<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form N-23c-1
Notification of Repurchase Offer
Pursuant to Rule 23c-3 [17 CFR 270.23c-3]
________________________________________________________________________________
1. Investment Company Act File Number Date of Notification
811-9004 February 9. 1996
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2. Exact name of investment company as specified in registration statement:
Avalon Capital, Inc.
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3. Address of principal executive office: (number, street, city, state, zip
code)
14 Wall Street, New York, New York 10005
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4. Check one of the following:
A. [X] The notification pertains to a periodic repurchase offer under
paragraph (b) of rule 23c-3.
B. [ ] The notification pertains to a discretionary repurchase offer under
paragraph (c) of rule 23c-3.
C. [ ] The notification pertains to a periodic repurchase offer under
paragraph (b) of rule 23c-3 and a discretionary repurchase offer under
paragraph (c) of rule 23c-3.
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By: /s/ Max Berueffy
------------------------
(Name)
Assistant Secretary
------------------------
(Title)
INSTRUCTIONS
1. This Form must be completed by registered closed-end investment companies
or business development companies that make repurchase offers pursuant to rule
23c-3. The form shall be attached to a notification to shareholders under
paragraph (b)(4) of rule 23c-3.
2. Submissions using this form shall be filed in triplicate with the
Commission within three business days after a notification is sent to
shareholders. One copy shall be manually signed; the other copies may have
facsimile or typed signatures.
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LETTER OF TRANSMITTAL
To Be Used To Tender Shares Of
AVALON CAPITAL, INC.
Pursuant to the Offer to Purchase
Dated February 8, 1996
_____________________
THE DEADLINE FOR SUBMITTING (OR WITHDRAWING) A TENDER OF SHARES FOR REPURCHASE
IS 4:00 P.M. (EASTERN TIME) ON FEBRUARY 29, 1996.
_____________________
PLEASE COMPLETE AND SUBMIT THIS LETTER OF TRANSMITTAL TO:
Forum Financial Corp.
Two Portland Square
Portland, Maine 04101
Fax (207) 879-6206
DELIVERY TO ANOTHER ADDRESS DOES NOT CONSTITUTE VALID DELIVERY.
IF YOUR SHARES ARE REGISTERED IN THE NAME OF A BROKER, DEALER, COMMERCIAL BANK,
TRUST COMPANY OR OTHER NOMINEE, YOU MUST CONTACT THAT BROKER, DEALER, COMMERCIAL
BANK, TRUST COMPANY OR OTHER NOMINEE IF YOU DESIRE TO TENDER YOUR SHARES.
The Letter of Transmittal is to be completed by shareholders only if Shares are
being tendered herewith or if Shares are being tendered by book-entry transfer
to the account maintained by Boston EquiServ, the Company's sub-transfer agent
(the "Depositary"), at The Depository Trust Company ("DTC"), the Midwest
Securities Trust Company ("MSTC") and the Philadelphia Depository Trust Company
("PDTC") (collectively referred to herein as the "Book-Entry Transfer
Facilities", or individually as a "Book-Entry Transfer Facility"). Delivery of
documents to a Book-Entry Transfer Facility does not constitute delivery to
Forum Financial Corp. See Instruction 2.
Capitalized terms used in this Letter of Transmittal are defined in the Offer to
Purchase.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
THIS FORM AND ANY NECESSARY DOCUMENTATION MUST BE RECEIVED BY FORUM FINANCIAL
CORP. AT THE ABOVE ADDRESS, IN GOOD ORDER, BY 4:00 P.M. ON FEBRUARY 29, 1996.
<PAGE>
To Whom it May Concern:
The undersigned hereby tenders to Avalon Capital, Inc., a closed-end
investment company organized as a Maryland corporation (the "Company"), the
Shares described below of its common stock, $0.001 par value per share, at a
price equal to the net asset value per share ("NAV") calculated on
February 29, 1996, in cash upon the terms and conditions set forth in the Offer
to Purchase dated February 8, 1996, receipt of which is hereby acknowledged, and
in this Letter of Transmittal.
The undersigned hereby sells to the Company all Shares tendered hereby that
are purchased pursuant to the Offer and hereby irrevocably constitutes and
appoints the Depositary as attorney in fact of the undersigned, with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to present such Shares and any share certificates for
cancellation of such Shares on the Company's books. The undersigned hereby
warrants that the undersigned has full authority to sell the Shares tendered
hereby and that the Company will acquire good title thereto, free and clear of
all liens, charges, encumbrances, conditional sales agreements or other
obligations relating to the sale thereof, and not subject to any adverse claim,
when and to the extent the same are purchased by it. Upon request, the
undersigned will execute and deliver any additional documents necessary to
complete the sale in accordance with the terms of the Offer.
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<TABLE>
<CAPTION>
<S> <C>
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DESCRIPTION OF SHARES TENDERED FOR REDEMPTION AT NET ASSET VALUE
(See Instructions 3 and 4)
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Check One:
/ / Partial Tender -- Only the number of Shares or dollars reflected below are to be tendered.
/ / Complete Tender -- All Shares (certificated and uncertificated) are to be tendered.
Name(s) and Address(es) of Registered Holder(s) Certificate(s) Tendered
(Please Fill in Exactly the Name(s) in Which Shares Are Registered) (attach additional schedule if necessary)
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Certificate No. of No. of Shares
No.(s)* Shares Tendered**
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
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ACCOUNT NO.
Total Shares Tendered __________ or all (CIRCLED 8)
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Daytime Telephone Number ( ) Or Total Dollars Tendered $
---- ------------------- ------------------------
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* Need not be completed by shareholders whose Shares are not evidenced by certificates.
** To be completed by all tendering shareholders, whether or not your Shares are evidenced by certificates. IF YOU DESIRE TO
TENDER FEWER THAN ALL SHARES HELD IN YOUR ACCOUNT OR EVIDENCED BY A CERTIFICATE LISTED ABOVE, PLEASE INDICATED IN THIS COLUMN
THE NUMBER YOU WISH TO TENDER. OTHERWISE ALL SHARES EVIDENCED BY SUCH CERTIFICATE OR HELD IN YOUR ACCOUNT WILL BE DEEMED TO
HAVE BEEN TENDERED.
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BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY
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(SYMBOL) CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE
DEPOSITARY WITH DTC AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY
BOOK-ENTRY TRANSFER)
Name of Tendering Institution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DTC Account Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transaction Code Number. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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</TABLE>
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The check for the purchase price for the tendered Shares should be
issued to the order of the undersigned and mailed to the address indicated above
unless otherwise indicated under the Special Payment Instructions or Special
Delivery Instructions below.
SPECIAL PAYMENT OR DELIVERY
INSTRUCTIONS MAIN SIGNATURE FORM
(SEE INSTRUCTIONS 4, 5, 6 AND 7) SIGN HERE
To be completed ONLY if (SEE INSTRUCTIONS 1 AND 5)
certificates for unpurchased Shares
and/or any check or federal funds
wire* are to be issued in the name --------------------------------
of or sent to someone other than
the undersigned.
--------------------------------
Issue:/ / Check or / / Federal funds (SIGNATURE(S) OF OWNER(S) EXACTLY
wire* to: AS REGISTERED)
Name(s) __________________________ Date______________________, 1996
(PLEASE PRINT)
Address ___________________________ Name(s) ________________________
___________________________________ ________________________________
(INCLUDE ZIP CODE) (PLEASE PRINT)
___________________________________ Telephone Number ( )
SIGNATURE(S) OF PAYEE(S)
Signature(s)
___________________________________ Guaranteed* ____________________
Account # (If Applicable)__________
* Must be obtained from an
ABA # (If Applicable)______________ eligible guarantor institution
such as a bank, broker, dealer,
credit union or savings
association authorized to
guarantee signatures.
See Instruction 1.
___________________________________
(TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER(S))
* PROCEEDS MUST EXCEED $5,000 IN
ORDER TO BE WIRED TO YOUR BANK.
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
THIS LETTER OF TRANSMITTAL IS TO BE USED ONLY IF YOU DESIRE TO EFFECT THE TENDER
OFFER TRANSACTION YOURSELF AND DO NOT INTEND TO REQUEST YOUR BROKER, DEALER OR
OTHER SELLING GROUP MEMBER TO EFFECT THE TRANSACTION FOR YOU.
1. GUARANTEE OF SIGNATURES. If the Letter of Transmittal is signed by the
registered holder of the Shares, the payment of the tender offer proceeds are to
be sent to the registered owner of the Shares and to the address shown in the
share registration and that address has not changed within the previous six
months and the tender offer proceeds will be less than $50,000, no signature
guarantee is required. In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an eligible signature guarantor such as a
bank, broker, dealer, credit union or savings association authorized to
guarantee signatures.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES OR BOOK-ENTRY
CONFIRMATIONS. Shareholders should mail or deliver Shares or confirmation of
any book-entry transfer of Shares into the Depositary's account with a Book-
Entry Transfer Facility to the Depositary at the appropriate address set forth
herein pursuant to the procedure set forth in Section 2 of the Offer, together
with a properly completed and duly executed Letter of Transmittal and any other
documents required by this Letter of Transmittal. Shares or such confirmation
must be received by the Depositary on or prior to the Expiration Date.
THE METHOD OF DELIVERY OF SHARES AND OTHER DOCUMENTS IS AT THE ELECTION AND
RISK OF THE TENDERING SHAREHOLDER. IT IS RECOMMENDED THAT SHARES DELIVERED BY
MAIL BE SENT BY REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED,
IN SUFFICIENT TIME TO PERMIT RECEIPT BY THE DEPOSITARY ON OR PRIOR TO FEBRUARY
29, 1996. FOR ASSISTANCE REGARDING METHOD OF DELIVERY OF SHARES, CALL FORUM
FINANCIAL CORP. AT (800) 943-6786 OR (207) 879-0001.
3. INADEQUATE SPACE. If the space provided is inadequate, the certificate
numbers and number of Shares should be listed on a separate signed schedule
attached hereto.
4. PARTIAL TENDERS. If fewer than all of the Shares evidenced by any
certificate submitted are to be tendered, fill in the number of Shares which are
to be tendered in the column entitled "No. of Shares Tendered." A new
certificate for the remainder of the Shares evidenced by your old certificate(s)
will be sent to you, unless otherwise specified in the "Special Payment
Instructions" or "Special Delivery Instructions" boxes on this Letter of
Transmittal, as soon as practicable under the Expiration Date of the Offer. All
Shares represented by certificates listed are deemed to have been tendered
unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, AUTHORIZATIONS AND ENDORSEMENTS.
(a) If this Letter of Transmittal is signed by the registered holder of
the Shares tendered hereby, the signature(s) must correspond with the name(s) in
which the Shares are registered.
(b) If the Shares are held of record by two or more joint holders, all
such holders must sign this Letter of Transmittal.
(c) If any tendered Shares are registered in different names it will be
necessary to complete, sign and submit as many separate Letters of Transmittal
as there are different registrations of Shares.
(d) When this Letter of Transmittal is signed by the registered holder(s)
of the Shares listed and, if applicable, of the certificates transmitted hereby,
no endorsements of certificates or separate authorizations are required. If,
however, the unpurchased Shares are to be registered in the name of any person
other than the registered holder(s) or any certificates for unpurchased Shares
are to be issued to a person other than the registered holder(s), then the
Letter of Transmittal and, if applicable, the certificates transmitted hereby
must be endorsed or accompanied by appropriate authorizations, in either case
signed exactly as the name(s) in which the Shares are registered.
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(e) If this Letter of Transmittal or any certificates or authorizations
are signed by trustees, executors, administrators, guardians, attorneys in fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and must submit proper
evidence satisfactory to the Company of their authority so to act.
6. TRANSFER TAXES. The Company will pay all the taxes, if any, payable on
the transfer to it of Shares, purchased pursuant to the Offer. If, however,
payment of the purchase price is to be made to, or (in the circumstances
permitted by the Offer) if unpurchased Shares are to be registered in the name
of any person other than the registered holder, or if tendered certificates are
registered in the name of any person other than the person(s) signing this
Letter of Transmittal, the amount of any transfer taxes (whether imposed on the
registered holder or such other person) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If certificates for
unpurchased Shares and/or checks are to be issued in the name of a person other
than the signer of this Letter of Transmittal or if such certificates and/or
checks are to be sent to someone other than the signer of this Letter of
Transmittal, the appropriate boxes on this Letter of Transmittal should be
completed.
8. IRREGULARITIES. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance of any tender of Shares will be
determined by the Company, whose determination shall be final and binding. The
Company reserves the absolute right to reject any or all tenders determined by
it not to be in appropriate form or the acceptance of or payment for which
would, in the opinion of the Company's counsel, be unlawful. The Company also
reserves the absolute right to waive any of the conditions of the Offer or any
defect in any tender with respect to any particular Shares or any particular
shareholder, and the Company's interpretations of the terms and conditions of
the Offer (including these instructions) will be final and binding. Unless
waived, any defects or irregularities in connection with tenders must be cured
within such time as the Company shall determine. Tenders will not be deemed to
have been made until all defects and irregularities have been cured or waived.
Neither the Company, Hutner Capital, Forum, nor any other person shall be
obligated to give notice of defects or irregularities in tenders, nor shall any
of them incur any liability for failure to give any such notice.
9. IMPORTANT TAX INFORMATION. Under Federal income tax law, a shareholder
whose tendered Shares are accepted for payment must provide Forum (as payer)
with a correct taxpayer identification number, which is accomplished by
completing and signing the Substitute Form W-9 on the front of this letter.
10. ADDITIONAL COPIES. Additional copies of the Offer to Purchase and
this Letter of Transmittal may be obtained from Forum Financial Corp., Two
Portland Square, Portland, Maine 04101, or by telephoning (800) 943-6786 or
(207) 879-0001.
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<PAGE>
AVALON CAPITAL, INC.
OFFER TO PURCHASE FOR CASH 31,498
OF ITS ISSUED AND OUTSTANDING SHARES
AT NET ASSET VALUE PER SHARE
THE DEADLINE FOR SUBMITTING (OR WITHDRAWING) A TENDER OF SHARES FOR REPURCHASE
PURSUANT TO THIS OFFER IS 4:00 P.M. (EASTERN TIME) ON FEBRUARY 29, 1996.
To the Holders of Shares of
AVALON CAPITAL, INC.:
Avalon Capital, Inc. (the "Company") is offering to purchase up to 31,498 of its
Shares of common stock (the "Shares") for cash at a price equal to their net
asset value ("NAV") as of the close of the New York Stock Exchange on February
29, 1996, upon the terms and conditions set forth in this Offer to Purchase and
the enclosed Letter of Transmittal which together constitute the "Offer."
If more than 31,498 Shares are duly tendered prior to the expiration of the
Offer, the Company will, assuming no changes in the factors originally
considered by the Board of Directors when it determined to make the Offer,
accept an additional amount of Shares not to exceed two percent (2%) of the
Shares outstanding on February 29, 1996 (315 Shares). If security holders
tender more than the repurchase offer amount plus two percent of the outstanding
Shares, the Company shall repurchase the Shares tendered on a pro rata basis.
If you desire to tender all or any portion of your Shares, you should either (1)
complete and sign the Letter of Transmittal and mail or deliver it along with
any Share certificate(s) and any other required documents to Forum Financial
Corp. ("Forum") or (2) request your broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for you via a book entry
transfer or directly with Boston EquiServ, the Company's sub-transfer agent (the
"Depositary").
IMPORTANT: IF YOUR SHARES ARE REGISTERED IN THE NAME OF A BROKER, DEALER,
COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE, YOU MUST CONTACT THAT BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE IF YOU DESIRE TO TENDER
YOUR SHARES.
<PAGE>
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. EACH
SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION WHETHER TO TENDER SHARES, AND IF
SO, HOW MANY SHARES TO TENDER.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER SHARES PURSUANT TO THE OFFER.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF
SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
Questions and requests for assistance may be directed to Hutner Capital
Management, Inc. ("Hutner Capital") or Forum Financial Corp. ("Forum") at the
addresses and telephone numbers set forth below. Requests for additional copies
of this Offer to Purchase and the Letter of Transmittal should be directed to
Forum.
February 8, 1996 AVALON CAPITAL, INC.
INVESTMENT ADVISER: TRANSFER AGENT:
Hutner Capital Management, Inc. Forum Financial Corp.
14 Wall Street Two Portland Square
New York, N.Y. 10005 Portland, Maine 04101
Tel. (212) 577-8400 Tel. (800) 943-6786
(207) 879-0001
Fax (207) 879-6206
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SECTIONS
1. Number of Shares . . . . . . . . . . . . . . . . . . . . . 3
2. Price. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Procedure for Tendering Shares . . . . . . . . . . . . . . 4
4. Withdrawal Rights . . . . . . . . . . . . . . . . . . . . 5
5. Payment for Shares . . . . . . . . . . . . . . . . . . . . 5
6. Certain Conditions of the Offer . . . . . . . . . . . . . 6
7. Purpose of the Offer . . . . . . . . . . . . . . . . . . . 7
8. Plans or Proposals of the Company . . . . . . . . . . . . 7
9. Certain Effects of the Offer . . . . . . . . . . . . . . . 7
10. Source and Amount of Funds . . . . . . . . . . . . . . . . 7
11. Certain Federal Income Tax Consequences . . . . . . . . . 7
12. Extension of Tender Period; Termination; Amendments . . . 8
1. NUMBER OF SHARES. The Company will, upon the terms and subject to the
conditions of the Offer, purchase up to 31,498 of its issued and outstanding
Shares that are tendered and not withdrawn before 4:00 p.m. (Eastern time) on
February 29, 1996.
On February 5, 1996, there were 629,918 Shares issued and outstanding and there
were approximately 260 holders of record of Shares, representing approximately
320 beneficial holders. The Company has been advised that none of the
directors, officers or affiliates intend to tender any Shares pursuant to the
Offer. This offer is being made to all shareholders of the Company and is not
conditioned upon any minimum number of Shares being tendered.
If more than 31,498 Shares are duly tendered prior to the expiration of the
Offer, the Company will, assuming no changes in the factors originally
considered by the Board of Directors when it determined to make the Offer,
accept an additional amount of Shares not to exceed two percent (2%) of the
Shares outstanding on February 29, 1996 (315 Shares). If security holders
tender more than the repurchase offer amount plus two percent of the outstanding
Shares, the company shall repurchase the Shares tendered on a pro rata basis.
2. PRICE. The purchase price of the Shares will be their net asset value
("NAV") at the close of the New York Stock Exchange on February 29, 1996.
The NAV of a Share is normally calculated each Friday at the close of the New
York Stock Exchange. On February 2, 1996, the NAV was $10.07 per Share. The NAV
of the Shares on November 20, 1995, the commencement of the Company's
operations, was $10.00 per Share. From November 20, 1995 to January 31, 1996,
the NAV of the Shares has ranged as follows:
Period Ending High Low
------------- ---- ---
November 30, 1995 $10.00 $10.00
December 31, 1995 $ 9.98 $ 9.95
January 31, 1996 $10.01 $ 9.83
The Shares have been listed on the NASDAQ SmallCap Market system since December
6, 1995. On February 5, 1996, the bid and ask for a Share was $9.25 and $11.25.
There have been no trades to date, however. Although the secondary market may
become more active during 1996, the Company does not anticipate any significant
trading volume before this Offer expires.
The NAV of the Company's Shares will be calculated as of the close of the New
York Stock Exchange (typically 4:00 p.m. Eastern time) each Friday and each of
the five business days preceding February 29, 1996. You can obtain the
Company's current NAV and market quotations by calling Forum at (800) 943-6786
or (207) 879-0001.
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3. PROCEDURE FOR TENDERING SHARES. To tender any of your Shares pursuant to
the Offer, you may either: (a) send to Forum Financial Corp., at the address
set forth above, any certificates for such Shares, a properly completed and
executed Letter of Transmittal and any other documents required therein or (b)
request your broker, dealer, commercial bank, trust company or other nominee to
effect the transaction for you via a book entry transfer or directly with the
Depositary. Please call Forum at (800) 943-6786 or (207) 879-0001 to determine
whether any additional documents may be required.
THE METHOD OF DELIVERY OF ANY DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES, IS
AT THE ELECTION AND RISK OF THE PARTY TENDERING THE SHARES. IF DOCUMENTS ARE
SENT BY MAIL, IT IS RECOMMENDED THAT THEY BE SENT BY REGISTERED MAIL, PROPERLY
INSURED, WITH RETURN RECEIPT REQUESTED.
A. PROCEDURES FOR SHAREHOLDERS.
For shareholders to tender Shares effectively pursuant to the Offer, either (i)
the certificate Shares, if any, together with a properly completed and duly
executed Letter of Transmittal for the Shares being tendered and any other
documents required by such Letter of Transmittal must be received by Forum
before 4:00 p.m. (Eastern time) on February 29, 1996, or (ii) the Shares must be
tendered pursuant to the procedure for book-entry transfer set forth below (and
a book-entry confirmation must be received by Forum) before 4:00 p.m. (Eastern
time) on February 29, 1996.
Signatures on the Letter of Transmittal need not be guaranteed unless (1) the
proceeds for the tendered Shares will amount to $50,000.00 or more, (2) the
Letter of Transmittal is signed by someone other than the registered holder of
the Shares tendered therewith or (3) payment for tendered Shares is to be sent
to a payee other than the registered owner of such Shares and/or to an address
other than that shown in the registration of the Shares. In those instances,
all signatures on the Letter of Transmittal must be guaranteed by an eligible
guarantor institution such as a bank, broker, dealer, credit union or savings
association authorized to guarantee signatures.
Payment for Shares tendered and purchased will be made only after receipt by
Forum at its address set forth on page 2 of this Offer to Purchase on or before
4:00 p.m. (Eastern time) on February 29, 1996 of a properly completed and duly
executed Letter of Transmittal, Share Certificates (if any) and any other
required documents.
IMPORTANT: BENEFICIAL OWNERS OF SHARES REGISTERED IN THE NAME OF A BROKER,
DEALER, BANK, TRUST COMPANY OR OTHER NOMINEE OR HELD THROUGH A BOOK-ENTRY
FACILITY, SHOULD NOT USE THE LETTER OF TRANSMITTAL. SUCH BENEFICIAL OWNERS
SHOULD CALL THEIR NOMINEES OR BOOK-ENTRY TRANSFER FACILITY PARTICIPANTS IF THEY
DESIRE TO TENDER SHARES.
B. PROCEDURES FOR BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES AND
NOMINEES:
You should transmit this Offer to your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. The Letter of Transmittal must be completed as
described above for accounts which are registered in your clients' name. Such
Letter of Transmittal is also to be used by your firm for tendering Shares
directly with Forum and it must be signed by an authorized officer of your firm
and signature guaranteed.
Accounts will be established at The Depository Trust Company, the Midwest
Securities Trust Company and the Philadelphia Depository Trust Company
(collectively referred to herein as the "Book-Entry Transfer Facilities", or
individually, as a "Book-Entry Transfer Facility") for purposes of the Offer
within two business days after the date of this Offer. Any financial
institution that is a participant in a Book-Entry Transfer Facility may make
book-entry delivery of Shares by causing such Book-Entry Transfer Facility to
transfer such Shares into the account, in accordance with such Book-Entry
Transfer Facility's procedure for such transfer. Although delivery of Shares
may be effected through a book-entry transfer at a Book-Entry Facility, a
properly completed and duly executed letter of Transmittal for the Shares being
tendered, and any other documents required by such Letter of Transmittal, must
be received by Forum by 4:00 p.m. (Eastern time) on February 29, 1996.
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C. DETERMINATIONS OF VALIDITY.
All questions as to the validity, form, eligibility (including time of receipt)
and acceptance of tenders will be determined by the Company, in its sole
discretion, whose determination shall be final and binding. The Company
reserves the absolute right to reject any or all tenders determined by it not to
be in appropriate form or the acceptance of or payment for which would, in the
opinion of the Company's counsel, be unlawful. The Company also reserves the
absolute right to waive any of the conditions of the Offer or any defect in any
tender with respect to any particular Shares or any particular shareholder, and
the Company's interpretations of the terms and conditions of the Offer will be
final and binding. Unless waived, any defects or irregularities in connection
with tenders must be cured within such times as the Company shall determine.
Tenders will not be deemed to have been made until the defects or irregularities
have been cured or waived. Neither the Company, Hutner Capital, Forum, or any
other person shall be obligated to give notice of any defects or irregularities
in tenders, nor shall any of them incur any liability for failure to give such
notice.
D. TENDER CONSTITUTES AN AGREEMENT.
A tender of Shares made pursuant to any one of the procedures set forth above
will constitute an agreement between the tendering shareholder and the Company
in accordance with the terms and subject to the conditions of the Offer.
4. WITHDRAWAL RIGHTS. You may withdraw a tender of Shares at any time before
4:00 p.m. (Eastern time) on February 29, 1996, and, if the Shares have not yet
been accepted for payment by the Company, at any time after February 29, 1996.
After that time, tenders made pursuant to the Offer will become irrevocable.
A withdrawal will be effective only if a written, telegraphic or facsimile
transmission notice of withdrawal is timely received by Forum at the address set
forth above. Any notice of withdrawal must specify the name of the person
having deposited the Shares to be withdrawn, the number of Shares to be
withdrawn, and, if the certificates representing such Shares have been delivered
or otherwise identified to Forum, the name of the registered holder(s) of such
Shares as set forth in such certificates and the number of Shares to be
withdrawn. If the certificates have been delivered to Forum, then, prior to the
release of such certificates, you must also submit the certificate numbers shown
on the particular certificates evidencing such Shares and the signature on the
notice of the withdrawal must be guaranteed by an Eligible Institution. All
questions as to the form and validity (including time of receipt) of notices of
withdrawal will be determined by the Company in its sole discretion, whose
determination shall be final and binding. Shares properly withdrawn shall not
thereafter be deemed to be tendered for purposes of the Offer. Withdrawn Shares
may be retendered, however, by following one of the procedures described in
Section 2 before 4:00 p.m. (Eastern time) on February 29, 1996.
5. PAYMENT FOR SHARES. For purposes of the Offer, the Company will be deemed
to have accepted for payment (and hereby purchased) Shares which are tendered
as, if and when it gives oral or written notice to Forum of its election to
purchase such Shares.
Payment for Shares will be made by Forum to tendering shareholders as directed
by the Company within seven days after the Shares are accepted for repurchase.
If more than 31,498 Shares are duly tendered and a determination is made to
accept Shares for repurchase on a pro rata basis, there may be a delay in
payment because of the difficulty in determining the precise number of Shares
validly tendered. In the event of proration, the Company will not pay for
Shares until the final proration factor is known.
Certificates for Shares not purchased by the Company (see Sections 1 and 6), or
for Shares not tendered included in certificates forwarded to Forum, will be
returned promptly following the termination, expiration or withdrawal of the
Offer, without expense to the tendering shareholder.
The Company will pay all transfer taxes, if any, payable on the transfer to it
of Shares purchased pursuant to the Offer. If, however, payment of the purchase
price is to be made to, or (in the circumstances permitted by the Offer) if
unpurchased Shares are to be registered in the name of any person other than the
registered holder, or if tendered certificates are registered in the name of any
person other than the person signing the Letter of Transmittal, the amount
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of any such transfer taxes (whether imposed on the registered holder or such
other person) payable on account of the transfer to such person will be deducted
from the purchase price unless satisfactory evidence of the payment of such
taxes, or exemption therefrom, is submitted. The Company will not pay any
interest on the purchase price under any circumstances.
A TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY AND SIGN THE
FORM W-9 INCLUDED WITH THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO REQUIRED
FEDERAL INCOME TAX WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAID TO SUCH
SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE SECTION 11.
6. CERTAIN CONDITIONS OF THE OFFER. The Company shall not be required to
accept for payment or pay for any Shares tendered, and may terminate or amend
the Offer; postpone the acceptance for payment of or payment for Shares
tendered, or, if more than 31,498 Shares are tendered, accept Shares for payment
on a pro rata basis, upon vote of a majority of the Directors, including a
majority of the Directors who are not interested persons of the Company under
any of the following conditions:
(1) the repurchase, if consummated, would impair the Company's status as a
regulated investment company under the Internal Revenue Code (which would make
the Company a taxable entity, causing the Company's income to be taxed at the
corporate level in addition to the taxation of shareholders who receive
dividends from the Company);
(2) the repurchase would cause the Company's Shares to no longer be
eligible to be quoted on the Nasdaq SmallCap Market;
(3) for any period during which the Nasdaq SmallCap Market is closed,
other than customary week-end and holiday closings, or during which trading in
such market is restricted;
(4) for any period during which an emergency exists as a result of which
disposal by the Company of securities owned by it is not reasonably practicable,
or during which it is not reasonably practicable for the Company fairly to
determine the value of its net assets; or
(5) for such other periods as the Securities and Exchange Commission may
by order permit for the protection of security holders of the Company.
If the Board of Directors of the Company determines to terminate or amend
the Offer or to postpone the acceptance for payment of or payment for Shares
tendered, it will, to the extent necessary, extend the period of time during
which the Offer is open (See Section 12). Moreover, in the event any of the
foregoing conditions are modified or waived in whole or in part at any time, the
Company will promptly make a public announcement of such waiver and may,
depending on the materiality of the modification or waiver, extend the Offer
period.
7. PURPOSE OF THE OFFER. Shares of closed-end investment companies traded on a
secondary market such as the Nasdaq SmallCap Market frequently trade at a
discount from, or premium to, the NAV per share. In recognition of the
possibility that its Shares might trade at a discount, the Company has a
fundamental policy, that may only be changed with shareholder approval, to
repurchase not less than five nor more than twenty-five percent of its common
stock at NAV on the last business day of February of each year. The percentage
of Shares to be repurchased is within the sole discretion of the Board of
Directors of the Company. The Directors have determined that it would be in the
best interest of shareholders for the Company to take action to reduce or
eliminate any market value discount from NAV that might exist by offering to
repurchase up to five percent of the Shares outstanding as of February 5, 1996.
There can be no assurance that repurchase offers will result in the Shares
trading at a price which is equal to their NAV.
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8. PLANS OR PROPOSALS OF THE COMPANY. The Company has no present plans or
proposals which relate to, or would result in, any extraordinary corporate
transaction such as a merger, reorganization, or liquidation involving the
Company; a sale or transfer of a material amount of assets of the Company; any
material changes in the Company's present capitalization (except as resulting
from the Offer or otherwise set forth herein); or, any other material changes in
the Company's corporate structure or business.
9. CERTAIN EFFECTS OF THE OFFER. The purchase of Shares pursuant to the Offer
will have the effect of increasing the proportionate interest in the Company of
shareholders who do not tender their Shares. If you retain your Shares,
however, you will be subject to any increased risks that may result from the
reduction in the Company's aggregate assets resulting from payment for the
Shares, E.G., greater volatility due to decreased diversification and higher
expenses. All Shares purchased by the Company pursuant to the Offer will be
retired by the Board of Directors of the Company.
10. SOURCE AND AMOUNT OF FUNDS. The total cost to the Company of purchasing
31,498 Shares pursuant to the Offer will be approximately $315,000. The Company
anticipates that the purchase price for any Shares acquired pursuant to the
Offer will first be derived from cash on hand, such as proceeds from the sale of
cash equivalents held by the Company.
11. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following discussion is a
general summary of the federal income tax consequences of a sale of Shares
pursuant to the Offer. It does not address all federal income tax considerations
that may be relevant to particular shareholders in light of their specific
circumstances, such as shareholders who are dealers in securities, foreign
persons or tax-exempt entities, nor does it address any aspects of state, local,
foreign or other tax laws. You should consult your own tax adviser for a
complete description of the tax consequences to you of a sale of Shares pursuant
to the Offer.
A shareholder who, pursuant to the Offer, tenders all Shares owned or considered
owned by such shareholder will realize a taxable gain or loss depending upon the
shareholder's basis in the Shares. Such gain or loss will be treated as capital
gain or loss if the Shares are capital assets in the shareholder's hands and
will be long-term or short-term depending upon the shareholder's holding period
for the Shares. If a tendering shareholder tenders less than all Shares owned
by and attributed to such shareholder (or if the Company purchases only some of
the Shares tendered by a shareholder), and if the distribution to such
shareholder does not otherwise qualify as an exchange, the proceeds received
will be treated as a dividend, return of capital or capital gain depending on
the Company's earnings and profits and the shareholder's basis in the tendered
Shares. There is a risk that non-tendering shareholders may be considered to
have received a deemed distribution as a result of the repurchase by the Company
of tendered Shares and that such distribution may be taxable as a dividend in
whole or in part.
12. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS. The Company reserves
the right, at any time and from time to time, to extend the period of time
during which the Offer is pending by making a public announcement thereof. In
the event that the Company so elects to extend the tender period, the NAV for
the Shares tendered will be determined as of the close of the New York Stock
Exchange on the extended deadline date. During any such extension, all Shares
previously tendered and not purchased or withdrawn will remain subject to the
Offer. Without limiting the manner in which the Company may choose to make a
public announcement of extension or amendment, except as provided by applicable
law, the Company shall have no obligation to publish, advertise or otherwise
communicate any such public announcement, other than by making a release to the
Dow Jones News Service.
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