-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FFlkwrcii1XvOA1zlOyD6hIy3txHZburolaeEJ9Aq7Tden2DBJfViH3vqLN4M44a fiSj2JjDfE8KTfJvT6DdHw== 0000912057-96-004156.txt : 19960311 0000912057-96-004156.hdr.sgml : 19960311 ACCESSION NUMBER: 0000912057-96-004156 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 20 FILED AS OF DATE: 19960308 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CUTLER TRUST CENTRAL INDEX KEY: 0000892568 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-52850 FILM NUMBER: 96532513 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-07242 FILM NUMBER: 96532514 BUSINESS ADDRESS: STREET 1: 61 BROADWAY STREET 2: C/O FORUM FINANCIAL SERVICES INC CITY: NEW YORK STATE: NY ZIP: 10006 BUSINESS PHONE: 2123633300 485APOS 1 485APOS AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 8, 1996 File No. 33-52850 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Post-Effective Amendment No. 4 and REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 6 - -------------------------------------------------------------------------------- THE CUTLER TRUST (Exact Name of Registrant as Specified in its Charter) Two Portland Square, Portland, Maine 04101 (Address of Principal Executive Office) Registrant's Telephone Number, including Area Code: 207-879-1900 - -------------------------------------------------------------------------------- Max Berueffy, Esq. Forum Financial Services, Inc. Two Portland Square, Portland, Maine 04101 (Name and Address of Agent for Service) - -------------------------------------------------------------------------------- It is proposed that this filing will become effective: immediately upon filing pursuant to Rule 485, paragraph (b) - --- on [ ] pursuant to Rule 485, paragraph (b) - --- X 60 days after filing pursuant to Rule 485, paragraph (a) - --- on [ ] pursuant to Rule 485, paragraph (a) - --- Registrant has registered an indefinite amount of securities under the Securities Act of 1933 pursuant to Section 24(f) under the investment Company Act of 1940; accordingly, no fee is payable herewith. A Rule 24f-2 Notice for the Registrant's fiscal year ending June 30, 1995 was filed with the Commission on or about August 29, 1995. CROSS REFERENCE SHEET (as required by Rule 404(c)) PART A Form N-1A Location in Prospectus Item No. (Caption) - ---------- ---------------------- Item 1. Cover Page Cover Page Item 2. Synopsis Expenses of Investing in the Trust Item 3. Condensed Financial Financial Highlights Information Item 4. General Description of Investment Objectives Registrant and Policies; The Trust and its Shares Item 5. Management of the Fund Management of the Trust Item 5A. Management's Discussion of Not Applicable Fund Performance Item 6. Capital Stock and Investment Objectives and Other Securities Policies; Dividends and Tax Matters; The Trust and its Shares; Management of the Trust - Shareholder Servicing Item 7. Purchase of Securities Purchases and Redemptions Being Offered of Shares; Management of the Trust - Manager Item 8. Redemption or Purchases and Redemptions Repurchase of Shares Item 9. Pending Legal Not Applicable Proceedings PART B Location in Statement Form N-1A of Additional Information Item No. (Caption) - ---------- ------------------------- Item 10. Cover Page Cover Page Item 11. Table of Contents Cover Page Item 12. General Information and History Not Applicable Item 13. Investment Objectives Investment Policies; and Policies Investment Limitations Item 14. Management of the Management of the Trust; The Trust Registrant and its Share-holders Item 15. Control Persons and Management of the Trust; The Trust Principal Holders of and its Shareholders Securities Item 16. Investment Advisory and Management of the Trust Other Services Item 17. Brokerage Allocation Portfolio Transactions and Other Practices Item 18. Capital Stock and Other Determination of Net Securities Asset Value; The Trust and its Shareholders Item 19. Purchase, Redemption Determination of Net and Pricing of Securities Asset Value; Additional Being Offered Purchase and Redemption Information Item 20. Tax Status Taxation Item 21. Underwriters Management of the Trust -Manager Item 22. Calculation of Performance Data Performance Data Item 23. Financial Statements Report of Independent Auditors; Financial Statements THE CUTLER TRUST The Cutler Trust (the "Trust") is an open-end, management investment company (a mutual fund). The Cutler Equity Income Fund, Cutler Approved List Equity Fund and Cutler Government Securities Fund (individually a "Fund" and collectively the "Funds") are each diversified no-load portfolios of the Trust.
INVESTMENT ADVISER: MANAGER AND DISTRIBUTOR: SHAREHOLDER ACCOUNT INFORMATION: Cutler & Company, LLC Forum Financial Services, Inc. Forum Financial Corp. 503 Airport Road Two Portland Square Two Portland Square Medford, Oregon 97504 Portland, ME 04101 Portland, ME 04101 (503) 770-9000 (800) 237-3113 (800) xxx-xxxx (800) 228-8537
----------------------------------------------------------- This Prospectus relates to CUTLER EQUITY INCOME FUND CUTLER APPROVED LIST EQUITY FUND CUTLER GOVERNMENT SECURITIES FUND ----------------------------------------------------------- The CUTLER EQUITY INCOME FUND seeks as generous a current income as is consistent with diversification and long-term capital appreciation by investing selectively within the Cutler & Company Approved List. The CUTLER APPROVED LIST EQUITY FUND seeks current income and long-term capital appreciation by investing in at least 90% of the common stocks within the Cutler & Company Approved List. The CUTLER GOVERNMENT SECURITIES FUND seeks current income with safety of principal by investing in debt instruments issued or guaranteed by the United States Government, its agencies and instrumentalities. As the future is unknown, obviously there can be no assurance that any Fund will achieve its investment objectives. This Prospectus sets forth concisely the information concerning the Trust and the Funds that a prospective investor should know before investing. The Trust has filed with the Securities and Exchange Commission a Statement of Additional Information dated April 15, 1996. It contains more detailed information about the Trust and the Funds and is incorporated into this Prospectus by reference. The Statement of Additional Information is available without charge by contacting Cutler & Company or the Trust's Distributor at the addresses or numbers listed above. PLEASE READ THIS PROSPECTUS BEFORE INVESTING IN ANY OF THE FUNDS, AND RETAIN IT FOR FUTURE REFERENCE. It contains important information about the Funds, their investments and the services available to its shareholders. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. April 15, 1996 TABLE OF CONTENTS Page 1. Expenses of Investing in the Trust. . . . . . . . . . . . . . . . 2. Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . 3. Investment Objectives and Policies. . . . . . . . . . . . . . . . 4 Risk Considerations . . . . . . . . . . . . . . . . . . . . . . . 5. Management of the Trust . . . . . . . . . . . . . . . . . . . . . 6. Purchases and Redemptions of Shares . . . . . . . . . . . . . . . 7. Dividends and Tax Matters . . . . . . . . . . . . . . . . . . . . 8. Performance Information . . . . . . . . . . . . . . . . . . . . . 9. The Trust and Its Shares. . . . . . . . . . . . . . . . . . . . . 1. EXPENSES OF INVESTING IN THE TRUST The purpose of the following table is to assist investors in understanding the various expenses that an investor in a Fund will bear directly or indirectly. There are no transaction charges associated with purchases or redemptions of Fund shares.
Equity Approved Government Income List Equity Securities Fund Fund Fund ---- ---- ---- ANNUAL FUND OPERATING EXPENSES (1) (as a percentage of average net assets after expense reimbursements and fee waivers) Investment Advisory Fee 0.75% 0.52% 0.00% Other Expenses 0.47% 0.73% 1.00% ----- ----- ----- Total Fund Operating Expenses 1.22% 1.25% 1.00%
(1) The expenses set forth in the table are the expenses incurred by the Funds for the Trust's fiscal year ended June 30, 1995, restated to reflect a new advisory fee for the Equity Income Fund and the Approved List Equity Fund approved by shareholders on March 20, 1996. Absent expense reimbursements and fee waivers, the restated expenses of the Equity Income Fund, Approved List Equity Fund and Government Securities Fund would have been: Investment Advisory Fees, 0.75%, 0.75%, and 0.25%, respectively; Other Expenses, 0.47%, 0.73% and 1.22%, respectively; and Total Fund Operating Expenses, 1.23%, 1.48%, and 1.48%, respectively. Until December 31, 1997, Cutler & Company has agreed to waive its fees or reimburse each Fund to the extent the Equity Income or Approved List Equity Fund's total operating expenses exceed 1.25% or the Government Securities Fund's expenses exceed 1.00%. For a further description of the various expenses incurred in the operation of the Fund, see "Management of the Trust." EXAMPLE You would pay the following expenses on a $1,000 investment in a Fund, assuming a 5% annual return and redemption at the end of each period:
One Three Five Ten Year Years Years Years ---- ----- ----- ----- Equity Income Fund $12 $39 $67 $148 Approved List Equity Fund $13 $40 $69 $151 Government Securities Fund $10 $32 $55 $122
The example is based on the expenses listed in the table above and assumes the reinvestment of all dividends. The 5% annual return is not a prediction of and does not represent the Funds' projected returns; rather, the assumed 5% annual return is required by government regulation. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURN. ACTUAL EXPENSES AND RETURN MAY BE GREATER OR LESS THAN INDICATED. 2. FINANCIAL HIGHLIGHTS The following represents selected data for a single share outstanding of each Fund throughout each fiscal year (which ends on June 30th). This information has been audited in connection with an audit of the Trust's financial statements by Deloitte & Touche LLP, independent auditors. The financial statements and independent auditors' report thereon are incorporated by reference into the Statement of Additional Information. Further information about the Funds' performance is contained in the Funds' annual report to shareholders, which may be obtained without charge.
CUTLER CUTLER CUTLER EQUITY APPROVED GOVERNMENT INCOME LIST EQUITY SECURITIES ------ ----------- ---------- Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended 6/30/95 6/30/94 6/30/93(a) 6/30/95 6/30/94 6/30/93(a) 6/30/95 6/30/94 6/30/93(a) ------- ------- ---------- ------- ------- ---------- ------- ------- ---------- BEGINNING NET ASSET VALUE PER SHARE $9.56 $9.95 $10.00 $9.78 $10.09 $10.00 $9.81 $10.37 $10.00 Net investment income 0.36(b) 0.27 0.10 0.24(b) 0.21 0.08 0.46(b) 0.46 0.23 Net realized and unrealized gain (loss) on securities 1.40 (0.40) (0.05) 1.92 (0.31) 0.09 0.29 (0.56) 0.37 Dividends from net investment income (0.34) (0.26) (0.10) (0.23) (0.21) (0.08) (0.46) (0.46) (0.23) Dividends from capital gains (0.02) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ------ ---- ---- ---- ---- ---- ---- ---- ---- ENDING NET ASSET VALUE PER SHARE $10.96 $9.56 $9.95 $11.71 $9.78 $10.09 $10.10 $9.81 $10.37 ------ ----- ----- ------ ----- ------ ------ ----- ------ ------ ----- ----- ------ ----- ------ ------ ----- ------ RATIOS TO AVERAGE NET ASSETS: Expenses (c) 0.97% 1.00% 0.98%(d) 1.00% 1.00% 0.98%(d) 0.75% 0.74% 0.53%(d) Net investment income 3.49% 3.49% 2.23%(d) 2.20% 2.43% 2.27%(d) 4.65% 4.46% 4.14%(d) TOTAL RETURN 18.63% (1.37%) 0.90%(d) 22.33% (1.07%) 3.31%(d) 7.83% (1.03%) 12.07%(d) PORTFOLIO TURNOVER RATE 43.37% 42.83% 32.04% 23.42% 22.27% 10.88% 0.00% 13.51% 0.00% NET ASSETS AT THE END OF PERIOD (000's omitted) $41,470 $19,706 $2,853 $21,890 $12,620 $3,618 $6,796 $5,534 $696 (a) Each Fund commenced operations on December 30, 1992. (b) Calculated using the weighted average number of shares outstanding. (c) During the period, various fees and expenses were waived and reimbursed, respectively. Had such waivers and reimbursements not occurred, the ratio of expenses to average net assets would have been: 0.97% 1.45% 3.69%(d) 1.23% 1.78% 4.53%(d) 1.47% 1.96% 2.34%(d) (d) Annualized.
3. INVESTMENT OBJECTIVES AND POLICIES INVESTMENT OBJECTIVES The investment objective of the CUTLER EQUITY INCOME FUND is to seek as generous a current income as is consistent with diversification and long-term capital appreciation by investing within the Cutler & Company Approved List (the "Approved List"). The investment objective of the CUTLER APPROVED LIST EQUITY FUND is to seek current income and long-term capital appreciation by investing in the entire list of common stocks within the Approved List. The investment objective of the CUTLER GOVERNMENT SECURITIES FUND is to seek current income with safety of principal by investing in debt instruments issued or guaranteed by the United States Government or by any of its agencies and instrumentalities ("U.S. Government Securities"). As the future is unknown, obviously there can be no assurance that any of these objectives will be achieved. INVESTMENT POLICIES CUTLER EQUITY INCOME FUND AND CUTLER APPROVED LIST EQUITY FUND. The Cutler Equity Income Fund and Cutler Approved List Equity Fund (the "Equity Funds") will invest only in the equity securities of the companies on Cutler & Company's Approved List. Each company on the Approved List is listed on the New York Stock Exchange and meets the following specific criteria. Each of the companies or its predecessor (i) paid dividends continuously for at least 20 years, without any reduction in the rate; (ii) has commercial paper rate Prime-1 and senior debt rated at least A by Moody's Investors Service, Inc. or similarly rated by another rating agency, or if no ratings are published, determined to be of similar quality by Cutler & Company; (iii) has annual sales, assets and market value of at least $1 billion; and (iv) in Cutler & Company's opinion has wide ownership among major institutional investors and very liquid markets. In addition, each company is subjected to such other analysis as may appear prudent including but not limited to the company's historical yield patterns, payout ratios and debt coverage ratios. The current Approved List and its entire history are available to any shareholder by contacting Cutler & Company or the Trust. Trades by the Equity Funds normally are made by Cutler & Company primarily to maintain quality (adhering to the Approved List) and to rebalance the portfolio to equalize positions; the Cutler Equity Income Fund will also trade within the Approved List to improve its yield. The Equity Funds will remain as fully invested as possible, considering cash flow and possible transactional delays, and may invest their cash holdings in high-quality, short-term money market instruments as described below. The Equity Funds will be rebalanced periodically to maintain holdings of approximately equal size in each issue held by those Funds with such rebalancing based either on cost or market. Rebalancing frequencies, however, may vary resulting in minor "tilts" (a slightly heavier weighting on some issues temporarily). Whereas the Cutler Approved List Equity Fund holds at least 90% of common stocks within the Approved List, the Cutler Equity Income Fund will hold approximately 20 to 30 of those stocks. Under normal conditions, each Equity Fund will invest at least 65% of its total assets in the income producing equity securities in the Approved List. CUTLER GOVERNMENT SECURITIES FUND. The Cutler Government Securities Fund will invest in U.S. Government Securities with such diversification as to provide a regular cash flow of both principal and interest payments, in order to achieve an average maturity of not less than three nor more than ten years. The U.S. Government Securities in which the Cutler Government Securities Fund may invest include direct obligations of the U.S. Treasury and obligations issued or guaranteed by U.S. Government agencies and instrumentalities backed by the full faith and credit of the U.S. Government, such as those issued by the Government National Mortgage Association. U.S. Government Securities also include securities supported primarily or solely by the creditworthiness of the issuer, such as securities of the Federal National Mortgage Association. There is no guarantee that the U.S. Government will support securities not backed by its full faith and credit. Under normal conditions, the Cutler Government Securities Fund will invest at least 65% of its total assets in U.S. Government Securities. U.S. Government Securities have historically involved little risk of loss of principal if held to maturity. Nonetheless, the market value of these securities may vary due to fluctuations in interest rates or the issuer's creditworthiness. There is normally an inverse relationship between the market value of securities sensitive to prevailing interest rates and actual changes in interest rates. In other words, a decline in interest rates produces an increase in market value, whereas an increase in interest rates produces a decrease in market value. Moreover, the longer the remaining maturity of a security, the greater will be the effect of interest rate changes on the market value of that security. The Cutler Government Securities Fund may invest up to 15% of its total assets in mortgage-related U.S. Government Securities. These securities represent an interest in, or are secured by and payable from, a pool of mortgages (which may have fixed or adjustable rates) made by lenders such as commercial banks, savings associations and mortgage bankers and brokers. Interests in mortgage-related securities differ from other forms of debt securities that normally provide for periodic payment of interest in fixed amounts with principal payments at maturity or specified call dates. In contrast, mortgage-related securities provide monthly payments that consist of interest and, in most cases, principal. In effect, these payments are a "pass-through" of the monthly payments made by the individual borrowers on their mortgage loans, net of any fees paid to the issuer or guarantor of the securities or a mortgage loan servicer. Additional payments to holders of these securities are caused by prepayments resulting from the sale or foreclosure of the underlying residential property or refinancing of the underlying loans. Because prepayment rates of individual pools of mortgage loans vary widely, it is not possible to predict accurately the average life of a particular security. Prepayments of the principal of underlying mortgage loans may shorten the effective maturities of mortgage-related securities. Although mortgage-related securities are issued with stated maturities up to forty years, unscheduled or early payments of principal and interest on the underlying mortgages may shorten considerably the effective maturities. Mortgage-related securities may have varying assumptions for average life. The volume of prepayments of principal on a pool of mortgages underlying a particular security will influence the yield of that security, and the principal returned to the Fund may be reinvested in instruments whose yield may be higher or lower than that which might have been obtained had the prepayments not occurred. When interest rates are declining, prepayments usually increase, with the result that reinvestment of principal prepayments will be at a lower rate than the rate applicable to the original mortgage-related security. Mortgage-related securities may have interest rates that are adjusted periodically according to a specified formula (usually with reference to some interest rate index or market interest rate). The interest paid on these securities is a function primarily of the indices or market rates upon which the interest rate adjustments are based. Similar to fixed rate debt instruments, adjustable rate securities are subject to changes in value based on changes in market interest rates or changes in the issuer's creditworthiness. Some adjustable rate mortgage-related securities (or the underlying mortgage loans) are subject to caps or floors that limit the maximum change in interest rate during a specified period or over the life of the security. OTHER POLICIES. Unless approved by the holders of a majority of a Fund's outstanding voting securities, a Fund may not change its investment objective, borrow money, invest in the securities of foreign issuers or purchase securities through a foreign market, invest in options or futures contracts, sell securities short, lend its securities, invest in repurchase agreements or engage in certain other activities, as more fully described in the Fund's Statement of Additional Information. Except as otherwise indicated, investment policies of a Fund may be changed by the Trust's Board of Trustees (the "Board") without shareholder approval. Each Fund's net asset value will fluctuate. For temporary defensive purposes, each Fund may invest in cash or in the following types of high quality, short-term money market instruments: (i) certificates of deposit and interest-bearing savings deposits of domestic commercial banks, (ii) money market mutual funds and (iii) short-term U.S. Government Securities. The frequency of each Fund's portfolio transactions will vary from year to year and is driven by the investment policies of each Fund as described above. For more details about the portfolio turnover rate of each Fund, see "Financial Highlights". 4. RISK CONSIDERATIONS CUTLER EQUITY INCOME FUND AND CUTLER APPROVED LIST EQUITY FUND. The Equity Funds invest only in the equity securities of the companies on Cutler & Company's Approved List. Over time, stocks have shown greater growth potential than other types of securities. Although the companies on the Approved List meet specific criteria for stability, credit quality and the prospect of good earnings, their stock prices can fluctuate dramatically in response to company, market, or economic news. These Funds alone do not constitute a balanced investment plan. When you sell your fund shares, they may be worth more or less than what you paid for them. CUTLER GOVERNMENT SECURITIES FUND. The Cutler Government Securities Fund will invest in U.S. Government Securities and high-grade corporate debt with such diversification as to provide a regular cash flow of both principal and interest payments. Because the securities in which the Fund invests may have maturities of up to ten years, the prices of these securities and the income they generate will vary from day to day, generally reflecting changes in interest rates, market conditions, and other political and economic news. By itself, the Government Securities Fund does not constitute a balanced investment plan. When you sell your shares they may be worth more or less than what you paid for them. 5. MANAGEMENT OF THE TRUST The business of the Trust is managed under the direction of the Board of Trustees. The Board formulates the general policies of the Funds and generally meets quarterly to review the results of the Funds, monitor investment activities and practices and discuss other matters affecting the Funds and the Trust. CUTLER & COMPANY Cutler & Company serves as investment adviser to each Fund pursuant to an Investment Advisory Agreement with the Trust. Subject to the general control of the Board, Cutler & Company makes and executes investment decisions for each Fund. For its services, Cutler & Company receives an advisory fee from each Equity Fund at an annual rate of 0.75% of each Fund's average daily net assets and from the Government Securities Fund at an annual rate of 0.25% of that Fund's average daily net assets until December 31, 1997. Cutler & Company has agreed to waive its fees or reimburse expenses of the Funds to the extent a the Approved List or Income Equity Fund's expenses exceed 1.25% of its annual average daily net assets or to the extent the Government Securities Fund's expenses exceed 1.00% of its average daily net assets. Cutler & Company is a registered investment adviser and provides investment management services to various individual and institutional clients, including financial institutions, public and private pension funds, profit-sharing plans, charitable corporations and private trust funds. As of the date of this Prospectus, Cutler & Company provided investment management services with respect to assets of approximately $722 million, including the Funds. Mr. Kenneth R. Cutler, who is primarily responsible for investment decisions for the Equity Funds, entered the investment business in 1945; between 1953 and 1962 he was principal operating and investment officer of two mutual funds; between 1962 and 1977 he held various investment positions; in 1977 he founded Cutler & Company, Inc. Mr. Cutler is a trustee and officer of the Trust. Mr. William Gossard, who is primarily responsible for investment decisions for the Cutler Government Securities Fund, joined Cutler & Company in 1995. Prior thereto, he was with the trust department of BancOne and predecessor American Fletcher National Bank. Mr. Gossard entered the investment business in 1968 and has managed fixed income securities since that time. Effective December 31, 1995, Cutler & Company, Inc. reorganized as a limited liability company, Cutler & Company, LLC. As of the date of this Prospectus, Mrs. Brooke Cutler Ashland (Kenneth Cutler's daughter) owned 59% and Geoffrey W. Cutler (Kenneth Cutler's son) owned 17% of the outstanding limited liability company interests in Cutler & Company, with the balance held by other managers of the Company. MANAGER Pursuant to a management agreement with Cutler & Company and the Trust, Forum Financial Services, Inc. ("Forum") supervises the overall management of the Trust, including overseeing the Trust's receipt of services, advising the Trust and the Trustees on matters concerning the Trust and its affairs, and, at the Board's request, providing the Trust with general office facilities and certain persons to serve as officers. Forum and FFC are members of the Forum Financial Group of companies and together provide a full range of services to the investment company and financial services industry. As of the date of this Prospectus, Forum provided management and administrative services to registered investment companies and collective investment funds with assets of approximately $14 billion. Forum, whose address is Two Portland Square, Portland, Maine 04101, is a registered broker-dealer and investment adviser and is a member of the National Association of Securities Dealers, Inc. For its management services, Forum receives a fee from the Trust with respect to each Fund at an annual rate of 0.10% of each Fund's average daily net assets. Forum also serves as the Trust's distributor and, as agent of the Trust, offers for sale shares of the Funds. As of the date of this Prospectus, Forum and FFC were controlled by John Y. Keffer, a trustee and officer of the Trust. SHAREHOLDER SERVICING Shareholder inquiries and communications concerning a Fund may be directed to Forum Financial Corp. ("FFC"), Two Portland Square, Portland, Maine 04101, which acts as the Funds' transfer agent and dividend disbursing agent. FFC maintains an account for each shareholder of a Fund (unless such accounts are maintained by sub-transfer agents or processing agents) and performs other transfer agency and shareholder-related functions. In addition, FFC performs portfolio accounting services for the Funds, including determination of each Fund's net asset value per share. The Trust has adopted a shareholder services plan providing that the Trust may obtain the services of the Adviser and other qualified financial institutions to act as shareholder servicing agents for their customers. Under this plan, the Trust has authorized FFC to enter into agreements pursuant to which the shareholder servicing agents perform certain shareholder services not otherwise provided by FFC. For these services, the Trust may pay the shareholder servicing agent a fee of up to 0.25% of the average daily net assets of the shares of a Fund owned by investors for which the shareholder servicing agent maintains a servicing relationship. Among the services provided by shareholder servicing agents are: answering customer inquiries regarding account matters; assisting shareholders in designating and changing various account options; aggregating and processing purchase and redemption orders and transmitting and receiving funds for shareholder orders; transmitting, on behalf of the Trust, proxy statements, prospectuses and shareholder reports to shareholders and tabulating proxies; processing dividend payments and providing subaccounting services for Fund shares held beneficially; and providing such other services as the Trust or a shareholder may request. EXPENSES The Trust is obligated to pay for all of its expenses. These expenses include interest charges, brokerage fees and commissions, insurance premiums, applicable fees and expenses under the Trust's contracts with Cutler & Company, Forum, FFC, the Trust's custodian and shareholder servicing agents, fees of pricing, interest, dividend, credit and other reporting services, costs of membership in trade associations, auditing, legal and compliance expenses, costs of preparing and printing the Trust's prospectuses, statements of additional information and shareholder reports and delivering them to existing shareholders, compensation of certain of the Trust's trustees, officers and employees and other personnel performing services for the Trust, and registration fees and related expenses. 5. PURCHASES AND REDEMPTIONS OF SHARES GENERAL You may purchase or redeem shares of the Funds without a sales charge at their net asset value on any weekday between 9:00 a.m. and 6:00 p.m. except New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas ("Fund Business Day"). The net asset values of the Funds are calculated at 4:00 p.m., Eastern time on each Fund Business Day. SEE "Determination of Net Asset Value." PURCHASES. Fund shares are issued at a price equal to the net asset value per share next determined after an order in proper form is received and accepted. The Trust reserves the right to reject any subscription for the purchase of its shares and may, in the Adviser's discretion, accept portfolio securities in lieu of cash as payment for Fund shares. Fund shares become entitled to receive dividends on the day after the shares are issued to an investor. REDEMPTIONS. There is no redemption charge, no minimum period of investment, and no restriction on frequency of redemptions. Shares are redeemed at a price equal to the net asset value per share next determined following acceptance by FFC of the redemption order in proper form (and any supporting documentation which FFC may require). Shares redeemed are not entitled to participate in dividends declared after the day on which a redemption becomes effective. The date of payment of redemption proceeds may not be postponed for more than seven days after shares are tendered to FFC for redemption by a shareholder of record. The right of redemption may not be suspended except in accordance with the provisions of the Investment Company Act. MINIMUM INVESTMENTS. There is a $25,000 ($2,000 for IRA's) minimum for initial investments in the Fund. There is no minimum for subsequent investments. The Trust and the Administrator each reserve the right to waive the minimum investment requirement. ACCOUNT STATEMENTS. Shareholders will receive from the Trust periodic statements listing account activity during the statement period. SHARE CERTIFICATES. FFC maintains a shareholder account for each shareholder. The Trust does not issue share certificates. PURCHASE AND REDEMPTION PROCEDURES You may obtain the account application necessary to open an account by calling 800-XXX-XXXX or by writing The Cutler Trust at P.O. Box 446, Portland, Maine 04112. INITIAL PURCHASE OF SHARES MAIL. Investors may send a check made payable to "The Cutler Trust" with a completed account application to: The Cutler Trust P.O. Box 446 Portland, Maine 04112 Checks are accepted at full value subject to collection. All checks must be drawn on a United States bank. If a check is returned unpaid, the purchase will be canceled, and the investor will be liable for any resulting losses or fees incurred by the Fund, the Adviser or FFC. BANK WIRE. To make an initial investment in a Fund using the fedwire system for transmittal of money between banks, you should first telephone FFC at 207-879- 0001 or 800-XXX-XXXX to obtain an account number. You should then instruct a member commercial bank to wire your money immediately to: The First National Bank of Boston Boston, Massachusetts ABA # 011000390 For Credit to: Forum Financial Corp. Account # 541-54171 The Cutler Trust (Name of Fund) (Investor's Name) (Investor's Account Number) You should then promptly complete and mail the account application. If you plan to wire funds, you should instruct your bank early in the day so the wire transfer can be accomplished the same day. Your bank may assess charges for transmitting the money by bank wire and for use of Federal Funds. The Trust does not charge investors for the receipt of wire transfers. Payment in the form of a bank wire received prior to 4:00 p.m., Eastern time on a Fund Business Day will be treated as a Federal Funds payment received before that time. THROUGH FINANCIAL INSTITUTIONS. You may purchase and redeem shares of the Funds through brokers, and other financial institutions that have entered into sales agreements with Forum. These institutions may charge a fee for their services and are responsible for promptly transmitting purchase, redemption and other requests to the Trust. The Trust is not responsible for the failure of any institution to promptly forward these requests. If you purchase shares through a broker-dealer or financial institution, your purchase will be subject to its procedures, which may include charges, limitations, investment minimums, cutoff times and restrictions in addition to, or different from, those applicable to shareholders who invest in a Fund directly. You should acquaint yourself with the institution's procedures and read this Prospectus in conjunction with any materials and information provided by your institution. If you purchase Fund shares in this manner, you may or may not be the shareholder of record and, subject to your institution's and the Fund's procedures, may have Fund shares transferred into your name. There is typically a one to five day settlement period for purchases and redemptions through broker-dealers. SUBSEQUENT PURCHASES OF SHARES You may purchase additional shares of a Fund by mailing a check or sending a bank wire as indicated above. Shareholders using the wire system for subsequent purchases should first telephone FFC at 207-879-0001 or 800-XXX-XXXX to notify it of the wire transfer. All payments should clearly indicate the shareholder's name and account number. REDEMPTION OF SHARES Redemption requests will not be effected unless any check used for investment has been cleared by the shareholder's bank, which may take up to 15 calendar days. This delay may be avoided by investing in a Fund through wire transfers. If FFC receives a redemption request by 4:00 p.m., the redemption proceeds normally are paid on the next business day, but in no event later than seven days after redemption, by check mailed to the shareholder of record at his record address. Shareholders that wish to redeem shares by Telephone or by Bank Wire must elect these options by properly completing the appropriate sections of their account application. These privileges may be modified or terminated by the Trust at any time. Due to the cost to the Trust of maintaining smaller accounts, the Trust reserves the right to redeem, upon not less than 60 days' written notice, all shares in any Fund account with an aggregate net asset value of less than $10,000 ($2,000 for IRAs). The Fund will not redeem accounts that fall below these amounts solely as a result of a reduction in net asset value of the Fund's shares. REDEMPTION BY MAIL. You may redeem all or any number of your shares by sending a written request to FFC at the address above. You must sign all written requests for redemption and provide a signature guarantee. SEE "Signature Guarantees." TELEPHONE REDEMPTIONS. A shareholder that has elected telephone redemption privileges may make a telephone redemption request by calling FFC at 207-879- 0001 or 800-XXX-XXXX. In response to the telephone redemption instruction, the Fund will mail a check to the shareholder's record address. If the shareholder has elected wire redemption privileges, FFC may wire the proceeds as set forth below under "Bank Wire Redemptions.". In an effort to prevent unauthorized or fraudulent redemption requests by telephone, the Trust and FFC will employ reasonable procedures to confirm that such instructions are genuine. Shareholders must provide FFC with the shareholder's account number, the exact name in which the shares are registered and some additional form of identification such as a password. The Trust or FFC may employ other procedures such as recording certain transactions. If such procedures are followed, neither FFC nor the Trust will be liable for any losses due to unauthorized or fraudulent redemption requests. Shareholders should verify the accuracy of telephone instructions immediately upon receipt of confirmation statements. During times of drastic economic or market changes, it may be difficult to make a redemption by telephone. If you cannot reach FFC by telephone, you may mail or hand-deliver your request to the FFC at Two Portland Square, Portland, Maine 04101. BANK WIRE REDEMPTIONS. If you have elected wire redemption privileges, the Fund will upon request transmit the proceeds of any redemption greater than $10,000 by Federal Funds wire to a bank account designated on your account application. If you wish to request bank wire redemptions by telephone, you must also elect telephone redemption privileges. EXCHANGE PRIVILEGE Shareholders of a Fund may exchange their shares for shares of any other Fund or for shares of the Daily Assets Treasury Fund, a money market fund managed by Forum and a separate series of Forum Funds, Inc. You may receive a copy of the Daily Assets Treasury Fund's prospectus by writing FFC or calling 800-XXX-XXXX. No sales charges are imposed on exchanges between a Fund and the Daily Assets Treasury Fund. EXCHANGE PROCEDURES. You may request an exchange by writing to FFC at Two Portland Square, Portland, Maine 04101. The minimum amount for an exchange to open an account in the Daily Assets Treasury Fund is $2,500. Exchanges may only be made between identically registered accounts. You do not need to complete a new account application, unless you are requesting different shareholder privileges for the new account. The Trust reserves the right to reject any exchange request and may modify or terminate the exchange privilege at any time. There is no charge for the exchange privilege or limitation as to frequency of exchanges. An exchange of shares in the Fund pursuant to the exchange privilege is, in effect, a redemption of Fund shares (at net asset value) followed by the purchase of shares of the investment company into which the exchange is made (at net asset value) and may result in a shareholder realizing a taxable gain or loss for Federal income tax purposes. The exchange privilege is available to shareholders residing in any state in which shares of the Daily Assets Treasury Fund may legally be sold. TELEPHONE EXCHANGES. If you have elected telephone exchange privileges, you may request an exchange by calling FFC at 800-XXX-XXXX. Neither the Trust nor FFC are responsible for the authenticity of telephone instructions or losses, if any, resulting from unauthorized telephone exchange requests. The Trust employs reasonable procedures to insure that telephone orders are genuine and, if it does not, may be liable for any losses due to unauthorized transactions. Shareholders should verify the accuracy of telephone instructions immediately upon receipt of confirmation statements. CHANGES TO ACCOUNT INFORMATION. To change the record name or address of your account, the designated bank account, the dividend election, or the telephone redemption option election on an account, you must provide a signature guarantee. SIGNATURE GUARANTEES. When a signature guarantee is called for, you must have "Signature Guaranteed" stamped under your signature and signed by a commercial bank or trust company, a broker, dealer or securities exchange, a credit union or a savings association that is authorized to guarantee signatures. RETIREMENT ACCOUNTS. The Fund may be a suitable investment for part or all of the assets held in retirement such as IRAs, SEP-IRAs, Keoghs, or other types of retirement accounts. The minimum initial investment for investors opening a retirement account or investing through your own IRA is $2,000. There is no minimum for subsequent investments. For information on investing in the Funds for retirement, and retirement account plans, call FFC at 800-XXX-XXXX, or write to Two Portland Square, Portland, Maine 04101. DETERMINATION OF NET ASSET VALUE The Trust determines the net asset value per share of each Fund as of the close of regular trading on the New York Stock Exchange (currently 4:00 P.M., Eastern time) on each Fund Business Day by dividing the value of the Fund's net assets (the value of its portfolio securities and other assets less its liabilities) by the number of the Fund's shares outstanding at the time the determination is made. Securities owned by a Fund for which market quotations are readily available are valued at current market value, or, in their absence, at fair value as determined by the Board. 6. DIVIDENDS AND TAX MATTERS DIVIDENDS Dividends of each Equity Fund's net investment income are declared and paid quarterly. Dividends of the Cutler Government Securities Fund's net investment income are declared daily and paid monthly. Distributions of capital gain, if any, realized by each Fund are made annually. Fund shares become entitled to receive dividends and distributions on the day after the shares are issued. Shares redeemed are not entitled to receive dividends or distributions declared after the day on which the redemption becomes effective. Shareholders may choose either to have dividends and distributions reinvested in shares of the Fund or received in cash. All dividends and distributions are treated in the same manner for Federal income tax purposes whether received in cash or reinvested in shares of the Fund. If reinvested, income dividends generally are invested at the Fund's net asset value as of the last day of the quarter or month with respect to which the dividends are paid. Capital gain distributions are reinvested at the net asset value of the Fund on the record date for the distribution. Unless a shareholder elects otherwise, all dividends and distributions are reinvested. TAXES Each Fund intends to qualify and continue to qualify for each fiscal year to be taxed as a "regulated investment company" under the Internal Revenue Code of 1986. As such, and because the Funds intend to distribute all of their net investment income and net capital gain each year, the Funds should each avoid all Federal income and excise taxes. Dividends paid by a Fund out of its net investment income (including any realized net short-term capital gain) are taxable to shareholders as ordinary income. Distributions by a Fund of net capital gain which the Fund designates as "capital gain dividends" are taxable to shareholders as long-term capital gain, regardless of the length of time the shareholder may have held his shares in the Fund. If Fund shares are sold at a loss after being held for six months or less, the loss will be treated as long-term capital loss to the extent of any capital gain distribution received on those shares. Any dividend or distribution from an Equity Fund received by a shareholder reduces the net asset value of the shareholder's shares by the amount of the dividend or distribution. To the extent that the income or gain comprising a dividend or distribution was accrued by the Fund before the shareholder purchased the shares, the dividend or distribution would be in effect a return of capital to that shareholder. All dividends and distributions (including those that operate as a return of capital), however, are taxable as described above to the shareholder receiving them regardless of the length of time the shareholder may have held the shares prior to the dividend or distribution. It is expected that a portion of each Equity Fund's dividends to shareholders will qualify for the dividends received deduction for corporations. Each Fund may be required by Federal law to withhold 31% of reportable payments (which may include dividends, capital gain distributions and redemption proceeds) paid to individuals and certain other non-corporate shareholders. Withholding is not required if a shareholder certifies that the shareholder's social security or tax identification number provided to the Fund is correct and that the shareholder is not subject to backup withholding for prior under-reporting to the Internal Revenue Service. Reports containing appropriate information with respect to the Federal income tax status of dividends and distributions paid during the year by the Funds will be mailed to shareholders shortly after the close of each year. The foregoing is only a summary of some of the important Federal tax considerations generally affecting the Funds and their shareholders. There may be other Federal, state or local tax considerations applicable to a particular investor. Prospective investors are urged to consult their tax advisors. 7. PERFORMANCE INFORMATION The Funds may quote their performance in advertising in terms of yield or total return. Both types are based on historical results and are not intended to indicate future performance. A Fund's yield is a way of showing the rate of income earned by the Fund as a percentage of the Fund's share price. Yield is calculated by dividing the net investment income of a Fund for a stated period by the average number of shares entitled to receive dividends and expressing the result as an annualized percentage rate based on the Fund's share price at the end of the period. Total Return refers to the average annual compounded rates of return over some representative period that would equate an initial amount invested at the beginning of a stated period to the ending redeemable value of the investment, after giving effect to the reinvestment of all dividends and distributions and deductions of expenses, if any, during the period. Because average annual returns tend to smooth out variations in a Fund's returns, shareholders should recognize that they are not the same as actual year-by-year results. The Funds' advertisements may reference ratings and rankings among similar funds by independent evaluators such as Lipper Analytical Services, Inc. or CDA/Wiesenberger. In addition, the performance of a Fund may be compared to recognized indices of market performance. The comparative material found in the Funds' advertisements, sales literature or reports to shareholders may contain performance ratings. These are not to be considered representative or indicative of future performance. 8. THE TRUST AND ITS SHARES The Trust was organized as a Delaware business trust on October 2, 1992. The trustees of the Trust have the authority to issue an unlimited number of shares of beneficial interest of separate series, with no par value per share. Except for the Funds, no other series of shares are currently authorized. The Board may, without shareholder approval, issue the shares in an unlimited number of separate series and may in the future divide existing series into two or more classes. Shares issued by the Trust have no conversion, subscription or preemptive rights. Shareholders of a Fund have equal and exclusive rights to dividends and distributions declared by that Fund and to the net assets of that Fund upon liquidation or dissolution. Voting rights are not cumulative and the shares of each series (the Funds) of the Trust will be voted separately except when an aggregate vote is required by law. The Trust does not hold annual meetings of shareholders, and it is anticipated that shareholder meetings will be held only when specifically required by law. Shareholders have available certain procedures for the removal of trustees. The Trust will call a shareholder meeting for the purpose of removing a trustee when 10% of the outstanding shares call for a meeting and will assist in certain shareholder communications. THE CUTLER TRUST CUTLER EQUITY INCOME FUND CUTLER APPROVED LIST EQUITY FUND CUTLER GOVERNMENT SECURITIES FUND Account Information and Shareholder Servicing: Distribution: Forum Financial Corp. Forum Financial Services, Inc. Two Portland Square Two Portland Square Portland, Maine 04101 Portland, Maine 04101 (207) 879-0001 (800) 237-3113 ----------------------------------------------------------------------- STATEMENT OF ADDITIONAL INFORMATION April 15, 1996 This Statement of Additional Information supplements the Prospectus offering shares of Cutler Equity Income Fund, the Cutler Approved List Equity Fund and the Cutler Government Securities Fund (each a "Fund" and collectively the "Funds"), three portfolios of The Cutler Trust (the "Trust"), and should be read only in conjunction with the applicable Prospectus, a copy of which may be obtained by an investor without charge by contacting the Trust's Shareholder Servicing Agent at the address listed above. TABLE OF CONTENTS Page 1. Investment Policies . . . . . . . . . . . . . . . . . . . . . .2 2. Investment Limitations. . . . . . . . . . . . . . . . . . . . .3 3. Management of the Trust . . . . . . . . . . . . . . . . . . . .4 Cutler & Company Manager and Distributor Transfer Agent Custodian and Auditor Expenses 4. Determination of Net Asset Value. . . . . . . . . . . . . . . .8 5. Portfolio Transactions. . . . . . . . . . . . . . . . . . . . .8 6. Additional Purchase and Redemption Information . . . . . . . .10 Purchase of Shares Exchanges Between Funds 7. Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . .11 8. The Trust and its Shareholders . . . . . . . . . . . . . . . .11 9. Performance Data . . . . . . . . . . . . . . . . . . . . . . .12 Yield Calculations Total Return Calculations 10. Financial Statements . . . . . . . . . . . . . . . . . . . . .14 THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. 1. INVESTMENT POLICIES Except for cash balances, the Cutler Equity Income Fund and the Cutler Approved List Equity Fund (the "Equity Funds") invest in securities on the Cutler & Company Approved List (the "Approved List"). Each Fund may invest in shares of other investment companies to the extent permitted under the 1940 Act. A Fund will bear its pro rata portion of another mutual fund's expenses. As a fundamental policy of each Fund, no portfolio transactions may be executed with Cutler & Company or any of its affiliates. See "Portfolio Transactions." THE CUTLER GOVERNMENT SECURITIES FUND At times, some of the mortgage-related U.S. Government Securities in which the Cutler Government Securities Fund may invest may have higher-than-market interest rates, and will therefore be purchased at a premium above their par value. Unscheduled prepayments on these securities, which are made at par, will cause the Fund to suffer a loss equal to the unamortized premium, if any. Although the rate adjustment feature of adjustable rate mortgage-related securities that the Fund may purchase may act as a buffer to reduce sharp changes in the value of these securities, they are still subject to changes in value based on changes in market interest rates or changes in the issuer's creditworthiness. Because the interest rate is reset only periodically, changes in the interest rate on adjustable rate mortgage-related securities may lag behind changes in prevailing market interest rates. During periods of declining interest rates, income to the Fund derived from adjustable rate mortgages that are not prepaid will decrease as the coupon rate resets along with the decline in interest rates, in contrast to the income on fixed-rate mortgages which will remain constant. During periods of rising interest rates, changes in the coupon rates of the mortgages underlying the Fund's adjustable rate mortgage-related investments may lag behind changes in market interest rates. This lag may result in a slightly lower value until the coupons reset to market rates. Some adjustable rate mortgage-related securities may have "caps" that limit the maximum amount by which the interest rate paid by a borrower may change at each reset date or over the life of the loan, and fluctuation in interest rates above these levels could cause these securities to "cap out" and to behave more like fixed-rate securities. Since the inception of the mortgage-related, pass-through security in 1970, the market for these securities has expanded considerably. The size of the primary issuance market and active participation in the secondary market by securities dealers and many types of investors make government and government-related pass-through pools highly liquid. The Government National Mortgage Association ("GNMA") issues GNMA Certificates that represent an interest in one mortgage or a pool of mortgages that are insured by the Federal Housing Administration or the Farmers Home Administration or are guaranteed by the Veterans Administration. Residential mortgage loans are pooled also by the Federal Home Loan Mortgage Corporation ("FHLMC"), which issues participation certificates ("PCs") which represent interests in mortgages from FHLMC's national portfolio. In addition, the Federal National Mortgage Association ("FNMA") purchases residential mortgages from a list of approved institutions and issues pass-through securities. In addition, the Fund may invest in Collateralized Mortgage Obligations (CMOs), mortgage-related securities that are typically structured with a number of classes or series that have different maturities and are generally retired in sequence. Each class of bonds receives periodic interest payments according to the coupon rate on the bonds. All monthly principal payments and any prepayments from the collateral pool, however, are paid first to the "Class 1" bondholders. The principal payments are such that the Class 1 bonds will be completely repaid no later than, for example, five years after the offering date. Thereafter, all payments of principal are allocated to the next most senior class of bonds until that class of bonds has been fully repaid. Although full payoff of each class of bonds is contractually required by a certain date, any or all classes of bonds may be paid off sooner than expected because of an acceleration in prepayments of the obligations comprising the collateral pool. 2. INVESTMENT LIMITATIONS Each Fund has adopted the following fundamental investment limitations. These limitations, along with any investment policies deemed to be fundamental, cannot be changed without the affirmative vote of the lesser of (i) more than 50% of the outstanding shares of the Fund or (ii) 67% of the shares of the Fund present or represented at a shareholders meeting at which the holders of more than 50% of the outstanding shares of the Fund are present or represented. Each Fund may not: (1) With respect to 75% of its assets, purchase a security other than an obligation issued or guaranteed as to principal and interest by the United States Government, its agencies or instrumentalities ("U.S. Government Securities") if, as a result, more than 5% of the Fund's total assets would be invested in the securities of a single issuer. (2) Purchase a security other than a U.S. Government Security if, immediately after the purchase, more than 25% of the value of the Fund's total assets would be invested in the securities of issuers having their principal business activities in the same industry. (3) Underwrite securities of other issuers, except to the extent that the Fund may be considered to be acting as an underwriter in connection with the disposition of portfolio securities. (4) Purchase or sell real estate or any interest therein, except that the Fund may invest in debt obligations secured by real estate or interests therein or issued by companies that invest in real estate or interests therein. (5) Purchase or sell physical commodities or contracts relating to physical commodities; borrow money; invest in the securities of foreign issuers or purchase securities through a foreign market; purchase or write options or invest in futures contracts; or purchase securities on margin or make short sales of securities, except for the use of short-term credit necessary for the clearance of purchases and sales of portfolio securities. (6) Issue senior securities except as appropriate to evidence indebtedness that the Fund may be permitted to incur, and provided that the Fund may issue shares of series or classes that the Board of Trustees (the "Board") may establish. (7) Enter into repurchase agreements, lend securities or otherwise make loans; except through the purchase of debt securities that may be purchased by the Fund. Each Fund has adopted the following nonfundamental investment limitations that may be changed by the Board without shareholder approval. Each Fund may not: (a) Invest in securities (other than fully-collateralized debt obligations) issued by companies that have conducted continuous operations for less than three years, including the operations of predecessors (unless guaranteed as to principal and interest by an issuer in whose securities the Fund could invest) if, as a result, more than 5% of the value of the Fund's total assets would be so invested. (b) Invest in or hold securities of any issuer other than the Fund if, to the Fund's knowledge, those Trustees and officers of the Trust or the Fund's investment adviser, individually owning beneficially more than 1/2 of 1% of the securities of the issuer, in the aggregate own more than 5% of the issuer's securities. (c) Invest in oil, gas or other mineral exploration or development programs, or leases, or in real estate limited partnerships; provided that the Fund may invest in securities issued by companies engaged in such activities. (d) Acquire securities that are not readily marketable ("illiquid") or are subject to restrictions on the sale of such securities to the public without registration under the Securities Act of 1933. Except as required by the 1940 Act, if a percentage restriction on investment or utilization of assets is adhered to at the time an investment is made, a later change in percentage resulting from a change in the market values of the Fund's assets, the change in status of a security or purchases and redemptions of shares will not be considered a violation of the limitation. 3. MANAGEMENT OF THE TRUST The trustees and officers of the Trust and their principal occupations during the past five years are set forth below. * BROOKE R. ASHLAND, Trustee Ms. Ashland is currently Chief Executive Officer and Manager of Cutler & Company, LLC. Prior thereto she was President, Trustee Investment Services, Inc. (financial services marketing firm)1990-1994. Ms. Ashland has been associated with Cutler & Company, Inc. since 1977 in various capacities such as Assistant to the Chairman, CFO and Secretary. Her address is 503 Airport Road, Medford, Oregon 97504. * KENNETH R. CUTLER, Trustee, Chairman of the Board and Vice President. Principal Portfolio Manager of the Equity Funds and Investment Committee Member, Cutler & Company, LLC (registered investment adviser). His address is 503 Airport Road, Medford, Oregon 97504. * JOHN Y. KEFFER, Trustee and President. President and Director, Forum Financial Services, Inc. (registered broker-dealer), Forum Financial Corp. (registered transfer agent) and Forum Advisors, Inc. (registered investment adviser). Mr. Keffer is also a director and/or officer of various registered investment companies for which Forum Financial Services, Inc. serves as manager, administrator and/or distributor. His address is Two Portland Square, Portland, Maine 04101. DR. HATTEN S. YODER, JR., Trustee. Director Emeritus, Geophysical Laboratory, Carnegie Institute of Washington and consultant to the Los Alamos National Laboratory. Dr. Yoder has been a director of the Geophysical Laboratory and consultant to the Los Alamos National Laboratory since 1971. His address is 6709 Melody Lane, Bethesda, Maryland 20817. CAROL FISCHER, Vice President, Assistant Secretary and Assistant Treasurer. Chief Operating Officer of Cutler & Company, LLC (registered investment adviser). Prior thereto, Ms. Fischer was associated with Cutler & Company, Inc., in various capacities. Her address is 503 Airport Road, Medford, Oregon 97504. MAX BERUEFFY, Vice President and Secretary. Counsel, Forum Financial Services, Inc., with which he has been associated since May 1994. Prior to that, Mr. Berueffy was a member of the staff of the U.S. Securities and Exchange Commission. Mr. Berueffy is also an officer of various registered investment companies for which Forum Financial Services, Inc. serves as manager, administrator and/or distributor. His address is Two Portland Square, Portland, Maine 04101. DAVID I. GOLDSTEIN, Assistant Secretary. Counsel, Forum Financial Services, Inc., with which he has been associated since 1991. Prior thereto, Mr. Goldstein was associated with the law firm of Kirkpatrick & Lockhart. Mr. Goldstein is also an officer of various registered investment companies for which Forum Financial Services, Inc. serves as manager, administrator and/or distributor. His address is Two Portland Square, Portland, Maine 04101. MICHAEL D. MARTINS, Treasurer. Director of Operations, Forum Financial Corp. Prior to that, Mr. Martins was a Manager of Deloitte & Touche, LLP. Mr. Martins is also an officer of various registered investment companies for which Forum Financial Corp. serves as fund accountant and/or transfer agent. His address is Two Portland Square, Portland, Maine 04101. LYNN Y. KELLEY, Assistant Treasurer. Fund Accounting Manager, Forum Financial Corp., with which she has been associated since December 1993. Prior to that, Ms. Kelley was Senior-in- Charge in Fund Accounting with Investors Bank and Trust Company. Her address is Two Portland Square, Portland, Maine 04101. * John Y. Keffer, Brooke R. Ashland and Kenneth R. Cutler are interested persons of the Trust as that term is defined in the 1940 Act. Kenneth R. Cutler is Brooke R. Ashland's father. For the fiscal year ended June 30, 1995, the aggregate compensation paid to the Trustees of the Trust by the funds is as follows: Dr. Hatten S. Yoder, Jr., $7,500. Messrs. Cutler and Keffer received no compensation for their services as Trustee for the past year and no officer of the Trust is compensated by the Trust. Trustees are reimbursed for travel and related expenses incurred in attending meetings of the Board. CUTLER & COMPANY Under an Investment Advisory Agreement with the Trust (the "Agreement"), Cutler & Company furnishes at its own expense all services, facilities and personnel necessary in connection with managing each Fund's investments and effecting portfolio transactions for each Fund. The Agreement provides for an initial term of twelve months from its effective date with respect to a Fund and for its continuance in effect for successive twelve-month periods thereafter, provided the Agreement is specifically approved at least annually by the Board or by vote of the shareholders, and in either case, by a majority of the Trustees who are not parties to the Agreement or interested persons of any such party at a meeting called for the purpose of voting on the Agreement. The Agreement is terminable without penalty by the Trust with respect to a Fund on 60 days' written notice when authorized either by vote of the Fund's shareholders or by a vote of a majority of the Board, or by Cutler & Company on 60 days' written notice and will automatically terminate in the event of its assignment. The Agreement also provides that, with respect to each Fund, Cutler & Company shall not be liable for any error of judgment or mistake of law or for any act or omission in the performance of its duties to the Fund, except for willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of reckless disregard of its obligations and duties under the Agreement. The following table shows the dollar amount of fees payable under the Investment Advisory Agreements between Cutler & Company and the Trust with respect to each Fund, the amount of fee that was waived by Cutler & Company, if any, and the actual fee received by Cutler & Company. The data are for the past three fiscal years.
Advisory Fee Advisory Fee Advisory Fee Payable Waived Retained ------- ------ -------- CUTLER EQUITY INCOME FUND Year Ended June 30, 1995 163,051 0 163,051 Year Ended June 30, 1994 54,007 30,495 23,512 Year Ended June 30, 1993 2,312 2,312 0 CUTLER APPROVED LIST EQUITY FUND Year Ended June 30, 1995 83,557 15,411 68,146 Year Ended June 30, 1994 38,186 38,186 0 Year Ended June 30, 1993 2,373 2,373 0 CUTLER GOVERNMENT SECURITIES FUND Year Ended June 30, 1995 14,952 14,952 0 Year Ended June 30, 1994 10,134 10,134 0 Year Ended June 30, 1993 108 108 0
MANAGER AND DISTRIBUTOR Forum Financial Services, Inc. ("Forum") supervises the overall management of the Trust (which includes, among other responsibilities, monitoring of performance and billing of the transfer agent and custodian and arranging for maintenance of books and records of the Trust), and provides the Trust with general office facilities pursuant to a Management Agreement with the Trust. The Management Agreement provides for an initial term of twelve months from its effective date with respect to a Fund and for its automatic renewal each year thereafter for an additional term of one year. The Management Agreement terminates automatically if it is assigned and may be terminated without penalty with respect to any Fund by vote of that Fund's shareholders or by either party on not more than 60 days' written notice. The Management Agreement also provides that Forum shall not be liable for any error of judgment or mistake of law or for any act or omission in the administration or management of the Trust, except for willful misfeasance, bad faith or gross negligence in the performance of Forum's duties or by reason of reckless disregard of its obligations and duties under the Management Agreement. At the request of the Board, Forum provides persons satisfactory to the Board to serve as officers of the Trust. Those officers, as well as certain other employees and Trustees of the Trust, may be directors, officers or employees of Forum, Cutler & Company or their affiliates. The following table shows the dollar amount of fees payable under the Management Agreements between Forum and the Trust with respect to each Fund, the amount of fee that was waived by Forum, if any, and the actual fee received by Forum. The data are for the past three fiscal years.
Management Fee Management Fee Management Fee Payable Waived Retained ------- ------ -------- CUTLER EQUITY INCOME FUND Year Ended June 30, 1995 32,610 0 32,610 Year Ended June 30, 1994 10,802 3,098 7,704 Year Ended June 30, 1993 462 462 0 CUTLER APPROVED LIST EQUITY FUND Year Ended June 30, 1995 16,711 7,613 9,098 Year Ended June 30, 1994 7,637 4,794 2,843 Year Ended June 30, 1993 475 475 0 CUTLER GOVERNMENT SECURITIES FUND Year Ended June 30, 1995 5,981 5,981 0 Year Ended June 30, 1994 4,054 4,054 0 Year Ended June 30, 1993 43 43 0
Forum is also the Trust's distributor and acts as the agent of the Trust in connection with the offering of shares of the Funds pursuant to a separate Distribution Agreement. The Distribution Agreement provides for an initial term of twelve months from its effective date and for its continuance in effect for successive twelve-month periods thereafter, provided the agreement is specifically approved at least annually by the Board or by vote of the shareholders, and in either case, by a majority of the Trustees who are not parties to the Distribution Agreement or interested persons of any such party at a meeting called for the purpose of voting on the Distribution Agreement. All subscriptions for Shares obtained by Forum are directed to the Trust for acceptance and are not binding on the Trust until accepted by it. Forum receives no compensation or reimbursement of expenses for the distribution services provided pursuant to the Distribution Agreement. The Distribution Agreement provides that Forum shall not be liable for any error of judgment or mistake of law or for any act or omission in the administration or management of the Trust, except for willful misfeasance, bad faith or gross negligence in the performance of Forum's duties or by reason of reckless disregard of its obligations and duties under the Distribution Agreement. The Distribution Agreement also provides for certain indemnification of Forum. The Distribution Agreement is terminable with respect to a Fund without penalty by the Trust on 60 days' written notice when authorized either by vote of the Fund's shareholders or by a vote of a majority of the Board, or by Forum on 60 days' written notice, and will automatically terminate in the event of its assignment. TRANSFER AGENT Forum Financial Corp. ("FFC") acts as transfer agent, dividend disbursing agent and fund accountant for the Trust pursuant to a Transfer Agency and Fund Accounting Agreement. The Transfer Agency and Fund Accounting Agreement provides for an initial term of twelve months from its effective date with respect to a Fund and for its automatic renewal for successive one-year periods thereafter. Cutler & Company may act as a subtransfer agent or processing agent. For its services, FFC is paid a transfer agent fee at an annual rate of $12,000 per year plus certain account charges and is reimbursed for certain expenses incurred on behalf of the Funds. FFC is paid an additional fee for its portfolio accounting services of $36,000 per year for each Fund, subject to adjustments for the number and type of portfolio transactions. The following table shows the dollar amount of fees payable under the Transfer Agency and Fund Accounting Agreements between Forum and the Trust with respect to each Fund, the amount of fee that was waived by Forum, if any, and the actual fee received by Forum. The data are for the past three fiscal years.
Transfer Agent Transfer Agent Transfer Agent and Accounting and Accounting and Accounting Fee Payable Fee Waived Fee Retained ----------- ---------- ------------ CUTLER EQUITY INCOME FUND Year Ended June 30, 1995 50,716 0 50,716 Year Ended June 30, 1994 49,706 13,754 35,952 Year Ended June 30, 1993 25,063 25,063 0 CUTLER APPROVED LIST EQUITY FUND Year Ended June 30, 1995 60,989 0 60,989 Year Ended June 30, 1994 48,471 15,682 32,789 Year Ended June 30, 1993 24,050 24,050 0 CUTLER GOVERNMENT SECURITIES FUND Year Ended June 30, 1995 48,465 12,465 36,000 Year Ended June 30, 1994 49,294 33,162 16,132 Year Ended June 30, 1993 23,023 23,023 0
CUSTODIAN AND AUDITOR Pursuant to a Custodian Agreement with the Trust, The First National Bank of Boston, 100 Federal Street, Boston, Massachusetts 02106, acts as the custodian of the Trust's assets. The custodian's responsibilities include safeguarding and controlling the Funds' cash and securities, determining income and collecting interest on the Funds' investments. Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281, independent auditors, has been chosen by the Board to act as auditor for the Trust. EXPENSES Each Fund's expenses comprise Trust expenses attributable to the Fund that are allocated to the Fund, and those not attributable to a particular Fund that are allocated among all Funds in proportion to their average net assets. Cutler & Company voluntarily agreed to waive its fees or reimburse each Fund to the extent a Fund's total expenses exceed the amounts indicated in the Prospectus until December 31, 1997. This voluntary limit may be discontinued at any time after that date. Any waivers or reimbursements have the effect of increasing the Funds' yield and may not be recouped at a later date. Cutler & Company also has agreed to reimburse the Trust for certain of each Fund's operating expenses (exclusive of interest, taxes, brokerage fees and organization and extraordinary expenses, all to the extent permitted by applicable state law or regulation) which in any year exceed the limits prescribed by any state in which the Fund's shares are qualified for sale. Forum believes that currently the most restrictive expense limitation imposed by any state is 2-1/2% of the first $30 million of each Fund's average net assets, 2% of the next $70 million of its average net assets and 1-1/2% of its average net assets in excess of $100 million. For the purpose of this obligation to reimburse expenses, each Fund's annual expenses are estimated and accrued daily, and any appropriate estimated payments are made monthly. Subject to any fee waiver or expense reimbursement arrangements, the Trust pays all of its expenses, including: interest charges, taxes, brokerage fees and commissions; expenses of issue, repurchase and redemption of shares; premiums of insurance for the Trust, its Trustees and officers and fidelity bond premiums; applicable fees, interest charges and expenses of third parties, including Cutler & Company, Forum, FFC, the Trust's custodian and shareholder servicing agents; fees of pricing, interest, dividend, credit and other reporting services; costs of membership in trade associations; telecommunications expenses; funds transmission expenses; auditing, legal and compliance expenses; costs of forming the Trust and maintaining its existence; costs of preparing and printing the Trust's prospectuses, statements of additional information and shareholder reports and delivering them to existing shareholders; expenses of meetings of shareholders and proxy solicitations therefor; costs of maintaining books and accounts and preparing tax returns; costs of reproduction, stationery and supplies; fees and expenses of the Trust's Trustees; compensation of the Trust's officers and employees who are not officers of Cutler & Company, Forum or their respective affiliates; costs of other personnel who may be employees of Cutler & Company, Forum or their respective affiliates performing services for the Trust; costs of Trustee meetings; Securities and Exchange Commission registration fees and related expenses; and state or foreign securities laws registration fees and related expenses. 4. DETERMINATION OF NET ASSET VALUE The Trust does not determine net asset value on the following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. Purchases and redemptions are effected as of the next determined net asset value following the receipt of any purchase or redemption order. In determining the approximate market value of portfolio investments, the Funds may employ outside organizations, which may use a matrix or formula method that takes into consideration market indices, matrices, yield curves and other specific adjustments. This may result in the securities being valued at a price different from the price that would have been determined had the matrix or formula method not been used. All cash, receivables and current payables are carried at their face value. 5. PORTFOLIO TRANSACTIONS The Equity Funds will effect purchases and sales through brokers who charge commissions. Allocations of transactions to brokers and the frequency of transactions are determined by Cutler & Company in its best judgment and in a manner deemed to be in the best interest of shareholders of the Funds rather than by any formula. The primary consideration is prompt execution of orders in an effective manner and at the most favorable price available to the Funds. Purchases and sales of portfolio securities for the Cutler Government Securities Fund usually are principal transactions. These purchases are made directly from the issuer or from a market maker for the securities. There usually are no brokerage commissions paid for such purchases. Purchases from dealers serving as market makers include the spread between the bid and asked prices. No portfolio transactions are executed with Cutler & Company or any of its affiliates. Any Fund may not always pay the lowest commission or spread available. Rather, in determining the amount of commission, including certain dealer spreads, paid in connection with Fund transactions, the Adviser takes into account such factors as size of the order, difficulty of execution, efficiency of the executing broker's facilities (including the services described below) and any risk assumed by the executing broker. The Adviser may also take into account payments made by brokers effecting transactions for the Fund (i) to the Fund or (ii) to other persons on behalf of the Fund for services provided to it for which it would be obligated to pay. Consistent with section 28(e) of the Securities and Exchange Act, the exercise of the Adviser's fiduciary duties under its Investment Advisory agreement with the Trust, and any other applicable law, the Adviser may allocate brokerage on behalf of the Trust to brokers who provide research services and may cause the Fund to pay these brokers a higher amount of commission than may be charged by other brokers. Such research and analysis may be used by the Adviser in connection with services to clients other than the Fund, and the Adviser's fee is not reduced by reason of the Adviser's receipt of the research services. Investment decisions for each Fund will be made independently from those for any other account (including another Fund) that is or may in the future become managed by Cutler & Company or its affiliates. When a Fund and other accounts managed by Cutler & Company are contemporaneously engaged in the purchase or sale of the same security, however, the transactions may be averaged as to price and allocated equitably to each account. In some cases, this policy might adversely affect the price paid or received by a Fund or the size of the position obtainable for the Fund. In addition, when purchases or sales of the same security for a Fund and for other accounts managed by Cutler & Company occur contemporaneously, the purchase or sale orders may be aggregated in order to obtain any price advantages available to large denomination purchases or sales. The following table shows the aggregate brokerage commissions with respect to each Fund. The data are for the past three fiscal years or shorter period if the Fund has been in operation for a shorter period.
AGGREGATE COMMISSIONS PAID CUTLER EQUITY INCOME FUND Year Ended June 30, 1995 42,374 Year Ended June 30, 1994 22,010 Year Ended June 30, 1993 4,281 CUTLER APPROVED LIST EQUITY FUND Year Ended June 30, 1995 19,824 Year Ended June 30, 1994 15,452 Year Ended June 30, 1993 4,765 CUTLER GOVERNMENT SECURITIES FUND Year Ended June 30, 1995 0.00 Year Ended June 30, 1994 0.00 Year Ended June 30, 1993 0.00
6. ADDITIONAL PURCHASE AND REDEMPTION INFORMATION Shares of each Fund are sold on a continuous basis by the distributor at net asset value without any sales charge. Shareholders may effect purchases or redemptions or request any shareholder privilege in person at FFC's offices located at Two Portland Square, Portland, Maine 04101. EXCHANGES BETWEEN FUNDS Shareholders of a Fund may exchange their shares for shares of any other Fund or for shares of the Daily Assets Treasury Fund, a money market fund managed by Forum and a separate series of Forum Funds, Inc. Exchange transactions will be made on the basis of relative net asset value per share at the time of the exchange transaction. For Federal tax purposes, exchange transactions are treated as sales on which a purchaser will realize a capital gain or loss depending on whether the value of the shares redeemed is more or less than his basis in such shares at the time of the transaction. Proceeds of an exchange transaction may be invested only in another Fund account for which the share registration is the same as the account from which the exchange is made. The terms of the exchange privilege are subject to change, and the privilege may be terminated by any Fund or the Trust. However, the privilege will not be terminated, and no material change that restricts the availability of the privilege to shareholders will be implemented, without 60 days' notice to shareholders, to the extent required by applicable regulation. ADDITIONAL REDEMPTION MATTERS Proceeds of redemptions normally are paid in cash. However, payments may be made wholly or partly in portfolio securities if the Board of Trustees determines economic conditions exist which would make payment in cash detrimental to the best interests of the Fund. If payment for shares redeemed is made wholly or partly in portfolio securities, brokerage costs may be incurred by the shareholder in converting the securities to cash. The Trust has filed an election with the Securities and Exchange Commission pursuant to which each Fund may only effect a redemption in portfolio securities if the particular shareholder is redeeming more than $250,000 or 1% of the Fund's total net assets, whichever is less, during any 90-day period. In addition to the situations described in the Prospectus under "Purchases and Redemptions of Shares," the Trust may redeem shares involuntarily to reimburse each Fund for any loss sustained by reason of the failure of a shareholder to make full payment for shares purchased by the shareholder or to collect any charge relating to transactions effected for the benefit of a shareholder which is applicable to the Fund's shares as provided in the Prospectus from time to time. Shareholders' rights of redemption may not be suspended, except (i) for any period during which the New York Stock Exchange, Inc. is closed (other than customary weekend and holiday closings) or during which the Securities and Exchange Commission determines that trading thereon is restricted, (ii) for any period during which an emergency (as determined by the Securities and Exchange Commission) exists as a result of which disposal by a Fund of its securities is not reasonably practicable or as a result of which it is not reasonably practicable for the Fund fairly to determine the value of its net assets, or (iii) for such other period as the Securities and Exchange Commission may by order permit for the protection of the shareholders of the Fund. Fund shares are normally issued for cash only. In the Adviser's discretion, however, each Fund may accept portfolio securities that meet the investment objective and policies of the Fund as payment for Fund shares. The Fund will only accept securities that (i) are not restricted as to transfer either by law or liquidity of market and (ii) have a value which is readily ascertainable (and not established only by valuation procedures). 7. TAXATION Qualification as a regulated investment company under the Internal Revenue Code of 1986 does not involve governmental supervision of management or investment practices or policies. Investors should consult their own counsel for a complete understanding of the requirements the Funds must meet to qualify for such treatment. The information set forth in the Prospectus and the following discussion relate solely to Federal income taxes on dividends and distributions by the Funds. Investors should consult their own counsel for further details and for the application of state and local tax laws to the investor's particular situation. In order to qualify for treatment as a regulated investment company under the Internal Revenue Code, each Fund must distribute to its shareholders for each taxable year at least 90% of its net investment income (which includes dividends, interest and the excess of net short-term capital gain over net long-term capital losses) and must meet several additional requirements. Among these requirements are the following: (1) each Fund must derive at least 90% of its gross income each taxable year from dividends, interest, gains from the sale or other disposition of securities and certain other income; (2) each Fund must derive less than 30% of its gross income each taxable year from the sale or other disposition of securities held for less than three months; (3) at the close of each quarter of the Fund's taxable year, at least 50% of the value of its total assets must be represented by cash and cash items, U.S. Government Securities, securities of other regulated investment companies and other securities, with these other securities limited, in respect of any one issuer, to an amount that does not exceed 5% of the value of the Fund's total assets or 10% of the outstanding voting securities of the issuer; and (4) at the close of each quarter of the Fund's taxable year, not more than 25% of the value of its total assets may be invested in securities (other than U.S. Government Securities or securities of other regulated investment companies) of any one issuer. 8. THE TRUST AND ITS SHAREHOLDERS The Trust is a business trust organized under Delaware law. Delaware law provides that shareholders shall be entitled to the same limitations of personal liability extended to stockholders of private corporations for profit. The courts of some states, however, may decline to apply Delaware law on this point. The Trust Instrument contains an express disclaimer of shareholder liability for the debts, liabilities, obligations and expenses of the Trust and requires that a disclaimer be given in each contract entered into or executed by the Trust or the Trustees. The Trust Instrument provides for indemnification out of each series' property of any shareholder or former shareholder held personally liable for the obligations of the series. The Trust Instrument also provides that each series shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the series and satisfy any judgment thereon. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which Delaware law does not apply, no contractual limitation of liability was in effect, and the portfolio is unable to meet its obligations. The Trust believes that, in view of the above, the risk of personal liability to shareholders is remote. The Trust Instrument further provides that the Trustees shall not be liable to any person other than the Trust or its shareholders; moreover, the Trustees shall not be liable for any conduct whatsoever, provided that a Trustee is not protected against any liability to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. Each series' capital consists of shares of beneficial interest. Shares are fully paid and nonassessable, except as set forth above with respect to Trustee and shareholder liability. Shareholders representing 10% or more of the Trust or a series may, as set forth in the Trust Instrument, call meetings of the Trust or series for any purpose related to the Trust or series, as the case may be, including, in the case of a meeting of the entire Trust, the purpose of voting on removal of one or more Trustees. The Trust or any series may be terminated upon the sale of its assets to, or merger with, another open-end management investment company or series thereof, or upon liquidation and distribution of its assets. Generally such terminations must be approved by the vote of the holders of a majority of the outstanding shares of the Trust or the series; however, the Trustees may, without prior shareholder approval, change the form of organization of the Trust by merger, consolidation or incorporation. If not so terminated or reorganized, the Trust and its series will continue indefinitely. Under the Trust, the Trustees may, without shareholder vote, cause the Trust to merge or consolidate into one or more trusts, partnerships or corporations or cause the Trust to be incorporated under Delaware law, so long as the surviving entity is an open-end management investment company that will succeed to or assume the Trust's registration statement. Although each Fund is offering only its own shares, it is possible that a Fund might become liable for any misstatement in the Prospectus of another Fund. The Board has considered this factor in approving the use of a single combined Prospectus. As of January 31, 1996, the officers and directors of the Trust owned as a group less than 1% of the outstanding shares of the Fund. Also as of that date, the following persons owned of record 5% or more of the outstanding shares of the Fund: CUTLER EQUITY INCOME FUND Comerica Bank TTEE for Big Creek Lumber The Karl Kirchgessner Foundation Profit Sharing Trust 1278 Glenneyre, Suite 149 3654 Highway 1 Laguna Beach, CA 92651 Davenport, CA 95014 7.92% 9.20% CUTLER APPROVED LIST EQUITY FUND THE KARL KIRCHGESSNER FOUNDATION HAROLD E. GRAY - IRA ACCOUNT 1278 Glenneyre, Suite 149 810 Whitney. Laguna Beach, CA 92651 Visalia, CA 93277 16.31% 5.34% CUTLER GOVERNMENT SECURITIES FUND MICHELETTI, INC. THE KARL KIRCHGESSNER FOUNDATION STEEL STRUCTURES, INC. MPP & P/S PLAN 1278 GLENNEYRE, SUITE 149 MPP & P/S PLAN P.O. Box 26620 Laguna Beach, CA 92651 P.O. Box 1170 San Jose, CA 95159 11.46% Madera, CA 93659 15.52% 10.39% 9. PERFORMANCE DATA Each Fund may quote performance in various ways. All performance information supplied by a Fund in advertising is historical and is not intended to indicate future returns. A Fund's net asset value, yield and total return fluctuate in response to market conditions and other factors, and the value of Fund shares when redeemed may be more or less than their original cost. In performance advertising a Fund may compare any of its performance information with data published by independent evaluators such as Lipper Analytical Services, Inc., CDA/Wiesenberger or other companies that track the investment performance of investment companies ("Fund Tracking Companies"). A Fund may also compare any of its performance information with the performance of recognized stock, bond and other indexes, including but not limited to the Standard & Poor's 500 Composite Stock Price Index, the Dow Jones Industrial Average, U.S. Treasury bonds, bills or notes, the Salomon Brothers Bond Index, the Shearson Lehman Bond Index, and changes in the Consumer Price Index as published by the U.S. Department of Commerce. A Fund may refer to general market performances over past time periods such as those published by Ibbotson Associates. A Fund may also refer in such materials to mutual fund performance rankings and other data published by Fund Tracking Companies. Performance advertising may also refer to discussions of a Fund and comparative mutual fund data and ratings reported in independent periodicals, such as newspapers and financial magazines. For the 30 day period ended June 30, 1995, the annualized yield of the Cutler Government Securities Fund was 4.69%. For the one year period ended June 30, 1995, the average annual total returns of the Cutler Equity Income Fund, Cutler Approved List Equity Fund and Cutler Government Securities Fund were 18.63%, 22.33%, and 7.83%, respectively. Since commencement of operations on December 30, 1992, the average annual total returns of the Cutler Equity Income Fund, Cutler Approved List Equity Fund and Cutler Government Securities Fund were 6.68%, 8.64%, and 5.07%, respectively. YIELD CALCULATIONS Yields for a Fund used in advertising are computed by dividing the Fund's interest income for a given 30 days or one-month period, net of expenses, if any, by the average number of shares entitled to receive distributions during the period, dividing this figure by the Fund's net asset value per share at the end of the period and annualizing the result (assuming compounding of income) in order to arrive at an annual percentage rate. Capital gain and loss generally are excluded from these calculations. Income calculated for the purpose of determining a Fund's yield differs from income as determined for other accounting purposes. Because of the different accounting methods used, and because of the compounding assumed in yield calculations, the yield quoted for a Fund may differ from the rate of distribution the Fund paid over the same period or the rate of income reported in the Fund's financial statements. Although published yield information is useful to investors in reviewing a Fund's performance, investors should be aware that a Fund's yield for any given period is not an indication or representation by the Fund of future yields or rates of return on the Fund's shares. The yields of the Funds are not fixed or guaranteed, and an investment in the Funds is not insured or guaranteed. Accordingly, yield information may not necessarily be used to compare shares of the Funds with investment alternatives which, like money market instruments or bank accounts, may provide a fixed rate of interest. Also, it may not be appropriate to compare a Fund's yield information directly to similar information regarding investment alternatives that are insured or guaranteed. TOTAL RETURN CALCULATIONS Each Fund may advertise its total return. Total returns quoted in advertising reflect all aspects of a Fund's return, including the effect of reinvesting dividends and capital gain distributions, and any change in the Fund's net asset value per share over the period. Average annual returns are calculated by determining the growth or decline in value of a hypothetical historical investment in a Fund over a stated period, and then calculating the annually compounded percentage rate that would have produced the same result if the rate of growth or decline in value had been constant over the period. Whereas average annual returns are a convenient means of comparing investment alternatives, investors should realize that the performance is not constant over time but changes from year to year, and that average annual returns represent averaged figures as opposed to the actual year-to-year performance of a Fund. Average annual total return is calculated by finding the average annual compounded rates of return of a hypothetical investment over a given period according to the following formula: P(1+T)TO THE POWER OF n = ERV, where: P = a hypothetical initial payment of $1,000; T = average annual total return; n = number of years; and ERV = ending redeemable value (ERV is the value, at the end of the applicable period, of a hypothetical $1,000 payment made at the beginning of the applicable period). In addition to average annual returns, the Funds may quote unaveraged or cumulative total returns reflecting the simple change in value of an investment over a stated period. Total returns may be broken down into their components of income and capital (including capital gain and changes in share price) in order to illustrate the relationship of these factors and their contributions to total return. Period total return is calculated according to the following formula: PT = (ERV/P-1), where: PT = period total return. The other definitions are the same as in average annual total return above. 10. FINANCIAL STATEMENTS The financial statements of the Trust for its fiscal year ended June 30, 1995 (which include statements of assets and liabilities, statements of operations, statements of changes in net assets, notes to financial statements, financial highlights, statements of investments and the auditors' report thereon) are included in the Annual Report to Shareholders of the Trust delivered along with this Statement of Additional Information, and are incorporated herein by reference. PART C OTHER INFORMATION ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements. Included in the Prospectus: Financial Highlights. Included in each Statement of Additional Information: Audited financial statements for the fiscal year ended June 30, 1995 including Statements of Assets and Liabilities, Statements of Operations, Statements of Changes in Net Assets, Notes to Financial Statements, Financial Highlights, Portfolio of Investments and Report of Independent Auditors (for each Fund, filed with the Securities and Exchange Commission on September 5, 1995 for such Fund pursuant to Rule 30b2-1 under the Investment Company Act of 1940, as amended, and incorporated herein by reference. (b) Exhibits: (1) Copy of Registrant's Trust Instrument (filed herewith). (2) Copy of Registrant's By-Laws (filed herewith). (3) None. (4) None. (5) Copy of Investment Advisory Agreement between Registrant and Cutler & Company, LLC (filed herewith). (6) Copy of Distribution Agreement between Registrant and Forum Financial Services, Inc. (filed herewith). (7) None. (8) Copy of Custodian Agreement between Registrant and The First National Bank of Boston (filed herewith). (9) (a) Copy of Management Agreement between Registrant and Forum Financial Services, Inc. (filed herewith). (b) Copy of Transfer Agency and Fund Accounting Agreement between Registrant and Forum Financial Corp. (filed herewith). (c) Copy of Shareholder Service Plan (filed herewith). (d) Copy of Form of Shareholder Service Agreement (filed herewith). (10) Opinion of counsel (filed herewith). (11) Consent of independent auditors (filed herewith). (12) None. (13) Investment Representation letter (filed herewith). (14) None. (15) None. (16) None. Other Exhibits: (A) Power of Attorney, Brooke R. Ashland, Trustee of Registrant (filed herewith). (B) Power of Attorney, Kenneth R. Cutler, Trustee of Registrant, previously filed as Other Exhibit (A) to Pre-Effective Amendment No. 2 (filed herewith). (C) Power of Attorney, Hatten S. Yoder, Jr., Trustee of Registrant, previously filed as Other Exhibit (B) to Pre-Effective Amendment No. 2 (filed herewith). (D) Power of Attorney, John Y. Keffer, Trustee of Registrant, previously filed as Other Exhibit (C) to Pre-Effective Amendment No. 2 (filed herewith). ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT. None. ITEM 26. NUMBER OF HOLDERS OF SECURITIES AS OF JANUARY 31, 1996. Title of Class of Shares of Beneficial Interest Number of Holders ------------------------ ----------------- Cutler Equity Income Fund 123 Cutler Approved List Equity Fund 92 Cutler Government Securities Fund 43 ITEM 27. INDEMNIFICATION. The general effect of Section 10.02 of the Registrant's Trust Instrument is to indemnify existing or former trustees and officers of the Trust to the fullest extent permitted by law against liability and expenses. There is no indemnification if, among other things, any such person is adjudicated liable to the Registrant or its shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. This description is modified in its entirety by the provisions of Section 10.02 of the Registrant's Trust Instrument contained in the Registration Statement as Exhibit 1, filed herewith. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER. The description of Cutler & Company, LLC under the caption "Management of the Trust" in both the Prospectus and the Statement of Additional Information, constituting Parts A and B, respectively, of this Registration Statement, is incorporated by reference herein. The following are the managing members of Cutler & Company, LLC, including their business connections that are of a substantial nature. The address of Cutler & Company, LLC is 503 Airport Road, Medford, Oregon 97504. Brooke Cutler Ashland, Chief Executive Officer and Manager. A founding shareholder of Cutler & Company, Inc. in 1977, and has been associated with the company since that time in various capacities such as Assistant to the Chairman, CFO and Secretary. Geoffrey W. Cutler, Senior Portfolio Manager, Investment Committee Member and Manager. A founding shareholder of Cutler & Company, Inc. in 1977, Mr. Cutler joined Cutler & Company, Inc. in 1978 in the capacity of President and has been associated with the company since that time. Stephen F. Brennan, Director of Marketing and Manager. Mr. Brennan joined Cutler & Company, Inc. in 1994, and has been associated with the company since that time. For the preceding three years, he had been Vice President, Marketing, Equitable Capital/ Alliance Capital Management. Michael T. Dieschbourg, CIMA, Managing Director, Investment Committee Member and Manager. Mr. Dieschbourg joined Cutler & Company, Inc. in 1995, and has been associated with the company since that time. For the preceding three years, he had been Senior Investment Management Consultant, Prudential Bache Securities. John F. Ray, Senior Portfolio Manager, Investment Committee Member and Manager. Mr. Ray joined Cutler & Company, Inc. in 1995, and has been associated with the company since that time. For the preceding three years, he had been Chairman and President, Commerce Capital Management, Inc. William G. Gossard, Director of Fixed Income, Investment Committee Member and Manager. Mr. Gossard joined Cutler & Company, Inc. in 1995, and has been associated with the company since that time. For the preceding three years, he had been Vice President and Senior Portfolio Manager, Fixed Income, Banc One Investment Advisors. Carol Fischer, Chief Operating Officer. Prior thereto, Ms. Fischer was associated with Cutler & Company, Inc., in various capacities. ITEM 29. PRINCIPAL UNDERWRITERS. (a) Forum Financial Services, Inc., Registrant's underwriter, serves as underwriter to Avalon Capital, Inc., Core Trust (Delaware), The CRM Funds, The Cutler Trust, Forum Funds, Inc., Monarch Funds, Norwest Advantage Funds, Norwest Select Funds, Sound Shore Fund, Inc., Stone Bridge Funds, Inc. and Trans Adviser Funds, Inc. (b) John Y. Keffer, President and Secretary of Forum Financial Services, Inc., is the Chairman and President of Registrant. David R. Keffer, Vice President and Treasurer of Forum Financial Services, Inc., is the Vice President, Assistant Treasurer and Assistant Secretary of Registrant. Their business address is Two Portland Square, Portland, Maine 04101. (c) Not Applicable. ITEM 30. LOCATION OF BOOKS AND RECORDS. The majority of the accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder are maintained at the offices of Forum Financial Services, Inc., Two Portland Square, Portland, Maine 04101, and Forum Financial Corp., Two Portland Square, Portland, Maine 04101. The records required to be maintained under Rule 31a-1(b)(1) with respect to journals of receipts and deliveries of securities and receipts and disbursements of cash are maintained at the offices of the Registrant's custodian. The records required to be maintained under Rule 31a- 1(b)(5), (6) and (9) are maintained at the offices of the Registrant's adviser, as listed in Item 28 hereof. ITEM 31. MANAGEMENT SERVICES. Not Applicable. ITEM 32. UNDERTAKINGS. Registrant undertakes to: (i) contain in its Trust Instrument or Bylaws provisions for assisting shareholder communications and for the removal of trustees substantially similar to those provided for in Section 16(c) of the Investment Company Act of 1940, except to the extent such provisions are mandatory or prohibited under applicable Delaware law. Notwithstanding any undertaking to the contrary in previous filings of its Registration Statement, the Registrant does not undertake to hold any meetings of shareholders except as required by applicable federal or state law or the provisions of its Trust Instrument. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this amendment to its Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Portland and State of Maine on the ___th day of March, 1996. THE CUTLER TRUST By: /s/ John Y. Keffer -------------------- John Y. Keffer President Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed below by the following persons on March ___, 1996. Signatures Title ---------- ----- (a) Principal Executive Officer /s/ John Y. Keffer President --------------------------- John Y. Keffer (b) Principal Financial and Accounting Officer /s/ Michael D. Martins Treasurer --------------------------- Michael D. Martins (c) All of the Trustees /s/ John Y. Keffer Trustee --------------------------- John Y. Keffer Brooke R. Ashland Trustee Kenneth R. Cutler Trustee Hatton Yoder, Jr. Trustee By: /s/ John Y. Keffer ----------------------- John Y. Keffer Attorney in Fact INDEX TO EXHIBITS Sequential Exhibit Page Number - ------- ----------- 1 Trust Instrument 2 By-Laws 5 Investment Advisory Agreement 6 Distribution Agreement 8 Custodian Agreement 9 (a) Management Agreement 9 (b) Transfer Agency and Fund Accounting Agreement 9 (c) Shareholder Service Plan 9 (d) Form of Shareholder Service Agreement 10 Opinion of Counsel 11 Consent of Independent Auditors 13 Investment Representation Letter OTHER: (A) Power of Attorney, Brooke R. Ashland, Trustee (B) Power of Attorney, Kenneth R. Cutler, Trustee (C) Power of Attorney, Hatten S. Yoder, Jr., Trustee (D) Power of Attorney, John Y. Keffer, Trustee EX-99.1 2 EX-99.1 EXHIBIT 1 THE CUTLER TRUST TRUST INSTRUMENT DATED OCTOBER 2, 1992 THE CUTLER TRUST TABLE OF CONTENTS PAGE ARTICLE I NAME AND DEFINITIONS Section 1.01 Name 1 Section 1.02 Definitions 1 ARTICLE II BENEFICIAL INTEREST Section 2.01 Shares of Beneficial Interest 2 Section 2.02 Issuance of Shares 2 Section 2.03 Register of Shares and Share Certificates 3 Section 2.04 Transfer of Shares 3 Section 2.05 Treasury Shares 3 Section 2.06 Establishment of Series 3 Section 2.07 Investment in the Trust 4 Section 2.08 Assets and Liabilities of Series 4 Section 2.09 No Preemptive Rights 6 Section 2.10 No Personal Liability of Shareholders 6 Section 2.11 Assent to Trust Instrument 6 ARTICLE III THE TRUSTEES Section 3.01 Management of the Trust 6 Section 3.02 Initial Trustees 7 Section 3.03 Term of Office 7 Section 3.04 Vacancies and Appointments 7 Section 3.05 Temporary Absence 8 Section 3.06 Number of Trustees 8 Section 3.07 Effect of Ending of a Trustee's Service 8 Section 3.08 Ownership of Assets of the Trust 8 ARTICLE IV POWERS OF THE TRUSTEES Section 4.01 Powers 9 Section 4.02 Issuance and Repurchase of Shares 12 Section 4.03 Trustees and Officers as Shareholders 12 Section 4.04 Action by the Trustees 12 Section 4.05 Chairman of the Trustees 13 Section 4.06 Principal Transactions 13 ARTICLE V EXPENSES OF THE TRUST 13 ARTICLE VI INVESTMENT ADVISER, PRINCIPAL UNDERWRITER, ADMINISTRATOR AND TRANSFER AGENT Section 6.01 Investment Adviser 14 Section 6.02 Principal Underwriter 15 Section 6.03 Administrator 15 Section 6.04 Transfer Agent 15 Section 6.05 Parties to Contract 15 Section 6.06 Provisions and Amendments 16 ARTICLE VII SHAREHOLDERS' VOTING POWERS AND MEETINGS Section 7.01 Voting Powers 16 Section 7.02 Meetings 17 Section 7.03 Quorum and Required Vote 17 ARTICLE VIII CUSTODIAN Section 8.01 Appointment and Duties 18 Section 8.02 Central Certificate System 18 ARTICLE IX DISTRIBUTIONS AND REDEMPTIONS Section 9.01 Distributions 19 Section 9.02 Redemptions 19 Section 9.03 Determination of Net Asset Value 20 and Valuation of Portfolio Assets Section 9.04 Suspension of the Right of Redemption 21 Section 9.05 Redemption of Shares in Order to 21 Qualify as Regulated Investment Company ARTICLE X LIMITATION OF LIABILITY AND INDEMNIFICATION Section 10.01 Limitation of Liability 21 Section 10.02 Indemnification 22 Section 10.03 Shareholders 23 ARTICLE XI MISCELLANEOUS Section 11.01 Trust Not a Partnership 23 Section 11.02 Trustee's Good Faith Action, 24 Expert Advice, No Bond or Surety Section 11.03 Establishment of Record Dates 24 Section 11.04 Termination of Trust 25 Section 11.05 Reorganization 25 Section 11.06 Filing of Copies, References, Headings 26 Section 11.07 Applicable Law 26 Section 11.08 Amendments 27 Section 11.09 Fiscal Year 27 Section 11.10 Provisions in Conflict with Law 27 - ii - THE CUTLER TRUST October 2, 1992 TRUST INSTRUMENT, made by John Y. Keffer, James F. Patterson and David I. Goldstein (the "Trustees"). WHEREAS, the Trustees desire to establish a business trust for the investment and reinvestment of funds contributed thereto; NOW THEREFORE, the Trustees declare that all money and property contributed to the trust hereunder shall be held and managed in trust under this Trust Instrument as herein set forth below. ARTICLE I NAME AND DEFINITIONS SECTION 1.01 NAME. The name of the trust created hereby is "The Cutler Trust." SECTION 1.02 DEFINITIONS. Wherever used herein, unless otherwise required by the context or specifically provided: (a) "Bylaws" means the Bylaws of the trust as adopted by the Trustees, as amended from time to time; (b) "Commission" has the meaning given it in the 1940 Act. "Affiliated Person", "Assignment," "Interested Person" and "Principal Underwriter" shall have the respective meanings given them in the 1940 Act, as modified by or interpreted by any applicable order or orders of the Commission or any rules or regulations adopted by or interpretive releases of the Commission thereunder. "Majority Shareholder Vote" shall have the same meaning as the term "vote of a majority of the outstanding voting securities" is given in the 1940 Act, as modified by or interpreted by any applicable order or orders of the Commission or any rules or regulations adopted by or interpretive releases of the Commission thereunder. (c) "Delaware Act" refers to Chapter 38 of Title 12 of the Delaware Code entitled "Treatment of Delaware Business Trusts," as amended from time to time. (d) "Net Asset Value" means the net asset value of each Series of the Trust determined in the manner provided in Article IX, Section 9.03 hereof; (e) "Outstanding Shares" means those Shares shown from time to time in the books of the Trust or its transfer agent as then issued and outstanding, but shall not include Shares which have been redeemed or repurchased by the Trust and which are at the time held in the treasury of the Trust; (f) "Series" means a series of Shares of the Trust established in accordance with the provisions of Article II, Section 2.06 hereof. - 3 - (g) "Shareholder" means a record owner of Outstanding Shares of the Trust; (h) "Shares" means the equal proportionate transferable units of beneficial interest into which the beneficial interest of each Series of the Trust or class thereof shall be divided and may include fractions of Shares as well as whole Shares; (i) The "Trust" means The Cutler Trust and reference to the Trust, when applicable to one or more Series of the Trust, shall refer to any such Series; (j) The "Trustees" means the person or persons who has or have signed this Trust Instrument, so long as he or they shall continue in office in accordance with the terms hereof, and all other persons who may from time to time be duly qualified and serving as Trustees in accordance with the provisions of Article III hereof and reference herein to a Trustee or to the Trustees shall refer to the individual Trustees in their capacity as Trustees hereunder; (k) "Trust Property" means any and all property, real or personal, tangible or intangible, which is owned or held by or for the account of one or more of the Trust or any Series, or the Trustees on behalf of the Trust or any Series. (l) The "1940 Act" means the Investment Company Act of 1940, as amended from time to time. ARTICLE II BENEFICIAL INTEREST SECTION 2.01 SHARES OF BENEFICIAL INTEREST. The beneficial interest in the Trust shall be divided into such transferable Shares of one or more separate and distinct Series or classes of a Series as the Trustees shall from time to time create and establish. The number of Shares of each Series, and class thereof, authorized hereunder is unlimited. Each Share shall have no par value. All Shares issued hereunder, including without limitation, Shares issued in connection with a dividend in Shares or a split or reverse split of Shares, shall be fully paid and nonassessable. SECTION 2.02 ISSUANCE OF SHARES. The Trustees in their discretion may, from time to time, without vote of the Shareholders, issue Shares, in addition to the then issued and outstanding Shares and Shares held in the treasury, to such party or parties and for such amount and type of consideration, subject to applicable law, including cash or securities, at such time or times and on such terms as the Trustees may deem appropriate, and may in such manner acquire other assets (including the acquisition of assets subject to, and in connection with, the assumption of liabilities) and businesses. In connection with any issuance of Shares, the Trustees may issue fractional Shares and Shares held in the treasury. The Trustees may from time to time divide or combine the Shares into a greater or lesser number without thereby changing the proportionate beneficial interests - 4 - in the Trust. Contributions to the Trust may be accepted for, and Shares shall be redeemed as, whole Shares and/or 1/1,000th of a Share or integral multiples thereof. SECTION 2.03 REGISTER OF SHARES AND SHARE CERTIFICATES. A register shall be kept at the principal office of the Trust or an office of the Trust's transfer agent which shall contain the names and addresses of the Shareholders of each Series, the number of Shares of that Series (or any class or classes thereof) held by them respectively and a record of all transfers thereof. As to Shares for which no certificate has been issued, such register shall be entitled to receive dividends or other distributions or otherwise to exercise or enjoy the rights of Shareholders. No Shareholder shall be entitled to receive payment of any dividend or other distribution, nor to have notice given to him as herein or in the Bylaws provided, until he has given his address to the transfer agent or such officer or other agent of the Trustees as shall keep the said register for entry thereon. No share certificates shall be issued by the Trust. SECTION 2.04 TRANSFER OF SHARES. Except as otherwise provided by the Trustees, Shares shall be transferable on the records of the Trust only by the record holder thereof or by his agent thereunto duly authorized in writing, upon delivery to the Trustees or the Trust's transfer agent of a duly executed instrument of transfer and such evidence of the genuineness of such execution and authorization and of such other matters as may be required by the Trustees. Upon such delivery the transfer shall be recorded on the register of the Trust. Until such record is made, the Shareholder of record shall be deemed to be the holder of such Shares for all purposes hereunder and neither the Trustees nor the Trust, nor any transfer agent or registrar nor any officer, employee or agent of the Trust shall be affected by any notice of the proposed transfer. SECTION 2.05 TREASURY SHARES. Shares held in the treasury shall, until reissued pursuant to Section 2.02 hereof, not confer any voting rights on the Trustees, nor shall such Shares be entitled to any dividends or other distributions declared with respect to the Shares. SECTION 2.06 ESTABLISHMENT OF SERIES. The Trust created hereby shall consist of one or more Series and separate and distinct records shall be maintained by the Trust for each Series and the assets associated with any such Series shall be held and accounted for separately from the assets of the Trust or any other Series. The Trustees shall have full power and authority, in their sole discretion, and without obtaining any prior authorization or vote of the Shareholders of any Series of the Trust, to establish and designate and to change in any manner any such Series of Shares or any classes of initial or additional Series and to fix such preferences, voting powers, rights and privileges of such Series or classes thereof as the Trustees may from time to time determine, to divide or combine the Shares or any Series or classes thereof into a greater or lesser number, to classify or reclassify any issued Shares or any Series or classes thereof into one or more Series or classes of Shares, and to take such other action with respect to the Shares as the Trustees may deem desirable. The - 5 - establishment and designation of any Series shall be effective upon the adoption of a resolution by a majority of the Trustees setting forth such establishment and designation and the relative rights and preferences of the Shares of such Series. A Series may issue any number of Shares and need not issue shares. At any time that there are no Shares outstanding of any particular Series previously established and designated, the Trustees may by a majority vote abolish that Series and the establishment and designation thereof. All references to Shares in this Trust Instrument shall be deemed to be Shares of any or all Series, or classes thereof, as the context may require. All provisions herein relating to the Trust shall apply equally to each Series of the Trust, and each class thereof, except as the context otherwise requires. Each Share of a Series of the Trust shall represent an equal beneficial interest in the net assets of such Series. Each holder of Shares of a Series shall be entitled to receive his pro rata share of all distributions made with respect to such Series. Upon redemption of his Shares, such Shareholder shall be paid solely out of the funds and property of such Series of the Trust. SECTION 2.07 INVESTMENT IN THE TRUST. The Trustees shall accept investments in any Series of the Trust from such persons and on such terms as they may from time to time authorize. At the Trustees' discretion, such investments, subject to applicable law, may be in the form of cash or securities in which the affected Series is authorized to invest, valued as provided in Article IX, Section 9.03 hereof. Investments in a Series shall be credited to each Shareholder's account in the form of full Shares at the Net Asset Value per Share next determined after the investment is received or accepted as may be determined by the Trustees; provided, however, that the Trustees may, in their sole discretion, (a) fix the Net Asset Value per Share of the initial capital contribution, (b) impose a sales charge upon investments in the Trust in such manner and at such time determined by the Trustees or (c) issue fractional Shares. SECTION 2.08 ASSETS AND LIABILITIES OF SERIES. All consideration received by the Trust for the issue or sale of Shares of a particular Series, together with all assets in which such consideration is invested or reinvested, all income, earnings, profits, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever from the same may be, shall be held and accounted for separately from the other assets of the Trust and of every other Series and may be referred to herein as "assets belonging to" that Series. The assets belonging to a particular Series shall belong to that Series for all purposes, and to no other Series, subject only to the rights of creditors of that Series. In addition, any assets, income, earnings, profits or funds, or payments and proceeds with respect thereto, which are not readily identifiable as belonging to any particular Series shall be allocated by the Trustees between and among one or more of the Series in such manner as the Trustees, in their sole discretion, deem fair and equitable. Each such allocation shall be - 6 - conclusive and binding upon the Shareholders of all Series for all purposes, and such assets, income, earnings, profits or funds, or payments and proceeds with respect thereto shall be assets belonging to that Series. The assets belonging to a particular Series shall be so recorded upon the books of the Trust, and shall be held by the Trustees in trust for the benefit of the holders of Shares of that Series. The assets belonging to each particular Series shall be charged with the liabilities of that Series and all expenses, costs, charges and reserves attributable to that Series. Any general liabilities, expenses, costs, charges or reserves of the Trust which are not readily identifiable as belonging to any particular Series shall be allocated and charged by the Trustees between or among any one or more of the Series in such manner as the Trustees in their sole discretion deem fair and equitable. Each such allocation shall be conclusive and binding upon the Shareholders of all Series for all purposes. Without limitation of the foregoing provisions of this Section 2.08, but subject to the right of the Trustees in their discretion to allocate general liabilities, expenses, costs, changes or reserves as herein provided, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular Series shall be enforceable against the assets of such Series only, and not against the assets of the Trust generally. Notice of this contractual limitation on inter-Series liabilities may, in the Trustee's sole discretion, be set forth in the certificate of trust of the Trust (whether originally or by amendment) as filed or to be filed in the Office of the Secretary of State of the State of Delaware pursuant to the Delaware Act, and upon the giving of such notice in the certificate of trust, the statutory provisions of Section 3804 of the Delaware Act relating to limitations on inter- Series liabilities (and the statutory effect under Section 3804 of setting forth such notice in the certificate of trust) shall become applicable to the Trust and each Series. Any person extending credit to, contracting with or having any claim against any Series may look only to the assets of that Series to satisfy or enforce any debt, with respect to that Series. No Shareholder or former Shareholder of any Series shall have a claim on or any right to any assets allocated or belonging to any other Series. SECTION 2.09 NO PREEMPTIVE RIGHTS. Shareholders shall have no preemptive or other right to subscribe to any additional Shares or other securities issued by the Trust or the Trustees, whether of the same or other Series. SECTION 2.10 NO PERSONAL LIABILITY OF SHAREHOLDER. Each Shareholder of the Trust and of each Series shall not be personally liable for the debts, liabilities, obligation and expenses incurred by, contracted for, or otherwise existing with respect to, the Trust or by or on behalf of any Series. The Trustees shall have no power to bind any Shareholder personally or to call upon any Shareholder for the payment of any sum of money or assessment whatsoever other than such as the Shareholder may at any time personally agree to pay by way of subscription for any Shares or otherwise. Every note, bond, contract or other undertaking issued by or on behalf of the Trust or the Trustees relating to the Trust or to a Series shall include a recitation limiting the obligation represented thereby to the Trust or to one or more Series - 7 - and its or their assets (but the omission of such a recitation shall not operate to bind any Shareholder or Trustee of the Trust). SECTION 2.11 ASSENT TO TRUST INSTRUMENT. Every Shareholder, by virtue of having purchased a Share shall become a Shareholder and shall be held to have expressly assented and agreed to be bound by the terms hereof. ARTICLE III THE TRUSTEES SECTION 3.01 MANAGEMENT OF THE TRUST. The Trustees shall have exclusive and absolute control over the Trust Property and over the business of the Trust to the same extent as if the Trustees were the sole owners of the Trust Property and business in their own right, but with such powers of delegation as may be permitted by this Trust Instrument. The Trustees shall have power to conduct the business of the Trust and carry on its operations in any and all of its branches and maintain offices both within and without the State of Delaware, in any and all states of the United States of America, in the District of Columbia, in any and all commonwealths, territories, dependencies, colonies, or possessions of the United States of America, and in any foreign jurisdiction and to do all such other things and execute all such instruments as they deem necessary, proper or desirable in order to promote the interests of the Trust although such things are not herein specifically mentioned. Any determination as to what is in the interests of the Trust made by the Trustees in good faith shall be conclusive. In construing the provisions of this Trust Instrument, the presumption shall be in favor of a grant of power to the Trustees. The enumeration of any specific power in this Trust Instrument shall not be construed as limiting the aforesaid power. The powers of the Trustees may be exercised without order of or resort to any court. Except for the Trustees named herein or appointed to fill vacancies pursuant to Section 3.04 of this Article III, the Trustees shall be elected by the Shareholders owning of record a plurality of the Shares voting at a meeting of Shareholders. Such a meeting shall be held on a date fixed by the Trustees. In the event that less than a majority of the Trustees holding office have been elected by Shareholders, the Trustees then in office will call a Shareholders' meeting for the election of Trustees. SECTION 3.02 INITIAL TRUSTEES. The initial Trustees shall be the persons named herein. On a date fixed by the Trustees, the Shareholders shall elect at least three (3) but not more than twelve (12) Trustees, as specified by the Trustees pursuant to Section 3.06 of this Article III. SECTION 3.03 TERM OF OFFICE. The Trustees shall hold office during the lifetime of this Trust, and until its termination as herein provided; except (a) that any Trustee may resign his trust by written instrument signed by him and delivered to the other Trustees, which - 8 - shall take effect upon such delivery or upon such later date as is specified therein; (b) that any Trustee may be removed at any time by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal, specifying the date when such removal shall become effective; (c) that any Trustee who requests in writing to be retired or who has died, become physically or mentally incapacitated by reason of disease or otherwise, or is otherwise unable to serve, may be retired by written instrument signed by a majority of the other Trustees, specifying the date of his retirement; and (d) that a Trustee may be removed at any meeting of the Shareholders of the Trust by a vote of Shareholders owning at least two-thirds of the Outstanding Shares. SECTION 3.04 VACANCIES AND APPOINTMENTS. In case of the declination to serve, death, resignation, retirement, removal, physical or mental incapacity by reason of disease or otherwise, or a Trustee is otherwise unable to serve, or an increase in the number of Trustees, a vacancy shall occur. Whenever a vacancy in the Board of Trustees shall occur, until such vacancy is filled, the other Trustees shall have all the powers hereunder and the certificate of the other Trustees of such vacancy shall be conclusive. In the case of an existing vacancy, the remaining Trustees shall fill such vacancy by appointing such other person as they in their discretion shall see fit consistent with the limitations under the 1940 Act. Such appointment shall be evidenced by a written instrument signed by a majority of the Trustees in office or by resolution of the Trustees, duly adopted, which shall be recorded in the minutes of a meeting of the Trustees, whereupon the appointment shall take effect. An appointment of a Trustee may be made by the Trustees then in office in anticipation of a vacancy to occur by reason of retirement, resignation or increase in number of Trustees effective at a later date, provided that said appointment shall become effective only at or after the effective date of said retirement, resignation or increase in number of Trustees. As soon as any Trustee appointed pursuant to this Section 3.04 shall have accepted this trust, the trust estate shall vest in the new Trustee or Trustees, together with the continuing Trustees, without any further act or conveyance, and he shall be deemed a Trustee hereunder. SECTION 3.05 TEMPORARY ABSENCE. Any Trustee may, by power of attorney, delegate his power for a period not exceeding six months at any time to any other Trustee or Trustees, provided that in no case shall less than two Trustees personally exercise the other powers hereunder except as herein otherwise expressly provided. SECTION 3.06 NUMBER OF TRUSTEES. The number of Trustees shall be at least three (3), and thereafter shall be such number as shall be fixed from time to time by a majority of the Trustees, provided, however, that the number of Trustees shall in no event be more than twelve (12). SECTION 3.07 EFFECT OF ENDING OF A TRUSTEE'S SERVICE. The declination to serve, death, resignation, retirement, removal, incapacity, or inability of the Trustees, or any one of them, shall not - 9 - operate to terminate the trust or to revoke any existing agency created pursuant to the terms of this Trust Instrument. SECTION 3.08 OWNERSHIP OF ASSETS OF THE TRUST. The assets of the Trust and of each Series shall be held separate and apart for any assets now or hereafter held in any capacity other than as Trustee hereunder by the Trustees or any successor Trustees. Legal title in all of the assets of the Trust and the right to conduct any business shall at all times be considered as vested in the Trustees on behalf of the Trust, except that the Trustees may cause legal title to any Trust Property to be held by, or in the name of the Trust, or in the name of any person as nominee. No Shareholder shall be deemed to have a severable ownership in any individual asset of the Trust or of any Series or any right of partition or possession thereof, but each Shareholder shall have, except as otherwise provided for herein, a proportionate undivided beneficial interest in the Trust or Series. The Shares shall be personal property giving only the rights specifically set forth in this Trust Instrument. ARTICLE IV POWERS OF THE TRUSTEES SECTION 4.01 POWERS. The Trustees in all instances shall act as principals, and are and shall be free from the control of the Shareholders. The Trustees shall have full power and authority to do any and all acts and to make and execute any and all contracts and instruments that they may consider necessary or appropriate in connection with the management of the Trust. The Trustees shall not in any way be bound or limited by present or future laws or customs in regard to trust investments, but shall have full authority and power to make any and all investments which they, in their sole discretion, shall deem proper to accomplish the purpose of this Trust without recourse to any court or other authority. Subject to any applicable limitation in this Trust Instrument or the Bylaws of the Trust, the Trustees shall have the power and authority: (a) To invest and reinvest cash and other property, and to hold cash or other property uninvested, without in any event being bound or limited by any present or future law or custom in regard to investments by trustees, and to sell, exchange, lend, pledge, mortgage, hypothecate, write options on and lease any or all of the assets of the Trust: (b) To operate as and carry on the business of an investment company, and exercise all the powers necessary and appropriate to the conduct of such operations; (c) To borrow money and in this connection issue notes or other evidence of indebtedness; to secure borrowings by mortgaging, pledging or otherwise subjecting as security the Trust Property; to endorse, guarantee, or undertake the performance of an obligation or engagement of any other Person and to lend Trust Property; (d) To provide for the distribution of interests of the Trust either through a principal underwriter in the manner hereinafter - 10 - provided for or by the Trust itself, or both, or otherwise pursuant to a plan of distribution of any kind; (e) To adopt Bylaws not inconsistent with this Trust Instrument providing for the conduct of the business of the Trust and to amend and repeal them to the extent that they do not reserve that right to the Shareholders; such Bylaws shall be deemed incorporated and included in this Trust Instrument; (f) To elect and remove such officers and appoint and terminate such agents as they consider appropriate; (g) To employ one or more banks, trust companies or companies that are members of a national securities exchange or such other entities as the Commission may permit as custodians of any assets of the Trust subject to any conditions set forth in this Trust Instrument or in the Bylaws; (h) To retain one or more transfer agents and shareholder servicing agents, or both; (i) To set record dates in the manner provided herein or in the Bylaws; (j) To delegate such authority as they consider desirable to any officers of the Trust and to any investment adviser, manager, custodian, underwriter or other agent or independent contractor; (k) To sell or exchange any or all of the assets of the Trust, subject to the provisions of Article XI, subsection 11.04(b) hereof; (l) To vote or give assent, or exercise any rights of ownership, with respect to stock or other securities or property; and to execute and deliver powers of attorney to such person or persons as the Trustees shall deem proper, granting to such person or persons such power and discretion with relation to securities or property as the Trustees shall deem proper; (m) To exercise powers and rights of subscription or otherwise which in any manner arise out of ownership of securities; (n) To hold any security or property in a form not indicating any trust, whether in bearer, book entry, unregistered or other negotiable form; or either in the name of the Trust or in the name of a custodian or a nominee or nominees, subject in either case to proper safeguards according to the usual practice of Delaware business trusts or investment companies; (o) To establish separate and distinct Series with separately defined investment objectives and policies and distinct investment purposes in accordance with the provisions of Article II hereof and to establish classes of such Series having relative rights, powers and duties as they may provide consistent with applicable law; - 11 - (p) Subject to the provisions of Section 3804 of the Delaware Act, to allocate assets, liabilities and expenses of the Trust to a particular Series or to apportion the same between or among two or more Series, provided that any liabilities or expenses incurred by a particular Series shall be payable solely out of the assets belonging to that Series as provided for in Article II hereof; (q) To consent to or participate in any plan for the reorganization, consolidation or merger of any corporation or concern, any security of which is held in the Trust; to consent to any contract, lease, mortgage, purchase, or sale of property by such corporation or concern, and to pay calls or subscriptions with respect to any security held in the Trust; (r) To compromise, arbitrate, or otherwise adjust claims in favor of or against the Trust or any matter in controversy including, but not limited to, claims for taxes; (s) To make distributions of income and of capital gains to Shareholders in the manner provided herein; (t) To establish, from time to time, a minimum investment for Shareholders in the Trust or in one or more Series or class, and to require the redemption of the Shares of any Shareholders whose investment is less than such minimum upon giving notice to such Shareholder; (u) To establish one or more committees, to delegate any of the powers of the Trustees to said committees and to adopt a committee charter providing for such responsibilities, membership (including Trustees, officers or other agents of the Trust therein) and any other characteristics of said committees as the Trustees may deem proper. Notwithstanding the provisions of this Article IV, and in addition to such provisions or any other provision of this Trust Instrument or of the Bylaws, the Trustees may by resolution appoint a committee consisting of less than the whole number of Trustees then in office, which committee may be empowered to act for and bind the Trustees and the Trust, as if the acts of such committee were the acts of all the Trustees then in office, with respect to the institution, prosecution, dismissal, settlement, review or investigation of any action, suit or proceeding which shall be pending or threatened to be brought before any court, administrative agency or other adjudicatory body; (v) To interpret the investment policies, practices or limitations of any Series; (w) To establish a registered office and have a registered agent in the state of Delaware; and (x) In general to carry on any other business in connection with or incidental to any of the foregoing powers, to do everything necessary, suitable or proper for the accomplishment of any purpose or the attainment of any object or the furtherance of any power hereinbefore set forth, either alone or in association with others, and - 12 - to do every other act or thing incidental or appurtenant to or growing out of or connected with the aforesaid business or purposes, objects or powers. The foregoing clauses shall be construed as objects and powers, and the foregoing enumeration of specific powers shall not be held to limit or restrict in any manner the general powers of the Trustees. Any action by one or more of the Trustees in their capacity as such hereunder shall be deemed an action on behalf of the Trust or the applicable Series, and not an action in an individual capacity. The Trustees shall not be limited to investing in obligations maturing before the possible termination of the Trust. No one dealing with the Trustees shall be under any obligation to make any inquiry concerning the authority of the Trustees, or to see the application of any payments make or property transferred to the Trustees or upon their order. SECTION 4.02 ISSUANCE AND REPURCHASE OF SHARES. The Trustees shall have the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold, resell, reissue, dispose of, and otherwise deal in Shares and, subject to the provisions set forth in Article II and Article IX, to apply to any such repurchase, redemption, retirement, cancellation or acquisition of Shares any funds or property of the Trust, or the particular Series of the Trust, with respect to which such Shares are issued. SECTION 4.03 TRUSTEES AND OFFICERS AS SHAREHOLDERS. Any Trustee, officer or other agent of the Trust may acquire, own and dispose of Shares to the same extent as if he were not a Trustee, officer or agent; and the Trustees may issue and sell or cause to be issued and sold Shares to and buy such Shares from any such person or any firm or company in which he is interested, subject only to the general limitations herein contained as to the sale and purchase of such Shares; and all subject to any restrictions which may be contained in the Bylaws. SECTION 4.04 ACTION BY THE TRUSTEES. The Trustees shall act by majority vote at a meeting duly called or by unanimous written consent without a meeting or by telephone meeting provided a quorum of Trustees participate in any such telephone meeting, unless the 1940 Act requires that a particular action be taken only at a meeting at which the Trustees are present in person. At any meeting of the Trustees, a majority of the Trustees shall constitute a quorum. Meetings of the Trustees may be called orally or in writing by the Chairman of the Board of Trustees or by any two other Trustees. Notice of the time, date and place of all meetings of the Trustees shall be given by the party calling the meeting to each Trustee by telephone, facsimile or other electronic mechanism sent to his home or business address at least twenty-four hours in advance of the meeting or by written notice mailed to his home or business address at least seventy-two hours in advance of the meeting. Notice need not be given to any Trustee who attends the - 13 - meeting without objecting to the lack of notice or who executes a written waiver of notice with respect to the meeting. Any meeting conducted by telephone shall be deemed to take place at the principal office of the Trust, as determined by the Bylaws or by the Trustees. Subject to the requirements of the 1940 Act, the Trustees by majority vote may delegate to any one or more of their number their authority to approve particular matters or take particular actions on behalf of the Trust. Written consents or waivers of the Trustees may be executed in one or more counterparts. Execution of a written consent or waiver and delivery thereof to the Trust may be accomplished by facsimile or other similar electronic mechanism. SECTION 4.05 CHAIRMAN OF THE TRUSTEES. The Trustees shall appoint one of their number to be Chairman of the Board of Trustees. The Chairman shall preside at all meetings of the Trustees, shall be responsible for the execution of policies established by the Trustees and the administration of the Trust, and may be (but is not required to be) the chief executive, financial and/or accounting officer of the Trust. SECTION 4.06 PRINCIPAL TRANSACTIONS. Except to the extent prohibited by applicable law, the Trustees may, on behalf of the Trust, buy any securities from or sell any securities to, or lend any assets of the Trust to, any Trustee or officer of the Trust or any firm of which any such Trustee or officer is a member acting as principal, or have any such dealings with any investment adviser, administrator, distributor or transfer agent for the Trust or with any Interested Person of such person; and the Trust may employ any such person, or firm or company in which such person is an Interested Person, as broker, legal counsel, registrar, investment adviser, administrator, distributor, transfer agent, dividend disbursing agent, custodian or in any other capacity upon customary terms. ARTICLE V EXPENSES OF THE TRUST (a) Subject to the provisions of Article II, Section 2.08 hereof, the Trustees shall be reimbursed from the Trust estate or the assets belonging to the appropriate Series for their expenses and disbursements, including, without limitation, interest charges, taxes, brokerage fees and commissions; expenses of issue, repurchase and redemption of shares; certain insurance premiums; applicable fees, interest charges and expenses of third parties, including the Trust's investment advisers, managers, administrators, distributors, custodian, transfer agent and fund accountant; fees of pricing, interest, dividend, credit and other reporting services; costs of membership in trade associations; telecommunications expenses; funds transmission expenses; auditing, legal and compliance expenses; costs of forming the Trust and maintaining corporate existence; costs of preparing and printing the Trust's prospectuses, statements of additional information and shareholder reports and delivering them to existing shareholders; expenses of meetings of shareholders and proxy solicitations therefore; - 14 - costs of maintaining books and accounts; costs of reproduction, stationery and supplies; fees and expenses of the Trust's trustees; compensation of the Trust's officers and employees and costs of other personnel performing services for the Trust; costs of Trustee meetings; Securities and Exchange Commission registration fees and related expenses; state or foreign securities laws registration fees and related expenses and for such non-recurring items as may arise, including litigation to which the Trust (or a Trustee acting as such) is a party, and for all losses and liabilities by them incurred in administering the Trust, and for the payment of such expenses, disbursements, losses and liabilities the Trustees shall have a lien on the assets belonging to the appropriate Series, or in the case of an expense allocable to more than one Series, on the assets of each such Series, prior to any rights or interests of the Shareholders thereto. This section shall not preclude the Trust from directly paying any of the aforementioned fees and expenses. (b) Notwithstanding anything to the contrary, the Trust and each Series will not commence operations or publicly sell Shares unless and until the Trust has entered into a contract with Cutler & Company, Inc. whereby Cutler & Company, Inc. has agreed to pay for or reimburse the Trust for all expenses of the Trust and Series except taxes to which the Trust or a Series may be liable and brokerage expenses. ARTICLE VI INVESTMENT ADVISER, PRINCIPAL UNDERWRITER, ADMINISTRATOR AND TRANSFER AGENT SECTION 6.01 INVESTMENT ADVISER. The Trustees may in their discretion, from time to time, enter into an investment advisory contract or contracts with respect to the Trust or any Series whereby the other party or parties to such contract or contracts shall undertake to furnish the Trustees with such investment advisory, statistical and research facilities and services and such other facilities and services, if any, all upon such terms and conditions as may be prescribed in the Bylaws or as the Trustees may in their discretion determine (such terms and conditions not to be inconsistent with the provisions of this Trust Instrument or of the Bylaws). Notwithstanding any other provision of this Trust Instrument, the Trustees may authorize any investment adviser (subject to such general or specific instructions as the Trustees may from time to time adopt) to effect purchases, sales or exchanges of portfolio securities, other investment instruments of the Trust, or other Trust Property on behalf of the Trustees, or may authorize any officer, agent, or Trustee to effect such purchases, sales or exchanges pursuant to recommendations of the investment adviser (and all without further action by the Trustees). Any such purchases, sales and exchanges shall be deemed to have been authorized by all of the Trustees. The Trustees may authorize the investment adviser to employ, from time to time, one or more sub-advisers to perform such of the acts and services of the investment adviser, and upon such terms and conditions, as may be agreed upon between the investment adviser and sub-adviser (such terms and conditions not to be inconsistent with the provisions of this Trust Instrument or of the Bylaws). Any reference - 15 - in this Trust Instrument to the investment adviser shall be deemed to include such sub-advisers, unless the context otherwise requires. SECTION 6.02 PRINCIPAL UNDERWRITER. The Trustees may in their discretion from time to time enter into an exclusive or non-exclusive underwriting contract or contracts providing for the sale of Shares, whereby the Trust may either agree to sell Shares to the other party to the contract or appoint such other party its sales agent for such Shares. In either case, the contract shall be on such terms and conditions as may be prescribed in the Bylaws and as the Trustees may in their discretion determine (such terms and conditions not to be inconsistent with the provisions of this Trust Instrument or of the Bylaws); and such contract may also provide for the repurchase or sale of Shares by such other party as principal or as agent of the Trust. SECTION 6.03 ADMINISTRATION. The Trustees may in their discretion from time to time enter into one or more management or administrative contracts whereby the other party or parties shall undertake to furnish the Trustees with management or administrative services. The contract or contracts shall be on such terms and conditions as may be prescribed in the Bylaws and as the Trustees may in their discretion determine (such terms and conditions not to be inconsistent with the provisions of this Trust Instrument or of the Bylaws). SECTION 6.04 TRANSFER AGENT. The Trustees may in their discretion from time to time enter into one or more transfer agency and Shareholder service contracts whereby the other party or parties shall undertake to furnish the Trustees with transfer agency and Shareholder services. The contract or contracts shall be on such terms and conditions as may be prescribed in the Bylaws and as the Trustees may in their discretion determine (such terms and conditions not to be inconsistent with the provisions of this Trust Instrument or of the Bylaws). SECTION 6.05 PARTIES TO CONTRACT. Any contract of the character described in Sections 6.01, 6.02, 6.03 and 6.04 of this Article VI or any contract of the character described in Article VIII hereof may be entered into with any corporation, firm, partnership, trust or association, although one or more of the Trustees or officers of the Trust may be an officer, director, trustee, shareholder, or member of such other party to the contract, and no such contract shall be invalidated or rendered void or voidable by reason of the existence of any relationship, nor shall any person holding such relationship be disqualified from voting on or executing the same in his capacity as Shareholder and/or Trustee, nor shall any person holding such relationship be liable merely by reason of such relationship for any loss or expense to the Trust under or by reason of said contract or accountable for any profit realized directly or indirectly therefrom, provided that the contract when entered into was not inconsistent with the provisions of this Article VI or Article VIII hereof or of the Bylaws. The same person (including a firm, corporation, partnership, trust, or association) may be the other party to contracts entered into pursuant to Sections 6.01, 6.02, 6.03 and 6.04 of this Article VI or - 16 - pursuant to Article VIII hereof, and any individual may be financially interested or otherwise affiliated with persons who are parties to any or all of the contracts mentioned in this Section 6.05. SECTION 6.06 PROVISIONS AND AMENDMENTS. Any contract entered into pursuant to Sections 6.01 or 6.02 of this Article VI shall be consistent with and subject to the requirements of Section 15 of the 1940 Act, if applicable, or other applicable Act of Congress hereafter enacted with respect to its continuance in effect, its termination, and the method of authorization and approval of such contract or renewal thereof, and no amendment to any contract entered into pursuant to Section 6.01 of this Article VI shall be effective unless assented to in a manner consistent with the requirements of said Section 15, as modified by any applicable rule, regulation or order of the Commission. ARTICLE VII SHAREHOLDERS' VOTING POWERS AND MEETINGS SECTION 7.01 VOTING POWERS. The Shareholders shall have power to vote only (a) for the election of Trustees as provided in Article III, Sections 3.01 and 3.02 hereof, (b) for the removal of Trustees as provided in Article III, Section 3.03(d) hereof, (c) with respect to any investment advisory contract as provided in Article VI, Sections 6.01 and 6.06 hereof, and (d) with respect to such additional matters relating to the Trust as may be required by law, by this Trust Instrument, or the Bylaws or any registration of the Trust with the Commission or any State, or as the Trustees may consider desirable. On any matter submitted to a vote of the Shareholders, all Shares shall be voted separately by individual Series, except (i) when required by the 1940 Act, Shares shall be voted in the aggregate and not by individual Series; and (ii) when the Trustees have determined that the matter affects the interests of more than one Series, then the Shareholders of all such Series shall be entitled to vote thereon. The Trustees may also determine that a matter affects only the interests of one or more classes of a Series, in which case any such matter shall be voted on by such class or classes. Each whole Share shall be entitled to one vote as to any matter on which it is entitled to vote, and each fractional Share shall be entitled to a proportionate fractional vote. There shall be no cumulative voting in the election of Trustees. Shares may be voted in person or by proxy or in any manner provided for in the Bylaws. A proxy may be given in writing. The Bylaws may provide that proxies may also, or may instead, be given by any electronic or telecommunications device or in any other manner. Notwithstanding anything else herein or in the Bylaws, in the event a proposal by anyone other than the officers or Trustees of the Trust is submitted to a vote of the Shareholders of one or more Series or of the Trust, or in the event of any proxy contest or proxy solicitation or proposal in opposition to any proposal by the officers or Trustees of the Trust, Shares may be voted only in person or by written proxy. Until Shares are issued, the Trustees may exercise all rights of Shareholders and may take any action required or permitted by law, this Trust Instrument or any of the Bylaws of the Trust to be taken by Shareholders. - 17 - SECTION 7.02 MEETINGS. The first Shareholders' meeting shall be held in order to elect Trustees as specified in Section 3.02 of Article III hereof at the principal office of the Trust or such other place as the Trustees may designate. Meetings may be held within or without the State of Delaware. Special meetings of the Shareholders of any Series may be called by the Trustees and shall be called by the Trustees upon the written request of Shareholders owning at least one-tenth of the Outstanding Shares entitled to vote. Whenever ten or more Shareholders meeting the qualifications set forth in Section 16(c) of the 1940 Act, as the same may be amended from time to time, seek the opportunity of furnishing materials to the other Shareholders with a view to obtaining signatures on such a request for a meeting, the Trustees shall comply with the provisions of said Section 16(c) with respect to providing such Shareholders access to the list of the Shareholders of record of the Trust or the mailing of such materials to such Shareholders of record, subject to any rights provided to the Trust or any Trustees provided by said Section 16(c). Notice shall be sent, by First Class Mail or such other means determined by the Trustees, at least 15 days prior to any such meeting. SECTION 7.03 QUORUM AND REQUIRED VOTE. One-third of Shares entitled to vote in person or by proxy shall be a quorum for the transaction of business at a Shareholders' meeting, except that where any provision of law or of this Trust Instrument permits or requires that holders of any Series shall vote as a Series (or that holders of a class shall vote as a class), then one-third of the aggregate number of Shares of that Series (or that class) entitled to vote shall be necessary to constitute a quorum for the transaction of business by that Series (or that class). Any lesser number shall be sufficient for adjournments. Any adjourned session or sessions may be held, within a reasonable time after the date set for the original meeting, without the necessity of further notice. Except when a larger vote is required by law or by any provision of this Trust Instrument or the Bylaws, a majority of the Shares voted in person or by proxy shall decide any questions and a plurality shall elect a Trustee, provided that where any provision of law or of this Trust Instrument permits or requires that the holders of any Series shall vote as a Series (or that the holders of any class shall vote as a class), then a majority of the Shares present in person or by proxy of that Series (or class), voted on the matter in person or by proxy shall decide that matter insofar as that Series (or class) is concerned. Shareholders may act by unanimous written consent. Actions taken by Series (or class) may be consented to unanimously in writing by Shareholders of that Series (or class). ARTICLE VIII CUSTODIAN SECTION 8.01 APPOINTMENT AND DUTIES. The Trustees shall at all times employ a bank, a company that is a member of a national securities exchange, or a trust company, each having capital, surplus and undivided profits of at least twenty million dollars ($20,000,000) and is a member of the Depository Trust Company as custodian with authority as its - 18 - agent, but subject to such restrictions, limitations and other requirements, if any, as may be contained in the Bylaws of the Trust: (a) to hold the securities owned by the Trust and deliver the same upon written order or oral order confirmed in writing; (b) to receive and receipt for any moneys due to the Trust and deposit the same in its own banking department or elsewhere as the Trustees may direct; and (c) to disburse such funds upon orders or vouchers. The Trustees may also authorize the custodian to employ one or more sub- custodians from time to time to perform such of the acts and services of the custodian, and upon such terms and conditions, as may be agreed upon between the custodian and such sub-custodian and approved by the Trustees, provided that in every case such sub-custodian shall be a bank, a company that is a member of a national securities exchange, or a trust company organized under the laws of the United States or one of the states thereof and having capital, surplus and undivided profits of at least twenty million dollars ($20,000,000) and is a member of the Depository Trust Company or such other person as may be permitted by the Commission or otherwise in accordance with the 1940 Act. SECTION 8.02 CENTRAL CERTIFICATE SYSTEM. Subject to such rules, regulations and orders as the Commission may adopt, the Trustees may direct the custodian to deposit all or any part of the securities owned by the Trust in a system for the central handling of securities established by a national securities exchange or a national securities association registered with the Commission under the Securities Exchange Act of 1934, as amended, or such other person as may be permitted by the Commission, or otherwise in accordance with the 1940 Act, pursuant to which system all securities of any particular class or series of any issuer deposited within the system are treated as fungible and may be transferred or pledged by bookkeeping entry without physical delivery of such securities, provided that all such deposits shall be subject to withdrawal only upon the order of the Trust or its custodians, sub-custodians or other agents. ARTICLE IX DISTRIBUTIONS AND REDEMPTIONS SECTION 9.01 DISTRIBUTIONS. (a) The Trustees may from time to time declare and pay dividends or other distributions with respect to any Series. The amount of such dividends or distributions and the payment of them and whether they are in cash or any other Trust Property shall be wholly in the discretion of the Trustees. (b) Dividends and other distributions may be paid or made to the Shareholders of record at the time of declaring a dividend or other distribution or among the Shareholders of record at such other date or time or dates or times as the Trustees shall determine, which dividends or distributions, at the election of the Trustees, may be paid pursuant to a standing resolution or resolutions adopted only once or with such frequency as the Trustees may determine. The Trustees may adopt and offer to Shareholders such dividend reinvestment plans, cash dividend payout plans or related plans as the Trustees shall deem appropriate. - 19 - (c) Anything in this Trust Instrument to the contrary notwithstanding, the Trustees may at any time declare and distribute a stock dividend pro rata among the Shareholders of a particular Series, or class thereof, as of the record date of that Series fixed as provided in Subsection 9.01(b) hereof. SECTION 9.02 REDEMPTIONS. In case any holder of record of Shares of a particular Series desires to dispose of his Shares or any portion thereof, he may deposit at the office of the transfer agent or other authorized agent of that Series a written request or such other form of request as the Trustees may from time to time authorize, requesting that the Series purchase the Shares in accordance with this Section 9.02; and the Shareholder so requesting shall be entitled to require the Series to purchase, and the Series or the principal underwriter of the Series shall purchase his said Shares, but only at the Net Asset Value thereof (as described in Section 9.03 of this Article IX). The Series shall make payment for any such Shares to be redeemed, as aforesaid, in cash or property from the assets of that Series and payment for such Shares shall be made by the Series or the principal underwriter of the Series to the Shareholder of record within seven (7) days after the date upon which the request is effective. Upon redemption, shares shall become Treasury shares and may be re-issued from time to time. SECTION 9.03 DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS. The term "Net Asset Value" of any Series shall mean that amount by which the assets of that Series exceed its liabilities, all as determined by or under the direction of the Trustees. Such value shall be determined separately for each Series and shall be determined on such days and at such times as the Trustees may determine. Such determination shall be made with respect to securities for which market quotations are readily available, at the market value of such securities; and with respect to other securities and assets, at the fair value as determined in good faith by the Trustees; provided, however, that the Trustees, without Shareholder approval, may alter the method of valuing portfolio securities insofar as permitted under the 1940 Act and the rules, regulations and interpretations thereof promulgated or issued by the Commission or insofar as permitted by any Order of the Commission applicable to the Series. The Trustees may delegate any of their powers and duties under this Section 9.03 with respect to valuation of assets and liabilities. The resulting amount, which shall represent the total Net Asset Value of the particular Series, shall be divided by the total number of shares of that Series outstanding at the time and the quotient so obtained shall be the Net Asset Value per Share of that Series. At any time the Trustees may cause the Net Asset Value per Share last determined to be determined again in similar manner and may fix the time when such redetermined value shall become effective. If, for any reason, the net income of any Series, determined at any time, is a negative amount, the Trustees shall have the power with respect to that Series (a) to offset each Shareholder's pro rata share of such negative amount from the accrued dividend account of such Shareholder, (b) to reduce the number of Outstanding Shares of such Series by reducing the number of Shares in the account of each Shareholder by a pro rata portion of that number of full and fractional Shares which represents - 20 - the amount of such excess negative net income, (c) to cause to be recorded on the books of such Series an asset account in the amount of such negative net income (provided that the same shall thereupon become the property of such Series with respect to such Series and shall not be paid to any Shareholder), which account may be reduced by the amount, of dividends declared thereafter upon the Outstanding Shares of such Series on the day such negative net income is experienced, until such asset account is reduced to zero; (d) to combine the methods described in clauses (a) and (b) and (c) of this sentence; or (e) to take any other action they deem appropriate, in order to cause (or in order to assist in causing) the Net Asset Value per Share of such Series to remain at a constant amount per Outstanding Share immediately after each such determination and declaration. The Trustees shall also have the power not to declare a dividend out of net income for the purpose of causing the Net Asset Value per Share to be increased. The Trustees shall not be required to adopt, but may at any time adopt, discontinue or amend the practice of maintaining the Net Asset Value per Share of the Series at a constant Amount. SECTION 9.04 SUSPENSION OF THE RIGHT OF REDEMPTION. The Trustees may declare a suspension of the right of redemption or postpone the date of payment as permitted under the 1940 Act. Such suspension shall take effect at such time as the Trustees shall specify but not later than the close of business on the business day next following the declaration of suspension, and thereafter there shall be no right of redemption or payment until the Trustees shall declare the suspension at an end. In the case of a suspension of the right of redemption, a Shareholder may either withdraw his request for redemption or receive payment based on the Net Asset Value per Share next determined after the termination of the suspension. In the event that any Series is divided into classes, the provisions of this Section 9.03, to the extent applicable as determined in the discretion of the Trustees and consistent with applicable law, may be equally applied to each such class. SECTION 9.05 REDEMPTION OF SHARES IN ORDER TO QUALIFY AS REGULATED INVESTMENT COMPANY. If the Trustees shall, at any time and in good faith, be of the opinion that direct or indirect ownership of Shares of any Series has or may become concentrated in any Person to an extent which would disqualify any Series as a regulated investment company under the Internal Revenue Code, then the Trustees shall have the power (but not the obligation) by lot or other means deemed equitable by them (a) to call for redemption by any such person of a number, or principal amount, of Shares sufficient to maintain or bring the direct or indirect ownership of Shares into conformity with the requirements for such qualification and (b) to refuse to transfer or issue Shares to any person whose acquisition of Shares in question would result in such disqualification. The redemption shall be effected at the redemption price and in the manner provided in this Article IX. The holders of Shares shall upon demand disclose to the Trustees in writing such information with respect to direct and indirect ownership of Shares as the Trustees deem necessary to comply with the requirements of any taxing authority. - 21 - ARTICLE X LIMITATION OF LIABILITY AND INDEMNIFICATION SECTION 10.01 LIMITATION OF LIABILITY. A Trustee, when acting in such capacity, shall not be personally liable to any person other than the Trust or beneficial owner for any act, omission or obligation of the Trust or any Trustee. A Trustee shall not be liable for any act or omission or any conduct whatsoever in his capacity as Trustee, provided that nothing contained herein or in the Delaware Act shall protect any Trustee against any liability to the Trust or to Shareholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee hereunder. SECTION 10.02 INDEMNIFICATION. (a) Subject to the exceptions and limitations contained in Subsection 10.02(b): (i) every person who is, or has been, a Trustee or officer of the Trust (hereinafter referred to as a "Covered Person") shall be indemnified by the Trust to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been a Trustee or officer and against amounts paid or incurred by him in the settlement thereof; (ii) the words "claim," "action," "suit," or "proceeding" shall apply to all claims, actions, suits or proceedings (civil, criminal or other, including appeals), actual or threatened while in office or thereafter, and the words "liability" and "expenses" shall include, without limitation, attorneys' fees, costs, judgments, amounts paid in settlement, fines, penalties and other liabilities. (b) No indemnification shall be provided hereunder to a Covered person: (i) who shall have been adjudicated by a court or body before which the proceeding was brought (A) to be liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office or (B) not to have acted in good faith in the reasonable belief that his action was in the best interest of the Trust; or (ii) in the event of a settlement, unless there has been a determination that such Trustee or officer did not engage in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office, (A) - 22 - by the court or other body approving the settlement; (B) by at least a majority of those Trustees who are neither Interested Persons of the Trust nor are parties to the matter based upon a review of readily available facts (as opposed to a full trial-type inquiry); or (C) by written opinion of independent legal counsel based upon a review of readily available facts (as opposed to a full trial-type inquiry); provided, however, that any Shareholder may, by appropriate legal proceedings, challenge any such determination by the Trustees or by independent counsel. (c) The rights of indemnification herein provided may be insured against by policies maintained by the Trust, shall be severable, shall not be exclusive of or affect any other rights to which any Covered Person may now or hereafter be entitled, shall continue as to a person who has ceased to be a Covered Person and shall inure to the benefit of the heirs, executors and administrators of such a person. Nothing contained herein shall affect any rights to indemnification to which Trust personnel, other than Covered Persons, and other persons may be entitled by contract or otherwise under law. (d) Expenses in connection with the preparation and presentation of a defense to any claim, action, suit or proceeding of the character described in Subsection 10.02(a) of this Section 10.02 may be paid by the Trust or Series from time to time prior to final disposition thereof upon receipt of an undertaking by or on behalf of such Covered Person that such amount will be paid over by him to the Trust or Series if it is ultimately determined that he is not entitled to indemnification under this Section 10.02; provided, however, that either (i) such Covered Person shall have provided appropriate security for such undertaking, (ii) the Trust is insured against losses arising out of any such advance payments or (iii) either a majority of the Trustees who are neither Interested Persons of the Trust nor parties to the matter, or independent legal counsel in a written opinion, shall have determined, based upon a review of readily available facts (as opposed to a trial-type inquiry or full investigation), that there is reason to believe that such Covered Person will be found entitled to indemnification under Section 10.02. SECTION 10.03 SHAREHOLDERS. In case any Shareholder of any Series shall be held to be personally liable solely by reason of his being or having been a Shareholder of such Series and not because of his acts or omissions or for some other reason, the Shareholder or former Shareholder (or his heirs, executors, administrators or other legal representatives, or, in the case of a corporation or other entity, its corporate or other general successor) shall be entitled out of the assets belonging to the applicable Series to be held harmless from and indemnified against all loss and expense arising from such liability. The Trust, on behalf of the affected Series, shall, upon request by the Shareholder, assume the defense of any claim made against the Shareholder for any act or obligation of the Series and satisfy any judgment thereon from the assets of the Series. - 23 - ARTICLE XI MISCELLANEOUS SECTION 11.01 TRUST NOT A PARTNERSHIP. It is hereby expressly declared that a trust and not a partnership is created hereby. No Trustee hereunder shall have any power to bind personally either the Trust officers or any Shareholder. All persons extending credit to, contracting with or having any claim against the Trust or the Trustees shall look only to the assets of the appropriate Series or (if the Trustees shall have yet to have established Series) of the Trust for payment under such credit, contract or claim; and neither the Shareholders nor the Trustees, nor any of their agents, whether past, present or future, shall be personally liable therefor. Nothing in this Trust Instrument shall protect a Trustee against any liability to which the Trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee hereunder. SECTION 11.02 TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY. The exercise by the Trustees of their powers and discretions hereunder in good faith and with reasonable care under the circumstances then prevailing shall be binding upon everyone interested. Subject to the provisions of Article X hereof and to Section 11.01 of this Article XI, the Trustees shall not be liable for errors of judgment or mistakes of fact or law. The Trustees may take advice of counsel or other experts with respect to the meaning and operation of this Trust Instrument, and subject to the provisions of Article X hereof and Section 11.01 of this Article XI, shall be under no liability for any act or omission in accordance with such advice or for failing to follow such advice. The Trustees shall not be required to give any bond as such, nor any surety if a bond is obtained. SECTION 11.03 ESTABLISHMENT OF RECORD DATES. The Trustees may close the Share transfer books of the Trust for a period not exceeding sixty (60) days preceding the date of any meeting of Shareholders, or the date for the payment of any dividends or other distributions, or the date for the allotment of rights, or the date when any change or conversion or exchange of Shares shall go into effect; or in lieu of closing the stock transfer books as aforesaid, the Trustees may fix in advance a date, not exceeding sixty (60) days preceding the date of any meeting of Shareholders, or the date for payment of any dividend or other distribution, or the date for the allotment of rights, or the date when any change or conversion or exchange of Shares shall go into effect, as a record date for the determination of the Shareholders entitled to notice of, and to vote at, any such meeting, or entitled to receive payment of any such dividend or other distribution, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of Shares, and in such case such Shareholders and only such Shareholders as shall be Shareholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting, or to receive payment of such dividend or other distribution, or to receive such allotment or rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any - 24 - Shares on the books of the Trust after any such record date fixed as aforesaid. SECTION 11.04 TERMINATION OF TRUST. (a) This Trust shall continue without limitation of time but subject to the provisions of Subsection 11.04(b). (b) The Trustees may, subject to a Majority Shareholder Vote of each Series affected by the matter or, if applicable, to a Majority Shareholder Vote of the Trust, and subject to a vote of a majority of the Trustees, (i) sell and convey all or substantially all of the assets of the Trust or any affected Series to another trust, partnership, association or corporation, or to a separate series of shares thereof, organized under the laws of any state which trust, partnership, association or corporation is an open-end management investment company as defined in the 1940 Act, or is a series thereof, for adequate consideration which may include the assumption of all outstanding obligations, taxes and other liabilities, accrued or contingent, of the Trust or any affected Series, and which may include shares of beneficial interest, stock or other ownership interests of such trust, partnership, association or corporation or of a series thereof; or (ii) at any time sell and convert into money all of the assets of the Trust or any affected Series. Upon making reasonable provision, in the determination of the Trustees, for the payment of all such liabilities in either (i) or (ii), by such assumption or otherwise, the Trustees shall distribute the remaining proceeds or assets (as the case may be) of each Series (or class) ratably among the holders of Shares of that Series then outstanding. (c) Upon completion of the distribution of the remaining proceeds or the remaining assets as provided in Subsection 11.05(b), the Trust or any affected Series shall terminate and the Trustees and the Trust shall be discharged of any and all further liabilities and duties hereunder and the right, title and interest of all parties with respect to the Trust or Series shall be canceled and discharged. Upon termination of the Trust, following completion of winding up of its business, the Trustees shall cause a certificate of cancellation of the Trust's certificate of trust to be filed in accordance with the Delaware Act, which certificate of cancellation may be signed by any one Trustee. SECTION 11.05 REORGANIZATION. Notwithstanding anything else herein, the Trustees, in order to change the form of organization of the Trust, may, without prior Shareholder approval, (a) cause the Trust to merge or consolidate with or into one or more trusts, partnerships, associations or corporations so long as the surviving or resulting entity is an open-end management investment company under the 1940 Act, - 25 - or is a series thereof, that will succeed to or assume the Trust's registration under that Act and which is formed, organized or existing under the laws of a state, commonwealth, possession or colony of the United States or (b) cause the Trust to incorporate under the laws of Delaware. Any agreement of merger or consolidation or certificate of merger may be signed by a majority of Trustees and facsimile signatures conveyed by electronic or telecommunication means shall be valid. Pursuant to and in accordance with the provisions of Section 3815(f) of the Delaware Act, and notwithstanding anything to the contrary contained in this Trust Instrument, an agreement of merger or consolidation approved by the Trustees in accordance with this Section 11.05 may effect any amendment to the Trust Instrument or effect the adoption of a new trust instrument of the Trust if it is the surviving or resulting trust in the merger or consolidation. SECTION 11.06 FILING OF COPIES, REFERENCES, HEADINGS. The original or a copy of this Trust Instrument and of each amendment hereof or Trust Instrument supplemental hereto shall be kept at the office of the Trust where it may be inspected by any Shareholder. Anyone dealing with the Trust may rely on a certificate by an officer or Trustee of the Trust as to whether or not any such amendments or supplements have been make and as to any matters in connection with the Trust hereunder, and with the same effect as if it were the original, may rely on a copy certified by an officer or Trustee of the Trust to be a copy of this Trust Instrument or of any such amendment or supplemental Trust Instrument. In this Trust Instrument or in any such amendment or supplemental Trust Instrument, references to this Trust Instrument, and all expressions like "herein," "hereof' and "hereunder," shall be deemed to refer to this Trust Instrument as amended or affected by any such supplemental Trust Instrument. All expressions like "his", "he" and "him", shall be deemed to include the feminine and neuter, as well as masculine, genders. Headings are placed herein for convenience of reference only and in case of any conflict, the text of this Trust Instrument, rather than the headings, shall control. This Trust Instrument may be executed in any number of counterparts each of which shall be deemed an original. SECTION 11.07 APPLICABLE LAW. The trust set forth in this instrument is made in the State of Delaware, and the Trust and this Trust Instrument, and the rights and obligations of the Trustees and Shareholders hereunder, are to be governed by and construed and administered according to the Delaware Act and the laws of said State; provided, however, that there shall not be applicable to the Trust, the Trustees or this Trust Instrument (a) the provisions of Section 3540 of Title 12 of the Delaware Code or (b) any provisions of the laws (statutory or common) of the State of Delaware (other than the Delaware Act) pertaining to trusts which relate to or regulate (i) the filing with any court or governmental body or agency of trustee accounts or schedules of trustee fees and charges, (ii) affirmative requirements to post bonds for trustees, officers, agents or employees of a trust, (iii) the necessity for obtaining court or other governmental approval concerning the acquisition, holding or disposition of real or personal property, (iv) fees or other sums payable to trustees, officers, agents - 26 - or employees of a trust, (v) the allocation of receipts and expenditures to income or principal, (vi) restrictions or limitations on the permissible nature, amount or concentration of trust investments or requirements relating to the titling, storage or other manner of holding of trust assets, or (vii) the establishment of fiduciary or other standards of responsibilities or limitations on the acts or powers of trustees, which are inconsistent with the limitations or liabilities or authorities and powers of the Trustees set forth or referenced in this Trust Instrument. The Trust shall be of the type commonly called a "business trust", and without limiting the provisions hereof, the Trust may exercise all powers which are ordinarily exercised by such a trust under Delaware law. The Trust specifically reserves the right to exercise any of the powers or privileges afforded to trusts or actions that may be engaged in by trusts under the Delaware Act, and the absence of a specific reference herein to any such power, privilege or action shall not imply that the Trust may not exercise such power or privilege or take such actions. SECTION 11.08 AMENDMENTS. Except as specifically provided herein, the Trustees may, without shareholder vote, amend or otherwise supplement this Trust Instrument by making an amendment, a Trust Instrument supplemental hereto or an amended and restated trust instrument. Shareholders shall have the right to vote (a) on any amendment which would affect their right to vote granted in Section 7.01 of Article VII hereof, (b) on any amendment to this Section 11.08, (c) on any amendment as may be required by law or by the Trust's registration statement filed with the Commission and (d) on any amendment submitted to them by the Trustees. Any amendment required or permitted to be submitted to Shareholders which, as the Trustees determine, shall affect the Shareholders of one or more Series shall be authorized by vote of the Shareholders of each Series affected and no vote of shareholders of a Series not affected shall be required. Notwithstanding anything else herein, any amendment to Article X hereof shall not limit the rights to indemnification or insurance provided therein with respect to action or omission of Covered Persons prior to such amendment. SECTION 11.09 FISCAL YEAR. The fiscal year of the Trust shall end on a specified date as set forth in the Bylaws, provided, however, that the Trustees may, without Shareholder approval, change the fiscal year of the Trust. SECTION 11.10 PROVISIONS IN CONFLICT WITH LAW. The provisions of this Trust Instrument are severable, and if the Trustees shall determine, with the advice of counsel, that any of such provisions is in conflict with the 1940 Act, the regulated investment company provisions of the Internal Revenue Code or with other applicable laws and regulations, the conflicting provision shall be deemed never to have constituted a part of this Trust Instrument; provided, however, that such determination shall not affect any of the remaining provisions of this Trust Instrument or render invalid or improper any action taken or omitted prior to such determination. If any provision of this Trust Instrument shall be held invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall attach only to such provision - 27 - in such jurisdiction and shall not in any matter affect such provisions in any other jurisdiction or any other provision of this Trust Instrument in any jurisdiction. IN WITNESS WHEREOF, the undersigned, being all of the initial Trustees of the Trust, have executed this instrument as of date first written above. /s/ John Y. Keffer ----------------------------- John Y. Keffer, as Trustee and not individually /s/ James F. Patterson ----------------------------- James F. Patterson, as Trustee and not individually /s/ David I. Goldstein ----------------------------- David I. Goldstein, as Trustee and not individually - 28 - EX-99.2 3 EX-99.2 EXHIBIT 2 THE CUTLER TRUST BYLAWS DATED OCTOBER 2, 1992 THE CUTLER TRUST BYLAWS These Bylaws of The Cutler Trust (the "Trust"), a Delaware business trust, are subject to the Trust Instrument of the Trust dated October, 2, 1992, as from time to time amended, supplemented or restated (the "Trust Instrument"). Capitalized terms used herein which are defined in the Trust Instrument are used as therein defined. ARTICLE I PRINCIPAL OFFICE The principal office of the Trust shall be located in New York City, New York, or such other location as the Trustees may, from time to time, determine. The Trust may establish and maintain such other offices and places of business as the Trustees may, from time to time, determine. ARTICLE II OFFICERS AND THEIR ELECTION SECTION 2.01 OFFICERS. The officers of the Trust shall be a President, a Treasurer, a Secretary, and such other officers as the Trustees may from time to time elect. The Trustees may delegate to any officer or committee the power to appoint any subordinate officers or agents. It shall not be necessary for any Trustee or other officer to be a holder of Shares in the Trust. SECTION 2.02 ELECTION OF OFFICERS. The Treasurer and Secretary shall be chosen by the Trustees. The President shall be chosen by and from the Trustees. Two or more offices may be held by a single person except the offices of President and Secretary. Subject to the provisions of Section 3.13 hereof, the President, the Treasurer and the Secretary shall each hold office until their successors are chosen and qualified and all other officers shall hold office at the pleasure of the Trustees. SECTION 2.03 RESIGNATIONS. Any officer of the Trust may resign, notwithstanding Section 2.02 hereof, by filing a written resignation with the President, the Trustees or the Secretary, which resignation shall take effect on being so filed or at such time as may be therein specified. ARTICLE III POWERS AND DUTIES OF OFFICERS AND TRUSTEES SECTION 3.01 MANAGEMENT OF THE TRUST. The business and affairs of the Trust shall be managed by, or under the direction of, the Trustees, and they shall have all powers necessary and desirable to carry out their responsibilities, so far as such powers are not inconsistent with the laws of the State of Delaware, the Trust Instrument or with these Bylaws. - 31 - SECTION 3.02 EXECUTIVE AND OTHER COMMITTEES. The Trustees may elect from their own number an executive committee, which shall have any or all the powers of the Trustees while the Trustees are not in session. The Trustees may also elect from their own number other committees from time to time. The number composing such committees and the powers conferred upon the same are to be determined by vote of a majority of the Trustees. All members of such committees shall hold such offices at the pleasure of the Trustees. The Trustees may abolish any such committee at any time. Any committee to which the Trustees delegate any of their powers or duties shall keep records of its meetings and shall report its actions to the Trustees. The Trustees shall have power to rescind any action of any committee, but no such rescission shall have retroactive effect. SECTION 3.03 COMPENSATION. Each Trustee and each committee member may receive such compensation for his services and reimbursement for his expenses as may be fixed from time to time by resolution of the Trustees. SECTION 3.04 CHAIRMAN OF THE TRUSTEES. The Trustees shall appoint from among their number a Chairman who shall serve as such at the pleasure of the Trustees. When present, he shall preside at all meetings of the Shareholders and the Trustees, and he may, subject to the approval of the Trustees, appoint a Trustee to preside at such meetings in his absence. He shall perform such other duties as the Trustees may from time to time designate. SECTION 3.05 PRESIDENT. The President shall be the chief executive officer of the Trust and, subject to the direction of the Trustees, shall have general administration of the business and policies of the Trust. Except as the Trustees may otherwise order, the President shall have the power to grant, issue, execute or sign such powers of attorney, proxies, agreements or other documents as may be deemed advisable or necessary in the furtherance of the interests of the Trust or any Series thereof. He shall also have the power to employ attorneys, accountants and other advisors and agents and counsel for the Trust. The President shall perform such duties additional to all of the foregoing as the Trustees may from time to time designate. SECTION 3.06 TREASURER. The Treasurer shall be the principal financial and accounting officer of the Trust. He shall deliver all funds and securities of the Trust which may come into his hands to such company as the Trustees shall employ as Custodian in accordance with the Trust Instrument and applicable provisions of law. He shall make annual reports regarding the business and condition of the Trust, which reports shall be preserved in Trust records, and he shall furnish such other reports regarding the business and condition of the Trust as the Trustees may from time to time require. The Treasurer shall perform such additional duties as the Trustees may from time to time designate. SECTION 3.07 SECRETARY. The Secretary shall record in books kept for the purpose all votes and proceedings of the Trustees and the Shareholders at their respective meetings. He shall have the custody of - 32 - the seal of the Trust. The Secretary shall perform such additional duties as the Trustees may from time to time designate. SECTION 3.08 VICE PRESIDENT. Any Vice President of the Trust shall perform such duties as the Trustees or the President may from time to time designate. At the request or in the absence or disability of the President, the Vice President (or, if there are two or more Vice Presidents, then the senior of the Vice Presidents present and able to act) may perform all the duties of the President and, when so acting, shall have all the powers of and be subject to all the restrictions upon the President. SECTION 3.09 ASSISTANT TREASURER. Any Assistant treasurer of the Trust shall perform such duties as the Trustees or the Treasurer may from time to time designate, and, in the absence of the Treasurer, the senior Assistant Treasurer, present and able to act, may perform all the duties of the Treasurer. SECTION 3.10 ASSISTANT SECRETARY. Any Assistant Secretary of the Trust shall perform such duties as the Trustees or the Secretary may from time to time designate, and, in the absence of the Secretary, the senior Assistant Secretary, present and able to act, may perform all the duties of the Secretary. SECTION 3.11 SUBORDINATE OFFICERS. The Trustees from time to time may appoint such officers or agents as they may deem advisable, each of whom shall have such title, hold office for such period, have such authority and perform such duties as the Trustees may determine. The Trustees from time to time may delegate to one or more officers or committees of Trustees the power to appoint any such subordinate officers or agents and to prescribe their respective terms of office, authorities and duties. SECTION 3.12 SURETY BONDS. The Trustees may require any officer or agent of the Trust to execute a bond (including without limitation, any bond required by the 1940 Act and the rules and regulations of the Commission) to the Trust in such sum and with such surety or sureties as the Trustees may determine, conditioned upon the faithful performance of his duties to the Trust including responsibility for negligence and for the accounting of any of the Trust's property, funds or securities that may come into his hands. SECTION 3.13 REMOVAL. Any officer may be removed from office whenever in the judgment of the Trustees the best interest of the Trust will be served thereby, by the vote of a majority of the Trustees given at any regular meeting or any special meeting of the Trustees. In addition, any officer or agent appointed in accordance with the provisions of Section 3.10 hereof may be removed, either with or without cause, by any officer upon whom such power of removal shall have been conferred by the Trustees. SECTION 3.14 REMUNERATION. The salaries or other compensation, if any, of the officers of the Trust shall be fixed from time to time by resolution of the Trustees. - 33 - ARTICLE IV SHAREHOLDER'S MEETINGS SECTION 4.01 SPECIAL MEETINGS. A special meeting of the shareholders shall be called by the Secretary whenever (a) ordered by the Trustees or (b) requested in writing by the holder or holders of at least 10% of the Outstanding Shares entitled to vote. If the Secretary, when so ordered or requested, refuses or neglects for more than 30 days to call such special meeting, the Trustees or the Shareholders so requesting, may, in the name of the Secretary, call the meeting by giving notice thereof in the manner required when notice is given by the Secretary. If the meeting is a meeting of the Shareholders of one or more Series or classes of Shares, but not a meeting of all Shareholders of the Trust, then only special meetings of the Shareholders of such one or more Series or classes shall be called and only the shareholders of such one or more Series or classes shall be entitled to notice of and to vote at such meeting. SECTION 4.02 NOTICES. Except as provided in Section 4.01, notices of any meeting of the Shareholders shall be given by the Secretary by delivering or mailing, postage prepaid, to each Shareholder entitled to vote at said meeting, written or printed notification of such meeting at least fifteen (15) days before the meeting, to such address as may be registered with the Trust by the Shareholder. Notice of any Shareholder meeting need not be given to any Shareholder if a written waiver of notice, executed before or after such meeting, is filed with the record of such meeting, or to any Shareholder who shall attend such meeting in person or by proxy. Notice of adjournment of a Shareholder's meeting to another time or place need not be given, if such time and place are announced at the meeting or reasonable notice is given to persons present at the meeting and the adjourned meeting is held within a reasonable time after the date set for the original meeting. SECTION 4.03 VOTING-PROXIES. Subject to the provisions of the Trust Instrument, shareholders entitled to vote may vote either in person or by proxy, provided that either (a) an instrument authorizing such proxy to act is executed by the Shareholder in writing and dated not more than eleven (11) months before the meeting, unless the instrument specifically provides for a longer period or (b) the Trustees adopt by resolution an electronic, telephonic, computerized or other alternative to execution of a written instrument authorizing the proxy to act which authorization is received not more than eleven (11) months before the meeting. Proxies shall be delivered to the Secretary of the Trust or other person responsible for recording the proceedings before being voted. A proxy with respect to Shares held in the name of two or more persons shall be valid if executed by one of them unless at or prior to exercise of such proxy the Trust receives a specific written notice to the contract from any one of them. Unless otherwise specifically limited by their terms, proxies shall entitle the holder thereof to vote at any adjournment of a meeting. A proxy purporting to be exercised by or on behalf of a Shareholder shall be deemed valid - 34 - unless challenged at or prior to its exercise and the burden or proving invalidity shall rest on the challenger. At all meetings of the Shareholders, unless the voting is conducted by inspectors, all questions relating to the qualifications of voters, the validity of proxies, and the acceptance or rejection of votes shall be decided by the Chairman of the meeting. Except as otherwise provided herein or in the Trust Instrument, as these Bylaws or such Trust Instrument may be amended or supplemented from time to time, all maters relating to the giving, voting or validity of proxies shall be governed by the General Corporation Law of the State of Delaware relating to proxies, and judicial interpretations thereunder, as if the Trust were a Delaware corporation and the Shareholders were shareholder of a Delaware corporation. SECTION 4.04 PLACE OF MEETING. All special meetings of the Shareholders shall be held at the principal place of business of the Trust or at such other place in the United States as the Trustees may designate. SECTION 4.05 ACTION WITHOUT A MEETING. Any action to be taken by Shareholders may be taken without a meeting if all Shareholders entitled to vote on the matter consent to the action in writing and the written consents are filed with the records of meetings of Shareholders of the Trust. Such consent shall be treated for all purposes as a vote at a meeting of the Shareholders held at the principal place of business of the Trust. ARTICLE V TRUSTEES' MEETINGS SECTION 5.01 SPECIAL MEETINGS. Special meetings of the Trustees may be called orally or in writing by the Chairman of the Board of Trustees or any two other Trustees. SECTION 5.02 REGULAR MEETINGS. Regular meetings of the Trustees may be held at such places and at such times as the Trustees may from time to time determine; each Trustee present at such determination shall be deemed a party calling the meeting and no call or notice will be required to such Trustee provided that any Trustee who is absent when such determination is made shall be given notice of the determination by the Chairman or any two other Trustees, as provided for in Section 4.04 of the Trust Instrument. SECTION 5.03 QUORUM. A majority of the Trustees shall constitute a quorum for the transaction of business and an action of a majority of the quorum shall constitute action of the Trustees. SECTION 5.04 NOTICE. Except as otherwise provided, notice of any special meeting of the Trustees shall be given by the party calling the meeting to each Trustee, as provided for the Section 4.04 of the Trust Instrument. A written notice may be mailed, postage prepaid, addressed to him at his address as registered on the books of the Trust or, if not so registered, at his last known address. - 35 - SECTION 5.05 PLACE OF MEETING. All special meetings of the Trustees shall be held at the principal place of business of the Trust or such other place as the Trustees may designate. Any meeting may adjourn to any place. SECTION 5.06 SPECIAL ACTION. When all the Trustees shall be present at any meeting, however called or wherever held, or shall assent to the holding of the meeting without notice, or shall sign a written assent thereto filed with the record of such meeting, the acts of such meeting shall be valid as if such meeting had been regularly held. SECTION 5.07 ACTION BY CONSENT. Any action by the Trustees may be taken without a meeting if a written consent thereto is signed by all the Trustees and filed with the records of the Trustees' meeting. Such consent shall be treated, for all purposes, as a vote at a meeting of the Trustees held at the principal place of business of the Trustees. SECTION 5.08 PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Trustees may participate in a meeting of Trustees by conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting. Any meeting conducted by telephone shall be deemed to take place at and from the principal office of the Trust. ARTICLE VI SHARES OF BENEFICIAL INTEREST SECTION 6.01 BENEFICIAL INTEREST. The beneficial interest in the Trust shall at all times divided into such transferable Shares of one or more separate and distinct Series, or classes thereof, as the Trustees shall from time to time create and establish. The number of Shares is unlimited, and each Share of each Series or class thereof shall be without par value and shall represent an equal proportionate interest with each other Share in the Series, none having priority or preference over another, except to the extent that such priorities or preference are established with respect to one or more classes of shares consistent with applicable law and any rule or order of the Commission. SECTION 6.02 TRANSFER OF SHARES. The Shares of the Trust shall be transferable, so as to affect the rights of the Trust, only by transfer recorded on the books of the Trust, in person or by attorney. SECTION 6.03 EQUITABLE INTEREST NOT RECOGNIZED. The Trust shall be entitled to treat the holder of record of any Share or Shares of beneficial interest as equitable or other claim or interest in such Share or Shares on the part of any other person except as may be otherwise expressly provided by law. SECTION 6.04 SHARE CERTIFICATE. No certificates certifying the ownership of Shares shall be issued except as the Trustees may otherwise authorize. The Trustees may issue certificates to a Shareholder of any - 36 - Series or class thereof for any purpose and the issuance of a certificate to one or more Shareholders shall not require the issuance of certificates generally. In the event that the Trustees authorize the issuance of Share certificates, such certificate shall be in the form proscribed from time to time by the Trustees and shall be signed by the President or a Vice President and by the Treasurer, Assistant Treasurer, Secretary or Assistant Secretary. Such signatures may be facsimiles if the certificate is signed by a transfer or shareholder services agent or by a registrar, other than a Trustee, officer or employee of the Trust. In case any officer who has signed or whose facsimile signature has been placed on certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Trust with the same effect as if he or she were such officer at the time of its issue. In lieu of issuing certificates for Shares, the Trustees or the transfer or shareholder services agent may either issue receipts therefor or may keep accounts upon the books of the Trusts for the record holders of such Shares, who shall in either case be deemed, for all purposes hereunder, to be the holders of certificates for such Shares as if they had accepted such certificates and shall be held to have expressly assented and agreed to the terms hereof. SECTION 6.05 LOSS OF CERTIFICATES. In the case of the alleged loss or destruction or the mutilation of a Share certificate, a duplicate certificate may be issued in place thereof, upon such terms as the Trustees may prescribe. SECTION 6.06 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees may at any time discontinue the issuance of Share certificates and may, by written notice to each Shareholder, require the surrender of Share certificates to the Trust for cancellation. Such surrender and cancellation shall not affect the ownership of Shares in the Trust. ARTICLE VII OWNERSHIP OF ASSETS OF THE TRUST The Trustees, acting for and on behalf of the Trust, shall be deemed to hold legal and beneficial ownership of any income earned on securities held by the Trust issued by any business entity formed, organized or existing under the laws of any jurisdiction other than a state, commonwealth, possession or colony of the United States or the laws of the United States. ARTICLE VIII INSPECTION OF BOOKS The Trustees shall from time to time determine whether and to what extent, and at what times and places, and under what conditions and regulations the accounts and books of the Trust or any of them shall be open to the inspection of the Shareholder; and no Shareholder shall have any right to inspect any account or book or document of the Trust except as conferred by law or otherwise by the Trustees or by resolution of the Shareholders. - 37 - ARTICLE IX INSURANCE OF OFFICERS, TRUSTEES, AND EMPLOYEES The Trust may purchase and maintain insurance on behalf of any Covered Person or employee of the Trust, including any Covered Person or employee of the Trust who is or was serving at the request of the Trust as a Trustee, officer or employee of a corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the Trustees would have the power to indemnify him against such liability. The Trust may not acquire or obtain a contract for insurance that protects or purports to protect any Trustee or officer of the Trust against any liability to the Trust of its Shareholders to which he would otherwise be subject by reason or willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office. ARTICLE X SEAL The seal of the Trust shall be circular in form bearing the inscription: "THE CUTLER TRUST -- 1992 THE STATE OF DELAWARE" - 38 - EX-99.5 4 EX-99.5 EXHIBIT 5 THE CUTLER TRUST INVESTMENT ADVISORY AGREEMENT AGREEMENT made this 31st day of December, 1992, between The Cutler Trust (the "Trust"), a business trust organized under the laws of the State of Delaware with its principal place of business at 61 Broadway, New York, New York 10006, and Cutler & Company, Inc. (the "Adviser"), a corporation organized under the laws of State of California with its principal place of business at 503 Airport Road, Medford, Oregon 97504. WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company and is authorized to issue its shares in separate series and classes; and WHEREAS, the Trust desires that the Adviser perform investment advisory services for the Cutler Equity Income Fund, the Cutler Approved List Equity Fund and the Cutler Government Fund, three separate investment portfolios of the Trust (each a "Fund" and, collectively, the "Funds"), and the Adviser is willing to provide those services on the terms and conditions set forth in this Agreement; NOW THEREFORE, the Trust and the Adviser agree as follows: SECTION 1. APPOINTMENT The Trust hereby appoints the Adviser, and the Adviser hereby agrees, to act as investment adviser to each Fund for the period and on the terms set forth in this Agreement. In connection therewith, (i) the Trust has delivered to the Adviser copies of its Trust Instrument and Bylaws, the Trust's Registration Statement and all amendments thereto filed pursuant to the Act or the Securities Act of 1933, as amended, with the Securities and Exchange Commission (the "Registration Statement") and the current Prospectus and Statement of Additional Information of the Funds (collectively, as currently in effect and as amended or supplemented, the "Prospectus") and, shall promptly furnish the Adviser with all amendments of or supplements to the foregoing and (ii) the Adviser has delivered to the Trust's secretary copies of its entire Form ADV and all amendments thereto as amended to date and will from time to time furnish the Trust's secretary with all amendments of or supplements to the Adviser's Form ADV. SECTION 2. INVESTMENT ADVISORY DUTIES Subject to the direction and control of the Trust's Board of Trustees (the "Board"), the Adviser shall manage the investment and reinvestment of the assets of the Funds, and, without limiting the generality of the foregoing, shall provide the management and other services specified below, all in such manner and to such extent as may be authorized by the Board. (a) The Adviser shall make decisions with respect to all purchases, sales and other transactions of securities and other - 40 - investment assets of the Funds, including the selection of brokers, dealers and other persons to introduce or execute those transactions. To carry out such decisions, the Adviser is authorized, as agent and attorney-in-fact for the Trust, for the account of, at the risk of and in the name of the Trust, to place orders and issue instructions with respect to those transactions of the Funds. In all purchases, sales and other transactions in securities or other investment assets for the Funds, the Adviser is authorized to exercise full discretion and act for the Trust in the same manner and with the same force and effect as the Trust might or could do with respect to such purchases, sales or other transactions, as well as with respect to all other things necessary or incidental to the furtherance or conduct of such purchases, sales or other transactions, subject to paragraph (b) below. (b) In making decisions with respect to all purchases, sales and other transactions of securities and other investment assets of the Funds the Adviser shall follow and comply with the policies set forth from time to time by the Board (to the extent communicated to the Adviser in writing or at a Board meeting attended by a representative of the Adviser) as well as the limitations imposed by the Trust's Trust Instrument and Bylaws, the Trust's Registration Statement and the Funds' Prospectuses (in each case, to the extent copies thereof are furnished to the Adviser) and the limitations in the Act and the requirements of subchapter M of the Internal Revenue Code of 1986, as amended, in respect of investment companies. (c) The Adviser shall monitor the performance of brokers, dealers and other persons who introduce or execute purchases, sales and other transactions of securities and other investment assets of the Funds. (d) The Adviser shall maintain records relating to portfolio transactions and the placing and allocation of brokerage orders as are required to be maintained by the Trust under the Act, including those required by paragraphs (b)(5), (6) and (9) of Rule 31a-1 promulgated under the Act. The Adviser shall prepare and maintain, or cause to be prepared and maintained, in such form, for such periods and in such locations as may be required by applicable law, all documents and records relating to the services provided by the Adviser pursuant to this Agreement required to be prepared and maintained by the Trust pursuant to the rules and regulations of any national, state, or local government entity with jurisdiction over the Trust, including the Securities and Exchange Commission and the Internal Revenue Service. The books and records pertaining to the Trust that are in possession of the Adviser shall be the property of the Trust. The Trust, or the Trust's authorized representatives, shall have access to such books and records at all times during the Adviser's normal business hours. Upon the reasonable request of the Trust, copies of any such books and records shall be provided promptly by the Adviser to the Trust or the Trust's authorized representatives. (e) The Adviser shall determine in its sole discretion the propriety of (i) honoring requests for orders to purchase Fund shares "in kind" for consideration consisting of securities determined to be - 41 - suitable to purchase, (ii) honoring requests by shareholders for proceeds upon redemption of Fund shares to be paid "in kind" by delivery of portfolio securities, and (iii) paying redemption proceeds "in kind" even though not requested by a Fund shareholder. (f) The Adviser shall provide to the Board at each regularly scheduled meeting thereof (or such other meetings as may be requested by the Trust) a report containing an appropriate summary of all changes in the Funds' investment portfolios since the prior report, will inform the Board of important developments affecting the Funds, and on its own initiative will furnish the Board from time to time with such information as it believes appropriate for this purpose, whether concerning the individual issuers whose securities are included in the Funds' investment portfolios, the industries in which these issuers engage, or the economic, social or political conditions prevailing in each country in which the Funds' maintain investments. The Adviser also shall provide the Board with such statistical and analytical information with respect to securities in the Funds' investment portfolios as the Adviser believes appropriate or as the Trust reasonably may request. The Adviser shall provide other persons, in such forms and at such times as the Trust's authorized representatives shall reasonably request, information about portfolio transactions and prices or yield quotations of portfolio securities. (g) The Adviser shall from time to time employ or associate with such persons as it believes to be particularly fitted to assist it in the execution of its duties under this Agreement, the cost of performance of such duties to be borne and paid by the Adviser. No obligation may be incurred on behalf of the Trust in any such respect. SECTION 3. EXPENSES (a) The Adviser shall be responsible for the portion of the net expenses of each Fund (except interest, taxes, brokerage fees, distribution fees and organization and extraordinary expenses, all to the extent such exclusions are permitted by applicable state law) during any fiscal year (or portion thereof) in which this Agreement is in effect which, as to a Fund, exceeds the limits applicable to the Fund under the laws of any state in which the Fund's shares are qualified for sale. The Adviser is not, however, required to bear expenses of the Trust or any Fund to an extent that would result in a Fund not qualifying under provisions of the Internal Revenue Code of 1986, as amended, as a regulated investment company. (b) Subject to the above and to any other agreement by the Adviser or other person to reimburse any expenses of the Trust that relate to the Funds, the Trust shall be responsible for and assumes the obligation for payment of all of its other expenses, including: (i) the fee payable under Section 5 hereof; (ii) the fees payable to Forum Financial Services, Inc. ("Forum") under an agreement between Forum and the Trust; (iii) expenses of issue, repurchase and redemption of Shares; (iv) interest charges, taxes and brokerage fees and commissions; (v) premiums of insurance for the Trust, its trustees and officers and fidelity bond premiums; (vi) fees, interest charges and expenses of - 42 - third parties, including the Trust's custodian, transfer agent, dividend disbursing agent and fund accountant; (vii) fees of pricing, interest, dividend, credit and other reporting services; (viii) costs of membership in trade associations; (ix) telecommunications expenses; (x) funds transmission expenses; (xi) auditing, legal and compliance expenses; (xii) costs of maintaining the Trust's existence; (xiii) costs of preparing and printing the Fund's Prospectuses, subscription application forms and shareholder reports and delivering them to existing shareholders; (xiv) expenses of meetings of shareholders and proxy solicitations therefore; (xv) costs of maintaining books of original entry for portfolio and fund accounting and other required books and accounts, of calculating the net asset value of shares of the Trust and of preparing tax returns; (xvi) costs of reproduction, stationery and supplies; (xvii) fees and expenses of the Trust's trustees; (xviii) compensation of the Trust's officers and employees who are not officers of the Adviser or Forum or their respective affiliated persons; (xix) costs of other personnel who may be employees of the Adviser, Forum or their respective affiliated persons performing services for the Trust; (xx) costs of Trustee meetings; (xxi) Securities and Exchange Commission registration fees and related expenses; and (xxii) state or foreign securities laws registration fees and related expenses. SECTION 4. STANDARD OF CARE (a) The Adviser shall give the Trust the benefit of its best judgment and efforts in rendering its services to the Trust and shall not be liable for error of judgment or mistake of law, for any loss arising out of any investment, or in any event whatsoever, provided that nothing herein shall be deemed to protect, or purports to protect, the Adviser against any liability to the Trust or to the security holders of the Trust to which it would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties hereunder, or by reason of reckless disregard of its obligations and duties hereunder. (b) The Adviser shall not be held responsible for any loss incurred by reason of any act or omission of any dealer, broker or custodian; provided that such loss is not the result of the Adviser's willful misfeasance, bad faith or gross negligence in the performance of its duties hereunder, or the result of the Adviser's reckless disregard of its obligations and duties hereunder. (c) This Section shall survive the termination of this Agreement and shall be binding upon the Trust's and the Adviser's successors and personal representatives. SECTION 5. COMPENSATION (a) For the services provided by the Adviser pursuant to this Agreement, the Trust shall pay the Adviser, with respect to each of the Funds, a fee at an annual rate equal to the amount set forth in Schedule A hereto. Such fees shall be accrued by the Trust daily and shall be payable monthly in arrears on the first day of each calendar month for - 43 - services performed under this Agreement during the prior calendar month. Upon the termination of this Agreement, the Trust shall pay to the Adviser such compensation as shall be payable prior to the effective date of such termination. (b) Notwithstanding anything in this Agreement to the contrary, the Adviser and its affiliated persons, if any, may receive compensation or reimbursement from the Trust with respect to (i) the provision of shareholder support or other services or (ii) service as a Trustee or officer of the Trust. SECTION 6. EFFECTIVENESS, DURATION AND TERMINATION (a) This Agreement shall become effective with respect to a Fund on the latter of the date on which the Trust's Registration Statement relating to the shares of the Fund becomes effective and date of its approval by a vote of a majority of the outstanding voting securities of the Fund. Upon the effectiveness of this Agreement, it shall supersede all previous agreements between the Trust and the Adviser covering the subject matter hereof. (b) This Agreement shall continue in effect with respect to a Fund for twelve months and, thereafter, shall continue in effect for successive twelve- month periods, provided that such continuance is specifically approved at least annually (i) by the Board or by a vote of a majority of the outstanding voting securities of the Fund and (ii) by a vote of a majority of Trustees of the Trust who are not parties to this Agreement or interested persons of any such party cast in person at a meeting called for the purpose of voting on such approval. If the continuation of this Agreement is not approved as to a Fund, the Adviser may continue to render to the Fund the services described herein in the manner and to the extent permitted by the Act. (c) This Agreement may be terminated with respect to a Fund at any time, without the payment of any penalty, (i) by the Board or by a vote of a majority of the outstanding voting securities of the Fund on 60 days' written notice to the Adviser or (ii) by the Adviser on 60 days' written notice to the Trust. This Agreement shall automatically terminate in the event of its assignment. SECTION 7. ACTIVITIES OF THE ADVISER (a) Except to the extent necessary to perform its obligations under this Agreement, nothing herein shall be deemed to limit or restrict the Adviser's right, or the right of any of its officers, directors or employees (whether or not they are a trustee, officer, employee or other affiliated person of the Trust) to engage in any other business or to devote time and attention to the management or other aspects of any other business, whether of a similar or dissimilar nature, or to render services of any kind to any other corporation, trust, firm, individual or association. - 44 - (b) The Adviser represents that it is currently registered, and during the entire period this Agreement is in effect will be registered, as an investment adviser under the Investment Advisers Act of 1940. SECTION 8. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY The Trustees of the Trust and the shareholders of each Fund shall not be liable for any obligations of the Trust or of the Funds under this Agreement, and the Adviser agrees that, in asserting any rights or claims under this Agreement, it shall look only to the assets and property of the Trust or the Fund to which the Adviser's rights or claims relate in settlement of such rights or claims, and not to the Trustees of the Trust or the shareholders of the Funds. SECTION 9. "CUTLER" NAME If the Adviser ceases to act as investment adviser to the Trust or any Fund whose name includes the word "Cutler," or if the Adviser requests in writing, the Trust shall take prompt action to change the name of the Trust or any such Fund to a name that does not include the word "Cutler." The Adviser may from time to time make available without charge to the Trust for the Trust's use any marks or symbols owned by the Adviser, including marks or symbols containing the words "Cutler" or any variation thereof, as the Adviser deems appropriate. Upon the Adviser's request in writing, the Trust shall cease to use any such mark or symbol at any time. The Trust acknowledges that any rights in or to the words "Cutler" and any such marks or symbols which may exist on the date of this Agreement or arise hereafter are, and under any and all circumstances shall continue to be, the sole property of the Adviser. The Adviser may permit other parties, including other investment companies, to use the word "Cutler" in their names without the consent of the Trust. The Trust shall not use the word "Cutler" in conducting any business other than that of an investment company registered under the Act without the permission of the Adviser. SECTION 10. REPRESENTATION OF THE TRUST The Trust represents and agrees that shares of the Funds will be offered and sold only to bona fide investment management clients of the Adviser (customers who have a signed investment counsel agreement with the Adviser). SECTION 11. MISCELLANEOUS (a) No provisions of this Agreement may be amended or modified in any manner except by a written agreement properly authorized and executed by both parties hereto and, if required by the Act, by a vote of a majority of the outstanding voting securities of any Fund thereby affected. (b) If any part, term or provision of this Agreement is held to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not be affected, and the rights and obligations of the parties shall be construed and - 45 - enforced as if the Agreement did no contain the particular part, term or provision held to be illegal or invalid. (c) Section headings in this Agreement are included for convenience only and are not to be used to construe or interpret this Agreement. (d) Notices, requests, instructions and communications received by the parties at their respective principal places of business, or at such other address as a party may have designated in writing, shall be deemed to have been properly given. (e) This Agreement shall be governed by and shall be construed in accordance with the laws of the State of New York. (f) The terms "vote of a majority of the outstanding voting securities," "interested person," "affiliated person" and "assignment" shall have the meanings ascribed thereto in the Act. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed all as of the day and year first above written. THE CUTLER TRUST By: /s/ JOHN Y. KEFFER ------------------- John Y. Keffer President CUTLER & COMPANY, INC. By: /s/ KENNETH R. CUTLER Kenneth R. Cutler Chairman - 46 - THE CUTLER TRUST INVESTMENT ADVISORY AGREEMENT SCHEDULE A ADVISORY FEES Fee as a % of the Annual Average Daily Fund Net Assets of the Fund ---- ---------------------- Cutler Equity Income Fund 0.50% Cutler Approved List Equity Fund 0.50% Cutler Government Fund 0.25% - 47 - EX-99.6 5 EX-99.6 EXHIBIT 6 THE CUTLER TRUST DISTRIBUTION AGREEMENT AGREEMENT made this 31st day of December, 1992, between The Cutler Trust (the "Trust"), a business trust organized under the laws of the State of Delaware with its principal place of business at 61 Broadway, New York, New York 10006, and Forum Financial Services, Inc. (the "Distributor"), a corporation organized under the laws of State of Delaware with its principal place of business at 61 Broadway, New York, New York 10006. WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end management investment company and may issue its shares of beneficial interest, no par value (the "Shares") in separate series and classes; and WHEREAS, the Trust desires that the Distributor offer the Shares of the Trust representing interests in each of the separate investment portfolios of the Trust as listed on Schedule A hereto (each a "Fund" and, collectively, the "Funds") as the Trust's principal underwriter, and Distributor is willing to act as principal underwriter on the terms and conditions set forth in this Agreement; NOW THEREFORE, the Trust and Distributor agree as follows: SECTION 1. APPOINTMENT The Trust hereby appoints Distributor, and Distributor hereby agrees, to act as distributor of the Shares for the period and on the terms set forth in this Agreement. In connection therewith, the Trust has delivered to the Distributor copies of its Trust Instrument and Bylaws, the Trust's Registration Statement and all amendments thereto filed pursuant to the Securities Act of 1933, as amended (the "Securities Act"), or the Act (the "Registration Statement") and the current Prospectus and Statement of Additional Information of each Fund (collectively, as currently in effect and as amended or supplemented, the "Prospectus") and, shall promptly furnish the Distributor with all amendments of or supplements to the foregoing. SECTION 2. DISTRIBUTION SERVICES Subject to the direction and control of the Trust's Board of Trustees (the "Board"), the Distributor shall serve as distributor of the Shares. (a) As agent of and sole distributor for the Trust, Distributor shall offer, and solicit offers to subscribe to, the unsold balance of Shares as shall then be effectively registered under the Securities Act and applicable state securities laws. All subscriptions for Shares obtained by Distributor shall be directed to the Trust for acceptance and shall not be binding on the Trust until accepted by it. Distributor - 49 - shall have no authority to make binding subscriptions on behalf of the Trust. The Trust reserves the right to sell Shares directly to investors through subscriptions received by the Trust. Distributor's rights hereunder shall not apply to Shares issued in connection with (a) the merger or consolidation of the Trust or its series or classes with any other investment company or series or class thereof, (b) the Trust's acquisition by purchase or otherwise of all or substantially all of the assets or stock of any other investment company, or (c) the reinvestment in Shares by the Trust's shareholders of dividends or other distributions or any other offering by the Trust of securities to its shareholders. (b) Distributor shall use its best efforts to obtain subscriptions to Shares upon the terms and conditions contained herein and in the Prospectus, including the offering price. Distributor shall send to the Trust promptly all subscriptions placed with Distributor. The Trust shall advise Distributor in its capacity as distributor of the approximate net asset value per Share at any time requested by Distributor that is a net asset value determination time as disclosed in the Prospectus and at such other times as it shall have been determined. The Trust shall furnish Distributor from time to time, for use in connection with the offering of Shares, such other information with respect to the Trust and Shares as Distributor may reasonably request. The Trust shall supply Distributor with such copies of the Prospectus as Distributor may reasonably request. Distributor may use its employees, agents and other persons who need not be its employees, at its cost and expense, to assist it in carrying out its obligations hereunder, but no such employee, agent or other person shall be deemed to be an agent of the Trust or have any rights under this Agreement. (c) The Trust reserves the right to suspend the offering of Shares at any time, in the absolute discretion of the Board, and upon notice of such suspension Distributor shall cease to offer shares of stock. (d) The Trust and Distributor will cooperate with each other in taking such action as may be necessary to qualify Shares for sale under the securities laws of such states as the Trust may designate, provided, that Distributor shall not be required to register as a broker-dealer or file a consent to service of process in any such state. Subject to any agreement by the Trust's investment adviser to reimburse expenses of the Trust that relate to the Funds, the Trust shall be responsible for payment of all fees and expenses of registering Shares under the Securities Act and of registering or qualifying Shares and the Trust's qualification under applicable state securities laws. Distributor shall pay all expenses relating to its broker-dealer qualification. (e) The Trust represents that its Registration Statement and Prospectus under the Securities Act have been or will be, as the case may be, carefully prepared in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission (the "Commission") thereunder. The Trust represents and warrants that its Registration Statement and Prospectus contain or will contain all statements required to be stated therein in accordance - 50 - with the Securities Act and the rules and regulations of the Commission thereunder, and that all statements of fact contained or to be contained therein are or will be true and correct at the time indicated or on the effective date as the case may be; that the Trust's Registration Statement and Prospectus, when they shall become effective or be authorized for use, will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading to a purchaser of Shares. The Trust will from time to time file such amendment or amendments to its Registration Statement and Prospectus as, in the light of future developments, shall, in the opinion of the Trust's counsel, be necessary in order to have such Registration Statement and Prospectus at all times contain all material facts required to be stated therein or necessary to make any statements therein not misleading to a purchaser of Shares, but, if the Trust shall not file such amendment or amendments within fifteen days after receipt of a written request from Distributor to do so, Distributor may, at its option, terminate this Agreement immediately. The Trust shall not file any amendment to its Registration Statement and Prospectus without giving Distributor reasonable notice thereof in advance; provided, however, that nothing contained in this Agreement shall in any way limit the Trust's right to file at any time such amendments to its Registration Statement and Prospectus, of whatever character, as it deems advisable, such right being in all respects absolute and unconditional. The Trust represents and warrants that any amendment to its Registration Statement and Prospectus hereafter filed will, when it becomes effective, contain all statements required to be stated therein in accordance with the Securities Act and the rules and regulations of the Commission thereunder, that all statements of fact contained therein will, when the same shall become effective, be true and correct and that no such amendment, when it becomes effective, will include an untrue statement of a material fact or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading to a purchaser of Shares. (f) The Trust will indemnify, defend and hold Distributor, its several officers and directors, and any person who controls Distributor within the meaning of Section 15 of the Securities Act (collectively, the "Distributor Indemnitees"), free and harmless from and against any and all claims, demands, liabilities and expenses (including the cost of investigating or defending such claims, demands or liabilities and any counsel fees incurred in connection therewith) that any Distributor Indemnitee may incur, under the Securities Act, or under common law or otherwise, arising out of or based upon any alleged untrue statement of a material fact contained in the Trust's Registration Statement and Prospectus under the Securities Act or arising out of or based upon any alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that in no event shall anything contained in this paragraph (f) be so construed as to protect Distributor against any liability to the Trust or its security holders to which Distributor would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of its duties, or by reason of its reckless disregard of its obligations and duties under this Section 2. This agreement to - 51 - indemnify Distributor Indemnitees is expressly conditioned upon the Trust being notified of any action brought against any Distributor Indemnitee, such notification to be given by letter, facsimile transmission or telegram to the Trust and referring to the person against whom such action is brought within ten days after the summons or other first legal process shall have been served on such person. The failure so to notify the Trust of any such action shall not relieve the Trust from any liability which it may have to any Distributor Indemnitee otherwise than on account of the indemnification provided for in this paragraph (f). The Trust will be entitled to assume the defense of any suit brought to enforce any such claim, and to retain counsel of good standing chosen by it and approved by Distributor. In the event the Trust elects to assume the defense of any such suit and retain counsel of good standing approved by Distributor, the defendants in such suit shall bear the fees and expenses of any additional counsel retained by any of them. In the event the Trust does not elect to assume the defense of any such suit, or in case Distributor does not approve of counsel chosen by the Trust or has been advised that it may have available defenses or claims which are not available to or conflict with those available to the Trust, the Trust will reimburse any Distributor Indemnitee named as defendant in such suit for the fees and expenses of any counsel retained by any such person. The indemnification provisions contained in this paragraph (f) and the Trust's representations and warranties in this Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Distributor Indemnitee and shall survive the sale of any Shares made pursuant to subscriptions obtained by Distributor. The indemnification provisions of this paragraph (f) will inure exclusively to the benefit of the Distributor Indemnitees and their respective successors and assigns. The Trust agrees promptly to notify Distributor of the commencement of any litigation or proceeding against the Trust or any of its trustees or officers in connection with the issue or sale of Shares. (g) Distributor agrees to indemnify, defend and hold the Trust, its several officers and directors, and any person who controls the Trust within the meaning of Section 15 of the Securities Act (collectively, the "Trust Indemnitees"), free and harmless from and against any and all claims, demands, liabilities, and expenses (including the cost of investigating or defending such claims, demands or liabilities and any reasonable counsel fees incurred in connection therewith) which any Trust Indemnitee may incur under the Act, or under common law or otherwise, but only to the extent that such liability, or expense incurred by the Trust Indemnitees resulting from such claims or demands shall arise out of or be based upon any alleged untrue statement of a material fact contained in information furnished in writing by Distributor in its capacity as distributor to the Trust for use in the Trust's Registration Statement or Prospectus under the Securities Act, or shall arise out of or be based upon any alleged omission to state a material fact in connection with such information required to be stated in the Registration Statement or Prospectus or necessary to make such information not misleading. Distributor's agreement to indemnify the Trust Indemnitees is expressly conditioned upon Distributor being notified of any action brought against a Trust Indemnitee, such notification to be given by letter, facsimile transmission or telegram - 52 - addressed and referring to the person against whom such action is brought within ten days after the summons or other first legal process shall have been served on such person. Distributor shall have a right to control the defense of such action, with counsel of its own choosing, satisfactory to the Trust, if such action is based solely upon such alleged misstatement or omission on Distributor's part, and in any other event Distributor and the Trust Indemnitees named shall each have the right to participate in the defense or preparation of the defense of any such action. The failure so to notify Distributor of any such action shall not relieve Distributor from any liability which it may have to any Trust Indemnitee otherwise than on account of the indemnification provisions in this paragraph (g). (h) The Trust shall advise Distributor immediately: (i) of any request by the Commission for amendments to the Trust's Registration Statement or Prospectus or for additional information; (ii) in the event of the issuance by the Commission of any stop order suspending the effectiveness of the Trust's Registration Statement or Prospectus or the initiation of any proceedings for that purpose; (iii) of the happening of any material event which makes untrue any statement made in the Trust's Registration Statement or Prospectus or which requires the making of a change in either thereof in order to make the statements therein not misleading; and (iv) of all action of the Commission with respect to any amendments to the Trust's Registration Statement or Prospectus which may from time to time be filed with Commission under the Act or the Securities Act. SECTION 3. STANDARD OF CARE The Distributor shall give the Trust the benefit of its best judgment and efforts in rendering its services to the Trust and shall not be liable for error of judgment or mistake of law, or in any event whatsoever, provided that nothing herein shall be deemed to protect, or purports to protect, the Distributor against any liability to the Trust or to the security holders of the Trust to which it would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties hereunder, or by reason of reckless disregard of its obligations and duties hereunder. SECTION 4. EXPENSES; COMPENSATION (a) Subject to any agreement by the Trust's investment adviser to reimburse or pay expenses of the Trust, the Trust shall be responsible and assumes the obligation for payment of all its expenses. (b) The Distributor shall be entitled to no compensation or reimbursement of expenses for the distribution services provided by the Distributor pursuant to this Agreement. (c) Notwithstanding anything in this Agreement to the contrary, the Distributor and its affiliated persons may receive compensation or reimbursement from the Trust with respect to (i) the provision of shareholder support or other services, (ii) the provision of management services or (iii) service as a Trustee or officer of the Trust. - 53 - SECTION 5. EFFECTIVENESS, DURATION AND TERMINATION (a) This Agreement shall become effective on the date on which the Trust's Registration Statement relating to the shares of the Cutler Equity Income Fund, the Cutler Approved List Equity Fund and the Cutler Government Securities Fund becomes effective and shall relate to every other Fund as of the date on which the Trust's Registration Statement relating to the shares of such Fund becomes effective. Upon the effectiveness of this Agreement, it shall supersede all previous agreements between the Trust and the Distributor covering the subject matter hereof. (b) Unless otherwise terminated pursuant to its terms, this Agreement shall continue in effect for twelve months and, thereafter, shall continue in effect for successive twelve-month periods, provided that such continuance is specifically approved at least annually (i) by the Board or by a vote of a majority of the outstanding voting securities of the Trust and (ii) by a vote of a majority of Trustees of the Trust who are not parties to this Agreement or interested persons of any such party cast in person at a meeting called for the purpose of voting on such approval. If the continuation of this Agreement is not approved, the Distributor may continue to render the services described herein in the manner and to the extent permitted by the Act. (c) This Agreement may be terminated at any time, without the payment of any penalty, (i) by the Board or by a vote of a majority of the outstanding voting securities of the Trust on 60 days' written notice to the Distributor or (ii) by the Distributor on 60 days' written notice to the Trust. This Agreement shall automatically terminate in the event of its assignment. SECTION 6. ACTIVITIES OF DISTRIBUTOR Except to the extent necessary to perform its obligations under this Agreement, nothing herein shall be deemed to limit or restrict the Distributor's right, or the right of any of its officers, directors or employees (whether or not they are a director, officer, employee or other affiliated person of the Trust) to engage in any other business or to devote time and attention to the management or other aspects of any other business, whether of a similar or dissimilar nature, or to render services of any kind to any other corporation, trust, firm, individual or association. SECTION 7. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY The Trustees of the Trust and the shareholders of each Fund shall not be liable for any obligations of the Trust or of the Funds under this Agreement, and the Distributor agrees that, in asserting any rights or claims under this Agreement, it shall look only to the assets and property of the Trust or the Fund to which the Distributor's rights or claims relate in settlement of such rights or claims, and not to the Trustees of the Trust or the shareholders of the Funds. - 54 - SECTION 8. MISCELLANEOUS (a) Except for Schedule A, no provision of this Agreement may be amended or modified in any manner except by a written agreement properly authorized and executed by both parties hereto and, if required by the Act, by a vote of a majority of the outstanding voting securities of the Trust. (b) If any part, term or provision of this Agreement is held to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did no contain the particular part, term or provision held to be illegal or invalid. (c) Section headings in this Agreement are included for convenience only and are not to be used to construe or interpret this Agreement. (d) Notices, requests, instructions and communications received by the parties at their respective principal places of business, or at such other address as a party may have designated in writing, shall be deemed to have been properly given. (e) This Agreement shall be governed by and shall be construed in accordance with the laws of the State of New York. (f) The terms "vote of a majority of the outstanding voting securities," "interested person," "affiliated person" and "assignment" shall have the meanings ascribed thereto in the Act. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed all as of the day and year first above written. THE CUTLER TRUST By:/s/ JOHN Y. KEFFER John Y. Keffer President FORUM FINANCIAL SERVICES, INC. By:/s/ DAVID R. KEFFER David R. Keffer Vice President - 55 - THE CUTLER TRUST DISTRIBUTION AGREEMENT SCHEDULE A FUNDS OF THE TRUST Cutler Equity Income Fund Cutler Approved List Equity Fund Cutler Government Securities Fund - 56 - EX-99.8 6 EX-99.8 EXHIBIT 8 CUSTODIAN AGREEMENT AGREEMENT, dated as of December 30, 1992, between The Cutler Trust (the "Trust"), a business trust duly organized and existing under the laws of the State of Delaware, and The First National Bank of Boston (the "Custodian"), a banking institution duly organized under the laws of the United States: WHEREAS, the Trust desires to appoint the Custodian as custodian of its securities and cash and the Custodian is willing to act in such capacity upon the terms and conditions set forth below; and WHEREAS, the Custodian in its capacity as custodian will also collect and apply the dividends and interest on securities in the manner and to the extent set forth below; NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained herein, the parties do hereby agree as follows: SECTION 1. DEFINITIONS The terms, as defined in this Section, whenever used in this Agreement or in any amendment or supplement hereto shall have the meanings specified below, insofar as the context will allow. (a) Board: The term Board shall mean the Board of Trustees of the Trust. (b) Book-Entry Account: The term Book-Entry Account shall mean an account maintained by a Federal Reserve Bank in which Book-Entry Securities are held. (c) Book-Entry Securities: The term Book-Entry Securities shall mean securities issued by the United States Treasury and United States Federal agencies and instrumentalities that are maintained in the book-entry system of a Federal Reserve Bank in accordance with the book-entry regulations of the Treasury and the various Federal agencies and instrumentalities. (d) Custodian: The term Custodian shall mean The First National Bank of Boston, in its capacity as custodian under this Agreement. (e) Oral Instructions: The term Oral Instructions shall mean an authorization, instruction, approval, item or set of data, or information of any kind transmitted to the Custodian in person or by telephone, vocal telegram or other electronic means, by a person or persons reasonably believed in good faith by the Custodian to be a person or persons authorized by a resolution of the Board to give Oral Instructions on behalf of the Trust. Each Oral Instruction shall specify whether it is applicable to the Trust or a specific Series. - 58 - (f) Securities: The term Securities shall mean bonds, debentures, notes, stocks, shares, evidences of indebtedness, and other securities and investments from time to time owned by the Trust. (g) Securities Depository: The term Securities Depository shall mean a clearing corporation registered under Section 17A of the 1934 Act which maintains a system for the central handling of securities in which all securities of any particular class or series of any issuer deposited within the system are treated as fungible and may be transferred or pledged by bookkeeping entry without physical delivery of the securities. (h) Series: The term Series shall mean each investment portfolio of the Trust as now exists or may in the future be created. (i) Sub-Custodian: The term Sub-Custodian shall mean a sub-custodian approved by the Trust as provided in Section 17. (j) The Trust: The term Trust shall mean The Cutler Trust. (k) Written Instructions: The term Written Instruction shall mean an authorization, instruction, approval, item or set of data, or information of any kind transmitted to the Custodian in original writing containing original signatures, or a copy of such document transmitted by telecopy, including transmission of such signature, or other mechanical or documentary means, at the request of a person or persons reasonably believed in good faith by the Custodian to be a person or persons authorized by a resolution of the Board to give Written Instructions on behalf of the Trust. Each Written Instruction shall specify whether it is applicable to the Trust or a specific Series. (l) 1934 Act: The term 1934 Act shall mean the Securities Exchange Act of 1934, as amended. (m) 1940 Act: The term 1940 Act shall mean the Investment Company Act of 1940, as amended. SECTION 2. RESOLUTIONS FOR INSTRUCTIONS The Trust shall, as necessary, file with the Custodian a certified copy of the operative resolution of the Board authorizing execution of Written Instructions and the number of signatories required and setting forth authentic signatures of all signatories authorized to sign on behalf of the Trust or any Series thereof. Such resolution shall constitute conclusive evidence of the authority of all signatories designated therein to act and shall be considered in full force and effect, with the Custodian fully protected in acting in reliance thereon, until the Custodian receives a certified copy of a replacement resolution adding or deleting a person or persons authorized to give Written Instructions. The Trust shall, as necessary, file with the Custodian a certified copy of the operative resolution of the Board authorizing the transmittal of Oral Instructions and specifying the person or persons - 59 - authorized to give Oral Instructions on behalf of the Trust or any Series thereof. This resolution shall constitute conclusive evidence of the authority of the person or persons designated therein to act and shall be considered in full force and effect, with the Custodian fully protected in acting in reliance therein, until the Custodian actually receives a certified copy of a replacement resolution adding or deleting a person or persons authorized to give Oral Instructions. If the officer certifying the resolution is authorized to give Oral Instructions, the certification shall also be signed by a second officer of the Trust authorized to give Written Instructions. SECTION 3. AUTHORIZATION FOR CUSTODIAN TO ACT For all purposes under this Agreement, the Custodian is authorized to act upon receipt of the first of any Written or Oral Instruction it receives. If the first Instruction is an Oral Instruction, the Trust shall be responsible for delivering, or having delivered to the Custodian, a confirmatory Written Instruction; and in cases where the Custodian receives an Instruction, whether Written or Oral, with respect to a portfolio transaction, the Trust shall cause the broker or dealer to send a written confirmation of the transaction to the Custodian. The Custodian shall be entitled to rely on the first Instruction received and, for any act or omission undertaken in compliance therewith, shall be free of liability and fully indemnified and held harmless by the Trust. The sole obligation of the Custodian with respect to any confirmatory Written Instruction or broker or dealer written confirmation shall be to make reasonable efforts to detect any discrepancy between the original Instruction and such confirmation and to report such discrepancy to the Trust. The Trust shall be responsible, at the Trust's expense, for taking any action, including any reprocessing, necessary to correct any discrepancy or error, and to the extent such action requires the Custodian to act, the Trust shall give the Custodian specific Written Instructions as to the action required. SECTION 4. APPOINTMENT AS CUSTODIAN The Trust hereby appoints the Custodian as custodian of the Securities and cash of each Series from time to time on deposit hereunder (collectively, "assets"). The Securities held by the Custodian, unless payable to bearer or maintained in a Securities Depository or Book-Entry Account pursuant to Section 5, shall be registered in the name of the Custodian or in the name of its nominee, or if directed by Written Instructions, in the name of the Trust or its nominee. Securities, excepting bearer securities, delivered from time to time to the Custodian in certificated form shall, in all cases, be in due form for transfer, or registered as above provided. The assets of the Trust shall be and remain the sole property of the Trust and the Custodian shall have only custody thereof. The Custodian shall hold, earmark and physically segregate for the appropriate Series account of the Trust all non-cash property, including all Securities that are not maintained pursuant to Section 5 in a Securities Depository or Book-Entry Account. - 60 - The Custodian shall open and maintain a separate bank account or accounts in the name of the Trust, subject only to draft or order by the Custodian acting pursuant to the terms of this Agreement, and shall hold in such account or accounts, subject to the provisions hereof, all cash received by it from or for the account of the Trust. Notwithstanding the foregoing, a separate bank account may be established by the Trust to be used as a petty cash account in accordance with Rule 17f-3 under the 1940 Act and the Custodian shall have no duty or liability with regard to such account. Upon receipt of Written Instructions, cash held by the Custodian for the Trust shall be deposited by the Custodian to the Custodian's credit in the banking department of the Custodian or in such other banks or trust companies as it may in its discretion deem necessary or desirable. Such funds shall be deposited by the Custodian in its capacity as Custodian and shall be withdrawable by the Custodian only in that capacity. SECTION 5. DEPOSIT OF TRUST ASSETS The Trust hereby authorizes the Custodian to deposit assets of the Series as follows: (a) [Intentionally Left Blank]; (b) deposit in the Custodian's account(s) with any Securities Depository all or any part of the Securities as may from time to time be held for the Trust; and (c) deposit Book-Entry Securities belonging to the Trust in a Book-Entry Account maintained for the Custodian. So long as any deposit referred to in (b) or (c) above is maintained for the Trust, the Custodian shall (i) deposit the Securities in an account that includes only assets held by it for customers; (ii) send the Trust a confirmation (i.e., an advice of notice of transaction) of any transfers of the Trust to or from the account; (iii) with respect to Securities of the Trust transferred to the account, identify as belonging to the Trust a quantity of securities in a fungible bulk of securities that are registered in the name of the Custodian or its nominee, or shown on the Custodian's account on the books of the Securities Depository, the Book-Entry System, or the Custodian's agent; (iv) promptly send to the Trust all reports it receives from the appropriate Federal Reserve Bank or Securities Depository on its respective system of internal accounting control; and - 61 - (v) send to the Trust such reports of the systems of internal accounting control of the Custodian and its agents through which such Securities are deposited as are available and as the Trust may reasonably request from time to time. The Trust warrants that the Board has approved the arrangement for the deposit of Securities in Securities Depositories and in Book-Entry Accounts. The Custodian shall not waive any rights it may have against a Securities Depository or Federal Reserve Bank. The Trust may elect to be subrogated to the rights of the Custodian against the Securities Depository or Federal Reserve Bank or any other person with respect to any claim that the Custodian may have as a consequence of any loss or damage suffered by the Trust as a result of the Custodian's use of a Securities Depository or Book Entry Account if and to the extent that the Trust has not been made whole for any such loss or damage. SECTION 6. TRANSFER OF ASSETS TO CUSTODIAN The Trust will initially transfer and deposit or cause to be transferred and deposited with the Custodian all of the assets owned by each Series at the time this Agreement becomes effective. Such transfer and deposit shall be evidenced by appropriate schedules duly executed by the Trust. The Trust will deposit with the Custodian additional Securities of the Trust and dividends or interest collected on such Securities as the same are acquired from time to time. The Trust will cause to be deposited with the Custodian from time to time (i) the net proceeds of Securities sold, (ii) the applicable net asset value of shares of the Trust sold, whether representing initial issue or any other securities and (iii) cash as may be acquired. SECTION 7. DISBURSEMENTS The Custodian is hereby authorized and directed to disburse cash from time to time as follows: (a) for the purchase of Securities by the Trust, upon receipt by the Custodian of (i) Written or Oral Instructions specifying the Securities and stating the purchase price and the name of the broker, investment banker or other party to or upon whose order the purchase price is to be paid and (ii) either the Securities so purchased, in due form for transfer or already registered as provided in Section 4, or notification by a Securities Depository or a Federal Reserve Bank that the Securities have been credited to the Custodian's account with the Securities Depository or Federal Reserve Bank; (b) for transferring funds, including mark-to-the-market payments, as directed by the Trust in connection with a repurchase agreement covering Securities that have been received by the Custodian as provided in subsection (a) above, upon receipt by the Custodian of Written or Oral Instructions specifying the Securities, the purchase price and the party to whom the purchase price is to be paid; - 62 - (c) to advance or pay out accrued interest on bonds purchased, cash dividends on stocks sold and similar items. In the event that any Securities are registered in the name of the Trust or its nominee, the Trust will endorse, or cause to be endorsed, to the Custodian dividend and interest checks, or will issue appropriate orders to the issuers of the Securities to pay dividends and interest to the Custodian; (d) for transferring funds as directed by the Trust to its redemption paying agent; (e) for exercising warrants and rights received upon the Securities, upon timely receipt of Written or Oral Instructions authorizing the exercise of such warrants and rights and stating the consideration to be paid; (f) for repaying, in whole or in part, any loan of the Trust, upon receipt of Written or Oral Instructions directing payment; (g) for transferring funds to any Sub-Custodian, upon receipt of Written or Oral Instructions and upon agreement by the Custodian; and (h) to disburse money to or upon the order of the Trust, as it may from time to time direct for the following purposes; (i) to pay proper compensation and expenses of the Custodian; (ii) to transfer funds to the Trust's dividends disbursing agent; (iii) to pay, or provide the Trust with money to pay, taxes, upon receipt of appropriate Written or Oral Instructions; (iv) to transfer funds to a separate checking account maintained by the Trust pursuant to Section 17(f) of the 1940 Act; and (v) to pay interest, management or supervisory fees, administration, dividend and transfer agency fees and costs, compensation of personnel and operating expenses, including but not limited to fees for legal, accounting and auditing services. Before making any such payment or disbursement, however, the Custodian shall receive, and may conclusively rely upon, Written or Oral Instructions requesting such payment or disbursement and stating that it is for one or more or the purposes enumerated above. Notwithstanding the foregoing, the Custodian may disburse cash for other corporate purposes; provided, however, that such disbursement may be made only upon receipt of Written or Oral Instructions stating that such disbursement was authorized by resolution of the Board as a proper corporate purpose. The determination of the Board as to what shall constitute income derived from the Securities, as distinguished from principal or capital, - 63 - shall be final and conclusive upon the Trust, the Custodian and the shareholders of the Trust. SECTION 8. DELIVERY OF SECURITIES The Custodian is hereby authorized and directed to deliver Securities of the Trust from time to time as follows: (a) for completing sales of Securities sold by the Trust, upon receipt of (i) Written or Oral Instructions specifying the Securities sold, the amount to be received and the broker, investment banker or other party to or upon whose order the Securities are to be delivered and (ii) the net proceeds of sale; provided, however, that the Custodian may accept payment in connection with the sale of Book-Entry Securities and Securities on deposit with a Securities Depository by means of a credit in the appropriate amount to the account described in Section 5(b) or (c) above; and provided further, that the Custodian may advance the proceeds of sale to the Trust pending the completion of the sale or the return to the Trust of the Securities in the event the sale fails to be completed. Any such advance shall be at the Custodian's risk and the Custodian shall be subrogated to the Trust's rights against any other person in the event the sale is not completed and the Trust's Securities are not returned; (b) for exchanging Securities for other Securities (and cash, if applicable), upon timely receipt of (i) Written or Oral Instructions stating the Securities to be exchanged, cash to be received and the manner in which the exchange is to be made and (ii) the other Securities (and cash, if applicable) as specified in the Written or Oral Instructions; (c) for exchanging or converting Securities pursuant to their terms or pursuant to any plan of conversion, consolidation, recapitalization, reorganization, readjustment or otherwise, upon timely receipt of (i) Written or Oral Instructions authorizing such exchange or conversion and stating the manner in which such exchange or conversion is to be made and (ii) the Securities, certificates of deposit, interim receipts, and/or cash to be received as specified in the Written or Oral Instructions; (d) for presenting for payment Securities that have matured or have been called for redemption; (e) for depositing with the lender Securities to be held as collateral for a loan to the Trust, upon receipt of Written or Oral Instructions directing delivery to the lender; (f) in connection with a repurchase agreement, upon receipt of Written or Oral Instructions stating (i) the Securities to be delivered and the payment to be received and (ii) payment; (g) for depositing with a depository agent in connection with a tender or other similar offer to purchase portfolio Securities of the Trust, upon receipt of Written or Oral Instructions; - 64 - (h) for depositing Securities with the issuer thereof, or its agents, for the purpose of transferring such Securities into the name of the Trust, the Custodian or any nominee of either in accordance with Section 4; and (i) for other proper corporate purposes; provided, that the Custodian shall receive Written or Oral Instructions requesting such delivery. SECTION 9. BORROWINGS The Trust will cause any bank (including the Custodian) from which it borrows money using Securities as collateral to deliver to the Custodian a notice of undertaking in the form then currently employed by the lender setting forth the amount that the lender will loan to the Trust against delivery of a stated amount of collateral. The Trust shall promptly deliver to the Custodian Written or Oral Instructions for each loan, stating (i) the name of the lender and the amount of loan; and (ii) the name of the issuer, the title and the number of shares or principal amount of the Securities to be delivered as collateral. The Custodian shall deliver as directed by the Trust such specified collateral, if any, and receive from the lender the total amount of the loan proceeds; provided, however, that no delivery of Securities shall occur if the amount of loan proceeds does not conform to the amount set forth in the Written or Oral Instructions, or if such Instructions do not contain the requirements of (ii) above. The Custodian shall deliver, from time to time, any Securities required as additional collateral for any transaction described in this Section, upon receipt of Written or Oral Instructions. The Trust shall cause all Securities released from collateral status to be returned directly to the Custodian. SECTION 10. ADVANCEMENTS If, in its sole discretion, the Custodian advances funds to the Trust to pay for the purchase of Securities, to cover an overdraft of the Trust's account with the Custodian, or to pay any other indebtedness to the Custodian, the Trust's indebtedness shall be deemed to be a loan by the Custodian to the Trust, payable on demand and bearing interest at the rate then charged by the Custodian for such loans; provided, however, that the Custodian shall obtain the Trust's prior approval for any advance of funds other than for the purpose of settling a Securities trade. The Trust hereby agrees that the Custodian shall have a continuing lien and security interest, to the extent of any such overdraft or indebtedness, and to the extent required by Regulation U of the Board of Governors of the Federal Reserve System in the event any security interest is taken in "margin stock" as therein defined, in any property then held by the Custodian or its agents for the benefit of the Trust, or in which the Trust may have an interest. The Trust authorizes the Custodian, in its sole discretion at any time, to charge any such overdraft or indebtedness, together with interest due thereon, against any balance then credited to the Trust on the Custodian's books. - 65 - SECTION 11. OPTION CONTRACTS [Intentionally Left Blank] SECTION 12. VOTING AND CONSENT RESPONSIBILITY The Custodian assumes no duty, obligation or responsibility whatsoever to exercise any voting or consent powers with respect to the Securities held by it from time to time hereunder. The Trust or such person or persons as it may designate shall have the right to vote, consent or otherwise act with respect to such Securities. The Custodian will exercise those efforts reasonably believed in good faith by the Custodian to be adequate in the circumstances ("Best Efforts") to furnish to the Trust in a timely manner all proxies or other appropriate authorizations with respect to Securities registered in the name of the Custodian or its nominee, so that the Trust or its designee may vote, consent or otherwise act. SECTION 13. COMPENSATION The Trust agrees to pay to the Custodian compensation for its services as set forth in Schedule A hereto attached, or as shall be set forth in written amendments to such Schedule approved by the Trust and the Custodian from time to time. SECTION 14. CORPORATE ACTIONS The Custodian will exercise Best Efforts to forward to the Trust in a timely manner all notices of stockholder meetings, proxy statements, annual reports, conversion notices, call notices, or other notices or written materials of any kind (excluding stock certificates and dividend and interest payments) received by the Custodian as registered owner of Securities ("notices and materials"). The Trust and its investment adviser have primary responsibility for taking action on such notices and materials. Upon receipt of warrants or rights issued in connection with the assets of the Trust, the Custodian shall enter into its ledgers appropriate notations indicating such receipt and shall notify the Trust of such receipt. However, the Custodian shall have no obligation to take any other action with respect to such warrants or rights, except as directed in Written or Oral Instructions. SECTION 15. BOOKS AND RECORDS The Custodian acknowledges and agrees that all books and records maintained for the Trust in any capacity under this Agreement are the property of the Trust and may be inspected by the Trust or any authorized regulatory agency at any reasonable time. Upon request all such books and records will be surrendered promptly to the Trust. The Custodian agrees to make available upon request and to preserve for the periods prescribed in Rule 31a-2 under the 1940 Act any records related - 66 - to services provided under this Agreement and required to be maintained by Rule 31a-1 of such Act. SECTION 16. LIABILITY OF CUSTODIAN The Custodian assumes no duty, obligation or responsibility whatsoever with respect to Securities not deposited with the Custodian. The Custodian assumes only the duties and obligations specifically set forth herein, and duties incidental thereto normally performed by custodians of mutual funds. It specifically assumes no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Trust, whether or not on deposit hereunder. The responsibility for the proper and timely management, investment and reinvestment of such Securities shall be that of the Trust and its investment advisor. The Custodian shall not be liable for any taxes, assessments or governmental charges that may be levied or assessed upon the Securities held by it hereunder, or upon the income therefrom. Upon Written or Oral Instructions, the Custodian may pay any such tax, assessment or charge and reimburse itself out of the monies of the Trust or the Securities held hereunder. The Custodian may rely upon the advice of counsel, who may be counsel for the Trust or for the Custodian, and upon statements of accountants, brokers or other persons believed by it in good faith to be expert in the matters upon which they are consulted. The Custodian shall not be liable for any action taken in good faith reliance upon such advice or statements. The Custodian shall not be liable for action taken in good faith in accordance with any Written or Oral Instructions, request or advice of the Trust or its officers, or information furnished by the Trust or its officers. The Custodian shall not be liable for any non-negligent action taken in good faith and reasonably believed by it to be within the powers conferred upon it by this Agreement. No liability of any kind, other than to the Trust, shall attach to the Custodian by reason of its custody of the Securities and cash of the Trust under this Agreement or otherwise as a result of its custodianship. In the event that any claim shall be made against the Custodian, it shall have the right to pay the claim and reimburse itself from the assets of the Trust in its hands; provided, however, that no such reimbursement shall occur unless the Trust is notified of the claim and is afforded an opportunity to defend the claim, if it so elects. Except as otherwise provided herein, the Trust shall further agree to indemnify and hold the Custodian harmless for any loss, claim, damage, expense or liability arising out of the custodian relationship under this Agreement; provided such loss, claim, damage, expense or liability is not the direct result of the Custodian's negligence or willful misconduct. - 67 - SECTION 17. SUB-CUSTODIANS Upon receipt of Written or Oral Instructions to appoint a Sub-Custodian, which shall be deemed a Trust approval of the appointment, the Custodian shall appoint one or more banking institutions licensed and examined by the United States or any state thereof as Sub-Custodian of Securities and cash of the Trust from time to time; provided, however, that the Custodian shall have requested appointment of a Sub-Custodian. The Custodian shall have no liability to the Trust or any other person by reason of any act or omission of any Sub-Custodian, and the Trust shall indemnify the Custodian and hold it harmless from and against any and all actions, suits and claims, whether groundless or otherwise, and from and against any and all losses, damages, costs, charges, counsel fees, payments, expenses and liabilities arising directly or indirectly out of or in connection with the performance of any Sub-Custodian; provided, however, that the Custodian shall, and hereby does, assign to the Trust any and all claims for any losses, costs, expenses, or damages that may be incurred by the Trust by reason of the negligence, gross negligence or misconduct of any Sub-Custodian, or by reason of the failure of a Sub-Custodian to perform in accordance with any applicable agreement, including instructions of the Custodian of the Trust. The Custodian shall be under no obligation to prosecute or to defend any action, suit or claim arising out of, or in connection with, the performance of any Sub-Custodian, if, in the opinion of the Custodian's counsel, such action will involve the Custodian in expense or liability. The Trust shall, upon request, furnish the Custodian with satisfactory indemnity against such expense or liability, and upon request of the Custodian, the Trust shall assume the entire defense of any action, suit, or claim subject to the foregoing indemnity. The Trust shall pay all fees and expenses of any Sub-Custodian. SECTION 18. EFFECTIVENESS, AMENDMENT, TERMINATION (a) This Agreement shall become effective as of the date set forth on the first page hereof. (b) This Agreement may be amended from time to time by a written supplemental agreement executed by the Trust and the Custodian. (c) This Agreement may be terminated by either party upon notice to the other. The termination shall become effective at the time specified in the notice but no earlier than sixty (60) days after the date of the notice. Upon notice of termination, the Trust shall use Best Efforts to obtain a successor custodian. If a successor custodian is not appointed within sixty (60) days after the date of the notice of termination, the Board shall, by resolution, designate the Trust as its own custodian. Each successor custodian shall be a person qualified to serve under the 1940 Act. Promptly following receipt of written notice from the Trust of the appointment of a successor custodian and receipt of Written or Oral Instructions, the Custodian shall deliver upon payment of the Custodian's reasonable charges and disbursements and any - 68 - other amounts due all Securities and cash it then holds directly to the successor custodian and shall, upon request of the Trust and the successor custodian, execute and deliver to the successor custodian an instrument approved by its counsel transferring to the successor custodian all the rights, duties and obligations of the Custodian, transfer to the successor custodian the originals or copies of all books and records maintained by the Custodian hereunder and cooperate with, and provide reasonable assistance to, the successor custodian in the establishment of the books and records necessary to carry out its responsibilities hereunder. If the Board fails to designate a successor custodian or to designate the Trust as its own custodian within sixty (60) days after the date of the notice of termination, the Custodian may, at the expense of the Trust, apply to the Federal District Court for the Commonwealth of Massachusetts for further direction as to the disposition of the Trust's assets. Notwithstanding the termination of this Agreement, the Custodian shall be obligated to safeguard the assets of the Trust and may change reasonable and customary fees for doing so pending receipt by the court or the Trust of instructions for delivery of all securities and cash held, but the Custodian shall have no obligation to process any other transactions or perform any other custodial functions following termination of this Agreement. Upon delivery of the Securities and other assets of the Trust and compliance with the other requirements of this Section 18, the Custodian shall have no further duty or liability hereunder. Every successor custodian appointed hereunder shall execute and deliver an appropriate written acceptance of its appointment and shall thereupon become vested with the rights, powers, obligations and custody of the predecessor custodian. SECTION 19. BUSINESS DAYS Nothing contained in this Agreement is intended to or shall require the Custodian or Sub-Custodian in any capacity hereunder to perform any functions or duties on any holiday, weekend or weekday on which the Custodian, the Sub- Custodian or the New York Stock Exchange is closed or permitted by law to be closed. Functions or duties normally scheduled to be performed on such days shall be performed on, and as of, the next business day on which both the New York Stock Exchange and the Custodian are open, unless otherwise required by law. SECTION 20. MISCELLANEOUS (a) This Agreement may be executed in more than one counterpart, each of which shall be deemed to be an original, and all of which together shall constitute one and the same instrument. (b) This Agreement shall extend to and bind the parties hereto and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by the Trust without the written consent of the Custodian, or by the Custodian without the written consent of the Trust, authorized or approved by a resolution of the Board. Notwithstanding the foregoing, either party may assign this Agreement without the consent of the other party so long as the assignee is an affiliate, parent or subsidiary of the assigning party and the - 69 - assignee of the Custodian is qualified to serve as custodian under the 1940 Act. (c) Headings in this Agreement are included for convenience only and are not to be used to construe or interpret this Agreement. (d) This Agreement shall be governed by the laws of the Commonwealth of Massachusetts. WITNESS the following signatures: THE CUTLER TRUST BY: -------------------------- John Y. Keffer President THE FIRST NATIONAL BANK OF BOSTON BY: -------------------------- TITLE: ----------------------- - 70 - LOGO 1993 MUTUAL FUND MASTER FEE SCHEDULE CUTLER TRUST U.S. ASSETS CUSTODIAN FEES ANNUAL ADMINISTRATIVE FEE - BILLED MONTHLY 2 basis points for the first $100 million of assets 1.5 basis point for the next $100 million of assets 1 basis points for the next $800 million of assets HOLDINGS CHARGE Waived PORTFOLIO TRANSACTIONS DTC $12.00 FBE $12.00 FNBB Repurchase Agreement $10.00 BKB Sweep Transactions $3.50 VRDN $20.00 Physical Transactions $20.00 Options $25.00 PTC Monthly Holding Charge $3.00 Buy/Sell Transaction $15.00 Monthly Principal and Interest Per Pool $4.50 GLOBAL FEES Unbundled by Country / Upon Request OUT OF POCKET EXPENSE AS INCURRED INCLUDED BUT NOT LIMITED TO: Postage, Insurance, Courier, Expedited Mail, Duplicating, Fax Charges, Wires in and out, Micro fiche, Stop Payments, etc. CREDIT FOR BALANCES Based on 50% of the 90 day U.S. Treasury Bill rate, less Federal Reserve Requirements and F.D.I.C. assessments, determine monthly. No credit carried forward. OVERDRAFT RECOVERY Overdraft charge will be calculated on the actual overdraft incurred plus Federal Reserve requirements and F.D.I.C. assessments. TERM OF CONTRACT Guaranteed for one year The First National Bank of Boston The Cutler Trust - --------------------------------- ---------------- /s/ Janice Chadbonnier /s/ John Y. Keffer - ---------------------- ------------------ title: Senior Manager title: President -------------- --------- date: January 5, 1993 date: January 20, 1993 --------------- ---------------- - 71 - EX-99.9(A) 7 EX-99.9(A) EXHIBIT 9(a) THE CUTLER TRUST MANAGEMENT AGREEMENT AGREEMENT made this 31st day of December, 1992, between The Cutler Trust (the "Trust"), a business trust organized under the laws of the State of Delaware with its principal place of business at 61 Broadway, New York, New York 10006, and Forum Financial Services, Inc. (the "Manager"), a corporation organized under the laws of State of Delaware with its principal place of business at 61 Broadway, New York, New York 10006. WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company and may issue its shares of beneficial interest, no par value (the "Shares") in separate series and classes; and WHEREAS, the Trust desires to employ the Manager to perform administrative services for certain investment portfolios of the Trust as listed on Schedule A hereto (each a "Fund" and, collectively, the "Funds") and the Manager is willing to provide those services on the terms and conditions set forth in this Agreement; NOW THEREFORE, the Trust and Manager agree as follows: SECTION 1. EMPLOYMENT The Trust hereby employs the Manager, and the Manager agrees, to act as manager of the Trust for the period and on the terms set forth in this Agreement. In connection therewith, the Trust has delivered to the Manager copies of its Trust Instrument and Bylaws, the Trust's Registration Statement and all amendments thereto filed pursuant to the Securities Act of 1933, as amended (the "Securities Act") or the Act (the "Registration Statement") and the current Prospectus and Statement of Additional Information of each Fund (collectively, as currently in effect and as amended or supplemented, the "Prospectus") and, shall promptly furnish the Manager with all amendments of or supplements to the foregoing. SECTION 2. ADMINISTRATIVE DUTIES (a) Subject to the direction and control of the Trust's Board of Directors (the "Board"), the Manager shall manage all aspects of the Trust's operations with respect to the Funds except those that are the responsibility of Cutler & Company or any other investment adviser to a Fund (the "Adviser"), all in such manner and to such extent as may be authorized by the Board. (b) With respect to the Trust or each Fund, as applicable, the Manager shall: (i) oversee (A) the preparation and maintenance by the Adviser and the Trust's custodian, transfer agent, dividend disbursing agent and fund accountant (or if appropriate, -73- prepare and maintain) in such form, for such periods and in such locations as may be required by applicable law, of all documents and records relating to the operation of the Trust required to be prepared or maintained by the Trust or its agents pursuant to applicable law; (B) the reconciliation of account information and balances among the Adviser and the Trust's custodian, transfer agent, dividend disbursing agent and fund accountant; (C) the transmission of purchase and redemption orders for Shares; (D) the notification to the Adviser of available funds for investment; and (E) the performance of fund accounting, including the calculation of the net asset value of the Shares; (ii) oversee the performance of administrative and professional services rendered to the Trust by others, including its custodian, transfer agent and dividend disbursing agent as well as legal, auditing and shareholder servicing and other services performed for the Funds; (iii) be responsible for the preparation and the printing of the periodic updating of the Registration Statement and Prospectus, tax returns, and reports to shareholders, the Securities and Exchange Commission and state securities commissions; (iv) be responsible for the preparation of proxy and information statements and any other communications to shareholders; (v) at the request of the Board, provide the Trust with adequate general office space and facilities and provide persons suitable to the Board to serve as officers of the Trust; (vi) provide the Trust with the services of persons, who may be officers of the Trust, competent to perform such supervisory, administrative and clerical functions as are necessary to provide effective operations of the Trust; (vii) prepare, file and maintain the Trust's governing documents, including the Trust Instrument, the Bylaws and minutes of meetings of Trustees and shareholders; (viii) with the approval of the Trust's counsel and cooperation from the Adviser and other relevant parties, prepare and disseminate materials for meetings of the Board of Trustees; (ix) monitor sales of shares and ensure that such shares are properly and duly registered with the Securities and Exchange Commission and applicable state securities commissions; (x) oversee the calculation of performance data for dissemination to information services covering the investment company industry, for sales literature of the Trust and other appropriate purposes; -74- (xi) oversee the determination of the amount of and supervise the declaration of dividends and other distributions to shareholders as necessary to, among other things, maintain the qualification of each Fund as a regulated investment company under the Internal Revenue Code of 1986, as amended, and prepare and distribute to appropriate parties notices announcing the declaration of dividends and other distributions to shareholders; (xii) oversee the payment of the Trust's expenses; and (xiii) advise the Trust and the Board on matters concerning the Trust and its affairs. (c) The books and records pertaining to the Trust which are in possession of the Manager shall be the property of the Trust. The Trust, the Adviser or the authorized representatives of either of them shall have access to such books and records at all times during the Manager's normal business hours. Upon the reasonable request of the Trust or the Adviser, copies of any such books and records shall be provided promptly by the Manager to the Trust, the Adviser or the authorized representatives of either of them. In the event the Trust designates a successor to any of the Manager's obligations hereunder, the Manager shall, at the expense and direction of the Trust, transfer to such successor all relevant books, records and other data established or maintained by the Manager under this Agreement. SECTION 3. STANDARD OF CARE The Manager shall give the Trust the benefit of its best judgment and efforts in rendering its services to the Trust and shall not be liable for error of judgment or mistake of law, for any loss arising out of any investment, or in any event whatsoever, provided that nothing herein shall be deemed to protect, or purports to protect, the Manager against any liability to the Trust or to the security holders of the Trust to which it would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties hereunder, or by reason of reckless disregard of its obligations and duties hereunder. SECTION 4. EXPENSES Subject to any expense reimbursement arrangements between the Adviser or others and the Trust, the Trust shall be responsible and assumes the obligation for payment of all its expenses. SECTION 5. COMPENSATION (a) For the services provided by the Manager pursuant to this Agreement, the Trust shall pay the Manager, with respect to each of the Funds, a fee at an annual rate equal to the amount set forth in Schedule B hereto. Such fees shall be accrued by the Trust daily and shall be payable monthly in arrears on the first day of each calendar month for -75- services performed under this Agreement during the prior calendar month. Upon the termination of this Agreement, the Trust shall pay to the Manager such compensation as shall be payable prior to the effective date of such termination. (b) Notwithstanding anything in this Agreement to the contrary, the Manager and its affiliated persons may receive compensation or reimbursement from the Trust with respect to (i) the provision of shareholder support or other services or (ii) service as a Trustee or officer of the Trust. SECTION 6. EFFECTIVENESS, DURATION AND TERMINATION (a) This Agreement shall become effective on the date on which the Trust's Registration Statement relating to the shares of the Cutler Equity Income Fund, the Cutler Approved List Equity Fund and the Cutler Government Securities Fund becomes effective and shall relate to every other Fund as of the date on which the Trust's Registration Statement relating to the shares of such Fund becomes effective. Upon the effectiveness of this Agreement, it shall supersede all previous agreements among the Adviser, the Trust and the Manager, or between any of them, covering the subject matter hereof. (b) This Agreement shall continue in effect for twelve months and, thereafter, shall be automatically renewed each year for an additional term of one year. (c) This Agreement may be terminated with respect to a Fund at any time, without the payment of any penalty, (i) by the Trust on 60 days' written notice to the Adviser and the Manager or (ii) by the Manager on 60 days' written notice to the Adviser and the Trust. (d) This Agreement shall terminate automatically in the event of its assignment. SECTION 7. ACTIVITIES OF MANAGER Except to the extent necessary to perform its obligations under this Agreement, nothing herein shall be deemed to limit or restrict the Manager's right, or the right of any of its officers, directors or employees (whether or not they are a trustee, officer, employee or other affiliated person of the Trust) to engage in any other business or to devote time and attention to the management or other aspects of any other business, whether of a similar or dissimilar nature, or to render services of any kind to any other corporation, trust, firm, individual or association. SECTION 8. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY The Trustees of the Trust and the shareholders of each Fund shall not be liable for any obligation of the Trust or of the Funds under this Agreement, and the Manager and the Adviser agree that, in asserting any rights or claims in connection with any obligation of the Trust or of the Funds under this Agreement, they shall look only to the assets and -76- property of the Trust or the Fund to which the Manager's or Adviser's rights or claims relate in settlement of such rights or claims, and not to the Trustees of the Trust or the shareholders of the Funds. SECTION 9. MISCELLANEOUS (a) No provision of this Agreement may be amended or modified in any manner except by a written agreement properly authorized and executed by both parties hereto and, if required by the Act, by a vote of a majority of the outstanding voting securities of the Trust. (b) If any part, term or provision of this Agreement is held to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did no contain the particular part, term or provision held to be illegal or invalid. (c) Section headings in this Agreement are included for convenience only and are not to be used to construe or interpret this Agreement. (d) Notices, requests, instructions and communications received by the parties at their respective principal places of business, or at such other address as a party may have designated in writing, shall be deemed to have been properly given. (e) This Agreement shall be governed by and shall be construed in accordance with the laws of the State of New York. (f) The terms "vote of a majority of the outstanding voting securities," "interested person," and "affiliated person" shall have the meanings ascribed thereto in the Act. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed all as of the day and year first above written. THE CUTLER TRUST By: /s/ JOHN Y. KEFFER ------------------- John Y. Keffer President FORUM FINANCIAL SERVICES, INC. By: /s/ DAVID R. KEFFER ------------------- David R. Keffer Vice President -77- THE CUTLER TRUST MANAGEMENT AGREEMENT SCHEDULE A FUNDS OF THE TRUST Cutler Equity Income Fund Cutler Approved List Equity Fund Cutler Government Securities Fund SCHEDULE B FEES Fee as a % of the Annual Average Daily Fund Net Assets of the Fund ---- ---------------------- Cutler Equity Income Fund 0.10% Cutler Approved List Equity Fund 0.10% Cutler Government Securities Fund 0.10% -78- EX-99.9(B) 8 EX-99.9(B) EXHIBIT 9 (B) THE CUTLER TRUST TRANSFER AGENCY AND FUND ACCOUNTING AGREEMENT AGREEMENT made this 31st day of December, 1992, between The Cutler Trust (the "Trust"), a business trust organized under the laws of the State of Delaware with its principal place of business at 61 Broadway, New York, New York 10006, and Forum Financial Corp. (the "Transfer Agent"), a corporation organized under the laws of State of Delaware with its principal place of business at Two Portland Square, Portland, Maine 04101. WHEREAS, the Trust is registered under the Investment Company Act of 1940 as an open-end management investment company and is authorized to issue shares of beneficial interest, no par value, in separate series and classes; WHEREAS, the Trust desires that the Transfer Agent act as transfer agent to the Trust for the purpose of recording the transfer, issuance and redemption of shares, transferring shares and disbursing dividends and other distributions to shareholders for each separate investment portfolio, and the Transfer Agent is willing to perform those services on the terms and conditions set forth in this Agreement; and WHEREAS, the Trust desires that the Transfer Agent perform certain fund accounting services for each separate investment portfolio and the Transfer Agent is willing to perform those services on the terms and conditions set forth in this Agreement; NOW THEREFORE, the Trust and the Transfer Agent agree as follows: SECTION 1. APPOINTMENT. The Trust hereby appoints Transfer Agent as its transfer agent and fund accountant and Transfer Agent agrees to act in such capacity upon the terms set forth in this Agreement. SECTION 2. DEFINITIONS. Whenever used in this Agreement or in any amendment or supplement hereto, capitalized terms not defined elsewhere shall have the meanings specified below, insofar as interpretable within the context: (a) "Act" shall mean the Investment Company Act of 1940, as amended. (b) "Adviser" shall mean Cutler & Company, Inc., or any successor thereto. (c) "Board" shall mean the Board of Trustees of the Trust. (d) "Business Day" shall have the meaning ascribed thereto in each Prospectus. - 80 - (e) "Custodian" shall mean The First National Bank of Boston or any successor or other custodian acting as such for any Fund. (f) "Custodian Agreement" shall mean the agreement or agreements between the Trust and the Custodian or Custodians providing for custodial services to the Trust. (g) "Eligible Guarantor Institution" shall have the meaning ascribed thereto in Rule 17Ad-15 under the 1934 Act. (h) "Fund" shall mean each investment portfolio of the Trust as now exists or may in the future be created. (i) "Manager" shall mean Forum Financial Services, Inc., or any successor thereto. (j) "Oral Instructions" shall mean an authorization, instruction, approval, item or set of data, or information of any kind transmitted to the Trust in person or by telephone, vocal telegram or other electronic means, by a person or persons reasonably believed in good faith by the Trust to be a person or persons authorized by a resolution of the Board to give Oral Instructions on behalf of the Trust. Each Oral Instruction shall specify whether it is applicable to the Trust or a specific Fund. (k) "Prospectus" shall mean the then-current prospectus and statement of additional information forming part of an effective Registration Statement of the Trust under the Act and the 1933 Act with respect to a Fund, as supplemented from time to time. (l) "Shareholders" shall mean the registered owners from time to time of the Shares, as reflected on the stock registry records of the Trust. (m) "Shares" shall mean the issued and outstanding shares of beneficial interest of the Trust including, unless otherwise noted, fractions thereof. (n) "Transfer Agent Indemnitee" shall mean the Transfer Agent and its directors, officers, employees and agents and persons controlling the Transfer Agent. (o) "UCC" shall mean the Uniform Commercial Code as in effect in the State of Delaware. (p) "Valuation Time" shall mean each time described in each Prospectus at which a Fund's net asset value is to be determined, or at such other time as the Trust may specify in a Written Instruction. - 81 - (q) "Written Instructions" shall mean an authorization, instruction, approval, item or set of data, or information of any kind transmitted to the Transfer Agent in an original writing containing original signatures, or a copy of such document transmitted by telecopy, including transmission of such signatures, or other mechanical or documentary means, at the request of a person or persons reasonably believed in good faith by the Transfer Agent to be a person or persons authorized by a resolution of the Board to give Written Instructions on behalf of the Trust. Each Written Instruction shall specify whether it is applicable to the Trust or a specific Fund. (r) "1933 Act" shall mean the Securities Act of 1933, as amended. (s) "1934 Act" shall mean the Securities Exchange Act of 1934, as amended. SECTION 3. DELIVERY OF DOCUMENTS AND RECORDS. The Trust has delivered to the Transfer Agent copies of its Trust Instrument and Bylaws, the Trust's Registration Statement and all amendments thereto filed pursuant to the Act and the 1933 Act, and the Prospectus of each Fund and shall promptly furnish the Transfer Agent with all amendments of or supplements to the foregoing. The Trust shall deliver over to the Transfer Agent (i) an accurate list of Shareholders of the Trust, showing each Shareholder's address of record and number of Shares owned and (ii) all Shareholder and fund accounting records, files, and other materials necessary or appropriate for proper performance of the functions assumed by the Transfer Agent under this Agreement. SECTION 4. ISSUANCE OF SHARES. The Transfer Agent shall make original issues of Shares of each Fund in accordance with the provisions hereof and the Prospectuses, upon receipt of (i) Written Instructions requesting the issuance, (ii) a certified copy of a resolution of the Board authorizing the issuance, (iii) necessary funds for the payment of any original issue tax applicable to the Shares, and (iv) an opinion of the Trust's counsel as to the legality and validity of the issuance, which opinion may provide that it is contingent upon the filing by the Trust of an appropriate notice with the SEC, as required by Rule 24f-2 under the Act. If the opinion described in clause (iv) above is contingent upon a filing under Rule 24f-2, the Trust shall fully indemnify the Transfer Agent for any liability arising from the failure of the Trust to comply with that rule. SECTION 5. TRANSFER OF SHARES. Transfers of Shares of each Fund shall be registered on the Shareholder records of the Trust maintained by the Transfer Agent pursuant to this Agreement. In registering transfers of Shares of each Fund, the Transfer Agent may rely upon the UCC, or any other statutes that, in the opinion of the Transfer Agent's counsel, protect the Transfer Agent and the Trust from liability arising from (i) not requiring complete documentation, (ii) registering a transfer without an adverse claim inquiry, (iii) delaying registration for purposes of an adverse claim inquiry or (iv) refusing registration - 82 - whenever an adverse claim requires refusal. The Transfer Agent is responsible for carrying out transfer instructions of the types specified in the Prospectuses and Written Instructions and for delivering to the transferee and transferor all documentation as is required by the UCC. SECTION 6. MAINTENANCE OF STOCK RECORDS. The Transfer Agent shall maintain customary stock registry records for each Fund, noting the issuance, transfer or redemption of Shares. The Transfer Agent shall maintain for each Fund a "Share Account" in which it will record the Shares issued and outstanding from time to time. The Transfer Agent shall keep records for each Fund, containing the names and addresses of record of Shareholders and the number of Shares from time to time owned by them. Each Shareholder will be assigned a single account number for each Fund. SECTION 7. RECORDS REFLECTING ISSUANCES AND REDEMPTIONS. When Shares are purchased, the Transfer Agent shall note on its stock registry records the issuance of the Shares and credit the Share Account and the respective Shareholders' accounts with the Shares. Whenever Shares owned by Shareholders are surrendered for redemption pursuant to the provisions hereof and the Prospectuses, the Transfer Agent shall make appropriate entries in the stock transfer records and debit the Share Account and the record of issued Shares outstanding. Except as permitted by the Prospectus, a redemption request for Shares being redeemed must reflect a guarantee of the owner's signature by an Eligible Guarantor Institution. The Trust may authorize the Transfer Agent by Written Instruction to waive the signature guarantee for any specific transaction or classes of transactions upon provision of an indemnity satisfactory in form to the Transfer Agent. SECTION 8. RELIANCE ON INFORMATION. In performing its duties hereunder, the Transfer Agent may rely conclusively and act without further investigation upon any list, instruction, certification, authorization or other instrument or paper reasonably believed by it in good faith to be genuine and unaltered, and to have been signed, countersigned or executed or authorized by a duly authorized person or persons, or by the Trust, or upon the advice of counsel for the Trust or for the Transfer Agent. The Transfer Agent may record any transfer of Shares it reasonably believes in good faith to have been duly authorized, or may refuse to record any transfer of Shares if, in good faith, it deems such refusal necessary in order to avoid any liability on the part of either the Trust or the Transfer Agent. The Trust shall indemnify and hold harmless the Transfer Agent from and against any and all losses, claims, damages, liabilities or expenses (including reasonable expenses for legal counsel) that it may suffer or incur by reason of such good faith reliance, action or failure to act. SECTION 9. COMPUTATION OF NET ASSET VALUE; SHARE PURCHASES. The Trust hereby instructs the Transfer Agent to consider Shareholder payments as Federal funds no later than on the day indicated below unless such other times shall be noted in a Prospectus: (a) For a wire received, at the time of the receipt of the wire; - 83 - (b) (i) For a check drawn on a member bank of the Federal Reserve System and received prior to 3:00 p.m., Eastern time, on a Business Day, on the Business Day following receipt and (ii) for a check drawn on a member bank of the Federal Reserve System and received at or after 3:00 p.m., Eastern time, on a Business Day, on the second Business Day following receipt; and (c) For a check drawn on an institution that is not a member of the Federal Reserve System, at such time as the Transfer Agent actually receives Federal funds in respect of that check. As soon as possible after each Valuation Time, the Transfer Agent shall use the net asset value determined as of the Valuation Time to compute the number of Shares to be purchased as of that Valuation Time and the aggregate purchase proceeds to be deposited with the Custodian. SECTION 10. SHARE ISSUANCE AND CONFIRMATIONS. Having made the calculations required by Section 9, the Transfer Agent shall upon receipt of Federal funds pay the Custodian the aggregate net asset value of Shares of each Fund purchased. The aggregate number of Shares purchased shall be issued daily and credited by the Transfer Agent to the Share Account and the individual account of the Shareholder. The Transfer Agent shall also credit each Shareholder's separate account with the number of Shares purchased by the Shareholder. If requested by the Trust, the Transfer Agent shall promptly thereafter mail written confirmation of the purchase to each Shareholder and to the Trust. Each confirmation shall indicate the prior Share balance, the new Share balance, the amount invested and the price paid for the newly-purchased Shares or other information as the Trust shall instruct in a Written Instruction. SECTION 11. SHARE REDEMPTIONS. Prior to each Valuation Time, the Transfer Agent shall process all requests to redeem Shares of each Fund in accordance with Section 7 and, if appropriate, shall advise the Custodian of the aggregate net asset value of all Shares requested to be redeemed. Upon confirmation of the net asset value, the Transfer Agent shall notify the Trust and, if appropriate, the Custodian of the redemption, apply the redemption proceeds in accordance with Section 12 and the applicable Prospectus, record the redemption in the stock registry books, debit the redeemed Shares from the Share Account and the individual account of the Shareholder. SECTION 12. REDEMPTION PROCEEDS. The proceeds of redemption shall be remitted by the Transfer Agent in accordance with the Prospectuses as follows: (a) By check mailed to the Shareholder at his address of record or to his designated custodian; (b) By wiring the appropriate amount in Federal funds; or - 84 - (c) By other procedures commonly followed by mutual funds, as set forth in the Prospectuses and in a Written Instruction from the Trust and mutually agreed upon between the Trust and the Transfer Agent. The Transfer Agent may delay payment of the proceeds of redemption of Shares that have been purchased by check within fifteen (15) days prior to receipt of the redemption request and for which Federal funds have not been received. The Trust shall provide the Transfer Agent with Written Instructions concerning the time within which such requests may be honored. The authority of the Transfer Agent to perform its responsibilities under Section 11 and Section 12 shall be suspended with respect to a Fund if the Transfer Agent receives notice from the Trust of the suspension of the determination of that Fund's net asset value. SECTION 13. DIVIDENDS AND OTHER DISTRIBUTIONS. Upon the declaration of each dividend, including each capital gain distribution, by the Board, the Trust or, in the case of dividends declared pursuant to an ongoing resolution of the Board, the Manager or such other person as the Manager shall by Written Instruction inform the Transfer Agent, shall notify the Transfer Agent of the date of such declaration, the amount payable per Share, the record date for determining the Shareholders entitled to payment, the payment and the reinvestment date. Dividends may be declared pursuant to an ongoing resolution of the Board that declares periodically a dividend consisting of all the undeclared net investment income of a Fund, in which case the amount of the dividend shall be determined by the Transfer Agent or such other person as the Manager shall by Written Instruction inform the Transfer Agent. On or before each payment date the Trust will transfer, or cause the Custodian to transfer, to the Transfer Agent the total amount of the dividend currently payable subject to such netting arrangements as may be agreed to between the Trust and the Custodian. The Transfer Agent will, on the designated payment date, reinvest all dividends in additional Shares and, to the extent provided by the applicable Prospectus, mail to each Shareholder at his address of record a statement showing the number of Shares (rounded to three decimal places) then owned by the Shareholder and the net asset value of the Shares; provided, however, that if a Shareholder elects to receive any or all dividends in cash, the Transfer Agent shall prepare a check in the appropriate amount and mail it to the Shareholder at his address of record promptly following the designated payment date. SECTION 14. ISSUANCE AND TRANSFER OF SHARE CERTIFICATES. Until authorized by the Trust, no share certificates shall exist or be issued. SECTION 15. COOPERATION WITH AUDITORS. The Transfer Agent shall cooperate with and assist the Trust's independent auditors and, upon approval of the Trust or the Manager, any regulatory body in any requested review of the Trust's books and records maintained by the Transfer Agent. The Transfer Agent shall take reasonable action to make all necessary information available to the auditors and any regulatory body approved by the Manager or the Trust for the performance of their duties. - 85 - SECTION 16. FUND ACCOUNTING. For each Fund, the Transfer Agent shall perform the fund accounting services listed in this Section. The Transfer Agent and the Manager may from time to time adopt such procedures as they agree upon to implement the terms of this Section. (a) For each Fund, the Transfer Agent shall: (i) calculate the net asset value per Share with the frequency prescribed in the Funds' Prospectuses; (ii) calculate dividends and capital gain distributions, if any, as required by the Trust; (iii) calculate the yield, effective yield, tax equivalent yield and total return, as applicable, and such other measure of performance as may be agreed upon between the parties hereto; (iv) provide the Trust and such other persons as the Manager may direct with the following reports: (A) a current security position report, (B) a summary report of transactions and pending maturities (including the principal, cost, and accrued interest on each portfolio security in maturity date order), and (C) a current cash position and projection report; (v) prepare and record, as of each time when the net asset value of a Fund is calculated, either (A) a valuation of the assets in the Fund (based upon the use of outside services normally used and contracted for this purpose by the Transfer Agent in the case of securities for which information and market price or yield quotations are readily available and based upon evaluations conducted in accordance with the Manager's instructions in the case of all other assets) or (B) a calculation confirming that the market value of the Fund's assets does not deviate from the amortized cost value of those assets by more than a specified percentage agreed to from time to time by the Transfer Agent and the Manager; and (vi) make such adjustments over such periods as the Transfer Agent deems necessary to reflect over-accruals or under-accruals of estimated expenses or income. (b) The Transfer Agent shall prepare periodic reports to the Trust's shareholders and the SEC and such other reports as may be agreed to from time to time and provide information typically supplied in the investment company industry to companies that track or report the price, performance or other information with respect to investment companies. SECTION 17. OTHER SERVICES. The Transfer Agent shall answer shareholder inquiries related to their Share accounts and other correspondence requiring an answer from the Trust. The Transfer Agent shall maintain dated copies of written communications from Shareholders and replies thereto. In addition, the Transfer Agent will perform other services for the Trust as mutually agreed upon in writing from time to - 86 - time, including but not limited to preparing and filing Federal tax forms, mailing Shareholder reports, preparing lists of Shareholders, mailing notices of Shareholders' meetings, proxies and proxy statements, tabulating proxies, and mailing Federal tax information to Shareholders. Nothing contained in this Agreement is intended to or shall require the Transfer Agent, in any capacity hereunder, to perform any functions or duties on any day other than a Business Day. Functions or duties normally scheduled to be performed on any day that is not a Business Day shall be performed on, and as of, the next Business Day, unless otherwise required by law. SECTION 18. UNPAID ITEMS. In the event that any check or other order for the payment of money is returned unpaid for any reason, the Transfer Agent shall promptly notify the Trust of the non-payment. SECTION 19. TAXES. The Transfer Agent shall not be liable for any taxes, assessments or governmental charges that may be levied or assessed on any basis whatsoever in connection with the Trust or any Shareholder, excluding taxes assessed against the Transfer Agent for compensation received by it hereunder. SECTION 20. RECORDKEEPING; INSPECTION OF RECORDS. (a) The Transfer Agent shall prepare and maintain in such form and in such locations as may be required by applicable regulation all records and documents relating to the services provided to the Trust pursuant to this Agreement required to be prepared and maintained by the Transfer Agent or the Trust pursuant to the Act, the 1934 Act and the rules and regulations of the SEC and the Internal Revenue Service. (b) Without limiting the requirements of Section 20(a), the Transfer Agent shall prepare and maintain on behalf of the Trust the following books and records of each Fund pursuant to Rule 31a-1 under the Act: (i) journals containing an itemized daily record in detail of all purchases and sales of securities, all purchases and sales of Shares, all receipts and disbursements of cash and all other debits and credits, as required by subsection (b)(1) of Rule 31a-1; (ii) journals and auxiliary ledgers reflecting all asset, liability, reserve, capital, income and expense accounts, as required by subsection (b)(2) of Rule 31a-1 (including the ledgers required by subsection (b)(2)(iv); (iii) a record of all options, if any, in which the Trust has any direct or indirect interest or which the Trust has granted or guaranteed and a record of any contractual commitments to purchase, sell, receive or deliver any property as required by subsection (b)(7) of Rule 31a-1; (iv) a monthly trial balance of all ledger accounts (except shareholder accounts) as required by subsection (b)(8) of Rule 31a-1; and (v) other records required by the Rule or any successor rule or pursuant to interpretations thereof to be kept by open-end management investment companies, but limited to those provisions of the Rule applicable to portfolio transactions and shareholders as agreed upon between the parties hereto. (c) The Transfer Agent shall notify the Trust of any request or demand for the inspection of the Trust's Share records. The Transfer - 87 - Agent shall abide by the Trust's instructions for granting or denying the inspection; provided, however, the Transfer Agent may grant the inspection without such instructions if it is advised by its counsel that failure to do so will result in liability to the Transfer Agent. (d) The books and records pertaining to the Trust that are in possession of the Transfer Agent shall be the property of the Trust. The Trust, or the Trust's authorized representatives, shall have access to such books and records at all times during the Transfer Agent's normal business hours. Upon the reasonable request of the Trust, copies of any such books and records shall be provided promptly by the Transfer Agent to the Trust or the Trust's authorized representatives. In the event the Trust designates a successor to any of the Transfer Agent's obligations hereunder, the Transfer Agent shall, at the expense and direction of the Trust, transfer to such successor all relevant books, records and other data established or maintained by the Transfer Agent under this Agreement. SECTION 21. EXPENSES; COMPENSATION. (a) Subject to any agreement by the Adviser to reimburse or pay the expenses of the Trust, the Trust shall be responsible and assumes the obligation for payment of all its expenses. (b) For its services hereunder, the Transfer Agent shall receive from the Trust, with respect to each Fund, such transfer agency and fund accounting fees as are listed in Schedule A hereto, as amended from time to time. These fees shall be paid monthly in advance. (c) The Transfer Agent shall be reimbursed for its ancillary costs incurred in providing any transfer agency services hereunder, including the cost of (or appropriate share of the cost of) (i) any and all forms and stationery used or specially prepared for the purpose, (ii) postage, (iii) telephone services, (iv) bank fees, (v) electronic or facsimile transmission and (vi) any other items for which the Trust is responsible, as described in the Trust's agreement with the Adviser. The Trust shall reimburse the Transfer Agent for all expenses and employee time attributable to any review of the Trust's accounts and records by the Trust's independent public accountants or any regulatory body outside of routine and normal periodic reviews and for all expenses for services in connection with the Transfer Agent's activities in effecting any termination of this Agreement (except the termination of Transfer Agent for cause), including expenses incurred by the Transfer Agent to deliver the property of the Trust in the possession of the Transfer Agent to the Trust or other persons. (d) Notwithstanding anything in this Agreement to the contrary, the Transfer Agent and its affiliated persons may receive compensation or reimbursement from the Trust with respect to (i) the provision of management services or (ii) service as a Trustee or officer of the Trust. - 88 - SECTION 22. STANDARD OF CARE; LIMITATION OF LIABILITY. (a) The Transfer Agent shall not be liable for any action taken or not taken in good faith and reasonably believed by the Transfer Agent to be within the powers conferred upon it under this Agreement; provided that nothing herein shall be deemed to protect, or purports to protect, the Transfer Agent against any liability to the Trust or to the security holders of the Trust to which it would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties hereunder. The Transfer Agent shall be entitled to rely conclusively on the completeness and correctness of any accounts and records turned over to it by the Trust. In no event shall a Transfer Agent Indemnitee be liable for loss of profit or goodwill or for other indirect, special or consequential damages, liabilities or costs (including administrative and litigation costs and attorneys' fees) suffered by the Trust or others, whether or not the possibility of such damage was disclosed to the Transfer Agent or could have been reasonably foreseen by the Transfer Agent and whether asserted on the basis of contract, tort (including negligence and strict liability) or otherwise. (b) The Trust shall indemnify and hold harmless each Transfer Agent Indemnitee from and against any and all losses, claims, damages, liabilities or expenses (including reasonable expenses for legal counsel) arising directly or indirectly out of or in connection with this Agreement; provided such loss, claim, damage, liability or expense is not the direct result of willful misfeasance, bad faith or gross negligence by the Transfer Agent Indemnitee. The Trust shall be entitled to assume the defense of any suit brought to enforce any claim and to retain counsel of good standing chosen by the Trust and approved by the Transfer Agent, the Transfer Agent's approval not to be unreasonably withheld. In the event the Trust does elect to assume the defense of a suit and retain counsel of good standing approved by the Transfer Agent, the defendant or defendants in the suit shall bear the fees and expenses of any additional counsel retained by any of them. In the event the Trust does not elect to assume the defense of a suit or in case the Transfer Agent does not approve of counsel chosen by the Trust, the Trust will reimburse each Transfer Agent Indemnitee named as defendant in such suit for the fees and expenses of any counsel retained by the Transfer Agent Indemnitee. In the event the Transfer Agent has been advised that it may have available defenses or claims that are not available or conflict with those available to the Trust, the Trust will reimburse the Transfer Agent for the fees and expenses of any counsel retained by the Transfer Agent. The Transfer Agent may, at any time, waive its right to indemnification hereunder and assume its own defense. (c) Without limiting the foregoing: (i) the Transfer Agent may rely upon the advice of the Trust or counsel to the Trust or the Transfer Agent, and upon statements of accountants, brokers and other persons believed by the Transfer Agent in good faith to be expert in the matters upon which they are consulted. The Transfer Agent shall not be liable for any action taken in good faith reliance upon such advice or statements; - 89 - (ii) the Transfer Agent shall not be liable for any action reasonably taken in good faith reliance upon any Written Instruction or certified copy of any resolution of the Board; provided, however, that upon receipt of a Written Instruction countermanding a prior Instruction that has not been fully executed by the Transfer Agent, the Transfer Agent shall verify the content of the second Instruction and honor it, to the extent possible. The Transfer Agent may rely upon the genuineness of any such document, or copy thereof, reasonably believed by the Transfer Agent in good faith to have been validly executed; and (iii) the Transfer Agent may rely, and shall be protected by the Trust in acting, upon any signature, instruction, request, letter of transmittal, certificate, opinion of counsel, permitted Oral Instruction, statement, instrument, report, notice, consent, order, or other paper or document reasonably believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties. (d) In the event of equipment failures beyond the Transfer Agent's control, the Transfer Agent shall, at no additional expense to the Trust, take reasonable steps to minimize service interruptions but shall have no liability with respect thereto. The Transfer Agent shall enter into and shall maintain in effect with appropriate parties one or more agreements making reasonable provision for emergency use of electronic data processing equipment to the extent appropriate equipment is available or shall maintain a secondary site with processing capability. (e) The Transfer Agent shall be under no duty to take any action on behalf of the Trust except as specifically set forth herein or as may be specifically agreed to by the Transfer Agent in writing. In the performance of its duties hereunder, the Transfer Agent shall be obligated to exercise care and diligence and to act in good faith and to use its best efforts within reasonable limits to insure the accuracy and completeness of all services performed under this Agreement. To the extent that duties, obligations and responsibilities are not expressly set forth in this Agreement, the Transfer Agent shall not be liable for any act or omission which does not constitute willful misfeasance, bad faith or gross negligence on the part of the Transfer Agent or reckless disregard of such duties, obligations and responsibilities. Without limiting the generality of the foregoing or of any other provision of this Agreement, the Transfer Agent in connection with its duties under this Agreement shall not be under any duty or obligation to inquire into and shall not be liable for or in respect of delays or errors or loss of data occurring by reason of circumstances beyond the Transfer Agent's control, including acts of civil or military authority, national emergencies, labor difficulties, fire, mechanical breakdown (except as provided in subsection (d) above), flood or catastrophe, acts of God, insurrection, war, riots or failure of the mails, transportation, communication or power supply. - 90 - SECTION 23. EFFECTIVENESS; DURATION AND AMENDMENT. (a) This Agreement shall become effective on the day on which the Trust's Registration Statement relating to Shares of the Cutler Equity Income Fund, the Cutler Approved List Equity Fund and the Cutler Government Securities Fund becomes effective and shall relate to every other Fund as of the date on which the Trust's Registration Statement relating to the shares of such Fund becomes effective. Upon the effectiveness of this Agreement, it shall supersede all previous agreements between the Trust and the Transfer Agent covering the subject matter hereof. (b) This Agreement shall continue in effect for twelve months and, thereafter, shall be automatically renewed each year for an additional term of one year. SECTION 24. TERMINATION. This Agreement may be terminated with respect to any Fund at any time, without the payment of any penalty, (i) by the Board on at least 60 days' written notice to the Transfer Agent or (ii) by the Transfer Agent on at least 60 days' written notice to the Trust. Upon receiving notice of termination from the Transfer Agent, the Trust shall use its best efforts to obtain a successor transfer agent. If a successor transfer agent is not appointed within sixty (60) days after the date of the notice of termination, the Board shall, by resolution, designate the Trust as its own transfer agent. Upon receipt of written notice from the Trust of the appointment of the successor transfer agent and upon receipt of Written Instructions the Transfer Agent shall, upon request of the Trust and the successor transfer agent and upon payment of the Transfer Agent's reasonable charges and disbursements, promptly transfer to the successor transfer agent the original or copies of all books and records maintained by the Transfer Agent hereunder including, in the case of records maintained on computer systems or other electronic media, copies of such records in machine-readable form, and shall cooperate with, and provide reasonable assistance to, the successor transfer agent in the establishment of the books and records necessary to carry out its responsibilities hereunder. SECTION 25. ASSIGNMENT; DELEGATION. (a) This Agreement shall extend to and shall bind the parties hereto and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by the Transfer Agent without the written consent of the Trust, authorized or approved by a resolution of the Board. Notwithstanding the foregoing, either party may assign this Agreement without the consent of the other party so long as the assignee is an affiliate, parent or subsidiary of the assigning party and is qualified to act under applicable law. (b) The Transfer Agent may contract with other qualified service providers to perform any of the services contemplated by this Agreement; provided, that the Transfer Agent shall not thereby be relieved of any of its obligations hereunder. The Transfer Agent may subcontract any or all of its functions to one or more qualified sub-transfer agents or processing agents, which may be the Manager or affiliates of the - 91 - Manager, who agree to comply with the terms of this Agreement. The Transfer Agent may pay those agents for their services, but no such payment will increase the Transfer Agent's compensation from the Trust. SECTION 26. RESOLUTIONS FOR INSTRUCTIONS; PROCEDURES. The Trust shall file with the Transfer Agent a certified copy of the operative resolution of the Board authorizing the execution of Written Instructions or the transmittal of Oral Instructions. The parties hereto may adopt procedures as may be appropriate or practical under the circumstances, and the Transfer Agent may conclusively rely, in the absence of actual knowledge to the contrary, on the determination of the Trust that any procedure that has been approved by the Trust does not conflict with or violate any requirement of the Trust's Trust Instrument, Bylaws or Prospectuses, or any rule, regulation or requirement of any regulatory body. SECTION 27. NOTICES. Any notice or other communication required by or permitted to be given in connection with this Agreement shall be in writing, and shall be delivered in person, sent by first-class mail, postage prepaid, or sent by overnight delivery, postage prepaid, to the respective parties at the following addresses or such other address as the parties may designate in writing by the same methods: If to the Trust: The Cutler Trust 61 Broadway, Suite 2770 New York, New York 10006 Attn.: Corporate Secretary If to the Transfer Agent: Forum Financial Corp. Two Portland Square Portland, Maine 04101 Attn.: Transfer Agent SECTION 28. REPRESENTATIONS AND WARRANTIES. The Trust represents and warrants to the Transfer Agent that the execution and delivery of this Agreement by the undersigned officer of the Trust has been duly and validly authorized by resolution of the Board. The Transfer Agent represents and warrants to the Trust that (i) the execution and delivery of this Agreement by the undersigned officer of the Transfer Agent has been duly and validly authorized and (ii) it is duly registered as a transfer agent under the 1934 Act. SECTION 29. SEVERABILITY. If any part, term or provision of this Agreement is held to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term or provision held to be illegal or invalid. - 92 - SECTION 30. GOVERNING LAW. This Agreement shall be governed by the laws of the State of Maine. SECTION 31. HEADINGS. Headings in this Agreement are included for convenience only and are not to be used to construe or interpret this Agreement. SECTION 32. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY. The Trustees of the Trust and the shareholders of each Fund shall not be liable for any obligations of the Trust or of the Funds under this Agreement, and the Transfer Agent agrees that, in asserting any rights or claims under this Agreement, it shall look only to the assets and property of the Trust or the Fund to which the Transfer Agent's rights or claims relate in settlement of such rights or claims, and not to the Trustees of the Trust or the shareholders of the Funds. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed all as of the day and year first above written. THE CUTLER TRUST By: /s/ JOHN Y. KEFFER ------------------ John Y. Keffer President FORUM FINANCIAL CORP. By: /s/ DAVID R. KEFFER ------------------- David R. Keffer Vice President - 93 - THE CUTLER TRUST TRANSFER AGENCY AND FUND ACCOUNTING AGREEMENT SCHEDULE A FEES FOR EACH FUND Transfer Agency Fees: - -------------------- Fee per Fund $ 12,000/year Annual Shareholder Account Fees (per shareholder account) $ 12.00 Fees based upon the number of Shareholder accounts shall be calculated as of the last Business Day of the prior month. Fund Accounting Fees: - -------------------- Standard Fee per Fund $ 36,000/year Plus Additional Surcharges for each of: Tax-Free Money Market Funds $ 12,000/year Global or International Funds $ 12,000/year Funds with more than 25% of their total assets invested in asset backed securities $ 1,000/month Funds with more than 100 security positions $ 1,000/month Funds with a monthly portfolio turnover rate of 10% or greater $ 1,000/month Monthly surcharges are based upon the total assets or security positions as of the end of the prior month and on the portfolio turnover rate for the prior month. Portfolio turnover rate shall have the meaning ascribed thereto in Securities and Exchange Commission Form N-1A. - 94 - EX-99.9(C) 9 EX-99.9(C) EXHIBIT 9 (C) THE CUTLER TRUST SHAREHOLDER SERVICE PLAN January 3, 1996 This Shareholder Service Plan (the "Plan") is adopted by The Cutler Trust (the "Trust") with respect to the shares of beneficial interest of each of the series of the Trust identified in Appendix A hereto (individually a "Fund" and collectively the "Funds"). SECTION 1. ADMINISTRATOR The Trust has entered into an Administration Agreement (the "Agreement") with Forum Financial Services, Inc. ("Forum") whereby Forum provides certain administrative services for the Trust and for each Fund. SECTION 2. SERVICE AGREEMENTS; PAYMENTS (a) Forum is authorized to enter into Shareholder Service Agreements (the "Agreements"), the form of which shall be approved by the Board of Trustees of the Trust (the "Board"), with financial institutions and other persons who provide services for and maintain shareholder accounts ("Service Providers") as set forth in this Plan. (b) Pursuant to the Agreements, as compensation for the services described in Section 4 below, Forum may pay the Service Provider, on behalf of the Trust, a fee at an annual rate of up to 0.25% of the average daily net assets of each Fund represented by the shareholder accounts for which the Service Provider maintains a service relationship. PROVIDED, however, that no Fund shall directly or indirectly pay any amounts, whether Payments (as defined in the Agreements) or otherwise, that exceed any applicable limits imposed by law or the National Association of Securities Dealers, Inc. (c) Each Agreement shall contain a representation by the Service Provider that any compensation payable to the Service Provider in connection with an investment in a Fund of the assets of its customers (i) will be disclosed by the Service Provider to its customers, (ii) will be authorized by its customers, and (iii) will not result in an excessive fee to the Service Provider. SECTION 3. SHAREHOLDER SERVICE FEE. Pursuant to this Plan, the Trust shall daily accrue and monthly pay Forum a Shareholder Service Fee not to exceed (i) 0.25% per annum of the average daily net assets of each Fund or (ii) the combined Payments made by Forum with respect to each Fund for the month. SECTION 4. SERVICE ACTIVITIES Service activities include (a) establishing and maintaining accounts and records relating to clients of Service Provider; (b) answering shareholder inquiries regarding the manner in which purchases, exchanges and redemptions of shares of the Trust may be effected and other matters pertaining to the Trust's services; (c) providing necessary personnel and facilities to establish and maintain shareholder accounts and records; (d) assisting shareholders in arranging for processing purchase, exchange and redemption transactions; (e) arranging for the wiring of funds; (f) guaranteeing shareholder signatures in connection with redemption orders and transfers and changes in shareholder- designated accounts; (g) integrating periodic statements with other shareholder transactions; and (h) providing such other related services as the shareholder may request. - 96 - SECTION 5. AMENDMENT AND TERMINATION (a) Any material amendment to the Plan shall be effective only upon approval of the Board, including a majority of the trustees who are not interested persons of the Trust as defined in the Investment Company Act of 1940 (the "Disinterested Trustees"), pursuant to a vote cast in person at a meeting called for the purpose of voting on the amendment to the Plan. (b) The Plan may be terminated without penalty at any time by a vote of a majority of the Disinterested Trustees. SECTION 6. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY The Trustees of the Trust and the shareholders of each Fund shall not be liable for any obligations of the Trust or of the Funds under the Plan, and Forum agrees that, in asserting any rights or claims under this Plan, it shall look only to the assets and property of the Trust or the Fund to which Forum's rights or claims relate in settlement of such rights or claims, and not to the Trustees of the Trust or the shareholders of the Funds. - 97 - THE CUTLER TRUST SHAREHOLDER SERVICE PLAN APPENDIX A: FUNDS TO WHICH SHAREHOLDER SERVICE PLAN APPLIES January 3, 1996 Cutler Income Equity Fund Cutler Approved List Equity Fund Cutler Government Securities Fund - 98 - EX-99.9(D) 10 EX-99.9(D) EXHIBIT 9(d) THE CUTLER TRUST SHAREHOLDER SERVICE AGREEMENT AGREEMENT made this day of , 199 , between Forum Financial ----- ------------ - Services, Inc. ("Forum"), a corporation organized under the laws of State of Delaware with its principal place of business at Two Portland Square, Portland, ME 04101 and the institution executing this document below (the "Institution"). WHEREAS, Forum acts as administrator and principal underwriter of The Cutler Trust (the "Trust"), a Delaware business trust registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end management investment company, which may issue its shares of beneficial interest in separate series; and WHEREAS, the Trust has adopted a Shareholder Service Plan with respect to each series of the Trust (the "Service Plan") that authorizes Forum to pay fees to qualified financial institutions for maintaining and providing services to shareholder accounts of each series of the Trust; and WHEREAS, Forum desires that Institution perform certain service activities on behalf of Forum and the Trust with respect to each series of the Trust listed in Schedule A to this Agreement (each a "Fund," and collectively, the "Funds") and Institution is willing to perform those services on the terms and conditions set forth in this Agreement; NOW, THEREFORE, for and in consideration of the representations, covenants and agreements contained herein and other valuable consideration, the undersigned parties do hereby agree as follows: SECTION 1. SERVICE ACTIVITIES In connection with providing services and maintaining shareholder accounts of each Fund with respect to its various customers, Institution may provide services including: (a) establishing and maintaining accounts and records relating to clients of Institution; (b) answering shareholder inquiries regarding the manner in which purchases, exchanges and redemptions of shares of the Trust may be effected and other matters pertaining to the Trust's services; (c) providing necessary personnel and facilities to establish and maintain shareholder accounts and records; (d) assisting shareholders in arranging for processing purchase, exchange and redemption transactions; (e) arranging for the wiring of funds; (f) guaranteeing shareholder signatures in connection with redemption orders and transfers and changes in shareholder-designated accounts; (g) integrating periodic statements with other shareholder transactions; and (h) providing such other related services as the shareholder may request. Institution shall not be obligated to perform any specific service for its clients. Institution's appointment shall be nonexclusive and Forum may enter into similar agreements with other persons. SECTION 2. COMPENSATION (a) As compensation for Institution's service activities with respect to each Fund, Forum shall pay Institution fees in the amounts listed on Schedule B to this Agreement (the "Payments"); provided, however, that in no event will Forum be required to make any payments for service activities in an amount greater than that which Forum is paid by the respective Fund for such services. (b) The Payments shall be accrued daily and paid monthly or at such other interval as Forum and Institution shall agree. (c) On behalf of each Fund, Institution may spend such amounts and incur such expenses as it deems appropriate or necessary on any service activities. Such expenses may include compensation to - 100 - employees and expenses, including overhead and telephone and other communication expenses, of Institution. Institution shall be solely liable for any expenses it incurs. SECTION 3. REPRESENTATIONS OF INSTITUTION Institution represents that: (a) the compensation payable to it under this Agreement in connection with the investment in any Fund of the assets of its customers (i) will be disclosed by the Institution to its customers, (ii) will be authorized by its customers, and (iii) will not result in an excessive fee to Institution; (b) if it is a member of the National Association of Securities Dealers, Inc. ("NASD"), it shall abide by the Rules of Fair Practice of the NASD; (c) it will, in connection with sales and offers to sell shares, furnish to or otherwise insure that each person to whom any such sale or offer is made receives a copy of the appropriate Fund's or Funds' then current prospectus, as applicable; (d) it will purchase shares only from Forum as agent of the Trust and that it will purchase shares only for the purpose of covering purchase orders already received or for its own bona fide investment purposes; (e) the performance of all its obligations hereunder will comply with all applicable laws and regulations, including any applicable Federal securities laws and any requirements to deliver confirmations to its customers, the provisions of its charter documents and bylaws and all material contractual obligations binding upon the Institution; and (f) it will promptly inform the Trust of any change in applicable laws or regulations (or interpretations thereof) or in its charter or bylaws or material contracts which would prevent or impair full performance of any of its obligations hereunder. SECTION 4. TRUST LITERATURE Institution is not authorized to make any representations concerning shares of any Fund except those contained in the Fund's then current prospectus and statement of additional information ("SAI") and printed information issued by the Trust or by Forum as information supplemental to the prospectus. Forum will supply Institution upon its request with prospectuses, SAIs, reasonable quantities of supplemental sales literature and additional information. Institution agrees not to use other advertising or sales material relating to a Fund unless approved in writing by Forum in advance of such use. Any printed information furnished by Forum other than the then current prospectus and SAI, periodic reports and proxy solicitation materials are Forum's sole responsibility and are not the responsibility of the Trust and the Trust shall have no liability or responsibility to Institution in these respects unless expressly assumed in connection therewith. Institution shall have no responsibility with regard to the accuracy or completeness of any of the printed information furnished by Forum and shall be held harmless by Forum from and against any cost or loss arising therefrom. SECTION 5. REPORTS Institution shall prepare and furnish to Forum, at Forum's request, written reports setting forth all amounts expended by Institution and identifying the activities for which the expenditures were made. SECTION 6. INDEMNIFICATION Institution agrees to indemnify and hold harmless Forum and the Trust from any claims, expenses, or liabilities incurred by Forum or the Trust as a result of any act or omission of the Institution in connection with its services under this Agreement. - 101 - SECTION 7. EFFECTIVENESS, DURATION AND TERMINATION (a) This Agreement shall become effective on the date hereof and, upon its effectiveness, shall supersede all previous agreements between the parties covering the subject matter hereof. (b) This Agreement may be terminated as follows: (i) at any time, without the payment of any penalty, by the vote of a majority of the Trustees of the Trust; (ii) automatically in the event of the termination of the Administration or Distribution agreements between the Trust and Forum or the Service Plan; (iii) automatically in the event of the assignment of this Agreement as defined in the Act; and (iv) by either party to the Agreement without cause by giving the other party at least sixty (60) days' written notice of its intention to terminate. SECTION 8. NOTICES Any notice under this Agreement shall be in writing and shall be addressed and delivered, or mailed postage prepaid, to the other party's principal place of business, or to such other place as shall have been previously specified by written notice given to the other party. SECTION 9. AMENDMENTS Subject to approval of material amendments to the form of this Agreement by the Trust's Board of Trustees, this Agreement may be amended by the parties at any time. In addition, this Agreement may be amended by Forum from time to time by the following procedure: Forum will mail a copy of the amendment to Institution at its principal place of business or such other address as Institution shall in writing provide to Forum. If Institution does not object to the amendment within thirty (30) days after its receipt, the amendment will become part of the Agreement. The Institution's objection must be in writing and be received by Forum within the thirty days. SECTION 10. USE OF THE TRUST'S NAME Institution shall not use the name of the Trust on any checks, bank drafts, bank statements or forms for other than internal use in a manner not approved by the Trust prior thereto in writing; provided however, that the approval of the Trust shall not be required for the use of the Trust's name which merely refers in accurate and factual terms to the Trust in connection with the Institution's role hereunder or which is required by any appropriate regulatory, governmental or judicial authority; and further provided that in no event shall such approval be unreasonably withheld or delayed. SECTION 11. MISCELLANEOUS (a) This Agreement shall be construed in accordance with the laws of the State of New York. (b) If any provision of this Agreement shall be held invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. - 102 - IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed all as of the day and year first above written. INSTITUTION: ----------------------------- Name of Institution By: -------------------------- Name: ------------------------ Title: ----------------------- FORUM FINANCIAL SERVICES, INC. By: -------------------------- John Y. Keffer President - 103 - THE CUTLER TRUST SHAREHOLDER SERVICE AGREEMENT SCHEDULE A SERIES OF THE CUTLER TRUST Cutler Income Equity Fund Cutler Approved List Equity Fund Cutler Government Securities Fund - 104 - THE CUTLER TRUST SHAREHOLDER SERVICE AGREEMENT SCHEDULE B PAYMENTS PURSUANT TO THE SERVICE PLAN 0.15% of the average annual daily net assets of each Fund represented by shares owned by investors for which Institution provides services pursuant to this Agreement. - 105 - THE CUTLER TRUST SHAREHOLDER SERVICE AGREEMENT APPENDIX A PAYMENTS PURSUANT TO THE SERVICE PLAN 0.25% of the average daily net assets of each Fund represented by shares owned by investors for which Institution maintains a servicing relationship. - 106 - EX-99.10 11 EX-99.10 EXHIBIT 10 LAW OFFICES OF 4000 BELL ATLANTIC TOWER DECHERT PRICE & RHOADS 1500 K STREET, N.W. 1717 ARCH STREET WASHINGTON, DC 20005-1208 (215) 994-4000 477 MADISON AVENUE (202) 626-3300 214 CARNEGIE CENTER NEW YORK, NY 10022-5891 TEN POST OFFICE SQUARE SOUTH PRINCETON, NJ 08540-6237 BOSTON, MA 02109-4603 (609) 520-3200 (617) 728-7100 TWENTY NORTH MARKET SQUARE TELEPHONE: (212) 326-3500 52 BEDFORD SQUARE HARRISBURG, PA 17101-1603 LONDON WC1B 3EX. ENGLAND (717) 237-2000 TELEX: 645612 BARDEP NY (071) 631-3383 FAX: (212) 308-2041 65 AVENUE LOUISE, BOX NO. 4 1050 BRUSSELS, BELGIUM (02) 535-5411 December 31, 1992 The Cutler Trust 61 Broadway New York, New York 10006 Dear Sir/Madam: The Cutler Trust ("Trust") is an unincorporated voluntary association organized under the laws of the State of Delaware pursuant to a Trust Instrument dated October 2, 1992. You have requested our opinion regarding certain matters in connection with the Trust's issuance of shares of beneficial interest ("Shares") in three series of the trust designated as Cutler Equity Income Fund, Cutler Approved List Equity Fund and Cutler Government Securities Fund, respectively. We have, as counsel, participated in various business and other matters related to the Trust. We have examined copies, either certified or otherwise proved to be genuine, of the Trust Instrument and By-Laws of the Trust and other documents relating to the organization and operation of the Trust, and we generally are familiar with its business affairs. Based on the foregoing, it is our opinion that the unlimited number of unissued Shares designated as Cutler Equity Income Fund, Cutler Approved List Equity Fund and Cutler Government Securities Fund, respectively, which are currently being registered, may be legally and validly issued from time to time in accordance with the Trust's Trust Instrument and By-Laws and subject to compliance with the Securities Act of 1933, the Investment Company Act of 1940, and applicable state laws regulating the offer and sale of securities; and when so issued, will be legally issued, fully paid and nonassessable by the Trust. The Trust is an entity of the type commonly known as a "business trust." Under the laws of certain states, shareholders could, under certain circumstances, be held personally liable for the obligations of the Trust. The Trust Instrument states that shareholders of the Trust shall not be personally liable for the debts, liabilities, obligations and expenses incurred by, contracted for, or otherwise existing with respect to, the Trust or by or on behalf of any series of the Trust. It also requires that notice of such limitation be given on each note, bond, contract or other undertaking issued by or on behalf of the Trust or the Trustees. The Trust Instrument further provides (I) for indemnification out of the assets of the applicable series for all losses and expenses of any shareholder held personally liable for the obligations of the trust solely by virtue of ownership of shares of the Trust and (ii) for the Trust, upon the request of a shareholder, to assume the defense of any claim against the shareholder for any act or obligation of the Trust. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which the applicable series would be unable to meet its obligations. We hereby consent to the filing of this opinion in connection with the Trusted Registration statement on Form N-1A to be filed with the Securities and Exchange Commission. Very truly yours, /s/Dechert Price & Rhoads Dechert Price & Rhoads -108- EX-99.11 12 EX-99.11 EXHIBIT 11 CONSENT OF INDEPENDENT AUDITORS We consent to the use in Post-Effective Amendment No. 4 to Registration Statement No. 33-52850 of The Cutler Trust of our report dated August 17, 1995, incorporated by reference in the Statement of Additional Information, which is a part of such Registration Statement, and to the references to us under the headings "Financial Highlights" in the Prospectus, which is a part of such Registration Statement, and "Custodian and Auditor" in the Statement of Additional Information. /s/ Deloitte & Touche LLP Deloitte & Touche LLP New York, New York March 4, 1996 -110- EX-99.13 13 EX-99.13 EXHIBIT 13 December 30, 1992 Board of Trustees The Cutler Trust 61 Broadway New York, NY 10006 Gentlemen: In connection with my purchase of 2,500 shares of Cutler Equity Income Fund, 8,800 shares of Cutler Approved List Equity Fund and 2,700 shares of Cutler Government Fund, each fund an initial portfolio of The Cutler Trust, and for the consideration of cash in the amount of $10.00 per share, this letter will confirm that I am purchasing those shares for my own account for investment only and not with a view to reselling or otherwise distributing those shares. Sincerely, /s/Kenneth R. Cutler Kenneth R. Cutler -112- EX-99.OTHERSA 14 EX-99.OTHERS A OTHER (A) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that Brooke R. Ashland constitutes and appoints John Y. Keffer, Max Berueffy, David I. Goldstein and William Goodwin, and each of them, as true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for her and in her name, place and stead, in any and all capacities, to sign the Registration Statement on Form N-1A and any or all amendments thereto of The Cutler Trust and to file the same with the Securities and Exchange Commission, granting unto said attorneys-in- fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. /s/ Brooke R. Ashland ------------------------------ Brooke R. Ashland Dated: December 29, 1995 -114- EX-99.OTHERSB 15 EX-99.OTHERS B OTHER (B) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that Kenneth R. Cutler constitutes and appoints John Y. Keffer, Max Berueffy, David I. Goldstein and William Goodwin, and each of them, as true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign the Registration Statement on Form N-1A and any or all amendments thereto of The Cutler Trust and to file the same with the Securities and Exchange Commission, granting unto said attorneys-in- fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. /s/ Kenneth R. Cutler --------------------- Kenneth R. Cutler Dated: February 12, 1996 -116- EX-99.OTHERSC 16 EX-99.OTHERS C OTHER (C) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that Hatten S. Yoder, Jr. constitutes and appoints John Y. Keffer, Max Berueffy, David I. Goldstein and William Goodwin, and each of them, as true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign the Registration Statement on Form N-1A and any or all amendments thereto of The Cutler Trust and to file the same with the Securities and Exchange Commission, granting unto said attorneys-in- fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. /s/ Hatten S. Yoder, Jr. -------------------------- Hatten S. Yoder, Jr. Dated: December 28, 1995 -118- EX-99.OTHERSD 17 EX-99.OTHERS D OTHER (D) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that John Y. Keffer constitutes and appoints Max Berueffy, David I. Goldstein and William Goodwin, and each of them, as true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign the Registration Statement on Form N-1A and any or all amendments thereto of The Cutler Trust and to file the same with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. /s/ John Y. Keffer ----------------------------- John Y. Keffer Dated: December 28, 1995 -120- EX-27.A 18 EX-27 A (EQUITY INCOME FUND)
6 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CUTLER EQUITY INCOME FUND DATED 12/30/95 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT. 010 CUTLER EQUITY INCOME FUND 6-MOS JUN-30-1996 DEC-30-1995 38,891,131 47,515,492 48,041 0 0 47,563,533 0 0 91,064 91,064 0 38,544,645 3,814,422 3,785,081 18,473 0 212,990 0 8,696,361 47,472,469 870,857 34,650 0 216,796 688,711 291,025 5,835,943 6,815,679 0 705,125 535,464 0 2,393,378 3,496,530 1,530,954 6,002,892 1,136,677 843,392 0 0 109,273 0 216,796 43,471,524 10.96 .19 1.63 .19 .14 0 12.45 .99 0 0
EX-27.C 19 EX-27 C (APPROVED LIST EQUITY FUND)
6 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CUTLER APPROVED LIST EQUITY FUND DATED 12/30/95 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT. 020 CUTLER APPROVED LIST EQUITY FUND 6-MOS JUN-30-1996 DEC-30-1995 21,257,205 27,181,231 60,694 0 0 27,241,925 0 0 41,258 41,258 0 21,290,655 2,044,946 1,869,065 3,783 0 (17,797) 0 5,924,026 27,200,667 349,390 11,695 0 124,841 236,244 212,206 3,012,689 3,461,139 0 234,807 0 0 3,772,232 2,021,205 333,438 5,310,797 367,432 (130,093) 0 0 62,309 0 130,841 24,788,187 11.71 .12 1.59 .12 0 0 13.30 1.00 0 0
EX-27.D 20 EX-27 D (GOVERNMENT)
6 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CUTLER GOVERNMENT DATED 12/30/95 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT 030 CUTLER GOVERNMENT SECURITIES FUND 6-MOS JUN-30-1996 DEC-30-1995 6,660,716 6,806,596 105,892 0 0 6,912,488 0 0 12,860 12,860 0 6,809,888 668,379 672,700 720 0 (56,860) 0 145,880 6,899,628 0 196,487 0 25,249 171,238 (54,618) 199,077 315,697 0 170,518 0 0 905,672 1,126,865 180,059 104,045 276,319 0 0 0 8395 0 44,261 6,679,843 10.10 .26 .22 .26 0 0 10.32 .75 0 0
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