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As filed with the Securities and Exchange Commission on May 30, 1997
File No. 811-8858
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 8
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CORE TRUST (DELAWARE)
(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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David I. Goldstein, Esq.
Forum Financial Services, Inc.
Two Portland Square
Portland, Maine 04101
(Name and Address of Agent for Service)
Copies to:
R. Darrell Mounts, Esq.
Kirkpatrick & Lockhart, LLP
1800 Massachusetts Ave., N.W. 2nd Floor
Washington, D.C. 20036-1800
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EXPLANATORY NOTE
This Registration Statement is being filed by Registrant pursuant to Section
8(b) of the Investment Company Act of 1940, as amended. Beneficial interests in
the series of Registrant are not being registered under the Securities Act of
1933, as amended, because such interests will be issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of that act. Investments in Registrant's series may
only be made by certain institutional investors, whether organized within or
without the United States. This Registration Statement does not constitute an
offer to sell, or the solicitation of an offer to buy, any beneficial interests
in any series of Registrant.
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PART A
CORE TRUST (DELAWARE)
Treasury Cash Portfolio
Government Cash Portfolio
Cash Portfolio
Treasury Portfolio
No changes are effected by this Post-Effective Amendment No. 8 to the Part A
regarding the above listed Portfolios included in previous Post-Effective
Amendments to Registrant's Registration Statement.
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PART A
CORE TRUST (DELAWARE)
PRIME MONEY MARKET PORTFOLIO INDEX PORTFOLIO
MONEY MARKET PORTFOLIO INCOME EQUITY PORTFOLIO
POSITIVE RETURN BOND PORTFOLIO LARGE COMPANY GROWTH PORTFOLIO
STABLE INCOME PORTFOLIO SMALL COMPANY STOCK PORTFOLIO
MANAGED FIXED INCOME PORTFOLIO SMALL COMPANY GROWTH PORTFOLIO
TOTAL RETURN BOND PORTFOLIO SMALL COMPANY VALUE PORTFOLIO
INTERNATIONAL PORTFOLIO
Part A of this Registration Statement on Form N-1A, as amended through the date
hereof, relating to the above listed portfolios of Core Trust (Delaware),
consists of the following Private Placement Memorandum. Responses to Items 1,
2, 3 and 5A of Form N-1A have been omitted pursuant to paragraph 4 of
Instruction F of the General Instructions to Form N-1A.
Responses to certain items required to be included in Part A of this
Registration Statement are incorporated herein by reference from
Post-Effective Amendment No. 42 of Norwest Funds (1940 Act File No.
811-4881), as filed with the Securities and Exchange Commission on June 2,
1997 (Feeder's Registration Statement).
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PART B
CORE TRUST (DELAWARE)
Treasury Cash Portfolio
Government Cash Portfolio
Cash Portfolio
Treasury Portfolio
No changes are effected by this Post-Effective Amendment No. 8 to the Part B
regarding the above listed Portfolios included in previous Post-Effective
Amendments to Registrant's Registration Statement.
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PART B
CORE TRUST (DELAWARE)
PRIME MONEY MARKET PORTFOLIO INDEX PORTFOLIO
MONEY MARKET PORTFOLIO INCOME EQUITY PORTFOLIO
POSITIVE RETURN BOND PORTFOLIO LARGE COMPANY GROWTH PORTFOLIO
STABLE INCOME PORTFOLIO SMALL COMPANY STOCK PORTFOLIO
MANAGED FIXED INCOME PORTFOLIO SMALL COMPANY GROWTH PORTFOLIO
TOTAL RETURN BOND PORTFOLIO SMALL COMPANY VALUE PORTFOLIO
INTERNATIONAL PORTFOLIO
Part B of this Registration Statement on Form N-1A, as amended through the date
hereof, relating to the above listed portfolios of Core Trust (Delaware),
consists of the following Private Placement Memorandum -- Statement of
Additional Information.
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PRIVATE PLACEMENT MEMORANDUM
JUNE 1, 1997
This Private Placement Memorandum relates to beneficial interests in Prime Money
Market Portfolio, Money Market Portfolio, Positive Return Bond Portfolio, Stable
Income Portfolio, Managed Fixed Income Portfolio, Total Return Bond Portfolio,
Index Portfolio, Income Equity Portfolio, Large Company Growth Portfolio, Small
Company Stock Portfolio, Small Company Growth Portfolio, Small Company Value
Portfolio and International Portfolio (each a "Portfolio" and collectively the
"Portfolios"), diversified portfolios of Core Trust (Delaware) (the "Trust"), a
registered, open-end management investment company.
Investments in the Portfolios may only be made by certain institutional
investors, whether organized within or outside the United States (excluding
individuals, S corporations, partnerships, and grantor trusts beneficially owned
by any individuals, S corporations, or partnerships). An investor in a
Portfolio must also be an "accredited investor," as that term is defined under
Rule 501(a) of Regulation D under the Securities Act of 1933, as amended ("1933
Act").
The Trust has filed with the Securities and Exchange Commission ("SEC") a
Statement of Additional Information ("SAI") with respect to the Portfolios dated
the same date as this Private Placement Memorandum and as may be further amended
from time to time, which contains more detailed information about the Trust and
the Portfolios and is incorporated into this Private Placement Memorandum by
reference. A prospective investor may obtain a copy of the SAI without charge
by contacting Forum Financial Services, Inc. ("Forum"), the Trust's placement
agent (the "Placement Agent") at Two Portland Square, Portland, Maine 04101 or
by calling (207) 879-1900.
This Private Placement Memorandum does not constitute an offer to sell, or the
solicitation of an offer to buy, beneficial interests in any Portfolio. An
investor may subscribe for a beneficial interest in a Portfolio by contacting
the Placement Agent at Two Portland Square, Portland, Maine 04101, (207)
879-1900, for a complete subscription package, including a subscription
agreement. The Trust and the Placement Agent reserve the right to refuse to
accept any subscription for any reason.
TABLE OF CONTENTS
Page
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General Description of Registrant. . . . . . . . . . . . . .
Management of the Portfolios . . . . . . . . . . . . . . . .
Capital Stock and Other Securities . . . . . . . . . . . . .
Purchase of Securities . . . . . . . . . . . . . . . . . . .
Redemption or Repurchase . . . . . . . . . . . . . . . . . .
Pending Legal Proceedings. . . . . . . . . . . . . . . . . .
THE SECURITIES OF THE TRUST DESCRIBED IN THIS PRIVATE PLACEMENT MEMORANDUM HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER (1) THE TERMS OF THE TRUST INSTRUMENT OF THE
TRUST AND (2) THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
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NOTE
Responses to Items 1, 2, 3 and 5A of Form N-1A (the form required to be used for
the registration statement of open-end, management investment companies) have
been omitted pursuant to paragraph 4 of Instruction F of the General
Instructions to Form N-1A.
GENERAL DESCRIPTION OF REGISTRANT (ITEM 4 OF FORM N-1A)
Core Trust (Delaware) (the "Trust") is an open-end, management investment
company which was organized as a business trust under the laws of the State of
Delaware pursuant to a Trust Instrument dated September 1, 1994, as amended and
restated November 1, 1994. The Trust offers units of beneficial interest
without any sales charge and units may be redeemed without charge.
Beneficial interests in the Trust are divided into 17 separate diversified
subtrusts or "series," each having a distinct investment objective and distinct
investment policies. the Portfolios are 13 of those series. The Trust is
empowered to establish, without investor approval, additional series which may
have different investment objectives and policies.
Index Portfolio and International Portfolio commenced operations on November 10,
1994. Positive Return Bond Portfolio, Stable Income Portfolio, Managed Fixed
Income Portfolio, Total Return Bond Portfolio, Income Equity Portfolio, Large
Company Growth Portfolio, Small Company Stock Portfolio, Small Company Growth
Portfolio and Small Company Value Portfolio commenced operations on June 1,
1997. Prime Money Market Portfolio and Money Market Portfolio had not commenced
operations as of June 1, 1997. The assets of each Portfolio belong only to that
Portfolio, and the assets belonging to a Portfolio are charged with the
liabilities of that Portfolio and all expenses, costs, charges and reserves
attributable to that Portfolio.
Effective June 1, 1997 Small Company Portfolio, a former series of the Trust,
divided to form three of the Portfolios -- Small Company Stock Portfolio, Small
Company Growth Portfolio and Small Company Value Portfolio. Small Company
Portfolio was managed by three portfolio managers, each of whom now serves as
the portfolio manager for one of the three new Portfolios. The division was
accomplished by Small Company Portfolio transferring the assets managed by each
portfolio manager to the corresponding new Portfolio. Also effective June 1,
1997, International Portfolio II changed its name to International Portfolio and
acquired the assets of a former series of the Trust which itself was named
international Portfolio.
Beneficial interests in the Portfolios are offered solely in private placement
transactions which do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. Investments in a Portfolio may only be made by
certain institutional investors, whether organized within or outside the United
States (excluding individuals, S corporations, partnerships, and grantor trusts
beneficially owned by any individuals, S corporations, or partnerships). This
registration statement does not constitute an offer to sell, or the solicitation
of an offer to buy, any "security" as that term is defined in the 1933 Act.
Norwest Investment Management, Inc. ("Norwest"), a subsidiary of Norwest Bank
Minnesota, N.A. ("Norwest Bank"), serves as the investment adviser of each
Portfolio except International Portfolio, for which Schroder Capital Management
International Inc. ("Schroder") serves as the investment adviser.
United Capital Management ("UCM"), a part of Norwest Bank Colorado, N.A., is the
investment subadviser of Total Return Bond Portfolio. Galliard Capital
Management, Inc. ("Galliard") is the investment subadviser of Stable Income
Portfolio and Managed Fixed Income Portfolio. Crestone Capital Management, Inc.
("Crestone") is the investment subadviser of Small Company Stock Portfolio.
Peregrine Capital Management, Inc. ("Peregrine") is the investment subadviser of
Positive Return Bond Portfolio, and Large Company Growth Portfolio, Small
Company Growth Portfolio and Small Company Value Portfolio. Galliard, Crestone
and Peregrine are each investment advisory subsidiaries of Norwest Bank and,
with UCM are referred to as the "Subadvisers." Norwest, Schroder, UCM,
Galliard, Crestone and Peregrine (or Norwest and a Subadviser) are collectively
referred to as the "Advisers."
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INVESTMENT OBJECTIVES
The investment objective of each Portfolio is fundamental and may not be changed
without investor approval. There can be no assurance that any Portfolio will
achieve its investment objective.
PRIME MONEY MARKET PORTFOLIO'S investment objective is to seek to provide high
current income to the extent consistent with the preservation of capital and the
maintenance of liquidity.
MONEY MARKET PORTFOLIO'S investment objective is to seek to provide high current
income to the extent consistent with the preservation of capital and the
maintenance of liquidity.
POSITIVE RETURN BOND PORTFOLIO'S investment objective is to seek positive total
return each calendar year regardless of the bond market.
STABLE INCOME PORTFOLIO'S investment objective is to maintain safety of
principal while providing low-volatility total return.
MANAGED FIXED INCOME PORTFOLIO'S investment objective is to seek consistent
fixed income returns.
TOTAL RETURN BOND PORTFOLIO'S investment objective is to seek total return.
INDEX PORTFOLIO'S investment objective is to duplicate the return of the
Standard & Poor's 500 Composite Stock Price Index.
INCOME EQUITY PORTFOLIO'S investment objective is to provide long-term capital
appreciation consistent with above-average dividend income.
LARGE COMPANY GROWTH PORTFOLIO'S investment objective is to provide long-term
capital appreciation by investing primarily in large, high-quality domestic
companies that the investment adviser believes have superior growth potential
SMALL COMPANY STOCK PORTFOLIO'S investment objective is long-term capital
appreciation.
SMALL COMPANY GROWTH PORTFOLIO'S investment objective is to provide long-term
capital appreciation by investing in smaller sized domestic companies.
SMALL COMPANY VALUE PORTFOLIO'S investment objective is to seek to provide
long-term capital appreciation.
INTERNATIONAL PORTFOLIO'S investment objective is to provide long-term capital
appreciation by investing directly or indirectly in high quality companies based
outside the United States ("foreign companies").
INVESTMENT PROGRAMS
A description of the Investment Objectives and Investment Policies of the
Portfolios is incorporated herein by reference from the section entitled
"Investment Objectives and Policies" and "Additional Investment Policies and
Risk Considerations" (excluding the subsection "Portfolio Transactions") in
the Feeder's Registration Statement.
PORTFOLIO TRANSACTIONS
The frequency of portfolio transactions ("portfolio turnover rate") for each of
the Portfolios that operated during the periods ending May 31, 1996 and October
31, 1995 was: Index Portfolio -- 7.21% and 7.73%; Small Company Portfolio (and
accordingly, Small Company Stock Portfolio, Small Company Growth Portfolio and
Small Company Value Portfolio) -- 84.00% and 126.01%; and International
Portfolio (formerly International Portfolio II) -- 17.58% and 28.19%. The
portfolio turnover rate of a Portfolio will vary from year to year depending
upon a variety of factors.
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An annual portfolio turnover rate of 100% would occur if all of the securities
in a Portfolio were replaced once in a period of one year. Higher portfolio
turnover rates may result in increased brokerage costs to the Portfolio and a
possible increase in short-term capital gains (or losses). Norwest does not
anticipate that the portfolio turnover rate of any other Portfolio will exceed
100%.
Commission rates for brokerage transactions are fixed on many foreign securities
exchanges, and this may cause higher brokerage expenses to accrue to
International Portfolio than would be the case for comparable transactions
effected on U. S. securities exchanges.
Subject to a Portfolio's policy of obtaining the best price consistent with
quality of execution of transactions, Norwest, Schroder and a Subadviser may
employ Norwest Investment Services, Inc., Schroder Securities Limited and other
broker-dealer affiliates of Norwest or Schroder (collectively "Affiliated
Brokers") to effect brokerage transactions for the Portfolio. A Portfolio's
payment of commissions to Affiliated Brokers is subject to procedures adopted by
the Board to provide that the commissions will not exceed the usual and
customary broker's commissions charged by unaffiliated brokers. No specific
portion of a Portfolio's brokerage will be directed to Affiliated Brokers, and
in no event will a broker affiliated with an adviser directing the transaction
receive brokerage transactions in recognition of research services provided to
the adviser.
MANAGEMENT OF THE PORTFOLIOS (ITEM 5 OF FORM N-1A)
TRUSTEES AND OFFICERS
The business of the Trust is managed under the direction of the Board of
Trustees. Forum Administrative Services, Limited Liability Company ("FAS"), the
Portfolios' administrator, provides persons satisfactory to the Board to serve
as officers of the Trust. Part B contains general background information about
each Trustee and officer of the Trust.
INVESTMENT ADVISERS
Norwest serves as investment adviser of each Portfolio other than International
Portfolio pursuant to investment advisory agreements between Norwest and the
Trust. Norwest, which is located at Norwest Center, Sixth Street and Marquette,
Minneapolis, Minnesota 55479, is an indirect subsidiary of Norwest Corporation,
a multi-bank holding company that was incorporated under the laws of Delaware in
1929. As of March 31, 1997, Norwest Corporation had assets of $83.6 billion,
which made it the 11th largest bank holding company in the United States. As of
December 31, 1996, Norwest and its affiliates managed assets with a value of
approximately $42.6 billion.
Schroder acts as investment adviser to International Portfolio pursuant to an
investment advisory agreement with the Trust. Schroder, whose principal
business address is 787 Seventh Avenue, New York, New York 10019, is a wholly
owned U.S. subsidiary of Schroders Incorporated, the wholly owned U.S. holding
company subsidiary of Schroders plc. Schroders plc is the holding company
parent of a large worldwide group of banks and financial services companies
(referred to as the "Schroder Group"), with associated companies and branch and
representative offices located in 18 countries worldwide. The Schroder Group
specializes in providing investment management services and has assets under
management in excess of $150 billion.
SUBADVISERS
To assist Norwest in carrying out its obligations, certain of the Portfolios and
Norwest have retained the services of the Subadvisers as follows:
PORTFOLIO SUBADVISER
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Positive Return Bond Portfolio Peregrine
Stable Income Portfolio Galliard
Managed Fixed Income Portfolio Galliard
Total Return Bond Portfolio UCM
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Large Company Growth Portfolio Peregrine
Small Company Stock Portfolio Crestone
Small Company Growth Portfolio Peregrine
Small Company Value Portfolio Peregrine
UCM, Galliard, Crestone and Peregrine make investment decisions for Core
Portfolios to which they act as investment subadviser and continuously review,
supervise and administer those Portfolios' investment programs with respect to
that portion, if any, of the Portfolios assets that Norwest believes should be
managed by the Subadviser. Currently, each Subadviser manages all of the assets
of each Portfolio that they subadvise. Norwest supervises the performance of
each Subadviser, including their adherence to Portfolios' investment objectives
and policies.
UCM, which is located at 1700 Lincoln Street, Suite 3301, Denver, Colorado
80274, is a division of Norwest Bank Colorado, N.A., a subsidiary of Norwest
Corporation. UCM provides specialized investment advisory services to various
institutional pension accounts. As of March 31, 1997 UCM managed over $2.05
billion in assets.
Galliard, which is located at 800 LaSalle Avenue, Suite 2060, Minneapolis,
Minnesota 55479, is an investment advisory subsidiary of Norwest Bank.
Galliard provides investment advisory services to bank and thrift institutions,
pension and profit sharing plans, trusts and charitable organizations and
corporate and other business entities. As of March 31, 1997 Galliard managed
over $2.95 billion in assets.
Crestone, which is located at 7720 East Belleview Avenue, Suite 220, Englewood
Colorado 80111, is an investment adviser subsidiary of Norwest Bank. Crestone
provides investment advice regarding companies with small market capitalization
to various clients, including institutional investors. As of December 31, 1996,
Crestone managed assets with a value of approximately $465 million.
Peregrine, which is located at LaSalle Plaza, 800 LaSalle Avenue, Suite 1850,
Minneapolis, Minnesota 55402, is an investment adviser subsidiary of Norwest
Bank. Peregrine provides investment advisory services to corporate and public
pension plans, profit sharing plans, savings-investment plans and 401(k) plans.
As of March 31, 1997 Peregrine managed over $4.25 billion in assets.
PORTFOLIO MANAGERS
Each Adviser is required to furnish at its expense all services, facilities and
personnel necessary in connection with managing the respective Portfolio's
investments and effecting portfolio transactions for the Portfolios. The
following persons, however, are primarily responsible for day-to-day management
and, unless otherwise noted, have been since the inception of the Portfolio.
For periods prior to June 1, 1997, all persons associated with Norwest served in
their current positions with Norwest Bank. Prior to that date Norwest Bank was
the investment adviser of Index Portfolio and the predecessor portfolio of Small
Company Stock Portfolio, Small Company Growth Portfolio and Small Company Value
Portfolio. In addition to their responsibilities as listed below, each of the
portfolio managers associated with Norwest may perform other portfolio
management duties for Norwest Bank.
MONEY MARKET PORTFOLIO/RATED MONEY MARKET PORTFOLIO - David D. Sylvester
and Laurie R. White. Mr. Sylvester has been associated with Norwest for 16
years, the last 8 years as a Vice President and Senior Portfolio Manager.
He has over 20 years' experience in managing securities portfolios. Ms.
White has been a Vice President and Senior Portfolio Manager of Norwest
since 1991; from 1989 to 1991, she was a Portfolio Manager at Richfield
Bank and Trust.
POSITIVE RETURN PORTFOLIO - William D. Giese. Mr. Giese is a Senior Vice
President of Peregrine. Mr. Giese has been a portfolio manager of
Peregrine for over ten years and has over 20 years experience in fixed
income securities management.
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STABLE INCOME PORTFOLIO - Karl P. Tourville. Mr. Tourville has been a
principal of Galliard since 1995. He has been associated with Norwest and
its affiliates since 1986, most recently as Vice President and Senior
Portfolio Manager.
MANAGED FIXED INCOME PORTFOLIO - Richard Merriam. Mr. Merriam has been a
principal of Galliard since 1995. Prior thereto, he was the Chief
Investment Officer of Insight Investment Management and prior thereto was
associated with Washington Square Capital.
TOTAL RETURN BOND PORTFOLIO - Mr. David B. Kinney. Mr. Kinney is a Vice
President of UCM. He has been associated with Norwest and its affiliates
since 1981.
INDEX PORTFOLIO - David D. Sylvester and Laurie R. White. Mr. Sylvester and
Ms. White began serving as portfolio managers of the Index Portfolio on
January 1, 1996. For a description of Mr. Sylvester and Ms. White see
"Money Market Portfolio/Rated Money Market Portfolio" above.
INCOME EQUITY PORTFOLIO - David L. Roberts. Mr. Roberts has been a Senior
Vice President of Norwest since 1991. Mr. Roberts has been associated with
Norwest and its affiliates for over 20 years in various investment related
capacities.
LARGE COMPANY GROWTH PORTFOLIO - John S. Dale. Mr. Dale is a Senior Vice
President of Peregrine. Mr. Dale has held various investment management
positions with Norwest, Peregrine and their affiliates since 1968.
SMALL COMPANY STOCK PORTFOLIO - Kirk McCown, CFA. Mr. McCown is founder,
President and a Director of Crestone, which was incorporated in 1990.
SMALL COMPANY GROWTH PORTFOLIO - Robert B. Mersky. Mr. Mersky is the
President of Peregrine Capital Management, Inc. Mr. Mersky has held
various investment management positions with Norwest, Peregrine and their
affiliates since 1977. From 1980 to 1984 he was head of investments for
Norwest Bank.
SMALL COMPANY VALUE PORTFOLIO - Tasso H. Coin, Jr. Mr. Coin has been a
Senior Vice President of Peregrine since 1995. From 1992 to 1995 he was a
research officer at Lord Asset Management, an investment adviser and prior
thereto was associated with Morgan Stanley Asset Management.
INTERNATIONAL PORTFOLIO - Mark J. Smith, a Director and First Vice
President of Schroder along with Michael Perelstein, a Senior Vice
President of Schroder, with the assistance of a Schroder investment
committee, are primarily responsible for the day-to-day management of the
Portfolio's investment portfolio. Mr. Smith has been a First Vice President
of Schroder since April 1990 and a Director thereof since April 1993. He
has been employed by various Schroder Group companies in the investment
research and portfolio management areas since 1983. Mr. Perelstein has been
a Senior Vice President of Schroder since January 2, 1997. Prior thereto,
Mr. Perelstein was a Managing Director at MacKay Shields. Mr. Perelstein
has more than twelve years of international and global investment
experience. Since January 1997, Messrs. Smith and Perelstein have served as
portfolio managers of International Portfolio.
ADVISORY FEES
For their services, Norwest and Schroder receive investment advisory fees from
the Portfolios at the following annual rates of the Portfolio's average daily
net assets.
PORTFOLIO INVESTMENT ADVISORY FEE
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Prime Money Market Portfolio 0.40% (first $300 million of assets)
0.36% (next $400 million of assets)
0.32% (remaining assets)
Money Market Portfolio 0.20% (first $300 million of assets)
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0.16% (next $400 million of assets)
0.12% (next $300 million of assets)
Stable Income Portfolio 0.30%
Total Return Bond Portfolio 0.35%
Index Portfolio 0.15%
Income Equity Portfolio 0.50%
Large Company Growth Portfolio 0.65%
Small Company Stock Portfolio 0.90%
Small Company Growth Portfolio 0.90%
Small Company Value Portfolio 0.90%
International Portfolio 0.45%
Norwest (and not Portfolios) pays each Subadviser a fee for their investment
subadvisory services. This compensation does not increase the amount paid by
Core Portfolios to Norwest for investment advisory services.
Each Adviser place orders for the purchase and sale of assets they manage with
brokers and dealers selected by and in the discretion of the respective Adviser.
Each Adviser seeks "best execution" for all portfolio transactions, but a
Portfolio may pay higher than the lowest available commission rates when an
adviser believes it is reasonable to do so in light of the value of the
brokerage and research services provided by the broker effecting the
transaction.
CUSTODIAN
Norwest Bank serves as the custodian for each Portfolio and may appoint
subcustodians to custody foreign securities and other assets held in foreign
countries. For its custodial services, Norwest Bank receives a fee with respect
to each Portfolio at an annual rate of 0.02% of the first $100 million of the
Portfolio's average daily net assets, 0.01% of the next $200 million of the
Portfolio's average daily net assets and 0.005% of the Portfolio's remaining
average daily net assets. With respect to International Portfolio, Norwest Bank
receives a fee at an annual rate of 0.075% of the Portfolio's average daily net
assets. Norwest has appointed Morgan Stanley as the sub-custodian for
International Portfolio, which employs foreign subcustodians to maintain
International Portfolios' foreign assets outside the United States.
ADMINISTRATOR, INTERESTHOLDER RECORDKEEPER AND FUND ACCOUNTANT
FAS supervises the overall management of the Portfolios, including the
Portfolios' receipt of services for which the Trust is obligated to pay, and
provides the Trust and Portfolios' with general office facilities pursuant to an
Administration Agreement with the Trust. As of June 1, 1997, Forum and FAS
provided management and administrative services to registered investment
companies and collective investment funds with assets of approximately $19
billion. For its services FAS receives a fee with respect to each Portfolio at
an annual rate of 0.10% of the Portfolio's average daily net assets.
Forum Accounting Services, Limited Liability Company ("Forum Accounting"), Two
Portland Square, Portland, Maine 04101, is the Trust's interestholder
recordkeeper and fund accountant. Forum Accounting is an affiliate of Forum.
For its services, Forum Accounting receives a base fee of $48,000 per year for
each Portfolio plus additional amounts depending on the assets of the Portfolio,
the number and type of securities held by the Portfolio and the portfolio
turnover rate of the Portfolio.
EXPENSES
Each Portfolio is obligated to pay for all of its expenses. These expenses
include: governmental fees; interest charges; taxes; brokerage fees and
commissions; insurance premiums; investment advisory, custodial, administrative
and transfer agency and fund accounting fees, as described above; compensation
of certain of the Trust's Trustees; costs of membership trade associations; fees
and expenses of independent auditors and legal counsel to the Trust; and
expenses of calculating the net asset value of and the net income of the
Portfolios. Each Portfolio's expenses comprise Trust
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expenses attributable to the Portfolio, which are allocated to the Portfolio,
and expenses not attributable to the Portfolio, which are allocated among the
Portfolios in proportion to their average net assets or as otherwise determined
by the Board.
CAPITAL STOCK AND OTHER SECURITIES (ITEM 6 OF FORM N-1A)
The Trust was organized as a business trust under the laws of the State of
Delaware. Under the Trust Instrument, the Trustees are authorized to issue
beneficial interests in separate subtrusts or "series" of the Trust. The Trust
currently has 17 series; the Trust reserves the right to create and issue
additional series.
Each investor in a Portfolio is entitled to participate equally in the
Portfolio's earnings and assets and to a vote in proportion to the amount of its
investment in the Portfolio. Investments in a Portfolio may not be transferred,
but an investor may withdraw all or any portion of its investment at any time at
net asset value ("NAV").
Investments in a Portfolio have no preemptive or conversion rights and are fully
paid and non-assessable, except as set forth below. The Trust is not required
and has no current intention to hold annual meetings of investors, but the Trust
will hold special meetings of investors when in the Trustees' judgment it is
necessary or desirable to submit matters to an investor vote. Generally,
interests will be voted in the aggregate without reference to a particular
Portfolio, except if the matter affects only one Portfolio or Portfolio voting
is required, in which case interests will be voted separately by Portfolio.
Investors have the right to remove one or more Trustees without a meeting by a
declaration in writing by a specified number of investors. Upon liquidation of
a Portfolio, investors will be entitled to share pro rata in the Portfolio's net
assets available for distribution to investors.
A Portfolio's net income consists of (1) all dividends, accrued interest
(including earned discount, both original issue and market discount), and other
income, including any net realized gains on the Portfolio's assets, less (2) all
actual and accrued expenses of the Portfolio, amortization of any premium, and
net realized losses on the Portfolio's assets, all as determined in accordance
with generally accepted accounting principles. All of a Portfolio's net income
is allocated pro rata among the investors in the Portfolio. A Portfolio's net
income generally is not distributed to the investors in the Portfolio, except as
determined by the Trustees from time to time, but instead is included in the NAV
of the investors' respective beneficial interests in the Portfolio.
Under the Portfolios' method of operations, they are not be subject to any
income tax. However, each investor in a Portfolio will be taxable on its
proportionate share (as determined in accordance with the Trust's Trust
Instrument and the Internal Revenue Code of 1986, as amended (the "Code"), and
the regulations promulgated thereunder) of the Portfolio's ordinary income and
capital gain. It is intended that each Portfolio's assets and income will be
managed in such a way that an investor in the Portfolio will be able to satisfy
the requirements of Subchapter M of the Code, assuming that the investor
invested all of its assets in the Portfolio.
Investor inquiries may be directed to Forum Financial Services, Inc.
PURCHASE OF SECURITIES (ITEM 7 OF FORM N-1A)
Beneficial interests in the Portfolios are issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. See "General Description of Registrant" above.
All investments in the Portfolios are made without a sales load, at the NAV next
determined after an order is received by the Portfolio.
The NAV of each Portfolio is determined as of 4:00 P.M., Eastern Time
("Valuation Time"), on all weekdays, except New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day ("Business
Day").
Each investor in a Portfolio may add to or reduce its investment in the
Portfolio. At the Valuation Time on each Business Day, the value of each
investor's beneficial interest in a Portfolio will be determined by multiplying
the Portfolio's NAV by the percentage, effective for that day, that represents
that investor's share of the aggregate
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beneficial interests in the Portfolio. Any additions to or withdrawals of those
interests which are to be effected on that day will then be effected. Each
investor's share of the aggregate beneficial interests in the Portfolio then
will be recomputed using the percentage equal to the fraction (1) the numerator
of which is the value of the investor's investment in the Portfolio as of the
Valuation Time on that day plus or minus, as the case may be, the amount of any
additions to or withdrawals from such investment effected on that day and
(2) the denominator of which is the Portfolio's aggregate NAV as of the
Valuation Time on that day plus or minus, as the case may be, the amount of the
net additions to or withdrawals from the aggregate investments in the Portfolio
by all investors. The percentages so determined then will be applied to
determine the value of each investor's respective interest in the Portfolio as
of the Valuation Time on the following Business Day.
Securities owned by a Portfolio 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.
Trading in securities on European, Far Eastern and other international
securities exchanges and over-the-counter markets is normally completed well
before the close of business of each Business Day. In addition, trading in
foreign securities generally or in a particular country or countries may not
take place on all Business Days or may take place on days other than Business
Days. Trading does take place in various foreign markets, however, on days on
which the Portfolio's NAV is not calculated. Calculation of the NAV per
beneficial interest may not occur contemporaneously with the determination of
the prices of the foreign securities used in the calculation. Events affecting
the values of foreign securities that occur after the time their prices are
determined and before a Portfolio's determination of NAV will not be reflected
in the Portfolio's calculation of NAV unless NIM or Schroder determines that the
particular event would materially affect NAV, in which case an adjustment would
be made.
All assets and liabilities of a Portfolio denominated in foreign currencies are
converted into U.S. dollars at the mean of the bid and asked prices of such
currencies against the U.S. dollar last quoted by a major bank prior to the time
of conversion.
There is no minimum initial or subsequent investment in a Portfolio. However,
since each Portfolio intends to be as fully invested at all times as is
reasonably practicable in order to enhance the return on its assets, investments
must be made in federal funds (i.e., monies credited to the account of the
Trust's custodian by a Federal Reserve Bank).
The Trust reserves the right to cease accepting investments in a Portfolio at
any time or to reject any investment order.
The exclusive placement agent for the Trust is Forum. The principal business
address of Forum is Two Portland Square, Portland, Maine 04101. Forum receives
no compensation for serving as the exclusive placement agent for the Trust.
REDEMPTION OR REPURCHASE (ITEM 8 OF FORM N-1A)
An investor in a Portfolio may withdraw all or any portion of its investment in
the Portfolio at the NAV next determined after a withdrawal request in proper
form is furnished by the investor to the Trust. The proceeds of a withdrawal
will be paid by the Portfolio in federal funds normally on the business day
after the withdrawal is effected, but in any event within seven days.
Investments in a Portfolio may not be transferred. The right of redemption may
not be suspended nor the payment dates postponed for more than seven days except
when the New York Stock Exchange is closed (or when trading thereon is
restricted) for any reason other than its customary weekend or holiday closings
or under any emergency or other circumstances as determined by the SEC.
Redemptions from a Portfolio may be made wholly or partially in portfolio
securities if the Board determines that payment in cash would be detrimental to
the best interests of the Portfolio. The Trust has filed an election with the
Commission pursuant to which each Portfolio will only consider effecting a
redemption in portfolio securities if the particular interestholder is redeeming
more than $250,000 or 1% of the Portfolio's NAV, whichever is less, during any
90-day period.
PENDING LEGAL PROCEEDINGS (ITEM 9 OF FORM N-1A)
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Not applicable.
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PRIVATE PLACEMENT MEMORANDUM
JUNE 1, 1997
PART B
STATEMENT OF ADDITIONAL INFORMATION
This Part B to the Private Placement Memorandum (the "Statement of Additional
Information" or "SAI") relates to beneficial interests in the PRIME MONEY MARKET
PORTFOLIO, MONEY MARKET PORTFOLIO, POSITIVE RETURN BOND PORTFOLIO, STABLE INCOME
PORTFOLIO, MANAGED FIXED INCOME PORTFOLIO, TOTAL RETURN BOND PORTFOLIO, INDEX
PORTFOLIO, INCOME EQUITY PORTFOLIO, LARGE COMPANY GROWTH PORTFOLIO, SMALL
COMPANY STOCK PORTFOLIO, SMALL COMPANY GROWTH PORTFOLIO, SMALL COMPANY VALUE
PORTFOLIO and INTERNATIONAL PORTFOLIO (each a "Portfolio" and collectively, the
"Portfolios") of Core Trust (Delaware) (the "Trust"), a registered, open-end
management investment company. This SAI and supplements Part A of the Private
Placement Memorandum (the "Part A") dated June 1, 1997, relating to the
Portfolios.
This SAI does not constitute an offer to sell, or the solicitation of an offer
to buy, beneficial interests in the Portfolios. An investor may subscribe for a
beneficial interest in a Portfolio by contacting Forum Financial Services, Inc.
("Forum"), the Trust's placement agent (the "Placement Agent"), at Two Portland
Square, Portland, Maine 04101, (207) 879-1900, for a complete subscription
package, including the Memorandum and a subscription agreement. The Trust and
the Placement Agent reserve the right to refuses to accept any subscription for
any reason.
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TABLE OF CONTENTS
Page
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General Information and History. . . . . . . . . . . . . . . . .
Investment Objectives and Policies . . . . . . . . . . . . . . .
Management of the Trust. . . . . . . . . . . . . . . . . . . . .
Control Persons and Principal Holders of Securities. . . . . . .
Investment Advisory and Other Services . . . . . . . . . . . . .
Brokerage Allocation and Other Practices . . . . . . . . . . . .
Capital Stock and Other Securities . . . . . . . . . . . . . . .
Purchase, Redemption and Pricing of Securities . . . . . . . . .
Tax Status . . . . . . . . . . . . . . . . . . . . . . . . . . .
Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . .
Calculation of Performance Data. . . . . . . . . . . . . . . . .
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Financial Statements . . . . . . . . . . . . . . . . . . . . . .
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THE SECURITIES OF THE TRUST DESCRIBED IN THIS PRIVATE PLACEMENT MEMORANDUM HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER (1) THE TERMS OF THE TRUST INSTRUMENT OF THE
TRUST AND (2) THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
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GENERAL INFORMATION AND HISTORY (ITEM 12 OF FORM N-1A)
Since its creation on September 1, 1994, the trust has solely conducted business
as an investment company under the name Core Trust (Delaware).
INVESTMENT OBJECTIVES AND POLICIES (ITEM 13 OF FORM N-1A)
INVESTMENT POLICIES
Part A contains information about the investment objectives, policies and
restrictions of each Portfolio. The following discussion is intended to
supplement the disclosure in Part A concerning the Portfolios' investments,
investment techniques and strategies and the risks associated therewith. This
Part B should be read only in conjunction with Part A.
DEFINITIONS
As used in Part B, the following terms shall have the meanings listed:
"Advisers" shall mean, collectively, Norwest, Schroder, UCM, Galliard,
Crestone and Peregrine, as applicable, or, Norwest and any Subadviser.
"Board" shall mean the Board of Trustees of the Trust.
"CFTC" shall mean the U.S. Commodities Futures Trading Commission.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Crestone" shall mean Crestone Capital Management, Inc.
"Custodian" shall mean Norwest Bank acting in its capacity as custodian of
a Fund.
"Forum Accounting" shall mean Forum Accounting Services, Limited Liability
Company, the Trust's interestholder recordkeeper and fund accountant.
"Fitch" shall mean Fitch Investors Service, L.P.
"Forum" shall mean Forum Financial Services, Inc., the Trust's placement
agent.
"Forum Administrative" shall mean Forum Administrative Services, Limited
Liability Company, the Portfolio's administrator.
"Galliard" shall mean Galliard Capital Management, Inc.
"Moody's" shall mean Moody's Investors Service, Inc.
"Norwest" shall mean Norwest Investment Management, Inc., a subsidiary of
Norwest Bank Minnesota, N.A.
"Norwest Bank" shall mean Norwest Investment Management, Inc., the
Portfolio's custodian.
"NRSRO" shall mean a nationally recognized statistical rating organization.
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"Peregrine" shall mean Peregrine Capital Management, Inc.
"Portfolio" shall mean Prime Money Market Portfolio, Money Market
Portfolio, Positive Return Bond Portfolio, Stable Income Portfolio, Managed
Fixed Income Portfolio, Total Return Bond Portfolio, Index Portfolio, Income
Equity Portfolio, Large Company Growth Portfolio, Small Company Stock
Portfolio, Small Company Growth Portfolio, Small Company Value Portfolio and
International Portfolio, thirteen separate portfolios of the Trust.
"Schroder" shall mean Schroder Capital Management Inc..
"SEC" shall mean the U.S. Securities and Exchange Commission.
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"S&P" shall mean Standard & Poor's Rating Group.
"Subadvisers" shall mean, collectively, UCM, Galliard, Crestone and
Peregrine.
"UCM" shall mean United Capital Management, a part of Norwest Bank
Colorado, N.A.
"U.S. Government Securities" shall mean obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities.
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1940 Act" shall mean the Investment Company Act of 1940, as amended.
The following information listed in the Statement of Additional Information,
dated June 1, 1997 for Norwest Funds, a registered, open-end, management
investment company is incorporated by reference:
INVESTMENT LIMITATIONS
Except as required by the 1940 Act, if any percentage restriction on investment
or utilization of assets is adhered to at the time an investment is made, a
later change in percentage resulting from a change in the market values of a
Portfolio's assets or purchases and redemptions of interests will not be
considered a violation of the limitation.
FUNDAMENTAL LIMITATIONS
Each Portfolio has adopted the following investment limitations which are
fundamental policies of the Portfolio and cannot be changed without the
affirmative vote of the lesser of (a) more than 50% of the outstanding interests
of the Portfolio or (b) 67% or more of the interests present at an
interestholders' meeting if more than 50% of the outstanding interests of the
Portfolio are represented at the meeting in person or by proxy.
Whenever reference is made throughout this SAI or the applicable prospectus to
the limitations of the 1940 Act, to "the extent permitted by the 1940 Act" or to
similar language, the reference shall be deemed to include reference to any
exemptive order obtained by the Trust or which may be relied upon by the Trust.
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(1) DIVERSIFICATION
Each of INDEX PORTFOLIO, SMALL COMPANY STOCK PORTFOLIO, SMALL COMPANY
GROWTH PORTFOLIO, SMALL COMPANY VALUE PORTFOLIO and INTERNATIONAL PORTFOLIO
may not, with respect to 75% of its assets, purchase a security (other than
a U.S. Government Security or a security of an investment company) if, as a
result (i) more than 5% of the Portfolio's total assets would be invested
in the securities of a single issuer, or (ii) the Portfolio would own more
than 10% of the outstanding voting securities of any single issuer.
EACH OTHER PORTFOLIO may not, with respect to 75% of its assets, purchase a
security (other than a U.S. Government Security or a security of an
investment company) if, as a result (i) more than 5% of the Fund's total
assets would be invested in the securities of a single issuer, or (ii) the
Fund would own more than 10% of the outstanding voting securities of any
single issuer
(2) CONCENTRATION
Each of INDEX PORTFOLIO, SMALL COMPANY STOCK PORTFOLIO, SMALL COMPANY
GROWTH PORTFOLIO, SMALL COMPANY VALUE PORTFOLIO and INTERNATIONAL PORTFOLIO
may not, not purchase securities if, immediately after the purchase, more
than 25% of the value of the Portfolio's total assets would be invested in
the securities of issuers conducting their principal business activities in
the same industry; provided, however that there is no limit on investments
in U.S. Government Securities, repurchase agreements covering U.S.
Government Securities, and issuers domiciled in a single country; that
financial service companies are classified according to the end users of
their services (for example, automobile finance, bank finance and
diversified finance); and that utility companies are classified according
to their services (for example, gas, gas transmission, electric and gas,
electric and telephone).
PRIME MONEY MARKET PORTFOLIO and MONEY MARKET PORTFOLIO may not purchase a
security if, as a result, more than 25% of the Portfolio's total assets
would be invested in securities of issuers conducting their principal
business activities in the same industry; provided, (i) there is no limit
on investments in U.S. Government Securities, in repurchase agreements
covering U.S. Government Securities or in foreign government securities,
(ii) municipal securities are not treated as involving a single industry,
(iii) there is no limit on investment in issuers domiciled in a single
country, (iv) financial service companies are classified according to the
end users of their services (for example, automobile finance, bank finance
and diversified finance) and (v) utility companies are classified according
to their services (for example, gas, gas transmission, electric and gas,
electric and telephone); and provided the Portfolio will invest more than
25% of the value of the Portfolio's total assets in obligations of domestic
and foreign financial institutions and their holding companies.
Notwithstanding anything to the contrary, to the extent permitted by the
1940 Act, the Portfolio may invest in one or more investment companies;
provided that, except to the extent the Portfolio invests in other
investment companies pursuant to Section 12(d)(1)(A) of the 1940 Act, the
Portfolio treats the assets of the investment companies in which it invests
as its own for purposes of this policy.
TOTAL RETURN BOND PORTFOLIO may not purchase a security if, as a result,
more than 25% of the Portfolio's total assets would be invested in
securities of issuers conducting their principal business activities in the
same industry; provided, (i) there is no limit on investments in U.S.
Government Securities, or in repurchase agreements covering U.S. Government
Securities, (ii) mortgage-related or housing-related securities (including
mortgage-related or housing-related U.S. Government Securities) and
municipal securities are not treated as involving a single industry, (iii)
financial service companies are classified according to the end users of
their services (for example, automobile finance, bank finance and
diversified finance), (iv) utility companies are classified according to
their services (for example, gas, gas transmission, electric and gas,
electric and telephone). Notwithstanding anything to the contrary, to the
extent permitted by the 1940 Act, the Portfolio may invest in one or more
investment companies; provided
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that, except to the extent the Portfolio invests in other investment
companies pursuant to Section 12(d)(1)(A) of the 1940 Act, the Portfolio
treats the assets of the investment companies in which it invests as its
own for purposes of this policy.
POSITIVE RETURN PORTFOLIO, STABLE INCOME PORTFOLIO, MANAGED FIXED INCOME
PORTFOLIO, INCOME EQUITY PORTFOLIO and LARGE COMPANY GROWTH PORTFOLIO may
not purchase a security if, as a result, more than 25% of the Portfolio's
total assets would be invested in securities of issuers conducting their
principal business activities in the same industry; provided, however, that
there is no limit on investments in U.S. Government Securities, repurchase
agreements covering U.S. Government Securities, foreign government
securities, mortgage-related or housing-related securities, municipal
securities and issuers domiciled in a single country; that financial
service companies are classified according to the end users of their
services (for example, automobile finance, bank finance and diversified
finance); that utility companies are classified according to their services
(for example, gas, gas transmission, electric and gas, electric and
telephone. Notwithstanding anything to the contrary, to the extent
permitted by the 1940 Act, the Portfolio may invest in one or more
investment companies; provided that, except to the extent the Portfolio
invests in other investment companies pursuant to Section 12(d)(1)(A) of
the 1940 Act, the Portfolio treats the assets of the investment companies
in which it invests as its own for purposes of this policy.
(3) BORROWING
Each of INDEX PORTFOLIO, SMALL COMPANY STOCK PORTFOLIO, SMALL COMPANY
GROWTH PORTFOLIO, SMALL COMPANY VALUE PORTFOLIO and INTERNATIONAL PORTFOLIO
may borrow money from a bank for temporary or emergency purposes, including
the meeting of redemption requests, but not in excess of 33 1/3% of the
value of the Portfolio's total assets (as computed immediately after the
borrowing).
EACH OTHER PORTFOLIO may borrow money if, as a result, outstanding
borrowings would exceed an amount equal to 33 1/3% of the Portfolio's total
assets.
(4) ISSUANCE OF SENIOR SECURITIES
EACH PORTFOLIO may not issue senior securities except to the extent
permitted by the 1940 Act.
(5) UNDERWRITING ACTIVITIES
EACH PORTFOLIO may not underwrite securities of other issuers, except to
the extent that the Portfolio may be considered to be acting as an
underwriter in connection with the disposition of portfolio securities.
(6) MAKING LOANS
EACH PORTFOLIO may not make loans, except the Portfolio may enter into
repurchase agreements, purchase debt securities that are otherwise
permitted investments and lend portfolio securities.
(7) PURCHASES AND SALES OF REAL ESTATE
EACH PORTFOLIO may not purchase or sell real estate, any interest therein
or real estate limited partnership interests, except that the Portfolio may
invest in debt obligations secured by real estate or interests therein or
securities issued by companies that invest in real estate or interests
therein.
(8) PURCHASES AND SALES OF COMMODITIES
EACH PORTFOLIO may not purchase or sell physical commodities or contracts,
options or options on contracts to purchase or sell physical commodities,
provided that currencies and currency-related contracts and contracts on
indices are not deemed to be physical commodities.
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NONFUNDAMENTAL LIMITATIONS
Each Portfolio has adopted the following investment limitations which are not
fundamental policies of the Portfolio and may be changed by the Board.
(1) BORROWING
Borrowing for other than temporary or emergency purposes or meeting
redemption requests is limited to 5% of the value of the Portfolio's total
assets. Where the Portfolio establishes a segregated account to limit the
amount of leveraging of the Portfolio with respect to certain investment
techniques, the Portfolio does not treat those techniques as involving
borrowings for purposes of this limitation.
(2) ILLIQUID SECURITIES
MONEY MARKET PORTFOLIO and PRIME MONEY MARKET PORTFOLIO may not acquire
securities or invest in repurchase agreements with respect to any
securities if, as a result, more than 10% of the Porfolio's net assets
(taken at current value) would be invested in repurchase agreements not
entitling the holder to payment of principal within seven days and in
securities which are not readily marketable, including securities that are
not readily marketable by virtue of restrictions on the sale of such
securities to the public without registration under the 1933 Act
("Restricted Securities").
EACH OTHER PORTFOLIO may not acquire securities or invest in repurchase
agreements with respect to any securities if, as result, more than 15% of
the Portfolio's net assets (taken at current value) would be invested in
repurchase agreements not entitling the holder to payment of principal
within seven days and in securities which are not readily marketable,
including securities that are not readily marketable by virtue of
restrictions on the sale of such securities to the public without
registration under the 1933 Act ("Restricted Securities").
(3) OTHER INVESTMENT COMPANIES
Each Portfolio may not invest in securities of another investment company,
except to the extent permitted by the 1940 Act.
(4) MARGIN AND SHORT SALES
Each Portfolio may not purchase securities on margin or make short sales of
securities (except short sales against the box) except for the use of
short-term credit necessary for the clearance of purchases and sales of
portfolio securities. Each Portfolio may make margin deposits in
connection with permitted transactions in options and futures contracts.
EACH PORTFOLIO may not enter short sales if, as a result, more that 25% of
the value of the Portfolio's total assets would be so invested, or such a
position would represent more than 2% of the outstanding voting securities
of any single issuer or class of an issuer.
(5) UNSEASONED ISSUERS
Each Portfolio may not invest in securities (other than
fully-collateralized debt obligations) issued by companies that have
conducted continuous operations for less than three years, including the
operations of predecessors, unless guaranteed as to principal and interest
by an issuer in whose securities the Portfolio could invest, if, as a
result, more than 5% of the value of the Portfolio's total assets would be
so invested.
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(6) PLEDGING
Each Portfolio may not pledge, mortgage, hypothecate or encumber any of its
assets except to secure permitted borrowings.
(7) SECURITIES WITH VOTING RIGHTS
MONEY MARKET PORTFOLIO, PRIME MONEY MARKET PORTFOLIO, POSITIVE RETURN
PORTFOLIO, STABLE INCOME PORTFOLIO, MANAGED FIXED INCOME PORTFOLIO and
TOTAL RETURN BOND PORTFOLIO may not purchase securities having voting
rights except securities of other investment companies; provided that the
Portfolios may hold securities with voting rights obtained through a
conversion or other corporate transaction of the issuer of the securities,
whether or not the Portfolio was permitted to exercise any rights with
respect to the conversion or other transaction.
(8) LENDING OF PORTFOLIO SECURITIES
EACH PORTFOLIO may not lend portfolio securities if the total value of all
loaned securities would exceed 33 1/3% of the Fund's total assets.
(9) OPTIONS AND FUTURES CONTRACTS
MONEY MARKET PORTFOLIO and PRIME MONEY MARKET PORTFOLIO may not invest in
options, futures contracts or options on futures contracts.
NO OTHER PORTFOLIO may purchase an option if, as a result, more that 5% of
the value of the Portfolio's total assets would be so invested.
(10)WARRANTS
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EACH PORTFOLIO may not invest in warrants if (i) more than 5% of the value
of the Portfolio's net assets would will be invested in warrants (valued at
the lower of cost or market) or (ii) more than 2% of the value of the
Portfolio's net assets would be invested in warrants which are not listed
on the New York Stock Exchange or the American Stock Exchange; provided,
that warrants acquired by a Portfolio attached to securities are deemed to
have no value.
(11)PURCHASES AND SALES OF COMMODITIES
MONEY MARKET PORTFOLIO and PRIME MONEY MARKET PORTFOLIO may not purchase or
sell physical commodities or contracts, options or options on contracts to
purchase or sell physical commodities, provided that currencies and
currency-related contracts and contracts on indices are not be deemed to be
physical commodities.
MANAGEMENT OF THE TRUST (ITEM 14 OF FORM N-1A)
The Trustees and officers of the Trust and their principal occupations during
the past five years are set forth below. Each Trustee who is an "interested
person" (as defined by the 1940 Act) of the Trust is indicated by an asterisk.
John Y. Keffer and David R. Keffer are brothers.
John Y. Keffer*, Chairman and President (age 54).
President and Director, Forum Financial Services, Inc. (a registered
broker-dealer), Forum Financial Corp. (a registered transfer agent) and
Forum Advisors, Inc. (a registered investment adviser). Mr. Keffer is a
Trustee/Director and/or officer of various registered investment companies
for which Forum Financial Services, Inc. serves as manager, administrator
and/or distributor. His address is Two Portland Square, Portland, Maine
04101.
Costas Azariadis, Trustee (age 52).
Professor of Economics, University of California, Los Angeles, since July
1992. Prior thereto, Dr. Azariadis was Professor of Economics at the
University of Pennsylvania. His address is Department of Economics,
University of California, Los Angeles, 405 Hilgard Avenue, Los Angeles,
California 90024.
James C. Cheng, Trustee (age 53).
Founder and President, Technology Marketing Associates (a marketing company
for small and medium size businesses in New England) since 1991. During
November 1991 to September 1994, Mr. Cheng provided marketing and sales
support to Forum. Mr. Cheng was President of Network Dynamics, Inc. (a
software development company). Prior thereto His address is 27 Temple
Street, Belmont, MA 02718.
J. Michael Parish, Trustee (age 52).
Partner at the law firm of Reid & Priest. Prior to 1995, Mr. Parish was a
partner at Winthrop Stimson Putnam & Roberts since 1989. His address is 40
West 57th Street, New York, New York.
Sara M. Clark, Vice President, Assistant Secretary and Assistant Treasurer (age
33).
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Managing Director, Forum Financial Services, Inc., with which she has been
associated since 1994. Prior thereto, from 1991 to 1994 Ms. Clark was
Controller of Wright Express Corporation (a national credit card company)
and for six years prior thereto was employed at Deloitte & Touche LLP as an
accountant. Ms. Clark is also an officer of various registered investment
companies for which Forum Financial Services, Inc. serves as manager,
administrator and/or distributor. Her address is Two Portland Square,
Portland, Maine 04101.
Thomas G. Sheehan, Vice President and Assistant Secretary (age 42).
Counsel, Forum Financial Services, Inc. since October, 1993. Prior
thereto, Mr. Sheehan was a Special Counsel in the Division of Investment
Management of the U.S. Securities and Exchange Commission in Washington,
D.C. His address is Two Portland Square, Portland, Maine 04101.
Richard C. Butt, Treasurer (age 40).
CPA, Managing Director, Operations, Forum Financial Corp. since 1996.
Prior thereto, Mr. Butt was a consultant in the financial services division
of KPMG Peat Marwick LLP ("KPMG"). Prior to his employment at KPMG, Mr.
Butt was President of 440 Financial Distributors, Inc., the distribution
subsidiary of 440 Financial Group, and Senior Vice President of the parent
company. Prior thereto, he was a Vice President at Fidelity Services
Company. Mr. Butt is responsible for fund accounting and transfer agency
at Forum. His address is Two Portland Square, Portland, Maine 04101.
David I. Goldstein, Secretary (age 35).
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, LLP. Mr. Goldstein is also an officer of various
registered investment companies for which Forum Financial Services, Inc.
serves as manager, administrator and/or distributor. His address is Two
Portland Square, Portland, Maine 04101.
Renee A. Walker, Assistant Secretary (age 26).
Fund Administrator, Forum Financial Services, Inc., with which she has been
associated since 1994. Prior thereto, Ms. Walker was an administrator at
Longwood Partners (the manager of a hedge fund partnership) for a year.
After graduating from college, from 1991 to 1993, Ms. Walker was a sales
representative assistant at PaineWebber Incorporated (a broker-dealer).
Her address is Two Portland Square, Portland, Maine 04101.
Each Trustee of the Trust (other than persons who are interested persons of the
Trust) is paid $1,000 for each Board meeting attended (whether in person or by
electronic communication) plus $100 per active portfolio of the Trust and is
paid $1,000 for each Committee meeting attended on a date when a Board meeting
is not held. To the extent a meeting relates to only certain portfolios of the
Trust, Trustees are paid the $100 fee only with respect to those portfolios.
Trustees are also reimbursed for travel and related expenses incurred in
attending meetings of the Board. No officer of the Trust is compensated by the
Trust.
The following table provides the aggregate compensation paid to the Trustees of
the Trust by the Trust. Information is presented for the year ended May 31,
1996, the Portfolios' fiscal year end.
Total Compensation
from the Trust
------------------
Costas Azariadis $3,500
James C. Cheng $3,500
J. Michael Parish $3,500
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<PAGE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES (ITEM 15 OF FORM N-1A)
As of the date hereof Forum and its affiliates owned all of the interests in
each Portfolio other than Index Portfolio and International Portfolio.
Substantially all of the interests of Index Portfolio and International
Portfolio, and it is expected that shortly after each other Portfolio commences
operations substantially all of the interest in those Portfolos, will be owned
by various series of Norwest Funds, a Delaware business trust registered with
the SEC as an open-end, management investment company.
Norwest Funds has informed the Trust that whenever a series of Norwest Funds
that invests all of its investable assets in a Portfolio is requested to vote on
matters pertaining to a Portfolio, that series will hold a meeting of its
shareholders and will cast its vote as instructed by its shareholders. In
addition, Norwest Funds has informed the Trust that it will similary hold a
meeting of its shareholders whenever it is requested to vote on matters
pertaining to a Portfolio required by law to do so. It is anticipated that
any other registered investment company (or series thereof) that may in the
future invest in a Portfolio will follow the same or a similar practice.
INVESTMENT ADVISORY AND OTHER SERVICES (ITEM 16 OF FORM N-1A)
INVESTMENT ADVISORY SERVICES
Norwest Investment Management, Inc., a subsidiary of Norwest Bank Minnesota,
N.A., acts as investment adviser to the Portfolios (except International
Portfolio) and is required to furnish at its expense all services, facilities
and personnel necessary in connection with managing the investments of, and
effecting portfolio transactions for, those Portfolios.
Schroder acts as investment adviser to International Portfolio and is required
to furnish at its expense all services, facilities and personnel necessary in
connection with managing the investments of, and effecting portfolio
transactions for, those Portfolios.
Crestone Capital Management, Inc. ("Crestone"), an investment advisory
subsidiary of Norwest Bank, is the investment subadviser of Small Company Stock
Portfolio and is an investment subadviser of Diversified Equity Fund and Growth
Equity Fund. Crestone provides investment advice regarding companies with small
capitalization to various clients, including institutional investors."
Galliard Capital Management, Inc. ("Galliard"), an investment advisory
subsidiary of Norwest Bank, is the investment subadviser of Stable Income
Portfolio. Galliard provides investment advice regarding advisory services to
bank and thrift institutions, pension and profit sharing plans, trusts and
charitable organizations and corporate and other business entities
Peregrine Capital Management, Inc. ("Peregrine"), an investment advisory
subsidiary of Norwest, is the investment subadviser of Small Company Stock
Portfolio, Small Company Growth Portfolio, Large Company Growth Portfolio and
Small Company Value Portfolio and is an investment subadviser of
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<PAGE>
______ and ____________. Peregrine provides investment advisory services to
corporate and public pension plans, profit sharing plans, savings-investment
plans and 401(k) plans.
United Capital Management, Inc. ("UCM"), a part of Norwest Bank Colorado, N.A.
is the investment subadviser of Total Return Bond Portfolio and of Total Return
Bond Portfolio. UCM provides specialized investment advisory services to
various institutional clients.
The investment advisory agreement for each Portfolio ("Advisory Agreement") will
continue in effect only if such continuance is specifically approved at least
annually by the Board or by vote of the interestholders of the Portfolio, and,
in either case, by a majority of the Trustees who are not parties to the
Advisory Agreement or interested persons of any such party, at a meeting called
for the purpose of voting on the Advisory Agreement.
The Advisory Agreement with respect to a Portfolio is terminable without the
payment of penalty, (i) by the Board or by a vote of a majority of the
Portfolio's outstanding voting securities (as defined in the 1940 Act) on 60
days' written notice to Norwest or Schroder, as applicable, or (ii) by Norwest
or Schroder on 60 days' written notice to the Trust. Each Advisory Agreement
terminates automatically upon its assignment.
The Sub-Investment Agreement is terminable without penalty by the 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 Crestone on not more than 60
days' nor less than 30 days' written notice, and will automatically terminate in
the event of its assignment. The Sub-Investment Advisory Agreement also
provides that neither Crestone nor its personnel shall be liable for any error
of judgment or mistake of law or for any act or omission in the performance of
its or their duties to the Fund, except for willful misfeasance, bad faith or
gross negligence in the performance of its or their duties or by reason of
reckless disregard of its or their obligations and duties under the
Sub-Investment Advisory Agreement. The Sub-Investment Advisory Agreement
provides that Crestone may render services to others.
The advisory fees, as described in Part A, are accrued daily and paid monthly.
Either adviser in its sole discretion, may waive all or any portion of its
advisory fee with respect to each Portfolio. Each Advisory Agreement provides
that the Advisers may render service to others.
The following table shows the dollar amount of fees payable under the Advisory
Agreements between the Advisers and the Trust with respect to each Portfolio,
the amount of the fee that was waived or reimbursed by Norwest, if any, and the
actual fee received by Norwest or Schroder. The data is for the past fiscal
year, November 1, 1995 through May 31, 1996 and for the Trust's first fiscal
year ending October 31, 1995.
<TABLE>
<CAPTION>
Fee Waived or Fee Fee
Fee Reimbursed Retained by Retained by
Payable by Norwest Norwest Schroder
------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Index Portfolio
Year ended May 31, 1996 281,183 281,183 0 N/A
Year ended October 31, 1995 359,914 359,914 0 N/A
Small Company Portfolio
(the predecessor to each of Small Company Stock Portfolio, Small Company Growth Portfolio
and Small Company Value Portfolio)
Year ended May 31, 1996 1,844,601 1,844,601 0 N/A
Year ended October 31, 1995 2,260,342 2,260,342 0 N/A
International Portfolio
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<PAGE>
Year ended May 31, 1996 1,005,925 1,005,925 0 1,005,925
Year ended October 31, 1995 1,231,536 1,231,536 0 1,231,536
</TABLE>
ADMINISTRATIVE SERVICES
Pursuant to an administration agreement with the Trust, FAS supervises the
overall administration of the Portfolios which includes, among other
responsibilities, overseeing the performance of administrative and professional
services rendered to the Trust by others, including its custodian, transfer
agent and fund accountant as well as legal and auditing services; preparing and
printing the periodic updating of the Trust's registration statement, tax
returns, and reports to interestholders and the SEC; preparing, filing and
maintaining the Trust's governing documents; preparing and disseminating
materials for meetings of the Board; and providing the Trust with general office
facilities.
The Administration Agreement between Forum and the Trust will continue in effect
with respect to a Portfolio only if such continuance is specifically approved at
least annually by the Board or by the interestholders of that Portfolio and, in
either case, by a majority of the Trustees who are not parties to the Management
Agreement or interested persons of any such party.
The administration agreement may be terminated with respect to each Portfolio
without the payment of any penalty, (i) by the Board or by vote of a majority of
the Portfolio's outstanding voting securities (as defined in the 1940) Act on 60
days' written notice to Forum or (ii) by Forum on 60 days' written notice to the
Trust.
The following table shows the dollar amount of fees payable under the
Administration Agreement between Forum and the Trust with respect to each
Portfolio, the amount of fee that was waived or reimbursed by Forum, if any, and
the actual fee received by Forum. The data is for the past fiscal year and the
fiscal year ended October 31, 1995. Forum's fees are accrued daily and paid
monthly.
<TABLE>
<CAPTION>
Fee Fee Fee
Payable Waived Retained
------- ------ --------
<S> <C> <C> <C>
Index Portfolio
Year ended May 31, 1996 $187,455 $7,045 $180,410
Year ended October 31, 1995 239,943 $16,182 239,943
Small Company Portfolio
(the predecessor to each of Small Company Stock Portfolio, Small Company Growth Portfolio
and Small Company Value Portfolio)
Year ended May 31, 1996 204,956 1,250 203,706
Year ended October 31, 1995 251,149 0 251,149
International Portfolio II
Year ended May 31, 1996 223,539 0 223,539
Year ended October 31, 1995 273,675 605 273,070
</TABLE>
CUSTODIAN
Norwest Bank, 733 Marquette Avenue, Minneapolis, Minnesota 55479-0040, is the
custodian of the Portfolio's assets. Morgan Stanley acts as sub-custodian of
International Portfolio's assets, but plays no role in making decisions as to
the purchase or sale of portfolio securities for the Portfolios. Pursuant to
rules adopted under the 1940 Act, each Portfolio may maintain its foreign
securities and cash in the custody of certain eligible foreign banks and
securities depositories. Selection of these foreign custodial institutions is
made by the Board following a consideration of a number of
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<PAGE>
factors. Morgan Stanley employs qualified foreign subcustodians to provide
custody of International Portfolio's assets in accordance with applicable
regulations.
PORTFOLIO ACCOUNTING
Forum Accounting, an affiliate of Forum, performs portfolio accounting services
for each Portfolio pursuant to a Fund Accounting Agreement with the Trust. The
Fund Accounting Agreement will continue in effect only if such continuance is
specifically approved at least annually by the Board or by a vote of the
shareholders of the Trust and in either case by a majority of the Trustees who
are not parties to the Fund Accounting Agreement or interested persons of any
such party, at a meeting called for the purpose of voting on the Fund Accounting
Agreement.
Under its agreement, FORUM ACCOUNTING prepares and maintains books and records
of each Fund on behalf of the Trust that are required to be maintained under the
1940 Act, calculates the net asset value per share of each Fund (and class
thereof) and dividends and capital gain distributions and prepares periodic
reports to shareholders and the SEC. For its accounting services, FORUM
ACCOUNTING receives from the Trust with respect to each Portfolio a fee of
$36,000 per year plus certain amounts based upon the type of Portfolio, and
number and types of portfolio transactions within each Portfolio. In addition,
for its interestholder recordkeeping services, FORUM ACCOUNTING is paid $12,000
for each Portfolio.
INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts
02109, has served as independent auditors for Index Portfolio and
International Portfolio since the inception of those Portfolios through the
year ended May 31, 1997. The Board has yet to elect independent auditors for
the portfolios' fiscal year ending May 31, 1998
BROKERAGE ALLOCATION AND OTHER PRACTICES (ITEM 17 OF FORM N-1A)
Investment decisions for the Portfolios will be made independently from those
for any other client account or investment company that is or may in the future
become managed by an Adviser or their affiliates. Investment decisions are the
product of many factors including basic suitability for the particular client
involved. Thus, a particular security may be bought or sold for certain clients
even though it could have been bought or sold for other clients at the same
time. Likewise, a particular security may be bought for one or more clients when
one or more clients are selling the security. In some instances, one client may
sell a particular security to another client. It also sometimes happens that two
or more clients simultaneously purchase or sell the same security, in which
event each day's transactions in such security are, insofar as is possible,
averaged as to price and allocated between such clients in a manner which, in an
Adviser's opinion, is equitable to each and in accordance with the amount being
purchased or sold by each. There may be circumstances when purchases or sales of
portfolio securities for one or more clients will have an adverse effect on
other clients. In addition, when purchases or sales of the same security for the
Portfolio and other client accounts managed by an Adviser occur
contemporaneously, the purchase or sale orders may be aggregated in order to
obtain any price advantages available to large denomination purchases or sales.
Purchases and sales of fixed income portfolio securities are generally effected
as principal transactions. These securities are normally purchased directly
from the issuer or from an underwriter or market maker for the securities.
There usually are no brokerage commissions paid for such purchases. Purchases
from underwriters of portfolio securities include a commission or concession
paid by the issuer to the underwriter, and purchases from dealers serving as
market makers include the spread between the bid and ask prices In the case of
securities traded in the foreign and domestic over-the-counter markets, there is
generally no stated commission, but the price usually includes an undisclosed
commission or markup In underwritten offerings, the price includes a disclosed
fixed commission or discount.
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<PAGE>
Purchases and sales of equity securities on exchanges are generally effected
through brokers who charge commissions except in the over-the-counter markets.
Allocations of transactions to brokers and dealers and the frequency of
transactions are determined by Norwest or Schroder, as applicable, in its best
judgment and in a manner deemed to be in the best interest of holders of
beneficial interests of the Portfolios rather than by any formula. The primary
consideration is prompt execution of orders in an effective manner and at the
most favorable price available to the Portfolio. In transactions on stock
exchanges in the United States, these commissions are negotiated, whereas on
foreign stock exchanges these commissions are generally fixed. Where
transactions are executed in the over-the-counter market, the Portfolio will
seek to deal with the primary market makers; but where necessary in order to
obtain best execution, it will utilize the services of others. In all cases the
Portfolio will attempt to negotiate best execution.
A Portfolio 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 securities transactions, Norwest and Schroder
take 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. Norwest and
Schroder may also take into account payments made by brokers effecting
transactions for a Portfolio (i) to the Portfolio or (ii) to other persons on
behalf of the Portfolio for services provided to it for which it would be
obligated to pay.
In addition, an Adviser may give consideration to research services furnished by
brokers for their use and may cause the Portfolio to pay these brokers a higher
amount of commission than may be charged by other brokers. Such research and
analysis may be used by Norwest and Schroder in connection with services to
clients other than the Portfolios, and advisory fees are not reduced by reason
of their receipt of the research services.
Subject to the general policies regarding allocation of portfolio brokerage as
set forth above, the Board has authorized the Advisers to employ their
respective affiliates to effect securities transactions of the Portfolios,
provided certain other conditions are satisfied. Payment of brokerage
commissions to an affiliate of an Adviser, as applicable, for effecting such
transactions is subject to Section 17(e) of the 1940 Act, which requires, among
other things, that commissions for transactions on securities exchanges paid by
a registered investment company to a broker which is an affiliated person of
such investment company, or an affiliated person of another person so
affiliated, not exceed the usual and customary brokers' commissions for such
transactions. It is the Portfolios' policy that commissions paid to Schroder
Muenchmeyer ("Muenchmeyer"), Norwest Investment Services, Inc. ("Norwest
Services") and other affiliates of either Norwest or Schroder will, in the
judgment of the adviser responsible for making portfolio decisions and selecting
brokers, be (i) at least as favorable as commissions contemporaneously charged
by the affiliate on comparable transactions for its most favored unaffiliated
customers and (ii) at least as favorable as those which would be charged on
comparable transactions by other qualified brokers having comparable execution
capability. The Board, including a majority of the non-interested Trustees, has
adopted procedures to ensure that commissions paid to affiliates of Norwest or
Schroder by the Portfolios satisfy the foregoing standards.
The Trust has no understanding or arrangement to direct any specific portion of
its brokerage to Muenchmeyer or Norwest Services, and will not direct brokerage
to Muenchmeyer or Norwest Services in recognition of research services.
For the fiscal years ended October 31, 1995 and May 31, 1996, the aggregate
brokerage commissions incurred by the Portfolios were as follows: Index
Portfolio, $84,456.51 and $74,898.21, Small Company Portfolio $758,509.92 and
$784,781.71, International Portfolio $212,757.45 and $188,843.90, and
International Portfolio II $730,490.67 and $434,449.57, of which 0.004%
($828.05) and 0% ($0.00) was paid for the years ended October 31, 1995 and May
31, 1996, respectively, to Muenchmeyer with respect to International Portfolio,
and of which 0.001% ($966.05) and 0% ($0.00) was paid for the years ended
October 31, 1995 and May 31, 1996, respectively, to Muenchmeyer with respect to
International Portfolio II. During those periods, approximately 0.002% and 0%
of the total dollar amount of transactions by International Portfolio, and
0.002% and 0% of the total dollar amount of transactions by International
Portfolio II involving the payment of commissions were effected through
Muenchmeyer, for the years ended October 31, 1995 and May 31, 1996,
respectively.
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<PAGE>
Transactions in futures contracts are executed through futures commission
merchants ("FCMs"), who receive brokerage commissions for their services. The
Trust's procedures in selecting FCMs to execute the Trust's transactions in
futures contracts, including procedures permitting the use of affiliates of
Norwest or Schroder, are similar to those in effect with respect to brokerage
transactions in securities.
The Trust will not purchase securities that are offered in underwritings in
which any affiliate of Norwest or Schroder is a member of the underwriting or
selling group, except pursuant to procedures adopted by the Board pursuant to
Rule 10f-3 under the 1940 Act. Among other things, these procedures require
that the spread or commission paid in connection with such a purchase be
reasonable and fair, the purchase be at not more than the public offering price
prior to the end of the first business day after the date of the public offering
and that Norwest, Schroder or any affiliates thereof not participate in or
benefit from the sale to the Trust.
CAPITAL STOCK AND OTHER SECURITIES (ITEM 18 OF FORM N-1A)
Under the Trust Instrument, the Trustees are authorized to issue beneficial
interest in one or more separate and distinct series. Investments in each
Portfolio have no preference, preemptive, conversion or similar rights and are
fully paid and nonassessable, except as set forth below. Each investor in a
Portfolio is entitled to a vote in proportion to the amount of its investment
therein. Investors in the Portfolios will all vote together in certain
circumstances (e.g., election of the Trustees and ratification of auditors, as
required by the 1940 Act and the rules thereunder). One or more Portfolios
could control the outcome of these votes. Investors do not have cumulative
voting rights, and investors holding more than 50% of the aggregate interests in
the Trust or in a Portfolio, as the case may be, may control the outcome of
votes. The Trust is not required and has no current intention to hold annual
meetings of investors, but the Trust will hold special meetings of investors
when (1) a majority of the Trustees determines to do so or (2) investors holding
at least 10% of the interests in the Trust (or a Portfolio) request in writing
a meeting of investors in the Trust (or Portfolio). Except for certain matters
specifically described in the Trust Instrument, the Trustees may amend the
Trust's Trust Instrument without the vote of investors.
The Trust, with respect to a Portfolio, may enter into a merger or
consolidation, or sell all or substantially all of its assets, if approved by
the Trust's Board. A Portfolio may be terminated (1) upon liquidation and
distribution of its assets, if approved by the vote of a majority of the
Portfolio's outstanding voting securities (as defined in the 1940 Act) or (2) by
the Trustees on written notice to the Portfolio's investors. Upon liquidation
or dissolution of any Portfolio, the investors therein would be entitled to
share pro rate in its net assets available for distribution to investors.
The Trust is organized as a business trust under the laws of the State of
Delaware. The Trust's interestholders are not personally liable for the
obligations of the Trust under Delaware law. The Delaware Business Trust Act
provides that an interestholder of a Delaware business trust shall be entitled
to the same limitation of liability extended to shareholders of private
corporations for profit. However, no similar statutory or other authority
limiting business trust interestholder liability exists in many other states,
including Texas. As a result, to the extent that the Trust or an interestholder
is subject to the jurisdiction of courts in those states, the courts may not
apply Delaware law, and may thereby subject the Trust to liability. To guard
against this risk, the Trust Instrument of the Trust disclaims liability for
acts or obligations of the Trust and requires that notice of such disclaimer be
given in each agreement, obligation and instrument entered into by the Trust or
its Trustees, and provides for indemnification out of Trust property of any
interestholder held personally liable for the obligations of the Trust. Thus,
the risk of an interestholder incurring financial loss beyond his investment
because of shareholder liability is limited to circumstances in which (1) a
court refuses to apply Delaware law, (2) no contractual limitation of liability
is in effect, and (3) the Trust itself is unable to meet its obligations.
PURCHASE, REDEMPTION AND PRICING OF SECURITIES (ITEM 19 OF FORM N-1A)
Interests in the Portfolios are issued solely in private placement transactions
that do not involve any "public offering" within the meaning of section 4(2) of
the 1933 Act. See "General Description of Registrant," "Purchase of
Securities," and "Redemption or Repurchase" in Part A.
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<PAGE>
The Trust was granted an exemptive order by the Commission which allows only
open-end management investment companies or their separate series for which
Norwest (or any person controlled by, controlling or under common control with
Norwest) acts as investment adviser (collectively, "Norwest Gateways") to invest
in Index Portfolio, Small Company Portfolio and International Portfolio II. The
original exemptive order, which imposed several substantive conditions upon the
Trust and Norwest Advantage Funds, was amended effective August 6, 1996, to
permit any Norwest Advantage Fund to invest all or a portion of its assets in a
Core Trust portfolio, irrespective of investment style, and which removed
certain restrictions imposed on the Trust thereby permitting the Trust to accept
investments from persons other than Norwest Advantage Funds.
TAX STATUS (ITEM 20 OF FORM N-1A)
Each Portfolio is classified for federal income tax purposes as a separate
partnership that is not a "publicly traded partnership." As a result, no
Portfolio is subject to federal income tax; instead, each investor in a
Portfolio is required to take into account in determining its federal income tax
liability its share of the Portfolio's income, gains, losses, deductions, and
credits, without regard to whether it has received any cash distributions from
the Portfolio. Each Portfolio also is not subject to Delaware income or
franchise tax.
Each investor in a Portfolio is deemed to own a proportionate share of the
Portfolio's assets, and to earn a proportionate share of the Portfolio's income,
for purposes of determining whether the investor satisfies the requirements to
qualify as a regulated investment company ("RIC") under Subchapter M of the
Internal Revenue Code of 1986, as amended. Accordingly, each Portfolio intends
to conduct its operations so that its investors that intend to qualify as RICs
("RIC investors") will be able to satisfy all those requirements.
Distributions to an investor from a Portfolio (whether pursuant to a partial or
complete withdrawal or otherwise) will not result in the investor's recognition
of any gain or loss for federal income tax purposes, except that (1) gain will
be recognized to the extent any cash that is distributed exceeds the investor's
basis for its interest in the Portfolio before the distribution, (2) income or
gain will be recognized if the distribution is in liquidation of the investor's
entire interest in the Portfolio and includes a disproportionate share of any
unrealized receivables held by the Portfolio, (3) loss will be recognized if a
liquidation distribution consists solely of cash and/or unrealized receivables,
and (4) gain or loss may be recognized on a distribution to an investor that
contributed property to the Portfolio. An investor's basis for its interest in
a Portfolio generally will equal the amount of cash and the basis of any
property it invests in the Portfolio, increased by the investor's share of the
Portfolio's net income and gains and decreased by (a) the amount of cash and the
basis of any property the Portfolio distributes to the investor and (b) the
investor's share of the Portfolio's losses.
Dividends and interest received by a Portfolio may be subject to income,
withholding, or other taxes imposed by foreign countries and; U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and many foreign countries do not impose taxes on capital gains in
respect of investments by foreign investors.
Each Portfolio (except Index Portfolio) may invest in the stock of "passive
foreign investment companies" ("PFICs"). A PFIC is a foreign corporation that,
in general, meets either of the following tests: (1) at least 75% of its gross
income is passive or (2) an average of at least 50% of its assets produce, or
are held for the production of, passive income. Under certain circumstances, a
RIC that holds stock of a PFIC indirectly through its interest in a Portfolio
will be subject to federal income tax on its proportionate share of a portion of
any "excess distribution" received by the Portfolio on the stock or of any gain
on disposition of the stock (collectively "PFIC income"), plus interest thereon,
even if the RIC distributes the PFIC income as a taxable dividend to its
shareholders. The balance of the PFIC income will be included in the RIC's
investment company taxable income and, accordingly, will not be taxable to it to
the extent that income is distributed to its shareholders.
If a Portfolio invests in a PFIC and elects to treat the PFIC as a "qualified
electing fund," then in lieu of the foregoing tax and interest obligation, each
RIC investor in the Portfolio would be required to include in income each year
its proportionate share of the Portfolio's pro rata share of the qualified
electing fund's annual ordinary earnings and net capital gain (the excess of net
long-term capital gain over net short-term capital loss) -- which most likely
would have to be distributed by the RIC investor to satisfy the distribution
requirements applicable to it -- even if those earnings
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and gain were not received by it. In most instances it will be very difficult,
if not impossible, to make this election because of certain requirements
thereof.
Proposed regulations have been published pursuant to which certain RICs would be
entitled to elect to "mark to market" their stock in certain PFICs. "Marking to
market," in this context, means recognizing as gain for each taxable year the
excess, as of the end of that year, of the fair market value of each such PFIC's
stock over the adjusted basis in that stock (including mark-to-market gain for
each prior year for which an election was in effect).
The Portfolios' use of hedging strategies, such as writing (selling) and
purchasing options and futures and entering into forward contracts, involves
complex rules that will determine for income tax purposes the character and
timing of recognition of the gains and losses the Portfolios realize in
connection therewith. For each Portfolio, gains from the disposition of foreign
currencies (except certain gains that may be excluded by future regulations),
and gains from hedging instruments derived by it with respect to its business of
investing in securities or foreign currencies, will qualify as permissible
income for its RIC investors under the requirement that at least 90% of a RIC's
gross income each taxable year consist of specified types of income. However,
income from the disposition by a Portfolio of hedging instruments (other than
those on foreign currencies) held for less than three months will be subject to
the requirement applicable to its RIC investors that less than 30% of a RIC's
gross income each taxable year consist of certain short-term gains ("Short-Short
Limitation"). Income from the disposition of foreign currencies, and hedging
instruments on foreign currencies, that are not directly related to a
Portfolio's principal business of investing in securities (or options and
futures with respect thereto) also will be subject to the Short-Short Limitation
for its RIC investors if they are held for less than three months.
If a Portfolio satisfies certain requirements, any increase in value of a
position that is part of a "designated hedge" will be offset by any decrease in
value (whether realized or not) of the offsetting hedging position during the
period of the hedge for purposes of determining whether its RIC investors
satisfy the Short-Short Limitation. Thus, only the net gain (if any) from the
designated hedge will be included in gross income for purposes of that
limitation. Each Portfolio will consider whether it should seek to qualify for
this treatment for its hedging transactions. To the extent a Portfolio does not
so qualify, it may be forced to defer the closing out of certain hedging
instruments beyond the time when it otherwise would be advantageous to do so, in
order for its RIC investors to qualify or continue to qualify as RICs.
UNDERWRITERS (ITEM 21 OF FORM N-1A)
Forum Financial Services, Inc., Two Portland Square, Portland, Maine 04101, the
Portfolios' administrator, serves as the Trust's placement agent. Forum
receives no compensation for such placement agent services.
CALCULATION OF PERFORMANCE DATA (ITEM 22 OF FORM N-1A)
Not applicable.
FINANCIAL STATEMENTS (ITEM 23 OF FORM N-1A)
The statement of assets and liabilities, statement of operations and statement
of changes in net assets for each Portfolio, and the notes to each of the
foregoing statements, for the fiscal years ended May 31, 1996 and October 31,
1995, and the report of the independent accountants, Coopers & Lybrand L.L.P.,
thereon (included in the Annual Report of the Trust), which follow, are
incorporated herein by reference.
The statement of assets and liabilities, statement of operations and statement
of changes in net assets for Index Portfolio and International Portfolio II ,
and the notes to each of the foregoing statements, for the semi-annual period
ended November 30, 1996, (included in the Semi-Annual Report of the Trust), are
incorporated herein by reference.
The Statements of Assets and Liabilities and Notes Thereto, dated May 30, 1997,
which follow, are incorporated herein by reference.
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PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS.
INCLUDED IN PART A
Not Applicable.
INCLUDED IN PART B
For Index Portfolio, Small Company Portfolio, International Portfolio and
International Portfolio II:
Audited financial statements for the fiscal year ended May 31, 1996,
including: statements of assets and liabilities, statements of
operations, statements of changes in net assets, notes to financial
statements, portfolios of investments and independent auditor's report
thereon.
Unaudited financial statements for the semi-annual period ended
November 30, 1996, including: statements of assets and liabilities,
statements of operations, statements of changes in net assets, notes
to financial statements and portfolios of investments.
For Prime Money Market Portfolio, Money Market Portfolio, Stable Income
Portfolio, Positive Return Bond Portfolio, Managed Fixed Income Portfolio,
Total Return Bond Portfolio, Income Equity Portfolio, Large Company Growth
Portfolio, Small Company Stock Portfolio, Small Company Growth Portfolio
and Small Company Value Portfolio:
Unaudited statements of assets and liabilities and notes thereto.
(b) EXHIBITS:
(1) Copy of Trust Instrument (See Note A)
(2) Not Applicable.
(3) Not Applicable.
(4) Not Applicable.
(5) (a) Copy of the Investment Advisory Agreement between Registrant and
Norwest Bank Minnesota, N.A ("Norwest") (See Note B).
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(b) Copy of the Investment Advisory Agreement between Registrant and
Schroder Capital Management International Inc. (See Note B).
(c) Copy of the Investment Advisory Agreement between Registrant and
Linden Asset Management, Inc. (See Note B).
(d) Copy of the Investment Advisory Agreement among Registrant,
Linden Asset Management, Inc. and Forum Advisors, Inc. (See Note
B).
(e) Copy of the Investment Advisory Agreement between Registrant and
Forum Advisors, Inc. (See Note B).
(f) Copy of the Investment Advisory Agreement among Registrant, Forum
Advisors, Inc., and Linden Asset Management, Inc. relating to
the Treasury Portfolio of Registrant (See Note B).
(g) Copy of the Investment Advisory Agreement between Registrant and
Linden Asset Management, Inc. relating to the Treasury Portfolio
of Registrant. (See Note B)
(6) Not required.
(7) Not Applicable.
(8) (a) Copy of the Custodian Agreement between Registrant and Norwest
(See Note B).
(b) Copy of the Custodian Agreement between Registrant and The Chase
Manhattan Bank, N.A. ("Chase") (See Note B).
(c) Copy of the Foreign Subcustody Agreement between Chase and
various foreign subcustodians (See Note A).
(d) Copy of the Custodian Agreement between Registrant and Imperial
Trust Company (See Note B).
(e) Copy of the Custodian Agreement between Registrant and First
National Bank of Boston, N.A. (See Note B).
(9) (a) Copy of the Administration Agreement between Registrant and Forum
Financial Services, Inc. (See Note B).
(b) Copy of the Fund Accounting Agreement between Registrant and
Forum Financial Corp. (See Note B).
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(c) Copy of the Placement Agent Agreement between Registrant and
Forum. (See Note B).
(d) Copy of the Administration Agreement between Registrant and Forum
with respect to Treasury Cash Portfolio, Government Cash
Portfolio, Cash Portfolio and Treasury Portfolio. (See Note B).
(e) Copy of the Fund Accounting Agreement between Registrant and
Forum Financial Corp. with respect to Treasury Cash Portfolio,
Government Cash Portfolio, Cash Portfolio and Treasury Portfolio.
(See Note B).
(f) Copy of the Placement Agent Agreement between Registrant and
Forum with respect to Treasury Cash Portfolio, Government Cash
Portfolio, Cash Portfolio and Treasury Portfolio. (See Note B).
(10) Not required.
(11) Not required.
(12) Not required.
(13) Not Applicable.
(14) Not Applicable.
(15) Not Applicable.
(16) Not Applicable.
(17) Financial Data Schedule.
(18) Not Applicable.
Note A: Filed in Registrant's Registration Statement on November 10, 1994.
Note B. Filed in Amendment No. 5 to Registrant's Registration Statement on
September 30, 1996.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
As of May 30, 1997 substantially all of the interests in Index Portfolio, Small
Company Portfolio, International Portfolio and International Portfolio II were
owned by various series of Norwest Funds, a registered open-end management
investment company.
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As of May 30, 1997 substantially all of the interests in Treasury Cash
Portfolio, Government Cash Portfolio and Cash Portfolio were owned by various
series of Monarch Funds, a registered open-end management investment company.
As of May 30, 1997 substantially all of the interests in Treasury Portfolio were
owned by Daily Assets Treasury Fund, a series of Forum Funds, a registered
open-end management investment company.
As of May 30, 1997 substantially all of the interests in Prime Money Market
Portfolio, Money Market Portfolio, Stable Income Portfolio, Positive Return Bond
Portfolio, Managed Fixed Income Portfolio, Total Return Bond Portfolio, Income
Equity Portfolio, Large Company Growth Portfolio, Small Company Stock Portfolio,
Small Company Growth Portfolio and Small Company Value Portfolio were owned by
Forum Financial Services, Inc. and its affiliates, which are controlled by John
Y. Keffer.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES AS OF MAY 30, 1997
Title of Class of Shares
of Beneficial Interest Number of Holders
---------------------- -----------------
Treasury Cash Portfolio 2
Government Cash Portfolio 2
Cash Portfolio 3
Treasury Portfolio 2
Prime Money Market Portfolio 2
Money Market Portfolio 2
Stable Income Portfolio 2
Positive Return Bond Portfolio 2
Managed Fixed Income Portfolio 2
Total Return Bond Portfolio 2
Index Portfolio 5
Income Equity Portfolio 2
Large Company Growth Portfolio 2
Small Company Portfolio 6
Small Company Stock Portfolio 2
Small Company Growth Portfolio 2
Small Company Value Portfolio 2
International Portfolio 2
International Portfolio II 6
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ITEM 27. INDEMNIFICATION.
The Trust currently holds a directors' and officers' errors and omissions
insurance policy jointly with Forum Funds, the terms of which are consistent
with industry standards. The policy provides generally for the indemnification
against loss by the insured in connection with a judgment of liability in
certain litigation arising from the insured's wrongful act or an error, act or
omission by a person for whom the insured becomes legally responsible. The
policy provides coverage in the amount of $6,000,000. The policy premiums are
allocated between the Trust and Forum Funds based upon the pro rata share of
assets of each insured. The Trust's trustees and officers also are insured
under the Trust's fidelity bond purchased pursuant to Rule 17j-1 under the
Investment Company Act of 1940, as amended (the "Act").
The general effect of Article 5 of 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
Article 5 of Registrant's Trust Instrument contained in this Registration
Statement as Exhibit 1 and incorporated herein by reference.
Provisions of each of Registrant's investment advisory agreements provide
that the respective investment adviser shall not be liable for any mistake of
judgment or in any event whatsoever, except for lack of good faith, provided
that nothing shall be deemed to protect, or purport to protect, the investment
adviser against any liability to Registrant or to Registrant's interestholders
to which the investment adviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of the investment
adviser's duties, or by reason of the investment adviser's reckless disregard of
its obligations and duties hereunder. This description is modified in its
entirety by the provisions of Registrant's Investment Advisory Agreements
contained in this Registration Statement as Exhibit 5 and incorporated herein by
reference.
As custodian to certain portfolios of the Trust, under Section 18 of its
custodian agreement Norwest is not liable for any action taken in good faith
reliance upon the advice or statements of certain experts. Under that
agreement, the Trust has agreed to indemnify and hold Norwest harmless for any
loss, claim, damage or expense arising out of the custodian relationship;
provided such loss, claim, damage or expense is not the direct result of the
Custodian's negligence or willful misconduct. This description is modified in
its entirety by the provisions of Registrant's Custodian Agreement contained in
this Registration Statement as Exhibit 8(a) and incorporated herein by
reference.
The indemnification provisions set forth under Section 1 paragraphs (f) and
(g) of the Placement Agent Agreement between FFSI (defined as "Forum" under the
agreement) and the Trust, specifically provide as follows:
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(f) The Trust agrees to indemnify, defend and hold Forum, its several
officers and directors, and any person who controls Forum within the
meaning of Section 15 of the 1933 Act or Section 20 of the Securities
Exchange Act of 1934 (the "1934 Act") (for purposes of this Section
1(f), collectively, "Covered Persons") free and harmless from and
against any and all claims, demands, liabilities and any counsel fees
incurred in connection therewith) which any Covered Person may incur
under the 1933 Act, the 1934 Act, common law or otherwise, arising out
of or based on any untrue statement of a material fact contained in
any registration statement, private placement memorandum or other
offering material ("Offering Material") or arising out of or based on
any omission to state a material fact required to be stated in any
Offering Material or necessary to make the statements in any Offering
Material not misleading, provided, however, that the Trust's agreement
to indemnify Covered Persons shall not be deemed to cover any claims,
demands, liabilities or expenses arising out of any financial and
other statements as are furnished in writing to the Trust by Forum in
its capacity as Placement Agent for use in the answers to any items of
any registration statement or in any statements made in any Offering
Material, or arising out of or based on any omission or alleged
omission to state a material fact in connection with the giving of
such information required to be stated in such answers or necessary to
make the answers not misleading; and further provided that the Trust's
agreement to Section 1(e) shall not be deemed to cover any liability to
the Trust or its investors to which a Covered Person would otherwise
be subject by reason or willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of a Covered
Person's reckless disregard of its obligations and duties under this
Agreement. The Trust shall be notified of any action brought against
a Covered Person, such notification to be given by letter or by
telegram addressed to the Secretary of the Trust, promptly after the
summons or other first legal process shall have been duly and
completely served upon such Covered Person. The failure to notify the
Trust of any such action shall not relieve the Trust from any
liability except to the extent that the Trust shall have been
prejudiced by such failure, or from any liability that the Trust may
have to the Covered Person against whom such action is brought by
reason of any such untrue statement or omission, otherwise than on
account of the Trust's indemnity agreement contained in this Section
1(f). The Trust will be entitled to assume the defense of any suit
brought to enforce any such claim, demand or liability, but in such
case such defense shall be conducted by counsel chosen by the Trust
and approved by Forum, the defendant or defendants in such suit shall
bear the fees and expenses of any additional counsel retained by any
of them; but in case the Trust does not elect to assume the defense of
any such suit, or in case Forum reasonably does not approve of counsel
chosen by the Trust, the Trust will reimburse the Covered Person named
as defendant in such suit, for the fees and expenses of any counsel
retained by Forum or such Covered Person. The Trust's indemnification
agreement contained in this Section (f) and the Trust's
representations and warranties in this Agreement shall remain
operative and in full force and effect regardless of any investigation
made by or on behalf of Covered Persons, and shall survive the
delivery of any Interests. This agreement of indemnity will inure
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exclusively to Covered Persons and their successors. The Trust agrees
to notify Forum promptly of the commencement of any litigation or
proceedings against the Trust or any of its officers or Trustees in
connection with the issue and sale of any Interests.
(g) Forum agrees to indemnify, defend and hold the Trust, its several
officers and trustees, and any person who controls the Trust within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act (for purposes of this Section 1(g) collectively, "Covered
Persons") free and harmless from and against any and all claims,
demands, liabilities and expenses (including the costs of
investigating or defending such claims, demands, liabilities and any
counsel fees incurred in connection therewith) that Covered Persons
may incur under the 1933 Act, the 1934 Act, or common law or
otherwise, but only to the extent that such liability or expense
incurred by a Covered Person resulting from such claims or demands
shall arise out of or be based on any untrue statement of a material
fact contained in information furnished in writing by Forum in its
capacity as Placement Agent to the Trust for use in the answers to any
of the items of any registration statement or in any statements in any
Offering Material or shall arise out of or be based on any omission to
state a material fact in connection with such information furnished in
writing by Forum to the Trust required to be stated in such answers or
necessary to make such information not misleading. Forum shall be
notified of any action brought against a Covered Person, such
notification to be given by letter or telegram addressed to Forum,
Attention: Legal Department, promptly after the summons or other first
legal process shall have been duly and completely served upon such
Covered Person. Forum shall have the right of first control of the
defense of the action with counsel of its own choosing satisfactory to
the Trust if such action is based solely on such alleged misstatement
or omission on Forum's part, and in any other event each Covered
Person shall have the right to participate in the defense or
preparation of the defense of any such action. The failure to so
notify Forum of any such action shall not relieve Forum from any
liability except to the extent that Forum shall have been prejudiced
by such failure, or from any liability that Forum may have to Covered
Persons by reason of any such untrue or alleged untrue statement, or
omission or alleged omission, otherwise than on account of Forum's
indemnity agreement contained in this Section 1(g).
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
Trust pursuant to the foregoing provisions, or otherwise, the Trust 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 Trust of expenses incurred or
paid by a trustee, officer or controlling person of the Trust 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
Trust 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
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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 ADVISERS.
NORWEST INVESTMENT MANAGEMENT, INC.
The description of Norwest Investment Management, Inc. ("NIM") in Parts A and B
of this Registration Statement are incorporated by reference herein.
The following are the directors and principal executive officers of NIM,
including their business connections which are of a substantial nature. The
address of Norwest Corporation, the parent of Norwest Bank Minnesota, N.A.
("Norwest Bank"), which is the parent of NIM, is Norwest Center, Sixth Street
and Marquette Avenue, Minneapolis, MN 55479. Unless otherwise indicated below,
the principal business address of any company with which the directors and
principal executive officers are connected is also Sixth Street and Marquette
Avenue, Minneapolis, MN 55479.
James R. Campbell, Director, President and Chief Executive Officer, has
held this position for the last two years. Mr. Campbell is also Executive
Vice President of Norwest Corporation, Director and Chairman of Norwest
Investment Advisors, Inc., and a Director of Flore Properties, Inc.,
Centennial Investment Corporation and Peregrine Capital Management, Inc.,
which is located at LaSalle Plaza, 800 LaSalle Avenue, Suite 1850,
Minneapolis, Minnesota 55402-2056. Mr. Campbell is also a Director of a
number of non-profit organizations located in Minneapolis, Minnesota.
Within the last two years Mr. Campbell was a Director of Norwest Insurance,
Inc. and Norwest Equipment Finance, Inc.
Michael A. Graf, Controller and Cashier, also serves as Senior Vice
President and Controller of Norwest Corporation.
P. Jay Kiedrowski, Executive Vice President, has served in various
capacities as an employee of Norwest Bank Minnesota, N.A. and/or its
affiliates since August 1987. Mr. Kiedrowski is also a Director and
Chairman of the Board of Norwest Investment Management, Inc. and President
of Norwest Investment Management, a part of Norwest.
Scott A. Kisting, Director and Executive Vice President, is also a Director
of Norwest Insurance, Inc., IntraWest Insurance Company and Fidelity
National Life Insurance Company.
William H. Queenan, Director, is also Executive Vice President of Norwest
Corporation.
John T. Thornton, Director, is also Executive Vice President and Chief
Financial Officer of Norwest Corporation. Mr. Thornton is also a Director
of Northern Prairie Indemnity, Limited, Grand Cayman, Cayman Islands,
British West Indies, a Director of Norwest
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Capital Markets, Inc. Mr. Thornton is also a Director of Norwest Growth
Fund, Inc., Norwest Venture Capital Management, Inc. and Norwest Equity
Capital, Inc., and Director, President and Treasurer of Norwest Investors,
Inc., and Director, President and CEO of Norwest Limited, Inc., all located
at 2800 Piper Jaffray Tower, 222 South Ninth Street, Minneapolis, MN
54402. Mr. Thornton is also Director and President of Superior Guaranty
Insurance Company and Norwest Holding Company, and a Director of Bettendorf
Asset Management, Inc. Mr. Thornton is also a Director of Eau Claire Asset
Management, Inc., Green Bay Asset Management, Inc., Iowa Asset Management,
Inc., LaCrosse Asset Management, Inc., South Bend Asset Management, Inc.,
South Dakota Asset Management, Inc., Waupun Asset Management, Inc., all
located at 100 West Commons Blvd., Suite 303, New Castle, DE 19720.
Richard C. Westergaard, Executive Vice President, has served in various
capacities as an employee of Norwest Bank Minnesota, N.A. and/or its
affiliates during the last two years. Mr.Westergaard is also a Director of
Norwest Business Credit, Inc., Norwest Credit, Inc., First Interstate
Equipment Finance, Inc. and R.D. Leasing, Inc. and a Director of Norwest
Equipment Finance, Inc. and Commonwealth Leasing Corporation, located at
Investors Building, 733 Marquette, Suite 300, Minneapolis, MN 55479-2048.
Charles D. White, Senior Vice President, has served in various capacities
as an employee of Norwest Bank Minnesota, N.A. and/or its affiliates during
the last two years. Mr. White is also Treasurer and Chief Financial
Officer of Norwest Limited, Inc. Mr. White is also a Director of
Bettendorf Asset Management, Inc., Eau Claire Asset Management, Inc., Green
Bay Asset Management, Inc., IntraWest Asset Management, Inc., Iowa Asset
Management, Inc., LaCrosse Asset Management, Inc., South Bend Asset
Management, Inc., South Dakota Asset Management, Inc., and Waupun Asset
Management, Inc., located at 100 West Commons Boulevard, Suite 303, New
Castle, DE 19720.
CRESTONE CAPITAL MANAGEMENT, INC.
The description of Crestone Capital Management, Inc. ("Crestone") in Parts A and
B of this Registration Statement are incorporated by reference herein.
The following are the directors and principal executive officers of Crestone,
including their business connections which are of a substantial nature. The
address of Crestone is 7720 East Belleview Avenue, Suite 220, Englewood Colorado
80111 and, unless otherwise indicated below, that address is the principal
business address of any company with which the directors and principal executive
officers are connected.
Kirk McCown, President and Director.
Mark Steven Sunderhuse, Senior Vice President and Director.
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P. Jay Kiedrowski, Director. Mr. Kiedrowski is also President and Chairman
of the Board of Norwest and an Executive Vice President of Norwest Bank.
His address is Sixth and Marquette Avenue, Minneapolis, Minnesota 55479.
Steven P. Gianoli, Director. Mr. Gianoli is a Vice President of Norwest
and Norwest Bank. His address is Sixth and Marquette Avenue, Minneapolis,
Minnesota 55479.
Susan Koonsman, Director. Ms. Koonsman is President of Norwest Investments
& Trust. Her address is 1740 Broadway, Denver, Colorado 80274.
PEREGRINE CAPITAL MANAGEMENT, INC.
The description of Peregrine Capital Management, Inc. ("Peregrine") in Parts A
and B of this Registration Statement are incorporated by reference herein.
The following are the directors and principal executive officers of Peregrine,
including their business connections which are of a substantial nature. The
address of Peregrine is LaSalle Plaza, 800 LaSalle Avenue, Suite 1850,
Minneapolis, Minnesota 55402 and, unless otherwise indicated below, that address
is the principal business address of any company with which the directors and
principal executive officers are connected.
James R. Campbell, Director. Mr. Campbell is President, Chief Executive
Odfficer and a Director of Norwest Bank. His address is Sixth and
Marquette Avenue, Minneapolis, Minnesota 55479-0116
Patricia D. Burns, Senior Vice President.
Tasso H. Coin, Senior Vice President.
John S. Dale, Senior Vice President.
Julie M. Gerend, Senior Vice President. Prior to September, 1995, Ms.
Gerend was Manager, Account Executive at Fidelity Institutional Retirement
Services, Co.
William D. Diese, Senior Vice President.
Daniel J. Hagen, Vice President. Prior to May, 1996, Mr. Hagen was
Managing Director of Piper Jaffray, Inc.
Ronald G. Hoffman, Senior Vice President and Secretary.
Frank T. Matthews, Vice President.
Jeannine McCormick, Senior Vice President.
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Barbara K. McFadden, Senior Vice President.
Robert B. Mersky, Chairman, President and Chief Executive Officer.
Gary E. Nussbaum, Senior Vice President.
James P. Ross, Vice President. Prior to November, 1996, Mr. Ross was Vice
President of Norwest Bank.
Jonathan L. Scharlau, Assistant Vice President.
Jay H. Strohmaier, Senior Vice President. Prior to September, 1996, Mr.
Strohmaier was Senior Vice President/Managed Accounts for Voyageur Asset
Management.
Paul E. von Kuster, Senior Vice President.
Janelle M. Walter, Assistant Vice President.
Paul R. Wurm, Senior Vice President.
J. Daniel Vandermark, Vice President. His address is Sixth and Marquette
Avenue, Minneapolis, Minnesota 55479-1013
GALLIARD CAPITAL MANAGEMENT, INC.
The description of Galliard Capital Management, Inc. ("Galliard") in Parts A and
B of this Registration Statement are incorporated by reference herein.
The following are the directors and principal executive officers of Galliard,
including their business connections which are of a substantial nature. The
address of Galliard is LaSalle Plaza, Suite 2060, 800 LaSalle Avenue,
Minneapolis, Minnesota 55479 and, unless otherwise indicated below, that address
is the principal business address of any company with which the directors and
principal executive officers are connected.
PETER JAY KIEDROWSKI, CHAIRMAN. MR. KIEDROWSKI IS PRESIDENT AND CHIEF
EXECUTIVE OFFICER OF NORWEST NIM; CHAIRMAN OF CRESTONE AND EXECUTIVE VICE
PRESIDENT OF NORWEST BANK.
RICHARD MERRIAM, PRINCIPAL. MR. MERRIAM IS CHIEF INVESTMENT OFFICER OF
INSIGHT INVESTMENT MANAGEMENT.
JOHN CASWELL, PRINCIPAL. MR. CASWELL IS CHIEF INVESTMENT OFFICER OF
NORWEST BANK MINNESOTA, N.A.
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KARL TOURVILLE, PRINCIPAL. MR. TOURVILLE IS VICE PRESIDENT/HEAD OF FIXED
INCOME OF NORWEST BANK.
LAURA GIDEON, SENIOR VICE PRESIDENT OF MARKETING. MS. GIDEON IS VICE
PRESIDENT OF MARKETING FOR AMERICAN EXPRESS.
LEELA SCATTUM, VICE PRESIDENT OF OPERATIONS. MS. SCATTUM IS A FUND
ACCOUNTANT FOR NORWEST BANK.
UNITED CAPITAL MANAGEMENT
The description of United Capital Management ("UCM") in Parts A and B of this
Registration Statement are incorporated by reference herein.
The following are the directors and principal executive officers of UCM,
including their business connections which are of a substantial nature. The
address of UCM is 1700 Lincoln Street, Suite 3301, Denver, Colorado 80274 and,
unless otherwise indicated below, that address is the principal business address
of any company with which the directors and principal executive officers are
connected.
W. Lon Schreur, President. Mr. Schreur is Senior Vice President of Norwest
Bank Colorado, N.A..
John T. Groton, Vice President. Mr. Groton is Vice President of Norwest
Bank Colorado, N.A.
David B. Kinney, Vice President. Mr. Kinney is Vice President of Norwest
Bank Colorado, N.A.
James C. Peery, Senior Vice President. Mr. Peery is Vice President of
Norwest Bank Colorado, N.A.
Leona F. Bennett, Vice President. Ms. Bennett is Vice President of Norwest
Bank Colorado, N.A.
Denise B. Johnson, Vice President. Mr. Johnson is Vice President of
Norwest Bank Colorado, N.A.
SCHRODER CAPITAL MANAGEMENT INTERNATIONAL INC.
The description of Schroder Capital Management International Inc. ("Schroder")
in Parts A and B of the Registration Statement are incorporated by reference
herein.
The following are the directors and principal officers of Schroder, including
their business connections which are of a substantial nature. The address of
each company listed, unless
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otherwise noted, is 33 Gutter Lane, London EC2V 8AS, United Kingdom. Schroder
Capital Management International Limited ("Schroder Ltd.") is a United Kingdom
affiliate of Schroder which provides investment management services
international clients located principally in the United States.
DAVID M. SALISBURY. CHIEF EXECUTIVE OFFICER, DIRECTOR AND CHAIRMAN OF
SCHRODER CAPITAL; JOINT CHIEF EXECUTIVE AND DIRECTOR OF SCHRODER.
RICHARD R. FOULKES. SENIOR VICE PRESIDENT AND MANAGING DIRECTOR OF SCHRODER
CAPITAL.
JOHN A. TROIANO. MANAGING DIRECTOR AND SENIOR VICE PRESIDENT. MR. TROIANO
IS ALSO A DIRECTOR OF SCHRODER LTD.
DAVID GIBSON. SENIOR VICE PRESIDENT AND DIRECTOR OF SCHRODER CAPITAL.
DIRECTOR OF SCHRODER WERTHEIM INVESTMENT SERVICES INC.
JOHN S. AGER. SENIOR VICE PRESIDENT AND DIRECTOR OF SCHRODER CAPITAL.
SHARON L. HAUGH. SENIOR VICE PRESIDENT AND DIRECTOR OF SCHRODER CAPITAL,
DIRECTOR AND CHAIRMAN OF SCHRODER ADVISORS INC.
GAVIN D.L. RALSTON. SENIOR VICE PRESIDENT AND DIRECTOR OF SCHRODER CAPITAL.
MARK J. SMITH. SENIOR VICE PRESIDENT AND DIRECTOR OF SCHRODER CAPITAL.
ROBERT G. DAVY. SENIOR VICE PRESIDENT. MR. DAVY IS ALSO A DIRECTOR OF
SCHRODER LTD. AND AN OFFICER OF OPEN END INVESTMENT COMPANIES FOR WHICH
SCMI AND/OR ITS AFFILIATES PROVIDE INVESTMENT SERVICES.
JANE P. LUCAS. SENIOR VICE PRESIDENT AND DIRECTOR OF SCHRODER CAPITAL;
DIRECTOR OF SCHRODER ADVISORS INC.; DIRECTOR OF SCHRODER WERTHEIM
INVESTMENT SERVICES, INC.
C. JOHN GOVETT. DIRECTOR OF SCHRODER CAPITAL; GROUP MANAGING DIRECTOR OF
SCHRODER INVESTMENT MANAGEMENT LTD. AND DIRECTOR OF SCHRODERS PLC.
PHILLIPA J. GOULD. SENIOR VICE PRESIDENT AND DIRECTOR OF SCHRODER CAPITAL.
LOUISE CROSET. FIRST VICE PRESIDENT AND DIRECTOR OF SCHRODER CAPITAL.
ABDALLAH NAUPHAL, GROUP VICE PRESIDENT AND DIRECTOR.
FORUM ADVISORS, INC.
The description of Forum Advisors, Inc. ("Forum Advisors") in Parts A and B of
the Registration Statement are incorporated by reference herein.
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The following are the directors and principal executive officers of Forum
Advisors, including their business connections which are of a substantial
nature. The address of Forum Advisors is Two Portland Square, Portland, Maine
04101 and, unless otherwise indicated below, that address is the principal
business address of any company with which the directors and principal executive
officers are connected.
John Y. Keffer, Director, President and Secretary.
Chairman and President of the Registrant; President and Secretary of
Forum Financial Services, Inc. and of Forum Financial Corp. Mr.
Keffer is a director and/or officer of various registered investment
companies for which Forum Financial Services, Inc. serves as manager,
administrator and/or distributor.
David R. Keffer, Vice President and Treasurer.
Vice President, Assistant Secretary and Assistant Treasurer of the
Registrant; Vice President and Treasurer of Forum Financial Services,
Inc. and of Forum Financial Corp. Mr. Keffer is an officer of various
registered investment companies for which Forum Financial Services,
Inc. serves as manager, administrator and/or distributor.
LINDEN ASSET MANAGEMENT, INC.
The description of Linden Asset Management, Inc. ("Linden") in Parts A and B of
the Registration Statement are incorporated by reference herein.
The following are the directors and principal executive officers of Linden,
including their business connections which are of a substantial nature. The
address of Linden is 812 N. Linden Street, Beverly Hills, California 90212 and,
unless otherwise indicated below, that address is the principal business address
of any company with which the directors and principal executive officers are
connected.
Anthony R. Fischer, Jr., Director, President and Secretary.
President and Secretary of Linden Asset Management, Inc. since its
incorporation. Since September 1989 Mr. Fischer has managed his own
personal investments and performed independent research. Prior
thereto, he was Senior Vice President and Treasurer of United
California Savings Bank, Santa Ana, California.
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) Not applicable.
(b) Not applicable.
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(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 Act and the Rules thereunder are maintained
at the offices of Forum Financial Services, Inc., Forum Financial Corp. and
Forum Accounting Services, Limited Liability Company, Two Portland Square,
Portland, Maine 04104. 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 custodians, as listed under "Custodian" in Part B to this
Registration Statement. The records required to be maintained under Rule
31a-1(b)(5), (6) and (9) are maintained at the offices of Registrant's
investment advisers, as listed in Item 28 hereof.
ITEM 31. MANAGEMENT SERVICES.
Not Applicable.
ITEM 32. UNDERTAKINGS.
Registrant undertakes to contain in its Trust Instrument provisions for
assisting shareholder communications and for the removal of trustees
substantially similar to those provided for in Section 16(c) of the Act, except
to the extent such provisions are mandatory or prohibited under applicable
Delaware law.
-15-
<PAGE>
CORE TRUST (DELAWARE)
Prime Money Market Portfolio
Money Market Portfolio
Stable Income Portfolio
Positive Return Bond Portfolio
Managed Fixed Income Portfolio
Total Return Bond Portfolio
Income Equity Portfolio
Large Company Growth Portfolio
Small Company Stock Portfolio
Small Company Growth Portfolio
Small Company Value Portfolio
Statements of Assets and Liabilities and Notes Thereto
May 30, 1997
<PAGE>
CORE TRUST (DELAWARE)
Statements of Assets and Liabilities
May 30, 1997
<TABLE>
<CAPTION>
Prime Positive
Money Money Stable Return
Market Market Income Bond
Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
ASSETS:
Cash $20 $20 $20 $20
Deferred Organization
Expenses (Note 1B) $4,943 $4,943 $4,943 $4,943
----------------------------------------------------
Total Assets
LIABILITIES:
Accrued Organization
Expense (Note 1B)
----------------------------------------------------
NET ASSETS $20 $20 $20 $20
COMPONENTS OF NET ASSETS:
Investors' Capital $20 $20 $20 $20
Managed Total Large
Fixed Return Income Company
Income Bond Equity Growth
Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ---------
ASSETS:
Cash $20 $20 $20 $20
Deferred Organization
Expenses (Note 1B) $4,943 $4,943 $4,943 $4,943
----------------------------------------------------
Total Assets
LIABILITIES:
Accrued Organization
Expense (Note 1B)
----------------------------------------------------
NET ASSETS $20 $20 $20 $20
COMPONENTS OF NET ASSETS:
Investors' Capital $20 $20 $20 $20
</TABLE>
See Notes to Statements of Assets and Liabilities
-2-
<PAGE>
CORE TRUST (DELAWARE)
Statements of Assets and Liabilities
May 30, 1997
<TABLE>
<CAPTION>
Small Small Small
Company Company Company
Stock Growth Value
Portfolio Portfolio Portfolio
---------- ---------- ----------
<S> <C> <C> <C>
ASSETS:
Cash $20 $20 $20
Deferred Organization
Expenses (Note 1B) -- -- --
----------------------------------
Total Assets $20 $20 $20
LIABILITIES:
Accrued Organization
Expense (Note 1B) -- -- --
----------------------------------
NET ASSETS $20 $20 $20
COMPONENTS OF NET ASSETS:
Investors' Capital $20 $20 $20
</TABLE>
See Notes to Statements of Assets and Liabilities
-3-
<PAGE>
CORE TRUST (DELAWARE)
Notes to Statements of Assets and Liabilities
May 30, 1997
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES:
(A) Core Trust (Delaware) ("Core Trust") was formed as a Delaware business
trust on September 1, 1994. Core Trust is registered under the Investment
Company Act of 1940, as amended, as an open, management investment company.
these Statements of Assets and liabilities relate to eleven portfolios of Core
Trust (the "Portfolios"), each of which is diversified. The eleven Portfolios
are Prime Money Market Portfolio, Money Market Portfolio, Stable Income
Portfolio, Positive Return Bond Portfolio, Managed Fixed Income Portfolio, Total
Return Bond Portfolio, Income Equity Portfolio, Large Company Growth Portfolio,
Small Company Stock Portfolio, Small Company Growth Portfolio and Small Company
Value Portfolio. As of May 30, 1997 the Portfolios had no operations other than
organizational matters and the issuance of interests to Forum Financial
Services, Inc., the Portfolios' placement agent, and Forum Administrative
Services, Limited Liability Company, the Portfolios' administrator.
(B) Costs incurred by each Portfolio (other than Small Company Stock Portfolio,
Small Company Growth Portfolio and Small Company Value Portfolio) in connection
with its organization have been deferred and will be amortized on a straight
line basis over a 60 month period from the date each Portfolio commences its
investment activity.
(C) Each Portfolio will be treated as a partnership for Federal income tax
purposes. Accordingly, no Federal income tax provision is required. All
interest, dividends, gain and loss of a portfolio are deemed to be passed
through to the partners of the Portfolio in proportion to their holdings of the
portfolio, regardless of whether such interest, dividends or gain has been
distributed by the Portfolio.
-4-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant, Core Trust (Delaware), 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 the State of Maine on the 30th day
of May, 1997.
CORE TRUST (DELAWARE)
By: /s/ John Y. Keffer
-----------------------------------
John Y. Keffer
President
<PAGE>
INDEX TO EXHIBITS
Sequential
Exhibit Page Number
- ------- -----------
No Exhibits are being filed in this Post-Effective Amendment No. 8.