(File Nos. 811-7242; 33-52850)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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[] Definitive Proxy Statement
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[] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
The Cutler Trust
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Preliminary Copies
December XX, 1999
Dear Shareholders:
In an effort to seek the highest level of return possible for a given level of
risk, we would like to initiate changes to the investment criteria of the Cutler
Equity Income Fund ("Fund"). We feel these changes will result in our ability to
maintain a conservative portfolio of companies that reflect our shareholders'
desire for owning large, well respected and financially solid industry leaders,
while also maintaining a stable income stream. The desired changes to the Fund's
objectives and corresponding investment policies will expand the Fund's
investable universe. This expansion allows for greater diversification as well
as the potential for better investment returns.
DIVERSIFICATION BENEFITS - When the Fund's current investment policies are
followed, entire industry categories, including leading issues in the major
averages, are removed from the Fund's investable universe. Eliminating the
current restrictions, set in place a generation ago, will bring us more in line
with current major institutional practice.
RETURN ENHANCEMENT - Broadening the number of eligible investment candidates
allows us to own the companies that in our opinion have the greatest potential
for price appreciation; although there is no guarantee, this increases the
likelihood of higher portfolio returns.
Your investment in this Fund indicates a desire to own large, well-respected,
financially solid industry leaders. We will continue to maintain a bias toward
dividend paying companies. The desired changes will greatly expand the Fund's
universe of investment candidates but will not materially alter the basic
premise in which you invested. We are excited by the potential for enhanced
investment results and hope you share our enthusiasm.
Sincerely,
Kenneth R. Cutler
Chairman
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Preliminary Copies
THE CUTLER TRUST
TWO PORTLAND SQUARE
PORTLAND, MAINE 04101
(888) CUTLER4
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
December __, 1999
To the Shareholders of The Cutler Trust:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of the Cutler Equity Income Fund (the "Fund"), a series of The Cutler
Trust (the "Trust"), will be held at the offices of the Trust, Two Portland
Square, Portland, Maine 04101, on December 15, 1999 (at 10:00 a.m. E.S.T.), for
the following purpose which is more fully described in the accompanying Proxy
Statement dated November __, 1999:
To approve the modification of the Fund's investment
objective and to effect corresponding revisions of the
Fund's investment policies.
In addition to the foregoing, the shareholders shall transact such other
business as may properly come before the Meeting or any adjournment thereof. The
Trustees have fixed the close of business on November 19, 1999 as the record
date for the determination of shareholders entitled to notice of and to vote at
the Meeting or any adjournment thereof. The enclosed proxy is being solicited on
behalf of the Trustees.
By order of the Board of Trustees,
D. Blaine Riggle
Secretary
November __, 1999
Portland, Maine
YOUR VOTE IS IMPORTANT NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE. IN
ORDER TO AVOID THE UNNECESSARY EXPENSE OF FURTHER SOLICITATION, WE URGE YOU TO
INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY, DATE AND SIGN IT, AND
RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED.
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Preliminary Copies
The Cutler Trust
Two Portland Square
Portland, Maine 04101
(888) CUTLER4
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Trustees of The Cutler
Trust (the "Trust"), a Delaware business trust, on behalf of Cutler Equity
Income Fund (the "Fund"). The Trust is a registered, open-end, investment
company whose principal office is located at Two Portland Square, Portland,
Maine 04101. Proxies will be voted at the Special Meeting of Shareholders (the
"Meeting") of the Fund to be held at the offices of the Trust, Two Portland
Square, Portland, Maine 04101 on Wednesday, December 15, 1999, at 10:00 a.m.
(Eastern Standard Time), and any adjournment thereof for the purpose set forth
below. This Proxy Statement and the enclosed notice of meeting and proxy card
were first mailed to shareholders on or about November 29, 1999.
The Fund's Annual Report to shareholders for the fiscal year ended June 30,
1999 has previously been mailed to shareholders of the Fund. Shareholders may
request a copy of the Annual Report without charge by calling the Fund's
distributor, Forum Fund Services, LLC, Two Portland Square, Portland, Maine
04101, at 1-888-CUTLER4.
The solicitation of proxies will be primarily by mail but may also include
telephone or oral communications by the officers of the Trust or by regular
employees of Cutler & Company, LLC (the "Adviser"), the Trust's administrator,
Forum Administrative Services , LLC ("Forum"), or their affiliates. The Adviser
will bear all of the costs of the Meeting and the preparation, printing and
mailing of proxies.
PURPOSE OF MEETING
The Meeting is being called:
To approve the modification of the Fund's investment
objective and to effect corresponding revisions of the
Fund's investment policies.
In addition to the foregoing, the shareholders shall transact such other
business as may properly come before the Meeting or any adjournment thereof.
DESCRIPTION OF VOTING
Approval of the proposal requires the affirmative vote of "a majority
of the outstanding voting securities" of the Fund as that term is defined under
the Investment Company Act of 1940, as amended (the "1940 Act"). Under the 1940
Act, this means the affirmative vote of the lesser of (a) 67% or more of the
shares of the Fund present at the Meeting or represented by proxy if the holders
of more than 50% of the outstanding shares are present or represented by proxy
at the Meeting or (b) more than 50% of the outstanding shares of the Fund.
Shareholders of record at the close of business on November 19, 1999 (the
"Record Date") will be entitled to notice of, and to vote at, the Meeting,
including any adjournment thereof. As of the Record Date there were
________________ shares of the Fund outstanding. As of the Record Date, no
trustees or officers of the Trust owned beneficially more than 1% of the
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outstanding shares of the Fund. As of the Record Date, the following
shareholder owned beneficially more than 5% of the outstanding shares of the
Fund: [name/address of owner], [amount and nature of ownership], and [percentage
of Fund].
Each shareholder will be entitled to one vote for each whole share and a
fractional vote for each fractional share held. Shares may be voted in person or
by proxy. Shareholders holding one-third of the outstanding shares of the Fund
at the close of business on the Record Date present in person or by proxy will
constitute a quorum for the transaction of business regarding the Fund at the
Meeting. All properly executed proxies received in time to be voted at the
Meeting will be counted at the Meeting, and any adjournment thereof, in
accordance with the instructions marked thereon or otherwise provided therein.
For purposes of determining the presence of a quorum and counting votes on
the matters presented, shares represented by abstentions and "broker non-votes"
will be counted as present, but not as votes cast at the Meeting. Broker
non-votes are shares held in street name for which the broker indicates that
instructions have not been received from the beneficial owners and other persons
entitled to vote and for which the broker lacks discretionary voting authority.
Under the 1940 Act, the affirmative vote necessary to approve a matter under
consideration may be determined with reference to a percentage of votes present
at the Meeting. For this reason, abstentions and non-votes have the effect of
votes AGAINST the proposal. In completing proxies, therefore, shareholders
should be aware that checking the box labeled ABSTAIN will result in the shares
covered by the proxy being treated as if they were voted AGAINST the proposal.
IF YOU DO NOT SPECIFY A CHOICE ON THE PROXY, PROPERLY EXECUTED PROXIES THAT
ARE RETURNED IN TIME TO BE VOTED AT THE MEETING WILL BE VOTED FOR THE APPROVAL
OF THE PROPOSAL DESCRIBED IN THIS PROXY STATEMENT.
If a quorum is not present at the Meeting, or if a quorum is present at the
Meeting, but sufficient votes to approve the proposal is not received, the
persons named as proxies may propose one or more adjournments of the Meeting to
permit further solicitation of proxies with respect to the proposal. In
determining whether to adjourn the Meeting, the following factors may be
considered: the nature of the proposal, the percentage of votes actually cast,
the percentage of negative votes actually cast, the nature of any further
solicitation and the information to be provided to shareholders with respect to
the reasons for the solicitation. Any adjournment will require the affirmative
vote of a majority of shares represented in person or by proxy at the Meeting.
In that case, the persons named as proxies will vote all proxies that they are
entitled to vote FOR such an adjournment; provided, however, any proxies
required to be voted against the proposal will be voted AGAINST such
adjournment. A shareholder vote may be taken on the proposal prior to
adjournment if sufficient votes have been received and it is otherwise
appropriate.
Shareholders may revoke their proxy at any time prior to exercise thereof
by giving written notice of revocation or by executing and delivering a later
dated proxy to Forum Shareholder Services, LLC, the Trust's transfer agent, at
Two Portland Square, Portland, Maine, 04101, or by personally casting a vote at
the Meeting.
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PROPOSAL
TO APPROVE THE MODIFICATION OF THE FUND'S INVESTMENT
OBJECTIVE AND CORRESPONDING REVISIONS
OF THE FUND'S INVESTMENT POLICIES
It is proposed that the Fund's investment objective and corresponding
investment policies be amended. The Fund's current investment objective is to
"seek current income and long-term capital appreciation" by investing within the
Adviser's Approved List (the "Approved List"). To qualify for the Approved List,
each company must meet the following five requirements. The Fund can only
purchase companies:
(1) listed on the New York Stock Exchange;
(2) that have paid dividends continuously for at least the last 20 years,
without any reduction in the rate;
(3) that have 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 the Adviser;
(4) with annual sales, assets and market value of at least $1 billion; and
(5) that in the Adviser's opinion have wide ownership among major
institutional investors and very liquid markets.
In addition, the Fund has been required to invest substantially all of its
total assets in the income-producing stocks of the Approved List and hold 23-30
of the stocks on the Approved List. The Fund's new investment objective will be
to seek current income and long-term capital appreciation by investing in stocks
that it considers undervalued with respect to their growth prospects relative to
the general market. It will seek to do this by no longer being required to
invest substantially all of its total assets in the income-producing stocks of
the Approved List and hold 23-30 of the stocks on the Approved List. The Fund
will continue only to purchase securities of companies that, in the Adviser's
opinion, are leaders in their industry, have wide ownership among major
institutional investors and very liquid markets as well as have annual sales,
assets and market value of at least $1 billion. The Fund will, however, now be
able to purchase securities of companies that are listed on exchanges other than
the New York Stock Exchange as long as the exchanges are subject to regulation
by the U.S. Securities and Exchange Commission. The Fund will no longer be
required to purchase securities of companies that paid dividends continuously
for at least the last 20 years, without any reduction in the rate. It will now
focus on stocks of which at least 75% pay dividends. The Fund will be able to
invest in companies that have senior debt rated "investment grade." Investment
grade is generally defined as a bond with a rating of at least BBB. The Fund's
portfolio will, under normal conditions, now be comprised of at least 25 stocks.
If the shareholders approve this proposal, the name of the Fund will be
changed to "Cutler Core Fund". Management believes that the proposed changes
will allow the Fund to maintain its conservative approach while expanding the
Fund's investable universe. This will bring the Fund more in line with current
major institutional practices and allow the Fund to own companies which, in the
Adviser's opinion, have the greatest potential for price appreciation. While the
Fund will be able to invest in a broader assortment of companies, the risk of
this proposed modification to the investment objective is that the companies
purchased may not have the same level of credit history and debt ratings as
before. The Board of Trustees, after weighing the potential risks and benefits,
believes that the proposed modification to the Fund's investment objective and
corresponding revisions of the Fund's investment policies are in the best
interests of the Fund and its shareholders.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF THE
FUND VOTE IN FAVOR OF THIS PROPOSAL
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OTHER BUSINESS
Management knows of no other business to be presented at the Meeting. If
any additional matters should be properly presented, it is intended that the
enclosed proxy will be voted in accordance with the judgment of the persons
named in the proxy.
It is anticipated that, following the Meeting, the Fund will not hold any
meetings of shareholders except as required by Federal or Delaware law.
Shareholders wishing to submit proposals for inclusion in a proxy statement for
a subsequent shareholder meeting should send proposals within a reasonable time
before solicitation of proxies for such meeting to the Secretary of the Trust,
D. Blaine Riggle, at Two Portland Square, Portland, Maine 04101. The timely
submission of a proposal does not guarantee its inclusion.
YOU ARE URGED TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY
By Order of the Board of Trustees,
D. Blaine Riggle
Secretary
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Preliminary Copies
THE CUTLER TRUST
Cutler Equity Income Fund
Two Portland Square
Portland, Maine 04101
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
Revoking any such prior appointments, the undersigned appoints D. Blaine Riggle
and David I. Goldstein (or, if only one shall act, that one) proxies with the
power of substitution to vote all of the shares of Cutler Equity Income Fund
(the "Fund"), a series of The Cutler Trust (the "Trust"), registered in the name
of the undersigned at the Special Meeting of Shareholders of the Fund to be held
at the offices of the Trust, Two Portland Square, Portland, Maine 04101, on
December 15, 1999, at 10:00 a.m. (Eastern Standard Time), and at any adjournment
or adjournments thereof.
The shares of beneficial interest represented by this Proxy will be voted in
accordance with the instructions given by the undersigned below. IF NO
INSTRUCTIONS ARE GIVEN, SUCH SHARES WILL BE VOTED FOR THE PROPOSAL SET FORTH
BELOW. The Trust has proposed the Proposal. The Board of Trustees recommends
voting FOR the Proposal.
PROPOSAL: To approve the modification of the Fund's investment objective
and the corresponding revisions of the Fund's investment policies.
FOR _____ AGAINST _____ ABSTAIN _____
The proxies are authorized to vote in their discretion on any other business
which may properly come before the meeting and ANY adjournments thereof.
(NOTE: Checking the boxes labeled ABSTAIN will result in the shares covered by
the Proxy being treated as if they were voted AGAINST the proposal.) Receipt is
acknowledged of the Notice and Proxy Statement for the Special Meeting of
Shareholders to be held on December 15, 1999. PLEASE SIGN AND DATE THIS PROXY IN
THE SPACE PROVIDED. Execution by shareholders who are not individuals must be
made by an authorized signatory. Executors, administrators, trustees, guardians
and others signing in a representative capacity should give their full title as
such.
Authorized Signature Date
Printed Name (and Title if Applicable)
Authorized Signature (Joint Investor or Second Signatory) Date
Printed Name (and Title if Applicable)
