AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 15, 1997
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. 7
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 9
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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:
__X__ immediately upon filing pursuant to Rule 485, paragraph (b)
_____ on [ ] pursuant to Rule 485, paragraph (b)
_____ 60 days after filing pursuant to Rule 485, paragraph (a)(i)
_____ on [ ] pursuant to Rule 485, paragraph (a)(i)
_____ 75 days after filing pursuant to Rule 485, paragraph (a)(ii)
_____ on [ ] pursuant to Rule 485, paragraph (a)(ii)
_____ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
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, 1997 was filed with the Commission
on or about August 27, 1997.
<PAGE>
CROSS REFERENCE SHEET
(as required by Rule 404(a))
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
and Distributor
Item 22. Calculation of Performance Data
Performance Data
Item 23. Financial Statements Financial Statements
<PAGE>
THE
CUTLER
TRUST
- -------
PROSPECTUS
SEPTEMBER 15, 1997
This Prospectus relates to
CUTLER EQUITY INCOME FUND
CUTLER APPROVED LIST EQUITY FUND
The Cutler Trust (the "Trust") is an open-end, management investment
company (a mutual fund). The Cutler Equity Income Fund and Cutler Approved List
Equity Fund (individually a "Fund" and collectively the "Funds") are each
diversified no-load portfolios of the Trust.
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.
As the future is unknown, obviously there can be no assurance that either 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 September 15, 1997. 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.
CONTENTS
Page
1. Expenses of Investing in the Trust.........................................3
2. Financial Highlights.......................................................4
3. Investment Objectives and Policies.........................................6
4 Risk Considerations........................................................7
5. Management of the Trust....................................................7
6. Purchases and Redemptions of Shares........................................9
7. Dividends and Tax Matters.................................................12
8. Performance Information...................................................13
9. The Trust and Its Shares..................................................14
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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.
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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.
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<PAGE>
(This Page Intentionally Left Blank)
2
<PAGE>
EXPENSES OF INVESTING IN THE TRUST
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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>
<S> <C> <C> <C>
Cutler Cutler
Equity Approved List
ANNUAL FUND OPERATING EXPENSES Income Equity
(as a percentage of average net assets) Fund Fund
------------------------------------- ---- ----
Investment Advisory Fee 0.75% 0.75%
Other Expenses 0.42% 0.50%
----- -----
Total Annual Fund Operating Expenses 1.17% 1.25%
</TABLE>
For a further description of the various expenses incurred in the operation
of the Fund, see "Management of the Trust - Expenses."
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>
<S> <C> <C> <C> <C>
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
Cutler Equity Income Fund $12 $37 $64 $142
Cutler Approved List Equity Fund $13 $40 $69 $151
</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.
3
<PAGE>
FINANCIAL HIGHLIGHTS
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The following tables represent selected data for a single outstanding share
of each Fund for the periods shown. Information for the periods was audited by
Deloitte & Touche LLP, independent auditors. The Funds' financial statements for
the fiscal year ended June 30, 1997 and independent auditors' report thereon are
contained in the Annual Report of the Funds and are incorporated by reference
into the Statement of Additional Information. Further information about each
Fund's performance is contained in the Funds' Annual Report to shareholders,
which may be obtained from the Trust without charge.
<TABLE>
CUTLER
EQUITY INCOME
FUND
----------------------------------------------------------------------
Year Ended June 30,
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1994 1993(a)
----------- ----------- ---------- ----------- -----------
Net Asset Value, Beginning of Period $12.95 $10.96 $9.56 $9.95 $10.00
----------- ----------- ---------- ----------- -----------
Investment Operations:
Net Investment Income (Loss) 0.24 0.35 0.36(b) 0.27 0.10
Net Realized and Unrealized
Gain (Loss) on Investments 4.30 2.13 1.40 (0.40) (0.05)
----------- ----------- ---------- ----------- -----------
Total from Investment Operations 4.54 2.48 1.76 (0.13) 0.05
----------- ----------- ---------- ----------- -----------
Distributions From:
Net Investment Income (0.24) (0.35) (0.34) (0.26) (0.10)
Net Realized Gain on Investments (1.19) (0.14) (0.02) 0.00 0.00
----------- ----------- ---------- ----------- -----------
Total Distributions (1.43) (0.49) (0.36) (0.26) (0.10)
----------- ----------- ---------- ----------- -----------
Net Asset Value, End of Period $16.06 $12.95 $10.96 $9.56 $9.95
=========== =========== ========== =========== ===========
Total Return 37.65% 22.93% 18.63% (1.37%) 0.90%(c)
Ratio/Supplementary Data:
Net Assets at End of Period (000's omitted) $62,523 $46,285 $41,470 $19,706 $2,583
Ratios to Average Net Assets:
Expenses Including Reimbursement/Waiver 1.17% 0.98% 0.97% 1.00% 0.98%(c)
Expenses Excluding Reimbursement/Waiver 1.17% 0.98% 0.97% 1.45% 3.69%(c)
Net Investment Income (Loss)
Including Reimbursement/Waiver 1.67% 2.81% 3.49% 3.49% 2.23%(c)
Portfolio Turnover Rate 23.22% 57.08% 43.37% 42.83% 32.04%
Average Commission Rate(d) $0.0509 $0.0525 - - -
(a) The Fund commenced operations on December 30, 1992.
(b) Calculated using the weighted average shares outstanding.
(c) Annualized.
(d) For the fiscal years beginning on or after September 1, 1995, the Fund is
required to disclose average commission per share paid to brokers on the
purchase or sale of equity securities.
</TABLE>
4
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS (CONTINUED)
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CUTLER
APPROVED LIST
EQUITY FUND
----------------------------------------------------------------------
Year Ended June 30,
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1994 1993(a)
----------- ----------- ---------- ----------- -----------
Net Asset Value, Beginning of Period $14.18 $11.71 $9.78 $10.09 $10.00
----------- ----------- ---------- ----------- -----------
Investment Operations:
Net Investment Income (Loss) 0.18 0.21 0.24(b) 0.21 0.08
Net Realized and Unrealized
Gain (Loss) on Investments 4.20 2.47 1.92 (0.31) 0.09
----------- ----------- ---------- ----------- -----------
Total from Investment Operations 4.38 2.68 2.16 (0.10) 0.17
----------- ----------- ---------- ----------- -----------
Distributions From:
Net Investment Income (0.18) (0.21) (0.23) (0.21) (0.08)
Net Realized Gain on Investments (0.05) 0.00 0.00 0.00 0.00
----------- ----------- ---------- ----------- -----------
Total Distributions (0.23) (0.21) (0.23) (0.21) (0.08)
----------- ----------- ---------- ----------- -----------
Net Asset Value, End of Period $18.33 $14.18 $11.71 $9.78 $10.09
=========== =========== ========== =========== ===========
Total Return 31.18% 23.01% 22.33% (1.07%) 3.31%(c)
Ratio/Supplementary Data:
Net Assets at End of Period (000's omitted) $35,277 $30,248 $21,890 $12,620 $3,618
Ratios to Average Net Assets:
Expenses Including Reimbursement/Waiver 1.25% 1.05% 1.00% 1.00% 0.98%(c)
Expenses Excluding Reimbursement/Waiver 1.25% 1.13% 1.23% 1.78% 4.53%(c)
Net Investment Income (Loss)
Including Reimbursement/Waiver 1.15% 1.65% 2.20% 2.43% 2.27%(c)
Portfolio Turnover Rate 3.86% 8.97% 23.42% 22.27% 10.88%
Average Commission Rate(d) $0.0600 $0.0569 - - -
(a) The Fund commenced operations on December 30, 1992.
(b) Calculated using the weighted average shares outstanding.
(c) Annualized.
(d) For the fiscal years beginning on or after September 1, 1995, the Fund is
required to disclose average commission per share paid to brokers on the
purchase or sale of equity securities.
</TABLE>
5
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
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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 at least 90%
of the common stocks within the Approved List.
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 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 rated 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 Funds normally are made by Cutler & Company primarily to
maintain quality (adhering to the Approved List) and to rebalance the portfolio;
the Cutler Equity Income Fund will also trade within the Approved List to
improve its yield. The Funds normally 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 Funds will be rebalanced periodically to maintain holdings weighted
to reflect the anticipated total return of each Fund's portfolio securities.
Such rebalancing may result in substantial "tilts" (a heavier weighting on some
issues). 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 Fund will
invest at least 65% of its total assets in the income producing equity
securities in the Approved List.
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".
6
RISK CONSIDERATIONS
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CUTLER EQUITY INCOME FUND AND CUTLER APPROVED LIST EQUITY FUND 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, 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 you paid for them.
MANAGEMENT OF THE TRUST
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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.
INVESTMENT ADVISER
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 Fund
at an annual rate of 0.75% of each Fund's average daily net assets. Cutler &
Company has agreed to waive its fees or reimburse expenses of the Funds to the
extent the Approved List or Equity Income Fund's expenses exceed 1.25% of its
annual average daily net until December 31, 1997.
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 $1.2 billion, including the Funds.
Mr. Kenneth R. Cutler, who is primarily responsible for investment
decisions for the 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 the Chairman and Vice President of the
Trust.
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 64% and
Geoffrey W. Cutler (Kenneth Cutler's son) owned 18% of the outstanding limited
liability company interests in Cutler & Company, with the balance held by other
employees of the firm.
ADMINISTRATION AND DISTRIBUTION
ADMINISTRATOR. Pursuant to a management agreement with the Trust, Forum
Administrative Services, LLC ("FAS") located at Two Portland Square, Portland,
Maine 04101 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.
For its administrative services, FAS 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.
DISTRIBUTOR. Forum Financial Services, Inc. ("FFSI"), serves as the Trust's
distributor and, as agent of the Trust, offers for sale shares of the Funds.
FFSI, whose address is Two Portland Square, Portland, Maine 04101, is a
registered broker-dealer and a member of the National Association of Securities
Dealers, Inc.
7
MANAGEMENT OF THE TRUST (CONTINUED)
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SHAREHOLDER SERVICES
TRANSFER AGENT. 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 for each shareholder of record, an account (unless such
accounts are maintained by sub-transfer agents or processing agents) to which
all shares purchased are credited, together with any distributions that are
reinvested in additional shares. FFC also performs other transfer agency and
shareholder-related functions.
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 FAS to enter into agreements pursuant to
which the shareholder servicing agents perform certain shareholder services not
otherwise provided by FAS. 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 that may be provided by FAS or 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.
ACCOUNTING SERVICES. Forum Accounting Services, LLC, ("FAcS") performs
portfolio accounting services for the Funds, including determination of each
Fund's net asset value per share.
FORUM FINANCIAL GROUP
FAS, FFSI, FFC and FAcS are members of the Forum Financial Group ("FFG") of
companies which together provide a full range of services to the investment
company and financial services industry. As of the date of this Prospectus, FFG
provided services to registered investment companies and collective investment
funds with assets of approximately $19 billion. FAS, FFSI and FFC are controlled
by John Y. Keffer, a trustee and the President of the Trust.
EXPENSES
The Adviser has agreed to reimburse the Trust for certain of the Funds'
operating expenses (exclusive of interest, taxes, brokerage fees and
organization 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 Funds' shares are qualified for sale. The Trust may elect not to qualify its
shares for sale in every state. For the purpose of this obligation to reimburse
expenses, a Fund's annual expenses are estimated and accrued daily, and any
appropriate estimated payments will be made by the Adviser monthly. Subject to
the above obligations, the Trust is obligated to pay all of the Trust's other
expenses.
8
<PAGE>
PURCHASES AND REDEMPTIONS OF SHARES
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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. Eastern
Time except days when the New York Stock Exchange is closed, normally, New
Year's Day, Martin Luther King, Jr. 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 toll free 888-CUTLER4 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.
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 toll free at 888-CUTLER4 to obtain an account number. You should
then instruct a member commercial bank to wire your money immediately to:
BankBoston
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)
9
<PAGE>
PURCHASES AND REDEMPTIONS OF SHARES (CONTINUED)
- --------------------------------------------------------------------------------
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 FFSI. 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 toll free at
888-CUTLER4 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. Eastern Time, 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 or her 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.
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 "Other Redemption
Matters."
TELEPHONE REDEMPTIONS. A shareholder that has elected telephone redemption
privileges may make a telephone redemption request by calling FFC at
207-879-0001 or toll free at 888-CUTLER4. 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
10
<PAGE>
PURCHASES AND REDEMPTIONS OF SHARES (CONTINUED)
- --------------------------------------------------------------------------------
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 FFC at Two Portland Square, Portland, Maine
04101.
OTHER REDEMPTION MATTERS. A signature guarantee is required for any written
redemption request and for any endorsement on a stock certificate. In addition,
a signature guarantee also is required for instructions to change a
shareholder's record name or address, designated bank account for wire
redemptions or automatic investment or redemption, dividend election, telephone
redemption or exchange option election or any other option election in
connection with the shareholder's account. Signature guarantees may be provided
by any eligible institution, including a bank, a broker, a dealer, a national
securities exchange, a credit union, or a savings association that is authorized
to guarantee signatures, acceptable to the Transfer Agent. Whenever a signature
guarantee is required, the signature of each person required to sign for the
account must be guaranteed. Such guarantee must have "Signature Guaranteed"
stamped under each signature and must be signed by the eligible institution.
The Transfer Agent will deem a shareholder's account "lost" if
correspondence to the shareholder's address of record is returned for six
months, unless the Transfer Agent determines the shareholder's new address. When
an account is deemed lost all distributions on the account will be reinvested in
additional shares of the Fund. In addition, the amount of any outstanding
(unpaid for six months or more) checks for distributions that have been returned
to the Transfer Agent will be reinvested and the checks will be canceled.
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 the other
Fund, the Daily Assets Treasury Fund, a money market fund managed by FAS and a
separate series of Forum Funds or the Investors Bond Fund, also a separate
series of Forum Funds managed by FAS. You may receive a copy of the prospectus
for the Daily Assets Treasury Fund or the Investors Bond Fund by writing FFC or
calling toll free at 888-CUTLER4. No sales charges are imposed on exchanges
between a Fund and the Daily Assets Treasury Fund. Exchanges into the Investors
Bond Fund are subject to the fees charged by that fund as set forth in the
Investor Bond Fund's prospectus.
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 or the Investors Bond 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
11
<PAGE>
PURCHASES AND REDEMPTIONS OF SHARES (CONTINUED)
- --------------------------------------------------------------------------------
tax purposes. The exchange privilege is available to shareholders residing in
any state in which shares of the Daily Assets Treasury Fund or the Investors
Bond Fund, as applicable, may legally be sold.
TELEPHONE EXCHANGES. If you have elected telephone exchange privileges, you
may request an exchange by calling FFC toll free at 888-CUTLER4. 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.
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 an 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 toll free at 888-CUTLER4, 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.
DIVIDENDS AND TAX MATTERS
- --------------------------------------------------------------------------------
DIVIDENDS
Dividends of each Fund's net investment income are declared and paid
quarterly. 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
12
<PAGE>
DIVIDENDS AND TAX MATTERS (CONTINUED)
designates as "capital gain 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 a 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 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 advisers.
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 refer to 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.
13
<PAGE>
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 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.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, THE STATEMENT OF
ADDITIONAL INFORMATION AND THE FUNDS' OFFICIAL SALES LITERATURE IN CONNECTION
WITH THE OFFERING OF THE FUNDS' SHARES, AND IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
TRUST. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO
ANY PERSON TO WHOM, SUCH OFFER MAY NOT LAWFULLY BE MADE.
14
<PAGE>
INVESTMENT ADVISER:
Cutler & Company, LLC
503 Airport Road
Medford, Oregon 97504
(541) 770-9000
(800) 228-8537
ADMINISTRATOR:
Forum Administrative Services, LLC
Two Portland Square
Portland, Maine 04101
(800) 237-3113
DISTRIBUTOR:
Forum Financial Services, Inc.
Two Portland Square
Portland, Maine 04101
(800) 237-3113
SHAREHOLDER ACCOUNT INFORMATION:
Forum Financial Corp.
Two Portland Square
Portland, Maine 04101
Toll free (888) CUTLER4
[GRAPHIC OF CRATER LAKE, OR]
THE CUTLER TRUST
PROSPECTUS
SEPTEMBER 15, 1997
CUTLER EQUITY INCOME FUND
CUTLER APPROVED LIST EQUITY FUND
<PAGE>
CUTLER EQUITY INCOME FUND
CUTLER APPROVED LIST EQUITY FUND
<TABLE>
<S> <C> <C> <C>
INVESTMENT ADVISER: ADMINISTRATOR: DISTRIBUTOR: SHAREHOLDER ACCOUNT
Cutler & Company, LLC Forum Administrative Forum Financial Services, INFORMATION:
503 Airport Road Services, LLC Inc. Forum Financial Corp.
Medford, Oregon 97504 Two Portland Square Two Portland Square Two Portland Square
(541) 770-9000 Portland, Maine 04101 Portland, Maine 04101 Portland, Maine 04101
(800) 228-8537 (800) 237-3113 (800) 237-3113 Toll free (888) CUTLER4
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
September 15, 1997
This Statement of Additional Information supplements the Prospectus offering
shares of the Cutler Equity Income Fund and the Cutler Approved List Equity Fund
(each a "Fund" and collectively the "Funds"), two 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
Administrator 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
Exchanges Between Funds
Additional Redemption Matters
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 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, in which case a Fund would bear its
pro rata portion of the other investment company'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."
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
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
2
<PAGE>
(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 C. ASHLAND, Trustee (age 46).
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 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 (age 77).
Principal Portfolio Manager of the 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 (age 55).
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 Administrative Services, LLC serves as
manager or administrator. His address is Two Portland Square,
Portland, Maine 04101.
DR. HATTEN S. YODER, JR., Trustee (age 76).
Director Emeritus, Geophysical Laboratory, Carnegie Institution 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.
ROBERT B. WATTS, JR., Trustee (age 66).
3
<PAGE>
Counsel, Northhaven Associates (private legal practice) since 1990.
His address is 2230 Brownsboro Highway Eagle Point, Oregon 97524.
CAROL FISCHER, Vice President, Assistant Secretary and Assistant Treasurer
(age 41).
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 (age 45).
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 Administrative Services, LLC serves as manager or
administrator. His address is Two Portland Square, Portland, Maine
04101.
DAVID I. GOLDSTEIN, Assistant Secretary (age 36).
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
Administrative Services, LLC serves as manager or administrator. His
address is Two Portland Square, Portland, Maine 04101.
TRACI E. BLOCK, Assistant Secretary (age 41).
Fund Administrator, Forum Financial Services, Inc., with which she has
been associated since 1995. Prior thereto, Ms. Block was a legal
assistant with the law firm of Pierce, Atwood in Portland, Maine. Ms.
Block is also an officer of various registered investment companies
for which Forum Administrative Services, LLC serves as manager or
administrator. Her address is Two Portland Square, Portland, Maine
04101.
Robert Campbell, Treasurer (age 36)
Director of Fund Accounting, Forum Financial Corp., with which he has
been associated since April 1997. Prior thereto, Mr. Campbell was the
Vice President of Domestic Operations for State Street Fund Services in
Toronto, Ontario, and prior to that, Mr. Cambell served as Assistant
Vice President/Fund Manager of Mutual Fund, State Street Bank & Trust
in Boston, Massachusetts. Mr. Campbell is also treasurer of various
registered investment companies for which Forum Administrative
Services, LLC or Forum Financial Services, Inc. serves as manager,
administrator and/or distributor. His address is Two Portland Square,
Portland, Maine 04101.
Enya H. Carter, Assistant Treasurer (age 29)
Accounting Manager, Forum Financial Corp., with which she has been
associated Since November 1993. Before that, Ms. Carter was an
accountant and office manager for Operations Management, Inc., a
restaurant holding company. Her address is Two Portland Square,
Portland, Maine 04101.
Cheryl O. Tumlin, Assistant Secretary (age 31)
Assistant Counsel, Forum Financial Services, Inc., with which she has
been associated since July 1996. Prior thereto, Ms. Tumlin was on the
staff of the U.S. Securities and Exchange Commission as an attorney in
the Division of Market Regulation and prior thereto Ms. Tumlin was an
associate with the law firm of Robinson Silverman Pearce Aronsohn &
Berman in New York, New York. Ms. Tumlin is also Assistant Secretary of
various registered investment companies for which Forum Administrative
Services, LLC or Forum Financial Services, Inc. serves as manager,
administrator and/or distributor. Her address is Two Portland Square,
Portland, Maine 04101.
* John Y. Keffer, Brooke C. 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 C. Ashland's father.
4
<PAGE>
For the fiscal year ended June 30, 1997, the aggregate compensation paid to the
Trustees of the Trust by the funds is as follows: Dr. Hatten S. Yoder, Jr.,
$10,833; Mr. Robert B. Watts, Jr., $10,833. 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. Non-interested 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>
<S> <C> <C> <C> <C>
Advisory Fee Advisory Fee Advisory Fee
Payable Waived Retained
------------ ------------ ------------
CUTLER EQUITY INCOME FUND
Year Ended June 30, 1997 $385,655 $0 $385,655
Year Ended June 30, 1996 244,542 0 244,542
Year Ended June 30, 1995 163,051 0 163,051
CUTLER APPROVED LIST EQUITY FUND
Year Ended June 30, 1997 $230,877 $0 $230,877
Year Ended June 30, 1996 147,509 4,351 143,158
Year Ended June 30, 1995 83,557 15,411 68,146
</TABLE>
ADMINSTRATOR AND DISTRIBUTOR
Forum Administrative Services, LLC ("FAS") 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
5
<PAGE>
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 FAS 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 FAS's duties or by reason of reckless
disregard of its obligations and duties under the Management Agreement.
At the request of the Board, FAS 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
FAS, Cutler & Company or their affiliates.
The following table shows the dollar amount of fees payable under the Management
Agreements between FAS and the Trust with respect to each Fund, the amount of
fee that was waived by FAS, if any, and the actual fee received by FAS. The
data are for the past three fiscal years.
<TABLE>
<S> <C> <C> <C> <C> <C>
Management Fee Management Fee Management Fee
Payable Waived Retained
-------------- -------------- ---------------
CUTLER EQUITY INCOME FUND
Year Ended June 30, 1997 $51,421 $0 $51,421
Year Ended June 30, 1996 45,027 0 45,027
Year Ended June 30, 1995 32,610 0 32,610
CUTLER APPROVED LIST EQUITY FUND
Year Ended June 30, 1997 $30,783 $0 $30,783
Year Ended June 30, 1996 26,997 0 26,997
Year Ended June 30, 1995 16,711 7,613 9,098
</TABLE>
Forum Financial Services, Inc. ("FFSI") is 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. FFSI receives no compensation or reimbursement of expenses for
the distribution services provided pursuant to the Distribution Agreement.
The Distribution Agreement provides that FFSI 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 FFSI'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 FFSI.
6
<PAGE>
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 FFSI 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 twelve month periods
thereafter. Cutler & Company may act as a sub-transfer 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.
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>
<S> <C> <C> <C> <C> <C>
Transfer Agent and Transfer Agent and Transfer Agent and
Accounting Fee Accounting Fee Accounting Fee
Payable Waived Retained
------------------ ------------------ ------------------
CUTLER EQUITY INCOME FUND
Year Ended June 30, 1997 $52,479 $0 $52,479
Year Ended June 30, 1996 54,422 0 54,422
Year Ended June 30, 1995 50,716 0 50,716
CUTLER APPROVED LIST EQUITY FUND
Year Ended June 30, 1997 $58,317 $1,780 $56,537
Year Ended June 30, 1996 63,471 12,000 51,471
Year Ended June 30, 1995 60,989 0 60,989
</TABLE>
CUSTODIAN AND AUDITOR
Pursuant to a Custodian Agreement with the Trust, BankBoston, 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, 125 Summer Street, Boston, Massachusetts 02110,
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
7
<PAGE>
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, 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, Dr. Martin Luther King, Jr. 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 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. No
portfolio transactions are executed with Cutler & Company or any of its
affiliates.
8
<PAGE>
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.
Aggregate
Commissions
Paid
-----------
CUTLER EQUITY INCOME FUND
Year Ended June 30, 1997 $25,693
Year Ended June 30, 1996 50,146
Year Ended June 30, 1995 42,374
CUTLER APPROVED LIST EQUITY FUND
Year Ended June 30, 1997 $ 9,110
Year Ended June 30, 1996 10,983
Year Ended June 30, 1995 19,824
During the fiscal year ended June 30, 1997, the Cutler Approved List Equity Fund
acquired securities of its regular brokers or dealers (as defined in Rule 10b-1
under the 1940 Act) or their parents; the value of the aggregate holdings were
as follows: $524,700 in Merrill Lynch & Company, Inc.
9
<PAGE>
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 the other Fund or
for shares of the Daily Assets Treasury Fund, a money market fund managed by FAS
and a separate series of Forum Funds, or the Investors Bond Fund, also a
separate series of Forum Funds managed by FAS. 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.
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
10
<PAGE>
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.
11
<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 August 31, 1997, the officers and trustees of the Trust owned as a group
less than 1% of the outstanding shares of each Fund. Also as of that date, the
following persons owned of record 5% or more of the outstanding shares of each
Fund:
CUTLER EQUITY INCOME FUND
- -------------------------
ENTERPRISE TRUST & INVESTMENT CO. TTEE THE KARL KIRCHGESSNER FOUNDATION
FBO BIG CREEK LUMBER PROFIT SHARING 1278 Glenneyre, Suite 311
3654 Highway 1 Laguna Beach, CA 92651
Davenport, CA 95014 8.89%
9.53%
CUTLER APPROVED LIST EQUITY FUND
- --------------------------------
THE KARL KIRCHGESSNER FOUNDATION LORRAINE Y. PERRIN TESTAMONTARY TRUST
1278 Glenneyre, Suite 311 500 Eastgate Lane
Laguna Beach, CA 92651 Santa Barbara, CA 93108
13.82% 5.80%
Bank of Boston - IRA Custodian
FBO Harold E. Gray
810 Whitney
Visalia, CA 93277
5.10%
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
12
<PAGE>
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 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 one year period ended June 30, 1997, the average annual total returns of
the Cutler Equity Income Fund and Cutler Approved List Equity Fund were 37.65%
and 31.18%, respectively. Since commencement of operations on December 30, 1992,
the average annual total returns of the Cutler Equity Income Fund and Cutler
Approved List Equity Fund were 16.49% and 16.44%, 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
13
<PAGE>
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)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).
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, 1997
(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.
14
<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, 1997 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 via EDGAR, Accession No. 0000912057-97-029546 with
the Securities and Exchange Commission on August 29, 1997 for
such Fund pursuant to Rule 30b2-1 under the Investment Company
Act of 1940, as amended, and incorporated herein by reference.
(b) EXHIBITS.
---------
NOTE: * INDICATES THAT THE EXHIBIT IS INCORPORATED HEREIN BY REFERENCE. ALL
REFERENCES TO A POST-EFFECTIVE AMENDMENT ("PEA") OR PRE-EFFECTIVE AMENDMENT
("PREEA") ARE TO PEAS AND PREEAS TO REGISTRANT'S REGISTRATION STATEMENT ON FORM
N-1A, FILE NO. 33-52850.
(1)* Copy of Registrant's Trust Instrument (filed as Exhibit 1 to
PEA No. 4 via EDGAR on March 8, 1996, accession number
0000912057-97-004156).
(2)* Copy of Registrant's By-Laws (filed as Exhibit 2 to PEA No. 4
via EDGAR on March 8, 1996, accession number
0000912057-97-004156).
(3) None.
(4) None.
(5)* Copy of Investment Advisory Agreement between Registrant and
Cutler & Company, LLC (filed as Exhibit 5 to PEA No. 4 via
EDGAR on March 8, 1996, accession number
0000912057-97-004156).
<PAGE>
(6)* Copy of Distribution Agreement between Registrant and Forum
Financial Services, Inc. (filed as Exhibit 6 to PEA No. 4 on
March 8, 1996, accession number 0000912057-97-004156).
(7) None.
(8)* Copy of Custodian Agreement between Registrant and The First
National Bank of Boston (filed as Exhibit 8 to PEA No. 4 on
March 8, 1996, accession number 0000912057-97-004156).
(9) (a)* Copy of Management Agreement between Registrant
and Forum Administrative Services, LLC
(filed as Exhibit 9(a) to PEA No. 4 via EDGAR on March
8, 1996, accession number 0000912057-97-004156).
(b) Form of Transfer Agency and Services Agreement between
Registrant and Forum Financial Corp.(filed herewith).
(c) Form of Fund Accounting Agreement between Registrant
and Forum Accounting Services, Limited Liability
Company (filed herewith).
(d)* Copy of Shareholder Service Plan (filed as Exhibit
9(c) to PEA No. 4 on March 8, 1996, accession number
0000912057-97-004156).
(e)* Copy of Form of Shareholder Service Agreement (filed
as Exhibit 9(d) to PEA No. 4 on March 8, 1996,
accession number 0000912057-97-004156.
(10)* Opinion of counsel (filed as Exhibit 10 to PEA No. 4 on
March 8, 1996, accession number 0000912057-97-004156).
(11) Consent of independent auditors (filed herewith).
(12) None.
(13)* Investment Representation letter (filed as Exhibit 13 to PEA
No.4 on March 8, 1996, accession number 0000912057-97-004156).
(14) None.
(15) None.
(16) Schedule of Sample Performance Calculations (filed herewith
as Exhibit 16).
(17) Financial Data Schedule (filed herewith as Exhibit 17).
<PAGE>
Other Exhibits:
(A)* Power of Attorney, Brooke R. Ashland, Trustee of
Registrant (filed as Other Exhibit (A) to PEA No. 4
on March 8, 1996, accession number
0000912057-97-004156).
(B)* Power of Attorney, Kenneth R. Cutler, Trustee of
Registrant (filed as Other Exhibit (B) to PEA No. 4
on March 8, 1996, accession number
0000912057-97-004156).
(C)* Power of Attorney, Hatten S. Yoder, Jr., Trustee of
Registrant (filed as Other Exhibit (C) to PEA No. 4
on March 8, 1996, accession number
0000912057-97-004156).
(D)* Power of Attorney, John Y. Keffer, Trustee of
Registrant (filed as Other Exhibit (D) to PEA No. 4
on March 8, 1996, accession number
0000912057-97-004156).
(E) Power of Attorney, Robert B. Watts, Jr., Trustee of
Registrant (filed herewith).
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
--------------------------------------------------------------
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES AS OF AUGUST 31, 1997.
------------------------------------------------------
Title of Class of Shares
Of Beneficial Interest Number Of Holders
------------------------ -----------------
Cutler Equity Income Fund 213
Cutler Approved List Equity Fund 333
ITEM 27. INDEMNIFICATION.
----------------
The general effect of Section 10.02 of the Registrant's Trust
Instrument is to indemnify existing or former trustees and officers of the Trust
to the fullest extent permitted by law against liability and expenses. There is
no indemnification if, among other things, any such person is adjudicated liable
to the Registrant or its shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office. This description is modified in its entirety by the
provisions of Section 10.02 of the Registrant's Trust Instrument contained in
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
<PAGE>
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. For the preceding three
years, he had been Chairman and President, Commerce Capital
Management, Inc.
<PAGE>
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 Core Trust (Delaware), The CRM Funds, The Cutler Trust,
Forum Funds, The Highland Family of Funds, Monarch Funds, Norwest
Advantage Funds, Norwest Select Funds and Sound Shore Fund, Inc.
(b) John Y. Keffer, President of Forum Financial Services, Inc., is the
President of the Registrant. Sara M. Morris is the Treasurer of Forum
Financial Services. David I. Goldstein, Secretary of Forum Financial
Services, Inc., is the Assistant Secretary of the Registrant. Margaret
J. Fenderson is the Assistant Treasurer of Forum Financial Services,
Inc. and Dana Lukens is the Assistant Secretary of Forum Financial
Services, Inc. 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 Administrative Services, LLC,
Two Portland Square, Portland, Maine 04101, and Forum Financial Corp., Two
Portland Square, Portland, Maine 04101. The records required to be maintained
under Rule 31a-1(b)(1) with respect to journals of receipts and deliveries of
securities and receipts and disbursements of cash are maintained at the offices
of the Registrant's custodian. 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:
<PAGE>
(i) furnish each person to whom a prospectus is delivered with a copy of
Registrant's latest annual report to shareholders relating to the portfolio or
class thereof to which the prospectus relates upon request and without charge.
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 certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and 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 12th
day of September, 1997.
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 Registrant's Registration Statement has been signed below by the following
persons on the 12th day of September, 1997.
SIGNATURES TITLE
---------- -----
(a) Principal Executive Officer
/S/ John Y. Keffer President
------------------
John Y. Keffer
(b) Principal Financial and
Accounting Officer
/S/ Robert B. Campbell Treasurer
-------------------
Robert B. Campbell
(c) All of the Trustees
/S/ John Y. Keffer Trustee
------------------
John Y. Keffer
Brooke R. Ashland* Trustee
Kenneth R. Cutler* Trustee
Hatten S. Yoder, Jr.* Trustee
Robert B. Watts, Jr.* Trustee
By: /S/ John Y. Keffer
------------------
John Y. Keffer
*Attorney in Fact
<PAGE>
INDEX TO EXHIBITS
Sequential
Exhibit Page Number
- ------ -----------
9(b)* Form of Transfer Agency and Services Agreement between Registrant
and Forum Financial Corp.
9(c)* Form of Fund Accounting Agreement between Registrant and Forum
Accounting Services, Limited Liability Company.
11 Consent of Independent Auditors
Other
Exhibit (E) Power of Attorney, Robert B. Watts, Jr., Trustee of Registrant
16 Schedule of Performance Quotations
17 Financial Data Schedule
<PAGE>
EXHIBIT 9(B)
FORM OF
THE CUTLER TRUST
TRANSFER AGENCY AND SERVICES AGREEMENT
AGREEMENT made as of the ____________ day of ______________, 199__, by
and between The Cutler Trust, a Delaware business trust, with its principal
office and place of business at Two Portland Square, Portland, Maine (the
"Trust"), and Forum Financial Corp., a Delaware corporation with its principal
office and place of business at Two Portland Square, Portland, Maine 04101
("Forum").
WHEREAS, the Trust is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets, and is authorized to divide those series into
separate classes;
WHEREAS, the Trust offers shares in various series as listed in
Appendix A hereto (each such series, together with all other series subsequently
established by the Trust and made subject to this Agreement in accordance with
Section 13, being herein referred to as a "Fund," and collectively as the
"Funds") and the Trust may in the future offer shares of various classes of each
Fund as listed in Appendix A hereto (each such class together with all other
classes subsequently established by the Trust in a Fund being herein referred to
as a "Class," and collectively as the "Classes"); and
WHEREAS, the Trust on behalf of the Funds desires to appoint Forum as
its transfer agent and dividend disbursing agent and Forum desires to accept
such appointment;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Trust and Forum hereby agree as follows:
SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) APPOINTMENT. The Trust, on behalf of the Funds, hereby appoints
Forum to act as, and Forum agrees to act as, (i) transfer agent for the
authorized and issued shares of beneficial interest of the Trust representing
interests in each of the respective Funds and Classes thereof ("Shares"), (ii)
dividend disbursing agent and (iii) agent in connection with any accumulation,
open-account or similar plans provided to the registered owners of shares of any
of the Funds ( "Shareholders") and set out in the currently effective
prospectuses and statements of additional information (collectively
"prospectus") of the applicable Fund, including, without limitation, any
periodic investment plan or periodic withdrawal program.
(b) DOCUMENT DELIVERY. The Trust has delivered to Forum copies of (i)
the Trust's Trust Instrument and Bylaws (collectively, as amended from time to
time, "Organic Documents"), (ii) the Trust's Registration Statement and all
amendments thereto filed with the U.S. Securities and Exchange Commission
("SEC") pursuant to the Securities Act of 1933, as amended (the "Securities
Act"), or the Investment Company Act of 1940, as amended ("1940 Act")(the
"Registration Statement"), (iii) the Trust's current Prospectus and Statement of
Additional Information of each Fund (collectively, as currently in effect and as
amended or supplemented, the "Prospectus"), (iv) each current plan of
distribution or similar document adopted by the Trust under Rule 12b-1 under the
1940 Act ("Plan") and each current shareholder service plan or similar document
adopted by the Trust ("Service Plan"), and (v) all procedures adopted by the
Trust with respect to the Funds (i.e., repurchase agreement procedures), and
shall promptly furnish Forum with all amendments of or supplements to the
foregoing. The Trust shall deliver to Forum a certified copy of the resolution
of the Board of Trustees of the Trust (the "Board") appointing Forum and
authorizing the execution and delivery of this Agreement.
SECTION 2. DUTIES OF FORUM
(a) SERVICES. Forum agrees that in accordance with procedures
established from time to time by agreement between the Trust on behalf of each
of the Funds, as applicable, and Forum, Forum will perform the following
services:
(i) provide the services of a transfer agent, dividend disbursing agent
and, as relevant, agent in connection with accumulation, open-account
or similar plans (including without limitation any periodic investment
plan or periodic withdrawal program) that are customary for open-end
management investment companies including: (A) maintaining all
Shareholder accounts, (B) preparing Shareholder meeting lists, (C)
mailing proxies to Shareholders, (D) mailing Shareholder reports and
prospectuses to current Shareholders, (E) withholding taxes on U.S.
resident and non-resident alien accounts, (F) preparing and filing U.S.
Treasury Department Forms 1099 and other appropriate forms required by
federal authorities with respect to distributions for Shareholders, (G)
preparing and mailing confirmation forms and statements of account to
Shareholders for all purchases and redemptions of Shares and other
confirmable transactions in Shareholder accounts, (H) preparing and
mailing activity statements for Shareholders, and (I) providing
Shareholder account information;
(ii) receive for acceptance orders for the purchase of Shares and
promptly deliver payment and appropriate documentation therefor to the
custodian of the applicable Fund (the "Custodian") or, in the case of
Fund's operating in a master-feeder or fund of funds structure, to the
transfer agent or interestholder recordkeeper for the master portfolios
in which the Fund invests;
(iii) pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder account;
(iv) receive for acceptance redemption requests and deliver the
appropriate documentation therefor to the Custodian or, in the case of
Fund's operating in a master-feeder or fund of funds structure, to the
transfer agent or interestholder recordkeeper for the master portfolios
in which the Fund invests;
(v) as and when it receives monies paid to it by the Custodian with
respect to any redemption, pay the redemption proceeds as required by
the prospectus pursuant to which the redeemed Shares were offered and
as instructed by the redeeming Shareholders;
(vi) effect transfers of Shares upon receipt of appropriate
instructions from Shareholders;
(vii) prepare and transmit to Shareholders (or credit the appropriate
Shareholder accounts) payments for all distributions declared by the
Trust with respect to Shares;
(viii) issue share certificates and replacement share certificates for
those share certificates alleged to have been lost, stolen, or
destroyed upon receipt by Forum of indemnification satisfactory to
Forum and protecting Forum and the Trust and, at the option of Forum,
issue replacement certificates in place of mutilated share certificates
upon presentation thereof without requiring indemnification;
(ix) receive from Shareholders or debit Shareholder accounts for sales
commissions, including contingent deferred, deferred and other sales
charges, and service fees (i.e., wire redemption charges) and prepare
and transmit payments to underwriters, selected dealers and others for
commissions and service fees received;
(x) prepare and transmit payments to underwriters, selected dealers and
others for trail commissions, Rule 12b-1 fees, shareholder service fees
and other payments based on the amount of assets in Shareholder
accounts in accordance with any Plan or Service Plan of the Trust;
(xi) maintain records of account for and provide reports and statements
to the Trust and Shareholders as to the foregoing;
(xii) record the issuance of Shares of the Trust and maintain pursuant
to Rule 17Ad-10(e) under the Securities Exchange Act of 1934, as
amended ("1934 Act") a record of the total number of Shares of the
Trust, each Fund and each Class thereof, that are authorized, based
upon data provided to it by the Trust, and are issued and outstanding
and provide the Trust on a regular basis a report of the total number
of Shares that are authorized and the total number of Shares that are
issued and outstanding; and
(xiii) provide a system which will enable the Trust to calculate the
total number of Shares of each Fund and Class thereof sold in each
State.
(b) BLUE SKY MATTERS. The Trust or its administrator or other agent (i)
shall identify to Forum in writing those transactions and assets to be treated
as exempt from reporting for each state and territory of the United States and
for each foreign jurisdiction (collectively "States") and (ii) shall monitor the
sales activity with respect to Shareholders domiciled or resident in each State.
The responsibility of Forum for the Trust's State registration status is solely
limited to the reporting of transactions to the Trust, and Forum shall have no
obligation, when recording the issuance of Shares, to monitor the issuance of
such Shares or to take cognizance of any laws relating to the issue or sale of
such Shares, which functions shall be the sole responsibility of the Trust.
(c) SAFEKEEPING. Forum shall establish and maintain facilities and
procedures reasonably acceptable to the Trust for the safekeeping, control,
preparation and use of share certificates, check forms, and facsimile signature
imprinting devices. Forum shall establish and maintain facilities and procedures
reasonably acceptable to the Trust for safekeeping of all records maintained by
Forum pursuant to this Agreement.
(d) COOPERATION WITH ACCOUNTANTS. Forum shall cooperate with each
Fund's independent public accountants and shall take reasonable action to make
all necessary information available to the accountants for the performance of
the accountants' duties.
(e) RESPONSIBILITY FOR COMPLIANCE WITH LAW. Except as otherwise
specifically provided herein, the Trust assumes all responsibility for ensuring
that the Trust complies with all applicable requirements of the Securities Act,
the 1940 Act and any laws, rules and regulations of governmental authorities
with jurisdiction over the Trust. All references to any law in this Agreement
shall be deemed to include reference to the applicable rules and regulations
promulgated under authority of the law and all official interpretations of such
law or rules or regulations.
SECTION 3. RECORDKEEPING
(a) PREDECESSOR RECORDS. Prior to the commencement of Forum's
responsibilities under this Agreement, if applicable, the Trust shall deliver or
cause to be delivered over to Forum (i) an accurate list of Shareholders of the
Trust, showing each Shareholder's address of record, number of Shares owned and
whether such Shares are represented by outstanding share certificates and (ii)
all Shareholder records, files, and other materials necessary or appropriate for
proper performance of the functions assumed by Forum under this Agreement
(collectively referred to as the "Materials"). The Trust shall on behalf of each
applicable Fund or Class indemnify and hold Forum harmless from and against any
and all losses, damages, costs, charges, counsel fees, payments, expenses and
liability arising out of or attributable to any error, omission, inaccuracy or
other deficiency of the Materials, or out of the failure of the Trust to provide
any portion of the Materials or to provide any information in the Trust's
possession or control reasonably needed by Forum to perform the services
described in this Agreement.
(b) RECORDKEEPING. Forum shall keep records relating to the services to
be performed under this Agreement, in the form and manner as it may deem
advisable and as required by applicable law. To the extent required by Section
31 of the 1940 Act, and the rules thereunder, Forum agrees that all such records
prepared or maintained by Forum relating to the services to be performed by
Forum under this Agreement are the property of the Trust and will be preserved,
maintained and made available in accordance with Section 31 of the 1940 Act and
the rules thereunder, and will be surrendered promptly to the Trust on and in
accordance with the Trust's request. The Trust and the Trust's authorized
representatives shall have access to Forum's records relating to the services to
be performed under this Agreement at all times during Forum's normal business
hours. Upon the reasonable request of the Trust, copies of any such records
shall be provided promptly by Forum to the Trust or the Trust's authorized
representatives.
(c) CONFIDENTIALITY OF RECORDS. Forum and the Trust agree that all
books, records, information, and data pertaining to the business of the other
party which are exchanged or received pursuant to the negotiation or the
carrying out of this Agreement shall remain confidential, and shall not be
voluntarily disclosed to any other person, except as may be required by law.
(d) INSPECTION OF RECORDS BY OTHERS. In case of any requests or demands
for the inspection of the Shareholder records of the Trust, Forum will endeavor
to notify the Trust and to secure instructions from an authorized officer of the
Trust as to such inspection. Forum shall abide by the Trust's instructions for
granting or denying the inspection; provided, however, that Forum may grant the
inspection without instructions if Forum is advised by counsel to Forum that
failure to do so will result in liability to Forum.
SECTION 4. ISSUANCE AND TRANSFER OF SHARES
(a) ISSUANCE OF SHARES. Forum shall make original issues of Shares of
each Fund and Class thereof in accordance with the Trust's then current
prospectus only upon receipt of (i) instructions requesting the issuance, (ii) a
certified copy of a resolution of the Board authorizing the issuance, (iii)
necessary funds for the payment of any original issue tax applicable to such
Shares, and (iv) an opinion of the Trust's counsel as to the legality and
validity of the issuance, which opinion may provide that it is contingent upon
the filing by the Trust of an appropriate notice with the SEC, as required by
Section 24 of the 1940 Act or the rules thereunder. If the opinion described in
(iv) above is contingent upon a filing under Section 24 of the 1940 Act, the
Trust shall indemnify Forum for any liability arising from the failure of the
Trust to comply with that section or the rules thereunder.
(b) TRANSFER OF SHARES. Transfers of Shares of each Fund and Class
thereof shall be registered on the Shareholder records maintained by Forum. In
registering transfers of Shares, Forum may rely upon the Uniform Commercial Code
as in effect in the State of Delaware or any other statutes that, in the opinion
of Forum's counsel, protect Forum and the Trust from liability arising from (i)
not requiring complete documentation, (ii) registering a transfer without an
adverse claim inquiry, (iii) delaying registration for purposes of such inquiry
or (iv) refusing registration whenever an adverse claim requires such refusal.
As Transfer Agent, Forum will be responsible for delivery to the transferor and
transferee of such documentation as is required by the Uniform Commercial Code.
SECTION 5. SHARE CERTIFICATES
(a) CERTIFICATES. The Trust shall furnish to Forum a supply of blank
share certificates of each Fund and Class thereof and, from time to time, will
renew such supply upon Forum's request. Blank share certificates shall be signed
manually or by facsimile signatures of officers of the Trust authorized to sign
by the Organic Documents of the Trust and, if required by the Organic Documents,
shall bear the Trust's seal or a facsimile thereof. Unless otherwise directed by
the Trust, Forum may issue or register Share certificates reflecting the manual
or facsimile signature of an officer who has died, resigned or been removed by
the Trust.
(b) ENDORSEMENT; TRANSPORTATION. New Share certificates shall be issued
by Forum upon surrender of outstanding Share certificates in the form deemed by
Forum to be properly endorsed for transfer and satisfactory evidence of
compliance with all applicable laws relating to the payment or collection of
taxes. Forum shall forward Share certificates in "non-negotiable" form by
first-class or registered mail, or by whatever means Forum deems equally
reliable and expeditious. Forum shall not mail Share certificates in
"negotiable" form unless requested in writing by the Trust and fully indemnified
by the Trust to Forum's satisfaction.
(c) NON-ISSUANCE OF CERTIFICATES. In the event that the Trust informs
Forum that any Fund or Class thereof does not issue share certificates, Forum
shall not issue any such share certificates and the provisions of this Agreement
relating to share certificates shall not be applicable with respect to those
Funds or Classes thereof.
SECTION 6. SHARE PURCHASES; ELIGIBILITY TO RECEIVE DISTRIBUTIONS
(a) PURCHASE ORDERS. Shares shall be issued in accordance with the
terms of a Fund's or Class' prospectus after Forum or its agent receives either:
(i) (A) an instruction directing investment in a Fund or Class, (B) a
check (other than a third party check) or a wire or other electronic
payment in the amount designated in the instruction and (C), in the
case of an initial purchase, a completed account application; or
(ii) the information required for purchases pursuant to a selected
dealer agreement, processing organization agreement, or a similar
contract with a financial intermediary.
(b) DISTRIBUTION ELIGIBILITY. Shares issued in a Fund after receipt of
a completed purchase order shall be eligible to receive distributions of the
Fund at the time specified in the prospectus pursuant to which the Shares are
offered.
(c) DETERMINATION OF FEDERAL FUNDS. Shareholder payments shall be
considered Federal Funds no later than on the day indicated below unless other
times are noted in the prospectus of the applicable Class or Fund:
(i) for a wire received, at the time of the receipt of the wire;
(ii) for a check drawn on a member bank of the Federal Reserve System,
on the second Fund Business Day following receipt of the check; and
(iv) for a check drawn on an institution that is not a member of the
Federal Reserve System, at such time as Forum is credited with Federal
Funds with respect to that check.
SECTION 7. FEES AND EXPENSES
(a) FEES. For the services provided by Forum pursuant to this
Agreement, the Trust, on behalf of each Fund, agrees to pay Forum the fees set
forth in clauses (i) and (ii) of Appendix B hereto. Fees will begin to accrue
for each Fund on the latter of the date of this Agreement or the date of
commencement of operations of the Fund. If fees begin to accrue in the middle of
a month or if this Agreement terminates before the end of any month, all fees
for the period from that date to the end of that month or from the beginning of
that month to the date of termination, as the case may be, shall be prorated
according to the proportion that the period bears to the full month in which the
effectiveness or termination occurs. Upon the termination of this Agreement with
respect to a Fund, the Trust shall pay to Forum such compensation as shall be
payable prior to the effective date of termination.
(b) EXPENSES. In connection with the services provided by Forum
pursuant to this Agreement, the Trust, on behalf of each Fund, agrees to
reimburse Forum for the expenses set forth in Appendix B hereto. In addition,
the Trust, on behalf of the applicable Fund, shall reimburse Forum for all
expenses and employee time (at 150% of salary) attributable to any review of the
Trust's accounts and records by the Trust's independent accountants or any
regulatory body outside of routine and normal periodic reviews. Should the Trust
exercise its right to terminate this Agreement, the Trust, on behalf of the
applicable Fund, shall reimburse Forum for all out-of-pocket expenses and
employee time (at 150% of salary) associated with the copying and movement of
records and material to any successor person and providing assistance to any
successor person in the establishment of the accounts and records necessary to
carry out the successor's responsibilities.
(c) PAYMENT. All fees and reimbursements are payable in arrears on a
monthly basis and the Trust, on behalf of the applicable Fund, agrees to pay all
fees and reimbursable expenses within five (5) business days following receipt`
of the respective billing notice.
SECTION 8. REPRESENTATIONS AND WARRANTIES
(a) REPRESENTATIONS AND WARRANTIES OF FORUM. Forum represents and
warrants to the Trust that:
(i) It is a corporation duly organized and existing and in good
standing under the laws of the State of Delaware.
(ii) It is duly qualified to carry on its business in the State of
Maine.
(iii) It is empowered under applicable laws and by its Article of
Incorporation and By-Laws to enter into this Agreement and perform its
duties under this Agreement.
(iv) All requisite corporate proceedings have been taken to authorize
it to enter into this Agreement and perform its duties under this
Agreement.
(v) It has access to the necessary facilities, equipment, and personnel
to perform its duties and obligations under this Agreement.
(vi) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of Forum, enforceable against Forum
in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties.
(vii) It is registered as a transfer agent under Section 17A of the
1934 Act.
(b) REPRESENTATIONS AND WARRANTIES OF THE TRUST. The Trust represents
and warrants to Forum that:
(i) It is a business trust duly organized and existing and in good
standing under the laws of Delaware.
(ii) It is empowered under applicable laws and by its Organic Documents
to enter into this Agreement and perform its duties under this
Agreement.
(iii) All requisite [corporate] proceedings have been taken to
authorize it to enter into this Agreement and perform its duties under
this Agreement.
(iv) It is an open-end management investment company registered under
the 1940 Act.
(v) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of the Trust, enforceable against
the Trust in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured
parties.
(vi) A registration statement under the Securities Act is currently
effective and will remain effective, and appropriate State securities
law filings have been made and will continue to be made, with respect
to all Shares of the Funds and Classes of the Trust being offered for
sale.
SECTION 9. PROPRIETARY INFORMATION
(a) PROPRIETARY INFORMATION OF FORUM. The Trust acknowledges that the
databases, computer programs, screen formats, report formats, interactive design
techniques, and documentation manuals maintained by Forum on databases under the
control and ownership of Forum or a third party constitute copyrighted, trade
secret, or other proprietary information (collectively, "Proprietary
Information") of substantial value to Forum or the third party. The Trust agrees
to treat all Proprietary Information as proprietary to Forum and further agrees
that it shall not divulge any Proprietary Information to any person or
organization except as may be provided under this Agreement.
(b) PROPRIETARY INFORMATION OF THE TRUST. Forum acknowledges that the
Shareholder list and all information related to Shareholders furnished to Forum
by the Trust or by a Shareholder in connection with this Agreement
(collectively, "Customer Data") constitute proprietary information of
substantial value to the Trust. In no event shall Proprietary Information be
deemed Customer Data. Forum agrees to treat all Customer Data as proprietary to
the Trust and further agrees that it shall not divulge any Customer Data to any
person or organization except as may be provided under this Agreement or as may
be directed by the Trust.
SECTION 10. INDEMNIFICATION
(a) INDEMNIFICATION OF FORUM. Forum shall not be responsible for, and
the Trust shall on behalf of each applicable Fund or Class thereof indemnify and
hold Forum harmless from and against, any and all losses, damages, costs,
charges, reasonable counsel fees, payments, expenses and liability arising out
of or attributable to:
(i) all actions of Forum or its agents or subcontractors required to be
taken pursuant to this Agreement, provided that such actions are taken
in good faith and without [gross] negligence or willful misconduct;
(ii) the Trust's lack of good faith or the Trust's gross negligence or
willful misconduct;
(iii) the reliance on or use by Forum or its agents or subcontractors
of information, records, documents or services which have been
prepared, maintained or performed by the Trust or any other person or
firm on behalf of the Trust, including but not limited to any previous
transfer agent or registrar;
(iv) the reasonable reliance on, or the carrying out by Forum or its
agents or subcontractors of, any instructions or requests of the Trust
on behalf of the applicable Fund; and
(v) the offer or sale of Shares in violation of any requirement under
the Federal securities laws or regulations or the securities laws or
regulations of any State that such Shares be registered in such State
or in violation of any stop order or other determination or ruling by
any federal agency or any State with respect to the offer or sale of
such Shares in such State.
(b) INDEMNIFICATION OF TRUST. Forum shall indemnify and hold the Trust
and each Fund or Class thereof harmless from and against any and all losses,
damages, costs, charges, reasonable counsel fees, payments, expenses and
liability arising out of or attributed to any action or failure or omission to
act by Forum as a result of Forum's lack of good faith, gross negligence or
willful misconduct with respect to the services performed under or in connection
with this Agreement.
(c) RELIANCE. At any time Forum may apply to any officer of the Trust
for instructions, and may consult with legal counsel to the Trust or to Forum
with respect to any matter arising in connection with the services to be
performed by Forum under this Agreement, and Forum and its agents or
subcontractors shall not be liable and shall be indemnified by the Trust on
behalf of the applicable Fund for any action taken or omitted by it in
reasonable reliance upon such instructions or upon the advice of such counsel.
Forum, its agents and subcontractors shall be protected and indemnified in
acting upon (i) any paper or document furnished by or on behalf of the Trust,
reasonably believed by Forum to be genuine and to have been signed by the proper
person or persons, (ii) any instruction, information, data, records or documents
provided Forum or its agents or subcontractors by machine readable input, telex,
CRT data entry or other similar means authorized by the Trust, and (iii) any
authorization, instruction, approval, item or set of data, or information of any
kind transmitted to Forum in person or by telephone, vocal telegram or other
electronic means, reasonably believed by Forum to be genuine and to have been
given by the proper person or persons. Forum shall not be held to have notice of
any change of authority of any person, until receipt of written notice thereof
from the Trust. Forum, its agents and subcontractors shall also be protected and
indemnified in recognizing share certificates which are reasonably believed to
bear the proper manual or facsimile signatures of the officers of the Trust, and
the proper countersignature of any former transfer agent or former registrar or
of a co-transfer agent or co-registrar of the Trust
(d) RELIANCE ON ELECTRONIC INSTRUCTIONS. If the Trust has the ability
to originate electronic instructions to Forum in order to (i) effect the
transfer or movement of cash or Shares or (ii) transmit Shareholder information
or other information, then in such event Forum shall be entitled to rely on the
validity and authenticity of such instruction without undertaking any further
inquiry as long as such instruction is undertaken in conformity with security
procedures established by Forum from time to time.
(e) USE OF FUND/SERV AND NETWORKING. The Trust has authorized or in the
future may authorize Forum to act as a "Fund/SERV" and "Networking" processing
agent for the Trust or various Funds. Fund/SERV and Networking are services
sponsored by National Securities Clearing Corporation ("NSCC") and as used
herein have the meanings as set forth in the then current edition of the Rules
of the SCC Division of NSCC or such other similar publication as may exist from
time to time. The Trust shall indemnify and hold Forum harmless from and against
any and all losses, damages, costs, charges, reasonable counsel fees, payments,
expenses and liability arising directly or indirectly out of or attributed to
any action or failure or omission to act by NSCC.
(f) NOTIFICATION OF CLAIMS. In order that the indemnification
provisions contained in this Section shall apply, upon the assertion of a claim
for which either party may be required to indemnify the other, the party seeking
indemnification shall promptly notify the other party of such assertion, and
shall keep the other party advised with respect to all developments concerning
such claim. The party who may be required to indemnify shall have the option to
participate with the party seeking indemnification in the defense of such claim
or to defend against said claim in its own name or in the name of the other
party. The party seeking indemnification shall in no case confess any claim or
make any compromise in any case in which the other party may be required to
indemnify it except with the other party's prior written consent.
SECTION 11. EFFECTIVENESS, DURATION AND TERMINATION
(a) EFFECTIVENESS. This Agreement shall become effective with respect
to each Fund or Class on the later of the date on which the Trust's Registration
Statement relating to the Shares of the Fund or Class becomes effective or the
date of the commencement of operations of the Fund or Class. Upon effectiveness
of this Agreement, it shall supersede all previous agreements between the
parties hereto covering the subject matter hereof insofar as such Agreement may
have been deemed to relate to the Funds.
(b) DURATION. This Agreement shall continue in effect with respect to a
Fund until terminated; provided, that continuance is specifically approved at
least annually (i) by the Board or by a vote of a majority of the outstanding
voting securities of the Fund and (ii) by a vote of a majority of Trustees of
the Trust who are not parties to this Agreement or interested persons of any
such party (other than as Trustees of the Trust).
(c) TERMINATION. This Agreement may be terminated with respect to a
Fund at any time, without the payment of any penalty (i) by the Board on 60
days' written notice to Forum or (ii) by Forum on 60 days' written notice to the
Trust. Any termination shall be effective as of the date specified in the
notice. Upon notice of termination of this Agreement by either party, Forum
shall promptly transfer to the successor transfer agent the original or copies
of all books and records maintained by Forum under this Agreement including, in
the case of records maintained on computer systems, copies of such records in
machine-readable form, and shall cooperate with, and provide reasonable
assistance to, the successor transfer agent in the establishment of the books
and records necessary to carry out the successor transfer agent's
responsibilities.
(d) SURVIVAL. The obligations of Sections 7, 9 and 10 shall survive
any termination of this -------- Agreement.
SECTION 12. ADDITIONAL FUNDS AND CLASSES. In the event that the Trust
establishes one or more series of Shares or one or more classes of Shares after
the effectiveness of this Agreement, such series of Shares or classes of Shares,
as the case may be, shall become Funds and Classes under this Agreement. Forum
or the Trust may elect not to make and such series or classes subject to this
Agreement.
SECTION 13. ASSIGNMENT. Except as otherwise provided in this Agreement,
neither this Agreement nor any rights or obligations under this Agreement may be
assigned by either party without the written consent of the other party. This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective permitted successors and assigns. Forum may, without further
consent on the part of the Trust, subcontract for the performance hereof with
any entity, including affiliated persons of Forum; provided however, that Forum
shall be as fully responsible to the Trust for the acts and omissions of any
subcontractor as Forum is for its own acts and omissions.
SECTION 14. FORCE MAJEURE. Forum shall not be responsible or liable for
any failure or delay in performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control including, without limitation, acts of civil or military
authority, national emergencies, labor difficulties, fire, mechanical
breakdowns, flood or catastrophe, acts of God, insurrection, war, riots or
failure of the mails or any transportation medium, communication system or power
supply.
SECTION 15. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS,
OFFICERS, EMPLOYEES AND AGENTS. The trustees of the Trust and the shareholders
of each Fund shall not be liable for any obligations of the Trust or of the
Funds under this Agreement, and Forum agrees that, in asserting any rights or
claims under this Agreement, it shall look only to the assets and property of
the Trust or the Fund to which Forum's rights or claims relate in settlement of
such rights or claims, and not to the trustees of the Trust or the shareholders
of the Funds.
SECTION 16. TAXES. Forum shall not be liable for any taxes, assessments
or governmental charges that may be levied or assessed on any basis whatsoever
in connection with the Trust or any Shareholder or any purchase of Shares,
excluding taxes assessed against Forum for compensation received by it under
this Agreement.
SECTION 17. MISCELLANEOUS
(a) NO CONSEQUENTIAL DAMAGES. Neither party to this Agreement shall be
liable to the other party for consequential damages under any provision of this
Agreement.
(b) AMENDMENTS. No provisions of this Agreement may be amended or
modified in any manner except by a written agreement properly authorized and
executed by both parties hereto.
(c) CHOICE OF LAW. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the State of
Delaware.
(d) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with respect to
the subject matter hereof whether oral or written.
(e) COUNTERPARTS. This Agreement may be executed by the parties hereto
on any number of counterparts, and all of the counterparts taken together shall
be deemed to constitute one and the same instrument.
(f) SEVERABILITY. If any part, term or provision of this Agreement is
held to be illegal, in conflict with any law or otherwise invalid, the remaining
portion or portions shall be considered severable and not be affected, and the
rights and obligations of the parties shall be construed and enforced as if the
Agreement did not contain the particular part, term or provision held to be
illegal or invalid.
(g) HEADINGS. Section and paragraph headings in this Agreement are
included for convenience only and are not to be used to construe or interpret
this Agreement.
(h) NOTICES. Notices, requests, instructions and communications
received by the parties at their respective principal addresses, or at such
other address as a party may have designated in writing, shall be deemed to have
been properly given.
(i) BUSINESS DAYS. Nothing contained in this Agreement is intended to
or shall require Forum, in any capacity hereunder, to perform any functions or
duties on any day other than a Fund Business Day. Functions or duties normally
scheduled to be performed on any day which is not a Fund Business Day shall be
performed on, and as of, the next Fund Business Day, unless otherwise required
by law.
(j) DISTINCTION OF FUNDS. Notwithstanding any other provision of this
Agreement, the parties agree that the assets and liabilities of each Fund of the
Trust are separate and distinct from the assets and liabilities of each other
Fund and that no Fund shall be liable or shall be charged for any debt,
obligation or liability of any other Fund, whether arising under this Agreement
or otherwise.
(k) NONLIABILITY OF AFFILIATES. No affiliated person (as that term is
defined in the 1940 Act), employee, agent, director, officer or manager of Forum
shall be liable at law or in equity for Forum's obligations under this
Agreement.
(l) REPRESENTATION OF SIGNATORIES. Each of the undersigned expressly
warrants and represents that they have full power and authority to sign this
Agreement on behalf of the party indicated and that their signature will bind
the party indicated to the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
[NAME]
By:
[Officer name]
[Title]
FORUM FINANCIAL CORP.
By:
John Y. Keffer
President
<PAGE>
- A1 -
THE CUTLER TRUST
TRANSFER AGENCY AND SERVICE AGREEMENT
APPENDIX A
FUNDS AND CLASSES
AS OF SEPTEMBER 10, 1997
Cutler Equity Income Fund
Cutler Approved List Equity Fund
<PAGE>
THE CUTLER TRUST
TRANSFER AGENCY AND SERVICE AGREEMENT
APPENDIX B
FEES AND EXPENSES
(I) BASE FEE:
Fee per Fund: $1,000/month plus $ 500/month for each Class over one.
The rates set forth above shall remain fixed through December 31, 1998.
On January 1, 1999, and on each successive January 1, the rates may be
adjusted automatically by Forum without action of the Trust to reflect
changes in the Consumer Price Index for the preceding calendar year, as
published by the U.S. Department of Labor, Bureau of Labor Statistics.
Forum shall notify the Trust each year of the new rates, if applicable.
(II) SHAREHOLDER ACCOUNT FEES:
$12.00 per Shareholder account per year. Shareholder account fees are
based upon the number of Shareholder accounts as of the last Fund
Business Day of the prior month.
(III) OUT-OF-POCKET AND RELATED EXPENSES
The Trust, on behalf of the applicable Fund, shall reimburse Forum for
all out-of-pocket and ancillary expenses in providing the services
described in this Agreement, including but not limited to the cost of
(or appropriate share of the cost of): (i) statement, confirmation,
envelope and stationary stock, (ii) share certificates, (iii) printing
of checks and drafts, (iv) postage, (v) telecommunications, (vi)
banking services (DDA account, wire and ACH, check and draft clearing
and lock box fees and charges), (vii) NSCC Fund/SERV and Networking
fees and expenses, (viii) outside proxy solicitors and tabulators, (ix)
proxy solicitation fees and (ix) microfilm and microfiche. In addition,
any other expenses incurred by Forum at the request or with the consent
of the Trust, will be reimbursed by the Trust on behalf of the
applicable Fund.
EXHIBIT 9(c)
<PAGE>
FORM OF
THE CUTLER TRUST
FUND ACCOUNTING AGREEMENT
AGREEMENT made as of the ____________ day of ______________, 199__, by
and between The Cutler Trust, a Delaware business trust, with its principal
office and place of business at Two Portland Square (the "Trust"), and Forum
Accounting Services, Limited Liability Company, a Delaware limited liability
company with its principal office and place of business at Two Portland Square,
Portland, Maine 04101 ("Forum").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 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 offers shares in various series as listed in
Appendix A hereto (each such series, together with all other series subsequently
established by the Trust and made subject to this Agreement in accordance with
Section 6, being herein referred to as a "Fund," and collectively as the
"Funds") and the Trust may in the future offer shares of various classes of each
Fund as listed in Appendix A hereto (each such class together with all other
classes subsequently established by the Trust in a Fund being herein referred to
as a "Class," and collectively as the "Classes");
WHEREAS, the Trust intends initially to offer shares in [Number of
Initial Series] series as listed in Appendix A hereto (each such series,
together with all other series subsequently established by the Trust and made
subject to this Agreement in accordance with Section 6, being herein referred to
as a "Fund," and collectively as the "Funds") and the Trust intends initially to
offer shares of various classes of each Fund as listed in Appendix A hereto
(each such class together with all other classes subsequently established by the
Trust in a Fund being herein referred to as a "Class," and collectively as the
"Classes");
WHEREAS, the Trust desires that Forum perform certain fund accounting
services for each Fund and Class thereof and Forum is willing to provide those
services on the terms and conditions set forth in this Agreement;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Trust and Forum hereby agree as follows:
SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS
SECTION 1. APPOINTMENT
(a) The Trust hereby appoints Forum, and Forum hereby agrees, to act as
fund accountant of the Trust for the period and on the terms set forth in this
Agreement.
(b) In connection therewith, the Trust has delivered to Forum copies of
(i) the Trust's its Trust Instrument and Bylaws (collectively, as amended from
time to time, "Organic Documents"), (ii) the Trust's Registration Statement and
all amendments thereto filed with the U.S. Securities and Exchange Commission
("SEC") pursuant to the Securities Act of 1933, as amended (the "Securities
Act"), or the 1940 Act (the "Registration Statement"), (iii) the Trust's 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 (iv) all procedures adopted by the Trust with respect to the
Funds (i.e., repurchase agreement procedures), and shall promptly furnish Forum
with all amendments of or supplements to the foregoing. The Trust shall deliver
to Forum a certified copy of the resolution of the Board of Trustees of the
Trust (the "Board") appointing Forum and authorizing the execution and delivery
of this Agreement. shall promptly furnish Forum with all amendments of or
supplements to the foregoing.
SECTION 2. DUTIES OF FORUM
(a) Forum and the Trust's administrator, Forum Administrative
Services, LLC (the "Administrator"), may from time to time adopt such
procedures as they agree upon to implement the terms of this Section.
With respect to each Fund, Forum shall perform the following services:
(i) calculate the net asset value per share with the frequency
prescribed in each Fund's then-current Prospectus;
(ii) calculate each item of income, expense, deduction, credit, gain
and loss, if any, as required by the Trust and in conformance with
generally accepted accounting practice ("GAAP"), the SEC's Regulation
S-X (or any successor regulation) and the Internal Revenue Code of
1986, as amended (or any successor laws)(the "Code");
(iii) Mmaintain each Fund's general ledger and record all income,
expenses, capital share activity and security transactions of each
Fund;
(iv) calculate the yield, effective yield, tax equivalent yield and
total return for each Fund, and each Class thereof, as applicable, and
such other measure of performance as may be agreed upon between the
parties hereto;
(v) provide the Trust and such other persons as the Administrator 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;
(vi) prepare and record, as of each time when the net asset value of a
Fund is calculated or as otherwise directed by the Trust, either (A) a
valuation of the assets of the Fund (unless otherwise specified in or
in accordance with this Agreement, based upon (based upon the use of
outside services normally used and contracted for this purpose by Forum
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 Trust'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;
(vii) make such adjustments over such periods as Forum deems necessary
to reflect over-accruals or under-accruals of estimated expenses or
income;
(viii) request any necessary information from the Administrator and the
Trust's transfer agent and distributor in order to prepare, and
prepare, the Trust's Form N-SAR;
(ix) provide appropriate records to assist the Trust's independent
accountants and, upon approval of the Trust or the Administrator, any
regulatory body in any requested review of the Trust's books and
records maintained by Forum;
(x) prepare semi-annual financial statements and oversee the production
of the semi-annual financial statements and any related report to the
Trust's shareholders prepared by the Trust or its investment advisers,
as applicable;
(xi) file the Funds' semi-annual financial statements with the SEC or
ensure that the Funds' semi-annual financial statements are filed with
the SEC;
(xii) provide information typically supplied in the investment company
industry to companies that track or report price, performance or other
information with respect to investment companies;
(xiii) provide the Trust or Administrator with the data requested by
the Administrator that is required to update the Trust's registration
statement;
(xiv) provide the Trust or independent accountants with all information
requested with respect to the preparation of the Trust's income, excise
and other tax returns;
(xv) prepare or prepare, execute and file all Federal income and excise
tax returns and state income and other tax returns, including any
extensions or amendments, each as agreed between the Trust and Forum;
(xvi) produce quarterly compliance reports for investment advisers, as
applicable, to the Trust and the Trust's Board of Trustees (the Board")
and provide information to the Administrator, investment advisers to
the Trust and other appropriate persons with respect to questions of
Fund compliance;
(xvii) determine the amount of distributions to shareholders as
necessary to, among other things, maintain the qualification of each
Fund as a regulated investment company under the Code, and prepare and
distribute to appropriate parties notices announcing the declaration of
dividends and other distributions to shareholders;
(xviii) transmit to and receive from each Fund's transfer agent
appropriate data to on a daily basis and daily reconcile Shares
outstanding and other data with the transfer agent;
(xiv) periodically reconcile all appropriate data with each Fund's
custodian; and
(xv) verify investment trade tickets when received from an investment
adviser, as applicable, and maintain individual ledgers and historical
tax lots for each security ; and
(xvi) perform such other recordkeeping, reporting and other tasks as
may be specified from time to time in the procedures adopted by the
Board; provided, that Forum need not begin performing any such task
except upon 65 days' notice and pursuant to mutually acceptable
compensation agreements.
(b) Forum shall prepare and maintain on behalf of the Trust the
following books and records of each Fund, and each Class thereof, pursuant to
Rule 31a-1 under the 1940 Act (the "Rule"):
(i) Journals containing an itemized daily record in detail of all
purchases and sales of securities, all receipts and disbursements of
cash and all other debits and credits, as required by subsection (b)(1)
of the Rule;
(ii) Journals and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, as required by
subsection (b)(2) of the Rule (but not including the ledgers required
by subsection (b)(2)(iv);
(iii) A record of each brokerage order given by or on behalf of the
Trust for, or in connection with, the purchase or sale of securities,
and all other portfolio purchases or sales, as required by subsections
(b)(5) and (b)(6) of the Rule;
(iv) 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 the Rule;
(v) A monthly trial balance of all ledger accounts (except shareholder
accounts) as required by subsection (b)(8) of the Rule; and
(VI) ADD RULE 2A-7 RECORDS HERE
(vii) 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 as agreed upon between the
parties hereto.
(c) The books and records maintained pursuant to Section 2(b) shall be
prepared and maintained in such form, for such periods and in such locations as
may be required by the 1940 Act. The books and records pertaining to the Trust
that are in possession of Forum 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 Forum's normal business hours. Upon the reasonable
request of the Trust or the Administrator, copies of any such books and records
shall be provided promptly by Forum to the Trust or the Trust's authorized
representatives at the Trust's expense. In the event the Trust designates a
successor that shall assume any of Forum's obligations hereunder, Forum shall,
at the expense and direction of the Trust, transfer to such successor all
relevant books, records and other data established or maintained by Forum under
this Agreement.
(d) In case of any requests or demands for the inspection of the
records of the Trust maintained by Forum, Forum will endeavor to notify the
Trust and to secure instructions from an authorized officer of the Trust as to
such inspection. Forum shall abide by the Trust's instructions for granting or
denying the inspection; provided, however, that Forum may grant the inspection
without instructions if Forum is advised by counsel to Forum that failure to do
so will result in liability to Forum.
(d) Nothing contained herein shall be construed to require Forum to
perform any service that could cause Forum to be deemed an investment adviser
for purposes of the 1940 Act or the Investment Advisers Act of 1940, as amended,
or that could cause a Fund to act in contravention of the Fund's Prospectus or
any provision of the 1940 Act. Except as otherwise specifically provided herein,
the Trust assumes all responsibility for ensuring that the Trust complies with
all applicable requirements of the Securities Act, the 1940 Act and any laws,
rules and regulations of governmental authorities with jurisdiction over the
Trust. All references to any law in this Agreement shall be deemed to include
reference to the applicable rules and regulations promulgated under authority of
the law and all official interpretations of such law or rules or regulations.
SECTION 3. STANDARD OF CARE; RELIANCE
(a) Forum shall be under no duty to take any action except as
specifically set forth herein or as may be specifically agreed to by Forum in
writing. Forum shall use its best judgment and efforts in rendering the services
described in this Agreement. Forum shall not be liable to the Trust or any of
the Trust's shareholders for any action or inaction of Forum relating to any
event whatsoever in the absence of bad faith, willful misfeasance or gross
negligence in the performance of Forum's duties or obligations under this
Agreement or by reason of Forum's reckless disregard of its duties and
obligations under this Agreement.
(b) The Trust agrees to indemnify and hold harmless Forum, its
employees, agents, directors, officers and managers and any person who controls
Forum within the meaning of section 15 of the Securities Act or section 20 of
the Securities Exchange Act of 1934, as amended, ("Forum Indemnitees") against
and from any and all claims, demands, actions, suits, judgments, liabilities,
losses, damages, costs, charges, reasonable counsel fees and other expenses of
every nature and character arising out of or in any way related to Forum's
actions taken or failures to act with respect to a Fund that are consistent with
the standard of care set forth in Section 3(a) or based, if applicable, on good
faith reliance upon an item described in Section 3(c)(a "Claim"). The Trust
shall not be required to indemnify any Forum Indemnitee if, prior to confessing
any Claim against the Forum Indemnitee, Forum or the Forum Indemnitee does not
give the Trust written notice of and reasonable opportunity to defend against
the claim in its own name or in the name of the Forum Indemnitee.
(c) A Forum Indemnitee shall not be liable for any action taken or
failure to act in good faith reliance upon:
(i) the advice of the Trust or of counsel, who may be counsel to the
Trust or counsel to Forum, and upon statements of accountants, brokers
and other persons reasonably believed in good faith by Forum to be
expert in the matters upon which they are consulted;
(ii) any oral instruction which it receives and which it reasonably
believes in good faith was transmitted by the person or persons
authorized by the Board to give such oral instruction (Forum shall have
no duty or obligation to make any inquiry or effort of certification of
such oral instruction.);
(iii) any written instruction or certified copy of any resolution of
the Board, and Forum may rely upon the genuineness of any such document
or copy thereof reasonably believed in good faith by Forum to have been
validly executed; or
(iv) any signature, instruction, request, letter of transmittal,
certificate, opinion of counsel, statement, instrument, report, notice,
consent, order, or other document reasonably believed in good faith by
Forum to be genuine and to have been signed or presented by the Trust
or other proper party or parties;
and no Forum Indemnitee shall be under any duty or obligation to inquire into
the validity or invalidity or authority or lack thereof of any statement, oral
or written instruction, resolution, signature, request, letter of transmittal,
certificate, opinion of counsel, instrument, report, notice, consent, order, or
any other document or instrument which Forum reasonably believes in good faith
to be genuine.
(d) Notwithstanding anything to the contrary in this Agreement, Forum
shall not be liable for the errors of other service providers to the Trust,
including the errors of pricing services (other than to pursue all reasonable
claims against the pricing service based on the pricing services' standard
contracts entered into by Forum) and errors in information provided by an
investment adviser (including prices and pricing formulas and the untimely
transmission of trade information), custodian or transfer agent to the Trust.
(e) With respect to Funds which do not value their assets in accordance
with Rule 2a-7 under the 1940 Act, notwithstanding anything to the contrary in
this Agreement, Forum shall not be liable to the Trust or any shareholder of the
Trust for (i) any loss to the Trust if an NAV Difference for which Forum would
otherwise be liable under this Agreement is less than or equal to 0.001 (1/10 of
1%) or (ii) any loss to a shareholder of the Trust if the NAV Difference for
which Forum would otherwise be liable under this Agreement is less than or equal
to 0.005 (1/2 of 1%) or if the loss in the shareholder's account with the Trust
is less than or equal to $10. Any loss for which Forum is determined to be
liable hereunder shall be reduced by the amount of gain which inures to
shareholders, whether to be collected by the Trust or not.
(f) For purposes of this Agreement, (i) the NAV Difference shall mean
the difference between the NAV at which a shareholder purchase or redemption
should have been effected ("Recalculated NAV") and the NAV at which the purchase
or redemption is effected, divided by the Recalculated NAV, (ii) NAV Differences
and any Forum liability therefrom are to be calculated each time a Fund's (or
class's) NAV is calculated, (iii) in calculating any NAV Difference for which
Forum would otherwise be liable under this Agreement for a particular NAV error,
Fund losses and gains shall be netted and (iv) in calculating any NAV Difference
for which Forum would otherwise be liable under this Agreement for a particular
NAV error that continues for a period covering more than one NAV determination,
Fund losses and gains for the period shall be netted.
(g) Nothing contained herein shall be construed to require Forum to
perform any service that could cause Forum to be deemed an investment adviser
for purposes of the 1940 Act or the Investment Advisers Act of 1940, as amended,
or that could cause a Portfolio to act in contravention of a Portfolio's
Offering Document or any provision of the 1940 Act. Except as otherwise
specifically provided herein, the Trust assumes all responsibility for ensuring
that the Trust complies with all applicable requirements of the Securities Act,
the 1940 Act and any laws, rules and regulations of governmental authorities
with jurisdiction over the Trust. All references to any law in this Agreement
shall be deemed to include reference to the applicable rules and regulations
promulgated under authority of the law and all official interpretations of such
law or rules or regulations.
SECTION 4. COMPENSATION AND EXPENSES
(a) In consideration of the services provided by Forum pursuant to this
Agreement, the Trust shall pay Forum, with respect to each Fund, the fees set
forth in Clause (i) of Appendix B hereto. In consideration of the services
provided by Forum to begin the operations of a new Fund, the Trust shall pay
Forum, with respect to each Fund, the fees set forth in clause (ii) of Appendix
B hereto. In consideration of additional services provided by Forum to perform
certain functions, the Trust shall pay Forum, with respect to each Fund the fees
set forth in clause (iii) of Appendix B hereto. Nothing in this Agreement shall
require Forum to perform any of the services listed in Section 2(a)(xiv) and
clause (iii) of Appendix B hereto, as such services may be performed by the
Fund's independent accountant if appropriate in the judgment of Forum.
All fees payable hereunder shall be accrued daily by the Trust. The
fees payable for the services listed in clauses (i) and (iii) of Appendix B
hereto shall be payable monthly in advance on the first day of each calendar
month for services to be performed during the following calendar month. The fees
payable for the services listed in clause (ii) and for all reimbursements as
described in Section 4(b) shall be payable monthly in arrears on the first day
of each calendar month (the first day of the calendar month after the Fund
commences operations in the case of the fees listed in clause (ii) of Appendix B
hereto) for services performed during the prior calendar month. If fees payable
for the services listed in clause (i) begin to accrue in the middle of a month
or if this Agreement terminates before the end of any month, all fees for the
period from that date to the end of that month or from the beginning of that
month to the date of termination, as the case may be, shall be prorated
according to the proportion that the period bears to the full month in which the
effectiveness or termination occurs. Upon the termination of this Agreement with
respect to a Fund, the Trust shall pay to Forum such compensation as shall be
payable prior to the effective date of termination.
(b) In connection with the services provided by Forum pursuant to this
Agreement, the Trust, on behalf of each Fund, agrees to reimburse Forum for the
expenses set forth in Clause (iv) of Appendix B hereto. In addition, the Trust,
on behalf of the applicable Fund, shall reimburse Forum for all expenses and
employee time (at 150% of salary) attributable to any review of the Trust's
accounts and records by the Trust's independent accountants or any regulatory
body outside of routine and normal periodic reviews. Should the Trust exercise
its right to terminate this Agreement, the Trust, on behalf of the applicable
Fund, shall reimburse Forum for all out-of-pocket expenses and employee time (at
150% of salary) associated with the copying and movement of records and material
to any successor person and providing assistance to any successor person in the
establishment of the accounts and records necessary to carry out the successor's
responsibilities.
(d) Forum may, with respect to questions of law relating to its
services hereunder, apply to and obtain the advice and opinion of counsel to the
Trust or counsel to Forum. The costs of any such advice or opinion shall be
borne by the Trust.
SECTION 5. EFFECTIVENESS, DURATION, TERMINATION AND ASSIGNMENT
(a) This Agreement shall become effective with respect to each Fund or
Class on the later of the date on which the Trust's Registration Statement
relating to the Shares of the Fund or Class becomes effective or the date of the
commencement of operations of the Fund or Class. Upon effectiveness of this
Agreement, it shall supersede all previous agreements between the parties hereto
covering the subject matter hereof insofar as such Agreement may have been
deemed to relate to the Funds.
(b) This Agreement shall continue in effect with respect to a Fund
until terminatedfor a period of one year from its effectiveness and shall
continue in effect for successive one year periods; provided, that continuance
is specifically approved at least annually (i) by the Board or by a vote of a
majority of the outstanding voting securities of the Fund and (ii) by a vote of
a majority of Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party (other than as Trustees of the Trust).
(c) This Agreement may be terminated with respect to a Fund at any
time, without the payment of any penalty (i) by the Board on 60 days' written
notice to Forum or (ii) by Forum on 60 days' written notice to the Trust. The
obligations of Sections 3 and 4 shall survive any termination of this Agreement.
(d) This Agreement and the rights and duties under this Agreement
otherwise shall not be assignable by either Forum or the Trust except by the
specific written consent of the other party. All terms and provisions of this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the respective successors and assigns of the parties hereto.
SECTION 6. ADDITIONAL FUNDS AND CLASSES
In the event that the Trust establishes one or more series of Shares or
one or more classes of Shares after the effectiveness of this Agreement, such
series of Shares or classes of Shares, as the case may be, shall become Funds
and Classes under this Agreement. Forum or the Trust may elect not to make anyd
such series or classes subject to this Agreement.
SECTION 7. CONFIDENTIALITY.
Forum agrees to treat all records and other information related to the
Trust as proprietary information of the Trust and, on behalf of itself and its
employees, to keep confidential all such information, except that Forum may
(a) prepare or assist in the preparation of periodic reports to
shareholders and regulatory bodies such as the SEC;
(b) provide information typically supplied in the investment company
industry to companies that track or report price, performance or other
information regarding investment companies; and
(c) release such other information as approved in writing by the Trust,
which approval shall not be unreasonably withheld and may not be withheld where
Forum may be exposed to civil or criminal contempt proceedings for failure to
release the information, when requested to divulge such information by duly
constituted authorities or when so requested by the Trust.
SECTION 8. FORCE MAJEURE
Forum shall not be responsible or liable for any failure or delay in
performance of its obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control
including, without limitation, acts of civil or military authority, national
emergencies, labor difficulties, fire, mechanical breakdowns, flood or
catastrophe, acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply. In addition, to the extent
Forum's obligations hereunder are to oversee or monitor the activities of third
parties, Forum shall not be liable for any failure or delay in the performance
of Forum's duties caused, directly or indirectly, by the failure or delay of
such third parties in performing their respective duties or cooperating
reasonably and in a timely manner with Forum.
SECTION 9. ACTIVITIES OF FORUM
(a) Except to the extent necessary to perform Forum's obligations under
this Agreement, nothing herein shall be deemed to limit or restrict Forum's
right, or the right of any of Forum's managers, officers or employees who also
may be a trustee, officer or employee of the Trust, or persons who are otherwise
affiliated persons of the Trust to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other corporation, trust, firm, individual or association.
(b) Forum may subcontract any or all of its responsibilities pursuant
to this Agreement to one or more corporations, trusts, firms, individuals or
associations, which may be affiliated persons of Forum, who agree to comply with
the terms of this Agreement; provided, that any such subcontracting shall not
relieve Forum of its responsibilities hereunder. Forum may pay those persons for
their services, but no such payment will increase Forum's compensation from the
Trust.
(b) Forum may subcontract any or all of its functions or
responsibilities pursuant to this Agreement to one or more corporations, trusts,
firms, individuals or associations, which may be affiliated persons of Forum,
who agree to comply with the terms of this Agreement. Forum may pay those
persons for their services, but no such payment will increase Forum's
compensation from the Trust.
SECTION 10. COOPERATION WITH INDEPENDENT ACCOUNTANTS
Forum shall cooperate, if applicable, with each Fund's independent
public accountants and shall take reasonable action to make all necessary
information available to the accountants for the performance of the accountants'
duties.
SECTION 11. SERVICE DAYS
Nothing contained in this Agreement is intended to or shall require
Forum, in any capacity under this Agreement, to perform any functions or duties
on any day other than a business day of the Trust or of a Fund. Functions or
duties normally scheduled to be performed on any day which is not a business day
of the Trust or of a Fund shall be performed on, and as of, the next business
day, unless otherwise required by law.
SECTION 12. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The trustees of the Trust and the shareholders of each Fund shall not
be liable for any obligations of the Trust or of the Funds under this Agreement,
and Forum agrees that, in asserting any rights or claims under this Agreement,
it shall look only to the assets and property of the Trust or the Fund to which
Forum's rights or claims relate in settlement of such rights or claims, and not
to the trustees of the Trust or the shareholders of the Funds.
SECTION 13. MISCELLANEOUS
(a) Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement.
(b) Except for Appendix A to add new Funds and Classes in accordance
with Section 6, no provisions of this Agreement may be amended or modified in
any manner except by a written agreement properly authorized and executed by
both parties hereto.
(c) This Agreement shall be governed by, and the provisions of this
Agreement shall be construed and interpreted under and in accordance with, the
laws of the State of Delaware.
(d) This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof, whether oral or written.
(e) This Agreement may be executed by the parties hereto on any number
of counterparts, and all of the counterparts taken together shall be deemed to
constitute one and the same instrument.
(f) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(g) Section headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
(h) 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.
(i) Notwithstanding any other provision of this Agreement, the parties
agree that the assets and liabilities of each Fund of the Trust are separate and
distinct from the assets and liabilities of each other Fund and that no Fund
shall be liable or shall be charged for any debt, obligation or liability of any
other Fund, whether arising under this Agreement or otherwise.
(j) No affiliated person, employee, agent, director, officer or manager
of Forum shall be liable at law or in equity for Forum's obligations under this
Agreement.
(k) Each of the undersigned warrants and represents that they have full
power and authority to sign this Agreement on behalf of the party indicated and
that their signature will bind the party indicated to the terms hereof and each
party hereto warrants and represents that this Agreement, when executed and
delivered, will constitute a legal, valid and binding obligation of the party,
enforceable against the party in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured parties.
(l) The terms "vote of a majority of the outstanding voting
securities," "interested person" and "affiliated person" shall have the meanings
ascribed thereto in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
[NAME]
By:
[Officer name]
[Title]
FORUM ACCOUNTING SERVICES, LIMITED LIABILITY COMPANY
By: Forum Advisors[ ], Inc., as Manager
By:
John Y. Keffer
President
<PAGE>
THE CUTLER TRUST
FUND ACCOUNTING AGREEMENT
APPENDIX A
FUNDS AND CLASSES OF THE TRUST
AS OF SEPTEMBER 10, 1997
Cutler Equity Income Fund
Cutler Approved List Equity Fund
<PAGE>
THE CUTLER TRUST
FUND ACCOUNTING AGREEMENT
APPENDIX B
FEES AND EXPENSES
(I) BASE FEE
<TABLE>
<CAPTION>
A. Standard Fee
<S> <C>
Fee per Fund................................................................... $3,000/month
Fee for each additional Class of the Fund above one............................ $1,000/month
B. Plus additional surcharges for each of:
(i) Portfolios with asset levels exceeding $100 million................... $500/month
Portfolios with asset levels exceeding $250 million................... $1000/month
Portfolios with asset levels exceeding $500 million................... $1,500/month
Portfolios with asset levels exceeding $1,000 million................. $2,000/month
(ii) Portfolios requiring international custody............................ $1,000/month
(iii) Portfolios with more than 30 international positions ................. $1,000/month
(iv) Tax free money market Funds........................................... $1,000/month
(v) Portfolios with more than 25% of net assets invested in
asset backed securities............................................... $1,000/month
Portfolios with more than 50% of net assets invested in
asset backed securities............................................... $2,000/month
(vii) Portfolios with more than 100 security positions...................... $1,000/month
(viii) Portfolios with a monthly portfolio turnover rate of 10%
or greater............................................................ $1,000/month
C. Standard Fee per Gateway Fund (a Fund operating pursuant to Section
12(d)(1)(E) of the 1940 Act)
Standard Fee per Fund.......................................................... $1,000/month
Standard Fee per Fund that invests inone or more instruments
in addition to the fund in which it invests.................................... $2,000/month
Fee for each additional Class of a Fund above one.............................. $1,000/month
Additional surcharges listed above do not apply
D. Standard Fee per Gateway Fund (a Fund operating pursuant to Section
12(d)(1)(G) of the 1940 Act or in a similar structure)
Standard Fee per Fund.......................................................... $1,000/month
Fee for each additional Class of a Fund above one.............................. $1,000/month
Plus additional surcharges listed above if the Fund invests in
securities other than investment companies (calculated as if
the securities were the Fund's only assets)
</TABLE>
Note 1: Surcharges are determined based upon the total assets, security
positions or other factors 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 SEC Form N-1A.
Note 2: The rates set forth above shall remain fixed through December
31, 1998. On January 1, 1999, and on each successive January 1, the
rates may be adjusted automatically by Forum without action of the
Trust to reflect changes in the Consumer Price Index for the preceding
calendar year, as published by the U.S. Department of Labor, Bureau of
Labor Statistics. Forum shall notify the Trust each year of the new
rates, if applicable.
(II) START-UP FEE
<TABLE>
<S> <C>
Fund Start-Up Fee ...................................................................... $2,000
(III) OTHER SERVICES (payable in equal installments monthly)
TAX SERVICES. Preparation of Federal income and excise tax
returns and preparation, execution and filing of state income
tax returns, including any extensions or amendments
Standard Fee.................................................. $3,000/fiscal period
Fee per Gateway Fund (a Fund described
in (i)(C) or (D) above)....................................... $1,500/fiscal period
Fee per Gateway Fund (a Fund described in (i)(C) or (D) above)
that invests in more than one instrument in addition to the
fund(s) in which
it invests.................................................... $3,000/fiscal period
</TABLE>
(IV) OUT-OF-POCKET AND RELATED EXPENSES
The Trust, on behalf of the applicable Fund, shall reimburse Forum for
all out-of-pocket and ancillary expenses in providing the services
described in this Agreement, including but not limited to the cost of
(or appropriate share of the cost of): (i) pricing, paydown, corporate
action, credit and other reporting services, (ii) taxes, (iii) postage
and delivery services, (iv) telephone services, (v) electronic or
facsimile transmission services, (vi) reproduction, (vii) printing and
distributing financial statements, (xiii) microfilm and microfiche and
(ix) Trust record storage and retention fees. In addition, any other
expenses incurred by Forum at the request or with the consent of the
Trust, will be reimbursed by the Trust on behalf of the applicable
Fund.
<PAGE>
EXHIBIT (11)
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by refernece in this Post-Effective Amendment
No. 7 to Registration Statement ( File No. 33-52850) of The Cutler Trust on
behalf of the Cutler Income Equity Fund and Cutler Approved List Equity Fund of
our reports dated July 22, 1997, and to the references to us under the headings
"Financial Highlights" in the Prospectus, and "Custodian and Auditor" in the
Statements of Additional Information which are a part of such Registration
Statement.
/s/ Deloitte & Touche LLP
- -------------------------
Deloitte & Touche LLP
Boston, Massachusetts
September 12, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Robert B. Watts, 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/ Robert B. Watts, Jr.
Robert B. Watts, Jr.
Dated: February , 1996
EXHIBIT 16
<PAGE>
EXHIBIT 16
SCHEDULE OF SAMPLE PERFORMANCE QUOTATION CALCULATIONS
CUTLER EQUITY INCOME FUND
Note: All performance is for the period ended: JUNE 30, 1997
------------------------
1. AVERAGE ANNUAL TOTAL RETURN (PURSUANT TO SEC STANDARDIZED FORMULA)
SEC Formula: T = ({{[((ERV/P) - 1)(1 - S) - S](1 - R) - R} + 1}1 / n )-1
where: T = average annual total return
P = initial payment of $1,000
n = number of years
ERV = ending redeemable value of the initial
payment at the end of the period
a. Average Annual Total Return (assuming deduction of the maximum sales/
--------------------------- purchase/redemption charges)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
N(YR) 1/12 1/4 1/2 1 3 5 10
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
ERV
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
S
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
R
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
T(%)
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
</TABLE>
b. Average Annual total Return (assuming no deduction of sales/purchase/
--------------------------- redemption charges)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
N(YR) 1/2 1/12 1/4 1/2 1 3 5 10 4.5
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
ERV 1225.70 1052.30 1159.80 1225.70 1376.50 2007.50 - - 1988.70
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
T(%) 50.23 84.27 80.96 50.23 37.65 26.12 - - 16.49
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
</TABLE>
<PAGE>
2. CUMULATIVE TOTAL RETURN (PURSUANT TO NON-STANDARDIZED FORMULA)
Formula: C = {{[(T + 1)n - 1 - R]/(1 - R)} + S}/(1 - S)
where: C = cumulative total return of the
investment over the specified period
T = average annual total return (see above)
P = initial payment of $1,000
n = number of years
ERV = ending redeemable value of the initial payment
at the end of the period
S = Maximum initial sales charge
R = Maximum redemption charge (calculated based on ____)
(i.e., lower of purchase amount or redemption amount)
a. Cumulative Total Return (assuming deduction of the maximum sales/
----------------------- purchase/redemption charges)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
N(YR) 1/12 1/4 1/2 1 3 5 10
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
ERV
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
S
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
R
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
C(%)
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
</TABLE>
b. Cumulative Or Aggregate Total Return (assuming no deduction of sales/
------------------------------------ purchase/redemption charges)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
N(YR) 1/2 1/12 1/4 1/2 1 3 5 10 4.5
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
ERV 1225.70 1052.30 1159.80 1225.70 1376.50 2007.50 - - 1988.70
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
C(%) 22.57 5.23 15.98 22.57 37.65 100.75 - - 98.87
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
</TABLE>
<PAGE>
3. 30 DAY YIELD (PURSUANT TO SEC STANDARDIZED FORMULA)
SEC Formula: Y = 2{[(a - b)/(cd) + 1]6 - 1]}
where: Y = 30 day yield
a = dividends and interest earned during the
period
b = expenses accrued for the period (net
of reimbursements)
c = the average daily number of shares
outstanding during the period that were
entitled to receive dividends
d = the maximum offering price per share on
the last day of the period
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
A($) B($) C D($) Y(%)
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
130,076.35 43,944.44 3,857,286.95 16.06 1.67
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
</TABLE>
4. 30 DAY TAX-EQUIVALENT YIELD (PURSUANT TO SEC STANDARDIZED FORMULA)
SEC Formula: TEY = Y/(1 - TR)
where: TEY = 30 day tax-equivalent yield
Y = 30 day yield (see above)
TR = assumed applicable tax rate
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------- ---------------------------------------------------------
TR(%) TEY(%)
- ----------------------------------------------------------- ---------------------------------------------------------
NA NA
- ----------------------------------------------------------- ---------------------------------------------------------
</TABLE>
5. 30-DAY DISTRIBUTION RATE (PURSUANT TO NON-STANDARDIZED FORMULA)
Formula: 30 Day Distribution Rate ("Rate")= (ab)/c
where: Rate = 30 day distribution rate
a = distributions in last 30 days
b = number of 30 day periods in year
c = maximum offering price per share on last
day of period
<TABLE>
<S> <C> <C> <C>
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
A B C RATE(%)
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
</TABLE>
<PAGE>
EXHIBIT 16
SCHEDULE OF SAMPLE PERFORMANCE QUOTATION CALCULATIONS
CUTLER APPROVED LIST FUND
Note: All performance is for the period ended: JUNE 30, 1997
------------------------
1. AVERAGE ANNUAL TOTAL RETURN (PURSUANT TO SEC STANDARDIZED FORMULA)
SEC Formula: T = ({{[((ERV/P) - 1)(1 - S) - S](1 - R) - R} + 1}1 / n )-1
where: T = average annual total return
P = initial payment of $1,000
n = number of years
ERV = ending redeemable value of the initial
payment at the end of the period
S = Maximum initial sales charge
R = Maximum redemption charge (calculated based
on _______)(i.e., lower of purchase amount or redemption
amount)
a. Average Annual Total Return (assuming deduction of the maximum sales/
--------------------------- purchase/redemption charges)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
N(YR) 1/12 1/4 1/2 1 3 5 10
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
ERV
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
S
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
R
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
T(%)
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
</TABLE>
b. Average Annual Total Return (assuming no deduction of sales/purchase/
--------------------------- redemption charges)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
N(YR) 1/2 1/12 1/4 1/2 1 3 5 10 4.5
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
ERV 1204.70 1051.50 1162.70 1204.70 1311.80 1974.00 - - 1985.10
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
T(%) 45.13 82.72 82.73 45.13 31.18 25.42 - - 16.44
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
</TABLE>
<PAGE>
2. CUMULATIVE TOTAL RETURN (PURSUANT TO NON-STANDARDIZED FORMULA)
Formula: C = {{[(T + 1)n - 1 - R]/(1 - R)} + S}/(1 - S)
where: C = cumulative total return of the investment over the
specified period
T = average annual total return (see above)
P = initial payment of $1,000
n = number of years
ERV = ending redeemable value of the initial payment at the
end of the period
a. Cumulative Total Return (assuming deduction of the maximum sales/
----------------------- purchase/redemption charges)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
N(YR) 1/12 1/4 1/2 1 3 5 10
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
ERV
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
S
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
R
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
C(%)
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
</TABLE>
b. Cumulative Or Aggregate Total Return (assuming no deduction of sales/
------------------------------------ purchase/redemption charges)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
N(YR) 1/2 1/12 1/4 1/2 1 3 5 10 4.5
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
ERV 1204.70 1051.50 1162.70 1204.70 1311.80 1974.00 - - 1985.10
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
C(%) 20.47 5.15 16.27 20.47 31.18 97.40 - - 98.51
- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
</TABLE>
<PAGE>
3. 30 DAY YIELD (PURSUANT TO SEC STANDARDIZED FORMULA)
SEC Formula: Y = 2{[(a - b)/(cd) + 1]6 - 1]}
where: Y = 30 day yield
a = dividends and interest earned during the
period
b = expenses accrued for the period (net
of reimbursements)
c = the average daily number of shares
outstanding during the period that were
entitled to receive dividends
d = the maximum offering price per share on
the last day of the period
<TABLE>
<S> <C> <C> <C> <C> <C>
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
A($) B($) C D($) Y(%)
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
61,750.70 35,626.81 1,915,782.54 18.33 0.89
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
</TABLE>
4. 30 DAY TAX-EQUIVALENT YIELD (PURSUANT TO SEC STANDARDIZED FORMULA)
SEC Formula: TEY = Y/(1 - TR)
where: TEY = 30 day tax-equivalent yield
Y = 30 day yield (see above)
TR = assumed applicable tax rate
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------- ---------------------------------------------------------
TR(%) TEY(%)
- ----------------------------------------------------------- ---------------------------------------------------------
N/A N/A
- ----------------------------------------------------------- ---------------------------------------------------------
</TABLE>
5. 30-DAY DISTRIBUTION RATE (PURSUANT TO NON-STANDARDIZED FORMULA)
Formula: 30 Day Distribution Rate ("Rate")= (ab)/c
where: Rate = 30 day distribution rate
a = distributions in last 30 days
b = number of 30 day periods in year
c = maximum offering price per share on last day of
period
<TABLE>
<S> <C> <C> <C> <C>
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
A B C RATE(%)
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CUTLER TRUST ANNUAL REPORT DATED JUNE 30, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<SERIES>
<NUMBER> 010
<NAME> CUTLER EQUITY INCOME FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 41,643,624
<INVESTMENTS-AT-VALUE> 62,453,728
<RECEIVABLES> 174,871
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 62,628,599
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 105,665
<TOTAL-LIABILITIES> 105,665
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 39,934,871
<SHARES-COMMON-STOCK> 3,893,863
<SHARES-COMMON-PRIOR> 3,573,490
<ACCUMULATED-NII-CURRENT> 14,978
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,762,981
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 20,810,104
<NET-ASSETS> 62,522,934
<DIVIDEND-INCOME> 1,337,812
<INTEREST-INCOME> 120,667
<OTHER-INCOME> 0
<EXPENSES-NET> 600,120
<NET-INVESTMENT-INCOME> 858,359
<REALIZED-GAINS-CURRENT> 2,878,813
<APPREC-INCREASE-CURRENT> 13,036,026
<NET-CHANGE-FROM-OPS> 16,773,198
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 869,845
<DISTRIBUTIONS-OF-GAINS> 4,115,498
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,928,772
<NUMBER-OF-SHARES-REDEEMED> 6,406,222
<SHARES-REINVESTED> 4,927,163
<NET-CHANGE-IN-ASSETS> 16,237,568
<ACCUMULATED-NII-PRIOR> 20,754
<ACCUMULATED-GAINS-PRIOR> 3,005,370
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 385,655
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 600,120
<AVERAGE-NET-ASSETS> 51,420,712
<PER-SHARE-NAV-BEGIN> 12.95
<PER-SHARE-NII> .24
<PER-SHARE-GAIN-APPREC> 4.30
<PER-SHARE-DIVIDEND> .24
<PER-SHARE-DISTRIBUTIONS> 1.19
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.06
<EXPENSE-RATIO> 1.17
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CUTLER TRUST ANNUAL REPORT DATED JUNE 30, 1997 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> YEAR
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 20,940,529
<INVESTMENTS-AT-VALUE> 35,935,638
<RECEIVABLES> 53,297
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 35,988,935
<PAYABLE-FOR-SECURITIES> 657,044
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 54,510
<TOTAL-LIABILITIES> 711,554
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 19,480,940
<SHARES-COMMON-STOCK> 1,924,574
<SHARES-COMMON-PRIOR> 2,132,571
<ACCUMULATED-NII-CURRENT> 2,749
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 798,583
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,995,109
<NET-ASSETS> 35,277,381
<DIVIDEND-INCOME> 699,184
<INTEREST-INCOME> 38,061
<OTHER-INCOME> 0
<EXPENSES-NET> 384,285
<NET-INVESTMENT-INCOME> 352,960
<REALIZED-GAINS-CURRENT> 817,421
<APPREC-INCREASE-CURRENT> 7,342,804
<NET-CHANGE-FROM-OPS> 8,513,185
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 361,715
<DISTRIBUTIONS-OF-GAINS> 94,208
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,668,009
<NUMBER-OF-SHARES-REDEEMED> 6,144,099
<SHARES-REINVESTED> 448,402
<NET-CHANGE-IN-ASSETS> 5,029,574
<ACCUMULATED-NII-PRIOR> 11,504
<ACCUMULATED-GAINS-PRIOR> 75,370
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 230,877
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 386,065
<AVERAGE-NET-ASSETS> 30,783,534
<PER-SHARE-NAV-BEGIN> 14.18
<PER-SHARE-NII> .18
<PER-SHARE-GAIN-APPREC> 4.20
<PER-SHARE-DIVIDEND> .18
<PER-SHARE-DISTRIBUTIONS> .05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.33
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
