<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 8, 1996
File No. 33-52850
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 4
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 6
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THE CUTLER TRUST
(Exact Name of Registrant as Specified in its Charter)
Two Portland Square, Portland, Maine 04101
(Address of Principal Executive Office)
Registrant's Telephone Number, including Area Code: 207-879-1900
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Max Berueffy, Esq.
Forum Financial Services, Inc.
Two Portland Square, Portland, Maine 04101
(Name and Address of Agent for Service)
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It is proposed that this filing will become effective:
immediately upon filing pursuant to Rule 485, paragraph (b)
- ---
on [ ] pursuant to Rule 485, paragraph (b)
- ---
X 60 days after filing pursuant to Rule 485, paragraph (a)
- ---
on [ ] pursuant to Rule 485, paragraph (a)
- ---
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Section 24(f) under the investment Company
Act of 1940; accordingly, no fee is payable herewith. A Rule 24f-2 Notice for
the Registrant's fiscal year ending June 30, 1995 was filed with the Commission
on or about August 29, 1995.
<PAGE>
CROSS REFERENCE SHEET
(as required by Rule 404(c))
PART A
Form N-1A Location in Prospectus
Item No. (Caption)
- ---------- ----------------------
Item 1. Cover Page Cover Page
Item 2. Synopsis Expenses of Investing in the Trust
Item 3. Condensed Financial Financial Highlights
Information
Item 4. General Description of Investment Objectives
Registrant and Policies; The Trust
and its Shares
Item 5. Management of the Fund Management of the Trust
Item 5A. Management's Discussion of Not Applicable
Fund Performance
Item 6. Capital Stock and Investment Objectives and
Other Securities Policies; Dividends and
Tax Matters; The Trust and
its Shares; Management of
the Trust - Shareholder
Servicing
Item 7. Purchase of Securities Purchases and Redemptions
Being Offered of Shares; Management of
the Trust - Manager
Item 8. Redemption or Purchases and Redemptions
Repurchase of Shares
Item 9. Pending Legal Not Applicable
Proceedings
<PAGE>
PART B
Location in Statement
Form N-1A of Additional Information
Item No. (Caption)
- ---------- -------------------------
Item 10. Cover Page Cover Page
Item 11. Table of Contents Cover Page
Item 12. General Information
and History Not Applicable
Item 13. Investment Objectives Investment Policies;
and Policies Investment Limitations
Item 14. Management of the Management of the Trust; The Trust
Registrant and its Share-holders
Item 15. Control Persons and Management of the Trust; The Trust
Principal Holders of and its Shareholders
Securities
Item 16. Investment Advisory and Management of the Trust
Other Services
Item 17. Brokerage Allocation Portfolio Transactions
and Other Practices
Item 18. Capital Stock and Other Determination of Net
Securities Asset Value; The Trust
and its Shareholders
Item 19. Purchase, Redemption Determination of Net
and Pricing of Securities Asset Value; Additional
Being Offered Purchase and Redemption
Information
Item 20. Tax Status Taxation
Item 21. Underwriters Management of the Trust -Manager
Item 22. Calculation of Performance Data
Performance Data
Item 23. Financial Statements Report of Independent
Auditors; Financial Statements
<PAGE>
THE CUTLER TRUST
The Cutler Trust (the "Trust") is an open-end, management investment company (a
mutual fund). The Cutler Equity Income Fund, Cutler Approved List Equity Fund
and Cutler Government Securities Fund (individually a "Fund" and collectively
the "Funds") are each diversified no-load portfolios of the Trust.
<TABLE>
<CAPTION>
<S><C>
INVESTMENT ADVISER: MANAGER AND DISTRIBUTOR: SHAREHOLDER ACCOUNT INFORMATION:
Cutler & Company, LLC Forum Financial Services, Inc. Forum Financial Corp.
503 Airport Road Two Portland Square Two Portland Square
Medford, Oregon 97504 Portland, ME 04101 Portland, ME 04101
(503) 770-9000 (800) 237-3113 (800) xxx-xxxx
(800) 228-8537
</TABLE>
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This Prospectus relates to
CUTLER EQUITY INCOME FUND
CUTLER APPROVED LIST EQUITY FUND
CUTLER GOVERNMENT SECURITIES FUND
-----------------------------------------------------------
The CUTLER EQUITY INCOME FUND seeks as generous a current income as is
consistent with diversification and long-term capital appreciation by investing
selectively within the Cutler & Company Approved List. The CUTLER APPROVED LIST
EQUITY FUND seeks current income and long-term capital appreciation by investing
in at least 90% of the common stocks within the Cutler & Company Approved List.
The CUTLER GOVERNMENT SECURITIES FUND seeks current income with safety of
principal by investing in debt instruments issued or guaranteed by the United
States Government, its agencies and instrumentalities. As the future is unknown,
obviously there can be no assurance that any Fund will achieve its investment
objectives.
This Prospectus sets forth concisely the information concerning the Trust and
the Funds that a prospective investor should know before investing. The Trust
has filed with the Securities and Exchange Commission a Statement of Additional
Information dated April 15, 1996. It contains more detailed information about
the Trust and the Funds and is incorporated into this Prospectus by reference.
The Statement of Additional Information is available without charge by
contacting Cutler & Company or the Trust's Distributor at the addresses or
numbers listed above.
PLEASE READ THIS PROSPECTUS BEFORE INVESTING IN ANY OF THE FUNDS, AND RETAIN IT
FOR FUTURE REFERENCE.
It contains important information about the Funds, their investments
and the services available to its shareholders.
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.
April 15, 1996
<PAGE>
TABLE OF CONTENTS
Page
1. Expenses of Investing in the Trust. . . . . . . . . . . . . . . .
2. Financial Highlights. . . . . . . . . . . . . . . . . . . . . . .
3. Investment Objectives and Policies. . . . . . . . . . . . . . . .
4 Risk Considerations . . . . . . . . . . . . . . . . . . . . . . .
5. Management of the Trust . . . . . . . . . . . . . . . . . . . . .
6. Purchases and Redemptions of Shares . . . . . . . . . . . . . . .
7. Dividends and Tax Matters . . . . . . . . . . . . . . . . . . . .
8. Performance Information . . . . . . . . . . . . . . . . . . . . .
9. The Trust and Its Shares. . . . . . . . . . . . . . . . . . . . .
1. EXPENSES OF INVESTING IN THE TRUST
The purpose of the following table is to assist investors in understanding the
various expenses that an investor in a Fund will bear directly or indirectly.
There are no transaction charges associated with purchases or redemptions of
Fund shares.
<TABLE>
<CAPTION>
Equity Approved Government
Income List Equity Securities
Fund Fund Fund
---- ---- ----
<S> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES (1)
(as a percentage of average net assets after
expense reimbursements and fee waivers)
Investment Advisory Fee 0.75% 0.52% 0.00%
Other Expenses 0.47% 0.73% 1.00%
----- ----- -----
Total Fund Operating Expenses 1.22% 1.25% 1.00%
</TABLE>
(1) The expenses set forth in the table are the expenses incurred by the Funds
for the Trust's fiscal year ended June 30, 1995, restated to reflect a new
advisory fee for the Equity Income Fund and the Approved List Equity Fund
approved by shareholders on March 20, 1996. Absent expense reimbursements
and fee waivers, the restated expenses of the Equity Income Fund, Approved
List Equity Fund and Government Securities Fund would have been: Investment
Advisory Fees, 0.75%, 0.75%, and 0.25%, respectively; Other Expenses,
0.47%, 0.73% and 1.22%, respectively; and Total Fund Operating Expenses,
1.23%, 1.48%, and 1.48%, respectively.
Until December 31, 1997, Cutler & Company has agreed to waive its fees or
reimburse each Fund to the extent the Equity Income or Approved List Equity
Fund's total operating expenses exceed 1.25% or the Government Securities Fund's
expenses exceed 1.00%. For a further description of the various expenses
incurred in the operation of the Fund, see "Management of the Trust."
<PAGE>
EXAMPLE
You would pay the following expenses on a $1,000 investment in a Fund, assuming
a 5% annual return and redemption at the end of each period:
<TABLE>
<CAPTION>
One Three Five Ten
Year Years Years Years
---- ----- ----- -----
<S> <C> <C> <C> <C>
Equity Income Fund $12 $39 $67 $148
Approved List Equity Fund $13 $40 $69 $151
Government Securities Fund $10 $32 $55 $122
</TABLE>
The example is based on the expenses listed in the table above and assumes the
reinvestment of all dividends. The 5% annual return is not a prediction of and
does not represent the Funds' projected returns; rather, the assumed 5% annual
return is required by government regulation. 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 represents selected data for a single share outstanding of each
Fund throughout each fiscal year (which ends on June 30th). This information has
been audited in connection with an audit of the Trust's financial statements by
Deloitte & Touche LLP, independent auditors. The financial statements and
independent auditors' report thereon are incorporated by reference into the
Statement of Additional Information. Further information about the Funds'
performance is contained in the Funds' annual report to shareholders, which may
be obtained without charge.
<TABLE>
<CAPTION>
CUTLER CUTLER CUTLER
EQUITY APPROVED GOVERNMENT
INCOME LIST EQUITY SECURITIES
------ ----------- ----------
Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended
6/30/95 6/30/94 6/30/93(a) 6/30/95 6/30/94 6/30/93(a) 6/30/95 6/30/94 6/30/93(a)
------- ------- ---------- ------- ------- ---------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BEGINNING NET ASSET VALUE
PER SHARE $9.56 $9.95 $10.00 $9.78 $10.09 $10.00 $9.81 $10.37 $10.00
Net investment income 0.36(b) 0.27 0.10 0.24(b) 0.21 0.08 0.46(b) 0.46 0.23
Net realized and unrealized gain
(loss) on securities 1.40 (0.40) (0.05) 1.92 (0.31) 0.09 0.29 (0.56) 0.37
Dividends from net investment
income (0.34) (0.26) (0.10) (0.23) (0.21) (0.08) (0.46) (0.46) (0.23)
Dividends from capital gains (0.02) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
------ ---- ---- ---- ---- ---- ---- ---- ----
ENDING NET ASSET VALUE
PER SHARE $10.96 $9.56 $9.95 $11.71 $9.78 $10.09 $10.10 $9.81 $10.37
------ ----- ----- ------ ----- ------ ------ ----- ------
------ ----- ----- ------ ----- ------ ------ ----- ------
RATIOS TO AVERAGE
NET ASSETS:
Expenses (c) 0.97% 1.00% 0.98%(d) 1.00% 1.00% 0.98%(d) 0.75% 0.74% 0.53%(d)
Net investment income 3.49% 3.49% 2.23%(d) 2.20% 2.43% 2.27%(d) 4.65% 4.46% 4.14%(d)
TOTAL RETURN 18.63% (1.37%) 0.90%(d) 22.33% (1.07%) 3.31%(d) 7.83% (1.03%) 12.07%(d)
PORTFOLIO TURNOVER RATE 43.37% 42.83% 32.04% 23.42% 22.27% 10.88% 0.00% 13.51% 0.00%
NET ASSETS AT THE END
OF PERIOD (000's
omitted) $41,470 $19,706 $2,853 $21,890 $12,620 $3,618 $6,796 $5,534 $696
(a) Each Fund commenced operations on December 30, 1992.
(b) Calculated using the weighted average number of shares outstanding.
(c) During the period, various fees and expenses were waived and reimbursed,
respectively. Had such waivers and reimbursements not occurred, the ratio
of expenses to average net assets would have been:
0.97% 1.45% 3.69%(d) 1.23% 1.78% 4.53%(d) 1.47% 1.96% 2.34%(d)
(d) Annualized.
</TABLE>
<PAGE>
3. INVESTMENT OBJECTIVES AND POLICIES
INVESTMENT OBJECTIVES
The investment objective of the CUTLER EQUITY INCOME FUND is to seek as generous
a current income as is consistent with diversification and long-term capital
appreciation by investing within the Cutler & Company Approved List (the
"Approved List").
The investment objective of the CUTLER APPROVED LIST EQUITY FUND is to seek
current income and long-term capital appreciation by investing in the entire
list of common stocks within the Approved List.
The investment objective of the CUTLER GOVERNMENT SECURITIES FUND is to seek
current income with safety of principal by investing in debt instruments issued
or guaranteed by the United States Government or by any of its agencies and
instrumentalities ("U.S. Government Securities").
As the future is unknown, obviously there can be no assurance that any of these
objectives will be achieved.
INVESTMENT POLICIES
CUTLER EQUITY INCOME FUND AND CUTLER APPROVED LIST EQUITY FUND. The Cutler
Equity Income Fund and Cutler Approved List Equity Fund (the "Equity Funds")
will invest only in the equity securities of the companies on Cutler & Company's
Approved List. Each company on the Approved List is listed on the New York Stock
Exchange and meets the following specific criteria. Each of the companies or its
predecessor (i) paid dividends continuously for at least 20 years, without any
reduction in the rate; (ii) has commercial paper rate Prime-1 and senior debt
rated at least A by Moody's Investors Service, Inc. or similarly rated by
another rating agency, or if no ratings are published, determined to be of
similar quality by Cutler & Company; (iii) has annual sales, assets and market
value of at least $1 billion; and (iv) in Cutler & Company's opinion has wide
ownership among major institutional investors and very liquid markets. In
addition, each company is subjected to such other analysis as may appear prudent
including but not limited to the company's historical yield patterns, payout
ratios and debt coverage ratios. The current Approved List and its entire
history are available to any shareholder by contacting Cutler & Company or the
Trust.
Trades by the Equity Funds normally are made by Cutler & Company primarily to
maintain quality (adhering to the Approved List) and to rebalance the portfolio
to equalize positions; the Cutler Equity Income Fund will also trade within the
Approved List to improve its yield. The Equity Funds will remain as fully
invested as possible, considering cash flow and possible transactional delays,
and may invest their cash holdings in high-quality, short-term money market
instruments as described below. The Equity Funds will be rebalanced periodically
to maintain holdings of approximately equal size in each issue held by those
Funds with such rebalancing based either on cost or market. Rebalancing
frequencies, however, may vary resulting in minor "tilts" (a slightly heavier
weighting on some issues temporarily). Whereas the Cutler Approved List Equity
Fund holds at least 90% of common stocks within the Approved List, the Cutler
Equity Income Fund will hold approximately 20 to 30 of those stocks. Under
normal conditions, each Equity Fund will invest at least 65% of its total assets
in the income producing equity securities in the Approved List.
CUTLER GOVERNMENT SECURITIES FUND. The Cutler Government Securities Fund will
invest in U.S. Government Securities with such diversification as to provide a
regular cash flow of both principal and interest payments, in order to achieve
an average maturity of not less than three nor more than ten years. The U.S.
Government Securities in which the Cutler Government Securities Fund may invest
include direct obligations of the U.S. Treasury and obligations issued or
guaranteed by U.S. Government agencies and instrumentalities backed by the full
faith and credit of the U.S. Government, such as those issued by the Government
National Mortgage Association. U.S. Government Securities also include
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. Under normal conditions, the Cutler Government Securities
Fund will invest at least 65% of its total assets in U.S. Government Securities.
U.S. Government Securities have historically involved little risk of loss of
principal if held to maturity. Nonetheless, the market value of these
securities may vary due to fluctuations in interest rates or the issuer's
creditworthiness. There is
<PAGE>
normally an inverse relationship between the market value of securities
sensitive to prevailing interest rates and actual changes in interest rates. In
other words, a decline in interest rates produces an increase in market value,
whereas an increase in interest rates produces a decrease in market value.
Moreover, the longer the remaining maturity of a security, the greater will be
the effect of interest rate changes on the market value of that security.
The Cutler Government Securities Fund may invest up to 15% of its total assets
in mortgage-related U.S. Government Securities. These securities represent an
interest in, or are secured by and payable from, a pool of mortgages (which may
have fixed or adjustable rates) made by lenders such as commercial banks,
savings associations and mortgage bankers and brokers. Interests in
mortgage-related securities differ from other forms of debt securities that
normally provide for periodic payment of interest in fixed amounts with
principal payments at maturity or specified call dates. In contrast,
mortgage-related securities provide monthly payments that consist of interest
and, in most cases, principal. In effect, these payments are a "pass-through" of
the monthly payments made by the individual borrowers on their mortgage loans,
net of any fees paid to the issuer or guarantor of the securities or a mortgage
loan servicer. Additional payments to holders of these securities are caused by
prepayments resulting from the sale or foreclosure of the underlying residential
property or refinancing of the underlying loans.
Because prepayment rates of individual pools of mortgage loans vary widely, it
is not possible to predict accurately the average life of a particular security.
Prepayments of the principal of underlying mortgage loans may shorten the
effective maturities of mortgage-related securities. Although mortgage-related
securities are issued with stated maturities up to forty years, unscheduled or
early payments of principal and interest on the underlying mortgages may shorten
considerably the effective maturities. Mortgage-related securities may have
varying assumptions for average life. The volume of prepayments of principal on
a pool of mortgages underlying a particular security will influence the yield of
that security, and the principal returned to the Fund may be reinvested in
instruments whose yield may be higher or lower than that which might have been
obtained had the prepayments not occurred. When interest rates are declining,
prepayments usually increase, with the result that reinvestment of principal
prepayments will be at a lower rate than the rate applicable to the original
mortgage-related security.
Mortgage-related securities may have interest 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 indices or market rates upon which the
interest rate adjustments are based. Similar to fixed rate debt instruments,
adjustable rate securities are subject to changes in value based on changes in
market interest rates or changes in the issuer's creditworthiness. Some
adjustable rate mortgage-related securities (or the underlying mortgage 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.
OTHER POLICIES. Unless approved by the holders of a majority of a Fund's
outstanding voting securities, a Fund may not change its investment objective,
borrow money, invest in the securities of foreign issuers or purchase securities
through a foreign market, invest in options or futures contracts, sell
securities short, lend its securities, invest in repurchase agreements or engage
in certain other activities, as more fully described in the Fund's Statement of
Additional Information. Except as otherwise indicated, investment policies of a
Fund may be changed by the Trust's Board of Trustees (the "Board") without
shareholder approval. Each Fund's net asset value will fluctuate.
For temporary defensive purposes, each Fund may invest in cash or in the
following types of high quality, short-term money market instruments: (i)
certificates of deposit and interest-bearing savings deposits of domestic
commercial banks, (ii) money market mutual funds and (iii) short-term U.S.
Government Securities.
The frequency of each Fund's portfolio transactions will vary from year to year
and is driven by the investment policies of each Fund as described above. For
more details about the portfolio turnover rate of each Fund, see "Financial
Highlights".
4. RISK CONSIDERATIONS
CUTLER EQUITY INCOME FUND AND CUTLER APPROVED LIST EQUITY FUND. The Equity
Funds invest only in the equity securities of the companies on Cutler &
Company's Approved List. Over time, stocks have shown greater growth potential
than other types of securities. Although the companies on the Approved List meet
specific criteria for stability,
<PAGE>
credit quality and the prospect of good earnings, their stock prices can
fluctuate dramatically in response to company, market, or economic news. These
Funds alone do not constitute a balanced investment plan. When you sell your
fund shares, they may be worth more or less than what you paid for them.
CUTLER GOVERNMENT SECURITIES FUND. The Cutler Government Securities Fund will
invest in U.S. Government Securities and high-grade corporate debt with such
diversification as to provide a regular cash flow of both principal and interest
payments. Because the securities in which the Fund invests may have maturities
of up to ten years, the prices of these securities and the income they generate
will vary from day to day, generally reflecting changes in interest rates,
market conditions, and other political and economic news. By itself, the
Government Securities Fund does not constitute a balanced investment plan. When
you sell your shares they may be worth more or less than what you paid for them.
5. MANAGEMENT OF THE TRUST
The business of the Trust is managed under the direction of the Board of
Trustees. The Board formulates the general policies of the Funds and generally
meets quarterly to review the results of the Funds, monitor investment
activities and practices and discuss other matters affecting the Funds and the
Trust.
CUTLER & COMPANY
Cutler & Company serves as investment adviser to each Fund pursuant to an
Investment Advisory Agreement with the Trust. Subject to the general control of
the Board, Cutler & Company makes and executes investment decisions for each
Fund. For its services, Cutler & Company receives an advisory fee from each
Equity Fund at an annual rate of 0.75% of each Fund's average daily net assets
and from the Government Securities Fund at an annual rate of 0.25% of that
Fund's average daily net assets until December 31, 1997. Cutler & Company has
agreed to waive its fees or reimburse expenses of the Funds to the extent a the
Approved List or Income Equity Fund's expenses exceed 1.25% of its annual
average daily net assets or to the extent the Government Securities Fund's
expenses exceed 1.00% of its average daily net assets.
Cutler & Company is a registered investment adviser and provides investment
management services to various individual and institutional clients, including
financial institutions, public and private pension funds, profit-sharing plans,
charitable corporations and private trust funds. As of the date of this
Prospectus, Cutler & Company provided investment management services with
respect to assets of approximately $722 million, including the Funds.
Mr. Kenneth R. Cutler, who is primarily responsible for investment decisions for
the Equity Funds, entered the investment business in 1945; between 1953 and 1962
he was principal operating and investment officer of two mutual funds; between
1962 and 1977 he held various investment positions; in 1977 he founded Cutler &
Company, Inc. Mr. Cutler is a trustee and officer of the Trust.
Mr. William Gossard, who is primarily responsible for investment decisions for
the Cutler Government Securities Fund, joined Cutler & Company in 1995. Prior
thereto, he was with the trust department of BancOne and predecessor American
Fletcher National Bank. Mr. Gossard entered the investment business in 1968 and
has managed fixed income securities since that time.
Effective December 31, 1995, Cutler & Company, Inc. reorganized as a limited
liability company, Cutler & Company, LLC. As of the date of this Prospectus,
Mrs. Brooke Cutler Ashland (Kenneth Cutler's daughter) owned 59% and Geoffrey W.
Cutler (Kenneth Cutler's son) owned 17% of the outstanding limited liability
company interests in Cutler & Company, with the balance held by other managers
of the Company.
<PAGE>
MANAGER
Pursuant to a management agreement with Cutler & Company and the Trust, Forum
Financial Services, Inc. ("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, at the
Board's request, providing the Trust with general office facilities and certain
persons to serve as officers. Forum and FFC are members of the Forum Financial
Group of companies and together provide a full range of services to the
investment company and financial services industry. As of the date of this
Prospectus, Forum provided management and administrative services to registered
investment companies and collective investment funds with assets of
approximately $14 billion. Forum, whose address is Two Portland Square,
Portland, Maine 04101, is a registered broker-dealer and investment adviser and
is a member of the National Association of Securities Dealers, Inc. For its
management services, Forum receives a fee from the Trust with respect to each
Fund at an annual rate of 0.10% of each Fund's average daily net assets. Forum
also serves as the Trust's distributor and, as agent of the Trust, offers for
sale shares of the Funds. As of the date of this Prospectus, Forum and FFC were
controlled by John Y. Keffer, a trustee and officer of the Trust.
SHAREHOLDER SERVICING
Shareholder inquiries and communications concerning a Fund may be directed to
Forum Financial Corp. ("FFC"), Two Portland Square, Portland, Maine 04101, which
acts as the Funds' transfer agent and dividend disbursing agent. FFC maintains
an account for each shareholder of a Fund (unless such accounts are maintained
by sub-transfer agents or processing agents) and performs other transfer agency
and shareholder-related functions. In addition, FFC performs portfolio
accounting services for the Funds, including determination of each Fund's net
asset value per share.
The Trust has adopted a shareholder services plan providing that the Trust may
obtain the services of the Adviser and other qualified financial institutions to
act as shareholder servicing agents for their customers. Under this plan, the
Trust has authorized FFC to enter into agreements pursuant to which the
shareholder servicing agents perform certain shareholder services not otherwise
provided by FFC. For these services, the Trust may pay the shareholder
servicing agent a fee of up to 0.25% of the average daily net assets of the
shares of a Fund owned by investors for which the shareholder servicing agent
maintains a servicing relationship.
Among the services provided by shareholder servicing agents are: answering
customer inquiries regarding account matters; assisting shareholders in
designating and changing various account options; aggregating and processing
purchase and redemption orders and transmitting and receiving funds for
shareholder orders; transmitting, on behalf of the Trust, proxy statements,
prospectuses and shareholder reports to shareholders and tabulating proxies;
processing dividend payments and providing subaccounting services for Fund
shares held beneficially; and providing such other services as the Trust or a
shareholder may request.
EXPENSES
The Trust is obligated to pay for all of its expenses. These expenses include
interest charges, brokerage fees and commissions, insurance premiums, applicable
fees and expenses under the Trust's contracts with Cutler & Company, Forum, FFC,
the Trust's custodian and shareholder servicing agents, fees of pricing,
interest, dividend, credit and other reporting services, costs of membership in
trade associations, auditing, legal and compliance expenses, costs of preparing
and printing the Trust's prospectuses, statements of additional information and
shareholder reports and delivering them to existing shareholders, compensation
of certain of the Trust's trustees, officers and employees and other personnel
performing services for the Trust, and registration fees and related expenses.
<PAGE>
5. PURCHASES AND REDEMPTIONS OF SHARES
GENERAL
You may purchase or redeem shares of the Funds without a sales charge at their
net asset value on any weekday between 9:00 a.m. and 6:00 p.m. except New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas ("Fund Business Day"). The net asset values of the
Funds are calculated at 4:00 p.m., Eastern time on each Fund Business Day. SEE
"Determination of Net Asset Value."
PURCHASES. Fund shares are issued at a price equal to the net asset value per
share next determined after an order in proper form is received and accepted.
The Trust reserves the right to reject any subscription for the purchase of its
shares and may, in the Adviser's discretion, accept portfolio securities in lieu
of cash as payment for Fund shares. Fund shares become entitled to receive
dividends on the day after the shares are issued to an investor.
REDEMPTIONS. There is no redemption charge, no minimum period of investment,
and no restriction on frequency of redemptions. Shares are redeemed at a price
equal to the net asset value per share next determined following acceptance by
FFC of the redemption order in proper form (and any supporting documentation
which FFC may require). Shares redeemed are not entitled to participate in
dividends declared after the day on which a redemption becomes effective.
The date of payment of redemption proceeds may not be postponed for more than
seven days after shares are tendered to FFC for redemption by a shareholder of
record. The right of redemption may not be suspended except in accordance with
the provisions of the Investment Company Act.
MINIMUM INVESTMENTS. There is a $25,000 ($2,000 for IRA's) minimum for initial
investments in the Fund. There is no minimum for subsequent investments. The
Trust and the Administrator each reserve the right to waive the minimum
investment requirement.
ACCOUNT STATEMENTS. Shareholders will receive from the Trust periodic
statements listing account activity during the statement period.
SHARE CERTIFICATES. FFC maintains a shareholder account for each shareholder.
The Trust does not issue share certificates.
PURCHASE AND REDEMPTION PROCEDURES
You may obtain the account application necessary to open an account by calling
800-XXX-XXXX or by writing The Cutler Trust at P.O. Box 446, Portland, Maine
04112.
INITIAL PURCHASE OF SHARES
MAIL. Investors may send a check made payable to "The Cutler Trust" with a
completed account application to:
The Cutler Trust
P.O. Box 446
Portland, Maine 04112
Checks are accepted at full value subject to collection. All checks must be
drawn on a United States bank. If a check is returned unpaid, the purchase will
be canceled, and the investor will be liable for any resulting losses or fees
incurred by the Fund, the Adviser or FFC.
<PAGE>
BANK WIRE. To make an initial investment in a Fund using the fedwire system for
transmittal of money between banks, you should first telephone FFC at 207-879-
0001 or 800-XXX-XXXX to obtain an account number. You should then instruct a
member commercial bank to wire your money immediately to:
The First National Bank of Boston
Boston, Massachusetts
ABA # 011000390
For Credit to: Forum Financial Corp.
Account # 541-54171
The Cutler Trust (Name of Fund)
(Investor's Name)
(Investor's Account Number)
You should then promptly complete and mail the account application.
If you plan to wire funds, you should instruct your bank early in the day so the
wire transfer can be accomplished the same day. Your bank may assess charges
for transmitting the money by bank wire and for use of Federal Funds. The Trust
does not charge investors for the receipt of wire transfers. Payment in the
form of a bank wire received prior to 4:00 p.m., Eastern time on a Fund Business
Day will be treated as a Federal Funds payment received before that time.
THROUGH FINANCIAL INSTITUTIONS. You may purchase and redeem shares of the Funds
through brokers, and other financial institutions that have entered into sales
agreements with Forum. These institutions may charge a fee for their services
and are responsible for promptly transmitting purchase, redemption and other
requests to the Trust. The Trust is not responsible for the failure of any
institution to promptly forward these requests.
If you purchase shares through a broker-dealer or financial institution, your
purchase will be subject to its procedures, which may include charges,
limitations, investment minimums, cutoff times and restrictions in addition to,
or different from, those applicable to shareholders who invest in a Fund
directly. You should acquaint yourself with the institution's procedures and
read this Prospectus in conjunction with any materials and information provided
by your institution. If you purchase Fund shares in this manner, you may or may
not be the shareholder of record and, subject to your institution's and the
Fund's procedures, may have Fund shares transferred into your name. There is
typically a one to five day settlement period for purchases and redemptions
through broker-dealers.
SUBSEQUENT PURCHASES OF SHARES
You may purchase additional shares of a Fund by mailing a check or sending a
bank wire as indicated above. Shareholders using the wire system for subsequent
purchases should first telephone FFC at 207-879-0001 or 800-XXX-XXXX to notify
it of the wire transfer. All payments should clearly indicate the shareholder's
name and account number.
REDEMPTION OF SHARES
Redemption requests will not be effected unless any check used for investment
has been cleared by the shareholder's bank, which may take up to 15 calendar
days. This delay may be avoided by investing in a Fund through wire transfers.
If FFC receives a redemption request by 4:00 p.m., the redemption proceeds
normally are paid on the next business day, but in no event later than seven
days after redemption, by check mailed to the shareholder of record at his
record address. Shareholders that wish to redeem shares by Telephone or by
Bank Wire must elect these options by properly completing the appropriate
sections of their account application. These privileges may be modified or
terminated by the Trust at any time.
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 $10,000 ($2,000
for IRAs). The Fund will not redeem accounts that fall below these amounts
solely as a result of a reduction in net asset value of the Fund's shares.
<PAGE>
REDEMPTION BY MAIL. You may redeem all or any number of your shares by sending a
written request to FFC at the address above. You must sign all written requests
for redemption and provide a signature guarantee. SEE "Signature Guarantees."
TELEPHONE REDEMPTIONS. A shareholder that has elected telephone redemption
privileges may make a telephone redemption request by calling FFC at 207-879-
0001 or 800-XXX-XXXX. In response to the telephone redemption instruction, the
Fund will mail a check to the shareholder's record address. If the shareholder
has elected wire redemption privileges, FFC may wire the proceeds as set forth
below under "Bank Wire Redemptions.".
In an effort to prevent unauthorized or fraudulent redemption requests by
telephone, the Trust and FFC will employ reasonable procedures to confirm that
such instructions are genuine. Shareholders must provide FFC with the
shareholder's account number, the exact name in which the shares are registered
and some additional form of identification such as a password. The Trust or FFC
may employ other procedures such as recording certain transactions. If such
procedures are followed, neither FFC nor the Trust will be liable for any losses
due to unauthorized or fraudulent redemption requests. Shareholders should
verify the accuracy of telephone instructions immediately upon receipt of
confirmation statements.
During times of drastic economic or market changes, it may be difficult to make
a redemption by telephone. If you cannot reach FFC by telephone, you may mail
or hand-deliver your request to the FFC at Two Portland Square, Portland, Maine
04101.
BANK WIRE REDEMPTIONS. If you have elected wire redemption privileges, the Fund
will upon request transmit the proceeds of any redemption greater than $10,000
by Federal Funds wire to a bank account designated on your account application.
If you wish to request bank wire redemptions by telephone, you must also elect
telephone redemption privileges.
EXCHANGE PRIVILEGE
Shareholders of a Fund may exchange their shares for shares of any other Fund or
for shares of the Daily Assets Treasury Fund, a money market fund managed by
Forum and a separate series of Forum Funds, Inc. You may receive a copy of the
Daily Assets Treasury Fund's prospectus by writing FFC or calling 800-XXX-XXXX.
No sales charges are imposed on exchanges between a Fund and the Daily Assets
Treasury Fund.
EXCHANGE PROCEDURES. You may request an exchange by writing to FFC at Two
Portland Square, Portland, Maine 04101. The minimum amount for an exchange to
open an account in the Daily Assets Treasury Fund is $2,500. Exchanges may only
be made between identically registered accounts. You do not need to complete a
new account application, unless you are requesting different shareholder
privileges for the new account. The Trust reserves the right to reject any
exchange request and may modify or terminate the exchange privilege at any time.
There is no charge for the exchange privilege or limitation as to frequency of
exchanges.
An exchange of shares in the Fund pursuant to the exchange privilege is, in
effect, a redemption of Fund shares (at net asset value) followed by the
purchase of shares of the investment company into which the exchange is made (at
net asset value) and may result in a shareholder realizing a taxable gain or
loss for Federal income tax purposes. The exchange privilege is available to
shareholders residing in any state in which shares of the Daily Assets Treasury
Fund may legally be sold.
TELEPHONE EXCHANGES. If you have elected telephone exchange privileges, you may
request an exchange by calling FFC at 800-XXX-XXXX. Neither the Trust nor FFC
are responsible for the authenticity of telephone instructions or losses, if
any, resulting from unauthorized telephone exchange requests. The Trust employs
reasonable procedures to insure that telephone orders are genuine and, if it
does not, may be liable for any losses due to unauthorized transactions.
Shareholders should verify the accuracy of telephone instructions immediately
upon receipt of confirmation statements.
<PAGE>
CHANGES TO ACCOUNT INFORMATION.
To change the record name or address of your account, the designated bank
account, the dividend election, or the telephone redemption option election on
an account, you must provide a signature guarantee.
SIGNATURE GUARANTEES. When a signature guarantee is called for, you must have
"Signature Guaranteed" stamped under your signature and signed by a commercial
bank or trust company, a broker, dealer or securities exchange, a credit union
or a savings association that is authorized to guarantee signatures.
RETIREMENT ACCOUNTS.
The Fund may be a suitable investment for part or all of the assets held in
retirement such as IRAs, SEP-IRAs, Keoghs, or other types of retirement
accounts. The minimum initial investment for investors opening a retirement
account or investing through your own IRA is $2,000. There is no minimum for
subsequent investments.
For information on investing in the Funds for retirement, and retirement account
plans, call FFC at 800-XXX-XXXX, or write to Two Portland Square, Portland,
Maine 04101.
DETERMINATION OF NET ASSET VALUE
The Trust determines the net asset value per share of each Fund as of the close
of regular trading on the New York Stock Exchange (currently 4:00 P.M., Eastern
time) on each Fund Business Day by dividing the value of the Fund's net assets
(the value of its portfolio securities and other assets less its liabilities) by
the number of the Fund's shares outstanding at the time the determination is
made. Securities owned by a Fund for which market quotations are readily
available are valued at current market value, or, in their absence, at fair
value as determined by the Board.
6. DIVIDENDS AND TAX MATTERS
DIVIDENDS
Dividends of each Equity Fund's net investment income are declared and paid
quarterly. Dividends of the Cutler Government Securities Fund's net investment
income are declared daily and paid monthly. Distributions of capital gain, if
any, realized by each Fund are made annually. Fund shares become entitled to
receive dividends and distributions on the day after the shares are issued.
Shares redeemed are not entitled to receive dividends or distributions declared
after the day on which the redemption becomes effective.
Shareholders may choose either to have dividends and distributions reinvested in
shares of the Fund or received in cash. All dividends and distributions are
treated in the same manner for Federal income tax purposes whether received in
cash or reinvested in shares of the Fund.
If reinvested, income dividends generally are invested at the Fund's net asset
value as of the last day of the quarter or month with respect to which the
dividends are paid. Capital gain distributions are reinvested at the net asset
value of the Fund on the record date for the distribution. Unless a shareholder
elects otherwise, all dividends and distributions are reinvested.
TAXES
Each Fund intends to qualify and continue to qualify for each fiscal year to be
taxed as a "regulated investment company" under the Internal Revenue Code of
1986. As such, and because the Funds intend to distribute all of their net
investment income and net capital gain each year, the Funds should each avoid
all Federal income and excise taxes.
Dividends paid by a Fund out of its net investment income (including any
realized net short-term capital gain) are taxable to shareholders as ordinary
income. Distributions by a Fund of net capital gain which the Fund designates as
"capital gain
<PAGE>
dividends" are taxable to shareholders as long-term capital gain, regardless of
the length of time the shareholder may have held his shares in the Fund. If Fund
shares are sold at a loss after being held for six months or less, the loss will
be treated as long-term capital loss to the extent of any capital gain
distribution received on those shares.
Any dividend or distribution from an Equity Fund received by a shareholder
reduces the net asset value of the shareholder's shares by the amount of the
dividend or distribution. To the extent that the income or gain comprising a
dividend or distribution was accrued by the Fund before the shareholder
purchased the shares, the dividend or distribution would be in effect a return
of capital to that shareholder. All dividends and distributions (including those
that operate as a return of capital), however, are taxable as described above to
the shareholder receiving them regardless of the length of time the shareholder
may have held the shares prior to the dividend or distribution.
It is expected that a portion of each Equity Fund's dividends to shareholders
will qualify for the dividends received deduction for corporations.
Each Fund may be required by Federal law to withhold 31% of reportable payments
(which may include dividends, capital gain distributions and redemption
proceeds) paid to individuals and certain other non-corporate shareholders.
Withholding is not required if a shareholder certifies that the shareholder's
social security or tax identification number provided to the Fund is correct and
that the shareholder is not subject to backup withholding for prior
under-reporting to the Internal Revenue Service.
Reports containing appropriate information with respect to the Federal income
tax status of dividends and distributions paid during the year by the Funds will
be mailed to shareholders shortly after the close of each year. The foregoing is
only a summary of some of the important Federal tax considerations generally
affecting the Funds and their shareholders. There may be other Federal, state or
local tax considerations applicable to a particular investor. Prospective
investors are urged to consult their tax advisors.
7. PERFORMANCE INFORMATION
The Funds may quote their performance in advertising in terms of yield or total
return. Both types are based on historical results and are not intended to
indicate future performance. A Fund's yield is a way of showing the rate of
income earned by the Fund as a percentage of the Fund's share price. Yield is
calculated by dividing the net investment income of a Fund for a stated period
by the average number of shares entitled to receive dividends and expressing the
result as an annualized percentage rate based on the Fund's share price at the
end of the period. Total Return refers to the average annual compounded rates of
return over some representative period that would equate an initial amount
invested at the beginning of a stated period to the ending redeemable value of
the investment, after giving effect to the reinvestment of all dividends and
distributions and deductions of expenses, if any, during the period. Because
average annual returns tend to smooth out variations in a Fund's returns,
shareholders should recognize that they are not the same as actual year-by-year
results.
The Funds' advertisements may reference ratings and rankings among similar funds
by independent evaluators such as Lipper Analytical Services, Inc. or
CDA/Wiesenberger. In addition, the performance of a Fund may be compared to
recognized indices of market performance. The comparative material found in the
Funds' advertisements, sales literature or reports to shareholders may contain
performance ratings. These are not to be considered representative or indicative
of future performance.
8. THE TRUST AND ITS SHARES
The Trust was organized as a Delaware business trust on October 2, 1992. The
trustees of the Trust have the authority to issue an unlimited number of shares
of beneficial interest of separate series, with no par value per share. Except
for the Funds, no other series of shares are currently authorized. The Board
may, without shareholder approval, issue the shares in an unlimited number of
separate series and may in the future divide existing series into two or more
classes.
Shares issued by the Trust have no conversion, subscription or preemptive
rights. Shareholders of a Fund have equal and exclusive rights to dividends and
distributions declared by that Fund and to the net assets of that Fund upon
liquidation or
<PAGE>
dissolution. Voting rights are not cumulative and the shares of each series (the
Funds) of the Trust will be voted separately except when an aggregate vote is
required by law. The Trust does not hold annual meetings of shareholders, and it
is anticipated that shareholder meetings will be held only when specifically
required by law. Shareholders have available certain procedures for the removal
of trustees. The Trust will call a shareholder meeting for the purpose of
removing a trustee when 10% of the outstanding shares call for a meeting and
will assist in certain shareholder communications.
<PAGE>
THE CUTLER TRUST
CUTLER EQUITY INCOME FUND
CUTLER APPROVED LIST EQUITY FUND
CUTLER GOVERNMENT SECURITIES FUND
Account Information and
Shareholder Servicing: Distribution:
Forum Financial Corp. Forum Financial Services, Inc.
Two Portland Square Two Portland Square
Portland, Maine 04101 Portland, Maine 04101
(207) 879-0001 (800) 237-3113
-----------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
April 15, 1996
This Statement of Additional Information supplements the Prospectus offering
shares of Cutler Equity Income Fund, the Cutler Approved List Equity Fund and
the Cutler Government Securities Fund (each a "Fund" and collectively the
"Funds"), three portfolios of The Cutler Trust (the "Trust"), and should be read
only in conjunction with the applicable Prospectus, a copy of which may be
obtained by an investor without charge by contacting the Trust's Shareholder
Servicing Agent at the address listed above.
TABLE OF CONTENTS
Page
1. Investment Policies . . . . . . . . . . . . . . . . . . . . . .2
2. Investment Limitations. . . . . . . . . . . . . . . . . . . . .3
3. Management of the Trust . . . . . . . . . . . . . . . . . . . .4
Cutler & Company
Manager and Distributor
Transfer Agent
Custodian and Auditor
Expenses
4. Determination of Net Asset Value. . . . . . . . . . . . . . . .8
5. Portfolio Transactions. . . . . . . . . . . . . . . . . . . . .8
6. Additional Purchase and Redemption Information . . . . . . . .10
Purchase of Shares
Exchanges Between Funds
7. Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . .11
8. The Trust and its Shareholders . . . . . . . . . . . . . . . .11
9. Performance Data . . . . . . . . . . . . . . . . . . . . . . .12
Yield Calculations
Total Return Calculations
10. Financial Statements . . . . . . . . . . . . . . . . . . . . .14
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED
FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY A
CURRENT PROSPECTUS.
<PAGE>
1. INVESTMENT POLICIES
Except for cash balances, the Cutler Equity Income Fund and the Cutler Approved
List Equity Fund (the "Equity Funds") invest in securities on the Cutler &
Company Approved List (the "Approved List"). Each Fund may invest in shares of
other investment companies to the extent permitted under the 1940 Act. A Fund
will bear its pro rata portion of another mutual fund's expenses.
As a fundamental policy of each Fund, no portfolio transactions may be executed
with Cutler & Company or any of its affiliates. See "Portfolio Transactions."
THE CUTLER GOVERNMENT SECURITIES FUND
At times, some of the mortgage-related U.S. Government Securities in which the
Cutler Government Securities Fund may invest may have higher-than-market
interest rates, and will therefore be purchased at a premium above their par
value. Unscheduled prepayments on these securities, which are made at par, will
cause the Fund to suffer a loss equal to the unamortized premium, if any.
Although the rate adjustment feature of adjustable rate mortgage-related
securities that the Fund may purchase may act as a buffer to reduce sharp
changes in the value of these securities, they 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 adjustable rate mortgage-related securities may lag
behind changes in prevailing market interest rates. During periods of declining
interest rates, income to the Fund derived from adjustable rate mortgages that
are not prepaid 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.
During periods of rising interest rates, changes in the coupon rates of the
mortgages underlying the Fund's adjustable rate mortgage-related investments may
lag behind changes in market interest rates. This lag may result in a slightly
lower value until the coupons reset to market rates. Some adjustable rate
mortgage-related securities may have "caps" that limit the maximum amount by
which the interest rate paid by a 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
securities.
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. The Government National Mortgage Association
("GNMA") issues GNMA Certificates that represent an interest in one mortgage or
a pool of mortgages that are insured by the Federal Housing Administration or
the Farmers Home Administration or are guaranteed by the Veterans
Administration. Residential mortgage loans are pooled also by the Federal Home
Loan Mortgage Corporation ("FHLMC"), which issues participation certificates
("PCs") which represent interests in mortgages from FHLMC's national portfolio.
In addition, the Federal National Mortgage Association ("FNMA") purchases
residential mortgages from a list of approved institutions and issues
pass-through securities.
In addition, the Fund may invest in Collateralized Mortgage Obligations (CMOs),
mortgage-related securities that 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. All monthly principal payments and any prepayments
from the collateral pool, however, are paid first to the "Class 1" 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 prepayments
of the obligations comprising the collateral pool.
2. INVESTMENT LIMITATIONS
Each Fund has adopted the following fundamental investment limitations. These
limitations, along with any investment policies deemed to be fundamental, cannot
be changed without the affirmative vote of the lesser of (i) more than 50% of
<PAGE>
the outstanding shares of 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. Each Fund may
not:
(1) With respect to 75% of its assets, purchase a security other than an
obligation issued or guaranteed as to principal and interest by the
United States Government, its agencies or instrumentalities ("U.S.
Government Securities") if, as a result, more than 5% of the Fund's total
assets would be invested in the securities of a single issuer.
(2) Purchase a security other than a U.S. Government Security if, immediately
after the purchase, more than 25% of the value of the Fund's total assets
would be invested in the securities of issuers having their principal
business activities in the same industry.
(3) Underwrite securities of other issuers, except to the extent that the
Fund 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
Fund 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; borrow money; invest in the securities of foreign issuers or
purchase securities through a foreign market; purchase or write options
or invest in futures contracts; or 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.
(6) Issue senior securities except as appropriate to evidence indebtedness
that the Fund may be permitted to incur, and provided that the Fund may
issue shares of series or classes that the Board of Trustees (the
"Board") may establish.
(7) Enter into repurchase agreements, lend securities or otherwise make
loans; except through the purchase of debt securities that may be
purchased by the Fund.
Each Fund has adopted the following nonfundamental investment limitations that
may be changed by the Board without shareholder approval. Each Fund may not:
(a) Invest in securities (other than fully-collateralized debt obligations)
issued by companies that have conducted continuous operations for less
than three years, including the operations of predecessors (unless
guaranteed as to principal and interest by an issuer in whose securities
the Fund could invest) if, as a result, more than 5% of the value of the
Fund's total assets would be so invested.
(b) Invest in or hold securities of any issuer other than the Fund if, to the
Fund's knowledge, those Trustees and officers of the Trust or the Fund's
investment adviser, individually owning beneficially more than 1/2 of 1%
of the securities of the issuer, in the aggregate own more than 5% of the
issuer's securities.
(c) Invest in oil, gas or other mineral exploration or development programs,
or leases, or in real estate limited partnerships; provided that the Fund
may invest in securities issued by companies engaged in such activities.
(d) Acquire securities that are not readily marketable ("illiquid") or are
subject to restrictions on the sale of such securities to the public
without registration under the Securities Act of 1933.
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 the Fund's
assets, the change in status of a security or purchases and redemptions of
shares will not be considered a violation of the limitation.
3. MANAGEMENT OF THE TRUST
The trustees and officers of the Trust and their principal occupations during
the past five years are set forth below.
* BROOKE R. ASHLAND, Trustee
Ms. Ashland is currently Chief Executive Officer and Manager of Cutler &
Company, LLC. Prior thereto she was President, Trustee Investment Services,
Inc. (financial services marketing firm)1990-1994. Ms. Ashland has been
<PAGE>
associated with Cutler & Company, Inc. since 1977 in various capacities
such as Assistant to the Chairman, CFO and Secretary. Her address is 503
Airport Road, Medford, Oregon 97504.
* KENNETH R. CUTLER, Trustee, Chairman of the Board and Vice President.
Principal Portfolio Manager of the Equity Funds and Investment Committee
Member, Cutler & Company, LLC (registered investment adviser). His address
is 503 Airport Road, Medford, Oregon 97504.
* JOHN Y. KEFFER, Trustee and President.
President and Director, Forum Financial Services, Inc. (registered
broker-dealer), Forum Financial Corp. (registered transfer agent) and Forum
Advisors, Inc. (registered investment adviser). Mr. Keffer is also a
director and/or officer of various registered investment companies for
which Forum Financial Services, Inc. serves as manager, administrator
and/or distributor. His address is Two Portland Square, Portland, Maine
04101.
DR. HATTEN S. YODER, JR., Trustee.
Director Emeritus, Geophysical Laboratory, Carnegie Institute of Washington
and consultant to the Los Alamos National Laboratory. Dr. Yoder has been a
director of the Geophysical Laboratory and consultant to the Los Alamos
National Laboratory since 1971. His address is 6709 Melody Lane, Bethesda,
Maryland 20817.
CAROL FISCHER, Vice President, Assistant Secretary and Assistant Treasurer.
Chief Operating Officer of Cutler & Company, LLC (registered investment
adviser). Prior thereto, Ms. Fischer was associated with Cutler & Company,
Inc., in various capacities. Her address is 503 Airport Road, Medford,
Oregon 97504.
MAX BERUEFFY, Vice President and Secretary.
Counsel, Forum Financial Services, Inc., with which he has been associated
since May 1994. Prior to that, Mr. Berueffy was a member of the staff of
the U.S. Securities and Exchange Commission. Mr. Berueffy is also an
officer of various registered investment companies for which Forum
Financial Services, Inc. serves as manager, administrator and/or
distributor. His address is Two Portland Square, Portland, Maine 04101.
DAVID I. GOLDSTEIN, Assistant Secretary.
Counsel, Forum Financial Services, Inc., with which he has been associated
since 1991. Prior thereto, Mr. Goldstein was associated with the law firm
of Kirkpatrick & Lockhart. Mr. Goldstein is also an officer of various
registered investment companies for which Forum Financial Services, Inc.
serves as manager, administrator and/or distributor. His address is Two
Portland Square, Portland, Maine 04101.
MICHAEL D. MARTINS, Treasurer.
Director of Operations, Forum Financial Corp. Prior to that, Mr. Martins
was a Manager of Deloitte & Touche, LLP. Mr. Martins is also an officer of
various registered investment companies for which Forum Financial Corp.
serves as fund accountant and/or transfer agent. His address is Two
Portland Square, Portland, Maine 04101.
LYNN Y. KELLEY, Assistant Treasurer.
Fund Accounting Manager, Forum Financial Corp., with which she has been
associated since December 1993. Prior to that, Ms. Kelley was Senior-in-
Charge in Fund Accounting with Investors Bank and Trust Company. Her
address is Two Portland Square, Portland, Maine 04101.
* John Y. Keffer, Brooke R. Ashland and Kenneth R. Cutler are interested persons
of the Trust as that term is defined in the 1940 Act. Kenneth R. Cutler is
Brooke R. Ashland's father.
<PAGE>
For the fiscal year ended June 30, 1995, the aggregate compensation paid to the
Trustees of the Trust by the funds is as follows: Dr. Hatten S. Yoder, Jr.,
$7,500. Messrs. Cutler and Keffer received no compensation for their services
as Trustee for the past year and no officer of the Trust is compensated by the
Trust. Trustees are reimbursed for travel and related expenses incurred in
attending meetings of the Board.
CUTLER & COMPANY
Under an Investment Advisory Agreement with the Trust (the "Agreement"), Cutler
& Company furnishes at its own expense all services, facilities and personnel
necessary in connection with managing each Fund's investments and effecting
portfolio transactions for each Fund.
The Agreement provides for an initial term of twelve months from its effective
date with respect to a Fund and for its continuance in effect for successive
twelve-month periods thereafter, provided the Agreement is specifically approved
at least annually by the Board or by vote of the shareholders, and in either
case, by a majority of the Trustees who are not parties to the Agreement or
interested persons of any such party at a meeting called for the purpose of
voting on the Agreement. The Agreement is terminable without penalty by the
Trust with respect to a Fund on 60 days' written notice when authorized either
by vote of the Fund's shareholders or by a vote of a majority of the Board, or
by Cutler & Company on 60 days' written notice and will automatically terminate
in the event of its assignment. The Agreement also provides that, with respect
to each Fund, Cutler & Company shall not be liable for any error of judgment or
mistake of law or for any act or omission in the performance of its duties to
the Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of its obligations
and duties under the Agreement.
The following table shows the dollar amount of fees payable under the Investment
Advisory Agreements between Cutler & Company and the Trust with respect to each
Fund, the amount of fee that was waived by Cutler & Company, if any, and the
actual fee received by Cutler & Company. The data are for the past three fiscal
years.
<TABLE>
<CAPTION>
Advisory Fee Advisory Fee Advisory Fee
Payable Waived Retained
------- ------ --------
<S> <C> <C> <C>
CUTLER EQUITY INCOME FUND
Year Ended June 30, 1995 163,051 0 163,051
Year Ended June 30, 1994 54,007 30,495 23,512
Year Ended June 30, 1993 2,312 2,312 0
CUTLER APPROVED LIST EQUITY FUND
Year Ended June 30, 1995 83,557 15,411 68,146
Year Ended June 30, 1994 38,186 38,186 0
Year Ended June 30, 1993 2,373 2,373 0
CUTLER GOVERNMENT SECURITIES FUND
Year Ended June 30, 1995 14,952 14,952 0
Year Ended June 30, 1994 10,134 10,134 0
Year Ended June 30, 1993 108 108 0
</TABLE>
MANAGER AND DISTRIBUTOR
Forum Financial Services, Inc. ("Forum") supervises the overall management of
the Trust (which includes, among other responsibilities, 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 a Management Agreement with the Trust. The
Management Agreement provides for an initial term of twelve months from its
effective date with respect to a Fund and for its automatic renewal each year
thereafter for an additional term of one year.
The Management 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
Management Agreement also provides that Forum 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
<PAGE>
negligence in the performance of Forum's duties or by reason of reckless
disregard of its obligations and duties under the Management Agreement.
At the request of the Board, Forum provides persons satisfactory to the Board to
serve as officers of the Trust. Those officers, as well as certain other
employees and Trustees of the Trust, may be directors, officers or employees of
Forum, Cutler & Company or their affiliates.
The following table shows the dollar amount of fees payable under the Management
Agreements between Forum and the Trust with respect to each Fund, the amount of
fee that was waived by Forum, if any, and the actual fee received by Forum. The
data are for the past three fiscal years.
<TABLE>
<CAPTION>
Management Fee Management Fee Management Fee
Payable Waived Retained
------- ------ --------
<S> <C> <C> <C>
CUTLER EQUITY INCOME FUND
Year Ended June 30, 1995 32,610 0 32,610
Year Ended June 30, 1994 10,802 3,098 7,704
Year Ended June 30, 1993 462 462 0
CUTLER APPROVED LIST EQUITY FUND
Year Ended June 30, 1995 16,711 7,613 9,098
Year Ended June 30, 1994 7,637 4,794 2,843
Year Ended June 30, 1993 475 475 0
CUTLER GOVERNMENT SECURITIES FUND
Year Ended June 30, 1995 5,981 5,981 0
Year Ended June 30, 1994 4,054 4,054 0
Year Ended June 30, 1993 43 43 0
</TABLE>
Forum is also the Trust's distributor and acts as the agent of the Trust in
connection with the offering of shares of the Funds pursuant to a separate
Distribution Agreement. The Distribution Agreement provides for an initial term
of twelve months from its effective date and for its continuance in effect for
successive twelve-month periods thereafter, provided the agreement is
specifically approved at least annually by the Board or by vote of the
shareholders, and in either case, by a majority of the Trustees who are not
parties to the Distribution Agreement or interested persons of any such party 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.
The Distribution Agreement provides that Forum 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 Forum's duties or by reason of reckless
disregard of its obligations and duties under the Distribution Agreement. The
Distribution Agreement also provides for certain indemnification of Forum.
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.
TRANSFER AGENT
Forum Financial Corp. ("FFC") acts as transfer agent, dividend disbursing agent
and fund accountant for the Trust pursuant to a Transfer Agency and Fund
Accounting Agreement. The Transfer Agency and Fund Accounting Agreement provides
for an initial term of twelve months from its effective date with respect to a
Fund and for its automatic renewal for successive one-year periods thereafter.
Cutler & Company may act as a subtransfer agent or processing agent. For its
services, FFC is paid a transfer agent fee at an annual rate of $12,000 per year
plus certain account charges and is reimbursed for certain expenses incurred on
behalf of the Funds. FFC is paid an additional fee for its portfolio accounting
services of $36,000 per year for each Fund, subject to adjustments for the
number and type of portfolio transactions.
<PAGE>
The following table shows the dollar amount of fees payable under the Transfer
Agency and Fund Accounting Agreements between Forum and the Trust with respect
to each Fund, the amount of fee that was waived by Forum, if any, and the actual
fee received by Forum. The data are for the past three fiscal years.
<TABLE>
<CAPTION>
Transfer Agent Transfer Agent Transfer Agent
and Accounting and Accounting and Accounting
Fee Payable Fee Waived Fee Retained
----------- ---------- ------------
<S> <C> <C> <C>
CUTLER EQUITY INCOME FUND
Year Ended June 30, 1995 50,716 0 50,716
Year Ended June 30, 1994 49,706 13,754 35,952
Year Ended June 30, 1993 25,063 25,063 0
CUTLER APPROVED LIST EQUITY FUND
Year Ended June 30, 1995 60,989 0 60,989
Year Ended June 30, 1994 48,471 15,682 32,789
Year Ended June 30, 1993 24,050 24,050 0
CUTLER GOVERNMENT SECURITIES FUND
Year Ended June 30, 1995 48,465 12,465 36,000
Year Ended June 30, 1994 49,294 33,162 16,132
Year Ended June 30, 1993 23,023 23,023 0
</TABLE>
CUSTODIAN AND AUDITOR
Pursuant to a Custodian Agreement with the Trust, The First National Bank of
Boston, 100 Federal Street, Boston, Massachusetts 02106, acts as the custodian
of the Trust's assets. The custodian's responsibilities include safeguarding
and controlling the Funds' cash and securities, determining income and
collecting interest on the Funds' investments.
Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281,
independent auditors, has been chosen by the Board to act as auditor for the
Trust.
EXPENSES
Each Fund's expenses comprise Trust expenses attributable to the Fund that are
allocated to the Fund, and those not attributable to a particular Fund that are
allocated among all Funds in proportion to their average net assets. Cutler &
Company voluntarily agreed to waive its fees or reimburse each Fund to the
extent a Fund's total expenses exceed the amounts indicated in the Prospectus
until December 31, 1997. This voluntary limit may be discontinued at any time
after that date. Any waivers or reimbursements have the effect of increasing the
Funds' yield and may not be recouped at a later date. Cutler & Company also has
agreed to reimburse the Trust for certain of each Fund's operating expenses
(exclusive of interest, taxes, brokerage fees and organization and extraordinary
expenses, all to the extent permitted by applicable state law or regulation)
which in any year exceed the limits prescribed by any state in which the Fund's
shares are qualified for sale. Forum believes that currently the most
restrictive expense limitation imposed by any state is 2-1/2% of the first $30
million of each Fund's average net assets, 2% of the next $70 million of its
average net assets and 1-1/2% of its average net assets in excess of $100
million. For the purpose of this obligation to reimburse expenses, each Fund's
annual expenses are estimated and accrued daily, and any appropriate estimated
payments are made monthly.
Subject to any fee waiver or expense reimbursement arrangements, 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
Cutler & Company, Forum, FFC, the Trust's custodian and shareholder servicing
agents; fees of pricing, interest, dividend, 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 therefor; costs of maintaining
books and accounts and preparing tax returns; costs of reproduction,
<PAGE>
stationery and supplies; fees and expenses of the Trust's Trustees; compensation
of the Trust's officers and employees who are not officers of Cutler & Company,
Forum or their respective affiliates; costs of other personnel who may be
employees of Cutler & Company, Forum or their respective affiliates performing
services for the Trust; costs of Trustee meetings; Securities and Exchange
Commission registration fees and related expenses; and state or foreign
securities laws registration fees and related expenses.
4. DETERMINATION OF NET ASSET VALUE
The Trust does not determine net asset value on the following holidays: New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas. Purchases and redemptions are effected as of
the next determined net asset value following the receipt of any purchase or
redemption order.
In determining the approximate market value of portfolio investments, the Funds
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.
5. PORTFOLIO TRANSACTIONS
The Equity Funds will effect purchases and sales through brokers who charge
commissions. Allocations of transactions to brokers and the frequency of
transactions are determined by Cutler & Company in its best judgment and in a
manner deemed to be in the best interest of shareholders of the Funds 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 Funds.
Purchases and sales of portfolio securities for the Cutler Government Securities
Fund usually are principal transactions. These purchases are made directly from
the issuer or from a market maker for the securities. There usually are no
brokerage commissions paid for such purchases. Purchases from dealers serving
as market makers include the spread between the bid and asked prices. No
portfolio transactions are executed with Cutler & Company or any of its
affiliates.
Any Fund may not always pay the lowest commission or spread available. Rather,
in determining the amount of commission, including certain dealer spreads, paid
in connection with Fund transactions, the Adviser takes into account such
factors as size of the order, difficulty of execution, efficiency of the
executing broker's facilities (including the services described below) and any
risk assumed by the executing broker. The Adviser may also take into account
payments made by brokers effecting transactions for the Fund (i) to the Fund or
(ii) to other persons on behalf of the Fund for services provided to it for
which it would be obligated to pay.
Consistent with section 28(e) of the Securities and Exchange Act, the exercise
of the Adviser's fiduciary duties under its Investment Advisory agreement with
the Trust, and any other applicable law, the Adviser may allocate brokerage on
behalf of the Trust to brokers who provide research services and may cause the
Fund to pay these brokers a higher amount of commission than may be charged by
other brokers. Such research and analysis may be used by the Adviser in
connection with services to clients other than the Fund, and the Adviser's fee
is not reduced by reason of the Adviser's receipt of the research services.
Investment decisions for each Fund will be made independently from those for any
other account (including another Fund) that is or may in the future become
managed by Cutler & Company or its affiliates. When a Fund and other accounts
managed by Cutler & Company are contemporaneously engaged in the purchase or
sale of the same security, however, 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 Fund or the size of the
position obtainable for the Fund. In addition, when purchases or sales of the
same security for a Fund and for other accounts managed by Cutler & Company
occur contemporaneously, the purchase or sale orders may be aggregated in order
to obtain any price advantages available to large denomination purchases or
sales.
The following table shows the aggregate brokerage commissions with respect to
each Fund. The data are for the past three fiscal years or shorter period if
the Fund has been in operation for a shorter period.
<PAGE>
<TABLE>
<CAPTION>
AGGREGATE
COMMISSIONS PAID
<S> <C>
CUTLER EQUITY INCOME FUND
Year Ended June 30, 1995 42,374
Year Ended June 30, 1994 22,010
Year Ended June 30, 1993 4,281
CUTLER APPROVED LIST EQUITY FUND
Year Ended June 30, 1995 19,824
Year Ended June 30, 1994 15,452
Year Ended June 30, 1993 4,765
CUTLER GOVERNMENT SECURITIES FUND
Year Ended June 30, 1995 0.00
Year Ended June 30, 1994 0.00
Year Ended June 30, 1993 0.00
</TABLE>
6. ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Shares of each Fund are sold on a continuous basis by the distributor at net
asset value without any sales charge. Shareholders may effect purchases or
redemptions or request any shareholder privilege in person at FFC's offices
located at Two Portland Square, Portland, Maine 04101.
EXCHANGES BETWEEN FUNDS
Shareholders of a Fund may exchange their shares for shares of any other Fund or
for shares of the Daily Assets Treasury Fund, a money market fund managed by
Forum and a separate series of Forum Funds, Inc. Exchange transactions will be
made on the basis of relative net asset value per share at the time of the
exchange transaction. 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.
Proceeds of an exchange transaction may be invested only in another Fund account
for which the share registration is the same as the account from which the
exchange is made. The terms of the exchange privilege are subject to change, and
the privilege may be terminated by any Fund 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 applicable regulation.
ADDITIONAL REDEMPTION MATTERS
Proceeds of redemptions normally are paid in cash. However, payments may be
made wholly or partly in portfolio securities if the Board of Trustees
determines economic conditions exist which would make payment in cash
detrimental to the best interests of the Fund. If payment for shares redeemed
is made wholly or partly in portfolio securities, brokerage costs may be
incurred by the shareholder in converting the securities to cash. The Trust
has filed an election with the Securities and Exchange Commission pursuant to
which each Fund may only effect a redemption in portfolio securities if the
particular shareholder is redeeming more than $250,000 or 1% of the Fund's total
net assets, whichever is less, during any 90-day period.
In addition to the situations described in the Prospectus under "Purchases and
Redemptions of Shares," the Trust may redeem shares involuntarily to reimburse
each 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 the Fund's shares as provided in the Prospectus from time to
time.
<PAGE>
Shareholders' rights of redemption may not be suspended, except (i) for any
period during which the New York Stock Exchange, Inc. is closed (other than
customary weekend and holiday closings) or during which the Securities and
Exchange Commission determines that trading thereon is restricted, (ii) for any
period during which an emergency (as determined by the Securities and Exchange
Commission) exists as a result of which disposal by a Fund of its securities is
not reasonably practicable or as a result of which it is not reasonably
practicable for the Fund fairly to determine the value of its net assets, or
(iii) for such other period as the Securities and Exchange Commission may by
order permit for the protection of the shareholders of the Fund.
Fund shares are normally issued for cash only. In the Adviser's discretion,
however, each Fund may accept portfolio securities that meet the investment
objective and policies of the Fund as payment for Fund shares. The Fund will
only accept securities that (i) are not restricted as to transfer either by law
or liquidity of market and (ii) have a value which is readily ascertainable (and
not established only by valuation procedures).
7. TAXATION
Qualification as a regulated investment company under the Internal Revenue Code
of 1986 does not involve governmental supervision of management or investment
practices or policies. Investors should consult their own counsel for a complete
understanding of the requirements the Funds must meet to qualify for such
treatment. The information set forth in the Prospectus and the following
discussion relate solely to Federal income taxes on dividends and distributions
by the Funds. Investors should consult their own counsel for further details and
for the application of state and local tax laws to the investor's particular
situation.
In order 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 (which includes
dividends, interest and the excess of net short-term capital gain over net
long-term capital losses) 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 dividends, interest, gains from the sale
or other disposition of securities and certain other income; (2) each Fund must
derive less than 30% of its gross income each taxable year from the sale or
other disposition of securities held for less than three months; (3) 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 by cash and cash items, U.S. Government
Securities, securities of other regulated investment companies 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 or
10% of the outstanding voting securities of the issuer; and (4) 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 or securities of other regulated investment companies) of any one
issuer.
8. 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
courts of some states, however, 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. The Trust believes that, in view of the
above, the risk of personal liability to shareholders is remote.
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 be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
<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. The Trust or any series may be terminated
upon the sale of its assets to, or merger with, another open-end management
investment company or series thereof, or upon liquidation and distribution of
its assets. 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, 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 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.
Although each Fund is offering only its own shares, it is possible that a Fund
might become liable for any misstatement in the Prospectus of another Fund. The
Board has considered this factor in approving the use of a single combined
Prospectus.
As of January 31, 1996, the officers and directors of the Trust owned as a group
less than 1% of the outstanding shares of the Fund. Also as of that date, the
following persons owned of record 5% or more of the outstanding shares of the
Fund:
CUTLER EQUITY INCOME FUND
Comerica Bank TTEE for Big Creek Lumber The Karl Kirchgessner Foundation
Profit Sharing Trust 1278 Glenneyre, Suite 149
3654 Highway 1 Laguna Beach, CA 92651
Davenport, CA 95014 7.92%
9.20%
CUTLER APPROVED LIST EQUITY FUND
THE KARL KIRCHGESSNER FOUNDATION HAROLD E. GRAY - IRA ACCOUNT
1278 Glenneyre, Suite 149 810 Whitney.
Laguna Beach, CA 92651 Visalia, CA 93277
16.31% 5.34%
CUTLER GOVERNMENT SECURITIES FUND
MICHELETTI, INC. THE KARL KIRCHGESSNER FOUNDATION STEEL STRUCTURES, INC.
MPP & P/S PLAN 1278 GLENNEYRE, SUITE 149 MPP & P/S PLAN
P.O. Box 26620 Laguna Beach, CA 92651 P.O. Box 1170
San Jose, CA 95159 11.46% Madera, CA 93659
15.52% 10.39%
9. PERFORMANCE DATA
Each Fund may quote performance in various ways. All performance information
supplied by a Fund in advertising is historical and is not intended to indicate
future returns. A Fund's net asset value, yield and total return fluctuate in
response to market conditions and other factors, and the value of Fund shares
when redeemed may be more or less than their original cost.
In performance advertising a Fund may compare any of its performance information
with data published by independent evaluators such as Lipper Analytical
Services, Inc., CDA/Wiesenberger or other companies that track the investment
performance of investment companies ("Fund Tracking Companies"). A Fund may also
compare any of its performance information with the performance of recognized
stock, bond and other indexes, including but not limited to the Standard &
Poor's 500 Composite Stock Price Index, the Dow Jones Industrial Average, U.S.
Treasury bonds, bills or notes, the
<PAGE>
Salomon Brothers Bond Index, the Shearson Lehman Bond Index, and changes in the
Consumer Price Index as published by the U.S. Department of Commerce. A Fund may
refer to general market performances over past time periods such as those
published by Ibbotson Associates. A Fund 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 discussions of a Fund and
comparative mutual fund data and ratings reported in independent periodicals,
such as newspapers and financial magazines.
For the 30 day period ended June 30, 1995, the annualized yield of the Cutler
Government Securities Fund was 4.69%. For the one year period ended June 30,
1995, the average annual total returns of the Cutler Equity Income Fund, Cutler
Approved List Equity Fund and Cutler Government Securities Fund were 18.63%,
22.33%, and 7.83%, respectively. Since commencement of operations on December
30, 1992, the average annual total returns of the Cutler Equity Income Fund,
Cutler Approved List Equity Fund and Cutler Government Securities Fund were
6.68%, 8.64%, and 5.07%, respectively.
YIELD CALCULATIONS
Yields for a Fund used in advertising are computed by dividing the Fund's
interest income for a given 30 days or one-month period, net of expenses, if
any, by the average number of shares entitled to receive distributions during
the period, dividing this figure by the Fund's net asset value per share at the
end of the period and annualizing the result (assuming compounding of income) in
order to arrive at an annual percentage rate. Capital gain and loss generally
are excluded from these calculations.
Income calculated for the purpose of determining a Fund's 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 Fund may differ from the rate of
distribution the Fund paid over the same period or the rate of income reported
in the Fund's financial statements.
Although published yield information is useful to investors in reviewing a
Fund's performance, investors should be aware that a Fund's 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. The yields of the Funds are not fixed or
guaranteed, and an investment in the Funds is not insured or guaranteed.
Accordingly, yield information may not necessarily be used to compare shares of
the Funds with investment alternatives which, like money market instruments or
bank accounts, may provide a fixed rate of interest. Also, it may not be
appropriate to compare a Fund's yield information directly to similar
information regarding investment alternatives that are insured or guaranteed.
TOTAL RETURN CALCULATIONS
Each Fund may advertise its total return. Total returns quoted in advertising
reflect all aspects of a Fund's return, including the effect of reinvesting
dividends and capital gain distributions, and any change in the Fund's net asset
value per share over the period. Average annual returns 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. Whereas 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 a Fund.
Average annual total return is calculated by finding the average annual
compounded rates of return of a hypothetical investment over a given period
according to the following formula:
P(1+T)TO THE POWER OF n = ERV, where:
P = a hypothetical initial payment of $1,000;
T = average annual total return;
n = number of years; and
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).
<PAGE>
In addition to average annual returns, the Funds may quote unaveraged or
cumulative total returns reflecting the simple change in value of an investment
over a stated period. Total returns may be broken down into their components of
income and capital (including capital gain and changes in share price) in order
to illustrate the relationship of these factors and their contributions to total
return.
Period total return is calculated according to the following formula:
PT = (ERV/P-1), where:
PT = period total return.
The other definitions are the same as in average annual total return above.
10. FINANCIAL STATEMENTS
The financial statements of the Trust for its fiscal year ended June 30, 1995
(which include statements of assets and liabilities, statements of operations,
statements of changes in net assets, notes to financial statements, financial
highlights, statements of investments and the auditors' report thereon) are
included in the Annual Report to Shareholders of the Trust delivered along with
this Statement of Additional Information, and are incorporated herein by
reference.
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
Included in the Prospectus:
Financial Highlights.
Included in each Statement of Additional Information:
Audited financial statements for the fiscal year ended June 30, 1995
including Statements of Assets and Liabilities, Statements of
Operations, Statements of Changes in Net Assets, Notes to Financial
Statements, Financial Highlights, Portfolio of Investments and Report
of Independent Auditors (for each Fund, filed with the Securities and
Exchange Commission on September 5, 1995 for such Fund pursuant to
Rule 30b2-1 under the Investment Company Act of 1940, as amended, and
incorporated herein by reference.
(b) Exhibits:
(1) Copy of Registrant's Trust Instrument (filed herewith).
(2) Copy of Registrant's By-Laws (filed herewith).
(3) None.
(4) None.
(5) Copy of Investment Advisory Agreement between Registrant and Cutler &
Company, LLC (filed herewith).
(6) Copy of Distribution Agreement between Registrant and Forum Financial
Services, Inc. (filed herewith).
(7) None.
(8) Copy of Custodian Agreement between Registrant and The First National
Bank of Boston (filed herewith).
(9) (a) Copy of Management Agreement between Registrant and Forum
Financial Services, Inc. (filed herewith).
(b) Copy of Transfer Agency and Fund Accounting Agreement between
Registrant and Forum Financial Corp. (filed herewith).
(c) Copy of Shareholder Service Plan (filed herewith).
<PAGE>
(d) Copy of Form of Shareholder Service Agreement (filed herewith).
(10) Opinion of counsel (filed herewith).
(11) Consent of independent auditors (filed herewith).
(12) None.
(13) Investment Representation letter (filed herewith).
(14) None.
(15) None.
(16) None.
Other Exhibits:
(A) Power of Attorney, Brooke R. Ashland, Trustee of Registrant
(filed herewith).
(B) Power of Attorney, Kenneth R. Cutler, Trustee of Registrant,
previously filed as Other Exhibit (A) to Pre-Effective Amendment
No. 2 (filed herewith).
(C) Power of Attorney, Hatten S. Yoder, Jr., Trustee of Registrant,
previously filed as Other Exhibit (B) to Pre-Effective Amendment
No. 2 (filed herewith).
(D) Power of Attorney, John Y. Keffer, Trustee of Registrant,
previously filed as Other Exhibit (C) to Pre-Effective Amendment
No. 2 (filed herewith).
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES AS OF JANUARY 31, 1996.
Title of Class of Shares
of Beneficial Interest Number of Holders
------------------------ -----------------
Cutler Equity Income Fund 123
Cutler Approved List Equity Fund 92
Cutler Government Securities Fund 43
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
<PAGE>
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 the Registration Statement as Exhibit 1, filed herewith.
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 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 Cutler & Company, LLC under the caption "Management of
the Trust" in both the Prospectus and the Statement of Additional Information,
constituting Parts A and B, respectively, of this Registration Statement, is
incorporated by reference herein.
The following are the managing members of Cutler & Company, LLC, including
their business connections that are of a substantial nature. The address of
Cutler & Company, LLC is 503 Airport Road, Medford, Oregon 97504.
Brooke Cutler Ashland, Chief Executive Officer and Manager. A founding
shareholder of Cutler & Company, Inc. in 1977, and has been associated with
the company since that time in various capacities such as Assistant to the
Chairman, CFO and Secretary.
Geoffrey W. Cutler, Senior Portfolio Manager, Investment Committee Member
and Manager. A founding shareholder of Cutler & Company, Inc. in 1977, Mr.
Cutler joined Cutler & Company, Inc. in 1978 in the capacity of President
and has been associated with the company since that time.
Stephen F. Brennan, Director of Marketing and Manager. Mr. Brennan joined
Cutler & Company, Inc. in 1994, and has been associated with the company
since that time. For the preceding three years, he had been Vice
President, Marketing, Equitable Capital/ Alliance Capital Management.
Michael T. Dieschbourg, CIMA, Managing Director, Investment Committee
Member and Manager. Mr. Dieschbourg joined Cutler & Company, Inc. in 1995,
and has been associated with the company since that time. For the
preceding three years, he had been Senior Investment Management Consultant,
Prudential Bache Securities.
John F. Ray, Senior Portfolio Manager, Investment Committee Member and
Manager. Mr. Ray joined Cutler & Company, Inc. in 1995, and has been
associated with the company since that time.
<PAGE>
For the preceding three years, he had been Chairman and President, Commerce
Capital Management, Inc.
William G. Gossard, Director of Fixed Income, Investment Committee Member
and Manager. Mr. Gossard joined Cutler & Company, Inc. in 1995, and has
been associated with the company since that time. For the preceding three
years, he had been Vice President and Senior Portfolio Manager, Fixed
Income, Banc One Investment Advisors.
Carol Fischer, Chief Operating Officer. Prior thereto, Ms. Fischer was
associated with Cutler & Company, Inc., in various capacities.
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) Forum Financial Services, Inc., Registrant's underwriter, serves as
underwriter to Avalon Capital, Inc., Core Trust (Delaware), The CRM Funds,
The Cutler Trust, Forum Funds, Inc., Monarch Funds, Norwest Advantage
Funds, Norwest Select Funds, Sound Shore Fund, Inc., Stone Bridge Funds,
Inc. and Trans Adviser Funds, Inc.
(b) John Y. Keffer, President and Secretary of Forum Financial Services, Inc.,
is the Chairman and President of Registrant. David R. Keffer, Vice
President and Treasurer of Forum Financial Services, Inc., is the Vice
President, Assistant Treasurer and Assistant Secretary of Registrant.
Their business address is Two Portland Square, Portland, Maine 04101.
(c) Not Applicable.
ITEM 30. LOCATION OF BOOKS 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 Financial Services, Inc., 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. 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 28 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.
Notwithstanding any undertaking to the contrary in previous filings of its
Registration Statement, the Registrant does not undertake to hold any meetings
of shareholders except as required by applicable federal or state law or the
provisions of its Trust Instrument.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this amendment to
its Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of Portland and State of Maine on the ___th
day of March, 1996.
THE CUTLER TRUST
By: /s/ John Y. Keffer
--------------------
John Y. Keffer
President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed below by the following persons on
March ___, 1996.
Signatures Title
---------- -----
(a) Principal Executive Officer
/s/ John Y. Keffer President
---------------------------
John Y. Keffer
(b) Principal Financial and
Accounting Officer
/s/ Michael D. Martins Treasurer
---------------------------
Michael D. Martins
(c) All of the Trustees
/s/ John Y. Keffer Trustee
---------------------------
John Y. Keffer
Brooke R. Ashland Trustee
Kenneth R. Cutler Trustee
Hatton Yoder, Jr. Trustee
By: /s/ John Y. Keffer
-----------------------
John Y. Keffer
Attorney in Fact
<PAGE>
INDEX TO EXHIBITS
Sequential
Exhibit Page Number
- ------- -----------
1 Trust Instrument
2 By-Laws
5 Investment Advisory Agreement
6 Distribution Agreement
8 Custodian Agreement
9 (a) Management Agreement
9 (b) Transfer Agency and Fund Accounting Agreement
9 (c) Shareholder Service Plan
9 (d) Form of Shareholder Service Agreement
10 Opinion of Counsel
11 Consent of Independent Auditors
13 Investment Representation Letter
OTHER:
(A) Power of Attorney, Brooke R. Ashland, Trustee
(B) Power of Attorney, Kenneth R. Cutler, Trustee
(C) Power of Attorney, Hatten S. Yoder, Jr., Trustee
(D) Power of Attorney, John Y. Keffer, Trustee
<PAGE>
EXHIBIT 1
<PAGE>
THE CUTLER TRUST
TRUST INSTRUMENT
DATED OCTOBER 2, 1992
<PAGE>
THE CUTLER TRUST
TABLE OF CONTENTS
PAGE
ARTICLE I NAME AND DEFINITIONS
Section 1.01 Name 1
Section 1.02 Definitions 1
ARTICLE II BENEFICIAL INTEREST
Section 2.01 Shares of Beneficial Interest 2
Section 2.02 Issuance of Shares 2
Section 2.03 Register of Shares and Share Certificates 3
Section 2.04 Transfer of Shares 3
Section 2.05 Treasury Shares 3
Section 2.06 Establishment of Series 3
Section 2.07 Investment in the Trust 4
Section 2.08 Assets and Liabilities of Series 4
Section 2.09 No Preemptive Rights 6
Section 2.10 No Personal Liability of Shareholders 6
Section 2.11 Assent to Trust Instrument 6
ARTICLE III THE TRUSTEES
Section 3.01 Management of the Trust 6
Section 3.02 Initial Trustees 7
Section 3.03 Term of Office 7
Section 3.04 Vacancies and Appointments 7
Section 3.05 Temporary Absence 8
Section 3.06 Number of Trustees 8
Section 3.07 Effect of Ending of a Trustee's Service 8
Section 3.08 Ownership of Assets of the Trust 8
ARTICLE IV POWERS OF THE TRUSTEES
Section 4.01 Powers 9
Section 4.02 Issuance and Repurchase of Shares 12
Section 4.03 Trustees and Officers as Shareholders 12
Section 4.04 Action by the Trustees 12
Section 4.05 Chairman of the Trustees 13
Section 4.06 Principal Transactions 13
ARTICLE V EXPENSES OF THE TRUST 13
ARTICLE VI INVESTMENT ADVISER, PRINCIPAL UNDERWRITER,
ADMINISTRATOR AND TRANSFER AGENT
Section 6.01 Investment Adviser 14
Section 6.02 Principal Underwriter 15
Section 6.03 Administrator 15
Section 6.04 Transfer Agent 15
Section 6.05 Parties to Contract 15
Section 6.06 Provisions and Amendments 16
<PAGE>
ARTICLE VII SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 7.01 Voting Powers 16
Section 7.02 Meetings 17
Section 7.03 Quorum and Required Vote 17
ARTICLE VIII CUSTODIAN
Section 8.01 Appointment and Duties 18
Section 8.02 Central Certificate System 18
ARTICLE IX DISTRIBUTIONS AND REDEMPTIONS
Section 9.01 Distributions 19
Section 9.02 Redemptions 19
Section 9.03 Determination of Net Asset Value 20
and Valuation of Portfolio Assets
Section 9.04 Suspension of the Right of Redemption 21
Section 9.05 Redemption of Shares in Order to 21
Qualify as Regulated Investment Company
ARTICLE X LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 10.01 Limitation of Liability 21
Section 10.02 Indemnification 22
Section 10.03 Shareholders 23
ARTICLE XI MISCELLANEOUS
Section 11.01 Trust Not a Partnership 23
Section 11.02 Trustee's Good Faith Action, 24
Expert Advice, No Bond or Surety
Section 11.03 Establishment of Record Dates 24
Section 11.04 Termination of Trust 25
Section 11.05 Reorganization 25
Section 11.06 Filing of Copies, References, Headings 26
Section 11.07 Applicable Law 26
Section 11.08 Amendments 27
Section 11.09 Fiscal Year 27
Section 11.10 Provisions in Conflict with Law 27
- ii -
<PAGE>
THE CUTLER TRUST
October 2, 1992
TRUST INSTRUMENT, made by John Y. Keffer, James F. Patterson and David I.
Goldstein (the "Trustees").
WHEREAS, the Trustees desire to establish a business trust for the
investment and reinvestment of funds contributed thereto;
NOW THEREFORE, the Trustees declare that all money and property contributed
to the trust hereunder shall be held and managed in trust under this Trust
Instrument as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
SECTION 1.01 NAME. The name of the trust created hereby is "The Cutler
Trust."
SECTION 1.02 DEFINITIONS. Wherever used herein, unless otherwise required
by the context or specifically provided:
(a) "Bylaws" means the Bylaws of the trust as adopted by the Trustees, as
amended from time to time;
(b) "Commission" has the meaning given it in the 1940 Act. "Affiliated
Person", "Assignment," "Interested Person" and "Principal Underwriter" shall
have the respective meanings given them in the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Commission or any rules or
regulations adopted by or interpretive releases of the Commission thereunder.
"Majority Shareholder Vote" shall have the same meaning as the term "vote of a
majority of the outstanding voting securities" is given in the 1940 Act, as
modified by or interpreted by any applicable order or orders of the Commission
or any rules or regulations adopted by or interpretive releases of the
Commission thereunder.
(c) "Delaware Act" refers to Chapter 38 of Title 12 of the Delaware Code
entitled "Treatment of Delaware Business Trusts," as amended from time to time.
(d) "Net Asset Value" means the net asset value of each Series of the
Trust determined in the manner provided in Article IX, Section 9.03 hereof;
(e) "Outstanding Shares" means those Shares shown from time to time in the
books of the Trust or its transfer agent as then issued and outstanding, but
shall not include Shares which have been redeemed or repurchased by the Trust
and which are at the time held in the treasury of the Trust;
(f) "Series" means a series of Shares of the Trust established in
accordance with the provisions of Article II, Section 2.06 hereof.
- 3 -
<PAGE>
(g) "Shareholder" means a record owner of Outstanding Shares of the Trust;
(h) "Shares" means the equal proportionate transferable units of
beneficial interest into which the beneficial interest of each Series of the
Trust or class thereof shall be divided and may include fractions of Shares as
well as whole Shares;
(i) The "Trust" means The Cutler Trust and reference to the Trust, when
applicable to one or more Series of the Trust, shall refer to any such Series;
(j) The "Trustees" means the person or persons who has or have signed this
Trust Instrument, so long as he or they shall continue in office in accordance
with the terms hereof, and all other persons who may from time to time be duly
qualified and serving as Trustees in accordance with the provisions of Article
III hereof and reference herein to a Trustee or to the Trustees shall refer to
the individual Trustees in their capacity as Trustees hereunder;
(k) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of one or
more of the Trust or any Series, or the Trustees on behalf of the Trust or any
Series.
(l) The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time.
ARTICLE II
BENEFICIAL INTEREST
SECTION 2.01 SHARES OF BENEFICIAL INTEREST. The beneficial interest in
the Trust shall be divided into such transferable Shares of one or more separate
and distinct Series or classes of a Series as the Trustees shall from time to
time create and establish. The number of Shares of each Series, and class
thereof, authorized hereunder is unlimited. Each Share shall have no par value.
All Shares issued hereunder, including without limitation, Shares issued in
connection with a dividend in Shares or a split or reverse split of Shares,
shall be fully paid and nonassessable.
SECTION 2.02 ISSUANCE OF SHARES. The Trustees in their discretion may,
from time to time, without vote of the Shareholders, issue Shares, in addition
to the then issued and outstanding Shares and Shares held in the treasury, to
such party or parties and for such amount and type of consideration, subject to
applicable law, including cash or securities, at such time or times and on such
terms as the Trustees may deem appropriate, and may in such manner acquire other
assets (including the acquisition of assets subject to, and in connection with,
the assumption of liabilities) and businesses. In connection with any issuance
of Shares, the Trustees may issue fractional Shares and Shares held in the
treasury. The Trustees may from time to time divide or combine the Shares into
a greater or lesser number without thereby changing the proportionate beneficial
interests
- 4 -
<PAGE>
in the Trust. Contributions to the Trust may be accepted for, and Shares shall
be redeemed as, whole Shares and/or 1/1,000th of a Share or integral multiples
thereof.
SECTION 2.03 REGISTER OF SHARES AND SHARE CERTIFICATES. A register shall
be kept at the principal office of the Trust or an office of the Trust's
transfer agent which shall contain the names and addresses of the Shareholders
of each Series, the number of Shares of that Series (or any class or classes
thereof) held by them respectively and a record of all transfers thereof. As to
Shares for which no certificate has been issued, such register shall be entitled
to receive dividends or other distributions or otherwise to exercise or enjoy
the rights of Shareholders. No Shareholder shall be entitled to receive payment
of any dividend or other distribution, nor to have notice given to him as herein
or in the Bylaws provided, until he has given his address to the transfer agent
or such officer or other agent of the Trustees as shall keep the said register
for entry thereon. No share certificates shall be issued by the Trust.
SECTION 2.04 TRANSFER OF SHARES. Except as otherwise provided by the
Trustees, Shares shall be transferable on the records of the Trust only by the
record holder thereof or by his agent thereunto duly authorized in writing, upon
delivery to the Trustees or the Trust's transfer agent of a duly executed
instrument of transfer and such evidence of the genuineness of such execution
and authorization and of such other matters as may be required by the Trustees.
Upon such delivery the transfer shall be recorded on the register of the Trust.
Until such record is made, the Shareholder of record shall be deemed to be the
holder of such Shares for all purposes hereunder and neither the Trustees nor
the Trust, nor any transfer agent or registrar nor any officer, employee or
agent of the Trust shall be affected by any notice of the proposed transfer.
SECTION 2.05 TREASURY SHARES. Shares held in the treasury shall, until
reissued pursuant to Section 2.02 hereof, not confer any voting rights on the
Trustees, nor shall such Shares be entitled to any dividends or other
distributions declared with respect to the Shares.
SECTION 2.06 ESTABLISHMENT OF SERIES. The Trust created hereby shall
consist of one or more Series and separate and distinct records shall be
maintained by the Trust for each Series and the assets associated with any such
Series shall be held and accounted for separately from the assets of the Trust
or any other Series. The Trustees shall have full power and authority, in their
sole discretion, and without obtaining any prior authorization or vote of the
Shareholders of any Series of the Trust, to establish and designate and to
change in any manner any such Series of Shares or any classes of initial or
additional Series and to fix such preferences, voting powers, rights and
privileges of such Series or classes thereof as the Trustees may from time to
time determine, to divide or combine the Shares or any Series or classes thereof
into a greater or lesser number, to classify or reclassify any issued Shares or
any Series or classes thereof into one or more Series or classes of Shares, and
to take such other action with respect to the Shares as the Trustees may deem
desirable. The
- 5 -
<PAGE>
establishment and designation of any Series shall be effective upon the adoption
of a resolution by a majority of the Trustees setting forth such establishment
and designation and the relative rights and preferences of the Shares of such
Series. A Series may issue any number of Shares and need not issue shares. At
any time that there are no Shares outstanding of any particular Series
previously established and designated, the Trustees may by a majority vote
abolish that Series and the establishment and designation thereof.
All references to Shares in this Trust Instrument shall be deemed to be
Shares of any or all Series, or classes thereof, as the context may require.
All provisions herein relating to the Trust shall apply equally to each Series
of the Trust, and each class thereof, except as the context otherwise requires.
Each Share of a Series of the Trust shall represent an equal beneficial
interest in the net assets of such Series. Each holder of Shares of a Series
shall be entitled to receive his pro rata share of all distributions made with
respect to such Series. Upon redemption of his Shares, such Shareholder shall
be paid solely out of the funds and property of such Series of the Trust.
SECTION 2.07 INVESTMENT IN THE TRUST. The Trustees shall accept
investments in any Series of the Trust from such persons and on such terms as
they may from time to time authorize. At the Trustees' discretion, such
investments, subject to applicable law, may be in the form of cash or securities
in which the affected Series is authorized to invest, valued as provided in
Article IX, Section 9.03 hereof. Investments in a Series shall be credited to
each Shareholder's account in the form of full Shares at the Net Asset Value per
Share next determined after the investment is received or accepted as may be
determined by the Trustees; provided, however, that the Trustees may, in their
sole discretion, (a) fix the Net Asset Value per Share of the initial capital
contribution, (b) impose a sales charge upon investments in the Trust in such
manner and at such time determined by the Trustees or (c) issue fractional
Shares.
SECTION 2.08 ASSETS AND LIABILITIES OF SERIES. All consideration received
by the Trust for the issue or sale of Shares of a particular Series, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds in whatever from the same may be,
shall be held and accounted for separately from the other assets of the Trust
and of every other Series and may be referred to herein as "assets belonging to"
that Series. The assets belonging to a particular Series shall belong to that
Series for all purposes, and to no other Series, subject only to the rights of
creditors of that Series. In addition, any assets, income, earnings, profits or
funds, or payments and proceeds with respect thereto, which are not readily
identifiable as belonging to any particular Series shall be allocated by the
Trustees between and among one or more of the Series in such manner as the
Trustees, in their sole discretion, deem fair and equitable. Each such
allocation shall be
- 6 -
<PAGE>
conclusive and binding upon the Shareholders of all Series for all purposes, and
such assets, income, earnings, profits or funds, or payments and proceeds with
respect thereto shall be assets belonging to that Series. The assets belonging
to a particular Series shall be so recorded upon the books of the Trust, and
shall be held by the Trustees in trust for the benefit of the holders of Shares
of that Series. The assets belonging to each particular Series shall be charged
with the liabilities of that Series and all expenses, costs, charges and
reserves attributable to that Series. Any general liabilities, expenses, costs,
charges or reserves of the Trust which are not readily identifiable as belonging
to any particular Series shall be allocated and charged by the Trustees between
or among any one or more of the Series in such manner as the Trustees in their
sole discretion deem fair and equitable. Each such allocation shall be
conclusive and binding upon the Shareholders of all Series for all purposes.
Without limitation of the foregoing provisions of this Section 2.08, but subject
to the right of the Trustees in their discretion to allocate general
liabilities, expenses, costs, changes or reserves as herein provided, the debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular Series shall be enforceable against the
assets of such Series only, and not against the assets of the Trust generally.
Notice of this contractual limitation on inter-Series liabilities may, in the
Trustee's sole discretion, be set forth in the certificate of trust of the Trust
(whether originally or by amendment) as filed or to be filed in the Office of
the Secretary of State of the State of Delaware pursuant to the Delaware Act,
and upon the giving of such notice in the certificate of trust, the statutory
provisions of Section 3804 of the Delaware Act relating to limitations on inter-
Series liabilities (and the statutory effect under Section 3804 of setting forth
such notice in the certificate of trust) shall become applicable to the Trust
and each Series. Any person extending credit to, contracting with or having any
claim against any Series may look only to the assets of that Series to satisfy
or enforce any debt, with respect to that Series. No Shareholder or former
Shareholder of any Series shall have a claim on or any right to any assets
allocated or belonging to any other Series.
SECTION 2.09 NO PREEMPTIVE RIGHTS. Shareholders shall have no preemptive
or other right to subscribe to any additional Shares or other securities issued
by the Trust or the Trustees, whether of the same or other Series.
SECTION 2.10 NO PERSONAL LIABILITY OF SHAREHOLDER. Each Shareholder of
the Trust and of each Series shall not be personally liable for the debts,
liabilities, obligation and expenses incurred by, contracted for, or otherwise
existing with respect to, the Trust or by or on behalf of any Series. The
Trustees shall have no power to bind any Shareholder personally or to call upon
any Shareholder for the payment of any sum of money or assessment whatsoever
other than such as the Shareholder may at any time personally agree to pay by
way of subscription for any Shares or otherwise. Every note, bond, contract or
other undertaking issued by or on behalf of the Trust or the Trustees relating
to the Trust or to a Series shall include a recitation limiting the obligation
represented thereby to the Trust or to one or more Series
- 7 -
<PAGE>
and its or their assets (but the omission of such a recitation shall not operate
to bind any Shareholder or Trustee of the Trust).
SECTION 2.11 ASSENT TO TRUST INSTRUMENT. Every Shareholder, by virtue of
having purchased a Share shall become a Shareholder and shall be held to have
expressly assented and agreed to be bound by the terms hereof.
ARTICLE III
THE TRUSTEES
SECTION 3.01 MANAGEMENT OF THE TRUST. The Trustees shall have exclusive
and absolute control over the Trust Property and over the business of the Trust
to the same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, but with such powers of delegation as may be
permitted by this Trust Instrument. The Trustees shall have power to conduct
the business of the Trust and carry on its operations in any and all of its
branches and maintain offices both within and without the State of Delaware, in
any and all states of the United States of America, in the District of Columbia,
in any and all commonwealths, territories, dependencies, colonies, or
possessions of the United States of America, and in any foreign jurisdiction and
to do all such other things and execute all such instruments as they deem
necessary, proper or desirable in order to promote the interests of the Trust
although such things are not herein specifically mentioned. Any determination
as to what is in the interests of the Trust made by the Trustees in good faith
shall be conclusive. In construing the provisions of this Trust Instrument, the
presumption shall be in favor of a grant of power to the Trustees.
The enumeration of any specific power in this Trust Instrument shall not be
construed as limiting the aforesaid power. The powers of the Trustees may be
exercised without order of or resort to any court.
Except for the Trustees named herein or appointed to fill vacancies
pursuant to Section 3.04 of this Article III, the Trustees shall be elected by
the Shareholders owning of record a plurality of the Shares voting at a meeting
of Shareholders. Such a meeting shall be held on a date fixed by the Trustees.
In the event that less than a majority of the Trustees holding office have been
elected by Shareholders, the Trustees then in office will call a Shareholders'
meeting for the election of Trustees.
SECTION 3.02 INITIAL TRUSTEES. The initial Trustees shall be the persons
named herein. On a date fixed by the Trustees, the Shareholders shall elect at
least three (3) but not more than twelve (12) Trustees, as specified by the
Trustees pursuant to Section 3.06 of this Article III.
SECTION 3.03 TERM OF OFFICE. The Trustees shall hold office during the
lifetime of this Trust, and until its termination as herein provided; except (a)
that any Trustee may resign his trust by written instrument signed by him and
delivered to the other Trustees, which
- 8 -
<PAGE>
shall take effect upon such delivery or upon such later date as is specified
therein; (b) that any Trustee may be removed at any time by written instrument,
signed by at least two-thirds of the number of Trustees prior to such removal,
specifying the date when such removal shall become effective; (c) that any
Trustee who requests in writing to be retired or who has died, become physically
or mentally incapacitated by reason of disease or otherwise, or is otherwise
unable to serve, may be retired by written instrument signed by a majority of
the other Trustees, specifying the date of his retirement; and (d) that a
Trustee may be removed at any meeting of the Shareholders of the Trust by a vote
of Shareholders owning at least two-thirds of the Outstanding Shares.
SECTION 3.04 VACANCIES AND APPOINTMENTS. In case of the declination to
serve, death, resignation, retirement, removal, physical or mental incapacity by
reason of disease or otherwise, or a Trustee is otherwise unable to serve, or an
increase in the number of Trustees, a vacancy shall occur. Whenever a vacancy
in the Board of Trustees shall occur, until such vacancy is filled, the other
Trustees shall have all the powers hereunder and the certificate of the other
Trustees of such vacancy shall be conclusive. In the case of an existing
vacancy, the remaining Trustees shall fill such vacancy by appointing such other
person as they in their discretion shall see fit consistent with the limitations
under the 1940 Act. Such appointment shall be evidenced by a written instrument
signed by a majority of the Trustees in office or by resolution of the Trustees,
duly adopted, which shall be recorded in the minutes of a meeting of the
Trustees, whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As soon as any
Trustee appointed pursuant to this Section 3.04 shall have accepted this trust,
the trust estate shall vest in the new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder.
SECTION 3.05 TEMPORARY ABSENCE. Any Trustee may, by power of attorney,
delegate his power for a period not exceeding six months at any time to any
other Trustee or Trustees, provided that in no case shall less than two Trustees
personally exercise the other powers hereunder except as herein otherwise
expressly provided.
SECTION 3.06 NUMBER OF TRUSTEES. The number of Trustees shall be at least
three (3), and thereafter shall be such number as shall be fixed from time to
time by a majority of the Trustees, provided, however, that the number of
Trustees shall in no event be more than twelve (12).
SECTION 3.07 EFFECT OF ENDING OF A TRUSTEE'S SERVICE. The declination to
serve, death, resignation, retirement, removal, incapacity, or inability of the
Trustees, or any one of them, shall not
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operate to terminate the trust or to revoke any existing agency created pursuant
to the terms of this Trust Instrument.
SECTION 3.08 OWNERSHIP OF ASSETS OF THE TRUST. The assets of the Trust
and of each Series shall be held separate and apart for any assets now or
hereafter held in any capacity other than as Trustee hereunder by the Trustees
or any successor Trustees. Legal title in all of the assets of the Trust and
the right to conduct any business shall at all times be considered as vested in
the Trustees on behalf of the Trust, except that the Trustees may cause legal
title to any Trust Property to be held by, or in the name of the Trust, or in
the name of any person as nominee. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or of any Series or any
right of partition or possession thereof, but each Shareholder shall have,
except as otherwise provided for herein, a proportionate undivided beneficial
interest in the Trust or Series. The Shares shall be personal property giving
only the rights specifically set forth in this Trust Instrument.
ARTICLE IV
POWERS OF THE TRUSTEES
SECTION 4.01 POWERS. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the Shareholders. The
Trustees shall have full power and authority to do any and all acts and to make
and execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust. The
Trustees shall not in any way be bound or limited by present or future laws or
customs in regard to trust investments, but shall have full authority and power
to make any and all investments which they, in their sole discretion, shall deem
proper to accomplish the purpose of this Trust without recourse to any court or
other authority. Subject to any applicable limitation in this Trust Instrument
or the Bylaws of the Trust, the Trustees shall have the power and authority:
(a) To invest and reinvest cash and other property, and to hold cash or
other property uninvested, without in any event being bound or limited by any
present or future law or custom in regard to investments by trustees, and to
sell, exchange, lend, pledge, mortgage, hypothecate, write options on and lease
any or all of the assets of the Trust:
(b) To operate as and carry on the business of an investment company, and
exercise all the powers necessary and appropriate to the conduct of such
operations;
(c) To borrow money and in this connection issue notes or other evidence
of indebtedness; to secure borrowings by mortgaging, pledging or otherwise
subjecting as security the Trust Property; to endorse, guarantee, or undertake
the performance of an obligation or engagement of any other Person and to lend
Trust Property;
(d) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereinafter
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provided for or by the Trust itself, or both, or otherwise pursuant to a plan of
distribution of any kind;
(e) To adopt Bylaws not inconsistent with this Trust Instrument providing
for the conduct of the business of the Trust and to amend and repeal them to the
extent that they do not reserve that right to the Shareholders; such Bylaws
shall be deemed incorporated and included in this Trust Instrument;
(f) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
(g) To employ one or more banks, trust companies or companies that are
members of a national securities exchange or such other entities as the
Commission may permit as custodians of any assets of the Trust subject to any
conditions set forth in this Trust Instrument or in the Bylaws;
(h) To retain one or more transfer agents and shareholder servicing
agents, or both;
(i) To set record dates in the manner provided herein or in the Bylaws;
(j) To delegate such authority as they consider desirable to any officers
of the Trust and to any investment adviser, manager, custodian, underwriter or
other agent or independent contractor;
(k) To sell or exchange any or all of the assets of the Trust, subject to
the provisions of Article XI, subsection 11.04(b) hereof;
(l) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
powers of attorney to such person or persons as the Trustees shall deem proper,
granting to such person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(m) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(n) To hold any security or property in a form not indicating any trust,
whether in bearer, book entry, unregistered or other negotiable form; or either
in the name of the Trust or in the name of a custodian or a nominee or nominees,
subject in either case to proper safeguards according to the usual practice of
Delaware business trusts or investment companies;
(o) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article II hereof and to establish classes of
such Series having relative rights, powers and duties as they may provide
consistent with applicable law;
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(p) Subject to the provisions of Section 3804 of the Delaware Act, to
allocate assets, liabilities and expenses of the Trust to a particular Series or
to apportion the same between or among two or more Series, provided that any
liabilities or expenses incurred by a particular Series shall be payable solely
out of the assets belonging to that Series as provided for in Article II hereof;
(q) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or
concern, any security of which is held in the Trust; to consent to any contract,
lease, mortgage, purchase, or sale of property by such corporation or concern,
and to pay calls or subscriptions with respect to any security held in the
Trust;
(r) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited to,
claims for taxes;
(s) To make distributions of income and of capital gains to Shareholders
in the manner provided herein;
(t) To establish, from time to time, a minimum investment for Shareholders
in the Trust or in one or more Series or class, and to require the redemption of
the Shares of any Shareholders whose investment is less than such minimum upon
giving notice to such Shareholder;
(u) To establish one or more committees, to delegate any of the powers of
the Trustees to said committees and to adopt a committee charter providing for
such responsibilities, membership (including Trustees, officers or other agents
of the Trust therein) and any other characteristics of said committees as the
Trustees may deem proper. Notwithstanding the provisions of this Article IV,
and in addition to such provisions or any other provision of this Trust
Instrument or of the Bylaws, the Trustees may by resolution appoint a committee
consisting of less than the whole number of Trustees then in office, which
committee may be empowered to act for and bind the Trustees and the Trust, as if
the acts of such committee were the acts of all the Trustees then in office,
with respect to the institution, prosecution, dismissal, settlement, review or
investigation of any action, suit or proceeding which shall be pending or
threatened to be brought before any court, administrative agency or other
adjudicatory body;
(v) To interpret the investment policies, practices or limitations of any
Series;
(w) To establish a registered office and have a registered agent in the
state of Delaware; and
(x) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and
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to do every other act or thing incidental or appurtenant to or growing out of or
connected with the aforesaid business or purposes, objects or powers.
The foregoing clauses shall be construed as objects and powers, and the
foregoing enumeration of specific powers shall not be held to limit or restrict
in any manner the general powers
of the Trustees. Any action by one or more of the Trustees in their capacity as
such hereunder shall be deemed an action on behalf of the Trust or the
applicable Series, and not an action in an individual capacity.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust.
No one dealing with the Trustees shall be under any obligation to make any
inquiry concerning the authority of the Trustees, or to see the application of
any payments make or property transferred to the Trustees or upon their order.
SECTION 4.02 ISSUANCE AND REPURCHASE OF SHARES. The Trustees shall have
the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, and otherwise deal in Shares and, subject to the
provisions set forth in Article II and Article IX, to apply to any such
repurchase, redemption, retirement, cancellation or acquisition of Shares any
funds or property of the Trust, or the particular Series of the Trust, with
respect to which such Shares are issued.
SECTION 4.03 TRUSTEES AND OFFICERS AS SHAREHOLDERS. Any Trustee, officer
or other agent of the Trust may acquire, own and dispose of Shares to the same
extent as if he were not a Trustee, officer or agent; and the Trustees may issue
and sell or cause to be issued and sold Shares to and buy such Shares from any
such person or any firm or company in which he is interested, subject only to
the general limitations herein contained as to the sale and purchase of such
Shares; and all subject to any restrictions which may be contained in the
Bylaws.
SECTION 4.04 ACTION BY THE TRUSTEES. The Trustees shall act by majority
vote at a meeting duly called or by unanimous written consent without a meeting
or by telephone meeting provided a quorum of Trustees participate in any such
telephone meeting, unless the 1940 Act requires that a particular action be
taken only at a meeting at which the Trustees are present in person. At any
meeting of the Trustees, a majority of the Trustees shall constitute a quorum.
Meetings of the Trustees may be called orally or in writing by the Chairman of
the Board of Trustees or by any two other Trustees. Notice of the time, date
and place of all meetings of the Trustees shall be given by the party calling
the meeting to each Trustee by telephone, facsimile or other electronic
mechanism sent to his home or business address at least twenty-four hours in
advance of the meeting or by written notice mailed to his home or business
address at least seventy-two hours in advance of the meeting. Notice need not
be given to any Trustee who attends the
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meeting without objecting to the lack of notice or who executes a written waiver
of notice with respect to the meeting. Any meeting conducted by telephone shall
be deemed to take place at the principal office of the Trust, as determined by
the Bylaws or by the Trustees. Subject to the requirements of the 1940 Act, the
Trustees by majority vote may delegate to any one or more of their number their
authority to approve particular matters or take particular actions on behalf of
the Trust. Written consents or waivers of the Trustees may be executed in one
or more counterparts. Execution of a written consent or waiver and delivery
thereof to the Trust may be accomplished by facsimile or other similar
electronic mechanism.
SECTION 4.05 CHAIRMAN OF THE TRUSTEES. The Trustees shall appoint one of
their number to be Chairman of the Board of Trustees. The Chairman shall
preside at all meetings of the Trustees, shall be responsible for the execution
of policies established by the Trustees and the administration of the Trust, and
may be (but is not required to be) the chief executive, financial and/or
accounting officer of the Trust.
SECTION 4.06 PRINCIPAL TRANSACTIONS. Except to the extent prohibited by
applicable law, the Trustees may, on behalf of the Trust, buy any securities
from or sell any securities to, or lend any assets of the Trust to, any Trustee
or officer of the Trust or any firm of which any such Trustee or officer is a
member acting as principal, or have any such dealings with any investment
adviser, administrator, distributor or transfer agent for the Trust or with any
Interested Person of such person; and the Trust may employ any such person, or
firm or company in which such person is an Interested Person, as broker, legal
counsel, registrar, investment adviser, administrator, distributor, transfer
agent, dividend disbursing agent, custodian or in any other capacity upon
customary terms.
ARTICLE V
EXPENSES OF THE TRUST
(a) Subject to the provisions of Article II, Section 2.08 hereof, the
Trustees shall be reimbursed from the Trust estate or the assets belonging to
the appropriate Series for their expenses and disbursements, including, without
limitation, interest charges, taxes, brokerage fees and commissions; expenses of
issue, repurchase and redemption of shares; certain insurance premiums;
applicable fees, interest charges and expenses of third parties, including the
Trust's investment advisers, managers, administrators, distributors, custodian,
transfer agent and fund accountant; fees of pricing, interest, dividend, 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 corporate
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;
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costs of maintaining books and accounts; costs of reproduction, stationery and
supplies; fees and expenses of the Trust's trustees; compensation of the Trust's
officers and employees and costs of other personnel performing services for the
Trust; costs of Trustee meetings; Securities and Exchange Commission
registration fees and related expenses; state or foreign securities laws
registration fees and related expenses and for such non-recurring items as may
arise, including litigation to which the Trust (or a Trustee acting as such) is
a party, and for all losses and liabilities by them incurred in administering
the Trust, and for the payment of such expenses, disbursements, losses and
liabilities the Trustees shall have a lien on the assets belonging to the
appropriate Series, or in the case of an expense allocable to more than one
Series, on the assets of each such Series, prior to any rights or interests of
the Shareholders thereto. This section shall not preclude the Trust from
directly paying any of the aforementioned fees and expenses.
(b) Notwithstanding anything to the contrary, the Trust and each Series
will not commence operations or publicly sell Shares unless and until the Trust
has entered into a contract with Cutler & Company, Inc. whereby Cutler &
Company, Inc. has agreed to pay for or reimburse the Trust for all expenses of
the Trust and Series except taxes to which the Trust or a Series may be liable
and brokerage expenses.
ARTICLE VI
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER,
ADMINISTRATOR AND TRANSFER AGENT
SECTION 6.01 INVESTMENT ADVISER. The Trustees may in their discretion,
from time to time, enter into an investment advisory contract or contracts with
respect to the Trust or any Series whereby the other party or parties to such
contract or contracts shall undertake to furnish the Trustees with such
investment advisory, statistical and research facilities and services and such
other facilities and services, if any, all upon such terms and conditions as may
be prescribed in the Bylaws or as the Trustees may in their discretion determine
(such terms and conditions not to be inconsistent with the provisions of this
Trust Instrument or of the Bylaws). Notwithstanding any other provision of this
Trust Instrument, the Trustees may authorize any investment adviser (subject to
such general or specific instructions as the Trustees may from time to time
adopt) to effect purchases, sales or exchanges of portfolio securities, other
investment instruments of the Trust, or other Trust Property on behalf of the
Trustees, or may authorize any officer, agent, or Trustee to effect such
purchases, sales or exchanges pursuant to recommendations of the investment
adviser (and all without further action by the Trustees). Any such purchases,
sales and exchanges shall be deemed to have been authorized by all of the
Trustees. The Trustees may authorize the investment adviser to employ, from time
to time, one or more sub-advisers to perform such of the acts and services of
the investment adviser, and upon such terms and conditions, as may be agreed
upon between the investment adviser and sub-adviser (such terms and conditions
not to be inconsistent with the provisions of this Trust Instrument or of the
Bylaws). Any reference
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in this Trust Instrument to the investment adviser shall be deemed to include
such sub-advisers, unless the context otherwise requires.
SECTION 6.02 PRINCIPAL UNDERWRITER. The Trustees may in their discretion
from time to time enter into an exclusive or non-exclusive underwriting contract
or contracts providing for the sale of Shares, whereby the Trust may either
agree to sell Shares to the other party to the contract or appoint such other
party its sales agent for such Shares. In either case, the contract shall be on
such terms and conditions as may be prescribed in the Bylaws and as the Trustees
may in their discretion determine (such terms and conditions not to be
inconsistent with the provisions of this Trust Instrument or of the Bylaws); and
such contract may also provide for the repurchase or sale of Shares by such
other party as principal or as agent of the Trust.
SECTION 6.03 ADMINISTRATION. The Trustees may in their discretion from
time to time enter into one or more management or administrative contracts
whereby the other party or parties shall undertake to furnish the Trustees with
management or administrative services. The contract or contracts shall be on
such terms and conditions as may be prescribed in the Bylaws and as the Trustees
may in their discretion determine (such terms and conditions not to be
inconsistent with the provisions of this Trust Instrument or of the Bylaws).
SECTION 6.04 TRANSFER AGENT. The Trustees may in their discretion from
time to time enter into one or more transfer agency and Shareholder service
contracts whereby the other party or parties shall undertake to furnish the
Trustees with transfer agency and Shareholder services. The contract or
contracts shall be on such terms and conditions as may be prescribed in the
Bylaws and as the Trustees may in their discretion determine (such terms and
conditions not to be inconsistent with the provisions of this Trust Instrument
or of the Bylaws).
SECTION 6.05 PARTIES TO CONTRACT. Any contract of the character described
in Sections 6.01, 6.02, 6.03 and 6.04 of this Article VI or any contract of the
character described in Article VIII hereof may be entered into with any
corporation, firm, partnership, trust or association, although one or more of
the Trustees or officers of the Trust may be an officer, director, trustee,
shareholder, or member of such other party to the contract, and no such contract
shall be invalidated or rendered void or voidable by reason of the existence of
any relationship, nor shall any person holding such relationship be disqualified
from voting on or executing the same in his capacity as Shareholder and/or
Trustee, nor shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was not
inconsistent with the provisions of this Article VI or Article VIII hereof or of
the Bylaws. The same person (including a firm, corporation, partnership, trust,
or association) may be the other party to contracts entered into pursuant to
Sections 6.01, 6.02, 6.03 and 6.04 of this Article VI or
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pursuant to Article VIII hereof, and any individual may be financially
interested or otherwise affiliated with persons who are parties to any or all of
the contracts mentioned in this Section 6.05.
SECTION 6.06 PROVISIONS AND AMENDMENTS. Any contract entered into
pursuant to Sections 6.01 or 6.02 of this Article VI shall be consistent with
and subject to the requirements of Section 15 of the 1940 Act, if applicable, or
other applicable Act of Congress hereafter enacted with respect to its
continuance in effect, its termination, and the method of authorization and
approval of such contract or renewal thereof, and no amendment to any contract
entered into pursuant to Section 6.01 of this Article VI shall be effective
unless assented to in a manner consistent with the requirements of said Section
15, as modified by any applicable rule, regulation or order of the Commission.
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 7.01 VOTING POWERS. The Shareholders shall have power to vote
only (a) for the election of Trustees as provided in Article III, Sections 3.01
and 3.02 hereof, (b) for the removal of Trustees as provided in Article III,
Section 3.03(d) hereof, (c) with respect to any investment advisory contract as
provided in Article VI, Sections 6.01 and 6.06 hereof, and (d) with respect to
such additional matters relating to the Trust as may be required by law, by this
Trust Instrument, or the Bylaws or any registration of the Trust with the
Commission or any State, or as the Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall be
voted separately by individual Series, except (i) when required by the 1940 Act,
Shares shall be voted in the aggregate and not by individual Series; and (ii)
when the Trustees have determined that the matter affects the interests of more
than one Series, then the Shareholders of all such Series shall be entitled to
vote thereon. The Trustees may also determine that a matter affects only the
interests of one or more classes of a Series, in which case any such matter
shall be voted on by such class or classes. Each whole Share shall be entitled
to one vote as to any matter on which it is entitled to vote, and each
fractional Share shall be entitled to a proportionate fractional vote. There
shall be no cumulative voting in the election of Trustees. Shares may be voted
in person or by proxy or in any manner provided for in the Bylaws. A proxy may
be given in writing. The Bylaws may provide that proxies may also, or may
instead, be given by any electronic or telecommunications device or in any other
manner. Notwithstanding anything else herein or in the Bylaws, in the event a
proposal by anyone other than the officers or Trustees of the Trust is submitted
to a vote of the Shareholders of one or more Series or of the Trust, or in the
event of any proxy contest or proxy solicitation or proposal in opposition to
any proposal by the officers or Trustees of the Trust, Shares may be voted only
in person or by written proxy. Until Shares are issued, the Trustees may
exercise all rights of Shareholders and may take any action required or
permitted by law, this Trust Instrument or any of the Bylaws of the Trust to be
taken by Shareholders.
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SECTION 7.02 MEETINGS. The first Shareholders' meeting shall be held in
order to elect Trustees as specified in Section 3.02 of Article III hereof at
the principal office of the Trust or such other place as the Trustees may
designate. Meetings may be held within or without the State of Delaware.
Special meetings of the Shareholders of any Series may be called by the Trustees
and shall be called by the Trustees upon the written request of Shareholders
owning at least one-tenth of the Outstanding Shares entitled to vote. Whenever
ten or more Shareholders meeting the qualifications set forth in Section 16(c)
of the 1940 Act, as the same may be amended from time to time, seek the
opportunity of furnishing materials to the other Shareholders with a view to
obtaining signatures on such a request for a meeting, the Trustees shall comply
with the provisions of said Section 16(c) with respect to providing such
Shareholders access to the list of the Shareholders of record of the Trust or
the mailing of such materials to such Shareholders of record, subject to any
rights provided to the Trust or any Trustees provided by said Section 16(c).
Notice shall be sent, by First Class Mail or such other means determined by the
Trustees, at least 15 days prior to any such meeting.
SECTION 7.03 QUORUM AND REQUIRED VOTE. One-third of Shares entitled to
vote in person or by proxy shall be a quorum for the transaction of business at
a Shareholders' meeting, except that where any provision of law or of this Trust
Instrument permits or requires that holders of any Series shall vote as a Series
(or that holders of a class shall vote as a class), then one-third of the
aggregate number of Shares of that Series (or that class) entitled to vote shall
be necessary to constitute a quorum for the transaction of business by that
Series (or that class). Any lesser number shall be sufficient for adjournments.
Any adjourned session or sessions may be held, within a reasonable time after
the date set for the original meeting, without the necessity of further notice.
Except when a larger vote is required by law or by any provision of this Trust
Instrument or the Bylaws, a majority of the Shares voted in person or by proxy
shall decide any questions and a plurality shall elect a Trustee, provided that
where any provision of law or of this Trust Instrument permits or requires that
the holders of any Series shall vote as a Series (or that the holders of any
class shall vote as a class), then a majority of the Shares present in person or
by proxy of that Series (or class), voted on the matter in person or by proxy
shall decide that matter insofar as that Series (or class) is concerned.
Shareholders may act by unanimous written consent. Actions taken by Series (or
class) may be consented to unanimously in writing by Shareholders of that Series
(or class).
ARTICLE VIII
CUSTODIAN
SECTION 8.01 APPOINTMENT AND DUTIES. The Trustees shall at all times
employ a bank, a company that is a member of a national securities exchange, or
a trust company, each having capital, surplus and undivided profits of at least
twenty million dollars ($20,000,000) and is a member of the Depository Trust
Company as custodian with authority as its
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agent, but subject to such restrictions, limitations and other requirements, if
any, as may be contained in the Bylaws of the Trust: (a) to hold the securities
owned by the Trust and deliver the same upon written order or oral order
confirmed in writing; (b) to receive and receipt for any moneys due to the Trust
and deposit the same in its own banking department or elsewhere as the Trustees
may direct; and (c) to disburse such funds upon orders or vouchers.
The Trustees may also authorize the custodian to employ one or more sub-
custodians from time to time to perform such of the acts and services of the
custodian, and upon such terms and conditions, as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees, provided that in
every case such sub-custodian shall be a bank, a company that is a member of a
national securities exchange, or a trust company organized under the laws of the
United States or one of the states thereof and having capital, surplus and
undivided profits of at least twenty million dollars ($20,000,000) and is a
member of the Depository Trust Company or such other person as may be permitted
by the Commission or otherwise in accordance with the 1940 Act.
SECTION 8.02 CENTRAL CERTIFICATE SYSTEM. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may direct the
custodian to deposit all or any part of the securities owned by the Trust in a
system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, as amended, or such other
person as may be permitted by the Commission, or otherwise in accordance with
the 1940 Act, pursuant to which system all securities of any particular class or
series of any issuer deposited within the system are treated as fungible and may
be transferred or pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to withdrawal only
upon the order of the Trust or its custodians, sub-custodians or other agents.
ARTICLE IX
DISTRIBUTIONS AND REDEMPTIONS SECTION 9.01 DISTRIBUTIONS.
(a) The Trustees may from time to time declare and pay dividends or other
distributions with respect to any Series. The amount of such dividends or
distributions and the payment of them and whether they are in cash or any other
Trust Property shall be wholly in the discretion of the Trustees.
(b) Dividends and other distributions may be paid or made to the
Shareholders of record at the time of declaring a dividend or other distribution
or among the Shareholders of record at such other date or time or dates or times
as the Trustees shall determine, which dividends or distributions, at the
election of the Trustees, may be paid pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Trustees may
determine. The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans or related plans as the Trustees
shall deem appropriate.
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(c) Anything in this Trust Instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute a stock dividend pro rata among
the Shareholders of a particular Series, or class thereof, as of the record date
of that Series fixed as provided in Subsection 9.01(b) hereof.
SECTION 9.02 REDEMPTIONS. In case any holder of record of Shares of a
particular Series desires to dispose of his Shares or any portion thereof, he
may deposit at the office of the transfer agent or other authorized agent of
that Series a written request or such other form of request as the Trustees may
from time to time authorize, requesting that the Series purchase the Shares in
accordance with this Section 9.02; and the Shareholder so requesting shall be
entitled to require the Series to purchase, and the Series or the principal
underwriter of the Series shall purchase his said Shares, but only at the Net
Asset Value thereof (as described in Section 9.03 of this Article IX). The
Series shall make payment for any such Shares to be redeemed, as aforesaid, in
cash or property from the assets of that Series and payment for such Shares
shall be made by the Series or the principal underwriter of the Series to the
Shareholder of record within seven (7) days after the date upon which the
request is effective. Upon redemption, shares shall become Treasury shares and
may be re-issued from time to time.
SECTION 9.03 DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO
ASSETS. The term "Net Asset Value" of any Series shall mean that amount by
which the assets of that Series exceed its liabilities, all as determined by or
under the direction of the Trustees. Such value shall be determined separately
for each Series and shall be determined on such days and at such times as the
Trustees may determine. Such determination shall be made with respect to
securities for which market quotations are readily available, at the market
value of such securities; and with respect to other securities and assets, at
the fair value as determined in good faith by the Trustees; provided, however,
that the Trustees, without Shareholder approval, may alter the method of valuing
portfolio securities insofar as permitted under the 1940 Act and the rules,
regulations and interpretations thereof promulgated or issued by the Commission
or insofar as permitted by any Order of the Commission applicable to the Series.
The Trustees may delegate any of their powers and duties under this Section 9.03
with respect to valuation of assets and liabilities. The resulting amount,
which shall represent the total Net Asset Value of the particular Series, shall
be divided by the total number of shares of that Series outstanding at the time
and the quotient so obtained shall be the Net Asset Value per Share of that
Series. At any time the Trustees may cause the Net Asset Value per Share last
determined to be determined again in similar manner and may fix the time when
such redetermined value shall become effective. If, for any reason, the net
income of any Series, determined at any time, is a negative amount, the Trustees
shall have the power with respect to that Series (a) to offset each
Shareholder's pro rata share of such negative amount from the accrued dividend
account of such Shareholder, (b) to reduce the number of Outstanding Shares of
such Series by reducing the number of Shares in the account of each Shareholder
by a pro rata portion of that number of full and fractional Shares which
represents
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the amount of such excess negative net income, (c) to cause to be recorded on
the books of such Series an asset account in the amount of such negative net
income (provided that the same shall thereupon become the property of such
Series with respect to such Series and shall not be paid to any Shareholder),
which account may be reduced by the amount, of dividends declared thereafter
upon the Outstanding Shares of such Series on the day such negative net income
is experienced, until such asset account is reduced to zero; (d) to combine the
methods described in clauses (a) and (b) and (c) of this sentence; or (e) to
take any other action they deem appropriate, in order to cause (or in order to
assist in causing) the Net Asset Value per Share of such Series to remain at a
constant amount per Outstanding Share immediately after each such determination
and declaration. The Trustees shall also have the power not to declare a
dividend out of net income for the purpose of causing the Net Asset Value per
Share to be increased. The Trustees shall not be required to adopt, but may at
any time adopt, discontinue or amend the practice of maintaining the Net Asset
Value per Share of the Series at a constant Amount.
SECTION 9.04 SUSPENSION OF THE RIGHT OF REDEMPTION. The Trustees may
declare a suspension of the right of redemption or postpone the date of payment
as permitted under the 1940 Act. Such suspension shall take effect at such time
as the Trustees shall specify but not later than the close of business on the
business day next following the declaration of suspension, and thereafter there
shall be no right of redemption or payment until the Trustees shall declare the
suspension at an end. In the case of a suspension of the right of redemption, a
Shareholder may either withdraw his request for redemption or receive payment
based on the Net Asset Value per Share next determined after the termination of
the suspension. In the event that any Series is divided into classes, the
provisions of this Section 9.03, to the extent applicable as determined in the
discretion of the Trustees and consistent with applicable law, may be equally
applied to each such class.
SECTION 9.05 REDEMPTION OF SHARES IN ORDER TO QUALIFY AS REGULATED
INVESTMENT COMPANY. If the Trustees shall, at any time and in good faith, be of
the opinion that direct or indirect ownership of Shares of any Series has or may
become concentrated in any Person to an extent which would disqualify any Series
as a regulated investment company under the Internal Revenue Code, then the
Trustees shall have the power (but not the obligation) by lot or other means
deemed equitable by them (a) to call for redemption by any such person of a
number, or principal amount, of Shares sufficient to maintain or bring the
direct or indirect ownership of Shares into conformity with the requirements for
such qualification and (b) to refuse to transfer or issue Shares to any person
whose acquisition of Shares in question would result in such disqualification.
The redemption shall be effected at the redemption price and in the manner
provided in this Article IX.
The holders of Shares shall upon demand disclose to the Trustees in writing
such information with respect to direct and indirect ownership of Shares as the
Trustees deem necessary to comply with the requirements of any taxing authority.
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ARTICLE X
LIMITATION OF LIABILITY AND INDEMNIFICATION
SECTION 10.01 LIMITATION OF LIABILITY. A Trustee, when acting in such
capacity, shall not be personally liable to any person other than the Trust or
beneficial owner for any act, omission or obligation of the Trust or any
Trustee. A Trustee shall not be liable for any act or omission or any conduct
whatsoever in his capacity as Trustee, provided that nothing contained herein or
in the Delaware Act shall protect any Trustee against any liability to the Trust
or to Shareholders to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Trustee hereunder.
SECTION 10.02 INDEMNIFICATION.
(a) Subject to the exceptions and limitations contained in Subsection
10.02(b):
(i) every person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as a "Covered Person") shall be indemnified
by the Trust to the fullest extent permitted by law against liability and
against all expenses reasonably incurred or paid by him in connection with
any claim, action, suit or proceeding in which he becomes involved as a
party or otherwise by virtue of his being or having been a Trustee or
officer and against amounts paid or incurred by him in the settlement
thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal or other,
including appeals), actual or threatened while in office or thereafter, and
the words "liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of his office
or (B) not to have acted in good faith in the reasonable belief that his
action was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office, (A)
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by the court or other body approving the settlement; (B) by at least a
majority of those Trustees who are neither Interested Persons of the Trust
nor are parties to the matter based upon a review of readily available
facts (as opposed to a full trial-type inquiry); or (C) by written opinion
of independent legal counsel based upon a review of readily available facts
(as opposed to a full trial-type inquiry);
provided, however, that any Shareholder may, by appropriate legal proceedings,
challenge any such determination by the Trustees or by independent counsel.
(c) The rights of indemnification herein provided may be insured against
by policies maintained by the Trust, shall be severable, shall not be exclusive
of or affect any other rights to which any Covered Person may now or hereafter
be entitled, shall continue as to a person who has ceased to be a Covered Person
and shall inure to the benefit of the heirs, executors and administrators of
such a person. Nothing contained herein shall affect any rights to
indemnification to which Trust personnel, other than Covered Persons, and other
persons may be entitled by contract or otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described in
Subsection 10.02(a) of this Section 10.02 may be paid by the Trust or Series
from time to time prior to final disposition thereof upon receipt of an
undertaking by or on behalf of such Covered Person that such amount will be paid
over by him to the Trust or Series if it is ultimately determined that he is not
entitled to indemnification under this Section 10.02; provided, however, that
either (i) such Covered Person shall have provided appropriate security for such
undertaking, (ii) the Trust is insured against losses arising out of any such
advance payments or (iii) either a majority of the Trustees who are neither
Interested Persons of the Trust nor parties to the matter, or independent legal
counsel in a written opinion, shall have determined, based upon a review of
readily available facts (as opposed to a trial-type inquiry or full
investigation), that there is reason to believe that such Covered Person will be
found entitled to indemnification under Section 10.02.
SECTION 10.03 SHAREHOLDERS. In case any Shareholder of any Series shall
be held to be personally liable solely by reason of his being or having been a
Shareholder of such Series and not because of his acts or omissions or for some
other reason, the Shareholder or former Shareholder (or his heirs, executors,
administrators or other legal representatives, or, in the case of a corporation
or other entity, its corporate or other general successor) shall be entitled out
of the assets belonging to the applicable Series to be held harmless from and
indemnified against all loss and expense arising from such liability. The
Trust, on behalf of the affected Series, shall, upon request by the Shareholder,
assume the defense of any claim made against the Shareholder for any act or
obligation of the Series and satisfy any judgment thereon from the assets of the
Series.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01 TRUST NOT A PARTNERSHIP. It is hereby expressly declared
that a trust and not a partnership is created hereby. No Trustee hereunder
shall have any power to bind personally either the Trust officers or any
Shareholder. All persons extending credit to, contracting with or having any
claim against the Trust or the Trustees shall look only to the assets of the
appropriate Series or (if the Trustees shall have yet to have established
Series) of the Trust for payment under such credit, contract or claim; and
neither the Shareholders nor the Trustees, nor any of their agents, whether
past, present or future, shall be personally liable therefor. Nothing in this
Trust Instrument shall protect a Trustee against any liability to which the
Trustee would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
the office of Trustee hereunder.
SECTION 11.02 TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretions hereunder
in good faith and with reasonable care under the circumstances then prevailing
shall be binding upon everyone interested. Subject to the provisions of Article
X hereof and to Section 11.01 of this Article XI, the Trustees shall not be
liable for errors of judgment or mistakes of fact or law. The Trustees may take
advice of counsel or other experts with respect to the meaning and operation of
this Trust Instrument, and subject to the provisions of Article X hereof and
Section 11.01 of this Article XI, shall be under no liability for any act or
omission in accordance with such advice or for failing to follow such advice.
The Trustees shall not be required to give any bond as such, nor any surety if a
bond is obtained.
SECTION 11.03 ESTABLISHMENT OF RECORD DATES. The Trustees may close the
Share transfer books of the Trust for a period not exceeding sixty (60) days
preceding the date of any meeting of Shareholders, or the date for the payment
of any dividends or other distributions, or the date for the allotment of
rights, or the date when any change or conversion or exchange of Shares shall go
into effect; or in lieu of closing the stock transfer books as aforesaid, the
Trustees may fix in advance a date, not exceeding sixty (60) days preceding the
date of any meeting of Shareholders, or the date for payment of any dividend or
other distribution, or the date for the allotment of rights, or the date when
any change or conversion or exchange of Shares shall go into effect, as a record
date for the determination of the Shareholders entitled to notice of, and to
vote at, any such meeting, or entitled to receive payment of any such dividend
or other distribution, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of Shares, and in
such case such Shareholders and only such Shareholders as shall be Shareholders
of record on the date so fixed shall be entitled to such notice of, and to vote
at, such meeting, or to receive payment of such dividend or other distribution,
or to receive such allotment or rights, or to exercise such rights, as the case
may be, notwithstanding any transfer of any
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Shares on the books of the Trust after any such record date fixed as aforesaid.
SECTION 11.04 TERMINATION OF TRUST.
(a) This Trust shall continue without limitation of time but subject to
the provisions of Subsection 11.04(b).
(b) The Trustees may, subject to a Majority Shareholder Vote of each
Series affected by the matter or, if applicable, to a Majority Shareholder Vote
of the Trust, and subject to a vote of a majority of the Trustees,
(i) sell and convey all or substantially all of the assets of the
Trust or any affected Series to another trust, partnership, association or
corporation, or to a separate series of shares thereof, organized under the
laws of any state which trust, partnership, association or corporation is
an open-end management investment company as defined in the 1940 Act, or is
a series thereof, for adequate consideration which may include the
assumption of all outstanding obligations, taxes and other liabilities,
accrued or contingent, of the Trust or any affected Series, and which may
include shares of beneficial interest, stock or other ownership interests
of such trust, partnership, association or corporation or of a series
thereof; or
(ii) at any time sell and convert into money all of the assets of the
Trust or any affected Series.
Upon making reasonable provision, in the determination of the Trustees, for the
payment of all such liabilities in either (i) or (ii), by such assumption or
otherwise, the Trustees shall distribute the remaining proceeds or assets (as
the case may be) of each Series (or class) ratably among the holders of Shares
of that Series then outstanding.
(c) Upon completion of the distribution of the remaining proceeds or the
remaining assets as provided in Subsection 11.05(b), the Trust or any affected
Series shall terminate and the Trustees and the Trust shall be discharged of any
and all further liabilities and duties hereunder and the right, title and
interest of all parties with respect to the Trust or Series shall be canceled
and discharged.
Upon termination of the Trust, following completion of winding up of its
business, the Trustees shall cause a certificate of cancellation of the Trust's
certificate of trust to be filed in accordance with the Delaware Act, which
certificate of cancellation may be signed by any one Trustee.
SECTION 11.05 REORGANIZATION. Notwithstanding anything else herein, the
Trustees, in order to change the form of organization of the Trust, may, without
prior Shareholder approval, (a) cause the Trust to merge or consolidate with or
into one or more trusts, partnerships, associations or corporations so long as
the surviving or resulting entity is an open-end management investment company
under the 1940 Act,
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or is a series thereof, that will succeed to or assume the Trust's registration
under that Act and which is formed, organized or existing under the laws of a
state, commonwealth, possession or colony of the United States or (b) cause the
Trust to incorporate under the laws of Delaware. Any agreement of merger or
consolidation or certificate of merger may be signed by a majority of Trustees
and facsimile signatures conveyed by electronic or telecommunication means shall
be valid.
Pursuant to and in accordance with the provisions of Section 3815(f) of the
Delaware Act, and notwithstanding anything to the contrary contained in this
Trust Instrument, an agreement of merger or consolidation approved by the
Trustees in accordance with this Section 11.05 may effect any amendment to the
Trust Instrument or effect the adoption of a new trust instrument of the Trust
if it is the surviving or resulting trust in the merger or consolidation.
SECTION 11.06 FILING OF COPIES, REFERENCES, HEADINGS. The original or a
copy of this Trust Instrument and of each amendment hereof or Trust Instrument
supplemental hereto shall be kept at the office of the Trust where it may be
inspected by any Shareholder. Anyone dealing with the Trust may rely on a
certificate by an officer or Trustee of the Trust as to whether or not any such
amendments or supplements have been make and as to any matters in connection
with the Trust hereunder, and with the same effect as if it were the original,
may rely on a copy certified by an officer or Trustee of the Trust to be a copy
of this Trust Instrument or of any such amendment or supplemental Trust
Instrument. In this Trust Instrument or in any such amendment or supplemental
Trust Instrument, references to this Trust Instrument, and all expressions like
"herein," "hereof' and "hereunder," shall be deemed to refer to this Trust
Instrument as amended or affected by any such supplemental Trust Instrument.
All expressions like "his", "he" and "him", shall be deemed to include the
feminine and neuter, as well as masculine, genders. Headings are placed herein
for convenience of reference only and in case of any conflict, the text of this
Trust Instrument, rather than the headings, shall control. This Trust
Instrument may be executed in any number of counterparts each of which shall be
deemed an original.
SECTION 11.07 APPLICABLE LAW. The trust set forth in this instrument is
made in the State of Delaware, and the Trust and this Trust Instrument, and the
rights and obligations of the Trustees and Shareholders hereunder, are to be
governed by and construed and administered according to the Delaware Act and the
laws of said State; provided, however, that there shall not be applicable to the
Trust, the Trustees or this Trust Instrument (a) the provisions of Section 3540
of Title 12 of the Delaware Code or (b) any provisions of the laws (statutory or
common) of the State of Delaware (other than the Delaware Act) pertaining to
trusts which relate to or regulate (i) the filing with any court or governmental
body or agency of trustee accounts or schedules of trustee fees and charges,
(ii) affirmative requirements to post bonds for trustees, officers, agents
or employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to trustees, officers,
agents
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or employees of a trust, (v) the allocation of receipts and expenditures
to income or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards of responsibilities or limitations
on the acts or powers of trustees, which are inconsistent with the limitations
or liabilities or authorities and powers of the Trustees set forth or referenced
in this Trust Instrument. The Trust shall be of the type commonly called a
"business trust", and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust under
Delaware law. The Trust specifically reserves the right to exercise any of the
powers or privileges afforded to trusts or actions that may be engaged in by
trusts under the Delaware Act, and the absence of a specific reference herein to
any such power, privilege or action shall not imply that the Trust may not
exercise such power or privilege or take such actions.
SECTION 11.08 AMENDMENTS. Except as specifically provided herein, the
Trustees may, without shareholder vote, amend or otherwise supplement this Trust
Instrument by making an amendment, a Trust Instrument supplemental hereto or an
amended and restated trust instrument. Shareholders shall have the right to
vote (a) on any amendment which would affect their right to vote granted in
Section 7.01 of Article VII hereof, (b) on any amendment to this Section 11.08,
(c) on any amendment as may be required by law or by the Trust's registration
statement filed with the Commission and (d) on any amendment submitted to them
by the Trustees. Any amendment required or permitted to be submitted to
Shareholders which, as the Trustees determine, shall affect the Shareholders of
one or more Series shall be authorized by vote of the Shareholders of each
Series affected and no vote of shareholders of a Series not affected shall be
required. Notwithstanding anything else herein, any amendment to Article X
hereof shall not limit the rights to indemnification or insurance provided
therein with respect to action or omission of Covered Persons prior to such
amendment.
SECTION 11.09 FISCAL YEAR. The fiscal year of the Trust shall end on a
specified date as set forth in the Bylaws, provided, however, that the Trustees
may, without Shareholder approval, change the fiscal year of the Trust.
SECTION 11.10 PROVISIONS IN CONFLICT WITH LAW. The provisions of this
Trust Instrument are severable, and if the Trustees shall determine, with the
advice of counsel, that any of such provisions is in conflict with the 1940 Act,
the regulated investment company provisions of the Internal Revenue Code or with
other applicable laws and regulations, the conflicting provision shall be deemed
never to have constituted a part of this Trust Instrument; provided, however,
that such determination shall not affect any of the remaining provisions of this
Trust Instrument or render invalid or improper any action taken or omitted prior
to such determination. If any provision of this Trust Instrument shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision
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in such jurisdiction and shall not in any matter affect such provisions in any
other jurisdiction or any other provision of this Trust Instrument in any
jurisdiction.
IN WITNESS WHEREOF, the undersigned, being all of the initial Trustees of
the Trust, have executed this instrument as of date first written above.
/s/ John Y. Keffer
-----------------------------
John Y. Keffer, as Trustee
and not individually
/s/ James F. Patterson
-----------------------------
James F. Patterson, as Trustee
and not individually
/s/ David I. Goldstein
-----------------------------
David I. Goldstein, as Trustee
and not individually
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EXHIBIT 2
<PAGE>
THE CUTLER TRUST
BYLAWS
DATED OCTOBER 2, 1992
<PAGE>
THE CUTLER TRUST
BYLAWS
These Bylaws of The Cutler Trust (the "Trust"), a Delaware business trust,
are subject to the Trust Instrument of the Trust dated October, 2, 1992, as from
time to time amended, supplemented or restated (the "Trust Instrument").
Capitalized terms used herein which are defined in the Trust Instrument are used
as therein defined.
ARTICLE I
PRINCIPAL OFFICE
The principal office of the Trust shall be located in New York City, New
York, or such other location as the Trustees may, from time to time, determine.
The Trust may establish and maintain such other offices and places of business
as the Trustees may, from time to time, determine.
ARTICLE II
OFFICERS AND THEIR ELECTION
SECTION 2.01 OFFICERS. The officers of the Trust shall be a President, a
Treasurer, a Secretary, and such other officers as the Trustees may from time to
time elect. The Trustees may delegate to any officer or committee the power to
appoint any subordinate officers or agents. It shall not be necessary for any
Trustee or other officer to be a holder of Shares in the Trust.
SECTION 2.02 ELECTION OF OFFICERS. The Treasurer and Secretary shall be
chosen by the Trustees. The President shall be chosen by and from the Trustees.
Two or more offices may be held by a single person except the offices of
President and Secretary. Subject to the provisions of Section 3.13 hereof, the
President, the Treasurer and the Secretary shall each hold office until their
successors are chosen and qualified and all other officers shall hold office at
the pleasure of the Trustees.
SECTION 2.03 RESIGNATIONS. Any officer of the Trust may resign,
notwithstanding Section 2.02 hereof, by filing a written resignation with the
President, the Trustees or the Secretary, which resignation shall take effect on
being so filed or at such time as may be therein specified.
ARTICLE III
POWERS AND DUTIES OF OFFICERS AND TRUSTEES
SECTION 3.01 MANAGEMENT OF THE TRUST. The business and affairs of the
Trust shall be managed by, or under the direction of, the Trustees, and they
shall have all powers necessary and desirable to carry out their
responsibilities, so far as such powers are not inconsistent with the laws of
the State of Delaware, the Trust Instrument or with these Bylaws.
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SECTION 3.02 EXECUTIVE AND OTHER COMMITTEES. The Trustees may elect from
their own number an executive committee, which shall have any or all the powers
of the Trustees while the Trustees are not in session. The Trustees may also
elect from their own number other committees from time to time. The number
composing such committees and the powers conferred upon the same are to be
determined by vote of a majority of the Trustees. All members of such
committees shall hold such offices at the pleasure of the Trustees. The
Trustees may abolish any such committee at any time. Any committee to which the
Trustees delegate any of their powers or duties shall keep records of its
meetings and shall report its actions to the Trustees. The Trustees shall have
power to rescind any action of any committee, but no such rescission shall have
retroactive effect.
SECTION 3.03 COMPENSATION. Each Trustee and each committee member may
receive such compensation for his services and reimbursement for his expenses as
may be fixed from time to time by resolution of the Trustees.
SECTION 3.04 CHAIRMAN OF THE TRUSTEES. The Trustees shall appoint from
among their number a Chairman who shall serve as such at the pleasure of the
Trustees. When present, he shall preside at all meetings of the Shareholders
and the Trustees, and he may, subject to the approval of the Trustees, appoint a
Trustee to preside at such meetings in his absence. He shall perform such other
duties as the Trustees may from time to time designate.
SECTION 3.05 PRESIDENT. The President shall be the chief executive
officer of the Trust and, subject to the direction of the Trustees, shall have
general administration of the business and policies of the Trust. Except as the
Trustees may otherwise order, the President shall have the power to grant,
issue, execute or sign such powers of attorney, proxies, agreements or other
documents as may be deemed advisable or necessary in the furtherance of the
interests of the Trust or any Series thereof. He shall also have the power to
employ attorneys, accountants and other advisors and agents and counsel for the
Trust. The President shall perform such duties additional to all of the
foregoing as the Trustees may from time to time designate.
SECTION 3.06 TREASURER. The Treasurer shall be the principal financial
and accounting officer of the Trust. He shall deliver all funds and securities
of the Trust which may come into his hands to such company as the Trustees shall
employ as Custodian in accordance with the Trust Instrument and applicable
provisions of law. He shall make annual reports regarding the business and
condition of the Trust, which reports shall be preserved in Trust records, and
he shall furnish such other reports regarding the business and condition of the
Trust as the Trustees may from time to time require. The Treasurer shall
perform such additional duties as the Trustees may from time to time designate.
SECTION 3.07 SECRETARY. The Secretary shall record in books kept for the
purpose all votes and proceedings of the Trustees and the Shareholders at their
respective meetings. He shall have the custody of
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the seal of the Trust. The Secretary shall perform such additional duties as
the Trustees may from time to time designate.
SECTION 3.08 VICE PRESIDENT. Any Vice President of the Trust shall
perform such duties as the Trustees or the President may from time to time
designate. At the request or in the absence or disability of the President, the
Vice President (or, if there are two or more Vice Presidents, then the senior of
the Vice Presidents present and able to act) may perform all the duties of the
President and, when so acting, shall have all the powers of and be subject to
all the restrictions upon the President.
SECTION 3.09 ASSISTANT TREASURER. Any Assistant treasurer of the Trust
shall perform such duties as the Trustees or the Treasurer may from time to time
designate, and, in the absence of the Treasurer, the senior Assistant Treasurer,
present and able to act, may perform all the duties of the Treasurer.
SECTION 3.10 ASSISTANT SECRETARY. Any Assistant Secretary of the Trust
shall perform such duties as the Trustees or the Secretary may from time to time
designate, and, in the absence of the Secretary, the senior Assistant Secretary,
present and able to act, may perform all the duties of the Secretary.
SECTION 3.11 SUBORDINATE OFFICERS. The Trustees from time to time may
appoint such officers or agents as they may deem advisable, each of whom shall
have such title, hold office for such period, have such authority and perform
such duties as the Trustees may determine. The Trustees from time to time may
delegate to one or more officers or committees of Trustees the power to appoint
any such subordinate officers or agents and to prescribe their respective terms
of office, authorities and duties.
SECTION 3.12 SURETY BONDS. The Trustees may require any officer or agent
of the Trust to execute a bond (including without limitation, any bond required
by the 1940 Act and the rules and regulations of the Commission) to the Trust in
such sum and with such surety or sureties as the Trustees may determine,
conditioned upon the faithful performance of his duties to the Trust including
responsibility for negligence and for the accounting of any of the Trust's
property, funds or securities that may come into his hands.
SECTION 3.13 REMOVAL. Any officer may be removed from office whenever in
the judgment of the Trustees the best interest of the Trust will be served
thereby, by the vote of a majority of the Trustees given at any regular meeting
or any special meeting of the Trustees. In addition, any officer or agent
appointed in accordance with the provisions of Section 3.10 hereof may be
removed, either with or without cause, by any officer upon whom such power of
removal shall have been conferred by the Trustees.
SECTION 3.14 REMUNERATION. The salaries or other compensation, if any, of
the officers of the Trust shall be fixed from time to time by resolution of the
Trustees.
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ARTICLE IV
SHAREHOLDER'S MEETINGS
SECTION 4.01 SPECIAL MEETINGS. A special meeting of the shareholders
shall be called by the Secretary whenever (a) ordered by the Trustees or (b)
requested in writing by the holder or holders of at least 10% of the Outstanding
Shares entitled to vote. If the Secretary, when so ordered or requested,
refuses or neglects for more than 30 days to call such special meeting, the
Trustees or the Shareholders so requesting, may, in the name of the Secretary,
call the meeting by giving notice thereof in the manner required when notice is
given by the Secretary. If the meeting is a meeting of the Shareholders of one
or more Series or classes of Shares, but not a meeting of all Shareholders of
the Trust, then only special meetings of the Shareholders of such one or more
Series or classes shall be called and only the shareholders of such one or more
Series or classes shall be entitled to notice of and to vote at such meeting.
SECTION 4.02 NOTICES. Except as provided in Section 4.01, notices of any
meeting of the Shareholders shall be given by the Secretary by delivering or
mailing, postage prepaid, to each Shareholder entitled to vote at said meeting,
written or printed notification of such meeting at least fifteen (15) days
before the meeting, to such address as may be registered with the Trust by the
Shareholder. Notice of any Shareholder meeting need not be given to any
Shareholder if a written waiver of notice, executed before or after such
meeting, is filed with the record of such meeting, or to any Shareholder who
shall attend such meeting in person or by proxy. Notice of adjournment of a
Shareholder's meeting to another time or place need not be given, if such time
and place are announced at the meeting or reasonable notice is given to persons
present at the meeting and the adjourned meeting is held within a reasonable
time after the date set for the original meeting.
SECTION 4.03 VOTING-PROXIES. Subject to the provisions of the Trust
Instrument, shareholders entitled to vote may vote either in person or by proxy,
provided that either (a) an instrument authorizing such proxy to act is executed
by the Shareholder in writing and dated not more than eleven (11) months before
the meeting, unless the instrument specifically provides for a longer period or
(b) the Trustees adopt by resolution an electronic, telephonic, computerized or
other alternative to execution of a written instrument authorizing the proxy to
act which authorization is received not more than eleven (11) months before the
meeting. Proxies shall be delivered to the Secretary of the Trust or other
person responsible for recording the proceedings before being voted. A proxy
with respect to Shares held in the name of two or more persons shall be valid if
executed by one of them unless at or prior to exercise of such proxy the Trust
receives a specific written notice to the contract from any one of them. Unless
otherwise specifically limited by their terms, proxies shall entitle the holder
thereof to vote at any adjournment of a meeting. A proxy purporting to be
exercised by or on behalf of a Shareholder shall be deemed valid
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unless challenged at or prior to its exercise and the burden or proving
invalidity shall rest on the challenger. At all meetings of the Shareholders,
unless the voting is conducted by inspectors, all questions relating to the
qualifications of voters, the validity of proxies, and the acceptance or
rejection of votes shall be decided by the Chairman of the meeting. Except as
otherwise provided herein or in the Trust Instrument, as these Bylaws or such
Trust Instrument may be amended or supplemented from time to time, all maters
relating to the giving, voting or validity of proxies shall be governed by the
General Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware corporation
and the Shareholders were shareholder of a Delaware corporation.
SECTION 4.04 PLACE OF MEETING. All special meetings of the Shareholders
shall be held at the principal place of business of the Trust or at such other
place in the United States as the Trustees may designate.
SECTION 4.05 ACTION WITHOUT A MEETING. Any action to be taken by
Shareholders may be taken without a meeting if all Shareholders entitled to vote
on the matter consent to the action in writing and the written consents are
filed with the records of meetings of Shareholders of the Trust. Such consent
shall be treated for all purposes as a vote at a meeting of the Shareholders
held at the principal place of business of the Trust.
ARTICLE V
TRUSTEES' MEETINGS
SECTION 5.01 SPECIAL MEETINGS. Special meetings of the Trustees may be
called orally or in writing by the Chairman of the Board of Trustees or any two
other Trustees.
SECTION 5.02 REGULAR MEETINGS. Regular meetings of the Trustees may be
held at such places and at such times as the Trustees may from time to time
determine; each Trustee present at such determination shall be deemed a party
calling the meeting and no call or notice will be required to such Trustee
provided that any Trustee who is absent when such determination is made shall be
given notice of the determination by the Chairman or any two other Trustees, as
provided for in Section 4.04 of the Trust Instrument.
SECTION 5.03 QUORUM. A majority of the Trustees shall constitute a quorum
for the transaction of business and an action of a majority of the quorum shall
constitute action of the Trustees.
SECTION 5.04 NOTICE. Except as otherwise provided, notice of any special
meeting of the Trustees shall be given by the party calling the meeting to each
Trustee, as provided for the Section 4.04 of the Trust Instrument. A written
notice may be mailed, postage prepaid, addressed to him at his address as
registered on the books of the Trust or, if not so registered, at his last known
address.
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SECTION 5.05 PLACE OF MEETING. All special meetings of the Trustees shall
be held at the principal place of business of the Trust or such other place as
the Trustees may designate. Any meeting may adjourn to any place.
SECTION 5.06 SPECIAL ACTION. When all the Trustees shall be present at
any meeting, however called or wherever held, or shall assent to the holding of
the meeting without notice, or shall sign a written assent thereto filed with
the record of such meeting, the acts of such meeting shall be valid as if such
meeting had been regularly held.
SECTION 5.07 ACTION BY CONSENT. Any action by the Trustees may be taken
without a meeting if a written consent thereto is signed by all the Trustees and
filed with the records of the Trustees' meeting. Such consent shall be treated,
for all purposes, as a vote at a meeting of the Trustees held at the principal
place of business of the Trustees.
SECTION 5.08 PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Trustees
may participate in a meeting of Trustees by conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation shall constitute presence in
person at such meeting. Any meeting conducted by telephone shall be deemed to
take place at and from the principal office of the Trust.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
SECTION 6.01 BENEFICIAL INTEREST. The beneficial interest in the Trust
shall at all times divided into such transferable Shares of one or more separate
and distinct Series, or classes thereof, as the Trustees shall from time to time
create and establish. The number of Shares is unlimited, and each Share of each
Series or class thereof shall be without par value and shall represent an equal
proportionate interest with each other Share in the Series, none having priority
or preference over another, except to the extent that such priorities or
preference are established with respect to one or more classes of shares
consistent with applicable law and any rule or order of the Commission.
SECTION 6.02 TRANSFER OF SHARES. The Shares of the Trust shall be
transferable, so as to affect the rights of the Trust, only by transfer recorded
on the books of the Trust, in person or by attorney.
SECTION 6.03 EQUITABLE INTEREST NOT RECOGNIZED. The Trust shall be
entitled to treat the holder of record of any Share or Shares of beneficial
interest as equitable or other claim or interest in such Share or Shares on the
part of any other person except as may be otherwise expressly provided by law.
SECTION 6.04 SHARE CERTIFICATE. No certificates certifying the ownership
of Shares shall be issued except as the Trustees may otherwise authorize. The
Trustees may issue certificates to a Shareholder of any
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Series or class thereof for any purpose and the issuance of a certificate to one
or more Shareholders shall not require the issuance of certificates generally.
In the event that the Trustees authorize the issuance of Share certificates,
such certificate shall be in the form proscribed from time to time by the
Trustees and shall be signed by the President or a Vice President and by the
Treasurer, Assistant Treasurer, Secretary or Assistant Secretary. Such
signatures may be facsimiles if the certificate is signed by a transfer or
shareholder services agent or by a registrar, other than a Trustee, officer or
employee of the Trust. In case any officer who has signed or whose facsimile
signature has been placed on certificate shall have ceased to be such officer
before such certificate is issued, it may be issued by the Trust with the same
effect as if he or she were such officer at the time of its issue.
In lieu of issuing certificates for Shares, the Trustees or the transfer or
shareholder services agent may either issue receipts therefor or may keep
accounts upon the books of the Trusts for the record holders of such Shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such Shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
SECTION 6.05 LOSS OF CERTIFICATES. In the case of the alleged loss or
destruction or the mutilation of a Share certificate, a duplicate certificate
may be issued in place thereof, upon such terms as the Trustees may prescribe.
SECTION 6.06 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees may
at any time discontinue the issuance of Share certificates and may, by written
notice to each Shareholder, require the surrender of Share certificates to the
Trust for cancellation. Such surrender and cancellation shall not affect the
ownership of Shares in the Trust.
ARTICLE VII
OWNERSHIP OF ASSETS OF THE TRUST
The Trustees, acting for and on behalf of the Trust, shall be deemed to
hold legal and beneficial ownership of any income earned on securities held by
the Trust issued by any business entity formed, organized or existing under the
laws of any jurisdiction other than a state, commonwealth, possession or colony
of the United States or the laws of the United States.
ARTICLE VIII
INSPECTION OF BOOKS
The Trustees shall from time to time determine whether and to what extent,
and at what times and places, and under what conditions and regulations the
accounts and books of the Trust or any of them shall be open to the inspection
of the Shareholder; and no Shareholder shall have any right to inspect any
account or book or document of the Trust except as conferred by law or otherwise
by the Trustees or by resolution of the Shareholders.
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ARTICLE IX
INSURANCE OF OFFICERS, TRUSTEES, AND EMPLOYEES
The Trust may purchase and maintain insurance on behalf of any Covered
Person or employee of the Trust, including any Covered Person or employee of the
Trust who is or was serving at the request of the Trust as a Trustee, officer or
employee of a corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the Trustees would
have the power to indemnify him against such liability.
The Trust may not acquire or obtain a contract for insurance that protects
or purports to protect any Trustee or officer of the Trust against any liability
to the Trust of its Shareholders to which he would otherwise be subject by
reason or willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office.
ARTICLE X
SEAL
The seal of the Trust shall be circular in form bearing the inscription:
"THE CUTLER TRUST -- 1992
THE STATE OF DELAWARE"
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EXHIBIT 5
<PAGE>
THE CUTLER TRUST
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 31st day of December, 1992, between The Cutler Trust
(the "Trust"), a business trust organized under the laws of the State of
Delaware with its principal place of business at 61 Broadway, New York, New York
10006, and Cutler & Company, Inc. (the "Adviser"), a corporation organized under
the laws of State of California with its principal place of business at 503
Airport Road, Medford, Oregon 97504.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "Act"), as an open-end management investment company and is
authorized to issue its shares in separate series and classes; and
WHEREAS, the Trust desires that the Adviser perform investment advisory
services for the Cutler Equity Income Fund, the Cutler Approved List Equity Fund
and the Cutler Government Fund, three separate investment portfolios of the
Trust (each a "Fund" and, collectively, the "Funds"), and the Adviser is willing
to provide those services on the terms and conditions set forth in this
Agreement;
NOW THEREFORE, the Trust and the Adviser agree as follows:
SECTION 1. APPOINTMENT
The Trust hereby appoints the Adviser, and the Adviser hereby agrees, to
act as investment adviser to each Fund for the period and on the terms set forth
in this Agreement. In connection therewith, (i) the Trust has delivered to the
Adviser copies of its Trust Instrument and Bylaws, the Trust's Registration
Statement and all amendments thereto filed pursuant to the Act or the Securities
Act of 1933, as amended, with the Securities and Exchange Commission (the
"Registration Statement") and the current Prospectus and Statement of Additional
Information of the Funds (collectively, as currently in effect and as amended or
supplemented, the "Prospectus") and, shall promptly furnish the Adviser with all
amendments of or supplements to the foregoing and (ii) the Adviser has delivered
to the Trust's secretary copies of its entire Form ADV and all amendments
thereto as amended to date and will from time to time furnish the Trust's
secretary with all amendments of or supplements to the Adviser's Form ADV.
SECTION 2. INVESTMENT ADVISORY DUTIES
Subject to the direction and control of the Trust's Board of Trustees (the
"Board"), the Adviser shall manage the investment and reinvestment of the assets
of the Funds, and, without limiting the generality of the foregoing, shall
provide the management and other services specified below, all in such manner
and to such extent as may be authorized by the Board.
(a) The Adviser shall make decisions with respect to all purchases, sales
and other transactions of securities and other
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investment assets of the Funds, including the selection of brokers, dealers and
other persons to introduce or execute those transactions. To carry out such
decisions, the Adviser is authorized, as agent and attorney-in-fact for the
Trust, for the account of, at the risk of and in the name of the Trust, to place
orders and issue instructions with respect to those transactions of the Funds.
In all purchases, sales and other transactions in securities or other investment
assets for the Funds, the Adviser is authorized to exercise full discretion and
act for the Trust in the same manner and with the same force and effect as the
Trust might or could do with respect to such purchases, sales or other
transactions, as well as with respect to all other things necessary or
incidental to the furtherance or conduct of such purchases, sales or other
transactions, subject to paragraph (b) below.
(b) In making decisions with respect to all purchases, sales and other
transactions of securities and other investment assets of the Funds the Adviser
shall follow and comply with the policies set forth from time to time by the
Board (to the extent communicated to the Adviser in writing or at a Board
meeting attended by a representative of the Adviser) as well as the limitations
imposed by the Trust's Trust Instrument and Bylaws, the Trust's Registration
Statement and the Funds' Prospectuses (in each case, to the extent copies
thereof are furnished to the Adviser) and the limitations in the Act and the
requirements of subchapter M of the Internal Revenue Code of 1986, as amended,
in respect of investment companies.
(c) The Adviser shall monitor the performance of brokers, dealers and
other persons who introduce or execute purchases, sales and other transactions
of securities and other investment assets of the Funds.
(d) The Adviser shall maintain records relating to portfolio transactions
and the placing and allocation of brokerage orders as are required to be
maintained by the Trust under the Act, including those required by paragraphs
(b)(5), (6) and (9) of Rule 31a-1 promulgated under the Act. The Adviser shall
prepare and maintain, or cause to be prepared and maintained, in such form, for
such periods and in such locations as may be required by applicable law, all
documents and records relating to the services provided by the Adviser pursuant
to this Agreement required to be prepared and maintained by the Trust pursuant
to the rules and regulations of any national, state, or local government entity
with jurisdiction over the Trust, including the Securities and Exchange
Commission and the Internal Revenue Service. The books and records pertaining
to the Trust that are in possession of the Adviser shall be the property of the
Trust. The Trust, or the Trust's authorized representatives, shall have access
to such books and records at all times during the Adviser's normal business
hours. Upon the reasonable request of the Trust, copies of any such books and
records shall be provided promptly by the Adviser to the Trust or the Trust's
authorized representatives.
(e) The Adviser shall determine in its sole discretion the propriety of
(i) honoring requests for orders to purchase Fund shares "in kind" for
consideration consisting of securities determined to be
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suitable to purchase, (ii) honoring requests by shareholders for proceeds upon
redemption of Fund shares to be paid "in kind" by delivery of portfolio
securities, and (iii) paying redemption proceeds "in kind" even though not
requested by a Fund shareholder.
(f) The Adviser shall provide to the Board at each regularly scheduled
meeting thereof (or such other meetings as may be requested by the Trust) a
report containing an appropriate summary of all changes in the Funds' investment
portfolios since the prior report, will inform the Board of important
developments affecting the Funds, and on its own initiative will furnish the
Board from time to time with such information as it believes appropriate for
this purpose, whether concerning the individual issuers whose securities are
included in the Funds' investment portfolios, the industries in which these
issuers engage, or the economic, social or political conditions prevailing in
each country in which the Funds' maintain investments. The Adviser also shall
provide the Board with such statistical and analytical information with respect
to securities in the Funds' investment portfolios as the Adviser believes
appropriate or as the Trust reasonably may request. The Adviser shall provide
other persons, in such forms and at such times as the Trust's authorized
representatives shall reasonably request, information about portfolio
transactions and prices or yield quotations of portfolio securities.
(g) The Adviser shall from time to time employ or associate with such
persons as it believes to be particularly fitted to assist it in the execution
of its duties under this Agreement, the cost of performance of such duties to be
borne and paid by the Adviser. No obligation may be incurred on behalf of the
Trust in any such respect.
SECTION 3. EXPENSES
(a) The Adviser shall be responsible for the portion of the net expenses
of each Fund (except interest, taxes, brokerage fees, distribution fees and
organization and extraordinary expenses, all to the extent such exclusions are
permitted by applicable state law) during any fiscal year (or portion thereof)
in which this Agreement is in effect which, as to a Fund, exceeds the limits
applicable to the Fund under the laws of any state in which the Fund's shares
are qualified for sale. The Adviser is not, however, required to bear expenses
of the Trust or any Fund to an extent that would result in a Fund not qualifying
under provisions of the Internal Revenue Code of 1986, as amended, as a
regulated investment company.
(b) Subject to the above and to any other agreement by the Adviser or
other person to reimburse any expenses of the Trust that relate to the Funds,
the Trust shall be responsible for and assumes the obligation for payment of all
of its other expenses, including: (i) the fee payable under Section 5 hereof;
(ii) the fees payable to Forum Financial Services, Inc. ("Forum") under an
agreement between Forum and the Trust; (iii) expenses of issue, repurchase and
redemption of Shares; (iv) interest charges, taxes and brokerage fees and
commissions; (v) premiums of insurance for the Trust, its trustees and officers
and fidelity bond premiums; (vi) fees, interest charges and expenses of
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third parties, including the Trust's custodian, transfer agent, dividend
disbursing agent and fund accountant; (vii) fees of pricing, interest, dividend,
credit and other reporting services; (viii) costs of membership in trade
associations; (ix) telecommunications expenses; (x) funds transmission expenses;
(xi) auditing, legal and compliance expenses; (xii) costs of maintaining the
Trust's existence; (xiii) costs of preparing and printing the Fund's
Prospectuses, subscription application forms and shareholder reports and
delivering them to existing shareholders; (xiv) expenses of meetings of
shareholders and proxy solicitations therefore; (xv) costs of maintaining books
of original entry for portfolio and fund accounting and other required books and
accounts, of calculating the net asset value of shares of the Trust and of
preparing tax returns; (xvi) costs of reproduction, stationery and supplies;
(xvii) fees and expenses of the Trust's trustees; (xviii) compensation of the
Trust's officers and employees who are not officers of the Adviser or Forum or
their respective affiliated persons; (xix) costs of other personnel who may be
employees of the Adviser, Forum or their respective affiliated persons
performing services for the Trust; (xx) costs of Trustee meetings; (xxi)
Securities and Exchange Commission registration fees and related expenses; and
(xxii) state or foreign securities laws registration fees and related expenses.
SECTION 4. STANDARD OF CARE
(a) The Adviser shall give the Trust the benefit of its best judgment and
efforts in rendering its services to the Trust and shall not be liable for error
of judgment or mistake of law, for any loss arising out of any investment, or in
any event whatsoever, provided that nothing herein shall be deemed to protect,
or purports to protect, the Adviser against any liability to the Trust or to the
security holders of the Trust to which it would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder, or by reason of reckless disregard of its obligations and
duties hereunder.
(b) The Adviser shall not be held responsible for any loss incurred by
reason of any act or omission of any dealer, broker or custodian; provided that
such loss is not the result of the Adviser's willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or the result of
the Adviser's reckless disregard of its obligations and duties hereunder.
(c) This Section shall survive the termination of this Agreement and shall
be binding upon the Trust's and the Adviser's successors and personal
representatives.
SECTION 5. COMPENSATION
(a) For the services provided by the Adviser pursuant to this Agreement,
the Trust shall pay the Adviser, with respect to each of the Funds, a fee at an
annual rate equal to the amount set forth in Schedule A hereto. Such fees shall
be accrued by the Trust daily and shall be payable monthly in arrears on the
first day of each calendar month for
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services performed under this Agreement during the prior calendar month. Upon
the termination of this Agreement, the Trust shall pay to the Adviser such
compensation as shall be payable prior to the effective date of such
termination.
(b) Notwithstanding anything in this Agreement to the contrary, the
Adviser and its affiliated persons, if any, may receive compensation or
reimbursement from the Trust with respect to (i) the provision of shareholder
support or other services or (ii) service as a Trustee or officer of the Trust.
SECTION 6. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to a Fund on the
latter of the date on which the Trust's Registration Statement relating to the
shares of the Fund becomes effective and date of its approval by a vote of a
majority of the outstanding voting securities of the Fund. Upon the
effectiveness of this Agreement, it shall supersede all previous agreements
between the Trust and the Adviser covering the subject matter hereof.
(b) This Agreement shall continue in effect with respect to a Fund for
twelve months and, thereafter, shall continue in effect for successive twelve-
month periods, provided that such 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
cast in person at a meeting called for the purpose of voting on such approval.
If the continuation of this Agreement is not approved as to a Fund, the Adviser
may continue to render to the Fund the services described herein in the manner
and to the extent permitted by the Act.
(c) This Agreement may be terminated with respect to a Fund at any time,
without the payment of any penalty, (i) by the Board or by a vote of a majority
of the outstanding voting securities of the Fund on 60 days' written notice to
the Adviser or (ii) by the Adviser on 60 days' written notice to the Trust.
This Agreement shall automatically terminate in the event of its assignment.
SECTION 7. ACTIVITIES OF THE ADVISER
(a) Except to the extent necessary to perform its obligations under this
Agreement, nothing herein shall be deemed to limit or restrict the Adviser's
right, or the right of any of its officers, directors or employees (whether or
not they are a trustee, officer, employee or other affiliated person 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.
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(b) The Adviser represents that it is currently registered, and during the
entire period this Agreement is in effect will be registered, as an investment
adviser under the Investment Advisers Act of 1940.
SECTION 8. 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 Adviser agrees that, in asserting any rights or claims under this
Agreement, it shall look only to the assets and property of the Trust or the
Fund to which the Adviser's rights or claims relate in settlement of such rights
or claims, and not to the Trustees of the Trust or the shareholders of the
Funds.
SECTION 9. "CUTLER" NAME
If the Adviser ceases to act as investment adviser to the Trust or any Fund
whose name includes the word "Cutler," or if the Adviser requests in writing,
the Trust shall take prompt action to change the name of the Trust or any such
Fund to a name that does not include the word "Cutler." The Adviser may from
time to time make available without charge to the Trust for the Trust's use any
marks or symbols owned by the Adviser, including marks or symbols containing the
words "Cutler" or any variation thereof, as the Adviser deems appropriate. Upon
the Adviser's request in writing, the Trust shall cease to use any such mark or
symbol at any time. The Trust acknowledges that any rights in or to the words
"Cutler" and any such marks or symbols which may exist on the date of this
Agreement or arise hereafter are, and under any and all circumstances shall
continue to be, the sole property of the Adviser. The Adviser may permit other
parties, including other investment companies, to use the word "Cutler" in their
names without the consent of the Trust. The Trust shall not use the word
"Cutler" in conducting any business other than that of an investment company
registered under the Act without the permission of the Adviser.
SECTION 10. REPRESENTATION OF THE TRUST
The Trust represents and agrees that shares of the Funds will be offered
and sold only to bona fide investment management clients of the Adviser
(customers who have a signed investment counsel agreement with the Adviser).
SECTION 11. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto and, if required by the Act, by a vote of a majority of the
outstanding voting securities of any Fund thereby affected.
(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
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enforced as if the Agreement did no 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 New York.
(f) The terms "vote of a majority of the outstanding voting securities,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
THE CUTLER TRUST
By: /s/ JOHN Y. KEFFER
-------------------
John Y. Keffer
President
CUTLER & COMPANY, INC.
By: /s/ KENNETH R. CUTLER
Kenneth R. Cutler
Chairman
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<PAGE>
THE CUTLER TRUST
INVESTMENT ADVISORY AGREEMENT
SCHEDULE A
ADVISORY FEES
Fee as a % of
the Annual Average Daily
Fund Net Assets of the Fund
---- ----------------------
Cutler Equity Income Fund 0.50%
Cutler Approved List Equity Fund 0.50%
Cutler Government Fund 0.25%
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EXHIBIT 6
<PAGE>
THE CUTLER TRUST
DISTRIBUTION AGREEMENT
AGREEMENT made this 31st day of December, 1992, between The Cutler Trust
(the "Trust"), a business trust organized under the laws of the State of
Delaware with its principal place of business at 61 Broadway, New York, New York
10006, and Forum Financial Services, Inc. (the "Distributor"), a corporation
organized under the laws of State of Delaware with its principal place of
business at 61 Broadway, New York, New York 10006.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "Act") as an open-end management investment company and may
issue its shares of beneficial interest, no par value (the "Shares") in separate
series and classes; and
WHEREAS, the Trust desires that the Distributor offer the Shares of the
Trust representing interests in each of the separate investment portfolios of
the Trust as listed on Schedule A hereto (each a "Fund" and, collectively, the
"Funds") as the Trust's principal underwriter, and Distributor is willing to act
as principal underwriter on the terms and conditions set forth in this
Agreement;
NOW THEREFORE, the Trust and Distributor agree as follows:
SECTION 1. APPOINTMENT
The Trust hereby appoints Distributor, and Distributor hereby agrees, to
act as distributor of the Shares for the period and on the terms set forth in
this Agreement. In connection therewith, the Trust has delivered to the
Distributor copies of its Trust Instrument and Bylaws, the Trust's Registration
Statement and all amendments thereto filed pursuant to the Securities Act of
1933, as amended (the "Securities Act"), or the Act (the "Registration
Statement") and the current Prospectus and Statement of Additional Information
of each Fund (collectively, as currently in effect and as amended or
supplemented, the "Prospectus") and, shall promptly furnish the Distributor with
all amendments of or supplements to the foregoing.
SECTION 2. DISTRIBUTION SERVICES
Subject to the direction and control of the Trust's Board of Trustees (the
"Board"), the Distributor shall serve as distributor of the Shares.
(a) As agent of and sole distributor for the Trust, Distributor shall
offer, and solicit offers to subscribe to, the unsold balance of Shares as shall
then be effectively registered under the Securities Act and applicable state
securities laws. All subscriptions for Shares obtained by Distributor shall be
directed to the Trust for acceptance and shall not be binding on the Trust until
accepted by it. Distributor
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shall have no authority to make binding subscriptions on behalf of the Trust.
The Trust reserves the right to sell Shares directly to investors through
subscriptions received by the Trust. Distributor's rights hereunder shall not
apply to Shares issued in connection with (a) the merger or consolidation of the
Trust or its series or classes with any other investment company or series or
class thereof, (b) the Trust's acquisition by purchase or otherwise of all or
substantially all of the assets or stock of any other investment company, or (c)
the reinvestment in Shares by the Trust's shareholders of dividends or other
distributions or any other offering by the Trust of securities to its
shareholders.
(b) Distributor shall use its best efforts to obtain subscriptions to
Shares upon the terms and conditions contained herein and in the Prospectus,
including the offering price. Distributor shall send to the Trust promptly all
subscriptions placed with Distributor. The Trust shall advise Distributor in
its capacity as distributor of the approximate net asset value per Share at any
time requested by Distributor that is a net asset value determination time as
disclosed in the Prospectus and at such other times as it shall have been
determined. The Trust shall furnish Distributor from time to time, for use in
connection with the offering of Shares, such other information with respect to
the Trust and Shares as Distributor may reasonably request. The Trust shall
supply Distributor with such copies of the Prospectus as Distributor may
reasonably request. Distributor may use its employees, agents and other persons
who need not be its employees, at its cost and expense, to assist it in carrying
out its obligations hereunder, but no such employee, agent or other person shall
be deemed to be an agent of the Trust or have any rights under this Agreement.
(c) The Trust reserves the right to suspend the offering of Shares at any
time, in the absolute discretion of the Board, and upon notice of such
suspension Distributor shall cease to offer shares of stock.
(d) The Trust and Distributor will cooperate with each other in taking
such action as may be necessary to qualify Shares for sale under the securities
laws of such states as the Trust may designate, provided, that Distributor shall
not be required to register as a broker-dealer or file a consent to service of
process in any such state. Subject to any agreement by the Trust's investment
adviser to reimburse expenses of the Trust that relate to the Funds, the Trust
shall be responsible for payment of all fees and expenses of registering Shares
under the Securities Act and of registering or qualifying Shares and the Trust's
qualification under applicable state securities laws. Distributor shall pay all
expenses relating to its broker-dealer qualification.
(e) The Trust represents that its Registration Statement and Prospectus
under the Securities Act have been or will be, as the case may be, carefully
prepared in conformity with the requirements of the Securities Act and the rules
and regulations of the Securities and Exchange Commission (the "Commission")
thereunder. The Trust represents and warrants that its Registration Statement
and Prospectus contain or will contain all statements required to be stated
therein in accordance
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with the Securities Act and the rules and regulations of the Commission
thereunder, and that all statements of fact contained or to be contained therein
are or will be true and correct at the time indicated or on the effective date
as the case may be; that the Trust's Registration Statement and Prospectus, when
they shall become effective or be authorized for use, will not 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. The Trust will from time to time file such amendment or
amendments to its Registration Statement and Prospectus as, in the light of
future developments, shall, in the opinion of the Trust's counsel, be necessary
in order to have such Registration Statement and Prospectus 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, but, if the Trust
shall not file such amendment or amendments within fifteen days after receipt of
a written request from Distributor to do so, Distributor may, at its option,
terminate this Agreement immediately. The Trust shall not file any amendment to
its Registration Statement and Prospectus without giving Distributor reasonable
notice thereof in advance; 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 its Registration Statement and Prospectus, of whatever character,
as it deems advisable, such right being in all respects absolute and
unconditional. The Trust represents and warrants that any amendment to its
Registration Statement and Prospectus hereafter filed will, when it becomes
effective, contain all statements required to be stated therein in accordance
with the Securities Act and the rules and regulations of the Commission
thereunder, that all statements of fact contained therein will, when the same
shall become effective, be true and correct and that 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 Shares.
(f) The Trust will indemnify, defend and hold Distributor, its several
officers and directors, and any person who controls Distributor within the
meaning of Section 15 of the Securities Act (collectively, the "Distributor
Indemnitees"), free and harmless from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or defending such
claims, demands or liabilities and any counsel fees incurred in connection
therewith) that 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 Trust's Registration
Statement and Prospectus under the Securities Act or arising out of or based
upon any alleged omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided, however,
that in no event shall anything contained in this paragraph (f) be so construed
as to protect Distributor against any liability to the Trust or its security
holders to which Distributor 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 this
Section 2. This agreement to
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indemnify Distributor Indemnitees is expressly conditioned upon the Trust being
notified of any action brought against any Distributor Indemnitee, such
notification to be given by letter, facsimile transmission or telegram to the
Trust and referring to the person against whom such action is brought within ten
days after the summons or other first legal process shall have been served on
such person. The failure so to notify the Trust of any such action shall not
relieve the Trust from any liability which it may have to any Distributor
Indemnitee otherwise than on account of the indemnification provided for in this
paragraph (f). The Trust will be entitled to assume the defense of any suit
brought to enforce any such claim, and to retain counsel of good standing chosen
by it and approved by Distributor. In the event the Trust elects to assume the
defense of any such suit and retain counsel of good standing approved by
Distributor, the defendants in such suit shall bear the fees and expenses of any
additional counsel retained by any of them. In the event the Trust does not
elect to assume the defense of any such suit, or in case Distributor does not
approve of counsel chosen by the Trust or has been advised that it may have
available defenses or claims which 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 fees and expenses of any counsel
retained by any such person. The indemnification provisions contained in this
paragraph (f) and the Trust's representations and warranties in this Agreement
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Distributor Indemnitee and shall
survive the sale of any Shares made pursuant to subscriptions obtained by
Distributor. The indemnification provisions of this paragraph (f) will inure
exclusively to the benefit of the Distributor Indemnitees and their respective
successors and assigns. The Trust agrees promptly to notify Distributor of the
commencement of any litigation or proceeding against the Trust or any of its
trustees or officers in connection with the issue or sale of Shares.
(g) Distributor agrees to indemnify, defend and hold the Trust, its
several officers and directors, and any person who controls the Trust within the
meaning of Section 15 of the Securities Act (collectively, the "Trust
Indemnitees"), free and harmless from and against any and all claims, demands,
liabilities, and expenses (including the cost of investigating or defending such
claims, demands or liabilities and any reasonable counsel fees incurred in
connection therewith) which any Trust Indemnitee may incur under the Act, or
under common law or otherwise, but only to the extent that such liability, or
expense incurred by the Trust Indemnitees resulting from such claims or demands
shall arise out of or be based upon any alleged untrue statement of a material
fact contained in information furnished in writing by Distributor in its
capacity as distributor to the Trust for use in the Trust's Registration
Statement or Prospectus under the Securities Act, or shall arise out of or be
based upon any alleged omission to state a material fact in connection with such
information required to be stated in the Registration Statement or Prospectus or
necessary to make such information not misleading. Distributor's agreement to
indemnify the Trust Indemnitees is expressly conditioned upon Distributor being
notified of any action brought against a Trust Indemnitee, such notification to
be given by letter, facsimile transmission or telegram
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addressed and referring to the person against whom such action is brought within
ten days after the summons or other first legal process shall have been served
on such person. Distributor shall have a right to control the defense of such
action, with counsel of its own choosing, satisfactory to the Trust, if such
action is based solely upon such alleged misstatement or omission on
Distributor's part, and in any other event Distributor and the Trust Indemnitees
named shall each have the right to participate in the defense or preparation of
the defense of any such action. The failure so to notify Distributor of any
such action shall not relieve Distributor from any liability which it may have
to any Trust Indemnitee otherwise than on account of the indemnification
provisions in this paragraph (g).
(h) The Trust shall advise Distributor immediately: (i) of any request by
the Commission for amendments to the Trust's Registration Statement or
Prospectus or for additional information; (ii) in the event of the issuance by
the Commission of any stop order suspending the effectiveness of the Trust's
Registration Statement or 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 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 Commission with
respect to any amendments to the Trust's Registration Statement or Prospectus
which may from time to time be filed with Commission under the Act or the
Securities Act.
SECTION 3. STANDARD OF CARE
The Distributor shall give the Trust the benefit of its best judgment and
efforts in rendering its services to the Trust and shall not be liable for error
of judgment or mistake of law, or in any event whatsoever, provided that nothing
herein shall be deemed to protect, or purports to protect, the Distributor
against any liability to the Trust or to the security holders of the Trust to
which it would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties hereunder, or by reason of
reckless disregard of its obligations and duties hereunder.
SECTION 4. EXPENSES; COMPENSATION
(a) Subject to any agreement by the Trust's investment adviser to
reimburse or pay expenses of the Trust, the Trust shall be responsible and
assumes the obligation for payment of all its expenses.
(b) The Distributor shall be entitled to no compensation or reimbursement
of expenses for the distribution services provided by the Distributor pursuant
to this Agreement.
(c) Notwithstanding anything in this Agreement to the contrary, the
Distributor and its affiliated persons may receive compensation or reimbursement
from the Trust with respect to (i) the provision of shareholder support or other
services, (ii) the provision of management services or (iii) service as a
Trustee or officer of the Trust.
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SECTION 5. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective on the date on which the Trust's
Registration Statement relating to the shares of the Cutler Equity Income Fund,
the Cutler Approved List Equity Fund and the Cutler Government Securities Fund
becomes effective and shall relate to every other Fund as of the date on which
the Trust's Registration Statement relating to the shares of such Fund becomes
effective. Upon the effectiveness of this Agreement, it shall supersede all
previous agreements between the Trust and the Distributor covering the subject
matter hereof.
(b) Unless otherwise terminated pursuant to its terms, this Agreement
shall continue in effect for twelve months and, thereafter, shall continue in
effect for successive twelve-month periods, provided that such 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 Trust 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 cast in person at a meeting called for the
purpose of voting on such approval. If the continuation of this Agreement is
not approved, the Distributor may continue to render the services described
herein in the manner and to the extent permitted by the Act.
(c) This Agreement may be terminated at any time, without the payment of
any penalty, (i) by the Board or by a vote of a majority of the outstanding
voting securities of the Trust on 60 days' written notice to the Distributor or
(ii) by the Distributor on 60 days' written notice to the Trust. This Agreement
shall automatically terminate in the event of its assignment.
SECTION 6. ACTIVITIES OF DISTRIBUTOR
Except to the extent necessary to perform its obligations under this
Agreement, nothing herein shall be deemed to limit or restrict the Distributor's
right, or the right of any of its officers, directors or employees (whether or
not they are a director, officer, employee or other affiliated person 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 7. 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.
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SECTION 8. MISCELLANEOUS
(a) Except for Schedule A, no provision of this Agreement may be amended
or modified in any manner except by a written agreement properly authorized and
executed by both parties hereto and, if required by the Act, by a vote of a
majority of the outstanding voting securities of the Trust.
(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 no 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 New York.
(f) The terms "vote of a majority of the outstanding voting securities,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
THE CUTLER TRUST
By:/s/ JOHN Y. KEFFER
John Y. Keffer
President
FORUM FINANCIAL SERVICES, INC.
By:/s/ DAVID R. KEFFER
David R. Keffer
Vice President
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THE CUTLER TRUST
DISTRIBUTION AGREEMENT
SCHEDULE A
FUNDS OF THE TRUST
Cutler Equity Income Fund
Cutler Approved List Equity Fund
Cutler Government Securities Fund
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EXHIBIT 8
<PAGE>
CUSTODIAN AGREEMENT
AGREEMENT, dated as of December 30, 1992, between The Cutler Trust (the
"Trust"), a business trust duly organized and existing under the laws of the
State of Delaware, and The First National Bank of Boston (the "Custodian"), a
banking institution duly organized under the laws of the United States:
WHEREAS, the Trust desires to appoint the Custodian as custodian of its
securities and cash and the Custodian is willing to act in such capacity upon
the terms and conditions set forth below; and
WHEREAS, the Custodian in its capacity as custodian will also collect and
apply the dividends and interest on securities in the manner and to the extent
set forth below;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the parties do hereby agree as follows:
SECTION 1. DEFINITIONS
The terms, as defined in this Section, whenever used in this Agreement or
in any amendment or supplement hereto shall have the meanings specified below,
insofar as the context will allow.
(a) Board: The term Board shall mean the Board of Trustees of the Trust.
(b) Book-Entry Account: The term Book-Entry Account shall mean an account
maintained by a Federal Reserve Bank in which Book-Entry Securities are held.
(c) Book-Entry Securities: The term Book-Entry Securities shall mean
securities issued by the United States Treasury and United States Federal
agencies and instrumentalities that are maintained in the book-entry system of a
Federal Reserve Bank in accordance with the book-entry regulations of the
Treasury and the various Federal agencies and instrumentalities.
(d) Custodian: The term Custodian shall mean The First National Bank of
Boston, in its capacity as custodian under this Agreement.
(e) Oral Instructions: The term Oral Instructions shall mean an
authorization, instruction, approval, item or set of data, or information of any
kind transmitted to the Custodian in person or by telephone, vocal telegram or
other electronic means, by a person or persons reasonably believed in good faith
by the Custodian to be a person or persons authorized by a resolution of the
Board to give Oral Instructions on behalf of the Trust. Each Oral Instruction
shall specify whether it is applicable to the Trust or a specific Series.
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(f) Securities: The term Securities shall mean bonds, debentures, notes,
stocks, shares, evidences of indebtedness, and other securities and investments
from time to time owned by the Trust.
(g) Securities Depository: The term Securities Depository shall mean a
clearing corporation registered under Section 17A of the 1934 Act which
maintains a system for the central handling of securities in which all
securities of any particular class or series of any issuer deposited within the
system are treated as fungible and may be transferred or pledged by bookkeeping
entry without physical delivery of the securities.
(h) Series: The term Series shall mean each investment portfolio of the
Trust as now exists or may in the future be created.
(i) Sub-Custodian: The term Sub-Custodian shall mean a sub-custodian
approved by the Trust as provided in Section 17.
(j) The Trust: The term Trust shall mean The Cutler Trust.
(k) Written Instructions: The term Written Instruction shall mean an
authorization, instruction, approval, item or set of data, or information of any
kind transmitted to the Custodian in original writing containing original
signatures, or a copy of such document transmitted by telecopy, including
transmission of such signature, or other mechanical or documentary means, at the
request of a person or persons reasonably believed in good faith by the
Custodian to be a person or persons authorized by a resolution of the Board to
give Written Instructions on behalf of the Trust. Each Written Instruction
shall specify whether it is applicable to the Trust or a specific Series.
(l) 1934 Act: The term 1934 Act shall mean the Securities Exchange Act of
1934, as amended.
(m) 1940 Act: The term 1940 Act shall mean the Investment Company Act of
1940, as amended.
SECTION 2. RESOLUTIONS FOR INSTRUCTIONS
The Trust shall, as necessary, file with the Custodian a certified copy of
the operative resolution of the Board authorizing execution of Written
Instructions and the number of signatories required and setting forth authentic
signatures of all signatories authorized to sign on behalf of the Trust or any
Series thereof. Such resolution shall constitute conclusive evidence of the
authority of all signatories designated therein to act and shall be considered
in full force and effect, with the Custodian fully protected in acting in
reliance thereon, until the Custodian receives a certified copy of a replacement
resolution adding or deleting a person or persons authorized to give Written
Instructions.
The Trust shall, as necessary, file with the Custodian a certified copy of
the operative resolution of the Board authorizing the transmittal of Oral
Instructions and specifying the person or persons
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authorized to give Oral Instructions on behalf of the Trust or any Series
thereof. This resolution shall constitute conclusive evidence of the authority
of the person or persons designated therein to act and shall be considered in
full force and effect, with the Custodian fully protected in acting in reliance
therein, until the Custodian actually receives a certified copy of a replacement
resolution adding or deleting a person or persons authorized to give Oral
Instructions. If the officer certifying the resolution is authorized to give
Oral Instructions, the certification shall also be signed by a second officer of
the Trust authorized to give Written Instructions.
SECTION 3. AUTHORIZATION FOR CUSTODIAN TO ACT
For all purposes under this Agreement, the Custodian is authorized to act
upon receipt of the first of any Written or Oral Instruction it receives. If
the first Instruction is an Oral Instruction, the Trust shall be responsible for
delivering, or having delivered to the Custodian, a confirmatory Written
Instruction; and in cases where the Custodian receives an Instruction, whether
Written or Oral, with respect to a portfolio transaction, the Trust shall cause
the broker or dealer to send a written confirmation of the transaction to the
Custodian. The Custodian shall be entitled to rely on the first Instruction
received and, for any act or omission undertaken in compliance therewith, shall
be free of liability and fully indemnified and held harmless by the Trust. The
sole obligation of the Custodian with respect to any confirmatory Written
Instruction or broker or dealer written confirmation shall be to make reasonable
efforts to detect any discrepancy between the original Instruction and such
confirmation and to report such discrepancy to the Trust. The Trust shall be
responsible, at the Trust's expense, for taking any action, including any
reprocessing, necessary to correct any discrepancy or error, and to the extent
such action requires the Custodian to act, the Trust shall give the Custodian
specific Written Instructions as to the action required.
SECTION 4. APPOINTMENT AS CUSTODIAN
The Trust hereby appoints the Custodian as custodian of the Securities and
cash of each Series from time to time on deposit hereunder (collectively,
"assets"). The Securities held by the Custodian, unless payable to bearer or
maintained in a Securities Depository or Book-Entry Account pursuant to Section
5, shall be registered in the name of the Custodian or in the name of its
nominee, or if directed by Written Instructions, in the name of the Trust or its
nominee. Securities, excepting bearer securities, delivered from time to time
to the Custodian in certificated form shall, in all cases, be in due form for
transfer, or registered as above provided. The assets of the Trust shall be and
remain the sole property of the Trust and the Custodian shall have only custody
thereof.
The Custodian shall hold, earmark and physically segregate for the
appropriate Series account of the Trust all non-cash property, including all
Securities that are not maintained pursuant to Section 5 in a Securities
Depository or Book-Entry Account.
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The Custodian shall open and maintain a separate bank account or accounts
in the name of the Trust, subject only to draft or order by the Custodian acting
pursuant to the terms of this Agreement, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from or for
the account of the Trust. Notwithstanding the foregoing, a separate bank
account may be established by the Trust to be used as a petty cash account in
accordance with Rule 17f-3 under the 1940 Act and the Custodian shall have no
duty or liability with regard to such account.
Upon receipt of Written Instructions, cash held by the Custodian for the
Trust shall be deposited by the Custodian to the Custodian's credit in the
banking department of the Custodian or in such other banks or trust companies as
it may in its discretion deem necessary or desirable. Such funds shall be
deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
SECTION 5. DEPOSIT OF TRUST ASSETS
The Trust hereby authorizes the Custodian to deposit assets of the Series
as follows:
(a) [Intentionally Left Blank];
(b) deposit in the Custodian's account(s) with any Securities Depository
all or any part of the Securities as may from time to time be held for the
Trust; and
(c) deposit Book-Entry Securities belonging to the Trust in a Book-Entry
Account maintained for the Custodian.
So long as any deposit referred to in (b) or (c) above is maintained for
the Trust, the Custodian shall
(i) deposit the Securities in an account that includes only assets held
by it for customers;
(ii) send the Trust a confirmation (i.e., an advice of notice of
transaction) of any transfers of the Trust to or from the account;
(iii) with respect to Securities of the Trust transferred to the account,
identify as belonging to the Trust a quantity of securities in a fungible
bulk of securities that are registered in the name of the Custodian or its
nominee, or shown on the Custodian's account on the books of the Securities
Depository, the Book-Entry System, or the Custodian's agent;
(iv) promptly send to the Trust all reports it receives from the
appropriate Federal Reserve Bank or Securities Depository on its respective
system of internal accounting control; and
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(v) send to the Trust such reports of the systems of internal accounting
control of the Custodian and its agents through which such Securities are
deposited as are available and as the Trust may reasonably request from
time to time.
The Trust warrants that the Board has approved the arrangement for the
deposit of Securities in Securities Depositories and in Book-Entry Accounts.
The Custodian shall not waive any rights it may have against a Securities
Depository or Federal Reserve Bank. The Trust may elect to be subrogated to the
rights of the Custodian against the Securities Depository or Federal Reserve
Bank or any other person with respect to any claim that the Custodian may have
as a consequence of any loss or damage suffered by the Trust as a result of the
Custodian's use of a Securities Depository or Book Entry Account if and to the
extent that the Trust has not been made whole for any such loss or damage.
SECTION 6. TRANSFER OF ASSETS TO CUSTODIAN
The Trust will initially transfer and deposit or cause to be transferred
and deposited with the Custodian all of the assets owned by each Series at the
time this Agreement becomes effective. Such transfer and deposit shall be
evidenced by appropriate schedules duly executed by the Trust. The Trust will
deposit with the Custodian additional Securities of the Trust and dividends or
interest collected on such Securities as the same are acquired from time to
time.
The Trust will cause to be deposited with the Custodian from time to time
(i) the net proceeds of Securities sold, (ii) the applicable net asset value of
shares of the Trust sold, whether representing initial issue or any other
securities and (iii) cash as may be acquired.
SECTION 7. DISBURSEMENTS
The Custodian is hereby authorized and directed to disburse cash from time
to time as follows:
(a) for the purchase of Securities by the Trust, upon receipt by the
Custodian of (i) Written or Oral Instructions specifying the Securities and
stating the purchase price and the name of the broker, investment banker or
other party to or upon whose order the purchase price is to be paid and (ii)
either the Securities so purchased, in due form for transfer or already
registered as provided in Section 4, or notification by a Securities Depository
or a Federal Reserve Bank that the Securities have been credited to the
Custodian's account with the Securities Depository or Federal Reserve Bank;
(b) for transferring funds, including mark-to-the-market payments, as
directed by the Trust in connection with a repurchase agreement covering
Securities that have been received by the Custodian as provided in subsection
(a) above, upon receipt by the Custodian of Written or Oral Instructions
specifying the Securities, the purchase price and the party to whom the purchase
price is to be paid;
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(c) to advance or pay out accrued interest on bonds purchased, cash
dividends on stocks sold and similar items. In the event that any Securities
are registered in the name of the Trust or its nominee, the Trust will endorse,
or cause to be endorsed, to the Custodian dividend and interest checks, or will
issue appropriate orders to the issuers of the Securities to pay dividends and
interest to the Custodian;
(d) for transferring funds as directed by the Trust to its redemption
paying agent;
(e) for exercising warrants and rights received upon the Securities, upon
timely receipt of Written or Oral Instructions authorizing the exercise of such
warrants and rights and stating the consideration to be paid;
(f) for repaying, in whole or in part, any loan of the Trust, upon receipt
of Written or Oral Instructions directing payment;
(g) for transferring funds to any Sub-Custodian, upon receipt of Written
or Oral Instructions and upon agreement by the Custodian; and
(h) to disburse money to or upon the order of the Trust, as it may from
time to time direct for the following purposes;
(i) to pay proper compensation and expenses of the Custodian;
(ii) to transfer funds to the Trust's dividends disbursing agent;
(iii) to pay, or provide the Trust with money to pay, taxes, upon receipt
of appropriate Written or Oral Instructions;
(iv) to transfer funds to a separate checking account maintained by the
Trust pursuant to Section 17(f) of the 1940 Act; and
(v) to pay interest, management or supervisory fees, administration,
dividend and transfer agency fees and costs, compensation of personnel and
operating expenses, including but not limited to fees for legal, accounting
and auditing services. Before making any such payment or disbursement,
however, the Custodian shall receive, and may conclusively rely upon,
Written or Oral Instructions requesting such payment or disbursement and
stating that it is for one or more or the purposes enumerated above.
Notwithstanding the foregoing, the Custodian may disburse cash for other
corporate purposes; provided, however, that such disbursement may be made
only upon receipt of Written or Oral Instructions stating that such
disbursement was authorized by resolution of the Board as a proper
corporate purpose.
The determination of the Board as to what shall constitute income derived
from the Securities, as distinguished from principal or capital,
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shall be final and conclusive upon the Trust, the Custodian and the shareholders
of the Trust.
SECTION 8. DELIVERY OF SECURITIES
The Custodian is hereby authorized and directed to deliver Securities of
the Trust from time to time as follows:
(a) for completing sales of Securities sold by the Trust, upon receipt of
(i) Written or Oral Instructions specifying the Securities sold, the amount to
be received and the broker, investment banker or other party to or upon whose
order the Securities are to be delivered and (ii) the net proceeds of sale;
provided, however, that the Custodian may accept payment in connection with the
sale of Book-Entry Securities and Securities on deposit with a Securities
Depository by means of a credit in the appropriate amount to the account
described in Section 5(b) or (c) above; and provided further, that the Custodian
may advance the proceeds of sale to the Trust pending the completion of the sale
or the return to the Trust of the Securities in the event the sale fails to be
completed. Any such advance shall be at the Custodian's risk and the Custodian
shall be subrogated to the Trust's rights against any other person in the event
the sale is not completed and the Trust's Securities are not returned;
(b) for exchanging Securities for other Securities (and cash, if
applicable), upon timely receipt of (i) Written or Oral Instructions stating the
Securities to be exchanged, cash to be received and the manner in which the
exchange is to be made and (ii) the other Securities (and cash, if applicable)
as specified in the Written or Oral Instructions;
(c) for exchanging or converting Securities pursuant to their terms or
pursuant to any plan of conversion, consolidation, recapitalization,
reorganization, readjustment or otherwise, upon timely receipt of (i) Written or
Oral Instructions authorizing such exchange or conversion and stating the manner
in which such exchange or conversion is to be made and (ii) the Securities,
certificates of deposit, interim receipts, and/or cash to be received as
specified in the Written or Oral Instructions;
(d) for presenting for payment Securities that have matured or have been
called for redemption;
(e) for depositing with the lender Securities to be held as collateral
for a loan to the Trust, upon receipt of Written or Oral Instructions directing
delivery to the lender;
(f) in connection with a repurchase agreement, upon receipt of Written or
Oral Instructions stating (i) the Securities to be delivered and the payment to
be received and (ii) payment;
(g) for depositing with a depository agent in connection with a tender or
other similar offer to purchase portfolio Securities of the Trust, upon receipt
of Written or Oral Instructions;
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(h) for depositing Securities with the issuer thereof, or its agents, for
the purpose of transferring such Securities into the name of the Trust, the
Custodian or any nominee of either in accordance with Section 4; and
(i) for other proper corporate purposes; provided, that the Custodian
shall receive Written or Oral Instructions requesting such delivery.
SECTION 9. BORROWINGS
The Trust will cause any bank (including the Custodian) from which it
borrows money using Securities as collateral to deliver to the Custodian a
notice of undertaking in the form then currently employed by the lender setting
forth the amount that the lender will loan to the Trust against delivery of a
stated amount of collateral. The Trust shall promptly deliver to the Custodian
Written or Oral Instructions for each loan, stating (i) the name of the lender
and the amount of loan; and (ii) the name of the issuer, the title and the
number of shares or principal amount of the Securities to be delivered as
collateral. The Custodian shall deliver as directed by the Trust such specified
collateral, if any, and receive from the lender the total amount of the loan
proceeds; provided, however, that no delivery of Securities shall occur if the
amount of loan proceeds does not conform to the amount set forth in the Written
or Oral Instructions, or if such Instructions do not contain the requirements of
(ii) above.
The Custodian shall deliver, from time to time, any Securities required as
additional collateral for any transaction described in this Section, upon
receipt of Written or Oral Instructions. The Trust shall cause all Securities
released from collateral status to be returned directly to the Custodian.
SECTION 10. ADVANCEMENTS
If, in its sole discretion, the Custodian advances funds to the Trust to
pay for the purchase of Securities, to cover an overdraft of the Trust's account
with the Custodian, or to pay any other indebtedness to the Custodian, the
Trust's indebtedness shall be deemed to be a loan by the Custodian to the Trust,
payable on demand and bearing interest at the rate then charged by the Custodian
for such loans; provided, however, that the Custodian shall obtain the Trust's
prior approval for any advance of funds other than for the purpose of settling a
Securities trade. The Trust hereby agrees that the Custodian shall have a
continuing lien and security interest, to the extent of any such overdraft or
indebtedness, and to the extent required by Regulation U of the Board of
Governors of the Federal Reserve System in the event any security interest is
taken in "margin stock" as therein defined, in any property then held by the
Custodian or its agents for the benefit of the Trust, or in which the Trust may
have an interest. The Trust authorizes the Custodian, in its sole discretion at
any time, to charge any such overdraft or indebtedness, together with interest
due thereon, against any balance then credited to the Trust on the Custodian's
books.
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SECTION 11. OPTION CONTRACTS
[Intentionally Left Blank]
SECTION 12. VOTING AND CONSENT RESPONSIBILITY
The Custodian assumes no duty, obligation or responsibility whatsoever to
exercise any voting or consent powers with respect to the Securities held by it
from time to time hereunder. The Trust or such person or persons as it may
designate shall have the right to vote, consent or otherwise act with respect to
such Securities. The Custodian will exercise those efforts reasonably believed
in good faith by the Custodian to be adequate in the circumstances ("Best
Efforts") to furnish to the Trust in a timely manner all proxies or other
appropriate authorizations with respect to Securities registered in the name of
the Custodian or its nominee, so that the Trust or its designee may vote,
consent or otherwise act.
SECTION 13. COMPENSATION
The Trust agrees to pay to the Custodian compensation for its services as
set forth in Schedule A hereto attached, or as shall be set forth in written
amendments to such Schedule approved by the Trust and the Custodian from time to
time.
SECTION 14. CORPORATE ACTIONS
The Custodian will exercise Best Efforts to forward to the Trust in a
timely manner all notices of stockholder meetings, proxy statements, annual
reports, conversion notices, call notices, or other notices or written materials
of any kind (excluding stock certificates and dividend and interest payments)
received by the Custodian as registered owner of Securities ("notices and
materials"). The Trust and its investment adviser have primary responsibility
for taking action on such notices and materials.
Upon receipt of warrants or rights issued in connection with the assets of
the Trust, the Custodian shall enter into its ledgers appropriate notations
indicating such receipt and shall notify the Trust of such receipt. However,
the Custodian shall have no obligation to take any other action with respect to
such warrants or rights, except as directed in Written or Oral Instructions.
SECTION 15. BOOKS AND RECORDS
The Custodian acknowledges and agrees that all books and records maintained
for the Trust in any capacity under this Agreement are the property of the Trust
and may be inspected by the Trust or any authorized regulatory agency at any
reasonable time. Upon request all such books and records will be surrendered
promptly to the Trust. The Custodian agrees to make available upon request and
to preserve for the periods prescribed in Rule 31a-2 under the 1940 Act any
records related
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to services provided under this Agreement and required to be maintained by Rule
31a-1 of such Act.
SECTION 16. LIABILITY OF CUSTODIAN
The Custodian assumes no duty, obligation or responsibility whatsoever with
respect to Securities not deposited with the Custodian.
The Custodian assumes only the duties and obligations specifically set
forth herein, and duties incidental thereto normally performed by custodians of
mutual funds. It specifically assumes no responsibility for the management,
investment or reinvestment of the Securities from time to time owned by the
Trust, whether or not on deposit hereunder. The responsibility for the proper
and timely management, investment and reinvestment of such Securities shall be
that of the Trust and its investment advisor.
The Custodian shall not be liable for any taxes, assessments or
governmental charges that may be levied or assessed upon the Securities held by
it hereunder, or upon the income therefrom. Upon Written or Oral Instructions,
the Custodian may pay any such tax, assessment or charge and reimburse itself
out of the monies of the Trust or the Securities held hereunder.
The Custodian may rely upon the advice of counsel, who may be counsel for
the Trust or for the Custodian, and upon statements of accountants, brokers or
other persons believed by it in good faith to be expert in the matters upon
which they are consulted. The Custodian shall not be liable for any action
taken in good faith reliance upon such advice or statements. The Custodian
shall not be liable for action taken in good faith in accordance with any
Written or Oral Instructions, request or advice of the Trust or its officers, or
information furnished by the Trust or its officers. The Custodian shall not be
liable for any non-negligent action taken in good faith and reasonably believed
by it to be within the powers conferred upon it by this Agreement.
No liability of any kind, other than to the Trust, shall attach to the
Custodian by reason of its custody of the Securities and cash of the Trust under
this Agreement or otherwise as a result of its custodianship. In the event that
any claim shall be made against the Custodian, it shall have the right to pay
the claim and reimburse itself from the assets of the Trust in its hands;
provided, however, that no such reimbursement shall occur unless the Trust is
notified of the claim and is afforded an opportunity to defend the claim, if it
so elects. Except as otherwise provided herein, the Trust shall further agree
to indemnify and hold the Custodian harmless for any loss, claim, damage,
expense or liability arising out of the custodian relationship under this
Agreement; provided such loss, claim, damage, expense or liability is not the
direct result of the Custodian's negligence or willful misconduct.
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SECTION 17. SUB-CUSTODIANS
Upon receipt of Written or Oral Instructions to appoint a Sub-Custodian,
which shall be deemed a Trust approval of the appointment, the Custodian shall
appoint one or more banking institutions licensed and examined by the United
States or any state thereof as Sub-Custodian of Securities and cash of the Trust
from time to time; provided, however, that the Custodian shall have requested
appointment of a Sub-Custodian.
The Custodian shall have no liability to the Trust or any other person by
reason of any act or omission of any Sub-Custodian, and the Trust shall
indemnify the Custodian and hold it harmless from and against any and all
actions, suits and claims, whether groundless or otherwise, and from and against
any and all losses, damages, costs, charges, counsel fees, payments, expenses
and liabilities arising directly or indirectly out of or in connection with the
performance of any Sub-Custodian; provided, however, that the Custodian shall,
and hereby does, assign to the Trust any and all claims for any losses, costs,
expenses, or damages that may be incurred by the Trust by reason of the
negligence, gross negligence or misconduct of any Sub-Custodian, or by reason of
the failure of a Sub-Custodian to perform in accordance with any applicable
agreement, including instructions of the Custodian of the Trust. The Custodian
shall be under no obligation to prosecute or to defend any action, suit or claim
arising out of, or in connection with, the performance of any Sub-Custodian, if,
in the opinion of the Custodian's counsel, such action will involve the
Custodian in expense or liability. The Trust shall, upon request, furnish the
Custodian with satisfactory indemnity against such expense or liability, and
upon request of the Custodian, the Trust shall assume the entire defense of any
action, suit, or claim subject to the foregoing indemnity.
The Trust shall pay all fees and expenses of any Sub-Custodian.
SECTION 18. EFFECTIVENESS, AMENDMENT, TERMINATION
(a) This Agreement shall become effective as of the date set forth on the
first page hereof.
(b) This Agreement may be amended from time to time by a written
supplemental agreement executed by the Trust and the Custodian.
(c) This Agreement may be terminated by either party upon notice to the
other. The termination shall become effective at the time specified in the
notice but no earlier than sixty (60) days after the date of the notice. Upon
notice of termination, the Trust shall use Best Efforts to obtain a successor
custodian. If a successor custodian is not appointed within sixty (60) days
after the date of the notice of termination, the Board shall, by resolution,
designate the Trust as its own custodian. Each successor custodian shall be a
person qualified to serve under the 1940 Act. Promptly following receipt of
written notice from the Trust of the appointment of a successor custodian and
receipt of Written or Oral Instructions, the Custodian shall deliver upon
payment of the Custodian's reasonable charges and disbursements and any
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other amounts due all Securities and cash it then holds directly to the
successor custodian and shall, upon request of the Trust and the successor
custodian, execute and deliver to the successor custodian an instrument approved
by its counsel transferring to the successor custodian all the rights, duties
and obligations of the Custodian, transfer to the successor custodian the
originals or copies of all books and records maintained by the Custodian
hereunder and cooperate with, and provide reasonable assistance to, the
successor custodian in the establishment of the books and records necessary to
carry out its responsibilities hereunder. If the Board fails to designate a
successor custodian or to designate the Trust as its own custodian within sixty
(60) days after the date of the notice of termination, the Custodian may, at the
expense of the Trust, apply to the Federal District Court for the Commonwealth
of Massachusetts for further direction as to the disposition of the Trust's
assets. Notwithstanding the termination of this Agreement, the Custodian shall
be obligated to safeguard the assets of the Trust and may change reasonable and
customary fees for doing so pending receipt by the court or the Trust of
instructions for delivery of all securities and cash held, but the Custodian
shall have no obligation to process any other transactions or perform any other
custodial functions following termination of this Agreement. Upon delivery of
the Securities and other assets of the Trust and compliance with the other
requirements of this Section 18, the Custodian shall have no further duty or
liability hereunder. Every successor custodian appointed hereunder shall
execute and deliver an appropriate written acceptance of its appointment and
shall thereupon become vested with the rights, powers, obligations and custody
of the predecessor custodian.
SECTION 19. BUSINESS DAYS
Nothing contained in this Agreement is intended to or shall require the
Custodian or Sub-Custodian in any capacity hereunder to perform any functions or
duties on any holiday, weekend or weekday on which the Custodian, the Sub-
Custodian or the New York Stock Exchange is closed or permitted by law to be
closed. Functions or duties normally scheduled to be performed on such days
shall be performed on, and as of, the next business day on which both the New
York Stock Exchange and the Custodian are open, unless otherwise required by
law.
SECTION 20. MISCELLANEOUS
(a) This Agreement may be executed in more than one counterpart, each of
which shall be deemed to be an original, and all of which together shall
constitute one and the same instrument.
(b) This Agreement shall extend to and bind the parties hereto and their
respective successors and assigns; provided, however, that this Agreement shall
not be assignable by the Trust without the written consent of the Custodian, or
by the Custodian without the written consent of the Trust, authorized or
approved by a resolution of the Board. Notwithstanding the foregoing, either
party may assign this Agreement without the consent of the other party so long
as the assignee is an affiliate, parent or subsidiary of the assigning party and
the
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assignee of the Custodian is qualified to serve as custodian under the 1940 Act.
(c) Headings in this Agreement are included for convenience only and are
not to be used to construe or interpret this Agreement.
(d) This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts.
WITNESS the following signatures:
THE CUTLER TRUST
BY:
--------------------------
John Y. Keffer
President
THE FIRST NATIONAL BANK OF BOSTON
BY:
--------------------------
TITLE:
-----------------------
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LOGO
1993 MUTUAL FUND
MASTER FEE SCHEDULE
CUTLER TRUST U.S. ASSETS
CUSTODIAN FEES
ANNUAL ADMINISTRATIVE FEE - BILLED MONTHLY
2 basis points for the first $100 million of assets
1.5 basis point for the next $100 million of assets
1 basis points for the next $800 million of assets
HOLDINGS CHARGE
Waived
PORTFOLIO TRANSACTIONS
DTC $12.00
FBE $12.00
FNBB Repurchase Agreement $10.00
BKB Sweep Transactions $3.50
VRDN $20.00
Physical Transactions $20.00
Options $25.00
PTC
Monthly Holding Charge $3.00
Buy/Sell Transaction $15.00
Monthly Principal and Interest
Per Pool $4.50
GLOBAL FEES
Unbundled by Country / Upon Request
OUT OF POCKET EXPENSE AS INCURRED INCLUDED BUT NOT LIMITED TO:
Postage, Insurance, Courier, Expedited Mail, Duplicating, Fax Charges, Wires in
and out, Micro fiche, Stop Payments, etc.
CREDIT FOR BALANCES
Based on 50% of the 90 day U.S. Treasury Bill rate, less Federal Reserve
Requirements and F.D.I.C. assessments, determine monthly. No credit carried
forward.
OVERDRAFT RECOVERY
Overdraft charge will be calculated on the actual overdraft incurred plus
Federal Reserve requirements and F.D.I.C. assessments.
TERM OF CONTRACT
Guaranteed for one year
The First National Bank of Boston The Cutler Trust
- --------------------------------- ----------------
/s/ Janice Chadbonnier /s/ John Y. Keffer
- ---------------------- ------------------
title: Senior Manager title: President
-------------- ---------
date: January 5, 1993 date: January 20, 1993
--------------- ----------------
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<PAGE>
EXHIBIT 9(a)
<PAGE>
THE CUTLER TRUST
MANAGEMENT AGREEMENT
AGREEMENT made this 31st day of December, 1992, between The Cutler Trust
(the "Trust"), a business trust organized under the laws of the State of
Delaware with its principal place of business at 61 Broadway, New York, New York
10006, and Forum Financial Services, Inc. (the "Manager"), a corporation
organized under the laws of State of Delaware with its principal place of
business at 61 Broadway, New York, New York 10006.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "Act"), as an open-end management investment company and may
issue its shares of beneficial interest, no par value (the "Shares") in separate
series and classes; and
WHEREAS, the Trust desires to employ the Manager to perform administrative
services for certain investment portfolios of the Trust as listed on Schedule A
hereto (each a "Fund" and, collectively, the "Funds") and the Manager is willing
to provide those services on the terms and conditions set forth in this
Agreement;
NOW THEREFORE, the Trust and Manager agree as follows:
SECTION 1. EMPLOYMENT
The Trust hereby employs the Manager, and the Manager agrees, to act as
manager of the Trust for the period and on the terms set forth in this
Agreement. In connection therewith, the Trust has delivered to the Manager
copies of its Trust Instrument and Bylaws, the Trust's Registration Statement
and all amendments thereto filed pursuant to the Securities Act of 1933, as
amended (the "Securities Act") or the Act (the "Registration Statement") and the
current Prospectus and Statement of Additional Information of each Fund
(collectively, as currently in effect and as amended or supplemented, the
"Prospectus") and, shall promptly furnish the Manager with all amendments of or
supplements to the foregoing.
SECTION 2. ADMINISTRATIVE DUTIES
(a) Subject to the direction and control of the Trust's Board of Directors
(the "Board"), the Manager shall manage all aspects of the Trust's operations
with respect to the Funds except those that are the responsibility of Cutler &
Company or any other investment adviser to a Fund (the "Adviser"), all in such
manner and to such extent as may be authorized by the Board.
(b) With respect to the Trust or each Fund, as applicable, the Manager
shall:
(i) oversee (A) the preparation and maintenance by the Adviser and the
Trust's custodian, transfer agent, dividend disbursing agent and fund accountant
(or if appropriate,
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prepare and maintain) in such form, for such periods and in such
locations as may be required by applicable law, of all documents and
records relating to the operation of the Trust required to be prepared
or maintained by the Trust or its agents pursuant to applicable law; (B)
the reconciliation of account information and balances among the Adviser
and the Trust's custodian, transfer agent, dividend disbursing agent and
fund accountant; (C) the transmission of purchase and redemption orders
for Shares; (D) the notification to the Adviser of available funds for
investment; and (E) the performance of fund accounting, including the
calculation of the net asset value of the Shares;
(ii) oversee the performance of administrative and professional services
rendered to the Trust by others, including its custodian, transfer
agent and dividend disbursing agent as well as legal, auditing and
shareholder servicing and other services performed for the Funds;
(iii) be responsible for the preparation and the printing of the periodic
updating of the Registration Statement and Prospectus, tax returns,
and reports to shareholders, the Securities and Exchange Commission
and state securities commissions;
(iv) be responsible for the preparation of proxy and information statements
and any other communications to shareholders;
(v) at the request of the Board, provide the Trust with adequate general
office space and facilities and provide persons suitable to the Board
to serve as officers of the Trust;
(vi) provide the Trust with the services of persons, who may be officers of
the Trust, competent to perform such supervisory, administrative and
clerical functions as are necessary to provide effective operations of
the Trust;
(vii) prepare, file and maintain the Trust's governing documents, including
the Trust Instrument, the Bylaws and minutes of meetings of Trustees
and shareholders;
(viii) with the approval of the Trust's counsel and cooperation from the
Adviser and other relevant parties, prepare and disseminate materials
for meetings of the Board of Trustees;
(ix) monitor sales of shares and ensure that such shares are properly and
duly registered with the Securities and Exchange Commission and
applicable state securities commissions;
(x) oversee the calculation of performance data for dissemination to
information services covering the investment company industry, for
sales literature of the Trust and other appropriate purposes;
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(xi) oversee the determination of the amount of and supervise the
declaration of dividends and other distributions to shareholders as
necessary to, among other things, maintain the qualification of each
Fund as a regulated investment company under the Internal Revenue Code
of 1986, as amended, and prepare and distribute to appropriate parties
notices announcing the declaration of dividends and other
distributions to shareholders;
(xii) oversee the payment of the Trust's expenses; and
(xiii) advise the Trust and the Board on matters concerning the Trust and its
affairs.
(c) The books and records pertaining to the Trust which are in possession
of the Manager shall be the property of the Trust. The Trust, the Adviser or
the authorized representatives of either of them shall have access to such books
and records at all times during the Manager's normal business hours. Upon the
reasonable request of the Trust or the Adviser, copies of any such books and
records shall be provided promptly by the Manager to the Trust, the Adviser or
the authorized representatives of either of them. In the event the Trust
designates a successor to any of the Manager's obligations hereunder, the
Manager shall, at the expense and direction of the Trust, transfer to such
successor all relevant books, records and other data established or maintained
by the Manager under this Agreement.
SECTION 3. STANDARD OF CARE
The Manager shall give the Trust the benefit of its best judgment and
efforts in rendering its services to the Trust and shall not be liable for error
of judgment or mistake of law, for any loss arising out of any investment, or in
any event whatsoever, provided that nothing herein shall be deemed to protect,
or purports to protect, the Manager against any liability to the Trust or to the
security holders of the Trust to which it would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder, or by reason of reckless disregard of its obligations and
duties hereunder.
SECTION 4. EXPENSES
Subject to any expense reimbursement arrangements between the Adviser or
others and the Trust, the Trust shall be responsible and assumes the obligation
for payment of all its expenses.
SECTION 5. COMPENSATION
(a) For the services provided by the Manager pursuant to this Agreement,
the Trust shall pay the Manager, with respect to each of the Funds, a fee at an
annual rate equal to the amount set forth in Schedule B hereto. Such fees shall
be accrued by the Trust daily and shall be payable monthly in arrears on the
first day of each calendar month for
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services performed under this Agreement during the prior calendar month. Upon
the termination of this Agreement, the Trust shall pay to the Manager such
compensation as shall be payable prior to the effective date of such
termination.
(b) Notwithstanding anything in this Agreement to the contrary, the
Manager and its affiliated persons may receive compensation or reimbursement
from the Trust with respect to (i) the provision of shareholder support or other
services or (ii) service as a Trustee or officer of the Trust.
SECTION 6. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective on the date on which the Trust's
Registration Statement relating to the shares of the Cutler Equity Income Fund,
the Cutler Approved List Equity Fund and the Cutler Government Securities Fund
becomes effective and shall relate to every other Fund as of the date on which
the Trust's Registration Statement relating to the shares of such Fund becomes
effective. Upon the effectiveness of this Agreement, it shall supersede all
previous agreements among the Adviser, the Trust and the Manager, or between any
of them, covering the subject matter hereof.
(b) This Agreement shall continue in effect for twelve months and,
thereafter, shall be automatically renewed each year for an additional term of
one year.
(c) This Agreement may be terminated with respect to a Fund at any time,
without the payment of any penalty, (i) by the Trust on 60 days' written notice
to the Adviser and the Manager or (ii) by the Manager on 60 days' written notice
to the Adviser and the Trust.
(d) This Agreement shall terminate automatically in the event of its
assignment.
SECTION 7. ACTIVITIES OF MANAGER
Except to the extent necessary to perform its obligations under this
Agreement, nothing herein shall be deemed to limit or restrict the Manager's
right, or the right of any of its officers, directors or employees (whether or
not they are a trustee, officer, employee or other affiliated person 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 8. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the shareholders of each Fund shall not be
liable for any obligation of the Trust or of the Funds under this Agreement, and
the Manager and the Adviser agree that, in asserting any rights or claims in
connection with any obligation of the Trust or of the Funds under this
Agreement, they shall look only to the assets and
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property of the Trust or the Fund to which the Manager's or Adviser'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 9. MISCELLANEOUS
(a) No provision of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto and, if required by the Act, by a vote of a majority of the
outstanding voting securities of the Trust.
(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 no 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 New York.
(f) The terms "vote of a majority of the outstanding voting securities,"
"interested person," and "affiliated person" shall have the meanings ascribed
thereto in the Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
THE CUTLER TRUST
By: /s/ JOHN Y. KEFFER
-------------------
John Y. Keffer
President
FORUM FINANCIAL SERVICES, INC.
By: /s/ DAVID R. KEFFER
-------------------
David R. Keffer
Vice President
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THE CUTLER TRUST
MANAGEMENT AGREEMENT
SCHEDULE A
FUNDS OF THE TRUST
Cutler Equity Income Fund
Cutler Approved List Equity Fund
Cutler Government Securities Fund
SCHEDULE B
FEES
Fee as a % of
the Annual Average Daily
Fund Net Assets of the Fund
---- ----------------------
Cutler Equity Income Fund 0.10%
Cutler Approved List Equity Fund 0.10%
Cutler Government Securities Fund 0.10%
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EXHIBIT 9 (B)
<PAGE>
THE CUTLER TRUST
TRANSFER AGENCY AND FUND ACCOUNTING AGREEMENT
AGREEMENT made this 31st day of December, 1992, between The Cutler Trust
(the "Trust"), a business trust organized under the laws of the State of
Delaware with its principal place of business at 61 Broadway, New York, New York
10006, and Forum Financial Corp. (the "Transfer Agent"), a corporation organized
under the laws of State of Delaware with its principal place of business at Two
Portland Square, Portland, Maine 04101.
WHEREAS, the Trust is registered under the Investment Company Act of 1940
as an open-end management investment company and is authorized to issue shares
of beneficial interest, no par value, in separate series and classes;
WHEREAS, the Trust desires that the Transfer Agent act as transfer agent to
the Trust for the purpose of recording the transfer, issuance and redemption of
shares, transferring shares and disbursing dividends and other distributions to
shareholders for each separate investment portfolio, and the Transfer Agent is
willing to perform those services on the terms and conditions set forth in this
Agreement; and
WHEREAS, the Trust desires that the Transfer Agent perform certain fund
accounting services for each separate investment portfolio and the Transfer
Agent is willing to perform those services on the terms and conditions set forth
in this Agreement;
NOW THEREFORE, the Trust and the Transfer Agent agree as follows:
SECTION 1. APPOINTMENT. The Trust hereby appoints Transfer Agent as its
transfer agent and fund accountant and Transfer Agent agrees to act in such
capacity upon the terms set forth in this Agreement.
SECTION 2. DEFINITIONS. Whenever used in this Agreement or in any
amendment or supplement hereto, capitalized terms not defined elsewhere shall
have the meanings specified below, insofar as interpretable within the context:
(a) "Act" shall mean the Investment Company Act of 1940, as amended.
(b) "Adviser" shall mean Cutler & Company, Inc., or any successor thereto.
(c) "Board" shall mean the Board of Trustees of the Trust.
(d) "Business Day" shall have the meaning ascribed thereto in each
Prospectus.
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(e) "Custodian" shall mean The First National Bank of Boston or any
successor or other custodian acting as such for any Fund.
(f) "Custodian Agreement" shall mean the agreement or agreements between
the Trust and the Custodian or Custodians providing for custodial
services to the Trust.
(g) "Eligible Guarantor Institution" shall have the meaning ascribed
thereto in Rule 17Ad-15 under the 1934 Act.
(h) "Fund" shall mean each investment portfolio of the Trust as now exists
or may in the future be created.
(i) "Manager" shall mean Forum Financial Services, Inc., or any successor
thereto.
(j) "Oral Instructions" shall mean an authorization, instruction,
approval, item or set of data, or information of any kind transmitted
to the Trust in person or by telephone, vocal telegram or other
electronic means, by a person or persons reasonably believed in good
faith by the Trust to be a person or persons authorized by a
resolution of the Board to give Oral Instructions on behalf of the
Trust. Each Oral Instruction shall specify whether it is applicable
to the Trust or a specific Fund.
(k) "Prospectus" shall mean the then-current prospectus and statement of
additional information forming part of an effective Registration
Statement of the Trust under the Act and the 1933 Act with respect to
a Fund, as supplemented from time to time.
(l) "Shareholders" shall mean the registered owners from time to time of
the Shares, as reflected on the stock registry records of the Trust.
(m) "Shares" shall mean the issued and outstanding shares of beneficial
interest of the Trust including, unless otherwise noted, fractions
thereof.
(n) "Transfer Agent Indemnitee" shall mean the Transfer Agent and its
directors, officers, employees and agents and persons controlling the
Transfer Agent.
(o) "UCC" shall mean the Uniform Commercial Code as in effect in the State
of Delaware.
(p) "Valuation Time" shall mean each time described in each Prospectus at
which a Fund's net asset value is to be determined, or at such other
time as the Trust may specify in a Written Instruction.
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(q) "Written Instructions" shall mean an authorization, instruction,
approval, item or set of data, or information of any kind transmitted
to the Transfer Agent in an original writing containing original
signatures, or a copy of such document transmitted by telecopy,
including transmission of such signatures, or other mechanical or
documentary means, at the request of a person or persons reasonably
believed in good faith by the Transfer Agent to be a person or persons
authorized by a resolution of the Board to give Written Instructions
on behalf of the Trust. Each Written Instruction shall specify
whether it is applicable to the Trust or a specific Fund.
(r) "1933 Act" shall mean the Securities Act of 1933, as amended.
(s) "1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
SECTION 3. DELIVERY OF DOCUMENTS AND RECORDS. The Trust has delivered to
the Transfer Agent copies of its Trust Instrument and Bylaws, the Trust's
Registration Statement and all amendments thereto filed pursuant to the Act and
the 1933 Act, and the Prospectus of each Fund and shall promptly furnish the
Transfer Agent with all amendments of or supplements to the foregoing. The
Trust shall deliver over to the Transfer Agent (i) an accurate list of
Shareholders of the Trust, showing each Shareholder's address of record and
number of Shares owned and (ii) all Shareholder and fund accounting records,
files, and other materials necessary or appropriate for proper performance of
the functions assumed by the Transfer Agent under this Agreement.
SECTION 4. ISSUANCE OF SHARES. The Transfer Agent shall make original
issues of Shares of each Fund in accordance with the provisions hereof and the
Prospectuses, upon receipt of (i) Written 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
the 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
Rule 24f-2 under the Act. If the opinion described in clause (iv) above is
contingent upon a filing under Rule 24f-2, the Trust shall fully indemnify the
Transfer Agent for any liability arising from the failure of the Trust to comply
with that rule.
SECTION 5. TRANSFER OF SHARES. Transfers of Shares of each Fund shall be
registered on the Shareholder records of the Trust maintained by the Transfer
Agent pursuant to this Agreement. In registering transfers of Shares of each
Fund, the Transfer Agent may rely upon the UCC, or any other statutes that, in
the opinion of the Transfer Agent's counsel, protect the Transfer Agent 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 an adverse claim inquiry or (iv) refusing
registration
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whenever an adverse claim requires refusal. The Transfer Agent is responsible
for carrying out transfer instructions of the types specified in the
Prospectuses and Written Instructions and for delivering to the transferee and
transferor all documentation as is required by the UCC.
SECTION 6. MAINTENANCE OF STOCK RECORDS. The Transfer Agent shall
maintain customary stock registry records for each Fund, noting the issuance,
transfer or redemption of Shares. The Transfer Agent shall maintain for each
Fund a "Share Account" in which it will record the Shares issued and outstanding
from time to time. The Transfer Agent shall keep records for each Fund,
containing the names and addresses of record of Shareholders and the number of
Shares from time to time owned by them. Each Shareholder will be assigned a
single account number for each Fund.
SECTION 7. RECORDS REFLECTING ISSUANCES AND REDEMPTIONS. When Shares are
purchased, the Transfer Agent shall note on its stock registry records the
issuance of the Shares and credit the Share Account and the respective
Shareholders' accounts with the Shares. Whenever Shares owned by Shareholders
are surrendered for redemption pursuant to the provisions hereof and the
Prospectuses, the Transfer Agent shall make appropriate entries in the stock
transfer records and debit the Share Account and the record of issued Shares
outstanding. Except as permitted by the Prospectus, a redemption request for
Shares being redeemed must reflect a guarantee of the owner's signature by an
Eligible Guarantor Institution. The Trust may authorize the Transfer Agent by
Written Instruction to waive the signature guarantee for any specific
transaction or classes of transactions upon provision of an indemnity
satisfactory in form to the Transfer Agent.
SECTION 8. RELIANCE ON INFORMATION. In performing its duties hereunder,
the Transfer Agent may rely conclusively and act without further investigation
upon any list, instruction, certification, authorization or other instrument or
paper reasonably believed by it in good faith to be genuine and unaltered, and
to have been signed, countersigned or executed or authorized by a duly
authorized person or persons, or by the Trust, or upon the advice of counsel for
the Trust or for the Transfer Agent. The Transfer Agent may record any transfer
of Shares it reasonably believes in good faith to have been duly authorized, or
may refuse to record any transfer of Shares if, in good faith, it deems such
refusal necessary in order to avoid any liability on the part of either the
Trust or the Transfer Agent. The Trust shall indemnify and hold harmless the
Transfer Agent from and against any and all losses, claims, damages, liabilities
or expenses (including reasonable expenses for legal counsel) that it may suffer
or incur by reason of such good faith reliance, action or failure to act.
SECTION 9. COMPUTATION OF NET ASSET VALUE; SHARE PURCHASES. The Trust
hereby instructs the Transfer Agent to consider Shareholder payments as Federal
funds no later than on the day indicated below unless such other times shall be
noted in a Prospectus:
(a) For a wire received, at the time of the receipt of the wire;
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(b) (i) For a check drawn on a member bank of the Federal Reserve System
and received prior to 3:00 p.m., Eastern time, on a Business Day, on
the Business Day following receipt and (ii) for a check drawn on a
member bank of the Federal Reserve System and received at or after
3:00 p.m., Eastern time, on a Business Day, on the second Business Day
following receipt; and
(c) For a check drawn on an institution that is not a member of the
Federal Reserve System, at such time as the Transfer Agent actually
receives Federal funds in respect of that check.
As soon as possible after each Valuation Time, the Transfer Agent shall use
the net asset value determined as of the Valuation Time to compute the number of
Shares to be purchased as of that Valuation Time and the aggregate purchase
proceeds to be deposited with the Custodian.
SECTION 10. SHARE ISSUANCE AND CONFIRMATIONS. Having made the
calculations required by Section 9, the Transfer Agent shall upon receipt of
Federal funds pay the Custodian the aggregate net asset value of Shares of each
Fund purchased. The aggregate number of Shares purchased shall be issued daily
and credited by the Transfer Agent to the Share Account and the individual
account of the Shareholder. The Transfer Agent shall also credit each
Shareholder's separate account with the number of Shares purchased by the
Shareholder. If requested by the Trust, the Transfer Agent shall promptly
thereafter mail written confirmation of the purchase to each Shareholder and to
the Trust. Each confirmation shall indicate the prior Share balance, the new
Share balance, the amount invested and the price paid for the newly-purchased
Shares or other information as the Trust shall instruct in a Written
Instruction.
SECTION 11. SHARE REDEMPTIONS. Prior to each Valuation Time, the Transfer
Agent shall process all requests to redeem Shares of each Fund in accordance
with Section 7 and, if appropriate, shall advise the Custodian of the aggregate
net asset value of all Shares requested to be redeemed. Upon confirmation of
the net asset value, the Transfer Agent shall notify the Trust and, if
appropriate, the Custodian of the redemption, apply the redemption proceeds in
accordance with Section 12 and the applicable Prospectus, record the redemption
in the stock registry books, debit the redeemed Shares from the Share Account
and the individual account of the Shareholder.
SECTION 12. REDEMPTION PROCEEDS. The proceeds of redemption shall be
remitted by the Transfer Agent in accordance with the Prospectuses as follows:
(a) By check mailed to the Shareholder at his address of record or to his
designated custodian;
(b) By wiring the appropriate amount in Federal funds; or
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(c) By other procedures commonly followed by mutual funds, as set forth in
the Prospectuses and in a Written Instruction from the Trust and mutually
agreed upon between the Trust and the Transfer Agent.
The Transfer Agent may delay payment of the proceeds of redemption of
Shares that have been purchased by check within fifteen (15) days prior to
receipt of the redemption request and for which Federal funds have not been
received. The Trust shall provide the Transfer Agent with Written Instructions
concerning the time within which such requests may be honored. The authority of
the Transfer Agent to perform its responsibilities under Section 11 and Section
12 shall be suspended with respect to a Fund if the Transfer Agent receives
notice from the Trust of the suspension of the determination of that Fund's net
asset value.
SECTION 13. DIVIDENDS AND OTHER DISTRIBUTIONS. Upon the declaration of
each dividend, including each capital gain distribution, by the Board, the Trust
or, in the case of dividends declared pursuant to an ongoing resolution of the
Board, the Manager or such other person as the Manager shall by Written
Instruction inform the Transfer Agent, shall notify the Transfer Agent of the
date of such declaration, the amount payable per Share, the record date for
determining the Shareholders entitled to payment, the payment and the
reinvestment date. Dividends may be declared pursuant to an ongoing resolution
of the Board that declares periodically a dividend consisting of all the
undeclared net investment income of a Fund, in which case the amount of the
dividend shall be determined by the Transfer Agent or such other person as the
Manager shall by Written Instruction inform the Transfer Agent. On or before
each payment date the Trust will transfer, or cause the Custodian to transfer,
to the Transfer Agent the total amount of the dividend currently payable subject
to such netting arrangements as may be agreed to between the Trust and the
Custodian. The Transfer Agent will, on the designated payment date, reinvest
all dividends in additional Shares and, to the extent provided by the applicable
Prospectus, mail to each Shareholder at his address of record a statement
showing the number of Shares (rounded to three decimal places) then owned by the
Shareholder and the net asset value of the Shares; provided, however, that if a
Shareholder elects to receive any or all dividends in cash, the Transfer Agent
shall prepare a check in the appropriate amount and mail it to the Shareholder
at his address of record promptly following the designated payment date.
SECTION 14. ISSUANCE AND TRANSFER OF SHARE CERTIFICATES. Until authorized
by the Trust, no share certificates shall exist or be issued.
SECTION 15. COOPERATION WITH AUDITORS. The Transfer Agent shall cooperate
with and assist the Trust's independent auditors and, upon approval of the Trust
or the Manager, any regulatory body in any requested review of the Trust's books
and records maintained by the Transfer Agent. The Transfer Agent shall take
reasonable action to make all necessary information available to the auditors
and any regulatory body approved by the Manager or the Trust for the performance
of their duties.
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SECTION 16. FUND ACCOUNTING. For each Fund, the Transfer Agent shall
perform the fund accounting services listed in this Section. The Transfer Agent
and the Manager may from time to time adopt such procedures as they agree upon
to implement the terms of this Section.
(a) For each Fund, the Transfer Agent shall: (i) calculate the net asset
value per Share with the frequency prescribed in the Funds' Prospectuses; (ii)
calculate dividends and capital gain distributions, if any, as required by the
Trust; (iii) calculate the yield, effective yield, tax equivalent yield and
total return, as applicable, and such other measure of performance as may be
agreed upon between the parties hereto; (iv) provide the Trust and such other
persons as the Manager may direct with the following reports:
(A) a current security position report,
(B) a summary report of transactions and pending maturities (including the
principal, cost, and accrued interest on each portfolio security in
maturity date order), and
(C) a current cash position and projection report;
(v) prepare and record, as of each time when the net asset value of a Fund is
calculated, either
(A) a valuation of the assets in the Fund (based upon the use of outside
services normally used and contracted for this purpose by the Transfer
Agent in the case of securities for which information and market price
or yield quotations are readily available and based upon evaluations
conducted in accordance with the Manager's instructions in the case of
all other assets) or
(B) a calculation confirming that the market value of the Fund's assets
does not deviate from the amortized cost value of those assets by more
than a specified percentage agreed to from time to time by the
Transfer Agent and the Manager; and
(vi) make such adjustments over such periods as the Transfer Agent deems
necessary to reflect over-accruals or under-accruals of estimated expenses or
income.
(b) The Transfer Agent shall prepare periodic reports to the Trust's
shareholders and the SEC and such other reports as may be agreed to from time to
time and provide information typically supplied in the investment company
industry to companies that track or report the price, performance or other
information with respect to investment companies.
SECTION 17. OTHER SERVICES. The Transfer Agent shall answer shareholder
inquiries related to their Share accounts and other correspondence requiring an
answer from the Trust. The Transfer Agent shall maintain dated copies of
written communications from Shareholders and replies thereto. In addition, the
Transfer Agent will perform other services for the Trust as mutually agreed upon
in writing from time to
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time, including but not limited to preparing and filing Federal tax forms,
mailing Shareholder reports, preparing lists of Shareholders, mailing notices of
Shareholders' meetings, proxies and proxy statements, tabulating proxies, and
mailing Federal tax information to Shareholders. Nothing contained in this
Agreement is intended to or shall require the Transfer Agent, in any capacity
hereunder, to perform any functions or duties on any day other than a Business
Day. Functions or duties normally scheduled to be performed on any day that is
not a Business Day shall be performed on, and as of, the next Business Day,
unless otherwise required by law.
SECTION 18. UNPAID ITEMS. In the event that any check or other order for
the payment of money is returned unpaid for any reason, the Transfer Agent shall
promptly notify the Trust of the non-payment.
SECTION 19. TAXES. The Transfer Agent 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, excluding taxes
assessed against the Transfer Agent for compensation received by it hereunder.
SECTION 20. RECORDKEEPING; INSPECTION OF RECORDS.
(a) The Transfer Agent shall prepare and maintain in such form and in such
locations as may be required by applicable regulation all records and documents
relating to the services provided to the Trust pursuant to this Agreement
required to be prepared and maintained by the Transfer Agent or the Trust
pursuant to the Act, the 1934 Act and the rules and regulations of the SEC and
the Internal Revenue Service.
(b) Without limiting the requirements of Section 20(a), the Transfer Agent
shall prepare and maintain on behalf of the Trust the following books and
records of each Fund pursuant to Rule 31a-1 under the Act: (i) journals
containing an itemized daily record in detail of all purchases and sales of
securities, all purchases and sales of Shares, all receipts and disbursements of
cash and all other debits and credits, as required by subsection (b)(1) of Rule
31a-1; (ii) journals and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, as required by subsection (b)(2)
of Rule 31a-1 (including the ledgers required by subsection (b)(2)(iv); (iii) a
record of all options, if any, in which the Trust has any direct or indirect
interest or which the Trust has granted or guaranteed and a record of any
contractual commitments to purchase, sell, receive or deliver any property as
required by subsection (b)(7) of Rule 31a-1; (iv) a monthly trial balance of all
ledger accounts (except shareholder accounts) as required by subsection (b)(8)
of Rule 31a-1; and (v) other records required by the Rule or any successor rule
or pursuant to interpretations thereof to be kept by open-end management
investment companies, but limited to those provisions of the Rule applicable to
portfolio transactions and shareholders as agreed upon between the parties
hereto.
(c) The Transfer Agent shall notify the Trust of any request or demand for
the inspection of the Trust's Share records. The Transfer
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Agent shall abide by the Trust's instructions for granting or denying the
inspection; provided, however, the Transfer Agent may grant the inspection
without such instructions if it is advised by its counsel that failure to do so
will result in liability to the Transfer Agent.
(d) The books and records pertaining to the Trust that are in possession
of the Transfer Agent shall be the property of the Trust. The Trust, or the
Trust's authorized representatives, shall have access to such books and records
at all times during the Transfer Agent's normal business hours. Upon the
reasonable request of the Trust, copies of any such books and records shall be
provided promptly by the Transfer Agent to the Trust or the Trust's authorized
representatives. In the event the Trust designates a successor to any of the
Transfer Agent's obligations hereunder, the Transfer Agent shall, at the expense
and direction of the Trust, transfer to such successor all relevant books,
records and other data established or maintained by the Transfer Agent under
this Agreement.
SECTION 21. EXPENSES; COMPENSATION.
(a) Subject to any agreement by the Adviser to reimburse or pay the
expenses of the Trust, the Trust shall be responsible and assumes the obligation
for payment of all its expenses.
(b) For its services hereunder, the Transfer Agent shall receive from the
Trust, with respect to each Fund, such transfer agency and fund accounting fees
as are listed in Schedule A hereto, as amended from time to time. These fees
shall be paid monthly in advance.
(c) The Transfer Agent shall be reimbursed for its ancillary costs
incurred in providing any transfer agency services hereunder, including the cost
of (or appropriate share of the cost of) (i) any and all forms and stationery
used or specially prepared for the purpose, (ii) postage, (iii) telephone
services, (iv) bank fees, (v) electronic or facsimile transmission and (vi) any
other items for which the Trust is responsible, as described in the Trust's
agreement with the Adviser. The Trust shall reimburse the Transfer Agent for
all expenses and employee time attributable to any review of the Trust's
accounts and records by the Trust's independent public accountants or any
regulatory body outside of routine and normal periodic reviews and for all
expenses for services in connection with the Transfer Agent's activities in
effecting any termination of this Agreement (except the termination of Transfer
Agent for cause), including expenses incurred by the Transfer Agent to deliver
the property of the Trust in the possession of the Transfer Agent to the Trust
or other persons.
(d) Notwithstanding anything in this Agreement to the contrary, the
Transfer Agent and its affiliated persons may receive compensation or
reimbursement from the Trust with respect to (i) the provision of management
services or (ii) service as a Trustee or officer of the Trust.
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SECTION 22. STANDARD OF CARE; LIMITATION OF LIABILITY.
(a) The Transfer Agent shall not be liable for any action taken or not
taken in good faith and reasonably believed by the Transfer Agent to be within
the powers conferred upon it under this Agreement; provided that nothing herein
shall be deemed to protect, or purports to protect, the Transfer Agent against
any liability to the Trust or to the security holders of the Trust to which it
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder. The Transfer Agent shall
be entitled to rely conclusively on the completeness and correctness of any
accounts and records turned over to it by the Trust. In no event shall a
Transfer Agent Indemnitee be liable for loss of profit or goodwill or for other
indirect, special or consequential damages, liabilities or costs (including
administrative and litigation costs and attorneys' fees) suffered by the Trust
or others, whether or not the possibility of such damage was disclosed to the
Transfer Agent or could have been reasonably foreseen by the Transfer Agent and
whether asserted on the basis of contract, tort (including negligence and strict
liability) or otherwise.
(b) The Trust shall indemnify and hold harmless each Transfer Agent
Indemnitee from and against any and all losses, claims, damages, liabilities or
expenses (including reasonable expenses for legal counsel) arising directly or
indirectly out of or in connection with this Agreement; provided such loss,
claim, damage, liability or expense is not the direct result of willful
misfeasance, bad faith or gross negligence by the Transfer Agent Indemnitee.
The Trust shall be entitled to assume the defense of any suit brought to enforce
any claim and to retain counsel of good standing chosen by the Trust and
approved by the Transfer Agent, the Transfer Agent's approval not to be
unreasonably withheld. In the event the Trust does elect to assume the defense
of a suit and retain counsel of good standing approved by the Transfer Agent,
the defendant or defendants in the suit shall bear the fees and expenses of any
additional counsel retained by any of them. In the event the Trust does not
elect to assume the defense of a suit or in case the Transfer Agent does not
approve of counsel chosen by the Trust, the Trust will reimburse each Transfer
Agent Indemnitee named as defendant in such suit for the fees and expenses of
any counsel retained by the Transfer Agent Indemnitee. In the event the
Transfer Agent has been advised that it may have available defenses or claims
that are not available or conflict with those available to the Trust, the Trust
will reimburse the Transfer Agent for the fees and expenses of any counsel
retained by the Transfer Agent. The Transfer Agent may, at any time, waive its
right to indemnification hereunder and assume its own defense.
(c) Without limiting the foregoing:
(i) the Transfer Agent may rely upon the advice of the Trust or counsel to
the Trust or the Transfer Agent, and upon statements of accountants,
brokers and other persons believed by the Transfer Agent in good faith to
be expert in the matters upon which they are consulted. The Transfer Agent
shall not be liable for any action taken in good faith reliance upon such
advice or statements;
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(ii) the Transfer Agent shall not be liable for any action reasonably
taken in good faith reliance upon any Written Instruction or certified copy
of any resolution of the Board; provided, however, that upon receipt of a
Written Instruction countermanding a prior Instruction that has not been
fully executed by the Transfer Agent, the Transfer Agent shall verify the
content of the second Instruction and honor it, to the extent possible.
The Transfer Agent may rely upon the genuineness of any such document, or
copy thereof, reasonably believed by the Transfer Agent in good faith to
have been validly executed; and
(iii) the Transfer Agent may rely, and shall be protected by the Trust in
acting, upon any signature, instruction, request, letter of transmittal,
certificate, opinion of counsel, permitted Oral Instruction, statement,
instrument, report, notice, consent, order, or other paper or document
reasonably believed by it in good faith to be genuine and to have been
signed or presented by the proper party or parties.
(d) In the event of equipment failures beyond the Transfer Agent's
control, the Transfer Agent shall, at no additional expense to the Trust, take
reasonable steps to minimize service interruptions but shall have no liability
with respect thereto. The Transfer Agent shall enter into and shall maintain in
effect with appropriate parties one or more agreements making reasonable
provision for emergency use of electronic data processing equipment to the
extent appropriate equipment is available or shall maintain a secondary site
with processing capability.
(e) The Transfer Agent shall be under no duty to take any action on behalf
of the Trust except as specifically set forth herein or as may be specifically
agreed to by the Transfer Agent in writing. In the performance of its duties
hereunder, the Transfer Agent shall be obligated to exercise care and diligence
and to act in good faith and to use its best efforts within reasonable limits to
insure the accuracy and completeness of all services performed under this
Agreement. To the extent that duties, obligations and responsibilities are not
expressly set forth in this Agreement, the Transfer Agent shall not be liable
for any act or omission which does not constitute willful misfeasance, bad faith
or gross negligence on the part of the Transfer Agent or reckless disregard of
such duties, obligations and responsibilities. Without limiting the generality
of the foregoing or of any other provision of this Agreement, the Transfer Agent
in connection with its duties under this Agreement shall not be under any duty
or obligation to inquire into and shall not be liable for or in respect of
delays or errors or loss of data occurring by reason of circumstances beyond the
Transfer Agent's control, including acts of civil or military authority,
national emergencies, labor difficulties, fire, mechanical breakdown (except as
provided in subsection (d) above), flood or catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation, communication
or power supply.
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SECTION 23. EFFECTIVENESS; DURATION AND AMENDMENT.
(a) This Agreement shall become effective on the day on which the Trust's
Registration Statement relating to Shares of the Cutler Equity Income Fund, the
Cutler Approved List Equity Fund and the Cutler Government Securities Fund
becomes effective and shall relate to every other Fund as of the date on which
the Trust's Registration Statement relating to the shares of such Fund becomes
effective. Upon the effectiveness of this Agreement, it shall supersede all
previous agreements between the Trust and the Transfer Agent covering the
subject matter hereof.
(b) This Agreement shall continue in effect for twelve months and,
thereafter, shall be automatically renewed each year for an additional term of
one year.
SECTION 24. TERMINATION. This Agreement may be terminated with respect to
any Fund at any time, without the payment of any penalty, (i) by the Board on at
least 60 days' written notice to the Transfer Agent or (ii) by the Transfer
Agent on at least 60 days' written notice to the Trust. Upon receiving notice
of termination from the Transfer Agent, the Trust shall use its best efforts to
obtain a successor transfer agent. If a successor transfer agent is not
appointed within sixty (60) days after the date of the notice of termination,
the Board shall, by resolution, designate the Trust as its own transfer agent.
Upon receipt of written notice from the Trust of the appointment of the
successor transfer agent and upon receipt of Written Instructions the Transfer
Agent shall, upon request of the Trust and the successor transfer agent and upon
payment of the Transfer Agent's reasonable charges and disbursements, promptly
transfer to the successor transfer agent the original or copies of all books and
records maintained by the Transfer Agent hereunder including, in the case of
records maintained on computer systems or other electronic media, 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 its responsibilities hereunder.
SECTION 25. ASSIGNMENT; DELEGATION.
(a) This Agreement shall extend to and shall bind the parties hereto and
their respective successors and assigns; provided, however, that this Agreement
shall not be assignable by the Transfer Agent without the written consent of the
Trust, authorized or approved by a resolution of the Board. Notwithstanding the
foregoing, either party may assign this Agreement without the consent of the
other party so long as the assignee is an affiliate, parent or subsidiary of the
assigning party and is qualified to act under applicable law.
(b) The Transfer Agent may contract with other qualified service providers
to perform any of the services contemplated by this Agreement; provided, that
the Transfer Agent shall not thereby be relieved of any of its obligations
hereunder. The Transfer Agent may subcontract any or all of its functions to
one or more qualified sub-transfer agents or processing agents, which may be the
Manager or affiliates of the
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Manager, who agree to comply with the terms of this Agreement. The Transfer
Agent may pay those agents for their services, but no such payment will increase
the Transfer Agent's compensation from the Trust.
SECTION 26. RESOLUTIONS FOR INSTRUCTIONS; PROCEDURES. The Trust shall
file with the Transfer Agent a certified copy of the operative resolution of the
Board authorizing the execution of Written Instructions or the transmittal of
Oral Instructions. The parties hereto may adopt procedures as may be
appropriate or practical under the circumstances, and the Transfer Agent may
conclusively rely, in the absence of actual knowledge to the contrary, on the
determination of the Trust that any procedure that has been approved by the
Trust does not conflict with or violate any requirement of the Trust's Trust
Instrument, Bylaws or Prospectuses, or any rule, regulation or requirement of
any regulatory body.
SECTION 27. NOTICES. Any notice or other communication required by or
permitted to be given in connection with this Agreement shall be in writing, and
shall be delivered in person, sent by first-class mail, postage prepaid, or sent
by overnight delivery, postage prepaid, to the respective parties at the
following addresses or such other address as the parties may designate in
writing by the same methods:
If to the Trust:
The Cutler Trust
61 Broadway, Suite 2770
New York, New York 10006
Attn.: Corporate Secretary
If to the Transfer Agent:
Forum Financial Corp.
Two Portland Square
Portland, Maine 04101
Attn.: Transfer Agent
SECTION 28. REPRESENTATIONS AND WARRANTIES. The Trust represents and
warrants to the Transfer Agent that the execution and delivery of this Agreement
by the undersigned officer of the Trust has been duly and validly authorized by
resolution of the Board. The Transfer Agent represents and warrants to the
Trust that (i) the execution and delivery of this Agreement by the undersigned
officer of the Transfer Agent has been duly and validly authorized and (ii) it
is duly registered as a transfer agent under the 1934 Act.
SECTION 29. 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.
- 92 -
<PAGE>
SECTION 30. GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Maine.
SECTION 31. HEADINGS. Headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
SECTION 32. 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 Transfer
Agent 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
Transfer Agent'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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
THE CUTLER TRUST
By: /s/ JOHN Y. KEFFER
------------------
John Y. Keffer
President
FORUM FINANCIAL CORP.
By: /s/ DAVID R. KEFFER
-------------------
David R. Keffer
Vice President
- 93 -
<PAGE>
THE CUTLER TRUST
TRANSFER AGENCY AND FUND ACCOUNTING AGREEMENT
SCHEDULE A
FEES FOR EACH FUND
Transfer Agency Fees:
- --------------------
Fee per Fund $ 12,000/year
Annual Shareholder Account Fees
(per shareholder account) $ 12.00
Fees based upon the number of Shareholder accounts shall be calculated as
of the last Business Day of the prior month.
Fund Accounting Fees:
- --------------------
Standard Fee per Fund $ 36,000/year
Plus Additional Surcharges for each of:
Tax-Free Money Market Funds $ 12,000/year
Global or International Funds $ 12,000/year
Funds with more than 25%
of their total assets invested
in asset backed securities $ 1,000/month
Funds with more than
100 security positions $ 1,000/month
Funds with a monthly portfolio
turnover rate of 10% or greater $ 1,000/month
Monthly surcharges are based upon the total assets or security positions as
of the end of the prior month and on the portfolio turnover rate for the
prior month. Portfolio turnover rate shall have the meaning ascribed
thereto in Securities and Exchange Commission Form N-1A.
- 94 -
<PAGE>
EXHIBIT 9 (C)
<PAGE>
THE CUTLER TRUST
SHAREHOLDER SERVICE PLAN
January 3, 1996
This Shareholder Service Plan (the "Plan") is adopted by The Cutler Trust
(the "Trust") with respect to the shares of beneficial interest of each of the
series of the Trust identified in Appendix A hereto (individually a "Fund" and
collectively the "Funds").
SECTION 1. ADMINISTRATOR
The Trust has entered into an Administration Agreement (the "Agreement")
with Forum Financial Services, Inc. ("Forum") whereby Forum provides certain
administrative services for the Trust and for each Fund.
SECTION 2. SERVICE AGREEMENTS; PAYMENTS
(a) Forum is authorized to enter into Shareholder Service Agreements
(the "Agreements"), the form of which shall be approved by the Board of Trustees
of the Trust (the "Board"), with financial institutions and other persons who
provide services for and maintain shareholder accounts ("Service Providers") as
set forth in this Plan.
(b) Pursuant to the Agreements, as compensation for the services described
in Section 4 below, Forum may pay the Service Provider, on behalf of the Trust,
a fee at an annual rate of up to 0.25% of the average daily net assets of each
Fund represented by the shareholder accounts for which the Service Provider
maintains a service relationship.
PROVIDED, however, that no Fund shall directly or indirectly pay any
amounts, whether Payments (as defined in the Agreements) or otherwise, that
exceed any applicable limits imposed by law or the National Association of
Securities Dealers, Inc.
(c) Each Agreement shall contain a representation by the Service Provider
that any compensation payable to the Service Provider in connection with an
investment in a Fund of the assets of its customers (i) will be disclosed by the
Service Provider to its customers, (ii) will be authorized by its customers, and
(iii) will not result in an excessive fee to the Service Provider.
SECTION 3. SHAREHOLDER SERVICE FEE.
Pursuant to this Plan, the Trust shall daily accrue and monthly pay Forum a
Shareholder Service Fee not to exceed (i) 0.25% per annum of the average daily
net assets of each Fund or (ii) the combined Payments made by Forum with respect
to each Fund for the month.
SECTION 4. SERVICE ACTIVITIES
Service activities include (a) establishing and maintaining accounts and
records relating to clients of Service Provider; (b) 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; (c) providing necessary personnel and facilities to establish and
maintain shareholder accounts and records; (d) assisting shareholders in
arranging for processing purchase, exchange and redemption transactions; (e)
arranging for the wiring of funds; (f) guaranteeing shareholder signatures in
connection with redemption orders and transfers and changes in shareholder-
designated accounts; (g) integrating periodic statements with other shareholder
transactions; and (h) providing such other related services as the shareholder
may request.
- 96 -
<PAGE>
SECTION 5. AMENDMENT AND TERMINATION
(a) Any material amendment to the Plan shall be effective only upon
approval of the Board, including a majority of the trustees who are not
interested persons of the Trust as defined in the Investment Company Act of 1940
(the "Disinterested Trustees"), pursuant to a vote cast in person at a meeting
called for the purpose of voting on the amendment to the Plan.
(b) The Plan may be terminated without penalty at any time by a vote of 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 the Plan, and
Forum agrees that, in asserting any rights or claims under this Plan, 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.
- 97 -
<PAGE>
THE CUTLER TRUST
SHAREHOLDER SERVICE PLAN
APPENDIX A:
FUNDS TO WHICH SHAREHOLDER SERVICE PLAN APPLIES
January 3, 1996
Cutler Income Equity Fund
Cutler Approved List Equity Fund
Cutler Government Securities Fund
- 98 -
<PAGE>
EXHIBIT 9(d)
<PAGE>
THE CUTLER TRUST
SHAREHOLDER SERVICE AGREEMENT
AGREEMENT made this day of , 199 , between Forum Financial
----- ------------ -
Services, Inc. ("Forum"), a corporation organized under the laws of State of
Delaware with its principal place of business at Two Portland Square, Portland,
ME 04101 and the institution executing this document below (the "Institution").
WHEREAS, Forum acts as administrator and principal underwriter of The
Cutler Trust (the "Trust"), a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "Act") as an open-end management
investment company, which may issue its shares of beneficial interest in
separate series; and
WHEREAS, the Trust has adopted a Shareholder Service Plan with respect to
each series of the Trust (the "Service Plan") that authorizes Forum to pay fees
to qualified financial institutions for maintaining and providing services to
shareholder accounts of each series of the Trust; and
WHEREAS, Forum desires that Institution perform certain service activities
on behalf of Forum and the Trust with respect to each series of the Trust listed
in Schedule A to this Agreement (each a "Fund," and collectively, the "Funds")
and Institution is willing to perform those services on the terms and conditions
set forth in this Agreement;
NOW, THEREFORE, for and in consideration of the representations, covenants
and agreements contained herein and other valuable consideration, the
undersigned parties do hereby agree as follows:
SECTION 1. SERVICE ACTIVITIES
In connection with providing services and maintaining shareholder accounts
of each Fund with respect to its various customers, Institution may provide
services including: (a) establishing and maintaining accounts and records
relating to clients of Institution; (b) 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;
(c) providing necessary personnel and facilities to establish and maintain
shareholder accounts and records; (d) assisting shareholders in arranging for
processing purchase, exchange and redemption transactions; (e) arranging for the
wiring of funds; (f) guaranteeing shareholder signatures in connection with
redemption orders and transfers and changes in shareholder-designated accounts;
(g) integrating periodic statements with other shareholder transactions; and (h)
providing such other related services as the shareholder may request.
Institution shall not be obligated to perform any specific service for its
clients. Institution's appointment shall be nonexclusive and Forum may enter
into similar agreements with other persons.
SECTION 2. COMPENSATION
(a) As compensation for Institution's service activities with respect to
each Fund, Forum shall pay Institution fees in the amounts listed on Schedule B
to this Agreement (the "Payments"); provided, however, that in no event will
Forum be required to make any payments for service activities in an amount
greater than that which Forum is paid by the respective Fund for such services.
(b) The Payments shall be accrued daily and paid monthly or at such other
interval as Forum and Institution shall agree.
(c) On behalf of each Fund, Institution may spend such amounts and incur
such expenses as it deems appropriate or necessary on any service activities.
Such expenses may include compensation to
- 100 -
<PAGE>
employees and expenses, including overhead and telephone and other communication
expenses, of Institution. Institution shall be solely liable for any expenses
it incurs.
SECTION 3. REPRESENTATIONS OF INSTITUTION
Institution represents that:
(a) the compensation payable to it under this Agreement in connection with
the investment in any Fund of the assets of its customers (i) will be disclosed
by the Institution to its customers, (ii) will be authorized by its customers,
and (iii) will not result in an excessive fee to Institution;
(b) if it is a member of the National Association of Securities Dealers,
Inc. ("NASD"), it shall abide by the Rules of Fair Practice of the NASD;
(c) it will, in connection with sales and offers to sell shares, furnish
to or otherwise insure that each person to whom any such sale or offer is made
receives a copy of the appropriate Fund's or Funds' then current prospectus, as
applicable;
(d) it will purchase shares only from Forum as agent of the Trust and that
it will purchase shares only for the purpose of covering purchase orders already
received or for its own bona fide investment purposes;
(e) the performance of all its obligations hereunder will comply with all
applicable laws and regulations, including any applicable Federal securities
laws and any requirements to deliver confirmations to its customers, the
provisions of its charter documents and bylaws and all material contractual
obligations binding upon the Institution; and
(f) it will promptly inform the Trust of any change in applicable laws or
regulations (or interpretations thereof) or in its charter or bylaws or material
contracts which would prevent or impair full performance of any of its
obligations hereunder.
SECTION 4. TRUST LITERATURE
Institution is not authorized to make any representations concerning shares
of any Fund except those contained in the Fund's then current prospectus and
statement of additional information ("SAI") and printed information issued by
the Trust or by Forum as information supplemental to the prospectus. Forum will
supply Institution upon its request with prospectuses, SAIs, reasonable
quantities of supplemental sales literature and additional information.
Institution agrees not to use other advertising or sales material relating to a
Fund unless approved in writing by Forum in advance of such use. Any printed
information furnished by Forum other than the then current prospectus and SAI,
periodic reports and proxy solicitation materials are Forum's sole
responsibility and are not the responsibility of the Trust and the Trust shall
have no liability or responsibility to Institution in these respects unless
expressly assumed in connection therewith. Institution shall have no
responsibility with regard to the accuracy or completeness of any of the printed
information furnished by Forum and shall be held harmless by Forum from and
against any cost or loss arising therefrom.
SECTION 5. REPORTS
Institution shall prepare and furnish to Forum, at Forum's request, written
reports setting forth all amounts expended by Institution and identifying the
activities for which the expenditures were made.
SECTION 6. INDEMNIFICATION
Institution agrees to indemnify and hold harmless Forum and the Trust from
any claims, expenses, or liabilities incurred by Forum or the Trust as a result
of any act or omission of the Institution in connection with its services under
this Agreement.
- 101 -
<PAGE>
SECTION 7. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective on the date hereof and, upon its
effectiveness, shall supersede all previous agreements between the parties
covering the subject matter hereof.
(b) This Agreement may be terminated as follows:
(i) at any time, without the payment of any penalty, by the vote
of a majority of the Trustees of the Trust;
(ii) automatically in the event of the termination of the
Administration or Distribution agreements between the Trust and Forum or
the Service Plan;
(iii) automatically in the event of the assignment of this
Agreement as defined in the Act; and
(iv) by either party to the Agreement without cause by giving the
other party at least sixty (60) days' written notice of its intention to
terminate.
SECTION 8. NOTICES
Any notice under this Agreement shall be in writing and shall be addressed
and delivered, or mailed postage prepaid, to the other party's principal place
of business, or to such other place as shall have been previously specified by
written notice given to the other party.
SECTION 9. AMENDMENTS
Subject to approval of material amendments to the form of this Agreement by
the Trust's Board of Trustees, this Agreement may be amended by the parties at
any time. In addition, this Agreement may be amended by Forum from time to time
by the following procedure: Forum will mail a copy of the amendment to
Institution at its principal place of business or such other address as
Institution shall in writing provide to Forum. If Institution does not object
to the amendment within thirty (30) days after its receipt, the amendment will
become part of the Agreement. The Institution's objection must be in writing
and be received by Forum within the thirty days.
SECTION 10. USE OF THE TRUST'S NAME
Institution shall not use the name of the Trust on any checks, bank drafts,
bank statements or forms for other than internal use in a manner not approved by
the Trust prior thereto in writing; provided however, that the approval of the
Trust shall not be required for the use of the Trust's name which merely refers
in accurate and factual terms to the Trust in connection with the Institution's
role hereunder or which is required by any appropriate regulatory, governmental
or judicial authority; and further provided that in no event shall such approval
be unreasonably withheld or delayed.
SECTION 11. MISCELLANEOUS
(a) This Agreement shall be construed in accordance with the laws of the
State of New York.
(b) If any provision of this Agreement shall be held invalid by a court
decision, statute, rule or otherwise, the remainder of the Agreement shall not
be affected thereby.
- 102 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
INSTITUTION:
-----------------------------
Name of Institution
By:
--------------------------
Name:
------------------------
Title:
-----------------------
FORUM FINANCIAL SERVICES, INC.
By:
--------------------------
John Y. Keffer
President
- 103 -
<PAGE>
THE CUTLER TRUST
SHAREHOLDER SERVICE AGREEMENT
SCHEDULE A
SERIES OF THE CUTLER TRUST
Cutler Income Equity Fund
Cutler Approved List Equity Fund
Cutler Government Securities Fund
- 104 -
<PAGE>
THE CUTLER TRUST
SHAREHOLDER SERVICE AGREEMENT
SCHEDULE B
PAYMENTS PURSUANT TO THE SERVICE PLAN
0.15% of the average annual daily net assets of each Fund represented by shares
owned by investors for which Institution provides services pursuant to this
Agreement.
- 105 -
<PAGE>
THE CUTLER TRUST
SHAREHOLDER SERVICE AGREEMENT
APPENDIX A
PAYMENTS PURSUANT TO THE SERVICE PLAN
0.25% of the average daily net assets of each Fund represented by shares owned
by investors for which Institution maintains a servicing relationship.
- 106 -
<PAGE>
EXHIBIT 10
<PAGE>
LAW OFFICES OF
4000 BELL ATLANTIC TOWER DECHERT PRICE & RHOADS 1500 K STREET, N.W.
1717 ARCH STREET WASHINGTON, DC 20005-1208
(215) 994-4000 477 MADISON AVENUE (202) 626-3300
214 CARNEGIE CENTER NEW YORK, NY 10022-5891 TEN POST OFFICE SQUARE SOUTH
PRINCETON, NJ 08540-6237 BOSTON, MA 02109-4603
(609) 520-3200 (617) 728-7100
TWENTY NORTH MARKET SQUARE TELEPHONE: (212) 326-3500 52 BEDFORD SQUARE
HARRISBURG, PA 17101-1603 LONDON WC1B 3EX. ENGLAND
(717) 237-2000 TELEX: 645612 BARDEP NY (071) 631-3383
FAX: (212) 308-2041 65 AVENUE LOUISE, BOX NO. 4
1050 BRUSSELS, BELGIUM
(02) 535-5411
December 31, 1992
The Cutler Trust
61 Broadway
New York, New York 10006
Dear Sir/Madam:
The Cutler Trust ("Trust") is an unincorporated voluntary association
organized under the laws of the State of Delaware pursuant to a Trust Instrument
dated October 2, 1992. You have requested our opinion regarding certain matters
in connection with the Trust's issuance of shares of beneficial interest
("Shares") in three series of the trust designated as Cutler Equity Income Fund,
Cutler Approved List Equity Fund and Cutler Government Securities Fund,
respectively.
We have, as counsel, participated in various business and other matters
related to the Trust. We have examined copies, either certified or otherwise
proved to be genuine, of the Trust Instrument and By-Laws of the Trust and other
documents relating to the organization and operation of the Trust, and we
generally are familiar with its business affairs. Based on the foregoing, it is
our opinion that the unlimited number of unissued Shares designated as Cutler
Equity Income Fund, Cutler Approved List Equity Fund and Cutler Government
Securities Fund, respectively, which are currently being registered, may be
legally and validly issued from time to time in accordance with the Trust's
Trust Instrument and By-Laws and subject to compliance with the Securities Act
of 1933, the Investment Company Act of 1940, and applicable state laws
regulating the offer and sale of securities; and when so issued, will be legally
issued, fully paid and nonassessable by the Trust.
The Trust is an entity of the type commonly known as a "business trust."
Under the laws of certain states, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust. The
Trust Instrument states that shareholders of the Trust shall not be personally
liable for the debts, liabilities, obligations and expenses incurred by,
contracted for, or otherwise existing with respect to, the Trust or by or on
behalf of any series of the Trust. It also requires that notice of such
limitation be given on each note, bond, contract or other undertaking issued by
or on behalf of the Trust or the Trustees. The Trust Instrument further
provides (I) for indemnification out of the assets of the applicable series for
all losses and expenses of any shareholder held personally liable for the
obligations of the trust solely by virtue of ownership of shares of the Trust
and (ii) for the Trust, upon the request of a shareholder, to assume the defense
of any claim against the shareholder for any act or obligation of the Trust.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the applicable series
would be unable to meet its obligations.
We hereby consent to the filing of this opinion in connection with the
Trusted Registration statement on Form N-1A to be filed with the Securities and
Exchange Commission.
Very truly yours,
/s/Dechert Price & Rhoads
Dechert Price & Rhoads
-108-
<PAGE>
EXHIBIT 11
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the use in Post-Effective Amendment No. 4 to Registration
Statement No. 33-52850 of The Cutler Trust of our report dated August 17, 1995,
incorporated by reference in the Statement of Additional Information, which is a
part of such Registration Statement, and to the references to us under the
headings "Financial Highlights" in the Prospectus, which is a part of such
Registration Statement, and "Custodian and Auditor" in the Statement of
Additional Information.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
New York, New York
March 4, 1996
-110-
<PAGE>
<PAGE>
EXHIBIT 13
<PAGE>
December 30, 1992
Board of Trustees
The Cutler Trust
61 Broadway
New York, NY 10006
Gentlemen:
In connection with my purchase of 2,500 shares of Cutler Equity Income
Fund, 8,800 shares of Cutler Approved List Equity Fund and 2,700 shares of
Cutler Government Fund, each fund an initial portfolio of The Cutler Trust, and
for the consideration of cash in the amount of $10.00 per share, this letter
will confirm that I am purchasing those shares for my own account for investment
only and not with a view to reselling or otherwise distributing those shares.
Sincerely,
/s/Kenneth R. Cutler
Kenneth R. Cutler
-112-
<PAGE>
OTHER (A)
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Brooke R. Ashland constitutes and
appoints John Y. Keffer, Max Berueffy, David I. Goldstein and William Goodwin,
and each of them, as true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for her and in her name, place and
stead, in any and all capacities, to sign the Registration Statement on Form
N-1A and any or all amendments thereto of The Cutler Trust and to file the same
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or their or his
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
/s/ Brooke R. Ashland
------------------------------
Brooke R. Ashland
Dated: December 29, 1995
-114-
<PAGE>
OTHER (B)
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Kenneth R. Cutler constitutes and
appoints John Y. Keffer, Max Berueffy, David I. Goldstein and William Goodwin,
and each of them, as true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign the Registration Statement on Form
N-1A and any or all amendments thereto of The Cutler Trust and to file the same
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or their or his
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
/s/ Kenneth R. Cutler
---------------------
Kenneth R. Cutler
Dated: February 12, 1996
-116-
<PAGE>
OTHER (C)
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Hatten S. Yoder, Jr. constitutes and
appoints John Y. Keffer, Max Berueffy, David I. Goldstein and William Goodwin,
and each of them, as true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign the Registration Statement on Form
N-1A and any or all amendments thereto of The Cutler Trust and to file the same
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or their or his
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
/s/ Hatten S. Yoder, Jr.
--------------------------
Hatten S. Yoder, Jr.
Dated: December 28, 1995
-118-
<PAGE>
OTHER (D)
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that John Y. Keffer constitutes and
appoints Max Berueffy, David I. Goldstein and William Goodwin, and each of them,
as true and lawful attorneys-in-fact and agents with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign the Registration Statement on Form N-1A and any or all
amendments thereto of The Cutler Trust and to file the same with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their or his substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
/s/ John Y. Keffer
-----------------------------
John Y. Keffer
Dated: December 28, 1995
-120-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CUTLER
EQUITY INCOME FUND DATED 12/30/95 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH REPORT.
</LEGEND>
<SERIES>
<NUMBER> 010
<NAME> CUTLER EQUITY INCOME FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-30-1995
<INVESTMENTS-AT-COST> 38,891,131
<INVESTMENTS-AT-VALUE> 47,515,492
<RECEIVABLES> 48,041
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 47,563,533
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 91,064
<TOTAL-LIABILITIES> 91,064
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 38,544,645
<SHARES-COMMON-STOCK> 3,814,422
<SHARES-COMMON-PRIOR> 3,785,081
<ACCUMULATED-NII-CURRENT> 18,473
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 212,990
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 8,696,361
<NET-ASSETS> 47,472,469
<DIVIDEND-INCOME> 870,857
<INTEREST-INCOME> 34,650
<OTHER-INCOME> 0
<EXPENSES-NET> 216,796
<NET-INVESTMENT-INCOME> 688,711
<REALIZED-GAINS-CURRENT> 291,025
<APPREC-INCREASE-CURRENT> 5,835,943
<NET-CHANGE-FROM-OPS> 6,815,679
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 705,125
<DISTRIBUTIONS-OF-GAINS> 535,464
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,393,378
<NUMBER-OF-SHARES-REDEEMED> 3,496,530
<SHARES-REINVESTED> 1,530,954
<NET-CHANGE-IN-ASSETS> 6,002,892
<ACCUMULATED-NII-PRIOR> 1,136,677
<ACCUMULATED-GAINS-PRIOR> 843,392
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 109,273
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 216,796
<AVERAGE-NET-ASSETS> 43,471,524
<PER-SHARE-NAV-BEGIN> 10.96
<PER-SHARE-NII> .19
<PER-SHARE-GAIN-APPREC> 1.63
<PER-SHARE-DIVIDEND> .19
<PER-SHARE-DISTRIBUTIONS> .14
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.45
<EXPENSE-RATIO> .99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CUTLER
APPROVED LIST EQUITY FUND DATED 12/30/95 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH REPORT.
</LEGEND>
<SERIES>
<NUMBER> 020
<NAME> CUTLER APPROVED LIST EQUITY FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-30-1995
<INVESTMENTS-AT-COST> 21,257,205
<INVESTMENTS-AT-VALUE> 27,181,231
<RECEIVABLES> 60,694
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 27,241,925
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 41,258
<TOTAL-LIABILITIES> 41,258
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 21,290,655
<SHARES-COMMON-STOCK> 2,044,946
<SHARES-COMMON-PRIOR> 1,869,065
<ACCUMULATED-NII-CURRENT> 3,783
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (17,797)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,924,026
<NET-ASSETS> 27,200,667
<DIVIDEND-INCOME> 349,390
<INTEREST-INCOME> 11,695
<OTHER-INCOME> 0
<EXPENSES-NET> 124,841
<NET-INVESTMENT-INCOME> 236,244
<REALIZED-GAINS-CURRENT> 212,206
<APPREC-INCREASE-CURRENT> 3,012,689
<NET-CHANGE-FROM-OPS> 3,461,139
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 234,807
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,772,232
<NUMBER-OF-SHARES-REDEEMED> 2,021,205
<SHARES-REINVESTED> 333,438
<NET-CHANGE-IN-ASSETS> 5,310,797
<ACCUMULATED-NII-PRIOR> 367,432
<ACCUMULATED-GAINS-PRIOR> (130,093)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 62,309
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 130,841
<AVERAGE-NET-ASSETS> 24,788,187
<PER-SHARE-NAV-BEGIN> 11.71
<PER-SHARE-NII> .12
<PER-SHARE-GAIN-APPREC> 1.59
<PER-SHARE-DIVIDEND> .12
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.30
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CUTLER
GOVERNMENT DATED 12/30/95 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
REPORT
</LEGEND>
<SERIES>
<NUMBER> 030
<NAME> CUTLER GOVERNMENT SECURITIES FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-30-1995
<INVESTMENTS-AT-COST> 6,660,716
<INVESTMENTS-AT-VALUE> 6,806,596
<RECEIVABLES> 105,892
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,912,488
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12,860
<TOTAL-LIABILITIES> 12,860
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6,809,888
<SHARES-COMMON-STOCK> 668,379
<SHARES-COMMON-PRIOR> 672,700
<ACCUMULATED-NII-CURRENT> 720
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (56,860)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 145,880
<NET-ASSETS> 6,899,628
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 196,487
<OTHER-INCOME> 0
<EXPENSES-NET> 25,249
<NET-INVESTMENT-INCOME> 171,238
<REALIZED-GAINS-CURRENT> (54,618)
<APPREC-INCREASE-CURRENT> 199,077
<NET-CHANGE-FROM-OPS> 315,697
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 170,518
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 905,672
<NUMBER-OF-SHARES-REDEEMED> 1,126,865
<SHARES-REINVESTED> 180,059
<NET-CHANGE-IN-ASSETS> 104,045
<ACCUMULATED-NII-PRIOR> 276,319
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 8395
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 44,261
<AVERAGE-NET-ASSETS> 6,679,843
<PER-SHARE-NAV-BEGIN> 10.10
<PER-SHARE-NII> .26
<PER-SHARE-GAIN-APPREC> .22
<PER-SHARE-DIVIDEND> .26
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.32
<EXPENSE-RATIO> .75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
