISTRIBUTION FEES
For the fiscal year ended August 31, 1998, no Investor Shares of Government Cash
Fund were outstanding and, accordingly, no fees were payable under the Investor
Class Plan with respect to Investor Shares of that Fund. For the fiscal year
ended August 31, 1998, the fees payable under the Investor Class Plan with
respect to the other Funds were as follows.
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Fund $114,707 $126 $114,581
Government Cash Fund n/a n/a n/a
Cash Fund $350,059 $0 $350,059
</TABLE>
For the fiscal year ended August 31, 1997, no Investor Shares of Government Cash
Fund were outstanding and, accordingly, no fees were payable under the Investor
Class Plan with respect to Investor Shares of that Fund. For the fiscal year
ended August 31, 1997, the fees payable under the Investor Class Plan with
respect to the other Funds were as follows.
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Fund $28,718 $0 28,718
Government Cash Fund n/a n/a n/a
Cash Fund $142,750 $0 $142,750
</TABLE>
For the fiscal year ended August 31, 1996, the fees payable under the Investor
Class Plan were as follows.
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Fund $5,089 $0 $5,089
Government Cash Fund $340 $8 $332
Cash Fund $37,340 $36 $37,304
</TABLE>
<PAGE>
TABLE 4 - TRANSFER AGENT FEES
For the fiscal year ended August 31, 1998, the fees payable by the Funds under
the Transfer Agency Agreement were:
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Fund
Institutional Shares $119,247 $32,971 $86,276
Investor Shares $101,975 $101 $101,874
Government Cash Fund
Universal Shares $144,599 $61,758 $82,841
Institutional Shares $815,003 $0 $815,003
Cash Fund
Universal Shares $34,429 $31,621 $2,808
Institutional Shares $441,229 $0 $441,229
Investor Shares $289,208 $0 $289,208
</TABLE>
For the fiscal year ended August 31, 1997, the fees payable by the Funds under
the Transfer Agency Agreement were:
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Fund
Institutional Shares $32,593 $22,400 $10,193
Investor Shares $84,369 $2 $84,367
Government Cash Fund
Universal Shares $145,679 $89,267 $56,412
Institutional Shares $536,252 $0 $536,252
Cash Fund
Universal Shares $11,015 $7,247 $3,768
Institutional Shares $123,240 $7 $123,233
Investor Shares $244,861 $0 $244,861
</TABLE>
For the fiscal year ended August 31, 1996, the fees payable by the Funds under
the Transfer Agency Agreement were:
Accrued Fee
Treasury Cash Fund
Institutional Shares $82,722
Investor Shares $12,110
Government Cash Fund
Universal Shares $127,832
Institutional Shares $518,144
Investor Shares $3,758
Cash Fund
Universal Shares $11,705
Institutional Shares $191,176
Investor Shares $39,450
TABLE 5 - SHAREHOLDER SERVICE FEES
INSTITUTIONAL SHARES
For the fiscal year ended August 31, 1998, the fees paid to the Administrator
under the Shareholder Service Agreement with respect to Institutional Shares
were as follows.
<PAGE>
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Fund $99,026 $50,048 $48,978
Government Cash Fund $726,580 $48,347 $678,233
Cash Fund $396,602 $78,293 $318,309
</TABLE>
For the fiscal year ended August 31, 1997, the fees paid to the Administrator
under the Shareholder Service Agreement with respect to Institutional Shares
were as follows.
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Fund $17,231 $22,277 $5,046
Government Cash Fund $389,295 $0 $389,295
Cash Fund $85,650 $29,315 $56,335
</TABLE>
For the fiscal year ended August 31, 1996, the fees paid to the Administrator
under the Shareholder Service Agreement with respect to Institutional Shares
were as follows.
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Fund $54,540 $24,768 $29,772
Government Cash Fund $378,006 $0 $378,006
Cash Fund $136,336 $14,708 $121,628
</TABLE>
INVESTOR SHARES
For the fiscal year ended August 31, 1998, no Investor Shares of Government Cash
Fund were outstanding and, accordingly, no fees were payable under the
Shareholder Service Agreement with respect to Investor Shares of that Fund. For
the fiscal year ended August 31, 1998, the fees paid to the Administrator under
the Shareholder Service Agreement with respect to Investor Shares were as
follows.
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Fund $83,999 $26,709 $57,290
Cash Fund $256,286 $43,447 $212,839
</TABLE>
For the fiscal year ended August 31, 1997, no Investor Shares of Government Cash
Fund were outstanding and, accordingly, no fees were payable under the
Shareholder Service Agreement with respect to Investor Shares of that Fund. For
the fiscal year ended August 31, 1997, the fees paid to the Administrator under
the Shareholder Service Agreement with respect to Investor Shares were as
follows.
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Fund $55,668 $2,875 $52,793
Cash Fund $175,845 $10,704 $165,141
</TABLE>
For the fiscal year ended August 31, 1996, the fees paid to the Administrator
under the Shareholder Service Agreement with respect to Investor Shares were:
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Fund $3,053 $510 $2,543
Government Cash Fund $204 $5 $199
Cash Fund $22,404 $3,752 $18,652
</TABLE>
TABLE 6 - FUND ACCOUNTING FEES
Prior to September 1, 1995, each Fund paid accounting fees directly. Since that
date, the Funds have incurred no fund accounting fees.
<PAGE>
For the fiscal year ended August 31, 1998, the fees payable by the Portfolios
under the Portfolio and Unitholder Accounting Agreement were:
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Portfolio $31,930 $0 $31,930
Government Cash Portfolio $47,429 $0 $47,429
Cash Portfolio $45,931 $0 $45,931
</TABLE>
For the fiscal year ended August 31, 1997, the fees payable by the Portfolios
under the Portfolio and Unitholder Accounting Agreement were:
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Portfolio $24,279 $0 $24,279
Government Cash Portfolio $48,000 $0 $48,000
Cash Portfolio $48,000 $0 $48,000
</TABLE>
For the fiscal year ended August 31, 1996, the fees payable by the Portfolios
under the Portfolio and Unitholder Accounting Agreement were:
<TABLE>
<S> <C> <C> <C>
Accrued Fee Fee Waived Fee Paid
Treasury Cash Portfolio $28,518 $2,259 $26,259
Government Cash Portfolio $42,000 $0 $42,000
Cash Portfolio $42,000 $2,259 $39,741
</TABLE>
TABLE 7 - 5% SHAREHOLDERS
As of [December [ ], 1998, the shareholders listed below owned of record 5% or
more of the outstanding shares of each class of shares of the Trust.
Shareholders beneficially owning 25% or more of the shares of a class, of a Fund
or of the Trust as a whole may be deemed to be controlling persons. By reason of
their substantial holdings of shares, these persons may be able to require the
Trust to hold a shareholder meeting to vote on certain issues and may be able to
determine the outcome of any shareholder vote. As noted, certain of these
shareholders are known to the Trust to hold their shares of record only and have
no beneficial interest, including the right to vote, in the shares.
As a percentage of all shares of the Trust outstanding, Imperial Bancorp and its
affiliates held [ ] of the shares.
Holders of record only are noted as such.
<TABLE>
<S> <C> <C>
TREASURY CASH FUND Percentage of of Fund
Institutional Shares Shareholders Shares Owned Shares Owned
--------------------------------- ------------- ------------
Percentage
TREASURY CASH FUND Percentage of of Fund
Investor Shares Shareholders Shares Owned Shares Owned
---------------------------- ------------- ------------
Percentage
GOVERNMENT CASH FUND Percentage of of Fund
Universal Shares Shareholders Shares Owned Shares Owned
----------------------------- ------------- ------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Percentage
GOVERNMENT CASH FUND Percentage of of Fund
Institutional Shares Shareholders Shares Owned Shares Owned
--------------------------------- ------------- ------------
Percentage
CASH FUND Percentage of of Fund
Universal Shares Shareholders Shares Owned Shares Owned
----------------------------- ------------- ------------
Percentage
CASH FUND Percentage of of Fund
Institutional Shares Shareholders Shares Owned Shares Owned
--------------------------------- ------------- ------------
Percentage
CASH FUND Percentage of of Fund
Investor Shares Shareholders Shares Owned Shares Owned
---------------------------- ------------- ------------
</TABLE>
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. EXHIBITS
(a) Financial Statements
Location in the Prospectus: Financial Highlights
Location in the SAI
(b) (1) Trust Instrument of Registrant dated July 10, 1992 (see Note1).
(2) By-Laws of Registrant dated July 10, 1992, as amended May 12,
1995 (see Note1).
(3) None.
(4) Form of Certificate for Shares (see Note 1).
(5) None.
(6) (a) Distribution Agreement between Registrant and Forum
Financial Services, Inc. dated as of the 20th day of
September, 1997, relating to Treasury Cash Fund, Government
Cash Fund and Cash Fund (see Note 1).
(b) Form of Distribution Agreement between Registrant and Forum
Fund Services, LLC dated as of the 1st day of January, 1999,
relating to Treasury Cash Fund, Government Cash Fund and
Cash Fund (filed herewith).
(7) None.
(8) Custodian Contract between Registrant and Imperial Trust
Company dated the 23rd day of October, 1992, as amended the
1st day of September, 1995 (see Note 1).
(9) (a) Administration Agreement between Registrant and Forum
Administrative Services, LLC dated as of December 1, 1997,
relating to Treasury Cash Fund, Government Cash Fund and
Cash Fund (see Note1).
(b) Transfer Agency Agreement between Registrant and Forum
Shareholder Services, LLC dated as of the 29th day of
October, 1998, relating to Treasury Cash Fund, Government
Cash Fund and Cash Fund (filed herewith).
(c) Shareholder Service Agreement between Registrant and Forum
Administrative Services, LLC, as amended June 1, 1998,
relating to Treasury Cash Fund, Government Cash Fund and
Cash Fund (filed herewith).
(d) Fund Accounting Agreement between Registrant and Forum
Accounting Services, LLC dated as of the 1st day of
December, 1997, relating to Treasury Cash Fund, Government
Cash Fund and Cash Fund (see Note 1).
(10) Opinion of Kirkpatrick & Lockhart LLP (see Note1).
(11) None.
(12) None.
(13) Investment Representation letter (see Note1).
(14) None.
(15) Investor Class Distribution (Rule 12b-1) Plan dated July 12,
1993, relating to Treasury Cash Fund, Government Cash Fund
and Cash Fund (see Note 1).
(16) Schedule for Computation of Performance (see Note 1)
(17) Not applicable.
(18) Multiclass (Rule 18f-3) Plan dated May 12, 1995, as amended
January 22, 1996 (see Note1).
<PAGE>
Other Exhibits:
(1) Powers of Attorney, Maurice J. DeWald, Jack J. Singer, John
Y. Keffer, Rudoph I. Estrada and Robert M. Franko, Trustees
of Registrant (see Note1).
(2) Powers of Attorney, John Y. Keffer, James C. Cheng, J.
Michael Parish and Costas Azariadis, Trustees of Core Trust
(Delaware) (see Note1).
- ---------------
Note:
(1) Exhibit incorporated by reference as filed in Post-Effective
Amendment No. 15 via EDGAR on December 19, 1997, accession
number 0001004402-97-000264.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Due to the ownership interest of Cash Fund, Government Cash Fund and
Treasury Cash Fund of Cash Portfolio, Government Cash Portfolio and
Treasury Cash Portfolio of Core Trust (Delaware), the Funds may be
deemed to control those portfolios.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
Not required.
ITEM 27. INDEMNIFICATION
The general effect of Section 10.02 of the Registrant's Trust
Instrument is to indemnify existing or former trustees and officers of
the Trust to the fullest extent permitted by law against liability and
expenses. There is no indemnification if, among other things, any such
person is adjudicated liable to the Registrant or its shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office. This
description is modified in its entirety by the provisions of Section
10.02 of the Registrant's Trust Instrument contained in this
Registration Statement as Exhibit 1 and incorporated herein by
reference.
The Registrant's Distribution Agreement provides that the Registrant's
principal underwriter ise protected against liability to the extent
permitted by Section 17(i) of the Investment Company Act of 1940.
Similar provisions are contained in the Administration Agreement,
Transfer Agency Agreement and Fund Accounting Agreement. The
Registrant's principal underwriter is also provided with
indemnification against various liabilities and expenses under Section
8 of the Distribution Agreement between the Registrant and the
principal underwriter; provided, however, that in no event shall the
indemnification provision be construed as to protect the principal
underwriter against any liability to the Registrant or its security
holders to which the principal underwriter would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties, or by reason of its reckless disregard of
its obligations and duties under Section 8 of the Distribution
Agreement. The Registrant's transfer agent and certain related
individuals are also provided with indemnification against various
liabilities and expenses under Section 10 of the Transfer Agency
Agreement between the Registrant and the transfer agent; provided,
however, that in no event shall the transfer agent or such persons be
indemnified against any liability or expense that is the direct result
of willful misfeasance, bad faith or gross negligence by the transfer
agent or such persons.
The preceding paragraph is modified in its entirety by the provisions
of Section 8 of the Distribution Agreement, Section 3 of the
Administration Agreement, Section 10 of the Transfer Agency Agreement
and Section 3 of the Fund Accounting Agreement of the Registrant filed
as Exhibits 6, 9(a), 9(b) and 9(d), respectively, to Registrant's
Registration Statement and incorporated herein by reference.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a trustee, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such trustee, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion
<PAGE>
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The description of Forum Investment Advisors, LLC (investment adviser
to each of Treasury Cash Portfolio, Government Cash Portfolio, Cash
Portfolio and Treasury Portfolio of Core Trust (Delaware) under the
caption "Management" in the Prospectuses and Statements of Additional
Information, constituting certain of Parts A and B, respectively, of
this Registration Statement, are incorporated by reference herein.
The following are the members of Forum Investment Advisors, LLC, Two
Portland Square, Portland, Maine 04101, including their business
connections which are of a substantial nature.
Forum Holdings Corp.I, Member.
Forum Trust, LLC., Member.
Both Forum Holdings Corp.I and Forum Trust, LLC are controlled by John
Y. Keffer, Chairman and President of the Registrant. Mr. Keffer is a
Director and President of Forum Trust, LLC. Mr. Keffer is also a
director and/or officer of various registered investment companies for
which the various Forum Financial Group of Companies provide services.
The following are the officers of Forum Investment Advisors, LLC,
including their business connections which are of a substantial nature.
Each officer may serve as an officer of various registered investment
companies for which the Forum Financial Group of Companies provides
services.
<TABLE>
<S> <C> <C>
------------------------------------ ------------------------------------ ----------------------------------
Name Title Business Connection
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Mark D. Kaplan Director Forum Investment Advisors, LLC
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Sara M. Morris Treasurer Forum Investment Advisors, LLC
------------------------------------ ----------------------------------
Chief Financial Officer Forum Financial Group, LLC
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Officer other Forum affiliated companies
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
David I. Goldstein Assistant Secretary Forum Investment Advisors, LLC
------------------------------------ ----------------------------------
General Counsel Forum Financial Group, LLC
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Officer other Forum affiliated companies
------------------------------------ ------------------------------------ ----------------------------------
</TABLE>
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Forum Fund Services, LLC, Registrant's underwriter, serves as
underwriter for the following investment companies registered under the
investment Company Act of 1940, as amended:
The Cutler Trust
Forum Funds
Monarch Funds
(b) The following directors and officers of Forum Financial Services, Inc.,
Registrant's underwriter, hold the following positions with registrant.
Their business address is Two Portland Square, Portland, Maine 04101.
<TABLE>
<S> <C> <C>
Name Position with Underwriter Position with Registrant
---- ------------------------- ------------------------
John Y. Keffer President Trustee, Chairman and President
David I. Goldstein Secretary Vice President and Secretary
</TABLE>
(c) Not Applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The majority of the accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940 and
the Rules thereunder are maintained at the offices of Forum Fund
Services, LLC, Two Portland Square, Portland, Maine 04101, and Forum
Financial Corp., Two Portland Square, Portland, Maine 04101. The
records required to be maintained under Rule 31a-1(b)(1) with respect
to journals of receipts and deliveries of securities and receipts and
disbursements of cash are maintained at the offices of the Registrant's
custodian, as listed under "Custodian" in Part B to this Registration
Statement. The records required to be maintained under Rule
31a-1(b)(5), (6) and (9) are maintained at the offices of the
Registrant's adviser, as listed in Item 26 hereof.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
Registrant undertakes to:
(i) contain in its Trust Instrument or Bylaws provisions for
assisting shareholder communications and for the removal of
trustees substantially similar to those provided for in
Section 16(c) of the Investment Company Act of 1940, except to
the extent such provisions are mandatory or prohibited under
applicable Delaware law.
(ii) file a post-effective amendment, using noncertified financial
statements, within four to six months from the effective date
of this Post Effective Amendment Number 16 with respect to
Crown Cash Fund.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all of the requirements for effectiveness of this registration statement
under rule 485(b) under the Securities Act of 1933, as amended, and has duly
caused this post-effective amendment number 17 to Registrant's registration
statement to be signed on its behalf by the undersigned, duly authorized in the
City of Portland, State of Maine on November 30, 1998.
MONARCH FUNDS
By: /s/ John Y. Keffer
------------------------
John Y. Keffer, President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons on
November 30, 1998.
(a) Principal Executive Officer
/s/ John Y. Keffer
---------------------------
John Y. Keffer, Chairman and President
(b) Principal Financial Officer
/s/ Stacey E. Hong
----------------------------
Stacey E. Hong, Treasurer
(c) A majority of the Trustees
/s/ John Y. Keffer
----------------------------
John Y. Keffer, Trustee
Rudolph I. Estrada, Trustee
Maurice J. DeWald, Trustee
Robert M. Franko, Trustee
Jack J. Singer, Trustee
By:/s/ John Y. Keffer
-----------------------------
John Y. Keffer, Attorney in fact*
* Pursuant to powers of attorney filed as Other Exhibit (1) to this
Registration Statement.
<PAGE>
SIGNATURES
On behalf of Core Trust (Delaware), being duly authorized, I have duly caused
this amendment to the Registration Statement of Monarch Funds to be signed in
the City of Portland, State of Maine on November 30, 1998.
CORE TRUST (DELAWARE)
By: /s/ John Y. Keffer
-----------------------
John Y. Keffer, President
This amendment to the Registration Statement of Core Trust (Delaware) has been
signed below by the following persons in the capacities indicated on November
30, 1998.
(a) Principal Executive Officer
/s/ John Y. Keffer
------------------------------------
John Y. Keffer, Chairman and President
(b) Principal Financial Officer
/s/ Sara M. Morris
------------------------------------
Sara M. Morris, Treasurer
(c) A majority of the Trustees
/s/ John Y. Keffer
------------------------------------
John Y. Keffer, Chairman
Costas Azariadis, Trustee
J. Michael Parish, Trustee
James C. Cheng, Trustee
By:/s/ John Y. Keffer
-------------------------------------
John Y. Keffer, Attorney in fact*
* Pursuant to powers of attorney filed as Other Exhibits (1) and (2)
to this Registration Statement.
<PAGE>
INDEX TO EXHIBITS
Exhibit
(6)(a) Form of Distribution Agreement between Registrant and Forum Fund
Services, LLC dated as of the 1st day of January, 1999, relating to
Treasury Cash Fund, Government Cash Fund and Cash Fund.
(9)(b) Transfer Agency Agreement between Registrant and Forum Shareholder
Services, LLC dated as of the 29th day of October, 1998, relating to
Treasury Cash Fund, Government Cash Fund and Cash Fund.
(9)(c) Shareholder Service Agreement between Registrant and Forum
Administrative Services, LLC, as amended June 1, 1998, relating to
Treasury Cash Fund, Government Cash Fund and Cash Fund.
17 Financial Data Schedules
<PAGE>
Exhibit (6)(a)
MONARCH FUNDS
DISTRIBUTION AGREEMENT
AGREEMENT made as of the 1st day of January, 1999, by and between
Monarch Funds, a Delaware business trust, with its principal office and place of
business at Two Portland Square, Portland, Maine 04101 (the "Trust"), and Forum
Fund Services, LLC, a Delaware limited liability company with its principal
office and place of business at Two Portland Square, Portland, Maine 04101
("Distributor").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company and
may issue its shares of beneficial interest, no par value ("Shares") in separate
series and classes; and
WHEREAS, the Distributor is registered under the Securities Exchange
Act of 1934, as amended ("1934 Act"), as a broker-dealer and is engaged in the
business of selling shares of registered investment companies either directly to
purchasers or through other financial intermediaries;
WHEREAS, the Trust offers shares in various series as listed in
Appendix A hereto (each such series, together with all other series subsequently
established by the Trust and made subject to this Agreement being herein
referred to as a "Fund," and collectively as the "Funds") and the Trust offers
shares of various classes of each Fund as listed in Appendix A hereto (each such
class together with all other classes subsequently established by the Trust in a
Fund being herein referred to as a "Class," and collectively as the "Classes");
and
WHEREAS, the Trust desires that the Distributor offer, as principal
underwriter, the Shares of each Fund and Class thereof to the public and the
Distributor is willing to provide those services on the terms and conditions set
forth in this Agreement in order to promote the growth of the Funds and
facilitate the distribution of the Shares;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Trust and the Distributor do hereby agree as
follows:
SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) The Trust hereby appoints the Distributor, and the Distributor
hereby agrees, to act as distributor of the Shares for the period and on the
terms set forth in this Agreement.
(b) In connection therewith, the Trust has delivered to the Distributor
copies of (i) the Trust's Trust Instrument and Bylaws (collectively, as amended
from time to time, "Organic Documents"), (ii) the Trust's Registration Statement
and all amendments thereto filed with the U.S. Securities and Exchange
Commission ("SEC") pursuant to the Securities Act of 1933, as amended
("Securities Act"), or the 1940 Act ("Registration Statement"), (iii) the
current prospectuses and statements of additional information of each Fund and
Class thereof (collectively, as currently in effect and as amended or
supplemented, the "Prospectus"), (iv) each current plan of distribution or
similar document adopted by the Trust under Rule 12b-1 under the 1940 Act
("Plan") and each current shareholder service plan or similar document adopted
<PAGE>
by the Trust ("Service Plan"); and (iv) all procedures adopted by the Trust with
respect to the Funds (E.G., repurchase agreement procedures), and shall promptly
furnish the Distributor with all amendments of or supplements to the foregoing.
The Trust shall deliver to the Distributor a certified copy of the resolution of
the Board of Trustees of the Trust (the "Board") appointing the Distributor and
authorizing the execution and delivery of this Agreement.
SECTION 2. EXCLUSIVE NATURE OF DUTIES
The Distributor shall be the exclusive representative of the Trust to
act as distributor of the Funds except that the rights given under this
Agreement to the Distributor shall not apply to: (i) Shares issued in connection
with the merger, consolidation or reorganization of any other investment company
or series or class thereof with a Fund or Class thereof; (ii) a Fund's
acquisition by purchase or otherwise of all or substantially all of the assets
or stock of any other investment company or series or class thereof; (iii) the
reinvestment in Shares by a Fund's shareholders of dividends or other
distributions; or (iv) any other offering by the Trust of securities to its
shareholders (collectively "exempt transactions").
SECTION 3. OFFERING OF SHARES
(a) The Distributor shall have the right to buy from the Trust the
Shares needed to fill unconditional orders for unsold Shares of the Funds as
shall then be effectively registered under the Securities Act placed with the
Distributor by investors or selected dealers or selected agents (each as defined
in Section 11 hereof) acting as agent for their customers or on their own
behalf. Alternatively, the Distributor may act as the Trust's agent, to offer,
and to solicit offers to subscribe to, unsold Shares of the Funds as shall then
be effectively registered under the Securities Act. The Distributor will
promptly forward all orders and subscriptions to the Trust. The price that the
Distributor shall pay for Shares purchased from the Trust shall be the net asset
value per Share, determined as set forth in Section 3(c) hereof, used in
determining the public offering price on which the orders are based. Shares
purchased by the Distributor are to be resold by the Distributor to investors at
the public offering price, as set forth in Section 3(b) hereof, or to selected
dealers or selected agents acting as agent for their customers that have entered
into agreements with the Distributor pursuant to Section 11 hereof or acting on
their own behalf. The Trust reserves the right to sell Shares directly to
investors through subscriptions received by the Trust, but no such direct sales
shall affect the sales charges due to the Distributor hereunder.
(b) The public offering price of the Shares of a Fund, I.E., the price
per Share at which the Distributor or selected dealers or selected agents may
sell Shares to the public or to those persons eligible to invest in Shares as
described in the applicable Prospectus, shall be the public offering price
determined in accordance with the then currently effective Prospectus of the
Fund or Class thereof under the Securities Act relating to such Shares. The
public offering price shall not exceed the net asset value at which the
Distributor, when acting as principal, is to purchase such Shares, plus, in the
case of Shares for which an initial sales charge is assessed, an initial charge
equal to a specified percentage or percentages of the public offering price of
the Shares as set forth in the current Prospectus relating to the Shares. In the
case of Shares for which an initial sales charge may be assessed, Shares may be
sold to certain classes of persons at reduced sales charges or without any sales
charge as from time to time set forth in the current Prospectus relating to the
Shares. The Trust will advise the Distributor of the net asset value per Share
<PAGE>
at each time as the net asset value per Share shall have been determined by the
Trust and at such other times as the Distributor may reasonably request.
(c) The net asset value per Share of each Fund or Class thereof shall
be determined by the Trust, or its designated agent, in accordance with and at
the times indicated in the applicable Prospectus on each Fund business day in
accordance with the method set forth in the Prospectus and guidelines
established by the Trust's Board of Trustees (the "Board").
(d) The Trust reserves the right to suspend the offering of Shares of a
Fund or of any Class thereof at any time in the absolute discretion of the
Board, and upon notice of such suspension the Distributor shall cease to offer
Shares of the Funds or Classes thereof specified in the notice.
(e) The Trust, or any agent of the Trust designated in writing to the
Distributor by the Trust, shall be promptly advised by the Distributor of all
purchase orders for Shares received by the Distributor and all subscriptions for
Shares obtained by the Distributor as agent shall be directed to the Trust for
acceptance and shall not be binding until accepted by the Trust. Any order or
subscription may be rejected by the Trust; provided, however, that the Trust
will not arbitrarily or without reasonable cause refuse to accept or confirm
orders or subscriptions for the purchase of Shares. The Trust or its designated
agent will confirm orders and subscriptions upon their receipt, will make
appropriate book entries and, upon receipt by the Trust or its designated agent
of payment thereof, will issue such Shares in certificated or uncertificated
form pursuant to the instructions of the Distributor. The Distributor agrees to
cause such payment and such instructions to be delivered promptly to the Trust
or its designated agent.
SECTION 4. REPURCHASE OR REDEMPTION OF SHARES BY THE TRUST
(a) Any of the outstanding Shares of a Fund or Class thereof may be
tendered for redemption at any time, and the Trust agrees to redeem or
repurchase the Shares so tendered in accordance with its obligations as set
forth in the Organic Documents and the Prospectus relating to the Shares. The
price to be paid to redeem or repurchase the Shares of a Fund of Class thereof
shall be equal to the net asset value calculated in accordance with the
provisions of Section 3(b) hereof less, in the case of Shares for which a
deferred sales charge is assessed, a deferred sales charge equal to a specified
percentage or percentages of the net asset value of those Shares as from time to
time set forth in the Prospectus relating to those Shares or their cost,
whichever is less. Shares of a Fund or Class thereof for which a deferred sales
charge may be assessed and that have been outstanding for a specified period of
time may be redeemed without payment of a deferred sales charge as from time to
time set forth in the Prospectus relating to those Shares.
(b) The Trust or its designated agent shall pay (i) the total amount of
the redemption price consisting of the redemption price less any applicable
deferred sales charge to the redeeming shareholder or its agent and (ii) except
as may be otherwise required by the Rules of Fair Practice (the "Rules") of the
National Association of Securities Dealers Regulation, Inc. (the "NASD") and any
interpretations thereof, any applicable deferred sales charges to the
Distributor in accordance with the Distributor's instructions on or before the
fifth business day (or such other earlier business day as is customary in the
investment company industry) subsequent to the Trust or its agent having
received the notice of redemption in proper form.
<PAGE>
(c) Redemption of Shares or payment therefor may be suspended at times
when the New York Stock Exchange is closed for any reason other than its
customary weekend or holiday closings, when trading thereon is restricted, when
an emergency exists as a result of which disposal by the Trust of securities
owned by a Fund is not reasonably practicable or it is not reasonably
practicable for the Trust fairly to determine the value of a Fund's net assets,
or during any other period when the SEC so requires or permits.
SECTION 5. DUTIES AND REPRESENTATIONS OF THE DISTRIBUTOR
(a) The Distributor shall use reasonable efforts to sell Shares of the
Funds upon the terms and conditions contained herein and in the then current
Prospectus. The Distributor shall devote reasonable time and effort to effect
sales of Shares but shall not be obligated to sell any specific number of
Shares. The services of the Distributor to the Trust hereunder are not to be
deemed exclusive, and nothing herein contained shall prevent the Distributor
from entering into like arrangements with other investment companies so long as
the performance of its obligations hereunder is not impaired thereby.
(b) In selling Shares of the Funds, the Distributor shall use its best
efforts in all material respects duly to conform with the requirements of all
federal and state laws relating to the sale of the Shares. None of the
Distributor, any selected dealer, any selected agent or any other person is
authorized by the Trust to give any information or to make any representations
other than as is contained in a Fund's Prospectus or any advertising materials
or sales literature specifically approved in writing by the Trust or its agents.
(c) The Distributor shall adopt and follow procedures for the
confirmation of sales to investors and selected dealers or selected agents, the
collection of amounts payable by investors and selected dealers or selected
agents on such sales, and the cancellation of unsettled transactions, as may be
necessary to comply with the requirements of the NASD.
(d) The Distributor represents and warrants to the Trust that:
(i) It is a limited liability company duly organized and existing and
in good standing under the laws of the State of Delaware and it is
duly qualified to carry on its business in the State of Maine;
(ii) It is empowered under applicable laws and by its Operating
Agreement to enter into and perform this Agreement;
(iii) All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement;
(iv) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement;
(v) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of the Distributor, enforceable
against the Distributor in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting the rights and remedies of creditors and
secured parties;
<PAGE>
(vi) It is registered under the 1934 Act with the SEC as a
broker-dealer, it is a member in good standing of the NASD, it will
abide by the rules and regulations of the NASD, and it will notify the
Trust if its membership in the NASD is terminated or suspended; and
(vii) The performance by the Distributor of its obligations hereunder
does not and will not contravene any provision of its Operating
Agreement.
(e) Notwithstanding anything in this Agreement, including the
Appendices, to the contrary, the Distributor makes no warranty or representation
as to the number of selected dealers or selected agents with which it has
entered into agreements in accordance with Section 11 hereof, as to the
availability of any Shares to be sold through any selected dealer, selected
agent or other intermediary or as to any other matter not specifically set forth
herein.
SECTION 6. DUTIES AND REPRESENTATIONS OF THE TRUST
(a) The Trust shall furnish to the Distributor copies of all financial
statements and other documents to be delivered to shareholders or investors at
least two Fund business days prior to such delivery and shall furnish the
Distributor copies of all other financial statements, documents and other papers
or information which the Distributor may reasonably request for use in
connection with the distribution of Shares. The Trust shall make available to
the Distributor the number of copies of the Funds' Prospectuses as the
Distributor shall reasonably request.
(b) The Trust shall execute any and all documents, furnish to the
Distributor any and all information, otherwise use its best efforts to take all
actions that may be reasonably necessary and cooperate with the Distributor in
taking any action as may be necessary to register or qualify Shares for sale
under the securities laws of the various states of the United States and other
jurisdictions ("States") as the Distributor shall designate (subject to approval
by the Trust); provided that the Distributor shall not be required to register
as a broker-dealer or file a consent to service of process in any State and
neither the Trust nor any Fund or Class thereof shall be required to qualify as
a foreign corporation, trust or association in any State. Any registration or
qualification may be withheld, terminated or withdrawn by the Trust at any time
in its discretion. The Distributor shall furnish such information and other
material relating to its affairs and activities as may be required by the Trust
in connection with such registration or qualification.
(c) The Trust represents and warrants to the Distributor that:
(i) It is a business trust duly organized and existing and in good standing
under the laws of the State of Delaware;
(ii) It is empowered under applicable laws and by its Organic Documents to
enter into and perform this Agreement;
(iii) All proceedings required by the Organic Documents have been taken to
authorize it to enter into and perform its duties under this Agreement;
(iv) It is an open-end management investment company registered with the
SEC under the 1940 Act;
<PAGE>
(v) All Shares, when issued, shall be validly issued, fully paid and
non-assessable;
(vi) This Agreement, when executed and delivered, will constitute a legal,
valid and binding obligation of the Trust, enforceable against the Trust in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights and
remedies of creditors and secured parties;
(vii) The performance by the Trust of its obligations hereunder does not
and will not contravene any provision of its Organic Documents.
(viii) The Registration statement is currently effective and will remain
effective with respect to all Shares of the Funds and Classes thereof being
offered for sale;
(ix) The Registration Statement and Prospectuses have been or will be, as
the case may be, prepared in conformity with the requirements of the Securities
Act and the rules and regulations thereunder;
(x) The Registration Statement and Prospectuses contain or will contain all
statements required to be stated therein in accordance with the Securities Act
and the rules and regulations thereunder; all statements of fact contained or to
be contained in the Registration Statement or Prospectuses are or will be true
and correct at the time indicated or on the effective date as the case may be;
and neither the Registration Statement nor any Prospectus, when they shall
become effective or be authorized for use, will include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of
Shares;
(xi) It will from time to time file such amendment or amendments to the
Registration Statement and Prospectuses as, in the light of then-current and
then-prospective developments, shall, in the opinion of its counsel, be
necessary in order to have the Registration Statement and Prospectuses at all
times contain all material facts required to be stated therein or necessary to
make any statements therein not misleading to a purchaser of Shares ("Required
Amendments");
(xii) It shall not file any amendment to the Registration Statement or
Prospectuses without giving the Distributor reasonable advance notice thereof;
provided, however, that nothing contained in this Agreement shall in any way
limit the Trust's right to file at any time such amendments to the Registration
Statement or Prospectuses, of whatever character, as the Trust may deem
advisable, such right being in all respects absolute and unconditional; and
(xiii) Any amendment to the Registration Statement or Prospectuses
hereafter filed will, when it becomes effective, contain all statements required
to be stated therein in accordance with the 1940 Act and the rules and
regulations thereunder; all statements of fact contained in the Registration
Statement or Prospectuses will, when be true and correct at the time indicated
or on the effective date as the case may be; and no such amendment, when it
becomes effective, will include an untrue statement of a material fact or will
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading to a purchaser of the Shares.
<PAGE>
SECTION 7. STANDARD OF CARE
(a) The Distributor shall use its best judgment and reasonable efforts
in rendering services to the Trust under this Agreement but shall be under no
duty to take any action except as specifically set forth herein or as may be
specifically agreed to by the Distributor in writing. The Distributor shall not
be liable to the Trust or any of the Trust's shareholders for any error of
judgment or mistake of law, for any loss arising out of any investment, or for
any action or inaction of the Distributor in the absence of bad faith, willful
misfeasance or gross negligence in the performance of the Distributor's duties
or obligations under this Agreement or by reason or the Distributor's reckless
disregard of its duties and obligations under this Agreement.
SECTION 8. INDEMNIFICATION
(a) The Trust will indemnify, defend and hold the Distributor, its
employees, agents, directors and officers and any person who controls the
Distributor within the meaning of section 15 of the Securities Act or section 20
of the 1934 Act ("Distributor Indemnitees") free and harmless from and against
any and all claims, demands, actions, suits, judgments, liabilities, losses,
damages, costs, charges, reasonable counsel fees and other expenses of every
nature and character (including the cost of investigating or defending such
claims, demands, actions, suits or liabilities and any reasonable counsel fees
incurred in connection therewith) which any Distributor Indemnitee may incur,
under the Securities Act, or under common law or otherwise, arising out of or
based upon any alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectuses or arising out of or based upon any
alleged omission to state a material fact required to be stated in any one
thereof or necessary to make the statements in any one thereof not misleading,
unless such statement or omission was made in reliance upon, and in conformity
with, information furnished in writing to the Trust in connection with the
preparation of the Registration Statement or exhibits to the Registration
Statement by or on behalf of the Distributor ("Distributor Claims").
After receipt of the Distributor's notice of termination under Section
13(e), the Trust shall indemnify and hold each Distributor Indemnitee free and
harmless from and against any Distributor Claim; provided, that the term
Distributor Claim for purposes of this sentence shall mean any Distributor Claim
related to the matters for which the Distributor has requested amendment to the
Registration Statement and for which the Trust has not filed a Required
Amendment, regardless of with respect to such matters whether any statement in
or omission from the Registration Statement was made in reliance upon, or in
conformity with, information furnished to the Trust by or on behalf of the
Distributor.
(b) The Trust may assume the defense of any suit brought to enforce any
Distributor Claim and may retain counsel of good standing chosen by the Trust
and approved by the Distributor, which approval shall not be withheld
unreasonably. The Trust shall advise the Distributor that it will assume the
defense of the suit and retain counsel within ten (10) days of receipt of the
notice of the claim. If the Trust assumes the defense of any such suit and
retains counsel, the defendants shall bear the fees and expenses of any
additional counsel that they retain. If the Trust does not assume the defense of
any such suit, or if the Distributor does not approve of counsel chosen by the
Trust or has been advised that it may have available defenses or claims that are
not available to or conflict with those available to the Trust, the Trust will
reimburse any Distributor Indemnitee named as defendant in such suit for the
<PAGE>
reasonable fees and expenses of any counsel that person retains. A Distributor
Indemnitee shall not settle or confess any claim without the prior written
consent of the Trust, which consent shall not be unreasonably withheld or
delayed.
(c) The Distributor will indemnify, defend and hold the Trust and its
several officers and trustees (collectively, the "Trust Indemnitees"), free and
harmless from and against any and all claims, demands, actions, suits,
judgments, liabilities, losses, damages, costs, charges, reasonable counsel fees
and other expenses of every nature and character (including the cost of
investigating or defending such claims, demands, actions, suits or liabilities
and any reasonable counsel fees incurred in connection therewith), but only to
the extent that such claims, demands, actions, suits, judgments, liabilities,
losses, damages, costs, charges, reasonable counsel fees and other expenses
result from, arise out of or are based upon:
(i) any alleged untrue statement of a material fact contained in the
Registration Statement or Prospectus or any alleged omission of a
material fact required to be stated or necessary to make the
statements therein not misleading, if such statement or omission was
made in reliance upon, and in conformity with, information furnished
to the Trust in writing in connection with the preparation of the
Registration Statement or Prospectus by or on behalf of the
Distributor; or
(ii) any act of, or omission by, Distributor or its sales
representatives that does not conform to the standard of care set
forth in Section 7 of this Agreement ("Trust Claims").
(d) The Distributor may assume the defense of any suit brought to
enforce any Trust Claim and may retain counsel of good standing chosen by the
Distributor and approved by the Trust, which approval shall not be withheld
unreasonably. The Distributor shall advise the Trust that it will assume the
defense of the suit and retain counsel within ten (10) days of receipt of the
notice of the claim. If the Distributor assumes the defense of any such suit and
retains counsel, the defendants shall bear the fees and expenses of any
additional counsel that they retain. If the Distributor does not assume the
defense of any such suit, or if the Trust does not approve of counsel chosen by
the Distributor or has been advised that it may have available defenses or
claims that are not available to or conflict with those available to the
Distributor, the Distributor will reimburse any Trust Indemnitee named as
defendant in such suit for the reasonable fees and expenses of any counsel that
person retains. A Trust Indemnitee shall not settle or confess any claim without
the prior written consent of the Distributor, which consent shall not be
unreasonably withheld or delayed.
(e) The Trust's and the Distributor's obligations to provide
indemnification under this Section is conditioned upon the Trust or the
Distributor receiving notice of any action brought against a Distributor
Indemnitee or Trust Indemnitee, respectively, by the person against whom such
action is brought within twenty (20) days after the summons or other first legal
process is served. Such notice shall refer to the person or persons against whom
the action is brought. The failure to provide such notice shall not relieve the
party entitled to such notice of any liability that it may have to any
Distributor Indemnitee or Trust Indemnitee except to the extent that the ability
of the party entitled to such notice to defend such action has been materially
adversely affected by the failure to provide notice.
(f) The provisions of this Section and the parties' representations and
warranties in this Agreement shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Distributor
<PAGE>
Indemnitee or Trust Indemnitee and shall survive the sale and redemption of any
Shares made pursuant to subscriptions obtained by the Distributor. The
indemnification provisions of this Section will inure exclusively to the benefit
of each person that may be a Distributor Indemnitee or Trust Indemnitee at any
time and their respective successors and assigns (it being intended that such
persons be deemed to be third party beneficiaries under this Agreement).
(g) Each party agrees promptly to notify the other party of the
commencement of any litigation or proceeding of which it becomes aware arising
out of or in any way connected with the issuance or sale of Shares.
(h) Nothing contained herein shall require the Trust to take any action
contrary to any provision of its Organic Documents or any applicable statute or
regulation or shall require the Distributor to take any action contrary to any
provision of its Operating Agreement or any applicable statute or regulation;
provided, however, that neither the Trust nor the Distributor may amend their
Organic Documents or Operating Agreement, respectively, in any manner that would
result in a violation of a representation or warranty made in this Agreement.
(i) Nothing contained in this section shall be construed to protect the
Distributor against any liability to the Trust or its security holders to which
the Distributor would otherwise be subject by reason of its failure to satisfy
the standard of care set forth in Section 7 of this Agreement.
SECTION 9. NOTIFICATION BY THE TRUST
The Trust shall advise the Distributor immediately: (i) of any request
by the SEC for amendments to the Trust's Registration Statement or Prospectus or
for additional information; (ii) in the event of the issuance by the SEC of any
stop order suspending the effectiveness of the Trust's Registration Statement or
any Prospectus or the initiation of any proceedings for that purpose; (iii) of
the happening of any material event which makes untrue any statement made in the
Trust's then current Registration Statement or Prospectus or which requires the
making of a change in either thereof in order to make the statements therein not
misleading; and (iv) of all action of the SEC with respect to any amendments to
the Trust's Registration Statement or Prospectus which may from time to time be
filed with the SEC under the 1940 Act or the Securities Act.
SECTION 10. COMPENSATION; EXPENSES
(a) In consideration of the Distributor's services in connection with
the distribution of Shares of each Fund and Class thereof, the Distributor shall
receive: (i) any applicable sales charge assessed upon investors in connection
with the purchase of Shares; (ii) from the Trust, any applicable contingent
deferred sales charge ("CDSC") assessed upon investors in connection with the
redemption of Shares; and (iii) from the Trust, the distribution service fees
with respect to the Shares of those Classes as designated in Appendix A for
which a Plan is effective (the "Distribution Fee"). The Distribution Fee shall
be accrued daily by each applicable Fund or Class thereof and shall be paid
monthly as promptly as possible after the last day of each calendar month but in
any event on or before the fifth (5th) Fund business day after month-end, at the
rate or in the amounts set forth in Appendix A and, as applicable, the Plans.
<PAGE>
(b) The Trust shall cause its transfer agent (the "Transfer Agent") to
withhold, from redemption proceeds payable to holders of Shares of the Funds and
the Classes thereof, all CDSCs properly payable by the shareholders in
accordance with the terms of the applicable Prospectus and shall cause the
Transfer Agent to pay such amounts over to the Distributor as promptly as
possible after the settlement date for each redemption of Shares.
(c) Except as specified in Sections 8 and 10(a), the Distributor shall
be entitled to no compensation or reimbursement of expenses for the services
provided by the Distributor pursuant to this Agreement.
(d) The Trust shall be responsible and assumes the obligation for
payment of all the expenses of the Funds, including fees and disbursements of
its counsel and auditors, in connection with the preparation and filing of the
Registration Statement and Prospectuses (including but not limited to the
expense of setting in type the Registration Statement and Prospectuses and
printing sufficient quantities for internal compliance, regulatory purposes and
for distribution to current shareholders).
(e) The Trust shall bear the cost and expenses (i) of the registration
of the Shares for sale under the Securities Act; (ii) of the registration or
qualification of the Shares for sale under the securities laws of the various
States; (iii) if necessary or advisable in connection therewith, of qualifying
the Trust, the Funds or the Classes thereof (but not the Distributor) as an
issuer or as a broker or dealer, in such States as shall be selected by the
Trust and the Distributor pursuant to Section 6(b) hereof; and (iv) payable to
each State for continuing registration or qualification therein until the Trust
decides to discontinue registration or qualification pursuant to Section 6(b)
hereof. The Distributor shall pay all expenses relating to the Distributor's
broker-dealer qualification.
SECTION 11. SELECTED DEALER AND SELECTED AGENT AGREEMENTS
The Distributor shall have the right to enter into selected dealer
agreements with securities dealers of its choice ("selected dealers") and
selected agent agreements with depository institutions and other financial
intermediaries of its choice ("selected agents") for the sale of Shares and to
fix therein the portion of the sales charge, if any, that may be allocated to
the selected dealers or selected agents; provided, that the Trust shall approve
the forms of agreements with selected dealers or selected agents and shall
review the compensation set forth therein. Shares of each Fund or Class thereof
shall be resold by selected dealers or selected agents only at the public
offering price(s) set forth in the Prospectus relating to the Shares. Within the
United States, the Distributor shall offer and sell Shares of the Funds only to
such selected dealers as are members in good standing of the NASD.
SECTION 12. CONFIDENTIALITY
The Distributor agrees to treat all records and other information
related to the Trust as proprietary information of the Trust and, on behalf of
itself and its employees, to keep confidential all such information, except that
the Distributor may:
(i) prepare or assist in the preparation of periodic reports to
shareholders and regulatory bodies such as the SEC;
<PAGE>
(ii) provide information typically supplied in the investment company
industry to companies that track or report price, performance or other
information regarding investment companies; and
(iii) release such other information as approved in writing by the
Trust, which approval shall not be unreasonably withheld;
provided, however, that the Distributor may release any information regarding
the Trust without the consent of the Trust if the Distributor reasonably
believes that it may be exposed to civil or criminal legal proceedings for
failure to comply, when requested to release any information by duly constituted
authorities or when so requested by the Trust.
SECTION 13. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to each Fund on
the later of (i) the date first above written or (ii) the date on which the
Trust's Registration Statement relating to Shares of the Fund becomes effective.
Upon effectiveness of this Agreement, it shall supersede all previous agreements
between the parties hereto covering the subject matter hereof insofar as such
Agreement may have been deemed to relate to the Funds.
(b) This Agreement shall continue in effect with respect to a Fund for
a period of one year from its effectiveness and thereafter shall continue in
effect with respect to a Fund until terminated; provided, that continuance is
specifically approved at least annually (i) by the Board or by a vote of a
majority of the outstanding voting securities of the Fund and (ii) by a vote of
a majority of Trustees of the Trust (I) who are not parties to this Agreement or
interested persons of any such party (other than as Trustees of the Trust) and
(II) with respect to each class of a Fund for which there is an effective Plan,
who do not have any direct or indirect financial interest in any such Plan
applicable to the class or in any agreements related to the Plan, cast in person
at a meeting called for the purpose of voting on such approval.
(c) This Agreement may be terminated at any time with respect to a
Fund, 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 or, with respect to
each class of a Fund for which there is an effective Plan, a majority of
Trustees of the Trust who do not have any direct or indirect financial interest
in any such Plan or in any agreements related to the Plan, on 60 days' written
notice to the Distributor or (ii) by the Distributor on 60 days' written notice
to the Trust.
(d) This Agreement shall automatically terminate upon its assignment
and upon the termination of the Distributor's membership in the NASD.
(e) If the Trust shall not file a Required Amendment within fifteen
days following receipt of a written request from the Distributor to do so, the
Distributor may, at its option, terminate this Agreement immediately.
(f) The obligations of Sections 5(d), 6(d), 8, 9 and 10 shall survive
any termination of this Agreement.
<PAGE>
SECTION 14. NOTICES
Any notice required or permitted to be given hereunder by either party
to the other shall be deemed sufficiently given if personally delivered or sent
by telegram, facsimile or registered, certified or overnight mail, postage
prepaid, addressed by the party giving such notice to the other party at the
last address furnished by the other party to the party giving such notice, and
unless and until changed pursuant to the foregoing provisions hereof each such
notice shall be addressed to the Trust or the Distributor, as the case may be,
at their respective principal places of business.
SECTION 15. ACTIVITIES OF THE DISTRIBUTOR
Except to the extent necessary to perform the Distributor's obligations
hereunder, nothing herein shall be deemed to limit or restrict the Distributor's
right, or the right of any of the Distributor's employees, agents, officers or
directors who may also be a trustee, officer or employee of the Trust, or
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 16. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the shareholders of each Fund shall not
be liable for any obligations of the Trust or of the Funds under this Agreement,
and the Distributor 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 Distributor'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 17. MISCELLANEOUS
(a) Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement.
(b) 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.
(c) This Agreement shall be governed by, and the provisions of this
Agreement shall be construed and interpreted under and in accordance with, the
laws of the State of New York.
(d) This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof, whether oral or written.
(e) This Agreement may be executed by the parties hereto on any number
of counterparts, and all of the counterparts taken together shall be deemed to
constitute one and the same instrument.
(f) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
<PAGE>
(g) Section headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
(h) Notwithstanding any other provision of this Agreement, the parties
agree that the assets and liabilities of each Fund are separate and distinct
from the assets and liabilities of each other Fund and that no Fund shall be
liable or shall be charged for any debt, obligation or liability of any other
Fund, whether arising under this Agreement or otherwise.
(i) No affiliated person, employee, agent, officer or director of the
Distributor shall be liable at law or in equity for the Distributor's
obligations under this Agreement.
(j) Each of the undersigned warrants and represents that they have full
power and authority to sign this Agreement on behalf of the party indicated and
that their signature will bind the party indicated to the terms hereof.
(k) 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 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers or persons, as of the day and year first above written.
MONARCH FUNDS
By:
______________________________________
Maurice J. DeWald
Trustee
FORUM FUND SERVICES, LLC
By:
_____________________________________
John Y. Keffer
Director
<PAGE>
MONARCH FUNDS
DISTRIBUTION AGREEMENT
APPENDIX A
FUNDS AND CLASSES OF THE TRUST
AS OF JANUARY 1, 1999
TREASURY CASH FUND: Universal Shares
Institutional Shares
Investor Shares
GOVERNMENT CASH FUND: Universal Shares
Institutional Shares
Investor Shares
CASH FUND: Universal Shares
Institutional Shares
Investor Shares
* * * * *
SHAREHOLDER SERVICE PAYMENTS PURSUANT TO THE SERVICE PLAN
TREASURY CASH FUND -- INSTITUTIONAL CLASS AND INVESTOR CLASS
GOVERNMENT CASH FUND-- INSTITUTIONAL CLASS AND INVESTOR CLASS
CASH FUND-- INSTITUTIONAL CLASS AND INVESTOR CLASS
0.20% of the average annual daily net assets of the Investor Class or
Institutional Class, as applicable, represented by shares owned by
investors for which the shareholder service agent maintains a servicing
relationship.
DISTRIBUTION PAYMENTS PURSUANT TO THE PLAN
TREASURY CASH FUND -- INVESTOR CLASS
GOVERNMENT CASH FUND-- INVESTOR CLASS
CASH FUND-- INVESTOR CLASS
0.25% of the average annual daily net assets of the Investor Class
represented by shares owned by investors for which the shareholder
service agent maintains a servicing relationship.
<PAGE>
Exhibit (9)(b)
MONARCH FUNDS
TRANSFER AGENCY AGREEMENT
AGREEMENT made as of the 29th day of October, 1998 by and between
Monarch Funds, a Delaware business trust, with its principal office and place of
business at Two Portland Square, Portland, Maine 04101 (the "Trust"), and Forum
Shareholder Services, LLC, a Delaware limited liability company with its
principal office and place of business at Two Portland Square, Portland, Maine
04101 ("Forum").
WHEREAS, the Trust is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets, and is authorized to divide those series into
separate classes; and
WHEREAS, the Trust offers shares in various series as listed in
Appendix A hereto (each such series, together with all other series subsequently
established by the Trust and made subject to this Agreement in accordance with
Section 13, being herein referred to as a "Fund," and collectively as the
"Funds") and the Trust offers shares of various classes of each Fund as listed
in Appendix A hereto (each such class together with all other classes
subsequently established by the Trust in a Fund being herein referred to as a
"Class," and collectively as the "Classes"); and
WHEREAS, the Trust on behalf of the Funds desires to appoint Forum as
its transfer agent and dividend disbursing agent and Forum desires to accept
such appointment;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Trust and Forum hereby agree as follows:
SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) Appointment. The Trust, on behalf of the Funds, hereby appoints
Forum to act as, and Forum agrees to act as, (i) transfer agent for the
authorized and issued shares of beneficial interest of the Trust representing
interests in each of the respective Funds and Classes thereof ("Shares"), (ii)
dividend disbursing agent and (iii) agent in connection with any accumulation,
open-account or similar plans provided to the registered owners of shares of any
of the Funds ("Shareholders") and set out in the currently effective
prospectuses and statements of additional information (collectively
"prospectus") of the applicable Fund, including, without limitation, any
periodic investment plan or periodic withdrawal program.
(b) Document Delivery. The Trust has delivered to Forum copies of (i)
the Trust's Trust Instrument and Bylaws (collectively, as amended from time to
time, "Organic Documents"), (ii) the Trust's Registration Statement and all
amendments thereto filed with the U.S. Securities and Exchange Commission
("SEC") pursuant to the Securities Act of 1933, as amended (the "Securities
Act"), or the Investment Company Act of 1940, as amended ("1940 Act")(the
"Registration Statement"), (iii) the Trust's current Prospectus and Statement of
Additional Information of each Fund (collectively, as currently in effect and as
amended or supplemented, the "Prospectus"), (iv) each current plan of
distribution or similar document adopted by the Trust under Rule 12b-1 under the
1940 Act ("Plan") and each current shareholder service plan or similar document
<PAGE>
adopted by the Trust ("Service Plan"), and (v) all procedures adopted by the
Trust with respect to the Funds (i.e., repurchase agreement procedures), and
shall promptly furnish Forum with all amendments of or supplements to the
foregoing. The Trust shall deliver to Forum a certified copy of the resolution
of the Board of Trustees of the Trust (the "Board") appointing Forum and
authorizing the execution and delivery of this Agreement.
SECTION 2. DUTIES OF FORUM
(a) Services. Forum agrees that in accordance with procedures
established from time to time by agreement between the Trust on behalf of each
of the Funds, as applicable, and Forum, Forum will perform the following
services:
(i) provide the services of a transfer agent, dividend disbursing agent
and, as relevant, agent in connection with accumulation, open-account
or similar plans (including without limitation any periodic investment
plan or periodic withdrawal program) that are customary for open-end
management investment companies including: (A) maintaining all
Shareholder accounts, (B) preparing Shareholder meeting lists, (C)
mailing proxies to Shareholders, (D) mailing Shareholder reports and
prospectuses to current Shareholders, (E) withholding taxes on U.S.
resident and non-resident alien accounts, (F) preparing and filing U.S.
Treasury Department Forms 1099 and other appropriate forms required by
federal authorities with respect to distributions for Shareholders, (G)
preparing and mailing confirmation forms and statements of account to
Shareholders for all purchases and redemptions of Shares and other
confirmable transactions in Shareholder accounts, (H) preparing and
mailing activity statements for Shareholders, and (I) providing
Shareholder account information;
(ii) receive for acceptance orders for the purchase of Shares and
promptly deliver payment and appropriate documentation therefor to the
custodian of the applicable Fund (the "Custodian") or, in the case of
Fund's operating in a master-feeder or fund of funds structure, to the
transfer agent or interestholder recordkeeper for the master portfolios
in which the Fund invests;
(iii) pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder account;
(iv) receive for acceptance redemption requests and deliver the
appropriate documentation therefor to the Custodian or, in the case of
Fund's operating in a master-feeder or fund of funds structure, to the
transfer agent or interestholder recordkeeper for the master portfolios
in which the Fund invests;
(v) as and when it receives monies paid to it by the Custodian with
respect to any redemption, pay the redemption proceeds as required by
the prospectus pursuant to which the redeemed Shares were offered and
as instructed by the redeeming Shareholders;
(vi) effect transfers of Shares upon receipt of appropriate
instructions from Shareholders;
(vii) prepare and transmit to Shareholders (or credit the appropriate
Shareholder accounts) payments for all distributions declared by the
Trust with respect to Shares;
<PAGE>
(viii) issue share certificates and replacement share certificates for
those share certificates alleged to have been lost, stolen, or
destroyed upon receipt by Forum of indemnification satisfactory to
Forum and protecting Forum and the Trust and, at the option of Forum,
issue replacement certificates in place of mutilated share certificates
upon presentation thereof without requiring indemnification;
(ix) receive from Shareholders or debit Shareholder accounts for sales
commissions, including contingent deferred, deferred and other sales
charges, and service fees (i.e., wire redemption charges) and prepare
and transmit payments to underwriters, selected dealers and others for
commissions and service fees received;
(x) track shareholder accounts by financial intermediary source and
otherwise as requested by the Trust and provide periodic reporting to
the Trust or its administrator or other agent;
(xi) maintain records of account for and provide reports and
statements to the Trust and Shareholders as to the foregoing;
(xii) record the issuance of Shares of the Trust and maintain pursuant
to Rule 17Ad-10(e) under the Securities Exchange Act of 1934, as
amended ("1934 Act") a record of the total number of Shares of the
Trust, each Fund and each Class thereof, that are authorized, based
upon data provided to it by the Trust, and are issued and outstanding
and provide the Trust on a regular basis a report of the total number
of Shares that are authorized and the total number of Shares that are
issued and outstanding; and
(xiii) provide a system which will enable the Trust to calculate the
total number of Shares of each Fund and Class thereof sold in each
State.
(b) Other Services. Forum shall provide the following additional
services on behalf of the Trust and such other services agreed to in
writing by the Trust and Forum:
(i) monitor and make appropriate filings with respect to the
escheatment laws of the various states and territories of the United
States; and
(ii) receive and tabulate proxy votes/oversee the activities of proxy
solicitation firms and coordinate the tabulation of proxy and
shareholder meeting votes.
(c) Blue Sky Matters. The Trust or its administrator or other agent (i)
shall identify to Forum in writing those transactions and assets to be treated
as exempt from reporting for each state and territory of the United States and
for each foreign jurisdiction (collectively "States") and (ii) shall monitor the
sales activity with respect to Shareholders domiciled or resident in each State.
The responsibility of Forum for the Trust's State registration status is solely
limited to the reporting of transactions to the Trust, and Forum shall have no
obligation, when recording the issuance of Shares, to monitor the issuance of
such Shares or to take cognizance of any laws relating to the issue or sale of
such Shares, which functions shall be the sole responsibility of the Trust or
its administrator or other agent.
<PAGE>
(d) Safekeeping. Forum shall establish and maintain facilities and
procedures reasonably acceptable to the Trust for the safekeeping, control,
preparation and use of share certificates, check forms, and facsimile signature
imprinting devices. Forum shall establish and maintain facilities and procedures
reasonably acceptable to the Trust for safekeeping of all records maintained by
Forum pursuant to this Agreement.
(e) Cooperation With Accountants. Forum shall cooperate with each
Fund's independent public accountants and shall take reasonable action to make
all necessary information available to the accountants for the performance of
the accountants' duties.
(f) Responsibility for Compliance With Law. Except with respect to
Forum's duties as set forth in this Section 2 and except as otherwise
specifically provided herein, the Trust assumes all responsibility for ensuring
that the Trust complies with all applicable requirements of the Securities Act,
the 1940 Act and any laws, rules and regulations of governmental authorities
with jurisdiction over the Trust. All references to any law in this Agreement
shall be deemed to include reference to the applicable rules and regulations
promulgated under authority of the law and all official interpretations of such
law or rules or regulations.
SECTION 3. RECORDKEEPING
(a) Predecessor Records. Prior to the commencement of Forum's
responsibilities under this Agreement, if applicable, the Trust shall deliver or
cause to be delivered over to Forum (i) an accurate list of Shareholders of the
Trust, showing each Shareholder's address of record, number of Shares owned and
whether such Shares are represented by outstanding share certificates and (ii)
all Shareholder records, files, and other materials necessary or appropriate for
proper performance of the functions assumed by Forum under this Agreement
(collectively referred to as the "Materials"). The Trust shall on behalf of each
applicable Fund or Class indemnify and hold Forum harmless from and against any
and all losses, damages, costs, charges, counsel fees, payments, expenses and
liability arising out of or attributable to any error, omission, inaccuracy or
other deficiency of the Materials, or out of the failure of the Trust to provide
any portion of the Materials or to provide any information in the Trust's
possession or control reasonably needed by Forum to perform the services
described in this Agreement.
(b) Recordkeeping. Forum shall keep records relating to the services to
be performed under this Agreement, in the form and manner as it may deem
advisable and as required by applicable law. To the extent required by Section
31 of the 1940 Act, and the rules thereunder, Forum agrees that all such records
prepared or maintained by Forum relating to the services to be performed by
Forum under this Agreement are the property of the Trust and will be preserved,
maintained and made available in accordance with Section 31 of the 1940 Act and
the rules thereunder, and will be surrendered promptly to the Trust on and in
accordance with the Trust's request. The Trust and the Trust's authorized
representatives shall have access to Forum's records relating to the services to
be performed under this Agreement at all times during Forum's normal business
hours. Upon the reasonable request of the Trust, copies of any such records
shall be provided promptly by Forum to the Trust or the Trust's authorized
representatives.
(c) Confidentiality of Records. Forum and the Trust agree that all
books, records, information, and data pertaining to the business of the other
party which are exchanged or received pursuant to the negotiation or the
carrying out of this Agreement shall remain confidential, and shall not be
<PAGE>
voluntarily disclosed to any other person, except as may be required by law.
(d) Inspection of Records by Others. In case of any requests or demands
for the inspection of the Shareholder records of the Trust, Forum will endeavor
to notify the Trust and to secure instructions from an authorized officer of the
Trust as to such inspection. Forum shall abide by the Trust's instructions for
granting or denying the inspection; provided, however, that Forum may grant the
inspection without instructions if Forum is advised by counsel to Forum that
failure to do so will result in liability to Forum.
SECTION 4. ISSUANCE AND TRANSFER OF SHARES
(a) Issuance of Shares. Forum shall make original issues of Shares of
each Fund and Class thereof in accordance with the Trust's then current
prospectus only upon receipt of (i) instructions requesting the issuance, (ii) a
certified copy of a resolution of the Board authorizing the issuance, (iii)
necessary funds for the payment of any original issue tax applicable to such
Shares, and (iv) an opinion of the Trust's counsel as to the legality and
validity of the issuance, which opinion may provide that it is contingent upon
the filing by the Trust of an appropriate notice with the SEC, as required by
Section 24 of the 1940 Act or the rules thereunder. If the opinion described in
(iv) above is contingent upon a filing under Section 24 of the 1940 Act, the
Trust shall indemnify Forum for any liability arising from the failure of the
Trust to comply with that section or the rules thereunder.
(b) Transfer of Shares. Transfers of Shares of each Fund and Class
thereof shall be registered on the Shareholder records maintained by Forum. In
registering transfers of Shares, Forum may rely upon the Uniform Commercial Code
as in effect in the State of Delaware or any other statutes that, in the opinion
of Forum's counsel, protect Forum and the Trust from liability arising from (i)
not requiring complete documentation, (ii) registering a transfer without an
adverse claim inquiry, (iii) delaying registration for purposes of such inquiry
or (iv) refusing registration whenever an adverse claim requires such refusal.
As Transfer Agent, Forum will be responsible for delivery to the transferor and
transferee of such documentation as is required by the Uniform Commercial Code.
SECTION 5. SHARE CERTIFICATES
(a) Certificates. The Trust shall furnish to Forum a supply of blank
share certificates of each Fund and Class thereof and, from time to time, will
renew such supply upon Forum's request. Blank share certificates shall be signed
manually or by facsimile signatures of officers of the Trust authorized to sign
by the Organic Documents of the Trust and, if required by the Organic Documents,
shall bear the Trust's seal or a facsimile thereof. Unless otherwise directed by
the Trust, Forum may issue or register Share certificates reflecting the manual
or facsimile signature of an officer who has died, resigned or been removed by
the Trust.
(b) Endorsement; Transportation. New Share certificates shall be issued
by Forum upon surrender of outstanding Share certificates in the form deemed by
Forum to be properly endorsed for transfer and satisfactory evidence of
compliance with all applicable laws relating to the payment or collection of
taxes. Forum shall forward Share certificates in "non-negotiable" form by
first-class or registered mail, or by whatever means Forum deems equally
<PAGE>
reliable and expeditious. Forum shall not mail Share certificates in
"negotiable" form unless requested in writing by the Trust and fully indemnified
by the Trust to Forum's satisfaction.
(c) Non-Issuance of Certificates. In the event that the Trust informs
Forum that any Fund or Class thereof does not issue share certificates, Forum
shall not issue any such share certificates and the provisions of this Agreement
relating to share certificates shall not be applicable with respect to those
Funds or Classes thereof.
SECTION 6. SHARE PURCHASES; ELIGIBILITY TO RECEIVE DISTRIBUTIONS
(a) Purchase Orders. Shares shall be issued in accordance with
the terms of a Fund's or Class' prospectus after Forum or its agent receives
either:
(i) (A) an instruction directing investment in a Fund or Class, (B) a
check (other than a third party check) or a wire or other electronic
payment in the amount designated in the instruction and (C), in the
case of an initial purchase, a completed account application; or
(ii) the information required for purchases pursuant to a selected
dealer agreement, processing organization agreement, or a similar
contract with a financial intermediary.
(b) Distribution Eligibility. Shares issued in a Fund after receipt of
a completed purchase order shall be eligible to receive distributions of the
Fund at the time specified in the prospectus pursuant to which the Shares are
offered.
(c) Determination of Federal Funds. Shareholder payments shall be
considered Federal Funds no later than on the day indicated below unless other
times are noted in the prospectus of the applicable Class or Fund:
(i) for a wire received, at the time of the receipt of the wire;
(ii) for a check drawn on a member bank of the Federal Reserve
System, on the second Fund Business Day following receipt of the check; and
(iv) for a check drawn on an institution that is not a member of the
Federal Reserve System, at such time as Forum is credited with Federal
Funds with respect to that check.
SECTION 7. FEES AND EXPENSES
(a) Fees. For the services provided by Forum pursuant to this
Agreement, the Trust, on behalf of each Fund, agrees to pay Forum the fees set
forth in Clauses (i) and (ii) of Appendix B hereto. Fees will begin to accrue
for each Fund on the latter of the date of this Agreement or the date of
commencement of operations of the Fund. If fees begin to accrue in the middle of
a month or if this Agreement terminates before the end of any month, all fees
for the period from that date to the end of that month or from the beginning of
that month to the date of termination, as the case may be, shall be prorated
according to the proportion that the period bears to the full month in which the
effectiveness or termination occurs. Upon the termination of this Agreement with
respect to a Fund, the Trust shall pay to Forum such compensation as shall be
payable prior to the effective date of termination.
<PAGE>
(b) Expenses. In connection with the services provided by Forum
pursuant to this Agreement, the Trust, on behalf of each Fund, agrees to
reimburse Forum for the expenses set forth in Appendix B hereto. In addition,
the Trust, on behalf of the applicable Fund, shall reimburse Forum for all
expenses and employee time (at 150% of salary) attributable to any review of the
Trust's accounts and records by the Trust's independent accountants or any
regulatory body outside of routine and normal periodic reviews. Should the Trust
exercise its right to terminate this Agreement, the Trust, on behalf of the
applicable Fund, shall reimburse Forum for all out-of-pocket expenses and
employee time (at 150% of salary) associated with the copying and movement of
records and material to any successor person and providing assistance to any
successor person in the establishment of the accounts and records necessary to
carry out the successor's responsibilities.
(c) Payment. All fees and reimbursements are payable in arrears on a
monthly basis and the Trust, on behalf of the applicable Fund, agrees to pay all
fees and reimbursable expenses within five (5) business days following receipt`
of the respective billing notice.
SECTION 8. REPRESENTATIONS AND WARRANTIES
(a) Representations and Warranties of Forum. Forum represents and
warrants to the Trust that:
(i) It is a corporation duly organized and existing and in good
standing under the laws of the State of Delaware.
(ii) It is duly qualified to carry on its business in the State of
Maine.
(iii) It is empowered under applicable laws and by its Article of
Incorporation and Bylaws to enter into this Agreement and perform its
duties under this Agreement.
(iv) All requisite corporate proceedings have been taken to authorize
it to enter into this Agreement and perform its duties under this
Agreement.
(v) It has access to the necessary facilities, equipment, and
personnel to perform its duties and obligations under this Agreement.
(vi) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of Forum, enforceable against
Forum in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties.
(vii) It is registered as a transfer agent under Section 17A of the
1934 Act.
(b) Representations and Warranties of the Trust. The Trust represents
and warrants to Forum that:
(i) It is a business trust duly organized and existing and in good
standing under the laws of Delaware.
<PAGE>
(ii) It is empowered under applicable laws and by its Organic
Documents to enter into this Agreement and perform its duties under
this Agreement.
(iii) All requisite corporate proceedings have been taken to authorize
it to enter into this Agreement and perform its duties under this
Agreement.
(iv) It is an open-end management investment company registered under
the 1940 Act.
(v) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of the Trust, enforceable against
the Trust in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured
parties.
(vi) A registration statement under the Securities Act is currently
effective and will remain effective, and appropriate State securities
law filings have been made and will continue to be made, with respect
to all Shares of the Funds and Classes of the Trust being offered for
sale.
SECTION 9. PROPRIETARY INFORMATION
(a) Proprietary Information of Forum. The Trust acknowledges that the
databases, computer programs, screen formats, report formats, interactive design
techniques, and documentation manuals maintained by Forum on databases under the
control and ownership of Forum or a third party constitute copyrighted, trade
secret, or other proprietary information (collectively, "Proprietary
Information") of substantial value to Forum or the third party. The Trust agrees
to treat all Proprietary Information as proprietary to Forum and further agrees
that it shall not divulge any Proprietary Information to any person or
organization except as may be provided under this Agreement.
(b) Proprietary Information of the Trust. Forum acknowledges that the
Shareholder list and all information related to Shareholders furnished to Forum
by the Trust or by a Shareholder in connection with this Agreement
(collectively, "Customer Data") constitute proprietary information of
substantial value to the Trust. In no event shall Proprietary Information be
deemed Customer Data. Forum agrees to treat all Customer Data as proprietary to
the Trust and further agrees that it shall not divulge any Customer Data to any
person or organization except as may be provided under this Agreement or as may
be directed by the Trust.
SECTION 10. INDEMNIFICATION
(a) Indemnification of Forum. Forum shall not be responsible for, and
the Trust shall on behalf of each applicable Fund or Class thereof indemnify and
hold Forum harmless from and against, any and all losses, damages, costs,
charges, reasonable counsel fees, payments, expenses and liability arising out
of or attributable to:
(i) all actions of Forum or its agents or subcontractors required to be
taken pursuant to this Agreement, provided that such actions are taken
in good faith and without gross negligence or willful misconduct;
<PAGE>
(ii) the Trust's lack of good faith or the Trust's gross negligence or
willful misconduct;
(iii) the reliance on or use by Forum or its agents or subcontractors
of information, records, documents or services which have been
prepared, maintained or performed by the Trust or any other person or
firm on behalf of the Trust, including but not limited to any previous
transfer agent or registrar;
(iv) the reasonable reliance on, or the carrying out by Forum or its
agents or subcontractors of, any instructions or requests of the Trust
on behalf of the applicable Fund; and
(v) the offer or sale of Shares in violation of any requirement under
the Federal securities laws or regulations or the securities laws or
regulations of any State that such Shares be registered in such State
or in violation of any stop order or other determination or ruling by
any federal agency or any State with respect to the offer or sale of
such Shares in such State.
(b) Indemnification of Trust. Forum shall indemnify and hold the Trust
and each Fund or Class thereof harmless from and against any and all losses,
damages, costs, charges, reasonable counsel fees, payments, expenses and
liability arising out of or attributed to any action or failure or omission to
act by Forum as a result of Forum's lack of good faith, gross negligence or
willful misconduct with respect to the services performed under or in connection
with this Agreement.
(c) Reliance. At any time Forum may apply to any officer of the Trust
for instructions, and may consult with legal counsel to the Trust or to Forum
with respect to any matter arising in connection with the services to be
performed by Forum under this Agreement, and Forum and its agents or
subcontractors shall not be liable and shall be indemnified by the Trust on
behalf of the applicable Fund for any action taken or omitted by it in
reasonable reliance upon such instructions or upon the advice of such counsel.
Forum, its agents and subcontractors shall be protected and indemnified in
acting upon (i) any paper or document furnished by or on behalf of the Trust,
reasonably believed by Forum to be genuine and to have been signed by the proper
person or persons, (ii) any instruction, information, data, records or documents
provided Forum or its agents or subcontractors by machine readable input, telex,
CRT data entry or other similar means authorized by the Trust, and (iii) any
authorization, instruction, approval, item or set of data, or information of any
kind transmitted to Forum in person or by telephone, vocal telegram or other
electronic means, reasonably believed by Forum to be genuine and to have been
given by the proper person or persons. Forum shall not be held to have notice of
any change of authority of any person, until receipt of written notice thereof
from the Trust. Forum, its agents and subcontractors shall also be protected and
indemnified in recognizing share certificates which are reasonably believed to
bear the proper manual or facsimile signatures of the officers of the Trust, and
the proper countersignature of any former transfer agent or former registrar or
of a co-transfer agent or co-registrar of the Trust.
<PAGE>
(d) Reliance on Electronic Instructions. If the Trust has the ability
to originate electronic instructions to Forum in order to (i) effect the
transfer or movement of cash or Shares or (ii) transmit Shareholder information
or other information, then in such event Forum shall be entitled to rely on the
validity and authenticity of such instruction without undertaking any further
<PAGE>
inquiry as long as such instruction is undertaken in conformity with security
procedures established by Forum from time to time.
(e) Use of Fund/SERV and Networking. The Trust has authorized or in the
future may authorize Forum to act as a "Mutual Fund Services Member" for the
Trust or various Funds. Fund/SERV and Networking are services sponsored by the
National Securities Clearing Corporation ("NSCC") and as used herein have the
meanings as set forth in the then current edition of NSCC Rules and Procedures
published by NSCC or such other similar publication as may exist from time to
time. The Trust shall indemnify and hold Forum harmless from and against any and
all losses, damages, costs, charges, reasonable counsel fees, payments, expenses
and liability arising directly or indirectly out of or attributed to any action
or failure or omission to act by NSCC.
(f) Notification of Claims. In order that the indemnification
provisions contained in this Section shall apply, upon the assertion of a claim
for which either party may be required to indemnify the other, the party seeking
indemnification shall promptly notify the other party of such assertion, and
shall keep the other party advised with respect to all developments concerning
such claim. The party who may be required to indemnify shall have the option to
participate with the party seeking indemnification in the defense of such claim
or to defend against said claim in its own name or in the name of the other
party. The party seeking indemnification shall in no case confess any claim or
make any compromise in any case in which the other party may be required to
indemnify it except with the other party's prior written consent.
SECTION 11. EFFECTIVENESS, DURATION AND TERMINATION
(a) Effectiveness. This Agreement shall become effective with respect
to each Fund or Class on December 1, 1997. Upon effectiveness of this Agreement,
it shall supersede all previous agreements between the parties hereto covering
the subject matter hereof insofar as such Agreement may have been deemed to
relate to the Funds.
(b) Duration. This Agreement shall continue in effect with respect to a
Fund until terminated; provided, that continuance is specifically approved at
least annually (i) by the Board or by a vote of a majority of the outstanding
voting securities of the Fund and (ii) by a vote of a majority of Trustees of
the Trust who are not parties to this Agreement or interested persons of any
such party (other than as Trustees of the Trust).
(c) Termination. This Agreement may be terminated with respect to a
Fund at any time, without the payment of any penalty (i) by the Board on 60
days' written notice to Forum or (ii) by Forum on 60 days' written notice to the
Trust. Any termination shall be effective as of the date specified in the
notice. Upon notice of termination of this Agreement by either party, Forum
shall promptly transfer to the successor transfer agent the original or copies
of all books and records maintained by Forum under this Agreement including, in
the case of records maintained on computer systems, copies of such records in
machine-readable form, and shall cooperate with, and provide reasonable
assistance to, the successor transfer agent in the establishment of the books
and records necessary to carry out the successor transfer agent's
responsibilities.
<PAGE>
(d) Survival. The obligations of Sections 7, 9 and 10 shall survive any
termination of this Agreement.
SECTION 12. ADDITIONAL FUNDS AND CLASSES. In the event that the Trust
establishes one or more series of Shares or one or more classes of Shares after
the effectiveness of this Agreement, such series of Shares or classes of Shares,
as the case may be, shall become Funds and Classes under this Agreement. Forum
or the Trust may elect not to make and such series or classes subject to this
Agreement.
SECTION 13. ASSIGNMENT. Except as otherwise provided in this Agreement,
neither this Agreement nor any rights or obligations under this Agreement may be
assigned by either party without the written consent of the other party. This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective permitted successors and assigns. Forum may, without further
consent on the part of the Trust, subcontract for the performance hereof with
any entity, including affiliated persons of Forum; provided however, that Forum
shall be as fully responsible to the Trust for the acts and omissions of any
subcontractor as Forum is for its own acts and omissions.
SECTION 14. FORCE MAJEURE. Forum shall not be responsible or liable for
any failure or delay in performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control including, without limitation, acts of civil or military
authority, national emergencies, labor difficulties, fire, mechanical
breakdowns, flood or catastrophe, acts of God, insurrection, war, riots or
failure of the mails or any transportation medium, communication system or power
supply.
SECTION 15. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS,
OFFICERS, EMPLOYEES AND AGENTS. The trustees of the Trust and the shareholders
of each Fund shall not be liable for any obligations of the Trust or of the
Funds under this Agreement, and Forum 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 Forum'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 16. TAXES. Forum shall not be liable for any taxes, assessments
or governmental charges that may be levied or assessed on any basis whatsoever
in connection with the Trust or any Shareholder or any purchase of Shares,
excluding taxes assessed against Forum for compensation received by it under
this Agreement.
SECTION 17. MISCELLANEOUS
(a) No Consequential Damages. Neither party to this Agreement shall be
liable to the other party for consequential damages under any provision of this
Agreement.
(b) Amendments. 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.
(c) Choice of Law. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the State
of Delaware.
<PAGE>
(d) Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with respect to
the subject matter hereof whether oral or written.
(e) Counterparts. This Agreement may be executed by the parties hereto on
any number of counterparts, and all of the counterparts taken together shall be
deemed to constitute one and the same instrument.
(f) Severability. If any part, term or provision of this Agreement is held
to be illegal, in conflict with any law or otherwise invalid, the remaining
portion or portions shall be considered severable and not be affected, and the
rights and obligations of the parties shall be construed and enforced as if the
Agreement did not contain the particular part, term or provision held to be
illegal or invalid.
(g) Headings. Section and paragraph headings in this Agreement are included
for convenience only and are not to be used to construe or interpret this
Agreement.
(h) Notices. Notices, requests, instructions and communications received by
the parties at their respective principal addresses, or at such other address as
a party may have designated in writing, shall be deemed to have been properly
given.
(i) Business Days. Nothing contained in this Agreement is intended to or
shall require Forum, in any capacity hereunder, to perform any functions or
duties on any day other than a Fund Business Day. Functions or duties normally
scheduled to be performed on any day which is not a Fund Business Day shall be
performed on, and as of, the next Fund Business Day, unless otherwise required
by law.
(j) Distinction of Funds. Notwithstanding any other provision of this
Agreement, the parties agree that the assets and liabilities of each Fund of the
Trust are separate and distinct from the assets and liabilities of each other
Fund and that no Fund shall be liable or shall be charged for any debt,
obligation or liability of any other Fund, whether arising under this Agreement
or otherwise.
(k) Nonliability of Affiliates. No affiliated person (as that term is
defined in the 1940 Act), employee, agent, director, officer or manager of Forum
shall be liable at law or in equity for Forum's obligations under this
Agreement.
(l) Representation of Signatories. Each of the undersigned expressly
warrants and represents that they have full power and authority to sign this
Agreement on behalf of the party indicated and that their signature will bind
the party indicated to the terms hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
persons, as of the day and year first above written.
MONARCH FUNDS
By:
______________________________
Maurice J. DeWald
Trustee
FORUM SHAREHOLDER SERVICES, LLC
By:
________________________________
Lisa J. Weymouth
Director
<PAGE>
MONARCH FUNDS
TRANSFER AGENCY AND SERVICE AGREEMENT
APPENDIX A
FUNDS AND CLASSES
AS OF OCTOBER 29, 1998
TREASURY CASH FUND
Universal Shares
Institutional Shares
Investor Shares
GOVERNMENT CASH FUND
Universal Shares
Institutional Shares
Investor Shares
CASH FUND
Universal Shares
Institutional Shares
Investor Shares
<PAGE>
MONARCH FUNDS
TRANSFER AGENCY AND SERVICE AGREEMENT
APPENDIX B
FEES AND EXPENSES
(I) BASE FEE:
Fees per Fund with $12,000 plus $6,000 per each class above one plus,
more than one Class
0.05% of the Average Annual Daily
Net Assets attributable to the Universal Class,
0.20% of the Average Annual Daily Net Assets
attributable to the Institutional Class, and
0.20% of the Average Annual Daily Net Assets
attributable to the Investor Class.
The rates set forth above shall remain fixed through December 31, 1998.
On January 1, 1999, and on each successive January 1, the rates may be
adjusted automatically by Forum without action of the Trust to reflect
changes in the Consumer Price Index for the preceding calendar year, as
published by the U.S. Department of Labor, Bureau of Labor Statistics.
Forum shall notify the Trust each year of the new rates, if applicable.
(II) SHAREHOLDER ACCOUNT FEES:
$120 per Shareholder account per year for the Universal Class.
$24 per Shareholder account per year for the Institutional Class.
$24 per Shareholder account per year for the Investor Class.
Shareholder account fees are based upon the number of Shareholder
accounts as of the last Fund Business Day of the prior month.
(III) OUT-OF-POCKET AND RELATED EXPENSES
The Trust, on behalf of the applicable Fund, shall reimburse Forum for
all out-of-pocket and ancillary expenses in providing the services
described in this Agreement, including but not limited to the cost of
(or appropriate share of the cost of): (i) statement, confirmation,
envelope and stationary stock, (ii) share certificates, (iii) printing
of checks and drafts, (iv) postage, (v) telecommunications, (vi)
banking services (DDA account, wire and ACH, check and draft clearing
and lock box fees and charges), (vii) NSCC Mutual Fund Service Member
fees and expenses, (viii) outside proxy solicitors and tabulators, (ix)
proxy solicitation fees and (ix) microfilm and microfiche. In addition,
any other expenses incurred by Forum at the request or with the consent
of the Trust, will be reimbursed by the Trust on behalf of the
applicable Fund.
<PAGE>
Exhibit (9)(c)
MONARCH FUNDS
SHAREHOLDER SERVICE AGREEMENT
as Amended June 1, 1998
SECTION 1. APPOINTMENT
In consideration of the services provided by Forum Administrative
Services, LLC ("Forum") to the Trust as described herein, Monarch Funds (the
"Trust") hereby appoints Forum as agent to perform the services for the period
and on the terms set forth in this Agreement. Forum accepts such appointment and
agrees to furnish the services described herein, in return for the compensation
specified in Section 3 of this Agreement. Forum agrees to comply with all
relevant provisions of the Investment Company Act of 1940, as amended (the
"Act"), and the Securities Exchange Act of 1934, as amended, and applicable
rules and regulations thereunder in performing the services described herein.
SECTION 2. SERVICE ACTIVITIES
Forum shall perform, or arrange for the performance of certain
activities relating to the servicing and maintenance of shareholder accounts not
otherwise provided by the Trust's transfer agent ("Shareholder Servicing
Activities") of each class of shares of the Institutional class ("Institutional
Shares") and Investor class ("Investor Shares") of Treasury Cash Fund,
Government Cash Fund, and Cash Fund (the "Funds") listed in Appendix A hereto
(each, a Share Class") of the various series of the trust (each, a
"Fund")("Shareholder Servicing Activities") not otherwise provided by the
Trust's transfer agent. Shareholder Servicing Activities include (i) answering
shareholder inquiries regarding the manner in which purchases, exchanges and
redemptions of shares of the Trust may be effected and other matters pertaining
to the Trust's services; (ii) providing necessary personnel and facilities to
establish and maintain shareholder accounts and records; (iii) assisting
shareholders in arranging for processing purchase, exchange and redemption
transactions; (iv) arranging for the wiring of funds; (v) guaranteeing
shareholder signatures in connection with redemption orders and transfers and
changes in shareholder-designated accounts; (vi) integrating periodic statements
with other shareholder transactions; and (vii) providing such other related
services as the shareholder may request.
SECTION 3. COMPENSATION
As compensation for Forum's Shareholder Servicing Activities with
respect to Institutional Shares and Investor Shares of each Share Class, the
Trust shall pay Forum a fee at an annual rate of 0.20% of the average daily net
assets of each Fund attributable to Institutional Shares and Investor Shares
(the "Payments"). The Payments shall be accrued daily and paid monthly or at
such other interval as the Trust's Board of Trustees ("Board") shall determine.
A Share Class Institutional Shares and the Investor Shares of each Fund shall
not directly or indirectly pay any amounts, whether Payments or otherwise, that
exceed any applicable limits imposed by law or the National Association of
Securities Dealers, Inc. The Trust hereby grants and transfers to Forum a
general lien and security interest in any and all securities and other assets of
<PAGE>
a Fund now or hereafter maintained in an account at the Fund's custodian on
behalf of the Fund, limited to the amount of any liability, to secure any
amounts owed Forum by the Fund under this Agreement.
SECTION 4. SERVICE AGREEMENTS
Forum is authorized to enter into shareholder service agreements
("Servicing Agreements") pursuant to which financial institutions or other
persons who service shareholder accounts ("Service Providers") would perform
Shareholder Servicing Activities, Forum may pay any or all amounts of the
Payments to the service providers for any service activity described in Section
2. To the extent practicable, each Agreement shall contain a representation by
the Service Provider that any compensation payable to the Service Provider in
connection with the investment in Institutional Shares or Investor Shares of a
Fund a Share Class of the assets of its customers (i) will be disclosed by the
Service Provider to its customers if required by law, (ii) will be authorized by
its customers if customer authorization is required, and (iii) will not result
in an excessive fee to the Service Provider.
SECTION 5. DURATION; TERMINATION AND AMENDMENT
With respect to Institutional Shares and Investor Shares of a Fund:
(a) This Agreement shall remain in effect for a period of one year from
the date of its effectiveness, unless earlier terminated in accordance with this
Section, and thereafter shall continue in effect for successive annual periods,
provided that such continuance is specifically approved at least annually by the
Board and a majority of the Trustees who are not interested persons of the Trust
(the "Disinterested Trustees").
(b) This Agreement may be terminated without penalty at any time (i)
by a vote of a majority of the Board and a majority of the Disinterested
Trustees or (ii) by Forum.
(c) Any amendment to this Agreement shall be effective only upon the
approval of the Board and a majority of the Disinterested Trustees.
SECTION 6. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the shareholders of each Fund shall not
be liable for any obligations of the Trust or of the Funds under this Agreement,
and Forum 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 Forum'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 7. 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 or Share Class thereby affected.
<PAGE>
(b) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(c) Section headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
(d) Notices, requests, instructions and communications received by the
parties at their respective principal places of business, or at such other
address as a party may have designated in writing, shall be deemed to have been
properly given.
(e) This Agreement shall be governed by and shall be construed in
accordance with the laws of the State of Delaware.
(f) The term "interested person" shall have the meaning ascribed
thereto in the Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their officers designated below as of the day first above
written.
MONARCH FUNDS
____________________________
Maurice J. DeWald
Trustee
FORUM ADMINISTRATIVE SERVICES, LLC
_____________________________
David I. Goldstein
Director
<PAGE>
MONARCH FUNDS
SHAREHOLDER SERVICE AGREEMENT
APPENDIX A
Fund Share Class
---- -----------
Treasury Fund Institutional Shares
Investor Shares
Government Cash Fund Institutional Shares
Investor Shares
Cash Fund Institutional Shares
Investor Shares
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MONARCH
FUNDS ANNUAL REPORT DATED AUGUST 31, 1998 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000889509
<NAME> MONARCH FUNDS
<SERIES>
<NUMBER>022
<NAME> CASH FUND INSTITUTIONAL
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-1-1997
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 573,561,896
<INVESTMENTS-AT-VALUE> 573,561,896
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 573,561,896
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 916,976
<TOTAL-LIABILITIES> 916,976
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 572,663,523
<SHARES-COMMON-STOCK> 299,232,745
<SHARES-COMMON-PRIOR> 152,054,483
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (18,603)
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 572,644,920
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 23,123,934
<OTHER-INCOME> (532,410)
<EXPENSES-NET> 1,944,778
<NET-INVESTMENT-INCOME> 20,646,746
<REALIZED-GAINS-CURRENT> 896
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 20,647,642
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 11,009,468
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 774,989,103
<NUMBER-OF-SHARES-REDEEMED> 633,514,099
<SHARES-REINVESTED> 5,703,260
<NET-CHANGE-IN-ASSETS> 325,670,431
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (19,499)
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,123,934
<AVERAGE-NET-ASSETS> 215,340,227
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .57
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MONARCH
FUNDS ANNUAL REPORT DATED AUGUST 31, 1998 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000889509
<NAME> MONARCH FUNDS
<SERIES>
<NUMBER>023
<NAME> CASH FUND INVESTOR
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-1-1997
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 573,561,896
<INVESTMENTS-AT-VALUE> 573,561,896
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 573,561,896
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 916,976
<TOTAL-LIABILITIES> 916,976
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 572,663,523
<SHARES-COMMON-STOCK> 181,759,799
<SHARES-COMMON-PRIOR> 76,486,624
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (18,603)
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 572,644,920
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 23,123,934
<OTHER-INCOME> (532,410)
<EXPENSES-NET> 1,944,778
<NET-INVESTMENT-INCOME> 20,646,746
<REALIZED-GAINS-CURRENT> 896
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 20,647,642
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 6,808,115
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,421,668,593
<NUMBER-OF-SHARES-REDEEMED> 1,323,203,441
<SHARES-REINVESTED> 6,808,022
<NET-CHANGE-IN-ASSETS> 325,670,431
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (19,499)
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,123,934
<AVERAGE-NET-ASSETS> 140,023,437
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MONARCH
FUNDS ANNUAL REPORT DATED AUGUST 31, 1998 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000889509
<NAME> MONARCH FUNDS
<SERIES>
<NUMBER>021
<NAME> CASH FUND UNIVERSAL
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-1-1997
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 573,561,896
<INVESTMENTS-AT-VALUE> 573,561,896
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 573,561,896
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 916,976
<TOTAL-LIABILITIES> 916,976
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 572,663,523
<SHARES-COMMON-STOCK> 91,670,975
<SHARES-COMMON-PRIOR> 18,452,878
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (18,603)
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 572,644,920
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 23,123,934
<OTHER-INCOME> (532,410)
<EXPENSES-NET> 1,944,778
<NET-INVESTMENT-INCOME> 20,646,746
<REALIZED-GAINS-CURRENT> 896
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 20,647,642
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,829,163
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,364,748,919
<NUMBER-OF-SHARES-REDEEMED> 1,293,795,619
<SHARES-REINVESTED> 2,264,797
<NET-CHANGE-IN-ASSETS> 325,670,431
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (19,499)
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,123,934
<AVERAGE-NET-ASSETS> 51,589,946
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .06
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .06
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .18
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MONARCH
FUNDS ANNUAL REPORT DATED AUGUST 31, 1998 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000889509
<NAME> MONARCH FUNDS
<SERIES>
<NUMBER>041
<NAME>CROWN MONEY FUND UNIVERSAL
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> JUN-30-1998
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 1,009,177
<INVESTMENTS-AT-VALUE> 1,009,177
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,009,177
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,420
<TOTAL-LIABILITIES> 2,420
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,006,759
<SHARES-COMMON-STOCK> 1,006,757
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (2)
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,006,757
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 9,439
<OTHER-INCOME> (260)
<EXPENSES-NET> 2,420
<NET-INVESTMENT-INCOME> 6,759
<REALIZED-GAINS-CURRENT> (2)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 6,757
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 6,759
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,003,326
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 3,433
<NET-CHANGE-IN-ASSETS> 221,695,138
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,334
<AVERAGE-NET-ASSETS> 1,001,636
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 1.00
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 1.55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MONARCH
FUNDS ANNUAL REPORT DATED AUGUST 31, 1998 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000889509
<NAME> MONARCH FUNDS
<SERIES>
<NUMBER>012
<NAME>GOVERNMENT CASH FUND INSTITUTIONAL
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-1-1997
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 699,288,136
<INVESTMENTS-AT-VALUE> 699,288,136
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 699,288,136
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,026,263
<TOTAL-LIABILITIES> 2,026,263
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 697,368,322
<SHARES-COMMON-STOCK> 443,662,637
<SHARES-COMMON-PRIOR> 245,179,214
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (34,950)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (71,499)
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 697,261,873
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 35,439,213
<OTHER-INCOME> (794,737)
<EXPENSES-NET> 1,898,172
<NET-INVESTMENT-INCOME> 32,746,304
<REALIZED-GAINS-CURRENT> (43,518)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 32,702,786
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 20,311,800
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,912,199,423
<NUMBER-OF-SHARES-REDEEMED> 2,723,774,548
<SHARES-REINVESTED> 10,058,549
<NET-CHANGE-IN-ASSETS> 221,695,138
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (34,793)
<OVERDIST-NET-GAINS-PRIOR> (27,981)
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,115,852
<AVERAGE-NET-ASSETS> 398,958,899
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .57
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MONARCH
FUNDS ANNUAL REPORT DATED AUGUST 31, 1998 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000889509
<NAME> MONARCH FUNDS
<SERIES>
<NUMBER>011
<NAME>GOVERNMENT CASH FUND UNIVERSAL
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-1-1997
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 699,288,136
<INVESTMENTS-AT-VALUE> 699,288,136
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 699,288,136
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,026,263
<TOTAL-LIABILITIES> 2,026,263
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 697,368,322
<SHARES-COMMON-STOCK> 253,705,528
<SHARES-COMMON-PRIOR> 230,450,715
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (34,950)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (71,499)
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 697,261,873
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 35,439,213
<OTHER-INCOME> (794,737)
<EXPENSES-NET> 1,898,172
<NET-INVESTMENT-INCOME> 32,746,304
<REALIZED-GAINS-CURRENT> (43,518)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 32,702,786
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 12,434,504
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,089,256,401
<NUMBER-OF-SHARES-REDEEMED> 5,072,628,157
<SHARES-REINVESTED> 6,626,988
<NET-CHANGE-IN-ASSETS> 221,695,138
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (34,793)
<OVERDIST-NET-GAINS-PRIOR> (27,981)
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,115,852
<AVERAGE-NET-ASSETS> 226,727,376
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
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<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.05
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<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.18
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MONARCH
FUNDS ANNUAL REPORT DATED AUGUST 31, 1998 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND><CIK> 0000889509<NAME> MONARCH FUNDS
<SERIES>
<NUMBER>032
<NAME>TREASURY CASH FUND INSTITUTIONAL
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-1-1997
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 149,329,590
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<TOTAL-LIABILITIES> 250,323
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<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 12,848
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 149,079,267
<DIVIDEND-INCOME> 0
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<OTHER-INCOME> (149,600)
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<NET-INVESTMENT-INCOME> 4,847,158
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<APPREC-INCREASE-CURRENT> 0
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<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,730,320
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<NUMBER-OF-SHARES-SOLD> 792,223,786
<NUMBER-OF-SHARES-REDEEMED> 742,834,980
<SHARES-REINVESTED> 899,824
<NET-CHANGE-IN-ASSETS> 78,130,994
<ACCUMULATED-NII-PRIOR> 3,473
<ACCUMULATED-GAINS-PRIOR> 2,441
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 613,973
<AVERAGE-NET-ASSETS> 54,653,185
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MONARCH
FUNDS ANNUAL REPORT DATED AUGUST 31, 1998 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND><CIK> 0000889509<NAME> MONARCH FUNDS
<SERIES>
<NUMBER>033
<NAME>TREASURY CASH FUND INVESTOR
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-1-1997
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 149,329,590
<INVESTMENTS-AT-VALUE> 149,329,590
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<TOTAL-ASSETS> 149,329,590
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 250,323
<TOTAL-LIABILITIES> 250,323
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 149,066,419
<SHARES-COMMON-STOCK> 57,951,053
<SHARES-COMMON-PRIOR> 30,115,623
<ACCUMULATED-NII-CURRENT> 0
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<ACCUMULATED-NET-GAINS> 12,848
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 149,079,267
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 5,470,244
<OTHER-INCOME> (149,600)
<EXPENSES-NET> 473,486
<NET-INVESTMENT-INCOME> 4,847,158
<REALIZED-GAINS-CURRENT> 6,934
<APPREC-INCREASE-CURRENT> 0
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<DISTRIBUTIONS-OF-INCOME> 2,116,838
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<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 337,141,622
<NUMBER-OF-SHARES-REDEEMED> 311,401,119
<SHARES-REINVESTED> 2,094,927
<NET-CHANGE-IN-ASSETS> 78,130,994
<ACCUMULATED-NII-PRIOR> 3,473
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 613,973
<AVERAGE-NET-ASSETS> 45,856,716
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
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<PER-SHARE-DISTRIBUTIONS> .05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .82
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
